STOCKHOLDERS' AGREEMENT, dated as of November 7, 1996, by and between
CORNERSTONE PROPERTIES INC., a Nevada corporation (the "Company"), and HEXALON
REAL ESTATE, INC., a Delaware corporation (the "Initial Stockholder" and
individually a "Stockholder" and together with any other purchaser(s) of 8%
Preferred Stock Series A which may become party hereto from time to time, the
"Stockholders").
R E C I T A L S
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of November
7, 1996 (the "Merger Agreement"), between the Company, CStone-Pittsburgh Trust,
a Maryland business trust and a wholly owned subsidiary of the Company (the
"Sub"), Xxxxx Building, Inc., a Delaware corporation ("Xxxxx"), and the Initial
Stockholder, Xxxxx has merged with and into the Sub, with the Sub as the
surviving corporation (the "Merger");
WHEREAS, after giving effect to the Merger the Initial Stockholder will be
the holder of 458,621 shares (the "Series A Preferred Shares") of the Company's
8% Cumulative Convertible Preferred Stock Series A, without par value (the "8%
Preferred Stock Series A");
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties and conditions set forth in this Agreement, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions and References. For purposes of this Agreement,
in addition to the definitions set forth above and elsewhere herein, the
following terms shall have the following respective meanings:
"Affiliate", with respect to any Person, means any other Person
directly or indirectly controlling, controlled by or under common
control with, such Person. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling",
"controlled by" or "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, 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 by contract or otherwise.
383917.1
"Closing Date" means November 7, 1996.
"Commission" means the Securities and Exchange Commission, and
any successor commission or agency having similar powers.
"Common Stock" shall mean the common stock of the Company,
without par value.
"Conversion Stock" means the Common Stock or other securities
issued on conversion of the 8% Preferred Stock Series A.
"8% Preferred Stock" means the 8% Cumulative Convertible
Preferred Stock of the Company, without par value.
"Encumbrance" means any lien, security interest, pledge, claim,
or option, right of first refusal, marital right or other encumbrance
with respect to any Series A Preferred Share or share of Conversion
Stock.
"Minimum Amount" means, at any time, the sum of (i) $75 million
plus (ii) the product of .5618 multiplied by the stated value of all
shares of 8% Preferred Stock issued by the Company prior to such time
and after November 1, 1996.
"1933 Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and, unless the context indicates otherwise,
the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and, unless the context indicates
otherwise, the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Person" means an individual, a partnership, a joint venture, a
corporation, an association, a trust, an individual retirement account
or any other entity or organization, including a government or any
department or agency thereof.
"Public Offering" means an underwritten public offering of Common
Stock pursuant to an effective registration statement under the 1933
Act and listed on the New York Stock Exchange.
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"Qualified Public Offering" means a Public Offering prior to
January 1, 2000 in which (i) the aggregate net proceeds to the Company
(after payment of all fees and expenses of the offering) together with
the net proceeds of any prior Public Offerings equal or exceed the
Minimum Amount and (ii) (a) if the Public Offering is completed in the
calendar year 1997, the initial public offering price is at least
$16.00 per share, (b) if the Public Offering is completed in the
calendar year 1998, the initial public offering price is at least
$16.50 per share, or (c) if the Public Offering is completed in the
calendar year 1999, the initial public offering price is at least
$17.00 per share; provided, however, that a Qualified Public Offering
shall be deemed to occur on the first business day which follows any
period of 20 trading days after a Public Offering and prior to January
1, 2000, in which the average of the closing prices for shares of the
Common Stock as reported on the New York Stock Exchange composite tape
equals or exceeds the applicable minimum price for a Public Offering
to be considered a Qualified Public Offering at such time.
"Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the 1933 Act and the
declaration or ordering of effectiveness of such registration
statement or document.
"Registrable Stock" shall mean (i) the Conversion Stock, (ii) any
common stock issued as (or issuable upon the conversion or exercise of
any warrant, right, option or other convertible security which is
issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the Conversion Stock, and (iii)
any common stock issued by way of a stock split of the Conversion
Stock referred to in clause (i) or (ii) above. For purposes of this
Agreement, any Registrable Stock shall cease to be Registrable Stock
when (x) a registration statement covering such Registrable Stock has
been declared effective and such Registrable Stock has been disposed
of pursuant to such effective registration statement, (y) such
Registrable Stock is sold by a Person in a transaction in which the
rights under the provisions of this Agreement are not assigned or (z)
such Registrable Stock may be sold pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the 1933 Act
without registration under the 1933 Act.
"Restricted Stock" means all shares of 8% Preferred Stock Series
A and Conversion Stock other than (a) shares that have been registered
under a registration statement pursuant to the 1933 Act, (b) shares
with respect to which a Sale has been made in reliance on and in
accordance with Rule 144 or (c) shares with respect to which the
holder thereof shall have delivered to the Company either (i) an
opinion, in form and substance satisfactory to the Company, of
counsel, who shall be satisfactory
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to the Company, or (ii) a "no action" letter from the Commission, to
the effect that subsequent transfers of such shares may be effected
without registration under the 1933 Act.
"Rule 144" means Rule 144 (or any successor provision) under the
1933 Act.
"Rule 144 Transaction" means any Sale of 8% Preferred Stock
Series A or Conversion Shares made in reliance on Rule 144 (as in
effect on the date hereof) which complies with paragraphs (d), (e),
(f) and (g) thereof (as in effect on the date hereof), regardless of
whether at the time of such sale the seller is entitled to rely upon
paragraph (k) of Rule 144 in connection with the Sale of such shares.
"Rule 144A" means Rule 144A (or any successor provision) under
the 1933 Act.
"Sale" means any sale, assignment, transfer, distribution
(whether by a partnership to any of its partners or otherwise) or
other disposition of 8% Preferred Stock Series A or Conversion Stock
or of a participation therein.
"Stockholder" means each Person (other than the Company) that
shall be a party to this Agreement, whether in connection with the
execution and delivery hereof as of the date hereof, pursuant to
Section 4.11 or otherwise, so long as such Person shall beneficially
own any shares of the 8% Preferred Stock Series A.
ARTICLE II
CERTAIN AGREEMENTS
SECTION 2.01. Board of Directors. Prior to the completion of a Public
Offering in which the aggregate net proceeds to the Company (after payment of
all fees and expenses of the offering) equal or exceed $75,000,000, if requested
by the holders of a majority of the stated value of all shares of 8% Preferred
Stock Series A outstanding at such time, the Company shall recommend the
election of one director chosen by such holders to the holders of Common Stock.
SECTION 2.02. Limitation on Issuance of 8% Preferred Stock Series A. So
long as any 8% Preferred Stock Series A is outstanding, the aggregate stated
value of all shares of 8% Preferred Stock issued by the Company shall not exceed
$150,000,000.
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SECTION 2.03. Notice of Public Offering. So long as any 8% Preferred Stock
Series A is outstanding, the Company shall endeavor to notify the Stockholders
no less than 30 days or more than 60 days prior to the completion of any
contemplated Public Offering. Within 15 days thereafter, each Stockholder shall
inform the Company whether they intend to convert the 8% Preferred Stock Series
A to Common Stock prior to the completion of the Public Offering.
ARTICLE III
RESTRICTIONS ON TRANSFER
SECTION 3.01. General Restrictions. No Stockholder shall, directly or
indirectly, make or solicit any Sale of, or create, incur, solicit or assume any
Encumbrance with respect to, any share of 8% Preferred Stock Series A or
Conversion Stock, except in compliance with the 1933 Act and this Agreement.
SECTION 3.02. Legends. (a) Each certificate representing shares of 8%
Preferred Stock Series A or Conversion Stock shall, except as otherwise provided
in this Section 3.02 or in Section 3.03, be stamped or otherwise imprinted with
a legend substantially in the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO REGISTRATION OF
TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER
UNLESS SUCH TRANSFER IS MADE IN CONNECTION WITH AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT APPLY.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS' AGREEMENT,
DATED AS OF NOVEMBER 7, 1996, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION OF TRANSFER
OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND
UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH."
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(b) In the event that any shares of 8% Preferred Stock Series A or
Conversion Stock shall cease to be Restricted Stock, the Company shall, upon the
written request of the holder thereof, issue to such holder a new certificate
evidencing such shares without the first paragraph of the legend required by
Section 3.02(a) endorsed thereon. In the event that any shares of 8% Preferred
Stock Series A or Conversion Stock shall cease to be subject to the restrictions
on transfer set forth in this Agreement, the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate evidencing
such shares of 8% Preferred Stock Series A or Conversion Stock without the
second paragraph of the legend required by Section 3.02(a).
SECTION 3.03. Notice of Proposed Transfer. Each Stockholder agrees that it
will not, directly or indirectly, make or solicit any Sale of, or create, incur
or assume any Encumbrance with respect to, any share of 8% Preferred Stock
Series A or Conversion Stock held by such Stockholder unless, prior to any such
action, the holder thereof shall give written notice to the Company of its
intention. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the 1933 Act, whereupon the holder of such
stock shall be entitled to transfer such stock in accordance with the terms of
its notice; provided, however, that no such opinion of counsel shall be required
for a transfer to one or more partners of the transferor (in the case of a
transferor that is a partnership) or to an Affiliated corporation (in the case
of a transferor that is a corporation). Each certificate for 8% Preferred Stock
Series A or Conversion Stock transferred as above provided shall bear the legend
set forth in Section 3.02, except that such certificate shall not bear the first
paragraph of such legend if (i) such transfer is in accordance with the
provisions of Rule 144 or Rule 144A (or any other rule permitting public sale
without registration under the 0000 Xxx) or (ii) the opinion of counsel referred
to above is to the further effect that the transferee and any subsequent
transferee (other than an Affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration under the 1933
Act. The restrictions provided for in this Section 3.03 shall not apply to
securities which are not required to bear the first paragraph of the legend
prescribed by Section 3.02(a) in accordance with the provisions of that Section.
SECTION 3.04. Certain Persons to Execute Agreement. (a) Each Stockholder
agrees that it will not directly or indirectly make any Sale of, or create,
incur or assume any Encumbrance with respect to, any shares of 8% Preferred
Stock Series A or Conversion Stock held by such Stockholder, unless, prior to
the consummation of any such Sale or the creation, incurrence or assumption of
any such Encumbrance, the Person to whom such Sale is proposed to be made or the
Person in whose favor such Encumbrance is proposed to be created, incurred or
assumed (for purposes of this Section 3.04, a
383917.1
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"Prospective Transferee") (i) executes and delivers to the Company an agreement,
in form and substance satisfactory to the Company, whereby such Prospective
Transferee confirms that, with respect to the shares of 8% Preferred Stock
Series A or Conversion Stock that are the subject of such Sale or Encumbrance,
it shall be deemed to be a "Stockholder" for the purposes of this Agreement and
agrees to be bound by all the terms of this Agreement and (ii) unless such
Prospective Transferee is a recognized institutional investor, delivers to the
Company an opinion of counsel, satisfactory in form and substance to the
Company, to the effect that the agreement referred to above that is delivered by
such Prospective Transferee is a legal, valid and binding obligation of such
Prospective Transferee enforceable against such Prospective Transferee in
accordance with its terms. Upon the execution and delivery by such Prospective
Transferee of the agreement referred to in clause (i) of the next preceding
sentence and, if required, the delivery of the opinion of counsel referred to in
clause (ii) of the next preceding sentence, such Prospective Transferee shall be
deemed a "Stockholder" for the purposes of this Agreement, and shall have the
rights and be subject to the obligations of a Stockholder hereunder with respect
to the shares held by such Prospective Transferee or in respect of which such
Encumbrance shall have been created, incurred or assumed.
(b) Anything in this Section 3.04 or in Section 3.03 to the contrary
notwithstanding, the provisions of this Section 3.04 will not be applicable to
(i) any Sale of shares of 8% Preferred Stock Series A or Conversion Stock
pursuant to a Public Offering or (ii) any Sale of shares of 8% Preferred Stock
Series A or Conversion Stock in a Rule 144 Transaction which is consummated
after the date of a Public Offering.
SECTION 3.05. Certain Information. The Company shall file all reports and
other information required to be filed by Section 13 or 15(d) under the 1934
Act, as the case may be, as shall be necessary in order that the conditions to
the availability of Rule 144 in connection with any Sale of shares of Common
Stock by a Stockholder shall be met.
SECTION 3.06. Improper Sale or Encumbrance. Any attempt to make any Sale
of, or create, incur or assume any Encumbrance with respect to, any share of 8%
Preferred Stock Series A or Conversion Stock not in compliance with this
Agreement shall be null and void and the Company shall not give any effect in
the Company's stock records to such attempted Sale or Encumbrance.
ARTICLE IV
REGISTRATION RIGHTS
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SECTION 4.01. Request for Registration. (a) On and after the earlier of (i)
the date which is six months after the date the registration statement filed by
the Company covering a Public Offering shall have become effective, and (ii)
December 31, 2000 if a Qualified Public Offering shall not have been completed
on or prior to such date, the Stockholders of all of the Registrable Stock
issued or issuable upon conversion of the 8% Preferred Stock Series A (the
"Initiating Holders") may request in a written notice that the Company file a
registration statement under the 1933 Act (or a similar document pursuant to any
other statute then in effect corresponding to the 0000 Xxx) covering the
registration of any or all Registrable Stock held by such Initiating Holders in
the manner specified in such notice, provided that there must be included in
such registration at least 100% of the Registrable Stock issued or issuable upon
conversion of the 8% Preferred Stock Series A (or any lesser percentage if the
anticipated aggregate offering proceeds from the Registrable Stock and other
shares to be offered under such registration statement would exceed $75
million). Following receipt of any notice under this Section 4.01(a) the Company
shall (x) within 20 days notify all other Stockholders of such request in
writing and (y) use its best efforts to cause to be registered under the 1933
Act all Registrable Stock that the Initiating Holders and such other
Stockholders have, within ten days after the Company has given such notice,
requested be registered in accordance with the manner of disposition specified
in such notice by the Initiating Holders.
(b) If the Initiating Holders intend to have the Registrable Stock
distributed by means of an underwritten offering, the Company shall include such
information in the written notice referred to in clause (x) of Section 4.01(a)
above. In such event, the right of any Stockholder to include its Registrable
Stock in such registration shall be conditioned upon such Stockholder's
participation in such underwritten offering and the inclusion of such
Stockholder's Registrable Stock in the underwritten offering (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Stockholder) to the extent provided below. All Stockholders proposing to
distribute Registrable Stock through such underwritten offering shall enter into
an underwriting agreement in customary form with the underwriter or
underwriters. Such underwriter or underwriters shall be selected by a majority
in interest of the Initiating Holders and shall be approved by the Company,
which approval shall not be unreasonably withheld. If any Stockholder of
Registrable Stock disapproves of the terms of the underwriting, such Stockholder
may elect to withdraw all its Registrable Stock by written notice to the
Company, the managing underwriter and the Initiating Holders. The securities so
withdrawn shall also be withdrawn from registration.
(c) Notwithstanding any provision of this Agreement to the contrary,
(i) the Company shall not be required to effect a registration
pursuant to this Section 4.01 during the period starting with the date
of filing by the Company of,
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and ending on a date 120 days following the effective date of, a
registration statement pertaining to a public offering of securities
for the account of the Company or on behalf of the selling
stockholders under any other registration rights agreement which the
Stockholders have been entitled to join pursuant to Section 4.02;
provided that the Company shall actively employ in good faith all
reasonable efforts to cause such registration statement to become
effective as soon as possible; and
(ii) if the Company shall furnish to such Stockholders a
certificate signed by the President of the Company stating that in the
good faith opinion of the board of directors of the Company such
registration would interfere with any material transaction then being
pursued by the Company, then the Company's obligation to use its best
efforts to file a registration statement shall be deferred for a
period not to exceed 120 days.
(d) The Company shall not be obligated to effect and pay for more than
one registration pursuant to this Section 4.01 prior to the completion of a
Public Offering and more than three registrations pursuant to this Section 4.01
after the completion of a Public Offering; provided that a registration
requested pursuant to this Section 4.01 shall not be deemed to have been
effected for purposes of this Section 4.01(d) unless (i) it has been declared
effective by the Commission, (ii) it has remained effective for the period set
forth in Section 4.03(a), (iii) Stockholders of Registrable Stock included in
such registration have not withdrawn sufficient shares from such registration
such that the remaining holders requesting registration would not have been able
to request registration under the provisions of Section 4 and (iv) the offering
of Registrable Stock pursuant to such registration is not subject to any stop
order, injunction or other order or requirement of the Commission (other than
any such stop order, injunction, or other requirement of the Commission prompted
by any act or omission of Stockholders of Registrable Stock).
SECTION 4.02. Incidental Registration. Subject to Section 4.06, if at any
time the Company determines that it shall file a registration statement under
the 1933 Act (other than a registration statement on Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders) on any form that would also permit the
registration of the Registrable Stock and such filing is to be on its behalf
and/or on behalf of selling holders of its securities for the general
registration of its common stock to be sold for cash, the Company shall each
such time promptly give each Stockholder written notice of such determination
setting forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than 60 days from the date of such
notice, and advising each Stockholder of its right to have Registrable Stock
included in such registration. Upon the written request of any Stockholder
received by the Company no later than 30 days after the date of the Company's
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notice, the Company shall use its best efforts to cause to be registered under
the 1933 Act all of the Registrable Stock that each such Stockholder has so
requested to be registered. If, in the written opinion of the managing
underwriter (or, in the case of a non-underwritten offering, in the written
opinion of the Company), the total amount of such securities to be so
registered, including such Registrable Stock, will exceed the maximum amount of
the Company's securities which can be marketed (i) at a price reasonably related
to the then current market value of such securities, or (ii) without otherwise
materially and adversely affecting the entire offering, then the Company shall
be entitled to reduce the number of shares of Registrable Stock to not less than
one-third of the total number of shares in such offering except in the case of
the initial firm commitment underwritten public offering of the Company, in
which case the managing underwriter may reduce the number of shares of
Registrable Stock to be included in such offering to zero. Such reduction shall
be allocated among all such Stockholders in proportion (as nearly as
practicable) to the amount of Registrable Stock owned by each Stockholder at the
time of filing the registration statement.
SECTION 4.03. Obligations of the Company. Whenever required under Section
4.01 to use its best efforts to effect the registration of any Registrable
Stock, the Company shall, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Stock and use its best efforts to
cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby determined as
provided hereafter;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions
of the 1933 Act with respect to the disposition of all Registrable
Stock covered by such registration statement;
(c) furnish to the Stockholders such numbers of copies of the
registration statement and the prospectus included therein (including
each preliminary prospectus and any amendments or supplements thereto
in conformity with the requirements of the 1933 Act and such other
documents and information as they may reasonably request);
(d) use its best efforts to register or qualify the Registrable
Stock covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United
States and Puerto Rico as shall be reasonably appropriate for the
distribution of the Registrable Stock covered by the registration
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statement; provided, however, that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do
business in or to file a general consent to service of process in any
jurisdiction wherein it would not but for the requirements of this
paragraph (d) be obligated to do so; and provided further that the
Company shall not be required to qualify such Registrable Stock in any
jurisdiction in which the securities regulatory authority requires
that any Stockholder submit any shares of its Registrable Stock to the
terms, provisions and restrictions of any escrow, lockup or similar
agreement(s) for consent to sell Registrable Stock in such
jurisdiction unless such Stockholder agrees to do so;
(e) promptly notify each Stockholder with Registrable Stock
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, of
the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made, and at the request of any such Stockholder promptly prepare
and furnish to such Stockholder a reasonable number of copies of such
supplement to or amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include 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 in light of
the circumstances under which they were made;
(f) furnish, at the request of any Stockholder requesting
registration of Registrable Stock pursuant to Section 4.01, if the
method of distribution is by means of an underwriting, on the date
that the shares of Registrable Stock are delivered to the underwriters
for sale pursuant to such registration, or if such Registrable Stock
is not being sold through underwriters, on the date that the
registration statement with respect to such shares of Registrable
Stock becomes effective, (1) a signed opinion, dated such date, of the
independent legal counsel representing the Company for the purpose of
such registration, addressed to the underwriters, if any, and if such
Registrable Stock is not being sold through underwriters, then to the
Stockholders making such request, as to such matters as such
underwriters or the Stockholders holding a majority of the Registrable
Stock included in such registration, as the case may be, may
reasonably request and as would be customary in such a transaction;
and (2) letters dated such date and the date the offering is priced
from the independent certified public accountants of the Company,
addressed to the underwriters, if any, and if such Registrable Stock
is not being sold through underwriters, then to the
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Stockholders making such request and, if such accountants refuse to
deliver such letters to such Stockholders, then to the Company (i)
stating that they are independent certified public accountants within
the meaning of the 1933 Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and (ii) covering such other financial matters (including information
as to the period ending not more than five business days prior to the
date of such letters) with respect to the registration in respect of
which such letter is being given as such underwriters or the
Stockholders holding a majority of the Registrable Stock included in
such registration, as the case may be, may reasonably request and as
would be customary in such a transaction;
(g) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement
in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of the
Registrable Stock to be so included in the registration statement;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later
than 18 months after the effective date of the registration statement,
an earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date of such
registration statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the 1933 Act; and
(i) use its best efforts to list the Registrable Stock covered by
such registration statement with the New York Stock Exchange.
For purposes of Sections 4.03(a) and 4.03(b), the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby and six months after the effective
date thereof.
SECTION 4.04. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Stockholders shall furnish to the Company such information regarding
themselves, the Registrable Stock held by them, and the intended method of
disposition of such securities as
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the Company shall reasonably request and as shall be required in connection with
the action to be taken by the Company.
SECTION 4.05. Expenses of Registration. All expenses incurred in connection
with each registration pursuant to Section 4.01 and Section 4.02 of this
Agreement, excluding underwriters' discounts and commissions, but including
without limitation all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting fees (including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance), fees of the National Association of Securities
Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws, fees and
disbursements of counsel for the Company, and the fees and disbursements of one
counsel for the selling Stockholders (which counsel shall be selected by the
Stockholders holding a majority in interest of the Registrable Stock being
registered), shall be paid by the Company; provided, however, that if a
registration request pursuant to Section 4.01 of this Agreement is subsequently
withdrawn at the request of the Stockholders of a number of shares of
Registrable Stock such that the remaining Stockholders requesting registration
would not have been able to request registration under the provisions of Section
4.01 of this Agreement, such withdrawing Stockholders shall bear such expenses
unless such withdrawing Stockholders shall forfeit their right to one requested
registration pursuant to Section 4.01 of this Agreement. The Stockholders shall
bear and pay the underwriting commissions and discounts applicable to securities
offered for their account in connection with any registrations, filings and
qualifications made pursuant to this Agreement.
SECTION 4.06. Underwriting Requirements. In connection with any
underwritten offering, the Company shall not be required under Section 4.02 to
include shares of Registrable Stock in such underwritten offering unless the
Stockholders holding such shares of Registrable Stock accept the terms of the
underwriting of such offering that have been reasonably agreed upon between the
Company and the underwriters selected by the Company.
SECTION 4.07. Rule 144 Information. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Stock to the public without registration
the Company agrees to:
(i) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under
the 1934 Act; and
(ii) furnish to each Stockholder holding Registrable Stock
forthwith upon request a written statement by the Company as to its
compliance with the reporting
383917.1
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requirements of the 1934 Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents
so filed by the Company as such Stockholder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
such Stockholder to sell any Registrable Stock without registration.
SECTION 4.08. Indemnification. In the event any Registrable Stock is
included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each
Stockholder, such Stockholder's directors and officers, each person
who participates in the offering of such Registrable Stock, including
underwriters (as defined in the 1933 Act), and each person, if any,
who controls such Stockholder or participating person within the
meaning of the 1933 Act, against any losses, claims, damages or
liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are
based on any untrue or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof
(including any prospectus filed under Rule 424 under the 1933 Act or
any amendments or supplements thereto) 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 shall reimburse each such Stockholder,
such Stockholder's directors and officers, such participating person
or controlling person for any legal or other expenses reasonably
incurred by them (but not in excess of expenses incurred in respect of
one counsel for all of them unless there is an actual conflict of
interest between any indemnified parties, which indemnified parties
may be represented by separate counsel) in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in
this Section 4.08(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Company; provided further that
the Company shall not be liable to any Stockholder, such Stockholder's
directors and officers, participating person or controlling person in
any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus,
final prospectus or amendments or supplements thereto, in reliance
upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Stockholder,
such Stockholder's directors and officers, participating person or
controlling person. Such indemnity shall remain in full force
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15
and effect regardless of any investigation made by or on behalf of any
such Stockholder, such Stockholder's directors and officers,
participating person or controlling person, and shall survive the
transfer of such securities by such Stockholder.
(b) Each Stockholder requesting or joining in a registration
severally and not jointly shall indemnify and hold harmless the
Company, each of its directors and officers, each person, if any, who
controls the Company within the meaning of the 1933 Act, and each
agent and any underwriter for the Company (within the meaning of the
0000 Xxx) against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement on the
effective date thereof (including any prospectus filed under Rule 424
under the 1933 Act or any amendments or supplements thereto) 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 such
registration statement, preliminary or final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with
written information furnished by or on behalf of such Stockholder
expressly for use in connection with such registration; and each such
Stockholder shall reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling
person, agent or underwriter (but not in excess of expenses incurred
in respect of one counsel for all of them unless there is an actual
conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 4.08(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of such
Stockholder (which consent shall not be unreasonably withheld), and
provided further that the liability of each Stockholder hereunder
shall be limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that the net
proceeds from the sale of the shares sold by such Stockholder under
such registration statement bears to the total net proceeds from the
sale of all securities sold thereunder, but not in any event to exceed
the net proceeds received by such Stockholder from the sale of
Registrable Stock covered by such registration statement.
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16
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section, notify the indemnifying party
in writing of the commencement thereof and the indemnifying party
shall have the right to participate in and assume the defense thereof
with counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party; provided, however, that an
indemnified party shall have the right to retain its own counsel, with
all fees and expenses thereof to be paid by such indemnified party,
and to be apprised of all progress in any proceeding the defense of
which has been assumed by the indemnifying party. The failure to
notify an indemnifying party promptly of the commencement of any such
action, if and to the extent prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section, but the omission so to notify
the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section.
(d) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, 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 or liabilities in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
party in connection with the actions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of 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 party,
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 as a result of the losses, claims, damages or
liabilities 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 4.08(d) 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 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
383917.1
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SECTION 4.09. Limitation on Registration Rights. Notwithstanding any other
provisions of this Agreement to the contrary, the Company shall not be required
to register any Registrable Stock under this Agreement with respect to any
request or requests made by any Stockholder after December 31, 2005.
SECTION 4.10. Lock-up. Each Stockholder shall, in connection with any
registration of the Company's securities, upon the request of the Company or the
underwriters managing any underwritten offering of the Company's securities,
agree in writing not to effect any sale, disposition or distribution of any
Registrable Stock (other than that included in the registration) without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time from the effective date of such registration as the
Company or the underwriters may specify; provided, however, that all executive
officers and directors of the Company shall also have agreed not to effect any
sale, disposition or distribution of any Registrable Stock under the
circumstances and pursuant to the terms set forth in this Section 4.10.
SECTION 4.11. Transfer of Registration Rights. The registration rights of
any Stockholder under this Agreement with respect to any Registrable Stock may
be transferred to (a) any transferee of such Registrable Stock who acquires at
least 50% of such Stockholder's shares of Registrable Stock (adjusted for stock
splits and stock consolidations after the effective date of this Agreement) or
(b) an Affiliate of such Stockholder; provided, however, that (i) the
transferring Stockholder shall give the Company written notice at or prior to
the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights under this Agreement
are being transferred; (ii) such transferee shall agree in writing, in form and
substance reasonably satisfactory to the Company, to be bound as a Stockholder
by the provisions of this Agreement; and (iii) immediately following such
transfer the further disposition of such securities by such transferee is
restricted under the 1933 Act. Except as set forth in this Section 4.11, no
transfer of Registrable Stock shall cause such Registrable Stock to lose such
status.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Termination. This Agreement shall terminate on the tenth
anniversary of the execution and delivery hereof.
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SECTION 5.02. Representations. Each of the parties hereto represents that
this Agreement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 5.03. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 5.04. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any such term may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of (a) the Company and (b) Stockholders holding shares of 8%
Preferred Stock Series A representing 80% of the then outstanding shares of 8%
Preferred Stock Series A held by all the Stockholders. Each Stockholder shall be
bound by any amendment or waiver authorized by this Section 5.04, whether or not
such Stockholder shall have consented thereto.
SECTION 5.05. Benefit; Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns;
provided, however, that this Agreement shall not inure to the benefit of any
Prospective Transferee unless such Prospective Transferee shall have complied
with the terms of Section 3.04. No Stockholder may assign any of its rights
hereunder to any Person other than a transferee that has complied with the
requirements of Section 3.04 in all respects. Nothing in this Agreement either
express or implied is intended to confer on any person other than the parties
hereto and their respective successors and permitted assigns, any rights,
remedies or obligations under or by reason of this Agreement.
SECTION 5.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5.07. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 5.08. Titles. The titles of the Sections of this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
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SECTION 5.09. Notices. Any notice required or permitted under this
Agreement shall be in writing and shall be delivered in person or mailed by
certified or registered mail, return receipt requested, or transmitted by
telecopier, directed to (a) the Company at the address set forth below its
signature hereof or (b) to a Stockholder at the address therefor as set forth in
the Company's records or at the address set forth below its signature hereof or,
in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. The giving of any notice
required hereunder may be waived in writing by the parties hereto. Every notice
or other communication hereunder shall be deemed to have been duly given or
served on the date on which personally delivered, or on the date actually
received, if sent by mail or telecopier, with receipt acknowledged.
SECTION 5.10. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provisions shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provisions were so excluded and shall be enforceable in accordance with its
terms.
SECTION 5.11. Entire Agreement. All prior agreements of the parties
concerning the subject matter of this Agreement are expressly superseded by this
Agreement. This Agreement contains the entire Agreement of the parties
concerning the subject matter hereof. Any oral representations or modifications
of this Agreement shall be of no effect.
383917.1
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CORNERSTONE PROPERTIES INC.
By:________________________________________
Name:
Title:
Address For Notices:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention:________________________________
Telecopier: (000) 000-0000
HEXALON REAL ESTATE, INC.
By:________________________________________
Name:
Title:
Address For Notices:
000 Xxxx Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention:_________________________________
Telecopier: (000) 000-0000
383917.1
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