EXHIBIT 20.2
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.
"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.
"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 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.
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."
(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 "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.
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(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
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, 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
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 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 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 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 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
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.
(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.
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.
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.
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.
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
