<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CORNERSTONE PROPERTIES, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
218916104
(CUSIP Number)
ANN F. CHAMBERLAIN, ESQ.
RICHARDS & O'NEIL, LLP
885 THIRD AVENUE
NEW YORK, NEW YORK
10022-4873
(212) 207-1200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 27, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box.
/ /
Check the following box if a fee is being paid with this statement.
/ /
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SCHEDULE 13D
CUSIP NO. 218916104
(1) Name of reporting person
. . . . . . . . . . . . . . . . . . . STICHTING PENSIOENFONDS VOOR
DE GEZONDHEID GEESTELIJKE EN
S.S. or I.R.S. identification Nos. of MAATSCHAPPELIJKE BELANGEN
above persons
. . . . . . . . . . . . . . . . . . .
(2) Check the appropriate box if a member (a) / /
of a group
(see instructions) (b) / /
(3) SEC use only . . . . . . . . . . . . .
(4) Source of funds
(see instructions). . . . . . . . . . OO
(5) Check if disclosure of legal proceedings
is required pursuant to items 2(d) or 2(e)
. . . . . . . . . . . . . . . . . . . / /
(6) Citizenship or place of
organization. . . . . . . . . . . . . . . THE NETHERLANDS
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power . . . . . . . . . . . . 27,458,750
(8) Shared voting power 0
(9) Sole dispositive power. . . . . . . . . . 27,458,750
(10) Shared dispositive power. . . . . . . . . 0
(11) Aggregate amount beneficially owned by
each reporting person . . . . . . . . . . 34,187,500
(12) Check box if the aggregate amount in Row
(11) excludes certain shares (see
instructions). . . . . . . . . . . . . . / /
(13) Percent of class represented by amount in
Row (11) . . . . . . . . . . . . . . . . . 41%
(14) Type of reporting person (see
instructions) . . . . . . . . . . . . . . HC/EP
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CUSIP NO. 218916104
(1) Names of reporting person
. . . . . . . . . . . . . . . . . . . . DUTCH INSTITUTIONAL HOLDING
S.S. or I.R.S. identification COMPANY, INC.
Nos. of above persons
. . . . . . . . . . . . . . . . . . . .
(2) Check the appropriate box (a)
if a member of a group / /
(see instructions) (b)
/ /
(3) SEC use only . . . . . . . . . . . . .
(4) Source of funds (see
instructions) . . . . . . . . . . . . . OO
(5) Check if disclosure of legal procedures is
required pursuant to items 2(d) or 2(e)
----
(6) Citizenship or place of
organization . . . . . . . . . . . . . . . DELAWARE
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power . . . . . . . . . . . . . 6,726,750
(8) Shared voting power . . . . . . . . . . . . 0
(9) Sole dispositive power . . . . . . . . . . 6,726,750
(10) Shared dispositive power . . . . . . . . . 0
(11) Aggregate amount beneficially owned by each
reporting person . . . . . . . . . . . . . 6,728,750
(12) Check box if the aggregate amount in
Row (11) excludes certain shares (see
instructions) . . . . . . . . . . . . . / /
(13) Percent of class represented by amount in
Row (11) . . . . . . . . . . . . . . . 8%
(14) Type of reporting person
(see instructions) . . . . . . . . . . . . CO
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This Amendment No. 1 ("Amendment No. 1") to the Schedule 13D (the "Schedule
13D"), dated as of August 26, 1997 and filed by Stichting Pensioenfonds Voor De
Gezondheid Geestelijke en Maatschappelijke Belangen ("PGGM") and Dutch
Institutional Holding Company, Inc. ("DIHC", and, together with PGGM, the
"Reporting Persons"), relates to the common stock, without par value ("Common
Stock"), of Cornerstone Properties, Inc. (the "Company").
This Amendment No. 1 is being filed to report the consummation on
October 27, 1997 of the transactions contemplated by the Loan Purchase
Agreement, dated as of August 18, 1997, between PGGM and the Company, and the
Stock Purchase Agreement, dated as of August 18, 1997, between DIHC and the
Company. Items 5, 6 and 7 of the Schedule 13D are hereby amended as provided
below. Items 1, 2, 3 and 4 of this Schedule 13D are not being amended by this
Amendment No. 1.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended in its entirety as follows:
(a) As of the date hereof, PGGM owns of record 27,458,750 shares of Common
Stock (representing 33% of the outstanding Common Stock) and DIHC owns of record
6,726,750 shares of Common Stock (representing 8% of the outstanding Common
Stock). DIHC also has the right to acquire, subject to the terms and conditions
set forth in the Common Stock Issuance Agreement between the Company and DIHC,
dated October 27, 1997 (the "Common Stock Purchase Agreement") attached hereto
as Exhibit A, an additional 2,000 shares of Common Stock. As the sole
stockholder of DIHC, PGGM may be deemed to beneficially own the shares of Common
Stock held beneficially or of record by DIHC. Accordingly, PGGM may be deemed
to own, in the aggregate, 34,187,500 shares of Common Stock (representing 41% of
the outstanding Common Stock).
(b) As of the date of filing of this Amendment No. 1, the Reporting
Persons have the power to vote or to direct the vote of or the power to dispose
or direct the disposition of the shares of Common Stock that are beneficially
owned by them as follows:
Beneficial Right Right to No Right to
Ownership to Vote Dispose Vote or Dispose
---------- ------- -------- ---------------
PGGM 34,187,500 27,458,750 27,458,750 2,000
DIHC 6,728,750 6,726,750 6,726,750 2,000
(c) None.
(d) None.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer
Item 6 is hereby amended by the addition of the following paragraph:
On October 30, 1997, PGGM requested, as Section 5.09 of the Loan Purchase
Agreement permits, that Cornerstone increase the size of its Board of Directors
to 12 and named Messrs. Jan van der Vlist and Dick van den Bos as its nominees
to fill the vacancies created by the increase.
Item 7. Material to be Filed as Exhibits.
Exhibit A is a copy of the Common Stock Purchase Agreement referred to in
Item 5 hereof.
Exhibit B is the Registration Rights and Voting Agreement entered into by
PGGM, DIHC, and the Company on October 27, 1997, the provisions of which are
described in the Schedule 13D.
Exhibit C is the Joint Filing Agreement between PGGM and DIHC.
[Remainder of page left blank intentionally]
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Dated: October 30, 1997
STICHTING PENSIOENFONDS VOOR DE
GEZONDHEID GEESTELIJKE EN
MAATSCHAPPELIJKE BELANGEN
By:/S/JAN H.W.R. VAN DER VLIST
--------------------------------
Jan H.W.R. van der Vlist
Attorney-in-Fact
By:/S/ANNEKE C. VAN DE PUTTELAAR
--------------------------------
Anneke C. van de Puttelaar
Attorney-in-Fact
DUTCH INSTITUTIONAL HOLDING
COMPANY, INC.
By:/S/ROBERT T. SORRENTINO
--------------------------------
Robert T. Sorrentino
Vice President
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EXHIBIT A
CORNERSTONE PROPERTIES INC.
126 East 56th Street
New York, New York 10022
October 27, 1997
Dutch Institutional Holding Company, Inc.
200 Galleria Parkway, N.W., Suite 2000
Atlanta, Georgia 30339
Attention: Robert T. Sorrentino
Re: Market Square Development Investors
Gentlemen:
This letter will confirm that Cornerstone Properties Inc. shall transfer to
Dutch Institutional Holding, Inc. 2,000 validly issued, fully paid and
nonassessable shares of common stock of Cornerstone Properties Inc. with no par
value (adjusted as necessary to fully reflect the effect of any stock split,
reverse stock split, or stock dividend with respect to such common shares
occurring after the date of that certain Stock Purchase Agreement dated as of
August 18, 1997 and prior to the date of the transfer of such shares), having an
agreed value of $16.00 per share and not subject to adjustment notwithstanding
any changes in the stock price between the date of the Stock Purchase Agreement
and the date of such transfer, subject to the terms and conditions of and in
accordance with that certain Redemption and Acquisition Agreement of even date
herewith between Market Square Development Investors, Dutch Institutional
Holding Company, Inc., DIHC Market Square, Inc. and Cornerstone Properties Inc.
Very truly yours,
CORNERSTONE PROPERTIES INC.
By: /S/JOHN S. MOODY
-------------------------------
John S. Moody, President
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EXHIBIT B
Registration Rights and Voting Agreement
THIS REGISTRATION RIGHTS AND VOTING AGREEMENT (this "Agreement"), is made
and entered into as of this ___ day of October, 1997, by and between
CORNERSTONE PROPERTIES INC., a Nevada corporation (the "Company"), DUTCH
INSTITUTIONAL HOLDING COMPANY, INC., a Delaware corporation ("DIHC"), and
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID, GEESTELIJKE EN MAATSCHAPPELIJKE
BELANGEN, a stichting formed according to the laws of The Netherlands
("PGGM").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Stock Purchase Agreement
(the "Purchase Agreement"), dated as of August 18, 1997, between the Company
and DIHC, and the Loan Purchase Agreement (the "Loan Agreement") dated as of
August 18, 1997, between the Company and PGGM, the Company is acquiring
certain shares of capital stock, partnership interests and loans from DIHC
and PGGM and issuing shares of its Common Stock (as defined below) to DIHC
and PGGM; and
WHEREAS, the Company, DIHC and PGGM desire to provide (i) for compliance
with the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the issuance of shares of its Common Stock and (ii) for the
registration under the Securities Act of certain shares upon the terms and
conditions set forth below; and
WHEREAS, the Company, DIHC and PGGM desire to provide (i) for the
nomination and election of certain persons to serve on the Board of Directors
of the Company, (ii) for certain restrictions regarding the transfer of
shares of Common Stock and (iii) for certain covenants regarding the
operation of the Company's business, upon the consummation of the
transactions provided for by the Purchase Agreement and the Loan Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Certain Other Definitions. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Purchase
Agreement. The capitalized terms set forth below (in their singular and
plural forms as applicable) shall have the following meanings:
1.1. "Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
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1.2. "Business Combination" means any one of the following
transactions:
(i) Any merger or consolidation of the Company or any
subsidiary thereof with any other Person (other than the Company);
(ii) Any sale, lease, exchange, mortgage, pledge, transfer
or other disposition by the Company (in one transaction or a series of
transactions) to or with any Person of all or a substantial portion of
the assets of the Company and its subsidiaries taken as a whole;
(iii) The adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or on behalf of
any Holder or its Affiliates that together own 25% or more of the
issued and outstanding Common Stock; or
(iv) Any reclassification of securities (including any
reverse stock split), recapitalization of the Company, or any merger
or consolidation of the Company with any subsidiary thereof or any
other transaction to which the Company is a party which has the
effect, directly or indirectly, of increasing the Holder Interest of
such Holder or its Affiliates that together own 25% or more of the
issued and outstanding Common Stock (whether or not with or into or
otherwise involving such Holder or any of its Affiliates).
1.3. "Closing Date" has the meaning specified in Section 2.04 of the
Purchase Agreement.
1.4. "Commission" shall mean the United States Securities and Exchange
Commission and any successor federal agency having similar powers.
1.5. "Common Stock" shall mean the common stock without par value of
the Company.
1.6. "control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee, personal
representative or executor, of the power to direct or cause the direction of
the affairs or management of a Person, whether through the ownership of
voting securities, as trustee, personal representative or executor, by
contract or otherwise, including, without limitation, the ownership, directly
or indirectly, of securities having the power to elect a majority of the
board of directors or similar body governing the affairs of such Person.
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1.7. "Current Market Price" of each share of Common Stock shall mean
(i) the average of the closing prices of the Common Stock for the five New
York Stock Exchange trading days immediately preceding the day in question as
reported by The Wall Street Journal under the New York Stock Exchange
Composite Transactions quotation system (or under any successor quotation
system) or, if the Common Stock is no longer traded on the New York Stock
Exchange under the quotation system under which such closing prices are
reported or, if The Wall Street Journal no longer reports such closing
prices, such closing prices as reported by a newspaper or trade journal
selected by the Company or (ii) if no such closing prices are available on
such dates, the fair market value as determined in good faith by the Board of
Directors of the Company.
1.8. "Demand Offering" shall mean a offering required to be effected
pursuant to Section 3.3 hereof.
1.9. "Demand Prospectus" shall mean the prospectus included in the
Shelf Registration Statement, including any preliminary prospectus, and any
amendment or supplement thereto, including any supplement relating to the
terms of the offering of any portion of the Demand Offering Securities
covered by the Demand Prospectus, and in each case including all material
incorporated by reference therein.
1.10. "Demand Offering Securities" shall mean the Shares held by DIHC
and PGGM or any subsequent Holder to whom this Agreement has, or rights to
cause the Company to register Shares in accordance with Section 3 have, been
assigned pursuant to Section 9, excluding (i) Shares that have been disposed
of under the Shelf Registration Statement or any other effective registration
statement, (ii) Shares sold or otherwise transferred pursuant to Rule 144
under the Securities Act, and (iii) those Shares held by any single Holder if
such Holder holds less than 1% of the issued and outstanding shares of Common
Stock and all of such Shares are eligible for sale pursuant to Rule 144 under
the Securities Act and all of such Holder's Shares could be sold by such
Holder in a single transaction under Rule 144 under the Securities Act.
1.11. "Demand Offering Expenses" shall mean any and all expenses
incurred by the Company in connection with Demand Offerings, including,
without limitation: (i) all Commission, stock exchange and National
Association of Securities Dealers, Inc. ("NASD") registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with
state securities or "blue sky" laws (including reasonable fees and
disbursements of counsel in connection with qualification of any of the
Demand Offering Securities under any state securities or blue sky laws and
the preparation of a blue sky memorandum) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word
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processing, printing and distributing any Demand Prospectus, certificates and
other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Demand Offering Securities on any U.S.
securities exchange or exchanges, and (v) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance. Demand
Offering Expenses shall specifically exclude Selling Expenses and the fees
and expenses of counsel representing the Holders, all of which shall be borne
by the Holders in all cases.
1.12. "Demand Offering Request" shall have the meaning set forth in
Section 3.3(a) hereof.
1.13. "DIHC" shall have the meaning set forth in the Preamble.
1.14. "Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement, or restriction of any
kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
1.15. "Equity Security" means any (i) Common Stock, (ii) securities of
the Company convertible into or exchangeable for Common Stock, and (iii)
options, rights, warrants and similar securities issued by the Company to
acquire Common Stock.
1.16. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
1.17. "Holder" shall mean DIHC and PGGM (and their respective
transferees of Shares as permitted by this Agreement to whom this Agreement
has, or rights to cause the Company to register Shares in accordance with
Section 3 have, been assigned pursuant to Section 9).
1.18. "Holder Interest" means, with respect to any Holder, the
percentage of issued and outstanding Common Stock represented by the shares
of Common Stock owned by such Holder and its Affiliates; provided, however,
that shares of Common Stock indirectly owned through an intermediary (i) of
which such Holder owns less than 1% of the issued and outstanding common
shares, or (ii) in connection with which Holder has no right to direct the
vote of shares of the Company shall not be included in the Holder Interest of
such Holder.
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1.19. "Indebtedness" means, with respect to any Person, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
property or services, (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in accordance
with U.S. GAAP, recorded as capital leases, (f) all obligations, contingent
or otherwise, of such Person under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or
any warrants, rights or options to acquire such capital stock, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (h) the
greater of (i) the principal amount and (ii) the redemption value of any
perpetual preferred stock issued by such Person, (i) all Indebtedness of
others referred to in clauses (a) through (f) above guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such
Indebtedness or to advance or supply funds for the payment or purchase of
such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the
holder of such Indebtedness against loss, (iii) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (j) all Indebtedness referred to in clauses (a) through (f) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Encumbrance on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
1.20. "Incumbent Directors" shall mean (i) all of the individuals
constituting the board of directors of the Company at the Closing Date (ii)
all individuals hereafter designated as nominees to the board of directors by
the New York State Teachers' Retirement System pursuant to a letter agreement
dated November 22, 1996, (iii) all individuals hereafter designated as
nominees to the board of directors by Hexalon Real Estate, Inc. pursuant to a
letter agreement dated November 7, 1996, and (iv) one individual hereafter
designated by Deutsche Bank AG as a nominee to the board of directors.
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1.21. "Initial Percentage" means the percentage of issued and
outstanding Common Stock represented immediately after the Closing by the
Shares.
1.22. "Leverage Ratio" shall mean the ratio of the Company's
Indebtedness to the Company's Total Market Capitalization.
1.23. "Maximum Number" shall having the meaning set forth in Section
3.3(e) hereof.
1.24. "Permitted Transferee" means any (i) mutual fund company, pension
fund, insurance company, investment company, any state, city, or county, or
any agency or instrumentality of a state, city, or county, or any state
university or state college, and any retirement system for the benefit of
employees of any of the foregoing, any religious or educational organization
or other passive institutional investor or (ii) any non-U.S. Person (as
defined in Section 9.02 of the Charter Amendment) that is not controlled by
U.S. Persons (as defined in the Charter Amendment).
1.25. "Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as
any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act.
1.26. "PGGM" shall have the meaning set forth in the Preamble.
1.27. "Piggyback Registration" shall have the meaning set forth in
Section 3.6(a) hereof.
1.28. "Piggyback Registration Request" shall have the meaning set forth
in Section 3.6(a) hereof.
1.29. "Public Offering" means a public offering of Common Stock
pursuant an effective registration statement under the Securities Act.
1.30. The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
1.31. "Securities Act" means the Securities Act of 1933, as amended.
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1.32. "Selling Expenses" shall mean all underwriting discounts and
selling commissions and transfer taxes applicable to the sale of Shelf
Registrable Securities or Demand Offering Securities and disbursements of
underwriters.
1.33. "Shares" shall mean (a) the shares of Common Stock issued
pursuant to the Purchase Agreement and the Loan Agreement and (b) shares of
Common Stock or any other securities which are hereafter issued with respect
to the shares referred to in Section 1.33(a) by way of conversion, exchange,
reclassification, dividend or distribution, whether or not such securities
have been offered and sold to the public.
1.34. "Shelf Prospectus" shall mean the prospectus included in the
Shelf Registration Statement, including any preliminary prospectus, and any
amendment or supplement thereto, including any supplement relating to the
terms of the offering of any portion of the Shelf Registrable Securities
covered by the Shelf Registration Statement, and in each case including all
material incorporated by reference therein.
1.35. "Shelf Registration" shall mean the registration required to be
effected pursuant to Section 3.1 hereof.
1.36. "Shelf Registrable Securities" shall mean the Shares held by DIHC
and PGGM or any subsequent Holder to whom this Agreement has, or rights to
cause the Company to register Shares in accordance with Section 3 have, been
assigned pursuant to Section 9, excluding (i) Shares that have been disposed
of under the Shelf Registration Statement or any other effective registration
statement, (ii) Shares sold or otherwise transferred pursuant to Rule 144
under the Securities Act, and (iii) those Shares held by any single Holder if
such Holder holds less than 1% of the issued and outstanding shares of Common
Stock and all of such Shares are eligible for sale pursuant to Rule 144 under
the Securities Act and all of such Holder's Shares could be sold by such
Holder in a single transaction under Rule 144 under the Securities Act.
1.37. "Shelf Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement, including,
without limitation: (i) all Commission, stock exchange and NASD registration
and filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws (including reasonable
fees and disbursements of counsel in connection with qualification of any of
the Shelf Registrable Securities under any state securities or blue sky laws
and the preparation of a blue sky memorandum) and compliance with the rules
of the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing the Shelf
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Registration Statement, any Shelf Prospectus, certificates and other
documents relating to the performance of and compliance with this Agreement,
(iv) all fees and expenses incurred in connection with the listing, if any,
of any of the Shelf Registrable Securities on any securities exchange or
exchanges, and (v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the expenses
of any special audits or "cold comfort" letters required by or incident to
such performance and compliance. Shelf Registration Expenses shall
specifically exclude Selling Expenses and the fees and disbursements of
counsel representing the Holders, all of which shall be borne by the Holders
in all cases.
1.38. "Shelf Registration Notice" shall have the meaning set forth in
Section 3.2(b) hereof.
1.39. "Shelf Registration Statement" shall mean a registration
statement of the Company (and any other entity required to be a registrant
with respect to such registration statement pursuant to the requirements of
the Securities Act) that covers all of the Shelf Registrable Securities to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, or any similar rule that may be adopted by the Commission,
and all amendments (including post-effective amendments) to such registration
statement, and all exhibits thereto and materials incorporated by reference
therein.
1.40. "Standstill Period" means, with respect to any Holder, a period
of time commencing on the Closing Date and terminating on October__, 2000
(the date three years after the Closing Date).
1.41. "Total Market Capitalization" shall mean the sum of (i) the
Company's total Indebtedness, plus (ii) the product of (x) the number of
issued and outstanding shares of Common Stock, plus the number of shares of
Common Stock issuable upon conversion of issued and outstanding preferred
stock (other than convertible preferred stock subject to redemption at the
option of the holder) times (y) the Current Market Price.
1.42. "U.S. GAAP" means United States generally accepted accounting
principles and practices in effect from time to time applied consistently
throughout the periods involved.
2. Restrictions on Transfer.
2.1. Representations and Warranties of PGGM. (a) PGGM and DIHC hereby
represent, acknowledge, covenant and agree as follows: (i) the Shares are
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being acquired for PGGM's and DIHC's own account for investment and not
with a view to any distribution or public offering within the meaning of
the Securities Act or any state securities law; (ii) the Shares have not
been registered under the Securities Act or any state securities law;
(iii) PGGM and DIHC is each an "accredited investor" within the meaning of
Rule 501 promulgated by the Commission pursuant to the Securities Act; (iv)
PGGM and DIHC have been furnished with all information that PGGM or DIHC
has requested for purposes of evaluating the Company and each has had an
opportunity to ask questions of and receive answers from the Company
regarding its business, assets, results of operations, and financial
condition; and (v) PGGM and DIHC will not sell or otherwise transfer any of
the Shares except upon the terms and conditions specified herein.
2.2. Legends. Except as provided in Section 2.4, each certificate
representing the Shares issued to PGGM and DIHC or transferred to a
subsequent Holder pursuant to Section 2.3 shall include, in addition to the
legends relating to provisions of the Company's articles of incorporation,
legends in substantially the following form, provided that the first such
legend shall not be required if such transfer is being made in connection
with a sale that is (i) pursuant to a Public Offering or (ii) exempt from
registration pursuant to Rule 144 under the Securities Act or if the
opinion of counsel referred to in Section 2.3 is to the further effect that
such legend is not required in order to ensure compliance with the
Securities Act; provided further, that the second such legend shall not be
required if Sections 7.6 and 8 hereof do not apply to such subsequent
Holder:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN THE REGISTRATION RIGHTS AND VOTING
AGREEMENT DATED AS OF OCTOBER__, 1997, AMONG THE ISSUER AND THE
OTHER PARTY(IES) NAMED THEREIN, A COMPLETE AND CORRECT COPY OF
WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
ISSUER AND WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE.
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<PAGE>
2.3. Notice of Transfer. Prior to any proposed assignment,
transfer or sale of any Shares, the Holder of such Shares shall give
written notice to the Company of Holder's intention to effect such
assignment, transfer or sale, which notice shall set forth the date of such
proposed assignment, transfer or sale. Holder shall also furnish to the
Company a written agreement by the transferee that it is taking and holding
the same subject to the terms and conditions specified in this Agreement
and, except in transfers pursuant to a Public Offering or under Rule 144 or
Regulation S under the Securities Act, a written opinion of Holder's
counsel, in form reasonably satisfactory to the Company, to the effect that
the proposed transfer may be effected without registration under the
Securities Act.
2.4. Termination of Restrictions. The restrictions set forth in
this Section 2 shall terminate and cease to be effective with respect to
any of the Shares (i) upon the sale of any such Shares which has been
registered under the Securities Act or is made pursuant to Rule 144 under
the Securities Act or (ii) upon receipt by the Company of an opinion of
counsel, which counsel and which opinion are reasonably satisfactory to the
Company, to the effect that compliance with such restrictions is not
necessary in order to comply with the Securities Act with respect to the
sale of the Shares. The restrictions with respect to a Holder set forth in
Sections 7.6 and 8 hereof shall terminate upon the end of the Standstill
Period. Whenever such restrictions shall so terminate, the Holder of such
Shares shall be entitled to receive from the Company, without expense
(other than transfer taxes, if any), certificates for such Shares not
bearing the respective legends set forth in Section 2.2.
3. Registration under Securities Act.
3.1. Shelf Registration.
(a) Within 20 days after the Closing Date and upon the request of
PGGM, the Company will use its commercially reasonable efforts to cause to
be filed the Shelf Registration Statement providing for the sale by the
Holders of all of the Shelf Registrable Securities in accordance with the
terms hereof and will use its commercially reasonable efforts to cause such
Shelf Registration Statement to be declared effective by the Commission as
soon as practicable thereafter. The Company agrees to use its commercially
reasonable efforts to keep the Shelf Registration Statement with respect to
the Shelf Registrable Securities continuously effective so long as Holder
holds Shelf Registrable Securities. Subject to Section 3.2(b) and
Section 3.2(i), the Company further agrees to amend the Shelf Registration
Statement if and as required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or any rules and
regulations thereunder; provided,
Page 10 of 36
<PAGE>
however, that the Company shall not be deemed to have used its commercially
reasonable efforts to keep the Shelf Registration Statement effective
during the applicable period if it voluntarily takes any action that would
result in the Holders not being able to sell Shelf Registrable Securities
covered thereby during that period, unless such action is required under
applicable law or the Company has filed a post-effective amendment to the
Shelf Registration Statement and the Commission has not declared it
effective or except as otherwise permitted by the last six sentences of
Section 3.2(b). The Holders will provide information reasonably requested
by the Company in connection with the Shelf Registration Statement as
promptly as practicable after receipt of such request. The "Plan of
Distribution" section of the Shelf Registration Statement shall permit
negotiated purchases, secondary distributions, block trades, ordinary
brokerage transactions or a combination of such methods of sale, provided,
however, that the Company's obligations under Sections 3.1 and 3.2 hereof
shall not include participation in underwritten offerings or other
organized distributions of securities, which obligations are limited to
registrations under Section 3.3 and 3.6 hereof.
(b) Expenses. The Company shall pay all Shelf Registration
Expenses in connection with the registration pursuant to Section 3.1(a).
The Holders shall pay all Selling Expenses and the fees and disbursements
of counsel representing the Holders, relating to the sale or disposition of
such Shelf Registrable Securities pursuant to the Shelf Registration
Statement.
3.2. Shelf Registration Procedures. In connection with the
obligations of the Company with respect to the Shelf Registration Statement
contemplated by Section 3.1 hereof, the Company shall:
(a) prepare and file with the Commission, within the time period
set forth in Section 3.1(a) hereof, the Shelf Registration Statement, which
Shelf Registration Statement shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the Commission to be filed therewith;
(b) subject to the last six sentences of this Section 3.2(b) and
Section 3.2(i) hereof, (i) prepare and file with the Commission such
amendments to such Shelf Registration Statement as may be necessary to keep
such Shelf Registration Statement effective throughout the applicable
period; (ii) cause the Shelf Prospectus to be amended or supplemented as
required and to be filed as required by Rule 424 or any similar rule that
may be adopted under the Securities Act; and (iii) respond as promptly as
practicable to any comments received from the Commission with respect to
the Shelf Registration Statement or any amendment thereto. Notwithstanding
anything to the contrary contained herein, the Company
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<PAGE>
shall not be required to take any of the actions described in clauses (i),
(ii) or (iii) in this Section 3.2(b), Section 3.2(d) or Section 3.2(i) with
respect to the Shelf Registrable Securities (x) to the extent that (i) in
the reasonable opinion of the Company (A) securities laws applicable to
such sale would require the Company to disclose material non-public
information ("Non-Public Information") and (B) the disclosure of such
Non-Public Information would materially adversely affect the Company;
(ii) such sale would occur during the measurement period for determining
the amount of Common Stock, or the amount of any other consideration the
amount of which will be based on the price of the Common Stock, in
connection with the acquisition of a business or assets by the Company (a
"Measurement Period"); or (iii) the Company is contemplating an
underwritten Public Offering of its securities and in the reasonable
opinion of the underwriters such sale would interfere materially with such
Public Offering by the Company (a "Financing Period"); and the Company
delivers written notice to the Holders to the effect that the Holders may
not make offers or sales under the Shelf Registration Statement for a
period not to exceed 45 days from the date of such notice; provided,
however, that the Company may deliver only four such notices under this
Section 3.2(b) and Section 3.4(a) within any twelve-month period, provided,
further, that the Company may deliver only two such notices under this
Section 3.2(b) and Section 3.4(a) within the twelve-month period
immediately following the expiration of the six-month period referred to in
Section 3.3(f)(i) hereof and (y) unless and until the Company has received
a written notice (a "Shelf Registration Notice") from any Holder that such
Holder intends to make offers or sales under the Shelf Registration
Statement as specified in such Shelf Registration Notice; provided,
however, that the Company shall have ten business days to prepare and file
any such amendment or supplement after receipt of the Shelf Registration
Notice. The Measurement Period and Financing Period are collectively
referred to herein as the "Restricted Period." In the event the sale by
the Holders of Shelf Registrable Securities is deferred because of the
existence of Non-Public Information, the Company will notify the Holders
promptly upon such Non-Public Information being included by the Company in
a filing with the Commission, being otherwise disclosed to the public
(other than through the actions of any Holder), or ceasing to be material
to the Company, and upon such notice being given by the Company, the
Holders shall again be entitled to sell Shelf Registrable Securities as
provided herein. In the event the sale by the Holders of Shelf Registrable
Securities is deferred because it is proposed to be made during a
Restricted Period, the Company shall specify, in notifying the Holders of
the deferral of its sale, when the Restricted Period will end, at which
time the Holders shall again be entitled to sell Shelf Registrable
Securities as provided herein. If the Restricted Period is thereafter
changed, the Company will promptly notify the Holders of such change and
upon the end of the Restricted Period as so changed, the Holders will again
be entitled to sell Shelf Registrable Securities as provided herein. If an
agreement to which such Restricted Period relates is terminated prior to
the end of the Restricted Period, the
Page 12 of 36
<PAGE>
deferral period hereunder shall end immediately and the Company shall
promptly notify the Holders of the end of the deferral period;
(c) promptly furnish the Holders after a Holder has delivered a
Shelf Registration Notice to the Company, without charge, as many copies of
each Shelf Prospectus and any amendment or supplement thereto in order to
facilitate the public sale or other disposition of the Shelf Registrable
Securities; the Company consents to the use of the Shelf Prospectus and any
amendment or supplement thereto by the Holders of Shelf Registrable
Securities in connection with the offering and sale of the Shelf
Registrable Securities covered by the Shelf Prospectus or amendment or
supplement thereto;
(d) use its commercially reasonable efforts to register or qualify
the Shelf Registrable Securities by the time the Shelf Registration
Statement is declared effective by the Commission under all applicable
state securities or blue sky laws of such jurisdictions in the United
States and its territories and possessions as the Holders shall reasonably
request in writing, keep each such registration or qualification effective
during the period such Shelf Registration Statement is required to be kept
effective or during the period offers or sales are being made by the
Holders after a Holder has delivered a Shelf Registration Notice to the
Company, whichever is shorter; provided, however, that in connection
therewith, the Company shall not be required to (i) qualify as a foreign
corporation to do business or to register as a broker or dealer in any such
jurisdiction where it would not otherwise be required to qualify or
register but for this Section 3.2(d), (ii) subject itself to taxation in
any such jurisdiction, or (iii) file a general consent to service of
process in any such jurisdiction;
(e) notify the Holders promptly and, if requested by a Holder,
confirm in writing, (i) when the Shelf Registration Statement and any
post-effective amendments thereto have become effective, (ii) when any
amendment or supplement to the Shelf Prospectus has been filed with the
Commission, (iii) of the issuance by the Commission or any state securities
authority of any stop order suspending the effectiveness of the Shelf
Registration Statement or any part thereof or the initiation of any
proceedings for that purpose, (iv) if the Company receives any notification
with respect to the suspension of the qualification of the Shelf
Registrable Securities for offer or sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (v) of the happening of
any event during the period the Shelf Registration Statement is effective
as a result of which (A) such Shelf Registration Statement contains any
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 or (B) the Shelf Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any
material fact necessary
Page 13 of 36
<PAGE>
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(f) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration Statement
or any part thereof as promptly as possible;
(g) promptly furnish to the Holders after a Holder has delivered a
Shelf Registration Notice to the Company, without charge, at least one
conformed copy of the Shelf Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Shelf Registrable
Securities to be sold and not bearing any Securities Act legend; and enable
certificates for such Shelf Registrable Securities to be issued for such
numbers of shares as the Holders may reasonably request at least two
business days prior to any sale of Shelf Registrable Securities;
(i) subject to the last six sentences of Section 3.2(b) hereof,
upon the occurrence of any event contemplated by clause (v) of
Section 3.2(e) hereof, use its reasonable best efforts promptly to prepare
and file an amendment or a supplement to the Shelf Prospectus or any
document incorporated therein by reference or prepare, file and obtain
effectiveness of a post-effective amendment to the Shelf Registration
Statement, or file any other required document, in any such case to the
extent necessary so that, as thereafter delivered to the purchasers of the
Shelf Registrable Securities, such Shelf Prospectus as then amended or
supplemented will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading;
(j) make available for inspection by the Holders after a Holder
has provided a Shelf Registration Notice to the Company and any counsel,
accountants or other representatives retained by the Holders all financial
and other records, material corporate documents and properties of the
Company and cause the officers, directors and employees of the Company to
supply all such material records, documents or information reasonably
requested by the Holders, counsel, accountants or representatives in
connection with the Shelf Registration Statement; provided, however, that
such records, documents or information which the Company determines in good
faith to be confidential and notifies the Holders, counsel, accountants or
Page 14 of 36
<PAGE>
representatives in writing that such records, documents or information are
confidential shall not be disclosed by the Holders, counsel, accountants or
representatives unless (i) such disclosure is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or
(ii) such records, documents or information become generally available to
the public other than through a breach of this Agreement;
(k) a reasonable time prior to the filing of the Shelf
Registration Statement or any amendment thereto, or any Shelf Prospectus or
any amendment or supplement thereto, provide copies of such document (not
including any documents incorporated by reference therein unless requested)
to the Holders; and
(l) use its reasonable best efforts to cause all Shelf Registrable
Securities to be listed on the New York Stock Exchange at the time the
Shelf Registration Statement is declared effective.
The Company may require the Holders to furnish to the Company in
writing such information regarding the proposed distribution by the Holders
as the Company may from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations
with respect to the Shelf Registration Statement pursuant to Section 3.1
hereof and this Section 3.2, the Holders covenant and agree that (i) they
will not offer or sell any Shelf Registrable Securities under the Shelf
Registration Statement until a Holder has provided a Shelf Registration
Notice pursuant to Section 3.2(b) and have received copies of the Shelf
Prospectus as then amended or supplemented as contemplated by
Section 3.2(c) and notice from the Company that the Shelf Registration
Statement and any post-effective amendments thereto have become effective
as contemplated by Section 3.2(e); (ii) upon receipt of any notice from the
Company contemplated by Section 3.2(b) or Section 3.2(e) (in respect of the
occurrence of an event contemplated therein), the Holders shall not offer
or sell any Shelf Registrable Securities pursuant to the Shelf Registration
Statement until the Holders receive copies of the supplemented or amended
Shelf Prospectus contemplated by Section 3.2(i) hereof and receive notice
that any post-effective amendment has become effective, and, if so directed
by the Company, the Holders will deliver to the Company (at the expense of
the Company) all copies in its possession, other than permanent file copies
then in the Holders' possession, of the Shelf Prospectus as amended or
supplemented at the time of receipt of such notice; (iii) upon the
expiration of 60 days after the first date on which offers or sales can be
made pursuant to clause (i) above, the Holders will not offer or sell any
Shelf Registrable Securities under the Shelf Registration Statement until
they have again complied with the provisions of clause (i) above; (iv) each
Holder and any of such Holder's partners, officers, directors or
Affiliates, if any, will comply with the provisions of Regulation M under
the Exchange Act as applicable to them in connection with sales of Shelf
Page 15 of 36
<PAGE>
Registrable Securities pursuant to the Shelf Registration Statement;
(v) each Holder and any of such Holder's partners, officers, directors or
Affiliates, if any, will comply with the prospectus delivery requirements
of the Securities Act as applicable to them in connection with sales of
Shelf Registrable Securities pursuant to the Shelf Registration Statement;
and (vi) each Holder and any of such Holder's partners, officers, directors
or Affiliates, if any, will enter into such written agreements as the
Company shall reasonably request to ensure compliance with clauses (iv) and
(v) above.
3.3. Demand Offerings.
(a) Requests for Demand Offering. PGGM, DIHC or a Holder or
Holders owning a majority of the Demand Offering Securities (the "Demand
Initiating Holder") may request the offering under the Securities Act of
all or any portion of the Demand Offering Securities held by such Holders
for sale in the manner specified in such request, including an underwritten
offering. Upon receipt of such request, the Company will promptly, but in
any event within 20 days, give written notice of such requested
registration to all Holders of Demand Offering Securities, and thereupon,
in accordance with Section 3.4 hereof, the Company will use its reasonable
best efforts to effect the registration and sale of:
(i) the Demand Offering Securities which the Company has been so
requested to register by such Demand Initiating Holder;
(ii) all other Demand Offering Securities which the Company has
been requested to register by the other Holders thereof by written request
delivered to the Company within 15 days after the giving of such written
notice by the Company, and
(iii) all shares of Common Stock which the Company may elect to
register for its own account or for the account of others in connection
with the offering of Demand Offering Securities pursuant to this Section
3.3.
Each initial request for a offering pursuant to this Section 3.3 shall
specify the number of Demand Offering Securities requested to be sold by
the Demand Initiating Holder, the method of disposition to be employed and
the Current Market Price of the Common Stock as of the date of such
request. Any request for an offering pursuant to this Section 3.3(a) shall
be referred to herein as a "Demand Offering Request" and all registrations
requested pursuant to this Section 3.3 are referred to herein as "Demand
Offerings."
Page 16 of 36
<PAGE>
(b) Number of Demand Offerings. The Company shall not be required
under this Section 3.3 (i) to effect more than one Demand Offering in any
twelve-month period or (ii) to effect more than eight Demand Offerings in the
aggregate. Notwithstanding anything to the contrary contained herein, if
such method of disposition is a firm commitment underwritten public offering,
a registration shall count as a Demand Offering only when all such Demand
Offering Securities shall have been sold pursuant thereto; provided, however,
that if a Demand Prospectus filed by the Company pursuant to a Demand
Offering Request shall be abandoned or withdrawn at the behest of the Demand
Initiating Holder, then, unless the Holders shall, promptly upon receipt of a
request by the Company therefor supported by an invoice setting forth the
expenses in reasonable detail, reimburse the Company for the Demand Offering
Expenses in respect of such prospectus attributable to the Holders, the
Company shall be deemed to have effected a Demand Offering.
(c) Minimum Offering Amount. The Company shall not be required to
comply with this Section 3.3 unless the aggregate Current Market Price of all
Demand Offering Securities covered by the Demand Offering Request and the
Demand Offering Securities described in Section 3.3(a)(ii) shall be $75
million or more (unless and to the extent the Demand Initiating Holder shall
hold less than $75 million of Demand Offering Securities, in which case such
minimum offering amount shall be equal to the amount of Demand Offering
Securities so held).
(d) Selection of Underwriters. If the method of disposition
specified by PGGM shall be an underwritten public offering, the Company may
designate the managing underwriter of such offering, subject to the approval
of the Demand Initiating Holder which approval shall not be unreasonably
withheld.
(e) Priority on Demand Offerings. The Company shall be entitled to
include in any offering referred to in this Section 3.3, for sale in
accordance with the method of disposition specified by the Demand Initiating
Holder shares of Common Stock to be sold by the Company for its own account
or by other shareholders of the Company for their account. Nonetheless,
whether or not the Company desires to include any such additional shares in a
Demand Offering, if the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included in
such offering exceeds the maximum number which can be included in such
offering without adversely affecting the marketability of the offering (the
"Maximum Number"), then the Company will limit the number of shares included
in such offering to the Maximum Number, and the shares offered shall be
selected in the following order of priority: (i) first, Demand Offering
Securities covered by the Demand Offering Request and the Demand Offering
Securities described in Section 3.3(a)(ii), subject to the proviso set forth
in clause (iii) below, (ii) second, securities the Company proposes to sell
and (iii)third, securities requested
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<PAGE>
to be included in such registration pursuant to (A) the Stockholders'
Agreement, dated as of November 22, 1996, by and among the Company and the
New York State Teachers' Retirement System and (B) the Stockholders'
Agreement, dated as of November 7, 1996, by and between the Company and
Hexalon Real Estate, Inc., pro rata among the holders thereof on the basis of
the number of shares requested to be included in such registration; provided
that the securities requested to be included pursuant to clauses (A) and (B)
shall not be reduced to less than one-third of the total number of shares in
such offering, and (iv) fourth, other securities requested to be included in
such registration.
(f) Exception. Anything in this Section 3.3 to the contrary
notwithstanding, the Company shall not be required to file a Demand
Prospectus in connection with a Demand Offering (i) within six months after
the closing date of a Demand Offering or the effective date of any
registration statement (other than pursuant to Section 3.1 or a registration
statement on Form S-8 with respect to an employee benefit plan or a
registration statement on Form S-4 relating to securities to be issued in a
merger or in exchange for securities or assets of another Person) of the
Company or (ii) if counsel for the Company, reasonably acceptable to the
Demand Initiating Holder shall deliver an opinion to the Holders to the
effect that, pursuant to Rule 144 under the Securities Act or otherwise, the
Holders can publicly offer and sell the Demand Offering Securities as to
which sale has been requested without registration under the Securities Act.
3.4. Demand Offering Procedures. If and whenever the Company is
required by the provisions of Section 3.3 hereof to use its reasonable best
efforts to effect the sale of any of the Demand Offering Securities under the
Securities Act, the Company shall use its reasonable best efforts to effect
the registration and sale of the Demand Offering Securities in accordance
with the intended method of disposition thereof and will, as expeditiously as
possible:
(a) within 45 days after receiving a request for a Demand Offering,
prepare and file with the Commission a Demand Prospectus as a supplement to
the Shelf Registration Statement with respect to such Demand Offering
Securities. Notwithstanding anything to the contrary contained herein, the
filing of such Demand Prospectus may be delayed for a period not to exceed 45
days if (i) any of the events specified in clause (x)(iii) of Section 3.2(b)
hereof shall have occurred, or (ii) the Company is engaged in any program for
the repurchase of Common Stock or other securities of the Company and the
Company provides written notice to the Demand Initiating Holder; provided,
however, that the Company may deliver only four notices under this Section
3.4(a) and 3.2(b) hereof within any twelve-month period; provided, further,
that the Company may deliver only two such notices under this Section 3.4(a)
Page 18 of 36
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and Section 3.2(b) within the twelve-month period immediately following the
expiration of the six-month period referred to in Section 3.3(f)(i) hereof.
(b) prior to the filing described in paragraph (a) above, furnish to
the Holders copies of the Demand Prospectus and any amendments or supplements
thereto, which documents shall be subject to the approval of the Holders only
with respect to any statement in the Demand Prospectus which relates to the
Holders;
(c) notify the Holders promptly and, if requested by the Holders,
confirm in writing, (i) when the Demand Prospectus has been filed with the
Commission, (ii) when any amendment or supplement to the Demand Prospectus
has been filed with the Commission, (iii) of the issuance by the Commission
or any state securities authority of any stop order suspending the
effectiveness of the Shelf Registration Statement or any part thereof or the
initiation of any proceedings for that purpose, (iv) if the Company receives
any notification with respect to the suspension of the qualification of the
Demand Offering Securities for offer or sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (v) of the happening of
any event during the period of the offering pursuant to the Demand Prospectus
as a result of which (A) such Shelf Registration Statement contains any
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 or (B) the Demand Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Shelf Registration Statement or any
part thereof as promptly as possible;
(e) furnish to the Holders after delivery of a Demand Offering
Request to the Company, without charge, at least one conformed copy of the
Shelf Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(f) prepare and file with the Commission such amendments and
supplements to such Shelf Registration Statement and the Demand Prospectus
used in connection therewith as may be necessary and comply with the
provisions of the Securities Act with respect to the disposition of all
Demand Offering Securities covered by such Demand Prospectus in accordance
with the Holders' intended method of disposition set forth in such Demand
Prospectus for such period;
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(g) furnish to the Holders and to each underwriter such number of
copies of the Shelf Registration Statement and the Demand Prospectus included
therein (including each preliminary prospectus) and such other documents, as
such persons may reasonably request in order to facilitate the public sale or
other disposition of the Demand Offering Securities covered by such Demand
Prospectus;
(h) use its reasonable best efforts to register or qualify the Demand
Offering Securities covered by such Demand Prospectus under the securities or
blue sky laws of such jurisdictions as the Holders or, in the case of an
underwritten public offering, the managing underwriter, shall reasonably
request;
(i) provide a transfer agent and registrar, which may be a single
entity, for all Demand Offering Securities;
(j) use its reasonable best efforts to cause all Demand Offering
Securities to be listed on the New York Stock Exchange;
(k) furnish on the date that Demand Offering Securities are delivered
to the underwriters for sale pursuant to such registration: (i) an opinion
dated such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters, stating that the Shelf
Registration Statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Securities Act,
(B) the Shelf Registration Statement, the related Demand Prospectus, and each
amendment or supplement thereto, comply as to form in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder and that such counsel does not
believe that any such Shelf Registration Statement, Demand Prospectus,
amendment or supplement contains a misstatement of a material fact or an
omission to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were made, not misleading (except that such counsel need express
no opinion as to financial statements or financial or statistical data
contained therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters or by the Holders or their counsel,
and (ii) a "cold comfort" letter dated such date from the independent public
accountants retained by the Company, addressed to the underwriters, stating
that they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the financial
statements of the Company included in the Shelf Registration Statement or the
Demand Prospectus, or any amendment or supplement thereto, comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall
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additionally cover such other financial matters (including information as to
the period ending no more than five business days prior to the date of such
letter) with respect to the registration in respect of which such letter is
being given as such underwriters may reasonably request; and
(l) make available for inspection by the Holders after the Demand
Initiating Holder has provided a Demand Offering Request to the Company and
any counsel, accountants or other representatives retained by the Holders all
financial and other material records, pertinent corporate documents and
properties of the Company and cause the officers, directors and employees of
the Company to supply all such material records, documents or information
reasonably requested by the Holders, counsel, accountants or representatives
in connection with the Demand Prospectus; provided, however, that such
records, documents or information which the Company determines in good faith
to be confidential and notifies the Holders, counsel, accountants or
representatives in writing that such records, documents or information are
confidential shall not be disclosed by Holders, counsel, accountants or
representatives unless (i) such disclosure is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction, or (ii) such records,
documents or information become generally available to the public other than
through a breach of this Agreement.
For purposes of paragraphs (a) and (f) of this Section 3.4, the period of
distribution of Demand Offering Securities in a firm commitment underwritten
public offering shall be deemed to be that period during which the
underwriters in such offering require in an underwriting agreement in the
form customarily used by such underwriters for comparable transactions that
the Company keep a registration statement effective to permit each
underwriter to complete the distribution of all securities purchased by it,
and the period of distribution of Demand Offering Securities in any other
registration shall be deemed to extend until the earlier of the sale of all
Demand Offering Securities covered thereby or nine months after the effective
date thereof.
In connection with each registration hereunder, each Holder will furnish
to the Company in writing such information with respect to itself and the
proposed distribution by itself as shall be reasonably necessary in order to
assure compliance with federal and applicable state securities laws.
Reasonable compliance with the obligation to furnish such information shall
be a condition to the rights afforded such Holder hereunder. In addition,
each Holder and any of its partners, officers, directors or Affiliates, if
any, (i) will comply with the provisions of Regulation M as applicable to
them in connection with sales of Demand Offering Securities pursuant to the
Demand Prospectus; (ii) will comply with the prospectus delivery requirements
of the Securities Act as applicable to them in connection with sales of
Demand Offering Securities
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pursuant to the Demand Prospectus; and (iii) will enter into such written
agreements as the Company shall reasonably request to ensure compliance
therewith.
In connection with each registration pursuant to Section 3.3 hereof
covering an underwritten public offering, the Company agrees to enter into a
written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature; provided that such
agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof; provided, further that the
time and place of the closing under said agreement shall be as mutually
agreed upon between the Company and such managing underwriter.
3.5. Demand Offering Expenses. In connection with any Demand
Offering, the Company shall pay all Demand Offering Expenses and the Holders
shall pay all Selling Expenses applicable to the shares sold by the Holders.
3.6. Piggyback Registrations.
(a) Right to Piggyback. In the event that a Holder is not permitted
to effect sales under the Shelf Registration Statement under Section
3.2(b)(x)(iii) hereof or the Holders are not permitted to effect Demand
Offering due to Section 3.4(a)(i), Holders shall become entitled to the
rights of this Section 3.6. The Company will promptly (but in any event
within 30 days) give written notice to the Holders of its intention to effect
such registration and a description of any underwriting agreement to be
entered into with respect thereto and will include in such registration all
Shelf Registrable Securities or Demand Offering Securities with respect to
which the Company has received written requests for inclusion within 15 days
after the receipt of the Company's notice (a "Piggyback Registration
Request"); provided, however, that the Company shall not be required to
include Shelf Registrable Securities or Demand Offering Securities in the
securities to be registered pursuant to a registration statement on any form
which limits the amount of securities which may be registered by the issuer
and/or selling security holders if, and to the extent that, such inclusion
would make the use of such form unavailable. In the event that any Piggyback
Registration shall be, in whole or in part, an underwritten public offering
of Common Stock, the Holders shall agree that such Demand Offering Securities
or Shelf Registrable Securities are to be included in the underwriting on the
same terms and conditions as the shares of Common Stock otherwise being sold
through underwriters under such registration.
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(b) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of shares requested to be included in such registration exceeds the
Maximum Number, the Company will limit the number of shares included in such
registration to the Maximum Number, and the shares registered shall be
selected in the following order of priority: (i) first, securities the
Company proposes to sell, subject to the proviso set forth in clause (ii)
below, (ii) second, (A) Shelf Registrable Securities or Demand Offering
Securities covered by Piggyback Registration Requests, and (B) securities
requested to be included in such registration pursuant to (x) the
Stockholders' Agreement, dated as of November 22, 1996, by and among the
Company and the New York State Teachers' Retirement System and (y) the
Stockholders' Agreement, dated as of November 7, 1996, by and between the
Company and Hexalon Real Estate, Inc., pro rata among the holders thereof on
the basis of the number of shares requested to be included in such
registration; provided that the securities requested to be included pursuant
to clauses (x) and (y) shall not be reduced to less than one-third of the
total number of shares in such offering and (iii) third, other securities
requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the
Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the Maximum Number, the Company will
include in such registration the shares requested to be included therein by
the holders requesting such registration and the Shelf Registrable Securities
and Demand Offering Securities covered by Piggyback Registration Requests and
any other securities requested to be included in such registration, pro rata
among the holders thereof on the basis of the number of shares requested to
be included in such registration; provided, however, that if the holders
requesting registration are doing so pursuant to demand registration rights
of such holders, such holders' shares shall take priority over any Shelf
Registrable Securities and Demand Offering Securities and any other
securities requested to be included, which shall be included on a pro rata
basis, subject to the proviso set forth in Section 3.6(b)(ii)(B).
3.7. Indemnification.
(a) Indemnification by the Company. To the extent permitted by law,
the Company shall indemnify and hold harmless the seller of any Shares
covered by any registration statement filed pursuant to Section 3, its
directors, trustees and officers, each other person who participates as an
underwriter in the offering or sale of such securities and each other person,
if any, who controls such seller or any such
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underwriter within the meaning of the Securities Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
seller or any such director, trustee or officer or participating or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or related
actions or proceedings) arise out of or are based upon (x) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained in such registration statement, or any amendment or
supplement to such registration statement, or any document incorporated by
reference in such registration statement, or (y) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such seller, and each such director, trustee, officer,
participating person and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding, provided
that the Company shall not be liable in any such case (1) to the extent that
any such loss, claim, damage, liability or expense (or action or proceeding
in respect thereof) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such seller or any such director, trustee,
officer, participating person or controlling person specifically stating that
it is for use in the preparation of such registration statement or (2) to the
extent any amount paid in settlement of any such loss, claim, damage,
liability or action of such settlement is effected without the written
consent of the Company (which consent shall not be unreasonably withheld).
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director,
trustee, officer, participating person or controlling person and shall
survive the transfer of such securities by such seller. The Company shall
agree to make provision for contribution relating to such indemnity as shall
be reasonably requested by any seller of Shares or the underwriters.
(b) Indemnification by the Sellers. The Company may require, as a
condition to including any Shares in any registration statement filed
pursuant to Section 3, that the Company shall have received an undertaking
satisfactory to it from each prospective seller of such securities, severally
and not jointly, to indemnify and hold harmless (in the same manner and to
the same extent as set forth in Section 3.6(a)) the Company, each director of
the Company, each officer of the Company who shall sign such registration
statement and each other person, if any, who controls the Company within the
meaning of the Securities Act, with respect to
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any untrue statement in or omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus included in
such registration statement, or any amendment or supplement to such
registration statement, of a material fact if such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller
specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling person and shall
survive the transfer of such securities by such seller.
(c) Indemnification Procedure. Promptly after receipt by any
party entitled to indemnification pursuant to Section 3.7(a) or 3.7(b) of
this Agreement (an "Indemnified Party") of notice by a third party of any
complaint or the commencement of any action or proceeding with respect to
which indemnification is being sought hereunder, such Indemnified Party
shall notify the party obligated to provide such indemnification (the
"Indemnifying Party") of such complaint or of the commencement of such
action or proceeding; provided, however, that the failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from liability
for such claim arising otherwise than under this Agreement, and such
failure to so notify the Indemnifying Party shall relieve the Indemnifying
Party from liability which the Indemnifying Party may have hereunder with
respect to such claim if, but only if, and only to the extent that, such
failure to notify the Indemnifying Party results in the forfeiture by the
Indemnifying Party of material rights and defenses otherwise available to
the Indemnifying Party with respect to such claim. The Indemnifying Party
shall have the right, upon written notice to the Indemnified Party, to
assume the defense of such action or proceeding, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment
of the fees and disbursements of such counsel. In the event, however, that
the Indemnifying Party declines or fails to assume the defense of the
action or proceeding or to employ counsel reasonably satisfactory to the
Indemnified Party, in either case in a timely manner, then such Indemnified
Party may employ counsel to represent or defend it in any such action or
proceeding and the Indemnifying Party shall pay the reasonable fees and
disbursements of such counsel as incurred; provided, however, that the
Indemnifying Party shall not be required to pay the fees and disbursements
of more than one counsel for all Indemnified Parties in any jurisdiction in
any single action or proceeding. In any action or proceeding with respect
to which indemnification is being sought hereunder, the Indemnified Party
or the Indemnifying Party, whichever is not assuming the defense of such
action, shall have the right to participate in such litigation and to
retain its own counsel at such party's own expense. The Indemnifying Party
or the Indemnified Party, as the case may be, shall at all times
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use reasonable best efforts to keep the Indemnifying Party or the
Indemnified Party, as the case may be, reasonably apprised of the status of
the defense of any action, the defense of which it is maintaining and to
cooperate in good faith with the Indemnifying Party or the Indemnified
Party, as the case may be, with respect to the defense of any such action.
No Indemnified Party may settle or compromise any claim or consent to
the entry of any judgment with respect to which indemnification is being
sought hereunder without the prior written consent of the Indemnifying
Party, unless such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party from all liability arising
out of such claim. An Indemnifying Party may not, without the prior
written consent of the Indemnified Party, settle or compromise any claim or
consent to the entry of any judgment with respect to which indemnification
is being sought hereunder unless such settlement, compromise or consent
includes an unconditional release of the Indemnified Party from all
liability arising out of such claim and does not contain any equitable
order, judgment or term which in any manner affects, restrains or
interferes with the business of the Indemnified Party or any of the
Indemnified Party's affiliates.
In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written
notice of such claim to the appropriate Indemnifying Party. Such notice
shall specify the basis for such claim. As promptly as possible after the
Indemnified Party has given such notice, such Indemnified Party and the
appropriate Indemnifying Party shall establish the merits and amount of
such claim (by mutual agreement or otherwise) and, within five business
days of the final determination of the merits and amount of such claim, the
Indemnifying Party shall deliver to the Indemnified Party immediately
available funds in an amount equal to such claim as determined hereunder.
If for any reason the indemnification provided for in this Section 3.7
is unavailable to an Indemnified Party or is insufficient to hold it
harmless as contemplated by this Section 3.7, then the Indemnifying Party
shall contribute to the amount paid or payable by the Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the Indemnified Party and the
Indemnifying Party, as well as any other relevant equitable considerations;
provided that in no event shall the liability of any Holder for such
contribution and indemnification exceed, in the aggregate, the dollar
amount of the proceeds received by such Holder upon the sale of Shares
giving rise to such indemnification and contribution obligations.
The obligations of the parties under this Section 3.7 shall be in
addition to any liability which any party may otherwise have to any other
party.
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3.8. Limitations on Registration Rights of Others. The Company
represents and warrants that, except pursuant to this Agreement and
pursuant to rights granted pursuant to the agreements set forth on Exhibit
A hereto, it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company.
4. Rule 144. The Company shall comply with the requirements of
Rule 144 under the Securities Act, as such Rule may be amended from time to
time (or any similar rule or regulation hereafter adopted by the
Commission), regarding the availability of current public information to
the extent required to enable any Holder of Shares to sell Shares without
registration under the Securities Act pursuant to Rule 144 (or any similar
rule or regulation). Upon the request of any Holder of Shares, the Company
will deliver to such Holder a written statement as to whether it has
complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have
obtained the written consent to such amendment, action or omission to act,
of the Holder or Holders of a majority of the Shares (and, in the case of
any amendment, action or omission to act which adversely affects any
specific Holder of Shares or a specific group of Holders of Shares, the
written consent of each such Holder or Holders of a majority of the Shares
held by such group). Each Holder of any Shares at the time shall be bound
by any consent authorized by this Section 5.
6. Nominees for Beneficial Owners. In the event that any Shares
are held by a nominee for the beneficial owner thereof, the beneficial
owner thereof may, at its election, be treated as the Holder of such Shares
for purposes of any request or other action by any Holder or Holders of
Shares pursuant to this Agreement or any determination of any number or
percentage of shares of Shares held by any Holder or Holders of Shares
contemplated by this Agreement. If the beneficial owner of any Shares so
elects, the Company may require assurances reasonably satisfactory to it of
such owner's beneficial ownership of such Shares.
7. Covenants of the Parties.
7.1. Board of Directors.
(a) So long as PGGM and DIHC and their respective Affiliates own
in the aggregate 5% or more of the issued and outstanding shares of Common
Stock, subject to the rights of the stockholders of the Company and the
requirements of Nevada law, the Company shall take all action necessary to
nominate for election to
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the board of directors of the Company (the "Board") at any annual or
special meeting of stockholders at which directors are being elected (or in
connection with a written consent in lieu of a meeting pursuant to which
directors are proposed to be elected) such persons as are necessary to
ensure that after such meeting (assuming all nominees are elected) two
members of the Board are "PGGM Directors" (as hereinafter defined). For
purposes of this Agreement, a "PGGM Director" shall be an individual
nominated by PGGM.
(b) From the date hereof until the earlier to occur of (i) the
date as of which PGGM and DIHC and their respective Affiliates own in the
aggregate less than 25% of the issued and outstanding shares of Common
Stock or (ii) October __, 2002 (the date five years after the Closing
Date), subject to the rights of the stockholders of the Company and the
requirements of the Nevada law:
(i) the Company shall take all action necessary to ensure
that one PGGM Director is appointed to the board affairs committee of
the Board (the "Committee").
(ii) All nominees for election as directors of the Company
by the Board (other than Incumbent Directors and PGGM Directors
nominated pursuant to Section 7.1(a)) shall be persons not affiliated
with PGGM or DIHC or any of their respective Affiliates and shall be
made with the approval of a majority of the members of the Committee,
which majority includes the approval (which will not be unreasonably
withheld) of the PGGM Director serving on the Committee;
(iii) PGGM and DIHC shall vote (or provide written consent
with respect to) all shares of Common Stock over which it exercises
voting authority in favor of the persons nominated as PGGM Directors
pursuant to Section 7.1(a) and all nominees nominated in accordance
with Section 7.1(b)(ii) and all Incumbent Directors nominated for
election as directors of the Company by the Board;
(iv) In the event of any vacancy on the Board, whether
caused by a director's resignation, removal, death or otherwise, the
Company shall take all action necessary to ensure that the successor
to the director whose absence from the Board caused such vacancy shall
be a PGGM Director if the director who caused such vacancy was a PGGM
Director; and
(v) The Company shall not increase the number of directors
constituting the full Board without the prior written consent of PGGM.
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(c) So long as PGGM and DIHC and their respective Affiliates own
in the aggregate 2.5% or more of the issued and outstanding shares of
Common Stock, the Company shall not without the prior written consent of
PGGM modify the policy of the Company with respect to its interest in One
Norwest Center, Denver, Colorado, adopted at a meeting of the Board on
August 13, 1997.
7.2. Leverage Ratio. So long as PGGM and DIHC and their respective
Affiliates own in the aggregate 2.5% or more of the issued and outstanding
shares of Common Stock, the Company shall at all times maintain a Leverage
Ratio not in excess of 0.45 to 1; provided, however, that notwithstanding
the foregoing, (i) the Company may at any time incur Indebtedness in an
amount which does not exceed the principal amount of outstanding
Indebtedness of the Company extended, refinanced, renewed or replaced with
the proceeds thereof, plus any costs associated with the extension
refinancing, renewal or replacement, even if such incurrence causes the
Leverage Ratio to exceed 0.45 to 1, (ii) the Company may incur Indebtedness
if, as of the date on which the Company enters into a binding commitment
with respect to such Indebtedness, the Leverage Ratio including such
Indebtedness did not exceed 0.45 to 1 and (iii) with respect to lines of
credit, the Company may incur Indebtedness under such line, if, as of the
date the Company enters into the line of credit, the Leverage Ratio
including the entire amount of Indebtedness available under such line did
not exceed 0.45 to 1.
7.3. Issuances of Common Stock. From the date hereof until
________, 1998 (the date six months after the Closing Date), the Company
shall not issue or sell any shares of Common Stock or other Equity
Securities, except at a price per share of Common Stock equal to or greater
than $16.00 (appropriately adjusted for stock dividends, stock splits and
the like), except in connection with (i) the conversion of securities or
Indebtedness of the Company into Common Stock by Deutsche Bank AG, (ii) the
conversion of promissory notes of the Company held by Hines Colorado
Limited, (iii) the Company's stock option or management incentive
compensation plans, (iv) the Company's dividend reinvestment plan, and
(v) stock splits or stock dividends.
7.4. Domestic REIT Status. So long as PGGM and DIHC and their
respective Affiliates own in the aggregate 2.5% or more of the issued and
outstanding shares of Common Stock, the Company shall not issue any Equity
Securities in connection with any Public Offering or other sale to any
Non-U.S. Person (as defined in Section 9.02 of the Charter Amendment),
other than in connection with stock splits or stock dividends or under the
Company's dividend reinvestment plan or stock option or management
incentive compensation plans; provided, however, that the Company,
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in connection with any Public Offering of Equity Securities, may issue and
sell up to 15% of the securities issued in such offering to Non-U.S.
Persons.
7.5. Holdback Agreements. Each Holder agrees, if so requested
prior to December 31, 1998, by the managing underwriter in any Public
Offering by the Company, not to effect any sale or distribution of Common
Stock (other than as part of such Public Offering) within such periods
prior to and after the effective date of such registration statement as the
managing underwriter may request and as may be required of executive
officers and directors of the Company after the effective date of such
registration statement; provided that no Holder shall be required to enter
into more than one such agreement. After December 31, 1998, each Holder
will consider entering into such agreements if so requested.
7.6. Restrictions on Transfer. During the Standstill Period, any
Holder and its Affiliates owning 25% or more of the issued and outstanding
shares of Common Stock, shall not assign, transfer or sell any Shares to
any Person or such Person's Affiliates (other than a Permitted Transferee
that agrees in writing to be bound by the provisions of this Agreement) in
any single transaction or series of related transactions if, after such
transaction or transactions, such Person and such Person's Affiliates would
own more than 10% of the then issued and outstanding shares of Common Stock
(other than transfers of Shares from DIHC to PGGM on or prior to
____________, 1998 (the date three months after the Closing Date)).
7.7. Ownership Limit. The Company has taken all action necessary
to ensure that issuance of the Shares to DIHC, DIHC Market Square, Inc. and
PGGM pursuant to the Purchase Agreement and the Loan Agreement shall not be
deemed a violation of Article 8 of the Company's articles of incorporation.
Whenever PGGM or DIHC (or DIHC Market Square, Inc.) proposes to transfer
any Shares to any Person, in accordance with the provisions of Section 8.03
of the articles of incorporation of the Company, the Board shall determine
whether the proposed transfer would jeopardize the Company's status as a
real estate investment trust (a "REIT") under Section 856 of the Internal
Revenue Code of 1986, as amended. If the Board determines that it would
not so jeopardize the Company's REIT status, or if it receives an opinion
of counsel, which counsel and opinion are reasonably satisfactory to the
Board, to the effect that such proposed transfer will not jeopardize the
Company's status as a REIT, the Board shall determine that such transferee
will not be treated as a "Person" within the meaning of Section 8.03(b) of
the Company's articles of incorporation and therefore the ownership of
Shares by such transferee will be exempt from the restrictions imposed by
Article 8 of the Company's articles of incorporation. If the Board
determines that the proposed transfer would jeopardize the Company's REIT
status, the Company shall provide a written explanation to DIHC
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and PGGM of the basis for its determination and shall provide reasonable
access to information regarding the Company's shareholders to DIHC and
PGGM.
7.8. Transfers to PGGM. The Company shall take all action
necessary to ensure that any transfer of Shares from DIHC or DIHC Market
Square, Inc. to PGGM shall not be deemed a violation of Article 8 or
Section 9.01 of the Company's articles of incorporation.
7.9. Share Repurchases. So long as DIHC and PGGM and their
respective Affiliates own in the aggregate 25% or more of the issued and
outstanding shares of Common Stock, in the event the Company proposes to
repurchase any shares of Common Stock from any holder thereof owning
together with its Affiliates 5% or more of the issued and outstanding
shares of Common Stock, DIHC and PGGM shall have the right to require the
Company to repurchase a number of shares of Common Stock held by DIHC and
PGGM equal to the product of (i) the total number of shares proposed to be
repurchased and (ii) a fraction, the numerator of which is (A) the number
of Shares owned by DIHC and PGGM and their respective Affiliates and the
denominator of which is (B) the sum of the number of shares of Common Stock
owned by such holder plus the number of Shares owned by DIHC and PGGM and
their respective Affiliates.
8. Standstill. During the Standstill Period, any Holder that
together with its Affiliates owns 25% or more of the issued and outstanding
shares of Common Stock shall not:
(a) directly or indirectly, purchase or otherwise acquire, or
propose or offer to purchase or otherwise acquire, any Equity Securities
whether by tender offer, market purchase, privately negotiated purchase,
Business Combination or otherwise, if, immediately after such purchase or
acquisition, the Holder Interest of such Holder would equal or exceed the
Initial Percentage;
(b) directly or indirectly propose to the Company or any Person a
Business Combination;
(c) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" to vote (as such terms are used in the
rules promulgated by the Commission under Section 14(a) of the Exchange
Act) or seek to advise, encourage or influence any person or entity with
respect to the voting of any shares of capital stock of the Company,
initiate, propose or otherwise solicit stockholders of the Company for the
approval of one or more stockholder proposals or induce or attempt to
induce any other Person to initiate any stockholder proposal; or
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(d) deposit any Equity Securities into a voting trust or subject
any Equity Securities to any arrangement or agreement with respect to the
voting of such securities or form, join or in any way participate in a
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any Equity Securities, other than as expressly set forth in
Section 7 hereof.
Nothing in this Section 8 shall limit the ability of PGGM Directors to
function in their capacities as members of the Board. The provisions of
this Section 8 may be waived by the Company only upon the approval of a
majority of the Board, excluding all PGGM Directors and shall not be
applicable to actions approved by the majority of the Board, excluding all
PGGM Directors in circumstances in which the PGGM Directors are "interested
directors" under Section 78.140 of the Nevada General Corporation Law.
9. Assignment. This Agreement shall not be assignable by the
parties hereto, except (i) by PGGM, DIHC or any Holder pursuant to a
transfer of Shares permitted hereunder to a Permitted Transferee that
agrees in writing to be bound by the terms hereof (including, without
limitation, Section 7.6 and 8, if applicable) and (ii) the rights to cause
the Company to register Shares pursuant to Section 3 may be assigned by
PGGM, DIHC or any Holder, but only together with all obligations of Holders
under Section 3 and Section 7.5, to a transferee of Shares representing at
least 1% of the issued and outstanding shares of Common Stock, provided
that, within a reasonable time after such transfer, the Company is
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights
are being assigned. Notwithstanding any transfer of Shares in connection
with an assignment permitted by this Section 9, the transferor shall comply
with the obligations set forth in Section 2 hereof.
10. Miscellaneous. This Agreement constitutes the sole
understanding of the parties hereto with respect to the subject matter
hereof; provided, however, that this provision is not intended to abrogate
any other written agreement between or among the parties executed with or
after this Agreement or any written agreement pertaining to another subject
matter. No amendment of this Agreement shall be binding unless made in
writing and duly executed by the parties hereto. This Agreement shall be
construed in accordance with and governed by the laws of the State of New
York without regard to conflict of laws principles thereof. No provision
of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or
judicial authority or by any board of arbitrators by reason of such party
or its counsel having or being deemed to have structured or drafted such
provision. Unless otherwise expressly provided herein, all references in
this Agreement to Section(s) shall refer to
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the Section(s) of this Agreement. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the
meaning of this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
11. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram,
by telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or
at such other address for a party as shall be specified in a notice given
in accordance with this Section 11):
(a) if to PGGM: Pensioenfonds PGGM
Kroostweg-Noord 149
3704 DV Zeist
The Netherlands
P. O. Box 117
3700 AC Zeist
The Netherlands
Telecopy: 011 (31.30) 696-3388
Attention: Mr. Jan van der Vlist
Ms. Anneke C. van de Puttelaar
with a copy to: Richards & O'Neil, LLP
885 Third Avenue
New York, New York 10022-4873
Telecopy: (212) 750-9022
Attention: Robert M. Safron, Esq.
(b) if to DIHC: 200 Galleria Parkway, NW
Suite 2000
Atlanta, Georgia 30339
Telecopy: (770) 951-9349
Attention: Mr. Robert T. Sorrentino
Mr. Michael F. Perkins
with a copy to: Richards & O'Neil, LLP
885 Third Avenue
New York, New York 10022-4873
Telecopy: (212) 750-9022
Attention: Robert M. Safron, Esq.
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<PAGE>
(c) if to the Company: 126 East 56th Street
New York, New York 10022
Telecopy: (212) 605-7199
Attention: Mr. John S. Moody
with a copy to: King & Spalding
191 Peachtree Street, NE
Atlanta, Georgia 30303
Telecopy: (404) 572-5148
Attention: William B. Fryer, Esq.
(d) If to any other Holder to the address set forth in the notice
referred to in Section 9 hereof.
12. Remedy. In the event that the Company materially breaches its
obligations to PGGM under Sections 7.1 and 7.2 hereof and such breach
continues for a period of 30 days after PGGM gives the Company written
notice of such breach, the obligations of PGGM under Sections 7.5, 7.6 and
8 shall thereafter be suspended for such period of time as such breach
continues; provided, however, that upon any such breach being cured by the
Company or waived by PGGM, PGGM shall again be obligated to comply with the
provisions of Sections 7.5, 7.6 and 8.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
CORNERSTONE PROPERTIES INC.
By: /s/ RODNEY C. DIMOCK
--------------------------------
Rodney C. Dimock
Executive Vice President
DUTCH INSTITUTIONAL HOLDING
COMPANY, INC.
By: /s/ROBERT T. SORRENTINO
--------------------------------
Robert T. Sorrentino
Vice President
STICHTING PENSIOENFONDS VOOR DE
GEZONDHEID, GEESTELIJKE EN
MAATSCHAPPELIJKE BELANGEN
By: /s/ JAN H.W.R. VAN DER VLIST
--------------------------------
Jan H.W.R. van der Vlist
Attorney-in-Fact
By: Anneke C. van de Puttelaar
--------------------------------
Anneke C. van de Puttelaar
Attorney-in-Fact
[Signature Page to Registration Rights and Voting Agreement]
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<PAGE>
EXHIBIT A
TO REGISTRATION RIGHTS AND VOTING AGREEMENT
Stockholders' Agreement dated November 22, 1996, between the Company and
New York State Teachers' Retirement System.
Stockholders' Agreement dated November 7, 1996, between the Company and
Hexalon Real Estate, Inc.
Convertible Promissory Note dated January 1, 1996 issued by the Company to
Hines Colorado Limited.
Letter Agreement dated July 10, 1995 between the Company and Deutsche Bank
AG.
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<PAGE>
EXHIBIT C
JOINT FILING AGREEMENT BETWEEN
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID
GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
-and-
DUTCH INSTITUTIONAL HOLDING COMPANY, INC.
AGREEMENT, dated as of October 30, 1997 by and between Stichting
Pensioenfonds Voor De Gezondheid Geestelijke en Maatschappelijke Belangen
("PGGM") and Dutch Institutional Holding Company, Inc. ("DIHC").
W I T N E S S E T H:
WHEREAS, in accordance with Rule 13d-1(f) under the Securities and Exchange
Act of 1934 (the "Act"), only one Statement and any amendments thereto need be
filed whenever two or more persons are required to file such a Statement or any
amendments thereto pursuant to Section 13(d) of the Act with respect to the same
securities, provided that said persons agree in writing that such Statement or
any amendments thereto is filed on behalf of them.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto agree as follows:
PGGM and DIHC do hereby agree, in accordance with Rule 13d-1(f) under the
Act, to file a Schedule 13D and any subsequent amendments thereto relating to
their beneficial ownership of the Common Stock of Cornerstone Properties, Inc.,
and do hereby further agree that said Schedule 13D and all said subsequent
amendments shall be filed on behalf of each of them.
STICHTING PENSIOENFONDS VOOR
DE GEZONDHEID GEESTELIJKE EN
MAATSCHAPPELIJKE BELANGEN
By:/S/JAN H.W.R. VAN DER VLIST
--------------------------------
Jan H.W.R. van der Vlist
Attorney-in-Fact
By:/S/ANNEKE C. VAN DE PUTTELAAR
--------------------------------
Anneke C. van de Puttelaar
Attorney-in-Fact
DUTCH INSTITUTIONAL HOLDING
COMPANY, INC.
By:/S/ROBERT T. SORRENTINO
--------------------------------
Robert T. Sorrentino
Vice President
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