<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
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)
June 22, 1998
(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. / /
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SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP NO. 218916104
- --------------------------------------------------------------------------------
(1) Name of reporting person STICHTING PENSIOENFONDS VOOR
DE GEZONDHEID GEESTELIJKE EN
- ------------------------------------ MAATSCHAPPELIJKE BELANGEN
S.S. or I.R.S. identification
Nos. of above persons
- ------------------------------------
- -------------------------------------- -----------------------------------------
(2) Check the appropriate box if a
member of a group (a) / /
(see instructions) (b) / /
- -------------------------------------- -----------------------------------------
(3) SEC use only
- -------------------------------------- -----------------------------------------
(4) Source of funds
(see instructions)
WC
- -------------------------------------- -----------------------------------------
(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 45,781,703
- -------------------------------------- -----------------------------------------
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- -------------------------------------- -----------------------------------------
(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) 40.47%
- -------------------------------------- -----------------------------------------
(14) Type of reporting person
(see instructions) HC/EP
- -------------------------------------- -----------------------------------------
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- --------------------------------------------------------------------------------
CUSIP NO. 218916104
- --------------------------------------------------------------------------------
(1) Names of reporting person
------------------------- DUTCH INSTITUTIONAL HOLDING COMPANY,
INC.
S.S. or I.R.S. identification
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) WC
- -------------------------------------- -----------------------------------------
(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) 5.95%
- -------------------------------------- -----------------------------------------
(14) Type of reporting person
(see instructions) CO
- -------------------------------------- -----------------------------------------
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CORNERSTONE PROPERTIES, INC. SCHEDULE 13D
AMENDMENT NO. 2
This Amendment No. 2 ("AMENDMENT NO. 2") amends and restates a Statement on
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"), as amended by an Amendment No. 1,
dated as of October 30, 1997 ("AMENDMENT NO. 1").
This Amendment No. 2 is being filed to reflect (i) an agreement by PGGM to
purchase additional shares of common stock, without par value (the "COMMON
STOCK"), of Cornerstone Properties Inc. (the "COMPANY") and certain transaction
contemplated thereby which permits PGGM to continue to influence the control of
the Company and (ii) a voting agreement entered into by PGGM and Dutch
Institutional Holding Company, Inc. ("DIHC"), under which PGGM and DIHC agreed
to vote the shares of Common Stock owned by them in favor of a merger of William
Wilson & Associates, a California Corporation, with and into the Company and
certain transactions contemplated by such merger.
ITEM 1. SECURITY AND ISSUER.
This Statement relates to the Common Stock of the Company which, to the
best knowledge of the persons filing this Statement, is a corporation organized
under the laws of Nevada with principal executive offices at 126 East 56th
Street, New York, New York 10022.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is 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").
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID GEESTELIJKE EN MAATSCHAPPELIJKE
BELANGEN
(a) Stichting Pensioenfonds Voor De Gezondheid Geestelijke en
Maatschappelijke Belangen.
(b) The business address of PGGM is Kroostweg-Noord 149, 3700 AC Zeist,
The Netherlands. The name and business address of each executive officer and
director of PGGM is set forth on EXHIBIT A and is incorporated by reference
herein.
(c) The principal business of PGGM is to serve as a pension fund in The
Netherlands which invests for the benefit of health care industry workers,
including nurses and medical technicians, but excluding self-employed doctors.
The present principal occupation of each executive officer and director of PGGM
is set forth on EXHIBIT A and is incorporated by reference herein.
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(d) Neither PGGM nor any of its executive officers or directors has,
during the last five years, been convicted in any criminal proceeding (excluding
traffic violations and similar misdemeanors).
(e) Neither PGGM nor any of its executive officers or directors has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which proceeding it
or he or she was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws,
decree or final order.
(f) PGGM is a "stichting" organized under the laws of The Netherlands.
The citizenship of each executive officer and director of PGGM is set forth on
EXHIBIT A and is incorporated by reference herein.
DUTCH INSTITUTIONAL HOLDING COMPANY, INC.
(a) Dutch Institutional Holding Company, Inc., a wholly-owned subsidiary
of PGGM.
(b) The business address of DIHC is 200 Galleria Parkway, N.W.,
Suite 2000, Atlanta, Georgia 30339. The name and business address of each
executive officer and director of DIHC is set forth on EXHIBIT B and is
incorporated by reference herein.
(c) The principal business of DIHC is to oversee the acquisition,
ownership, management and disposition of PGGM's direct real estate investments
in the United States. The present principal occupation of each executive
officer and director of DIHC is set forth on EXHIBIT B and is incorporated by
reference herein.
(d) Neither DIHC nor any of its executive officers or directors has,
during the last five years, been convicted in any criminal proceeding (excluding
traffic violations and similar misdemeanors).
(e) Neither DIHC nor any of its executive officers or directors has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which proceeding it
or he or she was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws,
decree or final order.
(f) DIHC is a corporation organized under the laws of Delaware. The
citizenship of each executive officer and director of DIHC is set forth on
EXHIBIT B and is incorporated by reference herein.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Pursuant to the Loan Purchase Agreement dated as of August 18, 1997
between PGGM as the "Seller" and the Company as the "Purchaser" (the "1997 LOAN
PURCHASE AGREEMENT") which is attached hereto as EXHIBIT C and is incorporated
by reference herein, PGGM sold and the
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Company purchased, subject to the terms and conditions in the loan Purchase
Agreement, the Purchased Loans and the Purchased Loan Documents, as defined in
the 1997 Loan Purchase Agreement and as more particularly identified in
Schedule 3.07(a) of the 1997 Loan Purchase Agreement, attached hereto as
EXHIBIT D, for an aggregate consideration of $779,432,000.00 paid by the Company
to PGGM as follows: (i) $220,092,000.00 by wire transfer in immediately
available funds, (ii) Purchase Money Notes and Purchase Money Mortgages
evidencing a principal amount of $120,000,000.00, and (iii) 27,458,750 validly
issued, fully paid and nonassessable shares of Common Stock of the Company at an
agreed value of $16.00 per share.
Pursuant to the Stock Purchase Agreement dated as of August 18, 1997
between DIHC as the "Seller" and the Company as the "Purchaser" (the "1997 STOCK
PURCHASE AGREEMENT") which is attached hereto as EXHIBIT E and is incorporated
by reference herein, DIHC sold and the Company purchased, subject to the terms
and conditions in the 1997 Stock Purchase Agreement, the Seller Subsidiary
Shares, as defined in the 1997 Stock Purchase Agreement and as more particularly
identified in Schedule 3.02 and 3.03(a) of the 1997 Stock Purchase Agreement,
attached hereto as EXHIBIT F, for an aggregate consideration of up to
$277,116,000.00 paid by the Company to DIHC as follows: (i) $39,456,000.00 by
wire transfer in immediately available funds, (ii) Purchase Money Notes and
Purchase Money Mortgages evidencing a principal amount of $130,000,000.00, and
(iii) 6,728,750 validly issued, fully paid and nonassessable shares of Common
Stock of the Company at an agreed value of $16.00 per share. Through the sale
of the Seller Subsidiary Shares pursuant to the 1997 Stock Purchase Agreement,
DIHC sold indirect interests in the properties listed on Schedule 1.01(1) of the
1997 Stock Purchase Agreement, attached hereto as EXHIBIT G.
(b) Pursuant to the Stock Purchase Agreement dated June 22, 1998 between
the Company and PGGM, as the "Purchaser" (the "1998 STOCK PURCHASE AGREEMENT")
which is attached hereto as EXHIBIT H and is incorporated by reference herein,
PGGM agreed to purchase and the Company agreed to sell, subject to the terms and
conditions of the 1998 Stock Purchase Agreement, an aggregate of 11,594,203
shares of Common Stock of the Company at a per share price equal to $17.25 (the
"PURCHASE PRICE"); provided, however, if the price under the Contribution
Agreement (as defined in Item 6, paragraph 4 below) is less than $17.25, the
Purchase Price shall be reduced to an amount equal to such price. In the event
the Purchase Price is less than $17.25, the number of shares to be purchased
under the 1998 Stock Purchase Agreement will equal $200,000,000 divided by the
Purchase Price (rounded to the nearest whole number). At the closing of the
transactions contemplated by the 1998 Stock Purchase Agreement which will occur
on the date the transactions under the Contribution Agreement close (the
"CLOSING"), PGGM agreed to deliver to the Company by wire transfer of
immediately available funds an amount equal to the number of shares of Common
Stock purchased multiplied by the Purchase Price.
ITEM 4. PURPOSE OF TRANSACTIONS.
The Reporting Persons have acquired shares of Common Stock previously and
intend to acquire the shares of Common Stock included by them in this Statement
for investment. PGGM also intends to influence the control of the Company
inasmuch as it has the right to designate two members to the Board of Directors
of the Company (the "COMPANY BOARD"). PGGM and DIHC may sell and buy shares of
the Common Stock from time to time, subject to the restrictions contained in the
Amended and Restated Registration Rights and Voting Agreement described below in
Item 6.
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The Reporting Persons have no plan or proposal which relates to or would result
in any of the actions enumerated in Item 4 of Schedule 13D, except as described
in Item 6 below.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) PGGM acquired 27,458,750 shares of Common Stock under the 1997 Loan
Purchase Agreement and has agreed to acquire, subject to the terms and
conditions of the 1998 Stock Purchase Agreement, 11,594,203 shares of Common
Stock, as adjusted pursuant to Section 2.01 of the 1998 Stock Purchase
Agreement (the "1998 SHARES") (representing in the aggregate approximately
34.52% of the outstanding shares of Common Stock after the issuance of the
1998 shares). Under the 1997 Stock Purchase Agreement, DIHC acquired
6,726,750 shares of Common Stock (representing approximately 5.95% of the
outstanding Common Stock after the issuance of the 1998 Shares). 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 I, 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, 45,781,703 shares of Common Stock
(representing approximately 40.47% of the outstanding Common Stock after the
issuance of the 1998 Shares). The issuance of the 1998 Shares is, however,
conditioned upon and will occur, if at all, simultaneously with the Closing
under the Contribution Agreement, pursuant to which up to 88,542,840 shares
of Common Stock may be issued. Therefore, when PGGM purchases the 1998
Shares, giving effect to the issuance of the maximum number of shares of
Common Stock issuable pursuant to the Contribution Agreement, it is estimated
that PGGM will beneficially own approximately 22.7% of the Common Stock.
(b) As of the date of filing of this Amendment No. 2, 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 45,781,703(1) 27,458,750 27,458,750 11,596,203
- ---- ------------------ --------------- ------------------ --------------------
DIHC 6,728,750 6,726,750 6,726,750 2,000
- ---- ------------------ --------------- ------------------ --------------------
(c) None.
(d) None.
- --------------------
(1) SEE last sentence of paragraph (a) of Item 5.
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(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
Except for the information set forth in Items 3, 4, and 5 of this Amendment
No. 2 and as described below in this Item 6, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) between or
among the persons named in Item 2 above or between such persons and any other
person with respect to the Common Stock.
1. AMENDED AND RESTATED REGISTRATION RIGHTS AND VOTING
AGREEMENT
In connection with the transactions contemplated by the 1997 Loan Purchase
Agreement and 1997 Stock Purchase Agreement (collectively, the "PURCHASE
AGREEMENTS"), PGGM, DIHC and the Company entered into a Registration Rights and
Voting Agreement, the form of which is attached hereto as EXHIBIT J hereto (the
"1997 REGISTRATION RIGHTS AGREEMENT"). Upon the Closing, PGGM, DIHC and the
Company have agreed to enter into an Amended and Restated Registration Rights
and Voting Agreement, the form of which is attached to the 1998 Stock Purchase
Agreement as Exhibit A, which is attached hereto as EXHIBIT K and is
incorporated by reference herein. Except as expressly noted below in this Item
6, paragraph 1, the provisions of the 1997 Registration Rights Agreement are
identical to those of the Amended and Restated Registration Rights and Voting
Agreement.
A. REGISTRATION RIGHTS
DEMAND REGISTRATION. The Amended and Restated Registration Rights and
Voting Agreement will provide that, subject to certain limitations, upon the
Closing, PGGM and DIHC will have the right to demand, on no more than eight
occasions, that the Company register all or a portion of the shares of Common
Stock issued to PGGM and DIHC in connection with the Purchase Agreements and
1998 Stock Purchase Agreement, subject to a requirement that the market value of
the shares requested to be registered as of the date of any demand must equal or
exceed $75 million (or the total aggregate amount of shares held by PGGM and
DIHC, if less than $75 million). The Company must use its commercially
reasonable efforts to effect any such registration on demand and will have the
ability to defer the filing of a registration statement relating to a demand in
certain circumstances.
SHELF REGISTRATION. The Company has registered all of the shares of Common
Stock issued to PGGM and DIHC in connection with the Purchase Agreements (and
will amend the applicable registration statement to include the 1998 Shares) on
a registration statement which provides for the offering of such securities on a
delayed or continuous basis. Prior to selling Common Stock under such
registration statement, PGGM and DIHC must give written notice to the Company of
their intent to sell shares of Common Stock. The Company will have the right in
certain circumstances to defer such intended sales.
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PIGGYBACK REGISTRATION. In the event that the Company exercises its rights
to defer a requested registration, suspend the effectiveness of the shelf
registration or sales of Common Stock by PGGM and DIHC due to a contemplated
public offering of Common Stock, PGGM and DIHC will have the right to include
their shares in the Company's registration statement relating to such public
offering. These piggyback registration rights will be subject to certain
customary limitations as well as limitations contained in the other agreements
between the Company and its stockholders.
All such registrations will be at the expense of the Company, except that
each of PGGM and DIHC will bear all underwriting discounts and commissions and
fees and expenses of its own counsel.
B. BOARD REPRESENTATION
The Amended and Restated Registration Rights and Voting Agreement will
provide that as long as PGGM and DIHC and their affiliates own in the aggregate
5% or more of the issued and outstanding shares of Common Stock, the Company
will take all action necessary to ensure that two members of the Company Board
are individuals designated by PGGM ("PGGM DIRECTORS"). In addition, until the
earlier to occur of (a) the date on which PGGM and DIHC and their affiliates own
in the aggregate less than 25% of the issued and outstanding shares of Common
Stock and (b) October 27, 2002, (i) the Company will take all action necessary
to ensure that one PGGM Director is appointed to the board affairs committee of
the Company Board (the "BOARD AFFAIRS COMMITTEE"), (ii) all nominees for
directors of the Company by the Company Board (other than "INCUMBENT DIRECTORS"
(as defined below) and PGGM Directors) shall be persons not affiliated with PGGM
or DIHC or any of their affiliates and will be made with the approval of a
majority of the members of the Board Affairs Committee, which majority will
include the approval (which will not be unreasonably withheld) of the PGGM
nominee serving on the Board Affairs Committee, (iii) each of PGGM and DIHC will
vote (or provide written consent with respect to) all shares of Common Stock
over which it will exercise voting authority in favor of the persons nominated
as PGGM Directors and all nominees of the Company Board nominated in accordance
with (ii), above and all Incumbent Directors, (iv) the Company will take all
action necessary to ensure that vacancies on the Company Board caused by the
resignation, removal or death of a PGGM Director are filled with a PGGM
Director, and (v) the number of directors constituting the full Company Board
will not be increased without the prior written consent of PGGM.
"INCUMBENT DIRECTORS" means (i) all individuals constituting the
Company Board at the Closing, (ii) all individuals thereafter
designated as nominees to the Company Board by New York State
Teachers' Retirement System pursuant to a letter agreement dated
November 22, 1996, (iii) all individuals thereafter designated as
nominees to the Company Board by Hexalon Real Estate, Inc. pursuant to
a letter agreement dated November 7, 1996, and (iv) one individual at
any time thereafter designated by Deutsche Bank AG as a nominee to the
Company Board, (v) Messrs. William Wilson III, _______ and _______ as
nominees to the Company Board pursuant to an agreement dated as of
June 22, 1998.
The definition of "Incumbent Directors" in the 1997 Registration Rights
Agreement does not include clause (v).
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C. TRANSFER RESTRICTIONS; 10% OWNERSHIP LIMITATION
Under the Amended and Restated Registration Rights and Voting Agreement,
each of PGGM and DIHC will agree to the following restriction on its rights to
transfer and acquire shares of the Common Stock of the Company: until the
earlier to occur of October 27, 2000 and the date as of which PGGM and DIHC and
their affiliates cease to own 25% or more of the issued and outstanding shares
of Common Stock, PGGM and DIHC will agree not to assign, transfer or sell any
shares of Common Stock to any person (other than a permitted transferee that
agrees in writing to be bound by the provisions of the Amended and Related
Registration Rights and Voting Agreement) if as a result of the sale, such
person and affiliates of such person would own collectively more than 10% of the
Common Stock then outstanding. This limitation will not apply in the case of
any transferee that is (a) a 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 (b) a Non-U.S. Person (as defined in Section 9.02 of
the Amendment to the Company's Charter (the "CHARTER AMENDMENT")) that is not
controlled by a U.S. Person (as defined in the Charter Amendment). The Charter
Amendment is attached to the 1997 Loan Purchase Agreement as Exhibit 5.02(a),
which is attached hereto as EXHIBIT L and is incorporated by reference herein.
D. STANDSTILL AGREEMENT
Under the Amended and Restated Registration Rights and Voting Agreement,
each of PGGM and DIHC will agree that until the earlier to occur of October 27,
2000 and the date as of which PGGM and DIHC and their affiliates cease to own at
least 25% of the Common Stock they shall not:
(i) directly or indirectly purchase or otherwise acquire, or
propose or offer to purchase or otherwise acquire, any "EQUITY SECURITIES"
(as defined below) if, immediately after such purchase or acquisition, PGGM
and DIHC and their respective affiliates would own 41% or more of the
Common Stock;
(ii) directly or indirectly propose to the Company or any person or
entity a "BUSINESS COMBINATION" (as defined below);
(iii) make, or in any way participate 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 Securities Exchange Act of 1934 (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 or entity to initiate any stockholder proposal;
or
(iv) deposit any equity securities of the Company 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)
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of the Exchange Act) with respect to any equity securities, except as
contemplated by this Agreement.
The Amended and Restated Registration Rights and Voting Agreement will
provide that nothing in the provisions described in clauses (i), (ii), (iii),
and (iv) above limits the ability of PGGM Directors to function in their
capacities as members of the Company Board.
The foregoing standstill provision may be waived by the Company only upon
the approval of a majority of its Board, excluding all PGGM Directors, and is
not applicable to actions approved by the majority of the Company 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.
"BUSINESS COMBINATION" means any one of the following transactions:
(i) Any merger or consolidation of the Company or any subsidiary
thereof with any person or entity (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 or entity 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 either of the
Reporting Persons or any affiliate thereof 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 proportionate share of the Reporting
Persons or any affiliate thereof that together own 25% or more of the
issued and outstanding Common Stock (whether or not with or into or
otherwise involving PGGM or any affiliate of PGGM).
"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.
E. AMENDED AND RESTATED BYLAWS
The Amended and Restated Registration Rights and Voting Agreement will
provide that from the date of adoption of the Amended and Restated Bylaws of the
Company, the form of which is attached to the 1998 Stock Purchase Agreement as
Exhibit D, which is attached hereto as EXHIBIT M and incorporated by reference
(the "AMENDED BYLAWS") until the third anniversary of such date, each of the
Reporting Persons shall (i) vote all shares of Common Stock over which it
exercises voting authority in favor of the persons nominated as Wilson Directors
(as defined in the Amended Bylaws); and (ii) use commercially reasonable efforts
to cause the PGGM Directors, in considering the
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nominees proposed by William Wilson, III ("WILSON III") or such other person as
is designated by Wilson III for inclusion in the Company Board's list of
nominees for election as director to approve in all cases Wilson III and in
considering other persons nominated as Wilson Directors, not to unreasonably
withhold its approval. The Reporting Persons also agree not to vote to repeal
or amend the Amended Bylaws, where such amendment is covered by Section 10.01(b)
of such Amended Bylaws, unless such amendment is approved by the Wilson
Directors.
The 1997 Registration Rights Agreement does not contain any of the
provisions described in this paragraph E.
F. LEVERAGE RATIO
The Amended and Restated Registration Rights and Voting Agreement will
provide that as long as PGGM and DIHC and their affiliates are the record owner
of at least 2.5% of the issued and outstanding shares of Common Stock, the
Company will maintain a ratio of Indebtedness to Total Market Capitalization
("LEVERAGE RATIO") of at least 0.45 to 1.
(i) "INDEBTEDNESS" means: (a) all indebtedness, 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
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 the Company (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 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, under acceptance, letter of
credit or similar facilities, (g) all obligations to purchase, redeem,
retire, decease or otherwise acquire for value any capital stock of the
Company 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 the Company,
(i) all Indebtedness of others referred to in clauses (a) through (f) above
guaranteed directly or indirectly in any manner by the Company, or in
effect guaranteed directly or indirectly by the Company 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 for 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 the Company, even though
the Company has not assumed or become liable for the payment of such
Indebtedness.
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<PAGE>
(ii) "TOTAL MARKET CAPITALIZATION" means on any day: the sum of
(i) the Company's total Indebtedness on such day, 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) and issued and outstanding units
of limited partnership in Cornerstone Properties Limited Partnership, a
Delaware limited partnership (the "OPERATING PARTNERSHIP"), times (y) the
average of the closing prices of the Common Stock for the five-day period
immediately preceding the day in question.
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 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.
G. LIMITATIONS ON ISSUANCE OF COMMON STOCK OUTSIDE THE UNITED STATES
So long as the Reporting Persons and their affiliates own 2.5% or more of
the issued and outstanding shares of Common Stock, the Company will agree under
the Amended and Restated Registration Rights and Voting Agreement that it will
not issue any Equity Securities in connection with any public offering or other
sale to any Non-U.S. Person, 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 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.
H. ONE NORWEST CENTER POLICY
So long as the Reporting Persons and their affiliates own 2.5% of more of
the issued and outstanding shares of Common Stock, the Company will agree under
the Amended and Restated Registration Rights and Voting Agreement that it will
not alter the policy adopted by the Company Board in August 1997 regarding its
interest in One Norwest Center without the prior written consent of PGGM. The
policy requires that the Company not dispose of its interest income derived from
One Norwest Center except in a tax deferred exchange of properties or in a
similar tax deferred manner, and also applies to all properties which the
Company may receive in any such exchange transaction.
I. HOLDBACK AGREEMENTS
If prior to December 31, 1998 the managing underwriter in any public
offering by the Company so requests, the Reporting Persons will agree under the
Amended and Restated Registration Rights and Voting Agreement that they will not
effect any sale or distribution of Common Stock
Page 14 of 94
<PAGE>
(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. The Reporting Persons shall only be obligated to
comply with such a request on no more than one occasion. After December 31,
1998, the Reporting Persons shall consider, but need not comply with, any such
request by an underwriter.
J. CERTAIN TRANSFERS OF COMMON STOCK TO PGGM
Under the Amended and Restated Registration Rights and Voting Agreement,
the Company will agree to take all action necessary to ensure that any transfer
of shares of Common Stock from DIHC or DIHC Market Square, Inc. to PGGM will not
be deemed a violation of Article 8 or Section 9.01 of the Company's charter.
K. SHARE REPURCHASES
Under the Amended and Restated Registration Rights and Voting Agreement, so
long as the Reporting Persons and their 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, the Reporting Persons shall have the right
to require the Company to repurchase a number of shares of Common Stock held by
the Reporting Persons 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 the Reporting Persons and their 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 of Common Stock owned by the
Reporting Persons and their affiliates.
2. REVISIONS TO THE COMPANY'S CHARTER
The Purchase Agreements required the Company to amend the Company's charter
to include new provisions designed to assist the Company in becoming, and
thereafter remaining, a "domestically controlled REIT" under the Internal
Revenue Code of 1986, as amended (the "CODE"). The Charter Amendment provides
that shares of the Company's stock cannot be transferred from a U.S. Person to a
Non-U.S. Person if such transfer would cause a Non-U.S. Person to become the
direct or indirect owner of more than 3% of the value of the outstanding shares
of any class of capital stock of the Company (the "Non U.S. Ownership Limit").
Shares of stock acquired in excess of the Non-US. Ownership Limit will be deemed
to be transferred to the Company as trustee for the benefit of the person to
whom the person who acquired the excess shares later transfers such shares. In
addition, excess shares will be deemed to have been offered for sale to the
Company or its designee at their "fair market value" for a 90-day period.
3. REVISIONS TO THE COMPANY'S BYLAWS
The Amended Bylaws required to be adopted by the Company on or prior to the
Closing will provide that (a) as long as PGGM and DIHC and their affiliates own
in the aggregate 5% or more of the issued and outstanding shares of Common
Stock, the Company Board will nominate two PGGM
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<PAGE>
Directors for election to the Company Board at any meeting of stockholders at
which directors are being elected; and (b) during the period that ends on the
earlier of the date on which the Reporting Persons and their affiliates own in
the aggregate less than 25% of the issued and outstanding shares of Common Stock
of the Company or October 31, 2002 (the "PGGM PERIOD"), (i) the number of
directors constituting the Company Board may not be increased or decreased
without the approval of the majority of the Board Affairs Committee, which
majority shall include at least one PGGM Director, if a member of such
committee; (ii) no director of the Company will be a person affiliated with the
Reporting Persons or their affiliates other than the two PGGM Directors; (iii)
all nominees for directors of the Company by the Company Board (other than PGGM
Directors, Wilson III and Incumbent Directors) must first receive the
affirmative vote of a majority of the members of the Board Affairs Committee,
which majority must include at least one PGGM Director, if a member of such
committee; (iv) the members of each committee of the Company Board except the
audit and compensation committee shall include at least one PGGM Director (if
any are members of the Company Board); (v) the duties and responsibilities of
the Board Affairs Committee will not be amended without the approval of all PGGM
Directors; and (vi) no fewer than half of the members of the investment
committee shall be independent.
The Amended Bylaws will further provide that (i) during the PGGM Period,
any amendment of the Amended Bylaws relating to the rights of the Reporting
Persons or the PGGM Directors, which rights are specific during the PGGM Period
to DIHC, PGGM or the PGGM Directors and not granted to directors generally, will
require the affirmative of all of the PGGM Directors; and (ii) so long as the
Reporting Persons and their affiliates own in the aggregate 5% or more of the
issued and outstanding shares of Common Stock of the Company, amendment by the
Company Board of the provisions of the Bylaws related to (i) above shall require
the affirmative vote of all of the PGGM Directors.
4. 1998 STOCK PURCHASE AGREEMENT AND VOTING AGREEMENT
The Closing of the transactions contemplated by the 1998 Stock Purchase
Agreement is conditioned on, among other things, the closing of the transactions
contemplated by the Contribution Agreement and Plan of Merger by and among the
Company, the Operating Partnership and William Wilson & Associates, a California
corporation ("WW&A") and certain affiliated partnerships dated as of June 22,
1998 (the "CONTRIBUTION AGREEMENT") occurring simultaneously. The Contribution
Agreement provides for, among other things, (i) the merger of WW&A with and into
the Company (the "MERGER"); and (ii) the issuance of shares of Common Stock and
units of limited partnership interest in the Operating Partnership. The closing
of the Contribution Agreement is conditioned on, among other things, obtaining
approval of the stockholders of the Company.
A. VOTING AGREEMENT
Simultaneously with entering the 1998 Stock Purchase Agreement, the
Reporting Persons entered into a Voting Agreement with WW&A and the Company
dated June 22, 1998 (the "VOTING AGREEMENT"), the form of which is attached
hereto as EXHIBIT N and is incorporated by reference herein. Under the Voting
Agreement, the Reporting Persons agreed to vote the shares owned by the
Reporting Persons on June 22, 1998 and any shares acquired after such date in
favor of the transactions contemplated by the Contribution Agreement, including
the Merger. In addition, if the
Page 16 of 94
<PAGE>
Company or any other person seeks a vote of the Company's stockholders with
respect to any transaction or any other matter which may contradict any
provision of the Contribution Agreement or the Voting Agreement or may make it
more difficult or less desirable for the Company to consummate the transactions
contemplated by the Contribution Agreement, the Reporting Persons agreed to vote
their shares of Common Stock in a manner most favorable to the consummation of
the transactions contemplated by the Contribution Agreement.
B. STANDSTILL
Until the closing of the transactions contemplated by the Contribution
Agreement, the Reporting Persons have agreed pursuant to the Voting Agreement
that they will not:
(i) directly or indirectly propose to the Company or any person or
entity a Business Combination;
(ii) make, or in any way participate 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 or
entity to initiate any stockholder proposal; or
(iii) deposit any equity securities of the Company 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, except as contemplated
by this Agreement.
The Voting Agreement also provides that nothing in the provisions described
in clauses (i), (ii) and (iii) above limits the ability of PGGM Directors to
function in their capacities as members of the Company Board. The foregoing
standstill provision may be waived by the Company only upon the approval of a
majority of its Board, excluding all PGGM Directors, and is not applicable to
actions approved by the majority of the Company Board, excluding all PGGM
Directors in circumstances in which the PGGM Directs are "interested directors"
under Section 78.140 of the Nevada General Corporation Law.
The Voting Agreement by its terms terminates on the earlier to occur of (i)
December 31, 1998 and (ii) the date upon which the Contribution Agreement is
terminated or the transactions thereunder are consummated.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT A, which appears on page 20 of this Amendment No. 2, contains
the name, citizenship, office, business address and present principal occupation
of each executive officer and director of PGGM.
Page 17 of 94
<PAGE>
EXHIBIT B, which appears on page 22 of this Amendment No. 2, contains
the name, citizenship, office, business address and present principal occupation
of each executive officer and director of DIHC.
EXHIBIT C, previously filed, is the Loan Purchase Agreement by PGGM and the
Company dated as of August 18, 1997.
EXHIBIT D, previously filed, is Schedule 3.07(a) of the Loan Purchase
Agreement, which sets forth the Purchased Loans and the Purchased Loan Documents
of PGGM transferred to the Company.
EXHIBIT E, previously filed, is the Stock Purchase Agreement by DIHC and
the Company dated as of August 18, 1997.
EXHIBIT F, previously filed, are Schedules 3.02 and 3.03(a) of the 1997
Stock Purchase Agreement, which set forth the Seller Subsidiary Shares of DIHC
transferred to the Company.
EXHIBIT G, previously filed, is Schedule 1.01(1) of the 1997 Stock Purchase
Agreement, which sets forth the properties of DIHC transferred to the Company.
EXHIBIT H, which appears on page 23 of this Amendment No. 2, is the
Stock Purchase Agreement entered into by the Company and PGGM on June 22, 1998.
EXHIBIT I, previously filed as Exhibit A to Amendment No. 1, is a copy of
the Common Stock Purchase Agreement referred to in Item 5 hereof.
EXHIBIT J, previously filed as Exhibit B to Amendment No. 1, 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 K, which appears on page 38 of this Amendment No. 2, is the form
of the Amended and Restated Registration Rights and Voting Agreement which is
proposed to be entered into by PGGM, DIHC, and the Company.
EXHIBIT L, previously filed as Exhibit I to Amendment No. 1, is the
amendment to the Company's Charter.
EXHIBIT M, which appears on page 72 of this Amendment No. 2, is the
proposed Amended and Restated Bylaws of the Company.
EXHIBIT N, which appears on page 89 of this Amendment No. 2, is the
Voting Agreement entered into by the Company, WW&A, PGGM and DIHC on June 22,
1998.
EXHIBIT O, previously filed as Exhibit C to Amendment No. 1, is the Joint
Filing Agreement between PGGM and DIHC.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
Page 18 of 94
<PAGE>
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: June 30, 1998
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/ Edwin A. Brassem
---------------------------------
Edwin A. Brassem
Attorney-in-Fact
DUTCH INSTITUTIONAL HOLDING COMPANY, INC.
By: /s/ Craig Johnston
---------------------------------
Craig Johnston
Vice President
Page 19 of 94
<PAGE>
EXHIBIT A
The name, citizenship, business address and present principal occupation of
each executive officer and director of PGGM is as follows:
- --------------------------------------------------------------------------------
Present Principal
Name and Citizenship Office Occupation and Address
- -------------------- ------ ----------------------
- --------------------------------------------------------------------------------
Dick J. de Beus (Mr.) Executive Officer Chairman, Board of Managing
(The Netherlands) Directors
Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
Roderick M.S.M. Munsters (Mr.) Executive Officer Managing Director Investments
(The Netherlands) Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
J.C.J. Lammerts (Mr.) Chairman of the Retired
(The Netherlands) Board of Directors Leidsegracht 25
of PGGM 1017 NA Amsterdam
The Netherlands
- --------------------------------------------------------------------------------
W.L. Bonhof (Mr.) Director Director
(The Netherlands) Zon en Schild (Hospital)
Utrechtseweg 266
P.O. Box 3051
3800 DB Amersfoort
The Netherlands
- --------------------------------------------------------------------------------
R.G. de Vries (Mr.) Director Vice Director
(The Netherlands) Nederlandse Zorg
Federatie
(Netherlands Health Care
Federation)
P.O. Box 9696
3506 GR Utrecht
The Netherlands
- --------------------------------------------------------------------------------
J. Hillenius (Mr.) Director Retired
(The Netherlands) Meije 342
3474 ME Zegveld
The Netherlands
- --------------------------------------------------------------------------------
W.H. de Weijer (Mr.) Director Chief Executive Officer
(The Netherlands) Zorg en Wonen
Zaanstreek/Waterland
P.O. Box 68
1440 AB Purmerend
The Netherlands
- --------------------------------------------------------------------------------
Page 20 of 94
<PAGE>
- --------------------------------------------------------------------------------
Present Principal
Name and Citizenship Office Occupation and Address
- -------------------- ------ ----------------------
- --------------------------------------------------------------------------------
H.D. Cornelissen (Mr.) Director Board Member
(The Netherlands) Profeesor Duboisstichting
P.O. Box 694
5900 AR Venlo
The Netherlands
- --------------------------------------------------------------------------------
M. Bouma (Ms.) Director Trade Union Officer
(The Netherlands) ABVAKABO (Trade Union)
P.O. Box 3010
2700 KT Zoetermeer
The Netherlands
- --------------------------------------------------------------------------------
A.J.M. van Huygevoort (Mr.) Director Trade Union Officer
(The Netherlands) ABVAKABO (Trade Union)
P.O. Box 3010
2700 KT Zoetermeer
The Netherlands
- --------------------------------------------------------------------------------
A.H. Wirtz (Mr.) Director Trade Union Officer
(The Netherlands) ABVAKABO (Trade Union)
P.O. Box 3010
2700 KT Zoetermeer
The Netherlands
- --------------------------------------------------------------------------------
E. de Bruin (Mr.) Director Board Member
(The Netherlands) CFO (Trade Union)
P.O. Box 84500
2508 AM Den Haag
The Netherlands
- --------------------------------------------------------------------------------
K. Kruithof (Mr.) Director Board Member
(The Netherlands) CFO (Trade Union)
P.O. Box 84500
2508 AM Den Haag
The Netherlands
- --------------------------------------------------------------------------------
K. de Jong (Mr.) Director Vice Chairman
(The Netherlands) NU '91 (Trade Union)
Leidseweg 63
P.O. Box 6001
3503 PA Utrecht
The Netherlands
- --------------------------------------------------------------------------------
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EXHIBIT B
The name, citizenship, business address and present principal occupation of
each executive officer and director of DIHC is as follows:
- --------------------------------------------------------------------------------
Present Principal
Name and Citizenship Office Occupation and Address
- -------------------- ------ ----------------------
- --------------------------------------------------------------------------------
Craig W. Johnston Vice President Vice President Finance-
(U.S.) and Assistant Financial Officer
Secretary Dutch Institutional Holding
Company, Inc.
200 Galleria Parkway,
Suite 2000
Atlanta, Georgia 30339
U.S.A.
- --------------------------------------------------------------------------------
Pieter S. van den Berg Director Staff Director Controlling
(The Netherlands) Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
Dick van den Bos (Mr.) Director Retired
(The Netherlands) Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
Jan van der Vlist (Mr.) Director Head of Real Estate
(The Netherlands) Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
Dick J. de Beus (Mr.) Director Chairman, Board of Managing
(The Netherlands) Directors
Pensioenfonds PGGM
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
- --------------------------------------------------------------------------------
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<PAGE>
EXHIBIT H
STOCK PURCHASE AGREEMENT
BETWEEN
CORNERSTONE PROPERTIES INC.
AND
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID,
GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
DATED AS OF JUNE 22, 1998
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<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II. THE SALE AND PURCHASE OF SHARES . . . . . . . . . . . . . . .3
Section 2.01. Obligations to Sell and Purchase the Shares. . . . . .3
Section 2.02. The Closing. . . . . . . . . . . . . . . . . . . . . .3
Section 2.03. Further Action . . . . . . . . . . . . . . . . . . . .4
ARTICLE III. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 3.01. Conditions to the Obligations of the Purchaser . . . .4
Section 3.02. Conditions to the Obligations of the Company . . . . .5
ARTICLE IV. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . .5
Section 4.01. Representations and Warranties of the Company. . . . .5
Section 4.02. Representations and Warranties of the Purchaser. . . 10
ARTICLE V. COVENANTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . . 11
Section 5.01. Standstill Agreement . . . . . . . . . . . . . . . . 11
ARTICLE VI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.01. Assignment . . . . . . . . . . . . . . . . . . . . . 11
Section 6.02. Benefit; Successors and Assigns. . . . . . . . . . . 11
Section 6.03. Notices. . . . . . . . . . . . . . . . . . . . . . . 11
Section 6.04. Governings Law . . . . . . . . . . . . . . . . . . . 12
Section 6.05. Entire Agreement . . . . . . . . . . . . . . . . . . 12
Section 6.06. Counterparts . . . . . . . . . . . . . . . . . . . . 12
Section 6.07. Amendments . . . . . . . . . . . . . . . . . . . . . 12
Section 6.08. Severability . . . . . . . . . . . . . . . . . . . . 13
Section 6.09. Titles and Subtitles . . . . . . . . . . . . . . . . 13
Section 6.10. Further Assurances . . . . . . . . . . . . . . . . . 13
EXHIBITS
EXHIBIT A Amended and Restated Registration Rights and Voting Agreement
EXHIBIT B Opinion of counsel to the Company
EXHIBIT C Opinion of Lionel, Sawyer & Collins, Nevada counsel to the Company
EXHIBIT D Amended and Restated Bylaws of the Company
EXHIBIT E [Intentionally Omitted]
EXHIBIT F Opinion of Purchaser
EXHIBIT G Opinion of Richards & O'Neil LLP, special counsel to the Purchaser
Page 24 of 94
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STOCK PURCHASE AGREEMENT dated as of June 22, 1998 between CORNERSTONE
PROPERTIES INC., a Nevada corporation (the "COMPANY"), and STICHTING
PENSIOENFONDS VOOR DE GEZONDHEID, GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN, a
stichting, formed according to the laws of the Kingdom of The Netherlands (the
"PURCHASER").
WHEREAS, the Company wishes to issue and sell to the Purchaser an aggregate
of 11,594,203 shares (as adjusted pursuant to Section 2.01 of this Agreement,
the "SHARES") of Common Stock, without par value, of the Company (the "COMMON
STOCK"); and
WHEREAS, the Purchaser wishes to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"ACTION" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"BASIC AGREEMENTS" means this Agreement and the Registration Rights
Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other day
on which commercial banks are required by law or authorized to close in New York
City or the Netherlands.
"BYLAWS" means the Bylaws of the Company, as amended from time to time.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock and all joint venture interests (however designated)
whether now outstanding or issued after the Closing Date, including, without
limitation, all common stock and all preferred stock.
"CHARTER" means the Restated Articles of Incorporation of the Company, as
amended or restated from time to time.
"CLOSING" has the meaning specified in Section 2.02.
"CLOSING DATE" has the meaning specified in Section 2.02.
"COMPANY STOCK" means the common stock of the Company, without par value.
Page 25 of 94
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"COMPANY SUBSIDIARY" means the entities listed on Schedule 5.1(c) to the
Contribution Agreement.
"COMPANY EMPLOYEE STOCK PLANS" shall have the meaning set forth in Section
4.01(e) of this Agreement.
"COMPANY OPTIONS" has the meaning specified in Section 4.01(e).
"COMPANY SEC DOCUMENTS" has the meaning specified in Section 4.01(f).
"CONTRIBUTION AGREEMENT" means the Contribution Agreement and Plan of
Merger by and among William Wilson & Associates, the entities identified on
schedule 1 thereto, the Company and the Operating Partnership, dated as of June
22, 1998.
"DIHC" means Dutch Institutional Holding Company, Inc.
"FINANCIAL STATEMENT DATE" has the meaning specified in Section 4.01(g).
"GOVERNMENTAL AUTHORITY" means any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"KNOWLEDGE" and correlative terms such as "KNOWLEDGE OF," "KNOWS OF," "IS
AWARE OF," OR "BEST KNOWLEDGE" when used herein with respect to the Company
shall mean the actual knowledge of the persons named on Schedule 1.01 and where
used with respect to the Seller shall mean the actual knowledge of the persons
named on SCHEDULE 1.01.
"MATERIAL ADVERSE CHANGE" has the meaning specified in Section 4.01(g).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
operations, properties or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.
"1933 ACT" means the United States Securities Act of 1933, as amended, and
the rules and, unless the context indicates otherwise, regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"1934 ACT" means the United States Securities Exchange Act of 1934, as
amended, and, unless the context indicates otherwise, the rules and regulations
of the SEC thereunder, all as the same shall be in effect from time to time.
"OPERATING PARTNERSHIP" means Cornerstone Properties Limited Partnership, a
Delaware limited partnership.
Page 26 of 94
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"PERSON" means a natural person, partnership (whether general or limited),
trust, estate, association, corporation, limited liability company,
unincorporated organization, custodian, nominee or any other individual or
entity in its own or representative capacity.
"PROXY STATEMENT" has the meaning specified in the Contribution Agreement.
"PUBLIC OFFERING" means an underwritten public offering of equity
securities of the Company pursuant to an effective registration statement under
the 1933 Act.
"PURCHASER" means Stichting Pensioenfonds Voor De Gezondheid, Geestelijke
En Maatschappelijke Belangen.
"REGISTRATION RIGHTS AGREEMENT" means the Amended and Restated Registration
Rights and Voting Agreement to be entered into by and between the Company,
Purchaser and Dutch Institutional Holding Company, Inc., set forth as Exhibit A
hereto.
"7% PREFERRED STOCK" means the 7% Cumulative Convertible Preferred Stock of
the Company, without par value.
"SEC" means the United States Securities and Exchange Commission.
"SUBSIDIARY" means any company, corporation or joint venture of which at
the time of determination the Company or the Operating Partnership, directly
and/or indirectly through one or more Subsidiaries, owns, or one or more other
Subsidiaries own, more than 50% of the Voting Stock or the Company or the
Operating Partnership controls, or one or more other Subsidiaries control, the
composition of more than 50% of the board of directors or comparable governing
body thereof. The Company Subsidiaries are Subsidiaries for purposes of this
Agreement.
"U.S. GAAP" has the meaning specified in Section 4.01(f).
"VOTING STOCK" means, with respect to any Person, securities of any class
or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person but does not include
Capital Stock having the right to vote in such election solely upon the
happening of a contingency unless and until such contingency has occurred, and
then only so long as such Capital Stock has voting rights with respect thereto.
ARTICLE 11. THE SALE AND PURCHASE OF SHARES
SECTION 2.01. OBLIGATIONS TO SELL AND PURCHASE THE SHARES. In reliance
upon the representations and warranties made herein and subject to the
satisfaction or waiver of the conditions set forth herein, the Company agrees to
issue and sell to the Purchaser, and the Purchaser agrees to purchase from the
Company, the Shares at a per share price equal to $17.25 (the "PURCHASE PRICE");
PROVIDED, HOWEVER, if the "Effective Price" or the "Adjusted Effective Price"
under the Contribution Agreement is
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less than $17.25, the Purchase Price shall be reduced to an amount equal to such
Effective Price or Adjusted Effective Price. In the event that the Purchase
Price is less than $17.25, the number of Shares shall equal $200,000,000 divided
by the Purchase Price (rounded to the nearest whole number).
SECTION 2.02. THE CLOSING. The closing shall take place at the offices of
King & Spalding, 1185 Avenue of the Americas, New York, New York 10036, on such
date as shall occur the Closing under the Contribution Agreement (such closing
being called the "CLOSING"and such date and time being called the "CLOSING
DATE"). At the Closing, the Company shall issue and deliver to the Purchaser a
stock certificate or certificates in definitive form, registered in the name of
the Purchaser, representing the Shares being purchased by it at the Closing. As
payment in full for the Shares being purchased by it under this Agreement, and
against delivery of the stock certificate or certificates therefor on the
Closing Date, the Purchaser shall deliver to the Company by wire transfer of
immediately available funds cash in an amount equal to the number of Shares
purchased multiplied by the Purchase Price to the account designated by the
Company.
SECTION 2.03. FURTHER ACTION. During the period from the date hereof to
the Closing Date, the Company and the Purchaser shall use its best efforts and
take all action necessary or appropriate to satisfy the closing conditions
contained in Section 3 hereof and to cause its respective representations and
warranties contained in Section 4 hereof to be complete and correct as of the
Closing Date, after giving effect to the transactions contemplated by this
Agreement.
ARTICLE III. CONDITIONS
SECTION 3.01. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The
obligations of the Purchaser under this Agreement shall be subject to the
satisfaction or waiver of the following conditions on or before the Closing
Date:
(a) STOCK CERTIFICATES. The Company shall have issued and delivered to the
Purchaser a stock certificate or certificates in definitive form, registered in
the name of the Purchaser, representing the Shares being purchased by the
Purchaser on the Closing Date.
(b) OPINIONS OF COMPANY'S COUNSEL. The Purchaser shall have received from
counsel for the Company (who shall be reasonably acceptable to Purchaser), and
from Lionel, Sawyer & Collins, Nevada counsel for the Company, opinions dated
the Closing Date in substantially the forms attached hereto as EXHIBIT B and
EXHIBIT C.
(c) REPRESENTATIONS AND WARRANTIES COMPLETE AND CORRECT. The
representations and warranties of the Company contained in Section 4.01 hereof
shall have been complete and correct in all material respects as of the Closing
Date.
(d) COMPLIANCE WITH THIS AGREEMENT. The Company shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained herein which are required to be performed or complied with by it on or
before the Closing Date.
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(e) OFFICERS' CERTIFICATE. The Purchaser shall have received a
certificate, dated the Closing Date and signed by the President or any Vice
President of the Company and attested by the Secretary of the Company,
certifying that the conditions set forth in Sections 3.01(c) and 3.01(d) are
satisfied on and as of such date.
(f) REGISTRATION RIGHTS AGREEMENT. The Company shall have executed and
delivered the Registration Rights Agreement.
(g) CLOSING OF ACQUISITION. The "Closing" as defined in the Contribution
Agreement shall have occurred simultaneously with the Closing hereunder.
(h) AMENDED AND RESTATED BYLAWS. The Amended and Restated Bylaws of the
Company, in the form attached hereto as EXHIBIT D, shall have been adopted by
the Board of Directors of the Company.
(i) ADDITIONAL DOCUMENTS. Purchaser shall have received such additional
supporting documents and other information with respect to the operations and
affairs of the Company as the Purchaser may reasonably request.
SECTION 3.02. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The Company's
obligations under this Agreement shall be subject to the satisfaction or waiver
of the following conditions on or before the Closing Date:
(a) OPINION OF PURCHASER'S COUNSEL. The Company shall have received from
the Purchaser and from Richards & O'Neil LLP, special counsel to the Purchaser,
opinions dated the Closing Date substantially in the forms attached hereto as
EXHIBIT F and EXHIBIT G.
(b) COMPLIANCE WITH THIS AGREEMENT. The Purchaser shall have performed
and complied in all material respects with all agreements, covenants and
conditions contained herein which are required to be performed or complied with
by it on or before the Closing Date.
(c) PURCHASER'S REPRESENTATIONS AND WARRANTIES COMPLETE AND CORRECT. The
Purchaser's representations and warranties contained in Section 4.02 of this
Agreement shall be complete and correct when made and shall be complete and
correct at and as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of such date.
(d) OFFICERS' CERTIFICATE. The Company shall have received a certificate,
dated the Closing Date and signed by an officer of the Purchaser and attested by
an in-house counsel to the Purchaser, certifying that the conditions set forth
in Sections 3.02(b) and 3.02(c) are satisfied on and as of such date.
(e) CLOSING OF ACQUISITION. The "Closing" as defined in the Contribution
Agreement shall have occurred simultaneously with the Closing hereunder.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
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SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchaser as follows:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and each of
the Company and its Subsidiaries has all requisite corporate power and authority
under such laws to own or lease and operate its properties and to carry on its
business as now conducted. Each of the Company and its Subsidiaries is duly
qualified or licensed to do business in each jurisdiction in which the nature of
the business transacted by it or the character of the properties owned or leased
by it requires it to so qualify or be licensed, except where the failure to so
qualify or be licensed would not have a Material Adverse Effect. The Company
has the corporate power and authority to execute, deliver and perform the Basic
Agreements, to issue, sell and deliver the Shares.
(b) OPERATING PARTNERSHIP. The Operating Partnership is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite partnership power and authority
under such laws to own or lease and operate its properties and to carry on its
business as now conducted. The Operating Partnership is duly qualified or
licensed to do business in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires it to so qualify or be licensed, except where the failure to so qualify
or be licensed would not have a Material Adverse Effect.
(c) AUTHORIZATION, ENFORCEABILITY. All corporate action on the part of
the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of the Basic Agreements, the performance
of all obligations of the Company thereunder and the authorization, issuance,
sale and delivery of the Shares, including any action required under Article 8
of the Charter has been taken. The Basic Agreements have been duly authorized,
executed and delivered by the Company and constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective!
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law).
(d) NO CONFLICT. The execution and delivery by the Company of the Basic
Agreements, the performance by the Company of its obligations thereunder, the
issuance, sale and delivery of the Shares, will not violate any provision of
law, the Charter or Bylaws of the Company, or, any order of any court or other
agency of government, or conflict with, result in a breach of or constitute
(with notice or lapse of time or both) a default under any indenture, agreement
or other instrument by which the Company or any of its properties or assets is
bound, or result in the creation or imposition of any lien, charge, restriction,
claim or encumbrance of any nature whatsoever known to the Company upon any of
the properties or assets of the Company or trigger any remedy provision in any
agreement or cause an adjustment in the Company's equity interest in any
partnership or joint venture.
(e) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 250,000,000 shares of Common Stock and 65,000,000 shares of
Preferred Stock. On the date hereof (i) 101,542,254 shares of Common Stock are
issued and outstanding, (ii) 3,030,303 shares of Preferred Stock are issued and
outstanding, (iii) 148,457,746 shares of Common Stock are authorized but not
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issued, (iv) 3,000,000 shares of Common Stock are reserved for issuance under
the Company's employee benefit or incentive plans pursuant to awards granted by
the Company (THE "COMPANY EMPLOYEE STOCK PLANS"), (v) 2,682,000 shares of Common
Stock are issuable upon the exercise of outstanding options (the "COMPANY
OPTIONS") to purchase Common Stock, (vi) no shares of Preferred Stock are
issuable upon the exercise of outstanding options, (vii) 4,482,133 shares of
Common Stock are reserved for issuance for the Company's Dividend Reinvestment
Share Purchase Plan, and (viii) no shares of Common Stock are reserved for
issuance pursuant to the Company's Employee Share Purchase Plan. On the date
hereof, there are 4,145,883 units of limited partnership of the Operating
Partnership issued and outstanding. On the date of this Agreement, except as
set forth above in this Section 4.01(e), no shares of stock or other voting
securities of the Company were issued, reserved for issuance or outstanding.
The Company has no outstanding stock appreciation rights relating to the shares
of the Company. All outstanding shares of common stock and preferred stock of
the Company are duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. Except as set forth on SCHEDULE 4.01(E),
there are no bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the Company
may vote. Except (x) as set forth in this Section 4.01(e), or (y) as set forth
in SCHEDULE 4.01(E), as of the date of this Agreement there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which such entity is bound, obligating the Company
or any Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock, voting securities or
securities convertible into voting securities or other ownership interests of
the Company or any Company Subsidiary or obligating the Company or any Company
Subsidiary to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking (other
than to the Company or a Company Subsidiary), except the 7% Preferred Stock.
Except as set forth on SCHEDULE 4.01(E), there are no outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any beneficial shares of interest of the Company or any
capital stock, voting securities or other ownership interests in any Company
Subsidiary or make any material investment (in the form of a loan, capital
contribution or otherwise) in any Person (other than a Company Subsidiary).
(f) SEC DOCUMENTS, FINANCIAL STATEMENTS, UNDISCLOSED LIABILITIES. The
Company has timely filed all required reports, schedules, forms, statements and
other documents required to be filed with the SEC (the "COMPANY SEC DOCUMENTS").
All of the Company SEC Documents, as of their respective filing dates, complied,
or will comply, as the case may be, in all material respects with all applicable
requirements of the 1933 Act, and the 1934 Act and, in each case, the rules and
regulations promulgated thereunder applicable to such Company SEC Documents. No
SEC "stop order" has been issued or is effective with respect to the Company.
None of the Company SEC Documents (including, without limitation, the Proxy
Statement) at the time of filing or effectiveness contained, or will contain, as
the case may be, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent such statements have been amended, modified
or superseded by later Company SEC Documents (including, without limitation, the
Proxy Statement). The consolidated financial statements of the Company included
in the Company SEC Documents (including, without limitation, the Proxy
Statement) complied, or will comply, as the case may be, as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with United
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States generally accepted accounting principles ("U.S. GAAP") (except, in the
case of unaudited statements, as permitted by Form 10-Q promulgated under the
1934 Act) applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly presented, or will present, as
the case may be, in accordance with the applicable requirements of U.S. GAAP,
the consolidated financial position of the Company and the Company Subsidiaries
as of the dates thereof and the consolidated results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal and recurring year end audit adjustments). Except as set forth in the
Company SEC Documents filed with the SEC prior to the date hereof or in SCHEDULE
4.01(F), neither the Company nor any Company Subsidiary has any liabilities
required by U.S. GAAP to be set forth on a consolidated balance sheet of the
Company and the Company Subsidiaries or, to the knowledge of the Company, or in
the notes thereto and which, individually or in the aggregate, would have a
Material Adverse Effect.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Company SEC Documents filed with the SEC prior to the date hereof or in SCHEDULE
4.01(I), since the date of the most recent financial statements included in the
Company SEC Documents (the "FINANCIAL STATEMENT DATE") and to the date of this
Agreement, the Company and the Company Subsidiaries have conducted their
business only in the ordinary course and there has not been (i) any change that
would have a Material Adverse Effect (a "MATERIAL ADVERSE CHANGE"), nor has
there been any occurrence or circumstance that with the passage of time would
reasonably be expected to result in a Material Adverse Change, (ii) except for
regular quarterly dividends not in excess of $.30 per share of Common Stock and
regular annual dividends not in excess of $1.155 per share of 7% Preferred Stock
with customary record and payment dates, (iii) any split, combination or
reclassification of any of the Company's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for, or giving the right to acquire by exchange or exercise,
shares of its capital stock or any issuance of an ownership interest in, any
Company Subsidiary, (iv) any damage, destruction or loss to the Company's and
the Company Subsidiaries' property, not covered by insurance, that has or would
have a Material Adverse Effect or (v) any change in accounting methods,
principles or practices by the Company or any Company Subsidiary, except insofar
as required by a change in U.S. GAAP.
(h) LITIGATION. To the Knowledge of the Company, except as set forth in
SCHEDULE 4.01(H) (which, with respect to each Action disclosed therein, sets
forth the parties, nature of the proceeding, date and method commenced, amount
of damages or other relief sought and, if applicable, paid or granted), there
are no Actions by or against the Company or any Company Subsidiary, pending
before any Governmental Authority (or, to the Knowledge of the Company,
threatened to be brought by or before any Governmental Authority) which has had
or could reasonably be expected to have a Material Adverse Effect. To the
Knowledge of the Company, none of the matters disclosed in SCHEDULE 4.01(H) has
had or could reasonably be expected to have a Material Adverse Effect or could
affect the legality, validity or enforceability of the Basic Agreements or the
consummation of the transactions contemplated hereby or thereby. To the
Knowledge of the Company, except as set forth in SCHEDULE 4.01(H), none of the
Company, the Company Subsidiaries nor any of their respective assets or
properties, is subject to any Governmental Order, including any stop order by
the SEC (nor, to the Knowledge of the Company, are there any such Governmental
Orders threatened to be imposed by any Governmental Authority) which has had or
could reasonably be expected to have a Material
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(i) VALID ISSUANCE OF SECURITIES. The Shares, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable. The
issuance, sale or delivery of the Shares is in compliance with the provisions of
Article 8 of the Charter and is not subject to any preemptive right of
stockholders of the Company arising under law or the Charter or Bylaws of the
Company or to any contractual right of first refusal or other right in favor of
any person.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser understands that the Shares are being offered and sold without
registration under the 1933 Act in reliance upon the exemption provided in
Section 4(2) of the 1933 Act. The Purchaser further understands that such
exemption depends in part upon, and such Shares are being sold in reliance on,
the representations and warranties set forth in this Section. The Purchaser
represents and warrants to the Company that:
(a) AUTHORIZATION. The Purchaser has full power and authority to enter
into this Agreement. This Agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether enforcement is sought by proceedings in
equity or at law).
(b) PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares will be acquired for
investment for the Purchaser's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and the Purchaser
has no present intention of selling, granting any participation in, or otherwise
distributing the same. The Purchaser further represents that it does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Shares.
(c) INVESTMENT EXPERIENCE. The Purchaser is an experienced investor and
acknowledges that it can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Shares.
(d) RESTRICTED Securities. The Purchaser understands that the Shares are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such shares may be resold without registration under the 1933 Act only in
certain limited circumstances. In this connection, the Purchaser represents
that it is familiar with SEC Rule 144, as presently in effect, and understands
the resale limitations imposed thereby and otherwise by the 1933 Act.
(e) ACCESS TO INFORMATION. The Purchaser has had access to the management
and records of the Company and has had an opportunity to ask questions of
management of the Company regarding its business and affairs.
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ARTICLE V. COVENANTS AND WAIVERS
SECTION 5.01. STANDSTILL AGREEMENT. The Company hereby agrees and
acknowledges that the execution of this Agreement by the Purchaser and DIHC
shall not be deemed a violation of Section 8 of the Registration Rights
Agreement and, to the extent that the execution by Purchaser and DIHC of such
document is deemed to be a violation of Section 8 of the Registration Rights
Agreement, such violation is hereby waived solely for the purposes of this
Agreement.
ARTICLE VI. MISCELLANEOUS
SECTION 6.01. ASSIGNMENT. This Agreement may not be assigned by operation
of law or otherwise without the express written consent of the Company (which
consent may be granted or withheld in the sole discretion of the Company) and
PROVIDED, that any such permitted assignee shall execute the Basic Agreements
and become party thereto.
SECTION 6.02. BENEFIT; SUCCESSORS AND ASSIGNS. Except as otherwise
provided herein, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; PROVIDED, HOWEVER, that this Agreement shall not inure to the benefit
of any successor or assignee unless such assignee shall have complied with the
terms of Section 6.01. Nothing in this Agreement either express or implied is
intended to confer on any person other than the parties hereto and their
respective successors and permitted assigns, any rights, remedies or obligations
under or by reason of this Agreement.
SECTION 6.03. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person or
mailed by certified or registered mail, return receipt requested, or telecopied,
addressed as follows:
(a) IF TO THE COMPANY: 126 East 56th Street
New York, New York
Attention: John S. Moody
Chief Executive Officer
Telecopy Number: (212) 605-7199
WITH A COPY TO: King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: William B. Fryer, Esq.
Telecopy Number: (404) 572-5148
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(b) IF TO THE PURCHASER: Pensioenfonds PGGM
Kroostweg-Noord 149
3704 DV Zeist
The Netherlands
P.O. Box 117
3700 AC Zeist
The Netherlands
Attention: Mr.Jan van der Vlist
Ms.Anneke C. van de Puttelaar
Telecopy Number: 011(31.30)696-3388
WITH A COPY TO: Richards & O'Neil LLP
885 Third Avenue
New York, New York 10022-4873
Attention: Ann Chamberlain, Esq.
Telecopy Number: (212) 750-9022
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. All notices, requests,
consents and other communications hereunder shall be deemed to have been duly
given or served on the date on which personally delivered or on the date
actually received, if sent by mail, telecopier or telex, with receipt
acknowledged.
SECTION 6.04. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles thereof.
SECTION 6.05. ENTIRE AGREEMENT. This Agreement, including the Schedules
and Exhibits hereto, constitutes the sole and entire agreement of the parties
with respect to the subject matter hereof. The Schedules and Exhibits hereto
are hereby incorporated herein by reference.
SECTION 6.06. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 6.07. AMENDMENTS. This Agreement may not be amended or modified,
and no provisions hereof may be waived, without the written agreement of the
parties.
SECTION 6.08. SEVERABILITY.If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
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SECTION 6.09. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpretation, any term or provision of this Agreement.
SECTION 6.10. FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any Purchaser or the Company, the Company and the
Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the
Shares.
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IN WITNESS WHEREOF, the Company and the Purchaser have executed this
Agreement as of the day and year first above written.
CONERSTONE PROPERTIES INC.
By: /s/ John S. Moody
-----------------------------
Name: John S. Moody
------------------------
Title: Chairman and Chief Executive Officer
-------------------------------------
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID,
GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
By: /s/ Jan van der Vlist
-----------------------------
Name: Jan van der Vlist
------------------------
Title: Director of Real Estate
------------------------
By: /s/ Anneke C. van de Puttelaar
-------------------------------
Name: Anneke C. van de Puttelaar
---------------------------
Title: Portfolio Manager Real Estate
------------------------------
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EXHIBIT K
AMENDED AND RESTATED
REGISTRATION RIGHTS AND VOTING AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AND VOTING AGREEMENT (this
"Agreement"), is made and entered into as of this ___ day of _________, 1998, 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 that certain Loan Purchase Agreement (the "Loan Agreement") dated as
of August 18, 1997, between the Company and PGGM, the Company acquired certain
shares of capital stock, partnership interests and loans from DIHC and PGGM and
issued shares of its Common Stock (as defined below) to DIHC and PGGM; and
WHEREAS, in connection with the Purchase Agreement, the Company, DIHC and
PGGM entered into a Registration Rights and Voting Agreement, dated as of
October 27, 1997 (the "Registration Rights Agreement"), which provided (I) for
the registration under the Securities Act of 1933, as amended, of certain shares
of Common Stock (II) for the nomination and election of certain persons to serve
on the Board of Directors of the Company, (III) for certain restrictions
regarding the transfer of shares of Common Stock and (IV) for certain covenants
regarding the operation of the Company's business; and
WHEREAS, pursuant to the terms of that certain Stock Purchase Agreement
(the "Stock Purchase Agreement"), dated as of _______, 1998, between the Company
and PGGM, the Company is issuing additional shares of its Common Stock to PGGM;
and
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WHEREAS, in connection with the Stock Purchase Agreement, the parties
desire to amend and restate the Registration Rights Agreement on the terms set
forth herein;
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.
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.
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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.
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.
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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 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).
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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.
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 on the date hereof, (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, (IV) one individual at any time hereafter designated by
Deutsche Bank
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AG as a nominee to the board of directors, and (V) Messrs. William Wilson III,
_____ and _____ as nominees to the board of directors pursuant to an agreement
dated as of June 22, 1998.
1.21 "INITIAL PERCENTAGE" means the percentage of issued and
outstanding Common Stock represented immediately after the Closing by the shares
issued pursuant to the Purchase Agreement and the Loan Agreement.
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, the Loan Agreement and the Stock Purchase
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 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
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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 each 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 27,
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) and issued and outstanding Units 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.
1.43 "UNITS" means units of limited partnership in Cornerstone
Properties Limited Partnership, a Delaware limited partnership.
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 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
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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 AMENDED AND RESTATED
REGISTRATION RIGHTS AND VOTING AGREEMENT DATED AS OF ______,
1998, 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.
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
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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 7.5 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 date hereof and upon the request of
PGGM, the Company will use its commercially reasonable efforts to cause to be
filed a Shelf Registration Statement, which, in accordance with Rule 429 under
the Securities Act, shall include a form of Shelf Prospectus for use with
respect to the Shelf Registrable Securities included in the Registration
Statement on Form S-3 (Registration No. 333-47149) filed by the Company with the
Commission on March 2, 1997, 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, 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
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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 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
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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 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
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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 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
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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 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 from and after 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
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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 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.
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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."
(b) NUMBER OF DEMAND OFFERINGS. The Company shall not be required
under this Section 3.3 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 the Demand Initiating Holder 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
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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 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, (B) the Stockholders' Agreement, dated
as of November 7, 1996, by and between the Company and Hexalon Real Estate,
Inc., and (C) the Registration Rights and Lockup Agreement, dated as of ______,
1998, by and among the Company and the parties named therein (the "Wilson
Registration Rights Agreement") 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 twelve months after the closing
date of a Demand Offering or within six months after 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) and
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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;
(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
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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 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
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(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 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
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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.
(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, (B) securities requested to be included in
such registration pursuant to the Wilson Registration Rights Agreement, and (C)
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
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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)(C).
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 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
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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 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
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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 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
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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.
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.
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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, the Company shall take all action necessary to nominate for election to
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 27, 2002 (the date five years after the Closing Date):
(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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<PAGE>
(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.
(d) From the date of adoption of the Amended and Restated Bylaws
of the Company in the form attached hereto as Annex A (the "Amended Bylaws")
until the third anniversary of such date:
(i) 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 Wilson Directors (as defined
in the Amended Bylaws) pursuant to Section 3.03(a) of the Amended Bylaws
and approved by the Board Affairs Committee as set forth in Section 3.02 of
the Amended Bylaws; and
(ii) PGGM and DIHC shall use commercially reasonable efforts to
cause the PGGM Directors, in considering the nominees proposed by Wilson
III (or the Wilson III Designee) (as defined in the Amended Bylaws) for
inclusion in the Board's list of nominees for election as director to
approve in all cases Wilson III, and in considering other persons nominated
as Wilson Directors, not to unreasonably withhold their approval.
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 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,
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HOWEVER, that the Company, 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.
7.4 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.
7.5 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.
7.6 OWNERSHIP LIMIT. The Company has taken and will continue to
take 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 and PGGM of the basis for its determination and shall
provide reasonable access to information regarding the Company's shareholders to
DIHC and PGGM.
7.7 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.
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<PAGE>
7.8 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.
7.9 AMENDED AND RESTATED BYLAWS. From the date of adoption of the
Amended Bylaws until the third anniversary of such date, PGGM and DIHC agree not
to vote to repeal or amend the Amended Bylaws, where such amendment is covered
by Section 10.01(b) of such Amended Bylaws, unless such amendment is approved by
the Wilson Directors (as defined in the Amended Bylaws).
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
(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
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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 7.5 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 7.4, 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 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,
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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. Craig Johnston
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.
(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
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<PAGE>
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 7.4, 7.5 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 7.4, 7.5
and 8.
13. THIRD PARTY BENEFICIARY. The parties to this Agreement agree and
acknowledge that Wilson III or the Wilson Designee are intended beneficiaries of
the provisions of Sections 7.1(d) and 7.9 of this Agreement, and Wilson III and
the Wilson Designee shall have the rights of intended beneficiaries to enforce
such provisions.
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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:
---------------------------------
Name:
----------------------------
Title:
---------------------------
DUTCH INSTITUTIONAL HOLDING COMPANY, INC.
---------------------------------
Name:
----------------------------
Title:
---------------------------
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID,
GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
---------------------------------
Name:
----------------------------
Title:
---------------------------
---------------------------------
Name:
----------------------------
Title:
---------------------------
[Signature Page to Amended and Restated Registration 96
Rights and Voting Agreement]
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<PAGE>
EXHIBIT A
TO
AMENDED AND RESTATED
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.
Letter Agreement dated July 10, 1995 between the Company and Deutsche Bank AG.
Registration Rights Agreement dated June 3, 1998, by and between the Company and
the parties named therein.
Registration Rights Agreement dated as of January 29, 1998, among the Company
and the Holders identified therein.
Registration Rights Agreement dated as of April 28, 1998, among the Company and
the Holders identified therein.
Registration Rights Agreement dated as of April 28, 1998, among the Company and
The Prudential Insurance Company of America.
Registration Rights and Lockup Agreement dated _______, 1998, by and between the
Company and the parties named therein.
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<PAGE>
EXHIBIT M
AMENDED AND RESTATED BYLAWS
OF
CORNERSTONE PROPERTIES INC.
ADOPTED:[CLOSING DATE], 1998
ARTICLE I
OFFICES
SECTION 1.01. REGISTERED OFFICE. The registered office of Cornerstone
Properties Inc. (the "CORPORATION") in the State of Nevada shall be at the
principal office of The Corporation Trust Company of Nevada in the City of Reno,
County of Washoe, and the registered agent in charge thereof shall be The
Corporation Trust Company of Nevada.
SECTION 1.02. OTHER OFFICES. The Corporation may also have an office or
offices at any other place or places within or without the State of Nevada as
the Board of Directors of the Corporation (the "BOARD") may from time to time
determine or the business of the Corporation may from time to time require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of the
Corporation for the election of directors of the Corporation ("DIRECTORS"), and
for the transaction of such other business as may properly come before such
meeting, shall be held at such place, date and time as shall be fixed by the
Board and designated in the notice or waiver of notice of such annual meeting;
PROVIDED, HOWEVER, that no annual meeting of stockholders need be held if all
actions, including the election of Directors, required by the General
Corporation Law of the State of Nevada (the "GENERAL CORPORATION LAW") to be
taken at such annual meeting are taken by written consent in lieu of meeting
pursuant to Section 2.09 hereof.
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SECTION 2.02. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called by the Board or the Chairman of the Board, the
President or the Secretary of the Corporation or by the recordholders of at
least a majority of the shares of common stock of the Corporation issued and
outstanding ("SHARES") and entitled to vote thereat, to be held at such place,
date and time as shall be designated in the notice or waiver of notice thereof.
SECTION 2.03. NOTICE OF MEETINGS. (a) Except as otherwise provided by
law, written notice of each annual or special meeting of stockholders stating
the purpose, place, date and time of such meeting shall be given personally or
by first-class mail to each recordholder of Shares (a "STOCKHOLDER") entitled to
vote thereat, not less than 10 nor more than 60 days before the date of such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the mail, postage prepaid, directed to the Stockholder at such Stockholder's
address as it appears on the records of the Corporation. If, prior to the time
of mailing, the Secretary of the Corporation (the "SECRETARY") shall have
received from any Stockholder a written request that notices intended for such
Stockholder are to be mailed to some address other than the address that appears
on the records of the Corporation, notices intended for such Stockholder shall
be mailed to the address designated in such request.
(b) Notice of a special meeting of Stockholders may be given by the person
or persons calling the meeting, or, upon the written request of such person or
persons, such notice shall be given by the Secretary on behalf of such person or
persons. If the person or persons calling a special meeting of Stockholders
give notice thereof, such person or persons shall deliver a copy of such notice
to the Secretary. Each request to the Secretary for the giving of notice of a
special meeting of Stockholders shall state the purpose or purposes of such
meeting.
SECTION 2.04. WAIVER OF NOTICE. Notice of any annual or special meeting
of Stockholders need not be given to any Stockholder who files a written waiver
of notice with the Secretary, signed by the person entitled to notice, whether
before or after such meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of Stockholders need be specified in any written waiver
of notice thereof. Attendance of a Stockholder at a meeting, in person or by
proxy, shall constitute a waiver of notice of such meeting, except when such
Stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the grounds that
the notice of such meeting was inadequate or improperly given.
SECTION 2.05. ADJOURNMENTS. Whenever a meeting of Stockholders, annual or
special, is adjourned to another date, time or place, notice need not be given
of the adjourned meeting if the date, time and place thereof are announced at
the meeting at which the adjournment is taken. If the adjournment is for more
than 30 days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned
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meeting shall be given to each Stockholder entitled to vote thereat. At the
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
SECTION 2.06. QUORUM. Except as otherwise provided by law or the Articles
of Incorporation of the Corporation (the "ARTICLES OF INCORPORATION"), the
recordholders of 20% of the Shares entitled to vote thereat, present in person
or by proxy, shall constitute a quorum for the transaction of business at all
meetings of Stockholders, whether annual or special. If, however, such quorum
shall not be present in person or by proxy at any meeting of Stockholders, the
Stockholders entitled to vote thereat may adjourn the meeting from time to time
in accordance with Section 2.05 hereof until a quorum shall be present in person
or by proxy.
SECTION 2.07. VOTING. Each Stockholder shall be entitled to one vote for
each Share held of record by such Stockholder. Except as otherwise provided by
law or the Articles of Incorporation, when a quorum is present at any meeting of
Stockholders, the vote of the recordholders of a majority of the Shares
constituting such quorum shall decide any question brought before such meeting.
SECTION 2.08. PROXIES. Each Stockholder entitled to vote at a meeting of
Stockholders or to express, in writing, consent to or dissent from any action of
Stockholders without a meeting may authorize another person or persons to act
for such Stockholder by proxy. Such proxy shall be filed with the Secretary
before such meeting of Stockholders or such action of Stockholders without a
meeting, at such time as the Board may require. No proxy shall be voted or
acted upon more than six months from its date, unless the proxy provides for a
longer period, which may not exceed seven years.
SECTION 2.09. STOCKHOLDERS' CONSENT IN LIEU OF MEETING. Any action
required by the General Corporation Law to be taken at any annual or special
meeting of Stockholders, and any action which may be taken at any annual or
special meeting of Stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the recordholders of a majority of the Shares, except
that if a different number of votes is required to authorize or take such action
at a meeting, then that proportion of written consents is required.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by the Board, which may exercise all such powers of the
Corporation and do all
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such lawful acts and things as are not by law, the Articles of Incorporation or
these Bylaws directed or required to be exercised or done by Stockholders.
SECTION 3.02. NUMBER AND TERM OF OFFICE. The number of Directors shall be
not less than three nor more than eighteen. As of the date of the adoption of
these Bylaws, the number of Directors constituting the Board shall be fourteen.
The number of Directors constituting the Board may be increased or decreased by
a resolution passed by a majority of the entire Board which, during the
applicable Periods referred to below, is also accompanied by the following
resolution: until both the Wilson Period (as defined below) and the PGGM Period
(as defined below) have expired, a resolution passed by a majority of the Board
Affairs Committee (described in Section 3.09 below), which majority shall
include, during the PGGM Period, at least one PGGM Director (defined below), if
a member of such committee, and during the Wilson Period, at least one Wilson
Director (defined below), if a member of such committee. Notwithstanding the
foregoing, upon the expiration of both the Wilson Period and the PGGM Period, an
increase or decrease in the number of Directors constituting the Board shall not
require the approval of a majority of the members of the Board Affairs
Committee. Directors need not be Stockholders. Directors shall be elected at
the annual meeting of Stockholders or, if, in accordance with Section 2.01
hereof, no such annual meeting is held, by written consent in lieu of meeting
pursuant to Section 2.09 hereof, and each Director shall hold office until his
successor is elected and qualified, or until his earlier death or resignation or
removal in the manner hereinafter provided. The "WILSON PERIOD" shall mean the
period from the date of adoption of these Bylaws until and including the third
anniversary of that date. "PGGM" shall mean Stichting Pensioenfonds Voor de
Gezondheid, Geestelijke en Maatschappelijke Belangen. "DIHC" shall mean Dutch
Institutional Holding Company, Inc., a Delaware corporation. "AFFILIATE" shall
mean, with respect to any specified individual, partnership, firm, corporation,
trust, association, 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 Securities Exchange Act of 1934 ("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. The "PGGM PERIOD" shall
mean the period that ends on the earlier of (i) the date on which PGGM and DIHC
and their respective Affiliates own in the aggregate less than 25% of the Shares
or (ii) October 31, 2002.
SECTION 3.03. MEMBERS OF THE BOARD. (a) Subject to the provisions of
Section 3.09 hereof, during the Wilson Period the Board shall nominate for
election to the Board at any special or annual 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), or appointed
in accordance with Section 3.07 of these Bylaws, William Wilson III ("WILSON
III") and two other individuals designated by Wilson III from time to time
(together with Wilson III, collectively, the "WILSON DIRECTORS") provided that
at least one Wilson Director must (i) satisfy the criteria for independent
directors described in
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the New York Stock Exchange, Inc. Listed Company Manual and (ii) satisfy the
criteria for non-employee directors described in Rule 16b- 3(b)(3)(i)
promulgated under the Securities Exchange Act of 1934, as amended
("INDEPENDENT"), and further provided that upon the death or incapacity of
Wilson III, his designee, who shall initially be Patricia W. Wilson, or such
other person as is designated from time to time by Wilson III (the "WILSON
DESIGNEE"), shall have the right to designate an individual to be nominated by
the Board to replace Wilson III as a Director, which individual shall have the
right to designate the other individuals to be nominated as Wilson Directors.
In the event that the Wilson Designee is not able, for whatever reason, to
designate an individual to be nominated to replace Wilson III as a Director,
that designation shall be made by the remaining Wilson Directors acting
unanimously.
(b) So long as PGGM and DIHC and their respective Affiliates own in the
aggregate 5% or more of the Shares, the Board shall nominate for election to the
Board at any special or annual 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), or appointed in
accordance with Section 3.07 of these Bylaws, two members designated by PGGM
("PGGM DIRECTORS").
(c) During the PGGM Period, no nominee for election as a Director of the
Company shall be a person affiliated with PGGM or DIHC or any of their
respective Affiliates, other than two PGGM Directors.
(d) All nominees for election as Directors of the Company by the Board
(other than PGGM Directors who are employees, officers or directors of PGGM or
DIHC and Wilson III and Incumbent Directors (defined below)) must first receive
the affirmative vote of a majority of the members of the Board Affairs
Committee, which majority must include, during the PGGM Period, at least one
PGGM Director (if a member of the Board Affairs Committee) and, during the
Wilson Period, at least one Wilson Director (if a member of the Board Affairs
Committee). "INCUMBENT DIRECTOR" shall mean (i) all of the individuals
constituting the Board of Directors of the Company on the date hereof, (ii) all
individuals hereafter designated as nominees to the Board 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 by
Hexalon Real Estate, Inc. pursuant to a letter agreement dated November 7, 1996,
and (iv) one individual at any time hereafter designated by Deutsche Bank AG as
a nominee to the Board.
SECTION 3.04. THE CHAIRMAN OF THE BOARD. The Board may select a Chairman
of the Board of the Corporation (the "CHAIRMAN") who shall have the power to
call special meetings of Stockholders, to call special meetings of the Board
and, if present, to preside at all meetings of Stockholders and all meetings of
the Board. The Chairman shall perform all duties incident to the office of
Chairman of the Board and all such other duties as may from
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time to time be assigned to him by the Board or these Bylaws. The provisions of
Section 4.03 hereof shall apply to the Chairman. Notwithstanding the foregoing,
during the Wilson Period, Wilson III shall be the Chairman, provided, however
that a majority of the Board may terminate Wilson III as Chairman if (i) Wilson
III is convicted of, pleads guilty to or confesses to any felony or any act of
fraud, misappropriation or embezzlement or (ii) a majority of the members of the
Board Affairs Committee determines that Wilson III has engaged in a fraudulent
or dishonest act or has been grossly negligent in carrying out his duties as a
Director or Chairman of the Board, in each case to the material damage or
prejudice of the Corporation or an Affiliate of the Corporation, or in conduct
or activities materially damaging to the property, business or reputation of the
Corporation or an Affiliate of the Corporation.
SECTION 3.05. RESIGNATION. Any Director may resign at any time by giving
written notice to the Board, the Chairman or the Secretary. Such resignation
shall take effect at the time specified in such notice or, if the time be not
specified, upon receipt thereof by the Board, the Chairman or the Secretary, as
the case may be. Unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3.06. REMOVAL. Any or all of the Directors may be removed, with
or without cause, at any time by vote of the recordholders of two-thirds of the
Shares then entitled to vote at an election of Directors, or by written consent
of the recordholders of Shares pursuant to Section 2.09 hereof.
SECTION 3.07. VACANCIES. Vacancies occurring on the Board for any reason,
including, without limitation, vacancies occurring as a result of the creation
of new directorships that increase the number of Directors or removal in
accordance with Section 3.06 of these Bylaws, may be filled by vote of the
recordholders of a majority of the Shares then entitled to vote at an election
of Directors, or by written consent of such recordholders pursuant to Section
2.09 hereof or by vote of the Board or by written consent of the Directors
pursuant to Section 3.10 hereof. If the number of Directors then in office is
less than a quorum, such vacancies may be filled by vote of a majority of the
Directors then in office or by written consent of all such Directors pursuant to
Section 3.10 hereof. If a vacancy of the Board is caused by the vacancy of a
Wilson Director or a PGGM Director, and the terms of these Bylaws require that
the membership constituting the Board require that such vacancy be filled by a
Wilson Director or a PGGM Director, the Board shall fill such vacancy by
appointing another Wilson Director or PGGM Director, as the case may be. Unless
earlier removed pursuant to Section 3.06 hereof, each Director chosen in
accordance with this Section 3.07 shall hold office until the next annual
election of Directors by the Stockholders and until his successor shall be
elected and qualified.
SECTION 3.08. MEETINGS. (a) ANNUAL MEETINGS. As soon as practicable
after each annual election of Directors by the Stockholders, the Board shall
meet for the purpose of
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organization and the transaction of other business, unless it shall have
transacted all such business by written consent pursuant to Section 3.10 hereof.
(b) OTHER MEETINGS. Other meetings of the Board shall be held at such
times as the Chairman, the President, the Secretary or a majority of the Board
shall from time to time determine.
(c) NOTICE OF MEETINGS. The Secretary shall give written notice to each
Director of each meeting of the Board, which notice shall state the place, date,
time and purpose of such meeting. Notice of each such meeting shall be given to
each Director, if by mail, addressed to him at his residence or usual place of
business, at least two days before the day on which such meeting is to be held,
or shall be sent to him at such place by telecopy, telegraph, cable, or other
form of recorded communication, or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be held. A
written waiver of notice, signed by the Director entitled to notice, whether
before or after the time of the meeting referred to in such waiver, shall be
deemed equivalent to notice. Neither the business to be transacted at, nor the
purpose of any meeting of the Board need be specified in any written waiver of
notice thereof. Attendance of a Director at a meeting of the Board shall
constitute a waiver of notice of such meeting, except as provided by law.
(d) PLACE OF MEETINGS. The Board may hold its meetings at such place or
places within or without the State of Nevada as the Board or the Chairman may
from time to time determine, or as shall be designated in the respective notices
or waivers of notice of such meetings.
(e) QUORUM AND MANNER OF ACTING. A majority of the total number of
Directors then in office shall be present in person at any meeting of the Board
in order to constitute a quorum for the transaction of business at such meeting,
and the vote of a majority of those Directors present at any such meeting at
which a quorum is present shall be necessary for the passage of any resolution
or act of the Board, except as otherwise expressly required by law, the Articles
of Incorporation or these Bylaws. In the absence of a quorum for any such
meeting, a majority of the Directors present thereat may adjourn such meeting
from time to time until a quorum shall be present.
(f) ORGANIZATION. At each meeting of the Board, one of the following
shall act as chairman of the meeting and preside, in the following order of
precedence:
(i) the Chairman;
(ii) the President;
(iii) any Director chosen by a majority
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of the Directors present.
The Secretary or, in the case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present) whom the chairman of
the meeting shall appoint shall act as secretary of such meeting and keep the
minutes thereof.
SECTION 3.09. COMMITTEES OF THE BOARD. (a) Subject to the other
provisions of this Section 3.09, the Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more Directors. The Board may designate one or more Directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of such committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another Director to act at the
meeting in the place of any such absent or disqualified member; provided that
such replacement shall not have the rights of a PGGM Director or Wilson Director
unless the replacement is in fact such a PGGM Director or Wilson Director. Any
committee of the Board, to the extent provided in the resolution of the Board
designating such committee, shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Each committee of the Board shall keep regular
minutes of its proceedings and report the same to the Board when so requested by
the Board.
(b) During the PGGM Period the members of each committee of the Board,
except the Audit and Compensation Committees, shall include at least one PGGM
Director (if any are members of the Board).
(c) During the Wilson Period the members of each committee of the Board
shall include one Wilson Director (if any are members of the Board), provided
that any Wilson Director appointed to serve on the Board's Audit or Compensation
Committees shall be Independent.
(d) While Wilson III is a Director, he shall be the Wilson Director that
is a member of the Board Affairs Committee during the Wilson Period.
(e) By resolution dated December 6, 1996, the Board established the Board
Affairs Committee. The duties and responsibilities of the Board Affairs
Committee, as set forth in such resolution, shall not be amended without the
approval of a majority of the members of the Board, which majority shall include
the approval, during the PGGM Period, of all PGGM Directors, and, during the
Wilson Period, of all the Wilson Directors.
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(f) Notwithstanding any other provision of this Section 3.09, during the
PGGM Period, no fewer than half of the members of the Investment Committee shall
be Independent.
SECTION 3.10. DIRECTORS' CONSENT IN LIEU OF MEETING. Any action required
or permitted to be taken at any meeting of the Board or of any committee thereof
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by all
the members of the Board or such committee and such consent is filed with the
minutes of the proceedings of the Board or such committee.
SECTION 3.11. ACTION BY MEANS OF TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT. Any one or more members of the Board, or of any committee thereof,
may participate in a meeting of the Board or such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
SECTION 3.12. COMPENSATION. Unless otherwise restricted by the Articles
of Incorporation, the Board may determine the compensation of Directors. In
addition, as determined by the Board, Directors may be reimbursed by the
Corporation for their expenses, if any, in the performance of their duties as
Directors. No such compensation or reimbursement shall preclude any Director
from serving the Corporation in any other capacity and receiving compensation
therefor.
ARTICLE IV
OFFICERS
SECTION 4.01. OFFICERS. The officers of the Corporation shall be the
President, the Secretary and a Treasurer and may include one or more Vice
Presidents (one or more of whom may be designated an Executive Vice President
and one or more of whom may be designated a Senior Vice President) and one or
more Assistant Secretaries and one or more Assistant Treasurers. Any two or
more offices may be held by the same person.
SECTION 4.02 AUTHORITY AND DUTIES. All officers shall have such authority
and perform such duties in the management of the Corporation as may be provided
in these Bylaws or, to the extent not so provided, by resolution of the Board.
SECTION 4.03 TERM OF OFFICE, RESIGNATION AND REMOVAL. (a) Each officer
shall be appointed by the Board and shall hold office for such term as may be
determined by the
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Board. Each officer shall hold office until his successor has been appointed
and qualified or his earlier death or resignation or removal in the manner
hereinafter provided. The Board may require any officer to give security for
the faithful performance of his duties.
(b) Any officer may resign at any time by giving written notice to the
Board, the Chairman, the President or the Secretary. Such resignation shall
take effect at the time specified in such notice or, if the time be not
specified, upon receipt thereof by the Board, the Chairman, the President or the
Secretary, as the case may be. Unless otherwise specified therein, acceptance
of such resignation shall not be necessary to make it effective.
(c) All officers and agents appointed by the Board shall be subject to
removal, with or without cause, at any time by the Board or by the action of the
recordholders of a majority of the Shares entitled to vote thereon.
SECTION 4.04. VACANCIES. Any vacancy occurring in any office of the
Corporation, for any reason, shall be filled by action of the Board. Unless
earlier removed pursuant to Section 4.03 hereof, any officer appointed by the
Board to fill any such vacancy shall serve only until such time as the unexpired
term of his predecessor expires unless reappointed by the Board.
SECTION 4.05. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall have general and active management and
control of the business and affairs of the Corporation, subject to the control
of the Board, and shall see that all orders and resolutions of the Board are
carried into effect. The President shall perform all duties incident to the
office of President and all such other duties as may from time to time be
assigned to him by the Board or these Bylaws.
SECTION 4.06. VICE PRESIDENTS. Vice Presidents, if any, in order of their
seniority or in any other order determined by the Board, shall generally assist
the President and perform such other duties as the Board or the President shall
prescribe, and in the absence or disability of the President, shall perform the
duties and exercise the powers of the President.
SECTION 4.07. THE SECRETARY. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of Stockholders
and shall record all votes and the minutes of all proceedings in a book to be
kept for that purpose, and shall perform the same duties for any committee of
the Board when so requested by such committee. He shall give or cause to be
given notice of all meetings of Stockholders and of the Board, shall perform
such other duties as may be prescribed by the Board or the President and shall
act under the supervision of the President. He shall keep in safe custody the
seal of the Corporation and affix the same to any instrument that requires that
the seal be affixed to it and which shall have been duly authorized for
signature in the name of the Corporation and, when so affixed, the seal shall be
attested by his signature or by the signature of the Treasurer of the
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Corporation or an Assistant Secretary or Assistant Treasurer of the Corporation.
He shall keep in safe custody the certificate books and stockholder records and
such other books and records of the Corporation as the Board or the President
may direct and shall perform all other duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the Board or the President.
SECTION 4.08. ASSISTANT SECRETARIES. Assistant Secretaries of the
Corporation, if any, in order of their seniority or in any other order
determined by the Board, shall generally assist the Secretary and perform such
other duties as the Board or the Secretary shall prescribe, and, in the absence
or disability of the Secretary, shall perform the duties and exercise the powers
of the Secretary.
SECTION 4.09. THE TREASURER. The Treasurer shall have the care and
custody of all the funds of the Corporation and shall deposit such funds in such
banks or other depositories as the Board, or any officer or officers, or any
officer and agent jointly, duly authorized by the Board, shall, from time to
time, direct or approve. He shall disburse the funds of the Corporation under
the direction of the Board and the President. He shall keep a full and accurate
account of all moneys received and paid on account of the Corporation and shall
render a statement of his accounts whenever the Board or the President shall so
request. He shall perform all other necessary actions and duties in connection
with the administration of the financial affairs of the Corporation and shall
generally perform all the duties usually appertaining to the office of
Treasurer. When required by the Board, he shall give bonds for the faithful
discharge of his duties in such sums and with such sureties as the Board shall
approve.
SECTION 4.10. ASSISTANT TREASURERS. Assistant Treasurers of the
Corporation, if any, in order of their seniority or in any other order
determined by the Board, shall generally assist the Treasurer and perform such
other duties as the Board or the Treasurer shall prescribe, and, in the absence
or disability of the Treasurer, shall perform the duties and exercise the powers
of the Treasurer.
SECTION 4.11. THE CONTROLLER. The Controller shall keep complete and
accurate books of account relating to the business of the Corporation, including
records of all assets, liabilities, commitments, receipts, disbursements and
other financial transactions of the Corporation and its subsidiaries. He shall
render a statement of the Corporation's financial condition whenever required to
do so by the Board or the President and shall generally perform all the duties
usually appertaining to the office of Controller.
ARTICLE V
CHECKS, DRAFTS, NOTES, AND PROXIES
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SECTION 5.01. CHECKS, DRAFTS AND NOTES. All checks, drafts and other
orders for the payment of money, notes and other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall be
determined, from time to time, by resolution of the Board.
SECTION 5.02. EXECUTION OF PROXIES. The President, or, in his absence,
any Vice President, may authorize, from time to time, the execution and issuance
of proxies to vote shares of stock or other securities of other corporations
held of record by the Corporation and the execution of consents to action taken
or to be taken by any such corporation. All such proxies and consents, unless
otherwise authorized by the Board, shall be signed in the name of the
Corporation by the President or any Vice President.
ARTICLE VI
SHARES AND TRANSFERS OF SHARES
SECTION 6.01. CERTIFICATES EVIDENCING SHARES. Shares shall be evidenced
by certificates in such form or forms as shall be approved by the Board or they
may be uncertificated. Certificates shall be issued in consecutive order and
shall be numbered in the order of their issue, and shall be signed by the
President or any Vice President and by the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer. If such a certificate is manually
signed by a transfer agent or registrar, any other signature on the certificate
may be a facsimile. In the event any such officer who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to hold
such office or to be employed by the Corporation before such certificate is
delivered, such certificate may be issued and delivered by the Corporation with
the same effect as if such officer had held such office on the date of delivery.
SECTION 6.02. STOCK LEDGER. A stock ledger in one or more counterparts
shall be kept by the Secretary, in which shall be recorded the name and address
of each person, firm or corporation owning the Shares evidenced by each
certificate evidencing Shares issued by the Corporation, the number of Shares
evidenced by each such certificate, the date of issuance thereof and, in the
case of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name Shares stand on the stock ledger of
the Corporation shall be deemed the owner and recordholder thereof for all
purposes.
SECTION 6.03. TRANSFERS OF SHARES. Registration of transfers of Shares
shall be made only in the stock ledger of the Corporation upon request of the
registered holder of such Shares, or of his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary, and upon the
surrender of the certificate or certificates evidencing
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such Shares properly endorsed or accompanied by a stock power duly executed,
together with such proof of the authenticity of signatures as the Corporation
may reasonably require.
SECTION 6.04. ADDRESSES OF STOCKHOLDERS. Each Stockholder shall designate
to the Secretary an address at which notices of meetings and all other corporate
notices may be served or mailed to such Stockholder, and, if any Stockholder
shall fail to so designate such an address, corporate notices may be served upon
such Stockholder by mail directed to the mailing address, if any, as the same
appears in the stock ledger of the Corporation or at the last known mailing
address of such Stockholder.
SECTION 6.05. LOST, DESTROYED AND MUTILATED CERTIFICATES. Each
recordholder of Shares shall promptly notify the Corporation of any loss,
destruction or mutilation of any certificate or certificates evidencing any
Share or Shares of which he is the recordholder. The Board may, in its
discretion, cause the Corporation to issue a new certificate in place of any
certificate theretofore issued by it and alleged to have been mutilated, lost,
stolen or destroyed, upon the surrender of the mutilated certificate or, in the
case of loss, theft or destruction of the certificate, upon satisfactory proof
of such loss, theft or destruction, and the Board may, in its discretion,
require the recordholder of the Shares evidenced by the lost, stolen or
destroyed certificate or his legal representative to give the Corporation a bond
sufficient to indemnify the Corporation against any claim made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
SECTION 6.06. REGULATIONS. The Board may make such other rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue, transfer and registration of certificates evidencing
Shares.
SECTION 6.07. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the Corporation may determine the Stockholders entitled to notice of
or to vote at any meeting of Stockholders or any adjournment thereof, or to
express consent to, or to dissent from, corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other such action. A determination of the Stockholders
entitled to notice of or to vote at a meeting of Stockholders shall apply to any
adjournment of such meeting; PROVIDED, HOWEVER, that the Board may fix a new
record date for the adjourned meeting.
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ARTICLE VII
SEAL
SECTION 7.01. SEAL. The Board may approve and adopt a corporate seal,
which shall be in the form of a circle and shall bear the full name of the
Corporation, the year of its incorporation and the words "Corporate Seal
Nevada".
ARTICLE VIII
FISCAL YEAR
SECTION 8.01. FISCAL YEAR. The fiscal year of the Corporation shall end
on the thirty-first day of December of each year unless changed by resolution of
the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
SECTION 9.01. INDEMNIFICATION. (a) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in
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the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including amounts paid in
settlement and attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged by a court of competent jurisdiction, after exhaustion of all
appeals therefrom, to be liable to the Corporation or for amounts paid in
settlement to the Corporation, unless and only to the extent that the court in
which such action or suit was brought or other court of competent jurisdiction
shall determine upon application that, in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses or amounts as the court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 9.01(a) and (b) of these
Bylaws, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under Section 9.01(a) and (b) of these Bylaws
(unless ordered by a court or advanced pursuant to Section 9.01(e)) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. Such determination shall be made (i) by the
Board by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
Stockholders of the Corporation.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation as they are incurred
and in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation pursuant to this Article IX. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board deems appropriate.
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(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article IX shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may
lawfully be entitled under any law, bylaw, agreement, vote of Stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office.
(g) For purposes of this Article IX, references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Article IX with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(h) For purposes of this Article IX, references to "other enterprise"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves service by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
IX.
(i) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article IX shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 9.02. INSURANCE FOR INDEMNIFICATION. The Corporation may purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and liability and expenses incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of Section 751 of the General Corporation Law.
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ARTICLE X
AMENDMENTS
SECTION 10.01. AMENDMENTS. (a) Any Bylaw may be adopted, amended or
repealed by the vote of the recordholders of a majority of the Shares then
entitled to vote at an election of Directors or by written consent of
Stockholders pursuant to Section 2.09 hereof, or by vote of the Board or by
written consent of Directors pursuant to Section 3.10 hereof.
(b) Notwithstanding the provisions of Subsection 10.01(a), during the
Wilson Period, any amendment by the Board of this Subsection 10.01(b) or any
provision of these Bylaws relating to the rights of Wilson III or the Wilson
Directors, which rights are specific to Wilson III or the Wilson Directors and
not granted to Directors generally, shall require the affirmative vote of all of
the Wilson Directors.
(c) Notwithstanding the provisions of Subsection 10.01(a): (i) during the
PGGM Period, any amendment by the Board of this Subsection 10.01(c) or any
provision of these Bylaws relating to the rights of DIHC, PGGM or the PGGM
Directors, which rights are specific during the PGGM Period to DIHC, PGGM or the
PGGM Directors and not granted to Directors generally, shall require the
affirmative vote of all of the PGGM Directors; and (ii) so long as PGGM and DIHC
and their respective Affiliates own in the aggregate 5% or more of the Shares,
amendment by the Board of Subsection 3.03(b) hereof and this Subsection
10.01(c), shall require the affirmative vote of all of the PGGM Directors.
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EXHIBIT N
VOTING AGREEMENT
VOTING AGREEMENT dated as of June 22, 1998, by and between Cornerstone
Properties Inc. (the "Company"), a Nevada corporation, William Wilson &
Associates, a California corporation ("WW&A"), Stichting Pensioenfonds voor de
Gezondheid, Geestelijke en Maatschappelijke Belangen, a stichting formed
according to the laws of the Kingdom of The Netherlands ("PGGM") and Dutch
Institutional Holding Company, Inc. ("DIHC" and together with PGGM, the
"Shareholder").
WHEREAS, PGGM is the beneficial owner of 27,458,750 shares of common stock,
without par value (the "Common Stock"), of the Company and DIHC is the
beneficial owner of 6,726,750 shares of Common Stock of the Company;
WHEREAS, the Company, Cornerstone Properties Limited Partnership, a
Delaware limited partnership (the "OP"), and WW&A, and certain affiliated
partnerships have entered into a Contribution Agreement and Agreement and Plan
of Merger (the "Contribution Agreement"), dated as of the date hereof, which
provides for, among other things, (i) the merger of WW&A with and into the
Company (the "Merger"), and (ii) the issuance of shares of Common Stock and
units of limited partnership interest in the OP; any terms used but not defined
herein which are defined in the Contribution Agreement shall have the meanings
set forth in the Contribution Agreement;
WHEREAS, PGGM hereby agrees to vote the 27,458,750 shares of Common Stock
owned by PGGM as of the date hereof and any shares acquired by PGGM after the
date hereof (the "PGGM Shares") as provided in this Agreement;
WHEREAS, DIHC hereby agrees to vote the 6,726,750 shares of Common Stock
owned by DIHC as of the date hereof and any shares acquired by DIHC after the
date hereof (the "DIHC Shares" and together with the PGGM Shares, the "Shares")
as provided in this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
1. AGREEMENT TO VOTE. At such time as the Company conducts a meeting of,
solicits written consents from or otherwise seeks a vote of its shareholders for
the purpose of approving the transactions contemplated by the Contribution
Agreement, including the Merger, Shareholder agrees to vote all of the Shares in
favor of the transactions contemplated by the Contribution Agreement, including
the Merger, and all other actions necessary or desirable for the consummation of
the transactions contemplated by the Contribution Agreement, including the
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Merger. If the Company or any other Person conducts a meeting of, solicits
written consents from or otherwise seeks a vote of the Company's shareholders
with respect to any transaction or any other matter which may contradict any
provision of this Agreement or the Contribution Agreement or may make it more
difficult or less desirable for the Company to consummate the transactions
contemplated by the Contribution Agreement, then Shareholder further agrees to
vote the Shares in the manner most favorable to consummation of the transactions
contemplated by the Contribution Agreement. Shareholder will retain at all
times the right to vote the Shares, in Shareholder's sole discretion, on all
matters other than those set forth in this Section 1 which are at any time or
from time to time presented for a vote to the Company's shareholders generally.
2. STANDSTILL.
(a) From the date hereof until the closing of the transactions
contemplated by the Contribution Agreement, Shareholder shall not:
(i) directly or indirectly propose to the Company or any person a
Business Combination (as hereinafter defined);
(ii) 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 Securities and Exchange
Commission under Section 14(a) of the Securities Exchange Act
of 1934, as amended (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 shareholders of the
Company for the approval of one or more shareholder proposals
or induce or attempt to induce any other person to initiate
any shareholder proposal; or
(iii) deposit any equity securities of the Company 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, except as contemplated by this
Agreement and the Post Closing Voting Agreement referred to in
the Contribution Agreement.
(b)"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);
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(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
Shareholder; 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 number
of shares of common stock of the Company owned by the
Shareholder or its affiliates (whether or not with or into or
otherwise involving Shareholder or any of its affiliates).
Nothing in this Section 2 shall limit the ability of the directors of
Shareholder to function in their capacities as members of the Board. The
provisions of this Section 2 may be waived by the Company only upon the approval
of a majority of the Board, excluding all directors appointed by PGGM shall not
be applicable to actions approved by the majority of the Board, excluding all
directors appointed by PGGM in circumstances in which such directors are
"interested directors" under Section 78.140 of the Nevada General Corporation
Law.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER. Shareholder
represents and warrants to, and agrees with, the Company and WW&A that:
(a) the Shareholder has the requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Shareholder and
constitutes a valid and legally binding obligation of Shareholder enforceable in
accordance with its terms;
(b) Shareholder is not subject to or obligated under any provisions of (i)
any contract, (ii) any license, franchise or permit or (iii) any law,
regulation, order, judgment or decree that would be breached or violated by the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby;
(c) no authorization, consent or approval of, or any filing with, any
public body or authority is necessary for the execution and delivery of this
Agreement and consummation by the Shareholder of the transactions contemplated
by this Agreement;
(d) on the date hereof it has, and it will have at all times up to the
termination of this Agreement, the unrestricted power to vote the Shares and
good and marketable
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title to the Shares free and clear of all claims, liens, charges, encumbrances
and security interest;
(e) it will not sell, transfer or otherwise dispose of any of the Shares
unless prior to any such sale, transfer or other disposition, the purchaser or
transferee agrees in writing to be bound by the terms of this Agreement; and
(f) the certificates representing the Shares (the "Certificates") issued
to Shareholder or to a transferee of the Shares shall include a legend (the
"Legend") in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AGREEMENT
DATED AS OF JUNE __, 1998, BETWEEN THE CORPORATION, THE SHAREHOLDER AND THE
THIRD PARTY NAMED THEREIN, A COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE CORPORATION AND WILL BE FURNISHED TO
THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Within 30 days of the execution of this Agreement by all parties hereto,
shareholder shall deliver the Certificates to the Company for purposes of
affixing the Legend. The Legend shall be removed upon the termination of this
Agreement pursuant to Section 8 hereof.
3 AMENDMENT. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all the parties hereto. No party to this Agreement may assign any
of its rights or obligations under this Agreement without the prior written
consent of all the other parties hereto.
4. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
5. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to the conflict
of laws principles thereof.
6. BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the heirs, personal representatives,
successors and permitted assigns of the parties hereto. Nothing expressed or
referred to in this Agreement is
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intended or shall be construed to give any person other than the parties of this
Agreement, or their respective heirs, personal representatives, successors or
permitted assigns, any legal or equitable right, remedy or claim under or in
respect to this Agreement or any provision contained herein.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
8. TERMINATION. This Agreement shall terminate on the earlier to occur
of (i) December 31, 1998 and (ii) the date upon which the Contribution Agreement
is terminated or the transactions thereunder are consummated.
9. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
10. FURTHER ASSURANCES. Shareholder will, upon the request of the
Company, execute and deliver such documents and take such action deemed by the
Company to be necessary or desirable to effectuate the purposes of this
Agreement.
11. REMEDIES. Shareholder agrees that, for any violation of this
Agreement, the Company and WW&A each shall have the option, in addition to any
remedies available at law, of seeking equitable relief in any court of competent
jurisdiction to require that the Shareholder comply with the terms of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CORNERSTONE PROPERTIES INC.
By: /s/ John S. Moody
------------------------------
Name: John S. Moody
Title: Chairman and Chief Executive Officer
WILLIAM WILSON & ASSOCIATES
By: /s/ William Wilson III
------------------------------
Name: William Wilson III
Title: President
PGGM
By: /s/ Jan van der Vlist
------------------------------
Name: Jan van der Vlist
Title: Director of Real Estate
By: /s/ Anneke C. van de Puttelaar
--------------------------------
Name: Anneke C. van de Puttelaar
Title: Portfolio Manager Real Estate
DIHC
By: /s/ Craig Johnston
------------------------------
Name: Craig Johnston
Title: Vice President
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