Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 1, 2000 by and among HQ Global Holdings, Inc., a
Delaware corporation (the "Company") and CarrAmerica Realty Corporation, a
Maryland corporation ("Xxxx").
This Agreement is in connection with (i) the Stockholders Agreement of
even date herewith (the "Stockholders Agreement") among the Company, as issuer
of the common stock, par value $.01 per share (the "Securities"), FrontLine
Capital Group (formerly known as Reckson Service Industries, Inc.) ("RSI"),
Xxxx, and (ii) the Agreement and Plan of Merger among RSI, VANTAS Incorporated,
a Nevada corporation ("VANTAS"), Xxxx and HQ Global Workplaces, Inc., a Delaware
corporation ("HQ Global"), (iii) the Stock Purchase Agreement dated as of
January 20, 2000 by and between RSI and Xxxx, and (iv) the Stock Purchase
Agreement dated as of January 20, 2000 by and among RSI, VANTAS, Xxxx,
OmniOffices (UK) Limited and OmniOffices (Lux) 1929 Holding Company S.A. In
order to induce Xxxx to consummate the transactions contemplated by the
foregoing agreements, the Company has agreed to provide to the Holders (as
hereinafter defined) the registration rights set forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
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capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of Section
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3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405 under
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the Securities Act or any successor rule thereunder.
"Agreement" shall have the meaning set forth in the preamble to this
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Agreement.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
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which banking institutions in The City of New York are authorized or required by
law, executive order or regulation to remain closed.
"Company" shall have the meaning set forth in the preamble to this
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Agreement and also includes the Company's successors and permitted assigns.
"Effectiveness Period" shall have the meaning set forth in Section 2(a)
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hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
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from time to time.
"Holder" shall mean Xxxx and each holder of Registrable Securities that
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becomes a party hereto after the date hereof in accordance with the terms of
this Agreement, for so long as any of them own any Registrable Securities, and
each of their respective successors, assigns and direct and indirect transferees
who become holders of record of Registrable Securities.
"Inspectors" shall have the meaning set forth in Section 3(i) hereof.
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"IPO" shall have the meaning set forth in the Stockholders Agreement.
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"Issue Date" shall mean the date of original issuance of the Securities
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pursuant to the Agreement.
"Person" shall mean an individual, partnership, corporation, joint venture,
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trust or unincorporated organization, limited liability corporation, other form
of business or legal entity or a government or agency or political subdivision
thereof.
"Prospectus" shall mean the prospectus included in a Shelf Registration
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Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and, in each case, including all documents incorporated by reference
therein.
"Records" shall have the meaning set forth in Section 3(i) hereof.
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"Registrable Securities" shall mean the Securities; provided, however, that
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Securities shall cease to be Registrable Securities when the earlier of the
following occurs (i) a Shelf Registration Statement with respect to such
Securities for the resale thereof shall have been declared effective under the
Securities Act and such Securities shall have been disposed of pursuant to such
Shelf Registration Statement, (ii) such Securities shall have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act or are eligible to be sold without
restriction as contemplated by Rule 144(k) or (iii) such Securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
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incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of one counsel for all underwriters
or Holders as a group in connection with blue sky qualification of any of the
Registrable Securities), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any Shelf
Registration Statement, any Prospectus and any amendments or supplements
thereto, (iv) all fees and expenses incurred in connection with the listing, if
any, of the Registrable Securities on any securities exchange or quoted on
NASDAQ, and (v) all fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any "cold comfort"
letters required by or incident to such performance and compliance.
"Rule 144(k) Period" shall mean the period of two years (or such shorter
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period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities" shall have the meaning set forth in the recitals hereto.
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"Securities Act" shall mean the Securities Act of 1933, as amended from
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time to time.
"Shelf Registration" shall mean a registration effected pursuant to Section
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2(a) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
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of the Company pursuant to the provisions of Section 2(a) hereof which covers
all of the Registrable Securities on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all documents incorporated by reference therein.
2. Registration Under the Securities Act.
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(a) Shelf Registration. The Company shall file a Shelf Registration
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Statement providing for the sale by the Holders of all of the Registrable
Securities then owned by the Holders (or which the Holders may be entitled to
receive) within thirty (30) days after the IPO and shall use its best efforts to
have such Shelf Registration Statement declared effective by the SEC within 90
days after the IPO. No Holder of Registrable Securities shall be entitled to
include any of its Registrable Securities in any Shelf Registration pursuant to
this Agreement unless and until such Holder agrees in writing to be bound by all
of the provisions of this Agreement applicable to such Holder and furnishes to
the Company in writing, within 10 Business Days after receipt of a request
therefor, such information as the Company may, after conferring with counsel
with regard to information relating to Holders that would be required by the SEC
to be included in such Shelf Registration Statement or Prospectus included
therein, reasonably request for inclusion in any Shelf Registration Statement or
Prospectus included therein. Each Holder as to which any Shelf Registration is
being effected agrees to furnish to the Company all information with respect to
such Holder necessary to make the information previously furnished to the
Company by such Holder not materially misleading.
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective and the Prospectus usable for
resales during the Rule 144(k) Period (subject to extension pursuant to the
provisions of this paragraph), or for such shorter period which will terminate
when all of the Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be Registrable
Securities (the "Effectiveness Period"); provided, however, that up to 60 days
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on not more than two occasions in any twelve-month period (any such period being
referred to herein as a "Blackout Period"), the Company shall be permitted to
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suspend sales of Securities: (i) if the Shelf Registration Statement is no
longer effective or the Prospectus is no longer usable for resales due to a good
faith determination by the Company that the sale of the Registrable Securities
pursuant to the Shelf Registration Statement would require disclosure of
material non-public information that the Company has a bona fide business
purpose for preserving as confidential or (ii) if the Company is engaged in or
has completed an underwritten public offering and the underwriters' lock-up
period with respect to sales of common stock (or securities convertible into
common stock) has not expired; provided, however, that subsequent to the earlier
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of (x) 12 months after the IPO and (y) the Company's completion of two
underwritten
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public offerings after the IPO, any Blackout Period imposed by the Company in
connection with underwriters' lock-up periods shall extend for no more than 30
days after the completion of an underwritten public offering and, to the extent
such Holder together with any Affiliates owns less than 10% of the Company's
outstanding classes of common stock, the Company shall have no further right to
suspend sales of Securities in connection with underwriters' lock-up periods. No
Blackout Period may commence fewer than 90 days following (i) the expiration of
a preceding Blackout Period, or (ii) the IPO. In addition, the Company shall be
permitted to suspend sales of Securities if it makes a good faith determination
that the Prospectus includes an untrue statement of a material fact or omits to
state a material fact necessary in order to make statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
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however, that under these circumstances the Company shall use its best efforts
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to terminate the related Blackout Period by causing the Prospectus to be
amended, modified or supplemented as promptly as reasonably practicable so as
not to include such an untrue statement or omit such a material fact and,
provided further that the maximum number of days that the Company may suspend
sales in any twelve month period under any suspension right set forth in this
Section 2(a) shall be 120 days. Each Holder agrees that it shall give the
Company notice of not less than 5 Business Days prior to disposing of any
Registered Securities under the Shelf Registration Statement so that the Company
may make any determination to suspend sales of Securities as contemplated in the
preceding sentence. In addition, each Holder agrees that it shall not dispose of
Registrable Securities under the Shelf Registration Statement in any
underwritten offering by one or more Holders of less than an aggregate of $20
million of Registrable Securities determined on the price per share offered to
the public. The Company will, upon the effectiveness of a Shelf Registration
Statement, provide to each Holder a reasonable number of copies of the
Prospectus which is a part of the Shelf Registration Statement, and, at that
time, notify each such Holder that the Shelf Registration Statement has become
effective and take such other actions as are required to permit unrestricted
resales of the Registrable Securities. The Company further agrees to supplement
or amend the Shelf Registration Statement if and as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registrations, and the Company
agrees to furnish to the Holders of Registrable Securities copies of any
supplement or amendment to the Prospectus promptly after its being used or filed
with the SEC.
(b) Expenses. The Company, as issuer of the Securities, shall pay
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all Registration Expenses in connection with any Shelf Registration Statement
filed pursuant to Section 2(a) hereof and will reimburse any single counsel
designated in writing by the Holders of a majority of the Registrable Securities
to act as counsel for the Holders of the Registrable Securities in connection
with a Shelf Registration Statement, which other counsel shall be reasonably
satisfactory to the Company; provided, however, that such reimbursement shall in
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no event exceed an aggregate of $10,000. Except as provided herein, each Holder
shall pay all expenses of its counsel, underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Effective Shelf Registration Statement. A Shelf Registration
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Statement will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
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declared effective, the offering of Registrable
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Securities pursuant to such Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Shelf Registration Statement will be deemed
not to have been effective during the period of such interference, until the
offering of Registrable Securities pursuant to such Shelf Registration Statement
may legally resume. The Company will be deemed not to have used its best efforts
to cause a Shelf Registration Statement to become, or to remain, effective
during the requisite period if it voluntarily takes any action that would result
in any such Shelf Registration Statement not being declared effective or that
would result in the Holders of Registrable Securities covered thereby not being
able to offer and sell such Registrable Securities during that period, unless
such action is required by applicable law. If the Company has not used its best
efforts to maintain the effectiveness of a Shelf Registration Statement and the
offering of Registrable Securities pursuant to such Shelf Registration Statement
therefore is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, then each day
that the effectiveness of a Shelf Registration Statement is suspended shall
apply to the Blackout Period limitation in Section 2(a) hereof.
(d) Specific Enforcement. Without limiting the remedies available to
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the Holders at law or in equity, the Company acknowledges that any failure by it
to comply with its obligations under Section 2(a) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy at law,
that it would not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder may obtain such relief in any
court having jurisdiction as may be required to specifically enforce the
Company's obligations under Section 2(a) hereof.
3. Registration Procedures. In connection with the obligations of
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the Company with respect to the Shelf Registration Statement pursuant to Section
2(a) hereof, the Company shall use its best efforts to:
(a) prepare and file with the SEC a Shelf Registration Statement as
prescribed by Section 2(a) hereof on the appropriate form under the Securities
Act, which form shall (i) be selected by the Company, (ii) be available for the
sale of the Registrable Securities by the selling Holders thereof, and (iii)
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith; the Company shall use its best efforts to cause such Shelf
Registration Statement to become effective and remain effective and the
Prospectus usable for resales in accordance with Section 2 hereof; provided,
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that before filing such Shelf Registration Statement or any amendments or
supplements thereto, the Company will furnish to the counsel selected by the
Holders whose Registrable Securities are included in the Shelf Registration
Statement copies of all such documents proposed to be filed, which documents
will be subject to the review of such counsel before any such filing is made,
and the Company will comply with any reasonable request made by such counsel to
make changes in any information contained in such documents relating to the
Holders.
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep such
Shelf Registration Statement effective for the Effectiveness Period, subject to
the provisos contained in the second paragraph in Section 2(a), and cause each
Prospectus to be supplemented, if so
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determined by the Company or requested by the SEC, by any required prospectus
supplement and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the Securities Act, and comply with the
provisions of the Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the disposition of all
securities covered by a Shelf Registration Statement during the Effectiveness
Period in accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement;
(c) register or qualify the Registrable Securities under all
applicable securities or "blue sky" laws of such jurisdictions (domestic or
foreign) by the time the applicable Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered by a Shelf
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request in writing in advance of such
date of effectiveness, keep such registration or qualification in effect for so
long as such Shelf Registration Statement remains in effect and use its best
efforts to obtain all appropriate registrations, permits and consents required
in connection therewith, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder and underwriter to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall not
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be required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(c), (ii) file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such service of process
or (iii) subject itself to taxation in any such jurisdiction if it is not then
so subject;
(d) promptly notify each Holder of Registrable Securities, their
counsel and the managing underwriters, if any, and promptly confirm such notice
in writing (i) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Shelf Registration Statement or
the qualification of the Registrable Securities in any jurisdiction described in
Section 3(c) hereof or the initiation of any proceedings for that purpose, (ii)
if, between the effective date of a Shelf Registration Statement and the closing
of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any purchase agreement, securities sales
agreement or other similar agreement cease to be true and correct in all
material respects, and (iii) of the happening of any event or the failure of any
event to occur or the discovery of any facts, during the Effectiveness Period,
which makes any statement made in a Shelf Registration Statement or the related
Prospectus untrue in any material respect or which causes such Shelf
Registration Statement or Prospectus to omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(e) obtain the withdrawal of any order suspending the effectiveness
of the Shelf Registration Statement at the earliest possible moment;
(f) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends and
registered in such names as the selling Holders or the underwriters may
reasonably request at least two Business Days prior to the closing of any sale
of Registrable Securities pursuant to the Shelf Registration Statement;
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(g) promptly after the occurrence of any event specified in Section
3(d)(i) or 3(d)(iii) (subject to the second paragraph of Section 2(a)) hereof,
prepare a supplement or post-effective amendment to the Shelf Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company shall
notify each Holder to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;
(h) if requested by the Holders of Registrable Securities in
connection with a firm commitment underwritten offering of at least $20 million
in public offering price of Registrable Securities: (i) enter into such
agreements (including underwriting agreements) as are customary in underwritten
offerings and make such representations and warranties to the underwriters (if
any), with respect to the business of the Company and its subsidiaries as then
conducted and with respect to the Shelf Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) furnish
to the Holders whose Registrable Securities are included in such offering
pursuant to the Shelf Registration Statement and to any underwriter of such
Registrable Securities opinions of counsel for the Company and updates thereof
(which may be in the form of a reliance letter) addressed to each such Holder
and dated the date of the closing under the underwriting agreement (if any) (or
if such offering is not underwritten, dated the effective date of the Shelf
Registration or any Prospectus Supplement thereto) in form and substance
reasonably satisfactory to such Holder or the managing underwriters covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Holders or
underwriters; (iii) furnish to the Holders whose Registrable Securities are
included in such offering pursuant to the Shelf Registration Statement and to
any underwriter of such Registrable Securities "cold comfort" accountants'
letters and updates thereof in form and substance reasonably satisfactory to the
managing underwriters signed by the independent public accountants who have
audited the Company's financial statements included in a Shelf Registration
Statement (and, if necessary, any other independent certified public accountants
of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the Holders or underwriters, such letters to be
in customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and such other
matters as reasonably requested by such Holders or underwriters in accordance
with Statement on Auditing Standards No. 72 and with respect to events
subsequent to the date of such financial statements; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and
procedures;
(i) if requested by Holders of Registrable Securities in connection
with a firm commitment underwritten offering of at least $20 million in public
offering price of Registrable Securities make reasonably available for
inspection by any selling Holder of Registrable Securities who certifies to the
Company that it has a current intention to sell Registrable
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Securities pursuant to the Shelf Registration, any underwriter participating in
any such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during the
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Company's normal business hours, all financial and other records, pertinent
organizational and operational documents and properties of the Company and its
subsidiaries (collectively, the "Records") as shall be reasonably necessary to
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enable them to exercise any applicable due diligence responsibilities, and cause
the officers, trustees and employees of the Company and its subsidiaries to
supply all relevant information in each case reasonably requested by any such
Inspector in connection with such Shelf Registration Statement; records and
information which the Company, in good faith, to be confidential and any Records
and information which it notifies the Inspectors are confidential shall not be
disclosed to any Inspector except where (i) the disclosure of such Records or
information is necessary to avoid or correct a material misstatement or omission
in such Shelf Registration Statement, (ii) the release of such Records or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) such Records or information previously has been made
generally available to the public; each selling Holder of such Registrable
Securities will be required to agree in writing that Records and information
obtained by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company unless and until such is made generally available to
the public through no fault of an Inspector or a selling Holder; and each
selling Holder of such Registrable Securities will be required to further agree
in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in connection
with any action, suit or proceeding, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent disclosure of
the Records and information deemed confidential;
(j) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make generally
available to its securityholders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
twelve-month period (or 90 days after the end of any twelve-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Shelf Registration Statement, which
statements shall cover said twelve-month periods, provided that the obligations
under this Section 3(j) shall be satisfied by the timely filing of quarterly and
annual reports on Forms 10-Q and 10-K under the Exchange Act;
(k) cooperate with each seller of Registrable Securities covered by a
Shelf Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(l) list all Registrable Securities covered by such Shelf
Registration Statement on any securities exchange or inter-dealer quotation
system (in each case, domestic or foreign) on which any of the Company's
securities are then listed;
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(m) cause all Registrable Securities covered by such Shelf
Registration Statement to be registered with or approved by such other U.S. or
state government authorities as may be reasonably necessary to enable the
Holders whose Registrable Securities are included in a Shelf Registration
Statement to consummate the disposition of such Registrable Securities;
(n) provide a transfer agent and registrar for all Registrable
Securities covered by a Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement; and
(o) take all other steps necessary to effect the registration of the
Registrable Securities covered by a Shelf Registration Statement contemplated
hereby.
Each Holder agrees that, upon receipt of any notice from the Company
of the occurrence of any event specified in Section 3(d)(i) or 3(d)(iii) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Shelf Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(g)
hereof or until it is advised in writing (the "Advice") by the Company that the
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use of the applicable Prospectus may be resumed, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies in such Holder's possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. If the Company shall give any
such notice to suspend the disposition of Registrable Securities pursuant to a
Shelf Registration Statement, the Company shall use its best efforts to file and
have declared effective (if an amendment) as soon as practicable after the
resolution of the related matters an amendment or supplement to the Shelf
Registration Statement and related Prospectus.
4. Indemnification and Contribution. (a) The Company hereby agrees
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to indemnify and hold harmless each Holder, each underwriter who participates in
an offering of the Registrable Securities, each Person, if any, who controls any
of such parties within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act and each of their respective directors, officers,
employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense
(including reasonable attorneys' fees and disbursements) and judgments,
joint or several, to which they or any of them may become subject
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in a Shelf Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that (subject to
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Section 4(d) hereof) such settlement is effected with the prior written
consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by such Holder),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
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claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by such
Holder or underwriter expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto).
(b) Each Holder or underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its trustees and officers (including
each officer of the Company who signed the Shelf Registration Statement), and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use in
such Shelf Registration Statement (or any amendment thereto) or such Prospectus
(or any amendment or supplement thereto); provided, however, that no Holder
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shall be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have under this Section 4 to the extent that it is
not materially prejudiced by such failure as a result thereof, and in any event
shall not relieve it from liability which it may have otherwise on account of
this Section 4. In the case of parties indemnified pursuant to Section 4(a) or
(b) above, counsel to the indemnified parties shall be selected by such parties.
An indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to local counsel),
separate from their own counsel, for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or
10
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional written release
of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have validly requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement set forth in this Section 4 is
for any reason held to be unenforceable by an indemnified party although
applicable in accordance with its terms, the Company, on the one hand, and the
Holders, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and the Holders, as incurred;
provided, however, that no Person guilty of fraudulent misrepresentation (within
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the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any Person that was not guilty of such fraudulent misrepresentation. As
between the Company, on the one hand, and the Holders, on the other hand, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the Company,
on the one hand, and the Holders, on the other hand, with respect to the
statements or omissions which resulted in such loss, liability, claim, damage or
expense, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holders, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or by or on behalf of the Holders, on
the other, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Holders of the Registrable Securities agree that it would not be just
and equitable if contribution pursuant to this Section 4 were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the relevant equitable considerations. For purposes of this
Section 4, each Affiliate of a Holder, and each director, officer and employee
and Person, if any, who controls a Holder or such Affiliate within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as such Holder, and each trustee and officer of the Company and each Person, if
any, who controls the Company within the meaning of Section 15
11
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.
5. Participation in an Underwritten Registration. No Holder may
---------------------------------------------
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
-------------------------
covered by the Shelf Registration Statement who desire to do so may sell the
Securities covered by such Shelf Registration in an underwritten offering,
subject to the provisions of Section 3(h) hereof. In any such underwritten
offering, the underwriter or underwriters and manager or managers that will
administer the offering will be selected by the Holders; provided, however, that
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such underwriters and managers must be reasonably satisfactory to the Company.
7. Miscellaneous.
-------------
(a) Rule 144. For so long as the Company is subject to the reporting
--------
requirements of Section 13 or 15 of the Exchange Act and any Registrable
Securities remain outstanding, the Company will timely file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC thereunder;
provided, however, that if the Company ceases to be so required to file such
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reports, it will, upon the request of any Holder of Registrable Securities (a)
make publicly available such information as is necessary to permit sales of its
securities pursuant to Rule 144 under the Securities Act and (b) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such rule
may be amended from time to time, or any similar rules or regulations hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into,
--------------------------
and will not enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure; provided that no
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12
amendment, modification or supplement or waiver or consent to the departure with
respect to the provisions of Section 4 hereof shall be effective as against any
Holder of Registrable Securities unless consented to in writing by such Holder
of Registrable Securities. Notwithstanding the foregoing sentence, (i) this
Agreement may be amended, modified or supplemented, and waivers and consents to
departures from the provisions hereof may be given, by written agreement signed
by the Company and the Holders or their successors and assigns to the extent
that any such amendment, modification, supplement, waiver or consent is, in
their reasonable judgment, necessary or appropriate to comply with applicable
law (including any interpretation of the Staff of the SEC) or any change therein
and (ii) to the extent any provision of this Agreement relates to the Holders,
such provision may be amended, modified or supplemented, and waivers or consents
to departures from such provisions may be given, by written agreement signed by
the Holders and the Company.
(d) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Holders, the
address set forth in the Stockholders Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 7(d); and (ii) if to the Company, initially at the Company's address set
forth in the Stockholders Agreement and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an overnight courier, including
Federal Express or similar courier utilizing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of the
Holders, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
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deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities, such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof.
(f) Sales During Blackout Period. Any Holder that sells Registrable
----------------------------
Securities during a Blackout Period of which it had written notice shall be
deemed to have materially breached this Agreement and shall have no further
rights hereunder.
(g) Third Party Beneficiaries. Each transferee of a Seller (and
-------------------------
subsequent transferees thereof) shall be a third party beneficiary of the
agreements made hereunder among the Company and the Holders, and such transferee
shall have the right to enforce such
13
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware without giving effect to
any provisions relating to conflicts of laws.
(k) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(l) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings among the parties with respect to such subject
matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HQ GLOBAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Operating Officer
CARRAMERICA REALTY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
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