SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 12)
CARRAMERICA REALTY CORPORATION
(FORMERLY NAMED CARR REALTY CORPORATION)
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(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
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(Title of Class of Securities)
14441K 10 3
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(CUSIP Number)
ARIEL AMIR
SECURITY CAPITAL U.S. REALTY
69, ROUTE D'ESCH
L-1470 LUXEMBOURG
(352) 48 78 78
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
APRIL 29, 1998
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
Page 1 of 9 Pages
<PAGE>
CUSIP No. 14441K 10 3 13D Page 2 of 9 Pages
- --------------------------------------------------------------------------------
1 NAME OF PERSON
SECURITY CAPITAL U.S. REALTY
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 28,603,417 (SEE ITEM 5)
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 28,603,417
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
28,603,417 (ITEM 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.9% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14 TYPE OF PERSON REPORTING*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
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CUSIP No. 14441K 10 3 13D Page 3 of 9 Pages
- --------------------------------------------------------------------------------
1 NAME OF PERSON
SECURITY CAPITAL HOLDINGS S.A.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 28,603,417 (SEE ITEM 5)
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 28,603,417
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
28,603,417 (SEE ITEM 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.9% (SEE ITEM 5)
- --------------------------------------------------------------------------------
14 TYPE OF PERSON REPORTING*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
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This Amendment No. 12 is filed by Security Capital U.S. Realty
("Security Capital U.S. Realty"), a corporation organized and existing under the
laws of Luxembourg, and by Security Capital Holdings S.A. ("Holdings"), a
corporation organized and existing under the laws of Luxembourg and a wholly
owned subsidiary of Security Capital U.S. Realty (together with Security Capital
U.S. Realty, "USRealty"), and amends the Schedule 13D originally filed on
November 14, 1995 (as previously amended, the "Schedule 13D"). This Amendment
No. 12 relates to shares of common stock, par value $0.01 per share ("Common
Stock"), of CarrAmerica Realty Corporation, a Maryland corporation formerly
named Carr Realty Corporation ("Carr"). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Schedule 13D.
This Amendment No. 12 is filed to report the acquisition of certain
shares of Common Stock since December 31, 1997. A schedule identifying all
transactions involving shares of Common Stock effected by Security Capital U.S.
Realty and Holdings since December 31, 1997 is included as Annex A hereto and is
hereby incorporated by reference herein. Except for (i) the purchase by Holdings
of 1,285,714 shares of Common Stock on April 8, 1998, (ii) the purchase by
Holdings of 192,857 shares of Common Stock on April 17, 1998 and (iii) the
purchase by Holdings of 505,263 shares of Common Stock on April 29, 1998, each
in an offering directly from Carr (each of which is described below), each of
such transactions was executed in stock market transactions. The funds used by
Security Capital U.S. Realty and Holdings to purchase such shares were obtained
from drawdowns under the Facility Agreement and from cash on hand.
On April 8, 1998, Holdings purchased 1,285,714 shares of Common
Stock directly from Carr for an aggregate purchase price of $37,767,849.00, or
$29.375 per share, pursuant to a Subscription Agreement, dated as of April 2,
1998, by and among Carr, Holdings and Security Capital U.S. Realty (the "April
2 Subscription Agreement"). Such purchase was effected concurrently with an
underwritten public offering (the "April 8 Public Offering") by Carr of
3,000,000 shares of Common Stock (which, together with the 1,285,714 shares of
Common Stock purchased by Holdings, resulted in a total issuance and sale by
Carr of 4,285,714 shares of Common Stock). No underwriting discounts were
applied to any shares of Common Stock purchased by Holdings pursuant to the
April 2 Subscription Agreement.
On April 17, 1998, Holdings purchased (the "April 17 Purchase")
192,857 shares of Common Stock directly from Carr for an aggregate purchase
price of $5,665,174, or $29.375 per share, pursuant to an overallotment option
granted to Holdings under the April 2 Subscription Agreement. Such purchase was
Page 4 of 9 Pages
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effected substantially concurrently with an underwritten public offering by Carr
of 450,000 shares of Common Stock pursuant to an overallotment option granted to
the underwriters in connection with the April 8 Public Offering (which together
with the 192,857 shares of Common Stock purchased by Holdings, resulted in a
total issuance and sale by Carr of 642,857 shares of Common Stock). No
underwriting discounts were applied to any shares of Common Stock purchased by
Holdings in the April 17 Purchase.
On April 29, 1998, Holdings purchased 505,263 shares of Common Stock
directly from Carr for an aggregate purchase price of $14,999,995, or $29.6875
per share, pursuant to a Subscription Agreement, dated as of April 23, 1998, by
and among Carr, Holdings and Security Capital U.S. Realty (the "April 23
Subscription Agreement"). Such purchase was effected concurrently with an
underwritten public offering by Carr of 1,178,947 shares of Common Stock (which
together with the 505,263 shares of Common Stock purchased by Holdings, resulted
in a total issuance and sale by Carr of 1,684,210 shares of Common Stock). No
underwriting discounts were applied to any shares of Common Stock purchased by
Holdings pursuant to the April 23 Subscription Agreement.
A copy of each of the April 2 Subscription Agreement and the April
23 Subscription Agreement are attached hereto as Exhibits 10 and 11,
respectively. The April 2 Subscription Agreement and the April 23 Subscription
Agreement are hereby incorporated herein by reference, and the descriptions
herein of the such Agreements are qualified in their respective entireties by
reference to such agreements.
ITEM 1. SECURITY AND ISSUER.
No material change.
ITEM 2. IDENTITY AND BACKGROUND.
No material change except as set forth above.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
No material change except as set forth above.
ITEM 4. PURPOSE OF TRANSACTION.
No material change except as set forth above.
Page 5 of 9 Pages
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
No material change except as set forth above and below.
As of May 5, 1998, Security Capital U.S. Realty and Holdings each
beneficially owns 28,603,417 shares of Common Stock. As of May 5, 1998,
Security Capital U.S. Realty and Holdings each beneficially owns approximately
39.9% of the outstanding Common Stock, and approximately 36.2% on a fully
diluted basis, based on the number of outstanding shares of Common Stock and the
number of outstanding limited partnership units that are redeemable for Common
Stock or the cash equivalent thereof.
Except as set forth herein and as previously reported, to the best
knowledge and belief of Security Capital U.S. Realty and of Holdings, no
transactions involving Common Stock have been effected during the past 60 days
by Security Capital U.S. Realty or by Holdings or by their respective directors,
executive officers or controlling persons.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
No material change except as described above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed as part of this Schedule 13D:
Exhibit 1 Name, Business Address, and Present Principal Occupation of
Each Executive Officer and Director of Security Capital U.S.
Realty and of Security Capital Holdings S.A.
Exhibit 2 Stock Purchase Agreement, dated as of November 5, 1995, by
and among Carr Realty Corporation, Security Capital Holdings
S.A. and Security Capital U.S. Realty (incorporated by
reference to Exhibit 5.1 of Carr Realty Corporation's Current
Report on Form 8-K dated November 6, 1995)
Exhibit 2.1 Amendment No. 1 to the Stock Purchase Agreement, dated as of
April 29, 1996, by and among Carr Realty Corporation,
Security Capital Holdings S.A. and Security Capital U.S.
Realty
Exhibit 2.2 Stockholders Agreement, dated as of April 30, 1996, by and
among Carr Realty Corporation, Carr
Page 6 of 9 Pages
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Realty, L.P., Security Capital Holdings S.A. and Security
Capital U.S. Realty
Exhibit 2.3 Registration Rights Agreement, dated as of April 30, 1996,
by and among Carr Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 3 Subscription Agreement, dated as of July 17, 1996, by and
among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 4 Facility Agreement, dated June 12, 1996, by and among
Security Capital U.S. Realty, Security Capital Holdings
S.A., Commerzbank Aktiengesellschaft, as arranger and
collateral agent, Commerzbank International S.A., as
administrative agent and the financial institutions listed
in Schedule 1 thereto (incorporated by reference to Exhibit
4 of the Schedule 13D, dated June 21, 1996, filed jointly
by Security Capital U.S. Realty and Security Capital
Holdings S.A. with respect to the common stock of Regency
Realty Corporation)
Exhibit 5 Subscription Agreement, dated as of November 21, 1996, by
and among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 6 Subscription Agreement, dated as of December 19, 1996, by
and among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 7 Subscription Agreement, dated as of January 31, 1997, by
and among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 8 Subscription Agreement, dated as of April 14, 1997, by and
among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 9 Subscription Agreement, dated as of December 18, 1997, by
and among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Page 7 of 9 Pages
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Exhibit 10 Subscription Agreement, dated as of April 2, 1998, by and
among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
Exhibit 11 Subscription Agreement, dated as of April 23, 1998, by and
among CarrAmerica Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty.
Page 8 of 9 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete,
and correct.
SECURITY CAPITAL U.S. REALTY
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
May 6, 1998
Page 9 of 9 Pages
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ANNEX A
Recent Stock Market Transactions in the Common Stock
by the Reporting Persons
Except as otherwise indicated, the transactions described below were effected in
stock market transactions. The price per share for such transactions includes
commissions (if any).
DATE OF NUMBER OF PRICE
TRANSACTION SHARES PURCHASED PER SHARE
1/13/98 54,500 $30.05
1/14/98 8,500 $30.12
1/15/98 100,000 $30.25
*4/8/98 1,285,714 $29.375
*4/17/98 192,857 $29.375
**4/29/98 505,263 $29.6875
- ----------
* Direct purchase from CarrAmerica pursuant to the April 2 Subscription
Agreement.
** Direct purchase from CarrAmerica pursuant to the April 23 Subscription
Agreement.
<PAGE>
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
1 Name, Business Address, and Present Principal *
Occupation of Each Executive Officer and
Director of Security Capital U.S. Realty and of
Security Capital Holdings S.A.
2 Stock Purchase Agreement, dated as of November *
5, 1995, by and among Carr Realty Corporation,
Security Capital U.S. Realty and Security
Capital Holdings S.A. (incorporated by
reference to Exhibit 5.1 of Carr Realty
Corporation's Current Report on Form 8-K dated
November 6, 1995)
2.1 Amendment No. 1 to the Stock Purchase *
Agreement, dated as of April 29, 1996, by and
among Carr Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S. Realty
2.2 Stockholders Agreement, dated as of April 30, *
1996, by and among Carr Realty Corporation,
Carr Realty, L.P., Security Capital Holdings
S.A. and Security Capital U.S. Realty
2.3 Registration Rights Agreement, dated as of *
April 30, 1996, by and among Carr Realty
Corporation, Security Capital Holdings S.A. and
Security Capital U.S. Realty
3 Subscription Agreement, dated as of July 17, *
1996, by and among CarrAmerica Realty
Corporation, Security Capital Holdings S.A. and
Security Capital U.S. Realty
- ----------
* Previously filed.
<PAGE>
4 Facility Agreement, dated June 12, 1996, by and *
among Security Capital U.S. Realty, Security
Capital Holdings S.A., Commerzbank
Aktiengesellschaft, as arranger and collateral
agent, Commerzbank International S.A., as
administrative agent and the financial
institutions listed in Schedule 1 thereto
(incorporated by reference to Exhibit 4 of the
Schedule 13D, dated June 21, 1996, filed
jointly by Security Capital U.S. Realty and
Security Capital Holdings S.A. with respect to
the common stock of Regency Realty Corporation)
5 Subscription Agreement, dated as of November *
21, 1996, by and among CarrAmerica Realty
Corporation, Security Capital Holdings S.A.
and Security Capital U.S. Realty
6 Subscription Agreement, dated as of December *
19, 1996, by and among CarrAmerica Realty
Corporation, Security Capital Holdings S.A.
and Security Capital U.S. Realty
7 Subscription Agreement, dated as of January 31, *
1997, by and among CarrAmerica Realty Corporation,
Security Capital Holdings S.A. and Security
Capital U.S. Realty
8 Subscription Agreement, dated as of April 14, *
1997, by and among CarrAmerica Realty Corporation,
Security Capital Holdings S.A. and Security
Capital U.S. Realty
9 Subscription Agreement, dated as of December 18, *
1997, by and among CarrAmerica Realty Corporation,
Security Capital Holdings S.A. and Security
Capital U.S. Realty
- ----------
* Previously filed.
<PAGE>
10 Subscription Agreement, dated as of
April 2, 1998, by and among CarrAmerica Realty
Corporation, Security Capital Holdings S.A. and
Security Capital U.S. Realty
11 Subscription Agreement, dated as of April 23,
1998, by and among CarrAmerica Realty
Corporation, Security Capital Holdings S.A. and
Security Capital U.S. Realty
Exhibit 10
SUBSCRIPTION AGREEMENT
by and among
CARRAMERICA REALTY CORPORATION
SECURITY CAPITAL HOLDINGS S.A.
and
SECURITY CAPITAL U.S. REALTY
dated as of
April 2, 1998
<PAGE>
TABLE OF CONTENTS
Page
1. SUBSCRIPTION; CLOSING.............................................2
1.1. Subscription for Company Common Stock........................2
1.2. Acceptance of Subscription...................................2
1.3. Purchase Price...............................................2
1.4. Closing......................................................2
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................3
2.1. Organization and Qualification...............................3
2.2. Authority Relative to the Agreement; Board Approval..........3
2.3. Capital Stock................................................4
2.4. No Conflicts; No Defaults; Required Filings and Consents.....4
2.5. Securities Law Matters; Material Changes; Corporate Action
Covenants...................................................5
2.6. Litigation; Compliance With Law..............................7
2.7. Tax Matters; REIT and Partnership Status.....................7
2.8. Compliance with Organizational Documents.....................7
2.9. Maryland Takeover Law........................................8
2.10. Brokers or Finders..........................................8
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE ADVANCING
PARTY..............................................................8
3.1. Organization and Standing....................................8
3.2. Due Authorization............................................8
3.3. Conflicting Agreements and Other Matters.....................9
3.4. Source of Funds..............................................9
3.5. Brokers or Finders...........................................9
3.6. REIT Qualification Matters...................................9
3.7. Investment Company Matters...................................9
4. CONDITIONS TO CLOSING.............................................10
4.1. Conditions to Obligations of Subscriber.....................10
4.2. Conditions to Obligations of the Company....................11
5. SURVIVAL; INDEMNIFICATION.........................................12
5.1. Survival....................................................12
5.2. Indemnification by Subscriber or the Company................12
5.3. Third-Party Claims..........................................13
6. MISCELLANEOUS.....................................................13
6.1. Counterparts................................................13
6.2. Governing Law...............................................14
6.3. Entire Agreement............................................14
6.4. Notices.....................................................14
6.5. Successors and Assigns......................................15
6.6. Headings....................................................15
6.7. Amendments and Waivers......................................16
6.8. Expenses....................................................16
6.9. Severability................................................16
6.10. Further Assurances.........................................16
6.11. Joint and Several Liability; Guaranty......................16
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SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered into as of
April 2, 1998 by and among CarrAmerica Realty Corporation, a Maryland
corporation (the "Company"), Security Capital U.S. Realty, a Luxembourg
corporation (the "Advancing Party"), and Security Capital Holdings S.A., a
Luxembourg corporation and a wholly owned subsidiary of the Advancing Party
("Subscriber"). Capitalized terms not otherwise defined herein have the meanings
ascribed to them in the Stockholders Agreement (as hereinafter defined).
WHEREAS, in connection with the Company's issuance and sale to
Subscriber on April 30, 1996 of 11,627,907 shares of the Company's common stock,
par value $0.01 per share (the "Company Common Stock"), the Company, Carr
Realty, L.P., a Delaware limited partnership ("Carr Realty, L.P."), the
Advancing Party and Subscriber entered into a Stockholders Agreement on such
date (the "Stockholders Agreement");
WHEREAS, pursuant to the terms of the Stockholders Agreement, in the
event that the Company issues or sells shares of capital stock of the Company,
Investor is, during a specified term, entitled (except in certain limited
circumstances) to a participation right to purchase, or subscribe for, a total
number of shares generally equal to up to 30% of the total number of shares of
capital stock proposed to be issued by the Company (the "Participation Rights");
WHEREAS, the Company currently intends to issue and to offer and
sell in a public offering (the "Public Offering") up to 3,450,000 shares (the
"Public Shares") of Company Common Stock;
WHEREAS, in connection with the Public Shares proposed to be issued
by the Company in the Public Offering, Investor is entitled to, and has
indicated to the Company that it desires to, exercise its Participation Rights;
and
WHEREAS, in accordance with Investor's desire to exercise its
Participation Rights, the Company desires to issue and sell to Subscriber shares
of Company Common Stock in an offering (the "Concurrent Purchase") from the
Company to Subscriber to be consummated concurrently with the Public Offering.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
<PAGE>
1. SUBSCRIPTION; CLOSING
1.1. SUBSCRIPTION FOR COMPANY COMMON STOCK
(a) Subject to the terms and conditions hereof, Subscriber hereby
subscribes (the "Subscription") to purchase that number of shares of Company
Common Stock (the "Concurrent Shares") equal to the lesser of (i) 1,478,571
shares of Company Common Stock, or (ii) that number (the "Reduced Number") of
shares of Company Common Stock which is equal to thirty percent (30%) of the sum
of the number of Public Shares sold in the Public Offering (including thirty
percent (30%) of any Public Shares sold as a result of the exercise of the
underwriters' over-allotment option in connection with the Public Offering) and
the Reduced Number.
(b) Investor hereby agrees that the Subscription represents the
complete and exclusive exercise of its Participation Rights with regard to the
Public Offering, provided that the number of Public Shares to be sold in the
Public Offering does not exceed 3,450,000 (including 450,000 Public Shares that
may be sold as a result of the exercise of the underwriters' over-allotment
option in connection with the Public Offering). The Company reserves the right
to terminate the Public Offering for any reason or for no reason, to sell less
than all of the Public Shares in the Public Offering or to increase the number
of Public Shares sold in the Public Offering.
1.2. ACCEPTANCE OF SUBSCRIPTION
Subject to the terms and conditions hereof, the Company hereby
accepts the Subscription.
1.3. PURCHASE PRICE
The per share purchase price (the "Per Share Purchase Price") for
the Concurrent Shares shall equal the per share public offering price of the
Company Common Stock in the Public Offering ($29.375). The aggregate purchase
price (the "Purchase Price") shall be equal to the Per Share Purchase Price
multiplied by the number of Concurrent Shares.
1.4. CLOSING
Subject to the terms and conditions hereof, the closing of the
Concurrent Purchase (the "Closing") shall occur concurrently with the closing of
the Public Offering. The closing, if any, of the purchase of Concurrent Shares
by Subscriber as a result of the sale of Public Shares pursuant to the exercise
of the underwriters' over-allotment option (the "Option Closing") shall occur
concurrently with the closing of the sale of the Public Shares subject to the
underwriter's
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<PAGE>
over-allotment option, if any. At the Closing or the Option Closing, as the case
may be, the Company will sell, convey, assign, transfer and deliver, and
Subscriber will purchase and acquire (and the Advancing Party shall advance to
the Subscriber sufficient funds for such purchase) from the Company, the
Concurrent Shares, and Subscriber will pay to the Company the Purchase Price by
wire transfer of immediately available funds in U.S. dollars to the account or
accounts specified by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Subscriber as follows:
2.1. ORGANIZATION AND QUALIFICATION
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland. The Company has
all requisite corporate power and authority to own, operate, lease and encumber
its properties and carry on its business as described in the Company Prospectus
(as hereinafter defined), and to enter into this Agreement and to perform its
obligations hereunder.
(b) Each of the Significant Subsidiaries of the Company is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and has the corporate or partnership power and
authority to own its properties and carry on its business as it is now being
conducted.
(c) Each of the Company and its Significant Subsidiaries is duly
qualified to do business and in good standing in each jurisdiction in which the
ownership of its property or the conduct of its business requires such
qualification, except for any failures to be so qualified or to be in good
standing as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(d) The issue and sale of the Concurrent Shares hereunder will not
give any stockholder of the Company the right to demand payment for his shares
under the Maryland General Corporation Law.
2.2. AUTHORITY RELATIVE TO THE AGREEMENT; BOARD APPROVAL
(a) The execution, delivery and performance of this Agreement by the
Company have been duly and validly authorized by all necessary corporate action.
This Agreement has been duly executed and delivered by the Company for itself
and constitutes the valid and legally binding obligation of the Company,
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<PAGE>
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights or general principles of equity.
(b) The Board of Directors of the Company has, as of the date
hereof, approved the transactions contemplated hereby.
(c) The Concurrent Shares have been duly authorized for issuance,
and upon issuance and receipt by the Company of the Purchase Price, will be duly
and validly issued, fully paid and nonassessable.
2.3. CAPITAL STOCK
The capital stock of the Company as of the date specified in the
Company Prospectus is as set forth therein under the caption entitled
"Capitalization". All of the issued and outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights (excluding any preemptive rights that Investor may
have under the Stockholders Agreement).
2.4. NO CONFLICTS; NO DEFAULTS; REQUIRED FILINGS AND CONSENTS
Neither the execution and delivery by the Company of this Agreement
nor the consummation by the Company of the transactions contemplated hereby in
accordance with the terms hereof, will:
(a) conflict with or result in a breach of any provisions of
the Company Charter or By-laws of the Company;
(b) result in a breach or violation of, a default under, or the
triggering of any payment or other obligations pursuant to, or accelerate
vesting under, any of the Company stock option plans or Partnership (as defined
below) Unit (as defined below) option plans or similar compensation plan or any
grant or award made under any of the foregoing, except as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect;
(c) violate or conflict with any statute, regulation, judgment,
order, writ, decree or injunction applicable to the Company, except as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect;
(d) violate or conflict with or result in a breach of any provision
of, or constitute a default (or any event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or in a
right of termination or cancellation of, or accelerate the performance required
by, or result
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<PAGE>
in the creation of any Lien upon any of the properties of the Company under, or
result in being declared void, voidable or without further binding effect, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or any license, franchise, permit, lease, contract, agreement or
other instrument, commitment or obligation to which the Company is a party, or
by which the Company or any of its properties is bound or affected, except for
any of the foregoing matters which would not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect; or
(e) require any consent, approval or authorization of, or
declaration, filing or registration with any Governmental Authority, other than
any filings required under the Securities Act, the Exchange Act, Blue Sky Laws
and any filings required to be made with any national securities exchange on
which the Company Common Stock is listed, except as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(f) For purposes hereof, the terms listed below shall have the
following meanings:
"Partnerships" shall mean, collectively, Carr Realty, L.P.
and CarrAmerica Realty, L.P., Delaware limited partnerships.
"Units" shall mean units of partnership interest in the
Partnerships.
2.5. SECURITIES LAW MATTERS; MATERIAL CHANGES; CORPORATE ACTION
COVENANTS
(a) As of the date hereof and as of the date of the Closing and the
Option Closing, if any, the Company Prospectus does not and 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, in the
light of the circumstances under which they were made, not misleading.
(b) The documents incorporated or deemed to be incorporated by
reference in the Company Prospectus pursuant to Item 12 of Form S-3 under the
Securities Act, at the time they were or hereafter are filed with the SEC,
complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC under the Exchange Act,
and, when read together with the other information in the Company Prospectus, as
of the date hereof and as of the date of the Closing and the Option Closing, if
any, did not and 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, in the light of the circumstances under which they were
made, not misleading.
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(c) Since the respective dates as of which information is given in
the Company Prospectus, except as otherwise stated therein, (A) there has been
no change in the condition, financial or otherwise, or in the earnings, assets
or business affairs of the Company and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, except as
would not reasonably be expected to, individually or in the aggregate, result in
a Material Adverse Effect, (B) no casualty loss or condemnation or other 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 or any entity
wholly or partially owned by the Company has occurred, except as would not
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Effect, (C) except for regular quarterly dividends on the
Common Stock and the Preferred Stock and regular quarterly distributions on the
Units, all in amounts per share that are consistent with past practice, 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 (D) with the exception of transactions in connection
with stock options and in connection with dividend reinvestment plans, the
issuance of shares of Common Stock upon the exchange of Units of the
Partnerships and the issuance of Units of the Partnerships 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 member interests, as the case
may be, of the Company or any Subsidiary, and no increase in the indebtedness of
the Company or any Subsidiary, that is material to such entities considered as
one enterprise.
(d) The financial statements (including the notes thereto) included
in, or incorporated by reference into, the Company Prospectus present fairly the
financial position of the respective entity or entities presented therein at the
respective dates indicated (if such financial position is presented) and the
results of their operations for the respective periods specified and, except as
otherwise stated in the Company Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis.
(e) As of the date hereof, the Company and its Controlled
Subsidiaries have complied in all material respects with the Corporate Action
Covenants set forth in Section 6.1 of the Stockholders Agreement.
(f) For purposes hereof, "Company Prospectus" shall mean,
collectively, the Prospectus dated April 2, 1998 and the Prospectus Supplement
dated April 2, 1998 relating to the shares of Company Common Stock to be offered
to the Subscriber, a copy of which is attached hereto as Exhibit A.
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2.6. LITIGATION; COMPLIANCE WITH LAW
(a) There are no Actions pending or, to the Company's knowledge,
threatened against the Company or any of its Significant Subsidiaries that
would, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, or which question the validity of this Agreement or any
action taken or to be taken in connection herewith. There are no continuing
orders, injunctions or decrees of any Government Authority to which the Company
or any of its Significant Subsidiaries is a party or by which any of its
properties or assets are bound.
(b) None of the Company or its Significant Subsidiaries is in
violation of any statute, rule, regulation, order, writ, decree or injunction of
any Government Authority or any body having jurisdiction over them or any of
their respective properties which, if enforced, would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
2.7. TAX MATTERS; REIT AND PARTNERSHIP STATUS
(a) The Company (i) was eligible to and did validly elect to be
taxed as a REIT under Sections 856 through 860 of the Code effective as of its
taxable year ended December 31, 1993, and does not intend, in its federal income
tax return for the tax year ended December 31, 1997 or in its federal income tax
return for the tax year that will end on December 31, 1998, to revoke such
election, (ii) has not, to its knowledge, taken or omitted to take any action
that would reasonably be expected to result in a termination of or challenge to
its status as a REIT, (iii) is not aware that any such challenge is pending or
threatened, (iv) intends to continue to operate in such a manner as to qualify
as a REIT for 1998, and (v) to the Company's knowledge, and assuming the
accuracy of Subscriber's representation in Section 3.7, will not be rendered
unable to qualify as a REIT for federal income tax purposes as a consequence of
the transactions contemplated hereby.
(b) Each Partnership and each subsidiary of the Company organized as
a partnership (and any other subsidiary of the Company that files tax returns as
a partnership for federal income tax purposes) was and continues to be
classified as a partnership for federal income tax purposes.
(c) For purposes of this Section 2.7, no representation set forth in
Section 2.7 shall be deemed to be untrue unless such untruths would,
individually or in the aggregate, be reasonably expected to result in a Material
Adverse Effect.
2.8. COMPLIANCE WITH ORGANIZATIONAL DOCUMENTS
Neither the Company nor any of its Significant Subsidiaries is in
default under or in violation of any provision of the Company Charter or the
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laws of the Company or the Partnership Agreement (or equivalent documents),
except for such defaults or violations which would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
2.9. MARYLAND TAKEOVER LAW
The terms of Section 3-602 and Subtitle 7 of Title 3 of the Maryland
General Corporation Law will not apply to Subscriber, the Subscription or any
other transaction contemplated hereby.
2.10. BROKERS OR FINDERS
No agent, broker, investment banker or other firm or person,
including any of the foregoing that is an Affiliate of the Company, is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee from the Company in connection with this Agreement or any of the
transactions contemplated hereby for which Subscriber will be responsible.
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE ADVANCING PARTY
Subscriber and the Advancing Party hereby jointly and severally
represent and warrant to the Company as follows:
3.1. ORGANIZATION AND STANDING
Each of Subscriber and the Advancing Party is a corporation duly
incorporated, validly existing and in good standing under the laws of
Luxembourg. Subscriber has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
conducted, and to enter into this Agreement and to perform its obligations
hereunder.
3.2. DUE AUTHORIZATION
The execution, delivery and performance of this Agreement have been
duly and validly authorized by all necessary corporate action on the part of
Subscriber and the Advancing Party. This Agreement has been duly executed and
delivered by each of Subscriber and the Advancing Party for itself and
constitutes the valid and legally binding obligations of Subscriber and the
Advancing Party, enforceable against Subscriber or the Advancing Party, as the
case may be, in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights or
general principles of equity.
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3.3. CONFLICTING AGREEMENTS AND OTHER MATTERS
Neither the execution and delivery of this Agreement nor the
performance by Subscriber or the Advancing Party, as the case may be, of its
obligations hereunder will conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, result in the creation
of any mortgage, security interest, encumbrance, lien or charge of any kind upon
any of the properties or assets of Subscriber or the Advancing Party, as the
case may be, pursuant to, or require any consent, approval or other action by or
any notice to or filing with any Government Authority pursuant to, the
organizational documents or agreements of Subscriber or the Advancing Party, as
the case may be, or any agreement, instrument, order, judgment, decree, statute,
law, rule or regulation by which Subscriber or the Advancing Party, as the case
may be, is bound, except for filings after any Closing under Section 13(d) of
the Exchange Act.
3.4. SOURCE OF FUNDS
At the Closing, the Advancing Party shall have available and shall
advance to Subscriber all of the funds necessary to satisfy Subscriber's
obligations hereunder and to pay any related fees and expenses in connection
with the foregoing.
3.5. BROKERS OR FINDERS
No agent, broker, investment banker or other firm or person,
including any of the foregoing that is an Affiliate of Subscriber or the
Advancing Party, is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from Subscriber or the Advancing Party in
connection with this Agreement or the transactions contemplated hereby for which
the Company will be responsible.
3.6. REIT QUALIFICATION MATTERS
To Subscriber's knowledge, no person which would be treated as an
"individual" for purposes of Section 542(a)(2) of the Code (as modified by
Section 856(h) of the Code) owns or would be considered to own (taking into
account the ownership attribution rules under Section 544 of the Code, as
modified by Section 856(h) of the Code) in excess of 9.8% of the value of the
outstanding equity interest in Subscriber or the Advancing Party.
3.7. INVESTMENT COMPANY MATTERS
Neither the Advancing Party nor Subscriber is, and after giving
effect to the purchase of the Concurrent Shares, neither will be, an "investment
company"
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or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
4. CONDITIONS TO CLOSING
4.1. CONDITIONS TO OBLIGATIONS OF SUBSCRIBER
The obligations of Subscriber to purchase and pay for the Concurrent
Shares at the Closing and the Option Closing, if any, are subject to
satisfaction or waiver of each of the following conditions precedent:
(a) All conditions to the closing of the Public Offering as set
forth in the underwriting agreement between the Company and the underwriters for
the Public Offering, other than conditions relating to the transactions
contemplated by this Agreement (if any), shall have been satisfied or waived,
and the Company shall have delivered to Subscriber at the Closing and the Option
Closing, if any, a certificate of an appropriate officer in form and substance
reasonably satisfactory to Subscriber dated the date of the Closing or the
Option Closing, as the case may be, to such effect.
(b) The representations and warranties of the Company contained
herein shall have been true and correct in all respects on and as of the date
hereof, and shall be true and correct in all respects on and as of the Closing
and the Option Closing, if any, with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing and the Option Closing, if any (except for representations and
warranties that speak as of a specific date or time other than the date of the
Closing or the Option Closing, as the case may be (which need only be true and
correct in all respects as of such date or time)), other than, in all such
cases, such failures to be true and/or correct as would not in the aggregate
reasonably be expected to have a Material Adverse Effect; provided, however,
that if any of the representations and warranties is already qualified in any
respect by materiality or as to Material Adverse Effect, for purposes of this
Section 4.1(b) such materiality or Material Adverse Effect qualification will be
in all respects ignored (but subject to the overall standard as to Material
Adverse Effect set forth immediately prior to this proviso). The Company shall
have delivered to Subscriber at the Closing and the Option Closing, if any, a
certificate of an appropriate officer in form and substance reasonably
satisfactory to Subscriber dated the date of the Closing or the Option Closing,
as the case may be, to such effect.
In making any determination as to Material Adverse Effect under
this Section 4.1(b), the matters set forth in each such Section shall be
aggregated and considered together.
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(c) There shall not be in effect any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated hereby and there shall be no
pending Actions which would reasonably be expected to have a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby or to issue the Concurrent Shares.
(d) The Company shall not have taken any action or have failed to
take any action which would reasonably be expected to, alone or in conjunction
with any other factors, result in the loss of its status as a REIT for federal
income tax purposes.
4.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to issue and sell the Concurrent
Shares at the Closing and the Option Closing, if any, are subject to
satisfaction or waiver of each of the following conditions precedent:
(a) All conditions to the closing of the Public Offering as set
forth in the underwriting agreement between the Company and the underwriters for
the Public Offering, other than conditions relating to the transactions
contemplated by this Agreement (if any), shall have been satisfied or waived.
(b) The representations and warranties of Subscriber and the
Advancing Party contained herein shall have been true and correct in all
respects on and as of the date hereof, and shall be true and correct in all
respects on and as of the Closing and the Option Closing, if any, with the same
effect as though such representations and warranties had been made on and as of
the date of the Closing or the Option Closing, as the case may be (except for
representations and warranties that speak as of a specific date or time other
than the date of the Closing or the Option Closing, as the case may be (which
need only be true and correct in all respects as of such date or time)), other
than, in all such cases, such failures to be true and/or correct as would not in
the aggregate reasonably be expected to have a Material Adverse Effect.
Subscriber shall have delivered to the Company at the Closing and the Option
Closing, if any, a certificate of an appropriate officer in form and substance
reasonably satisfactory to the Company dated the date of the Closing or the
Option Closing, as the case may be, to such effect.
(c) There shall not be in effect any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated hereby and there shall be no
pending Actions which would reasonably be expected to have a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby or to issue the Concurrent Shares.
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<PAGE>
5. SURVIVAL; INDEMNIFICATION
5.1. SURVIVAL
All representations, warranties, covenants and agreements of the
parties contained herein, including indemnity or indemnification agreements
contained herein, shall survive the Closing and the Option Closing, if any,
until the first anniversary of the Closing. No Action or proceeding may be
brought with respect to any of the representations, warranties, covenants or
agreements unless written notice thereof, setting forth in reasonable detail the
claimed misrepresentation or breach of warranty or breach of covenant or
agreement, shall have been delivered to the party alleged to have breached such
representation or warranty or such covenant or agreement prior to the first
anniversary of the Closing. Those covenants or agreements that contemplate or
may involve actions to be taken or obligations in effect after the Closing shall
survive in accordance with their terms.
5.2. INDEMNIFICATION BY SUBSCRIBER OR THE COMPANY
(a) Subject to Section 5.1, from and after the Closing, Subscriber
shall indemnify and hold harmless the Company, its successors and assigns, from
and against any and all Loss and Expenses suffered, directly or indirectly, by
the Company by reason of, or arising out of, (i) any breach as of the date made
or deemed made or required to be true of any representation or warranty made by
Subscriber in or pursuant to this Agreement, or (ii) any failure by Subscriber
to perform or fulfill any of its covenants or agreements set forth herein.
Notwithstanding any other provision of this Agreement to the contrary, in no
event shall Loss and Expenses include a party's incidental or consequential
damages.
(b) Subject to Section 5.1, from and after the Closing, the Company
shall indemnify and hold harmless Subscriber, its successors and assigns, from
and against any and all Loss and Expenses, suffered, directly or indirectly, by
Subscriber by reason of, or arising out of, (i) any breach as of the date made
or deemed made or required to be true of any representation or warranty made by
the Company in or pursuant to this Agreement and any statements made in any
certificate delivered pursuant to this Agreement, or (ii) any failure by the
Company to perform or fulfill any of its covenants or agreements set forth
herein. Notwithstanding any other provision of this Agreement to the contrary,
in no event shall Loss and Expenses include a party's incidental or
consequential damages.
(c) Notwithstanding the foregoing, (i) neither Subscriber nor the
Company shall be responsible for any Loss and Expenses as provided by paragraphs
(a) and (b), respectively, of this Section 5.2, until the cumulative aggregate
amount of such Loss and Expenses suffered by Subscriber or the Company, as the
case may be, exceeds $500,000, in which case Subscriber or the Company, as the
case may be,
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<PAGE>
shall then be liable for all such Loss and Expenses, and (ii) the cumulative
aggregate indemnity obligation of each of Subscriber and the Company under this
Section 5.2 shall in no event exceed the Purchase Price. Except with respect to
third-party claims being defended in good faith or claims for indemnification
with respect to which there exists a good faith dispute, the indemnifying party
shall satisfy its obligations hereunder within 30 days of receipt of a notice of
claim under this Section 5.
5.3. THIRD-PARTY CLAIMS
If a claim by a third party is made against Subscriber or the
Advancing Party or the Company (each, an "Indemnified Party") and if such
Indemnified Party intends to seek indemnity with respect thereto under this
Section 5, such Indemnified Party shall promptly notify the indemnifying party
in writing of such claims setting forth such claims in reasonable detail. The
indemnifying party shall have 20 days after receipt of such notice to undertake,
through counsel of its own choosing and at its own expense, the settlement or
defense thereof, and the Indemnified Party shall cooperate with it in connection
therewith; provided, however, that the Indemnified Party may participate in such
settlement or defense through counsel chosen by such Indemnified Party, provided
that the fees and expenses of such counsel shall be borne by such Indemnified
Party. The Indemnified Party shall not pay or settle any claim which the
indemnifying party is contesting. Notwithstanding the foregoing, the Indemnified
Party shall have the right to pay or settle any such claim, provided that in
such event it shall waive any right to indemnity therefor by the indemnifying
party. If the indemnifying party does not notify the Indemnified Party within 20
days after the receipt of the Indemnified Party's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, the Indemnified Party
shall have the right to contest, settle or compromise the claim but shall not
thereby waive any right to indemnity therefor pursuant to this Agreement.
6. MISCELLANEOUS
6.1. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall be effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service shall be considered
original executed counterparts for purposes of this Section, provided receipt of
copies of such counterparts is confirmed.
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<PAGE>
6.2. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF.
6.3. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties other than
those set forth or referred to herein. This Agreement is not intended to confer
upon any person not a party hereto (and their successors and assigns) any rights
or remedies hereunder.
6.4. NOTICES
All notices and other communications hereunder shall be sufficiently
given for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to the Company shall be addressed
to:
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<PAGE>
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, DC 20006
Attention: Thomas A. Carr, President
Telecopy Number: (202) 638-0102
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20004-1109
Attention: J. Warren Gorrell, Jr., Esq.
Telecopy Number: (202) 637-5910
Notices to Subscriber or the Advancing Party shall be addressed to:
Security Capital Holdings S.A.
69, route d'Esch
L-2953 Luxembourg
Attention: Jeffrey A. Cozad, Managing Director
Telecopy Number: (352) 4590-3331
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
6.5. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors. Neither Subscriber nor the
Advancing Party shall be permitted to assign any of its rights hereunder to any
third party; provided, however, that Subscriber and the Advancing Party may
assign all (but not less than all) of their rights hereunder to any other
Investor so long as such other Investor agrees in writing, in a form reasonably
acceptable to the Company, to be bound by all the terms and conditions of this
Agreement.
6.6. HEADINGS
The Section and other headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
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6.7. AMENDMENTS AND WAIVERS
This Agreement may not be modified or amended except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought. Any party hereto
may, only by an instrument in writing, waive compliance by the other parties
hereto with any term or provision hereof on the part of such other party hereto
to be performed or complied with. The waiver by any party hereto of a breach of
any term or provision hereof shall not be construed as a waiver of any
subsequent breach.
6.8. EXPENSES
Except as set forth in this Agreement, whether or not the Closing is
consummated, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
6.9. SEVERABILITY
Any provision hereof which is invalid or unenforceable shall be
ineffective to the extent of such invalidity or unenforceability, without
affecting in any way the remaining provisions hereof.
6.10. FURTHER ASSURANCES
The Company, Subscriber and the Advancing Party agree that, from
time to time, whether before, at or after the Closing, each of them will execute
and deliver such further instruments of conveyance and transfer and take such
other action as may be necessary to carry out the purposes and intents hereof.
6.11. JOINT AND SEVERAL LIABILITY; GUARANTY
The obligations and liability of Subscriber and the Advancing Party
under or in connection with this Agreement are joint and several. The Advancing
Party hereby unconditionally and irrevocably guarantees and agrees to be
responsible for the payment and performance of all of Subscriber's obligations
hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or have caused this Agreement to be duly executed on their behalf, 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
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
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Exhibit 11
SUBSCRIPTION AGREEMENT
by and among
CARRAMERICA REALTY CORPORATION
SECURITY CAPITAL HOLDINGS S.A.
and
SECURITY CAPITAL U.S. REALTY
dated as of
April 23, 1998
<PAGE>
TABLE OF CONTENTS
Page
1. SUBSCRIPTION; CLOSING.............................................2
1.1. Subscription for Company Common Stock.......................2
1.2. Acceptance of Subscription..................................2
1.3. Purchase Price..............................................2
1.4. Closing.....................................................2
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................3
2.1. Organization and Qualification..............................3
2.2. Authority Relative to the Agreement; Board Approval.........3
2.3. Capital Stock...............................................4
2.4. No Conflicts; No Defaults; Required Filings and Consents....4
2.5. Securities Law Matters; Material Changes; Corporate Action
Covenants..................................................5
2.6. Litigation; Compliance With Law.............................6
2.7. Tax Matters; REIT and Partnership Status....................7
2.8. Compliance with Organizational Documents....................7
2.9. Maryland Takeover Law.......................................8
2.10. Brokers or Finders.........................................8
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE ADVANCING
PARTY............................................................8
3.1. Organization and Standing...................................8
3.2. Due Authorization...........................................8
3.3. Conflicting Agreements and Other Matters....................8
3.4. Source of Funds.............................................9
3.5. Brokers or Finders..........................................9
3.6. REIT Qualification Matters..................................9
3.7. Investment Company Matters..................................9
4. CONDITIONS TO CLOSING.............................................10
4.1. Conditions to Obligations of Subscriber.....................10
4.2. Conditions to Obligations of the Company....................11
5. SURVIVAL; INDEMNIFICATION.........................................11
5.1. Survival....................................................11
5.2. Indemnification by Subscriber or the Company................12
5.3. Third-Party Claims..........................................13
6. MISCELLANEOUS.....................................................13
6.1. Counterparts................................................13
6.2. Governing Law...............................................13
6.3. Entire Agreement............................................14
6.4. Notices.....................................................14
6.5. Successors and Assigns......................................15
6.6. Headings....................................................15
6.7. Amendments and Waivers......................................15
6.8. Expenses....................................................15
6.9. Severability................................................15
6.10.Further Assurances..........................................15
6.11.Joint and Several Liability; Guaranty.......................16
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SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered into as of
April 23, 1998 by and among CarrAmerica Realty Corporation, a Maryland
corporation (the "Company"), Security Capital U.S. Realty, a Luxembourg
corporation (the "Advancing Party"), and Security Capital Holdings S.A., a
Luxembourg corporation and a wholly owned subsidiary of the Advancing Party
("Subscriber"). Capitalized terms not otherwise defined herein have the meanings
ascribed to them in the Stockholders Agreement (as hereinafter defined).
WHEREAS, in connection with the Company's issuance and sale to
Subscriber on April 30, 1996 of 11,627,907 shares of the Company's common stock,
par value $0.01 per share (the "Company Common Stock"), the Company, Carr
Realty, L.P., a Delaware limited partnership ("Carr Realty, L.P."), the
Advancing Party and Subscriber entered into a Stockholders Agreement on such
date (the "Stockholders Agreement");
WHEREAS, pursuant to the terms of the Stockholders Agreement, in the
event that the Company issues or sells shares of capital stock of the Company,
Investor is, during a specified term, entitled (except in certain limited
circumstances) to a participation right to purchase, or subscribe for, a total
number of shares generally equal to up to 30% of the total number of shares of
capital stock proposed to be issued by the Company (the "Participation Rights");
WHEREAS, the Company currently intends to issue and to offer and
sell in a public offering (the "Public Offering") up to 1,178,947 shares (the
"Public Shares") of Company Common Stock;
WHEREAS, in connection with the Public Shares proposed to be issued
by the Company in the Public Offering, Investor is entitled to, and has
indicated to the Company that it desires to, exercise its Participation Rights;
and
WHEREAS, in accordance with Investor's desire to exercise its
Participation Rights, the Company desires to issue and sell to Subscriber shares
of Company Common Stock in an offering (the "Concurrent Purchase") from the
Company to Subscriber to be consummated concurrently with the Public Offering.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
<PAGE>
1. SUBSCRIPTION; CLOSING
1.1. SUBSCRIPTION FOR COMPANY COMMON STOCK
(a) Subject to the terms and conditions hereof, Subscriber hereby
subscribes (the "Subscription") to purchase that number of shares of Company
Common Stock (the "Concurrent Shares") equal to the lesser of (i) 505,263 shares
of Company Common Stock, or (ii) that number (the "Reduced Number") of shares of
Company Common Stock which is equal to thirty percent (30%) of the sum of the
number of Public Shares sold in the Public Offering and the Reduced Number.
(b) Investor hereby agrees that the Subscription represents the
complete and exclusive exercise of its Participation Rights with regard to the
Public Offering, provided that the number of Public Shares to be sold in the
Public Offering does not exceed 1,178,947. The Company reserves the right to
terminate the Public Offering for any reason or for no reason, to sell less than
all of the Public Shares in the Public Offering or to increase the number of
Public Shares sold in the Public Offering.
1.2. ACCEPTANCE OF SUBSCRIPTION
Subject to the terms and conditions hereof, the Company hereby
accepts the Subscription.
1.3. PURCHASE PRICE
The per share purchase price (the "Per Share Purchase Price") for
the Concurrent Shares shall equal the per share public offering price of the
Company Common Stock in the Public Offering ($29.6875). The aggregate purchase
price (the "Purchase Price") shall be equal to the Per Share Purchase Price
multiplied by the number of Concurrent Shares.
1.4. CLOSING
Subject to the terms and conditions hereof, the closing of the
Concurrent Purchase (the "Closing") shall occur concurrently with the closing of
the Public Offering. At the Closing, the Company will sell, convey, assign,
transfer and deliver, and Subscriber will purchase and acquire (and the
Advancing Party shall advance to the Subscriber sufficient funds for such
purchase) from the Company, the Concurrent Shares, and Subscriber will pay to
the Company the Purchase Price by wire transfer of immediately available funds
in U.S. dollars to the account or accounts specified by the Company.
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<PAGE>
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Subscriber as follows:
2.1. ORGANIZATION AND QUALIFICATION
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Maryland. The Company has
all requisite corporate power and authority to own, operate, lease and encumber
its properties and carry on its business as described in the Company Prospectus
(as hereinafter defined), and to enter into this Agreement and to perform its
obligations hereunder.
(b) Each of the Significant Subsidiaries of the Company is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and has the corporate or partnership power and
authority to own its properties and carry on its business as it is now being
conducted.
(c) Each of the Company and its Significant Subsidiaries is duly
qualified to do business and in good standing in each jurisdiction in which the
ownership of its property or the conduct of its business requires such
qualification, except for any failures to be so qualified or to be in good
standing as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(d) The issue and sale of the Concurrent Shares hereunder will not
give any stockholder of the Company the right to demand payment for his shares
under the Maryland General Corporation Law.
2.2. AUTHORITY RELATIVE TO THE AGREEMENT; BOARD APPROVAL
(a) The execution, delivery and performance of this Agreement by the
Company have been duly and validly authorized by all necessary corporate action.
This Agreement has been duly executed and delivered by the Company for itself
and constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights or general principles of equity.
(b) The Board of Directors of the Company has, as of the date
hereof, approved the transactions contemplated hereby.
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<PAGE>
(c) The Concurrent Shares have been duly authorized for issuance,
and upon issuance and receipt by the Company of the Purchase Price, will be duly
and validly issued, fully paid and nonassessable.
2.3. CAPITAL STOCK
The capital stock of the Company as of the date specified in the
Company Prospectus is as set forth therein under the caption entitled
"Capitalization". All of the issued and outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights (excluding any preemptive rights that Investor may
have under the Stockholders Agreement).
2.4. NO CONFLICTS; NO DEFAULTS; REQUIRED FILINGS AND CONSENTS
Neither the execution and delivery by the Company of this Agreement
nor the consummation by the Company of the transactions contemplated hereby in
accordance with the terms hereof, will:
(a) conflict with or result in a breach of any provisions of the
Company Charter or By-laws of the Company;
(b) result in a breach or violation of, a default under, or the
triggering of any payment or other obligations pursuant to, or accelerate
vesting under, any of the Company stock option plans or Partnership (as defined
below) Unit (as defined below) option plans or similar compensation plan or any
grant or award made under any of the foregoing, except as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect;
(c) violate or conflict with any statute, regulation, judgment,
order, writ, decree or injunction applicable to the Company, except as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect;
(d) violate or conflict with or result in a breach of any provision
of, or constitute a default (or any event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or in a
right of termination or cancellation of, or accelerate the performance required
by, or result in the creation of any Lien upon any of the properties of the
Company under, or result in being declared void, voidable or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any license, franchise, permit, lease,
contract, agreement or other instrument, commitment or obligation to which the
Company is a party, or by which the Company or any of its properties is bound or
affected, except for any of the
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foregoing matters which would not reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect; or
(e) require any consent, approval or authorization of, or
declaration, filing or registration with any Governmental Authority, other than
any filings required under the Securities Act, the Exchange Act, Blue Sky Laws
and any filings required to be made with any national securities exchange on
which the Company Common Stock is listed, except as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(f) For purposes hereof, the terms listed below shall have the
following meanings:
"Partnerships" shall mean, collectively, Carr Realty, L.P.
and CarrAmerica Realty, L.P., Delaware limited partnerships.
"Units" shall mean units of partnership interest in the
Partnerships.
2.5. SECURITIES LAW MATTERS; MATERIAL CHANGES; CORPORATE ACTION
COVENANTS
(a) As of the date hereof and as of the date of the Closing, the
Company Prospectus does not and 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, in the light of the
circumstances under which they were made, not misleading.
(b) The documents incorporated or deemed to be incorporated by
reference in the Company Prospectus pursuant to Item 12 of Form S-3 under the
Securities Act, at the time they were or hereafter are filed with the SEC,
complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC under the Exchange Act,
and, when read together with the other information in the Company Prospectus, as
of the date hereof and as of the date of the Closing, did not and 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, in
the light of the circumstances under which they were made, not misleading.
(c) Since the respective dates as of which information is given in
the Company Prospectus, except as otherwise stated therein, (A) there has been
no change in the condition, financial or otherwise, or in the earnings, assets
or business affairs of the Company and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, except as
would not reasonably be expected to, individually or in the aggregate, result in
a Material
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<PAGE>
Adverse Effect, (B) no casualty loss or condemnation or other 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 or any entity
wholly or partially owned by the Company has occurred, except as would not
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Effect, (C) except for regular quarterly dividends on the
Common Stock and the Preferred Stock and regular quarterly distributions on the
Units, all in amounts per share that are consistent with past practice, 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 (D) with the exception of transactions in connection
with stock options and in connection with dividend reinvestment plans, the
issuance of shares of Common Stock upon the exchange of Units of the
Partnerships and the issuance of Units of the Partnerships 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 member interests, as the case
may be, of the Company or any Subsidiary, and no increase in the indebtedness
of the Company or any Subsidiary, that is material to such entities considered
as one enterprise.
(d) The financial statements (including the notes thereto) included
in, or incorporated by reference into, the Company Prospectus present fairly the
financial position of the respective entity or entities presented therein at the
respective dates indicated (if such financial position is presented) and the
results of their operations for the respective periods specified and, except as
otherwise stated in the Company Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis.
(e) As of the date hereof, the Company and its Controlled
Subsidiaries have complied in all material respects with the Corporate Action
Covenants set forth in Section 6.1 of the Stockholders Agreement.
(f) For purposes hereof, "Company Prospectus" shall mean,
collectively, the Prospectus dated April 2, 1998 and the Prospectus Supplement
dated April 23, 1998 relating to the shares of Company Common Stock to be
offered to the Subscriber, a copy of which is attached hereto as Exhibit A.
2.6. LITIGATION; COMPLIANCE WITH LAW
(a) There are no Actions pending or, to the Company's knowledge,
threatened against the Company or any of its Significant Subsidiaries that
would, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, or which question the validity of this Agreement or any
action taken or to be taken in connection herewith. There are no continuing
orders, injunctions or decrees of any Government Authority to which the Company
or any of its
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<PAGE>
Significant Subsidiaries is a party or by which any of its properties or
assets are bound.
(b) None of the Company or its Significant Subsidiaries is in
violation of any statute, rule, regulation, order, writ, decree or injunction of
any Government Authority or any body having jurisdiction over them or any of
their respective properties which, if enforced, would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
2.7. TAX MATTERS; REIT AND PARTNERSHIP STATUS
(a) The Company (i) was eligible to and did validly elect to be
taxed as a REIT under Sections 856 through 860 of the Code effective as of its
taxable year ended December 31, 1993, and does not intend, in its federal income
tax return for the tax year ended December 31, 1997 or in its federal income tax
return for the tax year that will end on December 31, 1998, to revoke such
election, (ii) has not, to its knowledge, taken or omitted to take any action
that would reasonably be expected to result in a termination of or challenge to
its status as a REIT, (iii) is not aware that any such challenge is pending or
threatened, (iv) intends to continue to operate in such a manner as to qualify
as a REIT for 1998, and (v) to the Company's knowledge, and assuming the
accuracy of Subscriber's representation in Section 3.7, will not be rendered
unable to qualify as a REIT for federal income tax purposes as a consequence of
the transactions contemplated hereby.
(b) Each Partnership and each subsidiary of the Company organized as
a partnership (and any other subsidiary of the Company that files tax returns as
a partnership for federal income tax purposes) was and continues to be
classified as a partnership for federal income tax purposes.
(c) For purposes of this Section 2.7, no representation set forth in
Section 2.7 shall be deemed to be untrue unless such untruths would,
individually or in the aggregate, be reasonably expected to result in a Material
Adverse Effect.
2.8. COMPLIANCE WITH ORGANIZATIONAL DOCUMENTS
Neither the Company nor any of its Significant Subsidiaries is in
default under or in violation of any provision of the Company Charter or the
By-laws of the Company or the Partnership Agreement (or equivalent documents),
except for such defaults or violations which would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
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<PAGE>
2.9. MARYLAND TAKEOVER LAW
The terms of Section 3-602 and Subtitle 7 of Title 3 of the Maryland
General Corporation Law will not apply to Subscriber, the Subscription or any
other transaction contemplated hereby.
2.10. BROKERS OR FINDERS
No agent, broker, investment banker or other firm or person,
including any of the foregoing that is an Affiliate of the Company, is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee from the Company in connection with this Agreement or any of the
transactions contemplated hereby for which Subscriber will be responsible.
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE ADVANCING PARTY
Subscriber and the Advancing Party hereby jointly and severally
represent and warrant to the Company as follows:
3.1. ORGANIZATION AND STANDING
Each of Subscriber and the Advancing Party is a corporation duly
incorporated, validly existing and in good standing under the laws of
Luxembourg. Subscriber has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
conducted, and to enter into this Agreement and to perform its obligations
hereunder.
3.2. DUE AUTHORIZATION
The execution, delivery and performance of this Agreement have been
duly and validly authorized by all necessary corporate action on the part of
Subscriber and the Advancing Party. This Agreement has been duly executed and
delivered by each of Subscriber and the Advancing Party for itself and
constitutes the valid and legally binding obligations of Subscriber and the
Advancing Party, enforceable against Subscriber or the Advancing Party, as the
case may be, in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights or
general principles of equity.
3.3. CONFLICTING AGREEMENTS AND OTHER MATTERS
Neither the execution and delivery of this Agreement nor the
performance by Subscriber or the Advancing Party, as the case may be, of its
obligations hereunder will conflict with, result in a breach of the terms,
conditions
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<PAGE>
or provisions of, constitute a default under, result in the creation of any
mortgage, security interest, encumbrance, lien or charge of any kind upon
any of the properties or assets of Subscriber or the Advancing Party, as the
case may be, pursuant to, or require any consent, approval or other action by or
any notice to or filing with any Government Authority pursuant to, the
organizational documents or agreements of Subscriber or the Advancing Party, as
the case may be, or any agreement, instrument, order, judgment, decree, statute,
law, rule or regulation by which Subscriber or the Advancing Party, as the case
may be, is bound, except for filings after any Closing under Section 13(d) of
the Exchange Act.
3.4. SOURCE OF FUNDS
At the Closing, the Advancing Party shall have available and shall
advance to Subscriber all of the funds necessary to satisfy Subscriber's
obligations hereunder and to pay any related fees and expenses in connection
with the foregoing.
3.5. BROKERS OR FINDERS
No agent, broker, investment banker or other firm or person,
including any of the foregoing that is an Affiliate of Subscriber or the
Advancing Party, is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from Subscriber or the Advancing Party in
connection with this Agreement or the transactions contemplated hereby for which
the Company will be responsible.
3.6. REIT QUALIFICATION MATTERS
To Subscriber's knowledge, no person which would be treated as an
"individual" for purposes of Section 542(a)(2) of the Code (as modified by
Section 856(h) of the Code) owns or would be considered to own (taking into
account the ownership attribution rules under Section 544 of the Code, as
modified by Section 856(h) of the Code) in excess of 9.8% of the value of the
outstanding equity interest in Subscriber or the Advancing Party.
3.7. INVESTMENT COMPANY MATTERS
Neither the Advancing Party nor Subscriber is, and after giving
effect to the purchase of the Concurrent Shares, neither will be, an "investment
company" or an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
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4. CONDITIONS TO CLOSING
4.1. CONDITIONS TO OBLIGATIONS OF SUBSCRIBER
The obligations of Subscriber to purchase and pay for the Concurrent
Shares at the Closing, are subject to satisfaction or waiver of each of the
following conditions precedent:
(a) All conditions to the closing of the Public Offering as set
forth in the underwriting agreement between the Company and the underwriters for
the Public Offering, other than conditions relating to the transactions
contemplated by this Agreement (if any), shall have been satisfied or waived,
and the Company shall have delivered to Subscriber at the Closing, a certificate
of an appropriate officer in form and substance reasonably satisfactory to
Subscriber dated the date of the Closing to such effect.
(b) The representations and warranties of the Company contained
herein shall have been true and correct in all respects on and as of the date
hereof, and shall be true and correct in all respects on and as of the Closing,
with the same effect as though such representations and warranties had been made
on and as of the date of the Closing (except for representations and warranties
that speak as of a specific date or time other than the date of the Closing
(which need only be true and correct in all respects as of such date or time)),
other than, in all such cases, such failures to be true and/or correct as would
not in the aggregate reasonably be expected to have a Material Adverse Effect;
provided, however, that if any of the representations and warranties is already
qualified in any respect by materiality or as to Material Adverse Effect, for
purposes of this Section 4.1(b) such materiality or Material Adverse Effect
qualification will be in all respects ignored (but subject to the overall
standard as to Material Adverse Effect set forth immediately prior to this
proviso). The Company shall have delivered to Subscriber at the Closing, a
certificate of an appropriate officer in form and substance reasonably
satisfactory to Subscriber dated the date of the Closing to such effect.
In making any determination as to Material Adverse Effect under this
Section 4.1(b), the matters set forth in each such Section shall be aggregated
and considered together.
(c) There shall not be in effect any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated hereby and there shall be no
pending Actions which would reasonably be expected to have a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby or to issue the Concurrent Shares.
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<PAGE>
(d) The Company shall not have taken any action or have failed to
take any action which would reasonably be expected to, alone or in conjunction
with any other factors, result in the loss of its status as a REIT for federal
income tax purposes.
4.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to issue and sell the Concurrent
Shares at the Closing are subject to satisfaction or waiver of each of the
following conditions precedent:
(a) All conditions to the closing of the Public Offering as set
forth in the underwriting agreement between the Company and the underwriters for
the Public Offering, other than conditions relating to the transactions
contemplated by this Agreement (if any), shall have been satisfied or waived.
(b) The representations and warranties of Subscriber and the
Advancing Party contained herein shall have been true and correct in all
respects on and as of the date hereof, and shall be true and correct in all
respects on and as of the Closing, with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing (except for representations and warranties that speak as of a specific
date or time other than the date of the Closing (which need only be true and
correct in all respects as of such date or time)), other than, in all such
cases, such failures to be true and/or correct as would not in the aggregate
reasonably be expected to have a Material Adverse Effect. Subscriber shall have
delivered to the Company at the Closing a certificate of an appropriate officer
in form and substance reasonably satisfactory to the Company dated the date of
the Closing to such effect.
(c) There shall not be in effect any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated hereby and there shall be no
pending Actions which would reasonably be expected to have a material adverse
effect on the ability of the Company to consummate the transactions contemplated
hereby or to issue the Concurrent Shares.
5. SURVIVAL; INDEMNIFICATION
5.1. SURVIVAL
All representations, warranties, covenants and agreements of the
parties contained herein, including indemnity or indemnification agreements
contained herein, shall survive the Closing, until the first anniversary of the
Closing. No Action or proceeding may be brought with respect to any of the
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representations, warranties, covenants or agreements unless written notice
thereof, setting forth in reasonable detail the claimed misrepresentation or
breach of warranty or breach of covenant or agreement, shall have been
delivered to the party alleged to have breached such representation or warranty
or such covenant or agreement prior to the first anniversary of the Closing.
Those covenants or agreements that contemplate or may involve actions to be
taken or obligations in effect after the Closing shall survive in accordance
with their terms.
5.2. INDEMNIFICATION BY SUBSCRIBER OR THE COMPANY
(a) Subject to Section 5.1, from and after the Closing, Subscriber
shall indemnify and hold harmless the Company, its successors and assigns, from
and against any and all Loss and Expenses suffered, directly or indirectly, by
the Company by reason of, or arising out of, (i) any breach as of the date made
or deemed made or required to be true of any representation or warranty made by
Subscriber in or pursuant to this Agreement, or (ii) any failure by Subscriber
to perform or fulfill any of its covenants or agreements set forth herein.
Notwithstanding any other provision of this Agreement to the contrary, in no
event shall Loss and Expenses include a party's incidental or consequential
damages.
(b) Subject to Section 5.1, from and after the Closing, the Company
shall indemnify and hold harmless Subscriber, its successors and assigns, from
and against any and all Loss and Expenses, suffered, directly or indirectly, by
Subscriber by reason of, or arising out of, (i) any breach as of the date made
or deemed made or required to be true of any representation or warranty made by
the Company in or pursuant to this Agreement and any statements made in any
certificate delivered pursuant to this Agreement, or (ii) any failure by the
Company to perform or fulfill any of its covenants or agreements set forth
herein. Notwithstanding any other provision of this Agreement to the contrary,
in no event shall Loss and Expenses include a party's incidental or
consequential damages.
(c) Notwithstanding the foregoing, (i) neither Subscriber nor the
Company shall be responsible for any Loss and Expenses as provided by paragraphs
(a) and (b), respectively, of this Section 5.2, until the cumulative aggregate
amount of such Loss and Expenses suffered by Subscriber or the Company, as the
case may be, exceeds $500,000, in which case Subscriber or the Company, as the
case may be, shall then be liable for all such Loss and Expenses, and (ii) the
cumulative aggregate indemnity obligation of each of Subscriber and the Company
under this Section 5.2 shall in no event exceed the Purchase Price. Except with
respect to third-party claims being defended in good faith or claims for
indemnification with respect to which there exists a good faith dispute, the
indemnifying party shall satisfy its obligations hereunder within 30 days of
receipt of a notice of claim under this Section 5.
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5.3. THIRD-PARTY CLAIMS
If a claim by a third party is made against Subscriber or the
Advancing Party or the Company (each, an "Indemnified Party") and if such
Indemnified Party intends to seek indemnity with respect thereto under this
Section 5, such Indemnified Party shall promptly notify the indemnifying party
in writing of such claims setting forth such claims in reasonable detail. The
indemnifying party shall have 20 days after receipt of such notice to undertake,
through counsel of its own choosing and at its own expense, the settlement or
defense thereof, and the Indemnified Party shall cooperate with it in connection
therewith; provided, however, that the Indemnified Party may participate in such
settlement or defense through counsel chosen by such Indemnified Party, provided
that the fees and expenses of such counsel shall be borne by such Indemnified
Party. The Indemnified Party shall not pay or settle any claim which the
indemnifying party is contesting. Notwithstanding the foregoing, the Indemnified
Party shall have the right to pay or settle any such claim, provided that in
such event it shall waive any right to indemnity therefor by the indemnifying
party. If the indemnifying party does not notify the Indemnified Party within 20
days after the receipt of the Indemnified Party's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, the Indemnified Party
shall have the right to contest, settle or compromise the claim but shall not
thereby waive any right to indemnity therefor pursuant to this Agreement.
6. MISCELLANEOUS
6.1. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall be effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service shall be considered
original executed counterparts for purposes of this Section, provided receipt of
copies of such counterparts is confirmed.
6.2. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MARYLAND WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF.
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6.3. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties other than
those set forth or referred to herein. This Agreement is not intended to confer
upon any person not a party hereto (and their successors and assigns) any rights
or remedies hereunder.
6.4. NOTICES
All notices and other communications hereunder shall be sufficiently
given for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to the Company shall be addressed
to:
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, DC 20006
Attention: Thomas A. Carr, President
Telecopy Number: (202) 638-0102
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, DC 20004-1109
Attention: J. Warren Gorrell, Jr., Esq.
Telecopy Number: (202) 637-5910
Notices to Subscriber or the Advancing Party shall be addressed to:
Security Capital Holdings S.A.
69, route d'Esch
L-2953 Luxembourg
Attention: Jeffrey A. Cozad, Managing Director
Telecopy Number: (352) 4590-3331
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
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6.5. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors. Neither Subscriber nor the
Advancing Party shall be permitted to assign any of its rights hereunder to any
third party; provided, however, that Subscriber and the Advancing Party may
assign all (but not less than all) of their rights hereunder to any other
Investor so long as such other Investor agrees in writing, in a form reasonably
acceptable to the Company, to be bound by all the terms and conditions of this
Agreement.
6.6. HEADINGS
The Section and other headings contained in this Agreement are
inserted for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
6.7. AMENDMENTS AND WAIVERS
This Agreement may not be modified or amended except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought. Any party hereto
may, only by an instrument in writing, waive compliance by the other parties
hereto with any term or provision hereof on the part of such other party hereto
to be performed or complied with. The waiver by any party hereto of a breach of
any term or provision hereof shall not be construed as a waiver of any
subsequent breach.
6.8. EXPENSES
Except as set forth in this Agreement, whether or not the Closing is
consummated, all legal and other costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
6.9. SEVERABILITY
Any provision hereof which is invalid or unenforceable shall be
ineffective to the extent of such invalidity or unenforceability, without
affecting in any way the remaining provisions hereof.
6.10. FURTHER ASSURANCES
The Company, Subscriber and the Advancing Party agree that, from
time to time, whether before, at or after the Closing, each of them will
execute and
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deliver such further instruments of conveyance and transfer and take such
other action as may be necessary to carry out the purposes and intents hereof.
6.11. JOINT AND SEVERAL LIABILITY; GUARANTY
The obligations and liability of Subscriber and the Advancing Party
under or in connection with this Agreement are joint and several. The Advancing
Party hereby unconditionally and irrevocably guarantees and agrees to be
responsible for the payment and performance of all of Subscriber's obligations
hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or have caused this Agreement to be duly executed on their behalf, 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
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Ariel Amir
Name: Ariel Amir
Title: Vice President
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