INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (the “Agreement”) is entered
into as of ___, by and between Hines Global REIT, Inc. (the
“Company”), a Maryland corporation, and ___ (the
“Indemnitee”).
WHEREAS, the
Indemnitee is an officer or a member of the Board of Directors of
the Company and in such capacity is performing a valuable service
for the Company;
WHEREAS, the law
of the Company’s state of organization permits the Company to
enter into contracts with its officers or members of its Board of
Directors with respect to indemnification of such persons;
and
WHEREAS, to induce
the Indemnitee to continue to provide services to the Company as an
officer or a member of the Board of Directors, 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 the Company’s
Amended and Restated Articles of Incorporation (“Articles of
Incorporation”), or any acquisition transaction relating to
the Company, the Company desires to provide the Indemnitee with
protection against personal liability.
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and the Indemnitee hereby agree as follows:
As used herein,
the following words and terms shall have the following respective
meanings:
(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 the Company, 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 Directors. A rebuttable
presumption of a Change in Control shall be created by any of the
following which first occur after the date hereof and the Company
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
the Company in the election of its directors (“Interested
Party”) (provided, however, “Interested Party”
shall not include an agent, broker, nominee, custodian or director,
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 Directors of the
Company cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in
advance by the directors representing two-thirds of the directors
then in office who were the directors at the beginning of the
period,
iii. the
approval of the stockholders of the Company of:
(a) a merger
or consolidation of the Company 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 the Company’s assets or the assets of any
subsidiary of the Company having a market value equal to 30% or
more of the aggregate market value of all assets of the Company
determined on a consolidated basis, all outstanding shares of
beneficial interest of the Company, or the earning power or net
income of the Company, determined on a consolidated
basis,
(c) the
issuance or transfer by the Company, 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 the Company other than the
issuance or transfer of such shares of beneficial interest to all
the Company stockholders on a pro rata basis,
(d) the
adoption of any plan or proposal for the partial or complete
liquidation or dissolution of the Company proposed by an Interested
Party or pursuant to any agreement, arrangement or understanding,
whether or not in writing, with any Interested Party,
(e) any
reclassification of securities, including, without limitation, any
share split, share dividend, or other distributions of shares, or
any reverse share split, recapitalization of the Company, or any
merger or consolidation of the Company 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 the Company 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
the Company other than the receipt of such advantages which are
provided to all the Company stockholders on a pro rata
basis.
(B) “Corporate
Status” describes the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Company 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 the Company.
(C) “Disinterested
Director” means a director of the Company 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 attorney and paralegal 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,
nor in the past two years has been, retained to represent
(i) the Company or the Indemnitee in any matter material to
either such party, or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder.
(G) “Proceeding”
includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing, or any
other proceeding, including appeals therefrom, whether civil,
criminal, administrative, or investigative, except one initiated by
the Indemnitee pursuant to Article VIII of this Agreement to
enforce such Indemnitee’s rights under this
Agreement.
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(A) The
Indemnitee shall be entitled to the rights of indemnification
provided in this Article II and under applicable law, the Articles
of Incorporation, the Company’s Bylaws, any agreement, a vote
of stockholders or resolution of the Board of Directors 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 the Company. Unless prohibited by
Article XIII 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.
(B) Notwithstanding
paragraph 2(A) above, the Company shall not indemnify any
Indemnitee that is a member of the Board of Directors or an
Affiliate (as such term is defined in the Articles of
Incorporation) of the Company unless all of the following
conditions are met:
i. the
Indemnitee determined, in good faith, that the course of conduct
which caused the loss or liability was in the best interests of the
Company; and
ii. the
Company shall not indemnify or hold harmless the Indemnitee if:
(1) in the case that the Indemnitee is a member of the Board
of Directors, other than an Independent Director (as such term is
defined in the Articles of Incorporation), the loss or liability
was the result of negligence or misconduct by the Indemnitee, or
(2) in the case that the Indemnitee is an Independent
Director, the loss or liability was the result of gross negligence
or willful misconduct by the Indemnitee.
(C) Notwithstanding
paragraphs 2(A) and 2(B) above, the Company shall not provide
indemnification for any loss, liability or expense arising from or
out of an alleged violation of federal or state securities laws by
an Indemnitee that is a member of the Board of Directors or an
Affiliate of the Company unless at least one of the following
conditions are met:
i. there has
been a successful adjudication on the merits of each count
involving alleged securities law violations as to the
Indemnitee;
ii. such
claims have been dismissed with prejudice on the merits by a court
of competent jurisdiction as to the Indemnitee; or
iii. a court
of competent jurisdiction approves a settlement of the claims
against the Indemnitee and finds that indemnification of the
settlement and the related costs should be made, and the court
considering the request for indemnification has been advised of the
position of the Securities and Exchange Commission and of the
published position of any state securities regulatory authority in
which securities of the Company were offered or sold as to
indemnification for violations of securities laws.
(D) Any
indemnification of expenses under this Agreement may be paid only
out of the Net Assets (as such term is defined in the Articles of
Incorporation) of the Company and no portion may be recoverable
from the stockholders of the Company.
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, the Company shall indemnify the
Indemnitee against all Expenses actually and reasonably incurred by
or on behalf of such Indemnitee in connection with each
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successfully
resolved claim, issue or matter. For purposes of this
Article III 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.
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.
(A) The
Company shall advance all reasonable Expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding within
20 days after the receipt by the Company 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.
(B) Notwithstanding
paragraph 5(A) above, the Company shall not advance any Expenses
incur
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