Exhibit 10.19
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 1, 2000 by and among HQ Global Holdings, Inc., a
Delaware corporation (the "Company") and CarrAmerica Realty Corporation, a
Maryland corporation ("Xxxx").
This Agreement is in connection with (i) the Stockholders
Agreement of even date herewith (the "Stockholders Agreement") among the
Company, as issuer of the common stock, par value $.01 per share (the
"Securities"), FrontLine Capital Group (formerly known as Reckson Service
Industries, Inc.) ("RSI"), Xxxx, and (ii) the Agreement and Plan of Merger
among RSI, VANTAS Incorporated, a Nevada corporation ("VANTAS"), Xxxx and HQ
Global Workplaces, Inc., a Delaware corporation ("HQ Global"), (iii) the Stock
Purchase Agreement dated as of January 20, 2000 by and between RSI and Xxxx,
and (iv) the Stock Purchase Agreement dated as of January 20, 2000 by and
among RSI, VANTAS, Xxxx, OmniOffices (UK) Limited and OmniOffices (Lux) 1929
Holding Company S.A. In order to induce Xxxx to consummate the transactions
contemplated by the foregoing agreements, the Company has agreed to provide to
the Holders (as hereinafter defined) the registration rights set forth in this
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph
of Section 3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Business Day" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law, executive order or regulation to remain closed.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Effectiveness Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Holder" shall mean Xxxx and each holder of Registrable Securities
that becomes a party hereto after the date hereof in accordance with the terms
of this Agreement, for so long as any of them own any Registrable Securities,
and each of their respective successors, assigns and direct and indirect
transferees who become holders of record of Registrable Securities.
"Inspectors" shall have the meaning set forth in Section 3(i) hereof.
"IPO" shall have the meaning set forth in the Stockholders Agreement.
"Issue Date" shall mean the date of original issuance of the
Securities pursuant to the Agreement.
"Person" shall mean an individual, partnership, corporation, joint
venture, trust or unincorporated organization, limited liability corporation,
other form of business or legal entity or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Shelf
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including
a prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and, in each case, including all
documents incorporated by reference therein.
"Records" shall have the meaning set forth in Section 3(i) hereof.
"Registrable Securities" shall mean the Securities; provided,
however, that Securities shall cease to be Registrable Securities when the
earlier of the following occurs (i) a Shelf Registration Statement with
respect to such Securities for the resale thereof shall have been declared
effective under the Securities Act and such Securities shall have been
disposed of pursuant to such Shelf Registration Statement, (ii) such
Securities shall have been sold to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the Securities Act
or are eligible to be sold without restriction as contemplated by Rule 144(k)
or (iii) such Securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of one counsel for all
underwriters or Holders as a group in connection with blue sky qualification
of any of the Registrable Securities), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Shelf Registration Statement, any Prospectus and any
amendments or supplements thereto, (iv) all fees and expenses incurred in
connection with the listing, if any, of the Registrable Securities on any
securities exchange or quoted on NASDAQ, and (v) all fees and disbursements of
counsel for the Company and of its independent public accountants, including
the expenses of any "cold comfort" letters required by or incident to such
performance and compliance.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the recitals hereto.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(a) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) hereof
which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all documents incorporated by
reference therein.
2. Registration Under the Securities Act.
(a) Shelf Registration. The Company shall file a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Securities then owned by the Holders (or which the Holders may be
entitled to receive) within thirty (30) days after the IPO and shall use its
best efforts to have such Shelf Registration Statement declared effective by
the SEC within 90 days after the IPO. No Holder of Registrable Securities
shall be entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company in writing, within 10 Business Days
after receipt of a request therefor, such information as the Company may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC 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 Holder
as to which any Shelf Registration is being effected agrees to furnish to the
Company all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective and the Prospectus usable for
resales during the Rule 144(k) Period (subject to extension pursuant to the
provisions of this paragraph), or for such shorter period which will terminate
when all of the Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement or cease to be
Registrable Securities (the "Effectiveness Period"); provided, however, that
up to 60 days on not more than two occasions in any twelve-month period (any
such period being referred to herein as a "Blackout Period"), the Company
shall be permitted to suspend sales of Securities: (i) if the Shelf
Registration Statement is no longer effective or the Prospectus is no longer
usable for resales due to a good faith determination by the Company that the
sale of the Registrable Securities pursuant to the Shelf Registration
Statement would require disclosure of material non-public information that the
Company has a bona fide business purpose for preserving as confidential or
(ii) if the Company is engaged in or has completed an underwritten public
offering and the underwriters' lock-up period with respect to sales of common
stock (or securities convertible into common stock) has not expired; provided,
however, that subsequent to the earlier of (x) 12 months after the IPO and (y)
the Company's completion of two underwritten public offerings after the IPO,
any Blackout Period imposed by the Company in connection with underwriters'
lock-up periods shall extend for no more than 30 days after the completion of
an underwritten public offering and, to the extent such Holder together with
any Affiliates owns less than 10% of the Company's outstanding classes of
common stock, the Company shall have no further right to suspend sales of
Securities in connection with underwriters' lock-up periods. No Blackout
Period may commence fewer than 90 days following (i) the expiration of a
preceding Blackout Period, or (ii) the IPO. In addition, the Company shall be
permitted to suspend sales of Securities if it makes a good faith
determination that the Prospectus includes an untrue statement of a material
fact or omits to state a material fact necessary in order to make 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 terminate the related Blackout Period by causing
the Prospectus to be 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 set forth in this Section 2(a) shall be 120 days. Each Holder
agrees that it shall give the Company notice of not less than 5 Business Days
prior to disposing of any Registered Securities under the Shelf Registration
Statement so that the Company may make any determination to suspend sales of
Securities as contemplated in the preceding sentence. In addition, each Holder
agrees that it shall not dispose of Registrable Securities under the Shelf
Registration Statement in any underwritten offering by one or more Holders of
less than an aggregate of $20 million of Registrable Securities determined on
the price per share offered to the public. The Company will, upon the
effectiveness of a Shelf Registration Statement, provide to each Holder 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 Registrable Securities.
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 and
regulations thereunder for shelf registrations, and the Company agrees to
furnish to the Holders of Registrable Securities copies of any supplement or
amendment to the Prospectus promptly after its being used or filed with the
SEC.
(b) Expenses. The Company, as issuer of the Securities, shall
pay all Registration Expenses in connection with any Shelf Registration
Statement filed pursuant to Section 2(a) hereof and will reimburse any single
counsel designated in writing by the Holders of a majority of the Registrable
Securities to act as counsel for the Holders of the Registrable Securities in
connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company; provided, however, that such
reimbursement shall in no event exceed an aggregate of $10,000. Except as
provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to
the Shelf Registration Statement.
(c) Effective Shelf Registration Statement. A Shelf Registration
Statement will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of Registrable Securities pursuant to such
Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC 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
Registrable Securities pursuant to such Shelf Registration Statement may
legally resume. The Company will be deemed not to have used its 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 Holders of Registrable Securities covered thereby
not being able to offer and sell such Registrable Securities 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 Securities pursuant to
such Shelf Registration Statement therefore is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, then each day that the effectiveness of a Shelf
Registration Statement is suspended shall apply to the Blackout Period
limitation in Section 2(a) hereof.
(d) Specific Enforcement. Without limiting the remedies
available to the Holders at law or in equity, the Company acknowledges that
any failure by it to comply with its obligations under Section 2(a) hereof may
result in material irreparable injury to the Holders for which there is no
adequate remedy at law, that it would not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, any Holder
may obtain such relief in any court having jurisdiction as may be required to
specifically enforce the Company's obligations under Section 2(a) hereof.
3. Registration Procedures. In connection with the obligations
of the Company with respect to the Shelf Registration Statement pursuant to
Section 2(a) hereof, the Company shall use its best efforts to:
(a) prepare and file with the SEC a Shelf Registration Statement
as prescribed by Section 2(a) hereof on the appropriate form under the
Securities Act, which form shall (i) be selected by the Company, (ii) be
available for the sale of the Registrable Securities by the selling Holders
thereof, and (iii) comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; the Company shall use its best
efforts to cause such Shelf Registration Statement to become effective and
remain effective and the Prospectus usable for resales in accordance with
Section 2 hereof; provided, that before filing such Shelf Registration
Statement or any amendments or supplements thereto, the Company will furnish
to the counsel selected by the Holders whose Registrable Securities are
included in the Shelf Registration Statement copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel before any such filing is made, and the Company will comply with any
reasonable request made by such counsel to make changes in any information
contained in such documents relating to the Holders.
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement effective for the
Effectiveness Period, subject to the provisos contained in the second
paragraph in Section 2(a), and cause each Prospectus to be supplemented, if so
determined by the Company or requested by the SEC, by any required prospectus
supplement and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the Securities Act, and comply with the
provisions of the Securities Act, the Exchange Act and the rules and
regulations promulgated thereunder applicable to it with respect to the
disposition of all securities covered by a Shelf Registration Statement during
the Effectiveness Period in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement;
(c) register or qualify the Registrable Securities under all
applicable securities or "blue sky" laws of such jurisdictions (domestic or
foreign) by the time the applicable Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered by a
Shelf Registration Statement and each underwriter of an underwritten offering
of Registrable Securities shall reasonably request in writing in advance of
such date of effectiveness, keep such registration or qualification in effect
for so long as such Shelf Registration Statement remains in effect and use its
best efforts to obtain all appropriate registrations, permits and consents
required in connection therewith, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder and
underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(c), (ii) file any general consent
to service of process in any jurisdiction where it would not otherwise be
subject to such service of process or (iii) subject itself to taxation in any
such jurisdiction if it is not then so subject;
(d) promptly notify each Holder of Registrable Securities, their
counsel and the managing underwriters, if any, and promptly confirm such
notice in writing (i) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Shelf
Registration Statement or the qualification of the Registrable Securities in
any jurisdiction described in Section 3(c) hereof or the initiation of any
proceedings for that purpose, (ii) if, between the effective date of a Shelf
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company contained
in any purchase agreement, securities sales agreement or other similar
agreement cease to be true and correct in all material respects, and (iii) of
the happening of any event or the failure of any event to occur or the
discovery of any facts, during the Effectiveness Period, which makes any
statement made in a Shelf Registration Statement or the related Prospectus
untrue in any material respect or which causes such Shelf Registration
Statement or Prospectus to 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;
(e) obtain the withdrawal of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible
moment;
(f) cooperate with the selling Holders of Registrable Securities
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and
registered in such names as the selling Holders or the underwriters may
reasonably request at least two Business Days prior to the closing of any sale
of Registrable Securities pursuant to the Shelf Registration Statement;
(g) promptly after the occurrence of any event specified in
Section 3(d)(i) or 3(d)(iii) (subject to the second paragraph of Section 2(a))
hereof, prepare a supplement or post-effective amendment to the Shelf
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not include any 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; and
the Company shall notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until the Company has amended
or supplemented the Prospectus to correct such misstatement or omission;
(h) if requested by the Holders of Registrable Securities in
connection with a firm commitment underwritten offering of at least $20
million in public offering price of Registrable Securities: (i) enter into
such agreements (including underwriting agreements) as are customary in
underwritten offerings and make such representations and warranties to the
underwriters (if any), with respect to the business of the Company and its
subsidiaries as then conducted and with respect to the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings, and confirm the same if and
when requested; (ii) furnish to the Holders whose Registrable Securities are
included in such offering pursuant to the Shelf Registration Statement and to
any underwriter of such Registrable Securities opinions of counsel for the
Company and updates thereof (which may be in the form of a reliance letter)
addressed to each such Holder and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not underwritten,
dated the effective date of the Shelf Registration or any Prospectus
Supplement thereto) in form and substance reasonably satisfactory to such
Holder or the managing underwriters covering the matters customarily covered
in opinions requested in underwritten offerings and such other matters as may
be reasonably requested by such Holders or underwriters; (iii) furnish to the
Holders whose Registrable Securities are included in such offering pursuant to
the Shelf Registration Statement and to any underwriter of such Registrable
Securities "cold comfort" accountants' letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters signed by the
independent public accountants who have audited the Company's financial
statements included in a Shelf Registration Statement (and, if necessary, any
other independent certified public accountants of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of the
Holders or underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as reasonably
requested by such Holders or underwriters in accordance with Statement on
Auditing Standards No. 72 and with respect to events subsequent to the date of
such financial statements; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures;
(i) if requested by Holders of Registrable Securities in
connection with a firm commitment underwritten offering of at least $20
million in public offering price of Registrable Securities make reasonably
available for inspection by any selling Holder of Registrable Securities who
certifies to the Company that it has a current intention to sell Registrable
Securities pursuant to the Shelf Registration, any underwriter participating
in any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
the Company's normal business hours, all financial and other records,
pertinent organizational and operational documents and properties of the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, trustees and employees of the
Company and its subsidiaries to supply all relevant information in each case
reasonably requested by any such Inspector in connection with such Shelf
Registration Statement; records and information which the Company, in good
faith, to be confidential and any Records and information which it notifies
the Inspectors are confidential shall not be disclosed to any Inspector except
where (i) the disclosure of such Records or information is necessary to avoid
or correct a material misstatement or omission in such Shelf Registration
Statement, (ii) the release of such Records or information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction or is
necessary in connection with any action, suit or proceeding or (iii) such
Records or information previously has been made generally available to the
public; each selling Holder of such Registrable Securities will be required to
agree in writing that Records and information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Company unless
and until such is made generally available to the public through no fault of
an Inspector or a selling Holder; and each selling Holder of such Registrable
Securities will be required to further agree in writing that it will, upon
learning that disclosure of such Records or information is sought in a court
of competent jurisdiction, or in connection with any action, suit or
proceeding, give notice to the Company and allow the Company at its expense to
undertake appropriate action to prevent disclosure of the Records and
information deemed confidential;
(j) comply with all applicable rules and regulations of the SEC
so long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any twelve-month period (or 90 days after the end of any
twelve-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a Shelf
Registration Statement, which statements shall cover said twelve-month
periods, provided that the obligations under this Section 3(j) shall be
satisfied by the timely filing of quarterly and annual reports on Forms 10-Q
and 10-K under the Exchange Act;
(k) cooperate with each seller of Registrable Securities covered
by a Shelf Registration Statement and each underwriter, if any, participating
in the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD;
(l) list all Registrable Securities covered by such Shelf
Registration Statement on any securities exchange or inter-dealer quotation
system (in each case, domestic or foreign) on which any of the Company's
securities are then listed;
(m) cause all Registrable Securities covered by such Shelf
Registration Statement to be registered with or approved by such other U.S. or
state government authorities as may be reasonably necessary to enable the
Holders whose Registrable Securities are included in a Shelf Registration
Statement to consummate the disposition of such Registrable Securities;
(n) provide a transfer agent and registrar for all Registrable
Securities covered by a Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement; and
(o) take all other steps necessary to effect the registration of
the Registrable Securities covered by a Shelf Registration Statement
contemplated hereby.
Each Holder agrees that, upon receipt of any notice from the
Company of the occurrence of any event specified in Section 3(d)(i) or
3(d)(iii) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Shelf Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(g) hereof or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, if so directed by the Company, such Holder will deliver to the
Company (at the Company's expense) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Shelf Registration
Statement, the Company shall use its best efforts to file and have declared
effective (if an amendment) as soon as practicable after the resolution of the
related matters an amendment or supplement to the Shelf Registration Statement
and related Prospectus.
4. Indemnification and Contribution. (a) The Company hereby
agrees to indemnify and hold harmless each Holder, each underwriter who
participates in an offering of the Registrable Securities, each Person, if
any, who controls any of such parties within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense (including reasonable attorneys' fees and disbursements) and
judgments, joint or several, to which they or any of them may become
subject whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in a Shelf
Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact required to be stated therein,
in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, provided that (subject to Section 4(d) hereof) such
settlement is effected with the prior written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen
by such Holder), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) of this
Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by
such Holder or underwriter expressly for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(b) Each Holder or underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its trustees and officers
(including each officer of the Company who signed the Shelf Registration
Statement), and each Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 4(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in such Shelf Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto); provided, however, that no Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have under this Section 4 to the extent that
it is not materially prejudiced by such failure as a result thereof, and in
any event shall not relieve it from liability which it may have otherwise on
account of this Section 4. In the case of parties indemnified pursuant to
Section 4(a) or (b) above, counsel to the indemnified parties shall be
selected by such parties. An indemnifying party may participate at its own
expense in the defense of such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from their own counsel, for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional written
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim 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 any indemnified party.
(d) If at any time an indemnified party shall have validly
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 4(a)(ii)
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms
of such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement set forth in this Section 4 is
for any reason held to be unenforceable by an indemnified party although
applicable in accordance with its terms, the Company, on the one hand, and the
Holders, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and the Holders, as incurred;
provided, however, that no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, on the one hand, and the Holders,
on the other hand, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company, on the one hand, and the Holders, on the other
hand, with respect to the statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and of the Holders, 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 or on behalf of the Holders, on the other, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Holders of the
Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each Affiliate of a Holder, and each director, officer and employee and
Person, if any, who controls a Holder or such Affiliate within the meaning of
Section 15 of the Securities Act shall have the same rights to contribution as
such Holder, and each trustee and officer of the Company and each Person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
5. Participation in an Underwritten Registration. No Holder may
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in
the underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell the Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(h) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or managers
that will administer the offering will be selected by the Holders; provided,
however, that such underwriters and managers must be reasonably satisfactory
to the Company.
7. Miscellaneous.
(a) Rule 144. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Securities remain outstanding, the Company will timely file the
reports required to be filed by it under the Securities Act and Section 13(a)
or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder; provided, however, that if the Company ceases to be so required to
file such reports, it will, upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales of its securities pursuant to Rule 144 under the Securities Act
and (b) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such rule may be amended from time to time, or any similar
rules or regulations hereafter adopted by the SEC. Upon the request of any
Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into, and will not enter into, any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's other issued and
outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of
Holders of a majority of the outstanding Registrable Securities affected by
such amendment, modification, supplement, waiver or departure; provided that
no amendment, modification or supplement or waiver or consent to the departure
with respect to the provisions of Section 4 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing by
such Holder of Registrable Securities. Notwithstanding the foregoing sentence,
(i) this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company and the Holders or their successors and
assigns to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate
to comply with applicable law (including any interpretation of the Staff of
the SEC) or any change therein and (ii) to the extent any provision of this
Agreement relates to the Holders, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may
be given, by written agreement signed by the Holders and the Company.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 7(d), which address initially is, with respect to the Holders,
the address set forth in the Stockholders Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 7(d); and (ii) if to the Company, initially at the Company's
address set forth in the Stockholders Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an overnight courier,
including Federal Express or similar courier utilizing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Holders, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities, 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 and such Person shall be entitled to receive the benefits hereof.
(f) Sales During Blackout Period. Any Holder that sells
Registrable Securities during a Blackout Period of which it had written notice
shall be deemed to have materially breached this Agreement and shall have no
further rights hereunder.
(g) Third Party Beneficiaries. Each transferee of a Seller (and
subsequent transferees thereof) shall be a third party beneficiary of the
agreements made hereunder among the Company and the Holders, and such
transferee shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
hereunder.
(h) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to any provisions relating to conflicts of laws.
(k) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(l) 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. This Agreement supersedes
all prior agreements and understandings among the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
HQ GLOBAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Operating Officer
CARRAMERICA REALTY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
