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EXHIBIT 10.7
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into as of
__________________, 1997, by and between Equity Office Properties Trust
("EOP"), a Maryland real estate investment trust, and (the "Indemnitee").
WHEREAS, the Indemnitee is an officer or a member of the Board of Trustees
of EOP and in such capacity is performing a valuable service for EOP;
WHEREAS, the law of EOP's state of organization permits EOP to enter into
contracts with its officers or members of its Board of Trustees with respect to
indemnification of such persons; and
WHEREAS, to induce the Indemnitee to continue to provide services to EOP
as an officer or a member of the Board of Trustees, and to provide the
Indemnitee with specific contractual assurance that indemnification will be
available to the Indemnitee regardless of, among other things, any amendment to
or revocation of EOP's Amended and Restated Declaration of Trust ("Declaration
of Trust"), or any acquisition transaction relating to EOP, EOP desires to
provide the Indemnitee with protection against personal liability.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, EOP and the Indemnitee hereby agree as follows:
1. DEFINITIONS.
For purposes of this Agreement:
(A) "Change in Control" shall mean a change in the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of EOP, or any successor in
interest thereto, whether through the ownership of voting
securities, by contract or otherwise, including but not limited to a
change which would be required to be reported under Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 as in effect on the date hereof (the "Exchange
Act") or as may otherwise be determined pursuant to a resolution of
the Board of Trustees. A rebuttable presumption of a Change in
Control shall be created by any of the following which first occur
after the date hereof and EOP shall have the burden of proof to
overcome such presumption:
i. the ability of any "Person" (as such term is
defined in Sections 13(d) and 14(d) of the Exchange Act)
together with an "Affiliate" or "Associate" (as defined in
Rule 12b-2 of the Exchange Act) or "Group" (within the
meaning of Section 13(d)(3) of the Exchange Act) to exercise
or direct the exercise of 20% or more of the combined voting
power of all outstanding shares of beneficial interest of EOP
in the election of its trustees ("Interested Party")
(provided, however, "Interested Party" shall not include an
agent,
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broker, nominee, custodian or trustee, solely in their
capacity as such, for one or more persons who do not
individually or as a group possess such power),
ii. during any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board of Trustees of EOP cease for any reason to
constitute at least a majority thereof, unless the election
of each trustee who was not a trustee at the beginning of
such period has been approved in advance by the trustees
representing two-thirds of the trustees then in office who
were the trustees at the beginning of the period,
iii. the approval of the shareholders of EOP of:
(a) a merger or consolidation of EOP
with any Interested Party,
(b) any sale, lease, exchange,
mortgage, pledge, transfer, or other disposition, to
or with any Interested Party in any transaction or
series of transactions, of EOP's assets or the assets
of any subsidiary of EOP having a market value equal
to 10% or more of the aggregate market value of all
assets of EOP determined on a consolidated basis, all
outstanding shares of beneficial interest of EOP, or
the earning power or net income of EOP, determined on
a consolidated basis,
(c) the issuance or transfer by EOP,
or any subsidiary thereof, to any Interested Party in
any transaction or a series of transactions, of
capital securities with a value equal to 5% or more of
the aggregate market value of the then outstanding
voting shares of beneficial interest of EOP other than
the issuance or transfer of such shares of beneficial
interest to all EOP shareholders on a pro rata basis,
(d) the adoption of any plan or
proposal for the partial or complete liquidation or
dissolution of EOP proposed by an Interested Party or
pursuant to any agreement, arrangement or
understanding, whether or not in writing, with any
Interested Party, or
(e) any reclassification of
securities, including, without limitation, any share
split, share dividend, or other distributions of
shares, or any reverse share split,
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recapitalization of EOP, or any merger or
consolidation of EOP with any subsidiary thereof, or
any other transaction proposed by, or pursuant to,
any agreement, arrangement, or understanding, whether
or not in writing, with any Interested Party which
has the effect, directly or indirectly, of increasing
the proportionate voting shares of beneficial
interest of EOP directly or indirectly owned by any
such Interested Party, or
iv. any receipt by any Interested Party, directly
or indirectly, of any loans, advances, guarantees, pledges or
other financial assistance, or any tax credits or other tax
advantages provided by or through EOP other than the receipt
of such advantages which are provided to all EOP shareholders
on a pro rata basis.
(B) "Corporate Status" describes the status of a person who is or
was a trustee, officer, employee, agent or fiduciary of EOP or of
any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise (whether conducted for profit or
not for profit) which such person is or was serving at the request
of EOP.
(C) "Disinterested Trustee" means a trustee of EOP who is not and
was not a party to the Proceeding (as hereinafter defined) in
respect of which indemnification is sought by the Indemnitee.
(D) "Effective Date" means the date of this Agreement as set
forth above.
(E) "Expenses" shall include all attorneys and paralegals' fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(F) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, or in the past two (2) years has been, retained to
represent (i) EOP or the Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving rise to
a claim for indemnification hereunder.
(G) "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation,
administrative hearing, or any other proceeding, including appeals
therefrom, whether civil, criminal,
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administrative, or investigative, except one initiated by the
Indemnitee pursuant to paragraph 8 of this Agreement to enforce
such Indemnitee's rights under this Agreement.
2. INDEMNIFICATION - GENERAL
The Indemnitee shall be entitled to the rights of indemnification
provided in this paragraph 2 and under applicable law, the Amended and
Restated Declaration of Trust, EOP's Bylaws, any agreement, a vote of
shareholders or resolution of the Board of Trustees or otherwise if, by
reason of such Indemnitee's Corporate Status, such Indemnitee is, or is
threatened to be made, a party to any threatened, pending, or completed
Proceeding, including a Proceeding by or in the right of EOP. Unless
prohibited by paragraph 13 hereof, the Indemnitee shall be indemnified
against Expenses, judgments, penalties, fines, and settlement amounts
actually and reasonably incurred by or on behalf of such Indemnitee in
connection with such Proceeding or any claim, issue or matter therein.
3. EXPENSES OF A SUCCESSFUL PARTY
Without limiting the effect of any other provision of this Agreement, to
the extent that the Indemnitee is, by reason of such Indemnitee's
Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding pursuant to a final non-appealable order,
such Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by or on behalf of such Indemnitee in connection
therewith. If the Indemnitee is not wholly successful in such Proceeding
pursuant to a final non-appealable order but is successful, on the merits
or otherwise, as to one or more but less than all claims, issues, or
matters in such Proceeding pursuant to a final non-appealable order, EOP
shall indemnify the Indemnitee against all Expenses actually and
reasonably incurred by or on behalf of such Indemnitee in connection with
each successfully resolved claim, issue or matter. For purposes of this
paragraph and without limitation, the termination of any claim, issue or
matter in such Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such claim, issue or matter.
4. WITNESS EXPENSES
Notwithstanding any other provision of this Agreement, to the extent that
the Indemnitee is, by reason of such Indemnitee's Corporate Status, a
witness for any reason in any Proceeding to which such Indemnitee is not
a party, such Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by or on behalf of such Indemnitee in
connection therewith.
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5. ADVANCES
EOP shall advance all reasonable Expenses incurred by or on behalf of the
Indemnitee in connection with any Proceeding within twenty (20) days
after the receipt by EOP of a statement from the Indemnitee requesting
such advance from time to time, whether prior to or after final
disposition of such Proceeding. Such statement shall reasonably evidence
the Expenses incurred by the Indemnitee and shall include or be preceded
or accompanied by an undertaking by or on behalf of the Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified against such Expenses.
6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
(A) To obtain indemnification under this Agreement, the
Indemnitee shall submit to EOP a written request, including
therewith such documentation and information reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification.
(B) Upon such written request pursuant to subparagraph 6(A), a
determination with respect to the Indemnitee's entitlement thereto
shall be made in the specific case: (i) if a Change in Control
shall have occurred, by Independent Counsel in a written opinion to
the Board of Trustees, a copy of which shall be delivered to the
Indemnitee (unless the Indemnitee shall request that such
determination be made by the Board of Trustees or the shareholders
of EOP, in which case by the person or persons or in the manner
provided in clauses (ii) or (iii) of this paragraph 6(B)); (ii) if a
Change in Control shall not have occurred, (A) by the Board of
Trustees by a majority vote of a quorum consisting of Disinterested
Trustees, or (B) if a quorum of the Board of Trustees consisting of
Disinterested Trustees is not obtainable, or, even if obtainable, if
such quorum of Disinterested Trustees so directs, by Independent
Counsel in a written opinion to the Board of Trustees, a copy of
which shall be delivered to the Trustee, or (C) by the shareholders
of EOP; or (iii) as provided in paragraph 7(B) of this Agreement.
If it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten
(10) days after such determination.
(C) The Indemnitee shall cooperate with the person or entity
making such determination with respect to the Indemnitee's
entitlement to indemnification, including providing upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to the Indemnitee and reasonably necessary to
such determination. Any costs or expenses (including attorneys'
fees and disbursements) incurred by
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the Indemnitee in so cooperating shall be borne by EOP
(irrespective of the determination as to the Indemnitee's
entitlement to indemnification) and EOP hereby indemnifies and
agrees to hold the Indemnitee's harmless therefrom.
(D) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
paragraph 6(B) hereof, the Independent Counsel shall be selected as
provided in this paragraph 6(D). If a Change in Control shall not
have occurred, the Independent Counsel shall be selected by the
Board of Trustees, and EOP shall give written notice to the
Indemnitee advising such Indemnitee of the identity of the
Independent Counsel so selected. If a Change in Control shall have
occurred, the Independent Counsel shall be selected by the
Indemnitee (unless the Indemnitee shall request that such selection
be made by the Board of Trustees, in which event the preceding
sentence shall apply), and the Indemnitee shall give written notice
to EOP advising it of the identity of the Independent Counsel so
selected. In either event, the Indemnitee, or EOP, as the case may
be, may, within seven (7) days after such written notice of
selection shall have been given, deliver to EOP or to the
Indemnitee, as the case may be, a written objection to such
selection. Such objection may be asserted only on the grounds that
the Independent Counsel so selected does not meet the requirements
of "Independent Counsel" as defined in paragraph 1 of this
Agreement. If such written objection is made, the Independent
Counsel so selected may not serve as Independent Counsel until a
court has determined that such objection is without merit. If,
within twenty (20) days after submission by the Indemnitee of a
written request for indemnification pursuant to paragraph 6(A)
hereof, no Independent Counsel shall have been selected or, if
selected, shall have been objected to, either EOP or the Indemnitee
may petition a court for resolution of any objection which shall
have been made by EOP or the Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as
the court shall designate, and the person with respect to whom an
objection is so resolved or the person so appointed shall act as
Independent Counsel under paragraph 6(B) hereof. EOP shall pay all
reasonable fees and expenses of Independent Counsel incurred in
connection with acting pursuant to paragraph 6(B) hereof, and all
reasonable fees and expenses incident to the selection of such
Independent Counsel pursuant to this paragraph 6(D). In the event
that a determination of entitlement to indemnification is to be made
by Independent Counsel and such determination shall not have been
made and delivered in a written opinion within ninety (90) days
after the receipt by EOP of the Indemnitee's request in accordance
with paragraph 6(A), upon the due commencement of any judicial
proceeding in accordance with paragraph
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8(A) of this Agreement, Independent Counsel shall be discharged
and relieved of any further responsibility in such capacity.
7. PRESUMPTIONS
(A) In making a determination with respect to entitlement or
indemnification hereunder, the person or entity making such
determination shall presume that the Indemnitee is entitled to
indemnification under this Agreement and EOP shall have the burden
of proof to overcome such presumption.
(B) If the person or entity making the determination whether the
Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by EOP of the
request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and the Indemnitee
shall be entitled to such indemnification, absent: (i) a
misstatement by the Indemnitee of a material fact, or an omission of
a material fact necessary to make the Indemnitee's statement not
materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law. Such sixty (60)-day period may be extended for a
reasonable time, not to exceed an additional thirty (30) days, if
the person or entity making said determination in good faith
requires additional time for the obtaining or evaluating of
documentation and/or information relating thereto. The foregoing
provisions of this paragraph 7(B) shall not apply: (i) if the
determination of entitlement to indemnification is to be made by the
shareholders and if within fifteen (15) days after receipt by EOP of
the request for such determination the Board of Trustees resolves to
submit such determination to the shareholders for consideration at
an annual or special meeting thereof to be held within seventy-five
(75) days after such receipt and such determination is made at such
meeting, or (ii) if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
paragraph 6(B) of this Agreement.
(C) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement, or conviction, or
upon a plea of nolo contendere or its equivalent, shall not (except
as otherwise expressly provided in this Agreement) of itself
adversely affect the right of the Indemnitee to indemnification.
8. REMEDIES
(A) In the event that: (i) a determination is made that the
Indemnitee is not entitled to indemnification under this Agreement,
or (ii) advancement of Expenses is not timely made pursuant to this
Agreement, or (iii) payment
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of indemnification due the Indemnitee under this Agreement is not
timely made, the Indemnitee shall be entitled to an adjudication
in an appropriate court of competent jurisdiction of such
Indemnitee's entitlement to such indemnification or advancement of
Expenses.
(B) In the event that a determination shall have been made
pursuant to this Agreement that the Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this
paragraph 8 shall be conducted in all respects as a de novo trial,
on the merits and the Indemnitee shall not be prejudiced by reason
of that adverse determination. In any judicial proceeding or
arbitration commenced pursuant to this paragraph 8, EOP shall have
the burden of proving that the Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(C) If a determination shall have been made or deemed to have
been made pursuant to this Agreement that the Indemnitee is entitled
to indemnification, EOP shall be bound by such determination in any
judicial proceeding commenced pursuant to this paragraph 8, absent:
(i) a misstatement by the Indemnitee of a material fact, or an
omission of a material fact necessary to make the Indemnitee's
statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
(D) EOP shall be precluded from asserting in any judicial
proceeding commenced pursuant to this paragraph 8 that the
procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court that EOP is
bound by all the provisions of this Agreement.
(E) In the event that the Indemnitee, pursuant to this paragraph
8, seeks a judicial adjudication of such Indemnitee's rights under,
or to recover damages for breach of, this Agreement, if successful
in whole or in part, the Indemnitee shall be entitled to recover
from EOP, and shall be indemnified by EOP against, any and all
Expenses actually and reasonably incurred by such Indemnitee in such
judicial adjudication.
9. ESTABLISHMENT OF TRUST
In the event of a Change in Control, EOP shall, upon written request by
the Indemnitee, create a trust for the benefit of the Indemnitee
("Trust") and from time-to-time upon written request by the Indemnitee,
shall fund such Trust in an amount sufficient to satisfy any and all
Expenses, judgments, penalties, fines and settlement amounts actually and
reasonably incurred by or on behalf of such Indemnitee or claimed,
reasonably anticipated or proposed to be paid in
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accordance with the terms of this Agreement. The amount to be deposited
in the Trust pursuant to the foregoing funding obligation shall be
determined by Independent Counsel. The terms of the Trust shall provide
that upon a Change in Control: (i) the Trust shall not be revoked or the
principal thereof invaded, without the prior written consent of the
Indemnitee, (ii) the trustee of the Trust ("Trustee") shall advance,
within two business days of a request by the Indemnitee and in accordance
with paragraph 5 of this Agreement, any and all Expenses to the
Indemnitee, (iii) the Trust shall continue to be funded by EOP in
accordance with the funding obligation set forth above, (iv) the Trustee
shall promptly pay to the Indemnitee all amounts for which the Indemnitee
shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (v) all unexpended funds in such Trust shall revert to EOP
upon a final determination by Independent Counsel that the Indemnitee has
been fully indemnified under the terms of this Agreement. The Trustee
shall be chosen by the Indemnitee and agreed to by EOP. Nothing in this
Section 9 shall relieve EOP of any of its obligations under this
Agreement.
10. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE SUBROGATION
(A) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive
of any other rights to which the Indemnitee may at any time be
entitled under applicable law, the Amended and Restated Declaration
of Trust, EOP's Bylaws, any agreement, a vote of shareholders or a
resolution of the Board of Trustees, or otherwise. No amendment,
alteration or repeal of this Agreement or any provision hereof shall
be effective as to the Indemnitee with respect to any action taken
or omitted by the Indemnitee as a member of the Board of Trustees
prior to such amendment, alteration or repeal.
(B) To the extent that EOP maintains an insurance policy or
policies providing liability insurance for trustees of EOP, the
Indemnitee shall be covered by such policy or policies in accordance
with its or their terms to the maximum extent of the coverage
available and upon any "Change in Control" EOP shall obtain
continuation and/or "tail" coverage for the Indemnitee to the
maximum extent obtainable at such time.
(C) In the event of any payment under this Agreement, EOP shall
be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required
and take all actions necessary to secure such rights, including
execution of such documents as are necessary to enable EOP to bring
suit to enforce such rights.
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(D) EOP shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the
extent that the Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement, or
otherwise.
11. CONTINUATION OF INDEMNITY
All agreements and obligations of EOP contained herein shall continue
during the period the Indemnitee is an officer or a member of the Board of
Trustees of EOP and shall continue thereafter so long as the Indemnitee shall
be subject to any threatened, pending or completed Proceeding by reason of such
Indemnitee's Corporate Status and during the period of statute of limitations
for any act or omission occurring during the Indemnitee's term of Corporate
Status. No legal action shall be brought and no cause of action shall be
asserted by or on behalf of EOP against the Indemnitee, the Indemnitee's
spouse, heirs, executors or personal or legal representatives after the
expiration of two (2) years from the date of accrual of such cause of action,
and any claim or cause of action of EOP shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two
(2) year period; provided, however, that if any shorter period of limitations
is otherwise applicable to any such cause of action such shorter period shall
govern. This Agreement shall be binding upon EOP and its successors and
assigns and shall inure to the benefit of the Indemnitee and such Indemnitee's
heirs, executors and administrators.
12. SEVERABILITY
If any provision or provisions of this Agreement shall be held to be
invalid, illegal, or unenforceable for any reason whatsoever, (i) the validity,
legality, and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any paragraph of this Agreement
containing any such provision held to be invalid, illegal, or unenforceable,
that is not itself invalid, illegal, or unenforceable) shall not in any way be
affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
any paragraph of this Agreement containing any such provision held to be
invalid, illegal, or unenforceable, that is not itself invalid, illegal, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provisions held invalid, illegal, or unenforceable.
13. EXCEPTIONS TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES
Notwithstanding any other provisions of this Agreement, the Indemnitee
shall not be entitled to indemnification or advancement of Expenses under this
Agreement: (i) with respect to any Proceeding initiated by such Indemnitee
against EOP other than a proceeding commenced pursuant to paragraph 8, or (ii)
with respect to any Proceeding in which such Indemnitee's act or omission was
material to the cause of action
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adjudicated and was committed in bad faith or was the result of active and
deliberate dishonesty, or (iii) if the Indemnitee actually received an improper
personal benefit in money, property, or services.
14. HEADINGS
The headings of the paragraph of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or to affect the construction thereof.
15. MODIFICATION AND WAIVER
No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
16. NOTICE BY THE INDEMNITEE
The Indemnitee agrees promptly to notify EOP in writing upon being served
with any summons, citation, subpoena, complaint, indictment, information, or
other document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder.
17. NOTICES
All notices, requests, demands, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed, or (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed, if so delivered or mailed, as the case may be, to the following
addresses:
If to the Indemnitee, to the address set forth in the records of EOP.
If to EOP, to: Equity Office Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Legal Counsel
or to such other address as may have been furnished to the Indemnitee by EOP or
to EOP by the Indemnitee, as the case may be.
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18. GOVERNING LAW
The parties agree that this Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EQUITY OFFICE PROPERTIES TRUST, a
Maryland real estate investment trust
By:
---------------------------------
Its:
---------------------------------
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<>, an individual
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