Exhibit 1.1
HFF, Inc.
Class A Common Stock
Underwriting Agreement
[
], 2007
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
and
Morgan Stanley & Co. Incorporated,
1585 Broadway,
New York, New York 10036
Ladies and Gentlemen:
HFF, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the
“Underwriters”) an aggregate of [___] shares (the “Firm Shares”) and, at the election of the
Underwriters, up to [___] additional shares (the “Optional Shares”) of Class A Common Stock, par
value $0.01 per share (“Stock”) of the Company (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the
“Shares”).
Morgan Stanley & Co. Incorporated (“Morgan Stanley”) has agreed to reserve a portion of the
Shares to be purchased by it under this Agreement for sale to the Company’s directors, officers and
employees and family members of such persons (collectively, “Participants”), as set forth in the
Prospectus under the heading “Underwriting” (the “Directed Share Program”). The Shares to be sold
by Morgan Stanley and its affiliates pursuant to the Directed Share Program are referred to
hereinafter as the “Directed Shares”. Any Directed Shares not orally confirmed for purchase by any
Participant by the end of the business day on which this Agreement is executed will be offered to
the public by the Underwriters as set forth in the Prospectus.
As used in this Agreement, the term “Holliday Fenoglio Fowler” refers to Holliday Fenoglio
Fowler, L.P., a Texas limited partnership; the term “HFF Securities” refers to HFF Securities L.P.,
a Delaware limited partnership; the term “Partnerships” refers collectively to Holliday Fenoglio
Fowler and HFF Securities; the term “Partnership Holdings” refers to HFF Partnership Holdings LLC,
a Delaware limited liability company; and the term “Holliday GP” refers to Holliday GP Corp., a
Delaware corporation and the sole general partner of each of the Partnerships.
Prior to the execution of this Agreement, the Company, HFF Holdings LLC, Holliday GP, HFF LP
Acquisition LLC, GP Acquisition Corp. and Partnership Holdings have entered into that certain Sale
and Merger Agreement, dated as of [___], 2007 (the “Reorganization Agreement”). Pursuant to the
Reorganization Agreement and simultaneously with the purchase and sale of the Shares pursuant to
this Agreement, the Company and other parties to the Reorganization Agreement will consummate the
transactions contemplated in the Reorganization Agreement (such transactions, collectively, the
“Reorganization Transactions”), which transactions are further described in the Pricing Prospectus
(as such term is defined herein).
For all purposes of this Agreement, including without limitation, representations, warranties,
covenants and agreements of the Company and the Partnerships contained herein, Partnership
Holdings, Holliday GP and the Partnerships shall be deemed to be subsidiaries of the Company as of
the date of this Agreement and at all times subsequent thereto.
1. The Company, Holliday Fenoglio Fowler and HFF Securities jointly and severally represent
and warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-138579) (the “Initial Registration
Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission
(the “Commission”); the Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits thereto, to you for each of
the other Underwriters, have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration
Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
“Act”), which became effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Act
is hereinafter called a
2
“Preliminary Prospectus”; the various parts of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement became effective or such part
of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the “Registration Statement”; the Preliminary Prospectus relating
to the Shares that was included in the Registration Statement immediately prior to the Applicable
Time (as defined in Section 1(c) hereof) is hereinafter called the “Pricing Prospectus”; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the “Prospectus”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act
relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”);
(b) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free
Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided
,
however
, that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated
(collectively, the “Lead Representatives”) expressly for use therein;
(c) For the purposes of this Agreement, the “Applicable Time” is [___:___m.] (Eastern time)
on the date of this Agreement. The Pricing Prospectus, as of the Applicable Time, did not include
any untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; and each Issuer Free Writing Prospectus listed on Schedule II(a) hereto does not
conflict with the information contained in the Registration Statement, the Pricing Prospectus or
the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together
with the Pricing Prospectus as of the Applicable Time, did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided
,
however
, that this representation and warranty shall not apply to statements or omissions
made in an Issuer Free Writing Prospectus in reliance upon and in
3
conformity with information furnished in writing to the Company by an Underwriter through the
Lead Representatives expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus will conform, in all material respects
to the requirements of the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to each part of the Registration Statement
and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided
,
however
, that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Lead Representatives expressly for use therein;
(e) Neither the Company nor the Partnerships nor any of their respective subsidiaries has
sustained since the date of the latest audited financial statements included in the Pricing
Prospectus any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus;
and, since the respective dates as of which information is given in the Registration Statement and
the Pricing Prospectus, there has not been any change in the capital stock or long-term debt of the
Company, the Partnerships or any of their respective subsidiaries or any material adverse change,
or any development involving a prospective material adverse change, in the general affairs,
management, financial position, stockholders’ equity or results of operations of the Company, the
Partnerships and their respective subsidiaries, otherwise than as set forth or contemplated in the
Pricing Prospectus;
(f) Neither the Company nor the Partnerships nor any of their respective subsidiaries own any
real property. The Company, the Partnerships and their respective subsidiaries have good and
marketable title to all personal property owned by them and material to the Company and its
subsidiaries, taken as a whole, free and clear of all liens, encumbrances and defects except such
as are described in the Pricing Prospectus or such as do not materially interfere with the use made
and proposed to be made of such property by the Company, the Partnerships and their respective
subsidiaries; and any real property and buildings held under lease by the Company, the Partnerships
and their respective subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company, the Partnerships and their respective
subsidiaries;
4
(g) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Pricing Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where any such failure to be so qualified or
be in good standing would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), business, properties or results of operations of the
Company and its subsidiaries taken as a whole (a “Material Adverse Effect”); each of Holliday
Fenoglio Fowler and HFF Securities has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware or the State of Texas, as the
case may be, with power and authority to own its properties and conduct its business as described
in the Pricing Prospectus, and has been duly qualified as a foreign limited partnership for the
transaction of business and is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require such qualification, except
where any such failure to be so qualified or be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect; and each subsidiary of the Company and the Partnerships
has been duly incorporated or organized and is validly existing as a corporation, limited liability
company or partnership, as the case may be, in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be;
(h) The Company has an authorized capitalization as set forth in the Pricing Prospectus and
all of the issued shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform to the description of the Stock contained
in the Pricing Prospectus and Prospectus; the partnership interests of the Partnerships to be
issued to the Company or its wholly-owned subsidiaries in connection with the Reorganization
Transactions will be duly authorized and validly issued and will be owned by the Company or its
wholly-owned subsidiaries free and clear of all liens, encumbrances, equities or claims; and all of
the issued shares of capital stock or other equity interests of each subsidiary of the Company and
the Partnerships owned directly or indirectly by the Company or the Partnerships, as the case may
be, have been duly authorized and validly issued, and, to the extent such concept is applicable,
are fully paid and non-assessable and are owned directly or indirectly by the Company or the
Partnerships, as the case may be, free and clear of all liens, encumbrances, equities or claims,
except for any lien or encumbrance in connection with that certain Credit Agreement, dated as of
March 29, 2006, by and among Holliday Fenoglio Fowler, HFF Holdings LLC and Bank of America, N.A.;
5
(i) The unissued Shares to be issued and sold by the Company to the Underwriters hereunder
have been duly and validly authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and non-assessable and will conform
in all material respects to the description of the Stock contained in the Prospectus;
(j) The issue and sale of the Shares and the compliance by the Company and the Partnerships
with this Agreement and the consummation of the transactions herein contemplated, including,
without limitation, the Reorganization Transactions, will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company, the Partnerships or any of their respective subsidiaries is a party or by which the
Company, the Partnerships or any of their respective subsidiaries is bound or to which any of the
property or assets of the Company, the Partnerships or any of their respective subsidiaries is
subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or the limited partnership agreements of the Partnerships or (iii) result in
any violation of any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, the Partnerships or any of their respective
subsidiaries or any of their properties, except, in the case of clause (i) above, for any such
conflict, breach or violation that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency or body is required
for the issue and sale of the Shares or the consummation by the Company and the Partnerships of the
transactions contemplated by this Agreement, including, without limitation, the Reorganization
Transactions, except the registration under the Act and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) of the Shares and such consents, approvals, authorizations,
registrations or qualifications as have already been obtained or made or as may be required by the
rules and regulations of the National Association of Securities Dealers, Inc. (the “NASD”) or under
applicable state securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;
(k) Neither the Company nor the Partnerships nor any of their subsidiaries is (i) in violation
of its Certificate of Incorporation, By-laws, limited partnership agreement, limited liability
company agreement or similar organizational documents or (ii) in default in the performance or
observance of any material obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, in the case of clause (ii)
above, for any such default that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
6
(l) The statements set forth in the Pricing Prospectus and Prospectus under the caption
“Description of Capital Stock”, insofar as they purport to constitute a summary of the terms of the
Stock
,
under the captions “Organizational Structure”, “Business Regulation”, “Management”, “Related
Party Transactions”, “Shares Eligible for Future Sale”, “Material U.S. Federal Tax Considerations
for Non-U.S. Holders of Class A Common Stock” and “Underwriting” , and in Part II, Item 14 of the
Registration Statement, insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(m) Other than as set forth in the Pricing Prospectus, there are no legal or governmental
proceedings pending to which the Company, the Partnerships or any of their respective subsidiaries
is a party or of which any property of the Company, the Partnerships or any of their respective
subsidiaries is the subject which, if determined adversely to the Company, the Partnerships or any
of their respective subsidiaries, would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and, to the Company’s and the Partnerships’ knowledge, no such
proceedings are threatened or contemplated by governmental authorities or threatened by others;
(n) The Company is not and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, will not be an “investment company”, as such term is defined
in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(o) At the time of filing the Initial Registration Statement, the Company was not and is not
an “ineligible issuer,” as defined under Rule 405 under the Act;
(p) Ernst & Young LLP, who have certified certain financial statements of the Company and its
subsidiaries, are an independent registered public accounting firm as required by the Act and the
rules and regulations of the Commission thereunder;
(q) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The Company’s internal
control over financial reporting is effective and the Company is not aware of any material
weaknesses in its internal control over financial reporting;
(r) Since the date of the latest financial statements included in the Pricing Prospectus,
there has been no change in the Company’s internal control over
7
financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting;
(s) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the Company’s principal executive officer and
principal financial officer by others within those entities; and such disclosure controls and
procedures are effective;
(t) There are no off-balance sheet arrangements (as defined in Regulation S-K Item
303(a)(4)(ii)) that may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity, capital expenditures
or capital resources;
(u) The historical financial statements of the Company and the consolidated historical
financial statements of HFF Holdings LLC (the “Predecessor”) and the related notes thereto included
in the Pricing Prospectus and the Prospectus present fairly, in all material respects, the
financial position, results of operations and cash flows of the Company and the Predecessor as of
the dates and for the periods indicated in conformity with accounting principles generally accepted
in the United States applied on a consistent basis throughout the periods involved (except as
described in the notes to such financial statements and, in the case of unaudited financial
statements, as permitted by the applicable rules of the Commission) and comply as to form in all
material respects with the applicable accounting requirements of the Act and the related published
rules and regulations; and the selected financial data set forth under the captions “Selected
Consolidated Financial Data” and “Summary Consolidated Financial and Other Data” in the Pricing
Prospectus and the Prospectus has been derived from the accounting records of the Company and/or
the Predecessor and present fairly, in all material respects, on the basis stated in the Pricing
Prospectus and the Prospectus, the information included therein;
(v) The pro forma financial statements included in the Pricing Prospectus and the Prospectus
include assumptions that provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper
application of those adjustments to the historical financial statement amounts in the pro forma
financial statements included in the Pricing Prospectus and the Prospectus. The pro forma financial
statements included in the Pricing Prospectus and the Prospectus comply as to form in all material
respects with the applicable requirements of Regulation S-X under the Act;
(w) The Company, the Partnerships and their respective subsidiaries are in compliance in all
material respects with all presently applicable provisions of the
8
Employee Retirement Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ERISA”); no “reportable event” (as defined in Section 4043
of ERISA) has occurred with respect to any “pension plan” (as defined in Section 3(2) of ERISA) for
which the Company, the Partnerships or any of their respective subsidiaries would have any material
liability; no “prohibited transaction” within the meaning of Section 406 of ERISA) has occurred
with respect to any “employee benefit plan” (within the meaning of Section 3(3) of ERISA) for which
the Company, the Partnerships or any of their respective subsidiaries would have any material
liability; neither the Company, the Partnerships nor any member of their “controlled group”
(defined as any organization which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder, the “Code”) has incurred or expects to incur material
liability under (i) Title IV of ERISA with respect to any “pension plan” or (ii) Sections 412 or
4971 of the Code; and each “pension plan” for which the Company, the Partnerships or any of their
respective subsidiaries would have any liability that is intended to be qualified under Section
401(a) of the Code, has received a favorable determination letter from the Internal Revenue Service
and nothing has occurred, whether by action or by failure to act, which would reasonably be
expected to cause the loss of such qualification;
(x) Neither the Company nor the Partnerships nor any of their respective subsidiaries, nor, to
the knowledge of the Company, any of the directors, officers, employees or agents of, or other
persons associated with or acting on behalf of, the Company, the Partnerships or any of their
respective subsidiaries, (1) has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity, except as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (2)
made any direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; or (3) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment;
(y) There is and has been no failure on the part of the Company or any of the Company’s
officers or directors, in their capacities as such, to comply in all material respects with any
applicable provisions of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated
in connection therewith that are applicable to the Company as of the date hereof;
(z) The Company, the Partnerships and each of their respective subsidiaries carry, or are
covered by, insurance from insurers of recognized financial responsibility in such amounts and
covering such risks as the Company, the Partnerships and each of their respective subsidiaries
believes to be reasonable for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar businesses in similar
industries;
9
(aa) Except as disclosed in the Pricing Prospectus and the Prospectus, the Company, the
Partnerships and each of their respective subsidiaries have such permits, licenses, consents,
exemptions, authorizations and other approvals (each, an “Authorization”) of, and have or will have
made all filings with and notices to, all Governmental Agencies as are necessary to conduct their
respective businesses, except where the failure to possess such Authorizations or make such filings
or notices would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; each such Authorization is valid and in full force and effect and the Company, the
Partnerships and each of their respective subsidiaries are, as of the date hereof, in compliance in
all material respects with all the terms and conditions thereof and with the applicable rules and
regulations of the Governmental Agencies having jurisdiction with respect thereto;
(bb) None of the Company, the Partnerships or any of their respective subsidiaries (other than
HFF Securities) is, or will as a result of the Reorganization Transactions be, required to register
as a broker-dealer under the Exchange Act and the rules and regulations of the Commission
thereunder or the securities laws of any state. No officer, partner or employee of the Company, the
Partnerships or any of their respective subsidiaries is, or will as a result of the Reorganization
Transactions be, required to register as a broker-dealer under the Exchange Act and the rules and
regulations of the Commission thereunder or the securities laws of any state, other than such
officers, partners and employees of the Company or any of its subsidiaries who are so registered
under the Exchange Act on the date hereof. HFF Securities is duly registered, licensed and
qualified as a broker-dealer under the Exchange Act and the rules and regulations of the Commission
thereunder and the securities laws of each state where the conduct of its business requires such
registration; and is duly registered and is in good standing with the NASD. No consent, approval,
authorization, order, registration or qualification of or with the NASD is required for the issue
and sale of the Shares or the consummation by the Company and the Partnerships of the transactions
contemplated by this Agreement, including, without limitation, the Reorganization Transactions,
except for such consents, approvals, authorizations, orders, registrations or qualifications as
have been obtained and are in full force and effect;
(cc) None of the Company, the Partnerships or any of their respective subsidiaries is, or will
as a result of the Reorganization Transactions be, required to register as an investment adviser
under the Advisers Act, or be registered, licensed or qualified as an investment adviser under the
laws requiring any such registration, licensing or qualification in any state in which it conducts
business;
(dd) The Company, the Partnerships and their respective subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information,
10
systems or procedures), trademarks, service marks and trade names currently employed by them
in connection with the business now operated by them, and neither the Company, nor the Partnerships
nor any of their respective subsidiaries have received any written notice of infringement of or
conflict with asserted rights of others with respect to any of the foregoing;
(ee) The Company has not taken, directly or indirectly, any action designed to or that has
constituted or that could reasonably be expected to cause or result in the unlawful stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the
shares of the Stock;
(ff) The Shares have been approved for listing on New York Stock Exchange (the “Exchange”)
subject to official notice of issuance;
(gg) The Registration Statement, the Prospectus, the Time of Sale Prospectus and any
preliminary prospectus comply, and any amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus, the Pricing
Prospectus or any preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program;
(hh) No consent, approval, authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in connection with the offering of the
Directed Shares in any jurisdiction where the Directed Shares are being offered; and
(ii) The Company has not offered, or caused Morgan Stanley to offer, Shares to any person
pursuant to the Directed Share Program with the specific intent to unlawfully influence (ii) a
customer or supplier of the Company to alter the customer’s or supplier’s level or type of business
with the Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
2. Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at a purchase price per share of $[___] the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such
11
Underwriter in Schedule I hereto and the denominator of which is the maximum number of
Optional Shares that all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at their election up to
[___] Optional Shares, at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering sales of shares in excess of the number of Firm Shares, provided that
the purchase price per Optional Share shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the Firm Shares but not payable
on the Optional Shares. Any such election to purchase Optional Shares may be exercised only by
written notice from the Lead Representatives to the Company, given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as determined by the Lead
Representatives but in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless the Lead Representatives and the Company otherwise agree in writing, earlier
than two or later than ten business days after the date of such notice.
3. Upon the authorization by the Lead Representatives of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in such authorized
denominations and registered in such names as the Lead Representatives may request upon at least
forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company
to the account specified by the Lead Representatives, through the facilities of The Depository
Trust Company (“DTC”), for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to the Lead Representatives at least forty-eight hours in advance.
The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30
a.m., New York City time, on [___], 2007 or such other time and date as the Lead
Representatives and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York time, on the date specified by the Lead Representatives in the written
notice given by the Lead Representatives of the Underwriters’ election to purchase such Optional
Shares, or such other time and date as the Lead Representatives and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called the “First Time of
Delivery”, such time and date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the “Second Time of Delivery”, and each such time and date for delivery
is herein called a “Time of Delivery”.
12
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties
hereto pursuant to Section 8 hereof, including the cross receipt for the Shares and any additional
documents requested by the Underwriters pursuant to Section 8[(k)] hereof, will be delivered at the
offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 (the
“Closing Location”), and the Shares will be delivered through the facilities of DTC, all at such
Time of Delivery. A meeting will be held at the Closing Location at [___] p.m., New York City
time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law or executive order to
close.
5. The Company and, in respect of Section 5(e) hereof, the Partnerships agree with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or
any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery
without your consent, which shall not be unreasonably withheld; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to
furnish you with copies thereof; to file promptly all material required to be filed by the Company
with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of
the Shares, of the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or
suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably request to qualify
the Shares for offering and sale under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided
13
that in connection therewith the Company shall not be required to qualify as a foreign
corporation or as a dealer in securities, to file a general consent to service of process in any
jurisdiction or to subject itself to taxation in any jurisdiction if it is not otherwise so
subject;
(c) Prior to 10:00 a.m., New York City time, on the second New York Business Day following the
date of this Agreement and from time to time, to furnish the Underwriters with written and
electronic copies of the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of the Shares and if at such
time any event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus in order to comply with the
Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any Underwriter is required to
deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in
connection with sales of any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver
to such Underwriter as many written and electronic copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable, but in any
event not later than sixteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and including the date
180 days after the date of the Prospectus (the “Lock-Up Period”), not to offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise dispose, or to permit
any of their respective subsidiaries to offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose, except as provided hereunder, of any securities
of the Company, the Partnerships or any of their subsidiaries that are
14
substantially similar to the Shares, including but not limited to any options or warrants to
purchase shares of Stock or any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar securities without your
prior written consent (other than (i) the issuance and sale of the Shares as contemplated by this
Agreement; (ii) pursuant to employee or director compensation, benefit, stock option or stock
purchase plans existing on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement; and
(iii) up to an aggregate of [____]
shares of Stock or securities convertible into or exercisable or exchangeable for Stock issued in
connection with any acquisition of assets or acquisition of a majority or controlling portion of
the equity of another entity,
provided
,
however
, that any recipient of Stock or
securities convertible into or exercisable or exchangeable for Stock pursuant to this clause (iii)
executes and delivers to the Lead Representatives a “lock-up” agreement covering such Stock or
securities for the remainder of the 180-day restricted period or any extension thereof as described
below);
provided
,
however
, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or announces material news or a material
event or (2) prior to the expiration of the initial Lock-Up Period, the Company announces that it
will release earnings results during the 15-day period following the last day of the initial
Lock-Up Period, then in each case the Lock-Up Period will be automatically extended until the
expiration of the 18-day period beginning on the date of release of the earnings results or the
announcement of the material news or material event, as applicable, unless the Lead Representatives
waive, in writing, such extension; the Company will provide the Lead Representatives and each
stockholder subject to the Lock-Up Period pursuant to the lockup letters described in Section
8[(i)] with prior notice of any such announcement that gives rise to an extension of the Lock-up
Period;
(f) To furnish to its stockholders as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the Registration Statement),
to make available to its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
provided
that any report or
financial statement furnished or filed with the Commission that is publicly available on the
Commission’s EDGAR system shall be deemed to have been furnished to the stockholders at the time
furnished or filed with the Commission;
(g) During a period of two years from the effective date of the Registration Statement, to
furnish to you copies of all reports or other communications (financial or other) furnished to
stockholders, and to deliver to
15
you (i) as soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of the Company and
its subsidiaries are consolidated in reports furnished to its stockholders generally or to the
Commission);
provided
that any report, communication or financial statement furnished or
filed with the Commission that is publicly available on the Commission’s EDGAR system shall be
deemed to have been furnished to you at the time furnished or filed with the Commission;
(h) To use the net proceeds received by it from the sale of the Shares pursuant to this
Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;
(i) To use its best efforts to list, subject to notice of issuance, the Shares on the
Exchange;
(j) To file with the Commission such information on Form 10-Q or Form 10-K as may be required
by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(l) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter
an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering
of the Shares (the “License”);
provided
,
however
, that the License shall be used
solely for the purpose described above, is granted without any fee and may not be assigned or
transferred; and
(m) To comply with all applicable securities and other laws, rules and regulations in each
jurisdiction in which the Directed Shares are offered in connection with the Directed Share
Program.
6. (a) The Company represents and agrees that, without the prior consent of the Lead
Representatives, it has not made and will not make any offer relating to the Shares that would
constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Underwriter
represents and agrees that, without the prior consent of the Company and the Lead Representatives,
it has not made and will not make any offer relating to the Shares that would constitute a free
writing prospectus; any such free writing prospectus the use of which has been
16
consented to by the Company and the Lead Representatives is listed on Schedule II(a) hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or
retention where required and legending; and the Company represents that it has satisfied and agrees
that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file
with the Commission any electronic road show; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the Pricing Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances then
prevailing, not misleading, the Company will give prompt notice thereof to the Lead Representatives
and, if requested by the Lead Representatives, will prepare and furnish without charge to each
Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict,
statement or omission;
provided
,
however
, that this representation and warranty
shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in
reliance upon and in conformity with information furnished in writing to the Company by an
Underwriter through the Lead Representatives expressly for use therein.
7. The Company and the Partnerships covenant and agree with the several Underwriters that they
will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation, printing, reproduction and filing of the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof
to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey (iv) all fees and expenses in connection with listing the
Shares on the Exchange; (v) the filing fees incident to, and the fees and disbursements of counsel
for the Underwriters in connection with, any required review by the National Association of
Securities Dealers, Inc. of the terms of the
17
sale of the Shares; (vi) the cost of preparing stock certificates; (vii) the cost and charges
of any transfer agent or registrar; (viii) all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Share
Program; and (ix) all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 9, 10 and 13 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected
with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each
Time of Delivery, shall be subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company and the Partnerships herein are, at and as of
such Time of Delivery, true and correct, the condition that the Company and the Partnerships shall
have performed all of their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a) hereof; all material required
to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with
the Commission within the applicable time period prescribed for such filing by Rule 433; if
the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been
initiated or threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable satisfaction;
(b) Simpson Thacher & Bartlett LLP, counsel for the Underwriters, shall have furnished
to you such written opinion or opinions with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
18
(c) Dechert LLP, counsel for the Company, shall have furnished to you their written
opinion, in form and substance satisfactory to you, substantially to the effect set forth
in Annex II(b) hereto and dated such Time of Delivery;
(d) On the date of the Prospectus at a time prior to the execution of this Agreement,
at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to
the Registration Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, Ernst & Young LLP shall have furnished to you a letter or letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex I(b) hereto);
(e) (i) Neither the Company nor the Partnerships nor any of their respective
subsidiaries shall have sustained since the date of the latest audited financial statements
included in the Pricing Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which
information is given in the Pricing Prospectus, there shall not have been any change in the
capital stock or long-term debt of the Company, the Partnerships or any of their respective
subsidiaries or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders’ equity or
results of operations of the Company, the Partnerships and their respective subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus,
the effect of which, in any such case described in clause (i) or (ii), is in your judgment
so material and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectus;
(f) On or after the Applicable Time (i) no downgrading shall have occurred in the
rating accorded the debt securities or preferred stock of the Company, the Partnerships or
their respective subsidiaries by any “nationally recognized statistical rating
organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2)
under the Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of any
19
of the debt securities or preferred stock of the Company, the Partnerships or their
respective subsidiaries;
(g) On or after the Applicable Time there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities generally on
the Exchange; (ii) a suspension or material limitation in trading in the Company’s
securities on the Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war; or (v) the occurrence of
any other calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, if the effect of any such event specified in clause (iv)
or (v) in your judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(h) The Shares to be sold at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(i) The Company shall have obtained and delivered to the Underwriters executed copies
of an agreement from each person listed on Schedule III hereto to the effect set forth in
Annex III hereto, in form and substance satisfactory to you;
(j) The Reorganization Transactions shall have been consummated; and
(k) The Company and the Partnerships shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of the Company or the Partnerships,
as the case may be, satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Partnerships herein at and as of such Time of Delivery,
as to the performance by the Company and the Partnerships of all of their obligations
hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as you may
reasonably request.
9. (a) The Company and the Partnerships will jointly and severally indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
20
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are incurred;
provided
,
however
, that the Company and the Partnerships shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with written information furnished to the Company by any Underwriter through the Lead
Representatives expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus
or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus,
in reliance upon and in conformity with written information furnished to the Company by such
Underwriter through the Lead Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve the indemnifying party from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action
21
shall be brought against any indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability arising out of such
action 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 the indemnification provided for in this Section 9 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Partnerships on the one hand and the Underwriters on the other hand from the offering of the
Shares. If, however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Partnerships on the one hand and the
Underwriters on the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company and the
Partnerships on the one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The relative
22
fault 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 or the Partnerships on the one hand or the
Underwriters on the other hand and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company and the Partnerships
and the Underwriters agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by
pro rata
allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Partnerships under this Section 9 shall be in
addition to any liability which the Company and the Partnerships may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act and each broker-dealer affiliate of any Underwriter; and the
obligations of the Underwriters under this Section 9 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of the Company) and
to each person, if any, who controls the Company within the meaning of the Act.
10. (a) The Company agrees to indemnify and hold harmless Morgan Stanley, each person, if any,
who controls Morgan Stanley within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of Morgan Stanley within the meaning of Rule 405
of the Securities Act (“Morgan Stanley Entities”) from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other expenses
23
reasonably incurred in connection with defending or investigating any such action or claim)
(i) caused by any untrue statement or alleged untrue statement of a material fact contained in any
material prepared by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading; (ii) caused by the failure of any Participant to pay for and accept delivery of
Directed Shares that the Participant agreed to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of Morgan Stanley Entities.
(b) In case any proceeding (including any governmental investigation) shall be instituted
involving any Morgan Stanley Entity in respect of which indemnity may be sought pursuant to Section
10(a), the Morgan Stanley Entity seeking indemnity, shall promptly notify the Company in writing
and the Company, upon request of the Morgan Stanley Entity, shall retain counsel reasonably
satisfactory to the Morgan Stanley Entity to represent the Morgan Stanley Entity and any others the
Company may designate in such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any Morgan Stanley Entity shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of
such Morgan Stanley Entity unless (i) the Company shall have agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the Company and the Morgan Stanley Entity and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Morgan Stanley Entities in connection
with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all Morgan Stanley
Entities. Any such separate firm for the Morgan Stanley Entities shall be designated in writing by
Morgan Stanley. The Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Company agrees to indemnify the Morgan Stanley Entities from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time a Morgan Stanley Entity shall have requested the Company to reimburse it
for fees and expenses of counsel as contemplated by the second and third sentences of this
paragraph, the Company agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30 days after receipt
by the Company of the aforesaid request and (ii) the Company shall not have reimbursed the Morgan
Stanley Entity in accordance
24
with such request prior to the date of such settlement. The Company shall not, without the
prior written consent of Morgan Stanley, effect any settlement of any pending or threatened
proceeding in respect of which any Morgan Stanley Entity is or could have been a party and
indemnity could have been sought hereunder by such Morgan Stanley Entity, unless such settlement
includes an unconditional release of the Morgan Stanley Entities from all liability on claims that
are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 10(a) is unavailable to a Morgan
Stanley Entity or insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then the Company in lieu of indemnifying the Morgan Stanley Entity thereunder, shall
contribute to the amount paid or payable by the Morgan Stanley Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Morgan Stanley Entities on the other hand
from the offering of the Directed Shares or (ii) if the allocation provided by clause 10(c)(i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 10(c)(i) above but also the relative fault of the
Company on the one hand and of the Morgan Stanley Entities on the other hand in connection with any
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by the Company on the
one hand and the Morgan Stanley Entities on the other hand in connection with the offering of the
Directed Shares shall be deemed to be in the same respective proportions as the net proceeds from
the offering of the Directed Shares (before deducting expenses) and the total underwriting
discounts and commissions received by the Morgan Stanley Entities for the Directed Shares, bear to
the aggregate Public Offering Price of the Directed Shares. If the loss, claim, damage or
liability is caused by an untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact, the relative fault of the Company on the one hand and
the Morgan Stanley Entities on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement or the omission or alleged omission relates
to information supplied by the Company or by the Morgan Stanley Entities and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.
(d) The Company and the Morgan Stanley Entities agree that it would not be just or equitable
if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the
Morgan Stanley Entities were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in Section 10(c).
The amount paid or payable by the Morgan Stanley Entities as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
25
reasonably incurred by the Morgan Stanley Entities in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this Section 10, no Morgan
Stanley Entity shall be required to contribute any amount in excess of the amount by which the
total price at which the Directed Shares distributed to the public were offered to the public
exceeds the amount of any damages that such Morgan Stanley Entity has otherwise been required to
pay. The remedies provided for in this Section 10 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or in equity.
(e) The indemnity and contribution provisions contained in this Section 10 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Morgan Stanley Entity or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and payment for any of the
Directed Shares.
11. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has
agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or
another party or other parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that it has so arranged
for the purchase of such Shares, you or the Company shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect whatever changes that in the
opinion of your counsel may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which in the opinion of
your counsel may thereby be made necessary. The term “Underwriter” as used in this Agreement shall
include any person substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the number of shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed
26
to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company
to sell the Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, the Company or the Partnerships, except for the expenses to be borne by
the Company, the Partnerships and the Underwriters as provided in Section 7 hereof and the
indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
12. The respective indemnities, agreements, representations, warranties and other statements
of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery of and payment for the
Shares.
13. If this Agreement shall be terminated pursuant to Section 11 hereof or in connection with
the occurrence of any event specified in clauses (i), (iii), (iv) or (v) of Section 8(g) hereof,
the Company and the Partnerships shall not then be under any liability to any Underwriter except as
provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by
or on behalf of the Company as provided herein, the Company and the Partnerships will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Shares not so delivered, but the Company and the
Partnerships shall then be under no further liability to any Underwriter except as provided in
Sections 7 and 9 hereof.
14. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement
on behalf of any Underwriter made or given by you jointly or by any Lead Representative on behalf
of you as the
27
representatives. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to you as the Lead Representatives in care of Goldman, Sachs & Co., One New York
Plaza, 42
nd
Floor, New York, New York 10004, Attention: Registration Department, and in
care of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:
Equity Syndicate Desk, with a copy to Morgan Stanley & Co. Incorporated, 1585 Broadway, New York,
New York 10036, Attention: Legal Department; and if to the Company or the Partnerships shall be
delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary, with a copy to Dechert LLP, Cira Centre, 2929
Arch Street, Philadelphia, PA 19104, Attention: James A. Lebovitz, Esq. and Brian D. Short, Esq.;
provided
,
however
, that any notice to an Underwriter pursuant to Section 9(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at
its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company by you upon request;
provided
,
however
, that notices under subsection 5(e) shall be in writing, and if to the Underwriters
shall be delivered or sent by mail, telex or facsimile transmission to you as the Lead
Representatives at Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attention:
Control Room and Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036,
Attention: Equity Syndicate Desk, with a copy to Morgan Stanley & Co. Incorporated, 1585 Broadway,
New York, New York 10036, Attention: Legal Department. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriters, the Company, the Partnerships and, to the extent provided in Sections 9 and 12
hereof, the officers and directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
16. Time shall be of the essence of this Agreement. As used herein, the term “business day”
shall mean any day when the Commission’s office in Washington, D.C. is open for business.
17. Each of the Company and the Partnerships acknowledges and agrees that (i) the purchase and
sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand, (ii) in connection
therewith and with the process leading to such transaction each Underwriter is acting solely as a
principal and not the agent or fiduciary of the Company or the Partnerships, (iii) no Underwriter
has assumed an advisory or fiduciary responsibility in favor of the
28
Company or the Partnerships with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is currently advising the
Company or the Partnerships on other matters) or any other obligation to the Company or the
Partnerships except the obligations expressly set forth in this Agreement and (iv) each of the
Company and the Partnerships has consulted its own legal and financial advisors to the extent it
deemed appropriate. Each of the Company and the Partnerships agrees that it will not claim that
the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes
a fiduciary or similar duty to the Company or the Partnerships, in connection with such transaction
or the process leading thereto.
18. This Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company or the Partnerships and the Underwriters, or any of them, with respect to
the subject matter hereof.
19.
This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.
20. The Company, the Partnerships and each of the Underwriters hereby irrevocably waive, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
21. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
22. Notwithstanding anything herein to the contrary, the Company and the Partnerships are
authorized to disclose to any persons the U.S. federal and state income tax treatment and tax
structure of the potential transaction and all materials of any kind (including tax opinions and
other tax analyses) provided to the Company or the Partnerships relating to that treatment and
structure, without the Underwriters imposing any limitation of any kind. However, any information
relating to the tax treatment and tax structure shall remain confidential (and the foregoing
sentence shall not apply) to the extent necessary to enable any person to comply with securities
laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that
treatment.
If the foregoing is in accordance with your understanding, please sign and return to us five
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters,
this letter and such acceptance hereof shall constitute a binding agreement between each of the
Underwriters and the Company and the Partnerships. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to
29
the Company for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
|
|
|
|
|
|
|
|
Very truly yours,
HFF, Inc.
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
Holliday Fenoglio Fowler, L.P.,
by Holliday GP Corp., its
General Partner
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
HFF Securities, L.P.
by Holliday GP Corp., its
General Partner
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
30
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
(Goldman, Sachs & Co.)
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Morgan Stanley & Co. Incorporated)
|
|
|
On behalf of each of the Underwriters
31
SCHEDULE I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Total
|
|
Optional
|
|
|
|
Number of
|
|
Shares to be
|
|
|
|
Firm
|
|
Purchased if
|
|
|
|
Shares
|
|
Maximum
|
|
|
|
to be
|
|
Option
|
|
Underwriter
|
|
Purchased
|
|
Exercised
|
|
Goldman, Sachs & Co.
|
|
|
|
|
|
|
|
|
|
Morgan Stanley & Co. Incorporated
|
|
|
|
|
|
|
|
|
|
[Names of other Underwriters]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
SCHEDULE II
(a) Issuer Free Writing Prospectuses:
(b) Additional Documents Incorporated by Reference:
SCHEDULE III
HFF Holdings, LLC
John P. Fowler
Mark D. Gibson
George L. Miles, Jr.
John H. Pelusi, Jr.
Joe B. Thornton, Jr.
Gregory R. Conley
Nancy O. Goodson
[each director and officer of HFF Inc.]
2
ANNEX III
[Form of lock-up agreement]
HFF, Inc.
Lock-Up Agreement
[_______], 2007
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
and
Morgan Stanley & Co. Incorporated,
1585 Broadway,
New York, New York 10036
Re:
HFF, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the “Representatives”), propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) on behalf of the several
Underwriters named in Schedule I to the Underwriting Agreement (collectively, the “Underwriters”),
with HFF, Inc., a Delaware corporation (the “Company”), Holliday Fenoglio Fowler, L.P., a Texas
limited partnership (“Holliday Fenoglio Fowler”) and HFF Securities L.P., a Delaware limited
partnership (“HFF Securities” and, together with Holliday Fenoglio Fowler, the “Partnerships”),
providing for a public offering of the Class A Common Stock, par value $0.01 per share of the
Company (the “Shares”) pursuant to a Registration Statement on Form S-1 to be filed with the
Securities and Exchange Commission (the “SEC”).
In consideration of the agreement by the Underwriters to offer and sell the Shares, and of
other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,
the undersigned agrees that, during the period specified in the following paragraph (the “Lock-Up
Period”), the undersigned will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of any shares of Class A Common Stock of the
Company, or any options or warrants to purchase any shares of Class A Common Stock of the Company,
or any securities convertible into, exchangeable for or that represent the right to receive shares
of Class A Common Stock of the Company or any such substantially similar securities, whether now
owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian)
or with respect to which the undersigned has beneficial ownership within the rules and regulations
of the SEC (collectively the “Undersigned’s Shares”). The foregoing restriction is expressly agreed
to preclude the undersigned from engaging in any hedging or other transaction which is designed to
or which reasonably could be expected to lead to or result in a sale or disposition of the
Undersigned’s Shares even if such Shares would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including without limitation any put or
call option) with respect to any of the Undersigned’s Shares or with respect to any security that
includes, relates to, or derives any significant part of its value from such Shares.
The initial Lock-Up Period will commence on the date of this Lock-Up Agreement and continue
for 180 days after the public offering date set forth on the final prospectus used to sell the
Shares (the “Public Offering Date”) pursuant to the Underwriting Agreement; provided, however, that
if (1) during the last 17 days of the initial Lock-Up Period, any of the Company, the Partnerships
or any of their respective subsidiaries releases earnings results or announces material news or a
material event or (2) prior to the expiration of the initial Lock-Up Period, any of the Company,
the Partnerships or any of their respective subsidiaries announces that it will release earnings
results during the 15-day period following the last day of the initial Lock-Up Period, then in each
case the Lock-Up Period will be automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the announcement of the material news
or material event, as applicable, unless the Representatives waive, in writing, such extension.
The undersigned hereby acknowledges that the Company and the Partnerships have agreed in the
Underwriting Agreement to provide written notice of any event that would result in an extension of
the Lock-Up Period pursuant to the previous paragraph to the undersigned (in accordance with
Section 14 of the Underwriting Agreement) and agrees that any such notice properly delivered will
be deemed to have been given to, and received by, the undersigned. The undersigned hereby further
agrees that, prior to engaging in any transaction or taking any other action that is subject to the
terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and
including the 34th day following the expiration of the initial Lock-Up Period, it will give notice
thereof to the Company and the Partnerships and will not consummate such
transaction or take any such action unless it has received written confirmation from the
Company or the Partnerships that the Lock-Up Period (as such may have been extended pursuant to the
previous paragraph) has expired.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a
bona fide
gift or gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided further that any
such transfer shall not involve a disposition for value, (iii) with the prior written consent of
the Representatives on behalf of the Underwriters, or (iv) if such transfer occurs by operation of
laws of descent and distribution,
provided
that prior to such transfer the transferee
agrees to be bound in writing by the restrictions set forth herein. For purposes of this Lock-Up
Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is a
corporation, the corporation may transfer the capital stock of the Company to any wholly-owned
subsidiary of such corporation;
provided
,
however
, that in any such case, it shall
be a condition to the transfer that the transferee execute an agreement stating that the transferee
is receiving and holding such capital stock subject to the provisions of this Agreement and there
shall be no further transfer of such capital stock except in accordance with this Agreement, and
provided
further
that any such transfer shall not involve a disposition for value.
The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above, for the
duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned’s
Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also
agrees and consents to the entry of stop transfer instructions with the transfer agent and
registrar of the Company or any other person against the transfer of the Undersigned’s Shares
except in compliance with the foregoing restrictions.
It is understood that if the Company notifies you in writing that it does not intend to
proceed with the offering, if the Underwriting Agreement does not become effective or if the
Underwriting Agreement (other than provisions thereof which survive termination) shall terminate or
be terminated prior to delivery of the Shares, or if the offering shall not have occurred by June
30, 2007, the undersigned will be released from its obligations under this agreement.
The undersigned understands that the Company, the Partnerships and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The
undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding
upon the undersigned’s heirs, legal representatives, successors, and assigns.
|
|
|
|
|
|
|
|
Very truly yours,
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
Exhibit 3.1
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
HFF, INC.
The present name of the corporation is HFF, Inc. (the “
Company
”). The Company was
incorporated under the name “HFF, Inc.” by the filing of its original certificate of incorporation
(the “
Original Certificate of Incorporation
”) with the Secretary of State of the State of
Delaware on November 2, 2006. This Amended and Restated Certificate of Incorporation of the
Company, which both restates and further amends the provisions of the Original Certificate of
Incorporation, was duly adopted in accordance with the provisions of Sections 228, 242 and 245 of
the General Corporation Law of the State of Delaware. The Original Certificate of Incorporation of
the Company is hereby amended and restated to read in its entirety as follows:
ARTICLE I
Section 1.1.
Name
. The name of the Company is HFF, Inc. (the “
Company
”).
ARTICLE II
Section 2.1.
Address
. The registered office of the Company in the State of Delaware is
1209 Orange Street, Wilmington, New Castle County, Delaware 19801; and the name of the Company’s
registered agent at such address is The Corporation Trust Company.
ARTICLE III
Section 3.1.
Purpose
. The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation Law of the State of
Delaware (the “
DGCL
”).
ARTICLE IV
Section 4.1.
Capitalization
. The total number of shares of all classes of stock that the
Company is authorized to issue is [
•
] shares, consisting of (i) [
•
] shares of Preferred
Stock, par value $.01 per share (“
Preferred Stock
”), (ii) [
•
] shares of Class A
Common Stock, par value $.01 per share (“
Class A Common Stock
”), and (iii) 1 share of Class
B Common Stock, par value $.01 per share (“
Class B Common Stock
” and, together with the
Class A Common Stock, the “
Common Stock
”). The number of authorized shares of any of the
Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but
not below the number of shares thereof then outstanding) by the affirmative vote of the holders of
a majority in voting power of the stock of the Company entitled to vote thereon irrespective of the
provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of
the holders of any of the Class A Common Stock, Class B Common Stock or Preferred Stock voting
separately as a class shall be required therefor.
Section 4.2.
Preferred Stock
.
(A) The Board of Directors of the Company (the “
Board
”) is hereby expressly authorized, by
resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of
Preferred Stock and, with respect to each such series, to fix the number of shares constituting
such series and the designation of such series, the voting powers (if any) of the shares of such
series, and the powers, preferences and relative, participating, optional or other special rights,
if any, and any qualifications, limitations or restrictions thereof, of the shares of such series.
The powers, preferences and relative, participating, optional and other special rights of each
series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time outstanding.
(B) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be
entitled only to such voting rights, if any, as shall expressly be granted thereto by this
Certificate of Incorporation (including any certificate of designations relating to such series).
Section 4.3.
Common Stock
.
(A)
Voting Rights
.
(1) Each holder of Class A Common Stock, as such, shall be entitled to one vote for each share of
Class A Common Stock held of record by such holder on all matters on which stockholders generally
are entitled to vote; provided, however, that to the fullest extent permitted by law, holders of
Class A Common Stock, as such, shall have no voting power with respect to, and shall not be
entitled to vote on, any amendment to this Certificate of Incorporation (including any certificate
of designations relating to any series of Preferred Stock) that relates solely to the terms of one
or more outstanding series of Preferred Stock if the holders of such affected series are entitled,
either separately or together with the holders of one or more other such series, to vote thereon
pursuant to this Certificate of Incorporation (including any certificate of designations relating
to any series of Preferred Stock) or pursuant to the DGCL.
(2) Each holder of Class B Common Stock shall be entitled, as such, without regard to the number of
shares of Class B Common Stock (or fraction thereof) held by such holder, to a number of votes that
is equal to the number of shares of Class A Common Stock into which the Partnership Units (defined
below) held of record by such holder are then exchangeable pursuant to Article V of this
Certificate of Incorporation on all matters on which stockholders are generally entitled to vote;
provided, however, that, to the fullest extent permitted by law, holders of Class B Common Stock,
as such, shall have no voting power with respect to, and shall not be entitled to vote on, any
amendment to this Certificate of Incorporation (including any certificate of designations relating
to any series of Preferred Stock) that relates solely to the terms of one or more outstanding
series of Preferred Stock if the holders of such affected series are entitled, either separately or
together with the holders of one or more other such series, to vote thereon pursuant to this
Certificate of Incorporation (including any certificate of designations relating to any series of
Preferred Stock) or pursuant to the DGCL. Subject to the above, when casting its votes at any
meeting of the Company, each holder of Class B Common Stock shall be entitled to cast all or any
portion of the number of votes to which the Class B Common Share shall be entitled for or against,
or to abstain all or any portion of the number of votes to which the Class B Common Stock shall be
entitled from voting on, any proposed matter, and shall be entitled in voting on any single matter
to vote a portion of such votes for, a portion of such votes against and/or abstain
2
a portion of such votes from voting on, such matter, in such number and proportions as the holder
sees fit. “
Partnership Unit
” means collectively a partnership unit in each of Holliday
Fenoglio Fowler, L.P., a Delaware limited partnership, and HFF Securities L.P., or any successor
entities thereto, issued under their respective partnership agreements, as amended
(“
Partnership Agreements
”).
(3) Except as otherwise required in this Certificate of Incorporation or by applicable law, the
holders of Common Stock shall vote together as a single class on all matters (or, if any holders of
Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class
with such holders of Preferred Stock).
(B)
Dividends
. Subject to applicable law and the rights, if any, of the holders of any
outstanding series of Preferred Stock or any class or series of stock having a preference over or
the right to participate with the Class A Common Stock with respect to the payment of dividends,
dividends may be declared and paid on the Class A Common Stock out of the assets of the Company
that are by law available therefor at such times and in such amounts as the Board in its discretion
shall determine. Dividends shall not be declared or paid on the Class B Common Stock.
(C)
Liquidation, Dissolution or Winding Up
. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, after payment or provision
for payment of the debts and other liabilities of the Company and of the preferential and other
amounts, if any, to which the holders of Preferred Stock shall be entitled, the holders of all
outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the
Company available for distribution ratably in proportion to the number of shares held by each such
stockholder. The holders of shares of Class B Common Stock, as such, shall not be entitled to
receive any assets of the Company in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company.
(D)
Retirement of Class B Common Stock
. In the event that any outstanding share of Class B
Common Stock shall cease to be held by a holder of Partnership Units, such share shall
automatically and without further action on the part of the Company or any holder of Class B Common
Stock be transferred to the Company and thereupon shall be retired.
In the event that the Class B
Common Stock is no longer entitled to any votes at any meeting or action under Section 4.3(A)(2)
above, all shares of such Class B Common Stock shall automatically and without further action on
the part of the Company or any holder of Class B Common Stock be transferred to the Company and
thereupon shall be retired.
ARTICLE V
Section 5.1.
Partnership Units
.
(A)
Exchange of Partnership Units
.
(1) Subject to adjustment as provided in this Article V and subject to the provisions of the
Partnership Agreements, each holder of a Partnership Unit (other than the Company) shall be
entitled to exchange, at any time and from time to time, any or all of such holder’s Partnership
Units, on a one-for-one basis, for the same number of shares of Class A Common Stock (the number of
shares of Class A Common Stock for which a Partnership Unit is entitled to be exchanged referred to
herein as the
3
“
Exchange Rate
”). Such right shall be exercised by a written notice to the Company from
the holder of such Partnership Units stating that such holder desires to exchange a stated number
of Partnership Units into an equal number of shares of Class A Common Stock, accompanied by
instruments of transfer to the Company, in form satisfactory to the Company and to the Company’s
transfer agent (the “
Transfer Agent
”), duly executed by such holder or such holder’s duly
authorized attorney, and transfer tax stamps or funds therefor, if required pursuant to this
Article V, in respect of the Partnership Units to be exchanged, in each case delivered during
normal business hours at the principal executive offices of the Company or at the office of the
Transfer Agent. Notwithstanding the foregoing, no holder of a Partnership Unit shall be entitled
to exchange such Partnership Unit for a share of Class A Common Stock if such exchange would be
prohibited under applicable federal or state securities laws or regulations.
(2) As promptly as practicable following the surrender for exchange of Partnership Units in the
manner provided in this Article V and the payment in cash of any amount required by the provisions
of this Article V, the Company shall deliver or cause to be delivered at the principal executive
offices of the Company or at the office of the Transfer Agent the number of shares of Class A
Common Stock issuable upon such exchange, issued in such name or names as such holder may direct.
Upon the date any such Partnership Units are surrendered for exchange, all rights of the holder of
such Partnership Units as such holder shall cease, and the person or persons in whose name or names
the shares of Class A Common Stock are to be issued shall be treated for all purposes as having
become the record holder or holders of such shares of Class A Common Stock.
(B)
Stock Splits, Stock Dividends and Reclassifications
. The Exchange Rate shall be
adjusted accordingly if there is: (1) any subdivision (by any unit split, unit distribution,
reclassification, recapitalization or otherwise) or combination (by reverse unit split,
reclassification, recapitalization or otherwise) of the Partnership Units that is not accompanied
by an identical subdivision or combination of the Class A Common Stock; or (2) any subdivision (by
any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination
(by reverse stock split, reclassification, recapitalization or otherwise) of the Class A Common
Stock that is not accompanied by an identical subdivision or combination of the Partnership Units.
In the event of a reclassification or other similar transaction as a result of which the shares of
Class A Common Stock are converted into another security, then a holder of Partnership Units shall
be entitled to receive upon exchange the amount of such security that such holder would have
received if such exchange had occurred immediately prior to the effective date of such
reclassification or other similar transaction. Except as may be required in the immediately
preceding sentence, no adjustments in respect of dividends shall be made upon the exchange of any
Partnership Unit; provided, however, that if a Partnership Unit shall be exchanged subsequent to
the record date for the payment of a dividend or other distribution on Partnership Units but prior
to the date of such payment, then the registered holder of such Partnership Unit at the close of
business on such record date shall be entitled to receive the dividend or other distribution
payable on such Partnership Unit on such payment date notwithstanding the exchange thereof or the
default in payment of the dividend or distribution due on such payment date.
4
(C)
Shares Reserved for Issuance
. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose
of issuance upon exchange of the Partnership Units, such number of shares of Class A Common Stock
that shall be issuable upon the exchange of all such outstanding Partnership Units; provided, that
nothing contained herein shall be construed to preclude the Company from satisfying its obligations
in respect of the exchange of the Partnership Units by delivery of purchased shares of Class A
Common Stock which are held in the treasury of the Company. The Company covenants that if any
shares of Class A Common Stock require registration with or approval of any governmental authority
under any federal or state law before such shares of Class A Common Stock may be issued upon
exchange, the Company shall use commercially reasonable efforts to cause such shares to be duly
registered or approved, as the case may be. The Company shall use commercially reasonable efforts
to list the shares of Class A Common Stock required to be delivered upon exchange prior to such
delivery upon each national securities exchange or inter-dealer quotation system upon which the
outstanding Class A Common Stock may be listed or traded at the time of such delivery. The Company
covenants that all shares of Class A Common Stock that shall be issued upon exchange of the
Partnership Units will, upon issue, be validly issued, fully paid and non-assessable.
(D)
Taxes
. The issuance of shares of Class A Common Stock upon exchange of Partnership
Units shall be made without charge to the holders of such Partnership Units for any stamp or other
similar tax in respect of such issuance; provided, however, that if any such shares to be issued in
a name other than that of the holder of the Partnership Units exchanged, then the person or persons
requesting the issuance thereof shall pay to the Company the amount of any tax that may be payable
in respect of any transfer involved in such issuance or shall establish to the satisfaction of the
Company that such tax has been paid or is not payable.
Section 5.2.
Amendment of Article V
. Notwithstanding anything to the contrary contained
in this Certificate of Incorporation, and in addition to any other vote required by the DGCL or
this Certificate of Incorporation, the affirmative vote of the holders of at least a majority in
voting power of the Class B Common Stock, voting separately as a class, shall be required to alter,
amend or repeal this Article V or to adopt any provision inconsistent therewith.
ARTICLE VI
Section 6.1.
Bylaws
. In furtherance and not in limitation of the powers conferred by the
DGCL, the Board is expressly authorized to make, amend, alter, change, add to or repeal the bylaws
of the Company without the assent or vote of the stockholders in any manner not inconsistent with
the laws of the State of Delaware or this Certificate of Incorporation. Notwithstanding anything
to the contrary contained in this Certificate of Incorporation, the affirmative vote of the holders
of at least 66-2/3% of the voting power of all the then outstanding shares of stock of the Company
entitled to vote generally
5
in the election of directors, voting together as a single class, shall be required for the
stockholders to make, amend, alter, change, add to or repeal any provision of the bylaws of the
Company.
ARTICLE VII
Section 7.1.
Board of Directors
.
(A) The business and affairs of the Company shall be managed by or under the direction of the
Board, with the exact number of directors to be determined from time to time by resolution adopted
by affirmative vote of a majority of the Board.
(B) Subject to the rights, if any, of any series of Preferred Stock then outstanding, the directors
shall be divided into three classes, designated Class I, Class II and Class III. The initial Class
I directors are [
•
], [
•
] and [
•
], the initial Class II directors are [
•
],
[
•
] and [
•
], and the initial Class III directors are [
•
], [
•
] and
[
•
]. The number of directors in each class shall be the whole number contained in the
quotient arrived at by dividing the authorized number of directors by three, and if a fraction is
also contained in such quotient then if such fraction is one-third (1/3) the extra director shall
be a member of Class III and if the fraction is two-thirds (2/3) one of the extra directors shall
be a member of Class III and the other shall be a member of Class II. Directors shall serve for
staggered terms of three years each, except that initially the Class I directors will serve until
the Company’s 2007 annual meeting of stockholders, the Class II directors will serve until the
Company’s 2008 annual meeting and the Class III directors will serve until the Company’s 2009
annual meeting. At each annual meeting of stockholders following the first annual meeting of
stockholders, directors shall be elected to succeed those directors whose terms expire for a term
of office to expire at the third succeeding annual meeting of stockholders after their election.
All directors shall hold office until the annual meeting of stockholders for the year in which
their term expires and until their successors are duly elected and qualified, or until their
earlier death, resignation, disqualification or removal.
(C) Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred
Stock issued by the Company shall have the right, voting separately as a series or separately as a
class with one or more such other series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, removal and other features of such directorships shall
be governed by the terms of this Certificate of Incorporation (including any certificate of
designations relating to any series of Preferred Stock) applicable thereto. The number of
directors that may be elected by the holders of any such series of Preferred Stock shall be in
addition to the number fixed pursuant to Section 7.1(A) hereof.
(D) Directors of the Company need not be elected by written ballot unless the bylaws of the Company
shall so provide.
ARTICLE VIII
Section 8.1.
Meetings of Stockholders
. Any action required or permitted to be taken by
the holders of stock of the Company must be effected at a duly called annual or special meeting of
such holders and may not be effected by any consent in writing by such holders; provided, however,
that any action required or permitted to be taken by the holders of Class B Common Stock, voting
separately as a
6
class, or, to the extent expressly permitted by the certificate of designation relating to one or
more series of Preferred Stock, by the holders of such series of Preferred Stock, voting separately
as a series or separately as a class with one or more other such series, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding shares of the relevant
class or series having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the Company by delivery to its registered office in
Delaware, its principal place of business, or to an officer or agent of the Company having custody
of the book in which proceedings of meetings of stockholders are recorded. Except as otherwise
required by law and subject to the rights of the holders of any series of Preferred Stock, special
meetings of the stockholders of the Company may be called only by or at the direction of the Board,
the Chairman of the Board or the Chief Executive Officer of the Company.
ARTICLE IX
Section 9.1.
Advance Notice
. Advance notice of new business and stockholder nomination
for the election of directors shall be given in the manner and to the extent provided in the bylaws
of the Company or any amendment thereof.
ARTICLE X
Section 10.1.
Limited Liability of Directors
. No director of the Company will have any
personal liability to the Company or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except to the extent such exemption from liability or limitation
thereof is not permitted under the DGCL as the same exists or hereafter may be amended. Neither
the amendment nor the repeal of this Article X shall eliminate or reduce the effect thereof in
respect of any matter occurring, or any cause of action, suit or claim that, but for this Article
X, would accrue or arise, prior to such amendment or repeal.
ARTICLE XI
Section 11.1.
Indemnification
. To the fullest extent permitted by the laws of the State
of Delaware as it presently exists or may hereafter be amended, the Company shall indemnify any
person (and such person’s heirs, executors or administrators) who was or is made or is threatened
to be made a party to or is otherwise involved in any threatened, pending or completed action, suit
or proceeding (brought in the right of the Company or otherwise), whether civil, criminal,
administrative or investigative, and whether formal or informal, including appeals, by reason of
the fact that such person, or a person for whom such person was the legal representative, is or was
a director or officer of the Company or, while a director or officer of the Company, is or was
serving at the request of the Company as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, limited liability company, nonprofit
entity or other enterprise, for and against all loss and liability suffered and expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement reasonably incurred by such
person or such heirs, executors or administrators in connection with such action, suit or
proceeding, including appeals. Notwithstanding the preceding sentence, except as otherwise
provided in Section 11.3 hereof, the Company shall be required to indemnify a person described in
such sentence in connection with any action, suit or proceeding (or part thereof) commenced by such
person only if the commencement of such action, suit or proceeding (or part thereof) by such person
was authorized by the Board.
7
Section 11.2.
Advance of Expenses
. To the fullest extent permitted by the laws of the
State of Delaware, the Company shall promptly pay expenses (including attorneys’ fees) incurred by
any person described in Section 11.1 hereof in appearing at, participating in or defending any
action, suit or proceeding in advance of the final disposition of such action, suit or proceeding,
including appeals, upon presentation of an undertaking on behalf of such person to repay such
amount if it shall ultimately be determined that such person is not entitled to be indemnified
under this Article XI or otherwise. Notwithstanding the preceding sentence, except as otherwise
provided in Section 11.3 hereof, the Company shall be required to pay expenses of a person
described in such sentence in connection with any action, suit or proceeding (or part thereof)
commenced by such person only if the commencement of such action, suit or proceeding (or part
thereof) by such person was authorized by the Board.
Section 11.3.
Unpaid Claims
. If a claim for indemnification (following the final
disposition of such action, suit or proceeding) or advancement of expenses under this Article XI is
not paid in full within thirty (30) days after a written claim therefor by any person described in
Section 11.1 has been received by the Company, such person may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part, shall be entitled to be paid the
expense of prosecuting such claim. In any such action the Company shall have the burden of proving
that such person is not entitled to the requested indemnification or advancement of expenses under
applicable law.
Section 11.4.
Insurance
. To the fullest extent permitted by the laws of the State of
Delaware, the Company may purchase and maintain insurance on behalf of any person described in
Section 11.1 against any liability asserted against such person, whether or not the Company would
have the power to indemnify such person against such liability under the provisions of this Article
XI or otherwise.
Section 11.5.
Non-Exclusivity of Rights
. The provisions of this Article XI shall be
applicable to all actions, claims, suits or proceedings made or commenced after the adoption
hereof, whether arising from acts or omissions to act occurring before or after its adoption. The
provisions of this Article XI shall be deemed to be a contract between the Company and each
director or officer (or legal representative thereof) who serves in such capacity at any time while
this Article XI and the relevant provisions of the laws of the State of Delaware and other
applicable law, if any, are in effect, and any alteration, amendment or repeal hereof shall not
affect any rights or obligations then existing with respect to any state of facts or any action,
suit or proceeding then or theretofore existing, or any action, suit or proceeding thereafter
brought or threatened based in whole or in part on any such state of facts. If any provision of
this Article XI shall be found to be invalid or limited in application by reason of any law or
regulation, it shall not affect the validity of the remaining provisions hereof. The rights of
indemnification provided in this Article XI shall neither be exclusive of, nor be deemed in
limitation of, any rights to which any person may otherwise be or become entitled or permitted by
contract, this Certificate of Incorporation, the bylaws of the Company, vote of stockholders or
directors or otherwise, or as a matter of law, both as to actions in such person’s official
capacity and actions in any other capacity, it being the policy of the Company that indemnification
of any person whom the Company is obligated to indemnify pursuant to Section 11.1 hereof shall be
made to the fullest extent permitted by law.
For purposes of this Article XI, references to “other enterprises” shall include employee benefit
plans;
8
references to “fines” shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries.
This Article XI shall not limit the right of the Company, to the extent and in the manner permitted
by law, to indemnify and to advance expenses to, and purchase and maintain insurance on behalf of,
persons other than persons described in Section 11.1 hereof.
ARTICLE XII
Section 12.1.
Severability
. If any provision or provisions of this Certificate of
Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance
for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any
other circumstance and of the remaining provisions of this Certificate of Incorporation (including,
without limitation, each portion of any paragraph of this Certificate of Incorporation containing
any such provision held to be invalid, illegal or unenforceable that is not itself held to be
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 Certificate of Incorporation (including,
without limitation, each such portion of any paragraph of this Certificate of Incorporation
containing any such provision held to be invalid, illegal or unenforceable) shall be construed so
as to permit the Company to protect its directors, officers, employees and agents from personal
liability in respect of their good faith service to or for the benefit of the Company to the
fullest extent permitted by law.
ARTICLE XIII
Section 13.1.
Amendment
. The Company reserves the right to amend or repeal any provisions
contained in this Certificate of Incorporation or any amendment thereof from time to time and at
any time in the manner now or hereafter prescribed by the laws of the State of Delaware, and all
rights conferred upon stockholders and directors are granted subject to such reservation; provided,
however, that, notwithstanding anything to the contrary elsewhere contained in this Certificate of
Incorporation, any amendment or repeal of Articles VI, VII, VIII, IX and XIII, shall not be
amended, altered or repealed without the affirmative vote of the holders of not less than 66-2/3%
of the then outstanding stock of the Company entitled to vote generally in the election of
directors.
* * *
9
IN WITNESS WHEREOF, the Company has caused this Certificate of Incorporation to be signed by John
H. Pelusi, Jr., its Chief Executive Officer, this
day of
,
2007.
|
|
|
|
|
|
|
HFF, INC.
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name: John H. Pelusi, Jr.
|
|
|
|
|
|
Title: Chief Executive Officer
|
|
|
10
Exhibit 3.2
FORM OF
AMENDED AND RESTATED
BYLAWS
OF
HFF, INC.
ARTICLE I.
STOCKHOLDERS
Section 1. The annual meeting of the stockholders of HFF, Inc. (the “
Company
”) for
the purpose of electing directors and for the transaction of such other business as may properly be
brought before the meeting shall be held on such date, and at such time and place, if any, within
or without the State of Delaware as may be designated from time to time by the Board of Directors
of the Company (the “
Board
”).
Section 2. Subject to the rights of the holders of any class or series of preferred stock of
the Company, special meetings of the stockholders of the Company may be called only by or at the
direction of the Board, the Chairman of the Board or the Chief Executive Officer of the Company.
Section 3. Except as otherwise provided by law, the certificate of incorporation of the
Company or these Bylaws, notice of the time, place (if any) and, in the case of a special meeting,
the purpose or purposes of the meeting of stockholders shall be given not more than sixty, nor less
than ten, days previous thereto, to each stockholder of record entitled to vote at the meeting at
such address as appears on the records of the Company.
Section 4. The holders of a majority in voting power of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at
all meetings of the stockholders for the transaction of business, except as otherwise provided
herein, by statute or by the certificate of incorporation of the Company; but if at any meeting of
stockholders there shall be less than a quorum present, the chairman of the meeting or the
stockholders present may, to the extent permitted by law, adjourn the meeting from time to time
without further notice other than announcement at the meeting of the date, time and place, if any,
of the adjourned meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be transacted which
might have been transacted at the original meeting. If the adjournment is for more than thirty
days, or if, after the adjournment, a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled to vote at the
meeting. Notwithstanding the foregoing, where a separate vote by a class or series or classes or
series is required, a majority of the outstanding shares of such class or series or classes or
series, present in person or represented by proxy, shall constitute a quorum entitled to take
action with respect to that vote on that matter.
Section 5. The Chairman of the Board, or in the Chairman’s absence or at the Chairman’s
direction, the Chief Executive Officer, or in the Chief Executive Officer’s absence or at the Chief
Executive Officer’s direction, any officer of the Company shall call all meetings of the
stockholders to order and shall act as chairman of any such meetings. The Secretary of the Company
or, in such officer’s absence, an Assistant Secretary shall act as secretary of the meeting. If
neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting shall
appoint a secretary of the meeting. Unless otherwise determined by the Board prior to the meeting,
the chairman of the meeting shall determine the order of business and shall have the authority in
his or her discretion to regulate the conduct of any such meeting, including, without
limitation, convening the meeting and adjourning the meeting (whether or not a quorum is
present), imposing restrictions on the persons (other than stockholders of record of the Company or
their duly appointed proxies) who may attend any such meeting, whether any stockholder or
stockholder’s proxy may be excluded from any meeting of stockholders based upon any determination
by the chairman of the meeting, in his or her sole discretion, that any such person has unduly
disrupted or is likely to disrupt the proceedings thereat, and the circumstances in which any
person may make a statement or ask questions at any meeting of stockholders.
Section 6. At all meetings of stockholders, any stockholder entitled to vote thereat shall be
entitled to vote in person or by proxy, but no proxy shall be voted after three years from its
date, unless such proxy provides for a longer period. Without limiting the manner in which a
stockholder may authorize another person or persons to act for the stockholder as proxy pursuant to
the General Corporation Law of the State of Delaware (the “
DGCL
”), the following shall
constitute a valid means by which a stockholder may grant such authority: (1) a stockholder may
execute a writing authorizing another person or persons to act for the stockholder as proxy, and
execution of the writing may be accomplished by the stockholder or the stockholder’s authorized
officer, director, employee or agent signing such writing or causing his or her signature to be
affixed to such writing by any reasonable means including, but not limited to, by facsimile
signature; or (2) a stockholder may authorize another person or persons to act for the stockholder
as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means
of electronic transmission to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly authorized by the person
who will be the holder of the proxy to receive such transmission, provided that any such telegram,
cablegram or other means of electronic transmission must either set forth or be submitted with
information from which it can be determined that the telegram, cablegram or other electronic
transmission was authorized by the stockholder. If it is determined that such telegrams,
cablegrams or other electronic transmissions are valid, the inspector or inspectors of stockholder
votes or, if there are no such inspectors, such other persons making that determination shall
specify the information upon which they relied. A duly executed proxy shall be irrevocable if its
states that it is irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself or an interest in
the Company generally. A stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing
another duly executed proxy bearing a later date with the Secretary of the Company.
Any copy, facsimile telecommunication or other reliable reproduction of the writing or
transmission created pursuant to the preceding paragraph of this Section 6 may be substituted or
used in lieu of the original writing or transmission for any and all purposes for which the
original writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the entire original
writing or transmission.
Proxies shall be filed with the secretary of the meeting prior to or at the commencement of
the meeting to which they relate.
Section 7. When a quorum is present at any meeting, the vote of the holders of a majority of
the votes cast shall decide any question brought before such meeting, unless the question is one
upon which by express provision of the certificate of incorporation of the Company, these Bylaws or
the DGCL a different vote is required, in which case such express provision shall govern and
control the decision of such question. Notwithstanding the foregoing, where a separate vote by a
class or series or classes or series is required and a quorum is present, the affirmative vote of a
majority of the votes cast by shares of such class or series or classes or series shall be the act
of such class or series or classes or series, unless the question is one upon which by express
provision of the certificate of incorporation of the Company, these Bylaws or the DGCL a different
vote is required, in which case such express provision shall govern and control the decision of
such question.
2
Section 8. In order that the Company may determine the stockholders (a) entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof or (b) entitled to receive
payment of any dividend or other distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record date (i) in the case
of clause (a) above, shall not be more than sixty nor less than ten days before the date of such
meeting and (ii) in the case of clause (b) above, shall not be more than sixty days prior to such
action. If for any reason the Board shall not have fixed a record date for any such purpose, the
record date for such purpose shall be determined as provided by law. Only those stockholders of
record on the date so fixed or determined shall be entitled to any of the foregoing rights,
notwithstanding the transfer of any such stock on the books of the Company after any such record
date so fixed or determined.
Section 9. Except as otherwise provided by or fixed pursuant to the provisions of the
certificate of incorporation of the Company relating to the rights of holders of any series of
preferred stock, any action required or permitted to be taken by the stockholders of the Company
must be effected at a duly called annual or special meeting of the stockholders of the Company, and
the ability of the stockholders to consent in writing or by telephone to the taking of any action
is specifically denied.
Section 10. The officer who has charge of the stock ledger of the Company shall prepare and
make at least ten days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the examination of any
stockholder for any purpose germane to the meeting for a period of at least ten days prior to the
meeting: (i) on a reasonably accessible electronic network, provided that the information required
to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary
business hours, at the principal place of business of the Company. In the event that the Company
determines to make the list available on an electronic network, the Company may take reasonable
steps to ensure that such information is available only to stockholders of the Company. If the
meeting is to be held at a place, then the list shall be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
If the meeting is to be held solely by means of remote communication, then the list shall also be
open to the examination of any stockholder during the whole time of the meeting on a reasonably
accessible electronic network, and the information required to access such list shall be provided
with the notice of the meeting.
Section 11. The Board, in advance of all meetings of the stockholders, shall appoint one or
more inspectors of stockholder votes, who may be employees or agents of the Company or stockholders
or their proxies, but not directors of the Company or candidates for office. In the event that the
Board fails to so appoint one or more inspectors of stockholder votes or, in the event that one or
more inspectors of stockholder votes previously designated by the Board fails to appear or act at
the meeting of stockholders, the chairman of the meeting may appoint one or more inspectors of
stockholder votes to fill such vacancy or vacancies. Inspectors of stockholder votes appointed to
act at any meeting of the stockholders, before entering upon the discharge of their duties, shall
take and sign an oath to faithfully execute the duties of inspector of stockholder votes with
strict impartiality and according to the best of their ability and the oath so taken shall be
subscribed by them. Inspectors of stockholder votes shall, subject to the power of the chairman of
the meeting to open and close the polls, take charge of the polls, and, after the voting, shall
make a certificate of the result of the vote taken.
Section 12. (A) Annual Meetings of Stockholders. (1) Nominations of persons for election to
the Board and the proposal of business to be considered by the stockholders may be made at an
annual meeting of stockholders only (a) pursuant to the Company’s notice of meeting (or any
supplement thereto) delivered pursuant to Article I, Section 3 of these Bylaws, (b) by or at the
direction of the Board or any committee thereof or (c) by any stockholder of the Company who is
entitled to vote on such election or such business at the meeting, who complied with the notice
procedures set forth in subparagraphs (2) and (3) of this
3
paragraph (A) of this Bylaw and who was a stockholder of record at the time such notice is
delivered to the Secretary of the Company.
(2) For nominations or other business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of
the Company, and, in the case of business other than nominations, such other business must be a
proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to
the Secretary at the principal executive offices of the Company not less than ninety days nor more
than one hundred twenty days prior to the first anniversary of the preceding year’s annual meeting;
provided, however, that in the event that the date of the annual meeting is advanced by more than
twenty days, or delayed by more than seventy days, from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 120th day prior to such annual
meeting and not later than the close of business on the later of the 90th day prior to such annual
meeting or the tenth day following the day on which public announcement of the date of such meeting
is first made; and provided further, that for purposes of the application of Rule 14a-4(c)
promulgated under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) (or
any successor provision), the date for notice specified in this paragraph (A)(2) shall be the
earlier of the date calculated as hereinbefore provided or the date specified in paragraph (c)(1)
of Rule 14a-4 promulgated under the Exchange Act. For purposes of the first annual meeting of
stockholders of the Company held after 2006, the anniversary date shall be deemed to be May 15,
2007.
Such stockholder’s notice shall set forth: (a) as to each person whom the stockholder proposes
to nominate for election or re-election as a director all information relating to such person that
is required to be disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Exchange Act, including such person’s
written consent to being named in the proxy statement as a nominee and to serving as a director if
elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting (including the text of
any resolutions proposed for consideration and, in the event that such business includes a proposal
to amend these Bylaws, the language of the proposed amendment), the reasons for conducting such
business at the meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is
made (i) the name and address of such stockholder, as they appear on the Company’s books, and of
such beneficial owner, (ii) the class and number of shares of the Company which are owned
beneficially and of record by such stockholder and such beneficial owner, (iii) a representation
that the stockholder intends to appear in person or by proxy at the meeting to propose such
business or nomination, (iv) a representation whether the stockholder or the beneficial owner, if
any, intends or is part of a group which intends (A) to deliver a proxy statement and/or form of
proxy to holders of at least the percentage of the Company’s outstanding capital stock required to
approve or adopt the proposal or elect the nominee and/or (B) otherwise to solicit proxies from
stockholders in support of such proposal or nomination, and (v) a description of any and all
arrangements or understandings between such stockholder and such beneficial owner. The foregoing
notice requirements of this Section 12 shall be deemed satisfied by a stockholder if the
stockholder has notified the Company of his or her intention to present a proposal or nomination at
an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the
Exchange Act and such stockholder’s proposal or nomination has been included in a proxy statement
that has been prepared by the Company to solicit proxies for such annual meeting. The Company may
require any proposed nominee to furnish such other information as it may reasonably require to
determine the eligibility of such proposed nominee to serve as a director of the Company.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the
contrary, in the event that the number of directors to be elected to the Board is increased and
there is no public announcement naming all of the nominees for director or specifying the size of
the increased Board made by the Company at least eighty days prior to the first anniversary of the
preceding year’s annual meeting, a stockholder’s notice required by this Bylaw shall also be
considered timely, but only with respect
4
to nominees for any new positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the Company not later than the close of business on
the tenth day following the day on which a public announcement of such increase is first made by
the Company; provided that, if no such announcement is made at least ten days before the meeting,
then no such notice shall be required.
(B) Special Meetings of Stockholders. Only such business shall be conducted at a special
meeting of stockholders as shall have been brought before the meeting pursuant to the Company’s
notice of meeting pursuant to Article I, Section 3 of these Bylaws. Nominations of persons for
election to the Board may be made at a special meeting of stockholders at which directors are to be
elected pursuant to the Company’s notice of meeting (a) by or at the direction of the Board or (b)
by any stockholder of the Company who is entitled to vote on such election at the meeting, who
complies with the notice procedures set forth in this Bylaw and who is a stockholder of record at
the time such notice is delivered to the Secretary of the Company. Nominations by stockholders of
persons for election to the Board may be made at such a special meeting of stockholders if the
stockholder’s notice as required by paragraph (A)(2) of this Bylaw shall be delivered to the
Secretary at the principal executive offices of the Company not earlier than the 120th day prior to
such special meeting and not later than the close of business on the later of the 90th day prior to
such special meeting or the tenth day following the day on which public announcement is first made
of the date of the special meeting and of the nominees proposed by the Board to be elected at such
meeting.
(C) General. (1) Only persons who are nominated in accordance with the procedures set forth
in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at
a meeting of stockholders as shall have been brought before the meeting in accordance with the
procedures set forth in this Bylaw. Except as otherwise provided by law, the certificate of
incorporation of the Company or these Bylaws, the chairman of the meeting shall have the power and
duty to determine whether a nomination or any business proposed to be brought before the meeting
was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination
or business is not in compliance with this Bylaw, to declare that such defective nomination shall
be disregarded or that such proposed business shall not be transacted. Notwithstanding the
foregoing provisions of this Section 12, if the stockholder (or a qualified representative of the
stockholder) does not appear at the annual or special meeting of stockholders of the Company to
present a nomination or business, such nomination shall be disregarded and such proposed business
shall not be transacted, notwithstanding that proxies in respect of such vote may have been
received by the Company. For purposes of this Section 12, to be considered a qualified
representative of the stockholder, a person must be a duly authorized officer, manager or partner
of such stockholder or must be authorized by a writing executed by such stockholder or an
electronic transmission delivered by such stockholder to act for such stockholder as proxy at the
meeting of stockholders and such person must produce such writing or electronic transmission, or a
reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or comparable national news service or in
a document publicly filed or furnished by the Company with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) For purposes of this Bylaw, no adjournment or postponement or notice of adjournment or
postponement of any meeting shall be deemed to constitute a new notice of such meeting for purposes
of this Section 12, and in order for any notification required to be delivered by a stockholder
pursuant to this Section 12 to be timely, such notification must be delivered within the periods
set forth above with respect to the originally scheduled meeting.
(4) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply
with all applicable requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall (a) be deemed to
affect any rights of stockholders to request inclusion of proposals in the Company’s proxy
statement pursuant to Rule 14a-8 promulgated under the Exchange Act or (b) apply to the right, if
any, of the holders of any series of
5
Preferred Stock (as defined in the certificate of incorporation of the Company) to elect
directors pursuant to any applicable provisions of the certificate of incorporation of the Company.
Section 13. Any previously scheduled annual or special meeting of the stockholders may be
postponed, and any previously scheduled annual or special meeting of the stockholders called by the
Board may be canceled, by resolution of the Board upon public notice given prior to the time
previously scheduled for such meeting of stockholders.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. The Board shall consist, subject to the certificate of incorporation of the
Company, of such number of directors as shall from time to time be fixed exclusively by resolution
adopted by affirmative vote of the majority of the Board. Directors shall (except as hereinafter
provided for the filling of vacancies and newly created directorships) be elected by the holders of
a plurality of the votes cast by the holders of shares present in person or represented by proxy at
the meeting and entitled to vote on the election of such directors. A majority of the total number
of directors then in office shall constitute a quorum for the transaction of business. Except as
otherwise provided by law, these Bylaws or by the certificate of incorporation of the Company, the
act of a majority of the directors present at any meeting at which there is a quorum shall be the
act of the Board. Directors need not be stockholders. If a quorum shall not be present at any
meeting of the Board, the directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 2. The directors shall be divided into classes as provided in the certificate of
incorporation of the Company.
Section 3. Any director may resign at any time upon delivery of written notice of such
resignation, signed by such director, to the Board, the Chairman of the Board or the Chief
Executive Officer. Such resignation shall take effect at the time specified therein, or if no time
is specified, at the time of its receipt. Any director may be removed at any time, but only for
cause upon the affirmative vote of not less than 66-2/3% of the combined voting power of the then
outstanding stock of the Company entitled to vote generally in the election of directors at any
meeting of such stockholders, including meetings called expressly for that purpose, and at which a
quorum of stockholders is present.
Section 4. Subject to the certificate of incorporation of the Company, unless otherwise
required by law, any newly created directorship on the Board that results from an increase in the
number of directors and any vacancy occurring in the Board shall be filled only by a majority of
the directors then in office, although less than a quorum, or by a sole remaining director. Each
director so chosen shall hold office until a successor is duly elected and qualified or until his
or her earlier death, resignation or removal as herein provided. No decrease in the number of
authorized directors constituting the whole Board shall shorten the term of any incumbent director.
Section 5. Meetings of the Board shall be held at such place, if any, within or without the
State of Delaware as may from time to time be fixed by resolution of the Board or as may be
specified in the notice of any meeting. Regular meetings of the Board shall be held at such times
as may from time to time be fixed by resolution of the Board and special meetings may be held at
any time upon the call of the Chairman of the Board or the Chief Executive Officer, by oral or
written notice, including voice messaging systems, telegraph, telex or transmission of a telecopy,
e-mail or other means of electronic transmission, duly served on or sent and delivered to each
director to such director’s address, e-mail address or telephone or telecopy
6
number as shown on the books of the Company not less than twenty-four hours before the
meeting. The notice of any meeting need not specify the purposes thereof. A meeting of the Board
may be held without notice immediately after the annual meeting of stockholders at the same place,
if any, at which such meeting is held. Notice need not be given of regular meetings of the Board
held at times fixed by resolution of the Board. Notice of any meeting need not be given to any
director who shall attend such meeting (except when the director attends a meeting for the express
purpose of objecting at the beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after
such meeting, in writing (including by electronic transmission).
Section 6. Notwithstanding the foregoing, whenever the holders of any one or more series of
Preferred Stock issued by the Company shall have the right, voting separately as a series or
separately as a class with one or more such other series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, removal, and other features of such
directorships shall be governed by the terms of the certificate of incorporation of the Company
(including any certificate of designation relating to any series of Preferred Stock) applicable
thereto. The number of directors that may be elected by the holders of any such series of
Preferred Stock shall be in addition to the number fixed pursuant to the certificate of
incorporation of the Company and these Bylaws. Except as otherwise expressly provided in the terms
of such series, the number of directors that may be so elected by the holders of any such series of
stock shall be elected for terms expiring at the next annual meeting of stockholders, and vacancies
among directors so elected by the separate vote of the holders of any such series of Preferred
Stock shall be filled by the affirmative vote of a majority of the remaining directors elected by
such series, or, if there are no such remaining directors, by the holders of such series in the
same manner in which such series initially elected a director.
Section 7. If at any meeting for the election of directors, the Company has outstanding more
than one class of stock, and one or more such classes or series thereof are entitled to vote
separately as a class to elect directors, and there shall be a quorum of only one such class or
series of stock, that class or series of stock shall be entitled to elect its quota of directors
notwithstanding absence of a quorum of the other class or series of stock.
Section 8. The Board may from time to time establish one or more committees of the Board to
serve at the pleasure of the Board, which shall be comprised of such members of the Board and have
such duties as the Board shall from time to time determine. Any director may belong to any number
of committees of the Board. The Board may also establish such other committees with such members
(whether or not directors) and with such duties as the Board may from time to time determine. The
Board may designate one or more directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the place of any such
absent or disqualified member. Unless otherwise provided in the certificate of incorporation of
the Company, these Bylaws or the resolution of the Board designating the committee, a committee may
create one or more subcommittees, each subcommittee to consist of one or more members of the
committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
Section 9. Unless otherwise restricted by the certificate of incorporation of the Company or
these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing (including by electronic transmission), and the writing or
writings are filed with the minutes of proceedings of the Board.
7
Section 10. The members of the Board or any committee thereof may participate in a meeting of
such Board or committee, as the case may be, by means of conference telephone or other
communications equipment by means of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant to this subsection shall constitute presence in
person at such a meeting.
Section 11. Each committee of the Board may fix its own rules of procedure and shall hold its
meetings as provided by such rules, except as may otherwise be provided by the resolution of the
Board designating such committee or the charter adopted by the Board for such committee. In the
absence of such rules, each committee shall conduct its business in the same manner as the Board
conducts its business pursuant to Article II of these Bylaws.
Section 12. The Board may establish policies for the compensation of directors and for the
reimbursement of the expenses of directors, in each case, in connection with services provided by
directors to the Company.
Section 13. Meetings of the Board shall be presided over by the Chairman of the Board, if
any, or in his or her absence by the Vice Chairman of the Board, if any, or in his or her absence
by the Chief Executive Officer or the President, if any, or in their absence by a chairman chosen
at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the meeting.
Section 14. A director shall, in the performance of his or her duties, be fully protected in
relying in good faith upon the records of the Company and upon information, opinions, reports or
statements presented to the Company by any of the Company’s officers or employees, or committees
designated by the Board, or by any other person as to the matters the director reasonably believes
are within such other person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company.
Section 15. Directors, as such, may receive, pursuant to a resolution of the Board, fixed
fees, other compensation for their services as directors and reimbursement of expenses, including,
without limitation, their services as members of committees of the Board.
ARTICLE III.
OFFICERS
Section 1. The Board, at its next meeting following each annual meeting of the stockholders,
shall elect officers of the Company, including a President, Chief Executive Officer and a
Secretary. The Board may also from time to time elect such other officers (including one or more
Presidents, Vice Presidents, a Treasurer, one or more Assistant Vice Presidents, one or more
Assistant Secretaries and one or more Assistant Treasurers) as it may deem proper or may delegate
to any elected officer of the Company the power to appoint and remove any such other officers and
to prescribe their respective terms of office, authorities and duties. Any Vice President may be
designated Executive, Senior or Corporate, or may be given such other designation or combination of
designations as the Board or the Chief Executive Officer may determine. Any two or more offices
may be held by the same person. The Board may also elect or appoint a Chairman or Vice-Chairman of
the Board, who may or may not also be an officer of the Company. The Board may elect or appoint
co-Chairmen of the Board, co-Vice Chairmen of the Board, co-Presidents or co-Chief Executive
Officers and, in such case, references in these Bylaws to the Chairman of the Board, the President
or the Chief Executive Officer shall refer to either such co-Chairman of the Board, co-President or
co-Chief Executive Officer, as the case may be.
8
Section 2. All officers of the Company elected by the Board shall hold office for such terms
as may be determined by the Board or until their respective successors are chosen and qualified.
Any officer may be removed from office at any time either with or without cause by affirmative vote
of a majority of the members of the Board then in office, or, in the case of appointed officers, by
any elected officer upon whom such power of removal shall have been conferred by the Board.
Designation of an officer shall not itself create contract rights.
Section 3. Each of the officers of the Company elected by the Board or appointed by an
officer in accordance with these Bylaws shall have the powers and duties prescribed by law, by
these Bylaws or by the Board and, in the case of appointed officers, the powers and duties
prescribed by the appointing officer, and, unless otherwise prescribed by these Bylaws or by the
Board or such appointing officer, shall have such further powers and duties as ordinarily pertain
to that office. The Chief Executive Officer shall have authority over the general direction of the
affairs of the Company.
Section 4. Unless otherwise provided in these Bylaws, in the absence or disability of any
officer of the Company, the Board may, during such period, delegate such officer’s powers and
duties to any other officer or to any director and the person to whom such powers and duties are
delegated shall, for the time being, hold such office.
Section 5. The compensation of the officers of the Company for their services as such
officers shall be fixed from time to time by the Board or any committee thereof, provided, however,
that, except to the extent otherwise required by applicable law or the rules and regulations of any
stock exchange or quotation system applicable to the Company, the Board or any committee thereof
may by resolution delegate to the Chief Executive Officer the power to fix compensation of
non-elected officers and agents appointed by the Chief Executive Officer. An officer of the Company
shall not be prevented from receiving compensation by reason of the fact that such officer is also
a director of the Company, but any such officer who shall also be a director shall not have any
vote in the determination of such officer’s compensation.
ARTICLE IV.
CORPORATE BOOKS
The books of the Company may be kept inside or outside of the State of Delaware at such place
or places as the Board may from time to time determine.
ARTICLE V.
CHECKS, NOTES, PROXIES, ETC.
All checks and drafts on the Company’s bank accounts and all bills of exchange and promissory
notes, and all acceptances, obligations and other instruments for the payment of money, shall be
signed by such officer or officers or agent or agents as shall be authorized from time to time by
the Board or such officer or officers who may be delegated such authority. Proxies to vote and
consents with respect to securities of other corporations owned by or standing in the name of the
Company may be executed and delivered from time to time on behalf of the Company by the Chairman of
the Board, the Chief Executive Officer, or by such officers as the Chairman of the Board, the Chief
Executive Officer or the Board may from time to time determine.
ARTICLE VI.
FISCAL YEAR
The fiscal year of the Company shall begin on the first day of January in each year and shall
end on the thirty-first day of December following.
9
ARTICLE VII.
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the Company. In lieu of the
corporate seal, when so authorized by the Board or a duly empowered committee thereof, a facsimile
thereof may be impressed or affixed or reproduced.
ARTICLE VIII.
AMENDMENTS
These Bylaws may be made, amended, altered, changed, added to or repealed at any meeting of
the Board or of the stockholders; provided, in the case of a meeting of the stockholders, that
notice of the proposed change was given in the notice of the meeting of the stockholders; provided,
further, that notwithstanding any other provisions of these Bylaws or any provision of law which
might otherwise permit a lesser vote of the stockholders, the affirmative vote of the holders of at
least 66-2/3% of the voting power of all the then outstanding shares of stock of the Company
entitled to vote generally in the election of directors, voting together as a single class, shall
be required for the stockholders to make, amend, alter, change, add to or repeal any provision of
these Bylaws.
10
Exhibit 10.3
FORM OF
TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this “
Agreement
”) is dated as of ___, 2007,
by and between HFF, Inc., a Delaware corporation (“HFF”), and HFF Holdings, LLC, a Delaware limited
liability company (“
Holdings
”).
WHEREAS, on the date hereof, HFF, Holdings, HFF LP Acquisition LLC, a Delaware limited
liability company (“
Acquisition
”), HFF Partnership Holdings LLC, a Delaware limited
liability company (“
Holdco
”), and Holliday GP Corp., a Delaware corporation, entered into
that certain Sale and Merger Agreement (the “
Sale and Merger Agreement
”); and
WHEREAS, Acquisition, a wholly-owned subsidiary of Holdings, and Holdco, a wholly-owned
subsidiary of HFF, are each treated as disregarded entities for U.S. Federal income tax purposes;
WHEREAS, pursuant to the Sale and Merger Agreement, certain membership interests in Holliday
Fenoglio Fowler, L.P., a Texas limited partnership (“
HFF, L.P.
”), HFF Securities L.P., a
Delaware limited partnership (“
HFFS
”, and together with HFF, L.P., referred to herein as
the “
Opcos
”), have been or are being sold by Acquisition to Holdco for cash (the
“
Original Sale
”); and
WHEREAS, Holdings will have the right, exercisable on behalf of Holdings’ members (the
“
Members
”), from time to time as provided in the Sale and Merger Agreement, to exchange
membership interests in the Opcos for shares of Class A Common Stock of HFF in transactions that
are intended to result in the recognition of gain (or loss) for U.S. Federal income tax purposes by
Holdings and the Members who initiate such exchanges (each such Member being an “
Exchange
Member
” and each such transaction being a “
Taxable Exchange
”);
WHEREAS, the Opcos shall each have in effect an election under Section 754 of the Code (as
defined herein) for the Taxable Year (as defined herein) in which the Original Sale occurs, which
election will result in an adjustment to HFF’s share of the tax basis of the assets owned by the
Opcos as of the Original Sale Date (such assets and any asset whose tax basis is determined, in
whole or in part, by reference to the adjusted basis of any such asset, the “
Original
Assets
”) by reason of the Original Sale;
WHEREAS, each of the Opcos will have in effect an election under Section 754 of the Code for
each Taxable Year in which any Taxable Exchange occurs, which election will result in an adjustment
to HFF’s share of the tax basis of the assets owned by the Opcos as of the date of any such Taxable
Exchange; and
WHEREAS, the income, gain, loss, expense and other Tax (as defined herein) items of the Opcos
and HFF will be affected by the Basis Adjustments (as defined herein) and Imputed Interest (as
defined herein); and
WHEREAS, the parties to this Agreement agree that certain payments shall be made by HFF to
Holdings based on the reduction of HFF’s liability for Covered Taxes (as defined herein) arising
from the Basis Adjustments and Imputed Interest.
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements
set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
Definitions
. For purposes of this Agreement, the terms set forth in this Article I
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined).
“
Acquisition
” is defined in the recitals.
“
Advisory Firm
” means Sisterson & Co. LLP (and any successor firm) or such other
accounting or law firm selected by the Audit Committee that is recognized as being expert in
Covered Tax matters.
“
Advisory Firm Letter
” shall mean a letter from the Advisory Firm stating that the
relevant schedule, notice or other information required under this Agreement to be provided by HFF
to Holdings (and all supporting schedules and work papers) were prepared in a manner consistent
with the terms of this Agreement and, to the extent not expressly provided for in this Agreement,
on a reasonable basis in light of the facts and law in existence on the date such schedule, notice
or other information is delivered to Holdings.
“
Agreed Rate
” means LIBOR as adjusted from time to time plus 50 basis points.
“
Agreement
” is defined in the preamble.
“
Amended Tax Benefit Schedule
” is defined in Section 2.05(b) of this Agreement.
“
Audit Committee
” means the audit committee of the board of directors of HFF.
“
Bank of America Loan
” means that certain term loan in the original principal amount
of $60 million, comprising a portion of a credit facility originated by Bank of America, NA, as
administrative agent, to HFF, L.P., on March 29, 2006, as guaranteed by Holdings, Holliday GP Corp.
and Acquisition.
“
Basis Adjustments
” means the adjustments to the tax basis of the Opcos’ assets
allocable to HFF (i) under Sections 743(b) and 754 of the Code and the comparable sections of
-2-
U.S. state and local income and franchise Tax law as a result of the Original Sale, (ii) under
Section 743(b) and 754 of the Code and the comparable sections of U.S. state and local income and
franchise Tax law as a result of any Taxable Exchange and (iii) under Sections 743(b) and 754 as a
result of any payments under this Agreement.
“
Business Day
” means any calendar day that is not a Saturday, Sunday or other calendar
day on which banks are required or authorized to be closed in the City of New York.
“
Change Notice
” is defined in Section 3.03 of this Agreement.
“
Code
” means the United State Internal Revenue Code of 1986, as amended.
“
Covered Taxable Year
” means any Taxable Year of HFF ending after the Original Sale
Date.
“
Covered Taxes
” means U.S. Federal Income Taxes and U.S. state and local income and
franchise Taxes imposed on or based upon net income.
“
Determination
” shall have the meaning ascribed to such term in Section 1313(a) of the
Code or similar provision of state or local income or franchise Tax law, as applicable.
“
Exchange Assets
” means the assets owned by the Opcos as of an applicable Exchange
Date (and any asset whose tax basis is determined, in whole or in part, by reference to the
adjusted basis of any such asset).
“
Exchange Basis Schedule
” is defined in Section 2.04(a) of this Agreement.
“
Exchange Date
” means the date on which any Taxable Exchange is effected.
“
Exchange Member
” is defined in the recitals.
“
Expert
” is defined in Section 6.09 of this Agreement.
“
Federal Income Tax
” means any tax imposed under Subtitle A of the Code or any other
provision of U.S. Federal income tax law (including, without limitation, the taxes imposed by
Sections 11, 55, 59A, and 1201(a) of the Code), and any interest, additions to tax or penalties
applicable or related to such tax.
“
Governmental Entity
” means any federal, state, local or provincial government or any
court of competent jurisdiction, administrative agency or commission or other governmental
authority or instrumentality.
“
HFF
” is defined in the preamble.
“
HFF, L.P.
” is defined in the recitals.
-3-
“
HFFS
” is defined in the recitals.
“
Holdings
” is defined in the preamble.
“
Holdings Operating Agreement
” means the Operating Agreement of Holdings as of the
date hereof and as amended thereafter.
“
Hypothetical Tax Basis
” means, with respect to any asset at any time, the tax basis
that such asset would have at such time if no Basis Adjustments had been made as a result of the
Original Sale or an applicable Taxable Exchange, as the case may be.
“
Hypothetical Tax Liability
” means, with respect to any Covered Taxable Year, the
liability for Covered Taxes of HFF using the same methods, elections, conventions and similar
practices used on the actual Tax Returns of HFF, but using the Hypothetical Tax Basis instead of
the actual tax basis of each relevant asset and excluding any deduction attributable to the Imputed
Interest.
“
Imputed Interest
” shall mean any interest imputed under Section 1272, 1274 or 483 or
other provision of the Code and any similar provision of applicable U.S. state or local income or
franchise Tax law with respect to HFF’s payment obligations under this Agreement.
“
IRS
” means the U.S. Internal Revenue Service.
“
LIBOR
” means, for each month (or portion thereof) during any period, an interest rate
per annum equal to the rate per annum reported, on the date two days prior to the first day of such
month (or the first preceding LIBOR Business Day if such date is not a LIBOR Business Day) , on the
Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters
Screen page “LIBO” or by any other publicly available source of such market rate) for London
interbank offered rates for U.S. dollar deposits for such month (or portion thereof).
“
LIBOR Business Day
” means any day that is a Business Day and on which dealings in
deposits in United States dollars are transacted in the London interbank market.
“
Members
” is defined in the recitals.
“
Opcos
” is defined in the recitals.
“
Original Assets
” is defined in the recitals.
“
Original Sale
” is defined in the recitals.
“
Original Sale Basis Schedule
” is defined in Section 2.02 of this Agreement.
“
Original Sale Date
” means the date on which the Original Sale is effected.
-4-
“
Person
” means and includes any individual, firm, corporation, partnership (including,
without limitation, any limited, general or limited liability partnership), company, limited
liability company, trust, joint venture, association, joint stock company, unincorporated
organization or similar entity or Governmental Entity.
“
Proceeding
” is defined in Section 6.08 of this Agreement.
“
Realized Tax Benefit
” means, for a Covered Taxable Year, the excess, if any, of the
Hypothetical Tax Liability over the actual liability for Covered Taxes of HFF for such Covered
Taxable Year with respect to the Original Sale and each Taxable Exchange as determined under
Article II of this Agreement. If all or a portion of the actual tax liability for Covered Taxes as
reported for a Covered Taxable Year is adjusted or proposed to be adjusted as a result of an audit
by a Taxing Authority of any Covered Taxable Year or an amended return, such liability shall not be
included in determining the Realized Tax Benefit or the Realized Tax Detriment unless and until
there has been a Determination and shall include interest under applicable law.
“
Realized Tax Detriment
” means, for a Covered Taxable Year, the excess, if any, of the
actual liability for Covered Taxes of HFF over the Hypothetical Tax Liability for such Covered
Taxable Year with respect to the Original Sale and each Taxable Exchange as determined under
Article II of this Agreement. If all or a portion of the actual tax liability for Covered Taxes as
reported for a Covered Taxable Year is adjusted or proposed to be adjusted as a result of an audit
by a Taxing Authority of any Covered Taxable Year or an amended return, such liability shall not be
included in determining the Realized Tax Benefit or Realized Tax Detriment unless and until there
has been a Determination (or amendment of a Tax Benefit Schedule pursuant to Section 2.05 (b) of
this Agreement) and shall include interest under applicable law.
“
Reconciliation Procedures
” shall mean those procedures set forth in Section 6.09 of
this Agreement.
“
Senior Obligations
” is defined in Section 4.01 of this Agreement.
“
Subsidiary
” means any entity in which HFF, directly or indirectly, possesses fifty
percent (50%) or more of the total combined voting power of all classes of its stock, membership
interests, partnership interests or other ownership interests, other than the Opcos and their
subsidiaries.
“
Tax Benefit Payment
” is defined in Section 3.01(b) of this Agreement.
“
Tax Benefit Schedule
” is defined in Section 2.05(a) of this Agreement.
“
Taxable Exchange
” is defined in the recitals.
-5-
“
Taxable Year
” means a taxable year as defined in Section 441(b) of the Code or
comparable section of U.S. state or local income or franchise Tax law, as applicable (and,
therefore, for the avoidance of doubt, may include a period of less than 12 months) for which a Tax
Return is made.
“
Taxes
” means (i) all forms of taxation or duties imposed, or required to be collected
or withheld, including, without limitation, charges, together with any related interest, penalties
or other additional amounts, (ii) liability for the payment of any amount of the type described in
the preceding clause (i) as a result of being a member of an affiliated, consolidated, combined or
unitary group, and (iii) liability for the payment of any amounts as a result of being party to any
tax sharing agreement (other than this Agreement) or as a result of any express or implied
obligation to indemnify any other person with respect to the payment of any amount described in the
immediately preceding clauses (i) or (ii); and “
Tax
” means any of the Taxes.
“
Tax Law
” means the Code, the applicable Treasury Regulations under the Code
(including temporary and proposed regulations), official IRS revenue rulings, revenue procedures
and other official announcements, applicable case law and legislative history and comparable
provisions of statutory, administrative and judicial law that apply to U.S. state and local income
and franchise Taxes.
“
Tax Return
” means any return, filing, report, questionnaire, information statement or
other document regarding Covered Taxes required to be filed, including amended returns that may be
filed, for any taxable period with any Taxing Authority (whether or not a payment is required to be
made with respect to such filing).
“
Taxing Authority
” means the IRS and any other state, local, foreign or other
Governmental Entity responsible for the administration of Taxes.
“
Sale and Merger Agreement
” is defined in the recitals.
ARTICLE II
Determination of Realized Tax Benefit or Realized Tax Detriment
SECTION 2.01.
Original Sale Date Basis Adjustments
. HFF and Holdings hereby agree
that (i) Holdings shall duly report its recognized gain on account of the Original Sale for
purposes of its Members’ Covered Taxes, and (ii) HFF shall duly report and shall cause the Opcos
duly to report HFF’s share of the basis in the Original Assets as increased by the excess of the
Original Sale proceeds over HFF’s proportionate share of the basis of the Original Assets on the
Original Sale Date, in accordance with the Basis Adjustments attributable to the Original Sale
including, without limitation, any Basis Adjustments attributable to amounts paid or caused to be
paid by HFF in the Original Sale and used to pay off the Bank of America Loan. HFF and Holdings
shall treat such gain and Basis Adjustments as occurring on the Original Sale Date unless there is
a Determination to the contrary.
-6-
SECTION 2.02. (a)
Original Sale Basis Schedule
. Within 180 calendar days after the
Original Sale Date, HFF shall deliver to Holdings a schedule (the “
Original Sale Basis
Schedule
”) prepared by the Advisory Firm and approved by the Audit Committee that shows, in
reasonable detail, for U.S. Federal income tax purposes, (i) the actual tax basis as of the
Original Sale Date of the Original Assets, (ii) the Basis Adjustments with respect to the Original
Assets as a result of the Original Sale and (iii) the period or periods, if any, over which the
Original Assets are amortizable or depreciable for U.S. Federal income tax purposes. If the
Advisory Firm thinks it is necessary or appropriate to engage a valuation or other expert to assist
them in preparing the Original Sale Basis Schedule, it may do so, as approved by the Audit
Committee. At the time HFF delivers the Original Sale Basis Schedule to Holdings, it shall (x)
deliver to Holdings work papers providing reasonable detail regarding the preparation of the
Original Sale Basis Schedule and (y) allow Holdings reasonable access to the appropriate
representatives at HFF and its Subsidiaries, the Opcos and the Advisory Firm in connection with its
review of such schedule. The Original Sale Basis Schedule shall become final and binding on the
parties unless Holdings, within 30 calendar days after receiving such Original Sale Basis Schedule,
provides HFF with written notice of a material objection or objections to such Original Sale Basis
Schedule made in good faith. If the parties, after negotiating in good faith, are unable to
resolve the issues raised in such notice within 60 calendar days after such Original Sale Basis
Schedule was delivered to Holdings, HFF and Holdings shall employ the Reconciliation Procedures.
(b)
Amended Original Sale Basis Schedule
. The Original Sale Basis Schedule shall be
amended from time to time by HFF with the consent of the Audit Committee (i) in connection with a
Determination, (ii) to correct material inaccuracies to the Original Sale Basis Schedule or (iii)
to comply with the Expert’s determination under the Reconciliation Procedures. At the time HFF
delivers such amended Original Sale Basis Schedule to Holdings it shall (x) deliver to Holdings
work papers providing reasonable detail regarding the preparation of the amended Original Sale
Basis Schedule and an Advisory Firm Letter supporting and explaining the reason or reasons for such
amended Original Sale Basis Schedule and (y) allow Holdings reasonable access to the appropriate
representatives at HFF and its Subsidiaries, the Opcos and the Advisory Firm in connection with its
review of such schedule. The amended Original Sale Basis Schedule shall become final and binding
on the parties unless Holdings, within 30 calendar days after receiving such amended Original Sale
Basis Schedule, provides HFF with notice of a material objection or objections to such amended
Original Sale Basis Schedule made in good faith. If the parties, after negotiating in good faith,
are unable to resolve the issues raised in such notice within 60 calendar days after such amended
Original Sale Basis Schedule was delivered to Holdings, HFF and Holdings shall employ the
Reconciliation Procedures.
SECTION 2.03.
Basis Adjustments Attributable to a Taxable Exchange
. Pursuant to each
Taxable Exchange, Holdings will exchange with HFF the portion of Holdings’ interests in the Opcos
attributable to that portion of such Exchange Member’s interest in Holdings specified by such
Exchange Member upon initiation of such Taxable Exchange in accordance with the Holdings Operating
Agreement in exchange for Class A Common shares of HFF and Holdings will, at Holdings’ option,
either (x) distribute such Class A Common Stock to the Exchange Member, or (y) sell such Class A
Common Stock and distribute the sale proceeds to the
-7-
Exchange Member, in either case in redemption of the specified portion of such Exchange
Member’s membership interest in Holdings. HFF and Holdings hereby agree that Holdings shall
recognize gain (or loss) for U.S. Federal income tax purposes on the Exchange Date under the Code
in an amount equal to the excess of (i) the fair market value of the HFF shares received by
Holdings in the Taxable Exchange over (ii) Holdings’ basis in its interests in the Opcos
transferred to HFF pursuant to the Taxable Exchange. Any such gain (or loss) recognized by
Holdings shall be allocated by Holdings to the Exchange Member who initiated the Taxable Exchange.
For purposes of this Agreement, HFF and Holdings hereby agree that the fair market value of the HFF
shares received in the Taxable Exchange shall be the closing trading price of such shares on the
Exchange Date. HFF and Holdings further agree that, with respect to each Taxable Exchange, HFF’s
share of the basis in the Exchange Assets shall be increased by the excess, if any, of (i) the fair
market value of the HFF shares transferred to the Exchange Member pursuant to the Taxable Exchange
over (ii) HFF’s proportionate share of the basis of the Exchange Assets immediately after the
Taxable Exchange attributable to the interests in the Opcos exchanged. HFF and the Exchange
Members, pursuant to the Holdings Operating Agreement, will treat such gain and basis Adjustments
as occurring entirely on the Exchange Date unless there is a Determination to the contrary.
SECTION 2.04. (a)
Exchange Basis Schedule
. Within 180 calendar days after the end of
a Covered Taxable Year in which any Taxable Exchange has been effected, HFF shall deliver to
Holdings a schedule (the “
Exchange Basis Schedule
”) approved by the Audit Committee that
shows, in reasonable detail, for U.S. Federal income tax purposes, (i) the actual tax basis as of
each applicable Exchange Date in such Covered Taxable Year of the Exchange Assets, (ii) the Basis
Adjustments with respect to the Exchange Assets as a result of each Taxable Exchange effected in
such Covered Taxable Year, and (iii) the period or periods, if any, over which the Exchange Assets
attributable to each Taxable Exchange are amortizable or depreciable. If the Advisory Firm thinks
it is necessary or appropriate to engage a valuation or other expert to assist them in preparing
the Exchange Basis Schedule, it may do so, as approved by the Audit Committee. At the time HFF
delivers the Exchange Basis Schedule to Holdings, it shall (x) deliver to Holdings work papers
providing reasonable detail regarding the preparation of the Exchange Basis Schedule and an
Advisory Firm Letter supporting such Exchange Basis Schedule and (y) allow Holdings reasonable
access to the appropriate representatives at HFF and its Subsidiaries, the Opcos and the Advisory
Firm in connection with its review of such schedule. The Exchange Basis Schedule shall become
final and binding on the parties unless Holdings, within 30 calendar days after receiving such
Exchange Basis Schedule, provides HFF with notice of a material objection or objections to such
Exchange Basis Schedule made in good faith. If the parties, after negotiating in good faith, are
unable to resolve the issues raised in such notice within 60 calendar days after such Exchange
Basis Schedule was delivered to Holdings, HFF and Holdings shall employ the Reconciliation
Procedures.
(b)
Amended Exchange Basis Schedule
. The Exchange Basis Schedule shall be amended
from time to time by HFF with the consent of the Audit Committee (i) in connection with a
Determination, (ii) to correct material inaccuracies to the original Exchange Basis Schedule or
(iii) to comply with the Expert’s determination under the Reconciliation Procedures.
-8-
At the time HFF delivers such amended Exchange Basis Schedule to Holdings it shall (x) deliver
to Holdings work papers providing reasonable detail regarding the preparation of the amended
Exchange Basis Schedule and an Advisory Firm Letter supporting and explaining the reason or reasons
for such amended Exchange Basis Schedule and (y) allow Holdings reasonable access to the
appropriate representatives at HFF and its Subsidiaries, the Opcos and the Advisory Firm in
connection with its review of such schedule. The amended Exchange Basis Schedule shall become
final and binding on the parties unless Holdings, within 30 calendar days after receiving such
amended Exchange Basis Schedule, provides HFF with notice of a material objection to such amended
Exchange Basis Schedule made in good faith. If the parties, after negotiating in good faith, are
unable to resolve the issues raised in such notice within 60 calendar days after such amended
Exchange Basis Schedule was delivered to Holdings, HFF and Holdings shall employ the Reconciliation
Procedures.
SECTION 2.05. (a)
Tax Benefit Schedule
. Within 30 calendar days after filing the U.S.
Federal Income Tax Return of HFF for the relevant Covered Taxable Year, HFF shall provide to
Holdings a schedule approved by the Audit Committee showing, in reasonable detail, the calculation
of HFF’s Realized Tax Benefit or Realized Tax Detriment for such Covered Taxable Year (the “
Tax
Benefit Schedule
”). At the time HFF delivers the Tax Benefit Schedule to Holdings it shall (i)
deliver to Holdings work papers providing reasonable detail regarding the preparation of the Tax
Benefit Schedule and an Advisory Firm Letter supporting such Tax Benefit Schedule and (ii) allow
Holdings reasonable access to the appropriate representatives at HFF and its Subsidiaries, the
Opcos and the Advisory Firm in connection with its review of such schedules. The Tax Benefit
Schedule shall become final and binding on the parties unless Holdings, within 30 calendar days
after receiving such Tax Benefit Schedules, provides HFF with notice of a material objection or
objections to such Tax Benefit Schedules made in good faith. If the parties, after negotiating in
good faith, are unable to resolve the issues raised in such notice within 60 calendar days after
such Tax Benefit Schedules were delivered to Holdings, HFF and Holdings shall employ the
Reconciliation Procedures.
(b)
Amended Tax Benefit Schedule
. A Tax Benefit Schedule for any Covered Taxable Year
shall be amended from time to time by HFF with the consent of the Audit Committee (i) in connection
with a Determination affecting such Tax Benefit Schedule, (ii) to correct material inaccuracies in
the original Tax Benefit Schedule, (iii) to reflect a change in the Realized Tax Benefit or
Realized Tax Detriment for such Covered Taxable Year attributable to a carryback or carryforward of
a loss or other tax item to such Covered Taxable Year, (iv) to reflect a change in the Realized Tax
Benefit or Realized Tax Detriment for such Covered Taxable Year attributable to an amended tax
return filed for such Covered Taxable Year (
provided
,
however
, that such a change
attributable to an audit of a Tax Return by an applicable Taxing Authority shall not be taken into
account on an Amended Tax Benefit Schedule unless and until there has been a Determination with
respect to such change) or (v) to comply with the Expert’s determination under the Reconciliation
Procedures. At the time HFF delivers such an amended Tax Benefit Schedule pursuant to this Section
2.05(b) (an “
Amended Tax Benefit Schedule
”) to Holdings it shall (x) deliver to Holdings
work papers providing reasonable detail regarding the preparation of the Amended Tax Benefit
Schedule and an Advisory Firm Letter
-9-
supporting and explaining the reason or reasons for such Amended Tax Benefit Schedule and (y)
allow Holdings reasonable access to the appropriate representatives at HFF and its Subsidiaries,
the Opcos and the Advisory Firm in connection with its review of such schedule. Such Amended Tax
Benefit Schedule shall become final and binding on the parties unless Holdings, within 30 calendar
days after receiving such Amended Tax Benefit Schedule, provides HFF with notice of a material
objection or objections to such Amended Tax Benefit Schedule made in good faith. If the parties,
after negotiating in good faith, are unable to resolve the issues raised in such notice within 60
calendar days after such Amended Tax Benefit Schedule was delivered to Holdings, HFF and Holdings
shall employ the Reconciliation Procedures.
(c)
Applicable Principles
. The Realized Tax Benefit or Realized Tax Detriment for
each Covered Taxable Year is intended to reflect the decrease or increase in the actual Covered Tax
liability of HFF for such Covered Taxable Year attributable to Basis Adjustments and Imputed
Interest, determined using a “with and without” methodology. Carryovers or carrybacks of any tax
item attributable to Basis Adjustments or Imputed Interest (determined using such “with and
without” methodology) shall be considered to be subject to the Tax Law governing the use,
limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or
carryback of any tax item includes a portion that is attributable to Basis Adjustments or Imputed
Interest and another portion that is not, such portions shall be considered to be used or applied
in the order provided under applicable Tax Law using such “with and without” methodology or, if
applicable Tax Law does not specify the order in which the applicable tax attributes are to be used
or applied, then in proportion to the amount of each type of tax attribute. When there has been
one or more Taxable Exchanges in addition to the Original Sale that affect the Realized Tax Benefit
or Realized Tax Detriment for any Covered Taxable Year, the resulting decrease in the actual
Covered Tax liability of HFF attributable to each Taxable Exchange and the Original Sale shall be
determined on a pro rata basis proportionate to the amount of deductions attributable to each
Taxable Exchange and the Original Sale divided by the amount of deductions attributable to the
Original Sale and all such Taxable Exchanges.
ARTICLE III
Tax Benefit Payments
SECTION 3.01.
Payments
. (a) Except as provided in Section 3.03, within three Business
days of the delivery of the Tax Benefit Schedule to Holdings for any Covered Taxable Year, HFF
shall pay to Holdings an amount equal to the Tax Benefit Payment (as defined below) for such
Covered Taxable Year. Each Tax Benefit Payment shall be made by wire transfer of immediately
available funds to the bank account of Holdings previously designated by Holdings to HFF. For the
avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments,
including, without limitation, estimated Federal Income Tax payments.
(b) A “
Tax Benefit Payment
” shall equal (x) 85% of HFF’s Realized Tax Benefit, if any,
for a Covered Taxable Year, increased by 85% of the net increase to the Realized
-10-
Tax Benefit and decreased by 85% of the Realized Tax Detriment for any prior Covered Taxable
Year as reflected on an Amended Tax Benefit Schedule for such prior Covered Taxable Year which
increase (or decrease) has not previously been taken into account plus (y) interest on the amount
determined in clause (x) at the Agreed Rate from August 15 of the year following the end of the
most recent Covered Taxable Year to the date of payment.
SECTION 3.02.
No Duplicative Payment
. No duplicative payment of any Tax Benefit
Payment (including interest) shall be required under this Agreement.
SECTION 3.03.
Tax Uncertainty Escrow
.
(a) If HFF, its Subsidiaries or the Opcos receives a 30-day letter, a final audit report, a
statutory notice of deficiency or similar written notice from any Taxing Authority with respect to
the Tax treatment of the Original Sale or any Taxable Exchange or the determination of the tax
liability for Covered Taxes in any Covered Taxable Year (a “
Change Notice
”), which, if
sustained, would result in (i) a reduction in the amount of Realized Tax Benefit (or the increase
in the amount of Realized Tax Detriment) with respect to a Covered Taxable Year preceding the
taxable year in which the Change Notice is received or (ii) a reduction in the amount of Tax
Benefit Payments HFF would be required to pay to Holdings with respect to Covered Taxable Years
after and including the taxable year in which the Change Notice is received, prompt written notice
shall be given to Holdings.
(b) If HFF receives a Change Notice and the Advisory Firm or another law firm or accounting
firm which is nationally recognized to have expertise regarding Covered Taxes concludes that there
is substantial uncertainty regarding a material amount of the Realized Tax Benefit for a Covered
Taxable Year (a “
Tax Uncertainty Event
”), HFF may elect to deposit up to 50% of the payment
that would otherwise be made pursuant to Section 3.01 of this Agreement in escrow. Such amount
shall be held in escrow until such Tax Uncertainty Event has been resolved, either as a result of
delivery of an opinion from a law firm or accounting firm that is nationally recognized as expert
in Covered Taxes matters that no such Tax Uncertainty Event exists or due to a Determination or
because the statute of limitations with respect to HFF’s Tax Return for such Covered Year has
expired without any challenge to the Realized Tax Benefit, as soon as practicable after which
resolution amounts in escrow shall be paid to the person or persons determined to be entitled to
such amounts, so that the escrow, and all accrued interest, shall, for example, be paid to Holdings
if it is determined that HFF was entitled to all of the originally determined Realized Tax Benefit,
or, if HFF is entitled to only a portion of the originally determined Realized Tax Benefit, the
amount of the escrow shall be paid so that Holdings shall receive the payment it would be entitled
to receive under Section 3.01 of this Agreement, along with a proportionate amount of the interest,
and the balance, including the remaining interest, in escrow shall be paid to HFF.
SECTION 3.04.
No Obligation of Holdings to Make Payments
. For the avoidance of doubt,
Holdings has no obligation to make any payments to HFF pursuant to this Agreement.
-11-
ARTICLE IV
Subordination and Late Payments
SECTION 4.01.
Subordination
. Notwithstanding any other provision of this Agreement to
the contrary, any payment required to be made by HFF to Holdings under this Agreement shall rank
subordinate and junior in right of payment to any principal, interest or other amounts due and
payable in respect of any secured debt of HFF or any other debt instrument issued by HFF which
Holdings consents to treat as senior to Holdings’ right to payments under this Agreement
(“
Senior Obligations
”) and shall rank pari passu with all current or future unsecured
obligations of HFF that are not Senior Obligations.
SECTION 4.02.
Late Payments by HFF
. The amount of any payment not made by any party
when due under the terms of this Agreement shall bear interest, computed at the Agreed Rate and
commencing from the date such payment is due until the date payment is made.
ARTICLE V
Tax Matters; Consistency; Cooperation
SECTION 5.01.
Holdings Participation In HFF Tax Matters
. Except as otherwise provided
herein, HFF shall have responsibility for, and discretion over, all Tax matters concerning HFF and
the Opcos, including without limitation the preparation, filing or amending of any Tax Return and
defending, contesting or settling any issue pertaining to Taxes. Notwithstanding the foregoing,
HFF shall notify Holdings of, and keep Holdings reasonably informed with respect to, and Holdings
shall have the right to participate in and monitor (but, for the avoidance of doubt, not to
control) the portion of any audit of HFF by a Taxing Authority the outcome of which is reasonably
expected to affect Holdings’ rights or obligations under this Agreement. HFF shall provide to
Holdings reasonable opportunity to provide information and other input to HFF and its advisors
concerning the conduct of any such portion of such audits. HFF shall not settle or otherwise
resolve any audit or other challenge by a Taxing Authority relating to the Basis Adjustments or the
deduction of Imputed Interest or otherwise affecting the amount of a Realized Tax Benefit or
Realized Tax Detriment without the consent of the Audit Committee and Holdings, which consent
Holdings shall not unreasonably withhold, condition or delay. If the parties, after negotiating in
good faith, are unable to resolve whether such consent is being unreasonably withheld, conditioned
or delayed, HFF and Holdings shall employ the Reconciliation Procedures.
SECTION 5.02.
Consistency
. Unless there is a Determination to the contrary, HFF
agrees to report and cause its Subsidiaries and the Opcos to report, and Holdings agrees to report,
and cause its Members to report for all U.S. Federal, state and local income and franchise Tax
purposes all Tax–related items relating to this Agreement (including without limitation the Basis
Adjustments, Imputed Interest and each Tax Benefit Payment) in a manner consistent with the Tax
Benefit Schedules, the Amended Tax Benefit Schedules and the terms of this Agreement. In the event
that an Advisory Firm is replaced with another firm acceptable to the Audit Committee,
-12-
such replacement Advisory Firm shall be required to perform its services under this Agreement
using procedures and methodologies consistent with those used by the previous Advisory Firm, unless
otherwise required by law or unless HFF, (as approved by the Audit Committee) and Holdings agree to
the use of other procedures and methodologies.
SECTION 5.03.
Cooperation
. Holdings and HFF shall each (a) furnish in a timely manner
such non-privileged information, documents and other materials as the other party may reasonably
request for purposes of making any determination or computation necessary or appropriate under this
Agreement, preparing any Tax Return or contesting or defending any audit, examination or
controversy with any Taxing Authority, (b) make its employees reasonably available to the other
party and its representatives to provide explanations of documents and materials and such other
information as requesting party or its representative may reasonably request in connection with any
of the matters described in clause (a) above, and (c) reasonably cooperate with the other party in
connection with any such matter. Holdings shall cause its Subsidiaries, and HFF shall cause its
Subsidiaries and the Opcos, similarly to cooperate with the other party and to furnish
non-privileged information, documents and other materials in response to the other party’s
reasonable requests as provided in this Section 5.03.
ARTICLE VI
General Provisions
SECTION 6.01.
Notices
. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed duly given and received (a) on the
date of delivery if delivered personally, or by facsimile upon confirmation of transmission by the
sender’s fax machine if sent on a Business Day (or otherwise on the next Business Day) or (b) on
the first Business Day following the date of dispatch if delivered by a recognized next-day courier
service. All notices hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such notice:
if to HFF, to:
HFF, Inc.
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Chief Executive Officer
Facsimile No.: [
•
]
with a required copy to (which shall not itself constitute notice):
Dechert LLP
90 State House Square, 12th Floor
Hartford, CT 06103-3702
Attention: John J. Gillies, Esq.
-13-
Facsimile No.: (860) 524-3930
if to Holdings, to:
HFF, Inc.
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Chief Executive Officer
Facsimile No.: [
•
]
with a required copy to (which shall not itself constitute notice):
Dechert LLP
90 State House Square, 12th Floor
Hartford, CT 06103-3702
Attention: John J. Gillies, Esq.
Facsimile No.: (860) 524-3930
Any party may change its address or facsimile number by giving the other party written notice of
its new address or fax number in the manner set forth above.
SECTION 6.02.
Counterparts
. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties and delivered to
the other parties, it being understood that all parties need not sign the same counterpart.
SECTION 6.03.
Entire Agreement; No Third Party Beneficiaries
. This Agreement
constitutes the entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof. This Agreement
shall be binding upon and inure solely to the benefit of each party hereto, the Members and their
respective successors and permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
SECTION 6.04.
Governing Law
. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to applicable principles
of conflict of laws.
SECTION 6.05.
Severability
. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
-14-
good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
SECTION 6.06.
Successors’ Assignment; Amendments
. Holdings may not assign this
Agreement to any person without the prior written consent of HFF (as approved by the Audit
Committee), which consent shall not be unreasonably withheld, conditioned or delayed;
provided
,
however
, Holdings may pledge some or all of its rights, interests or
entitlements under this Agreement to any U.S. money center bank in connection with a bona fide loan
or other indebtedness;
provided
further
,
however
, Holdings may assign this
Agreement to one or more wholly owned (directly or indirectly) subsidiaries (whether corporations,
partnerships, limited liability companies, trusts or other entities) of Holdings, the ownership of
which may be transferred to the Members. HFF may not assign any of its rights or obligations under
this Agreement without the consent of Holdings, not to be unreasonably withheld or delayed.
Subject to each of the two immediately preceding sentences, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by, the parties and their respective successors and
assigns including any acquirer of all or substantially all of the assets of HFF.
No amendment to this Agreement shall be effective unless it is (i) in writing, (ii) signed by
HFF and Holdings and (iii) approved by the Audit Committee.
SECTION 6.07.
Titles and Subtitles
. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be considered in construing
this Agreement.
SECTION 6.08.
Submission to Jurisdiction; Waivers
. With respect to any suit, action
or proceeding relating to this Agreement (collectively, a “
Proceeding
”), each party to this
Agreement irrevocably (a) consents and submits to the exclusive jurisdiction of the courts of the
State of New York and any court of the U.S. located in the Borough of Manhattan in New York City,
New York; (b) waives any objection which such party may have at any time to the laying of venue of
any Proceeding brought in any such court, waives any claim that such Proceeding has been brought in
an inconvenient forum and further waives the right to object, with respect to such Proceeding, that
such court does not have jurisdiction over such party; (c) consents to the service of process at
the address set forth for notices in Section 6.01 herein;
provided
,
however
, that
such manner of service of process shall not preclude the service of process in any other manner
permitted under applicable law; and (d) waives, to the fullest extent permitted by applicable law,
any and all rights to trial by jury in connection with any Proceeding.
SECTION 6.09.
Reconciliation
. In the event that HFF and Holdings are unable to
resolve a disagreement within the relevant period designated in this Agreement the matter shall be
submitted for determination to an accounting firm or a law firm (other than the Advisory Firm),
that is nationally recognized as having expertise with respect to the matter or matters in dispute
which firm is acceptable to the Audit Committee and Holdings (the “
Expert
”). If the matter
is not resolved before any payment that is the subject of a disagreement is due or any Tax Return
reflecting the subject of a disagreement is due (including extensions), such payment shall
-15-
be due on the date prescribed by this Agreement and such Tax Return shall be filed as prepared
by HFF by such due date, subject to adjustment or amendment upon resolution. The determinations of
the Expert pursuant to this Section 6.09 shall be binding on HFF and its Subsidiaries, the Opcos
and Holdings absent manifest error. In the event that this reconciliation provision is utilized,
the fees of the accounting or law firm selected in accordance with this Section 6.09 shall be paid
in proportion to the manner in which the dispute is resolved, such that, for example, if the entire
dispute is resolved in favor of HFF, Holdings shall pay all of the fees, or if the items in dispute
are resolved 50% in favor of HFF and 50% in favor of Holdings, each of HFF and Holdings shall pay
50% of the fees of the firm retained pursuant to this Section 6.09.
SECTION 6.10.
Withholding
. HFF shall be entitled to deduct and withhold from any
payment payable pursuant to this Agreement such amounts as HFF is required to deduct and withhold
with respect to the making of such payment under applicable Tax Law. To the extent that amounts
are so withheld and paid over to the appropriate taxing authority by HFF, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to Holdings.
IN WITNESS WHEREOF, HFF and Holdings have duly executed this Agreement as of the date first
written above.
|
|
|
|
|
|
|
HFF, INC.
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
HFF HOLDINGS LLC
|
|
|
|
|
|
|
|
By
|
|
|
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
Address:
|
-16-
Exhibit 10.4
FORM OF
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
HFF, INC.
AND
HFF HOLDINGS LLC
Dated as of [
•
], 2007
Table of Contents
ARTICLE I
DEFINITIONS AND OTHER MATTERS
|
|
|
|
|
|
|
Section 1.1. Definitions
|
|
|
1
|
|
|
|
|
|
|
|
|
Section 1.2. Definitions Generally
|
|
|
4
|
|
|
|
|
|
|
|
ARTICLE II
REGISTRATION RIGHTS
|
|
|
|
|
|
|
|
Section 2.1. Fifth Anniversary Registration
|
|
|
5
|
|
|
|
|
|
|
|
|
Section 2.2. Demand Registration
|
|
|
5
|
|
|
|
|
|
|
|
|
Section 2.3. Piggyback Registration
|
|
|
6
|
|
|
|
|
|
|
|
|
Section 2.4. Lock-Up Agreements
|
|
|
8
|
|
|
|
|
|
|
|
|
Section 2.5. Registration Procedures
|
|
|
8
|
|
|
|
|
|
|
|
|
Section 2.6. Indemnification by the Company
|
|
|
11
|
|
|
|
|
|
|
|
|
Section 2.7. Indemnification by HFF Holdings
|
|
|
11
|
|
|
|
|
|
|
|
|
Section 2.8. Conduct of Indemnification Proceedings
|
|
|
12
|
|
|
|
|
|
|
|
|
Section 2.9. Contribution
|
|
|
12
|
|
|
|
|
|
|
|
|
Section 2.10. Participation in Public Offering
|
|
|
13
|
|
|
|
|
|
|
|
|
Section 2.11. Other Indemnification
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 2.12. Cooperation by the Company
|
|
|
13
|
|
|
|
|
|
|
|
|
Section 2.13. No Transfer of Registration Rights
|
|
|
13
|
|
|
|
|
|
|
|
|
Section 2.14. Parties in Interest
|
|
|
13
|
|
|
|
|
|
|
|
|
Section 2.15. Acknowledgement Regarding the Company
|
|
|
14
|
|
|
|
|
|
|
|
|
Section 2.16. Mergers, Recapitalizations, Exchanges or Other
Transactions Affecting Registrable Securities
|
|
|
14
|
|
|
|
|
|
|
|
ARTICLE III
MISCELLANEOUS
|
|
|
|
|
|
|
|
Section 3.1. Term of the Agreement; Termination of Certain Provisions
|
|
|
14
|
|
|
|
|
|
|
|
|
Section 3.2. Amendments; Waiver
|
|
|
14
|
|
|
|
|
|
|
|
|
Section 3.3. Governing Law
|
|
|
15
|
|
|
|
|
|
|
|
|
Section 3.4. Notices
|
|
|
15
|
|
|
|
|
|
|
|
|
Section 3.5. Severability
|
|
|
16
|
|
|
|
|
|
|
|
|
Section 3.6. Specific Performance
|
|
|
16
|
|
|
|
|
|
|
|
|
Section 3.7. Assignment; Successors
|
|
|
16
|
|
|
|
|
|
|
|
|
Section 3.8. No Third-Party Rights
|
|
|
16
|
|
|
|
|
|
|
|
|
Section 3.9. Section Headings
|
|
|
16
|
|
|
|
|
|
|
|
|
Section 3.10. Execution in Counterparts
|
|
|
16
|
|
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “
Agreement
”) is made and entered into as of
[
•
], 2007, by and among HFF, Inc., a Delaware corporation (the “
Company
”), and HFF
Holdings LLC, a Delaware limited liability company (“
HFF Holdings
”).
W I T N E S S E T H:
WHEREAS, the Company and HFF Holdings are beneficial owners of partnership units (the
“
Units
”) of each of Holliday Fenoglio Fowler, L.P., a Texas limited partnership (“
HFF
LP
”), and HFF Securities L.P., a Delaware limited partnership (“
HFF Securities
” and,
together with HFF LP, the “
Operating Partnerships
”);
WHEREAS, pursuant to the Sale and Merger Agreement (defined below), HFF Holdings has received
an exchange right to exchange one partnership unit in each of the Operating Partnerships for one
share of the Company’s Class A common stock, par value $0.01 per share (the “
Class A Common
Stock
”), at the option of HFF Holdings pursuant to the LLC Agreement (defined below); and
WHEREAS, the Company desires to provide HFF Holdings with registration rights with respect to
shares of Class A Common Stock underlying its Units.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements, covenants and
provisions herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
Section 1.1.
Definitions
. Capitalized terms used in this Agreement without other
definition shall, unless expressly stated otherwise, have the meanings specified in this Section
1.1:
(a) “
Agreement
” has the meaning ascribed to such term in the Recitals.
(b) “
Beneficial owner
” has the meaning set forth in Rule 13d-3 under the Exchange Act.
(c) “
Board
” means the Board of Directors of the Company.
(d) “
Certificate of Incorporation
” means the Amended and Restated Certificate of
Incorporation of HFF, Inc., as filed with the Delaware Secretary of State on [
•
], 2007.
(e)“
Class A Common Stock
” has the meaning ascribed to such term in the Recitals.
(f) “
Company
” has the meaning ascribed to such term in the Recitals.
(g) “
Demand Notice
” has the meaning ascribed to such term in Section 2.2(a).
(h) “
Demand Registration
” has the meaning ascribed to such term in Section 2.2(a).
(i) “
Exchange Act
” means the United States Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(j) “
Fifth Anniversary Registration
” has the meaning ascribed to such term in Section
2.1(a).
(k) “
Governmental Authority
” means any national, local or foreign (including U.S. federal,
state or local) or supranational (including European Union) governmental, judicial, administrative
or regulatory (including self-regulatory) agency, commission, department, board, bureau, entity or
authority of competent jurisdiction.
(l) “
Indemnified Parties
” has the meaning ascribed to such term in Section 2.6.
(m) “
IPO Date
” means the closing date of the initial public offering of the Class A Common
Stock.
(n) “
LLC Agreement
” means the Second Amended and Restated Limited Liability Agreement, as
amended, of HFF Holdings, by and among the Members thereof.
(o) “
Public Offering
” means an underwritten public offering pursuant to an effective
registration statement under the Securities Act, other than pursuant to a registration statement on
Forms S-4 or S-8 or any similar or successor form.
(p) “
Registration Expenses
” means any and all expenses incident to the performance of or
compliance with any registration or marketing of securities, including all (i) registration and
filing fees, and all other fees and expenses payable in connection with the listing of securities
on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of
compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of
counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses
in connection with the preparation, printing, mailing and delivery of any registration statements,
prospectuses and other documents in connection therewith and any amendments or supplements thereto,
(iv) security engraving and printing expenses, (v) internal expenses of the Company (including,
without limitation, all salaries and expenses of its officers and employees performing legal or
accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary
fees and expenses for independent certified public accountants retained by the Company (including
the expenses relating to any comfort letters or costs associated with the delivery by independent
certified public accountants of any comfort letters requested pursuant to Section 2.5(h)), (vii)
reasonable fees and expenses of any special experts retained by the Company in connection with such
registration, (viii) reasonable fees, out-of-pocket costs and expenses of HFF Holdings, including
counsel for HFF Holdings, (ix) fees and expenses in connection with any review by the NASD of the
underwriting arrangements or other terms of the offering, and all fees and expenses of any
“qualified independent underwriter,” including the fees
and expenses of any counsel thereto, (x) fees and disbursements underwriters customarily paid by
issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities, (xi) costs of printing and producing any
agreements among underwriters, underwriting agreements, any “blue sky” or legal investment
memoranda and any selling agreements and other documents in connection with the offering, sale or
delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses
and the fees and expenses of any other agent or trustee appointed in connection with such offering,
(xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in
connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees
and expenses payable in connection with any ratings of the Registrable Securities, including
expenses relating to any presentations to rating agencies and (xv) all out-of-pocket costs and
expenses incurred by the Company or its appropriate officers in connection with their compliance
with Section 2.5(l).
(q) “
Registrable Securities
” shall mean shares of Class A Common Stock deliverable or
delivered in exchange for Units. For purposes of this Agreement, (i) Registrable Securities shall
cease to be Registrable Securities when a Registration Statement covering such Registrable
Securities has been declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective Registration Statement and (ii) the
Registrable Securities of a holder shall not be deemed to be Registrable Securities at any time
when the entire amount of such Registrable Securities proposed to be sold by HFF Holdings in a
single sale constitutes less than 1% of the then outstanding shares of Class A Common Stock or, in
the opinion of counsel satisfactory to the Company and HFF Holdings, each in their reasonable
judgment, may be distributed to the public pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act in any three-month period or any such Registrable Securities have
been sold in a sale made pursuant to Rule 144 of the Securities Act.
(r) “
Sale and Merger Agreement
” means that certain Sale and Merger Agreement, dated as of
[
•
], 2007, among HFF Holdings, Holliday GP Corp., HFF LP Acquisition LLC, the Company, GP
Acquisition Corp. and HFF Partnership Holdings LLC.
(s) “
SEC
” means the Securities and Exchange Commission.
(t) “
Securities Act
” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
(u) “
Subsidiary
” means, with respect to any person, any corporation, limited liability
company, company, partnership, trust, association or other legal entity or organization of which
such person (either directly or through one or more subsidiaries of such person) (a) owns, directly
or indirectly, a majority of the capital stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other governing body of
such corporation, limited liability company, partnership, trust, association or other legal entity
or organization, or (b) is otherwise entitled to exercise (1) a majority of the voting power
generally in the election of the board of directors or other governing body of such corporation,
limited
liability company, partnership, trust, association or other legal entity or organization or (2)
control of such corporation, limited liability company, partnership, trust, association or other
legal entity or organization.
(v) “
Transfer
” means, in respect of any Unit, share of Class A Common Stock, property or
other asset, any sale, assignment, transfer, distribution or other disposition thereof, whether
voluntarily or by operation of Law, including, without limitation, the exchange of any Unit for any
other security.
(w) “
Units
” has the meaning ascribed to such term in the Recitals.
Section 1.2.
Definitions Generally
. Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa, and references to any agreement, document
or instrument shall be deemed to refer to such agreement, document or instrument as amended,
supplemented or modified from time to time. When used herein:
(a) the word “or” is not exclusive;
(b) the words “including,” “includes,” “included” and “include” are deemed to be followed by the
words “without limitation”;
(c) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or subdivision;
(d) the word “person” means any individual, corporation, limited liability company, trust, joint
venture, association, company, partnership or other legal entity or a government or any department
or agency thereof or self-regulatory organization; and
(e) all section, paragraph or clause references not attributed to a particular document shall be
references to such parts of this Agreement, and all exhibit, annex and schedule references not
attributed to a particular document shall be references to such exhibits, annexes and schedules to
this Agreement.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1.
Fifth Anniversary Registration
.
(a) The Company shall use its commercially reasonable efforts to cause to be declared effective
under the Securities Act by the SEC, on or prior to the fifth anniversary of the IPO Date, a
registration statement relating to all shares of the following Registrable Securities (“
Fifth
Anniversary Registration
”): Registrable Securities to be delivered to HFF Holdings by the
Company in respect of the exchange of Units pursuant to the Certificate of Incorporation and all
other Registrable Securities of HFF Holdings which Registrable Securities are reasonably expected
to continue to be Registrable Securities at the expected filing date for the registration statement
with respect to such registration.
(b) The Company shall be liable for and pay all Registration Expenses in connection with any Fifth
Anniversary Registration, regardless of whether such Registration is effected.
(c) Upon notice to HFF Holdings, the Company may postpone effecting a registration pursuant to
this Section 2.1 on one occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 120 days (which period may not be extended or renewed),
if (i) the Company shall determine in good faith that effecting the registration would materially
and adversely affect an offering of securities of such company the preparation of which had then
been commenced or (ii) the Company is in possession of material non-public information the
disclosure of which during the period specified in such notice the Company believes in good faith
would not be in the best interests of the Company.
Section 2.2.
Demand Registration
.
(a) If at any time following the IPO, the Company shall receive a written request (a “
Demand
Notice
”) from HFF Holdings that the Company effect the registration under the Securities Act of
all or any portion of the Registrable Securities specified in the Demand Notice (a “
Demand
Registration
”), specifying the intended method of disposition thereof, then the Company shall
use its commercially reasonable efforts to effect, as expeditiously as reasonably practicable,
subject to the restrictions in Section 2.2(d), the registration under the Securities Act of the
Registrable Securities for which HFF Holdings has requested registration under this Section 2.2,
all to the extent necessary to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered. Notwithstanding the
foregoing, (i) HFF Holdings shall be entitled to ten Demand Registrations pursuant to this Section
2.2, (ii) HFF Holdings shall be entitled to no more than one demand registration during any
six-month period, and (iii) the Company shall not be obligated to make a Demand Registration with
respect to HFF Holdings in the event that a Fifth Anniversary Registration or Piggyback
Registration (as defined below) had been available to HFF Holdings within the 180 days preceding
the date of the Demand Notice.
(b) Notwithstanding any provision in this Section 2.3 or elsewhere in the Agreement, the Company
shall be entitled to elect to effect the registration under the Securities Act of all of the
Registrable Securities held by HFF Holdings in any individual Demand Registration, subject to the
right of HFF Holdings to revoke its Demand Registration request pursuant to Section 2.3(c).
(c) At any time prior to the effective date of the registration statement relating to such
registration, HFF Holdings may revoke such Demand Registration request by providing a notice to the
Company revoking such request. The Company shall be liable for and pay all Registration Expenses in
connection with any Demand Registration.
(d) If a Demand Registration involves an underwritten Public Offering and the managing underwriter
advises the Company and HFF Holdings that, in its view, the number of shares of Registrable
Securities requested to be included in such registration exceeds the largest number of shares that
can be sold without having an adverse effect on such offering, including the price at which such
shares can be sold (the “
Maximum Offering Size
”), the Company shall include in such
registration, in the priority listed below, up to the Maximum Offering Size:
(i) first, all Registrable Securities requested to be registered in the Demand Registration by
HFF Holdings; and
(ii) second, any securities proposed to be registered by the Company or any securities
proposed to be registered for the account of any other persons, with such priorities among them as
the Company shall determine.
(e) Upon notice to HFF Holdings, the Company may postpone effecting a registration pursuant to
this Section 2.2 on one occasion during any period of six consecutive months for a reasonable time
specified in the notice but not exceeding 120 days (which period may not be extended or renewed),
if (i) the Company shall determine in good faith that effecting the registration would materially
and adversely affect an offering of securities of such company the preparation of which had then
been commenced or (ii) the Company is in possession of material non-public information the
disclosure of which during the period specified in such notice the Company believes in good faith
would not be in the best interests of the Company.
Section 2.3.
Piggyback Registration
.
(a) Subject to any contractual obligations to the contrary, if the Company proposes at any time to
register any of the equity securities issued by it under the Securities Act (other than a
registration on Form S-8 or S-4, or any successor forms, relating to shares of Class A Common Stock
issuable in connection with any employee benefit or similar plan of the Company or in connection
with a direct or indirect acquisition by the Company of another Person or as a recapitalization or
reclassification of securities of the Company), whether or not for sale for its own account, the
Company shall each such time give prompt notice at least 15 business days prior to the anticipated
filing date of the registration statement relating to such registration to HFF Holdings which
notice shall set forth HFF Holdings’ rights under this Section 2.3 and shall offer HFF Holdings the
opportunity to include in such registration statement the number of Registrable Securities of the
same class or series as those proposed to be registered as HFF Holdings may request (a
“
Piggyback Registration
”), subject to the provisions of Section 2.3(b). Upon the request of
HFF Holdings made within five business days after the receipt of notice from the Company (which
request shall specify the number of Registrable Securities intended to be registered by HFF
Holdings), the Company shall use its commercially reasonable efforts to effect the registration
under the Securities Act of all Registrable Securities that the Company has been so requested to
register by HFF Holdings to the extent necessary to permit the disposition of the Registrable
Securities so to be registered, provided that (i) if such registration involves an underwritten
Public Offering, HFF Holdings must sell its Registrable Securities to the underwriters selected by
the Company on the same terms and conditions as apply to the
Company, as applicable, and (ii) if, at any time after giving notice of its intention to register
any securities pursuant to this Section 2.3(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall determine for any reason
not to register such securities, the Company shall give notice to HFF Holdings and, thereupon,
shall be relieved of its obligation to register any Registrable Securities in connection with such
registration. No registration effected under this Section 2.3 shall relieve the Company of its
obligations to effect a Fifth Anniversary Registration or Demand Registration to the extent
required by Section 2.1 or Section 2.2, respectively. The Company shall pay all Registration
Expenses in connection with each Piggyback Registration.
(b) Subject to any contractual obligations to the contrary, if a Piggyback Registration involves
an underwritten Public Offering and the managing underwriter advises the Company that, in its view,
the number of Registrable Securities that the Company and HFF Holdings intend to include in such
registration exceeds the Maximum Offering Size, the Company shall include in such registration, in
the following priority, up to the Maximum Offering Size:
(i) first, so much of the Company securities proposed to be registered for the account of the
Company;
(ii) second, to the Company securities proposed to be registered pursuant to any demand
registration rights of third parties;
(iii) third, all Registrable Securities requested to be included in such registration by HFF
Holdings; and
(iv) fourth, any securities proposed to be registered for the account of any other Persons
with such priorities among them as the Company shall determine.
(c) Notwithstanding any provision in this Section 2.3 or elsewhere in this Agreement, no provision
relating to the registration of Registrable Securities shall be construed as permitting HFF
Holdings to effect a transfer of securities that is otherwise prohibited by the terms of any
agreement between HFF Holdings and the Company or any of its subsidiaries. The Company shall not be
obligated to provide notice or afford Piggyback Registration to HFF Holdings pursuant to this
Section 2.3 unless some or all of HFF Holdings’ Registrable Securities are permitted to be
transferred under the terms of applicable agreements between HFF Holdings and the Company or any of
its subsidiaries.
Section 2.4.
Lock-Up Agreements
. If any registration of Registrable Securities shall
be effected in connection with a Public Offering, neither the Company nor HFF Holdings shall effect
any public sale or distribution, including any sale pursuant to Rule 144, of any shares of Common
Stock or other security of the Company (except as part of such Public Offering) during the period
beginning 14 days prior to the effective date of the applicable registration statement until the
earlier of (i) such time as the Company and the lead managing underwriter shall agree and (ii) 180
days following the effective date of the applicable registration statement.
Section 2.5.
Registration Procedures
. Whenever HFF Holdings requests that any
Registrable Securities be registered pursuant to Section 2.2 or 2.3 or in respect of any Fifth
Anniversary Registration pursuant to Section 2.1, subject to the provisions of such Sections, the
Company shall use its commercially reasonable efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of disposition thereof as
promptly as practicable, and, in connection with any such request:
(a) The Company shall as expeditiously as reasonably practicable prepare and file with the SEC a
registration statement on any form for which the Company then qualifies or that counsel for the
Company shall deem appropriate and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method of distribution
thereof, and use its commercially reasonable efforts to cause such filed registration statement to
become and remain effective for a period of not less than 40 days, or in the case of a Fifth
Anniversary Registration, until all of the Registrable Securities of HFF Holdings included in such
registration statement shall have actually been sold thereunder; provided that, at the request of
HFF Holdings, the intended method of distribution relating to the sale of the Registrable
Securities to be registered thereunder shall provide for individual members of HFF Holdings to be
named as selling stockholders under such registration statement.
(b) Prior to filing a registration statement or prospectus or any amendment or supplement thereto,
the Company shall, if requested, furnish to HFF Holdings and each underwriter, if any, of the
Registrable Securities covered by such registration statement copies of such registration statement
as proposed to be filed, and thereafter the Company shall furnish to HFF Holdings and underwriter,
if any, such number of copies of such registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities
Act and such other documents as HFF Holdings or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by HFF Holdings. HFF Holdings shall
have the right to request that the Company modify any information contained in such registration
statement, amendment and supplement thereto pertaining to HFF Holdings and the Company shall use
its all commercially reasonable efforts to comply with such request, provided, however, that the
Company shall not have any obligation so to modify any information if the Company reasonably
expects that so doing would cause the prospectus to contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) After the filing of the registration statement, the Company shall (i) cause the related
prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be
filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities covered by such
registration statement during the applicable period in accordance with the intended methods of
disposition by HFF Holdings thereof set forth in such registration statement or supplement to
such prospectus and (iii) promptly notify HFF Holdings of any stop order issued or threatened by
the SEC or any state securities commission and take all reasonable best efforts to prevent the
entry of such stop order or to remove it if entered.
(d) The Company shall use its commercially reasonable best efforts to (i) register or qualify the
Registrable Securities covered by such registration statement under such other securities or “blue
sky” laws of such jurisdictions in the United States as HFF Holdings reasonably (in light of HFF
Holdings’ intended plan of distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable HFF Holdings to consummate the disposition
of the Registrable Securities owned by HFF Holdings, provided that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 2.5(d), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such jurisdiction.
(e) The Company shall immediately notify HFF Holdings, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and promptly prepare and make
available to HFF Holdings and file with the SEC any such supplement or amendment.
(f) The Company shall select an underwriter or underwriters in connection with any Public
Offering; provided that, in the event of a Demand Registration, such underwriter or underwriters
shall be reasonably acceptable to HFF Holdings. In connection with any Public Offering, the Company
shall enter into customary agreements (including an underwriting agreement in customary form) and
take such all other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities in any such Public Offering, including, to the extent
necessary, the engagement of a “qualified independent underwriter” in connection with the
qualification of the underwriting arrangements with the NASD.
(g) Subject to the execution of confidentiality agreements satisfactory in form and substance to
the Company in the exercise of its good faith judgment, the Company will give to HFF Holdings, its
counsel and accountants (i) reasonable and customary access to its books and records and (ii) such
opportunities to discuss the business of the Company with its directors, officers, employees,
counsel and the independent public accountants who have certified its financial statements, as
shall be appropriate, in the reasonable judgment of counsel, to HFF Holdings, to enable it to
exercise its due diligence responsibility.
(h) The Company shall use its commercially reasonable efforts to furnish to HFF Holdings and to
each such underwriter, if any, a signed counterpart, addressed to HFF Holdings or such underwriter,
of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company’s independent public accountants, each in customary form and
covering such matters of the kind customarily covered by opinions or comfort letters, as the case
may be, as HFF Holdings therefor reasonably requests.
(i) HFF Holdings shall promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required or advisable in connection with such
registration.
(j) HFF Holdings agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 2.5(e), HFF Holdings shall forthwith discontinue disposition
of Registrable Securities pursuant to the registration statement covering such Registrable
Securities until HFF Holdings’ receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.5(e), and, if so directed by the Company, HFF Holdings shall deliver to
the Company all copies, other than any permanent file copies then in HFF Holdings’ possession, of
the most recent prospectus covering such Registrable Securities at the time of receipt of such
notice. If the Company shall give such notice, the Company shall extend the period during which
such registration statement shall be maintained effective (including the period referred to in
Section 2.5(a)) by the number of days during the period from and including the date of the giving
of notice pursuant to Section 2.5(e) to the date when the Company shall make available to HFF
Holdings a prospectus supplemented or amended to conform with the requirements of Section 2.5(e).
(k) The Company shall use its commercially reasonable efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or quotation system on which any
of the Registrable Securities are then listed or traded.
(l) The Company shall have appropriate officers of the Company (i) prepare and make presentations
at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other
actions to obtain ratings for any Registrable Securities and (iii) otherwise use their commercially
reasonable efforts to cooperate as reasonably requested by the underwriters in the offering,
marketing or selling of the Registrable Securities.
Section 2.6.
Indemnification by the Company
. In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article II, the Company will,
and it hereby does, indemnify and hold harmless, to the extent permitted by law, HFF Holdings, each
affiliate of HFF Holdings and its members and managing members (including any director, officer,
affiliate, employee, agent and controlling Person of any of the foregoing), each other person who
participates as an underwriter in the offering or sale of such securities and each other person, if
any, who controls such seller or any such underwriter within the meaning of the Securities Act
(collectively, the “
Indemnified Parties
”), against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including reasonable attorney’s fees and reasonable
expenses of investigation) to which such Indemnified Party may become subject under the Securities
Act, common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such Indemnified Party is
a party thereto) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under which such securities
were registered under the Securities Act, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein
(in the case of a prospectus, in light of the circumstances under which they were made) not
misleading, and the Company will reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending against any such
loss, claim, liability, action or proceeding; provided, that the Company shall not be liable to any
Indemnified Party in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in such registration
statement or amendment or supplement thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity with written information furnished to the Company
with respect to such seller through an instrument duly executed by such seller specifically stating
that it is for use in the preparation thereof.
Section 2.7.
Indemnification by HFF Holdings
. The Company may require, as a
condition to including any Registrable Securities in any registration statement filed in accordance
with this Article II, that the Company shall have received an undertaking reasonably satisfactory
to it from HFF Holdings or any underwriter to indemnify and hold harmless the Company and all other
prospective sellers of Registrable Securities with respect to any untrue statement or alleged
untrue statement in or omission or alleged omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or supplement, if such
untrue statement or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company with respect to such
seller through an instrument duly executed by such seller or underwriter specifically stating that
it is for use in the preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference into any of the
foregoing. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or HFF Holdings, or any of their respective affiliates,
directors, officers or controlling persons and shall survive the transfer of such securities by
such person. In no event shall the liability of HFF Holdings hereunder be greater in amount than
the dollar amount of the proceeds received by HFF Holdings upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
Section 2.8.
Conduct of Indemnification Proceedings
. Promptly after receipt by an
Indemnified Party hereunder of written notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursuant to this Article II, such
Indemnified Party will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided, that the failure of
the Indemnified Party to give notice as provided herein shall not relieve the indemnifying party of
its obligations under this Article II, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action
is brought against an Indemnified Party, unless in such Indemnified Party’s reasonable
judgment a conflict of interest between such Indemnified Party and indemnifying parties may exist
in respect of such claim, the indemnifying party will be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and after notice
from the indemnifying party to such Indemnified Party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such Indemnified Party for any legal or other
expenses subsequently incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party will consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term thereof, the giving by
the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to
such claim or litigation.
Section 2.9.
Contribution
. If the indemnification provided for in this Article II
from the indemnifying party is unavailable to an Indemnified Party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying party and
Indemnified Parties in connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative fault
of such indemnifying party and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or Indemnified Parties, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party under this Section 2.9 as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 2.9 were determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Section 2.10.
Participation in Public Offering
. HFF Holdings may not participate in
any Public Offering hereunder unless HFF Holdings (a) agrees to sell its securities on the basis
provided in any underwriting arrangements approved by HFF Holdings and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and the provisions of this
Agreement in respect of registration rights.
Section 2.11.
Other Indemnification
. Indemnification similar to that specified herein
(with appropriate modifications) shall be given by the Company and HFF Holdings participating
therein with respect to any required registration or other qualification of securities under any
federal or state law or regulation or Governmental Authority other than the Securities Act.
Section 2.12.
Cooperation by the Company
. If HFF Holdings shall transfer any
Registrable Securities pursuant to Rule 144, the Company shall use its commercially reasonable
efforts to cooperate with HFF Holdings and shall provide to HFF Holdings such information as HFF
Holdings shall reasonably request.
Section 2.13.
No Transfer of Registration Rights
. Except as set forth in Section
2.14, none of the rights of HFF Holdings under this Article II shall be assignable by HFF Holdings
to any person acquiring securities.
Section 2.14.
Parties in Interest
. HFF Holdings shall be entitled to receive the
benefits of this Agreement and shall be bound by the terms and provisions of this Agreement by
reason of its election to participate in a registration under this Article II. To the extent
Registrable Securities are effectively transferred in accordance with the terms of the operating
agreement of HFF Holdings, the transferee of such Registrable Securities shall be entitled to
receive the benefits of this Agreement and shall be bound by the terms and provisions of this
Agreement upon becoming bound hereby pursuant to Section 3.1(c).
Section 2.15.
Acknowledgement Regarding the Company
. All determinations necessary or
advisable under this Article II shall be made by the Company, the determinations of which shall be
final and binding.
Section 2.16.
Mergers, Recapitalizations, Exchanges or Other Transactions Affecting
Registrable Securities
. The provisions of this Agreement shall apply to the full extent set
forth herein with respect to the Registrable Securities, to any and all securities or capital stock
of the Operating Partnerships or the Company or any successor or assign of any such person (whether
by merger, amalgamation, consolidation, sale of assets or otherwise) that may be issued in respect
of, in exchange for, or in substitution of such Registrable Securities, by reason of any dividend,
split, issuance, reverse split, combination, recapitalization, reclassification, merger,
amalgamation, consolidation or otherwise.
ARTICLE III
MISCELLANEOUS
Section 3.1.
Term of the Agreement; Termination of Certain Provisions
.
(a) The term of this Agreement shall continue until the first to occur of (i) such time as HFF
Holdings no longer holds any Registrable Securities and (ii) such time as the Agreement is
terminated in writing by HFF Holdings.
(b) Unless this Agreement is theretofore terminated pursuant to Section 3.1(a) hereof, HFF
Holdings shall be bound by the provisions of this Agreement with respect to any of its Units or
Registrable Security until such time as HFF Holdings ceases to hold any Registrable Security.
Thereafter, HFF Holdings shall no longer be bound by the provisions of this Agreement other than
Sections 2.6, 2.7, 2.8, 2.9 and 2.11 and Article III.
Section 3.2.
Amendments; Waiver
.
(a) The provisions of this Agreement may be amended only by HFF Holdings.
(b) In addition to any other vote or approval that may be required under this Section 3.2, any
amendment of this Agreement that has the effect of changing the obligations of the Operating
Partnerships or the Company hereunder to make such obligations materially more onerous to the
Operating Partnerships or Company shall require the approval of the Operating Partnerships or the
Company, as the case may be.
(c) No provision of this Agreement may be waived except by an instrument in writing executed by
the party against whom the waiver is to be effective.
Section 3.3.
Governing Law
. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 3.4.
Notices
.
(a) Any communication, demand or notice to be given hereunder will be duly given (and shall be
deemed to be received) when delivered in writing by hand or first class mail or by telecopy to a
party at its address as indicated below:
If to the Company,
HFF, Inc.
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Chief Executive Officer
Fax: [
•
]
If to HFF Holdings LLC
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Managing Member
Fax: [
•
]
(b) Unless otherwise provided to the contrary herein, any notice which is required to be given in
writing pursuant to the terms of this Agreement may be given by telecopy.
Section 3.5.
Severability
. If any provision of this Agreement is finally held to be
invalid, illegal or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be deemed replaced by a
term or provision that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision.
Section 3.6.
Specific Performance
. Each party hereto acknowledges that the remedies
at law of the other parties for a breach or threatened breach of this Agreement would be inadequate
and, in recognition of this fact, any part to this Agreement, without posting any bond, and in
addition to all other remedies that may be available, shall, subject to Section 3.4, be entitled to
obtain equitable relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy that may be then available.
Section 3.7.
Assignment; Successors
. This Agreement shall be binding upon and inure
to the benefit of the respective legatees, legal representatives, successors and assigns of HFF
Holdings; provided, however, that HFF Holdings may not assign this Agreement or any of his rights
or obligations hereunder, and any purported assignment in breach hereof by HFF Holdings shall be
void; and provided further that no assignment of this Agreement by the Company or to a successor of
the Company (by operation of law or otherwise) shall be valid unless such assignment is made to a
person which succeeds to the business of such Person substantially as an entirety.
Section 3.8.
No Third-Party Rights
. Other than as expressly provided herein, nothing
in this Agreement will be construed to give any person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and assigns.
Section 3.9.
Section Headings
. The headings of sections in this Agreement are
provided for convenience only and will not affect its construction or interpretation.
Section 3.10.
Execution in Counterparts
. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly executed this
Agreement as of the dates indicated.
|
|
|
|
|
|
|
|
HFF, INC.
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
HFF HOLDINGS LLC
|
|
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Title:
|
|
|
|
|
Exhibit 10.5
FORM OF
SALE AND MERGER AGREEMENT
Among
HFF HOLDINGS LLC,
HOLLIDAY GP CORP.,
HFF LP ACQUISITION LLC,
HFF, INC.,
GP ACQUISITION CORP.
and
HFF PARTNERSHIP HOLDINGS LLC
Dated As Of
[
•
], 2007
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
Page
|
|
ARTICLE 1 CERTAIN DEFINITIONS
|
|
|
2
|
|
|
|
|
|
|
|
|
1.1. Defined Terms
|
|
|
2
|
|
|
1.2. Other Definitional Provisions
|
|
|
4
|
|
|
|
|
|
|
|
|
ARTICLE 2 THE TRANSACTIONS
|
|
|
5
|
|
|
|
|
|
|
|
|
2.1. Sale and Merger Transactions
|
|
|
5
|
|
|
2.2. Closing
|
|
|
7
|
|
|
2.3. Other Deliveries and Proceedings at Closing
|
|
|
7
|
|
|
2.4. Initial Public Offering
|
|
|
8
|
|
|
2.5. Post-Closing Transactions
|
|
|
8
|
|
|
|
|
|
|
|
|
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
|
|
|
8
|
|
|
|
|
|
|
|
|
3.1. Representations and Warranties of HFF Holdings, Holliday GP and Holdings Sub
|
|
|
8
|
|
|
3.2. Representations and Warranties of HoldCo LLC, GP Acquisition Corp. and the Company
|
|
|
10
|
|
|
|
|
|
|
|
|
ARTICLE 4 CONDITIONS PRECEDENT TO CLOSING
|
|
|
12
|
|
|
|
|
|
|
|
|
4.1. Conditions Precedent to Obligations of HoldCo LLC, GP Acquisition Corp. and the Company
|
|
|
12
|
|
|
4.2. Conditions Precedent to Obligations of HFF Holdings, Holliday GP and Holdings Sub
|
|
|
12
|
|
|
4.3. Additional Conditions Precedent.
|
|
|
13
|
|
|
|
|
|
|
|
|
ARTICLE 5 INDEMNIFICATION
|
|
|
13
|
|
|
|
|
|
|
|
|
5.1. Indemnification Obligation of HFF Holdings
|
|
|
13
|
|
|
5.2. Indemnification Obligation of HoldCo LLC
|
|
|
14
|
|
|
5.3. Other Rights and Remedies
|
|
|
14
|
|
|
|
|
|
|
|
|
ARTICLE 6 MISCELLANEOUS
|
|
|
14
|
|
|
|
|
|
|
|
|
6.1. Termination
|
|
|
14
|
|
|
6.2. No Liabilities in Event of Termination
|
|
|
14
|
|
|
6.3. Further Assurances
|
|
|
14
|
|
|
6.4. Contents of Agreement
|
|
|
15
|
|
|
6.5. Assignment and Binding Effect
|
|
|
15
|
|
|
6.6. Waiver
|
|
|
15
|
|
-i-
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
6.7.
|
|
Notices
|
|
|
15
|
|
|
6.8.
|
|
Applicable Law; Consent to Jurisdiction
|
|
|
16
|
|
|
6.9.
|
|
No Benefit to Others
|
|
|
16
|
|
|
6.10.
|
|
Headings
|
|
|
17
|
|
|
6.11.
|
|
Severability
|
|
|
17
|
|
|
6.12.
|
|
Counterparts
|
|
|
17
|
|
-ii-
EXHIBITS:
|
|
|
|
|
Exhibit A
|
|
Company Bylaws
|
|
Exhibit B
|
|
Company Certificate of Incorporation
|
|
Exhibit C
|
|
Amended and Restated Texas Limited Partnership Agreement of
Holliday Fenoglio Fowler, L.P.
|
|
Exhibit D
|
|
Amended and Restated Limited Partnership Agreement of HFF
Securities L.P.
|
|
Exhibit E
|
|
Tax Receivable Agreement
|
|
Exhibit F
|
|
Registration Rights Agreement
|
-iii-
FORM OF
SALE AND MERGER AGREEMENT
THIS SALE AND MERGER AGREEMENT (this “
Agreement
”), dated as of [
•
], 2007, is entered
into by and among HFF Holdings LLC, a limited liability company organized under the laws of
Delaware (“
HFF Holdings
”), Holliday GP Corp., a corporation organized under the laws of
Delaware (“
Holliday GP
”), HFF LP Acquisition LLC, a limited liability company organized
under the laws of Delaware (“
Holdings Sub
” and together with HFF Holdings, the
“
Sellers
”), HFF, Inc., a corporation organized under the laws of Delaware (the
“
Company
”), HFF Partnership Holdings LLC, a limited liability company organized under the
laws of Delaware (“
HoldCo LLC
”), and GP Acquisition Corp., a corporation organized under
the laws of Delaware (“
GP Acquisition Corp.
”).
R E C I T A L S
WHEREAS, the Company has formed HoldCo LLC;
WHEREAS, HoldCo LLC has formed GP Acquisition Corp.;
WHEREAS, the Company is expected to issue shares of Class A Common Stock to the public in an
initial public primary offering and contribute the net proceeds of that issuance to HoldCo LLC;
WHEREAS, HFF Holdings owns 100% of the outstanding equity interests of Holliday GP, which is
the general partner of each of Holliday Fenoglio Fowler, L.P. (“
HFF LP
”) and HFF Securities
L.P. (“
HFF Securities
” and together with HFF LP, the “
Operating Partnerships
”);
WHEREAS, Holdings Sub and Holliday GP own 99% and 1%, respectively, of the outstanding
partnership interests of each of HFF LP and HFF Securities;
WHEREAS, on the terms and subject to the conditions set forth herein, HoldCo LLC will purchase
outstanding partnership interests of each of HFF LP and HFF Securities from the Sellers;
WHEREAS, on the terms and subject to the conditions set forth herein, GP Acquisition Corp.
will merge with and into Holliday GP (the “
Merger
”) and Holliday GP, as the surviving
corporation of the Merger, will become a wholly-owned subsidiary of HoldCo LLC; and
WHEREAS, the Managing Member of HoldCo LLC, the Boards of Directors of GP Acquisition Corp.
and Holliday GP, and the sole stockholder of each of Holliday GP and GP Acquisition Corp. has
approved the Merger whereby Holliday GP’s outstanding stock held by HFF Holdings will be converted
into the right to receive the merger consideration provided for herein.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and intending to be legally bound, the
Parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1.
Defined Terms
. For purposes of this Agreement, the terms defined in this
Agreement shall have the respective meanings specified herein, and, in addition, the following
terms shall have the following meanings:
“
Action
” means any claim, action, suit, litigation, arbitration, inquiry,
investigation or other proceeding.
“
Affiliate
” means, as to any Person, any other Person, which, directly or indirectly,
is in control of, is controlled by, or is under common control with, such Person. The term
“
control
” (including, with correlative meanings, the terms “
controlled by
” and
“
under common control with
”), as applied to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other ownership interest, by contract
or otherwise.
“
Agreement
” means this Sale and Merger Agreement, and all Exhibits hereto, as amended,
modified or supplemented from time to time in accordance with the terms hereof.
“
Authorizations
” means, as to any Person, all licenses, permits, franchises, orders,
approvals, concessions, registrations, qualifications and other authorizations with or under all
federal, state, local or foreign laws and Governmental Authorities and all industry or other
non-governmental regulatory organizations that are issued to such Person.
“
Business Day
” means any day other than a Saturday, a Sunday or a day on which banks
in the City of New York are authorized or required to close.
“
Class A Common Stock
” means Class A common stock, par value $0.01 per share, of the
Company, which Class A common stock shall have the rights, preferences and terms contained in the
Company Certificate of Incorporation and the Company Bylaws.
“
Class B Common Stock
” means Class B common stock, par value $0.01 per share, of the
Company, which Class B common stock shall have the rights, preferences and terms contained in the
Company Certificate of Incorporation and the Company Bylaws.
“
Closing
” and “
Closing Date
” is defined in Section 2.2.
“
Code
” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder, in each case as in effect from time to time, with any
-2-
references to specific sections of the Code construed also to refer to any predecessor or
successor sections thereof.
“
Company
” is defined in the preamble.
“
Company Bylaws
” means the Bylaws of the Company substantially in the form attached
hereto as Exhibit A.
“
Company Certificate of Incorporation
” means the Certificate of Incorporation of the
Company substantially in the form attached hereto as Exhibit B.
“
DGCL
” is defined in Section 2.1(b).
“
Effective Time
” is defined in Section 2.1(c).
“
Exchange Act
” means the U.S. Securities and Exchange Act of 1934, and the rules and
regulations promulgated thereunder, as amended.
“
Exchange Right
” is defined in Section 2.1(a).
“
Governmental Authority
” means any branch of power (whether executive, legislative or
judicial) of any nation or government, any state or other political subdivision thereof or any
entity (including a court) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
“
Governmental Order
” means, as to any Person, any judgment, injunction, decree, order
or determination of a Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property or assets is subject.
“
GP Acquisition Corp.
” is defined in the preamble.
“
HFF Holdings
” is defined in the preamble.
“
HFF LP
” is defined in the Recitals.
“
HFF Securities
” is defined in the Recitals.
“
HoldCo LLC
” is defined in the preamble.
“
Holdings Sub
” is defined in the preamble.
“
Holliday GP
” is defined in the preamble.
“
IPO
” is defined in Section 2.4.
-3-
“
Lien
” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other), charge or other security interest, preemptive right, existing or claimed
right of first refusal, right of first offer, right of consent, put right, default or similar right
or other adverse claim of any kind or nature whatsoever (including any conditional sale or other
title retention agreement and any financing lease having substantially the same economic effect as
any of the foregoing).
“
Losses
” is defined in Section 5.1.
“
Merger
” is defined in the Recitals.
“
Merger Consideration
” is defined in Section 2.1(e).
“
Operating Partnerships
” is defined in the Recitals.
“
Partnership Agreements
” means collectively, the Amended and Restated Texas Limited
Partnership Agreement of HFF LP and the Amended and Restated Limited Partnership Agreement of HFF
Securities substantially in the forms attached hereto as Exhibits C and D.
“
Party
” or “
party
” means a party to this Agreement.
“
Person
” means an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity or enterprise of whatever nature.
“
Registration Rights Agreement
” is defined in Section 2.3(a)(iii).
“
Requirement of Law
” means, as to any Person, any permit, license, judgment, order,
decree, statute, law, ordinance, code, rule, regulation or arbitration award in each case
applicable to or binding upon such Person or any of its property or assets or to which such Person
or any of its property or assets is subject.
“
Sale and Merger Transactions
” is defined in Section 2.1.
“
SEC
” means the U.S. Securities and Exchange Commission.
“
Securities Act
” means the U.S. Securities Act of 1933, and the rules and regulations
promulgated thereunder, as amended.
“
Sellers
” is defined in the preamble.
“
Surviving Corporation
” is defined in Section 2.1(b).
“
Tax Receivable Agreement
” is defined in Section 2.1(a).
1.2.
Other Definitional Provisions
.
-4-
(a) The words “
hereof
,” “
herein
” and “
hereunder
” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and Section and Exhibit references are to
this Agreement unless otherwise specified.
(b) Unless the context otherwise requires, the words “
include
,”
“
includes
” and “
including
” and words of similar import when used in this
Agreement shall be deemed to be followed by the phrase “without limitation.”
(c) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
(d) The terms “
Dollars
” and “
$
” shall mean United States dollars.
ARTICLE 2
THE TRANSACTIONS
2.1.
Sale and Merger Transactions
. Subject to the terms and conditions hereinafter
set forth and on the basis of and in reliance upon the representations, warranties, covenants,
agreements and conditions set forth herein, the Parties hereto will take each of the actions
described in this Section 2.1 (collectively, the “
Sale and Merger Transactions
”).
(a)
Contribution and Sale
. The Company shall contribute the net cash proceeds
of the IPO to HoldCo LLC. HoldCo LLC shall use such proceeds to (i) purchase [
•
]
partnership units of each of the Operating Partnerships from the Sellers and (ii) acquire
all of the outstanding stock of Holliday GP held by HFF Holdings pursuant to the Merger. In
addition to such cash proceeds, HFF Holdings shall also receive (i) an exchange right that
shall permit HFF Holdings to exchange one partnership unit in each of the Operating
Partnerships for one share of Class A Common Stock as set forth in the Company Certificate
of Incorporation (the “
Exchange Right
”) and (ii) rights under a tax receivable
agreement by and between the Company and HFF Holdings (the “
Tax Receivable
Agreement
”) substantially in the form attached hereto as Exhibit E.
(b)
Merger
. In accordance with the General Corporation Law of the State of
Delaware (the “
DGCL
”), GP Acquisition Corp. shall be merged with and into Holliday
GP at the Effective Time. Following the Effective Time, the separate corporate existence of
GP Acquisition Corp. shall cease and Holliday GP shall continue as the surviving corporation
and a wholly-owned subsidiary of HoldCo LLC (the “
Surviving Corporation
”).
(c)
Effective Time
. GP Acquisition Corp. and Holliday GP shall file a
Certificate of Merger executed in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the DGCL to effect the Merger as
soon as practicable on the Closing Date. The Merger shall become effective at
-5-
such time as the Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware or at such later time as may be specified in the Certificate of Merger
(the “
Effective Time
”).
(d)
Effect of the Merger
. The Merger shall have the effect set forth in this
Agreement and in the applicable provisions of the DGCL. Without limiting the generality of
the foregoing, and subject thereto and any other applicable laws, at the Effective Time, all
the properties, rights, privileges, powers and franchises of GP Acquisition Corp. and
Holliday GP shall vest in the Surviving Corporation, and all debts, liabilities,
restrictions, disabilities and duties of GP Acquisition Corp. and Holliday GP shall become
the debts, liabilities, restrictions, disabilities and duties of the Surviving Corporation.
(e)
Conversion of Shares
. At the Effective Time, by virtue of the Merger and
without any further action on the part of HFF Holdings, GP Acquisition Corp., Holliday GP or
HoldCo LLC: (i) each share of Holliday GP’s outstanding stock held by HFF Holdings as of
the Effective Time shall be cancelled and extinguished and be converted into the right to
receive total consideration consisting of one (1) share of Class B Common Stock and
$[•] in cash (the “
Merger Consideration
”); (ii) each share of Holliday GP’s
stock held in the treasury of Holliday GP shall be cancelled and extinguished and no payment
or other consideration shall be made with respect thereto; and (iii) each then issued and
outstanding share, and each share held in the treasury, of the stock of GP Acquisition Corp.
shall be surrendered and converted into one (1) validly issued, fully paid and
non-assessable share of the Surviving Corporation.
(f)
Certificate of Incorporation
. Effective upon and as part of the Merger,
the Certificate of Incorporation of Holliday GP shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter altered, amended or repealed.
(g)
Bylaws
. The Bylaws of Holliday GP in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation from and after the Effective
Time until thereafter altered, amended or repealed.
(h)
Directors and Officers
. The directors of Holliday GP immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, and the officers of
Holliday GP immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, each to hold office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation.
(i)
Sale Treatment
. It is the intention of the Parties that the purchase of
partnership units of each of the Operating Partnerships from the Sellers pursuant to Section
2.1(a) shall be a transaction in which gain or loss is recognized by the Sellers on the sale
of partnership interests pursuant to Sections 741 and 1001 of the Code. Each of the Parties
hereby agrees to treat such transaction in such manner for all relevant income
-6-
tax purposes, to file their respective tax returns accordingly and to take no positions
that are inconsistent with such treatment.
2.2.
Closing
. Unless this Agreement shall have been earlier terminated in accordance
with the terms of this Agreement, the closing of the Sale and Merger Transactions (the
“
Closing
”) shall take place (a) at the offices of Dechert LLP in New York City at 10:00
a.m., on the date and contemporaneously with the closing of the IPO (defined below) so long as the
conditions precedent set forth herein have been satisfied or waived (other than conditions with
respect to actions the respective Parties will take at the Closing itself, but subject to the
satisfaction or waiver of those conditions) or (b) on such other date as may be mutually agreed
upon in writing by the Parties. The date of the Closing is referred to herein as the “
Closing
Date
.”
2.3.
Other Deliveries and Proceedings at Closing
. At the Closing and subject to the
terms and conditions herein contained:
(a)
Deliveries by HoldCo LLC
. HoldCo LLC shall deliver (or cause to be
delivered) to the Sellers:
(i) cash, as consideration for the purchase of [
•
] partnership units of each of
the Operating Partnerships, in the amount of $[
•
];
(ii) the Tax Receivable Agreement, duly executed by the Company;
(iii) a registration rights agreement by and between the Company and HFF
Holdings (the “
Registration Rights Agreement
”) substantially in the form
attached hereto as Exhibit F, duly executed by the Company;
(iv) the Merger Consideration, consisting of a certificate evidencing one (1)
share of Class B Common Stock in the name of HFF Holdings and cash of $[
•
]; and
(v) a certificate duly executed by HoldCo LLC, dated as of the Closing Date,
certifying as set forth in Section 4.2.3.
(b)
Deliveries by the Sellers
. The Sellers shall deliver (or cause to be
delivered) to HoldCo LLC:
(i) [
•
] partnership units of each of the Operating Partnerships;
(ii) the Tax Receivable Agreement, duly executed by HFF Holdings;
(iii) the Registration Rights Agreement, duly executed by HFF Holdings;
-7-
(iv) certificates evidencing 100% of the equity interests of Holliday GP;
(v) a certificate duly executed by HFF Holdings, dated as of the Closing Date,
certifying as set forth in Section 4.1.3; and
(vi) a pay-off letter or other reasonably satisfactory evidence of the
repayment of outstanding indebtedness under that certain Credit Agreement dated as
of March 29, 2006 by and among HFF LP, HFF Holdings and Bank of America, N.A. (the
“
Credit Agreement
”).
(c)
Repayment of Debt
. HFF Holdings shall use a portion of the cash proceeds
received pursuant hereto to repay all the outstanding indebtedness under the Credit
Agreement.
(d)
Other Deliveries
. The Parties hereto shall also deliver to each other any
other agreements, closing certificates and other documents and instruments required to be
delivered pursuant to this Agreement.
2.4.
Initial Public Offering
. Each of the Parties intends that the Company shall
consummate an initial public offering (the “
IPO
”) of shares of Class A Common Stock
contemporaneously with the Closing.
2.5.
Post-Closing Transactions
.
(a) Pursuant to the provisions of the limited liability company agreement of HFF
Holdings, the Exchange Right may be exercised at HFF Holdings’ election and for the benefit
of individual members of HFF Holdings.
(b) Shares of Class A Common Stock issued in accordance with Section 2.5(a) shall be
evidenced by one or more duly authorized stock certificates (or through mutually agreed upon
electronic means) representing such shares of Class A Common Stock, delivered to HFF
Holdings and in the name designated by HFF Holdings.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1.
Representations and Warranties of HFF Holdings, Holliday GP and Holdings Sub
.
Each of HFF Holdings, Holliday GP and Holdings Sub hereby represents and warrants to HoldCo LLC, GP
Acquisition Corp. and the Company, as of the date hereof, as set forth below:
3.1.1.
Existence, Qualification and Authority
.
-8-
(a) Each of HFF Holdings and Holdings Sub is a limited liability company, duly
organized, validly existing and in good standing under the laws of Delaware. Holliday GP is
a corporation, duly organized, validly existing and in good standing under the laws of
Delaware. The execution, delivery and performance by each of HFF Holdings, Holliday GP and
Holdings Sub of this Agreement has been duly authorized by all necessary action.
(b) Each of HFF Holdings, Holliday GP and Holdings Sub has the requisite power,
authority and legal right to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
(c) This Agreement has been duly executed and delivered by each of HFF Holdings,
Holliday GP and Holdings Sub and constitutes the legal, valid and binding obligation of HFF
Holdings, Holliday GP and Holdings Sub, enforceable against them in accordance with its
terms, except to the extent such enforcement may be limited by applicable bankruptcy laws
and other similar laws affecting creditors’ rights generally.
3.1.2.
Validity of Contemplated Transactions, Etc
.
(a) Neither the execution, delivery and performance by HFF Holdings, Holliday GP or
Holdings Sub of this Agreement, nor the consummation by HFF Holdings, Holliday GP or
Holdings Sub of the transactions contemplated hereby, nor compliance by HFF Holdings,
Holliday GP or Holdings Sub with the terms and provisions hereof, will, directly or
indirectly (with or without notice or lapse of time or both), (i) contravene or conflict
with, or result in a breach or termination of, or constitute a default under (or with notice
or lapse of time or both, result in the breach or termination of or constitute a default
under) or result in the termination or suspension of, or accelerate the performance required
by the terms, conditions or provisions of, or cause any payments to be due under, any
contracts of HFF Holdings, Holliday GP or Holdings Sub, (ii) constitute a violation by HFF
Holdings, Holliday GP or Holdings Sub of any existing Requirement of Law or Governmental
Order applicable to HFF Holdings, Holliday GP, Holdings Sub or any of their respective
properties, rights or assets or (iii) result in the creation of any Lien upon any equity
interests, properties, rights or assets of HFF Holdings, Holliday GP or Holdings Sub,
except, in the case of clauses (i), (ii) and (iii), as would not reasonably be expected to
result in, individually or in the aggregate, a material adverse effect on the ability of HFF
Holdings, Holliday GP or Holdings Sub to consummate the transactions contemplated by this
Agreement.
(b) Except for the Certificate of Merger, no Authorization and no filing or
notification with any Governmental Authority, any counterparty to any of the contracts of
HFF Holdings, Holliday GP, Holdings Sub or any other Person is required to be made or
obtained by HFF Holdings, Holliday GP or Holdings Sub in connection with the execution,
delivery or performance by HFF Holdings, Holliday GP and Holdings Sub of this Agreement, or
the consummation of the transactions contemplated hereby by HFF Holdings, Holliday GP and
Holdings Sub, except for any such Authorization, filing or
-9-
notification the failure of which to make or obtain would not reasonably be expected to
result in, individually or in the aggregate, a material adverse effect on the ability of HFF
Holdings, Holliday GP or Holdings Sub to consummate the transactions contemplated by this
Agreement.
3.1.3.
Holliday GP Shares
. HFF Holdings owns beneficially and of record 100% of the
outstanding equity interests of Holliday GP, free and clear of any Liens.
3.1.4.
Provisions Relating to Securities Laws
.
(a) HFF Holdings acknowledges that the shares of Class A Common Stock received pursuant
to the Exchange Right have not been registered under the Securities Act or under any
applicable state securities laws, and are being offered and sold in reliance on exemptions
from the registration requirements of the Securities Act and all such laws.
(b) The Class A Common Stock is being acquired by HFF Holdings for its own account for
the purpose of investment for the benefit of its members and not with a view to distribute
(other than to its members), it being understood that the right to dispose of Class A Common
Stock shall be entirely within HFF Holdings’ discretion subject to the transfer restrictions
under the Securities Act. HFF Holdings will refrain from transferring or otherwise
disposing of the Class A Common Stock (other than to its members) or any interest therein in
such manner as to cause the Company to violate the registration requirements of the
Securities Act or any applicable state securities or blue sky laws.
(c) HFF Holdings has received, reviewed and analyzed information concerning the Company
necessary to enable it to evaluate the merits and risks of an investment in the Class A
Common Stock.
3.2.
Representations and Warranties of HoldCo LLC, GP Acquisition Corp. and the
Company
. Each of HoldCo LLC, GP Acquisition Corp. and the Company hereby represents and
warrants to HFF Holdings, Holliday GP and Holdings Sub, as of the date hereof, as set forth below:
3.2.1.
Existence, Qualification and Authority
.
(a) HoldCo LLC is a limited liability company duly organized, validly existing and in
good standing under the laws of Delaware and each of GP Acquisition Corp. and the Company is
a corporation duly organized, validly existing and in good standing under the laws of
Delaware, and each of HoldCo LLC, GP Acquisition Corp. and the Company has all requisite
power and authority to own and operate its assets and carry on its business as currently
conducted, except where any such failure to be so organized or existing or to have such
power and authority has not had, and would not reasonably be expected to result in,
individually or in the aggregate, a material adverse
-10-
effect on the ability of HoldCo LLC, GP Acquisition Corp. or the Company to consummate
the transactions contemplated by this Agreement. Each of HoldCo LLC, GP Acquisition Corp.
and the Company has the requisite power, authority and legal right to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by each of HoldCo LLC, GP Acquisition Corp. and the Company of this
Agreement has been duly authorized by all necessary action.
(b) This Agreement has been duly executed and delivered by each of HoldCo LLC, GP
Acquisition Corp. and the Company and constitutes the legal, valid and binding obligation of
HoldCo LLC, GP Acquisition Corp. and the Company, enforceable against them in accordance
with its terms, except to the extent such enforcement may be limited by applicable
bankruptcy laws and other similar laws affecting creditors’ rights generally.
3.2.2.
Validity of Contemplated Transactions, Etc
.
(a) Neither the execution, delivery and performance by HoldCo LLC, GP Acquisition Corp.
or the Company of this Agreement, nor the consummation by them of the transactions
contemplated hereby, nor compliance by them with the terms and provisions hereof, will,
directly or indirectly (with or without notice or lapse of time or both), (i) contravene or
conflict with the organizational documents of HoldCo LLC, GP Acquisition Corp. or the
Company, (ii) contravene or conflict with, or result in a breach or termination of, or
constitute a default under (or with notice or lapse of time or both, result in a breach or
termination of, or constitute a default under) or result in the termination or suspension
of, or accelerate the performance required by the terms, conditions or provisions of, or
cause any payments to be due under, any contracts to which HoldCo LLC, GP Acquisition Corp.
or the Company is a party or any Authorizations held by HoldCo LLC, GP Acquisition Corp. or
the Company, (iii) constitute a violation by HoldCo LLC, GP Acquisition Corp. or the Company
of any existing Requirement of Law or Governmental Order applicable to HoldCo LLC, GP
Acquisition Corp., the Company or any of their respective properties, rights or assets or
(iv) result in the creation of any Lien upon any equity interests, properties, rights or
assets of HoldCo LLC, GP Acquisition Corp. or the Company, except, in the case of clauses
(ii), (iii) and (iv), as would not reasonably be expected to result in, individually or in
the aggregate, a material adverse effect on the ability of HoldCo LLC, GP Acquisition Corp.
or the Company to consummate the transactions contemplated by this Agreement.
(b) Other than the Certificate of Merger, no Authorization and no filing or
notification with any Governmental Authority, any counterparty to any of the contracts to
which HoldCo LLC, GP Acquisition Corp. or the Company is a party or any other Person is
required to be made or obtained by HoldCo LLC, GP Acquisition Corp. or the Company in
connection with the execution, delivery or performance by HoldCo LLC, GP Acquisition Corp.
or the Company of this Agreement, or the consummation of the transactions contemplated
hereby by HoldCo LLC, GP Acquisition Corp. or the
-11-
Company, except for any such Authorization, filing or notification the failure of which
to make or obtain would not reasonably be expected to result in, individually or in the
aggregate, a material adverse effect on the ability of HoldCo LLC, GP Acquisition Corp. or
the Company to consummate the transactions contemplated by this Agreement.
3.2.3.
Class A Stock
. The Class A Common Stock to be transferred to HFF Holdings
pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and
nonassessable.
ARTICLE 4
CONDITIONS PRECEDENT TO CLOSING
4.1.
Conditions Precedent to Obligations of HoldCo LLC, GP Acquisition Corp. and the
Company
. The obligations of HoldCo LLC, GP Acquisition Corp. and the Company under Article 2
are subject to the fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent, which may be waived in writing in whole or in part by HoldCo LLC:
4.1.1.
Representations and Warranties True as of Closing
. Each of the representations
and warranties of HFF Holdings, Holliday GP and Holdings Sub contained in this Agreement shall have
been true and correct in all material respects (without duplicating any materiality qualifications
included in such representations and warranties for all purposes of this Section 4.1.1) as of the
date of this Agreement and shall be true and correct in all material respects (without duplicating
any materiality qualifications included in such representations and warranties for all purposes of
this Section 4.1.1) as of the Closing Date (provided that the representations and warranties
contained in Section 3.1.3 shall be true and correct in all respects as of the date of this
Agreement and as of the Closing Date), with the same effect as though each of such representations
and warranties had been made on and as of the Closing Date.
4.1.2.
Compliance with this Agreement
. HFF Holdings, Holliday GP and Holdings Sub
shall have performed and complied in all material respects with each of the agreements and
covenants required by this Agreement to have been performed or complied with by it prior to or at
the Closing.
4.1.3.
Closing Certificates
. HoldCo LLC shall have received a certificate executed by
HFF Holdings certifying as set forth in Sections 4.1.1 and 4.1.2.
4.2.
Conditions Precedent to Obligations of HFF Holdings, Holliday GP and Holdings
Sub
. The obligations of HFF Holdings, Holliday GP and Holdings Sub under Article 2 are subject
to the fulfillment or satisfaction, prior to or at the Closing, of each of the following conditions
precedent, which may be waived in writing in whole or in part by HFF Holdings:
4.2.1.
Representations and Warranties True as of Closing
. Each of the representations
and warranties of HoldCo LLC, GP Acquisition Corp. and the Company
-12-
contained in this Agreement shall have been true and correct in all material respects (without
duplicating any materiality qualifications included in such representations and warranties for all
purposes of this Section 4.2.1) as of the date of this Agreement and shall be true and correct in
all material respects (without duplicating any materiality qualifications included in such
representations and warranties for all purposes of this Section 4.2.1) as of the Closing Date
(provided that the representations and warranties contained in Section 3.2.3 shall be true and
correct in all respects as of the date of this Agreement and as of the Closing Date), with the same
effect as though each of such representations and warranties had been made on and as of the Closing
Date.
4.2.2.
Compliance with this Agreement
. HoldCo LLC, GP Acquisition Corp. and the
Company shall have performed and complied in all material respects with each of the agreements and
covenants required by this Agreement to have been performed or complied with by it prior to or at
the Closing.
4.2.3.
Closing Certificates
. HFF Holdings shall have received a certificate executed
by HoldCo LLC certifying as set forth in Sections 4.2.1 and 4.2.2.
4.3.
Additional Conditions Precedent
. All obligations of the Parties under this
Agreement are subject to the fulfillment or satisfaction, prior to or at the Closing, of each of
the following conditions precedent, each of which may be waived in whole or in part by the mutual
agreement of HFF Holdings and HoldCo LLC:
4.3.1.
No Pending Governmental Litigation
. On the Closing Date, no suit, Action or
other proceeding brought by any Governmental Authority shall be pending in which it is sought to
restrain or prohibit the consummation of the transactions contemplated hereby.
4.3.2.
IPO Closing
. The closing of the transactions contemplated by the IPO shall
have occurred contemporaneously with the Closing.
ARTICLE 5
INDEMNIFICATION
5.1.
Indemnification Obligation of HFF Holdings
. From and after the Closing, HFF
Holdings shall indemnify and hold harmless HoldCo LLC, GP Acquisition Corp. and the Company, and
their respective directors, managers, officers, members, partners, employees, agents, Affiliates,
successors and assigns, against and in respect of any and all damages, losses, deficiencies,
liabilities, costs and expenses (collectively, “
Losses
”) incurred or suffered by any such
Person that result from, relate to or arise out of, and any and all Actions, suits, claims,
proceedings, investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable fees and expenses of attorneys, accountants and other professional
advisors) incident to, any breaches of this Agreement by HFF Holdings, Holliday GP or Holdings Sub.
-13-
5.2.
Other Rights and Remedies
. Following the Closing, the sole and exclusive remedy
at law (other than with respect to claims involving intentional misrepresentation or fraud) for
HoldCo LLC, GP Acquisition Corp. and the Company for any claim (whether such claim is framed in
tort, contract or otherwise) arising out of a breach of any representation, warranty, covenant or
other agreement in this Agreement shall be a claim by HoldCo LLC, GP Acquisition Corp. and the
Company for indemnification pursuant to this Article 5, which claims are independent of and in
addition to any equitable rights or remedies that HoldCo LLC, GP Acquisition Corp. and the Company
may seek in connection with this Agreement or the transactions contemplated hereby.
ARTICLE 6
MISCELLANEOUS
6.1.
Termination
. Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated (and the transactions contemplated herein may be abandoned) at any time
before the Closing Date (a) by mutual written consent of HFF Holdings, on the one hand, and HoldCo
LLC, on the other hand; and (b) by HFF Holdings, on the one hand, or HoldCo LLC, on the other hand,
upon notice given to the other, if any Governmental Authority shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement.
6.2.
No Liabilities in Event of Termination
. In the event of any termination of this
Agreement as provided in Section 6.1, (a) written notice thereof shall promptly be given to the
other Parties hereto and this Agreement shall forthwith become wholly void and terminate and of no
further force and effect except for Sections 6.2, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11 and
6.12, and (b) there shall be no liability on the part of any of the Parties hereto, except that
such termination shall not preclude any party from pursuing judicial remedies for damages and/or
other relief as a result of the breach by the other party of any representation, warranty, covenant
or agreement contained herein prior to such termination.
6.3.
Further Assurances
. Each of the Parties shall from time to time after the
Closing Date, at the request of any other Party, execute, acknowledge and deliver to such other
Party such other instruments of conveyance and transfer or assumption and will take such other
actions and execute and deliver such other documents, certifications and further assurances as such
other party may reasonably require in order to effect the transactions contemplated hereby and will
use Commercially Reasonable Efforts to cooperate with the other Parties and execute and deliver to
the other Parties such other instruments and documents and take such other actions as may be
reasonably requested from time to time by such other party as necessary to carry out, evidence and
confirm the intended purposes of this Agreement. Each of the Parties will cause their respective
Affiliates to comply with this Section 6.3 to the extent necessary or desirable to fulfill the
purposes thereof.
6.4.
Contents of Agreement
. This Agreement, including the Exhibits hereto, sets forth
the entire understanding of the Parties hereto with respect to the transactions contemplated
-14-
hereby and supersede any and all previous agreements and understandings, oral or written,
between or among the Parties regarding the transactions contemplated hereby. This Agreement shall
not be amended or modified except by written instrument duly executed by each of the Parties
hereto.
6.5.
Assignment and Binding Effect
. This Agreement may not be assigned by any party
without the prior written consent of the other Parties.
6.6.
Waiver
. No waiver of any term or provision of this Agreement shall be effective
unless in writing, signed by the Party against whom enforcement of the same is sought. The grant
of a waiver in one instance does not constitute a continuing waiver in all similar instances. No
failure to exercise, and no delay in exercising, by any Party, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof.
6.7.
Notices
. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and shall be deemed
given only if delivered personally or sent by registered or certified mail or by Federal Express or
other overnight mail service, postage prepaid, by e-mail or by facsimile, with written confirmation
to follow, as follows:
If to HoldCo LLC, GP Acquisition Corp. or the Company, to:
c/o HFF, Inc.
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Chief Executive Officer
Facsimile No.: [ • ]
With a required copy to (which shall not itself constitute notice):
Dechert LLP
90 State House Square, 12
th
Floor
Hartford, CT 06103-3702
Attention: John J. Gillies, Esq.
Facsimile No.: (860) 524-3930
If to HFF Holdings, Holliday GP or Holdings Sub, to:
c/o HFF Holdings LLC
429 Fourth Avenue
Suite 200
Pittsburgh, PA 15219
Attention: Managing Member
Facsimile No.: [ • ]
-15-
With a required copy, to (which shall not itself constitute notice):
Dechert LLP
90 State House Square, 12
th
Floor
Hartford, CT 06103-3702
Attention: John J. Gillies, Esq.
Facsimile No.: (860) 524-3930
or to such other address or facsimile numbers as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or
other communication will be deemed to have been given as of the date so delivered or, if such date
is not a Business Day, on the next Business Day.
6.8.
Applicable Law; Consent to Jurisdiction
. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving effect to such
State’s laws and principles regarding the conflict of laws. Each of the Parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal court located in the State of
New York or any New York state court in connection with any dispute that arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any Action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a federal court sitting in the
State of New York or a New York state court unless venue would not be proper under rules applicable
in such courts and (d) waives any right to which it may be entitled, on account of place of
residence or domicile.
6.9.
No Benefit to Others
. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the Parties hereto and, in the case of
Article 5, the other indemnitees, and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns, and they shall not be construed as conferring
any rights on any other Persons.
6.10.
Headings
. All section headings contained in this Agreement are for convenience
of reference only, do not form a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
6.11.
Severability
. Any provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof, and such
invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provisions in any other jurisdiction.
6.12.
Counterparts
. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall
-16-
constitute but one and the same instrument. This Agreement shall become binding when one or
more counterparts taken together shall have been executed and delivered by all of the Parties.
[Remainder of this page intentionally left blank.]
-17-
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first
written above.
|
|
|
|
|
|
|
|
|
|
|
HFF HOLDINGS LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HFF LP ACQUISITION LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HFF, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HFF PARTNERSHIP HOLDINGS LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
HOLLIDAY GP CORP.
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GP ACQUISITION CORP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
-2-
Exhibit 10.6
FORM OF
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “
Agreement
”) is made and entered into as
of
, 2006 (the “
Restated Effective Date
”), by and between
John H. Pelusi, Jr. (“
Employee
”) and Holliday Fenoglio Fowler, LP, a Texas limited
partnership (“
HFF
”).
RECITALS
WHEREAS, Employee is a member (“
Member
”) of HFF Holdings LLC, a Delaware limited liability
company (“
HFF Holdings
”), pursuant to that certain Second Amended and Restated Limited Liability
Company Agreement of HFF Holdings LLC, dated as of
, 2007;
WHEREAS, Employee previously entered into an employment agreement with HFF (the “
Original
Employment Agreement
”), dated March 29, 2006 (the “
Original Effective Date
”);
WHEREAS, HFF Holdings previously owned 100% of the equity of Holliday GP Corp. (the “
General
Partner
”);
WHEREAS, HFF Holdings is party to that certain Sale and Merger Agreement, dated as of
, 2007, among HFF Holdings, HFF Inc. (“
Publico
”), and the other parties thereto (the
“
Sale and Merger Agreement
”), pursuant to which Publico (through its wholly-owned subsidiary, HFF
Partnership Holdings LLC, a Delaware limited liability company (“
Holdco
”)) will own 100% of the
General Partner;
WHEREAS, in connection with the transactions contemplated by the Contribution and Sale and
Merger Agreement, it is necessary to amend and restate the Original Employment Agreement; and,
WHEREAS, HFF desires to continue the employ of Employee, and Employee desires to continue to
be employed by HFF, under the terms specified in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements, acknowledgments,
representations, and warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Employee and HFF, intending to be legally
bound, agree as follows:
1.
Term
. The term of Employee’s employment hereunder shall commence on the Restated
Effective Date and shall end on the date (the “
Termination Date
”) that Employee’s employment is
terminated by HFF or Employee for any reason, including, but not limited to death, disability, with
or without Cause (as defined below), or for no reason. Notwithstanding
the foregoing but subject to Sections 4(e) and 6(d), the provisions contained in Section 4
(Non-Competition), Section 5 (Non-Disclosure), Section 6 (Non-Solicitation of Client), Section 7
(Non-Solicitation of Employees), Section 8 (Non-Disparagement) and Section 9 (Enforcement; Remedies
and Forfeitures) shall survive and continue after the term of this Agreement.
2.
Responsibilities
. Employee’s primary duties and obligations hereunder shall be as
directed from time to time by the General Partner of HFF as directed by the board of directors of
Publico (the “
Board
”) after considering the recommendations and advice of the Operating Committee
of Holdco and the managing member of the operating committee of Holdco (the “
Holdco Managing
Member
”). During the period of Employee’s employment, he shall devote his full business time,
energy and best efforts to the business and affairs of HFF.
3.
Compensation and Benefits
. In consideration for the foregoing and for the
covenants described below, HFF agrees to provide to Employee the following compensation and
benefits:
(a)
Commission and Other Income
. Policies and allocations with respect to commission
sharing, draws against commissions, bonuses and other income allocation will be established from
time to time by the General Partner of HFF as directed by the Board after consideration of the
recommendations and advice of the Holdco Operating Committee and Holdco Managing Member, and
Employee shall be paid in accordance with such policies and allocations.
(b)
Benefits
. Employee shall be provided with the welfare benefits and other fringe
benefits to the same extent and on the same terms as those benefits are provided by HFF from time
to time to HFF’s other similar employees. Employee shall be entitled to elect to participate in
any of HFF’s standard benefit plans according to their terms. These plans may be modified or
terminated from time-to-time by HFF in accordance with the terms thereof. The written plan
documents shall govern any questions of eligibility, coverage, duration of coverage, or other
details of the plans.
(c)
Expense Reimbursement
. HFF agrees to reimburse Employee for all reasonable,
ordinary, necessary and documented business expenses incurred in the performance of services
hereunder in accordance with the policies of HFF as from time to time in effect. Employee, as a
condition precedent to obtaining such payment or reimbursement, shall provide to HFF any and all
statements, bills or receipts evidencing the travel or out-of-pocket expenses for which Employee
seeks payment or reimbursement, and any other information or materials, as HFF may from time to
time reasonably request.
(d)
No Mitigation
. Subject to Sections 4, 5, 6 and 7, in no event shall Employee be
obligated to seek other employment or be obligated to mitigate any of the amounts payable to
Employee under any of the provisions of this Agreement.
2
4.
Non-Compete
.
(a) Employee acknowledges that HFF, the General Partner, Holdco, Publico and their affiliates
and their related entities (the “
Company Entities
”) are engaged in a highly competitive business on
a nationwide basis, and that the Company Entities intend to expand the business by entering into
new business lines and by increasing the geographic scope domestically and potentially
internationally, and that the relationships with their Clients (as defined below), goodwill, and
Confidential Information (defined below) are extremely valuable, provide them with competitive
business advantages and are critical to their success. Employee further acknowledges and agrees
that the Company Entities have expended considerable time, money and effort to build a competitive
business which is national in scope and to develop such Client relationships, goodwill and
Confidential Information. Employee further acknowledges that, as an Employee and by virtue of his
or her employment with HFF, Employee has had and will have close contact with such Clients, has
developed and will develop relationships with such Clients and goodwill on behalf of the Company
Entities, has and will have access to, possesses and will possess and has developed and will
develop Confidential Information of and on behalf of the Company Entities. Employee therefore
understands and agrees that both the nature and scope of the covenants contained in this Section 4
as well as the covenants set forth in Sections 5, 6, 7 and 8 are reasonable and necessary for the
protection of HFF and the other Company Entities, including, without limitation, its and/or their
Client relationships, goodwill and Confidential Information, as defined and limited below.
(b) Employee understands that as an employee of HFF, Employee’s competition with any of the
Company Entities would result in irreparable harm to HFF and the other Company Entities.
Therefore, until the earlier of (i) five years from the Original Effective Date, or (ii) the second
anniversary of the Termination Date (the “
Restrictive Period
”), Employee agrees that he or she will
not, without the prior written consent of HFF, Compete (as defined below) with HFF or any of the
other Company Entities anywhere in or with respect to the United States where HFF or any of the
other Company Entities engages in a Competitive Business (as defined below).
(c) As used herein, except as modified below, “
Compete
” means to directly or indirectly own,
operate, manage, control, engage in, participate in, invest in, permit his or her name to be used
by, act as a consultant or advisor to, render services for (alone or in association with any
individual or entity, and the heirs, executors, administrators, legal representatives, successors
and assign of such individual or entity (a “
Person
”), or otherwise assist any Person that engages
in or owns, invests in, operates, manages or controls any venture or enterprise which, directly or
indirectly, wholly or partly, engages in the business that provides services or performs functions
that are the same as, substantially similar to, or substitute for the services or functions
provided or performed by HFF and/or the other Company Entities, or in any new lines of business
considered by (meaning that a comprehensive business plan and budget were prepared by or for HFF
for consideration) and not rejected by any of the Company Entities at any time during the six (6)
month period preceding the Termination Date, in each case whether domestically or in such
international markets as considered by any of the Company Entities during such six (6) month period
(the “
Competitive Business
”). “
Compete
” shall also mean to directly or indirectly engage in any
activity or perform, develop, provide or offer any services,
3
functions or duties (in any capacity for the benefit of Employee or any other Person) which
involves or requires, or which would inevitably involve or require, the use or disclosure (partly
or wholly, intentionally or unintentionally) of any Confidential Information (as defined and
limited below) of HFF or the Company Entities. Notwithstanding the foregoing, Employee will not be
deemed to “
Compete
”:
(i) Solely by reason of the performance of his duties as a full time employee or part time
employee of a commercial bank, savings and loan, savings bank, insurance company, pension fund,
investment bank or any other entity (including any Commercial Mortgage Backed Securities (CMBS)
entities) making or acquiring commercial real estate loans or acquiring commercial real estate if,
(A) Employee’s duties for such entity are limited to the origination or acquisition of commercial
real estate loans or commercial real estate for such entity or (B) such entity originates such
loans or acquires such loans or real estate with the intent of holding the loans or real estate for
its own account, or in respect of loans, selling the loans in its capacity as a principal.
(ii) If Employee shall either (A) be a principal in a business engaged in real estate
development, real estate securities or in the ownership of commercial real estate, or (B) work as a
full time or part time employee of a company or other entity engaged in real estate development,
investment in real estate securities or the ownership of commercial real estate or real estate
securities, even though in the course of Employee’s employment, Employee acquires loans, securities
and/or real estate (it being understood and agreed that in this capacity, Employee shall be
permitted to secure a loan or acquire commercial real estate from, or sell commercial real estate
to HFF’s lending relationships without violating the restrictions set forth herein).
(iii) Solely by reason of Employee’s passive ownership of any stock, bond, note, debenture,
mortgage or other security issued by any other entity if such securities are actively traded on a
stock exchange or on NASDAQ and such securities constitute less than three percent (3%) of the
total voting securities issued by such entity;
(iv) Solely by reason of Employee’s passive ownership of any stock, bond, note, debenture,
mortgage or other security that is owned by Employee as of the date hereof;
(v) Solely by reason of activities undertaken during his employment by HFF which are on behalf
of, and for the benefit of, HFF or any of the Company Entities notwithstanding that such activities
may involve engaging in transactions with or for entities that would otherwise “
Compete
” as defined
above; or
(vi) Solely by reason of Employee becoming employed by, or becoming a principal in, any entity
involved in residential home sales brokerage and mortgage banking, provided that none of the
Company Entities are engaged in such activities as of the Termination Date or considered (meaning
that a comprehensive business plan and budget were prepared for consideration) and did not reject
engaging in such activities at any time during the six (6) month period preceding the Termination
Date.
4
(d) Nothing in this Agreement shall prevent Employee from owning less than 1% of the publicly
traded stock of any Person that Competes with HFF or any of the Company Entities; provided that
Employee shall have no special voting rights, board representation or other oversight or
information rights with respect to such Person (except as generally available to all stockholders
of such Person).
(e) This Section 4 shall not apply in the event that Employee’s employment is terminated by
HFF without Cause. “
Cause
” shall mean: (i) gross misconduct or gross negligence in the performance
of Employee’s duties hereunder; (ii) conviction of a crime; (iii) significant nonperformance or
misperformance of Employee’s duties hereunder; (iv) material violation of policies and procedures
established by HFF (including, without limitation, material violations of policies concerning
disclosure of confidential information, sexual harassment, and travel and entertainment
reimbursement); and (v) material violation of the covenants of this Agreement. Cause shall be
determined by the Board after consideration of the recommendations and advice of the Holdco
Operating Committee and Holdco Managing Member; provided, however, that if Cause is being
determined with respect to any member of the Holdco Operating Committee or Holdco Managing Member,
then such member or Holdco Managing Member shall not participate in such determination.
5.
Non-Disclosure
.
(a) Employee acknowledges that, by reason of his or her employment with HFF, Employee has been
and will be given access to, has developed and will develop, and has and will become informed of,
confidential or proprietary information (whether or not in writing, and whether or not developed by
Employee) concerning HFF’s and other Company Entities’ prior, current or contemplated businesses,
products, services, plans and strategies, business relationships, employees, Clients, prospects and
financial affairs, which is not generally known to the public or in the trade, is a competitive
asset, constitutes trade secrets (as defined under applicable law) or the disclosure of which would
reasonably be expected to result in a competitive disadvantage to HFF or any of the Company
Entities (collectively “
Confidential Information
”). By way of illustration, but without
limitation, Confidential Information includes: (i)
corporate information
, including plans,
strategies, developments, policies, resolutions, negotiations or litigation; (ii)
marketing
information
, including strategies, methods, planning data, customers, clients, prospects, mailing
lists, customer and client lists, referral sources and information, vendor lists, suppliers,
supplier lists, market analyses or projections, financial information, reports or forecasts; (iii)
financial information
, including cost and performance data, financial results and information about
the business condition of the Company Entities, debt arrangement, equity or financing structure,
investors and holdings, purchasing, sales data, and pricing or cost data and information; (iv)
operational and technological information
, including plans, manuals, forms, templates, intellectual
property, inventions, software, software code, software-related documents, innovations,
improvements, designs, research, developments, procedures, formulas, and product specifications;
(v)
personnel information
, including personnel lists, reporting or organizational structure,
personnel data, contact information, and compensation structure; and (vi)
Client information
,
including contact information, Client confidential and investment or property related information,
pricing data, operations and conditions (financial or otherwise), data, investment methods,
strategies and preferences, need for and use of HFF’s or
5
other Company Entities’ products or services, the fact they are doing or have done business with
HFF or any of the Company Entities, the nature, extent and particulars of such business dealings,
and such other information provided to HFF or other Company Entities by its Clients under
obligations of confidentiality. Notwithstanding anything herein to the contrary, “
Confidential
Information
” shall not include (i) information that is or hereafter becomes generally available to
the public (other than by reason of violation of this Agreement), (ii) the general skills and
experience gained during Employee’s work with HFF or Company Entities which Employee could
reasonably have been expected to acquire in similar work with another company, or (iii) contact
information, lists (including but not limited to internal mailing lists) and other similar
materials related to customers, clients, suppliers, or prospects that either (A) Employee acquired
prior to employment by HFF or (B) Employee acquired or developed as a result of Employee’s own
business generation efforts.
(b) Employee shall at all times during and after his or her employment hold all such
Confidential Information in trust and confidence for HFF and shall not, directly or indirectly, use
or disclose any such Confidential Information except as necessary for use in the regular course of
Employee’s duties for and business of HFF or the other Company Entities; provided that Employee
shall have the right to disclose Confidential Information in response to a governmental inquiry,
including a tax audit or a judicial subpoena.
(c) Employee agrees that all written materials (including, without limitation, correspondence,
memoranda, manuals, notes and notebooks) and all computer software, computer files and data,
models, mechanisms, devices, drawings or plans to which Employee may have access (whether or not
written or prepared by Employee) constituting or containing Confidential Information (the “
Company
Materials
”) shall be and remain the sole property of HFF, and Employee will use all reasonable
precautions to assure that all such Company Materials are properly protected and kept from
unauthorized persons, use or disclosure due to any action or inaction of Employee. Notwithstanding
anything herein to the contrary, materials related to matters and information that was acquired or
developed prior to commencing employment with HFF shall not be Company Materials and shall not
constitute Confidential Information for any purpose hereunder. Employee further agrees to deliver
the same, including all copies, promptly to HFF on the Termination Date, or at any time that HFF
may request. In the event Employee is uncertain whether any given material or information is,
constitutes or contains Confidential Information, Employee agrees to consult the General Partner
for resolution.
6.
Non-Solicitation of Clients
. Except as otherwise provide in Section 6(d), during
the Restrictive Period, Employee agrees that he or she will not, without the prior written consent
of HFF, directly or indirectly, individually or on behalf of other Person in an intermediate
brokerage capacity:
(a) call upon solicit, divert, or take away (or attempt or assist others to call upon,
solicit, divert, or take away) the business or patronage of, or perform duties for, any Clients or
Prospective Clients (as defined below) in respect of real estate investment banking services,
capital solutions and/or services, including, without limitation, debt placement, investment sales,
structured finance, private equity, note sales and loan servicing; and/or other services or
6
functions that are the same as, similar to, or substitutes for those services or functions offered,
provided or performed by HFF and/or the other Company Entities; or
(b) influence, encourage, persuade or induce (or attempt or assist others to influence,
encourage, persuade or induce) any Clients or Prospective Clients to cease or refrain from doing
business with HFF or the other Company Entities;
(c) For purposes of this Agreement, “
Client
” shall mean any Person with which HFF and/or the
other Company Entities conduct business and “
Prospective Clients
” shall mean any Person with which
HFF and/or the other Company Entities was or were in active business discussions or negotiations at
any time during the six (6) month period preceding the Termination Date.
(d) This Section 6 shall not apply in the event that Employee’s employment is terminated by
HFF without Cause.
7.
Non-Solicitation of Employees
. During the Restrictive Period, Employee agrees that
he or she will not, without the prior written consent of HFF, directly or indirectly, individually
or on behalf of another Person, (a) call upon, solicit, influence, encourage, persuade or induce
(or attempt or assist others to call upon, solicit, influence, encourage, persuade or induce) any
employee, consultant, contractor or agent of HFF or the other Company Entities to give up, or not
to commence, employment or other material, business or remunerative relationship with HFF or the
other Company Entities, or (b) hire (or attempt or assist others to hire) any such employee,
consultant, contractor or agent of HFF or the other Company Entities.
8.
Non-Disparagement
.
(a) Except as compelled by law, judicial process or governmental inquiry or audit, Employee
agrees that he or she shall not disparage HFF or any of the Company Entities. For purposes of this
Section 8(a), the term “
disparage
” means knowingly making comments or statements to third parties,
including the press, media or to any Client, Prospective Client or any other Person with whom HFF
or any of the Company Entities has or, to the knowledge of Employee, is actively seeking a business
or professional relationship, that would have a material adverse impact on the business or business
reputation of HFF or any of the Company Entities, or, to the extent related to the business of HFF
or any of the Company Entities, any employees, officers, principals, owners, partners, members,
directors, agents, employees, consultants, contractors and/or trustees thereof.
(b) Except as compelled by law, judicial process or governmental inquiry or audit, HFF and the
Company Entities (and any employees, officers, principals, owners, partners, members, directors,
agents, employees, consultants, contractors and/or trustees thereof) agree that each shall not
disparage Employee. For purposes of this Section 8(b), the term “
disparage
” means knowingly making
comments or statements to third parties, including the press, media or to any Client, Prospective
Client or any other Person with whom Employee has or, to the knowledge of HFF or the applicable
Company Entity, is seeking a business or professional
7
relationship, that would have a material adverse impact on the business or business reputation of
Employee.
9.
Enforcement; Remedies and Forfeitures
.
(a) Employee acknowledges and agrees that his or her breach of this Agreement will result in
immediate and irreparable harm to the Company Entities. Employee further acknowledges and agrees
that the remedy at law available for any such breach would be inadequate and that damages flowing
from such a breach may not readily be susceptible to being measured or ascertained in monetary
terms. Accordingly, Employee acknowledges, consents and agrees that, in addition to any other
rights or remedies which the Company Entities may have at law, in equity or under any agreement,
the Company Entities, without proof of actual damage, will be entitled to immediate injunctive
relief and may obtain a temporary or permanent injunction or order restraining any threatened or
further breach.
(b) Employee acknowledges and agrees that the provisions of this Agreement are necessary and
reasonable to protect the Company Entities in the conduct of their business, their Client
relationships, their goodwill, and Confidential Information.
(c) Employee also acknowledges and agrees that his or her experience, background and skills
are such that he or she is able to obtain employment on reasonable terms and conditions without
violation of the restrictive covenants contained herein and that such restrictive covenants will
not pose any undue hardship to Employee.
(d) Employee and HFF expressly acknowledge and agree that the Company Entities are intended to
be beneficiaries of the rights of HFF and the obligations of Employee hereunder and shall be
entitled in its/their own name to bring actions at law or in equity to enforce the provisions of
this Agreement.
10.
Severability and Judicial Reformation/Partial Enforcement
. Each term, provision,
covenant and restriction in this Agreement is intended to be severable. If a court of competent
jurisdiction shall determine that any term, provision, covenant or restriction of this Agreement is
overbroad, unreasonable, invalid, void, unenforceable or against public policy, then, (i) if such
term, provision, covenant or restriction is found to be overbroad, unreasonable, invalid, void,
unenforceable or against public policy because of the duration, scope of activities restricted, or
geographic scope set forth in this Agreement, or for any other reason, the parties hereto agree
that the duration, scope of activities restricted, or geographical scope, as the case may be, or
any other provision hereof, shall be reduced, reformed or modified (and enforced as so reduced,
reformed or modified) so that such term, provision, covenant and restriction is enforceable and
enforced to the maximum extent permitted by applicable law; and (ii) the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
11.
Governing Law
. This Agreement shall be governed by, construed under and enforced
in accordance with the internal laws of the State of New York, without regard to any conflict of
law principles.
8
12.
Consent to Jurisdiction; Waiver of Jury Trial
. The parties agree that
jurisdiction and venue in any action brought by any party pursuant to this Agreement shall lie
exclusively in any federal or state court located in the city, state and county of New York. By
execution and delivery of this agreement, each party irrevocably submits to the exclusive
jurisdiction of such courts for itself and in respect of its property with respect to such action.
The parties irrevocably agree that venue would be proper in such court, and hereby waive any
objection that such court is an improper or inconvenient forum for the resolution of such action.
The parties further agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and lawful service of
process against them, without necessity for service by any other means provided by statute or rule
of court.
EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
12.
13.
Successors and Assigns
. This Agreement shall not be assignable by Employee.
This Agreement, and the rights of HFF and the other Company Entities hereunder, shall be freely
assignable by HFF to any successor entity or other Person that acquires in any manner (including,
but not limited to, by merger, acquisition, asset sale and/or public offering) all or substantially
all of the business, assets, or interests of HFF or any other Company Entity; and shall survive and
remain enforceable after any such transaction. Employee hereby expressly consents to any such
assignment and acknowledges that no further consent by him or her to such assignment shall be
necessary hereafter to effectuate such assignment. Employee further acknowledges that his or her
obligations and covenants under this Agreement and the rights of HFF or any other Company Entity
are for the benefit of, and protect the business interests of HFF and the other Company Entities,
and their respective successors and assigns.
14.
Acknowledgment; Knowing and Voluntary
. Employee acknowledges and represents that
he or she has carefully read this Agreement; understands the terms and conditions set forth in this
Agreement and their binding effect; has had adequate time to consider whether to agree to them and
to consult with an attorney of his or her own choosing if he or she desired to do so; and is
signing this Agreement voluntarily and of his or her own free will with the intent to be bound
hereby.
15.
Notices
. All notices to be given under this Agreement shall be in writing and
delivered personally, by registered or certified mail, return receipt requested, or by overnight
courier to the addresses set forth below:
9
|
|
|
|
|
|
|
Employee:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[
Address of Employee
]
|
|
|
|
|
|
[
email address
]
|
|
|
|
|
|
|
|
|
|
HFF:
|
|
8401 North Central Expressway
|
|
|
|
|
|
Suite 400
|
|
|
|
|
|
Dallas, TX 75225
|
|
|
If delivered personally or by overnight courier, a notice shall be deemed communicated upon
receipt of the written notice. If mailed as provided in this Agreement, notice shall be deemed
communicated as of three (3) days after mailing. Any change of address by either Employee or HFF
must be promptly communicated to the other party in a manner prescribed hereinabove.
16.
Withholding
. HFF will withhold from any amounts payable to Employee hereunder all
sums required by federal, state, and local laws, and all other sums upon which Employee and HFF
agree.
17.
Entire Agreement
. This Agreement constitutes the entire agreement between HFF and
Employee and supersedes any prior, contemporaneous, or subsequent statements, representations,
warranties, understandings, or inducements of any kind, whether oral or written agreements,
including, but not limited to, the Original Employment Agreement, between HFF and Employee.
18.
Modification
. No change, modification, or waiver of any term or condition in this
Agreement shall be valid or binding upon HFF or Employee unless such change, modification, or
waiver is in writing, signed by HFF and Employee, or, in the case of a waiver, by the party waiving
compliance, and specifically states that it modifies this Agreement. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege hereunder. The
failure to enforce, at any time, any of the provisions of this Agreement or to require, at any
time, the performance by the other party of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect the validity of this Agreement, or any
part hereof, or the right of any party thereafter to enforce each and every such provision in
accordance with the terms of this Agreement.
19.
Execution
. This Agreement may be executed in two or more counterparts, which
together shall constitute a single agreement.
10
20.
Headings
. The headings contained herein are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
* * * * *
11
IN WITNESS WHEREOF
, this Agreement has been executed as of the day and year first above written.
|
|
|
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
John H. Pelusi, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOLLIDAY FENOGLIO FOWLER, LP:
By: Holliday GP Corp., its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|