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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 2, 1998
CARRAMERICA REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
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(202) 624-7500
Not applicable
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(Former name or former address, if changed since last report)
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CARRAMERICA REALTY CORPORATION
Item 5. Other Events
On April 2, 1998, the Company entered into an Underwriting
Agreement and related Terms Agreement with Goldman, Sachs & Co. relating to the
proposed underwritten public offering of 3,000,000 shares of common stock of the
Company. In connection with this offering, Security Capital U.S. Realty agreed
to purchase 1,285,714 shares of common stock of the Company in a concurrent
offering at the public offering price. The closings of these offerings are
expected to occur on April 8, 1998. Copies of the Underwriting Agreement and
Terms Agreement relating to the underwritten public offering are filed as
exhibits to this report.
On April 6, 1998, the Company consummated a forward equity sale
transaction with Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") pursuant to which the Company sold to Merrill Lynch 5,000,000 shares of
common stock of the Company. Copies of the Purchase Agreement and the Purchase
Price Adjustment Agreement relating to this transaction are filed as exhibits to
this report. In connection with this offering, the Company and Merrill Lynch
have entered into an agreement to adjust the total number of shares of common
stock sold by the Company to Merrill Lynch (or adjust the aggregate purchase
price for such shares of common stock) in the event of a change in the trading
price of a share of common stock over the next 12 months. Merrill Lynch may sell
any or all of such shares in the future.
The Company intends to use the net proceeds from these offerings
(approximately $271 million) to fund acquisition and development activities,
either through direct payments or repayment of unsecured credit facility
borrowings incurred to fund acquisition or development activities, and for
general corporate purposes.
Item 7. Exhibits
The exhibits listed below relate to the Registration Statement on
Form S-3 (No. 333-22353) of the Company and are filed herewith for incorporation
by reference in such Registration Statement.
1.1 Underwriting Agreement and Terms
Agreement, dated as of April 2, 1998,
each by and between CarrAmerica Realty
Corporation and Goldman, Sachs & Co. (the
"Underwriting and Terms Agreements")
1.2 Purchase Agreement, dated as of April 2,
1998, by and between CarrAmerica Realty
Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the
"Purchase Agreement")
1.3 Purchase Price Adjustment Agreement,
dated as of April 2, 1998, by and between
CarrAmerica Realty Corporation and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
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5.1 Opinion of Hogan & Hartson L.L.P.
regarding legality of shares related to
the Purchase Agreement
5.2 Opinion of Hogan & Hartson L.L.P.
regarding legality of shares related to
the Underwriting and Terms Agreements and
a Subscription Agreement dated as of
April 2, 1998 by and among the Company,
Security Capital Holdings, S.A. and
Security Capital U.S. Realty
23.1 Consent of Hogan & Hartson L.L.P.
(included in its opinions filed as
Exhibits 5.1 and 5.2)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CARRAMERICA REALTY CORPORATION
Date: April 8, 1998 By: /s/ Brian K. Fields
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Brian K. Fields
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Document
1.1 Underwriting Agreement and Terms
Agreement, dated as of April 2, 1998,
each by and between CarrAmerica Realty
Corporation and Goldman, Sachs & Co. (the
"Underwriting and Terms Agreements")
1.2 Purchase Agreement, dated as of April 2,
1998, by and between CarrAmerica Realty
Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the
"Purchase Agreement")
1.3 Purchase Price Adjustment Agreement,
dated as of April 2, 1998, by and between
CarrAmerica Realty Corporation and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
5.1 Opinion of Hogan & Hartson L.L.P.
regarding legality of shares related to
the Purchase Agreement
5.2 Opinion of Hogan & Hartson L.L.P.
regarding legality of shares related to
the Underwriting and Terms Agreements and
a Subscription Agreement dated as of
April 2, 1998 by and among the Company,
Security Capital Holdings, S.A. and
Security Capital U.S. Realty
23.1 Consent of Hogan & Hartson L.L.P.
(included in its opinions filed as
Exhibits 5.1 and 5.2)
Exhibit 1.1
CARRAMERICA REALTY CORPORATION
(a Maryland corporation)
Common Stock, Preferred Stock, Common Stock Warrants,
Depositary Shares and Debt Securities
UNDERWRITING AGREEMENT
April 2, 1998
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
CarrAmerica Realty Corporation (the "Company") may from time
to time offer in one or more series its (i) unsecured debt securities ("Debt
Securities"), (ii) preferred stock, $.01 par value ("Preferred Stock"), (iii)
common stock, $.01 par value ("Common Stock"), (iv) warrants exercisable for
Common Stock ("Common Stock Warrants") and (v) shares of Preferred Stock
represented by depositary shares ("Depositary Shares"), with an aggregate public
offering price of up to $1,000,000,000 (or its equivalent in another currency
based on the exchange rate at the time of sale) in amounts, at prices and on
terms to be determined at the time of offering. The Debt Securities, Preferred
Stock, Common Stock, Common Stock Warrants, and Depositary Shares (collectively,
the "Securities") may be offered, separately or together, in separate series in
amounts, at prices and on terms to be set forth in one or more Prospectus
Supplements as hereinafter defined. The Common Stock Warrants will be issued
pursuant to a Common Stock Warrant Agreement (the "Warrant Agreement") between
the Company and a warrant agent (the "Warrant Agent"). The Debt Securities will
be issued under one or more indentures, as amended or supplemented (each, an
"Indenture"), between the Company and a trustee (a "Trustee"). The Company may
issue receipts for the Depositary Shares, each of which will represent a
fractional interest of a share of a particular series of Preferred Stock. Shares
of Preferred Stock of each series represented by Depositary Shares will be
deposited under a separate deposit agreement (each a "Deposit Agreement") among
the Company, the depositary named therein and the holders from time to time of
receipts for the Depositary Shares. Each series of Preferred Stock may vary as
to the specific number of shares, title, liquidation preference, issuance price,
ranking, dividend rate or rates (or method of calculation), dividend payment
dates, any redemption or sinking fund requirements, any conversion provisions
and any other variable terms as set forth in the applicable articles
supplementary (each, an "Articles Supplementary") relating to such Preferred
Stock as issued from time to time. Each series of Debt Securities may vary as to
aggregate principal amount, maturity date, interest rate or formula and timing
of payments thereof, redemption or
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repayment provisions, conversion provisions and any other variable terms which
the Indenture contemplates may be set forth in the Debt Securities as issued
from time to time. As used herein, "the Representatives," unless the context
otherwise requires, shall mean the parties to whom this Agreement is addressed
together with the other parties, if any, identified in the applicable Terms
Agreement (as hereinafter defined) as additional co-managers with respect to
Underwritten Securities (as hereinafter defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of
Securities through the Representatives or through an underwriting syndicate
managed by the Representatives, the Company will enter into an agreement (the
"Terms Agreement") providing for the sale of such Securities (the "Underwritten
Securities") to, and the purchase and offering thereof by, the Representatives
and such other underwriters, if any, selected by the Representatives as have
authorized the Representatives to enter into such Terms Agreement on their
behalf (the "Underwriters," which term shall include the Representatives whether
acting alone in the sale of the Underwritten Securities or as a member of an
underwriting syndicate and any Underwriter substituted pursuant to Section 10
hereof). The Terms Agreement relating to the offering of Underwritten Securities
shall specify the amount of Underwritten Securities to be initially issued (the
"Initial Underwritten Securities"), the names of the Underwriters participating
in such offering (subject to substitution as provided in Section 10 hereof), the
amount of Initial Underwritten Securities which each such Underwriter severally
agrees to purchase, the names of such of the Representatives or such other
Underwriters acting as co-managers, if any, in connection with such offering,
the price at which the Initial Underwritten Securities are to be purchased by
the Underwriters from the Company, the initial public offering price, if any, of
the Initial Underwritten Securities, the time and place of delivery and payment
and any other variable terms of the Initial Underwritten Securities (including,
but not limited to, current ratings, designations, liquidation preferences,
voting and other rights, denominations, interest rates or formulas, interest
payment dates, maturity dates and conversion, redemption or repayment provisions
applicable to the Initial Underwritten Securities). In addition, each Terms
Agreement shall specify whether the Underwriters will be granted an option to
purchase additional Underwritten Securities to cover over-allotments, if any,
and the aggregate amount of Underwritten Securities subject to such option (the
"Option Securities"). As used herein, the term "Underwritten Securities" shall
include the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
telecommunication between the Representatives and the Company. Each offering of
Underwritten Securities through the Representatives or through an underwriting
syndicate managed by the Representatives will be governed by this Agreement, as
supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-22353) for the registration of the Securities under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 430A or Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), and the Company has
filed such amendments thereto as may have been required prior to the execution
of the applicable Terms Agreement. Such registration statement (as amended, if
applicable) has been declared effective by the Commission and an Indenture has
been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement and the prospectus constituting a part
thereof (including in each case the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations), and each
prospectus supplement relating to the offering of Underwritten Securities
pursuant to Rule 415 of the 1933 Act Regulations (the "Prospectus Supplement"),
including all documents incorporated therein by reference, as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act") or otherwise, are collectively referred to
herein as the "Registration Statement" and the "Prospectus," respectively;
provided that if any revised Prospectus shall be provided to the Representatives
by the Company for use in connection with the offering of Underwritten
Securities which differs from the Prospectus on file at the Commission at the
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time the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of the
1933 Act Regulations), the term "Prospectus" shall refer to each such revised
prospectus from and after the time it is first provided to the Representatives
for such use; provided, further, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of
Underwritten Securities to which it relates. Any registration statement
(including any supplement thereto or information which is deemed part thereof)
filed by the Company under Rule 462(b) of the 1933 Act Regulations (a "Rule
462(b) Registration Statement") shall be deemed to be part of the Registration
Statement. Any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in the Rule 462(b)
Registration Statement and any term sheet as contemplated by Rule 434 of the
1933 Act Regulations (a "Term Sheet") shall be deemed to be part of the
Prospectus. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, preliminary prospectus
supplement, Prospectus or Prospectus Supplement or any Term Sheet or any
amendment or supplement to the foregoing shall be deemed to include the copy
filed with the Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System.
The term "Subsidiary" means a corporation or a partnership a
majority of the outstanding voting stock, partnership or membership interests,
as the case may be, of which is owned or controlled, directly or indirectly, by
the Company, Carr Realty, L.P., a Delaware limited partnership ("Carr L.P."), or
CarrAmerica Realty, L.P., a Delaware limited partnership ("CarrAmerica L.P." and
together with Carr L.P., the "Partnerships"), as the case may be, or by one or
more other Subsidiaries of the Company or either Partnership.
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SECTION 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to the
Representatives, as of the date hereof, and to the Representatives and each
other Underwriter named in the applicable Terms Agreement, as of the date
thereof (in each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective, complied, and as
of each Representation Date will comply, in all material respects with
the requirements of the 1933 Act Regulations and, at the time any Debt
Securities are issued, will comply with the 1939 Act and the rules and
regulations thereunder (the "1939 Act Regulations"). The Registration
Statement, at the time the Registration Statement became effective, did
not, and as of each Representation Date, will not, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, as of the date hereof does not, and as of
each Representation Date and Closing Time (as hereinafter defined)
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Representatives by the Company for use in connection
with an offering of Underwritten Securities which differs from the
Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case at the time it was first
provided to the Representatives for such use) will not, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through the Representatives expressly for use in the Registration
Statement or Prospectus or to that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification
on Form T-1 under the 1939 Act (the "Statement of Eligibility") of a
Trustee under an Indenture. If a Rule 462(b) Registration Statement is
required in connection with the offering and sale of the Securities,
the Company has complied or will comply with the requirements of Rule
111 under the 1933 Act Regulations relating to the payment of filing
fees therefor.
(ii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus pursuant to Item 12 of Form
S-3 under the 1933 Act, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of
the Commission under the 1934 Act (the "1934 Act Regulations"), and,
when read together with the other information in the Prospectus, at the
time the Registration Statement became effective and as of the
applicable Representation Date or Closing Time or during the period
specified in Section 3(f), did not and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(iii) The accountants who certified the financial
statements and supporting schedules included in, or incorporated by
reference into, the Registration Statement and Prospectus, are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
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(iv) The financial statements (including the notes
thereto) included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly the financial
position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified; except as otherwise stated in the
Registration Statement and Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; the supporting schedules
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information required to be stated
therein; and the Company's ratios of earnings to fixed charges (actual
and, if any, proforma) included in the Prospectus under the captions
"Ratios of Earnings to Fixed Charges" and in Exhibit 12.1 to the
Registration Statement have been calculated in compliance with Item
503(d) of Regulation S-K of the Commission. The financial information
and data included in the Registration Statement and the Prospectus
present fairly the information included therein and have been prepared
on a basis consistent with that of the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus and the books and records of the respective entities
presented therein. Pro forma financial information included in or
incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the 1933 Act, the 1933 Act Regulations and guidelines
of the American Institute of Certified Public Accountants with respect
to pro forma financial information and includes all adjustments
necessary to present fairly in all material respects the pro forma
financial position of the Company at the respective dates indicated (if
such financial position is presented) and the results of operations for
the respective periods specified.
(v) No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company or either Partnership, threatened by the Commission or by
the state securities authority of any jurisdiction. No order preventing
or suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company or either Partnership, threatened by the Commission or by
the state securities authority of any jurisdiction.
(vi) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, assets or
business affairs of the Company, the Partnerships, and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business; (B) no material casualty loss or material
condemnation or other material adverse event with respect to any of the
interests held directly or indirectly in any of the real properties
owned, directly or indirectly, by the Company, either Partnership or
any Subsidiary (the "Properties") or any entity wholly or partially
owned by the Company, either Partnership or any Subsidiary has
occurred; (C) there have been no acquisitions or transactions entered
into by the Company, either Partnership or any Subsidiary, other than
those in the ordinary course of business, which are material with
respect to such entities or would result, upon consummation, in any
material inaccuracy in the representations contained in Section
1(a)(iv) above; (D) except for regular quarterly dividends on the
Common Stock, and dividends on the Preferred Stock, if any, and
distributions by either of the
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Partnerships with respect to its partnership interests ("Units"), there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock or by either of the
Partnerships with respect to its Units; and (E) with the exception of
transactions in connection with stock and Unit options and in
connection with dividend reinvestment plans, the issuance of shares of
Common Stock upon the exchange of Units and the issuance of Units in
connection with the acquisition of real or personal property, there has
been no change in the capital stock or in the partnership interests or
membership interests, as the case may be, of the Company, either of the
Partnerships or any Subsidiary, and no increase in the indebtedness of
the Company, either of the Partnerships, or any Subsidiary, that is
material to the Company, the Partnerships and the Subsidiaries,
considered as one enterprise.
(vii) The Company has been duly formed, and is validly
existing and in good standing as a corporation under the laws of
Maryland with corporate power and authority to conduct the business in
which it is engaged or proposes to engage and to own, lease and operate
its properties as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Terms Agreement, any
Warrant Agreement and any Indenture.
(viii) Each of the Partnerships and the Subsidiaries has
been duly formed, and is validly existing and in good standing as a
corporation or partnership under the laws of its jurisdiction of
organization, with partnership or corporate power and authority to
conduct the business in which it is engaged or proposes to engage and
to own, lease and operate its properties as described in the
Prospectus.
(ix) Each of the Company, the Partnerships and the
Subsidiaries is duly qualified or registered as a foreign partnership
or corporation in good standing and authorized to do business in each
jurisdiction in which such qualification is required whether by reason
of the ownership, leasing or management of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, assets or business affairs of the Company, the
Partnerships and the Subsidiaries considered as one enterprise (a
"Material Adverse Effect").
(x) The capital stock of the Company as of the date
specified in the Prospectus is as set forth therein under
"Capitalization." All the issued and outstanding shares of capital
stock of the Company have been duly authorized and are validly issued,
fully paid and non-assessable and have been offered and sold in
compliance with all applicable laws (including, without limitation,
federal, state or foreign securities laws).
(xi) Except for transactions described in the Prospectus
and transactions in connection with stock and Unit options and in
connection with dividend reinvestment plans and exchanges of Units,
there are no outstanding securities convertible into or exchangeable
for any capital stock of the Company and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
such shares, Units or other securities of the Company, the Partnerships
or the Subsidiaries.
(xii) The applicable Underwritten Securities, if such
Underwritten Securities are Common Stock or Preferred Stock, have been
duly authorized by the Company for issuance and sale to the
Underwriters pursuant to this Agreement, and, when issued and delivered
by the Company, pursuant to this Agreement and the applicable Terms
Agreement against payment of the consideration set forth in the Terms
Agreement, will be validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of such Underwritten
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Securities in accordance herewith, each of the Underwriters will
receive good, valid and marketable title to such Underwritten
Securities, free and clear of all security interests, mortgages,
pledges, liens, encumbrances, claims and equities. The terms of such
applicable Underwritten Securities conform in all material respects to
all statements and descriptions related thereto contained in the
Prospectus. The form of stock certificate to be used to evidence the
applicable Underwritten Securities will be in due and proper form and
will comply with all applicable legal requirements. The issuance of
such applicable Underwritten Securities is not subject to any
preemptive or other similar rights, except as described in the
Prospectus.
(xiii) If applicable, the Common Stock Warrants have been
duly authorized by the Company for issuance and sale to the
Underwriters pursuant to this Agreement, and, when issued and delivered
in the manner provided for in this Agreement and any Terms Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, against payment of the consideration therefor specified in
the applicable Terms Agreement, will be duly executed, countersigned,
issued and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Warrant Agreement under which they are issued. Upon payment of the
purchase price and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will receive good, valid
and marketable title to such Underwritten Securities, free and clear of
all security interests, mortgages, pledges, liens, encumbrances, claims
and equities. The terms of the Common Stock Warrants conform in all
material respects to all statements and descriptions related thereto
contained in the Prospectus. The issuance of the Common Stock Warrants
is not subject to any preemptive or other similar rights, except as
described in the Prospectus.
(xiv) The applicable Underwritten Securities, if such
Underwritten Securities are Debt Securities, are in the form
contemplated by the Indenture, have been duly authorized by the Company
for issuance and sale to the Underwriters pursuant to this Agreement
and, when executed, authenticated, issued and delivered in the manner
provided for in this Agreement, any Terms Agreement and the applicable
Indenture, against payment of the consideration therefor specified in
the applicable Terms Agreement, such Debt Securities will constitute
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and such Debt Securities will be enforceable
against the Company in accordance with their terms; provided, however,
that the enforceability of the foregoing may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general equitable principles. Upon payment of
the purchase price and delivery of such Underwritten Securities in
accordance herewith, each of the Underwriters will receive good, valid
and marketable title to such Underwritten Securities, free and clear of
all security interests, mortgages, pledges, liens, encumbrances, claims
and equities. The terms of such applicable Underwritten Securities
conform in all material respects to all statements and descriptions
related thereto in the Prospectus. Such Underwritten Securities rank
and will rank on a parity with all unsecured indebtedness (other than
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subordinated indebtedness) of the Company that is outstanding on the
Representation Date or that may be incurred thereafter, and senior to
all subordinated indebtedness of the Company that is outstanding on the
Representation Date or that may be incurred thereafter, except that
such Underwritten Securities will be effectively subordinated to the
prior claims of each secured mortgage lender to any specific Property
which secures such lender's mortgage.
(xv) If applicable, the Common Stock issuable upon
conversion of any of the Debt Securities or the Preferred Stock and
upon exercise of the Common Stock Warrants will have been duly and
validly authorized and reserved for issuance upon such conversion or
exercise by all necessary action and such stock, when issued upon such
conversion or exercise, will be duly and validly issued, fully paid and
non-assessable, and the issuance of such stock upon such conversion or
exercise will not be subject to preemptive or other similar rights
except as described in the Prospectus. The Common Stock so issuable
conforms in all material respects to all statements relating thereto
contained in the Prospectus.
(xvi) The applicable Warrant Agreement, if any, will have
been duly authorized, executed and delivered by the Company prior to
the issuance of any applicable Underwritten Securities, and will
constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms; provided, however, that the
enforceability of the foregoing may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general equitable principles. The Warrant
Agreement conforms in all material respects to all statements relating
thereto contained in the Prospectus.
(xvii) (A) This Agreement has been duly and validly
authorized, executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Representatives, is a
valid and binding agreement of the Company, and (B) at the
Representation Date, the Terms Agreement will have been duly and
validly authorized, executed and delivered by the Company, and,
assuming due authorization, execution and delivery by the
Representatives, will be valid and binding agreements, enforceable in
accordance with its or their terms; provided, however, that the
enforceability of the foregoing may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general equitable principles;.
(xviii) If applicable, the Indenture (A) has been duly
qualified under the 1939 Act, will have been duly and validly
authorized, executed and delivered by the Company prior to the issuance
of any applicable Underwritten Securities, and when executed and
delivered by the Trustee, will constitute a valid and binding
obligation of the Company, enforceable in accordance with its terms;
provided, however, that the enforceability of the foregoing may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable
principles; and (B) conforms in all material respects to the
description thereof in the Prospectus.
(xix) None of the Company, the Partnerships or any
Subsidiary is in violation of its charter, by-laws, certificate of
limited partnership or partnership agreement, as the case may be, or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which such entity is
a party or by which such entity may be bound, or to which any of its
property or assets is subject, which violation or default separately or
in the aggregate would have a Material Adverse Effect.
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(xx) The issuance of the Underwritten Securities, the
execution and delivery of this Agreement, the applicable Terms
Agreement, any Warrant Agreement, any Deposit Agreement and any
Indenture and the performance of the obligations set forth herein or
therein, and the consummation of the transactions contemplated hereby
and thereby will not (A) result in the creation of any lien, charge or
encumbrance upon the Properties and (B) conflict with or constitute a
breach or violation by the parties thereto of, or default under, (1)
any material contract, indenture, mortgage, loan agreement, note,
lease, joint venture or partnership agreement or other instrument or
agreement to which the Company, either of the Partnerships or any
Subsidiary is a party, or by which they, any of them, any of their
respective properties or other assets or any Property (including,
without limitation, partnership and other interests in partnerships or
other entities which own direct or indirect interests therein) is or
may be bound or subject, (2) the charter, by-laws, certificate of
limited partnership, partnership agreement or other organizational
document, as the case may be, of the Company, the Partnerships or any
Subsidiary or (3) any applicable law, rule, order, administrative
regulation or administrative or court decree.
(xxi) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company and the Partnerships,
threatened against or affecting the Company, either of the
Partnerships, any Subsidiary, any Property or any officer or director
of the foregoing that is required to be disclosed in the Registration
Statement (other than as disclosed therein), and that, if determined
adversely to the Company, the applicable Partnership, any Subsidiary,
any Property, or any such officer or director, would reasonably be
expected to result in any Material Adverse Effect, or which might
materially and adversely affect the consummation of this Agreement, the
applicable Terms Agreement, any Warrant Agreement, any Deposit
Agreement, the Indenture, if any, or the transactions contemplated
herein and therein. There is no pending legal or governmental
proceeding to which the Company, either of the Partnerships or any
Subsidiary is a party or of which any of their respective properties or
assets or any Property (including, without limitation, partnership and
other interests in partnerships or other entities which own direct or
indirect interests therein), is the subject, including ordinary routine
litigation incidental to the business or operations of the foregoing,
that is or would reasonably be expected to be, material to the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company, the Partnerships and the
Subsidiaries, considered as one enterprise. There are no contracts or
documents of a character which are required to be filed as exhibits to
the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been filed as exhibits to the Registration
Statement.
(xxii) At all times beginning with its taxable period
ended December 31, 1993, the Company has been, and upon the sale of the
applicable Underwritten Securities, the Company will continue to be,
organized and operated in conformity with the requirements for
qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"), and its proposed method
of operation will enable it to continue to meet the requirements for
taxation as a real estate investment trust under the Code.
(xxiii) None of the Company, the Partnerships or any
Subsidiary is required to be registered under the Investment Company
Act of 1940, as amended (the "1940 Act").
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(xxiv) The Company, the Partnerships and the other
Subsidiaries own or possess the trademarks, service marks and trade
names (collectively, "proprietary rights") that are material to the
businesses now operated or proposed to be operated by them and that are
currently employed or proposed to be employed by them in connection
with such businesses, and none of the Company, the Partnerships or any
of the Subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any such proprietary rights.
(xxv) All authorizations, approvals or consents of any
court or government authority or agency or other entity or person that
are necessary in connection with the offering, issuance or sale of the
Underwritten Securities hereunder by the Company have been obtained,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws with respect to the Underwritten
Securities.
(xxvi) Each of the Company, the Partnerships and the
Subsidiaries possesses such certificates, authorizations or permits
issued by the appropriate regulatory agencies or bodies necessary to
conduct the business now conducted by it, or proposed to be conducted
by it, and none of the Company, either of the Partnerships or any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company, the Partnerships and the
Subsidiaries considered as one enterprise.
(xxvii) No material labor dispute with the employees of
the Company, either of the Partnerships or any Subsidiary exists or, to
the knowledge of the Company or either of the Partnerships is imminent.
(xxviii) Except as disclosed in the Prospectus, (A) to
the knowledge of the Company, the Environment (as defined below) at
each Property is free of any Hazardous Substance (as defined below)
except for any Hazardous Substance that would not reasonably be
expected to have any material adverse effect on the condition,
financial or otherwise, or on the earnings, assets, business affairs or
business prospects of the Property, the Company, the Partnerships and
the Subsidiaries considered as one enterprise; (B) none of the Company,
the Partnerships or any Subsidiary and, to the knowledge of the Company
and the Partnerships, no prior owner of any Property has caused or
suffered to occur any Release (as defined below) of any Hazardous
Substance into the Environment on, in, under or from any Property in
violation of any Environmental Law applicable to such Property in an
amount that would reasonably be expected to have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
assets, business affairs or business prospects of any Property, the
Company, the Partnerships and the Subsidiaries considered as one
enterprise and no condition exists on, in or under any Property or, to
the knowledge of the Company or the Partnerships, any property adjacent
to any Property that could reasonably be expected to result in the
occurrence of material liabilities under, or any material violations
of, any Environmental Law (as defined below) applicable to such
Property, give rise to the imposition of any Lien (as defined below)
under any Environmental Law, or cause or constitute an environmental
hazard to any property, person or entity; (C) none of the Company, the
Partnerships or any Subsidiary is engaged in or intends to engage in
any manufacturing or any other similar operations at any Property and,
to the knowledge of the Company and the Partnerships, no prior owner of
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any Property engaged in any manufacturing or any similar operations at
any Property that (1) require the use, handling, transportation,
storage, treatment or disposal of any Hazardous Substance (other than
paints, stains, cleaning solvents, insecticides, herbicides, or other
substances that are used in the ordinary course of operating any
Property and in compliance with all applicable Environmental Laws) or
(2) require permits or are otherwise regulated pursuant to any
Environmental Law; (D) none of the Company, the Partnerships or any
Subsidiary and, to the knowledge of the Company and the Partnerships,
no prior owner of any Property has received any notice of a claim under
or pursuant to any Environmental Law applicable to a Property or under
common law pertaining to Hazardous Substances on any Property or
pertaining to other property at which Hazardous Substances generated at
any Property have come to be located; (E) none of the Company, the
Partnerships or any Subsidiary and, to the best knowledge of the
Company and the Partnerships, no prior owner of any Property has
received any notice from any Governmental Authority (as defined below)
claiming any violation of any Environmental Law that is uncured or
unremediated as of the date hereof; and (F) no Property (1) is included
or proposed for inclusion on the National Priorities List issued
pursuant to CERCLA (as defined below) by the United States
Environmental Protection Agency (the "EPA") or on the Comprehensive
Environmental Response, Compensation, and Liability Information System
database maintained by the EPA as a potential CERCLA removal, remedial
or response site or (2) is included or proposed for inclusion on, any
similar list of potentially contaminated sites pursuant to any other
applicable Environmental Law nor has the Company, either of the
Partnerships or any Subsidiary received any written notice from the EPA
or any other Governmental Authority proposing the inclusion of any
Property on such list.
As used herein, "Hazardous Substance" shall include any
hazardous substance, hazardous waste, toxic or dangerous substance,
pollutant, asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation, pollutant
or waste, including any such substance, pollutant or waste identified,
listed or regulated under any Environmental Law (including, without
limitation, materials listed in the United States Department of
Transportation Optional Hazardous Material Table, 49 C.F.R. ss.
172.101, as the same may now or hereafter be amended, or in the EPA's
List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part
3202, as the same may now or hereafter be amended); "Environment" shall
mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings and structures;
"Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, as amended (42 U.S.C. ss.
9601, et seq.) ("CERCLA"), the Resource Conservation Recovery Act, as
amended (42 U.S.C. ss. 6901, et seq.), the Clean Air Act, as amended
(42 U.S.C. ss. 7401, et seq.), the Clean Water Act, as amended (33
U.S.C. ss. 1251, et seq.), the Toxic Substances Control Act, as amended
(15 U.S.C. ss. 2601, et seq.), the Toxic Substances Control Act, as
amended (29 U.S.C. ss. 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. ss. 1801, et seq.), together
with all rules, regulations and orders promulgated thereunder and all
other federal, state and local laws, ordinances, rules, regulations and
orders relating to the protection of the environment from environmental
effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or
authority to promulgate, implement or enforce any Environmental Law;
"Lien" shall mean, with respect to any Property, any material mortgage,
deed of trust, pledge, security interest, lien, encumbrance, penalty,
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fine, charge, assessment, judgment or other liability in, on or
affecting such Property; and "Release" shall mean any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous
Substance into the Environment, including, without limitation, the
abandonment or discard of barrels, containers, tanks (including,
without limitation, underground storage tanks) or other receptacles
containing or previously containing any Hazardous Substance or any
release, emission, discharge or similar term, as those terms are
defined or used in any Environmental Law.
(xxix) Each of the Company, the Partnerships and the
Subsidiaries has filed all federal, state, local and foreign income and
franchise tax returns which have been required to be filed and each
such tax return was filed on or prior to the date on which such tax
return was required to be filed or, in lieu of such timely filings,
each of the Company, the Partnerships, or the Subsidiaries, as the case
may be, has duly and timely filed such applications for extension as
may be required to effect all necessary extensions (such extensions
having been obtained and remaining in full force and effect) and has
paid all taxes shown thereon as due and payable and any other
assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such
tax assessment, fine or penalty that is being contested in good faith
through appropriate proceedings and as to which appropriate reserves
have been established.
(xxx) Except as disclosed in the Registration Statement
and except for (i) persons who received Units or shares of Common Stock
in connection with the formation of the Company, or (ii) persons who
received shares of Common Stock, options to acquire shares of Common
Stock or Units in connection with transactions with the Partnerships or
the Company, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act.
(xxxi) Each of the Company, the Partnerships and the
Subsidiaries (or the partnership or other entity owning the Property)
has obtained title insurance insuring good, marketable and lien free
title to the Properties owned by them (other than the Properties in
which the applicable entity owns less than a majority interest),
subject only to customary easements and encumbrances and other
exceptions to title which do not materially impair the operation,
development or use thereof for the purposes intended therefor as
contemplated by the Prospectus on each of such Properties.
(xxxii) The Common Stock will be listed on the New York
Stock Exchange on the applicable Representation Date and at the
applicable Closing Time. If so stated in the applicable Prospectus
Supplement as of the applicable Representation Date, the Preferred
Stock and Common Stock Warrants, as applicable, will have been approved
for listing on the New York Stock Exchange upon notice of issuance.
(xxxiii) Unless otherwise agreed to by the Representatives,
the Preferred Stock and Debt Securities will have an investment grade
rating from one or more nationally recognized statistical rating
organizations at the Representation Date and at the applicable Closing
Time.
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(xxxiv) If the Underwritten Securities are Debt Securities,
then immediately following the application of the proceeds of the sale
of the Underwritten Securities in the manner set forth in the
Prospectus, the mortgages and deeds of trust encumbering the Properties
and assets described in the Prospectus will not be convertible and none
of the partnerships or other entities owning an interest in the
Properties nor any person related to or affiliated with such
partnerships or other entities will hold a participating interest
therein and said mortgages and deeds of trust will not be
cross-defaulted or cross- collateralized with any property not owned
directly or indirectly by the Company, the Partnerships or the
Subsidiaries.
(xxxv) Each of the Company, the Partnerships and the
Subsidiaries is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; and
none of the Company, the Partnerships and the Subsidiaries has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its businesses at a cost that would not have a Material Adverse Effect,
except as described in or contemplated by the Registration Statement
and the Prospectus.
(xxxvi) The Company has not taken and will not take,
directly or indirectly, any action prohibited by Regulation M under the
1934 Act.
(xxxvii) The assets of the Company and the Partnerships do
not constitute "plan assets" under the Employee Retirement Income
Security Act of 1974, as amended.
(b) Any certificate signed by any officer of the Company,
either of the Partnerships or of any of the Subsidiaries and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by such entity to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) The several commitments of the Underwriters to purchase
the Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions set forth
herein or in the applicable Terms Agreement.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company may grant, if so provided in the applicable Terms Agreement
relating to the Initial Underwritten Securities, an option to the Underwriters
named in such Terms Agreement, severally and not jointly, to purchase up to the
number of Option Securities set forth therein at the same price per Option
Security as is applicable to the Initial Underwritten Securities. Such option,
if granted, will expire 30 days (or such lesser number of days as may be
specified in the applicable Terms Agreement) after the Representation Date
relating to the Initial Underwritten Securities, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several
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Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time, date and place of delivery
(a "Date of Delivery") shall be determined by the Representatives, but shall not
be later than seven full business days nor earlier than two full business days
after the exercise of said option, nor in any event prior to the Closing Time,
unless otherwise agreed upon by the Representatives and the Company. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in the applicable Terms Agreement
bears to the total number of Initial Underwritten Securities (except as
otherwise provided in the applicable Terms Agreement), subject to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional Underwritten Securities.
(c) Payment of the purchase price for, and delivery of
certificates for, the Underwritten Securities to be purchased by the
Underwriters shall be made at the offices of Rogers & Wells LLP, 200 Park
Avenue, New York, New York 10166, or at such other place as shall be agreed upon
by the Representatives and the Company at 9:30 a.m. on the fourth business day
(or the third business day if required under Rule 15c6-1 of the 1934 Act, or
unless postponed in accordance with the provisions of Section 10) following the
date of the applicable Terms Agreement or at such other time as shall be agreed
upon by the Representatives and the Company (each referred to herein as a
"Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices of Rogers & Wells LLP, or at such other place as shall
be agreed upon by the Representatives and the Company on each Date of Delivery
as specified in the notice from the Representatives to the Company. Unless
otherwise specified in the applicable Terms Agreement, payment shall be made to
the Company by wire transfer of Federal or similar same day funds payable to the
order of the Company against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Underwritten Securities to
be purchased by them. Certificates for the Underwritten Securities and the
Option Securities, if any, shall be in such denominations and registered in such
names as the Representatives may request in writing at least two business days
before the Closing Time or the relevant Date of Delivery, as the case may be. It
is understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Underwritten Securities and the Option Securities, if any, which
it has agreed to purchase. The Representatives, individually and not as
representatives of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but any such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Initial Underwritten Securities and the
Option Securities, if any, will be made available for examination and packaging
by the Representatives not later than 10:00 a.m. on the last business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be, in New
York, New York.
SECTION 3. Covenants of the Company. The Company covenants with the
Representatives and with each Underwriter participating in the offering of
Underwritten Securities, as follows:
(a) In respect to each offering of Underwritten Securities,
the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not
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otherwise specified in the Prospectus pursuant to which the
Underwritten Securities are being issued, the names of the Underwriters
participating in the offering and the number of Underwritten Securities
which each severally has agreed to purchase, the names of the
Underwriters acting as co-managers in connection with the offering, the
price at which the Underwritten Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, if
any, the selling concession and reallowance, if any, and such other
information as the Representatives and the Company deem appropriate in
connection with the offering of the Underwritten Securities; and the
Company will promptly transmit copies of the Prospectus Supplement to
the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations and will furnish to the Underwriters named therein as many
copies of the Prospectus (including such Prospectus Supplement) as the
Representatives shall reasonably request.
(b) If, at the time the Prospectus Supplement was filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, any
information shall have been omitted therefrom in reliance upon Rule
430A of the 1933 Act Regulations, then immediately following the
execution of the Terms Agreement, the Company will prepare, and file or
transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) of the 1933 Act Regulations, a copy of an amended
Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including amended
Prospectuses), containing all information so omitted. If required, the
Company will prepare and file or transmit for filing a Rule 462(b)
Registration Statement not later than the date of execution of the
Terms Agreement. If a Rule 462(b) Registration Statement is filed, the
Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule
111 of the 1933 Act Regulations.
(c) The Company will notify the Representatives immediately,
and confirm such notice in writing, of (i) the effectiveness of any
amendment to the Registration Statement, (ii) the transmittal to the
Commission for filing of any Prospectus Supplement or other supplement
or amendment to the Prospectus to be filed pursuant to the 1933 Act,
(iii) the receipt of any comments from the Commission, (iv) any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional
information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; and the Company will
make every reasonable effort to prevent the issuance of any such stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(d) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales
of the Underwritten Securities, the Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus, whether pursuant to the 1933 Act, 1934 Act or
otherwise, will furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing and, unless required by law, will not file or use any
such amendment or supplement or other documents in a form to which the
Representatives or counsel for the Underwriters shall reasonably
object.
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(e) The Company will deliver to the Representatives as soon as
available as many signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents
incorporated by reference therein) as the Representatives may
reasonably request and will also deliver to the Representatives as many
conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including documents incorporated by
reference into the Prospectus) as the Representatives may reasonably
request.
(f) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as the Underwriters may
reasonably request for the purposes contemplated by the 1933 Act or the
1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(g) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters,
to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or
supplement the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances existing
at the time it is delivered to a purchaser, not misleading, and the
Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(h) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities for offering and
sale under the applicable securities laws and real estate syndication
laws of such states and other jurisdictions as the Representatives may
designate; provided, however, that the Company shall not be obligated
to (i) qualify as a foreign corporation in a jurisdiction it is not so
qualified, (ii) file any general consent to service of process or (iii)
take any actions that would subject it to income taxation in any such
jurisdiction. In each jurisdiction in which the Underwritten Securities
have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities.
(i) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon
as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with
the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(j) The Company will use the net proceeds received by it from
the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(k) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to
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Sections 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(l) The Company will file with the New York Stock Exchange all
documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and, to the
extent the Preferred Stock, Common Stock Warrants or Debt Securities
are listed on the New York Stock Exchange, the Company will use its
best efforts to maintain the listing of any such Underwritten
Securities listed on the New York Stock Exchange.
(m) In respect to each offering of Debt Securities, the
Company will qualify an Indenture under the 1939 Act and will endeavor
to have a Statement of Eligibility submitted on behalf of the Trustee.
(n) The Company will take all reasonable action necessary to
enable Standard & Poor's Corporation ("S&P"), Moody's Investors
Service, Inc. ("Moody's") or any other nationally recognized
statistical rating organization to provide their respective credit
ratings of any Underwritten Securities, if applicable.
(o) During the period specified in the applicable Prospectus
Supplement, the Company and the Partnerships will not, without the
prior written consent of Goldman, Sachs & Co., directly or indirectly,
sell, offer to sell, transfer, hypothecate, grant any option for the
sale of, or otherwise dispose of, (i) any securities of the same class
or series or ranking on a parity with any Underwritten Securities
(other than the Underwritten Securities covered by such Prospectus
Supplement) or any security convertible into or exchangeable for such
Underwritten Securities and (ii) if such Prospectus Supplement relates
to Common Stock Warrants or Debt Securities or Preferred Stock that is
convertible into or exchangeable for Common Stock, any Common Stock or
Units or any security convertible into or exchangeable for shares of
Common Stock. This transfer restriction does not apply to (i) grants of
options, and the issuance of shares in respect of such options; (ii)
the issuance of shares and units pursuant to a dividend reinvestment
plan or stock purchase plan; (iii) the issuance of Common Stock on the
exchange of Units; and (iv) the issuance of shares of Common Stock, or
any security convertible into or exchangeable or exercisable for Common
Stock, in connection with the acquisition of real property or an
interest or interests in real property.
(p) With respect to the Common Stock issuable on exercise of
Common Stock Warrants and the conversion of any Debt Securities and
Preferred Stock if such securities are convertible into Common Stock,
the Company will reserve and keep available at all times, free of
preemptive rights and other similar rights, a sufficient number of
shares of Common Stock for the purpose of enabling the Company to
satisfy any obligations to issue such Common Stock upon exercise of the
Common Stock Warrants and conversion of the Debt Securities or
Preferred Stock.
(q) With respect to the Common Stock issuable on exercise of
Common Stock Warrants and the conversion of any Debt Securities and
Preferred Stock if such securities are convertible into Common Stock,
the Company will use its best efforts to list such Common Stock on the
New York Stock Exchange.
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(r) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under
the Code.
(s) During the period from the Closing Time until five years
after the Closing Time, the Company will deliver to the
Representatives, (i) promptly upon their becoming available, copies of
all current, regular and periodic reports of the Company mailed to its
stockholders or filed with any securities exchange or with the
Commission or any governmental authority succeeding to any of the
Commission's functions, and (ii) such other information concerning the
Company and the Partnerships as the Representatives may reasonably
request.
SECTION 4. Payment of Expenses. The Company and the
Partnerships will pay all expenses incident to the performance of their
obligations under this Agreement and the applicable Terms Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto; (ii) the cost of printing, or reproducing, and
distributing to the Underwriters copies of this Agreement and the applicable
Terms Agreement; (iii) the preparation, issuance and delivery of the
Underwritten Securities to the Underwriters, including capital duties, stamp
duties and stock transfer taxes, if any, payable upon issuance of any of the
Underwritten Securities, the sale of the Underwritten Securities to the
Underwriters, their transfer between the Underwriters pursuant to an agreement
between such Underwriters and the fees and expenses of the transfer agent for
the Underwritten Securities; (iv) the fees and disbursements of the Company's
and Partnerships' counsel and accountants; (v) the qualification of the
Underwritten Securities and the Common Stock issuable upon exercise of Common
Stock Warrants and conversion of Debt Securities or Preferred Stock, if any,
under securities laws and real estate syndication laws in accordance with the
provisions of Section 3(h) hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey; (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of each preliminary prospectus,
and of the Prospectus and any amendments or supplements thereto; (vii) the cost
of printing, or reproducing, and delivering to the Underwriters copies of the
Blue Sky Survey; (viii) the fee of the National Association of Securities
Dealers, Inc.; (ix) the fees and expenses incurred in connection with the
listing of the Underwritten Securities and the Common Stock issuable upon
exercise of the Common Stock Warrants and conversion of Debt Securities or
Preferred Stock, if any, on the New York Stock Exchange, any other national
securities exchange or quotation system; (x) any fees charged by nationally
recognized statistical rating organizations for the rating of the Preferred
Stock or Debt Securities, if any; (xi) the printing and delivery to the
Underwriters of copies of the Indenture; (xii) the fees and expenses of the
Trustee and the Warrant Agent, including the reasonable fees and disbursements
of counsel for the Trustee or Warrant Agent, in connection with the Warrant
Agreement, Indenture and the Underwritten Securities; (xiii) the preparation,
issuance and delivery to the Depository Trust Company for credit to the accounts
of the respective Underwriters of any global note registered in the name of Cede
& Co., as nominee for the Depository Trust Company; and (xiv) any transfer taxes
imposed on the sale of the Underwritten Securities to the several Underwriters.
If this Agreement shall be terminated pursuant to Section 10
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 4 and 6 hereof; but, if for any other reason, any
Underwritten Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
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disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Underwritten Securities
not so delivered, but the Company shall then be under no further liability to
any Underwriter except as provided in Sections 4 and 6 hereof.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy, as of the date hereof
and at Closing Time, of the representations and warranties of the Company herein
contained, to the performance by the Company of its obligations hereunder, and
to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission; (ii) if the Company has elected to rely upon Rule 430A
of the 1933 Act Regulations, the public offering price of and the
interest rate on the Underwritten Securities, as the case may be, and
any price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the
1933 Act Regulations within the prescribed time period, and prior to
the applicable Closing Time, the Company shall have provided evidence
satisfactory to the Representatives of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations; (iii) if
Preferred Stock or Debt Securities are being offered, the rating
assigned by any nationally recognized statistical rating organization
as of the date of the applicable Terms Agreement shall not have been
lowered since such date nor shall any such rating organization have
publicly announced that it has placed the Preferred Stock or Debt
Securities on what is commonly termed a "watch list" for possible
downgrading; (iv) if Debt Securities are being offered, the rating
assigned by any nationally recognized statistical rating organization
to any long-term debt securities of the Company as of the date of the
applicable Terms Agreement shall not have been lowered since such date
nor shall any such rating organization have publicly announced that it
has placed any long-term debt securities of the Company on what is
commonly termed a "watch list" for possible downgrading; and (v) there
shall not have come to the attention of the Representatives any facts
that would cause the Representatives to believe that the Prospectus,
together with the applicable Prospectus Supplement, at the time it was
required to be delivered to purchasers of the Underwritten Securities,
included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
light of the circumstances existing at such time, not misleading. If a
Rule 462(b) Registration Statement is required, such Rule 462(b)
Registration Statement shall have been transmitted to the Commission
for filing and have become effective within the prescribed time period,
and, prior to Closing Time, the Company shall have provided to the
Underwriters evidence of such filing and effectiveness in accordance
with Rule 462(b) of the 1933 Act Regulations.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of the applicable
Closing Time, of Hogan & Hartson L.L.P., counsel for the
Company and the Partnerships in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company was incorporated, existing
and in good standing as of the date of the
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certificate identified elsewhere in the opinion
letter under the laws of the State of Maryland. The
Company has the corporate power and corporate
authority under its charter and the Maryland
Corporation Law to own, lease and operate its
properties, to execute and deliver, and perform its
obligations under, the Underwriting Agreement, the
applicable Terms Agreement, any Warrant Agreement and
any Indenture; and to conduct its business as
described in the Prospectus. The Company is
authorized to transact business as a foreign
corporation in those states in which the Company owns
Properties either directly or through a partnership
in which the Company is a general partner, as of the
dates of the certificates identified elsewhere in the
opinion letter.
(ii) Each of the Partnerships is a
limited partnership formed, existing and in good
standing as of the date of its respective certificate
identified elsewhere in the opinion letter, under the
Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act"). Each Partnership has the partnership
power and partnership authority under its partnership
agreement and under the Delaware Act to own, lease
and operate its properties and to conduct its
business as described in the Prospectus and to
perform its obligations under this Agreement and any
Terms Agreement. Each of the Partnerships is
qualified or registered as a foreign partnership, as
of the dates of the certificates identified elsewhere
in the opinion letter, in those states in which such
Partnership owns Properties.
(iii) Each of CarrAmerica GP Holdings,
Inc., Carr Real Estate Services, Inc. and Carr
Development & Construction, Inc. (collectively, the
"Significant Subsidiaries") was incorporated,
existing and in good standing as of the date of its
respective certificate identified elsewhere in the
opinion letter under the Delaware General Corporation
Law. Each of the Significant Subsidiaries has the
corporate power and corporate authority under its
charter and the Delaware General Corporation Law to
own, lease and operate its properties and to conduct
its business as described in the Prospectus.
(iv) The capital stock of the Company,
as of the date specified in the Prospectus, was as
set forth in the Prospectus under the caption
"Capitalization." To the knowledge of such counsel,
(A) except for shares reserved for issuance upon the
redemption of Units and upon conversion of
outstanding securities convertible into shares of
Common Stock or as otherwise disclosed in the
Registration Statement, no shares of capital stock of
the Company are reserved for any purpose. To the
knowledge of such counsel, except as described in the
Prospectus, and except in connection with stock or
Unit options and in connection with dividend
reinvestment plans and the possible issuance of
shares of Common Stock upon the redemption of Units
or as otherwise disclosed in the Registration
Statement, there are no outstanding securities
convertible into or exchangeable for any shares of
capital stock of the Company, and no outstanding
options, rights or warrants to purchase or to
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subscribe for such shares or any other securities of
the Company or either of the Partnerships. No holder
of outstanding shares of Common Stock has any
preemptive rights described in Section 2-205(a) of
the MGCL, or, to the knowledge of such counsel, any
contractual right to subscribe for any such shares,
except as set forth in the Prospectus.
(v) The applicable Underwritten
Securities, if such Underwritten Securities are
Common Stock or Preferred Stock, have been duly
authorized by the Company for issuance and sale to
the Underwriters pursuant to this Agreement, and,
when issued and delivered by the Company, pursuant to
this Agreement and the applicable Terms Agreement
against payment of the consideration set forth in the
Terms Agreement, will be validly issued, fully paid
and non-assessable under the MGCL. The form of stock
certificate to be used to evidence the applicable
Underwritten Securities is in due and proper form and
complies with all applicable legal requirements.
(vi) The Common Stock Warrants, if such
Underwritten Securities are Common Stock Warrants,
have been duly authorized by the Company for issuance
and sale to the Underwriters pursuant to this
Agreement and the applicable Terms Agreement, and,
when issued and delivered in the manner provided for
in this Agreement and any Terms Agreement and
countersigned by the Warrant Agent as provided in the
Warrant Agreement against payment of the
consideration set forth in the Terms Agreement, will
be duly executed, countersigned, issued and delivered
and will constitute valid and legally binding
obligations of the Company entitled to the benefits
provided by the Warrant Agreement under which they
are to be issued. The issuance of the Common Stock
Warrants is not subject to any preemptive rights
described in Section 2- 205(a) of the MGCL, or, to
the knowledge of such counsel, and except as
described in the Prospectus, any contractual right to
subscribe for or purchase any such Common Stock
Warrants or Common Stock.
(vii) The applicable Underwritten
Securities, if such Underwritten Securities are Debt
Securities, are in the form contemplated in the
Indenture, have been duly authorized by the Company
for issuance and sale to the Underwriters pursuant to
this Agreement and, when executed, authenticated,
issued and delivered in the manner provided for in
this Agreement, the applicable Terms Agreement and
the applicable Indenture, against payment of the
consideration therefor specified in the applicable
Terms Agreement, such Debt Securities will constitute
valid and legally binding obligations of the Company
entitled to the benefits of the Indenture and such
Debt Securities will be enforceable against the
Company in accordance with their terms. Such
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Underwritten Securities rank and will rank on a
parity with all unsecured indebtedness (other than
subordinated indebtedness of the Company that is
outstanding on the Representation Date or that may be
incurred thereafter) and senior to all subordinated
indebtedness of the Company that is outstanding on
the Representation Date or that may be incurred
thereafter, except that such Underwritten Securities
will be effectively subordinated to the prior claims
of each secured mortgage lender to any specific
Property which secures such lender's mortgage.
(viii) If applicable, the Common Stock
issuable upon exercise of the Common Stock Warrants
or upon conversion of the Debt Securities or
Preferred Stock will have been duly and validly
authorized and reserved for issuance upon such
conversion or exercise by all necessary action and
such stock, when issued upon such conversion or
exercise, will be duly and validly issued, fully paid
and non-assessable, and the issuance of such stock
upon such conversion or exercise will not be subject
to any preemptive rights described in Section
2-205(a) of the MGCL, or, to the knowledge of such
counsel, and except as described in the Prospectus,
any contractual right to subscribe for or purchase
any Common Stock.
(ix) Each of this Agreement and the
applicable Terms Agreement was duly executed and
delivered on behalf of the Company.
(x) The applicable Warrant Agreement,
if any, has been duly executed and delivered by the
Company, and (assuming due authorization, execution
and delivery by the Warrant Agent) constitutes a
valid and legally binding agreement of the Company,
enforceable in accordance with its terms.
(xi) The Indenture has been duly
qualified under the 1939 Act and has been duly
executed and delivered by the Company, and, assuming
due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation
of the Company, enforceable in accordance with its
terms. The Indenture conforms in all material
respects to the descriptions thereof contained in the
Prospectus.
(xii) The execution, delivery and
performance as of the date hereof of the Underwriting
Agreement, the applicable Terms Agreement, any
Warrant Agreement, any Indenture, any Deposit
Agreement and, if applicable, the Underwritten
Securities, by the Company does not (i) breach or
constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to,
any contract, indenture, mortgage, loan agreement,
note, lease, joint venture or partnership agreement
or other instrument or agreement which has been filed
as an exhibit to the Registration Statement, or (ii)
violate the charter or by-laws of the Transaction
Entities.
(xiii) None of the Company or either of
the Partnerships is an investment company as such
term is defined under the 1940 Act.
(xiv) No consent, approval,
authorization or filing with any federal or Maryland
or Delaware state governmental agency or authority is
required in connection with the offering, issuance or
sale of the applicable Underwritten Securities to the
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<PAGE>
Underwriters in connection with this Agreement or the
applicable Terms Agreement, except such as may be
required under the federal securities laws (certain
matters with respect to which are addressed elsewhere
in the opinion) or state or foreign securities laws
or real estate syndication laws (as to which such
counsel need express no opinion), or such as have
been received or made.
(xv) The documents incorporated or
deemed to be incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 under the
1933 Act (other than the financial statements and
related schedules and financial information and data
included therein or omitted therefrom, as to which no
opinion need be rendered), at the time they were
filed with the Commission, complied as to form in all
material respects with the requirements of the 1934
Act and the 1934 Act Regulations.
(xvi) The Registration Statement is
effective under the 1933 Act and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(xvii) At the time the Registration
Statement became effective and at the Representation
Date, (A) the Registration Statement and the
Prospectus (except for the financial statements and
supporting schedules and financial information and
data included or incorporated by reference therein or
omitted therefrom, as to which no opinion need be
rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xviii) The statements made in the
Prospectus under the headings entitled "Description
of Debt Securities," "Description of Preferred
Stock," "Description of Common Stock," "Description
of Common Stock Warrants," "Description of Depositary
Shares," and the information in the applicable
Prospectus Supplement under similar specified
sections to the extent that they describe matters of
law or legal conclusions, have been reviewed by them
and is correct in all material respects.
(xix) To the knowledge of such counsel,
except as otherwise described in the Registration
Statement or in the agreements referred to in an
exhibit to such opinion, there are no persons with
registration or other similar rights to have any
securities registered under the Registration
Statement, or to require the Company to file any
other registration statement, as a result of the
offer and sale of the Underwritten Securities.
The opinions rendered pursuant to clauses (vii), (x)
and (xi) above may be subject to exceptions regarding
bankruptcy and similar laws, general principles of equity and
other customary exceptions reasonably acceptable to counsel
for the Underwriters.
(2) [INTENTIONALLY OMITTED]
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(3) The favorable opinion, dated as of the applicable
Closing Time, of Rogers & Wells LLP, counsel to the
Underwriters, in form and substance satisfactory to the
Underwriters.
(4) In giving their opinions required by subsections
(b)(1) and (b)(3), respectively, of this Section, Hogan &
Hartson L.L.P. and Rogers & Wells LLP shall additionally state
that such counsel has participated in conferences with
officers and other representatives of the Company and the
independent public accountants for the Company at which the
contents of the Registration Statement and the Prospectus and
related matters were discussed and in the preparation of the
Registration Statement and the Prospectus and, on the basis of
the foregoing, nothing has come to their attention that would
lead them to believe that either the Registration Statement or
any amendment thereto (excluding the financial statements and
financial schedules and financial information and data
included or incorporated by reference therein or the Statement
of Eligibility, as to which such counsel need express no
belief), at the time it became effective or at the time an
Annual Report on Form 10-K was filed by the Company with the
Commission (whichever is later), or at the Representation
Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto
(excluding the financial statements or financial schedules and
financial information and data included or incorporated by
reference therein or the Statement of Eligibility, as to which
such counsel need express no belief), at the Representation
Date or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In giving their opinions, Hogan & Hartson L.L.P. and
Rogers & Wells LLP may rely upon, or assume the accuracy of,
(A) as to all matters of fact, certificates and written
statements of officers and employees of and accountants for
each of the Company, the Partnerships and the Significant
Subsidiaries and (B) as to the qualification and good standing
of each of the Company, the Partnerships and the Significant
Subsidiaries to do business in any jurisdiction, certificates
of appropriate government officials or opinions of counsel in
such jurisdictions.
Hogan & Hartson L.L.P. shall additionally state that
the Underwriters may rely on their opinion addressed to the
Company, and attached to the Registration Statement as Exhibit
8.1, as if such opinion were addressed to them.
(c) At Closing Time, (i) no action, suit or proceeding at law
or in equity shall be pending or, to the knowledge of the Company and
the Partnerships, threatened against the Company, the Partnerships and
any Subsidiary which would be required to be set forth in the
Prospectus other than as set forth therein; (ii) there shall not have
been, since the date of the applicable Terms Agreement or since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business
affairs or business prospects of the Company, the Partnerships and the
Subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business; (iii) no proceedings shall be pending
or, to the knowledge of the Company and the Partnerships, threatened
against such entity or any
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<PAGE>
Subsidiary before or by any federal, state or other commission, board
or administrative agency wherein an unfavorable decision, ruling or
finding might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, assets, business affairs or
business prospects of the Company, the Partnerships and the
Subsidiaries, considered as one enterprise, other than as set forth in
the Prospectus; (iv) no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened by the Commission or by the state securities authority of
any jurisdiction; and (v) the Representatives shall have received a
certificate of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company, dated
as of the Closing Time, evidencing compliance with the provisions of
this subsection (c) and stating that the representations and warranties
in Section 1 hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time.
(d) At the time of the execution of the applicable Terms
Agreement, the Representatives shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that: (i) they are
independent public accountants with respect to the Company as required
by the 1933 Act and the 1933 Act Regulations; (ii) it is their opinion
that the financial statements and supporting schedules included in the
Registration Statement, or incorporated by reference therein, and
covered by their opinions therein comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations; (iii) based upon limited procedures set forth in detail in
such letter, including a reading of the latest available interim
financial statements of the Company a reading of the minute books of
the Company inquiries of officials of the Company responsible for
financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited
financial statements of the Company included in the Registration
Statement, or incorporated by reference therein, do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations, or material modifications are
required for them to be presented in conformity with generally accepted
accounting principles, (B) the operating data and balance sheet data
set forth in the Prospectus under the caption "Selected Consolidated
Financial Data" were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement, (C) the pro forma financial information
included or incorporated by reference in the Registration Statement was
not determined on a basis substantially consistent with that of the
audited financial statements included or incorporated by reference in
the Registration Statement or did not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilations of the
statements or (D) at a specified date not more than five days prior to
the date of the applicable Terms Agreement, there has been any change
in the capital stock of the Company or any increase in the debt of the
Company or any decrease in the net assets of the Company as compared
with the amounts shown in the most recent consolidated balance sheet of
the Company included in the Registration Statement or incorporated by
reference therein, or, during the period from the date of the most
recent consolidated statement of operations included in the
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Registration Statement or incorporated by reference therein to a
specified date not more than five days prior to the date of the
applicable Terms Agreement, there were any decreases, as compared with
the corresponding period in the preceding year, in revenues, net income
or funds from operations of the Company except in all instances for
changes, increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur; and (iv) in
addition to the audit referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are
specified by the Representatives, and have found such amounts,
percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company
identified in such letter.
(e) At Closing Time, the Representatives shall have received
from KPMG Peat Marwick LLP a letter, dated the Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the "specified
date" referred to shall be a date not more than five days prior to
Closing Time.
(f) At Closing Time, the Underwritten Securities, if such
Underwritten Securities are Preferred Stock or Debt Securities, shall
be rated investment grade by one or more nationally recognized
statistical rating organizations and the Company shall have delivered
to the Representatives a letter, dated the Closing Time, from each such
rating organization, or other evidence satisfactory to the
Representatives, confirming that such Underwritten Securities have such
ratings; and since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to such Underwritten
Securities or any of the Company's other debt securities by any
nationally recognized securities rating organization, and no such
securities rating organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of such Underwritten Securities or any of the Company's
other debt securities.
(g) At Closing Time and at each Date of Delivery, if any,
counsel for the Underwriter shall have been furnished with such
documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the applicable
Underwritten Securities as contemplated herein, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the applicable Underwritten Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriter.
(h) At Closing Time, the Representatives shall have received a
letter agreement from Security Capital Holdings S.A., wherein Security
Capital Holdings S.A. shall agree that during the period specified in
the applicable Prospectus Supplement they and their affiliates will
not, without the prior written consent of Goldman, Sachs & Co. and the
Company (which consent, in the case of the Company, will be subject to
the approval of the Company's unaffiliated directors), directly or
indirectly, sell, offer to sell, grant any option for the sale of,
enter into any agreement to sell, or otherwise dispose of, (i) any
securities of the same class or series or ranking on a parity with any
Underwritten Securities or any security convertible into or
exchangeable for shares of such Underwritten Securities, and (ii) if
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such Prospectus Supplement relates to Common Stock Warrants or Debt
Securities or Preferred Stock that is convertible into or exchangeable
for Common Stock, any Common Stock or Units or any security convertible
into or exchangeable for shares of Common Stock. Such transfer
restrictions do not apply to transfers to members of the family of such
director or executive officer (or an entity for their benefit), or to
the granting of a bona fide security interest to a secured party. Any
transferees of such shares, Units or other securities will be likewise
prohibited from making any transfer of shares, Units or other
securities.
(i) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(1) A certificate, dated such Date of Delivery, of
the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company
confirming that their respective certificates delivered at
Closing Time pursuant to Section 5(c) hereof remain true and
correct as of such Date of Delivery.
(2) The favorable opinion of Hogan & Hartson L.L.P.
in form and substance satisfactory to counsel for the
Underwriter, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by
Section 5(b)(1) hereof (including the statement of belief
required by Section 5(b)(4) hereof).
(3) The favorable opinion of Rogers & Wells LLP,
counsel for the Underwriter, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(3) hereof.
(4) A letter from KPMG Peat Marwick, in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this Section 5(i)(4) shall be a
date not more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to
Closing Time and such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof.
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SECTION 6. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
preliminary prospectus, Prospectus, preliminary prospectus supplement or
Prospectus Supplement, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, such preliminary
prospectus, preliminary prospectus supplement or the Prospectus or Prospectus
Supplement, or any such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use under the caption "Plan of
Distribution" or "Underwriting" in the Registration Statement (or any amendment
thereto) or such preliminary prospectus, preliminary prospectus supplement or
the Prospectus or Prospectus Supplement (or any amendment or supplement
thereto).
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any preliminary prospectus,
Prospectus, preliminary prospectus supplement or Prospectus Supplement, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, Prospectus, preliminary prospectus
supplement or Prospectus Supplement, or any such amendment or supplement thereto
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Goldman, Sachs & Co. expressly for use under
the caption "Plan of Distribution" or "Underwriting" in the Registration
Statement (or any amendment thereto) or such preliminary prospectus, preliminary
prospectus supplement or the Prospectus or Prospectus Supplement (or any
amendment or supplement thereto); and will reimburse the Company or CarrAmerica
L.P., as the case may be, for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
28
<PAGE>
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Underwritten Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and CarrAmerica L.P. on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Underwritten Securities (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
29
<PAGE>
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Securities underwritten by it pursuant to
the applicable Terms Agreement and distributed to the public were offered to the
public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the 1933 Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the 1933 Act.
SECTION 7. [INTENTIONALLY OMITTED].
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of the
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any termination of the applicable Terms
Agreement, or any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company and shall survive delivery
of the Underwritten Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if either the Company, the Partnerships or the Subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus; or
(ii) if there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any change
in the capital stock or long-term debt of the Company, the Partnerships or the
Subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company, the Partnerships
or the Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus; or (iii) if there has occurred any downgrading in the rating
accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or preferred stock; or (iv) if there has occurred a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange or on the American Stock Exchange or a suspension or material
limitation in trading in the Common Stock on the New York Stock
30
<PAGE>
Exchange, or if a general moratorium on commercial banking activities has been
declared by either Federal, New York or Maryland authorities; or (v) if there
has occurred any outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war,
if the effect of any such event specified in Clause (i), (ii) or (v) of this
Section 9(a) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Securities on the terms and in the manner contemplated in the
Prospectus. As used in this Section 9(a), the term "Prospectus" means the
Prospectus together with any Prospectus Supplement in the form first used to
confirm sales of the Underwritten Securities.
(b) In the event of any such termination, in respect to such
terminated Terms Agreement, (x) the covenants set forth in Section 3 with
respect to any offering of Underwritten Securities shall remain in effect so
long as any Underwriter owns any such Underwritten Securities purchased from the
Company pursuant to the applicable Terms Agreement and (y) the covenant set
forth in Section 3(i) hereof, the provisions of Section 4 hereof, the indemnity
and contribution agreements set forth in Section 6 hereof, and the provisions of
Sections 8 and 13 hereof shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth. If, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Underwritten Securities to be purchased pursuant to such Terms
Agreement, each of the non-defaulting Underwriters named in such Terms
Agreement shall be obligated, severally and not jointly, to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default under this
Agreement and the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, each of the Representatives or
the Company shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004, attention Registration Department; notices to the Company
shall be directed to 1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006,
attention of Thomas A. Carr.
31
<PAGE>
SECTION 12. Parties. This Agreement and the applicable Terms Agreement
shall each inure to the benefit of and be binding upon the parties hereto and
their respective successors. Nothing expressed or mentioned in this Agreement or
the applicable Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than those referred to in Section 6 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or the applicable Terms Agreement or any
provision herein or therein contained. This Agreement and the applicable Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement and the Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
32
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
CARRAMERICA REALTY CORPORATION
By: /s/ BRIAN K. FIELDS
----------------------
Name: Brian K. Fields
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
GOLDMAN, SACHS & CO.
/s/ GOLDMAN, SACHS & CO.
- ------------------------
(Goldman, Sachs & Co.)
<PAGE>
CARRAMERICA REALTY CORPORATION
(a Maryland Corporation)
3,000,000 Shares of Common Stock
TERMS AGREEMENT
Dated: April 2, 1998
To: CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Chairman of the Board of Directors
Ladies and Gentlemen:
We (the "Underwriter") understand that CarrAmerica Realty Corporation,
a Maryland corporation (the "Company"), proposes to issue and sell 3,000,000
shares of common stock ("Common Stock")(such Common Stock being hereinafter
referred to as the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the Underwriter offers
to purchase the Initial Underwritten Securities (as defined in the Underwriting
Agreement referred to below), and the Option Securities (as defined in the
Underwriting Agreement referred to below) to the extent any are purchased, at
the purchase price set forth below.
The Underwritten Securities shall have the following terms:
<TABLE>
<S> <C>
Title of Securities: Common Stock
Number of Shares: 3,000,000
Public offering price per share: $29.375
Purchase price per share: $28.425
Number of Option Securities: 450,000
Underwriter: Goldman, Sachs & Co.
Payment: Federal or similar same day funds
Closing time, date and location: April 8, 1998, 9:30 a.m. (EST), Hogan & Hartson L.L.P.,
Columbia Square, 555 Thirteenth Street, N.W., Washington, DC
20004-1109
</TABLE>
All the provisions contained in the document entitled "CarrAmerica
Realty Corporation -- Common Stock, Preferred Stock, Common Stock Warrants,
Depositary Shares and Debt Securities Underwriting Agreement" to which this
Terms Agreement is attached are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein. Terms
defined in such document are used herein as therein defined.
<PAGE>
Please accept this offer by signing a copy of this Terms Agreement in
the space set forth below and returning the signed copy to us.
Very truly yours,
GOLDMAN, SACHS & CO.
/s/ GOLDMAN, SACHS & CO.
------------------------
(Goldman, Sachs & Co.)
Accepted:
CARRAMERICA REALTY CORPORATION
By: /s/ BRIAN K. FIELDS
------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
2
Exhibit 1.2
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made as of the 2nd day of April 1998, by and
among CarrAmerica Realty Corporation (the "Company") and Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch").
IN CONSIDERATION of the mutual covenants contained in this Purchase
Agreement, the Company and Merrill Lynch hereby agree as follows:
SECTION l. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Purchase Agreement, the Company has authorized the sale to
Merrill Lynch of 5,000,000 shares (the "Purchased Shares") of its common stock,
$.01 par value per share ("Common Shares"). In connection with the execution and
delivery of this Agreement, the Company and Merrill Lynch also are entering into
a Purchase Price Adjustment Agreement dated as of the date of this Agreement
(the "Adjustment Agreement") under which the Company may issue to Merrill Lynch
additional Common Shares (the "Additional Shares") and/or Merrill Lynch may
return Purchased Shares or Additional Shares to the Company in settlement of
certain obligations under the Adjustment Agreement. The Purchased Shares and the
Additional Shares are hereinafter collectively called the "Shares."
The Company and Merrill Lynch intend that all payments and deliveries
made under the Adjustment Agreement constitute adjustments to the purchase price
paid by Merrill Lynch for the Purchased Shares (or, as applicable, adjustments
to the number of Purchased Shares purchased) under this Agreement and agree, to
the extent relevant to their respective business and commercial activities and
in the absence of a definitive administrative determination or judicial ruling
to the contrary, to treat all such payments and deliveries in a manner
consistent therewith for United States federal income tax and financial
accounting purposes.
SECTION 2. Agreement to Sell and Purchase the Purchased Shares. Subject
to the terms and conditions of this Purchase Agreement, on the Closing Date (as
defined in Section 3 hereof), the Company will sell each of the Purchased Shares
to Merrill Lynch for a per share purchase price equal to 98.00% of the Closing
Price (the "Net Purchase Price"). The "Closing Price" shall equal the closing
price reported on the New York Stock Exchange for a Common Share on the date
hereof.
SECTION 3. Delivery of the Shares at the Closing.
3.1. Closing. The completion of the purchase and sale of the
Purchased Shares (the "Closing") shall occur as soon as practicable on or after
the date hereof on a business day to be agreed upon by the Company and Merrill
Lynch, but in no event later than five business days after the execution of this
Purchase Agreement (hereinafter, the "Closing Date").
<PAGE>
3.2. Conditions. At the Closing, the Company shall deliver to
Merrill Lynch one or more stock certificates registered in the name of Merrill
Lynch representing the Purchased Shares.
The Company's obligation to complete the purchase and sale of the
Purchased Shares and deliver such stock certificate(s) to Merrill Lynch at the
Closing shall be subject to the following conditions, any one or more of which
may be waived by the Company: (i) receipt by the Company of Federal Funds (or
other mutually agreed upon form of payment) in the full amount of the Net
Purchase Price, (ii) the accuracy, in all material respects, as of the Closing
Date of the representations and warranties made by Merrill Lynch herein and the
fulfillment, in all material respects, of those undertakings of Merrill Lynch to
be fulfilled prior to the Closing, (iii) execution and delivery of the
Adjustment Agreement, (iv) receipt by the Company of a cross-receipt with
respect to the Purchased Shares executed by Merrill Lynch and (v) receipt by the
Company of a certificate of an officer or authorized representative of Merrill
Lynch to the effect that the representations and warranties of Merrill Lynch set
forth in Section 5 hereof are true and correct as of the Closing Date.
Merrill Lynch's obligation to accept delivery of such stock
certificate(s) and to pay for the Purchased Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may be waived by
Merrill Lynch: (i) the accuracy, in all material respects, as of the Closing
Date, of the representations and warranties made by the Company herein and the
fulfillment, in all material respects, of those undertakings of the Company to
be fulfilled prior to the Closing, (ii) receipt by Merrill Lynch of all
opinions, letters and certificates to be delivered by the Company pursuant to
this Purchase Agreement, (iii) execution and delivery of the Adjustment
Agreement, and (iv) receipt by Merrill Lynch of a cross-receipt with respect to
the purchase price for the Purchased Shares executed by the Company.
The Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-22353) for the registration of certain Common Shares, shares of preferred
stock, warrants for the purchase of Common Shares, debt securities and shares of
preferred stock represented by depositary shares under the Securities Act of
1933, as amended (the "Securities Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the Securities Act (the "1933 Act Regulations"), and the Company has filed
such amendment or amendments thereto as may have been required prior to the
execution of this Agreement. Such registration statement (as amended, if
applicable) has been declared effective by the Commission. Such registration
statement and the prospectus (including any prospectus supplement) constituting
a part thereof provided by the Company to Merrill Lynch for use in connection
with the offering and sale of the Purchased Shares to Merrill Lynch (including,
in each case, any information deemed to be a part thereof pursuant to Rule
430A(b) of the 1933 Act Regulations), as from time to time amended or
supplemented pursuant to the Securities Act or otherwise, are hereinafter
referred to as the "Registration Statement" and the "Prospectus," respectively,
except that if any revised prospectus shall be provided to Merrill Lynch by the
Company for use in connection with the offering and sale of the Shares that
differs from the prospectus on file at the Commission (whether or not such
revised prospectus is required to be filed by the Company pursuant to
2
<PAGE>
Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to Merrill
Lynch for such use; and except further that a prospectus supplement shall be
deemed to have supplemented a prospectus only to the extent that it relates to,
and only with respect to, the offering and sale of the Shares. All references in
this Agreement to financial statements and schedules and other information that
are "contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all financial statements and schedules and other information that are or
are deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that is or is deemed to
be incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The term "Subsidiary" means a corporation or a partnership a majority of
the outstanding voting stock or partnership or membership interests, as the case
may be, of which is owned or controlled, directly or indirectly, by the Company,
Carr Realty, L.P., a Delaware limited partnership ("Carr L.P."), or CarrAmerica
Realty, L.P., a Delaware limited partnership ("CarrAmerica L.P." and, together
with Carr L.P., the "Partnerships"), as the case may be, or by one or more other
Subsidiaries of the Company or either Partnership.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to Merrill Lynch, and covenants with
Merrill Lynch, as follows:
4.1. Registration Statement and Prospectus. The Registration
Statement, at the time the Registration Statement became effective, complied,
and as of the date hereof complies, in all material respects with the
requirements of the Securities Act and the 1933 Act Regulations. The
Registration Statement, at the time the Registration Statement became effective,
did not, and as of the date hereof does not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as of
the date it was first provided to Merrill Lynch for use in connection with the
offering and sale of the Purchased Shares to Merrill Lynch did not, and as of
the date hereof does not, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this section shall
not apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing through Merrill Lynch expressly for use in the
Registration Statement or the Prospectus.
4.2. Documents Incorporated by Reference. The documents
incorporated or deemed to be incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the "1934 Act Regulations"), and, when read together
3
<PAGE>
with the other information in the Prospectus, at the time the Registration
Statement became effective and as of the date hereof, did not and do not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
4.3. Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement and
Prospectus are independent public accountants as required by the Securities Act
and the 1933 Act Regulations.
4.4. Financial Statements. The financial statements (including the
notes thereto) included in the Registration Statement and the Prospectus present
fairly the financial position of the respective entity or entities presented
therein at the respective dates indicated and the results of their operations
for the respective periods specified; except as otherwise stated in the
Registration Statement and Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis; and the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information required to be stated therein. The financial information and data
included in the Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis consistent with
that of the financial statements included or incorporated by reference in the
Registration Statement and the Prospectus and the books and records of the
respective entities presented therein. The pro forma financial information
included in the Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of the Securities Act, the 1933 Act
Regulations and guidelines of the American Institute of Certified Public
Accountants with respect to pro forma financial information and includes all
adjustments necessary to present fairly in all material respects the pro forma
financial position of the Company at the respective dates indicated (if such
financial position is presented) and the results of operations for the
respective periods specified.
4.5. No Stop Order. No stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of the Prospectus has
been issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission or by the state
securities authority of any jurisdiction.
4.6. No Material Change. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, assets, business affairs
or business prospects of the Company, the Partnerships, and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business; (B) no material casualty loss or material condemnation or other
material adverse event with respect to any of the interests held directly or
indirectly in any of the real properties owned, directly or indirectly, by the
Company, either Partnership or any Subsidiary (the "Properties") or any entity
wholly or partially owned by the
4
<PAGE>
Company, either Partnership or any Subsidiary has occurred; (C) there have been
no acquisitions or transactions entered into by the Company, either Partnership
or any Subsidiary, other than those in the ordinary course of business, which
are material with respect to such entities or would result, upon consummation,
in any material inaccuracy in the representations contained in Section 4.4
above; (D) except for regular quarterly dividends on Common Shares, dividends on
outstanding shares of the Company's preferred stock in amounts per share that
are consistent with past practice, and distributions by either of the
Partnerships with respect to its partnership interests ("Units"), there has been
no dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock or by either of the Partnerships with respect to
its Units; and (E) with the exception of transactions in connection with stock
and Unit options and in connection with dividend reinvestment plans, the
issuance of Common Shares upon the exchange of Units, the issuance of Units in
connection with the acquisition of real or personal property, the sale of the
Purchased Shares under this Agreement and the reservation of the Additional
Shares for issuance pursuant to the Adjustment Agreement, there has been no
change in the capital stock or in the partnership interests or membership
interests, as the case may be, of the Company, either of the Partnerships or any
Subsidiary, and no increase in the indebtedness of the Company, either of the
Partnerships, or any Subsidiary, that is material to the Company, the
Partnerships and the Subsidiaries, considered as one enterprise.
4.7. Organization of the Company. The Company has been duly
formed, and is validly existing and in good standing as a corporation under the
laws of Maryland with corporate power and authority to conduct the business in
which it is engaged or proposes to engage and to own, lease and operate its
properties as described in the Prospectus and to enter into and perform its
obligations under this Agreement.
4.8. Organization the Partnerships and Subsidiaries. Each of the
Partnerships and the Subsidiaries has been duly formed, and is validly existing
and in good standing as a corporation or partnership under the laws of its
jurisdiction of organization, with partnership or corporate power and authority
to conduct the business in which it is engaged or proposes to engage and to own,
lease and operate its properties as described in the Prospectus.
4.9. Qualification. Each of the Company, the Partnerships and the
Subsidiaries is duly qualified or registered as a foreign partnership or
corporation in good standing and authorized to do business in each jurisdiction
in which such qualification is required whether by reason of the ownership,
leasing or management of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets or business affairs of the
Company, the Partnerships and the Subsidiaries considered as one enterprise (a
"Material Adverse Effect").
4.10. Authorized Capital Stock. The capital stock of the Company
as of the date specified in the Prospectus is as set forth therein under
"Capitalization." All the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
non-assessable and have been offered and sold in compliance with all applicable
laws (including, without limitation, federal, state or foreign securities laws).
Except for transactions described in the Prospectus and transactions in
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connection with stock and Unit options and in connection with dividend
reinvestment plans and exchanges of Units, there are no outstanding securities
convertible into or exchangeable for any capital stock of the Company and no
outstanding options, rights (preemptive or otherwise) or warrants to purchase or
to subscribe for such shares, Units or other securities of the Company, the
Partnerships or the Subsidiaries.
4.11. Issuance, Sale and Delivery of the Shares. The Shares have
been duly authorized by the Company for issuance and sale pursuant to this
Agreement and the Adjustment Agreement, and, when issued and delivered by the
Company in the manner and against payment of the consideration set forth herein
and therein, will be validly issued, fully paid and non-assessable. Upon payment
of the purchase price and delivery of the Shares in accordance with this
Agreement and the Adjustment Agreement, Merrill Lynch will receive good, valid
and marketable title to the Shares, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims and equities. No approval of or
authorization by the stockholders or the Board of Directors of the Company will
be required for the issuance and/or sale of the Shares to be sold by the Company
as contemplated herein and in the Adjustment Agreement, except such as will have
been obtained on or before the Closing Date. The terms of the Purchased Shares
conform in all material respects to all statements and descriptions related
thereto contained in the Prospectus. The form of stock certificate to be used to
evidence the Purchased Shares will be in due and proper form and will comply
with all applicable legal requirements. The issuance of the Purchased Shares is
not subject to any preemptive or other similar rights, except as described in
the Prospectus.
4.12. Resale Registration Statement. The Company meets and will
continue to meet the requirements to use Form S-3 under the Securities Act and
the 1933 Act Regulations for the resale of the Shares by Merrill Lynch. The
Company has filed or will file all documents which it is required to file under
the Exchange Act and the rules and regulations promulgated thereunder (the "1934
Act Regulations") to be incorporated or deemed to be incorporated in the Resale
Registration Statement (as defined in Section 7 below) within the time periods
prescribed by the Exchange Act and the 1934 Act Regulations and all such
documents comply (or will comply) in all material respects with the requirements
of the Exchange Act and the 1934 Act Regulations, as applicable, and none of
such documents, when so filed, contained or will contain any untrue statement of
a material fact or omitted or will omit to state a 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. Each Resale
Registration Statement, when filed, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
4.13. Due Execution, Delivery and Performance by the Company. This
Agreement and the Adjustment Agreement have been duly and validly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery by Merrill Lynch, are valid and binding agreements of the Company,
enforceable in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' and contracting parties' rights
generally, except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
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in equity or at law) and except that enforcement of the indemnification
agreements in Section 7.4 hereof may be limited by public policy.
4.14. No Defaults. None of the Company, the Partnerships or any
Subsidiary is in violation of its charter, by-laws, certificate of limited
partnership or partnership agreement, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which such entity is a party or by which such entity may be
bound, or to which any of its property or assets is subject, which violation or
default separately or in the aggregate would have a Material Adverse Effect.
4.15. No Liens, Conflicts or Breaches. The execution and delivery
of this Agreement and the Adjustment Agreement, the performance of the
obligations set forth herein and therein and the consummation of the
transactions contemplated hereby and thereby by the Company will not (A) result
in the creation of any lien, charge or encumbrance upon the Properties or (B)
conflict with or constitute a breach or violation by the Company of, or default
under, (1) any material contract, indenture, mortgage, loan agreement, note,
lease, joint venture or partnership agreement or other instrument or agreement
to which the Company, either of the Partnerships or any Subsidiary is a party,
or by which they, any of them, any of their respective properties or other
assets or any Property (including, without limitation, partnership and other
interests in partnerships or other entities which own direct or indirect
interests therein) is or may be bound or subject, (2) the charter, by-laws,
certificate of limited partnership, partnership agreement or other
organizational document, as the case may be, of the Company, the Partnerships or
any Subsidiary or (3) any applicable law, rule, order, administrative regulation
or administrative or court decree.
4.16. No Actions. There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting the
Company, either of the Partnerships, any Subsidiary, any Property or any officer
or director of the foregoing that is required to be disclosed in the
Registration Statement (other than as disclosed therein), and that, if
determined adversely to the Company, the applicable Partnership, any Subsidiary,
any Property, or any such officer or director, would reasonably be expected to
result in any Material Adverse Effect, or which might materially and adversely
affect the consummation of this Agreement or the Adjustment Agreement or the
transactions contemplated herein and therein. There is no pending legal or
governmental proceeding to which the Company, either of the Partnerships or any
Subsidiary is a party or of which any of their respective properties or assets
or any Property (including, without limitation, partnership and other interests
in partnerships or other entities which own direct or indirect interests
therein) is the subject, including ordinary routine litigation incidental to the
business or operations of the foregoing, that is or would reasonably be expected
to be, material to the condition, financial or otherwise, or the earnings,
assets, business affairs or business prospects of the Company, the Partnerships
and the Subsidiaries, considered as one enterprise. There are no contracts or
documents of a character which are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the 1933 Act Regulations
which have not been filed as exhibits to the Registration Statement.
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4.17. REIT Qualification. At all times beginning with its taxable
period ended December 31, 1993, the Company has been organized and operated in
conformity with the requirements for qualification as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code"), and its
proposed method of operation will enable it to continue to meet the requirements
for taxation as a real estate investment trust under the Code.
4.18. Investment Company. None of the Company, the Partnerships or
any Subsidiary is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
4.19. Intellectual Property. The Company, the Partnerships and the
other Subsidiaries own or possess the trademarks, service marks and trade names
(collectively, "proprietary rights") that are material to the businesses now
operated or proposed to be operated by them and that are currently employed or
proposed to be employed by them in connection with such businesses, and none of
the Company, the Partnerships or any of the Subsidiaries has received any notice
or is otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any such proprietary rights.
4.20. Government Authorizations. All authorizations, approvals or
consents of any court or government authority or agency or other entity or
person that are necessary in connection with the execution and delivery of this
Agreement and the Adjustment Agreement and the consummation of the transactions
contemplated herein and therein have been obtained, except such as may be
required under the Securities Act or the 1933 Act Regulations or state
securities laws with respect to the offering and sale of the Shares and in
connection with the filing of any Resale Registration Statement under Section 7
below.
4.21. Permits. Each of the Company, the Partnerships and the
Subsidiaries possesses such certificates, authorizations or permits issued by
the appropriate regulatory agencies or bodies necessary to conduct the business
now conducted by it, or proposed to be conducted by it, and none of the Company,
either of the Partnerships or any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, assets, business affairs
or business prospects of the Company, the Partnerships and the Subsidiaries
considered as one enterprise.
4.22. Labor Disputes. No material labor dispute with the employees
of the Company, either of the Partnerships or any Subsidiary exists or, to the
knowledge of the Company or either of the Partnerships is imminent.
4.23. Environmental Protection. Except as disclosed in the
Prospectus, (A) to the knowledge of the Company, the Environment (as defined
below) at each Property is free of any Hazardous Substance (as defined below)
except for any Hazardous Substance that would not reasonably be expected to have
any Material Adverse Effect; (B) none of the Company, the Partnerships or any
Subsidiary and, to the knowledge of the Company, no prior owner of any Property
has caused or suffered to occur any Release (as defined below)
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of any Hazardous Substance into the Environment on, in, under or from any
Property in violation of any Environmental Law applicable to such Property in an
amount that would reasonably be expected to have a Material Adverse Effect and
no condition exists on, in or under any Property or, to the knowledge of the
Company, any property adjacent to any Property that could reasonably be expected
to result in the occurrence of material liabilities under, or any material
violations of, any Environmental Law (as defined below) applicable to such
Property, give rise to the imposition of any Lien (as defined below) under any
Environmental Law, or cause or constitute an environmental hazard to any
property, person or entity; (C) none of the Company, the Partnerships or any
Subsidiary is engaged in or intends to engage in any manufacturing or any other
similar operations at any Property and, to the knowledge of the Company and the
Partnerships, no prior owner of any Property engaged in any manufacturing or any
similar operations at any Property that (1) require the use, handling,
transportation, storage, treatment or disposal of any Hazardous Substance (other
than paints, stains, cleaning solvents, insecticides, herbicides, or other
substances that are used in the ordinary course of operating any Property and in
compliance with all applicable Environmental Laws) or (2) require permits or are
otherwise regulated pursuant to any Environmental Law; (D) none of the Company,
the Partnerships or any Subsidiary and, to the knowledge of the Company, no
prior owner of any Property has received any notice of a claim under or pursuant
to any Environmental Law applicable to a Property or under common law pertaining
to Hazardous Substances on any Property or pertaining to other property at which
Hazardous Substances generated at any Property have come to be located; (E) none
of the Company, the Partnerships or any Subsidiary and, to the best knowledge of
the Company, no prior owner of any Property has received any notice from any
Governmental Authority (as defined below) claiming any violation of any
Environmental Law that is uncured or unremediated as of the date hereof; and (F)
no Property (1) is included or proposed for inclusion on the National Priorities
List issued pursuant to CERCLA (as defined below) by the United States
Environmental Protection Agency (the "EPA") or on the Comprehensive
Environmental Response, Compensation, and Liability Information System database
maintained by the EPA as a potential CERCLA removal, remedial or response site
or (2) is included or proposed for inclusion on, any similar list of potentially
contaminated sites pursuant to any other applicable Environmental Law nor has
the Company, either of the Partnerships or any Subsidiary received any written
notice from the EPA or any other Governmental Authority proposing the inclusion
of any Property on such list. As used herein, "Hazardous Substance" shall
include any hazardous substance, hazardous waste, toxic or dangerous substance,
pollutant, asbestos-containing materials, PCBs, pesticides, explosives,
radioactive materials, dioxins, urea formaldehyde insulation, pollutant or
waste, including any such substance, pollutant or waste identified, listed or
regulated under any Environmental Law (including, without limitation, materials
listed in the United States Department of Transportation Optional Hazardous
Material Table, 49 C.F.R. ss. 172.101, as the same may now or hereafter be
amended, or in the EPA's List of Hazardous Substances and Reportable Quantities,
40 C.F.R. Part 3202, as the same may now or hereafter be amended); "Environment"
shall mean any surface water, drinking water, ground water, land surface,
subsurface strata, river sediment, buildings and structures; "Environmental Law"
shall mean the Comprehensive Environmental Response, Compensation and Liability
Act, as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"), the Resource
Conservation Recovery Act, as amended (42 U.S.C. ss. 6901 et seq.), the Clean
Air Act, as amended (42 U.S.C. ss. 7401 et seq.), the Clean Water Act, as
amended (33 U.S.C.
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ss. 1251 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. ss.
2601 et seq.), the Toxic Substances Control Act, as amended (29 U.S.C. ss. 651
et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. ss.
1801 et seq.), together with all rules, regulations and orders promulgated
thereunder and all other federal, state and local laws, ordinances, rules,
regulations and orders relating to the protection of the environment from
environmental effects; "Governmental Authority" shall mean any federal, state or
local governmental office, agency or authority having the duty or authority to
promulgate, implement or enforce any Environmental Law; "Lien" shall mean, with
respect to any Property, any material mortgage, deed of trust, pledge, security
interest, lien, encumbrance, penalty, fine, charge, assessment, judgment or
other liability in, on or affecting such Property; and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or discard
of barrels, containers, tanks (including, without limitation, underground
storage tanks) or other receptacles containing or previously containing any
Hazardous Substance or any release, emission, discharge or similar term, as
those terms are defined or used in any Environmental Law.
4.24. Taxes. Each of the Company, the Partnerships and the
Subsidiaries has filed all federal, state, local and foreign income and
franchise tax returns which have been required to be filed and each such tax
return was filed on or prior to the date on which such tax return was required
to be filed or, in lieu of such timely filings, each of the Company, the
Partnerships, or the Subsidiaries, as the case may be, has duly and timely filed
such applications for extension as may be required to effect all necessary
extensions (such extensions having been obtained and remaining in full force and
effect) and has paid all taxes shown thereon as due and payable and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except, in all cases, for any such tax assessment,
fine or penalty that is being contested in good faith through appropriate
proceedings and as to which appropriate reserves have been established.
4.25. Registration Rights. Except as disclosed in the Registration
Statement and except for (i) persons who received Units or shares of Common
Stock in connection with the formation of the Company, or (ii) persons who
received shares of Common Stock, options to acquire shares of Common Stock or
Units in connection with transactions with the Partnerships or the Company,
there are no persons with registration or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act. Other than Merrill Lynch, no
stockholder of the Company has any right, which has not or will not have been
waived or has not expired by reason of lapse of time following notification of
the Company's intent to file any Resale Registration Statement (as defined
below) pursuant to Section 7.1, to require the Company to register the sale of
any shares owned by such stockholder under the Resale Registration Statement.
4.26. Title to Properties. Each of the Company, the Partnerships
and the Subsidiaries (or the partnership or other entity owning the Property)
has obtained title insurance insuring good, marketable and lien free title to
the Properties owned by them (other than the Properties in which the applicable
entity owns less than a majority interest),
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subject only to customary easements and encumbrances and other exceptions to
title which do not materially impair the operation, development or use thereof
for the purposes intended therefor as contemplated by the Prospectus on each of
such Properties.
4.27. NYSE Listing. The Purchased Shares will be listed on the New
York Stock Exchange on the Closing Date.
4.28. Insurance. Each of the Company, the Partnerships and the
Subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; and none of the Company, the
Partnerships and the Subsidiaries has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its businesses at a cost that would not have a Material Adverse Effect,
except as described in or contemplated by the Registration Statement and the
Prospectus.
4.29. Regulation M. The Company has not taken and will not take,
directly or indirectly, any action prohibited by Regulation M under the 1934
Act.
4.30. Regulation T. The Company will not use the proceeds from the
sale of the Purchased Shares for the purpose of purchasing or carrying
"securities" as such term is defined in Regulation T of the Board of Governors
of the Federal Reserve System.
4.31. ERISA. The assets of the Company and the Partnerships do not
constitute "plan assets" under the Employee Retirement Income Security Act of
1974, as amended.
4.32. Officers' Certificates. At or prior to the Closing, the
Company shall deliver a certificate of the Company executed by the President and
Chief Executive Officer and the Chief Financial Officer of the Company, dated
the Closing Date and in form and substance satisfactory to Merrill Lynch, to the
effect that the representations and warranties of the Company set forth in this
Section 4 are true and correct as of Closing Date with the same force and effect
as though expressly made on the Closing Date, and that the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing. Any certificate signed by any
officer of the Company, either of the Partnerships or any of the Subsidiaries
and delivered to Merrill Lynch or to counsel for Merrill Lynch shall be deemed a
representation and warranty by such entity to Merrill Lynch as to the matters
covered thereby.
4.33. Legal Opinions. At or prior to the Closing, counsel to the
Company will deliver a legal opinion dated the Closing Date in substantially the
form of Exhibit A hereto.
4.34. Comfort Letter. The Company shall cooperate with KPMG Peat
Marwick LLP and KPMG Peat Marwick LLP shall, prior to the delivery of the
Purchased Shares to Merrill Lynch, deliver to Merrill Lynch a letter, in form
and substance satisfactory to Merrill Lynch, to the effect that: (i) they are
independent public accountants with respect to the Company as required by the
Securities Act and the 1933 Act Regulations;
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(ii) it is their opinion that the financial statements and any supporting
schedules included in the Registration Statement and covered by their opinions
therein comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the 1933 Act Regulations;
(iii) based upon limited procedures set forth in detail in such letter,
including a reading of the latest available interim financial statements of the
Company, a reading of the minute books of the Company, inquiries of officials of
the Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing has come to
their attention that caused them to believe that (A) the unaudited financial
statements of the Company included in the Registration Statement do not comply
as to form in all material respects with the applicable accounting requirements
of the Securities Act, the 1933 Act Regulations, the Exchange Act, and the 1934
Act Regulations, or material modifications are necessary for them to be
presented in conformity with generally accepted accounting principles, (B) the
operating data and balance sheet data set forth in the Prospectus under the
caption "Selected Consolidated Financial Data" were not determined on a basis
substantially consistent with that used in determining the corresponding amounts
in the audited financial statements included in the Registration Statement, (C)
the pro forma financial information in the Registration Statement was not
determined on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement or did not comply as
to form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or (D) at a specified date not more than five days
prior to the date of this Agreement, there has been any change in the capital
stock of the Company or any increase in the debt of the Company or any decrease
in the net assets of the Company as compared with the amounts shown in the most
recent consolidated balance sheet of the Company included in the Registration
Statement, or, during the period from the date of the most recent consolidated
statement of operations included in the Registration Statement to a specified
date not more than five days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period in the preceding year, in
revenues, net income or funds from operations of the Company except in all
instances for changes, increases or decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur; and (iv) in addition to
the audit referred to in their opinions and the limited procedures referred to
in clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included in the Registration Statement and
Prospectus and which are specified by Merrill Lynch in a letter, and have found
such amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company identified in
such letter.
SECTION 5. Representations, Warranties and Covenants of Merrill Lynch.
5.1. Investment. Merrill Lynch represents and warrants to, and
covenants with, the Company that: (i) it is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in securities presenting an investment decision like that involved
in the purchase of the Shares, including investments in securities issued by the
Company; (ii) Merrill Lynch is acquiring the Shares in the ordinary course of
its business and for its own account for investment (as defined for purposes of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the regulations
thereunder) only and with no present intention of distributing any of the Shares
or any arrangement
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or understanding with any other persons regarding the distribution of any of the
Shares (this representation and warranty not limiting the right of Merrill Lynch
to sell pursuant to any Resale Registration Statement); (iii) Merrill Lynch will
not, directly or indirectly, sell or otherwise dispose of (or solicit any offers
to purchase or otherwise acquire) any of the Shares except in compliance with
the Securities Act and any applicable state securities or blue sky laws; (iv)
Merrill Lynch has completed or caused to be completed the Registration Statement
Questionnaire and the Stock Certificate Questionnaire, both attached hereto as
Appendix I, for use in preparing the Resale Registration Statement and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the Resale Registration Statement.
5.2. Resale. Merrill Lynch acknowledges and agrees that in
connection with any transfer of the Shares it will provide to the transfer agent
prompt notice of any Shares sold pursuant to the Resale Registration Statement
or otherwise transferred in compliance with applicable federal and state
securities laws. Merrill Lynch acknowledges that there may occasionally be times
when the Company, under Section 7.2(a), may suspend the right of Merrill Lynch
to effect sales of the Shares through the use of the Resale Prospectus (as
defined below) forming a part of a Resale Registration Statement. Merrill Lynch
covenants to notify the Company promptly of its sale of all of the Shares.
5.3. Due Execution, Delivery and Performance of this Agreement.
Merrill Lynch represents and warrants to, and covenants with, the Company that
(i) Merrill Lynch has full right, power, authority and capacity to enter into
this Agreement and the Adjustment Agreement and to perform its obligations
hereunder and thereunder and consummate the transactions contemplated hereby and
thereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement and the Adjustment Agreement by it, and (ii)
this Agreement and the Adjustment Agreement are valid and binding obligations of
Merrill Lynch, enforceable in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally, except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except that enforcement of the
indemnification agreements in Section 7.4 hereof may be limited by public
policy.
5.4. Residence of Merrill Lynch. Merrill Lynch represents and
warrants that it is organized in the State of Delaware and has its principal
place of business in New York, New York.
5.5. Certain Tax Considerations. Merrill Lynch represents and
warrants that it is a "corporation" for U.S. federal income tax purposes and for
purposes of any exemptions from information reporting and backup withholding
requirements that may apply to payments by the Company to Merrill Lynch under
this Agreement.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
representations, warranties, covenants and agreements made by the Company and
Merrill Lynch herein shall survive the execution of this Purchase Agreement, the
Adjustment Agreement, the delivery
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to Merrill Lynch of the Purchased Shares, the payment therefor and the
consummation of any other transactions contemplated hereby by the Adjustment
Agreement.
SECTION 7. Registration of the Shares; Compliance with the Securities Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) (i) as soon as practicable after the Closing, but in no
event later than three business days thereafter, prepare
and file with the Commission an initial resale registration
statement, an amendment to the Registration Statement or a
supplement to the prospectus included in the initial resale
registration statement which will permit the public resale
by Merrill Lynch, from time to time, of the Purchased
Shares in any of the manners specified in the Adjustment
Agreement (the "Initial Resale Registration Statement")
and, if such filing is not effective upon filing, use its
best efforts to obtain effectiveness of the Initial Resale
Registration Statement as promptly as practicable following
such filing; and (ii) as soon as practicable after the
issuance of Additional Shares, prepare and file with the
Commission any amendments to the Initial Resale
Registration Statement, supplements to a prospectus
included in the Initial Registration Statement or
additional Resale Registration Statements as shall be
necessary to cover the public resale by Merrill Lynch of
the Additional Shares in the same manner as contemplated by
the Initial Resale Registration Statement for the Purchased
Shares. For purposes of this Purchase Agreement, "Resale
Registration Statement" means the Initial Resale
Registration Statement, any such amendment or additional
Resale Registration Statement or any other registration
statement under the Securities Act covering the resale by
Merrill Lynch of the Shares filed and maintained
continuously effective by the Company pursuant to the
provisions of this Section 7, including the prospectus
contained therein (the "Resale Prospectus"), any amendments
and supplements to any such registration statement,
including all post-effective amendments thereto, and all
exhibits and all material incorporated by reference into
any such registration statement;
(b) use its commercially reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of the
Resale Registration Statement or Resale Prospectus or
suspending the qualification (or exemption from
qualification) of any of the Shares in any jurisdiction;
(c) prepare and file with the Commission such amendments and
supplements to the Resale Registration Statement and the
Resale Prospectus as may be reasonably requested by Merrill
Lynch in order to accomplish the public resale or other
disposition of any of
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the Shares in accordance with the terms of the Adjustment
Agreement, or as may be necessary to keep the Resale
Registration Statement effective until the date on which
either (i) the Shares covered thereby have been sold by or
on behalf of Merrill Lynch or (ii) Merrill Lynch has
advised the Company that it no longer requires that the
Resale Registration Statement remain effective;
(d) furnish to Merrill Lynch with respect to the Shares
registered under the Resale Registration Statement such
reasonable number of copies of the Resale Prospectus,
including any supplements and amendments thereto, as are
necessary to facilitate the public sale or other
disposition of all or any of the Shares by Merrill Lynch;
(e) in order to facilitate the public sale or other disposition
of all or any of the Shares by Merrill Lynch, furnish to
Merrill Lynch with respect to the Shares registered under
any Resale Registration Statement, in connection with any
such public sale or other disposition, an opinion of
counsel to the Company covering the matters set forth in
Exhibit B hereto and such other documents as Merrill Lynch
may reasonably request (including a comfort letter from the
Company's independent certified public accountants and a
"bring down" certificate of representations and warranties
in connection with sales of Shares under the Resale
Registration Statement) (collectively, the "Resale Closing
Documents") (i) upon effectiveness of the Initial Resale
Registration Statement, (ii) if the Shares are publicly
sold or otherwise disposed of through an underwritten
offering or a block trade, as of either the date of the
closing or the date of pricing, as applicable upon prior
notice from Merrill Lynch to the Company as to which date
applies, and (iii) if the Shares are sold or otherwise
disposed of through a continuous offering, upon
commencement of the offering and quarterly thereafter for
the duration of the offering; provided, however, that the
Company shall not be required to deliver any Resale Closing
Documents in the event that the aggregate offering price of
any Shares offered in an underwritten offering or a block
trade is less than $20,000,000, unless, as of the date of
any such underwritten offering or block sale, the Company
has not made any previous delivery of Resale Closing
Documents to Merrill Lynch in connection with any other
public sale or other disposition of the Shares;
(f) use its best efforts to prevent the happening of any
event that would cause any such Resale Registration
Statement to contain a material misstatement or
omission or to be not effective and continuously
useable for resale of the Shares during the period that
such Resale Registration Statement is required to be
effective and usable;
15
<PAGE>
(g) file documents required of the Company for normal blue sky
clearance in states specified in writing by Merrill Lynch;
provided, however, that the Company shall not be required
to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or
has not so consented;
(h) bear all expenses in connection with the procedures in
paragraphs (a) through (f) of this Section 7.1 and Section
7.2(a) and the registration of the Shares pursuant to each
Resale Registration Statement, which expenses shall not
include brokerage or underwriting commissions or taxes of
any kind (including without limitation, transfer bonuses)
with respect to any sale or other disposition of Shares by
Merrill Lynch or any legal, accounting and other expenses
incurred by Merrill Lynch, which expenses shall be borne by
Merrill Lynch; and
(i) promptly file any necessary listing applications or
amendments to existing listing applications to cause any
Additional Shares issued to Merrill Lynch to be listed or
admitted to trading on the New York Stock Exchange or any
national stock exchange or automated quotation system on
which the Company's Common Shares are then listed or
traded.
7.2. Covenants in Connection with Resale Registration.
(a) The Company hereby covenants with Merrill Lynch that (i) it
shall not file any Resale Registration Statement or Resale Prospectus or any
amendment or supplement thereto, unless a copy thereof shall have been first
submitted to Merrill Lynch and Merrill Lynch shall not have objected thereto in
good faith (provided that if Merrill Lynch does not object within two business
days of receiving any such material, it shall be deemed to have no objection
thereto); (ii) it shall immediately notify Merrill Lynch of the issuance by the
Commission of any stop order suspending the effectiveness of any Resale
Registration Statement or the initiation of any proceedings for such purpose;
(iii) it shall make every reasonable effort to obtain promptly the withdrawal of
any order suspending the effectiveness of any Resale Registration Statement at
the earliest possible moment; (iv) it shall immediately notify Merrill Lynch of
the receipt of any notification with respect to the suspension of the
qualification of the Shares for sale under the securities or blue sky laws of
any jurisdiction or the initiation of any proceeding for such purpose; and (v)
it shall immediately notify Merrill Lynch orally or in writing of the happening
of any event or the failure of any event to occur or the existence of any fact
or circumstance that results in any Resale Registration Statement, amendment
thereto, Resale Prospectus, prospectus supplement to the Resale Prospectus or
any document incorporated therein by reference containing an untrue statement of
a material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and promptly
shall prepare, file with the Commission and furnish to Merrill Lynch a
reasonable number of copies of a post-effective amendment or supplement to the
Resale Registration Statement or the Resale Prospectus, or any document
incorporated therein by reference or other required document so that, as
thereafter delivered to the purchasers of the
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<PAGE>
Shares, the Resale Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading. Merrill Lynch hereby covenants that it will not sell any Shares
pursuant to the Resale Registration Statement during the period commencing at
the time at which the Company gives Merrill Lynch notice (which such notice
shall have been given by the Company as promptly as practicable) of the
suspension of the use of said Resale Prospectus by reason of the occurrence of
events described in clauses (ii), (iv) and (v) above and ending at the time the
Company gives Merrill Lynch oral or written notice that Merrill Lynch may
thereafter effect sales pursuant to said Resale Prospectus. Merrill Lynch and
the Company agree that circumstances may exist where the obligation of the
Company under clause (v) above to promptly prepare and file a document may
conflict with a valid business purpose of the Company to avoid premature
disclosure of a material corporate transaction, in which case the Company may
delay preparing and filing a document for a reasonable period of time after
taking into account the valid business purposes of the Company, the Company's
disclosure obligations under the federal securities laws and the adverse effect
of the delay on Merrill Lynch.
(b) Merrill Lynch shall cooperate with the Company in connection
with the preparation of the Resale Registration Statement and shall furnish to
the Company, in a timely manner, all information in its possession or reasonably
obtainable by it and necessary for inclusion in the Resale Registration
Statement (including, without limitation, information relating to the ownership
by Merrill Lynch of Common Shares and the plan of distribution). Merrill Lynch
also shall furnish to the Company, in connection with the commencement of any
continuous offering of Shares under any Resale Registration Statement or
connection with a public sale or other disposition of the Shares through an
underwritten offering or block trade, such documentation as is customary and
reasonably necessary in connection with such transactions. Merrill Lynch also
shall deliver a copy of the Resale Prospectus to all purchasers from it of
Common Shares in accordance with the requirements of applicable law.
(c) Merrill Lynch shall notify the Company at least two business
days prior to the earlier of the date on which it intends to commence effecting
any resales of Shares under a Resale Registration Statement or the date of
pricing with respect to the public sale or other disposition of any Shares under
a Resale Registration Statement effected through an underwritten offering or
block trade and if the Company does not, within such two day period, advise
Merrill Lynch of the existence of any facts of the type referred to in Section
7.2(a) above, then the Company shall be deemed to have certified and represented
to Merrill Lynch that no such facts then exist and Merrill Lynch may rely on
such certificate and representations in making such sales. The preceding
sentence shall in no way limit the Company's obligations under Section 7.2(a)
above.
(d) The Company shall cooperate with Merrill Lynch to facilitate
the timely preparation and delivery of certificates representing the Shares to
be sold under the Resale Registration Statements and not bearing any restrictive
legends and in such denominations and registered in such names as Merrill Lynch
may reasonably request at least one business day prior to the closing of any
sale of the Shares.
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<PAGE>
(e) If the Company notifies Merrill Lynch that it wishes a selling
stockholder under the Resale Registration Statement to effect an underwritten
offering or block trade of Shares, (i) Merrill Lynch shall have the right to
select the managing underwriters or the executing dealer, as the case may be,
who shall be subject to the approval of the Company, which approval shall not be
unreasonably withheld (it being understood that Merrill Lynch is, in any event,
reasonably acceptable to the Company for this purpose) and (ii) the Company
shall (A) enter into written agreements (including underwriting agreements) as
are customary in underwritten offerings or block trades, as the case may be; (B)
obtain an opinion of counsel to the Company and other entities reasonably
requested by the underwriters or the executing dealer, as the case may be, and
updates thereof (which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters or the executing
dealer, as the case may be, and Merrill Lynch addressed to the underwriters or
the executing dealer, as the case may be, and Merrill Lynch covering the matters
customarily covered in opinions requested in underwritten offerings or block
trades, as the case may be, and such other matters as may be reasonably
requested by such underwriters or the executing dealer, as the case may be, and
Merrill Lynch (it being agreed that the matters to be covered by such opinion
may be subject to customary qualifications and exceptions); (C) obtain "cold
comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriters or the executing dealer, as the case
may be, and Merrill Lynch from the independent certified public accountants of
the Company (and, if necessary, other independent certified public accountants
of any affiliate or Subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Resale Registration Statement), addressed to each of the
underwriters or the executing dealer, as the case may be, and Merrill Lynch, if
permitted by applicable accounting rules and statements, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings or block trades, as
the case may be, and such other matters as may be reasonably requested by such
underwriters or the executing dealer, as the case may be, or Merrill Lynch in
accordance with Statement on Auditing Standards No. 72; (D) ensure that any
underwriting agreement contains indemnification provisions and procedures not
less favorable than those included herein (or such other provisions and
procedures acceptable to Merrill Lynch and the underwriters) with respect to all
parties to be indemnified pursuant to said section (including, without
limitation, the underwriters); and (E) deliver such other documents as are
customarily delivered in connection with closing of underwritten offerings or
block trades, as the case may be.
(f) The Company will make reasonably available for inspection by
Merrill Lynch or any underwriter, agent or broker-dealer participating in any
disposition of Shares under the Resale Registration Statement such information
and corporate documents as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities for the purposes of
applicable law, and cause the officers of the Company and its "significant
subsidiaries" (as that term is defined in Regulation S-X) to be available, upon
request at least two business days in advance, to respond to questions relevant
to such due diligence inquiries.
7.3. Transfer of Shares After Registration. Merrill Lynch agree
that it will not effect any disposition of the Shares or its right to purchase
the Shares that would constitute
18
<PAGE>
a sale within the meaning of the Securities Act or pursuant to any applicable
state securities or blue sky laws except as contemplated in the Resale
Registration Statement or pursuant to an exemption from the registration
requirements of the Securities Act (including, without limitation, Rule 144
promulgated thereunder and any successor thereto) and that it will promptly
notify the Company of any changes in the information set forth in any such
Resale Registration Statement regarding Merrill Lynch or the plan of
distribution.
7.4. Indemnification. For the purpose of this Section 7.4 only,
the term "Resale Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to any Resale
Registration Statement referred to in Section 7.1.
(a) Indemnification by Company. The Company will indemnify and
hold harmless Merrill Lynch and each person, if any, who controls Merrill Lynch
within the meaning of Section 15 of the Securities Act, and any director,
officer, employee or affiliate of Merrill Lynch, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Resale Registration
Statement (or any amendment thereto), including the information deemed to be
part of any Resale Registration Statement pursuant to Rule 430A(b) of the 1933
Act Regulations, if applicable, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any related Resale
Prospectus or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company shall not be required under this paragraph (i) to indemnify
Merrill Lynch with respect to any loss, liability, claim, damage or expense to
the extent such loss, liability, claim, damage or expense arises out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by Merrill Lynch specifically for inclusion in any Resale Registration
Statement or any related Resale Prospectus;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or of any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
for which indemnification is provided under paragraph (i) above, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including,
without limitation, the fees and other charges of counsel chosen by you)
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceedings by any governmental agency or
body, commenced or threatened, or any claim whatsoever for which indemnification
is provided under paragraph (i) above, to the extent that any such expense is
not paid under paragraph (i) or (ii) above.
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<PAGE>
(b) Indemnification by Merrill Lynch. Merrill Lynch agrees to
indemnify and hold harmless the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, and any
director, officer, employee or affiliate thereof, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section 7.4, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
Resale Registration Statement (or any amendment thereto) or any related Resale
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by Merrill Lynch
specifically for inclusion in any Resale Registration Statement or any related
Resale Prospectus.
(c) Proceedings. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that the
named parties to any such action (including any impleaded parties) include both
such indemnified parties and an indemnifying party, and such indemnified parties
reasonably believe that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7.4 (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7.4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii)
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<PAGE>
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(d) Contribution. If the indemnification provided for in this
Section 7.4 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under subsections (a), (b) or (c) of this Section 7.4 in respect of any losses,
claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any losses, claims, damages, liabilities
or expenses referred to herein, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and Merrill Lynch from the
purchase and sale of the Shares or (ii) if the allocation provided in clause (i)
is not permitted by applicable law, in such proportion or as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and Merrill Lynch in connection with the
statements or omissions or inaccuracies which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company on the
one hand and Merrill Lynch on the other shall be deemed to be in the same
proportion as the amount paid by Merrill Lynch to the Company pursuant to this
Agreement and the Adjustment Agreement bears to the net proceeds retained by
Merrill Lynch from the transactions contemplated by this Agreement and the
Adjustment Agreement. The relative fault of the Company and Merrill Lynch shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or the alleged omission to
state a material fact or the inaccurate or the alleged inaccurate representation
and/or warranty relates to information supplied by the Company or by Merrill
Lynch and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in subsection (c) of this Section 7.4 any reasonable legal
or other fees or expenses incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
subsection (c) of this Section 7.4 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this
subsection (c); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subsection (c)
for purposes of indemnification. The Company and Merrill Lynch agree that it
would not be just and equitable if contribution pursuant to this Section 7.4
were determined solely by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this subsection (d). Notwithstanding the provisions of this Section 7.4,
Merrill Lynch shall not be required to contribute any amount in excess of the
amount by which the aggregate net proceeds retained by Merrill Lynch from the
transactions contemplated hereby and by the Adjustment Agreement exceeds the
amount of any damages that Merrill Lynch has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
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7.5. Information Available. So long as any Resale Registration
Statement covering the resale of Common Shares owned by Merrill Lynch is
effective, the Company will furnish to Merrill Lynch:
(a) as soon as practicable after available, one copy of (i)
its Annual Report to Stockholders, (ii) its annual
report on Form 10-K, (iii) its quarterly reports to
stockholders (if any), (iv) its quarterly reports on
Form 10-Q, (v) a full copy of each Resale Registration
Statement covering the Shares (the foregoing, in each
case, excluding exhibits) and (vi) upon request, any or
all other filings made with the Commission by the
Company; and
(b) upon the reasonable request of Merrill Lynch, a
reasonable number of copies of the Resale Prospectus to
supply to any other party requiring copies of such
Resale Prospectus;
and the Company, upon the reasonable request of Merrill Lynch, will meet with
Merrill Lynch or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Resale Registration
Statement, subject to appropriate confidentiality limitations.
7.6. Remedies. The Company and Merrill Lynch acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations under this Section 7, and accordingly agree that Merrill Lynch,
in addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of the
Company under this Section 7, and the Company hereby waives the defense that a
remedy at law would be adequate.
7.7. Notice Requirement. The Company will notify Merrill Lynch at
any time it becomes aware that as a result of a change in the Company's capital
stock Merrill Lynch beneficially holds more than 4.9% of the outstanding Common
Shares.
SECTION 8. Broker's Fee. Other than any fees payable under or in
connection with the Adjustment Agreement, each of the parties hereto represents
that, on the basis of any actions and agreements by it, there are no brokers or
finders entitled to compensation in connection with the sale or issuance of the
Shares to Merrill Lynch.
SECTION 9. Notices. Unless otherwise specifically provided herein, all
notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed by first-class registered or certified airmail, by
telegram or telecopy or sent by nationally recognized overnight express courier
postage prepaid, and shall be deemed given when so mailed or, in the case of
telecopies, when transmitted and receipt confirmed, and shall be delivered
addressed as follows:
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(a) if to the Company, to:
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Brian K. Fields, Chief Financial Officer
with copies so mailed to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
Attention: David W. Bonser, Esq.
or to such other person at such other place as the Company
shall designate to Merrill Lynch in writing; and
(b) if to Merrill Lynch, to:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1305
Attention: Mr. Paul Pepe
SECTION 10. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and Merrill Lynch.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Successors and Assigns. Each of the parties may assign any of
its rights, or delegate any of its duties, under this Agreement if the other
party first consents to such assignment or delegation in writing, which consent
shall not be withheld unreasonably. This Purchase Agreement shall inure to the
benefit of and be binding upon (i) the successors of the parties and (ii) any
permitted assignee or transferee of rights and obligations of either party
pursuant to the Agreement. Any successor, assignee or transferee of a party
pursuant to the Agreement shall be held subject to all of the terms and
conditions hereof.
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SECTION 14. Transfer to Affiliate. Notwithstanding anything herein to the
contrary, Merrill Lynch may transfer the Shares and assign all of its rights
hereunder to any affiliate of Merrill Lynch; provided that (i) such affiliate is
not a "foreign person" (as defined for purposes of Section 897(h)(4)(B) of the
Code) and (ii) such transfer and assignment are consistent with the investment
representations set forth in Section 5.1 hereof. In the event of such a transfer
and assignment, such affiliate shall in all respects be substituted for Merrill
Lynch as a party hereto.
SECTION 15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts of law principles thereof.
SECTION 16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
-----------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Dean D'Onofrio
-----------------------------------
Name: Dean D'Onofrio
Title: Authorized Signatory
<PAGE>
Appendix I
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Stockholders" section of the Registration
Statement please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the number of shares that you or your organization
(including all affiliates) will own immediately after Closing, including those
Shares purchased by you or your organization (including all affiliates) pursuant
to this Purchase Agreement and those shares purchased by you or your
organization (including all affiliates) through other transactions:
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates:
________ Yes _______ No
If yes, please indicate the nature of any such relationships below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Exhibit 1.3
PURCHASE PRICE ADJUSTMENT AGREEMENT
THIS PURCHASE PRICE ADJUSTMENT AGREEMENT (this "Agreement") is made as of
the 2nd day of April, 1998, by and between CarrAmerica Realty Corporation (the
"Company") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S").
On the date hereof, the Company and MLPF&S are entering into an agreement
(the "Purchase Agreement") pursuant to which the Company is selling to MLPF&S
5,000,000 shares of the Company's common stock, par value $.01 per share
("Common Shares"), at a price of $30.00 per share, for an aggregate
consideration of $150,000,000. In connection with, and as a condition to, the
Purchase Agreement, the parties desire to agree to a mechanism for adjusting the
total number of Common Shares sold by the Company to MLPF&S pursuant to the
Purchase Agreement (or an adjustment in the aggregate purchase price for such
Common Shares) upon changes in the market price of a Common Share.
The purpose of this Agreement is to set forth the terms and conditions of
the purchase price adjustments agreed to between MLPF&S and the Company.
IN CONSIDERATION of the mutual representations, warranties and covenants
herein contained, and on the terms and subject to the conditions herein set
forth, the Company and MLPF&S hereby agree as follows:
Section 1 Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below:
(a) Ability to Settle in Common Shares. As of the date
hereof, the Company has not, and after the date hereof, the
Company will not, enter into any obligation that would
contractually prohibit the Company from delivering Common Shares
pursuant to Section 3.2, 4.2 or 5 of this Agreement.
(b) Adjustment Shares. 5,000,000 Common Shares, as may be
adjusted from time to time pursuant to Section 1(c), reduced by
the number of Settlement Shares that are the subject of Settlement
pursuant to Section 3.1 or Section 4.1. The initial number of
Adjustment Shares is equal to the number of Purchased Shares (as
defined in the Purchase Agreement) being purchased by MLPF&S under
the Purchase Agreement.
<PAGE>
(c) Certain Adjustments to Reference Price or Number of
Adjustment Shares. In the event of:
(i) a subdivision, consolidation or reclassification
of the Common Shares, or a free distribution or
dividend of any Common Shares to all existing holders
of Common Shares by way of bonus, capitalization or
similar issue;
(ii) a distribution or dividend to all existing
holders of Common Shares of (A) additional Common
Shares or (B) other share capital or securities
granting right to payment of dividends and/or the
proceeds of liquidation of the Company equally or
proportionally with such payments to holders of
Common Shares or (C) any other type of securities,
warrants or other assets, in any case for payment
(cash or otherwise) at less than the prevailing
market price; or
(iii) any other event that has a dilutive or
concentrative effect on the value of the Common
Shares,
an adjustment shall thereupon be effected to the Reference
Price and/or the Adjustment Shares at the time of such event
with the intent that, following such adjustment, the value
of this transaction is economically equivalent to the value
immediately prior to the occurrence of the event causing the
adjustment.
(d) Block Sale. Any privately negotiated sales of the Common
Shares involving at least a block of such security (as defined in
Rule 10b-18 under the Exchange Act).
(e) Business Day. Any day other than Saturday, Sunday, or
any other day on which banking institutions in the States of
Maryland or New York, or in the District of Columbia, are not open
for business.
(f) Calculation Agent. MLPF&S, whose calculations and
determinations shall be made in a reasonable manner.
(g) Closing Price. The last sale price of the Common Shares
on the Relevant Exchange on the relevant date.
(h) Commission. The Securities and Exchange Commission.
(i) Compounding Period. Each period commencing on and
including:
2
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(i) in the case of the first Compounding Period, the
Initial Settlement Date and ending on but excluding
the first Reset Date; and
(ii) for each period thereafter, a Reset Date and
ending on (but excluding) the next following Reset
Date.
(j) Date of Effectiveness. The first date on which resales
of the Purchased Shares may be made under a prospectus comprising
part of an effective Resale Registration Statement (as defined in
the Purchase Agreement).
(k) Distribution Amount. On each Reset Date, an amount in
U.S. Dollars equal to:
(i) the sum of all cash distributions paid on a
single Common Share during the relevant Compounding
Period; plus
(ii) an amount representing interest that could have
been earned on such distributions at the USD LIBOR
rate having a designated maturity of 1 month, plus
the Spread, for the period from the date that such
distributions would have been received by a holder of
such number of Common Shares until such Reset Date.
(l) DRIP Distribution. Sales to any Dividend Reinvestment
Plan now or hereafter established by the Company, or to any agent
acting on behalf of such Plan, for sale to participants in such
Plan.
(m) Effective Date. April 2, 1998.
(n) Exchange Act. The Securities Exchange Act of 1934, as
amended.
(o) Exchange Trading Day. Each day on which the Relevant
Exchange is open for trading.
(p) Execution Price. The Closing Price on the Effective
Date.
(q) Gradual Market Distribution. An offering of the Common
Shares into the existing trading market for outstanding shares of
the same class at other than a fixed price on or through
facilities of a national securities exchange or to or through a
market maker otherwise than on an exchange.
(r) Initial Price.
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(i) For the Compounding Period ending on the first
Reset Date, an amount in U.S. Dollars equal to
$30.00, and
(ii) for each subsequent Reset Date, the Reference
Price as calculated on or adjusted as of the prior
Reset Date.
(s) Initial Settlement Date. April 6, 1998.
(t) Interim Settlement Amount. With respect to a given Reset
Date, means the amount by which the Reference Amount exceeds the
product of (x) the Closing Price and (y) the number of Adjustment
Shares.
(u) Interim Settlement Shares. The Interim Settlement Amount
divided by the Closing Price on such Reset Date.
(v) Maturity Date. April 2, 1999.
(w) Relevant Exchange. Means, with respect to any Exchange
Trading Day, the principal Stock Exchange on which the Common
Shares are traded on that day.
(x) Reference Amount. On each Reset Date, the Reference
Price multiplied by the Adjustment Shares or Settlement Shares, as
applicable.
(y) Reference Price. On each Reset Date, the Reference Price
shall be determined by:
(i) compounding the Initial Price for each
Compounding Period at the USD LIBOR rate having a
designated maturity of one month (Actual/360 day
count fraction), plus the Spread, to such Reset Date;
and
(ii) subtracting the Distribution Amount at that
date.
The Reference Price shall be subject to adjustment under Section
1(c).
(z) Reset Date. Means, through the final Trade Date, (i) the
last day of each one-month period, beginning on April 30, 1998
(provided, that if such day is not a Business Day then the Reset
Date shall be the next Business Day) and (ii) as to any Settlement
Shares, the related Trade Date.
(aa) Securities Act. The Securities Act of 1933, as amended.
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<PAGE>
(ab) Settlement. Has the meaning set forth in Section 3.1 or
Section 4.1, as applicable.
(ac) Settlement Amount. The net sales proceeds realized by
or on behalf of MLPF&S for all sales of Common Shares in
connection with any Settlement, calculated as follows:
(i) if the manner of Settlement sale pursuant to
Section 3.1 or Section 4.1 is an Underwritten
Secondary Offering, the Settlement Amount will equal
the gross proceeds realized, net of a negotiated
underwriting discount;
(ii) if the manner of Settlement sale pursuant to
Section 3.1 or Section 4.1 is a Block Sale, the
Settlement Amount will equal the gross sales proceeds
realized, net of a negotiated underwriting discount;
(iii) if the manner of Settlement sale pursuant to
Section 3.1 or Section 4.1 is a Gradual Market
Distribution, the Settlement Amount will equal the
gross sales proceeds realized from sales to the
market over the period of the distribution, net of a
resale spread of 50 basis points;
(iv) if the manner of Settlement sale pursuant to
Section 3.1 or Section 4.1 is a DRIP Distribution,
the Settlement Amount will equal the gross sales
proceeds realized from sales to any purchase agent
for a Company Dividend Reinvestment Plan, net of a
resale spread of 50 basis points.
(ad) Settlement Date. The date on which, in accordance with
standard market practice, the Common Shares are delivered and the
funds received, in respect of any Settlement in accordance with
Section 3.2 or Price Decline Termination Event in accordance with
Section 4.2.
(ae) Settlement Shares. The number of Adjustment Shares
subject to Settlement.
(af) Spread. 75 basis points, subject to adjustment pursuant
to Section 6.2.
(ag) Stock Exchange. Means the New York Stock Exchange, the
American Stock Exchange or NASDAQ.
(ah) Trade Date. Any date on which MLPF&S executes a
settlement trade or trades as part of a Settlement in any of the
manners
5
<PAGE>
of Settlement sale set forth in Section 3.1, pursuant to either
Section 3.1 or 4.1.
(ai) Underwritten Secondary Offering. An underwritten fixed
price offering of the Common Shares.
(aj) USD LIBOR. The London Inter Bank Offered Rate in
respect of U.S. Dollars for the designated maturity as quoted on
Page 3750 on the Telerate Service (or such other page as may
replace Page 3750 on that service) as of 11:00 a.m., London time,
on the date on which it is to be determined.
Section 2 Representations and Warranties.
The representations and warranties of the Company in Section 4 of the
Purchase Agreement are hereby incorporated by reference herein, and the
Company hereby so represents and warrants to MLPF&S. The provisions of
Section 6 of the Purchase Agreement also shall be applicable to any
Common Shares delivered to MLPF&S under this Agreement.
Section 3 Settlement.
3.1 Settlement Sale.
On any Reset Date, or on any other Exchange Trading Date agreed by both
parties, up to and including the Maturity Date, the Company may give
telephonic notice to MLPF&S to settle, and MLPF&S shall settle, in a
commercially reasonable manner (which may require sales over a period of
more than 1 day), subject to Section 6.6, all or a portion of the
Adjustment Shares ("Settlement"), as specified by the Company, through
sale of not less than the number of Common Shares, the sale of which
would result in a Settlement Amount equal to 100% of the Reference Amount
on the Settlement Date, and not more than the number of Common Shares,
the sale of which would result in a Settlement Amount equal to 105% of
the Reference Amount on the Settlement Date, in any of the manners set
forth below, as selected by the Company:
(i) an Underwritten Secondary Offering (for which the
Company shall provide at least 21 Business Days prior
notice to MLPF&S);
(ii) a Block Sale (for which the Company shall
provide at least 5 Business Days prior notice to
MLPF&S);
6
<PAGE>
(iii) a Gradual Market Distribution (for which the
Company shall provide at least 2 Business Days prior
notice to MLPF&S); or
(iv) a DRIP Distribution (for which the Company shall
provide at least 2 Business Days prior notice to
MLPF&S).
If the Company does not specify a manner of sale, a Gradual Market
Distribution shall be used. In connection with any Underwritten Secondary
Offering or Block Sale, MLPF&S shall be the sole manager and underwriter.
Settlement procedures shall begin on the first Exchange Trading Day after
expiration of the notice period unless otherwise agreed by the Company
and MLPF&S. At such time as the Company delivers notice pursuant to this
Section 3.1, the Company may direct MLPF&S to sell not less than the
number of Common Shares equal to the number of Settlement Shares, and
MLPF&S shall comply with such direction in a commercially reasonable
manner. Final Settlement shall occur no later than the Maturity Date.
However, if the Company has not given MLPF&S notice to settle by the
Maturity Date, then MLPF&S shall settle the Settlement Shares using a
Gradual Market Distribution to begin as soon as commercially practicable,
as determined by MLPF&S, on or after the Maturity Date.
3.2 Settlement.
(a) If the Settlement Amount resulting from a sale by MLPF&S
under Section 3.1 is greater than the Reference Amount, MLPF&S shall pay
to the Company an amount in cash equal to the difference or deliver to
the Company Common Shares with a value (valued at the Closing Price on
the Trade Date) equal to the difference.
(b) If the number of Common Shares sold by MLPF&S under
Section 3.1 is greater than the number of Settlement Shares, the Company
shall deliver to MLPF&S, on the Settlement Date, the number of Common
Shares equal to the difference. If the number of Common Shares sold by
MLPF&S under Section 3.1 is less than the number of Settlement Shares,
MLPF&S shall deliver to the Company, on the Settlement Date, the number
of Common Shares equal to the difference.
(c) In all events, MLPF&S will pay to the Company an amount
equal to all cash distributions payable to holders of the Common Shares
but not paid prior to the Settlement Date, on a number of Common Shares
equal to the Settlement Shares, on the Business Day after the relevant
distribution payment date declared by the Company's Board of Directors.
7
<PAGE>
(d) If MLPF&S, in connection with any Settlement, receives
net sales proceeds, as calculated pursuant to the definition of
Settlement Amount, from the sale of Common Shares prior to the applicable
Settlement Date, MLPF&S, on the Settlement Date, shall pay the Company an
amount in cash representing interest that could have been earned on such
net sales proceeds at the USD LIBOR rate having a designated maturity of
1 month, plus the Spread, for the period from the date that such net
sales proceeds are received by MLPF&S until such Settlement Date.
Section 4 Price Decline Termination Event.
4.1 Price Decline Termination Event Sale.
If the Closing Price on any Exchange Trading Day falls below any
Termination Price listed in the following schedule (a "Price Decline
Termination Event"), MLPF&S may, at its discretion, in a commercially
reasonable manner (which may require sales over a period of more than 1
day), subject to Section 6.6, following notice to the Company, settle the
percentage of the Adjustment Shares indicated in the table below
("Settlement") through sale of not less than the number of Common Shares,
the sale of which would result in a Settlement Amount on the Settlement
Date equal to 100% of the Reference Amount with respect to the percentage
of the Adjustment Shares indicated in the table below, and not more than
the number of Common Shares, the sale of which would result in a
Settlement Amount equal to 105% of the Reference Amount on the Settlement
Date, in any of the manners specified in Section 3.1:
Percentage of Adjustment
Shares to be Settled Termination Price
-------------------- -----------------
25% $24.00
50% $22.50
75% $21.00
100% $19.50
Settlement procedures shall commence on the date specified by MLPF&S.
4.2 Price Decline Termination Event Settlement.
(a) If the Settlement Amount resulting from a sale by MLPF&S
under Section 4.1 is greater than the Reference Amount, MLPF&S shall pay
to the Company an amount in cash equal to the difference or deliver to
the Company Common Shares with a value (valued at the Closing Price on
the Trade Date) equal to the difference.
8
<PAGE>
(b) If the number of Common Shares sold by MLPF&S under
Section 4.1 is greater than the number of Settlement Shares, the Company
shall deliver to MLPF&S, on the Settlement Date, the number of Common
Shares equal to the difference. If the number of Common Shares sold by
MLPF&S under Section 4.1 is less than the number of Settlement Shares,
MLPF&S shall deliver to the Company, on the Settlement Date, the number
of Common Shares equal to the difference.
(c) In all events, MLPF&S will pay to the Company an amount
equal to all cash distributions payable to holders of the Common Shares
but not paid prior to the Settlement Date, on a number of Common Shares
equal to the Settlement Shares, on the Business Day after the relevant
distribution payment date declared by the Company's Board of Directors.
(d) If MLPF&S, in connection with any Settlement, receives
net sales proceeds, as calculated pursuant to the definition of
Settlement Amount, from the sale of Common Shares prior to the applicable
Settlement Date, MLPF&S, on the Settlement Date, shall pay the Company an
amount in cash representing interest that could have been earned on such
net sales proceeds at the USD LIBOR rate having a designated maturity of
1 month, plus the Spread, for the period from the date that such net
sales proceeds are received by MLPF&S until such Settlement Date.
Section 5 Interim Settlements.
Within 5 Business Days following each Reset Date, the Company shall
deliver the Interim Settlement Amount in Interim Settlement Shares issued
pursuant to an effective registration statement and freely saleable
without further action under the Securities Act to MLPF&S or its agent
for deposit in a collateral account in the name of the Company at MLPF&S
or a custodian or depository designated by MLPF&S. Such shares shall be
registered in the stock register of the Company as instructed by MLPF&S
and shall be held by MLPF&S or a custodian or depository designated by
MLPF&S. If the Company is unable to deliver Interim Settlement Shares in
accordance with the preceding sentence, the Company shall deliver
"restricted" Interim Settlement Shares that are the subject of a resale
registration statement that has been declared effective under the
Securities Act by the Commission (an "Effective Resale Registration
Statement") in an amount equal to the Interim Settlement Amount. If the
restricted Interim Settlement Shares are not the subject of an Effective
Resale Registration Statement, the Company shall deliver additional
Interim Settlement Shares equal to 50% of the Interim Settlement Amount.
At such time as the Interim Settlement Shares are the subject of an
Effective Resale Registration Statement, the Company may elect to have
returned all additional Interim Settlement Shares delivered
9
<PAGE>
pursuant to the preceding sentence. On any Reset Date, if Interim
Settlement Shares are held by MLPF&S, MLPF&S shall deliver to the Company
within five (5) Business Days after such Reset Date the amount in Interim
Settlement Shares by which the amount in Interim Settlement Shares held
by MLPF&S (valued at the Closing Price on such Reset Date) plus any cash
amounts in the collateral account exceeds the Interim Settlement Amount
(or 150% of the Interim Settlement Amount, in the event that MLPF&S holds
restricted Interim Settlement Shares that are not the subject of an
Effective Registration Statement). Distributions on the Interim
Settlement Shares will be deposited in the collateral account at MLPF&S
or a custodian or depository designated by MLPF&S. The cash amounts in
the collateral account will earn interest at the USD LIBOR rate having a
designated maturity of 1 month plus the Spread. Upon final Settlement,
MLPF&S shall immediately release all claims to cash and Interim
Settlement Shares held in the collateral account (including interest
earned thereon) and deliver such amounts and all Interim Settlement
Shares to the Company.
Section 6 Certain Covenants and Other Provisions.
6.1 Par Value.
MLPF&S shall pay to the Company $0.01 par value per share for each Common
Share delivered to MLPF&S pursuant to this Agreement.
6.2 Purchase Price Adjustment Treatment.
The Company and MLPF&S intend that all payments and deliveries made under
this Agreement constitute adjustments to the purchase price paid for the
Purchased Shares (and as applicable the number of Purchased Shares
purchased) pursuant to Section 2 of the Purchase Agreement and agree, to
the extent relevant to their respective business and commercial
activities and in the absence of a definitive administrative
determination or judicial ruling to the contrary, to treat all such
payments and deliveries in a manner consistent therewith for United
States federal income tax and financial accounting purposes.
6.3 Adjustment to Spread.
If the Purchased Shares may not be resold under a prospectus comprising
part of an effective Resale Registration Statement (as defined in the
Purchase Agreement) by June 2, 1998, the Spread shall increase,
retroactively, effective on the Initial Settlement Date, to 200 basis
points. At such time as the Purchased Shares may be resold under a
prospectus comprising part of such an Effective Resale Registration
Statement, the Spread shall be reduced, from and after such time, to 75
basis points.
10
<PAGE>
6.4 Delivery of Common Shares.
The Company covenants and agrees with MLPF&S that Common Shares delivered
by the Company pursuant to settlement events in accordance herewith will
be duly authorized, validly issued, fully paid and nonassessable. The
issuance of such Common Shares will not require the consent, approval,
authorization, registration, or qualification of any government
authority, except such as shall have been obtained on or before the
delivery date to MLPF&S in connection with any registration statement
filed with respect to any Common Shares.
6.5 Securities Law Compliance.
Each party agrees that it will comply, in connection with the
transactions contemplated by this Agreement and all related or
contemporaneous sales and purchases of the Company's Common Shares, with
the applicable provisions of the Securities Act, the Exchange Act and the
rules and regulations thereunder.
6.6 Regulatory Compliance.
Each party agrees that if the delivery of Common Shares upon settlement
is subject to any restriction imposed by a regulatory authority, it shall
not be an event of default, and the parties will negotiate in good faith
a procedure to effect settlement of such shares in a manner which
complies with any relevant rules of such regulatory authority and which
is satisfactory in form and substance to their respective counsel,
subject to Section 7 of the Purchase Agreement. Each party further agrees
that any sale pursuant to Section 3.1 or Section 4.1 may be delayed or
postponed if, in MLPF&S's judgment, such delay or postponement is
necessary to comply with the requirements of applicable law or
regulation.
6.7 Settlement Transfer.
All settlements shall occur through DTC or any other mutually acceptable
depository.
6.8 Trading Authorization.
The following individuals and/or any individual authorized in writing by
the Treasurer of the Company are authorized by the Company to provide
trading instructions to MLPF&S with regard to this transaction:
Thomas A. Carr
Brian K. Fields
Debra A. Volpicelli
11
<PAGE>
6.9 Specific Performance.
The parties acknowledge and agree that the failure of the Company or
MLPF&S to deliver Common Shares in accordance with the provisions hereof
would result in damage to the other party that could not be adequately
compensated by a monetary award. The parties therefore agree that, if
either party fails to deliver Common Shares in accordance with the
provisions hereof, the other party may, in addition to all other
remedies, seek an order of specific performance from a court of
appropriate jurisdiction.
6.10 Certain Tax Considerations.
MLPF&S represents and warrants that it is a corporation incorporated
under the laws of the State of Delaware, and that it is a "corporation"
for U.S. federal income tax purposes and for purposes of any exemptions
from information reporting and backup withholding requirements that may
apply to payments by the Company to MLPF&S under this Agreement.
6.11 Governing Law.
The Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law
doctrine.
6.12 Confidentiality.
Subject to the other applicable subsections of this Section 6, to any
contrary requirement of law and to the right of each party to enforce its
rights hereunder in any legal action, each party shall keep strictly
confidential and shall cause its employees and agents to keep strictly
confidential the terms of this Agreement and any information relating to
or concerning the other party which it or any of its agents or employees
may acquire pursuant to, or in the course of performing its obligation
under, any provision of this Agreement. Notwithstanding the immediately
preceding sentence, if the Company determines, in good faith but in its
sole discretion, after notice to and consultation with MLPF&S, that a
public announcement, news release or public filing is necessary or
appropriate to comply with securities laws or recognized national
exchange requirements, such announcement, release or filing shall not be
deemed to violate the immediately preceding sentence.
6.13 Successors and Assigns.
Each of the parties may assign any of its rights, or delegate any of its
duties under this Agreement if the other party first consents to such
assignment in writing, which consent shall not be withheld unreasonably.
This Agreement shall inure to the benefit of and be binding upon (i) the
successors of the parties and (ii) any permitted assignee or transferee
of rights and obligations of either party pursuant to this Agreement. Any
successor, assignee or transferee
12
<PAGE>
of a party pursuant to this Agreement shall be held subject to all of the
terms and conditions hereof.
6.14 Restrictions on Certain Future Offerings.
The Company agrees that, from and after the date hereof until the date
180 days from the date hereof, it will not, without the prior consent of
MLPF&S, which consent shall not be withheld unreasonably, consummate a
forward equity interest transaction (other than as set forth in the
Purchase Agreement and this Agreement), or any economically equivalent
transaction.
6.15 Transfer to Affiliate.
Notwithstanding anything herein to the contrary, if MLPF&S transfers the
Purchased Shares to any affiliate of MLPF&S and assigns all of MLPF&S's
rights under the Purchase Agreement, pursuant to and in accordance with
Section 14 of the Purchase Agreement (including, without limitation, the
requirement that such affiliate is not a "foreign person" (as defined for
purposes of Section 897(h)(4)(B) of the Internal Revenue Code of 1986, as
amended)), then MLPF&S's rights and obligations under this Agreement
shall be transferred to such affiliate of MLPF&S. In the event of such a
transfer and assignment, such affiliate shall in all respects be
substituted for MLPF&S as a party hereto.
6.16 Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together,
shall constitute but one instrument, and shall become effective when one
or more counterparts have been signed by each party hereto and delivered
to the other party.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Dean D'Onofrio
------------------------------------
Name: Dean D'Onofrio
Title: Authorized Signatory
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
-------------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
Exhibit 5.1
HOGAN & HARTSON L.L.P
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202) 637-5600
(202) 637-5910
April 7, 1998
BY EDGAR
Board of Directors
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Ladies and Gentlemen:
We are acting as counsel to CarrAmerica Realty Corporation, a
Maryland corporation (the "Company"), in connection with its registration
statement on Form S-3 (SEC File No. 333-22353) (the "Registration Statement")
previously declared effective by the Securities and Exchange Commission (the
"Commission") relating to the proposed public offering and sale by the Company
of its securities from time to time as set forth in the prospectus which forms a
part of the Registration Statement, and as set forth in one or more supplements
to such Prospectus. This opinion letter is rendered in connection with the
proposed sale of up to 5,000,000 shares of common stock, par value $.01 per
share (the "Shares"), of the Company, as described in the Prospectus Supplement
dated April 2, 1998 and filed with the Commission under Rule 424(b)(5). This
opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. ss. 229.601(b)(5),
in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of
the following documents:
1. An executed copy of the Registration Statement.
2. The Articles of Amendment and Restatement of Articles of
Incorporation of the Company, as amended and as
supplemented, as certified by the State Department of
Assessments and Taxation of the State of Maryland (the
"Department") on April 3, 1998 and by the Assistant
Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
<PAGE>
Board of Directors
CarrAmerica Realty Corporation
April 7, 1998
Page 2
3. The Second Amendment and Restatement of Bylaws of the
Company, as amended, as certified by the Assistant
Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
4. An executed copy of the Purchase Agreement, dated as of
April 2, 1998, by and between the Company and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the "Purchase
Agreement").
5. Resolutions of the Board of Directors of the Company
adopted on March 16, 1998 and March 23, 1998 and
resolutions of Pricing Committee of the Board of Directors,
adopted on April 2, 1998, relating to the issuance and sale
of the Shares and arrangements in connection therewith, as
certified by the Assistant Secretary of the Company on the
date hereof as then being complete, accurate and in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, and
the conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic, or reproduced copies. This opinion letter is
given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the
General Corporation Law of the State of Maryland. We express no opinion herein
as to any other laws, statutes, regulations or ordinances.
Based upon, subject to and limited by the foregoing, we are of the
opinion that following (i) issuance of the Shares pursuant to the terms of the
Purchase Agreement referred to above, and (ii) receipt by the Company of the
consideration for the Shares specified in the resolutions of the Board of
Directors and the Pricing Committee referred to above, the Shares will be
legally issued, fully paid and nonassessable under the General Corporation Law
of the State of Maryland.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion letter
has been prepared solely in connection with the filing by the Company of a
Current Report on Form 8-K on or about the date of this opinion letter, which
Form 8-K will be incorporated by reference into the Registration Statement. This
opinion letter should not be quoted in whole or in part or otherwise be referred
to, nor filed with or furnished to any governmental agency or other person or
entity, without the prior written consent of this firm.
<PAGE>
Board of Directors
CarrAmerica Realty Corporation
April 7, 1998
Page 3
We hereby consent to the filing of this opinion letter as an
exhibit to the Form 8-K and to the reference to this firm under the caption
"Legal Matters" in the Prospectus dated April 2, 1998 and in the Prospectus
Supplement dated April 2, 1998, each of which constitutes a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
Exhibit 5.2
HOGAN & HARTSON L.L.P
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202) 637-5600
(202) 637-5910
April 7, 1998
BY EDGAR
Board of Directors
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Ladies and Gentlemen:
We are acting as counsel to CarrAmerica Realty Corporation, a
Maryland corporation (the "Company"), in connection with its registration
statement on Form S-3 (SEC File No. 333-22353) (the "Registration Statement")
previously declared effective by the Securities and Exchange Commission (the
"Commission") relating to the proposed public offering and sale by the Company
of its securities from time to time as set forth in the prospectus which forms a
part of the Registration Statement, and as set forth in one or more supplements
to such Prospectus. This opinion letter is rendered in connection with the
proposed public offering of up to 4,285,714 shares of common stock, par value
$.01 per share (the "Shares"), of the Company, as described in two Prospectus
Supplements dated April 2, 1998 and filed with the Commission under Rule
424(b)(5). This opinion letter is furnished to you at your request to enable you
to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. ss.
229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of
the following documents:
1. An executed copy of the Registration Statement.
2. The Articles of Amendment and Restatement of Articles of
Incorporation of the Company, as amended and as
supplemented, as certified by the State Department of
Assessments and Taxation of the State of Maryland (the
"Department") on April 3, 1998 and by the Assistant
Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
<PAGE>
Board of Directors
CarrAmerica Realty Corporation
April 7, 1998
Page 2
3. The Second Amendment and Restatement of Bylaws of the
Company, as certified by the Assistant Secretary of the
Company on the date hereof as then being complete, accurate
and in effect.
4. Executed copies of the Underwriting Agreement and the Terms
Agreement, both dated as of April 2, 1998, between the
Company and Goldman, Sachs & Co.
5. An executed copy of the Subscription Agreement, dated as of
April 2, 1998, by and among the Company, Security Capital
Holdings, S.A. and Security Capital U.S. Realty.
6. Resolutions of the Board of Directors of the Company
adopted on March 5, 1998, and resolutions of a Pricing
Committee of the Board of Directors adopted on April 2,
1998, relating to the issuance and sale of the Shares and
arrangements in connection therewith, as certified by the
Assistant Secretary of the Company on the date hereof as
then being complete, accurate and in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, and
the conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic, or reproduced copies. This opinion letter is
given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the
General Corporation Law of the State of Maryland. We express no opinion herein
as to any other laws, statutes, regulations or ordinances.
Based upon, subject to and limited by the foregoing, we are of the
opinion that following (i) issuance of the Shares pursuant to the terms of the
Underwriting Agreement, Terms Agreement and Subscription Agreement referred to
above, and (ii) receipt by the Company of the consideration for the Shares
specified in the resolutions of the Board of Directors and the Pricing Committee
referred to above, the Shares will be legally issued, fully paid and
nonassessable under the General Corporation Law of the State of Maryland.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion letter
has been prepared solely in connection with the filing by the Company of a
Current Report on Form 8-K on or
<PAGE>
Board of Directors
CarrAmerica Realty Corporation
April 7, 1998
Page 3
about the date of this opinion letter, which Form 8-K will be incorporated by
reference into the Registration Statement. This opinion letter should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.
We hereby consent to the filing of this opinion letter as an
exhibit to the Form 8-K and to the reference to this firm under the caption
"Legal Matters" in the Prospectus dated April 2, 1998 and in the two Prospectus
Supplements dated April 2, 1998, each of which constitutes a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
