Exhibit 10.2
INDEMNIFICATION AND ESCROW AGREEMENT
THIS INDEMNIFICATION AND ESCROW AGREEMENT (this "Agreement") is
entered into as of the 1/st/ day of June, 2000 by and among FrontLine Capital
Group (formerly known as Reckson Services Industries, Inc.), a Delaware
corporation ("RSI"), CarrAmerica Realty Corporation, a Maryland corporation
("CarrAmerica"), Strategic Omni Investors LLC, a Delaware limited liability
company ("Strategic Omni"), Security Capital Holdings S.A., a Luxembourg
corporation ("SC-USRealty"), The Xxxxxx Xxxx Company, a District of Columbia
corporation ("OCCO"), Xxxx Holdings LLC, a Maryland limited liability company
("Xxxx Holdings"), and the additional persons who are shown on the signature
page hereto (the "Additional Indemnitors") (CarrAmerica, Strategic Omni, SC-
USRealty, OCCO, Xxxx Holdings, and each of the Additional Indemnitors,
collectively the "Shareholders" and individually a "Shareholder"; sometimes
collectively referred to herein with RSI as "Depositors" and individually a
"Depositor") and Citibank, N.A., a New York corporation, as escrow agent
hereunder (the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, RSI, CarrAmerica, VANTAS Incorporated, a Nevada corporation
("VANTAS"), and HQ Global Workplaces, Inc., a Delaware corporation ("HQGW"),
have entered into an Agreement and Plan of Merger dated as of January 20, 2000,
as amended as of April 29, 2000 and as of May 31, 2000 (the "Merger Agreement")
pursuant to which VANTAS will merge with and into HQGW ("the Merger");
WHEREAS, on the date hereof, pursuant to an agreement among certain of
the Shareholders and RSI dated as of January 20, 2000 (the "Stock Purchase
Agreement"), certain of the Shareholders are selling to RSI, and RSI is
purchasing from such Shareholders, that number of the shares of voting common
stock, par value $.01 per share, and non-voting common stock, par value $.01 per
share, of Holdco as set forth in, and subject to the terms and conditions of,
the Stock Purchase Agreement;
WHEREAS, on the date hereof, pursuant to the Merger Agreement, each
issued and outstanding share of (A) common stock, par value $.01 per share
("VANTAS Common Stock"), of VANTAS shall be converted into the right to receive
$8.00 per share in cash and (B) (i) Series A Convertible Preferred Stock, par
value $.01 per share, of VANTAS (the "Series A Stock"), (ii) Series B
Convertible Preferred Stock, par value $.01 per share, of VANTAS (the "Series B
Stock"), (iii) Series C Convertible Preferred Stock, par value $.01 per share,
of VANTAS (the "Series C Stock"), (iv) Series D Convertible Preferred Stock, par
value $.01 per share, of VANTAS (the "Series D Stock"), and (v) Series E
Convertible Preferred Stock, par value $.01 per share of VANTAS (the "Series E
Stock"), other than shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock held in the treasury of VANTAS, are, by virtue
of the Merger and without any action on the part of the holder thereof, being
converted into the right to receive shares of voting common stock of HQGW;
WHEREAS, as a condition to the consummation by VANTAS and/or RSI, as
applicable, of the transactions contemplated by the Merger Agreement, the Stock
Purchase Agreement, and that certain Stock Purchase Agreement by and among
VANTAS, RSI, CarrAmerica, OmniOffices (UK) Limited ("Omni UK") and OmniOffices
(Lux) 1929 Holding Company S.A. ("LuxCo") (the "UK Agreement"), (i) the
Shareholders have hereby agreed to indemnify and hold harmless RSI from and
against certain losses related to the Merger Agreement and the Stock Purchase
Agreement, and (ii) CarrAmerica has hereby agreed to indemnify and hold harmless
RSI from and against certain losses related to the UK Agreement, upon the terms
and conditions provided herein;
WHEREAS, as a condition to the consummation by HQGW and the applicable
Shareholders of the transactions contemplated by the Merger Agreement, the Stock
Purchase Agreement and the UK Agreement, RSI has agreed to indemnify and hold
harmless certain Shareholders from and against certain losses from certain
matters upon the terms and conditions provided herein;
WHEREAS, in connection with the Shareholders' indemnification
obligations, the parties have agreed that the Shareholders are depositing an
aggregate of 706,612 shares of non-voting common stock of Holdco (the "Non-
Voting Common Stock") (collectively, the "Shareholder Indemnification Shares")
and $4,158,492 in cash (the "Shareholder Cash Collateral") with the Escrow Agent
to be held and disbursed by the Escrow Agent in accordance with this Agreement,
with such Shareholder Indemnification Shares and Shareholder Cash Collateral
having an aggregate initial value of $30,000,000 as of the Closing;
WHEREAS, in connection with RSI's indemnification obligations, the
parties have agreed that RSI is depositing an aggregate of 820,322 shares of
voting common stock of Holdco (the "Voting Common Stock") (the "RSI
Indemnification Shares," and together with the Shareholder Indemnification
Shares, the "Indemnification Shares") with the Escrow Agent to be held and
disbursed by the Escrow Agent in accordance with this Agreement, with the RSI
Indemnification Shares having an aggregate initial value of $30,000,000 as of
the Closing;
WHEREAS, capitalized words and phrases used and not defined herein
shall have the meanings ascribed to them in the Merger Agreement; and
WHEREAS, the Escrow Agent is willing to establish and administer this
escrow on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Certain Definitions. As used in this Agreement, certain
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capitalized terms not otherwise defined herein shall have the following
respective meanings:
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"Cash Collateral" shall mean the Shareholder Cash Collateral and any
cash deposited by RSI or any Shareholder in the Escrow Account in substitution
of RSI Indemnification Shares or Shareholder Indemnification Shares in
accordance with Section 2(b).
"Company Level Loss" shall mean any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) directly or indirectly
incurred by HQGW or its Subsidiaries and VANTAS or its Subsidiaries
respectively; it being understood that a Company Level Loss shall not include
any consequential, incidental or punitive damages or any Direct Loss.
"Escrow Property" shall mean the Indemnification Shares and the Cash
Collateral delivered to the Escrow Agent, together with all interest, dividends
and other distributions and payments thereon received by Escrow Agent, less any
property and/or funds distributed or paid in accordance with this Agreement.
"Loss" or "Losses" shall mean a Company Level Loss or a Direct Loss.
"Direct Loss" shall mean any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) incurred by (i) any Shareholder
Indemnitee arising from, relating to or as a result of the inaccuracy at the
time made or deemed made of any of the representations or warranties set forth
in: (a) Section 5(B) of the Merger Agreement; and (b) Section 5 of the Stock
Purchase Agreement; or (ii) RSI Indemnitees arising from, relating to, or as a
result of the inaccuracy at the time made or deemed made of any of the
representations or warranties set forth in: (a) Section 4(B) of the Merger
Agreement; (b) Section 4 of the Stock Purchase Agreement and (c) Article II,
Section (B) of the UK Agreement; it being understood that a Direct Loss shall
not include (x) any consequential, incidental or punitive damages, (y) any loss
or damages suffered by such party as a result of the diminution in value (either
directly or indirectly) of the interest held by such party in the Holdco, or (z)
any Company Level Loss.
"Market Value" shall mean $36.57 per share.
"Ownership Percentage" shall mean, with respect to a Shareholder, the
percentage set forth opposite such Shareholder's name on Schedule A attached
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hereto.
"RSI Indemnitees" shall mean RSI and its directors, officers,
employees, shareholders, agents and representatives.
"RSI's Indemnification Share" shall mean one (1) minus the
Shareholder's Indemnification Share.
"Shareholder Indemnitees" shall mean the Shareholder listed on
Schedule C attached hereto and its directors, officers, employees, shareholders,
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agents and representatives.
"Shareholder Litigation" shall mean the legal proceedings disclosed in
Schedule 4(p) of the Merger Agreement under the caption "Omni Offices, Inc. and
CarrAmerica Realty
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Corporation v. Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxx" and any and all other claims,
counterclaims, causes of actions or other proceedings threatened or initiated by
or on behalf of Xxxxxx Xxxxxx ("Arcoro") or Xxxxxx Xxxxxxxx ("Kaidanow") that
relate to facts or circumstances or alleged facts or alleged circumstances
arising on or prior to May 31, 2000 (the "Closing Date"), other than any such
claims, causes of action or other proceedings with respect to and only to the
extent of allegations thereon that any information supplied in writing by RSI to
CarrAmerica for inclusion in materials that HQGW delivers to Arcoro or Kaidanow
in connection with the Merger contains any untrue statement of a material fact
with respect to RSI or VANTAS or omits to state a material fact necessary in
order to make the statements therein with respect to RSI or VANTAS not
misleading.
"Shareholders' Indemnification Share" shall mean the aggregate
percentage ownership interest of the Voting Common Stock and Non-Voting Common
Stock of Holdco owned by the Shareholders immediately after the Closing.
2. Establishment of Escrow Account.
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(a) Each Shareholder and RSI are contemporaneously with the
execution and delivery of this Agreement by each of the parties delivering the
number of Indemnification Shares (together with executed stock powers in respect
thereof) and/or the amount of Cash Collateral set forth opposite its name on
Schedule A hereto to the Escrow Agent for deposit into an escrow account (the
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"Escrow Account") by the Escrow Agent and the Escrow Agent hereby acknowledges
receipt of the same. All Indemnification Shares and Cash Collateral in the
Escrow Account shall be available for distribution by the Escrow Agent, subject
to the provisions of this Agreement, to reimburse any RSI Indemnitee or any
Shareholder Indemnitee, as the case may be, in respect of any Losses that are
indemnifiable pursuant to this Agreement. Notwithstanding the escrow of the
Indemnification Shares, dividends and other distributions declared and paid on
Indemnification Shares held in escrow shall continue to be paid by Holdco to the
respective Shareholders and RSI, all voting rights with respect to such shares
shall inure to the benefit of and be enjoyed by the respective Shareholders and
RSI, and such Shareholders and RSI shall be the legal and beneficial owners of
such shares for all purposes subject to the terms of this Agreement; provided,
that the parties agree that (i) Holdco shall deposit with the Escrow Agent any
securities issued to the Shareholders or RSI in respect of any Indemnification
Shares held in escrow as a result of a stock split or combination of shares of
Voting Common Stock or Non-Voting Common Stock, as the case may be, payment of a
stock dividend or other stock distribution made without receipt of consideration
therefor in or on the Voting Common Stock or Non-Voting Common Stock, as the
case may be, or change of shares of the Voting Common Stock or Non-Voting Common
Stock, as the case may be, into any other securities pursuant to or as part of a
business combination or otherwise, in each case together with specific written
instructions to the Escrow Agent on whose behalf the same should be credited,
and (ii) such securities shall be held by the Escrow Agent as, and shall be
included within the definition of, Indemnification Shares, as the case may be;
provided, however, notwithstanding the foregoing proviso, to the extent that any
such distribution of securities is properly taxable as a dividend for federal
income tax purposes, Holdco shall instruct the Escrow Agent to distribute such
securities
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to the respective Shareholders and RSI. The Escrow Agent agrees that it shall
invest any Cash Collateral in the HQ/VANTAS Indemnification Escrow Agreement
account (F/B/O 795012). The Escrow Agent shall not have any liability for any
loss sustained as a result of any investment made pursuant to the preceding
sentence or as a result of any liquidation of any such investment prior to its
maturity. Any interest earned on any Cash Collateral shall not be used to
increase the amount of the Escrow Account of any party hereto and shall be paid
to the applicable depositor of the Escrow Account from time to time upon written
demand by such depositor, upon specific written instructions to the Escrow Agent
with respect thereto. The Escrow Agent shall have no obligation to invest or
reinvest the Cash Collateral if deposited with the Escrow Agent after 11:00 a.m.
(E.S.T.) on such day of deposit. Instructions received after 11:00 a.m.(E.S.T.)
will be treated as if received on the following business day. The Escrow Agent
shall have the power to sell or liquidate the foregoing investments whenever the
Escrow Agent shall be required to release the Escrow Property pursuant to the
terms hereof. Requests (or instructions) received after 11:00 a.m. (E.S.T.) by
the Escrow Agent to liquidate the Escrow Property will be treated as if received
on the following business day. The Escrow Agent shall have no responsibility for
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any investment losses resulting from the investment, reinvestment or liquidation
of the Escrow Property. Any interest or other income received on such investment
and reinvestment of the Escrow Property shall become part of the Escrow
Property. If a selection is not made, the Escrow Property shall remain
uninvested with no liability for interest therein. It is agreed and understood
that the Escrow Agent may earn fees associated with the investments outlined
above.
(b) At any time and from time to time after the Closing Date, any
or all of the Indemnification Shares deposited by any Shareholder or RSI in the
Escrow Account on the Closing Date may be withdrawn upon at least five (5)
business days' prior notice by RSI or the Shareholders, as applicable, to the
other (with a copy to the Escrow Agent), but if and only if simultaneously with
such withdrawal the withdrawing party delivers immediately available funds to
the Escrow Agent for deposit into the Escrow Account in an amount equal to the
aggregate Market Value of the number of Indemnification Shares so withdrawn,
which determination shall be set forth in a written notice to the Escrow Agent
signed by RSI or the applicable Shareholder and upon which the Escrow Agent
shall be entitled to conclusively rely.
3. Tax Indemnification.
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(a) Tax Indemnification by Shareholders. Subject to the
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limitations of indemnification pursuant to Section 5, the Shareholders
severally, based on each such Shareholder's Ownership Percentage, shall
indemnify the RSI Indemnitees against and hold them harmless from (i) any Loss
incurred by reason of any liability of HQGW and its Subsidiaries for Taxes for
any Pre-Closing Tax Period, (ii) any Loss incurred by reason of any liability
for Taxes of the Shareholders or any other person (other than HQGW) which is or
has ever been affiliated with HQGW and its Subsidiaries, and (iii) any Loss
incurred by reason of any liability for reasonable legal, accounting, appraisal,
consulting or similar fees and expenses for any item attributable to any item in
clause (i) or (ii) above.
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(b) Tax Indemnification by RSI. Subject to the limitations of
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indemnification pursuant to Section 5, RSI shall indemnify the Shareholder
Indemnitees against and hold them harmless from (i) any Loss incurred by reason
of any liability of VANTAS and its Subsidiaries for Taxes for any Pre-Closing
Tax Period, (ii) any Loss incurred by reason of any liability for Taxes of RSI
or any other person (other than VANTAS and its Subsidiaries) which has ever been
affiliated with RSI and its Subsidiaries, and (iii) any Loss incurred by reason
of any liability for reasonable legal, accounting, appraisal, consulting or
similar fees and expenses for any item attributable to any item in clause (i) or
(ii) above.
(c) Straddle Period. For purposes of subparagraphs (a) and (b)
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above, in the case of any taxable period that includes (but does not end on) the
Closing Date (a "Straddle Period"):
(i) real, personal and intangible property Taxes ("Property Taxes")
of HQGW and its Subsidiaries and VANTAS and its Subsidiaries,
respectively, for any Pre-Closing Tax Period (other than Taxes imposed
in connection with the Merger or otherwise in connection with this
Agreement or the transactions contemplated hereby) shall be equal to
the amount of such Property Taxes of HQGW and its Subsidiaries and
VANTAS and its Subsidiaries, respectively, for the entire Straddle
Period (limited, however, to those Taxes attributable to the assets of
HQGW and its Subsidiaries and VANTAS and its Subsidiaries,
respectively, owned prior to the Closing Date) multiplied by a
fraction, the numerator of which is the number of days during the
Straddle Period that are in the Pre-Closing Tax Period and the
denominator of which is the number of days in the Straddle Period; and
(ii) the Taxes of HQGW and its Subsidiaries and VANTAS and its
Subsidiaries, respectively (other than Property Taxes and other than
Taxes referred to in Section 6(e) of this Agreement, which Taxes will
be governed by such Section), for the Pre-Closing Tax Period shall be
computed as if such taxable period ended as of the close of business
on the Closing Date. The indemnity obligations of the Shareholders in
respect of Taxes for a Straddle Period shall, subject to the
limitations on indemnification pursuant to Section 5, equal the excess
of (x) such Taxes for the Pre-Closing Tax Period over (y) the sum of
(i) the amount of such Taxes for the Pre-Closing Tax Period paid by
the Shareholders or any of their affiliates (other than HQGW) at any
time and (ii) the amount of such Taxes paid by HQGW and its
Subsidiaries on or prior to the Closing Date (which includes any
payments of estimated taxes or similar amounts made by HQGW and its
Subsidiaries on or prior to the Closing Date and any amounts of Taxes
for which a reserve has been reflected on the Company Balance Sheet,
even though the amount reflected for such reserve has not yet been
paid, based on each such Shareholder's Ownership Percentage, to the
applicable taxing authority). The Shareholders severally, based on
each such Shareholder's Ownership Percentage, shall initially pay such
excess to RSI upon the later of (A) five days prior to the
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date on which the Tax Return (including any Tax Return with respect to
estimated Taxes) with respect to the liability for such Taxes is
required to be filed (and if no such Tax Return is required to be
filed, five days prior to the date satisfaction of the Tax liability
is required by the relevant taxing authority) or (B) ten days after
the receipt from RSI of notice that such amount is required to be paid
pursuant hereto. The payments to be made pursuant to this paragraph by
the Shareholders with respect to a Straddle Period shall be
appropriately adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or any successor form) with
respect to Taxes for the Straddle Period.
RSI shall cause Holdco to within 10 days of the receipt thereof, pay
to each of the Shareholders an amount equal to such Shareholder's
Ownership Percentage, an amount equal to 100% of any refund of any
Taxes of HQGW with respect to any Pre-Closing Tax Period received by
HQGW, any of its Subsidiaries or Holdco at any time after the Closing
Date (including for this purpose any credit against Taxes owed for any
taxable period ending after the Closing Date, if such credit is
attributable to a taxable period ending on or prior to the Closing
Date, any refund of estimated tax payments made on or prior to the
Closing Date or any application of such payments to either a taxable
period commencing after the Closing Date or a portion of a Straddle
Period that is subsequent to the Closing Date, and any interest
received by HQGW, any of its Subsidiaries or Holdco with respect to
any of the foregoing from the applicable taxing authority) unless (and
only to the extent) that the amount of such refund for Taxes was
reflected as an asset on the Company Balance Sheet.
(d) RSI shall indemnify each of the Shareholder Indemnitees for
any Extra Tax Costs incurred by such Shareholder Indemnitees in connection with
the HQ Merger, the Second Step Merger, and/or the sale of shares by such
Shareholder Indemnitee pursuant to the Stock Purchase Agreement. For purposes of
this Section 3(d), "Extra -Tax Costs" shall be defined as (i) all interest,
penalties, and similar charges actually payable by a Shareholder Indemnitee to
any applicable taxing authority with respect to Extra Taxes attributable to the
period ending on the earlier of January 1, 2003 or the date all of such
Shareholder Indemnitee's shares of stock in HQGW not sold pursuant to the Stock
Purchase Agreement actually are sold (in either case, the "Deemed Sale Date"),
plus (ii) in the event that such interest, penalties, and similar charges have
not been paid on or prior to the Deemed Sale Date, all interest, penalties and
similar charges accruing with respect to such interest, penalties and similar
charges until the earlier of the actual date on which the interest, penalties,
and similar charges described in clause (i) are paid or thirty (30) days
following a "final determination" within the meaning of Section 1313 of the Code
that the Shareholder Indemnitee is required to pay Extra Taxes, plus (iii) if
and to the extent that a Shareholder Indemnitee is required to pay any Extra
Taxes prior to the applicable Deemed Sale Date, interest on such Extra Taxes
from the date the Shareholder Indemnitee makes such payment of Extra Taxes to
and including the applicable Deemed Sale Date, computed at a rate equal to the
rate applicable under Section 6621 of the Code with respect to underpayments of
federal income tax, plus (iv) an amount equal to all federal, state and local
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income taxes (net of the federal income tax benefit, if any, resulting to the
Shareholder Indemnitee from any deduction allowed to such Shareholder Indemnitee
for any such state and local income taxes) required to be paid by such
Shareholder Indemnitee with respect to the payment received pursuant to this
Section 3(d). For purposes of this Section 3(d), "Extra Taxes" shall be defined
as the excess of (i) the amount of all Taxes (other than stock transfer Taxes)
payable (determined as described below) by a Shareholder Indemnitee by reason of
the Second Step Merger and/or the sale of shares of stock by the Shareholder
Indemnitee pursuant to the Stock Purchase Agreement over (ii) the amount of
Taxes (other than stock transfer Taxes) that would have been payable by such
Shareholder Indemnitee by such reason if (a) the exchange into Holdco Preferred
Stock described on the Financing Exhibits were not to have taken place and (b)
the surviving corporation in the Second Step Merger were the HQ Surviving
Corporation rather than M Sub. The amount of Extra Taxes and the Extra Tax Costs
for purposes of this Section 3(d) shall be determined and certified to by an
independent accountant selected by the applicable Shareholder Indemnitee, as may
be reasonably acceptable to RSI. Extra Taxes and Extra Tax Costs shall be
considered payable for the purposes hereof on the earlier of (i) the date on
which the Shareholder Indemnitee notifies RSI in writing of any assertion by the
Internal Revenue Service, formal or informal, of a position to the effect that
such amounts might be required to be paid, or (ii) the date on which the
Shareholder Indemnitee delivers to RSI a copy of an opinion of the tax advisor
to such Indemnitee providing that it is more likely than not that the
Shareholder Indemnitee is liable for such Extra Taxes and Extra Tax Costs (in
either case, a "Potential Adverse Determination Date"), unless in either event
RSI notifies such Shareholder Indemnitee in writing within ten days of the
Potential Adverse Determination Date that, pursuant to the provisions of this
section, it will indemnify the Shareholder Indemnitee for (a) all interest,
penalties, and similar charges accruing with respect to such Extra Taxes and
Extra Tax Costs from the Potential Adverse Determination Date until the earlier
of thirty (30) days following a "final determination" within the meaning of
Section 1313 of the Code that the Shareholder is required to pay Extra Taxes
and/or Extra Tax Costs or ten (10) days following written notice from RSI to
such Shareholder Indemnitee to pay all such Extra Taxes and Extra Tax Costs as
to which a Potential Adverse Determination Date has occurred (in either case,
the "Delayed Payment Date"), and (b) all legal and accounting costs and expenses
incurred in connection with any challenge or assertion by the Internal Revenue
Service (it being understood that the Shareholder Indemnitee shall not in any
event have any duty to contest any such challenge except, and only to the extent
that, RSI bears any and all costs associated therewith), in which event Extra
Taxes and Extra Tax Costs shall be considered payable for purposes hereof on the
Delayed Payment Date. The obligations of RSI pursuant to this Section 3(d) are
in addition to, and not in lieu of, the obligations of HQ Surviving Corporation
and HQGW under Section 7(j) of the Merger Agreement. The provisions of Section
5(a), 5(b), 5(c) and 5(d) shall not apply with respect to this Section 3(d).
4. Other Indemnification.
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(a) Other Indemnification by the Shareholders. (W) The
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Shareholders severally, based on each such Shareholder's respective Ownership
Percentage, shall indemnify the RSI Indemnitees against and hold them harmless
from any Company Level Loss (other than
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any relating to Taxes, for which indemnification provisions are set forth in
Section 3(a), and any relating to the Shareholder Litigation, for which
indemnification provisions are set forth in Section 4)(a)(X)) arising from,
relating to or otherwise in respect of any inaccuracy of any representation or
warranty of HQGW contained in the Merger Agreement (other than the
representations set forth in Sections 4(A)(b) and 4(A)(ee) of the Merger
Agreement, for which indemnification provisions are set forth in Section 4(a)(X)
below) or in any certificate delivered pursuant thereto or in connection
therewith at the time made or deemed made (regardless of whether or not VANTAS
or RSI was aware of such failure on or prior to the Effective Time).
(X) All Shareholders severally, based on each such Shareholder's
respective Ownership Percentage, shall indemnify the RSI Indemnitees against and
hold them harmless from RSI's Indemnification Share of any Company Level Loss
and from any claims, causes of action or other proceedings under which any RSI
Indemnitee may be subject to liability arising from, relating to, or otherwise
in respect of any inaccuracy of the representations set forth in Section 4(A)(b)
and 4(A)(ee) of the Merger Agreement. CarrAmerica shall indemnify the RSI
Indemnitees against and hold them harmless from RSI's Indemnification Share of
any Company Level Loss and from any claims, causes of action or other
proceedings under which any RSI Indemnitee may be subject to liability arising
from, relating to, or otherwise in respect of the Shareholder Litigation.
(Y) Each Shareholder severally with respect to any Direct Loss
attributable to itself only shall indemnify the RSI Indemnitees against and hold
them harmless from any such Direct Loss directly or indirectly suffered or
incurred by any such RSI Indemnitee.
(Z) CarrAmerica shall indemnify the RSI Indemnitees against and hold
them harmless from any Company Level Loss directly or indirectly suffered or
incurred by any such RSI Indemnitee arising from, relating to or otherwise in
respect of any inaccuracy of the representations and warranties of HQ UK and HQ
LuxCo contained in the UK Agreement or in any certificate delivered pursuant
thereto or in connection therewith at the time made or deemed made (regardless
of whether or not VANTAS or RSI was aware of such failure on or prior to the
Closing Date).
(b) Other Indemnification by RSI. (Y) RSI shall indemnify the
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Shareholder Indemnitees against and hold them harmless from any Company Level
Loss or Direct Loss (other than any relating to Taxes, for which indemnification
provisions are set forth in Section 3(a)) directly or indirectly suffered or
incurred by them arising from, relating to or otherwise in respect of any
inaccuracy of any representation or warranty of RSI or VANTAS contained in the
Merger Agreement (other than the representations set forth in Section 5(A)(b) of
the Merger Agreement, for which indemnification provisions are set forth in
Section 5(b)(Z) below), the UK Agreement or the Stock Purchase Agreement or in
any certificate delivered pursuant to either of the foregoing or in connection
therewith at the time made or deemed made (regardless of whether or not any
Shareholders were aware of such failure on or prior to the Effective Time).
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(Z) RSI shall indemnify the Shareholder Indemnitees against and hold
them harmless from the Shareholders' Indemnification Share of any Company Level
Loss and from any claims, causes of actions or other proceedings under which any
Shareholder Indemnitee may be subject to liability (i) arising from, relating
to, or otherwise in respect of the matter disclosed in clause (ii) of Schedules
5(r) or 5(u) to the Merger Agreement or any inaccuracy of the representations
set forth in Section 5(A)(b) of the Merger Agreement or (ii) threatened or
initiated by or on behalf of any holder of VANTAS Common Stock or Preferred
Stock that relate to the execution and delivery of the Merger Agreement or to
any of the transactions contemplated therein, or (iii) arising from, relating
to, or otherwise in respect of the offer or sale of equity securities of HQGW or
Holdco to any third party in connection with the transactions contemplated by
the Merger Agreement, the Stock Purchase Agreement or the UK Agreement; provided
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that, RSI shall not be required to make any payment under this clause (Z) to the
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extent of any amounts that the Shareholders are required to pay under Section
4(a) hereof with respect to the same facts and circumstances that give rise to a
claim under this clause (Z).
(ZZ) Except with respect to any matter referred to in clause (ZZZ)
below, in the event Holdco is required to pay any amounts under (i) Section
11(a) of that certain Exchange Agreement dated as of May 31, 2000 by and between
Holdco and RSI (the "Exchange Agreement") or otherwise as a result of a breach
of the representations and warranties of Holdco contained in Section 2 of the
Exchange Agreement, (ii) Section 11(a) of any of those certain Purchase
Agreements, each dated as of May 31, 2000, by and between, in each case, RSI, on
the one hand, and the Investor specified in each such Agreement, on the other
hand, or otherwise as a result of a breach of representations and warranties of
RSI contained in Section 2 of the Purchase Agreements, or (iii) Section 11(a) of
the Purchase Agreement dated as of May 31, 2000 by and among Holdco, RSI and
Equity Office Properties Trust or otherwise as a result of a breach of the
representations and warranties of Holdco contained in Sections 2 and 3 of such
Purchase Agreement (all of the foregoing obligations being hereinafter referred
to as "Holdco Indemnification Obligations"), RSI shall indemnify the Shareholder
Indemnitees and hold them harmless in an amount equal to the product of any
amounts paid by Holdco under the Holdco Indemnification Obligations and the
Shareholders' Indemnification Share; provided that, RSI shall not be required to
-------- ----
make any payment under this clause (Z) to the extent of any amounts that the
Shareholders are required to pay under Section 4(a) hereof with respect to the
same facts and circumstances that give rise to a claim under this clause (ZZ).
(ZZZ) In the event Holdco pays any Holdco Indemnification Obligations
under Section 12(a) of any Purchase Agreement arising from, relating to or
otherwise in respect of any act or failure to act of RSI or any breach of any of
RSI's representations under Section 3 of any such Purchase Agreement, then in
lieu of the indemnification provisions of clause (ZZ) above, RSI shall indemnify
and hold Holdco harmless from the entire amount of such payment.
5. Limitations on Indemnification. Any claim brought under Section
------------------------------
3 or 4 is subject in each case to the following limitations and restrictions:
(a) Damages Net of Insurance, etc. The amount of any Company
-----------------------------
Level Loss for which indemnification is provided under this Agreement shall be
net of any amounts
10
actually recovered by the Second Step Surviving Corporation under insurance
policies with respect to such Company Level Loss (which the Second Step
Surviving Corporation shall use commercially reasonable efforts to recover under
such policies) and the amount of any Loss shall be (i) increased to take account
of any net Tax cost incurred by the indemnified party arising from the receipt
of indemnity payments hereunder (grossed up for such increase), and (ii) reduced
to take account of any net Tax benefit realized by the Second Step Surviving
Corporation arising from the incurrence or payment of any such Loss. In
computing the amount of any such Tax cost or Tax benefit, the indemnified party
or the Second Step Surviving Corporation, as the case may be, shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnity payment hereunder
or the incurrence or payment of any indemnified Loss. Any indemnity payment
under this Agreement shall be treated as an adjustment to the Merger
Consideration for tax purposes, unless a final determination (which shall
include the execution of a Form 870-AD or successor form) with respect to the
indemnified party causes any such payment not to be treated as an adjustment to
the Merger Consideration for United States Federal income tax purposes.
(b) Minimum Claim Amounts.
---------------------
(i) Claims made by the RSI Indemnitees with respect to Losses for
which indemnification is provided pursuant to Section 3(a), 3(c),
4(a)(W) or 4(a)(Z) shall be required to be paid if and only if the
aggregate amount of all such Losses, but for this Section 5(b)(i),
exceed on a cumulative basis $6,219,000 (the "Holder Basket"), in
which event the entire amount of such Losses shall be recoverable; it
being understood that claims with respect to Losses or damages arising
from claims, causes of action or other proceedings for which
indemnification is provided pursuant to Section 4(a)(X) or 4(a)(Y)
shall not be subject to the foregoing limitation.
(ii) Claims made by the Shareholder Indemnitees with respect to
Losses for which indemnification is provided pursuant to Section 3(b),
3(c) or 4(b)(Y) (with respect to claims for Company Level Losses)
shall be required to be paid if and only if the aggregate amount of
all such Losses, but for this Section 5(b)(ii), exceed on a cumulative
basis $25,510,000 (the "RSI Basket"), in which event the entire amount
of such Losses shall be recoverable; it being understood that claims
with respect to Direct Losses for which indemnification is provided
pursuant to Section 4(b)(Y) or Losses, claims, causes of action or
other proceedings pursuant to Section 4(b)(Z), 4(b)(ZZ) or 4(b)(ZZZ))
shall not be subject to the foregoing limitation.
(iii) In determining whether the Shareholder Indemnitees or RSI
Indemnitees, as the case may be, is or are entitled to indemnification
under Section 4 (other than under Section 4(b)(ZZ) or 4(b)(ZZZ)), the
representations and warranties of the Shareholders and HQGW, or RSI
and VANTAS, as applicable, shall not be
11
deemed qualified by any references to material or materiality
contained therein and any inaccuracies therein shall be determined
without regard to whether such inaccuracy constitutes a Company
Material Adverse Effect or a VANTAS Material Adverse Effect; provided,
however, in no event will any Shareholder Indemnitees or RSI
Indemnitees, as the case may be, be entitled (A) to recovery for any
Loss relating to or arising out of an inaccuracy of any representation
or warranty of VANTAS, RSI, HQGW or any Shareholder, as the case may
be, even if such Shareholder Indemnitee or RSI Indemnitee, as
applicable, would be entitled to indemnification pursuant to Section
5(b)(i) or 5(b)(ii), but for this Section 5(b)(iii), unless the Loss
related thereto exceeds $50,000, (B) to aggregate items referred to in
clause (A) of this Section 5(b)(iii) for the purpose of exceeding the
limitation set forth in clause (A) of this Section 5(b)(iii), or (C)
to otherwise submit the items referred to in clause (A) of this
Section 5(b)(iii) as Losses reimbursable pursuant to this Section 5.
(c) Percentage Recovery.
-------------------
(i) If cumulative Company Level Losses under Sections 3(a), 3(c),
4(a)(W) and 4(a)(Z) exceed the Holder Basket, the indemnification
amount to be paid to the applicable RSI Indemnitees shall be equal to
RSI's Indemnification Share of the entire amount of Company Level
Losses. In all events (other than as expressly limited to RSI's
Indemnification Share in Section 4(a)(X)), 100% of the entire amount
of Losses under Sections (4)(a)(X) and 4(a)(Y) shall be paid to the
applicable RSI Indemnitees.
(ii) If cumulative Company Level Losses under Sections 3(b), 3(c) and
4(b)(Y) exceed the RSI Basket, the indemnification amount to be paid
to the applicable Shareholder Indemnitees shall be equal to the
Shareholders' Indemnification Share of the entire amount of Company
Level Losses. The indemnification amount to be paid in respect of
Company Level Losses under Section 4(b)(Z) is limited to the
Shareholders' Indemnification Share thereof and the indemnification
amount to be paid under Section 4(b)(ZZ) or 4(b)(ZZZ) shall not be
limited in any respect. In all events, 100% of the entire amount of
Losses that constitute Direct Losses of any Shareholder Indemnitee
shall be paid to the applicable Shareholder Indemnitees.
(d) Other Limitations on Recovery.
-----------------------------
(i) Except as otherwise provided in the immediately following
sentence, claims made by any RSI Indemnitee against any Shareholder
pursuant to this Agreement shall be made solely against the
Shareholder Indemnification Shares or Cash Collateral deposited into
the Escrow Account by such Shareholder. Claims made by any RSI
Indemnitee against any Shareholder with respect to Direct Losses and
under Section 4(a)(X) shall be made first against the Shareholder
Indemnification Shares or Cash Collateral deposited into the Escrow
12
Account by such Shareholder in accordance with Section 7, but only
after any and all amounts in respect of Valid Claims with respect to
the Company Level Losses shall have first been disbursed in accordance
with Section 7; provided, that if the amount available in the Escrow
Account attributable to such Shareholder (valuing any Indemnification
Shares in accordance with Section 7) is less than the full amount of
the claim, or if the Escrow Account has been terminated, a claim may
be made directly against such Shareholder, which shall be personally
liable for the remaining amount of the claim. Except as set forth in
the preceding sentence, no Shareholder shall have any personal
liability to any RSI Indemnitee in any respect pursuant to this
Agreement or otherwise.
(ii) Except as otherwise provided in the immediately following
sentence, claims made by any Shareholder Indemnitee against RSI
pursuant to this Agreement shall be made solely against the RSI
Indemnification Shares or Cash Collateral deposited into the Escrow
Account by RSI. Claims made by any Shareholder Indemnitee against RSI
with respect to Direct Losses and under Section 4(b)(ZZ) and 4(b)(ZZZ)
shall be made first against the RSI Indemnification Shares or cash
collateral deposited into the Escrow Account by RSI in accordance with
Section 7, but only after any and all amounts in respect of Valid
Claims with respect to Company Level Losses shall have first been
disbursed in accordance with Section 7; provided that if the amount
available in the Escrow Account attributable to RSI (valuing any
Indemnification Shares in accordance with Section 7) is less than the
full amount of the claim, or if the Escrow Account has been
terminated, a claim may be made directly against RSI, which shall be
personally liable for the remaining amount of the claim. Except as set
forth in the immediately preceding sentence, RSI shall not have any
personal liability to any Shareholder Indemnitee in any respect
pursuant to this Agreement or otherwise.
(e) Termination of Indemnities. Notwithstanding anything in this
--------------------------
Agreement to the contrary, the obligations of the Shareholders and RSI to
provide indemnification under this Agreement shall terminate and be extinguished
forever at the close of business on June 30, 2001, except for (i) claims under
Section 3 hereof and claims under Section 4 hereof that relate to the
representations concerning authorization and benefit plan matters set forth in
Sections 4(b), 4(r), 5(b) and 5(k) of the Merger Agreement, Section 4(b)(ZZ) and
4(b)(ZZZ) hereof, and Sections 2.2 and 2.16 of the UK Agreement and the
representations set forth in the Stock Purchase Agreement, which claims may be
made until the expiration of the applicable statute of limitations; provided,
however, that the obligations of the Shareholders and/or RSI to provide
indemnification under this Agreement shall not terminate at such time with
respect to any claim that has been properly asserted by delivering a notice of
such claim to the indemnifying party in accordance with the terms hereof and
such claim has not been paid or otherwise resolved as of the date on which such
indemnity obligation would otherwise terminate pursuant to this Section 5(e). If
a claim has been properly asserted and not paid or resolved as described above,
the indemnity obligations of the Shareholders or RSI, as applicable, shall
13
continue beyond June 30, 2001, but (i) the indemnity obligation shall continue
only with respect to the claim in question, and only until such claim is paid or
otherwise finally resolved, and (ii) any amounts in the Escrow Account not
reasonably determined by the indemnified party to be needed to cover the
disputed claim shall be released from the Escrow Account to the Shareholders or
RSI, as applicable, upon written instructions to the Escrow Agent in connection
therewith by the indemnified party upon which the Escrow Agent shall be entitled
to conclusively rely.
6. Other Tax Matters.
-----------------
(a) For any taxable period of HQGW that includes (but does not
end on) the Closing Date, RSI shall, or shall cause the Second Step Surviving
Corporation to, timely prepare and file with the appropriate taxing authorities
all Tax Returns required to be filed; provided, however, that no such Tax Return
shall be filed without the written consent of the Representative, which consent
shall not be unreasonably withheld. The Shareholders shall reimburse RSI (in
accordance with the procedures set forth in Sections 3(a) and 3(c)) for any
amount owed by the Shareholders to RSI pursuant to such Sections (subject to the
limitation set forth in Section 5) with respect to the taxable periods covered
by such Tax Returns. For any taxable period of HQGW that ends on or before the
Closing Date, HQGW shall timely prepare and file with the appropriate taxing
authorities all Tax Returns required to be filed and shall pay all Taxes due
with respect to such Tax Returns; provided, however, that no such Tax Return
shall be filed without the prior written consent of RSI and the Representative,
which consent shall not be unreasonably withheld. RSI and the Shareholders agree
to cause HQGW to file all Tax Returns for the taxable period including the
Closing Date on the basis that the relevant taxable period ended as of the close
of business on the Closing Date, unless the relevant taxing authority will not
accept a Tax Return filed on that basis.
(b) RSI shall cause HQGW to, and the Shareholders, RSI and the
Second Step Surviving Corporation shall, reasonably cooperate, and cause their
respective Affiliates, officers, employees, agents, auditors and other
representatives reasonably to cooperate, in preparing and filing all Tax Returns
and in resolving all disputes and audits with respect to all taxable periods
relating to Taxes, including by maintaining and making available to each other
all records necessary in connection with Taxes, provided, however, in no event
shall RSI be required to provide any Tax Return to the Shareholders and the
Shareholders shall not be required to provide to RSI any Tax Return not actually
in their possession. RSI recognizes that the Shareholders will need access, from
time to time, after the Closing Date, to certain accounting and Tax records and
information held by the Second Step Surviving Corporation to the extent such
records and information pertain to events occurring prior to the Closing Date
acting as representative for the Shareholders; therefore, RSI agrees after the
Closing to cause the Second Step Surviving Corporation to allow the
Representative, and its agents and other representatives, at times and dates
mutually acceptable to the parties, reasonable access to such records from time
to time, during normal business hours and at the Shareholders' expense.
14
(c) An amount equal to 100% of the amount or economic benefit of
any refunds, credits or offsets of Taxes of HQGW for any Pre-Closing Tax Period
(including that portion of a Straddle Period ending on the Closing Date) shall
be for the account of the Shareholders. Notwithstanding the foregoing, (i) any
such refunds, credits or offsets of Taxes shall be for the account of the Second
Step Surviving Corporation and RSI to the extent such refunds, credits or
offsets of Taxes are attributable (determined on a marginal basis) to the
carryback from a taxable period beginning after the Closing Date (or the portion
of a Straddle Period that begins on the day after the Closing Date) of items of
loss, deduction or credit, or other tax items, of the Second Step Surviving
Corporation (or any of its Affiliates, including RSI) and (ii) to the extent RSI
or the Second Step Surviving Corporation, depending on which entity made such
payment, pays after the Closing Date any amount with respect to Taxes for any
such Pre-Closing Tax Period, refunds of such Taxes (determined on a first-in,
first-out basis) shall be for the account of RSI or the Second Step Surviving
Corporation, depending on which entity made such payment. The amount or economic
benefit of any refunds, credits or offsets of Taxes of HQGW or the Second Step
Surviving Corporation for any taxable period beginning after the Closing Date
shall be for the account of the Second Step Surviving Corporation and RSI. The
amount or economic benefit of any refunds, credits or offsets of Taxes of HQGW
or the Second Step Surviving Corporation for any Straddle Period shall be
equitably apportioned between the Shareholders, on the one hand, and RSI and the
Second Step Surviving Corporation, on the other hand. Each party shall forward,
and shall cause its Affiliates to forward, to the party entitled pursuant to
this Section 6(c) to receive the amount or economic benefit of a refund, credit
or offset to Tax the amount of such refund, or the economic benefit of such
credit or offset to Tax, within 30 days after such refund is received or after
such credit or offset is allowed or applied against other Tax liability, as the
case may be; provided, however, that any such amounts payable pursuant to this
Section 6(c) shall be net of any Tax cost or Tax benefit to the party making
payment pursuant to this Section 6(c) and its Affiliates attributable to the
receipt of such refund, credit or offset to Tax and/or the payment of such
amounts pursuant to this Section 6(c). RSI and the Shareholders shall treat any
amounts payable pursuant to this Section 6(c) as an adjustment to the Merger
Consideration unless a final determination (which shall include the execution of
a Form 870-AD or successor form) causes any such payment not to be treated as an
adjustment to the Merger Consideration for United States Federal income Tax
purposes.
(d) The Shareholders shall supply any necessary information to
enable the Second Step Surviving Corporation to file any amended consolidated,
combined or unitary Tax Returns for taxable years ending on or prior to the
Closing Date which are required as a result of examination adjustments made by
the IRS or by the applicable state, municipal, provincial, local or foreign
taxing authorities for such taxable years as finally determined; provided,
however, that no such Tax Return shall be filed without the prior written
consent of the Representative and RSI, which consent shall not be unreasonably
withheld.
For those jurisdictions in which separate Tax Returns are filed by
HQGW, any required amended returns resulting from such examination adjustments,
as finally determined, shall be prepared by the Second Step Surviving
Corporation or RSI and furnished to the Representative, for approval at least 30
days prior to the due date for filing such Tax Returns.
15
(e) All transfer, documentary, sales, use, registration and
other such Taxes (including all applicable real estate transfer or gains Taxes
and stock transfer Taxes) and related fees (including any penalties, interest
and additions to Tax) incurred in connection with the Merger or otherwise in
connection with this Agreement and the transactions contemplated hereby that are
attributable to the assets of HQGW and its Subsidiaries shall be paid by the
Shareholders and that are attributable to the assets of VANTAS and its
Subsidiaries shall be paid by RSI. The Representative and RSI shall cooperate in
timely preparing and filing all Tax Returns as may be required to comply with
the provisions of such Tax laws.
7. Indemnification Procedures.
--------------------------
(a) Notice of a Claim. In order for a party to be entitled to
-----------------
indemnification pursuant to this Agreement, the indemnified party shall notify
the indemnifying party in writing of any claim that it reasonably believes is
likely to result in a Loss within ten (10) days of the date such party receives
written notice or otherwise becomes aware of the claim, describing in reasonable
detail the claim (including whether such claim is for Direct Losses or Company
Level Losses) and the estimated amount of the claim; provided, however, that the
failure of an indemnified party so to notify the indemnifying party of the claim
shall not relieve the indemnifying party of its obligations under this Agreement
except to the extent the indemnifying party shall have been actually prejudiced
as a result of such failure (except that the indemnifying party shall not be
liable for any expenses incurred during the period in which the indemnified
party failed to give notice). The indemnified party shall deliver to the
indemnifying party copies of all notices and documents (including court papers)
received by the indemnified party relating the claim along with the notice
referred to above. If the indemnifying party does not object in writing to the
availability of the indemnity under this Agreement within twenty (20) days after
receiving such notice, then the claim set forth in the notice by such party
shall be considered a valid claim under this Agreement (a "Valid Claim"), and
such Valid Claim (to the extent payable after giving effect to the limitations
set forth in Section 5(b)) shall be paid in accordance with Section 7 hereof. If
any indemnifying party objects in writing as to the availability of the
indemnity with respect to such claim within such twenty (20) day period, then
the indemnifying party and the indemnified party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.
(b) Defense of Third Party Claims. If any Valid Claim arises out
-----------------------------
of or involves a claim or demand made by any person against the Second Step
Surviving Corporation or the indemnified party (a "Third Party Claim"), then the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the indemnified
party therefor, to assume the defense thereof with counsel selected by the
indemnifying party; provided, that such counsel is not reasonably objected to by
the indemnified party; and provided further, that if either (i) any indemnified
party reasonably concludes that there may be one or more legal defenses
available to it that are different from or in addition to (and are inconsistent
with) those available to the indemnifying party, or that a conflict or potential
conflict exists between any indemnified party, on the one hand, and any
16
indemnifying party, on the other hand (a "Conflicting Matter"), or (ii) the
Third Party Claim seeks an order, injunction or other equitable relief or relief
for other than money damages which the indemnified party reasonably concludes
cannot be separated from any related claim for money damages (a "Specific
Performance Matter"), the indemnifying party will not have the right to direct
the defense of such action on behalf of such indemnified party with respect to
such Conflicting Matter or Specific Performance Matter, and the indemnified
party shall direct the defense of the portion of such claim that constitutes a
Conflicting Matter or Specific Performance Matter through counsel (including a
local counsel, if necessary) of its choosing, at the expense of the indemnified
party. Should the indemnifying party so elect to assume the defense of a Third
Party Claim, the indemnifying party shall not be liable to the indemnified party
for legal expenses subsequently incurred by the indemnified party in connection
with the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. Notwithstanding the foregoing, the indemnifying party
shall be liable for the fees and expenses of counsel employed by the indemnified
party for any period during which the indemnifying party has failed to assume
the defense thereof (other than during the period prior to the time the
indemnified party shall have given notice of the Third Party Claim as provided
above).
If the indemnifying party so elects to assume the defense of any Third
Party Claim, the indemnified party shall cooperate with the indemnifying party
in the defense or prosecution thereof. Such cooperation shall include the
retention and (upon the indemnifying party's request) the provision to the
indemnifying party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party shall have assumed the defense
of a Third Party Claim, the indemnified party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the indemnifying party's prior written consent (which consent shall not be
unreasonably withheld). If the indemnifying party shall have assumed the defense
of a Third Party Claim, the indemnified party shall agree to any settlement,
compromise or discharge of a Third Party Claim which the indemnifying party may
recommend and which by its terms obligates the indemnifying party to pay the
full amount of the liability in connection with such Third Party Claim, which
releases the indemnifying party completely in connection with such Third Party
Claim and which would not otherwise adversely affect the Indemnified Party.
(c) Procedures Unique to Tax Claims. With respect to any claim
-------------------------------
made by any taxing authority (a "Tax Claim") covered by Section 3(a) hereof, the
Representative shall control all proceedings and may make all decisions taken in
connection with such Tax Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any taxing
authority with respect thereto, and may, in its sole discretion, either pay the
Tax claimed and xxx for a refund where applicable law permits such refund suits
or contest the Tax
17
Claim in any permissible manner; provided, however, that the Representative must
first consult in good faith with RSI before taking any action with respect to
the conduct of a Tax Claim. Notwithstanding the foregoing, (i) the
Representative shall not settle any Tax Claim without the prior written consent
of RSI, which consent shall not be unreasonably withheld, (ii) RSI, and counsel
of its own choosing, shall have the right to participate fully in all aspects of
the defense of such Tax Claim, (iii) the Representative shall inform RSI,
reasonably promptly in advance, of the date, time and place of all
administrative and judicial meetings, conferences, hearings and other
proceedings relating to such Tax Claim, (iv) RSI shall be entitled to have its
representatives (including counsel, accountants and consultants) attend and
participate in any such administrative and judicial meetings, conferences,
hearings and other proceedings relating to such Tax Claim and (v) the
Representative shall provide to RSI all information, document requests and
responses, proposed notices of deficiency, notices of deficiency, revenue
agent's reports, protests, petitions and any other documents relating to such
Tax Claim promptly upon receipt from, or in advance of submission to (as the
case may be), the relevant taxing authority.
With respect to any Tax Claim covered by Section 3(b) hereof, RSI
shall control all proceedings and may make all decisions taken in connection
with such Tax Claim (including selection of counsel) and, without limiting the
foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any taxing
authority with respect thereto, and may, in its sole discretion, either pay the
Tax claimed and xxx for a refund where applicable law permits such refund suits
or contest the Tax Claim in any permissible manner; provided, however, that RSI
must first consult in good faith with the Representative before taking any
action with respect to the conduct of a Tax Claim. Notwithstanding the
foregoing, (i) RSI shall not settle any Tax Claim without the prior written
consent of the Representative, which consent shall not be unreasonably withheld,
(ii) the Representative, and counsel of its own choosing, shall have the right
to participate fully in all aspects of the defense of such Tax Claim, (iii) RSI
shall inform the Representative, reasonably promptly in advance, of the date,
time and place of all administrative and judicial meetings, conferences,
hearings and other proceedings relating to such Tax Claim, (iv) the
Representative shall be entitled to have its representatives (including counsel,
accountants and consultants) attend and participate in any such administrative
and judicial meetings, conferences, hearings and other proceedings relating to
such Tax Claim and (v) RSI shall provide to the Representative all information,
document requests and responses, proposed notices of deficiency, notices of
deficiency, revenue agent's reports, protests, petitions and any other documents
relating to such Tax Claim promptly upon receipt from, or in advance of
submission to (as the case may be), the relevant taxing authority.
The Representative and RSI shall jointly control and participate in
all proceedings taken in connection with any Tax Claim relating to Taxes of HQGW
and its Subsidiaries for a Straddle Period. Neither the Representative nor RSI
shall settle any such Tax Claim without the prior written consent of the other.
RSI, on the one hand, and each Shareholder, on the other hand, shall,
reasonably cooperate in contesting any Tax Claim, which cooperation shall
include the retention and, upon
18
request, the provision to the requesting person of records and information which
are reasonably relevant to such Tax Claim, and making employees available on a
mutually convenient basis to provide additional information or explanation of
any material provided hereunder or to testify at proceedings relating to such
Tax Claim.
8. Escrow Disbursements in Respect of Valid Claims.
-----------------------------------------------
(a) Upon receipt of (i) a written notice signed jointly by a
duly authorized officer of the Representative and a duly authorized officer of
RSI or (ii) a certified copy of a final, non-appealable judgment of a court of
competent jurisdiction accompanied by a certificate of the prevailing party
reasonably satisfactory to the Escrow Agent to the effect that said judgment is
final and non-appealable, specifying the amount of Loss to be paid by RSI or the
Shareholders, as the case may be, the Escrow Agent shall distribute to the RSI
Indemnitee or the Shareholder Indemnitee, as the case may be, from the Escrow
Account, a number of Indemnification Shares (each such share being deemed to
have a value equal to the Market Value) and any Cash Collateral equal in value
to such Shareholders' or RSI's, as the case may be, share of the total amount of
Loss specified in such notice, which notice shall take into account the
limitations set forth in Section 5(b) hereof. If the Indemnification Shares
(based on the Market Value) and Cash Collateral contributed by a Shareholder or
RSI remaining in the Escrow Account are insufficient to satisfy such
Shareholder's or RSI's share of the total amount of Loss specified in such
notice, the Escrow Agent shall distribute to the RSI Indemnitee or the
Shareholder Indemnitee, as the case may be, all remaining Indemnification Shares
and Cash Collateral deposited by such Shareholder or RSI, as the case may be,
held in the Escrow Account in accordance with written instructions from the RSI
Indemnitee or Shareholder Indemnitee, as the case may be, upon which the Escrow
Agent shall be entitled to conclusively rely.
(b) Notwithstanding anything herein to the contrary, to the
extent that Indemnification Shares and/or Cash Collateral are to be distributed
to the RSI Indemnitee or the Shareholder Indemnitee, as the case may be, to pay
a Loss, in the absence of instructions pursuant to the proviso to this sentence
(of which the Escrow Agent shall have no duty or obligation to inquire about)
given through written notice to the Escrow Agent by the Shareholder or RSI with
respect to the Indemnification Shares and Cash Collateral in the Escrow Account,
the Escrow Agent will satisfy the portion of such Loss payable by such
Shareholder or RSI, as the case may be, (i) first, by distributing to the RSI
Indemnitee or the Shareholder Indemnitee, as the case may be, the
Indemnification Shares deposited by such Shareholder or RSI, as the case may be,
in the Escrow Account on the Closing Date, and (ii) second, by distributing any
Cash Collateral deposited by such Shareholder or RSI, as the case may be, in the
Escrow Account; provided, that any Shareholder or RSI, as the case may be, by
written notice to the Escrow Agent, may direct that Cash Collateral referred to
in clause (ii) above be distributed from the Escrow Account prior to the
distribution of Indemnification Shares. This provision shall be controlling at
all times unless such instructions have been received prior to such
distributions.
(c) In each case in which a party seeks the delivery by the
Escrow Agent of Indemnification Shares pursuant to this Agreement, such party
shall provide to the
19
Escrow Agent all information, to the extent applicable, with respect to the
transfer agent thereof, including without limitation, the name and contact
person.
9. Final Distribution. At the close of business on June 30, 2001,
------------------
any Indemnification Shares and Cash Collateral remaining in the Escrow Account
shall be returned in whole or in part by the Escrow Agent to the respective
Shareholders or RSI who contributed such Indemnification Shares or Cash
Collateral upon and to the extent set forth in a joint notification by the
Representative and RSI.
10. Limitation of Duties. The duties, responsibilities and
--------------------
obligations of Escrow Agent shall be limited to those expressly set forth herein
and no duties, responsibilities or obligations shall be inferred or implied.
Escrow Agent shall not be subject to, nor required to comply with, any other
agreement between or among any or all of the Depositors or to which any
Depositor is a party, even though reference thereto may be made herein, or to
comply with any direction or instruction (other than those contained herein or
delivered in accordance with this Agreement) from any Depositor or an entity
acting on its behalf. Escrow Agent shall not be required to expend or risk any
of its own funds or otherwise incur any financial or other liability in the
performance of any of its duties hereunder.
11. Legal Process. (a) If at any time Escrow Agent is served with
-------------
any judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process which in any way affects the Escrow Property
(including but not limited to orders of attachment or garnishment or other forms
of levies or injunctions or stays relating to the transfer of the Escrow
Property), Escrow Agent is authorized to comply therewith in any manner it or
legal counsel of its own choosing deems appropriate; and if Escrow Agent
complies with any such judicial or administrative order, judgment, decree, writ
or other form of judicial or administrative process, Escrow Agent shall not be
liable to any of the parties hereto or to any other person or entity even though
such order, judgment, decree, writ or process may be subsequently modified or
vacated or otherwise determined to have been without legal force or effect.
Escrow Agent shall not be liable for any action taken or omitted or for any loss
or injury resulting from its actions or its performance or lack of performance
of its duties hereunder in the absence of gross negligence or willful misconduct
on its part. In no event shall Escrow Agent be liable (i) for acting in
accordance with or relying upon any instruction, notice, demand, certificate or
document from any Depositor or any entity acting on behalf of any Depositor,
(ii) for any indirect, consequential, punitive or special damages, regardless of
the form of action and whether or not any such damages were foreseeable or
contemplated, (iii) for the acts or omissions of its nominees, correspondents,
designees, agents, subagents or subcustodians, (iv) for the investment or
reinvestment of any cash held by it hereunder, in each case in good faith, in
accordance with the terms hereof, including without limitation any liability for
any delays (not resulting from its gross negligence or willful misconduct) in
the investment or reinvestment of the Escrow Property, or any loss of interest
incident to any such delays, or (v) for an amount in excess of the value of the
Escrow Property, valued as of the date of deposit, but only to the extent of
direct money damages.
20
(b) Escrow Agent may consult with its legal counsel as to any matter
relating to this Agreement, and Escrow Agent shall not incur any liability in
acting in good faith in accordance with any advice from such counsel.
(c) Escrow Agent shall not incur any liability for not performing any act
or fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of Escrow Agent (including but not limited to any
act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or facsimile or other wire or communication facility).
(d) The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person purporting
to give receipt or advice to make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
12. Authority; Validity. Escrow Agent shall not be responsible in
-------------------
any respect for the form, execution, validity, value or genuineness of documents
or securities deposited hereunder, or for any description therein, or for the
identity, authority or rights of persons executing or delivering or purporting
to execute or deliver any such document, security or endorsement. The Escrow
Agent shall not be called upon to advise any party as to the wisdom in selling
or retaining or taking or refraining from any action with respect to any
securities or other property deposited hereunder.
13. Duty of Care. The Escrow Agent shall not be under any duty to
------------
give the Escrow Property held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any funds
held hereunder except as directed in this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest.
14. Liability to Escrow Agent. Depositors, jointly and severally,
-------------------------
shall be liable for and shall reimburse and indemnify Escrow Agent (and any
predecessor Escrow Agent) and hold Escrow Agent harmless from and against any
and all claims, losses, actions. liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively "Escrow Agent
Losses") arising from or in connection with its administration of this
Agreement, except to the extent such Escrow Agent Losses are caused by its own
gross negligence or willful misconduct. In addition, when the Escrow Agent acts
on any information, instructions or communications, (including, but not limited
to, communications with respect to the delivery of securities or the wire
transfer of funds) sent by telex or facsimile, the Escrow Agent, absent gross
negligence, shall not be responsible or liable in the event such communication
is not an authorized or authentic communication of the Depositor(s) or is not in
the form the Depositor(s) sent or intended to send (whether due to fraud,
distortion or otherwise). The Depositor(s) shall
21
jointly and severally indemnify the Escrow Agent against any Loss it may incur
with its acting in accordance with any such communication. This paragraph shall
survive the termination of this Agreement or the removal of the Escrow Agent.
15. Disputes; Ambiguities. (a) In the event of any ambiguity or
---------------------
uncertainty hereunder or in any notice, instruction or other communication
received by Escrow Agent hereunder, Escrow Agent may, in its sole discretion,
refrain from taking any action other than retain possession of the Escrow
Property, unless Escrow Agent receives written instructions, signed by the
Representative and RSI, which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or
among the Depositors with respect to any Escrow Property, Escrow Agent shall be
entitled, in its sole discretion, to refuse to comply with any and all claims,
demands or instructions with respect to such Escrow Property so long as such
dispute or conflict shall continue, and Escrow Agent shall not be or become
liable in any way to the Depositors for failure or refusal to comply with such
conflicting claims, demands or instructions. Escrow Agent shall be entitled to
refuse to act until, in its sole discretion, either (i) such conflicting or
adverse claims or demands shall have been determined by a final order, judgment
or decree of a court of competent jurisdiction, which order, judgment or decree
is not subject to appeal, or settled by agreement between the conflicting
parties as evidenced in a writing satisfactory to Escrow Agent or (ii) Escrow
Agent shall have received security or an indemnity satisfactory to it sufficient
to hold it harmless from and against any and all Escrow Agent Losses which it
may incur by reason of so acting. The Escrow Agent shall act on such court
order without further question. Escrow Agent may, in addition, elect, in its
sole discretion, to commence an interpleader action or seek other judicial
relief or orders as it may deem, in its sole discretion, necessary. The costs
and expenses (including reasonable attorneys' fees and expenses) incurred in
connection with such proceeding shall be paid by, and shall be deemed a joint
and several obligation of, the Depositors.
(c) The Escrow Agent shall have no responsibility for the contents of
any writing of the arbitrators or any third party contemplated herein as a means
to resolve disputes and may conclusively rely without any liability upon the
contents thereof.
16. Interest in Escrow Property. The Escrow Agent does not have any
---------------------------
interest in the Escrow Property deposited hereunder but is serving as escrow
holder only and having only possession thereof. The Depositors shall pay or
reimburse the Escrow Agent upon request for any transfer taxes or other taxes
relating to the Escrow Property incurred in connection herewith and shall
indemnify and hold harmless the Escrow Agent from any amounts that it is
obligated to pay in the way of such taxes. Any payments of income from the
Escrow Account shall be subject to withholding regulations then in force with
respect to United States taxes. The Depositors will provide the Escrow Agent
with appropriate W-9 forms for tax I.D., number certifications, or W-8 forms for
non-resident alien certifications. This paragraph shall survive notwithstanding
any termination of this Agreement or the resignation or removal of the Escrow
Agent.
17. Due Authorization. Each Depositor hereby represents and warrants
-----------------
(a) that this Agreement has been duly authorized, executed and delivered on its
behalf and
22
constitutes its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Agreement by the Depositor(s) does not and will
not violate any applicable law or regulation.
18. Payments to Escrow Agent. At the time of execution of this
------------------------
Agreement, Depositors shall pay Escrow Agent an acceptance fee of $10,000. In
addition, Depositors shall pay Escrow Agent a fee of $60,000 per annum or part
thereof payable upon execution of this Agreement and thereafter on each
anniversary date of this Agreement and Depositors agree to reimburse the Escrow
Agent for all reasonable expenses, disbursements and advances incurred or made
by the Escrow Agent in performance of its duties hereunder (including reasonable
fees, expenses and disbursements of its counsel). The obligations contained in
this Section shall be a joint and several obligation of the Depositors. Without
limiting the rights of the Escrow Agent under the preceding sentence, RSI, on
the one hand, and the Shareholders, on the other hand, agree as between
themselves that all fees and related expenses of the Escrow Agent hereunder
(including fees of its legal counsel) shall be paid one-half by RSI and one-half
by the Shareholders.
19. Fractional Shares. No fractional shares shall be delivered to
-----------------
satisfy any claims. If the Indemnification Shares to be so delivered from the
Escrow Account in respect of any Shareholder or RSI, as the case may be, would
include a fractional share, the parties hereto agree that the Representative and
RSI may round such fraction to the nearest whole share.
20. Notices. All notices or other communications required or
-------
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
shall be deemed given when so delivered by hand, telexed, cabled or telecopied,
or if mailed, three days after mailing (one business day in the case of express
mail or overnight courier service), as follows:
If to the Shareholders:
At the address set forth opposite
such Shareholder's name on the
signature page hereto
with a copy to:
Xxxxx & Xxxxxxx, L.L.P.,
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Xxxxx Xxxxxx; and
If to RSI:
23
Reckson Service Industries, Inc.
00 Xxxx 00/xx/ Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
with copies to:
Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
J. Xxxxxx Xxxxxxx
If to the Escrow Agent:
Global Agency and Trust Services Department
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Carmina Day
or such other address as any party may from time to time specify by written
notice to the other parties hereto.
21. No Assignment or Benefit to Third Parties. This Agreement may
-----------------------------------------
not be assigned by operation of law or otherwise, except by RSI to one or more
entities controlled by RSI (with RSI remaining responsible for its obligations
under this Agreement). Notwithstanding the foregoing, the rights or duties of
each of the parties under this Agreement may be assigned by such party in
connection with a sale of all or substantially all of its assets or a merger,
consolidation or other similar business combination transaction. Nothing
expressed or implied in this Agreement is intended, nor shall be construed, to
confer (a) any rights, remedies, obligations or liabilities, legal or equitable,
other than as provided in this Agreement or (b) otherwise constitute any person
(other than the Representative) a third party beneficiary under or by reason of
this Agreement (it being acknowledged that the Representative is a third party
beneficiary of this Agreement and is entitled to enforce the relevant provisions
of this Agreement, including Section 4(b)(ZZZ) on behalf of Holdco).
22. Headings. The headings of the Sections of this Agreement are for
--------
convenience only and do not constitute a part of this Agreement.
23. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become
24
effective when one or more counterparts have been signed by each party and
delivered to the others.
24. Applicable Law. This Agreement shall be construed and enforced
--------------
in accordance with, and governed by the laws of the State of New York, without
application of any choice of law provisions that would apply any law other than
the laws of New York.
25. Several Liability. Anything in this Agreement to the contrary
-----------------
notwithstanding, the representations, warranties, covenants and agreements of
the Shareholders set forth herein are several and not joint, except with respect
to any obligations due and payable to the Escrow Agent.
26. Powers of the Representative. Each Shareholder by executing
----------------------------
this Agreement hereby appoints CarrAmerica as such Shareholder's agent and
attorney in fact (the "Representative") hereunder with full irrevocable power
and authority in the place and stead of such Shareholder and in the name of such
Shareholder to take any and all actions, and to execute any and all instruments
and other documents, which in the sole judgment of the Representative are
necessary or appropriate in handling claims for Losses made pursuant to Section
3, 4(a)(W), 4(a)(X) and 4(b) of this Agreement. Said power of attorney shall
not be affected by the subsequent incapacity of any Shareholder. Without
limiting the generality of the foregoing, each of the Shareholders agrees that
the Representative (1) has full power and authority to take such action on
behalf of the Shareholders with respect to any Indemnification Shares and Cash
Collateral held by the Escrow Agent and with respect to any and all claims for
Losses (including, without limitation, any decisions to accept or to challenge
any claims for Losses) as the Representative in its sole discretion may
determine (except to the extent that this Agreement provides for any action with
respect to such Indemnification Shares or Cash Collateral to be taken by the
Shareholders themselves) and (2) shall represent the Shareholders for all
purposes in connection with the claims specified above, including the receipt of
notices and the exercise or wavier of any rights with respect to RSI's
obligations under this Agreement, and resolution of disputes or uncertainties
arising hereunder and thereunder (except to the extent that any such agreement
expressly provides for any action to be taken or other matter to be dealt with
by the Shareholders themselves). The Representative shall forward the
Shareholders copies of all notices of Claims received from any RSI Indemnitee
and of the disposition of all such Claims. The Shareholders also agree that the
Shareholders shall be bound by all decisions of the Representative pursuant to
the authority granted hereunder, and that such authority may not be revoked
during the term of this Agreement.
Except as expressly set forth in this Agreement, it is understood that
the Representative is not assuming any responsibility or liability to any person
by virtue of the powers granted by the Shareholders hereby. The Representative
shall not make any representations with respect to and shall have no
responsibility for the transactions contemplated by the Merger Agreement, the
Stock Purchase Agreement or the UK Agreement or any aspect thereof except as
expressly set forth in such agreements. The Representative shall not be liable
to any other Shareholder for any error of judgment or for any act done or
omitted or for any
25
mistake of fact or law except for such Representative's own gross negligence or
bad faith. Each Shareholder agrees to indemnify the Representative and to hold
the Representative harmless against any loss, claim, damage or liability
incurred by him arising out of or in connection with acting as the
Representative pursuant to this Agreement, as well as the cost and expense of
investigating and defending against any such loss, claim, damage or liability,
except to the extent such loss, claim, damage or liability is due to the gross
negligence or bad faith of the Representative. Each Shareholder agrees that the
Representative may consult with counsel of its own choice (who may be counsel
for CarrAmerica or any affiliate thereof) and it shall have full and complete
authorization and protection for any action taken or suffered by it hereunder in
good faith and in accordance with the opinion of such counsel. It is understood
that the Representative may, without breaching any express or implied obligation
to any Shareholder hereunder, release, amend or modify any other power of
attorney granted by any other person under any related agreement.
27. Litigation Costs. If any litigation with respect to the
----------------
obligations of the parties under this Agreement results in a final nonappealable
order of a court of competent jurisdiction that results in a final disposition
of such litigation, the prevailing party, as determined by the court ordering
such disposition, shall be entitled to reasonable attorneys' fees as shall be
determined by such court. contingent or other percentage compensation
arrangements shall not be considered reasonable attorneys' fees.
28. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY
--------------------
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.
29. Amendment. This Agreement may be amended by written agreement
---------
signed by the Escrow Agent (other than Sections 3 through 7 inclusive), RSI, the
Representative and each Shareholder that would be adversely affected by such
amendment.
30. Waiver. Any party to this Agreement may extend the time for the
------
performance of any of the obligations or other acts of any other party hereto,
or waive compliance with any of the agreements of any other party or with any
condition to the obligations hereunder, in each case only to the extent that
such obligations, agreements and conditions are intended for its benefit, each
Shareholder hereby severally agreeing that any such extension or waiver by such
Shareholder may be given by the Representative and each Shareholder hereby
severally confirming that it has appointed the Representative as its attorney-
in-fact to give any such extension or waiver on behalf of such Shareholder.
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
CARRAMERICA REALTY
CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
STRATEGIC OMNI INVESTORS LLC
By: /s/ Xxxx X. Xxxxx
------------------
Name: Xxxx X. Louis
Title: Attorney-in-Fact
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxx X. Xxxxx
------------------
Name: Xxxx X. Louis
Title: Attorney-in-Fact
THE XXXXXX XXXX COMPANY
By: /s/ Xxxx X. Louis
------------------
Name: Xxxx X. Xxxxx
Title: Attorney-in-Fact
27
XXXX HOLDINGS LLC
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Louis
Title: Attorney-in-Fact
Escrow Agent:
CITIBANK, N.A.
By: /s/ Xxxxxxx Xxxxx Day
---------------------
Name: Xxxxxxx Xxxxx Day
Title: Assistant Vice President
Additional Indemnitors Listed on Schedule B
By: /s/ Xxxx X. Xxxxx
------------------
Name: Xxxx X. Louis
Title: Attorney-in-Fact
28
