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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 1-11706
CARRAMERICA REALTY CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 52-1796339
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(State of Incorporation) (I.R.S. Employer Identification No.)
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
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Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (202) 624-7500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common Stock, $0.01 Par Value New York Stock Exchange
Series B Cumulative Redeemable
Preferred Stock, $0.01 Par Value New York Stock Exchange
Series C Depositary Cumulative
Redeemable Preferred Stock,
$0.001 Par Value New York Stock Exchange
Series D Depositary Cumulative
Redeemable Preferred Stock,
$0.001 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|
As of March 4, 1998, the aggregate market value of the 32,403,511
shares of Common Stock held by non-affiliates of the registrant was
approximately $964.0 million, based upon the closing price of $29.75 on the New
York Stock Exchange composite tape on such date.
Number of shares of Common Stock outstanding as of March 4, 1998: 59,997,486
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the proxy statement for the
Annual Stockholders Meeting to be held in 1998 are incorporated by reference
into Part III.
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PART 1
Item 1. BUSINESS
THE COMPANY
General
CarrAmerica Realty Corporation (the "Company") is a fully integrated,
self-administered and self-managed publicly traded real estate investment trust
("REIT") that focuses primarily on the acquisition, development, ownership and
operation of office properties in select suburban growth markets across the
United States. As of March 1, 1998, the Company owned a greater than 50%
interest in a portfolio of 256 operating office properties, and 41 properties
under construction. These 256 operating properties contain an aggregate of
approximately 19.9 million square feet and the 41 properties under construction
will contain approximately 3.7 million square feet. The operating properties
owned by the Company as of December 31, 1997 were 95.9% leased as of that date,
with approximately 1,400 tenants.
The Company and its predecessor, The Oliver Carr Company ("OCCO"), have
developed, owned and operated office buildings in the Washington, D.C.
metropolitan area for more than 35 years. In November 1995, the Company
announced a strategic alliance with a wholly-owned subsidiary of Security
Capital U.S. Realty (together with Security Capital U.S. Realty, "SC-USREALTY"),
a European real estate operating company which owns strategic positions in
selected real estate companies in the United States. As of February 28, 1998,
SC-USREALTY owned approximately 44.1% of the outstanding common stock of the
Company (39.3% on a fully diluted basis).
The Company's experienced staff of over 1,200 employees, including
approximately 900 on-site building employees, provides a broad range of real
estate services. The Company's principal executive offices are located at 1700
Pennsylvania Avenue, N.W., Washington, D.C. 20006, and its telephone number is
(202) 624-7500. After July 1, 1998 the Company's principal offices will be
located at 1850 K Street, N.W., Washington, D.C. 20006 and its telephone number
will be (202) 729-7500. The Company's web site can be found at
www.carramerica.com. The Company was organized as a Maryland corporation on July
9, 1992.
Business Strategy
The Company's primary business objectives are to achieve long-term
sustainable per share cash flow growth and to maximize stockholder value through
a strategy of (i) acquiring, developing, owning and operating office properties
primarily in suburban markets throughout the United States that exhibit strong,
long-term growth characteristics and (ii) maintaining and enhancing a national
operating system that provides corporate users of office space with a mix of
products and services to meet their workplace needs at both the national and
local level. The Company has focused its investments primarily in suburban
markets throughout the United States because it believes that the suburban
markets provide growth oriented companies and their employees with workplace
locations which have lower operating costs, greater convenience and a higher
quality of life than traditional central business district locations.
Target Markets. The Company has focused its acquisition and development
activity in markets of the United States, which generally possess strong
long-term growth characteristics. Within these markets, the Company is targeting
specific submarkets in which (i) operating costs for businesses are relatively
low, (ii) long-term population and job growth generally are expected to exceed
the national average, (iii) large, well-educated employment pools exist, and
(iv) barriers to entry exist for new supplies of office space. The Company has
established a local presence in each of its existing target markets through its
investment activity and through relationships established by its experienced
market officers. The Company's target markets include the following: Suburban
Atlanta, Suburban Austin, Suburban Chicago, Suburban Dallas, Southeast Denver,
Tampa, Florida, Boca Raton, Florida, Orange County/Los Angeles, Suburban
Phoenix, Suburban Portland, Oregon, Sacramento, Suburban Salt Lake City, San
Diego, San Francisco Bay Area, Suburban Seattle and metropolitan Washington,
D.C.
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For each identified target market, the Company has established a set of
general guidelines and physical characteristics to evaluate investment
opportunities. All investment decisions are driven by real estate research,
focusing on variables such as composition of economic base, rate and composition
of job growth and office space supply and demand fundamentals. During 1997, the
Company believes that it met its critical mass threshold in substantially all of
its target markets. By achieving such critical mass, the Company believes that
it is able to better serve its customers' needs, realize certain operating
efficiencies and achieve sustainable long-term per share cash flow growth and
maximize stockholder value.
As of December 31, 1997 the distribution of the Company's operating
properties (on a rentable square foot basis) was as follows: 38% in its Pacific
region, primarily in suburban Seattle and the California markets of Silicon
Valley, Pleasanton, San Mateo, Orange County, Los Angeles and San Diego; 31% in
its Southeast region, primarily in metropolitan Washington, D.C., suburban
Atlanta and Boca Raton, Florida; 14% in its Mountain region, primarily in
suburban Salt Lake City, southeast Denver and suburban Phoenix; and 17% in its
Central region, primarily in suburban Chicago, suburban Dallas and suburban
Austin. Downtown Washington, D.C., which represented 100% of the Company's
portfolio in 1993, accounted for approximately 13% of the Company's portfolio
(on a rentable square foot basis) as of December 31, 1997.
Operating Property Acquisitions. In November 1995, the Company
implemented a major initiative to acquire operating office properties in order
to establish the operating platform for its national business strategy. Between
January 1, 1996 and March 1, 1998, the Company acquired 241 operating properties
containing approximately 16.7 million square feet, resulting in an approximate
500% increase in the total square footage of operating properties in which the
Company has a majority interest. These properties were acquired for an aggregate
purchase price of approximately $1.9 billion.
Development Program. Development of office properties is an
increasingly important component of the Company's growth strategy as attractive
acquisition opportunities diminish due to the influx of capital into the office
property market. The Company believes that long-term investment returns
resulting from properties it develops generally will exceed those from
properties it acquires, and the Company will not assume significantly increased
investment risks. The Company minimizes its development risk by employing
extensively trained and experienced development personnel, by avoiding the
assumption of significant entitlement risk in conjunction with land acquisitions
and by entering into guaranteed maximum price (GMP) construction contracts with
seasoned and credible contractors. Most importantly, the Company carefully
analyzes the supply and demand characteristics of a target market before
commencing inventory development in the market. In general, the Company will
only undertake inventory development (which excludes properties under
construction that have been substantially pre-leased) in markets with strong
real estate fundamentals, and then the Company generally will construct office
buildings attractive to a wide range of office users. The Company's
research-driven development program enables it to tailor its development
activities in each target market, from inventory development, to build-to-suit
projects, to holding land for future development. From January 1, 1997 to March
1, 1998, the Company placed in service nine development properties containing
approximately 780,000 square feet. The total cost of these development
properties was $99.1 million and the Company expects that the first year
stabilized unlevered return of these properties will be 11.7%. In addition, as
of March 1, 1998, the Company had an additional 41 properties under construction
that will contain approximately 3.7 million square feet.
Investments in Land Held for Future Development. The Company believes
that acquiring land to support future development provides it with a competitive
advantage in responding to customers' needs for office space in markets with low
vacancy rates, barriers to entry for new supplies of office space and increasing
rental rates. The Company also believes that the long-term investment returns
available to it on office properties it develops generally will exceed those of
office property acquisition opportunities currently available to the Company. In
addition to its portfolio of operating properties and projects currently under
development, the Company owned or controlled, as of March 1, 1998, land in 15 of
its target markets that is expected to support future development of up to 5.9
million square feet. The Company believes that acquiring land to support future
development provides it with a competitive advantage in responding to customers'
needs for office space in markets with low vacancy rates.
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National Operating System. As part of its business strategy, the
Company has developed and will continue to enhance a national operating system
to provide nationally coordinated customer service, marketing and development.
The Company's national operating system consists of three components: (i) a
Market Officer Group, currently consisting of 11 market officers focused on
developing and maintaining strong local relationships with the Company's
customers and the brokerage community and identifying investment opportunities
for the Company; (ii) a Corporate Services Group, which is dedicated to
marketing the Company's office space to a targeted list of companies; and
(iii) a National Development Group, which is responsible for developing office
properties, build-to-suit facilities and business parks. The Company's national
operating system is designed to provide corporate users of office space with a
mix of products and services to meet their workplace needs at both the national
and local levels. The Company believes that through its existing portfolio of
operating properties, property development opportunities and land acquired and
currently held for future development, the Company can generate incremental
demand through the relocation and expansion needs of many of its customers, both
within a single target market and in multiple target markets.
Market Officer Group. The Market Officer Group currently consists of 11
market officers who cover the 16 target markets in which the Company currently
owns properties. These market officers are responsible for maximizing the
performance of the Company's properties in their markets and ensuring that the
needs of the Company's customers are consistently being met. Because they meet
with the Company's customers on a regular basis, market officers are cognizant
of and responsive to customers' relocation or expansion needs. The market
officers have extensive knowledge of local conditions in their respective
markets and, therefore, are invaluable in identifying attractive investment
opportunities in their markets. In addition, through their contact with
customers, market officers are well positioned to help the Corporate Services
Group identify customers with new build-to-suit and multi-market requirements.
Corporate Services Group. The Company established the Corporate
Services Group in 1997. This group is responsible for marketing the Company's
properties, build-to-suit capabilities and the national scope of the Company's
operations to a targeted list of major corporate users. The Corporate Services
Group acts as a primary point of contact for national customers, coordinating
all of the office space the Company offers and giving corporate customers the
opportunity to address their national space requirements efficiently and
economically.
National Development Group. The National Development Group is
responsible for developing suburban office properties, build-to-suit facilities
and business parks. The Company's development team currently has over 40
professionals consisting of architects, engineers and construction professionals
across the United States who have an average of over 15 years of experience
developing office properties. This team of development professionals oversees
every aspect of the Company's land planning, building design, construction and
development of office properties, ensuring that all projects meet the same high
standards and uniform specifications in building design and systems. The Company
believes that, the National Development Group's expertise has given the Company
a competitive edge in marketing its facilities and services to customers.
Executive Office Suites Business. In August 1997, OmniOffices, Inc.
("OmniOffices"), an affiliate of the Company, acquired substantially all of the
assets of OmniOffices Group, Inc. and its subsidiaries for an aggregate purchase
price of approximately $50 million in cash. These assets included 28 executive
office suite centers containing approximately 1,650 office suites located in 14
markets across the country. In addition, OmniOffices has acquired an additional
10 executive office suite centers, and entered into an agreement to acquire
(subject to certain closing conditions) an additional 22 executive office suite
centers (although there can be no assurance that this pending acquisition will
be consummated), for an aggregate cash investment of approximately $88 million.
These additional 32 executive office suite centers contain approximately 2,300
office suites located primarily in New York City, San Francisco, Chicago, Tampa,
Indianapolis and San Diego, and are operated by the two largest franchisees of
the HQ(R) executive office suite network, the largest operator of executive
suites.
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The "executive office suites" business typically involves leasing
20,000 to 30,000 square feet of an office building from the owner and outfitting
that space with 60-70 individual offices (known as office suites) that are
leased on a relatively short-term basis (i.e., one year or less) to customers
who generally utilize one to three offices at a time. OmniOffices generally
provides these customers with administrative support services (e.g.,
secretarial, duplicating, fax and receptionist services), conference and
training facilities, video conferencing, travel arrangements and catering
arrangements. The Company believes that approximately 60% of the current demand
being generated for executive office suites originates from national and
multi-national companies. The Company believes that this line of business has
significant potential for growth because the demand for executive office suites
is likely to increase as companies seek greater flexibility and alternative
workplace solutions for their staffing and business plan requirements. The
Company believes that its position as the only national office property owner
and operator providing both traditional, long-term office space and (through
OmniOffices) flexible, short-term workplace options provides it with a
competitive advantage in meeting the evolving needs of growing companies.
OmniOffices expects to continue expanding its operations through a
program encompassing both acquisitions and the creation of new executive office
suite centers. OmniOffices has financed its recent acquisitions primarily
through debt and equity investments by the Company. (In conformance with
limitations under the tax laws relating to REITs, OmniOffices is structured as a
taxable "C" corporation in which the Company owns 95% of the economic interest,
but none of the voting stock.) Because the tax laws relating to REITs limit the
amount of investment by the Company in OmniOffices to 5% of the Company's total
assets (or approximately $150 million), future growth of OmniOffices likely will
be financed through third-party debt financing (some or all of which may be
guaranteed by the Company) or equity investments by others (possibly including
public investors).
Asset Optimization. As a component of its business strategy, the
Company may dispose of assets that become inconsistent with its long-term
strategic or return objectives or where market conditions for disposition are
favorable. The Company would then redeploy the proceeds of such dispositions
into other office properties (utilizing tax-deferred exchanges where possible).
Consistent with this strategy, during 1997, the Company disposed of seven
properties containing approximately 664,000 square feet for approximately $68
million in value. The Company recognized a gain of $5.4 million in conjunction
with these transactions. In addition, in January 1998, the Company disposed of
an additional property containing 267,000 square feet for approximately $78
million in value, resulting in a gain of $43.8 million. The Company also may
consider disposing of additional properties or interests in properties, some of
which may be significant. The Company, however, has agreed with SC-USREALTY to
use its reasonable efforts to dispose of properties only through tax-deferred
exchanges (and the Company also is subject to other similar restrictions with
respect to certain properties acquired by CarrAmerica Realty, L.P. and Carr
Realty, L.P.).
Recent Developments
From January 1, 1997 to March 1, 1998, the Company invested
approximately $1.3 billion ($1.099 billion in cash, the assumption of $182.8
million of debt and the issuance of $26.0 million in partnership interests
("Units")) in 95 operating properties containing approximately 7.6 million
square feet and in land held for future development which is expected to support
the development of approximately 6.7 million square feet. On certain parcels of
land acquired between January 1, 1997 and March 1, 1998, the Company developed
and placed into service five properties containing an aggregate of approximately
346,000 square feet and placed under construction 31 properties which will
contain an aggregate of approximately 2.6 million square feet. The table below
provides certain information by market regarding the operating properties
acquired between January 1, 1997 and March 1, 1998:
Purchase
Price Number of Rentable
Region/Market (in millions) Properties Square Feet
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SOUTHEAST REGION
Suburban Atlanta $ 58.8 5 626,000
Boca Raton, Florida 42.8 1 279,000
PACIFIC REGION
San Francisco Bay Area 313.3 29 2,007,000
Sacramento 34.6 8 314,000
Orange County/Los Angeles 79.8 7 489,000
San Diego 35.6 5 325,000
Suburban Portland, Oregon 9.0 1 81,000
Suburban Seattle 51.0 8 438,000
CENTRAL REGION
Suburban Chicago 92.8 6 707,000
Suburban Austin 15.6 2 171,000
Suburban Dallas 93.8 9 936,000
MOUNTAIN REGION
Suburban Salt Lake City 50.1 8 463,000
Suburban Phoenix 112.6 6 714,000
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Total $ 989.8 95 7,550,000
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The following table provides certain information regarding the
Company's acquisition of land (including land subject to options), all of which
was acquired between January 1, 1997 and March 1, 1998:
Square Feet Future
Under Buildable
Region/Market Construction Square Footage
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Pacific Region:
San Francisco Bay Area 776,000(1) 254,000
Suburban Portland, Oregon --(2) 444,000
Orange County/Los Angeles -- 136,000
San Diego 182,000 156,000
Suburban Seattle 279,000 286,000
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Subtotal 1,237,000 1,276,000
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Mountain Region:
Southeast Denver -- 128,000
Suburban Salt Lake City 50,000 193,000
Suburban Phoenix 137,000 350,000
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Subtotal 187,000 671,000
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Central Region:
Suburban Dallas 607,000 740,000
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Subtotal 607,000 740,000
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Southeast Region:
Suburban Washington, D.C. 322,000 --
Downtown Washington, D.C. -- 221,000
Boca Raton, Florida 188,000 388,000
Tampa, Florida -- 202,000
Suburban Atlanta 76,000 216,000
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Subtotal 586,000 1,027,000
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TOTAL 2,617,000 3,714,000
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(1) Excludes Baytech Business Park which was purchased in 1997 and
placed in service in January 1998.
(2) Excludes RadiSys II which was purchased in 1997 and placed in
service in December 1997.
Capital Transactions
During the fourth quarter of 1997, the Company raised aggregate net
proceeds of $246 million. The Company sold 6,000,000 depositary shares of Series
C Cumulative Redeemable Preferred Stock in October 1997, and 2,000,000
depositary shares of Series D Cumulative Redeemable Preferred Stock in December
1997, from which the Company raised net proceeds of $145 million and $48
million, respectively. In addition, the Company sold 1.8 million shares of its
common stock to two unit investment trusts and a concurrent sale to SC-USREALTY
in December, 1997, from which the Company raised net proceeds of $53 million.
The net proceeds of these offerings were used to acquire the suburban office
properties and land described above, to fund develpoment costs and to pay down
indebtedness under the Company's unsecured credit facility.
In February 1998, the Company sold seven-year and ten-year senior
unsecured notes in an offering that raised net proceeds of approximately $198
million. The net proceeds were used to acquire the suburban office properties
and land described above, to fund development costs, to pay down indebtedness
under the Company's unsecured credit facility, and to pay certain costs related
to certain related hedging contracts.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company or industry results to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: national and local economic, business and real estate conditions that
will, among other things, affect demand for office properties, availability and
creditworthiness of tenants, the level of lease rents and the availability of
financing for both tenants and the Company, adverse changes in the real estate,
including, among other things, competition with other
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companies, risks of real estate acquisition and development (including the
failure of pending acquisitions to close and pending developments to be
completed on time and within budget), governmental approvals, actions and
initiatives, and environmental/safety requirements.
Directors of the Company
The directors of the Company are divided into three classes, with
approximately one-third of the directors elected by the stockholders annually.
As of March 1, 1998, the Board of Directors of the Company consisted of the
following persons:
Oliver T. Carr, Jr., 72, has been the Chairman of the Board of
Directors of the Company since it commenced operations in February 1993. In May
1997, Mr. Carr resigned as Chief Executive Officer, a position he had since
February 1993. Mr. Carr's term as a director of the Company expires at the 1999
Annual Meeting of Stockholders. Mr. Carr founded the Company's predecessor, The
Oliver Carr Company, in 1962 and since that time has been its Chairman of the
Board and a director. In addition, Mr. Carr had served as President of The
Oliver Carr Company from 1993 to the present. He was Chairman of the board of
Trustees of The George Washington University from July 1988 to June 1995. Mr.
Carr is the father of Thomas A. Carr and Robert O. Carr. Mr. Carr is a member of
the Executive Committee and the Investment Committee of the Board of Directors.
Thomas A. Carr, 39, has been President and a director of the Company
since February 1993. Mr. Carr's term as a director of the Company expires at the
1998 Annual Meeting of Stockholders. In May 1997, Mr. Carr was appointed Chief
Executive Officer of the Company. Mr. Carr was the Company's Chief Operating
Officer from May 1995 to May 1997 and the Company's Chief Financial Officer from
February 1993 to May 1995. Mr. Carr was President of Carr Partners, Inc., a
financial services affiliate of The Oliver Carr Company, from 1991 until Carr
Partners, Inc. ceased operations in February 1993. Prior to that time, Mr. Carr
was Vice President of Suburban Development and Regional Development Partner for
Maryland beginning in 1985. Mr. Carr is a member of the National Association of
Real Estate Investment Trusts (NAREIT), a member of International Development
Research Council CRE 2000 Research project (IDRC), a director of Lafayette
Square Investments, Inc. and a director of The Oliver Carr Company. Mr. Carr
also serves as a director and officer of certain subsidiaries of the Company,
including as Chairman of the Board of Directors of OmniOffices. Mr. Carr holds a
Masters degree in Business Administration from Harvard Business School and a
Bachelor of Arts degree from Brown University. Mr. Carr is a member of the
Executive Committee and the Investment Committee of the Board of Directors. In
addition, Mr. Carr is a member of management's Operating Committee and
Investment Committee.
Andrew F. Brimmer, 71, has been a director of the Company since
February 1993. Dr. Brimmer's term as a director of the Company expires at the
1999 Annual Meeting of Stockholders. He has been President of Brimmer & Company,
Inc., an economic and financial consulting firm, since 1976. Since 1995, Dr.
Brimmer has served as the chairman of the District of Columbia Financial Control
Board. Dr. Brimmer was a member of the Board of Governors of the Federal Reserve
System from 1966 through 1974. He is also the Wilmer D. Barrett Professor of
Economics at the University of Massachusetts-Amherst. Dr. Brimmer serves as a
director of BlackRock Investment Income Trust, Inc. (and other affiliated
funds), E.I. du Pont de Nemours & Company, Navistar International Corporation,
Borg-Warner Automotive, Inc. and Airborne Express. Dr. Brimmer received a
Bachelor of Arts and a Masters degree in Economics from the University of
Washington and holds a Ph.D. in Economics from Harvard University. Dr. Brimmer
is a member of the Audit Committee of the Board of Directors.
A. James Clark, 70, has been a director of the Company since February
1993. Mr. Clark's term as a director of the Company expires at the 1998 Annual
Meeting of Stockholders. He has been Chairman of the Board and President of
Clark Enterprises, Inc., a Bethesda, Maryland-based company involved in real
estate, communications, and commercial and residential construction, since 1972.
Mr. Clark is a member of the University of Maryland Foundation, and serves on
the Board of Trustees of The Johns Hopkins Board of Medicine. He is also a
member of the PGA Tour Golfcourse Properties Advisory Board, an Advisory
Director of Lockheed Martin Corporation and a director of Potomac Electric Power
Company. Mr. Clark is a graduate of The University of Maryland. Mr. Clark is a
member of the Executive Committee, Executive Compensation Committee, Investment
Committee and Nominating Committee of the Board of Directors.
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Todd W. Mansfield, 40, has been a director of the Company since
November 1997. Mr. Mansfield filled a vacancy for a directorship whose term
expires at the 2000 Annual Meeting of Stockholders. Mr. Mansfield has been
Managing Director of Security Capital (U.K.) Management Limited since May 1997.
Prior to that time, Mr. Mansfield had been with The Walt Disney Company since
May 1986, where he was Executive Vice President/General Manager of Disney
Development Company and President of The Celebration Company. Mr. Mansfield is a
director of Parking Services International (an affiliate of SC-USREALTY) and a
trustee of Urban Growth Property Trust (an affiliate of SC-USREALTY). Mr.
Mansfield also is a director of OmniOffices. Mr. Mansfield received his Masters
in Business Administration from Harvard University and his Bachelor of Arts from
Claremont McKenna College. Mr. Mansfield is a member of the Executive
Compensation Committee of the Board of Directors.
Caroline S. McBride, 44, has been a director of the Company since July
1996. Ms. McBride's term as a director of the Company expires at the 1998 Annual
Meeting of Stockholders. Ms. McBride is a Managing Director of Security Capital
Global Strategic Group, an affiliate of SC-USREALTY. From January 1995 to June
1996, Ms. McBride was the director of private market investments for the IBM
Retirement Fund and from January 1992 to January 1995, she was the director of
real estate investments for such fund. Prior to joining the IBM Retirement Fund
in 1992, Ms. McBride was director of finance, investments and asset management
for IBM's corporate real estate division. Ms. McBride is on the Boards of
Directors of Storage USA (an affiliate of SC-USREALTY), the Pension Real Estate
Association (PREA) and the Real Estate Research Institute. Ms. McBride received
her Masters in Business Administration from New York University and a Bachelor
of Arts degree from Middlebury College. Ms. McBride is a member of the
Investment Committee and the Audit Committee of the Board of Directors.
William D. Sanders, 56, has been a director of the Company since May
1996. Mr. Sanders' term as a director of the Company expires at the 1999 Annual
Meeting of Stockholders. Mr. Sanders is the founder and Chairman of Security
Capital Group (an affiliate of SC-USREALTY). Mr. Sanders resigned on January 1,
1990, as chief executive officer of LaSalle Partners Limited, which he founded
in 1968. Mr. Sanders is on the Boards of Directors of R. R. Donnelley & Sons
Company, SC-USREALTY, Storage USA, Inc. (an affiliate of SC-USREALTY) and
Regency Realty Corporation (an affiliate of SC-USREALTY). Mr. Sanders is a
former trustee and member of the executive committee of the University of
Chicago and a former trustee fellow of Cornell University. Mr. Sanders received
his Bachelor of Science degree from Cornell University. Mr. Sanders is a member
of the Nominating Committee of the Board of Directors.
Wesley S. Williams, Jr., 55, has been a director of the Company since
February 1993. Mr. Williams' term as a director of the Company expires at the
1998 Annual Meeting of Stockholders. Mr. Williams has been a partner of the law
firm of Covington & Burling, Washington, DC, since 1975. He was an adjunct
professor of real estate finance law at the Georgetown University Law Center
from 1971 to 1973 and is a contributing author to several texts on banking law
and on real estate finance and investment. Mr. Williams is also on the Editorial
Advisory Board of the District of Columbia Real Estate Reporter. Mr. Williams
serves on the Boards of Directors of Blackstar Communications, Inc. and its
Florida, Michigan and Oregon subsidiaries; Blackstar LLC and its Nebraska and
South Dakota subsidiaries; and the Federal Reserve Bank of Richmond. Mr.
Williams is Chairman of the Boards of Directors of Broadcast Capital, Inc. and
Broadcast Capital Fund, Inc. and is Vice Chairman of The Lockhart Companies,
Incorporated. Mr. Williams also is a member of the Executive Committee of the
Board of Trustees of Penn Mutual Life Insurance Company. Mr. Williams received a
B.A. and J.D. from Harvard University, an M.A. from the Fletcher School of Law
and Diplomacy and an L.L.M. from Columbia University. Mr. Williams is a member
of the Executive Compensation Committee of the Board of Directors.
Executive Officers and Certain Key Employees of the Company
As of March 1, 1998, the Company's executive officers and key employees
were as follows:
Brian K. Fields, 38, has been the Company's Chief Financial Officer
since May 1995. Prior to that time, Mr. Fields had served as the Company's Vice
President, Treasurer and Controller since February 1993. Mr. Fields served as
Treasurer and Controller of The Oliver Carr Company from 1990 to February 1993.
Mr. Fields serves as a director and officer of certain subsidiaries of the
Company. He holds a Bachelor of Science degree in Accounting from Virginia Tech
and is a Certified Public Accountant. Mr. Fields is a member of management's
Operating Committee and Investment Committee.
8
<PAGE>
Kent C. Gregory, 47, has been the Company's Managing
Director--Corporate Services since July 1997. Prior to that time, Mr. Gregory
had been employed by Opus, a real estate services company, since 1993, serving
as Senior Vice President of National Accounts. He holds a Masters in Business
Administration from Pace University and a Bachelor of Arts degree in Business
Administration from St. Thomas University. Mr. Gregory is a member of
management's Operating Committee and Investment Committee.
Philip L. Hawkins, 42, has been the Company's Managing Director--Asset
Management since February 1996. Prior to that time, Mr. Hawkins had been
employed by LaSalle Partners Limited, a real estate services company, since
1982, serving as Executive Vice President, Eastern Division, Asset Management
Group since 1995, Senior Vice President, Northeast Region, Asset Management
Group from 1990 to 1994, and in other asset management positions prior to that
time. Mr. Hawkins also was a director of LaSalle Partners Limited. He holds a
Masters in Business Administration from the University of Chicago Graduate
School of Business and a Bachelor of Arts degree from Hamilton College. Mr.
Hawkins is a member of management's Operating Committee and Investment
Committee. Mr. Hawkins serves as a director and officer of certain subsidiaries
of the Company, including as a director of OmniOffices.
Robert E. Peterson, 46, has been the Company's Managing Director--
Development since August 1997 and President of CarrAmerica Development, Inc.
since January 1, 1998. Prior to that time, Mr. Peterson had been Regional
Managing Director, Southeast Region, since November 1996. Mr. Peterson has over
23 years of real estate experience. Mr. Peterson's most recent experience
includes 18 years as President of Peterson Properties, which he co-founded in
1978. Mr. Peterson is a former member of the Society of Industrial and Office
Realtors and serves on the Developer Advisory Council for the Georgia Chapter of
the National Association of Industrial and Office Parks. Mr. Peterson holds a
Bachelor of Science in Business Administration from the University of North
Carolina at Chapel Hill. Mr. Peterson is the brother of James D. Peterson. Mr.
Peterson is a member of management's Operating Committee and Investment
Committee.
Robert G. Stuckey, 36, has been the Company's Chief Investment Officer
since August 1997. Prior to that time, Mr. Stuckey had been the Company's
Managing Director--Acquisitions and Development since February 1996. Prior to
that time, Mr. Stuckey was employed by Security Capital Industrial Trust (an
affiliate of SC-USREALTY) since January 1993, serving as Senior Vice President
managing the operations of the development group since November 1994, and as
Vice President supervising acquisition due diligence from May 1993 to November
1994. Mr. Stuckey serves as a director and officer of certain subsidiaries of
the Company. Mr. Stuckey holds a Masters in Business Administration from Harvard
Business School and a Bachelor of Science in Finance from the University of
Nebraska. Mr. Stuckey is a member of management's Operating Committee and
Investment Committee.
Paul R. Adkins, 39, has been the Company's Vice President, Market
Officer for Washington, D.C. since August 1996. Mr. Adkins has been with the
Company for over 15 years, including serving as Vice President of Acquisitions
from May 1994 to August 1996. Prior to that, Mr. Adkins served in a variety of
other capacities with the Company, with over 12 years in commercial real estate
leasing. Mr. Adkins is a member of the District of Columbia's Building Industry
Association and Northern Virginia's National Association of Industrial and
Office Parks. Mr. Adkins holds a Bachelor of Arts degree from Bucknell
University.
Steven N. Bralower, 47, has been Senior Vice President of Carr Realty,
L.P., a subsidiary of the Company, since May 1996. Mr. Bralower was Senior Vice
President of Carr Services, Inc., a subsidiary of the Company, from 1993 to May
1996. He was Senior Vice President of The Oliver Carr Company from 1985 to
February 1993, where he was responsible for overseeing and directing one-half of
that Company's leasing activities in its portfolio of commercial office and
retail space. Mr. Bralower first joined The Oliver Carr Company in 1978 as a
commercial leasing agent. Mr. Bralower has been a member of the Georgetown
University Law Center adjunct faculty since 1987. Mr. Bralower holds a Bachelor
of Arts degree from Kenyon College.
9
<PAGE>
Robert L. Brumm, 46, has been a Senior Vice President of the Company
since February 1998. Prior to that Mr. Brumm had been Vice President, Human
Resources and Administration of the Company since May 1996. From 1993 to 1996,
Mr. Brumm held the same position with Carr Services, Inc., a subsidiary of the
Company, and from March 1990 to 1993 held the same position with The Oliver Carr
Company. He is responsible for managing the Human Resources, Risk Management,
Training, and Office Management functions. He has over 20 years of experience,
including eight years with Mark Controls Corporation and five years with the
real estate division of Philip Morris, Inc. Mr. Brumm received his L.C.
Bachelors degree from California State University at Long Beach.
Robert O. Carr, 47, has been President and Chairman of the Board of
Directors of Carr Services, Inc., a subsidiary of the Company, since February
1993. Mr. Carr served as a director of the Company from 1993 until 1997. Mr.
Carr is a director of The Oliver Carr Company and, from 1987 until February
1993, served as its President and Chief Executive Officer. Mr. Carr joined The
Oliver Carr Company in 1973 and has served in a number of positions, which have
included the supervision of all development operations since 1979 and all
day-to-day company operations since 1982 as Executive Vice President. Mr. Carr
is a member of the Boards of Directors for the Greater Washington Research
Center, the Corcoran School of Art and the National Cathedral School for Girls.
Mr. Carr is also a member of the Greater Washington Board of Trade, the Urban
Land Institute and the D.C. Chamber of Commerce. Mr. Carr holds a Bachelor of
Arts degree from Trinity College.
Clete Casper, 38, has been the Company's Vice President, Market Officer
for suburban Seattle since July 1996. Mr. Casper has over 10 years of experience
in real estate and marketing. Mr. Casper's most recent experience includes one
year as a Senior Associate with CB Commercial Real Estate Group Inc., Seattle,
Washington. Prior to that, Mr. Casper was with Sabey Corporation in Seattle,
Washington, serving as Development Manager for four years and a Marketing
Associate for five years. Mr. Casper is a graduate of Washington State
University.
John J. Donovan, Jr., 54, has been a Senior Vice President of Carr
Services, Inc., a subsidiary of the Company, since February 1993. Prior to that,
Mr. Donovan was Senior Vice President of The Oliver Carr Company from 1988 to
February 1993 and was responsible for overseeing and directing one-half of The
Oliver Carr Company's leasing activities in its portfolio of commercial office
and retail space. Mr. Donovan joined The Oliver Carr Company as a commercial
leasing agent in 1976. He is a member of the Advisory Board for Jubilee
Enterprise of Greater Washington (an affiliate of Jubilee Housing and The
Enterprise Foundation). Mr. Donovan holds a Bachelor of Arts degree from
Georgetown University.
Karen B. Dorigan, 33, has been a Senior Vice President of the Company
since May 1997. Prior to that, Ms. Dorigan was the Company's Vice
President--Land Due Diligence since January 1996. Prior to that time, Ms.
Dorigan served for more than nine years in a variety of capacities in the
development business of The Oliver Carr Company, including from February 1993 to
January 1996 as a Vice President. She is a past member of the Northern Virginia
Building Industry Association's Arlington Chapter Council. Ms. Dorigan holds a
Bachelor of Science degree in Economics from the University of Pennsylvania,
Wharton School.
J. Thad Ellis, 37, has been the Company's Vice President, Market
Officer for suburban Atlanta since November 1996. Mr. Ellis has over 13 years of
experience in real estate. Mr. Ellis' most recent experience includes 10 years
with Peterson Properties, where his primary responsibility was to oversee and
coordinate leasing and property management for the management services
portfolio. Mr. Ellis is a graduate of Washington & Lee University and is
involved with the National Association of Industrial and Office Parks and
Atlanta's Chamber of Commerce and is on the Advisory Board of Black's Guide.
10
<PAGE>
Richard W. Greninger, 46, has been Senior Vice President--Operations of
the Company since January 1998. Prior to that, Mr. Greninger had been the Senior
Vice President of Carr Services, Inc., a subsidiary of the Company, since March
1995. Prior to that time, he had been Vice President of Carr Services, Inc.
since February 1993. Mr. Greninger was with The Oliver Carr Company as Vice
President of Property Management Services from January 1992 to February 1993.
During 1994, Mr. Greninger served as President of the Greater Washington
Apartment and Office Building Association. Mr. Greninger has served as a
director of both the Institute of Real Estate Management and the Building Owners
and Managers Association. Mr. Greninger holds a Masters in Business
Administration from the University of Cincinnati and a Bachelor of Science
degree from Ohio State University.
John S. Herr, 42, has been the Company's Senior Vice President, Market
Officer for Northern California since February 1998. Prior to that time, Mr.
Herr served as the Company's Vice President, Market Officer for Northern
California since September 1996. Mr. Herr has over 13 years of experience in
real estate marketing. Mr. Herr's most recent experience includes 2 years as the
President and Chief Executive Officer of Simeon Commercial Properties in San
Francisco, California. Prior to that, Mr. Herr spent 8 years with Trammel Crow,
serving as Principal and Executive Vice President in San Francisco for two
years; Partner in Richmond, Virginia for three years, and Marketing
Representative in Washington, D.C. for four years. Mr. Herr holds a Masters in
Business Administration from Stanford University and a Bachelors degree from the
U.S. Naval Academy.
Austin W. Lehr, 36, has been the Company's Vice President, Market
Officer for Southeast Denver since July 1996. Mr. Lehr has over 11 years of
experience in real estate marketing. Mr. Lehr's most recent experience includes
four years as a Vice President with Southwest Value Partners and Affiliates in
Phoenix, Arizona. Prior to that, Mr. Lehr spent four years with Draper and
Kramer, Incorporated in Washington, D.C. as the Director of Development and
Marketing. Mr. Lehr holds a Masters of Management degree from Northwestern
University and a Bachelor of Arts degree from Williams College.
Linda A. Madrid, 38, has been the Company's Senior Vice President and
General Counsel since March 1998. Prior to that time, Ms. Madrid had been Senior
Vice President, Managing Director of Legal Affairs and Corporate Secretary of
Riggs National Corporation/Riggs Bank N.A. since February 1996 and Vice
President and Litigation Manager from September 1993 to January 1996. Prior to
that time, Ms. Madrid practiced law in several law firms in Washington, D.C. and
served as Assistant General Counsel for Amtrak. Ms. Madrid holds a J.D. from
Georgetown University Law Center and a Bachelor of Arts degree from Arizona
State University.
Dwight L. Merriman, 37, has been the Company's Senior Vice President,
Market Officer for Southern California since February 1998. Prior to that time,
Mr. Merriman served as the Company's Vice President, Market Officer for Southern
California since August 1996. Mr. Merriman has over 12 years of experience in
real estate marketing. Mr. Merriman's most recent experience includes one year
as Vice President with Security Capital Industrial Trust (an affiliate of
SC-USREALTY) in Irvine, California. Prior to that, Mr. Merriman spent 11 years
with Overton, Moore in Los Angeles, serving as the Director of Marketing--Asset
Management (Partner) for five years, the Director of Marketing--Development
(Partner) for four years and Marketing Associate for two years. Mr. Merriman
holds a Masters in Business Administration from the University of California at
Los Angeles and a Bachelors degree from the University of Southern California.
B. Thomas Miller, Jr., 36, has been an Executive Vice President of
OmniOffices, Inc., since October 1997. Prior to that Mr. Miller had been the
Company's Vice President--Acquisitions and Marketing since September 1996. Mr.
Miller has over 10 years of experience in real estate marketing. Mr. Miller's
most recent experience includes three years as Vice President of Security
Capital Investment Research Incorporated (an affiliate of SC-USREALTY). Prior to
that time, Mr. Miller spent three years as a Senior Manager with Arthur Andersen
S.C. Real Estate Services Group and two years as an Associate in Management
Advisory Services at Kenneth Leventhal & Company. Mr. Miller holds a Bachelor of
Arts degree in Finance from University of Texas at Austin.
11
<PAGE>
Robert M. Milkovich, 38, has been the Company's Vice President, Market
Officer for suburban Phoenix, Arizona since January 1998. Mr. Milkovich has over
14 years of experience in real estate leasing. Mr. Milkovich's most recent
experience includes five years as the Assistant Vice President of Leasing for
Carr Services, Inc. a subsidiary of the Company. Mr. Milkovich holds a Bachelor
of Science in Business Administration from the University of Maryland. Mr.
Milkovich serves as President of the executive committee of The Real Estate
Group.
Gerald J. O'Malley, 54, has been the Company's Vice President, Market
Officer for suburban Chicago since July 1996. Mr. O'Malley has over 30 years of
experience in real estate marketing. Mr. O'Malley's most recent experience
includes 10 years as founder and President of G. J. O'Malley & Company, a real
estate office leasing company. Mr. O'Malley holds a Bachelors degree from Loyola
University.
Jeffrey S. Pace, 35, has been the Company's Vice President, Market
Officer for Austin, Texas since May 1997. Mr. Pace has over 12 years of
experience in real estate marketing. Mr. Pace's most recent experience was with
Trammell Crow Company as Marketing Director. Prior to that time, Mr. Pace held
the position of Marketing Representative in the Dallas and Austin markets for
Carlisle Property Company, Stockton, Luedmann, French & West and Trammell Crow
Company. Mr. Pace holds a Masters of Business Administration from the University
of Texas at Arlington and a Bachelor of Science from the University of Texas at
Austin.
James D. Peterson, 50, has been the Company's Vice President, Market
Officer for Florida since November 1996. Mr. Peterson has over 25 years of
experience in the real estate field. Mr. Peterson's most recent experience
includes three years (from 1993 to October 1996) as Vice President of Peterson
Properties with responsibility for property operations in Florida. Mr. Peterson
is involved with the National Association of Industrial and Office Parks and is
a member of Boca Raton's Chamber of Commerce. Mr. Peterson holds a Masters in
Business Administration from University of Texas at Austin and a Bachelor of
Science degree in Economics from University of North Carolina at Chapel Hill.
M. Bruce Snyder, 37, has been the Company's Vice President, Capital
Markets since December 1997. Prior to that time, Mr. Snyder had been Vice
President, Corporate Finance of Charles E. Smith Residential Realty, Inc. since
1994. Mr. Snyder held several different accounting and finance positions with
the Charles E. Smith Company, the predecessor of Charles E. Smith Residential
Realty, Inc., for 13 years. He is a member of the National Investor Relations
Institute. Mr. Snyder holds a Master of Business Administration and Bachelor of
Science in Accounting from The George Washington University.
William H. Vanderstraaten, 37, has been the Company's Vice President,
Market Officer for suburban Dallas since April 1997. Mr. Vanderstraaten has over
15 years of experience in real estate development and leasing fields. Mr.
Vanderstraaten's most recent experience includes eight years as Vice
President--New Development for Harwood Pacific Corporation in Dallas, Texas,
where his primary responsibilities were directing large scale development
projects and coordinating leasing efforts for portfolios. Mr. Vanderstraaten
holds a Bachelor of Science degree in Business Administration from Southern
Methodist University.
Debra A. Volpicelli, 33, has been the Company's Treasurer and
Controller since May 1995. Prior to that time, Ms. Volpicelli had been the
Company's Tax Manager since February 1993. Ms. Volpicelli was Tax Manager for
The Oliver Carr Company from 1990 to February 1993. Ms. Volpicelli holds a
Bachelor of Science degree in Business Administration from Georgetown University
and is a Certified Public Accountant.
Joseph D. Wallace, 34, has been the Executive Vice President of
OmniOffices, Inc. since October 1997. Prior to that time, Mr. Wallace had served
as the Company's Vice President--Building Due Diligence since January 1996 and
was responsible for supervising building acquisition due diligence. Prior to
that time, Mr. Wallace had been the Company's Vice President of Asset Management
since February 1993. Mr. Wallace was Vice President of Carr Partners, Inc. from
1990 to February 1993. Mr. Wallace holds a Bachelor of Science degree in
Commerce from University of Virginia.
12
<PAGE>
James S. Williams, 41, has been a Senior Vice President of CarrAmerica
Development, Inc. with responsibility for oversight of all project management,
design and construction operations since October 1996. Mr. Williams rejoined the
Company after two years as Vice President of Operations of Obadwick
International. Mr. Williams' initial tenure with the Company was from 1983 to
1994, during which time he served in a variety of capacities in The Oliver Carr
Company. Mr. Williams is a guest lecturer at George Washington University. Mr.
Williams holds a Bachelor of Science degree in Business Administration from West
Virginia University.
Item 2. PROPERTIES
General. As of December 31, 1997, the Company owned interests in 248
operating office properties consisting of whole or partial ownership interests,
ranging from two to 16 stories each, located in 16 target markets across the
United States. As of December 31, 1997, the Company owned fee simple title or
leasehold interest in 240 operating office properties, controlling partial
interests in three operating office properties, and non-controlling partial
interests of 5% to 50% in five operating office properties. In addition, as of
December 31, 1997, the Company owned 40 office properties under development.
Except as disclosed in "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations Liquidity and Capital Resources,"
the Company has no immediate plans to renovate its operating office properties
other than for routine capital maintenance. The Company believes its properties
are adequately covered by insurance. The Company believes that, as a result of
its national operating system, market research capabilities, access to capital,
and experience as an owner, operator and developer of office properties, it will
continue to be able to identify and consummate acquisition and development
opportunities and to operate its portfolio more effectively than competitors
without such capabilities. The Company, however, competes in many of its target
markets with other real estate operators, some of which may have been active in
such markets for a longer period than the Company.
13
<PAGE>
General
The following table sets forth certain information about each operating
property owned by the Company as of December 31, 1997:
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
Consolidated Properties
SOUTHEAST REGION
Downtown Washington, D.C.:
International Square (3 Properties) 100.0% 1,018,383 87.7% $28,408
1730 Pennsylvania Avenue 100.0 229,292 99.3 8,753
2550 M Street 100.0 187,931 100.0 6,305
1775 Pennsylvania Avenue (6) 100.0 143,981 99.1 3,481
900 19th Street 100.0 100,907 86.4 2,643
1747 Pennsylvania Avenue 89.7(7) 152,119 89.1 4,076
1255 23rd Street 75.0(8) 304,538 97.3 8,098
2445 M Street (14) 74.0(7) 266,902 95.0 6,849
Suburban Washington, D.C.:
One Rock Spring Plaza (6) 100.0 205,298 100.0 4,653
Tycon Courthouse 100.0 416,195 99.0 8,199
Three Ballston Plaza 100.0 302,875 99.7 7,382
Sunrise Corporate Center (formerly Reston 100.0 260,643 99.9 5,312
Quadrangle) (3 Properties)
Parkway One 100.0 87,842 100.0 1,371
Suburban Atlanta:
Veridian (22 Properties) 100.0 187,842 96.0 2,465
Glenridge 100.0 64,431 99.4 984
Century Springs West 100.0 94,766 96.7 1,457
Holcomb Place 100.0 72,823 100.0 1,147
DeKalb Tech (5 Properties) 100.0 163,159 76.2 1,124
Midori 100.0 99,900 100.0 1,745
Crestwood 100.0 88,186 96.0 1,445
Parkwood 100.0 151,020 89.7 2,436
Lakewood 100.0 80,338 98.2 1,135
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
<S> <C> <C>
Consolidated Properties
SOUTHEAST REGION
Downtown Washington, D.C.:
International Square (3 Properties) $ 31.80 International Monetary Fund (42%)
1730 Pennsylvania Avenue 38.44 Federal Deposit Insurance Corporation (52%)
King & Spalding (26%)
2550 M Street 33.55 Patton Boggs, LLP (86%), Pocket Communications (10%)
1775 Pennsylvania Avenue (6) 24.40 Citibank F.S.B.(81%)
900 19th Street 30.32 America's Community Bankers (29%), Lucent
Technologies (11%)
1747 Pennsylvania Avenue 38.07 Legg Mason Wood Walker (16%)
1255 23rd Street 27.33 Academy for Educational Development (18%),
Chronicle of Higher Education (16%),
Seabury & Smith (16%), Peabody & Brown (11%)
2445 M Street (14) 27.02 Wilmer, Cutler & Pickering (84%)
Suburban Washington, D.C.:
One Rock Spring Plaza (6) 22.67 Sybase (27%), Caterair (22%)
Tycon Courthouse 19.90 Siemens Rolm (19%), GSA-FINCEN (16%), Vie de France (11%)
Three Ballston Plaza 24.46 CACI (50%), Eastman Kodak (20%), Nixon & Vanderhye, PC (11%)
Sunrise Corporate Center (formerly Reston 20.41 Software AG (67%), Lucas (14%), LaFarge Corporation (11%)
Quadrangle) (3 Properties)
Parkway One 15.61 EIS International (89%)
Suburban Atlanta:
Veridian (22 Properties) 13.68 Edwards Baking Co.(17%)
Glenridge 15.37 Industrial Computer Corp. (40%), Crawford & Co. (27%)
Century Springs West 15.89 Retirement Care Associates (27%)
Holcomb Place 15.75 Prudential (24%), Intercept Holdings, Inc. (20%),
The Progeni Corp. (13%)
DeKalb Tech (5 Properties) 9.04 Lucent Technologies (21%), Moreland & Altobelli (21%)
Midori 17.46 National Consumer Services Corp. (58%), UPS (21%)
Crestwood 17.06 EBC Gwinnet Enterprises (24%), Eveready Battery Co.(13%)
Parkwood 17.98 Columbian Chemicals Company (32%)
Lakewood 14.39 Paychex (26%), ISS (25%), Hickson Corp. (23%),
Morrison's (18%)
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
The Summit 100.0 % 178,382 100.0% $ 2,416
Triangle Parkway (formerly Spalding 100.0 82,102 100.0 1,096
Triangle II) (3 Properties)
2400 Lake Park 100.0 99,534 98.2 1,385
680 Engineering Drive 100.0 62,154 76.1 407
Embassy Row (3 Properties) 100.0 463,846 98.7 7,101
Boca Raton, Florida:
Peninsula Plaza (formerly Lake Wyman 100.0 160,081 94.7 2,063
Plaza)
Presidential Circle 100.0 278,766 93.2 3,997
------- ---- -----
Southeast Region Subtotal 6,004,236 94.9 127,933
PACIFIC REGION
Southern California,
Orange County/Los Angeles:
Scenic Business Park (4 Properties) 100.0 139,012 100.0 1,547
Harbor Corporate Park (4 Properties) 100.0 148,747 93.0 2,033
Plaza PacifiCare 100.0 104,377 100.0 960
Katella Corporate Center 100.0 79,917 96.4 1,242
Warner Center (12 Properties) `100.0 342,866 97.3 7,716
South Coast Executive Center 100.0 160,301 94.9 3,078
(2 Properties)
Warner Premier 100.0 61,553 100.0 1,354
Westlake Corporate Center (2 Properties) 100.0 71,419 82.2 1,047
Von Karman 100.0 103,713 100.0 2,439
2600 W. Olive 100.0 145,304 100.0 3,051
Bay Technology Center (2 Properties) 100.0 107,481 100.0 1,570
Southern California,
San Diego:
Del Mar Corporate Plaza (2 Properties) 100.0 123,142 100.0 1,841
Wateridge Pavilion 100.0 62,194 100.0 886
Lightspan 100.0 64,800 100.0 1,081
Century Park II (3 Properties) 100.0 198,306 100.0 2,403
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ---------------------------
<S> <C> <C>
The Summit $ 13.54 Unisys Corp. (73%), GE Claims Service (14%)
Triangle Parkway (formerly Spalding 13.35 OHM Remediation Services Corp. (28%), UNI
Triangle II) (3 Properties) Distribution Corp. (18%), Wakefield/Beasley & Associates (16%)
2400 Lake Park 14.16 GSA (23%), Computer Language Research (22%), United
Healthcare Services, Inc. (20%)
680 Engineering Drive 8.60 EMS Technologies (43%), Tie/Communications, Inc.
(12%), Loral Aerospace Corporation (12%)
Embassy Row (3 Properties) 15.51 Ceridian Corporation (25%), Cabot Corporation (10%)
Boca Raton, Florida:
Peninsula Plaza (formerly Lake Wyman 13.61 Motorola (16%)
Plaza)
Presidential Circle 15.39 Suncoast Savings (12%)
-----
Southeast Region Subtotal 22.45
PACIFIC REGION
Southern California,
Orange County/Los Angeles:
Scenic Business Park (4 Properties) 11.13 FHP (30%), Talbert Medical Management (29%), So. Cal
Blood & Tissue (12%)
Harbor Corporate Park (4 Properties) 14.70 Delmas (25%), Texaco Refining & Marketing (13%),
Clayton Environmental (10%)
Plaza PacifiCare 9.20 Pacificare Health Systems (100%)
Katella Corporate Center 16.12 Friendly Hills Healthcare (19%)
Warner Center (12 Properties) 23.13 El Camino Resources (18%), GSA (17%)
South Coast Executive Center 20.23 State Compensation Insurance Fund (33%)
(2 Properties)
Warner Premier 21.99 Panorama Software (34%), RSL COM, USA (27%), Paging
Network of L.A. (12%)
Westlake Corporate Center (2 Properties) 17.83 No tenant occupies more than 10%
Von Karman 23.52 Fidelity National Title Insurance (82%), Taco Bell
Corporation (18%)
2600 W. Olive 21.00 The Walt Disney Company (89%)
Bay Technology Center (2 Properties) 14.61 AMRESCO (100%)
Southern California,
San Diego:
Del Mar Corporate Plaza (2 Properties) 14.95 Peregrine Systems, Inc. (77%), Newgen Results Company (23%)
Wateridge Pavilion 14.24 Stellcom, Inc. (37%), Platinum Solutions, Inc. (19%),
Wateridge Insurance Services (18%), TCS Mortgage, Inc. (14%)
Lightspan 16.69 The Lightspan Partnership, Inc. (100%)
Century Park II (3 Properties) 12.12 San Diego Gas & Electric Co. (100%)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
Northern California,
San Francisco Bay Area:
CarrAmerica Corporate Center (formerly 100.0% 949,281 100.0% $18,456
AT&T Center)(6 Properties)
Sunnyvale Research Plaza (3 Properties) 100.0 126,000 100.0 1,672
Rio Robles (7 Properties) 100.0 368,178 100.0 4,179
Valley Business Park II (formerly San 100.0 161,040 100.0 1,731
Jose Orchard Business Park - B
(6 Properties)
Bayshore Centre (formerly Orchard 100.0 195,249 100.0 2,711
Bayshore Center) (2 Properties)
Rincon Centre (formerly Orchard Rincon 100.0 201,178 100.0 1,892
Centre) (3 Properties)
Valley Centre II (formerly Orchard Office 100.0 212,082 100.0 2,385
Centre II) (4 Properties)
Valley Office Centre (formerly Orchard 100.0 68,731 100.0 1,639
Office Centre) (2 Properties)
Valley Centre (formerly Orchard Centre) 100.0 102,291 100.0 1,181
(2 Properties)
Valley Business Park I (formerly San Jose 100.0 67,784 100.0 904
Orchard Business Park - A) (2 Properties)
3745 North First Street 100.0 67,582 100.0 852
3571 North First Street 100.0 116,000 100.0 1,219
Mission Plaza (2 Properties) 100.0 102,687 100.0 1,083
North San Jose Technology Park (formerly 100.0 299,233 100.0 2,780
Fortran) (4 Properties)
Foster City Technology Center 100.0 66,869 100.0 936
(2 Properties)
150 River Oaks 100.0 100,024 100.0 1,320
Amador/Rinconada (3 Properties) 100.0 134,476 100.0 1,694
Amador III 100.0 82,944 100.0 1,138
Arroyo Center (2 Properties) 100.0 104,741 100.0 956
San Mateo I 100.0 70,000 100.0 2,394
San Mateo II and III (2 Properties) 100.0 140,675 94.8 3,346
900-910 East Hamilton (2 Properties) 100.0 351,811 60.4 3,750
Northern California,
Sacramento:
1860 Howe Avenue 100.0 97,887 94.6 1,910
University Office Park (2 Properties) 100.0 121,257 95.4 1,966
Capital Corporate Center (5 Properties) 100.0 94,670 93.5 1,404
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
<S> <C> <C>
Northern California,
San Francisco Bay Area:
CarrAmerica Corporate Center (formerly $ 19.44 AT&T (53%), PeopleSoft (20%)
AT&T Center) (6 Properties)
Sunnyvale Research Plaza (3 Properties) 13.27 Cadence Design Systems (68%), AEA Credit Union (27%)
Rio Robles (7 Properties) 11.35 Fujitsu (41%), KLA Instruments (31%), NEC Systems
Laboratory (23%)
Valley Business Park II (formerly San 10.75 Computer Training Academy (20%), Pericom (17%)
Jose Orchard Business Park - B
(6 Properties)
Bayshore Centre (formerly Orchard 13.88 Clarify, Inc. (51%), Alantec (49%)
Bayshore Center) (2 Properties)
Rincon Centre (formerly Orchard Rincon 9.40 Ontrak Systems (44%), Toshiba America Electronic
Centre) (3 Properties) (38%), Future Electronics (19%)
Valley Centre II (formerly Orchard Office 11.25 Boston Scientific (100%)
Centre II) (4 Properties)
Valley Office Centre (formerly Orchard 23.85 Bank of America (21%), Quadrep (20%)
Office Centre) (2 Properties)
Valley Centre (formerly Orchard Centre) 11.55 Seagate Technology (40%), Gregory Associates (38%),
(2 Properties) Neoparadigm Labs, Inc. (22%)
Valley Business Park I (formerly San Jose 13.33 Leybold-Heraeus (35%), Tylan General (17%), Arcom
Orchard Business Park - A) (2 Properties) Electronics (15%)
3745 North First Street 12.60 Comdisco, Inc. (100%)
3571 North First Street 10.51 Sun Microsystems, Inc. (100%)
Mission Plaza (2 Properties) 10.55 Intel Corp (62%), Deskin Research (38%)
North San Jose Technology Park (formerly 9.29 AG Associates (38%), Reply Corp. (27%), Elexsys
Fortran) (4 Properties) International (22%), Novellus Systems (13%)
Foster City Technology Center 14.00 Nortel Communications System (46%), Storybook
(2 Properties) Heirlooms (30%), Genomyx, Inc. (20%)
150 River Oaks 13.20 Seiko-Epson Corporation (100%)
Amador/Rinconada (3 Properties) 12.60 Vanstar Corporation (100%)
Amador III 13.72 Pacific Bell Corporation (100%)
Arroyo Center (2 Properties) 9.13 Hexcel Corporation (53%), TOPCOM America Corporation (47%)
San Mateo I 34.20 Franklin Resources (100%)
San Mateo II and III (2 Properties) 25.08 Franklin Resources, Inc. (37%), Peoplesoft/Red Pepper (20%)
900-910 East Hamilton (2 Properties) 17.66 Apple Computer, Inc. (50%), Philips Electronics (10%)
Northern California,
Sacramento:
1860 Howe Avenue 20.61 Transamerica Information (31%), Anytime Access, Inc.
(19%), GSA (19%), TIG Insurance Company (12%)
University Office Park (2 Properties) 17.00 State Lands Commission (26%), Western Buyers (10%)
Capital Corporate Center (5 Properties) 15.85 Vision Services Plan (31%), Capital Center Investors (29%)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
Suburban Portland:
RadiSys Corporate Headquarters 100.0% 80,525 100.0% $ 822
RadiSys II 100.0 45,655 100.0 614
Suburban Seattle:
Redmond East (10 Properties) 100.0 398,030 98.9 4,603
Willow Creek (formerly Data I/O) 100.0 96,179 100.0 981
Canyon Park Business Center (6 Properties) 100.0 246,565 100.0 3,243
Canyon Park Commons (formerly Tract 17) 100.0 95,290 100.0 1,358
--------- ----- -------
Pacific Region Subtotal 7,278,046 97.1 107,367
CENTRAL REGION
Austin, Texas:
Great Hills Plaza 100.0 135,333 100.0 2,155
Balcones Center 100.0 75,761 80.2 940
Park North (2 Properties) 100.0 132,923 88.4 1,775
City View Centre (formerly The Settings) 100.0 132,647 95.8 2,136
(3 Properties)
Tower of the Hills (2 Properties) 100.0 171,157 98.1 2,332
Suburban Chicago:
Parkway North (2 Properties) 100.0 508,749 95.7 7,982
Unisys (2 Properties) 100.0 355,386 96.0 5,792
The Crossings (2 Properties) 100.0 296,624 91.6 4,668
Bannockburn I & II (2 Properties) 100.0 209,860 100.0 3,248
Bannockburn IV 100.0 108,470 98.7 1,681
Summit Oaks 100.0 91,601 89.8 1,367
Dallas, Texas:
Greyhound 100.0 92,890 100.0 845
Search Plaza 100.0 151,176 95.3 2,408
Quorum North 100.0 113,420 80.1 1,471
Quorum Place 100.0 176,260 91.9 2,413
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
<S> <C> <C>
Suburban Portland:
RadiSys Corporate Headquarters $ 10.21 RadiSys Corp. (100%)
RadiSys II 13.46 RadiSys II Corporation (100%)
Suburban Seattle:
Redmond East (10 Properties) 11.70 Mosaix, Inc. (21%), Incontrol, Inc. (17%), Edmark
Corp (15%), Genetic Systems (14%), Trigon Packaging (10%)
Willow Creek (formerly Data I/O) 10.20 Data I/O Corporation (100%)
Canyon Park Business Center (6 Properties) 13.15 Cellpro Inc. (27%), Board of Regents of UWA (22%),
Federal Express (13%), ITT Educational Services (11%)
Canyon Park Commons (formerly Tract 17) 14.25 Microsoft (100%)
-----
Pacific Region Subtotal 15.19
CENTRAL REGION
Austin, Texas:
Great Hills Plaza 15.92 First USA Management, Inc. (48%), Blue Cross (24%),
Skjerven Morrill, Machpherson (13%), Businesssuites (12%)
Balcones Center 15.47 Medianet (37%), Austin Diagnostic Clinic (15%), Amil
International Ins.(11%)
Park North (2 Properties) 15.11 CSC Continuum Inc.(28%)
City View Centre (formerly The Settings) 16.81 Holt, Rinehart & Winston (78%), Barter Exchange (13%)
(3 Properties)
Tower of the Hills (2 Properties) 13.89 Texas Guaranteed Student (67%)
Suburban Chicago:
Parkway North (2 Properties) 16.39 Fujisawa USA (27%), Alliant Foodservice (23%), Baxter
Healthcare Corporation (13%)
Unisys (2 Properties) 16.97 Unisys (21%), PNC Mortgage (14%), Sears Logistical (14%)
The Crossings (2 Properties) 17.17 Allstate Ins. Co (13%), Abercrbomei & Kent (11%)
Bannockburn I & II (2 Properties) 15.48 IMC Global (38%), Deutsche Credit Corp. (36%)
Bannockburn IV 15.70 Open Text (35%), Abbott Laboratories (11%), NY Life
Insurance (10%)
Summit Oaks 16.61 GSA (18%), BMG Music (14%), Master Printer Credit
Union (14%), National Truck Leasing Suite (12%)
Dallas, Texas:
Greyhound 9.10 Greyhound Lines (100%)
Search Plaza 16.72 Basic Capital Management (34%)
Quorum North 16.19 Digital Matrix Systems (20%), HQ Dallas Quorum North
(14%), ElectronicTransmissions (10%)
Quorum Place 14.91 VHASouthwest, Inc. (22%), Objectspace (16%)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
Cedar Maple Plaza (3 Properties) 100.0% 112,185 96.1% $ 1,923
Tollhill East & West (2 Properties) 100.0 238,808 90.1 3,106
Two Mission Park 100.0 76,933 85.6 832
------ ---- ---
Central Region Subtotal 3,180,183 93.9 47,074
MOUNTAIN REGION
Southeast Denver:
Harlequin Plaza (2 Properties) 100.0 327,711 98.0 4,720
Quebec Court I & II (2 Properties) 100.0 287,041 100.0 2,887
Greenwood Center 100.0 75,866 75.6 971
Quebec Center (3 Properties) 100.0 106,849 97.7 1,467
Panorama Corporate Center I 100.0 100,542 98.7 2,019
JD Edwards 100.0 189,087 100.0 2,716
Phoenix, Arizona:
Camelback Lakes (2 Properties) 100.0 199,029 99.8 3,414
Pointe Corridor IV 100.0 178,373 93.2 2,739
Highland Park 100.0 78,019 87.5 1,129
The Grove at Black Canyon (formerly Cigna 100.0 103,304 91.7 1,833
Healthcare)
US West (4 Properties) 100.0 532,506 100.0 8,129
Salt Lake City, Utah:
Sorenson Research Park (5 Properties) 100.0 285,144 99.1 3,262
Wasatch Corporate Center (formerly Draper
Park North) (3 Properties) 100.0 178,098 100.0 1,961
------- ----- -----
Mountain Region Subtotal 2,641,569 97.6 37,247
--------- ---- ------
TOTAL CONSOLIDATED PROPERTIES: 19,104,034 $ 319,621
---------- ---------
WEIGHTED AVERAGE 95.9%
----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
<S> <C> <C>
Cedar Maple Plaza (3 Properties) $ 17.84 Fidelity National Bank (12%)
Tollhill East & West (2 Properties) 14.44 Digital Equipment Corporation (22%)
Two Mission Park 12.64 Bland Garvey and Taylor (16%)
-----
Central Region Subtotal 15.76
MOUNTAIN REGION
Southeast Denver:
Harlequin Plaza (2 Properties) 14.70 Travelers Insurance (21%), Bellco First Federal
Credit Union (12%)
Quebec Court I & II (2 Properties) 10.06 Time Warner Communications (45%), Alert Centre (37%),
TCI Digital Satellite (17%)
Greenwood Center 16.93 General Motors Corp. (33%)
Quebec Center (3 Properties) 14.05 Gordon Gumeeson & Associates (12%), Walberg & Dagner (11%)
Panorama Corporate Center I 20.34 Teleport Communications Group (70%), Sprint Spectrum, LP (11%)
JD Edwards 14.36 JD Edwards (100%)
Phoenix, Arizona:
Camelback Lakes (2 Properties) 17.19 Vanguard Group (38%), Humana Health Plan (14%)
Pointe Corridor IV 16.47 Jostens Learning Corp (26%), Aetna Life Insurance
Company (22%), Jennifer Loomis Associates, Inc. (16%)
Highland Park 16.54 Mastering Computers, Inc. (26%), Ryland Group, Inc. (17%)
The Grove at Black Canyon (formerly Cigna 19.36 Cigna Healthcare of Arizona (81%)
Healthcare)
US West (4 Properties) 15.27 US West Business Resources (100%)
Salt Lake City, Utah:
Sorenson Research Park (5 Properties) 11.55 Foundation Health Corp (24%), Matrix Marketing, Inc. (22%),
Datachem Laboratories, Inc. (20%), Dayna Communications,
Wasatch Corporate Center (formerly Draper Inc. (14%), ITT Educational Services (12%)
Park North) (3 Properties) 11.01 Advanta Financial Corp (28%), Times Mirror Training,
----- Inc. (23%), Fonix Corp. (14%), Keytex Corp (14%),
Novus Credit Services, Inc. (12%)
Mountain Region Subtotal 14.44
-----
TOTAL CONSOLIDATED PROPERTIES:
WEIGHTED AVERAGE $ 17.44
--------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Company's Net Total
Effective Rentable Annualized
Property Area Percent Base Rent(3)
Property Ownership (square feet)(1) Leased(2) (in thousands)
- -------- --------- ---------------- --------- --------------
<S> <C> <C> <C> <C>
Unconsolidated Properties
Downtown Washington, D.C.:
1717 Pennsylvania Avenue 50.0% (9) 184,446 99.3% $ 6,254
AARP Headquarters 24.0 (10) 477,187 100.0 16,780
Bond Building 15.0 (11) 162,097 100.0 4,714
Willard Office/Hotel 5.0 (12) 242,787 98.8 9,255
Suburban Washington, D.C.:
Booz-Allen & Hamilton Building 50.0 (13) 222,989 100.0 3,307
---------- ----- -----
TOTAL UNCONSOLIDATED PROPERTIES: 1,289,506 $ 40,310
--------- -------
WEIGHTED AVERAGE 99.7 %
----
ALL OPERATING PROPERTIES
TOTAL: 20,393,540 $359,931
========== ========
WEIGHTED AVERAGE 96.2 %
====
</TABLE>
<TABLE>
<CAPTION>
Average Base
Rent Per
Leased
Property Square Foot(4) Significant Tenants(5)
- -------- -------------- ----------------------
<S> <C> <C>
Unconsolidated Properties
Downtown Washington, D.C.:
1717 Pennsylvania Avenue $ 34.15 MCI Telecommunications (57%)
AARP Headquarters 35.17 American Association of Retired Persons (99%)
Bond Building 29.08 General Services Administration - Dept of Justice (93%)
Willard Office/Hotel 38.60 Vinson & Elkins (27%), Hale & Dorr (17%)
Suburban Washington, D.C.:
Booz-Allen & Hamilton Building 14.83 Booz Allen & Hamilton (100%)
-----
TOTAL UNCONSOLIDATED PROPERTIES:
WEIGHTED AVERAGE $ 31.35
--------
ALL OPERATING PROPERTIES
TOTAL:
WEIGHTED AVERAGE $18.35
======
</TABLE>
<PAGE>
- --------------
(1) Includes office and retail space but excludes storage space.
(2) Includes space for leases that have been executed and have commenced as
of December 31, 1997.
(3) Total annualized base rent equals total original base rent, including
historical contractual increases and excluding (i) percentage rents,
(ii) additional rent payable by tenants such as common area
maintenance, real estate taxes and other expense reimbursements, (iii)
future contractual or contingent rent escalations, and (iv) parking
rents.
(4) Calculated as total annualized base rent divided by net rentable area
leased.
(5) Includes tenants leasing 10% or more of rentable square footage (with
the percentage of rentable square footage in parentheses).
(6) The Company owns the improvements on the property and has a leasehold
interest in all or a portion of the underlying land.
(7) The Company holds a general and limited partner interest in a
partnership that owns the property.
(8) The Company holds a 50% joint venture interest in the joint venture
that owns this property and a 50% joint venture interest in another
joint venture, which holds the remaining 50% interest in the joint
venture that owns the property. As a result of preferential rights to
annual distributions from another venture, the Company will receive
distributions of less than 75% (but in no event less than 50%) of the
total amount distributed with respect to this property in each year
until the preferential distribution requirements are satisfied, but
will receive 100% of any subsequent distributions during the year until
its aggregate distributions equal 75% of the cumulative distributions
with respect to the property since inception of the partnership.
Thereafter, the Company will receive 75% of the distributions made
during the year with respect to the property. Upon sale of the
property, the Company will receive 75% of the distributions until the
Company receives its preference amount, 50% until the remaining
venturer receives its preference amount, and 75% of the distributions
thereafter.
(9) The Company holds a 50% interest in the limited liability company that
owns the property and serves as the entity's managing member.
(10) The Company holds an effective 24% interest in the property by virtue
of a 48% general partner interest in a partnership that owns a 50%
general partner interest in the property.
(11) The Company holds an effective 15% interest in the property by virtue
of a 30.6% limited partner interest in a partnership that has a 49%
limited partner interest in the property.
(12) The Company holds an effective 5% interest in the property by virtue of
a 7.85% limited partner interest in a partnership that owns a 63.7%
limited partner interest in the property. The partnership in which the
Company holds an interest owns the improvements on the property and has
a leasehold interest in the underlying land.
(13) The Company holds a 50% joint venture interest, and is the managing
partner.
(14) The property was disposed of in January 1998.
19
<PAGE>
Occupancy, Average Rentals and Lease Expirations. As of December 31,
1997, 95.9% of the aggregate net rentable square footage in the 243 operating
office properties whose results are consolidated in the financial statements of
the Company was leased. The following table sets forth the percent leased and
average annualized rent per leased square foot (excluding storage space) for
office and retail space combined for the past five years for the operating
office properties that were consolidated for financial statement purposes at
each of the dates indicated:
<TABLE>
<CAPTION>
Average
Percent Annualized Rent Number of
Leased at Per Leased Consolidated
December 31, Year End Square Foot (1) Properties
------------ ------------ ---------------- ------------
<S> <C> <C> <C>
1997 95.9% $ 19.38 243
1996 93.6 19.37 159
1995 93.5 27.36 13
1994 95.9 32.48 11
1993 95.5 34.35 9
</TABLE>
- ---------------------
(1) Calculated as total annualized building operating revenue, including
tenant reimbursements for operating expenses and excluding parking and
storage revenue, divided by the total square feet, excluding storage,
in the building under lease at year end.
The following table sets forth a schedule of the lease expirations for
leases in place as of December 31, 1997 in each of the next ten years beginning
with 1998 and thereafter for the 243 operating office properties whose results
are consolidated in the financial statements of the Company, assuming that no
tenants exercise renewal options:
<TABLE>
<CAPTION>
Net Annual Percent of
Rentable Area Base Rent Total Annual
Number of Subject to Under Base Rent
Year Tenants With Expiring Expiring Represented
of Lease Expiring Leases (1) Leases by Expiring
Expiration Leases (square feet) (in thousands) Leases
---------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C>
1998 384 3,239,000 $ 55,393 17.3%
1999 266 1,891,000 31,932 10.0
2000 219 2,519,000 42,895 13.4
2001 193 2,255,000 34,239 10.7
2002 142 2,065,000 38,629 12.1
2003 59 1,436,000 22,535 7.1
2004 33 1,159,000 25,245 7.9
2005 25 557,000 10,146 3.2
2006 31 1,059,000 21,499 6.7
2007 18 1,154,000 18,674 5.8
2008 and thereafter 12 996,000 18,434 5.8
</TABLE>
- ----------------------
(1) Excludes 774,000 square feet of space that was vacant as of December 31,
1997.
20
<PAGE>
Building and Lease Information. The following table sets forth certain
information for the 243 operating office properties that were consolidated for
financial statement purposes regarding leases that commenced during the year
ended December 31, 1997, excluding leases for office properties that were
executed prior to the date of acquisition of such properties:
<TABLE>
<CAPTION>
Calculated on a Weighted Average Basis
Operating Properties, ----------------------------------------------------------------------
Downtown Tenant Base
Washington, D.C. Improvements Rent Leasing
(10 Properties) Total & Cash per Lease Abatements Commission
Square Allowances per Square Life in in Per Square
Type of Lease Feet Leased Square Foot Foot Years Months Foot
- ------------- ----------- ----------- ---- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Office 634,462 $ 4.60 $ 31.03 6.4 0.1 $ 1.27
Retail 19,699 11.01 26.87 7.2 1.1 4.41
--------
Total/Weighted Average 654,161 4.80 30.90 6.4 0.1 1.37
======== ======= ======= ===== ====== =======
New leases or
expansion space 139,106 $ 14.61 $ 29.69 6.0 0.5 $ 3.28
Renewals of existing
tenants' space 515,055 2.15 31.23 6.5 0.0 .85
--------
Total/Weighted Average 654,161 4.80 30.90 6.4 0.1 1.37
======== ======= ======= ===== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Calculated on a Weighted Average Basis
Operating Properties, ----------------------------------------------------------------------
Other Than Downtown Tenant Base
Washington, D.C. Improvements Rent Leasing
(233 Properties) Total & Cash per Lease Abatements Commission
Square Allowances per Square Life in in Per Square
Type of Lease Feet Leased Square Foot Foot Years Months Foot
- ------------- ----------- ----------- ---- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Office 2,421,129 $ 4.70 $ 16.00 5.2 0.4 $ 1.64
Retail 5,492 0.00 4.28 3.2 0.0 0.00
---------
Total/Weighted Average 2,426,621 4.69 15.98 5.2 0.4 1.64
========= ======= ======= ===== ===== =======
New leases or
expansion space 1,856,220 $ 5.64 $ 15.18 5.5 0.5 $ 2.01
Renewals of existing
tenants' space 570,401 1.60 18.56 4.4 0.2 0.44
--------
Total/Weighted Average 2,426,621 4.69 15.98 5.2 0.4 1.64
========= ======= ======= ===== ===== =======
</TABLE>
21
<PAGE>
Mortgage Financing. As of December 31, 1997, certain of the 243
operating office properties that were consolidated for financial statement
purposes were subject to fixed rate mortgage indebtedness in an aggregate
principal amount of $591 million. The Company's fixed rate mortgage debt bears
an effective weighted average interest rate of 8.1% and a weighted average
maturity of 5.9 years (assuming loans callable before maturity are called as
early as possible). Certain information regarding the existing mortgage
indebtedness for the consolidated operating office properties subject to fixed
rate mortgage indebtedness is set forth in the table below as of December 31,
1997:
<TABLE>
<CAPTION>
Principal Annual Debt Due at
Interest Balance Service Maturity Maturity
Property Rate (in thousands) (in thousands) Date (in thousands)
- -------- ---- -------------- -------------- ---- --------------
<S> <C> <C> <C> <C>
US West 6.50% $ 11,562 $ (1) 1/9/98 $ (1)
2600 W. Olive 7.52 19,517 1,994 6/1/98 19,264 (2)
1775 Pennsylvania Avenue 7.50 6,245 586 2/1/99 6,098 (2)
South Coast Executive Center 9.01 10,226 1,015 5/31/99 10,103 (2)
Quorum Place 6.99 7,719 665 11/15/00 7,327 (2)
Warner Center 7.40 26,000 1,924 12/1/00 26,000 (2)
Presidential Circle 7.14 23,418 2,061 3/1/01 22,041 (2)
Bannockburn I & II 9.52 20,464 2,801 8/31/01 16,835 (2)
Quorum North 8.27 6,658 640 12/1/01 6,258 (2)
Valley Business Park (formerly San
Jose Orchard Business Park - A) }
Valley Office Centre (formerly
Orchard Office Center) } 8.25 43,773 4,655 12/10/01 37,873 (2)
Valley Centre II
(formerly Orchard Center II) }
Rincon Centre
(formerly Orchard Rincon Center) }
Bayshore Centre
(formerly Orchard Bayshore Center)}
2445 M Street (6) 8.90 36,890 4,646 6/1/02 26,925 (2)
International Square
1850 K Street }
1825 Eye Street }
1875 Eye Street } 8.80 93,500 8,228 2/1/03 87,164 (2)
1730 Pennsylvania Avenue}
1255 23rd Street} 7.75 40,000 3,100 2/1/03 36,981 (2)
International Square Land 7.55 40,000 3,020 2/1/03 36,781 (2)
International Square Land 8.00 10,000 800 2/1/03 9,243 (2)
Parkway North I 7.96 29,250 2,328 12/1/03 29,250 (4)
Canyon Park Commons (formerly Tract 17) 9.13 5,822 713 12/1/04 4,071 (2)
US West 7.92 57,584 8,495 12/1/05
(7)
Redmond East 8.38 27,724 2,648 1/1/06 24,022 (3)
Century Springs West }
Glenridge }
Crestwood }
Lakewood }
Parkwood } 7.20 21,464 2,126 1/1/06 15,209 (5)
Wateridge Pavilion 8.25 3,530 338 11/1/06 2,921 (2)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Principal Estimated
Balance Balance
as of Annual Debt Due at
Interest 12/31/97 Service Maturity Maturity
Property Rate (in thousands) (in thousands) Date (in thousands)
- -------- ---- -------------- -------------- ---- --------------
<S> <C> <C> <C> <C> <C>
Wasatch Corporate Center
(formerly Draper Park North) 8.15 12,834 1,220 1/2/07 10,569(2)
Sorenson Research Park 7.75 2,737 328 7/1/11 (7)
Sorenson Research Park 8.88 1,681 182 5/1/17 (7)
1747 Pennsylvania Avenue 9.50 15,357 1,730 7/10/17(8) (8)
900 19th Street 8.25 16,690 1,656 7/15/19(9) (9)
-------- -------
Total $590,645 $57,899
======== =======
</TABLE>
- --------------------
(1) Note was repaid in full in January 1998.
(2) Currently prepayable at the rates stated in the loan documents.
(3) Prepayable after December 19, 2005 at the rates stated in the loan
documents.
(4) Prepayable after December 1, 1999 at the rates stated in the loan
documents.
(5) Prepayable after January 2001 at the rates stated in the loan documents.
(6) In January 1998, the Company disposed of its interest in 2445 M Street.
The lender kept the debt in place and accepted substitute collateral
consisting of two properties in Northern California and one property in
Dallas, all of which were acquired in 1998.
(7) Note will be fully repaid at maturity.
(8) Note is callable by the lender after June 30, 2002. The estimated
principal balance at June 30, 2002 will be $13,840,000.
(9) Note is callable by the lender after July 1, 2004. The estimated principal
balance at July 1, 2004 will be $14,262,000.
For additional information regarding the Company's office properties
and their operation, see "Item 1, Business."
Item 3. LEGAL PROCEEDINGS
The Company is a party to a variety of legal proceedings arising in the
ordinary course of its business. All of these matters, taken together, are not
expected to have a material adverse impact on the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
23
<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY & RELATED STOCKHOLDER
MATTERS
The Company's common stock is listed on the New York Stock Exchange
("NYSE") under the symbol "CRE". As of February 28, 1998, there were 425
stockholders of record. The following table sets forth the high and low sale
prices of the Company's common stock as reported on the NYSE Composite Tape, and
the dividends per share of common stock paid for each full quarterly period
within the two most recent fiscal years:
<TABLE>
<CAPTION>
1997 1Q 2Q 3Q 4Q Full Year
-------------- ------------- ------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
High $32 1/4 30 5/8 32 3/16 33 7/16 33 7/16
Low $28 1/4 26 1/4 27 3/4 28 1/4 26 1/4
Dividend $.4375 .4375 .4375 .4375 1.75
1996 1Q 2Q 3Q 4Q Full Year
-------------- ------------- ------------- ------------- -------------- -----------------
High $25 25 1/4 25 7/8 29 1/2 29 1/2
Low $23 5/8 23 5/8 21 7/8 24 7/8 21 7/8
Dividend $.4375 .4375 .4375 .4375 1.75
</TABLE>
The Company, in order to qualify as a REIT, is required to make
distributions (other than capital gain distributions) to its stockholders in
amounts at least equal to (i) the sum of (A) 95% of its "REIT taxable income"
(computed without regard to the dividends paid deduction and its net capital
gain) and (B) 95% of the net income (after tax), if any, from foreclosure
property, minus (ii) the sum of certain items of non-cash income. The Company's
distribution strategy is to distribute what it believes is a conservative
percentage of its cash flow permitting the Company to retain funds for capital
improvements and other investments while funding its distributions.
For federal income tax purposes, distributions may consist of ordinary
income, capital gains, nontaxable return of capital or a combination thereof.
Distributions that exceed the Company's current and accumulated earnings and
profits (calculated for tax purposes) constitute a return of capital rather than
a dividend and reduce the stockholder's basis in his or her shares of common
stock. To the extent that a distribution exceeds both current and accumulated
earnings and profits and the stockholder's basis in his or her shares, it will
generally be treated as gain from the sale or exchange of that stockholder's
shares. The Company annually notifies stockholders of the taxability of
distributions paid during the preceding year.
The following table sets forth the taxability of common stock
distributions paid in 1997 and 1996:
1997 1996
---- ----
Ordinary income 90% 95%
Capital Gain -- --
Return of Capital 10% 5%
24
<PAGE>
Item 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating
information for the Company as of December 31, 1997, 1996, 1995, 1994 and 1993
and for the years ended December 31, 1997, 1996, 1995 and 1994 and the period
from February 16, 1993 (commencement of operations) to December 31, 1993. The
following table also sets forth selected financial and operating information for
the Carr Group, the predecessor entity to the Company, for the period from
January 1, 1993 to February 15, 1993.
The following selected financial and operating information should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and all of the financial statements and
notes thereto included elsewhere in this Annual Report on Form 10-K:
(In thousands, except per share data)
<TABLE>
<CAPTION>
The Company Carr Group
------------------------------------------------------------------- ----------------
Period from Period from
February 16, January 1,
1993 to 1993 to
Year Ended December 31, December 31, February 15,
--------------------------------------------------- --------------- ----------------
1997 1996 1995 1994 1993 1993
--------------- ----------- ----------- ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Operating Data:
Real Estate Operating Revenue:
Rental revenue $ 325,502 154,165 89,539 82,665 59,932 8,209
Real estate service revenue 15,998 12,512 11,315 8,890 8,978 1,096
Executive office suites revenue 17,865 -- -- -- -- --
------ ------- ------ ------ ------- ----------
Total revenue 359,365 166,677 100,854 91,555 68,910 9,305
Net income (loss) 78,132 24,318 (1) 12,067(1) 12,097 (1,464)(2) 1,251
Dividends paid to common
stockholders 97,195 42,914 23,344 20,204 10,578 --
Per Share Data:
Basic income before extraordinary
item 1.23 0.90 0.90 1.06 0.41 --
Diluted income before extraordinary
item 1.23 0.90 0.90 1.06 0.41 --
Dividends paid to common
stockholders 1.75 1.75 1.75 1.75 1.06 --
Weighted average shares
outstanding - basic 54,873 26,932 13,338 11,387 10,000 --
Weighted average shares
outstanding - diluted 59,597 26,999 13,339 11,387 10,024 --
</TABLE>
<TABLE>
<CAPTION>
(In thousands)
The Company
--------------------------------------------------------------------------
As of December 31,
1997 1996 1995 1994 1993
--------------- -------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Real estate, before accumulated
depreciation $2,397,023 1,475,998 480,589 429,537 286,764
Total assets 2,744,060 1,536,564 458,860 407,948 284,633
Mortgages and notes payable 1,028,946 655,449 317,374 254,933 185,827
Minority interest 74,955 50,597 34,850 38,644 25,373
Total stockholders' equity 1,552,697 787,478 95,543 106,042 59,590
Total shares outstanding 59,994 43,789 13,409 13,248 10,000
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
(In thousands)
The Company Carr Group
------------------------------------------------------------------- ----------------
Period from Period from
February 16, January 1,
1993 to 1993 to
Year Ended December 31, December 31, February 15,
--------------------------------------------------- --------------- ----------------
1997 1996 1995 1994 1993 1993
-------------- ----------- ------------ ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Other Data:
Net Cash provided (used) by
operating activities $ 138,628 82,300 35,277 29,908 (663) (1,286)
Net cash used by investing
activities (1,004,284) (876,947) (81,635) (67,046) (85,363) (1,015)
Net cash provided (used) by
financing activities 861,864 813,067 37,113 32,652 108,974 (4,391)
Funds from operations before
allocation to the
unitholders(3) 153,262 64,496(1) 33,190(1) 30,640 14,286(4) 2,421
</TABLE>
(1) Net income includes non-recurring deductions of approximately $2.3
million and $1.9 million in 1996 and 1995, respectively, related to the
write-off of the unamortized purchase price of certain third party real
estate service contracts that were terminated in 1996 and the
termination of an agreement to acquire the development business of The
Evans Company in 1995, respectively.
(2) Net loss includes a deduction for reorganization costs of $9.6 million
and an extraordinary loss on early extinguishment of debt of $5.6
million.
(3) The Company believes that funds from operations is helpful to investors
as a measure of the performance of an equity REIT because, along with
cash flow from operating activities, financing activities and investing
activities, it provides investors with an indication of the ability of
the Company to incur and service debt, to make capital expenditures and
to fund other cash needs. In accordance with the final National
Association of Real Estate Investment Trusts (NAREIT) White Paper on
Funds From Operations as approved by the Board of Governors of NAREIT on
March 3, 1995, funds from operations represents net income (loss)
(computed in accordance with generally accepted accounting principles),
excluding gains (or losses) from debt restructuring or sales of
property, plus depreciation and amortization of assets uniquely
significant to the real estate industry and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect
funds from operations on the same basis. For purposes of calculating the
Company's funds from operations, the Company has added amortization
expense associated with goodwill amortization related to the purchase of
the assets of OmniOffices Group, Inc. back to net income. The Company
computes funds from operations in accordance with standards established
by NAREIT, except for adding back goodwill amortization. The Company's
funds from operations may not be comparable to funds from operations
reported by other REITs that do not define the term in accordance with
the current NAREIT definition or that interpret the current NAREIT
definition differently than the Company. The Company's funds from
operations in 1994 and 1993 have been restated to conform to the NAREIT
definition of funds from operations. Funds from operations does not
represent net income or cash flow generated from operating activities in
accordance with generally accepted accounting principles and, as such,
should not be considered an alternative to net income as an indication
of the Company's performance or to cash flow as a measure of liquidity
or the Company's ability to make distributions.
(4) Net loss used to calculate funds from operations includes a deduction
of approximately $9.6 million related to reorganization costs associated
with the formation of the Company.
26
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion is based primarily on the Consolidated
Financial Statements of CarrAmerica Realty Corporation and its subsidiaries (the
"Company") as of December 31, 1997 and 1996, and for the years ended December
31, 1997, 1996 and 1995. The comparability of the periods is significantly
impacted by acquisitions made during 1997 and 1996. As of December 31, 1995, the
Company owned 13 properties. This number grew to 159 as of December 31, 1996 and
243 as of December 31, 1997.
This information should be read in conjunction with the accompanying
consolidated financial statements and notes thereto. These consolidated
financial statements include all adjustments which are, in the opinion of
management, necessary to reflect a fair statement of the periods presented, and
all such adjustments are of a normal, recurring nature.
RESULTS OF OPERATIONS - 1997 TO 1996
Real Estate Operating Revenue. Total real estate operating revenue increased
$192.7 million, or 115.6%, to $359.4 million for 1997 as compared to $166.7
million for 1996. The increase in revenue was primarily attributable to a $171.3
million and a $21.4 million increase in rental revenue and other real estate
operating revenue, respectively. The Company experienced net growth in its
rental revenue as a result of its acquisitions, and development properties
placed in service, which together contributed approximately $168.0 million of
additional rental revenue in 1997. Rental revenue from properties that were
fully operational throughout both periods increased by approximately $3.3
million primarily due to increased occupancy in these properties. Other real
estate operating revenue increased by $21.4 million, or 170.6%, for 1997 to
$33.9 million as compared to $12.5 million for 1996, primarily as a result of
executive office suites revenue earned by OmniOffices, which acquired the assets
of OmniOffices Group, Inc. in August 1997.
Real Estate Operating Expenses. Total real estate operating expenses increased
$143.8 million for 1997, or 105.0%, to $280.9 million as compared to $137.1
million for 1996. The net increase in operating expenses was attributable to a
$62.9 million increase in property operating expenses, a $19.9 million increase
in interest expense, the addition of $15.7 million in executive office suites
operating expenses associated with OmniOffices, a $6.6 million increase in
general and administrative expenses, and a $38.7 million increase in
depreciation and amortization. Property operating expenses increased $62.6
million primarily as a result of property acquisitions. The Company also
experienced an increase in property operating expenses from properties that were
fully operational in both periods of approximately $.3 million. The increase in
the Company's interest expense is primarily related to borrowings for
acquisitions. The addition of executive office suites operating expenses is a
result of the acquisition of the assets of OmniOffices Group, Inc. by
OmniOffices in August 1997. The increase in general and administrative expenses
is predominately a result of the addition of new staff to implement the
Company's business strategy. The increase in depreciation and amortization is
predominately a result of additional depreciation and amortization on the
Company's real estate acquisitions.
Other Operating Income (Expense). Other operating income (expense) increased
$8.6 million for 1997, to $8.5 million as compared to ($.1) million for 1996,
primarily due to an increase in interest income and gains on the disposition of
664,000 square feet.
Net Income. Net income of $78.1 million was earned for 1997 as compared to $24.3
million during 1996. The comparability of net income between the two periods is
impacted by the acquisitions the Company made and the other changes described
above.
Cash Flows. Net cash provided by operating activities increased $56.3 million,
or 68.4%, to $138.6 million for 1997 as compared to $82.3 million for 1996,
primarily as a result of the acquisitions made by the Company. Net cash used by
investing activities increased $127.3 million, to $1.004 billion for 1997 as
compared to $876.9 million for 1996, primarily as a result of capital deployed
by the Company for acquisitions of office properties, land held for future
development and construction in progress. Net cash provided by financing
activities increased $48.8 million, to $861.9 million for 1997 as compared to
$813.1 million for 1996, primarily as a result of proceeds from the sale of
common and preferred stock and the issuance of unsecured notes, net of
repayments of mortgages payable and a portion of the unsecured credit facility
and the payment in dividends paid to the common and preferred stockholders.
27
<PAGE>
RESULTS OF OPERATIONS - 1996 TO 1995
Real Estate Operating Revenue. Total real estate operating revenue increased
$65.8 million, or 65.3%, to $166.7 million for 1996 as compared to $100.9
million for 1995. The increase in revenue was primarily attributable to $64.6
million and $1.2 million increases in rental revenue and real estate service
revenue, respectively. The Company experienced net growth in its rental revenue
as a result of its acquisitions, which contributed approximately $68.2 million
of additional rental revenue in 1996. Rental revenue from properties that were
fully operational throughout both years decreased by approximately $3.6 million
due to increased vacancies experienced in those properties. Real estate service
revenue increased by $1.2 million, or 10.6%, for 1996 to $12.5 million as
compared to $11.3 million for 1995. The increase was primarily as a result of
development fees earned by CarrAmerica Development which was acquired in May
1996.
Real Estate Operating Expenses. Total real estate operating expenses increased
$54.4 million for 1996, or 65.8%, to $137.1 million as compared to $82.7 million
for 1995. The net increase in operating expenses was attributable to a $20.3
million increase in property operating expenses, a $9.8 million increase in
interest expense, a $4.5 million increase in general and administrative
expenses, and a $19.8 million increase in depreciation and amortization. The
increase in property operating expenses was primarily attributable to $20.2
million in operating expenses associated with property acquisitions. Exclusive
of operating expenses attributable to new property acquisitions, property
operating expenses increased by $.1 million for 1996. The increase in the
Company's interest expense is primarily related to borrowings for acquisitions.
The increase in general and administrative expenses is predominantly a result of
the addition of new staff to implement the Company's new business strategy, the
addition of approximately $1.8 million of expenses associated with CarrAmerica
Development and inflation. The increase in depreciation and amortization was
predominately a result of additional depreciation and amortization on the
Company's real estate acquisitions.
Other Operating Income (Expense). Other operating income (expense) increased $.8
million for 1996, to ($.1) million as compared to ($.9) million for 1995,
primarily as a result of an increase in interest income and the addition of
equity in earnings of CC-JM II Associates, a joint venture which owns the
Booz-Allen & Hamilton Building. The Company is a 50% venturer in this entity,
which constructed the Booz-Allen & Hamilton Building that was placed in service
in January 1996. The increases in other operating income were partially offset
by an additional loss recognized on the write-off of intangible assets.
Net Income. Net income of $24.3 million was earned for 1996 as compared to $12.1
for 1995. The comparability of net income between the two periods is impacted by
the acquisitions the Company made and the other changes described above.
Cash Flows. Net cash provided by operating activities increased $47.0 million,
or 133.3%, to $82.3 million for 1996 as compared to $35.3 million for 1995,
primarily as a result of the acquisitions made by the Company. Net cash used by
investing activities increased $795.3 million, to $876.9 million for 1996 as
compared to $81.6 million for 1995, primarily as a result of capital deployed by
the Company for acquisitions of office properties, land held for future
development and construction in progress. Net cash provided by financing
activities increased $776.0 million to $813.1 million provided for 1996 as
compared to $37.1 million for 1995, primarily as a result of the sale of common
and preferred stock by the Company and net borrowings for the Company's
acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
The Company seeks to create and maintain a capital structure that will
enable it to diversify its capital sources and thereby allow the Company to
obtain additional capital from a number of different sources, including
additional equity offerings of common and/or preferred stock, public and private
debt financings, and, where appropriate, asset dispositions. Management believes
that the Company will have access to the capital resources necessary to expand
and develop its business, to fund its operating and administrative expenses, to
continue debt service obligations, to pay dividends in accordance with REIT
requirements, to acquire additional properties and land, and to pay for
construction in progress in both the short and long term.
The Company has three investment grade ratings. Duff & Phelps Credit
Rating Co. (DCR) and Standard & Poors (S&P) have each assigned their BBB rating
to prospective senior unsecured debt offerings of the Company and their BBB-
rating to prospective cumulative preferred stock offerings of the Company.
Moody's Investor Service (Moody's) has assigned its Baa3 rating to prospective
senior unsecured debt offerings of the Company and its Ba2 rating to prospective
cumulative preferred stock offerings of the Company.
28
<PAGE>
The Company's total indebtedness at December 31, 1997 was $1.029
billion, of which $159.5 million, or 15.5%, bears a LIBOR-based floating
interest rate. The weighted average interest rate under the unsecured credit
facility for 1997 was 6.9%. Currently, the unsecured credit facility bears
interest at 90 basis points over LIBOR. The Company's mortgage payable fixed
rate indebtedness bears an effective weighted average interest rate of 8.1% at
December 31, 1997 and has a weighted average term to maturity of 5.9 years.
Based upon the Company's total market capitalization at December 31, 1997 of
$3.552 billion (the common stock price was $31.6875 per share; the total shares
of common stock, convertible preferred stock and Units outstanding was
67,012,464 and the aggregate liquidation value of the cumulative redeemable
preferred stock was $400 million), the Company's debt represented 29.0% of its
total market capitalization. The Company has a $450.0 million unsecured credit
facility with a current borrowing capacity of $312.0 million. As of March 16,
1998, the Company had $217.5 million outstanding and $94.5 million available for
draw under this unsecured credit facility.
In first quarter of 1998, the Company developed a plan to address Year
2000 issues and began converting its computer systems to be Year 2000 compliant.
The plan provides for the conversion efforts to be completed prior to the end of
1999 for both the Company's financial and property related systems. The Year
2000 issues are the result of computer programs being written using two digits
rather than four to define the applicable year. The Company believes that
through its commitment to maintaining the highest level of systems support and
by working closely with vendors providing services to the Company's properties,
it will, through the normal course of business, convert all systems users to
Year 2000 compliant equipment prior to the end of 1999. The Company estimates
the costs associated with implementation of the plan will not be significant to
the Company's financial statements.
The Company will require capital to invest in its existing portfolio of
operating assets for major capital projects such as large-scale renovations,
routine capital expenditures and deferred maintenance on certain properties
recently acquired and tenant related capital expenditures, such as tenant
improvements and allowances and leasing commissions. With respect to major
capital projects, the Company is planning renovations of three properties
containing 563,000 square feet during 1998 which will cost $11.9 million, or
approximately $21.00 per square foot. With respect to routine capital
expenditures and deferred maintenance on certain properties recently acquired,
the Company anticipates spending approximately $17.7 million, or approximately
$0.85 per square foot, during 1998 on its portfolio of operating assets owned as
of December 31, 1997. The Company expects this amount to decrease in subsequent
years as deferred maintenance activities are completed on recently acquired
properties and as the emphasis of the Company's growth shifts from acquiring
existing office properties to developing new properties. The Company's capital
requirements for tenant related capital expenditures are dependent upon a number
of factors, including the square footage covered by expiring leases, tenant
retention ratios and whether the expiring leases are in central business
district properties or suburban properties. As of March 1, 1998, the Company had
367,011 square feet and 2,872,184 square feet of expiring leases in central
business district properties and suburban properties, respectively.
Tenant-related capital expenditures (tenant improvements, cash allowances and
leasing commissions) were $6.17 per square foot and $6.33 per square foot for
leases executed in 1997 for the Company's central business district properties
and suburban properties, respectively. The Company intends to use cash flow from
operations and its unsecured revolving credit facility to meet its working
capital needs for its existing portfolio of operating assets.
The Company will also require a substantial amount of capital for
development projects currently underway and planned for the future. As of March
1, 1998, the Company had 41 development projects underway which are expected to
require a total investment by the Company of $518.0 million. The Company intends
to use cash flow from operations, its unsecured, revolving credit facility and
the Company's access to public and private equity and debt markets to meet its
capital needs for development projects.
Net cash provided by operating activities was $138.6 million for the
year ended December 31, 1997, compared to $82.3 million for the year ended
December 31, 1996. The increase in net cash provided by operating activities was
primarily a result of acquisitions made by the Company. The Company's investing
activities used approximately $1.004 billion and $876.9 million for the years
ended December 31, 1997 and 1996, respectively. The Company's investment
activities included the acquisitions of office buildings, executive office
suites businesses, and land held for future development and additions to
construction in process of approximately $1.014 billion for the year ended
December 31, 1997, as compared to $855.4 million in acquisitions during the same
period in 1996. Additionally, the Company invested approximately $36.3 million
and $11.5 million in its existing real estate assets for the years ended
December 31, 1997 and 1996, respectively. Net of distributions to the Company's
stockholders and minority interests, the Company's financing activities provided
net cash of $976.2 million and $863.4 million for the years ended December 31,
1997 and 1996, respectively. For the year ended December 31, 1997, the Company
raised $1.1 billion through the sale of common and
29
<PAGE>
preferred stock and unsecured notes which was used to repay amounts outstanding
under its unsecured credit facility and its secured credit facility (which has
been canceled) and to fund acquisitions. The Company also drew amounts from its
unsecured credit facility during 1997 to finance its acquisitions and other
investing activities. For the year ended December 31, 1997, the Company's net
repayments of its unsecured credit facility were approximately $55.5 million.
Rental revenue and real estate service revenue have been the principal
sources of capital to fund the Company's operating expenses, debt service and
capital expenditures, excluding non-recurring capital expenditures. The Company
believes that rental revenue and real estate service revenue will continue to
provide the necessary funds for its operating expenses and debt service. The
Company expects to fund capital expenditures, including tenant concession
packages, building renovations and construction costs, from (i) available funds
from operations, (ii) existing capital reserves, and (iii) if necessary, credit
facilities established with third party lenders. If these sources of funds are
insufficient, the Company's ability to make expected distributions may be
adversely impacted. As of December 31, 1997, the Company had cash of $41.9
million, of which $18.0 million was restricted.
The Company's dividends are paid quarterly. Amounts accumulated for
distribution are primarily invested by the Company in short-term investments
that are collateralized by securities of the United States Government or certain
of its agencies. For the fourth quarter 1997, the Company increased its
quarterly dividend, to be paid in the first quarter of 1998, from $0.4375 to
$0.4625. This increase was necessary in order for the Company to be in
compliance during 1998 with the REIT requirement to distribute 95% of taxable
income.
Management believes that the Company will have access to the capital
resources necessary to expand and develop its business. The Company may seek to
obtain funds through additional equity offerings or debt offerings in a manner
consistent with its intention to operate with a conservative borrowing policy.
The Company anticipates that adequate cash will be available to fund its
operating and administrative expenses, continuing debt service obligations, the
payment of dividends in accordance with REIT requirements in both the short term
and long term, and future acquisitions of office properties.
The Company believes that funds from operations is helpful to investors
as a measure of the performance of an equity REIT because, along with cash flow
from operating activities, financing activities and investing activities, it
provides investors with an indication of the ability of the Company to incur and
service debt, to make capital expenditures and to fund other cash needs. In
accordance with the final National Association of Real Estate Investment Trusts
(NAREIT) White Paper on Funds From Operations as approved by the Board of
Governors of NAREIT on March 3, 1995, funds from operations represents net
income (loss) (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring or sales of
property, plus depreciation and amortization of assets uniquely significant to
the real estate industry and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures are calculated to reflect funds from operations on the same basis. For
purposes of calculating the Company's funds from operations, the Company has
added amortization expense associated with goodwill amortization related to the
purchase of the assets of OmniOffices Group, Inc. back to net income. The
Company computes funds from operations in accordance with standards established
by NAREIT, except for adding back goodwill amortization. The Company's funds
from operations may not be comparable to funds from operations reported by other
REITs that do not define the term in accordance with the current NAREIT
definition or that interpret the current NAREIT definition differently than the
Company. Funds from operations does not represent net income or cash flow
generated from operating activities in accordance with generally accepted
accounting principles and, as such, should not be considered an alternative to
net income as an indication of the Company's performance or to cash flow as a
measure of liquidity or the Company's ability to make distributions.
30
<PAGE>
The following table provides the calculation of the Company's funds
from operations for 1997, 1996 and 1995:
(in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net operating income before minority interest
and extraordinary items $ 87,013 29,534 17,284
Adjustments to derive funds from operations:
Add:
Depreciation and amortization 72,922(2) 35,888 17,564
Deduct:
Minority interests' (non Unitholders)
share of depreciation, amortization and
net income (1,253) (926) (1,658)
Gain on sale of assets (5,420) -- --
-------- ------- -------
Funds from operations before allocation to
the minority Unitholders 153,262 64,496 33,190
Less: Funds from operations allocable to the
minority Unitholders (12,697) (8,610) (7,876)
-------- ------ -------
Funds from operations allocable
to CarrAmerica Realty Corporation 140,565 55,886 25,314
Less: Preferred stock dividends (1) (8,786) -- --
-------- ------ -------
Funds from operations attributable
to common shareholders: $131,779 55,886 25,314
======== ====== =======
</TABLE>
- ----------
(1) Excludes dividends on shares of Series A Preferred Stock which are
convertible into common shares.
(2) Includes $426 of goodwill amortization related to the acquisition
of the assets of OmniOffices Group, Inc.
Changes in funds from operations are largely attributable to changes in net
income between the periods, as previously discussed.
ACQUISITION AND DEVELOPMENT ACTIVITY
The following is a discussion of the Company's acquisition and
development activity during 1997. A more detailed discussion can be found in
"Item 1. Business--Recent Developments".
During 1997, the Company acquired the following properties: in its
Pacific region, the Company acquired 51 properties containing a total of
approximately 3.3 million square feet, for an aggregate purchase price of
approximately $464.2 million; in its Mountain region, the Company acquired 14
properties containing a total of approximately 1.2 million square feet, for an
aggregate purchase price of approximately $162.7 million; in its Central region,
the Company acquired 16 properties containing a total of approximately 1.6
million square feet for an aggregate purchase price of approximately $178.2
million; and in its Southeast region, the Company acquired six properties
containing a total of approximately .9 million square feet for an aggregate
purchase price of approximately $101.6 million.
During 1997, the Company acquired land that is expected to support the
development of up to 4.6 million square feet for an aggregate purchase price of
$117.3 million. In addition, as of December 31, 1997, the Company had 40 office
properties under construction: 1,196,000 square feet in its Pacific region;
425,000 square feet in its Mountain region; 1,194,000 square feet in its Central
region; and 714,000 square feet in its Southeast region. Costs incurred during
1997 for properties under construction were $180.1 million. An additional $62.4
million is expected to be expended for completion of projects already under
construction as of December 31, 1997.
31
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data included in this Annual
Report on Form 10-K are listed in Part IV, Item 14(a).
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is hereby incorporated by
reference to the material appearing in Part I of this Annual Report on Form 10-K
and in the Proxy Statement for the Annual Stockholders Meeting to be held in
1998 (the "Proxy Statement").
Item 11. EXECUTIVE COMPENSATION
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Executive Compensation."
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Voting Securities and Principal Holders Thereof."
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the caption
"Certain Relationships and Transactions."
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM
8-K
14(a)(1) Financial Statements
Reference is made to the Index to Financial Statements and
Schedule on page F-1
14(a)(2) Financial Statement Schedule
Reference is made to the Index to Financial Statements and
Schedule on page S-1.
14(a)(3) Exhibits
3.1 Amendment and Restatement of Articles of
Incorporation of CarrAmerica Realty Corporation, as
amended on April 29, 1996 and April 30, 1996
(incorporated by reference to the same numbered
exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996).
3.2 Second Amendment and Restatement of By-laws of
CarrAmerica Realty Corporation (incorporated by
reference to Exhibit 3.1 to the Company's Current
Report on Form 8-K filed February 12, 1997).
3.3 Articles Supplementary relating to Series A
Cumulative Convertible Redeemable Preferred Stock
dated October 24, 1996 (incorporated by reference
to Exhibit 4.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30,
1996).
32
<PAGE>
3.4 Articles Supplementary relating to Series B
Cumulative Redeemable Preferred Stock dated August
8, 1997 (incorporated by reference to Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997).
3.5 Articles Supplementary relating to Series C
Cumulative Redeemable Preferred Stock dated October
30, 1997 (incorporated by reference to Exhibit 4.1
to the Company's Current Report on Form 8-K dated
and filed on November 6, 1997).
3.6 Articles Supplementary relating to Series D
Cumulative Redeemable Preferred Stock dated
December 17, 1997 (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form
8-K dated December 16, 1997 and filed on December
19, 1997).
4.1 Indenture, dated as of July 1, 1997, by and among
the Company, as Issuer, CarrAmerica Realty, L.P.,
as Guarantor, and Bankers Trust Company, as
Trustee, relating to the Company's 7.20% Notes due
2004 and 7.375% Notes due 2007 (incorporated by
reference to Exhibit 4.1 to the Company's quarterly
report on Form 10-Q for the quarter ended June 30,
1997).
4.2 Indenture, dated as of February 23, 1998, by and
among the Company, as Issuer, CarrAmerica Realty,
L.P., as Guarantor, and Bankers Trust Company, as
Trustee, relating to the Company's 6.625% Notes due
2005 and 6.875% Notes due 2008.
10.1 Second Amended and Restated Agreement of Limited
Partnership of CarrAmerica Realty, L.P., dated May
9, 1997 (incorporated by reference to Exhibit 10.1
to the Company's quarterly report on Form 10-Q for
the quarter ended March 31, 1997).
10.2 First Amendment to Second Amended and Restated
Agreement of Limited Partnership of CarrAmerica
Realty, L.P., dated October 6, 1997.
10.3 Second Amendment to Second Amended and Restated
Agreement of Limited Partnership of CarrAmerica
Realty, L.P., dated December 12, 1997.
10.4 Third Amendment to Second Amended and Restated
Agreement of Limited Partnership of CarrAmerica
Realty, L.P., dated December 31, 1997.
10.5 Third Amended and Restated Agreement of Limited
Partnership of Carr Realty, L.P., dated March 5,
1996, as amended (incorporated by reference to
Exhibit 3.3 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996).
10.6 1993 Carr Realty Option Plan (incorporated by
reference to Exhibit 10.3 of the Company's
Registration Statement on Form S-11, No. 33-53626).
10.7 Non-Employee Director Stock Option Plan
(incorporated by reference to the Company's
Registration Statement on Form S-8, No. 33-92136).
10.8 1997 Stock Option and Incentive Plan (incorporated
by reference to Exhibit 10.5 to the Company's
annual report on Form 10-K for the year ended
December 31, 1996).
10.9 Noncompetition and Restriction Agreement by and
among The Oliver Carr Company, Oliver T. Carr, Jr.,
Carr Realty Corporation and Carr Realty, L.P.
(incorporated by reference to Exhibit 10.7 of the
Company's Registration Statement on Form S-11, No.
33-53626).
10.10 Promissory Note from Carr Realty, L.P. to the
Northwestern Mutual Life Insurance Company
(incorporated by reference to Exhibit 10.27 of the
Company's Registration Statement on Form S-11, No.
33-72974).
<PAGE>
10.11 Deed of Trust and Security Agreement by and among
Carr Realty, L.P., Patrick H. McGuire, III, and the
Northwestern Mutual Life Insurance Company
(incorporated by reference to Exhibit 10.28 of the
Company's Registration Statement on Form S-11, No.
33-72974).
10.12 Stock Purchase Agreement, dated 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 to
the Company's Current Report on Form 8-K filed
November 6, 1995).
10.13 Stockholders Agreement, dated April 30, 1996 by and
among Carr Realty Corporation, Carr Realty, L.P.,
Security Capital Holdings, S.A. and Security
Capital U.S. Realty (incorporated by reference to
Exhibit 2.2 of Security Capital U.S. Realty's
Schedule 13D dated April 30, 1996).
33
<PAGE>
10.14 Registration Rights Agreement, dated April 30, 1996
by and among Carr Realty Corporation, Security
Capital Holdings, S.A. and Security Capital U.S.
Realty (incorporated by reference to Exhibit 2.3 of
Security Capital U.S. Realty's Schedule 13D dated
April 30, 1996).
10.15 Third Amended and Restated Credit Agreement, dated
March 11, 1998 by and among CarrAmerica Realty
Corporation, Carr Realty, L.P., CarrAmerica Realty,
L.P., Morgan Guaranty Trust Company of New York,
Commerzbank Aktiengesellschaft, New York Branch,
NationsBank, N.A., Wells Fargo Bank, National
Association, Bank of America National Trust and
Savings Association, and the other banks listed
therein.
21.1 List of Subsidiaries.
23.1 Consent of KPMG Peat Marwick LLP, dated March 18,
1998.
27 Financial Data Schedule.
14(b) Reports on Form 8-K
Form 8-K filed December 23, 1997 regarding (i) Underwriting
Agreement for offering of 594,377 shares of common stock
under the Legg Mason Unit Investment Trust, (ii)
Underwriting and Terms Agreement for offering of 642,510
shares of common stock under the Prudential Unit Investment
Trust, and (iii) opinion of Hogan & Hartson L.L.P. on such
common stock offerings.
Form 8-K filed December 19, 1997 regarding Terms Agreement,
Articles Supplementary, Deposit Agreement and opinion of
Hogan & Hartson L.L.P. for offering of 2,000,000 depositary
shares of the Company's Series D Preferred Stock.
Form 8-K filed December 16, 1997 regarding the Company's
Pro Forma Balance Sheet for the nine months ended September
30, 1997 and Pro Forma Statements of Operations for the
nine months ended September 30, 1997 and the year ended
December 31, 1996 for Presidential Circle and 900-910 East
Hamilton.
Form 8-K filed December 16, 1997 regarding the Company's
Pro Forma Balance Sheet for the nine months ended September
30, 1997 and Pro Forma Statements of Operations for the
nine months ended September 30, 1997 and the year ended
December 31, 1996.
Form 8-K filed November 6, 1997 regarding Terms Agreement,
Articles Supplementary, Deposit Agreement and opinion of
Hogan & Hartson L.L.P. for offering of 6,000,000 depositary
shares of the Company's Series C Preferred Stock.
34
<PAGE>
Form 8-K filed October 31, 1997 regarding Supplemental
Financial and Operating Information of the Company as of
September 30, 1997.
Form 8-K filed October 30, 1997 regarding the Company's Pro
Forma Balance Sheet for the nine months ended September 30,
1997 and Pro Forma Statements of Operations for the nine
months ended September 30, 1997 and the year ended December
31, 1996.
Form 8-K filed October 30, 1997 regarding the Company's (i)
Historical Financial Statements for the nine months ended
September 30, 1997 and the year ended December 31, 1996 for
U.S. West, 2600 West Olive, CM Capital and Cedar Maple,
(ii) Historical Financial Statements for the three months
ended March 31, 1997 and the year ended December 31, 1996
for Bannockburn IV, Sorenson Research Park, Tollhill East
and West and Draper Park North, and (iii) Historical
Financial Statements for the year ended December 31, 1996
for Presidential Circle and Quorum Place.
14(c) Exhibits
The list of exhibits filed with this report is set
forth in response to Item 14(a)(3). The required
exhibit index has been filed with the exhibits.
14(d) Financial Statements
None.
35
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registration has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the District of Columbia on March 19, 1998.
CARRAMERICA REALTY CORPORATION
a Maryland corporation
By: /s/ THOMAS A. CARR
-------------------------------------
Thomas A. Carr
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following person on behalf
of the registrant and in the capacities indicated on March 19, 1998.
Signature Title
* Chairman of the Board
---------------------------- and Director
Oliver T. Carr, Jr.
/s/ THOMAS A. CARR President, Chief Executive Officer
---------------------------- and Director
Thomas A. Carr
/s/ BRIAN K. FIELDS Chief Financial Officer
----------------------------
Brian K. Fields
*
---------------------------- Director
Andrew F. Brimmer
*
---------------------------- Director
A. James Clark
*
---------------------------- Director
Todd W. Mansfield
*
---------------------------- Director
Caroline S. McBride
*
---------------------------- Director
William D. Sanders
*
---------------------------- Director
Wesley S. Williams, Jr.
*/s/ BRIAN K. FIELDS
----------------------------
Brian K. Fields,
Attorney-in-Fact
36
<PAGE>
CARRAMERICA REALTY CORPORATION
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
The following Consolidated Financial Statements and Schedule of
CarrAmerica Realty Corporation and Subsidiaries and the Independent Auditors'
Reports thereon are attached hereto:
<TABLE>
<CAPTION>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
<S> <C>
Consolidated Balance Sheets as of December 31, 1997 and 1996.............................F-2
Consolidated Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995.................................................F-3
Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 1997, 1996 and 1995.................................................F-4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995.................................................F-5
Notes to Consolidated Financial Statements...............................................F-7
Independent Auditors' Report.............................................................F-21
FINANCIAL STATEMENT SCHEDULE
Independent Auditors' Report.............................................................S-1
Schedule III: Consolidated Real Estate and Accumulated Depreciation as of
December 31, 1997 for CarrAmerica Realty Corporation and Subsidiaries............S-2
</TABLE>
All other schedules are omitted because they are not applicable, or because the
required information is included in the financial statements or notes thereto.
F-1
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets for the Years Ended December 31, 1997 and 1996
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In thousands, except share amounts)
1997 1996
---- ----
<S> <C> <C>
Assets
Rental property (notes 2 and 11):
Land $ 557,536 356,797
Buildings 1,692,389 1,017,313
Tenant improvements 131,527 99,760
Furniture, fixtures and equipment 15,571 2,128
---------- ---------
2,397,023 1,475,998
Less - accumulated depreciation (184,266) (119,657)
---------- ---------
Total rental property 2,212,757 1,356,341
Land held for development 81,647 32,277
Construction in progress 210,829 31,723
Restricted and unrestricted cash and cash equivalents (note 2) 41,894 35,866
Accounts and notes receivable (note 8) 38,321 11,899
Investments (note 4) 20,128 13,524
Accrued straight-line rents 33,212 23,810
Tenant leasing costs, net of accumulated amortization
of $15,576 in 1997 and $11,986 in 1996 19,473 13,499
Deferred financing costs, net of accumulated amortization
of $4,100 in 1997 and $1,979 in 1996 6,899 3,800
Prepaid expenses and other assets, net of accumulated
depreciation and amortization of $6,179 in 1997 and
$3,506 in 1996 78,900 13,825
---------- ---------
$2,744,060 1,536,564
========== =========
Liabilities, Minority Interest, and Stockholders' Equity
Liabilities:
Mortgages and notes payable (notes 2 and 11) 1,028,946 655,449
Accounts payable and accrued expenses 67,311 32,657
Rent received in advance and security deposits 20,151 10,383
---------- ---------
Total liabilities 1,116,408 698,489
Minority interest (note 3) 74,955 50,597
Stockholders' equity (notes 6 and 7):
Preferred Stock, $.01 par value, authorized 15,000,000 shares:
Series A Cumulative Convertible Redeemable Preferred Stock, $.01 par value,
780,000 shares issued and outstanding at December 31, 1997, and 1,740,000 shares
issued and outstanding at December 31, 1996 with an aggregate liquidation
preference of $19.5 million and $43.5 million, respectively. 8 17
Series B, C and D Cumulative Redeemable Preferred Stock, outstanding
8,800,000 shares at December 31, 1997, with an aggregate liquidation
preference of $400.0 million. 88 --
Common Stock, $.01 par value, authorized 90,000,000 shares, issued and
outstanding 59,993,778 shares at December 31, 1997 and 43,789,073 shares at
December 31, 1996. 600 438
Additional paid in capital 1,629,214 837,355
Cumulative dividends in excess of net income (77,213) (50,332)
---------- ---------
Total stockholders' equity 1,552,697 787,478
---------- ---------
Commitments and contingencies (notes 5, 8 and 10)
$2,744,060 1,536,564
========== =========
</TABLE>
See accompanying notes to consolidated financial statements
F-2
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In thousands, except per common share amounts)
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Real estate operating revenue (notes 5 and 8):
Rental revenue:
Minimum base rent $274,603 133,807 79,688
Recoveries from tenants 37,134 14,105 5,266
Parking and other tenant charges 13,765 6,253 4,585
-------- -------- --------
Total rental revenue 325,502 154,165 89,539
Executive suites revenue 17,865 -- --
Real estate service income 15,998 12,512 11,315
-------- -------- --------
Total revenue 359,365 166,677 100,854
-------- -------- --------
Real estate operating expenses:
Property operating expenses:
Operating expenses 84,432 37,047 21,894
Real estate taxes 30,394 14,880 9,685
Interest expense 51,528 31,630 21,873
Executive suites operating expenses 15,728 -- --
General and administrative 21,839 15,228 10,711
Depreciation and amortization 76,958 38,264 18,495
-------- -------- --------
Total operating expenses 280,879 137,049 82,658
-------- -------- --------
Real estate operating income 78,486 29,628 18,196
-------- -------- --------
Other operating income (expense):
Interest Income 2,452 1,701 1,121
Equity in earnings (losses) of
unconsolidated partnerships (note 4) 655 484 (131)
Gain on sale of assets (note 9) 5,420 -- --
Loss on write-off of investment and
intangible assets (note 9) -- (2,279) (1,902)
-------- -------- --------
Total other operating income (expense) 8,527 (94) (912)
-------- -------- --------
Net operating income before minority
interest and extraordinary item 87,013 29,534 17,284
Minority interest (note 3) (8,273) (4,732) (5,217)
-------- -------- --------
Income before extraordinary item 78,740 24,802 12,067
Extraordinary item - loss on early
extinguishment of debt (608) (484) --
-------- -------- --------
Net income $ 78,132 24,318 12,067
======== ======== ========
Basic net income per common share:
Income before extraordinary item (note 1) $ 1.23 0.90 0.90
Extraordinary item - loss on early
extinguishment of debt (0.01) (0.02) --
--------- -------- --------
Basic net income per common share $ 1.22 0.88 0.90
========= ======== ========
Diluted net income per common share:
Income before extraordinary item (note 1) $ 1.23 0.90 0.90
Extraordinary item - loss on early
extinguishment of debt (0.01) (0.02) --
--------- -------- --------
Diluted net income per common share $ 1.22 0.88 0.90
========= ======== ========
</TABLE>
See accompanying notes to consolidated financial statements
F-3
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1997, 1996 and 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In thousands, except share amounts)
Dividends in
Additional excess of
Common Preferred Common Preferred paid-in cumulative
shares shares stock stock capital earnings Total
----------- ----------- ---------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 13,248,011 -- $ 132 -- 126,059 (20,149) 106,042
Shares issued in exchange
for Unit redemptions (note 3) 161,166 -- 2 -- 776 -- 778
Net income -- -- -- -- -- 12,067 12,067
Dividends paid -- -- -- -- -- (23,344) (23,344)
---------- --------- ----- ------ --------- --------- --------
Balance at December 31, 1995 13,409,177 -- 134 -- 126,835 (31,426) 95,543
Sales of common stock 30,102,907 -- 301 -- 665,178 -- 665,479
Sale of Series A Cumulative
Convertible Redeemable
Preferred Stock -- 1,740,000 -- 17 42,976 -- 42,993
Shares issued in exchange
for Unit redemptions (note 3) 212,293 -- 2 -- 831 -- 833
Exercise of stock options 2,000 -- -- -- 36 -- 36
Shares issued to acquire
rental property 62,696 -- 1 -- 1,499 -- 1,500
Net income -- -- -- -- -- 24,318 24,318
Dividends paid -- -- -- -- -- (43,224) (43,224)
---------- --------- ----- ------ --------- --------- --------
Balance at December 31, 1996 43,789,073 1,740,000 438 17 837,355 (50,332) 787,478
Sales of common stock 15,032,815 -- 151 -- 400,781 -- 400,932
Sales of Preferred Stock -- 8,800,000 -- 88 386,843 -- 386,931
Shares issued in exchange
for Unit redemptions
(note 3) 199,223 -- 2 -- 3,955 -- 3,957
Exercise of stock options 12,667 -- -- -- 280 -- 280
Conversion of Series A
Cumulative Convertible
Redeemable
Preferred Stock to
Common stock 960,000 (960,000) 9 (9) -- -- --
Net income -- -- -- -- -- 78,132 78,132
Dividends Paid -- -- -- -- -- (105,013) (105,013)
---------- --------- ------ ----- --------- --------- ---------
Balance at December 31, 1997 59,993,778 9,580,000 $ 600 96 1,629,214 (77,213) 1,552,697
========== ========= ====== ===== ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In thousands)
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 78,132 24,318 12,067
---------- -------- -------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 76,958 38,264 18,495
Minority interest in income 8,273 4,732 5,217
Equity in (earnings) losses of unconsolidated partnerships (655) (464) 161
Extraordinary item-loss on early extinguishment of debt 608 484 --
Loss on write-off of assets -- 2,279 --
Increase in accounts receivable and notes receivable (26,422) (3,171) (3,124)
Decrease (increase) in accrued straight-line rents (9,402) (1,373) 1,931
Additions to tenant leasing costs (10,671) (5,530) (1,350)
Increase in prepaid expenses and other assets (22,615) (5,915) (884)
Increase in accounts payable and
accrued expenses 34,654 20,029 2,969
Increase (decrease) in rent received in advance and
security deposits 9,768 8,647 (205)
---------- -------- -------
Total adjustments 60,496 57,982 23,210
---------- -------- -------
Net cash provided by operating activities 138,628 82,300 35,277
---------- -------- -------
Cash flows from investing activities:
Acquisition of executive suites assets (45,736) -- --
Additions to rental property (36,303) (11,525) (8,927)
Acquisitions of rental property (692,001) (800,628) (64,363)
Additions to land held for development (96,225) (23,022) --
Additions to construction in progress (180,104) (31,723) --
Acquisition of real estate service contracts and other
intangibles -- (1,750) (7,419)
Distributions from unconsolidated partnerships 1,574 1,739 4,399
Investments in unconsolidated partnerships (7,398) (4,055) (3,437)
Acquisition of minority interest -- (3) (1,546)
Increase in restricted cash and cash equivalents (6,019) (5,980) (342)
Proceeds from disposition of rental property, land held
for development and construction in progress 57,928 -- --
---------- -------- -------
Net cash used by investing activities (1,004,284) (876,947) (81,635)
----------- -------- -------
Cash flows from financing activities:
Net proceeds from sales of common and preferred stock 788,143 708,508 --
Net borrowings (repayments) on unsecured line of credit (55,500) 215,000 --
Proceeds from issuance of unsecured notes 275,000 -- --
Borrowings on mortgages payable -- -- 72,000
Repayment of mortgages payable (19,305) (57,048) (2,559)
Disposition of mortgage payable from sale of rental property (9,508) -- --
Contributions from minority interests 1,502 -- 17
Dividends paid (105,013) (43,224) (23,344)
Additions to deferred financing costs (4,179) (3,020) (879)
Distributions to minority interests (9,276) (7,149) (8,122)
---------- -------- -------
Net cash provided by financing activities 861,864 813,067 37,113
---------- -------- -------
Increase (decrease) in unrestricted cash
and cash equivalents (3,792) 18,420 (9,245)
Unrestricted cash and cash equivalents, beginning of the period 27,637 9,217 18,462
---------- -------- -------
Unrestricted cash and cash equivalents, end of the period $ 23,845 27,637 9,217
========== ======== =======
Supplemental disclosure of cash flow information:
Cash paid for interest (net of capitalized interest of $12,571 in
1997, $2,664 in 1996 and $226 in 1995) $ 41,170 29,693 21,825
========== ======== ======
</TABLE>
F-5
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995
- -------------------------------------------------------------------------------
(Continued)
Supplemental disclosure of noncash investing and financing activities:
(a) During 1997, the Company funded a portion of the aggregate purchase
price of its property acquisitions by assuming $182.8 million of debt
and liabilities and by issuing $26.0 million of units.
(b) During 1996, the Company funded a portion of the aggregate purchase
price of its property acquisitions by assuming $184.4 million of debt
and liabilities and by issuing $1.5 million of common stock and $18.0
million of Units. The Company also repaid $1.0 million of liabilities
by issuing $1.0 million of Units.
(c) On July 6, 1995, the Company formed a limited liability company (the
"LLC") with a commingled pension trust fund. The Company contributed
its ownership in 1717 Pennsylvania Avenue to the LLC in exchange for a
50 percent ownership interest. The Company was credited with a
contribution of $20.0 million, reduced by $7.0 million of indebtedness
secured by the property. Subsequent to the Company's contribution to
the LLC, the Company received a distribution from the LLC of $2.9
million.
See accompanying notes to consolidated financial statements
F-6
<PAGE>
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
- -------------------------------------------------------------------------------
(1) Description of Business and Summary of Significant Accounting Policies
(a) Business
CarrAmerica Realty Corporation (the "Company") is a
self-administered and self-managed equity real estate
investment trust ("REIT"), organized under the laws of
Maryland, which owns, develops, acquires and operates office
properties. The Company's office properties primarily are
located in 16 suburban markets across the United States.
(b) Basis of Presentation
The accounts of the Company and its majority-owned subsidiaries
are consolidated in the accompanying financial statements. The
Company uses the equity method of accounting for its
investments in and earnings and losses of unconsolidated
partnerships not controlled by the Company. Management of the
Company has made a number of estimates and assumptions relating
to the reporting of assets and liabilities, revenues and
expenses, and the disclosure of contingent assets and
liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results
could differ from those estimates. Certain amounts for prior
years have been reclassified to conform with the presentation
for 1997.
(c) Rental Property
Rental property is recorded at cost less accumulated
depreciation (which is less than the net realizable value of
the rental property). Depreciation is computed on the
straight-line basis over the estimated useful lives of the
assets, as follows:
Base Building.........................30 to 50 years
Building components...................7 to 20 years
Tenant improvements...................Terms of the leases or
useful lives, whichever
is shorter
Furniture, fixtures and equipment.....5 to 15 years
Expenditures for maintenance and repairs are charged to
operations as incurred. Significant renovations are
capitalized.
The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net
cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets.
(d) Development Property
Land held for development and construction in progress is
carried at cost. Specifically identifiable direct and indirect
acquisition, development and construction costs are capitalized
including, where applicable, salaries and related costs, real
estate taxes, interest and certain pre-construction costs
essential to the development of a property.
(e) Tenant Leasing Costs
Fees and costs incurred in the successful negotiation of leases
have been deferred and are being amortized on a straight-line
basis over the terms of the respective leases.
(f) Deferred Financing Costs
Deferred financing costs include fees and costs incurred to
obtain financing and are being amortized over the terms of the
respective loans on a basis which approximates the interest
method.
F-7
<PAGE>
(g) Goodwill, Real Estate Service Contracts and Other Intangibles
Real estate service contracts and other intangible assets
represent the purchase price of net assets of real estate
service operations acquired and are amortized on the
straight-line basis over the expected lives of the respective
real estate service contracts. Goodwill which represents the
excess of purchase price over the fair value of net assets
acquired in the acquisition of OmniOffices, is amortized on the
straight-line basis over 30 years. The Company assesses the
recoverability of these intangible assets by determining
whether the balance can be recovered over its remaining life
through undiscounted future operating cash flows of the related
assets or operations acquired. The amount of impairment loss,
if any, is measured as the amount by which the carrying amount
of the assets exceeds the fair value of the assets. The
assessment of the recoverability of these intangible assets
will be impacted if estimated future operating cash flows are
not achieved.
(h) Fair Value of Financial Instruments
The carrying amount of the following financial instruments
approximates fair value because of their short-term maturity:
cash and cash equivalents; accounts and notes receivable;
accounts payable and accrued expenses.
(i) Revenue Recognition
The Company reports base rental revenue for financial statement
purposes straight-line over the terms of the respective leases.
Accrued straight-line rents represent the amount that
straight-line rental revenue exceeds rents collected in
accordance with the lease agreements. Management, considering
current information and events regarding the tenants' ability
to fulfill their lease obligations, considers accrued
straight-line rents to be impaired if it is probable that the
Company will be unable to collect all rents due according to
the contractual lease terms. If accrued straight-line rents
associated with a tenant are considered to be impaired, the
amount of the impairment is measured based on the present value
of expected future cash flows. Impairment losses, if any, are
recorded through a loss on the write-off of assets. Cash
receipts on impaired accrued straight-line rents are applied to
reduce the remaining outstanding balance and as rental revenue,
thereafter.
The Company earns real estate service revenue for certain
properties it manages, leases and develops for third parties
and revenue from its executive suites business. Such revenue is
recognized as earned.
(j) New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (FASB)
issued SFAS No. 130, "Reporting Comprehensive Income," which
requires an enterprise to display comprehensive income and its
components in a financial statement to be included in an
enterprise's full set of financial statements. Comprehensive
income represents a measure of all changes in equity of an
enterprise that result from recognized transactions and other
economic events for the period other than transactions with
owners in their capacity as owners. Comprehensive income
includes net income and such items as foreign currency items
and certain unrealized gains and losses. This standard is
effective for the Company's fiscal year 1998 and requires prior
years' comparative financial statements to be reclassified to
reflect the provisions of this standard.
Also in June 1997, the FASB issued SFAS No. 131 "Disclosures
about Segments of an Enterprise and Related Information," which
requires a public entity to report selected information about
operating segments in financial reports issued to shareholders.
It also establishes standards for related disclosures about
products and services, geographic areas and major customers.
This standard is also effective for the Company's 1998 fiscal
year. The Company is currently in the process of evaluating the
effect this new standard will have on its financial statement
presentation and disclosures and the required information, if
any, will be reflected in the Company's 1998 financial
statements.
F-8
<PAGE>
(k) Income and Other Taxes
The Company qualifies as a REIT under Sections 856 through 860
of the Internal Revenue Code of 1986, as amended. A REIT will
generally not be subject to federal income taxation on that
portion of its income that qualifies as REIT taxable income to
the extent that it distributes at least 95 percent of its
taxable income to its shareholders and complies with certain
other requirements. Accordingly, no provision has been made for
federal income taxes for the Company and certain of its
subsidiaries in the accompanying consolidated financial
statements. At December 31, 1997 and 1996, the Company's income
tax basis in its assets was approximately $2.5 billion and $1.5
billion, respectively.
Certain subsidiaries, organized as partnerships, of the Company
are subject to District of Columbia franchise taxes. Franchise
taxes are recorded as general and administrative expenses in
the accompanying consolidated financial statements.
CarrAmerica Development, Inc. ("CarrAmerica Development"), the
Company's development subsidiary, Carr Real Estate Services,
Inc. ("Carr Services, Inc."), the Company's real estate service
subsidiary, and OmniOffices, Inc. ("OmniOffices"), the
Company's executive suites subsidiary, file separate tax
returns and are subject to federal, state and local income
taxes. The Company has adopted the asset and liability method
of accounting for income taxes for these subsidiaries. Under
the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases and to operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized
in income in the period of the enactment date. The income taxes
and the effect of the asset and liability method of the
accounting for income taxes for these subsidiaries, are
insignificant to the financial statements of the Company.
(l) Hedging Transactions
From time to time, the Company enters into interest rate lock
and collar agreements that are designed to hedge against the
impact of interest rate fluctuations on certain of the
Company's existing and probable future long-term debt
instruments. Because these agreements qualify for hedge
accounting treatment, any gains or losses are recognized as
adjustments to interest expense over the lives of the
underlying debt instruments. For hedge agreements that are
terminated early or that are associated with anticipated future
debt instruments, gains or losses are deferred until those debt
instruments are entered into. If the Company determines it is
no longer probable that the Company will enter into an
anticipated debt instrument, any related deferred gains or
losses are recognized in the current period.
F-9
<PAGE>
(m) Per Share Data and Dividends
Effective December 31, 1997, the Company adopted the provisions
of SFAS No. 128 "Earnings Per Share." SFAS No. 128 supersedes
APB No. 15 and specifies computation, presentation and
disclosure requirements for EPS and requires restatement of
prior years' comparative EPS amounts. The following is a
reconciliation of the numerators and denominators of the basic
and diluted EPS computations for income before extraordinary
loss.
<TABLE>
<CAPTION>
Year Ended December 31, 1997 Year Ended December 31, 1996 Year Ended December 31, 1995
------------------------------- ------------------------------ -------------------------------
Income Per Income Per Income Per
(000's) Shares Share (000's) Shares Share (000's) Shares Share
(Numerator)(Denominator) Amount (Numerator)(Denominator) Amount (Numerator)(Denominator) Amount
------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Basic EPS $ 67,749 54,873 $1.23 $24,230 26,932 $0.90 $12,067 13,338 $0.90
Effect of Dilutive
Securities
Stock Options -- 205 -- -- 67 -- -- 1 --
Units in Carr
Realty, LP 5,530 4,519 -- -- -- -- -- -- --
-------- ------ ----- ------- ------ ----- ------- ------ -----
Diluted EPS $ 73,279 59,597 $1.23 $24,230 26,999 $0.90 $12,067 13,339 $0.90
======== ====== ======= ====== ======= =======
</TABLE>
Income before extraordinary item has been reduced by
preferred stock dividends of $10,991 and $572 for 1997 and 1996, respectively.
The effects of units and Series A Preferred Stock are not
included in the computation of diluted EPS for a given year if their effect is
antidilutive.
Following is the income tax status of common stock dividends
paid during the last three calendar years:
1997 1996 1995
---- ---- ----
Ordinary income 90% 95% 85%
Capital Gain -- -- --
Return of Capital 10% 5% 15%
(n) Cash Equivalents
For the purposes of reporting cash flows, the Company considers
all highly liquid investments with a maturity of three months
or less at the time of purchase to be cash equivalents.
(o) Stock/Unit Option Plans
Prior to January 1, 1996, the Company accounted for its option
plans in accordance with the provisions of Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. As such,
compensation expenses would be recorded only if the current
market price of the underlying unit or stock on the date of
grant exceeded the exercise price. As of January 1, 1996, the
Company adopted SFAS No. 123, Accounting for Stock-Based
Compensation, which permits entities to recognize as expense,
over the vesting period, the fair value of all unit-based and
stock-based awards on the date of grant. Alternatively, SFAS
No. 123 allows entities to continue to apply the provisions of
APB Opinion No. 25 and provide pro forma net income and pro
forma earnings per share disclosures for employee option grants
made in 1995 and future years as if the fair-value-based method
defined in SFAS No. 123 had been applied. The Company has
elected to continue to apply the provisions of APB Opinion No.
25 and provide the pro forma disclosures permitted by SFAS No.
123.
F-10
<PAGE>
(2) Mortgages, Unsecured Notes and Credit Facility
The Company's mortgages payable, unsecured notes and credit facilities
are summarized as follows (in thousands):
December 31, December 31,
1997 1996
---- ----
Fixed rate mortgages $ 590,645 440,449
Unsecured credit facility 159,500 215,000
Notes payable 3,801 --
Senior unsecured notes 275,000 --
---------- -------
$1,028,946 655,449
========== =======
Mortgages payable are collateralized by certain rental properties and
generally require monthly principal and/or interest payments. Mortgages
payable mature at various dates from June 1998 through July 2019. The
weighted average interest rate of mortgages payable was 8.1% at
December 31, 1997 and 1996. A mortgage payable of $27.7 million at
December 31, 1997 is held by Carr Redmond Corporation, a wholly-owned
subsidiary of the Company, which owns the Redmond East office campus.
The Company also has a $450.0 million unsecured credit facility with
Morgan Guaranty Trust Company of New York (Morgan), as agent for a
group of banks. At December 31, 1997, the credit facility bore
interest, as selected by the Company, at either (i) the higher of the
prime rate or the Federal Funds Rate for such day or (ii) an interest
rate equal to 100 basis points above the 30 day London Interbank
Offered Rate (LIBOR). The Company has predominately selected interest
rates equal to 1.00 percent above the 30 day LIBOR rate. The credit
facility matures in September 2000. The weighted average effective
interest rate for 1997 was 6.9%.
The Company's unsecured credit facility contains a number of financial
and other covenants with which the Company must comply including, but
not limited to, covenants relating to ratios of annual EBITDA (earning
before interest, taxes, depreciation and amortization) to interest
expense, annual EBITDA to debt service, and total debt to tangible fair
market value of the Company's assets , and restrictions on the ability
of the Company to make dividend distributions in excess of 90% of funds
from operations. Availability under the unsecured credit facility is
also limited to a specified percentage of the Company's unsecured
properties.
In June 1997, the Company sold senior unsecured notes in the aggregate
principal amount of $275 million of its long-term debt, in the form of
$150 million of 7.20% notes due in 2004 and, $125 million of 7.375%
notes due in 2007. The Company's senior unsecured notes contain various
covenants with which the Company must comply, including but not limited
to: limits on the aggregate amount of indebtedness the company may have
outstanding on a consolidated basis; limits on the aggregate amount of
secured indebtedness the Company may have outstanding on a consolidated
basis; and, limits on the Company's required debt service payments. The
senior unsecured notes are unconditionally guaranteed by CarrAmerica
Realty, L.P.
F-11
<PAGE>
The annual maturities of debt as of December 31, 1997 are summarized as
follows (in thousands):
1998 $ 43,621
1999 34,430
2000 208,682
2001 101,092
2002 42,236
2003 & thereafter 598,885
----------
$1,028,946
==========
Restricted and unrestricted cash and cash equivalents include $18.0
million and $8.2 million of restricted cash at December 31, 1997 and
1996, respectively, consisting primarily of escrow deposits required by
lenders to be used for future building renovations, tenant improvements
or as collateral for letters of credit.
Based on the borrowing rates available to the Company for mortgages
payable with similar terms and average maturities, the estimated fair
value of the Company's mortgages at December 31, 1997 and 1996 was
approximately $615.5 million and $644.5 million, respectively.
(3) Minority Interest
In conjunction with the formation of the Company and its majority-owned
subsidiary, Carr Realty, L.P., persons contributing interests in
properties to Carr Realty, L.P. had the right to elect to receive
either common stock of the Company or Units in Carr Realty, L.P. In
addition, the Company has acquired certain assets since its formation
by issuing distribution paying Units and non-distribution paying Units
of Carr Realty, L.P. and CarrAmerica Realty, L.P. The non-distribution
paying Units are not entitled to any distributions until they
automatically convert into distribution paying Units at various dates
in the future. Each distribution paying Unit, subject to certain
restrictions, may be redeemed for either one share of common stock or,
at the option of the Company, cash equal to the fair market value of a
share of common stock at the time of the redemption. When a Unitholder
redeems a distribution paying Unit for a share of common stock or cash,
minority interest is reduced and the Company's investment in Carr
Realty, L.P. or CarrAmerica Realty, L.P., as the case may be, is
increased. During the years ended December 31, 1997 and 1996, 199,223
and 212,293 distribution paying Units, of Carr Realty, L.P. and
CarrAmerica Realty, L.P., respectively, were redeemed for common stock
of the Company.
The following table sets forth the common stock and preferred stock
which is convertible into common stock, of the Company and Units of
Carr Realty, L.P. and CarrAmerica Realty, L.P. (in thousands):
<TABLE>
<CAPTION>
Convertible Distribution Non-Distribution
Common Stock Preferred Stock Paying Units Paying Units
Outstanding Outstanding Outstanding Outstanding
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
As of December 31,:
1997 59,994 780 5,699 540
1996 43,789 1,740 4,940 540
1995 13,409 -- 4,080 668
====== ======= ===== ===
Weighted average for:
1997 54,873 1,322 5,381 540
1996 26,932 328 4,131 872
1995 13,338 -- 4,151 668
====== ======= ===== ===
</TABLE>
Minority interest in the accompanying consolidated financial statements
relates primarily to holders of Units.
F-12
<PAGE>
(4) Investments in Unconsolidated Partnerships
The Company owns interests ranging from 5% to 50% in office properties
through unconsolidated partnerships. The Company had five investments
in 1997 and seven investments in 1996 and 1995 in these partnerships.
The combined condensed financial information for the unconsolidated
partnerships is as follows:
(in thousands)
December 31,
Balance Sheets 1997 1996
---- ----
Assets
Rental property, net $258,571 310,100
Cash and cash equivalents 14,348 15,577
Other assets 41,959 38,073
-------- -------
$314,878 363,750
======== =======
Liabilities and Accumulated Deficit
Liabilities:
Notes payable $294,328 362,849
Other liabilities 23,897 17,233
-------- -------
Total liabilities 318,225 380,082
Accumulated deficit (3,347) (16,332)
-------- -------
$314,878 363,750
======== =======
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Statements of Operations
Revenue $82,583 85,702 81,182
Depreciation and amortization expense 10,217 6,266 3,608
Interest expense 26,257 24,470 22,998
Other expenses 42,335 41,787 41,304
------- ------- ------
Net income $ 3,774 13,179 13,272
======= ======= ======
</TABLE>
(5) Lease Agreements
The following table summarizes future minimum base rent to be received
under noncancelable tenant leases and the percentage of total rentable
space under leases expiring each year, as of December 31, 1997 (in
thousands):
Percentage
Future of Total
Minimum Space Under
Rent Leases Expiring
-------------- ----------------
1998 $ 319,273 17.7%
1999 297,152 10.3
2000 268,027 13.7
2001 229,138 12.3
2002 191,538 11.3
2003 & thereafter 547,299 34.7
==========
$1,852,427
==========
The leases also provide for additional rent based on increases in the
Consumer Price Index (CPI) and increases in operating expenses. These
increases are generally payable in equal installments throughout the
year, based on estimated increases, with any differences being adjusted
in the succeeding year.
F-13
<PAGE>
(6) Preferred Stock
The Company is authorized to issue 15,000,000 shares of Preferred
Stock. On October 25, 1996, the Company issued 1,740,000 shares of
Series A Cumulative Convertible Redeemable Preferred Stock ("Series A
Preferred Stock") at $25 per share. Dividends for the Series A
Preferred Stock are cumulative from the date of issuance and are
payable quarterly in arrears in an amount per share equal to the
greater of (1) $1.75 per share per annum, or (2) the cash dividend paid
on the number of shares, or portion thereof, of the Company's common
stock into which a share of Series A Preferred Stock is convertible.
The Series A Preferred Stock has a liquidation preference of $25 per
share. After April 25, 1997, each share of Series A Preferred Stock
became convertible, at the option of the holder, into one share of the
Company's common stock, subject to certain conversion adjustments. As
of December 31, 1997, 960,000 shares of Series A Preferred Stock had
been converted into the Company's common stock. After October 25, 1999,
each outstanding share of Series A Preferred Stock is redeemable at the
Company's option, at $25 per share, plus accrued and unpaid dividends.
During 1997, the Company issued additional preferred stock as follows:
<TABLE>
<CAPTION>
Liquidation
Shares Issue Date Preference Dividend Rate
---------------------- -------------- -------------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Series B 8,000,000 August 1997 $ 25.00 8.57%
Series C 6,000,000 November 1997 $ 25.00 8.55%
Series D 2,000,000 December 1997 $ 25.00 8.45%
</TABLE>
Series C and D shares listed above are Depositary Shares, each
representing a 1/10 fractional interest in a share of preferred stock.
Dividends for the Series B, C and D shares are cumulative from the date
of issuance and are payable quarterly in arrears on the last day of
February, May, August and November of each year. These preferred shares
are redeemable at the option of the Company not prior to the following
dates:
Series B - August 12, 2002
Series C - November 6, 2002
Series D - December 19, 2002
(7) Stock/Unit Option Plans
As of December 31, 1997, the Company had three option plans: two plans
for the purpose of attracting and retaining executive officers and
other key employees (1997 Employee Stock Option and Incentive Plan and
the 1993 Employee Unit Option Plan); and the other plan for the purpose
of attracting and retaining directors who are not employees of the
Company (Non-Employee Director Stock Option Plan).
The 1997 Employee Stock Option and Incentive Plan ("Stock Option Plan")
allows for the grant of options to purchase the Company's common stock
at an exercise price which is equal to the fair market value of the
common stock at the date of grant. The Stock Option Plan was approved
by the Company's stockholders at its Annual Meeting of Stockholders on
May 8, 1997. At December 31, 1997, the Company had 3,000,000 shares of
common stock reserved for issuance under the Stock Option Plan, of
which 897,121 were outstanding. All of these options have a ten-year
term from the date of grant and vest over a five-year period, 20% per
year.
The 1993 Employee Unit Option Plan allows for the grant of options to
purchase Units of Carr Realty, L.P. (Unit options) that are exercisable
at the fair market value of the Units at the date of grant, which is
deemed to be equivalent to the fair market value of the Company's
common stock at such date. Units (following exercise of Unit options)
are redeemable for cash or common stock of the Company, at the option
of the Company.
F-14
<PAGE>
At December 31, 1997, the Company had 1,266,900 Units reserved for
issuance under the Employee Unit Option Plan, of which 827,000 were
outstanding. All of these options have a ten-year term from the date of
grant and vest over a five-year period, 20% per year.
The Non-Employee Director Stock Option Plan provides for the grant of
options to purchase the Company's common stock at an exercise price
which is equal to the fair market value of the common stock on the date
of grant. The Non-Employee Director Stock Option Plan was approved by
the Company's stockholders at its Annual Meeting of Stockholders on
April 28, 1995, following which each then-serving non-employee director
was granted options to purchase 3,000 shares of the Company's common
stock. Immediately following each annual election of directors, each
continuing non-employee director will receive options to purchase 5,000
shares of the Company's common stock. Each newly elected director will
receive options to purchase 3,000 shares of common stock. The stock
options have a 10-year term from the date of grant and vest over a
three-year period, 33 1/3% per year. At December 31, 1997, the Company
had 150,000 shares of common stock reserved for issuance under the
Non-Employee Director Stock Option Plan, of which 66,333 were
outstanding.
The per share weighted-average fair value of Unit options and stock
options granted during 1997 and 1996 was $2.84 and $2.15, respectively,
on the date of grant using the Black Scholes option-pricing model with
the following weighed-average assumptions: 1997 - expected dividend
yield of 7.36%, risk free interest rate of 6.26%, stock volatility of
19.42%, and expected option life of 5.46 years; 1996 - expected
dividend yield of 7.89%, risk free interest rate of 6.08%, stock
volatility of 19.45%, and expected option life of 4.02 years.
The Company applies APB Opinion No. 25 in accounting for its Unit
options and stock options and, accordingly, no compensation cost has
been recognized for its Unit options and stock options in the financial
statements. However, pro forma information regarding net income and
earnings per share is required by SFAS No. 123 and has been determined
as if the Company had accounted for its unit and stock options under
the fair value method. For 1997, the Company's pro forma net income and
basic EPS is $77,725 and $1.22, respectively. The pro forma effect for
1996 is insignificant. Unit option and stock option activity during
1997 and 1996 is as follows:
Number of Weighted Average
Units/Shares Exercise Price
------------ ---------------
Balance at December 31, 1995 937,348 $ 22.86
Granted 112,000 24.70
Exercised 4,000 20.75
Forfeited -- --
Expired -- --
---------
Balance at December 31, 1996 1,045,348 23.06
Granted 917,202 29.01
Exercised 96,015 23.04
Forfeited 76,081 24.09
Expired -- --
---------
Balance at December 31, 1997 1,790,454 $ 26.07
========= =======
At December 31, 1997, the range of exercise prices was between $17.75
and $30.25 per Unit/share and the weighted average remaining
contractual life of outstanding options was 7.70 years.
At December 31, 1997 and 1996, the number of options exercisable was
639,572 and 526,420, respectively, and the weighted average exercise
price of those options was $22.80 and $22.72 per Unit/share,
respectively.
F-15
<PAGE>
(8) Transactions With Affiliates
Parking Services International, Inc., a subsidiary of SC-USREALTY and
The Oliver Carr Company, both stockholders of the Company, manages
certain of the parking garages in the Company's properties for fees
ranging from 24 to 62 percent of gross receipts from garage operations.
Parking Services International, Inc. is responsible for payment of all
garage operating expenses. Parking revenue recognized is net of fees
paid to Parking Services International, Inc. of $4.5 million in 1997,
$1.9 million in 1996, and $1.8 million in 1995. Accounts receivable
includes $.8 million and $.3 million at December 31, 1997 and 1996,
respectively, due from Parking Services International, Inc.
Accounts receivable includes management and leasing fees, development
and architectural fees and payroll reimbursements receivable from
affiliates of $3.6 million at December 31, 1997 and $4.0 million at
December 31, 1996. This amount includes a leasing commission receivable
of $2.5 million at December 31, 1997 and $2.7 million at December 31,
1996, which receivable is collectible in quarterly installments of
approximately $47 thousand through September 2011. The fair market
value of this receivable is $1.5 million at December 31, 1997 and $1.6
million at December 31, 1996. The leasing commission is due from an
unconsolidated investee partnership.
The Company earned management, leasing, development and architectural
fees in 1997 and 1996 from affiliated partnerships of $7.4 million in
1997, $6.9 million in 1996, and $6.7 million in 1995.
A wholly owned subsidiary of Clark Enterprises, Inc., a Unitholder, has
provided construction management services to the Company. In connection
with these services, the Company paid $1.5 million in 1997, $1.3
million in 1996, and $.7 million in 1995. Additionally, a wholly owned
subsidiary of Clark Enterprises, Inc. received a total of $19.6 million
during the years of 1996, 1995 and 1994 under a construction contract
for the Booz-Allen & Hamilton Building (in which the Company is a 50%
joint venturer).
The Company leases office space from a partnership affiliated with The
Oliver Carr Company. Rent expense amounted to $1.2 million in 1997,
$1.1 million in 1996, and $.9 million in 1995 under the lease. Future
minimum payments under the lease are $.4 million in 1998.
The Company paid Security Capital Markets Group, Inc., an affiliate of
SC-USREALTY, a placement fee of $.4 million in 1996 for services
rendered in connection with the sale of 1,740,000 shares of Series A
Preferred Stock issued in October 1996.
During 1997 and 1996, payments of $.1 million and $1.1 million,
respectively were made to Security Capital Investment Research
Incorporated, an affiliate of SC-USREALTY, for research rendered in
connection with the acquisition of operating and development
properties.
(9) Gains/Losses From Dispositions of Assets
The Company disposed of assets that are inconsistent with its long-term
strategic or return objectives or where market conditions for sale are
favorable. The proceeds were redeployed into other office properties
(utilizing tax-deferred exchanges where possible). As such, during
1997, the Company disposed of seven properties. The Company recognized
gains totaling $5.4 million on these dispositions.
On January 31,1996, the Company terminated an agreement to acquire the
development business of The Evans Company ("Evans") and, as a result,
in 1995 the Company recognized a $1.9 million loss on its investment.
Furthermore, in 1996, the Company wrote off approximately $2.3 million
of the unamortized purchase price of certain third-party real estate
service contracts that were terminated during the year. These contracts
were acquired from Evans in 1995 and were terminated early as a result
of the sale of the properties by third-party owners.
F-16
<PAGE>
(10) Commitments and Contingencies
At December 31, 1997, the Company is contingently liable on letters
of credit amounting to approximately $1.4 million for various
completion escrows and on performance bonds amounting to approximately
$6.3 million to ensure completion of required public improvements on
its construction projects.
The Company leases certain commercial office space for its executive
suite business under non-cancelable operating leases with initial terms
ranging from 10 to 15 years, expiring through 2012. Future minimum
lease payments required under these operating leases as of December 31,
1997 were as follows:
1998 $ 13,857
1999 14,032
2000 13,732
2001 13,746
2002 11,432
2003 & thereafter 38,174
--------
$104,973
========
The Company leases land beneath two office properties located in
metropolitan Washington, D.C. The Company also leases land adjacent to
an office property in suburban Chicago. The terms of these leases range
from 5 years to 99 years, with the last lease maturing in the year
2086. The minimum base annual rental payment associated with these
leases is $1.1 million.
In September 1997, the Company entered into an agreement with a
counterparty to hedge against the impact that interest rate
fluctuations may have on debt instruments the Company issued in
February 1998. The agreement is a forward treasury lock agreement on a
notional amount of $75 million based on the 10-year U.S. Treasury Bill
at 6.415%. In February 1998, the Company paid $5.9 million to the
counterparty to unwind the agreement in connection with the sale of
$200 million of senior unsecured notes by the Company in February 1998
(see note 12). The amount paid by the Company will be deferred and
amortized over the term of the debt instruments as a component of
interest expense.
In October 1997, the Company entered into a similar agreement to
effectively fix its interest rate as of February 26, 1998, based on the
10-year U.S. Treasury Bill at 5.898% on a notional amount of $50
million. On February 18, 1998, the Company paid $1.5 million to unwind
this agreement in connection with the sale of senior unsecured notes
described above. The amount will be deferred and amortized over the
term of the senior unsecured notes.
At December 31, 1997, the amount due to the counterparty under the
forward Treasury Lock Agreements of $4.3 million has been
deferred/accrued in the Company's financial statements.
The Company has a 401(k) plan for employees that will match 50% of
employee contributions up to the first 4% of an employee's pay and will
make a base contribution of 3% of pay for participants who remain
employed on December 31 (the end of the plan year). Company
contributions to the plan are subject to a five-year graduated vesting
schedule. Company contributions to the plan amounted to $.6 million in
1997, $.3 million in 1996, and $.3 million in 1995.
In the course of the Company's normal business activities, various
lawsuits, claims and proceedings have been or may be instituted or
asserted against the Company. Based on currently available facts,
management believes that the disposition of matters that are pending or
asserted will not have a material adverse effect on the consolidated
financial position, results of operations or liquidity of the Company.
F-17
<PAGE>
(11) Acquisition and Development Activities
During 1997, the Company made the following acquisitions: in its
Pacific region, the Company acquired 51 properties containing a total
of approximately 3.3 million square feet (unaudited), for an aggregate
purchase price of approximately $464.2 million; in its Mountain region,
the Company acquired 14 properties containing a total of approximately
1.2 million square feet (unaudited), for an aggregate purchase price of
approximately $162.7 million; in its Central region, the Company
acquired 16 properties containing a total of approximately 1.6 million
square feet (unaudited), for an aggregate purchase price of
approximately $178.2 million; and in its Southeast region, the Company
acquired six properties containing a total of approximately .9 million
square feet (unaudited), for an aggregate purchase price of
approximately $101.6 million.
During 1997, the Company acquired land that will support the
development of up to 4.6 million square feet (unaudited) for an
aggregate purchase price of approximately $117.3 million. In addition,
as of December 31, 1997, the Company had 40 office properties under
construction: 1,196,000 square feet (unaudited) in its Pacific region;
425,000 square feet (unaudited) in its Mountain region; 1,194,000
square feet (unaudited) in its Central region; and 714,000 square feet
(unaudited) in its Southeast region. Costs incurred during 1997 for
properties under construction were $180.1 million. An additional $62.4
million (unaudited) is expected to be expended for completion of
projects already under construction as of December 31, 1997.
During 1997, the Company acquired the assets of OmniOffices Group, Inc.
for approximately $50 million in cash. OmniOffices, Inc. owned 28
executive suites located in 14 markets nationally.
During 1996, the Company made the following acquisitions: in its
Pacific region, the Company acquired 73 properties containing a
total of approximately 4.0 million square feet (unaudited), for an
aggregate purchase price of approximately $454.3 million; in its
Mountain region, the Company acquired 13 properties containing a total
of approximately 1.3 million square feet (unaudited), for an aggregate
purchase price of approximately $112.7 million; in its Central region,
the Company acquired 17 properties containing a total of approximately
2.1 million square feet (unaudited), for an aggregate purchase price of
approximately $243.5 million; and in its Southeast region, the Company
acquired 43 properties containing a total of approximately 1.8 million
square feet (unaudited), for an aggregate purchase price of
approximately $178.3 million.
During 1996, the Company acquired, or purchased options to acquire,
land which will support the future development of 3.2 million square
feet (unaudited) in four of its target markets: suburban Seattle;
Southeast Denver; Austin, Texas; and suburban Chicago. In addition, as
of December 31, 1996, the Company had three properties under
construction: 128,000 square feet (unaudited) in suburban Atlanta; and
two properties that will contain approximately 295,000 square feet
(unaudited) in southeast Denver (including a build-to-suit project with
189,000 rentable square feet). Land held for development was purchased
for an aggregate purchase price of $32.3 million. Costs incurred during
1996 for properties under construction were $31.7 million. An
additional $36.3 million (unaudited) is expected to be expended for
completion of projects already under construction as of December 31,
1996.
All acquisitions have been accounted for as purchases. Operations of
the properties acquired have been included in the accompanying
consolidated financial statements from their respective dates of
acquisition.
F-18
<PAGE>
The following unaudited pro forma summary presents information as if
the Company's acquisitions, sales of common and preferred stock, and
issuance of debt securities through December 31, 1997 had occurred at
the beginning of each year. The pro forma information is provided for
informational purposes only. It is based on historical information and
does not necessarily reflect the actual results that would have
occurred nor is it necessarily indicative of future results of
operations of the Company.
<TABLE>
<CAPTION>
Pro forma Information (unaudited)
(in thousands, except per share amounts)
1997 1996
----------- -----------
<S> <C> <C>
Total Revenue $ 437,818 $ 384,671
Net Income before extraordinary item $ 103,502 $ 83,000
Net Income $ 102,894 $ 82,516
Basic net income per common share $ 1.12 $ 0.78
========= =========
</TABLE>
(12) Subsequent Events
In March 1998, the Company, through its subsidiary OmniOffices, Inc.,
acquired the operations of an executive suites business for
approximately $32.5 million in cash plus warrants to purchase stock of
OmniOffices, Inc. The business has ten centers with 800 suites located
in three markets.
In March 1998, the Company loaned $51.0 million to finance the
construction of two operating office buildings located in Northern
California. The Company has the option to purchase the buildings once
construction is complete. The interest rate on the loan during the
option period ranges from 9.34% to 10.32%. If the option to purchase is
not exercised prior to March 10, 2003, the loan will bear an interest
rate of 9.0% and will mature on February 10, 2018.
In March 1998, the Company's unsecured credit facility was amended so
as to reduce the interest rate from 100 basis points over LIBOR to 90
basis points over LIBOR. The amendment also increased the Company's
availability under the facility by increasing the percentage of the
Company's unsecured properties available for draw.
In February 1998, the Company sold an aggregate principal amount of
$200 million of its long-term debt, in the form of $100 million
aggregate principal amount of 6.625% unsecured notes due in 2005 and
$100 million aggregate principal amount of 6.875% unsecured notes due
in 2008. The notes contain various covenants substantially similar to
the notes issued in June 1997. The offering raised net proceeds of $198
million which were used to acquire the suburban office properties and
land discussed below, to pay down indebtedness under the Company's
unsecured credit facility, and to cover costs relating to certain
hedging contracts entered into in September and October 1997 in
anticipation of the offering and for general corporate purposes.
From January 1, 1998, to March 1, 1998 the Company acquired eight
office properties and placed into service six office buildings. In
addition, since January 1, 1998, the Company has acquired land which is
expected to support the future development of 2.0 million square feet.
The Company paid $130.2 million to purchase the properties and land.
These acquisitions and properties placed in service added to the
Company's holdings as follows (unaudited):
<TABLE>
<CAPTION>
Buildable
Square Feet
of Land Held
Square for
# of Feet Development
Region Buildings (unaudited) (unaudited)
----------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Pacific Region 12 763,000 1,204,000
Mountain Region 1 101,000 230,000
Central Region 1 218,000 567,000
Southeast Region -- -- --
------------- ------------ -----------
Total 14 1,082,000 2,001,000
============= ============ ===========
</TABLE>
In January 1998, the Company disposed of a 267,000 square foot
(unaudited) building for $78.1 million in value and recorded a gain of
$43.8 million. The Company entered into a contract with the purchaser
F-19
<PAGE>
to continue to manage and lease the property. The proceeds of this transaction
have been used to acquire eight operating office properties. The debt formerly
secured by the property remains in place, under the same terms, with the newly
acquired properties serving as substitute collateral.
(13) Quarterly Financial Information (unaudited)
The following is a summary of quarterly results of operations for 1997
and 1996 (in thousands, except per share data):
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
1997
----
Rental revenue $ 66,289 77,688 87,855 93,670
======== ====== ====== ======
Real estate service revenue $ 4,178 3,759 3,575 4,486
======== ====== ====== ======
Real estate operating income $ 14,495 19,524 20,679 23,788
======== ====== ====== ======
Income before extraordinary item $ 13,259 18,531 19,481 27,469
======== ====== ====== ======
Net income $ 13,259 18,531 18,873 27,469
======== ====== ====== ======
Basic net income per share:
Income before extraordinary item $ 0.26 0.32 0.29 0.35
======= ====== ====== =======
Net income $ 0.26 0.32 0.28 0.35
======= ====== ====== =======
Diluted net income per share:
Income before extraordinary item $ 0.26 0.32 0.29 0.35
======= ====== ====== =======
Net income $ 0.26 0.32 0.28 0.35
======= ====== ====== =======
1996
----
Rental revenue $ 25,350 32,784 42,506 53,525
======== ====== ====== =======
Real estate service revenue $ 2,726 2,904 3,634 3,248
======== ====== ====== =======
Real estate operating income $ 4,321 5,280 8,670 11,357
======== ====== ====== =======
Income before extraordinary item $ 3,335 4,741 7,910 8,816
======== ====== ====== =======
Net income $ 3,335 4,257 7,910 8,816
======== ====== ====== =======
Basic net income per share:
Income before extraordinary item $ 0.25 0.22 0.20 0.21
======= ====== ====== =======
Net income $ 0.25 0.20 0.20 0.21
======= ====== ====== =======
Diluted net income per share:
Income before extraordinary item $ 0.25 0.22 0.20 0.20
======= ====== ====== =======
Net income $ 0.25 0.20 0.20 0.20
======= ====== ======= =======
</TABLE>
F-20
<PAGE>
INDEPENDENT AUDITORS' REPORTS
CarrAmerica Realty Corporation and Subsidiaries
- -------------------------------------------------------------------------------
The Board of Directors and Stockholders
CarrAmerica Realty Corporation:
We have audited the accompanying consolidated
balance sheets of CarrAmerica Realty Corporation
and subsidiaries as of December 31, 1997 and 1996
and the related consolidated statements of
operations, stockholders' equity, and cash flows
for each of the years in the three-year period
ended December 31, 1997. These consolidated
financial statements are the responsibility of
the Company's management. Our responsibility is
to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant
estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in
all material respects, the financial position of
CarrAmerica Realty Corporation and subsidiaries
as of December 31, 1997 and 1996, and the results
of their operations and their cash flows for each
of the years in the three-year period ended
December 31, 1997, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Washington, D.C.
February 6, 1998, except as to notes 10 and 12
which are as of March 1998
F-21
<PAGE>
INDEPENDENT AUDITORS' REPORT
CarrAmerica Realty Corporation and Subsidiaries
- -------------------------------------------------------------------------------
Board of Directors and Stockholders
CarrAmerica Realty Corporation:
Under date of February 6, 1998, we reported on
the consolidated balance sheets of CarrAmerica
Realty Corporation and subsidiaries as of
December 31, 1997 and 1996, and the related
consolidated statements of operations,
stockholders' equity, and cash flows for each
of the years in the three-year period ended
December 31, 1997, which are included in this
Form 10-K. In connection with our audits of the
aforementioned consolidated financial
statements, we also audited the related
consolidated financial statement schedule in
this Form 10-K. This financial statement
schedule is the responsibility of the Company's
management. Our responsibility is to express an
opinion on this financial statement schedule
based on our audits.
In our opinion, this financial statement
schedule, when considered in relation to the
basic consolidated financial statements taken
as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG Peat Marwick LLP
Washington, D.C.
February 6, 1998
S-1
<PAGE>
CARRAMERCA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Real Estate and Accumulated Depreciation as of December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Cost Carried at Close of Period
----------------------- ---------------------------
Costs Capitalized
Buildings and Subsequent to Buildings and
Properties Encumbrances Land Improvements Acquisition (4) Land Improvements Total
- ---------- ------------ ---- ------------ --------------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Downtown Washington, D.C.:
International Square (1) $183,500 (2) 69,651 100,921 4,097 69,651 105,018 174,669
1730 Pennsylvania Avenue, N.W. -- (2) 2,196 11,013 12,455 2,196 23,468 25,664
2550 M Street, N.W. -- 2,340 11,348 3,742 2,340 15,090 17,430
1775 Pennsylvania Avenue, N.W. 6,245 -- 19,000 1,981 -- 20,981 20,981
Presidential Plaza 16,690 1,985 13,358 1,897 1,985 15,255 17,240
1747 Pennsylvania Avenue, N.W. 15,357 1,636 8,157 5,031 1,636 13,188 14,824
1255 23rd Street (2) 10,793 40,214 4,344 10,793 44,558 55,351
2445 M Street (6) 36,890 4,530 37,439 (254) 4,530 37,185 41,715
1201 F Street (7) -- 421 -- 90 511 -- 511
Virginia:
Ballston Plaza -- 8,250 46,926 1,173 8,250 48,099 56,349
Tycon Courthouse -- 14,183 31,772 2,024 14,183 33,796 47,979
Sunrise Corporate Center -- 8,997 34,322 579 9,011 34,887 43,898
(formerly Reston Quadrangle)
Parkway One -- 2,010 4,663 112 2,013 4,772 6,785
Reston Crossing (8) -- 8,379 -- 1,358 -- 9,737 9,737
Maryland:
One Rock Spring Plaza -- -- 18,409 1,118 -- 19,527 19,527
Orange County/Los Angeles:
Plaza PacifiCare -- 3,493 6,392 57 3,493 6,449 9,942
Katella Corporate Center -- 2,671 4,314 434 2,681 4,738 7,419
Warner Center 26,000 16,490 33,698 1,841 16,509 35,520 52,029
Scenic Business Park -- 2,469 4,503 520 2,469 5,023 7,492
South Coast Executive Center 10,226 3,324 17,212 365 3,372 17,529 20,901
Harbor Corporate Park -- 2,191 5,784 1,596 2,191 7,380 9,571
Westlake Corporate Center -- 1,705 4,450 271 1,722 4,704 6,426
Warner Premier -- 3,252 6,040 94 3,285 6,101 9,386
2600 W. Olive 19,517 3,855 25,054 2,271 3,855 27,325 31,180
Bay Technology Center -- 2,442 11,164 -- 2,442 11,164 13,606
Von Karman -- 3,731 12,493 121 3,744 12,601 16,345
Pacific Corporate Plaza -- 5,756 -- 13 5,769 -- 5,769
San Diego:
Del Mar Corporate Center -- 2,860 13,252 77 2,869 13,320 16,189
Wateridge Pavilion 3,530 881 5,509 93 894 5,589 6,483
Century Park II -- 4,863 16,207 -- 4,863 16,207 21,070
Lightspan -- 1,438 5,710 720 1,439 6,429 7,868
Towne Center Technology Park -- 2,522 -- 1,352 -- 3,874 3,874
(formerly Eastgate
Technology Park) (8)
Towne Center Technology Park -- 2,407 -- -- 2,407 -- 2,407
(formerly Eastgate
Technology Park)
San Francisco Bay Area:
CarrAmerica Corporate Center -- 32,946 75,720 4,911 32,949 80,628 113,577
(formerly AT&T Center)
Sunnyvale Research Plaza -- 5,082 11,191 172 5,101 11,344 16,445
Valley Business Park I 43,773 (3) 3,859 3,155 138 3,865 3,287 7,152
(formerly San Jose Orchard
Business Park - A)
Valley Business Park II -- 8,753 7,155 342 8,765 7,485 16,250
(formerly San Jose Orchard
Business Park - B)
Valley Centre (formerly -- 6,051 4,945 76 6,059 5,013 11,072
Orchard Center)
</TABLE>
<PAGE>
Accumulated Date of Year of
Properties Depreciation Construction Acquisition
- ---------- ------------ ------------ -----------
Downtown Washington, D.C.:
International Square (1) 51,481 1977,1979,1982 1993
1730 Pennsylvania Avenue, N.W. 9,595 1972 1993
2550 M Street, N.W. 7,778 1978 1993
1775 Pennsylvania Avenue, N.W. 2,030 1975 1994
Presidential Plaza 5,493 1986 1993
1747 Pennsylvania Avenue, N.W. 5,529 1970 1993
1255 23rd Street 15,009 1983 1993
2445 M Street (6) 11,109 1986 1993
1201 F Street (7) -- N/A 1997
Virginia:
Ballston Plaza 7,997 1991 1994
Tycon Courthouse 2,412 1983 1995
Sunrise Corporate Center 2,304 1987-1989 1996
(formerly Reston Quadrangle)
Parkway One 414 1985 1996
Reston Crossing (8) -- N/A 1997
Maryland:
One Rock Spring Plaza 3,131 1989 1995
Orange County/Los Angeles:
Plaza PacifiCare 415 1986 1996
Katella Corporate Center 286 1982 1996
Warner Center 2,376 1981-1985 1996
Scenic Business Park 467 1985 1996
South Coast Executive Center 680 1987 1996
Harbor Corporate Park 561 1987 1996
Westlake Corporate Center 110 1986 1997
Warner Premier 215 1990 1997
2600 W. Olive 219 1986 1997
Bay Technology Center 16 1985 1997
Von Karman 198 1981 1997
Pacific Corporate Plaza -- N/A 1997
San Diego:
Del Mar Corporate Center 673 1986 1996
Wateridge Pavilion 166 1987 1997
Century Park II -- 1986 1997
Lightspan 129 1985 1997
Towne Center Technology Park -- N/A 1997
(formerly Eastgate Technology
Park) (8)
Towne Center Technology Park -- N/A 1997
(formerly Eastgate
Technology Park)
San Francisco Bay Area:
CarrAmerica Corporate Center 14,292 1988 1996
(formerly AT&T Center)
Sunnyvale Research Plaza 777 1985 1996
Valley Business Park I 134 1981 1996
(formerly San Jose Orchard
Business Park - A)
Valley Business Park II 307 1979 1996
(formerly San Jose Orchard
Business Park - B)
Valley Centre (formerly 211 1980 1996
Orchard Center)
S-2
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Cost Carried at Close of Period
----------------------- ----------------------------
Costs Capitalized
Buildings and Subsequent to Buildings and
Properties Encumbrances Land Improvements Acquisition (4) Land Improvements Total
- ---------- ------------ ---- ------------ --------------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Valley Office Centre (3) 6,134 5,014 99 6,142 5,105 11,247
(formerly Orchard Office Center)
Valley Centre II (formerly (3) 13,658 11,164 (341) 13,676 10,805 24,481
Orchard Center II)
Rincon Centre (formerly (3) 12,464 10,188 366 12,480 10,538 23,018
Orchard Rincon Center)
Bayshore Centre (formerly (3) 17,545 14,342 842 17,569 15,160 32,729
Orchard Bayshore Center)
3745 North First Street -- 3,388 4,884 216 3,411 5,077 8,488
Mission Plaza -- 3,978 6,280 85 4,010 6,333 10,343
North San Jose Technology -- 9,124 21,681 272 9,169 21,908 31,077
Park (formerly Fortran)
150 River Oaks -- 6,409 8,698 83 6,444 8,746 15,190
Foster City Technology Center -- 3,986 5,614 383 4,014 5,969 9,983
Rio Robles -- 16,655 29,598 413 16,669 29,997 46,666
San Mateo II & III -- 9,723 15,556 100 9,755 15,624 25,379
3571 North First Street -- 6,297 8,862 70 6,326 8,903 15,229
San Mateo I -- 5,703 9,126 -- 5,703 9,126 14,829
900-910 East Hamilton -- 28,264 52,993 -- 28,264 52,993 81,257
Amador I/Rinconda, Amador -- 14,448 24,706 115 14,490 24,779 39,269
III, Arroyo Center
Baytech Business Park (8) -- 14,958 -- 18,654 -- 33,612 33,612
Oakmead West (8) -- 22,842 -- 12,082 -- 34,924 34,924
Sacramento:
1860 Howe Avenue -- 2,824 8,944 98 2,843 9,023 11,866
University Park -- 3,217 10,185 358 3,239 10,521 13,760
Capital Corporate Center -- 2,189 6,932 69 2,205 6,985 9,190
Southeast Denver:
Quebec Center -- 1,423 5,659 419 1,423 6,078 7,501
Greenwood Center -- 289 6,619 151 289 6,770 7,059
Quebec Court I & II -- 2,368 19,819 564 2,371 20,380 22,751
Harlequin Plaza -- 4,746 21,344 1,700 4,748 23,042 27,790
Panorama Corporate Center III (8) -- 1,541 -- 9,887 -- 11,428 11,428
Panorama Phase IV-VII -- 4,962 -- 5,125 10,087 -- 10,087
JD Edwards -- 3,006 5,479 19,173 3,242 24,416 27,658
Panorama Corporate Center I -- 1,325 6,486 1,712 1,325 8,198 9,523
Panorama Corporate Center II (8) -- 1,844 -- 8,190 -- 10,034 10,034
Marriott Tract -- 4,060 -- 55 4,115 -- 4,115
Suburban Seattle:
Redmond East 27,724 6,957 32,390 676 6,972 33,051 40,023
Redmond Hilltop (8) -- 2,511 -- 5,114 -- 7,625 7,625
Canyon Park -- 5,748 23,624 200 5,782 23,790 29,572
Canyon Park-Land -- 5,112 -- 513 5,625 -- 5,625
Canyon Park Commons 5,822 2,375 9,958 -- 2,375 9,958 12,333
(formerly Tract 17)
Willow Creek Corporate -- 1,709 6,972 79 1,724 7,036 8,760
Center (formerly Data I/O)
Willow Creek Corporate -- 3,029 -- -- 3,029 -- 3,029
Center (formerly Data I/O) (8)
Willow Creek Corporate Center -- 3,456 -- 14,640 -- 18,096 18,096
(formerly Data I/O)
</TABLE>
<PAGE>
Accumulated Date of Year of
Properties Depreciation Construction Acquisition
- ---------- ------------ ------------ -----------
Valley Office Centre 191 1981 1996
(formerly Orchard Office Center)
Valley Centre II (formerly 502 1980 1996
Orchard Center II)
Rincon Centre (formerly 560 1984 1996
Orchard Rincon Center)
Bayshore Centre (formerly 841 1984 1996
Orchard Bayshore Center)
3745 North First Street 156 1984 1997
Mission Plaza 299 1985 1997
North San Jose Technology 913 1984 1997
Park (formerly Fortran)
150 River Oaks 182 1984 1997
Foster City Technology Center 152 1988 1997
Rio Robles 1,128 1985 1996
San Mateo II & III 239 1985 1997
3571 North First Street 136 1985 1997
San Mateo I 63 1986 1997
900-910 East Hamilton 74 1989 1997
Amador I/Rinconda, Amador 310 1983 1997
III, Arroyo Center
Baytech Business Park (8) -- N/A 1997
Oakmead West (8) -- N/A 1997
Sacramento:
1860 Howe Avenue 113 1983 1997
University Park 133 1981 1997
Capital Corporate Center 87 1985 1997
Southeast Denver:
Quebec Center 432 1985 1996
Greenwood Center 375 1982 1996
Quebec Court I & II 1,474 1979/1980 1996
Harlequin Plaza 1,519 1981 1996
Panorama Corporate Center III (8) -- 1996 1996
Panorama Phase IV-VII -- N/A 1996
JD Edwards 371 N/A 1996
Panorama Corporate Center I 455 N/A 1996
Panorama Corporate Center II (8) -- N/A 1996
Marriott Tract -- N/A 1997
Suburban Seattle:
Redmond East 2,566 1988-1992 1996
Redmond Hilltop (8) -- N/A 1996
Canyon Park 461 1989 1997
Canyon Park-Land -- N/A 1997
Canyon Park Commons 62 1988 1997
(formerly Tract 17)
Willow Creek Corporate 146 1981 1997
Center (formerly Data I/O)
Willow Creek Corporate -- N/A 1997
Center (formerly Data I/O) (8)
Willow Creek Corporate Center -- N/A 1997
(formerly Data I/O)
S-3
<PAGE>
CARRAMERCA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Real Estate and Accumulated Depreciation as of December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Cost Carried at Close of Period
----------------------- -----------------------------
Costs Capitalized
Buildings and Subsequent to Buildings and
Properties Encumbrances Land Improvements Acquisition (4) Land Improvements Total
- ---------- ------------ ---- ------------- --------------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Salt Lake City, Utah:
Sorenson Research Park 4,418 4,389 25,304 291 4,423 25,561 29,984
Wasatch Corporate Center 12,834 3,318 15,495 68 3,326 15,555 18,881
(formerly Draper Park North)
Wasatch Corporate Center -- 1,268 -- 878 -- 2,146 2,146
(formerly Draper Park North) (8)
Wasatch Corporate Center -- 1,368 -- -- 1,368 -- 1,368
(formerly Draper Park North)
Sorenson Research Park -- 2,262 -- 183 2,445 -- 2,445
Suburban Chicago:
Parkway North I 29,250 3,727 29,146 598 3,733 29,738 33,471
Parkway North III & IV -- 4,304 34,390 1,024 4,310 35,408 39,718
Unisys -- 6,387 45,111 1,383 6,346 46,535 52,881
Parkway North III - Land -- 6,807 -- 3,170 9,977 -- 9,977
Parkway North III - Land (8) -- 2,003 -- 1,573 -- 3,576 3,576
The Crossings -- 5,268 34,215 1,566 5,289 35,760 41,049
Bannockburn IV -- 1,914 12,729 160 1,924 12,879 14,803
Summit Oaks -- 949 7,285 290 952 7,572 8,524
Bannockburn I & II 20,464 3,448 22,928 694 3,472 23,598 27,070
Austin, Texas:
Balcones Center -- 949 7,649 128 949 7,777 8,726
Great Hills Plaza -- 1,680 13,545 393 1,680 13,938 15,618
Park North -- 1,671 13,471 442 1,671 13,913 15,584
City View Centre (formerly -- 1,718 13,854 631 1,718 14,485 16,203
The Setting I, II & III)
Tower of the Hills -- 1,633 13,625 22 1,633 13,647 15,280
Riata Buildings 4,5,8,9 (8) -- 3,976 - 10,384 -- 14,360 14,360
Riata -- 6,145 -- -- 6,145 -- 6,145
City View Centre (8) -- 1,890 -- 12,034 -- 13,924 13,924
Braker Pointe (formerly -- 6,602 -- 691 7,293 -- 7,293
Mopac at Braker, formerly
Aubrey Smith)
Dallas, Texas:
Greyhound -- 1,312 7,999 90 1,321 8,080 9,401
Search Plaza -- 1,822 13,362 171 1,827 13,528 15,355
Quorum North 6,658 1,357 9,078 548 1,365 9,618 10,983
Quorum Place 7,719 1,941 14,234 902 1,954 15,123 17,077
Tollhill East & West -- 2,603 19,086 1,239 2,612 20,316 22,928
Two Mission Park -- 823 4,320 172 829 4,486 5,315
Cedar Maple Plaza -- 1,220 10,982 248 1,225 11,225 12,450
Cedar Maple Plaza-Land -- 520 -- 49 569 -- 569
Tollway I & II (8) -- 2,960 -- 7,280 -- 10,240 10,240
Tollway III -- 2,522 -- 160 2,682 -- 2,682
Royal Ridge (8) -- 3,159 -- 721 -- 3,880 3,880
Phoenix, Arizona:
Camelback Lakes -- 5,476 21,365 (3,746) 4,565 18,530 23,095
Highland Park -- 1,956 5,544 181 1,968 5,713 7,681
The Grove @ Black Canyon -- 1,748 9,658 453 1,748 10,111 11,859
(formerly Cigna Health Care)
U.S. West 69,146 18,517 74,069 -- 18,517 74,069 92,586
Pointe Corridor IV -- 2,396 12,580 485 2,403 13,058 15,461
Gateway Plaza (8) -- 3,420 -- 2,161 -- 5,581 5,581
</TABLE>
<PAGE>
Accumulated Date of Year of
Properties Depreciation Construction Acquisition
- ---------- ------------ ------------ -----------
Salt Lake City, Utah:
Sorenson Research Park 604 1988,1989,1993, 1997
1995, 1997
Wasatch Corporate Center 281 1996 1997
(formerly Draper Park North)
Wasatch Corporate Center N/A 1997
(formerly Draper Park North) (8)
Wasatch Corporate Center -- N/A 1997
(formerly Draper Park North)
Sorenson Research Park -- N/A 1997
Suburban Chicago:
Parkway North I 1,726 1986-1989 1996
Parkway North III & IV 2,778 1986-1989 1996
Unisys 1,696 1984-1985 1996
Parkway North III - Land -- N/A 1996
Parkway North III - Land (8) -- N/A 1996
The Crossings 1,329 1985 1997
Bannockburn IV 232 1988 1997
Summit Oaks 150 1982 1997
Bannockburn I & II 702 1980 1997
Austin, Texas:
Balcones Center 449 1985 1996
Great Hills Plaza 961 1985 1996
Park North 769 1981 1996
City View Centre (formerly 936 1985 1996
The Setting I, II & III)
Tower of the Hills 19 1986 1997
Riata Buildings 4,5,8,9 (8) -- N/A 1997
Riata -- N/A 1996
City View Centre (8) -- N/A 1996
Braker Pointe (formerly -- N/A 1997
Mopac at Braker, formerly
Aubrey Smith)
Dallas, Texas:
Greyhound 303 1962 1996
Search Plaza 469 1985 1996
Quorum North 274 1983 1997
Quorum Place 420 1981 1997
Tollhill East & West 502 1974 1997
Two Mission Park 71 1983 1997
Cedar Maple Plaza 367 1985 1997
Cedar Maple Plaza-Land -- N/A 1997
Tollway I & II (8) -- N/A 1997
Tollway III -- N/A 1997
Royal Ridge (8) -- N/A 1997
Phoenix, Arizona:
Camelback Lakes 835 1982 1996
Highland Park 138 1986 1997
The Grove @ Black Canyon 45 1986 1997
(formerly Cigna Health Care)
U.S. West 98 1988 1997
Pointe Corridor IV 657 1990 1996
Gateway Plaza (8) -- N/A 1997
S-4
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Initial Cost Carried at Close of Period
--------------------- --------------------------------
Costs Capitalized
Buildings and Subsequent to Buildings and
Properties Encumbrances Land Improvements Acquisition (4) Land Improvements Total
- ---------- ------------ ---- ------------- --------------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Suburban Portland:
Radisys Corporate -- 1,448 7,518 49 1,456 7,559 9,015
Headquarters
Radisys II -- 926 -- 4,612 798 4,740 5,538
Suburban Atlanta:
Veridian -- 2,730 13,308 (5,064) 1,766 9,208 10,974
Century Springs West 21,464 (5) 1,642 7,646 (1,727) 1,280 6,281 7,561
Glenridge (5) 1,423 4,870 (350) 1,292 4,651 5,943
Crestwood (5) 1,423 7,306 847 1,543 8,033 9,576
Midori -- 1,802 6,715 2,798 2,320 8,995 11,315
Triangle Parkway (formerly -- 1,365 5,449 (690) 1,188 4,936 6,124
Spalding Triangle)
Summit -- 2,237 15,027 367 2,241 15,390 17,631
Holcomb Place -- 1,419 4,574 101 1,421 4,673 6,094
DeKalb Tech -- 1,090 7,662 80 1,092 7,740 8,832
Parkwood (5) 2,080 12,678 2,731 2,362 15,127 17,489
Lakewood (5) 1,040 6,789 299 1,049 7,079 8,128
Spalding Ridge (8) -- 1,550 4,950 8,020 -- 14,520 14,520
2400 Lake Park Drive -- 805 6,539 234 812 6,766 7,578
680 Engineering Drive -- 559 3,420 340 563 3,756 4,319
Embassy Row -- 7,916 36,907 1,683 7,959 38,547 46,506
Embassy Row-Land -- 1,868 -- -- 1,868 -- 1,868
Embassy Row - Land (8) -- 2,460 -- 2,157 -- 4,617 4,617
Preston Ridge -- 1,993 -- 89 2,082 -- 2,082
Boca Raton Florida:
Peninsula Plaza (Formerly -- 3,003 10,475 4,353 3,745 14,086 17,831
Lake Wyman Plaza)
Presidential Circle 23,418 7,074 35,370 1 7,074 35,371 42,445
Peninsula Executive Center -- 5,962 -- 2,693 -- 8,655 8,655
(formerly Glades Site) (8)
Peninsula Corporate Center -- 12,020 -- 981 13,001 -- 13,001
(formerly Knight Site)
Tampa, Florida
Rocky Point Plaza -- 2,667 -- 7 2,674 -- 2,674
------- ------- --------- ------- ------- --------- ---------
Subtotal 590,645 714,609 1,732,834 229,701 639,183 2,037,961 2,677,144
OmniOffices, Inc. 3,801 -- 10,198 2,157 -- 12,355 12,355
------- ------- --------- ------- ------- --------- ---------
Total 594,446 714,609 1,743,032 231,858 639,183 2,050,316 2,689,499
======= ======= ========= ======= ======= ========= =========
</TABLE>
<PAGE>
Accumulated Date of Year of
Properties Depreciation Construction Acquisition
- ---------- ------------ ------------ -----------
Suburban Portland:
Radisys Corporate 199 1996 1997
Headquarters
Radisys II 9 1997 1997
Suburban Atlanta:
Veridian 347 1976 1996
Century Springs West 247 1982 1996
Glenridge 190 1986 1996
Crestwood 308 1986 1996
Midori 334 1989 1996
Triangle Parkway (formerly 175 1988 1996
Spalding Triangle)
Summit 576 1986 1996
Holcomb Place 178 1982 1996
DeKalb Tech 285 1985 1996
Parkwood 571 1985 1996
Lakewood 270 1985 1996
Spalding Ridge (8) -- N/A 1996
2400 Lake Park Drive 172 1982 1997
680 Engineering Drive 158 1985 1997
Embassy Row 1,198 1983 1997
Embassy Row-Land -- N/A 1997
Embassy Row - Land (8) -- N/A 1997
Preston Ridge -- N/A 1997
Boca Raton Florida: 1997
Peninsula Plaza (formerly 616 1988 1996
Lake Wyman Plaza)
Presidential Circle 245 1989 1997
Peninsula Executive Center -- N/A 1997
(formerly Glades Site) (8)
Peninsula Corporate Center -- N/A 1997
(formerly Knight Site)
Tampa, Florida:
Rocky Point Plaza -- N/A 1997
-------
Subtotal 183,343
OmniOffices, Inc. 923 N/A 1997
-------
Total 184,266
=======
<PAGE>
Depreciation and amortization of the investment in building and improvements
reflected in the statements of operations are calculated over the estimated
lives of the assets as follows:
Base Building 30 to 50 years
Building components 7 to 20 years
Tenant improvements Terms of leases or useful lives,
whichever is shorter
Furniture, fixtures and equipment 5 to 15 years
The aggregate cost for federal income tax purposes was approximately $2,549,405
at December 31, 1997.
S-5
<PAGE>
CARRAMERCA REALTY CORPORATION AND SUBSIDIARIES
Consolidated Real Estate and Accumulated Depreciation as of December 31, 1997
- --------------------------------------------------------------------------------
The changes in total real estate assets and accumulated depreciation and
amortization for the three years ended December 31, 1997, 1996, and 1995 are as
follows:
<TABLE>
<CAPTION>
Total Real Estate Assets Accumulated Depreciation
------------------------------ --------------------------
1997 1996 1995 1997 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, beginning of period $1,539,998 $ 480,589 $429,537 Balance, beginning of period $119,657 $ 98,873 $88,408
Acquisitions 1,023,070 1,050,227 65,783
Improvements 186,541 20,536 3,029 Depreciation for the period 67,353 32,078 10,465
Retirements and write-offs (60,110) (11,354) (17,760) Retirements and write-offs (2,744) (11,294) --
---------- ---------- -------- -------- -------- -------
$2,689,499 $1,539,998 $480,589 $184,266 $119,657 $98,873
========== ========== ======== ======== ======== =======
</TABLE>
- ---------------------
Notes:
(1) Represents 3 properties: 1850 K Street, N.W., 1875 Eye Street, N.W., and
1825 Eye Street, N.W.
(2) Consists of four loans secured by International Square, 1730 Pennsylvania
Avenue & 1255 23rd Street.
(3) Secured by Valley Business Park I (formerly San Jose Orchard Business Park
- A), Valley Office Centre (formerly Orchard Office Center), Valley Centre
II (formerly Orchard Center II), Rincon Centre (formerly Orchard Rincon
Center) and Bayshore Centre (formerly Orchard Bayshore Center).
(4) Costs capitalized are offset by retirements and write-offs.
(5) Secured by Century Springs West, Glenridge, Crestwood, Lakewood and
Parkwood.
(6) Includes the effect of consolidating 2445 M Street, NW, effective January
1, 1994.
(7) Represents cost of options to acquire land for future development.
(8) Under construction as of December 31, 1997. Construction costs are shown
under buildings and improvements until completion. At that time, costs will
be allocated between land and buildings and improvements.
S-6
EXHIBIT 4.2
CARRAMERICA REALTY CORPORATION, AS ISSUER
CARRAMERICA REALTY L.P., AS GUARANTOR
AND
BANKERS TRUST COMPANY, AS TRUSTEE
------------------------
INDENTURE
DATED AS OF FEBRUARY 23, 1998
------------------------------------------------------
$100,000,000 6.625% Notes due 2005
$100,000,000 6.875% Notes due 2008
------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................ 1
SECTION 101. Definitions................................................................... 1
Acquired Indebtedness............................................................... 2
Acquisition Lines of Credit......................................................... 2
Act................................................................................. 2
Additional Amounts.................................................................. 2
Adjusted Total Assets............................................................... 2
Affiliate........................................................................... 2
Annual Service Charge............................................................... 2
Applicable Procedures............................................................... 2
Authenticating Agent................................................................ 2
Authorized Newspaper................................................................ 2
Bankruptcy Law...................................................................... 3
Board of Directors.................................................................. 3
Board Resolution.................................................................... 3
Business Day........................................................................ 3
Capital Stock....................................................................... 3
Commission.......................................................................... 3
Company............................................................................. 3
Company Request..................................................................... 3
Consolidated Income Available for Debt Service...................................... 3
Consolidated Net Income............................................................. 3
Corporate Trust Office.............................................................. 4
Corporation......................................................................... 4
Custodian........................................................................... 4
Defaulted Interest.................................................................. 4
Defubutuve Note..................................................................... 4
Disqualified Stock.................................................................. 4
DTC................................................................................. 4
Dollar.............................................................................. 4
Earnings from Operations............................................................ 4
Encumbrance......................................................................... 4
Event of Default.................................................................... 4
Exchange Act........................................................................ 5
Exchange Notes...................................................................... 5
Exchange Offer...................................................................... 5
Exchange Registration Statement..................................................... 5
GAAP................................................................................ 5
Global Note......................................................................... 5
Government Obligations.............................................................. 5
Guaranteed Obligations.............................................................. 6
Guarantor........................................................................... 6
Holder.............................................................................. 6
Indebtedness........................................................................ 6
Indenture........................................................................... 6
<PAGE>
Indexed Security.................................................................... 6
Indirect Participant................................................................ 7
Initial Notes....................................................................... 7
Initial Purchasers.................................................................. 7
Interest Payment Date............................................................... 7
Letter of Transmittal............................................................... 7
Make-Whole Amount................................................................... 7
Maturity............................................................................ 7
Non-Recourse Indebtedness........................................................... 7
Notes............................................................................... 7
Officers' Certificate............................................................... 7
144A Global Note.................................................................... 8
Opinion of Counsel.................................................................. 8
Outstanding......................................................................... 8
Participant...........................................................................8
Paying Agent........................................................................ 8
Person.............................................................................. 8
Place of Payment.................................................................... 8
Predecessor Note.................................................................... 9
Private Exchange.................................................................... 9
Private Exchane Notes............................................................... 9
Real Property Assets................................................................ 9
Recourse Indebtedness............................................................... 9
Redemption Date..................................................................... 9
Redemption Price.................................................................... 9
Registered Note..................................................................... 9
Registration Rights Agreement....................................................... 9
Registration Statement.............................................................. 9
Regular Record Date................................................................. 10
Reinvestment Rate................................................................... 10
Responsible Officer................................................................. 10
Restricted Definitive Note.......................................................... 10
Restricted Global Note.............................................................. 10
Restricted Securities Legends....................................................... 10
Securities Act...................................................................... 10
Security Register................................................................... 10
Shelf Registration.................................................................. 10
Significant Subsidiary.............................................................. 11
Special Record Date................................................................. 11
Stated Maturity..................................................................... 11
Statistical Release................................................................. 11
Subsidiary.......................................................................... 11
Total Assets........................................................................ 11
Total Unencumbered Assets........................................................... 11
Trust Indenture Act................................................................. 11
Trustee............................................................................. 11
2005 Initial Notes.................................................................. 12
2008 Initial Notes.................................................................. 12
2005 Notes.......................................................................... 12
2008 Notes.......................................................................... 12
Undepreciated Real Estate Assets.................................................... 12
Unrestricted Definitive Note........................................................ 12
Unrectricted Global Note............................................................ 12
Unsecured Indebtedness.............................................................. 12
United States....................................................................... 12
United States person................................................................ 12
Yield to Maturity................................................................... 12
SECTION 102. Compliance Certificates and Opinions.......................................... 12
SECTION 103. Form of Documents Delivered to Trustee........................................ 13
SECTION 104. Acts of Holders............................................................... 13
SECTION 105. Notices, etc., to Trustee and Company......................................... 15
SECTION 106. Notice to Holders; Waiver..................................................... 15
SECTION 107. Effect of Headings and Table of Contents...................................... 15
SECTION 108. Successors and Assigns........................................................ 16
<PAGE>
SECTION 109. Separability Clause........................................................... 16
SECTION 110. Benefits of Indenture......................................................... 16
SECTION 111. No Personal Liability......................................................... 16
SECTION 112. Governing Law................................................................. 16
SECTION 113. Legal Holidays................................................................ 16
ARTICLE II
FORMS OF NOTES............................................. 16
SECTION 201. Forms of Notes................................................................ 16
SECTION 202. Form of Trustee's Certificate of Authentication............................... 17
SECTION 203. Notes Issuable in Global Form................................................. 17
ARTICLE III
THE NOTES................................................ 18
SECTION 301. Terms of the Notes............................................................ 18
SECTION 302. Denominations................................................................. 19
SECTION 303. Execution, Authentication, Delivery and Dating................................ 19
SECTION 304. Temporary Notes............................................................... 21
SECTION 305. Registration, Registration of Transfer and Exchange........................... 21
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes................................... 34
SECTION 307. Payment of Interest; Interest Rights Preserved................................ 34
SECTION 308. Persons Deemed Owners......................................................... 36
SECTION 309. Cancellation.................................................................. 36
SECTION 310. Computation of Interest....................................................... 37
ARTICLE IV
SATISFACTION AND DISCHARGE...................................... 37
SECTION 401. Satisfaction and Discharge of Indenture....................................... 37
SECTION 402. Application of Trust Funds.................................................... 38
ARTICLE V
REMEDIES................................................ 38
SECTION 501. Events of Default............................................................. 38
SECTION 502. Acceleration of Maturity; Rescission and Annulment............................ 40
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............... 41
SECTION 504. Trustee May File Proofs of Claim.............................................. 42
SECTION 505. Trustee May Enforce Claims Without Possession of Notes........................ 42
SECTION 506. Application of Money Collected................................................ 43
SECTION 507. Limitation on Suits........................................................... 43
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium or
Make-Whole Amount, if any, Interest and Additional Amounts.................... 44
SECTION 509. Restoration of Rights and Remedies............................................ 44
SECTION 510. Rights and Remedies Cumulative................................................ 44
SECTION 511. Delay or Omission Not Waiver.................................................. 44
<PAGE>
SECTION 512. Control by Holders of Notes................................................... 44
SECTION 513. Waiver of Past Defaults....................................................... 45
SECTION 514. Waiver of Usury, Stay or Extension Laws....................................... 45
SECTION 515. Undertaking for Costs......................................................... 45
ARTICLE VI
THE TRUSTEE............................................... 46
SECTION 601. Notice of Defaults............................................................ 46
SECTION 602. Certain Rights of Trustee..................................................... 46
SECTION 603. Not Responsible for Recitals or Issuance of Notes............................. 48
SECTION 604. May Hold Notes................................................................ 48
SECTION 605. Money Held in Trust........................................................... 48
SECTION 606. Compensation and Reimbursement................................................ 48
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests................ 49
SECTION 608. Resignation and Removal; Appointment of Successor............................. 50
SECTION 609. Acceptance of Appointment by Successor........................................ 51
SECTION 610. Merger, Conversion, Consolidation or Succession to Business................... 52
SECTION 611. Appointment of Authenticating Agent........................................... 52
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY........................ 54
SECTION 701. Disclosure of Names and Addresses of Holders.................................. 54
SECTION 702. Reports by Trustee............................................................ 54
SECTION 703. Reports by Company............................................................ 54
SECTION 704. The Company to Furnish Trustee Names and Addresses of Holders................. 55
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE.......................... 55
SECTION 801. Consolidations and Mergers of the Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions....................... 55
SECTION 802. Rights and Duties of Successor Entity......................................... 56
SECTION 803. Officers' Certificate and Opinion of Counsel.................................. 56
ARTICLE IX
SUPPLEMENTAL INDENTURES....................................... 56
SECTION 901. Supplemental Indentures without Consent of Holders............................ 56
SECTION 902. Supplemental Indentures with Consent of Holders............................... 58
SECTION 903. Execution of Supplemental Indentures.......................................... 59
SECTION 904. Effect of Supplemental Indentures............................................. 59
SECTION 905. Conformity with TIA........................................................... 59
SECTION 906. Reference in Notes to Supplemental Indentures................................. 59
<PAGE>
ARTICLE X
COVENANTS............................................... 59
SECTION 1001. Payment of Principal, Premium (if any), Make-Whole Amount (if
any), Interest and Additional Amounts (if any)........................... 59
SECTION 1002. Maintenance of Office or Agency.............................................. 60
SECTION 1003. Money for Notes Payments to Be Held in Trust................................. 60
SECTION 1004. Limitations on Incurrence of Indebtedness.................................... 61
SECTION 1005. [Omitted].................................................................... 63
SECTION 1006. Existence.................................................................... 63
SECTION 1007. Maintenance of Properties.................................................... 63
SECTION 1008. Insurance.................................................................... 63
SECTION 1009. Payment of Taxes and Other Claims............................................ 63
SECTION 1010. Provision of Financial Information........................................... 63
SECTION 1011. Statement as to Compliance................................................... 64
SECTION 1012. Additional Amounts........................................................... 64
SECTION 1013. Waiver of Certain Covenants.................................................. 65
ARTICLE XI
REDEMPTION OF NOTES......................................... 65
SECTION 1101. Applicability of Article..................................................... 65
SECTION 1102. Election to Redeem; Notice to Trustee........................................ 65
SECTION 1103. Selection by Trustee of Notes to Be Redeemed................................. 66
SECTION 1104. Notice of Redemption......................................................... 66
SECTION 1105. Deposit of Redemption Price.................................................. 67
SECTION 1106. Notes Payable on Redemption Date............................................. 67
SECTION 1107. Notes Redeemed in Part....................................................... 67
ARTICLE XII
GUARANTY................................................ 68
SECTION 1201. Guaranty..................................................................... 68
SECTION 1202. Guaranty Absolute............................................................ 68
SECTION 1203. Waivers...................................................................... 69
SECTION 1204. Waiver of Subrogation and Contribution....................................... 70
SECTION 1205. Certain Agreements........................................................... 71
SECTION 1206. No Waiver; Cumulative Remedies............................................... 72
SECTION 1207. Continuing Guaranty.......................................................... 72
SECTION 1208. Severability................................................................. 73
SECTION 1209. Limitation on Guarantor Liability............................................ 73
ARTICLE XIII
[OMITTED]............................................... 73
<PAGE>
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE.................................. 73
SECTION 1401. Applicability of Article; Company's Option to Effect Defeasance or
Covenant Defeasance...................................................... 73
SECTION 1402. Defeasance and Discharge..................................................... 73
SECTION 1403. Covenant Defeasance.......................................................... 74
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.............................. 74
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions........................................... 76
ARTICLE XV
MEETINGS OF HOLDERS OF NOTES ................................. 76
SECTION 1501. Purposes for Which Meetings May Be Called.................................... 76
SECTION 1502. Call, Notice and Place of Meetings........................................... 76
SECTION 1503. Persons Entitled to Vote at Meetings......................................... 77
SECTION 1504. Quorum; Action............................................................... 77
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings................................................................. 78
SECTION 1506. Counting Votes and Recording Action of Meetings.............................. 79
SECTION 1507. Evidence of Action Taken by Holders.......................................... 79
SECTION 1508. Proof of Execution of Instruments............................................ 79
ANNEX A.................................................................................... A-1
ANNEX B.................................................................................... B-1
ANNEX C.................................................................................... C-1
ANNEX D.................................................................................... D-1
</TABLE>
<PAGE>
CarrAmerica Realty Corporation, as Obligor
Reconciliation and tie between Trust Indenture Act of 1939 (the "1939 Act")
and this Indenture, dated as of February 23, 1998.
Trust Indenture Act Section Indenture Section
ss. 310 (a) (1)........................................... 607
(a) (2)........................................... 607
(b)........................................... 607, 608
ss. 312 (c)............................................... 701
ss. 313 (a)............................................... 70
(c)............................................... 702
ss. 314 (a)............................................... 703
(a) (4)........................................... 1011
(c) (1)........................................... 102
(c) (2)........................................... 102
(e)............................................... 102
ss. 315 (b)............................................... 601
ss. 316 (a) (last sentence)............................... 101 ("Outstanding")
(a) (1) (A)....................................502, 512
(a) (1) (B)....................................... 513
(b)............................................... 508
ss. 317 (a) (1)........................................... 503
(a) (2)........................................... 504
ss. 318 (a)............................................... 111
(c)............................................... 111
- ----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
Attention should also be directed to Section 318 (c) of the 1939
Act, which provides that the provisions of Sections 310 to and including
317 of the 1939 Act are a part of and govern every qualified indenture,
whether or not physically contained therein.
<PAGE>
Indenture (this "Indenture"), dated as of February 23, 1998, by and among
CARRAMERICA REALTY CORPORATION, a Maryland corporation (the "Company"), having
its principal office at 1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006;
CARRAMERICA REALTY, L.P., a Delaware limited partnership, as guarantor (the
"Guarantor"), having its principal office at 1700 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 and BANKERS TRUST COMPANY, a bank organized under the
laws of the United States of America, as Trustee hereunder (the "Trustee"),
having its Corporate Trust Office (as defined below) at Four Albany Street, New
York, New York 10006.
WHEREAS, the Company deems it necessary to issue for its lawful purposes
the Notes (as defined herein), and has duly authorized the execution and
delivery of this Indenture to provide for the issuance of the Notes, which Notes
will bear interest at the rates or formulas, to mature at such times and to have
such other provisions as hereinafter provided. The Notes will be senior debt
securities representing unsecured debt obligations of the Company.
WHEREAS, the Guarantor deems it advisable to guarantee satisfaction of
certain of the Company's obligations under this Indenture, and has duly
authorized the execution and delivery of this Indenture to provide the Guaranty
(as defined herein) as hereinafter provided.
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, and in consideration of
the premises and the purchase of the Notes by the Holders (as defined below)
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper", as used in TIA
Section 311, have the meanings assigned to them in the rules of the Commission
adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
<PAGE>
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time the Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from the Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, the Person becoming a
Subsidiary or that acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person or the
date the acquired Person becomes a Subsidiary.
"Acquisition Lines of Credit" means, collectively, any secured lines of
credit of the Company or any Subsidiary, the proceeds of which are to be used,
among other things, to acquire interests, directly or indirectly, in real
estate.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required by a
Note or by or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain taxes imposed on
certain Holders and which are owing to such Holders.
"Adjusted Total Assets" has the meaning specified in Section 1004.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Service Charge" for any period means the aggregate interest expense
for the period in respect of, and the amortization during the period of any
original issue discount of, Indebtedness of the Company and its Subsidiaries and
the amount of dividends which are payable during the period in respect of any
Disqualified Stock.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of DTC
or any successor depositary that apply to such transfer and exchange.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection
<PAGE>
with which the term is used or in the financial community of each such place.
Whenever successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same or in different
Authorized Newspapers in the same city meeting the foregoing requirements and in
each case on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Board of Directors" means the board of directors of the Company, the
executive committee or any committee of that board duly authorized to act
hereunder, as the case may be.
"Board Resolution" means a copy of a resolution (i) with respect to the
Company, of the Company, certified by the Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors and (ii) with
respect to the Guarantor, of the general partner of the Guarantor, certified by
the Secretary or an Assistant Secretary of the general partner of the Guarantor,
and, in each case, to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Chicago are authorized or required by law, regulation
or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of the Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties on
such date.
"Company" Company means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Company shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Company.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of and on behalf of the Company by its Chairman of
the Board, its President or a Vice President, and by its Treasurer or an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, or
Chief Financial Officer and delivered to the Trustee.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted, and minus amounts which have been added,
for the following (without duplication): (i) interest expense on Indebtedness of
the Company and its Subsidiaries; (ii) provision for taxes of the Company and
its Subsidiaries based on income; (iii) amortization of debt discount; (iv)
provisions for
<PAGE>
gains and losses on properties and property depreciation and amortization; (v)
the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for the period; and (vi)
amortization of deferred charges.
"Consolidated Net Income" any period means the amount of consolidated net
income (or loss) of the Company and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at Four Albany Street,
New York, NY 10006.
"Corporation" includes corporations, associations, companies, Companies and
business trusts.
"Custodian" has the meaning specified in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 305 hereof, substantially
in the form of Annexes A and B hereto except that Note shall not bear the Global
Note Legend.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of the Person which by the terms of that Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for Capital Stock which is not Disqualified Stock or the
redemption price of which may, at the option of that Person, be paid in Capital
Stock which is not Disqualified Stock), in each case on or prior to the Stated
Maturity of the Notes; provided, however, that equity interests whose holders
have (or will have after the expiration of an initial holding period) the right
to have such equity interests redeemed for cash in an amount determined by the
value of the Common Stock of the Company (including, without limitation, certain
equity interests in the Guarantor and Carr Realty, L.P.) do not constitute
Disqualified Stock.
"DTC" means The Depository Trust Company for so long as it shall be a
clearing agency registered under the Exchange Act, or such successor as the
Company shall designate from time to time in an Officers' Certificate delivered
to the Trustee.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
<PAGE>
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items, and property
valuation losses, net, as reflected in the financial statements of the Company
and its Subsidiaries for the period determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security interest
of any kind, except any mortgage, lien, charge, pledge or security interest of
any kind which secures debt of the Guarantor owed to the Company.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934 and any successor
statute thereto, in each case as amended from time to time, and the rules and
regulations of the Commission thereunder.
"Exchange Notes" means those Notes issued pursuant to this Indenture in
connection with the Exchange Offer pursuant to the Registration Rights
Agreement, the terms of which shall be materially identical to those of the
Initial Notes.
"Exchange Offer" has the meaning specified in the Registration Rights
Agreement.
"Exchange Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis;
provided, that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
"Global Note" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such obligation or a specific payment of interest on or principal of any
such obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the obligation or the specific payment of interest on or principal of the
obligation evidenced by such depository receipt.
<PAGE>
"Guaranteed Obligations" has the meaning specified in Article 12.
"Guaranty" means the guaranty of the Notes contained in Article 12 given by
the Guarantor.
"Guarantor" means the Person named as the "Guarantor" in the recitals of
this Indenture until a successor Guarantor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Guarantor" shall
mean such successor Guarantor.
"Holder" means, in the case of a Registered Note, the Person in whose name
a Note is registered in the Security Register.
"Indebtedness" of the Company or any Subsidiary means any indebtedness of
the Company or any Subsidiary, whether or not contingent, in respect of (i)
borrowed money or indebtedness evidenced by bonds, notes, debentures or similar
instruments, (ii) borrowed money or indebtedness evidenced by bonds, notes,
debentures or similar instruments secured by any Encumbrance existing on
property owned by the Company or any Subsidiary, (iii) reimbursement obligations
in connection with any letters of credit actually issued or amounts representing
the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade
payable, or all conditional sale obligations under any title retention
agreement, (iv) the amount of all obligations of the Company or any Subsidiary
with respect to redemption, repayment or other repurchase of any Disqualified
Stock, and (v) any lease of property by the Company or any Subsidiary as lessee
which is reflected on the Company's consolidated balance sheet as a capitalized
lease in accordance with GAAP, to the extent, in the case of items of
indebtedness under (i) through (iv) above, that any such items (other than
letters of credit) would appear as a liability on the Company's consolidated
balance sheet in accordance with GAAP, and also includes, to the extent not
otherwise included, any obligation of the Company or any Subsidiary to be liable
for, or to pay, as obligor, guarantor or otherwise (other than for purposes of
collection in the ordinary course of business), Indebtedness of another Person
(other than the Company or any Subsidiary) (it being understood that
Indebtedness shall be deemed to be incurred by the Company or any Subsidiary
whenever the Company or the Subsidiary shall create, assume, guarantee or
otherwise become liable in respect thereof).
"Indenture" means this Indenture, as amended and supplemented from time to
time.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Indirect Participant" means entities that clear through or maintain a
custodial relationship with a Participant either directly or indirectly.
<PAGE>
"Initial Notes" means $100,000,000 aggregate principal amount of 6.625%
Notes due 2005 and $100,000,000 aggregate principal amount of 6.875% Notes due
2008, in each case, issued under this Indenture on or about the date hereof.
"Initial Purchasers" means J.P. Morgan Securities Inc., Goldman, Sachs &
Co. and Lehman Brothers.
"Interest Payment Date" when used with respect to any Note, means the
Stated Maturity of an installment of interest on such Note, as specified in
Section 301.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with an Exchange Offer pursuant to the Registration Rights Agreement.
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had not been made, determined by discounting, on a semi-annual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of Redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had not been made, over (ii) the aggregate principal amount of the Notes
being redeemed or paid.
"Maturity", when used with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, notice of redemption, notice of option to elect repayment or
otherwise.
"Non-Recourse Indebtedness" means Indebtedness for which the right of
recovery of the obligee thereof is limited to recourse against the Real Property
Assets securing such Indebtedness (subject to such limited exceptions to the
non-recourse nature of such Indebtedness such as fraud, misappropriation,
misapplication and environmental indemnities, as are usual and customary in like
transactions at the time of the incurrence of such Indebtedness).
"Notes" means the Company's 6.625% Notes due 2005 and the Company's 6.875%
Notes due 2008 issued pursuant to this Indenture.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President or a Vice-President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company in
the case of a certificate delivered on behalf of the Company or of the general
partner of the Guarantor in the case of a certificate delivered on behalf of the
Guarantor, and, in each case, delivered to the Trustee.
<PAGE>
"144A Global Note" means a global Note substantially in the form of Annex A
hereto bearing the Global Note Legend and the Restricted Securities Legend and
deposited with or on behalf of, and registered in the name of, the depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company or
the Guarantor, as the case may be, and who shall be reasonably satisfactory to
the Trustee.
"Outstanding" when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Notes, provided that, if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Notes, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen; and
(iv) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect
of which there shall have been presented to the Trustee proof satisfactory
to it that such Notes are held by a bona fide purchaser in whose hands such
Notes are valid obligations of the Company. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
"Participant" means, with respect to the depositary, a Person who has an
account with the depositary.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Notes on behalf of the
Company.
"Person" means any individual, corporation, joint venture, partnership
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
<PAGE>
"Place of Payment", when used with respect to the Notes of or within any
series, means the place or places where the principal of (and premium, if any)
and interest on such Notes are payable as specified as contemplated by Sections
1001 and 1002.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to issue and deliver to the Initial Purchasers,
in exchange for the Initial Notes held by the Initial Purchasers as part of
their initial distribution, a like principal amount of Private Exchange Notes.
"Private Exchange Notes" means the Exchange Notes to be issued pursuant to
this Indenture in connection with a Private Exchange effected pursuant to the
Registration Rights Agreement.
"Real Property Assets" means as of any time, the real property assets
(including interests in participating mortgages in which the interest of the
Company or any Subsidiary therein is characterized as equity according to GAAP)
owned directly or indirectly by the Company or any Subsidiary at such time.
"Recourse Indebtedness" shall mean Indebtedness of the Company or any
Subsidiary that is not Non-Recourse Indebtedness.
"Redemption Date", when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," has the meaning specified in Section 1101.
"Registered Note" shall mean any Note which is registered in the Security
Register.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated February 23, 1998 among the Company, the Guarantor and the Initial
Purchasers named therein.
"Registration Statement" shall have the meaning specified in the
Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Notes of or within any series means the date specified for
that purpose in Section 301, whether or not a Business Day.
<PAGE>
"Reinvestment Rate" means 0.25% (twenty-five one hundredths of one percent)
plus the arithmetic mean of the yields under the respective headings "This Week"
and "Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity of the Notes, as of the payment
date of the principal being redeemed or paid. If no maturity exactly corresponds
to such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust and Agency Group of the Trustee (or any
successor group of the Trustee) including any managing director, vice president,
assistant vice president, assistant secretary, assistant treasurer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred at the
Trustee's Corporate Trust Office because of such officer's knowledge and
familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Restricted
Securities Legend.
"Restricted Global Note" means a Global Note bearing the Restricted
Securities Legend.
"Restricted Securities Legends" shall mean the legends identified as such
in Annexes A and B hereto.
"Securities Act" means the Securities Act of 1933 and any successor statute
thereto, in each case as amended from time to time and the rules and regulations
of the Commission thereunder.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Shelf Registration" has the meaning specified in the Registration Rights
Agreement.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Notes of or within any series means a date fixed by the Trustee
pursuant to Section 307.
<PAGE>
"Stated Maturity" when used with respect to any Note or any installment of
principal thereof or interest thereon, means the date specified in such Note as
the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination of the Make-Whole Amount, then
such other reasonably comparable index which shall be designated by the Company.
"Subsidiary" means a corporation, partnership or other entity a majority of
the voting power of the voting equity securities or the outstanding equity
interests of which are owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company. For the purposes of this definition,
"voting equity securities" means equity securities having voting power for the
election of directors, whether at all times or only so long as no senior class
of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Undepreciated Real
Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP (but excluding
intangibles).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee has become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" means or
includes each Person who is then a Trustee hereunder; provided, however, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Notes of any series means only the Trustee with respect to Notes of that
series.
"2005 Initial Notes" means $100,000,000 aggregate principal amount of
6.625% Notes due 2005 issued under this Indenture on or about the date hereof.
"2008 Initial Notes" means $100,000,000 aggregate principal amount of
6.875% Notes due 2007 issued under this Indenture on or about the date hereof.
"2005 Notes" means the 2005 Initial Notes, and the respective Exchange
Notes and Private Exchange Notes, treated as a single series.
<PAGE>
"2008 Notes" means the 2008 Initial Notes, and the respective Exchange
Notes and Private Exchange Notes, treated as a single series.
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Company and its
Subsidiaries on that date, before depreciation and amortization, determined on a
consolidated basis in accordance with GAAP.
"Unrestricted Definitive Note" means a Definitive Note that does not bear
and is not required to bear, the Restricted Securities Legend.
"Unrestricted Global Note" means a Global Note that does not bear and is
not required to bear, the Restricted Securities Legend.
"Unsecured Indebtedness" means Indebtedness which is not secured by any
Encumbrance upon any of the properties of the Company or any Subsidiary.
"United States" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect to
any Notes pursuant to Section 301, an individual who is a citizen or resident of
the United States, a corporation, Company or other entity created or organized
in or under the laws of the United States or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source."
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Note (or, if applicable, at the most recent redetermination of
interest on such Note) and as set forth in such Note in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates delivered
pursuant to Section 1011) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
<PAGE>
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Notes of all series or one or
more series, as the case may be, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agents duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or record or
both are delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Note, shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Notes shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary
<PAGE>
public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument, or the authority of the Person executing the same, may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) The ownership of Registered Notes shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Registered Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, in or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Notes of a series have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Notes of a series
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent, any Authenticating Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Note.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the
<PAGE>
first paragraph of this Indenture or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture provides for
notice of any event to Holders of Registered Notes by the Company or the
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Notes is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Notes. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail service
or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Notes as shall be made
with the approval of the Trustee shall constitute a sufficient notification to
such Holders for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in this
Indenture by the Company and the Guarantor shall be binding on their successors
and assigns, whether so expressed or not.
SECTION 109. Separability Clause. In case any provision in this Indenture
or in any Note shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture, or in the
Notes express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
<PAGE>
SECTION 111. No Personal Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or in any Note, or
because of any indebtedness evidenced thereby, shall be had against any
promoter, as such, or against any past, present or future shareholder, officer
or director, as such, of the Company or the Guarantor or of any of their
successors either directly or through the Company or the Guarantor or any of
their successors under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Notes by the Holders thereof and as part of the consideration
for the issue of the Notes.
SECTION 112. Governing Law. This Indenture and the Notes shall be governed
by and construed in accordance with the law of the State of New York.
SECTION 113. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date, Stated Maturity or Maturity of any Note shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Indenture or any Note other than a provision in the Notes of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity or Maturity, provided that no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date, Stated Maturity or Maturity, as the case may be.
ARTICLE II
FORMS OF NOTES
SECTION 201. Forms of Notes. The Initial Notes of each series shall be in
substantially the forms of Annex A and Annex B hereto, respectively, and, in the
event of an Exchange Offer, the Exchange Notes of each series shall be in
substantially the forms of Annex C and Annex D hereto, respectively, and in each
case may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Notes may be listed, or to conform to usage.
The Definitive Notes shall be printed, lithographed or engraved or produced
by any combination of these methods on a steel engraved border or steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
<PAGE>
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By:___________________________________
Authorized Signatory
SECTION 203. Notes Issuable in Global Form. The Initial Notes shall be
issuable and transferable in fully registered form as Registered Notes. Each
series of the Initial Notes shall be issued in the form of one or more permanent
Global Notes or, in the case of accredited "institutional investors", in the
form of one or more Definitive Notes.
In the event of an Exchange Offer, the Exchange Notes shall be issuable and
transferable in fully registered form as Registered Notes. Each series of
Exchange Notes shall be issued in the form of one or more permanent Global
Notes. The depository for the Notes shall initially be DTC. The Notes shall not
be issuable in definitive form except as provided in Section 305 of this
Indenture. If Notes of or within a series are issuable in global form, then,
notwithstanding the provisions of Section 302, any such Note shall represent
such of the Outstanding Notes of such series as shall be specified therein and
may provide that it shall represent the aggregate principal amount of
Outstanding Notes of such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Notes of such series represented thereby may
from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Note in global form to reflect the amount, or any increase or
decrease in the amount, of Outstanding Notes represented thereby shall be made
by the Trustee in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in the Company Order to be delivered to
the Trustee pursuant to Section 303 or 304. Subject to the provisions of Section
303 and, if applicable, Section 304, the Trustee shall deliver and redeliver any
Note in permanent global form in the manner and upon instructions given by the
Person or Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Note in global form shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any Note
represented by a Note in global form if such Note was never issued and sold by
the Company and the Company delivers to the Trustee the Note in global form
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Notes represented thereby, together with the written
statement contemplated by the last sentence of Section 303.
<PAGE>
Notwithstanding the provisions of Section 307, payment of principal of and
any premium and interest on any Note in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Notes represented by a permanent Global Note in the case of a permanent Global
Note in registered form, the Holder of such permanent Global Note in registered
form.
ARTICLE III
THE NOTES
SECTION 301. Terms of the Notes. There shall be a series of Notes
designated the "6.625% Notes due 2005" and a series of Notes designated the
"6.875% Notes due 2008."
The aggregate principal amount of the 2005 Notes shall be limited to
$100,000,000, and, except as provided herein, the Company shall not execute and
the Trustee shall not authenticate or deliver 2005 Notes in excess of such
aggregate principal amount.
The aggregate principal amount of the 2008 Notes shall be limited to
$100,000,000, and, except as provided herein, the Company shall not execute and
the Trustee shall not authenticate or deliver 2008 Notes in excess of such
aggregate principal amount.
Nothing contained in this Indenture, or in the Notes, is intended to or
shall limit execution by the Company or authentication or delivery by the
Trustee of Notes under the circumstances contemplated by Sections 303, 304, 305,
306, 906 and 1107 of this Indenture.
The 2005 Notes will bear interest at a rate of 6.625% per annum and the
2008 Notes will bear interest at a rate of 6.875% per annum in each case, from
February 23, 1998 or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for, payable semi-annually in
arrears on March 1 and September 1 of each year, commencing September 1, 1998
(each, an "Interest Payment Date"), to the Person in whose name such Note is
registered at the close of business on February 15 or August 15 (whether or not
a Business Day), as the case may be, next preceding such Interest Payment Date
(each, a "Regular Record Date"). Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. The interest so payable on any
Note which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Person in whose name such Note
is registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the Special Record Date or other specified date determined in accordance with
this Indenture.
The 2005 Notes will mature on March 1, 2005 and the 2008 Notes will mature
on March 1, 2008.
<PAGE>
The Initial 2005 Notes issued in global form shall be substantially in the
form of Annex A hereto (including the Global Note legend affixed thereon) and
the Initial 2005 Notes issued in definitive form shall be substantially in the
form of Annex A hereto (but without the Global Note legend attached thereto).
The Initial 2008 Notes issued in global form shall be substantially in the form
of Annex B hereto (including the Global Note legend affixed thereon) and the
Initial 2008 Notes issued in definitive form shall be substantially in the form
of Annex B hereto (but without the Global Note legend attached thereto).
The Exchange Notes issued in exchange for Initial 2005 Notes that are
issued in global form shall be substantially in the form of Annex C hereto
(including the Global Note legend affixed thereon) and Exchange Notes issued in
exchange for Initial 2005 Notes that are issued in definitive form shall be
substantially in the form of Annex C hereto (but without the Global Note legend
attached thereto). The Exchange Notes that are issued in exchange for Initial
2008 Notes that are issued in global form shall be substantially in the form of
Annex D hereto (including the Global Note legend affixed thereon) and Exchange
Notes that are issued in exchange for Initial 2008 Notes that are issued in
definitive form shall be substantially in the form of Annex D hereto (but
without the Global Note legend attached thereto). Any Exchange Note that is a
Private Exchange Note will include the Restricted Securities Legend affixed
thereon.
SECTION 302. Denominations. The Notes of each series shall be issuable in
denominations of $1,000 and integral multiples thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The Notes
shall be executed by the Company's Chairman of the Board, Chief Financial
Officer, President, Secretary or one of its Executive Vice Presidents and by the
general partner of the Guarantor. The signature of any of these officers or
general partner on the Notes may be manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Notes. Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company or general
partner of the Guarantor shall bind the Company or the Guarantor, as the case
may be, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver the Notes, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes, and the Trustee in accordance with the Company Order
shall authenticate and deliver such Notes.
In authenticating such Notes, and accepting the additional responsibilities
under this Indenture in relation to such Notes, the Trustee shall be entitled to
receive (other than in the case of the Initial Notes), and (subject to TIA
Section 315(a) through 315(d)) shall be fully protected in relying upon,
<PAGE>
(i) an Opinion of Counsel stating that
(a) the form or forms of such Notes have been established in
conformity with the provisions of this Indenture;
(b) the terms of such Notes have been established in
conformity with the provisions of this Indenture; and
(c) such Notes when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for
authentication in accordance with this Indenture, authenticated and
delivered by the Trustee in accordance with this Indenture and issued
by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization
and other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights generally and to
general equitable principles; and
(ii) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Notes have been complied with and that, to the best of the knowledge of the
signers of such certificate, no Event of Default with respect to any of the
Notes has occurred and is continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Notes if the issue of such Notes pursuant to this
Indenture will affect the Trustee's own rights, duties, obligations or
immunities under the Notes and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee.
Each Registered Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Note shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Note to the Trustee for cancellation
as provided in Section 309 together with a written statement (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
stating that such Note has never been issued and sold by the Company, for all
purposes of this Indenture such Note shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Notes. Pending the preparation of Definitive Notes,
the Company may execute, and upon Company Order, the Trustee shall authenticate
and deliver, temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Notes in lieu of which they
<PAGE>
are issued, in registered form, and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes. Such
temporary Notes may be in global form.
Except in the case of temporary Notes in global form (which shall be
exchanged in accordance with or pursuant to a Board Resolution), if temporary
Notes of any series are issued, the Company will cause Definitive Notes of that
series to be prepared without unreasonable delay. After the preparation of
Definitive Notes of such series, the temporary Notes of such series shall be
exchangeable for Definitive Notes of such series upon surrender of the temporary
Notes of such series at the office or agency of the Company in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes of any series, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of the same series and authorized
denominations. Until so exchanged, the temporary Notes of any series shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Notes of such series.
SECTION 305. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Notes (the registers maintained in such office or in any such office
or agency of the Company in a Place of Payment being herein sometimes referred
to collectively as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Registered Notes and of transfers of Registered Notes. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby initially appointed "Security Registrar" for the purpose of
registering Registered Notes and transfers of Registered Notes on such Security
Register as herein provided. In the event that the Trustee shall cease to be
Security Registrar, it shall have the right to examine the Security Register at
all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Note of any series at any office or
agency of the Company in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Notes of the
same series, of any authorized denominations and of a like aggregate principal
amount, bearing a number not contemporaneously outstanding, and containing
identical terms and provisions. Subject to the provisions of this Section 305,
at the option of the Holder, Registered Notes of any series may be exchanged for
other Registered Notes of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Notes to be exchanged at
any such office or agency. Whenever any such Registered Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Notes which the Holder making the exchange is entitled
to receive.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by DTC to a nominee of DTC, by a nominee of DTC to
another nominee of DTC, or
<PAGE>
by DTC or any such nominee to a successor of DTC or a nominee of such successor
depositary. All Global Notes will be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee notice from DTC that it is
unwilling or unable to continue to act as depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor depositary is not appointed by the Company within 90 days after the
date of such notice from the depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the DTC shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided herein. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Article Three, shall be authenticated and delivered in the form of, and
shall be, a Global Note. A Global Note may not be exchanged for another Note
other than as provided herein.
(b) Transfer and Exchange of Beneficial Interests in Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through DTC, in accordance with the provisions of this Indenture and
the Applicable Procedures. For the purposes of Subparagraphs (b)-(d) of this
Section 305, neither the Company nor the Trustee (nor any registrar or paying
agent) will have any responsibility for the performance by DTC or their
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations. DTC has advised the Company
that it will take any action permitted to be taken by a holder of Notes only at
the direction of one or more Participants whose accounts are credited with DTC
interests in a Global Note. Beneficial interests in the Restricted Global Notes
shall be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Transfers of beneficial
interests in the 144A Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the
other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Restricted Securities Legend. Beneficial
interests in any Unrestricted Global Note may be transferred only to
persons who take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in 3.05(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a person who takes delivery thereof in the form of a beneficial interest
in the same Global Note), the transferor of such beneficial interest must
deliver to DTC either (A) (1) a written order from a participant or an
indirect participant given to DTC in accordance with the Applicable
Procedures directing DTC to credit or cause to be credited a beneficial
interest in another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding
the participant account to be credited with such increase or (B) (1) a
written order from a participant or an indirect participant given
<PAGE>
to DTC directing DTC to cause to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given by DTC to the Registrar containing information regarding
the person in whose name such Definitive Note shall be registered to effect
the transfer or exchange referred to in (1) above. Upon an Exchange Offer
by the Company in accordance with Section 3.05(f) hereof, the requirements
of this clause (ii) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in a Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Indenture, the Notes and otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note
pursuant to Section 3.05(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in the 144A Global Note if the transfer complies with
the requirements of clause (ii) above and DTC receives, if the transferee
will take delivery in the form of a beneficial interest in the 144A Global
Note, from the transferor a certificate in the form of Exhibit A hereto,
including the certifications in item (1) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any Holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to a Shelf
Registration in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Registration Statement in
accordance with the Registration Rights Agreement; or
(D) DTC receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an
<PAGE>
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(1)(a) thereof;
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit A hereto,
including the certifications in item (3) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to DTC to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Restricted Securities
Legend are not required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 303 of this Indenture, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) If any Holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note or
to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon receipt by DTC of the
following documentation:
(A) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including, subject to Section 3.05(c)(ii) below, the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit A hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144
<PAGE>
under the Securities Act, a certificate to the effect set forth in
Exhibit A hereto, including the certifications in item (2)(a) thereof;
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (C) above, a certificate to the
effect set forth in Exhibit A hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(E) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)(b)
thereof; or
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit A hereto,
including the certifications in item (2)(c) thereof, the Company shall
cause by issuance of a Company Order to the Trustee the aggregate
principal amount of the applicable Global Note to be reduced
accordingly as provided herein, and the Company shall execute and the
Trustee upon receipt of such Company Order shall authenticate and
deliver to the person designated in the instructions a Definitive Note
in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 3.05(c) shall be registered in such name or
names and in such authorized denomination or denominations as the
Holder of such beneficial interest shall instruct DTC and the
participant or indirect participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section
3.05(c)(i) shall bear the Restricted Securities Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Notwithstanding Section 3.05(c)(i), a Holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
<PAGE>
(C) any such transfer is effected by a participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) DTC receives the following:
(1) if the Holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Restricted
Securities Legend, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (1)(b)
thereof;
(2) if the Holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Restricted Securities
Legend, a certificate from such Holder in the form of Exhibit A
hereto, including the certifications in item (3) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company, to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Restricted
Securities Legend are not required in order to maintain
compliance with the Securities Act.
(iii) If any Holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 3.05(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to this Indenture, and the Company shall execute and
the Trustee shall upon receipt of a Company Order authenticate and deliver
to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 3.05(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct DTC
and the participant or indirect participant. The Trustee shall deliver such
Definitive Notes to the persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 305(c)(iii) shall not bear the Restricted
Securities Legend. A beneficial interest in an Unrestricted Global Note
cannot be exchanged for a Definitive Note bearing the Restricted Securities
Legend or transferred to a Person who takes delivery thereof in the form of
a Definitive Note bearing the Restricted Securities Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Definitive Notes to a
<PAGE>
person who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by DTC of the following
documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit A hereto, including the certifications
in item (1) thereof;
(C) if such Definitive Note is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit A hereto, including the certifications
in item (2)(a) thereof;
(D) if such Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (C) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2) thereof, if
applicable;
(E) if such Definitive Note is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit A hereto, including the certifications in item (2)(b)
thereof; or
(F) if such Definitive Note is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit A hereto, including the
certifications in item (2)(c) thereof, the Trustee shall cancel the
Definitive Note, increase or cause to be increased the aggregate
principal amount of, the appropriate restricted Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a person participating in the
distribution of the Exchange Notes or (3) a person who is an affiliate
(as defined in Rule 144) of the Company;
<PAGE>
(B) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to an Exchange Registration Statement in
accordance with the Registration Rights Agreement; or
(D) DTC receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(1)(c) thereof;
(2) if the Holder of such Definitive Notes
proposes to transfer such Definitive Notes to a person who shall
take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit A hereto, including the certifications in item
(3) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the
restrictions on transfer contained herein and in the Restricted
Securities Legend are not required in order to maintain
compliance with the Securities Act, and such Definitive Notes are
being exchanged or transferred in compliance with any applicable
blue sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 3.05(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of a Company Order in accordance with Section 3.03
of this Indenture, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above.
<PAGE>
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 3.05(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 3.05(e).
(i) Restricted Definitive Notes may be transferred to and
registered in the name of Persons who take delivery thereof if the
Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit A hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit
B hereto, including the certifications, certificates and Opinion of
Counsel required by item (2) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the
Holder thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer (as defined in the Registration Rights Agreement)
pursuant to the Exchange Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (1)(d)
thereof;
<PAGE>
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit A hereto,
including the certifications in item (3) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form acceptable to the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act, that the restrictions on
transfer contained herein and in the Restricted Securities Legend
are not required in order to maintain compliance with the
Securities Act, and such Restricted Definitive Note is being
exchanged or transferred in compliance with any applicable blue
sky securities laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof. Unrestricted Definitive Notes cannot
be exchanged for or transferred to Persons who take delivery thereof in the
form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Company shall issue and, upon
receipt of a Company Order in accordance with Section 303 of this Indenture, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letter of Transmittal that they are not (x)
broker-dealers, (y) participating in the distribution of the Exchange Notes or
(z) affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrent with the issuance
of such Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and the Company
shall execute and the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Restricted Securities Legend.
(A) Except as permitted by subparagraph (B) below, each
Restricted Global Note and each Restricted Definitive Note (and all
Notes issued in exchange therefor or
<PAGE>
substitution thereof) and each Private Exchange Note shall bear the
legend in substantially the following form:
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"), (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
EXCEPT (A) TO CARRAMERICA REALTY CORPORATION (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL
BUYER ("QIB") IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE FOR THE NOTES A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE) OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SUCH SECURITY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR
THE NOTES. IF THE PROPOSED TRANSFEREE IS NOT THE COMPANY, A SUBSIDIARY
THEREOF OR A QIB TO WHICH THIS NOTE IS BEING TRANSFERRED IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE NOTES SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR
THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE
<PAGE>
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UNLESS THE TRANSFER
HAS BEEN REGISTERED UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii)-(iii), (d)(ii)-(iii), (e)(ii)-(iii) or (f) of this Section 305
(and all Notes issued in exchange therefor or substitution thereof
other than Private Exchange Notes) or, in the case of any Private
Exchange Notes, pursuant to subparagraph (b)(iv)(B) to this Section
305 shall not bear the Restricted Securities Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), 55 WATER STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING SET FORTH IN
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR DEPOSITORY OR
ITS NOMINEE."
(h) General Provisions Regarding Transfer and Exchange
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange. Upon consummation of an Exchange
Offer, (i) all Outstanding Initial 2004 Notes and any Exchange Notes or
<PAGE>
or Private Exchange Notes issued in exchange therefor shall, together, be
considered one series of Notes and (ii) all Outstanding Initial 2007 Notes and
any Exchange Notes or Private Exchange Notes issued in exchange therefor shall,
together, be considered one series of Notes.
Every Registered Note presented or surrendered for registration of transfer
or for exchange or redemption shall (if so required by the Company or the
Security Registrar) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Company, the Trustee or the Security Registrar, as applicable, shall
not be required (i) to issue, register the transfer of or exchange any Note if
such Note may be among those selected for redemption during a period beginning
at the opening of business 15 days before selection of the Notes to be redeemed
under Section 1103 and ending at the close of business on the day of the mailing
of the relevant notice of redemption or (ii) to register the transfer of or
exchange any Registered Note so selected for redemption in whole or in part,
except, in the case of any Registered Note to be redeemed in part, the portion
thereof not to be redeemed, or (iii) to issue, register the transfer of or
exchange any Note which has been surrendered for repayment at the option of the
Holder, except the portion, if any, of such Note not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes. If any mutilated
Note is surrendered to the Trustee or the Company, together with, in appropriate
cases, such security or indemnity as may be required by the Company or the
Trustee to hold each of them or any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Note of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by them to hold each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon the Company's request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Note a new Note of the same series and principal amount, containing identical
terms and provisions and bearing a number not contemporaneously outstanding.
Notwithstanding the provisions of the immediately preceding two paragraphs,
in case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note pay such.
<PAGE>
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the reasonable fees and expenses of the Trustee) connected therewith.
Every new Note of any series issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved. Interest on
any Registered Note that is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name that
Note (or one or more Predecessor Notes) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Note may at the Company's
option be paid by mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 308, to the
address of such Person as it appears on the Security Register.
Every permanent Global Note will provide that interest, if any, payable on
any Interest Payment Date will be paid to DTC, for the purpose of permitting DTC
to credit the interest received by it in respect of such permanent Global Note
to the accounts of the beneficial owners thereof.
Any interest on any Registered Note of any series that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Registered Notes of such series (or their respective
Predecessor Notes) are registered at the close of business on a special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Registered Note of such series
and the date of the proposed payment (which shall not be less than 20 days after
such notice is received by the Trustee), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
<PAGE>
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Registered
Notes of such series at his address as it appears in the Note Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Notes of such series (or their respective Predecessor
Notes) are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Notes of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Notes may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Registered Note for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Registered Note is registered as the owner of such Note for the purpose of
receiving payment of principal of (and premium or Make-Whole Amount, if any) and
(subject to Sections 305 and 307) interest on, such Registered Note and for all
other purposes whatsoever, whether or not such Registered Note be overdue, and
none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Note in global form or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global Note, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
Global Note or impair, as between such depositary and owners of beneficial
interests in such Global Note, the operation of customary practices governing
the exercise of the rights of such depositary (or its nominee) as Holder of such
Global Note.
<PAGE>
SECTION 309. Cancellation. All Notes surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Notes surrendered directly to the Trustee for any such
purpose shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Notes previously authenticated hereunder which the Company has
not issued and sold, and all Notes so delivered shall be promptly canceled by
the Trustee. If the Company shall so acquire any of the Notes, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. Canceled Notes held by the Trustee shall
be destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless, by the Company Order, the Company directs
the return of such cancelled Notes to the Company.
SECTION 310. Computation of Interest. Interest on the Notes of each series
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall
upon Company Request cease to be of further effect with respect to any series of
Notes specified in such Company Request (except as to any surviving rights of
registration of transfer or exchange of Notes of such series herein expressly
provided for and any right to receive Additional Amounts, as provided in Section
1012), and the Trustee, upon receipt of a Company Order, and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such series when,
(1) either
(A) all Notes of such series theretofore authenticated and
delivered other than (i) Notes of such series that have been destroyed, lost or
stolen and replaced or paid as provided in Section 306, and (ii) Notes of such
series for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1003) have been delivered
to the Trustee for cancellation; or
(B) all Notes of such series not theretofore delivered to the
Trustee for cancellation
<PAGE>
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption at the option of the
Company within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense of the Company, and the Company has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust for the purpose an
amount of money, sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for cancellation, for
principal and premium or Make-Whole Amount, if any and interest, to the
date of such deposit (in the case of Notes which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of the
last paragraph of Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Notes, and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
and premium or Make-Whole Amount, if any, and any interest and Additional
Amounts for whose payment such money has deposited with or received by the
Trustee, but such money need not be segregated from other funds except to the
extent required by law.
<PAGE>
ARTICLE V
REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever used herein
with respect to either series of Notes, means any one of the following events
(whatever the reason for such Event of Default and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon or Additional
Amounts payable in respect of any Note of that series when such interest or
Additional Amount becomes due and payable, and continuance of such default
for a period of 30 days; or
(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Note of that series when it becomes due
and payable at its Maturity, upon redemption, upon declaration or
otherwise; or
(3) (i) default in the performance, or breach, of any covenant or
warranty of the Company or the Guarantor in this Indenture with respect to
any Note of that series (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), or (ii) the failure of any Subsidiary to comply with the
provisions in Section 1004, and, in each case, continuance of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail to the Company, by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Notes of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) default under any bond, debenture, note, or other evidence of
indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the
balance sheet of the lessee under GAAP), representing Recourse Indebtedness
or indebtedness guaranteed by such party in an aggregate principal amount
in excess of $5,000,000, or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any of its
Subsidiaries (including the leases) in an aggregate principal amount in
excess of $5,000,000, whether the indebtedness now exists or shall
hereafter be created, which default shall have resulted in the indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, or the obligations being
accelerated, without the acceleration having been rescinded or annulled;
(5) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
<PAGE>
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its property,
or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(7) except as permitted under this Indenture, the Guaranty is
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or the Guarantor shall
deny or disaffirm, in any pleading, its obligations under the Guaranty.
As used in this Section 501, the term "Bankruptcy Law" means Title 11 U.S.
Code or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Notes of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Notes of that series
may declare the principal of, and the Make-Whole Amount, if any, on, all the
Notes of that series to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal and Make-Whole Amount or specified portion thereof
shall become immediately due and payable. If an Event of Default with respect to
the Notes of any series set forth in Section 501(5) or (6) of this Indenture
occurs and is continuing, then in every such case all the Notes of that series
shall become immediately due and payable, without notice to the Company, at the
principal amount thereof plus accrued interest to the date the Notes of that
series are paid plus any Make-Whole Amount, due on the Notes of that series.
At any time after such a declaration of acceleration with respect to Notes
of any series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the
<PAGE>
Outstanding Notes of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay:
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding Notes of that
series.
(B) the principal of (and premium or Make-Whole Amount, if
any, on) any Outstanding Notes of that series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates borne by or provided for in such Notes,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such Notes,
and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Notes of that series, other than
the nonpayment of the principal of (or premium or Make-Whole Amount, if any) or
interest on Notes of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Note of any series when such interest or
Additional Amount becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Note of any series at its Maturity, upon
redemption, upon declaration or otherwise.
Then the Company will, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Notes of such series, the whole amount then
due and payable on such Notes for principal (and premium or Make-Whole Amount,
if any) and interest and Additional Amount with interest upon any overdue
principal (and premium or Make-Whole Amount, if any) and, to the extent that
payment of such interest shall be legally enforceable, upon any overdue
installments of interest or Additional Amounts, if any, at the rate or rates
borne by or provided for in such Notes, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
<PAGE>
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company, or any other obligor upon such Notes of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Notes of
such series, wherever situated.
If an Event of Default with respect to Notes of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Notes of such series by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Notes of any series shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of overdue
principal, premium or Make-Whole Amount, if any, or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Notes of such series, of
principal (and premium or Make-Whole Amount, if any) and interest and
Additional Amounts, if any, owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
And any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby authorized
by each Holder of Notes of such series to make such payments to the Trustee, and
in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee and
any predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
<PAGE>
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder of a Note in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes. All
rights of action and claims under this Indenture or any of the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest and any Additional Amounts, upon presentation of the Notes, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the Notes
for principal (and premium or Make-Whole Amount, if any) and interest and any
Additional Amounts payable, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes for principal
(and premium or Make-Whole Amount, if any) and interest and Additional Amounts,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Note of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Notes of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Notes of that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
<PAGE>
(3) such Holder or Holders have offered to the Trustee indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Notes of that series; it being understood and intended
that no one or more of such Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders, or to obtain or to
seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
or Make-Whole Amount, if any, Interest and Additional Amount. Notwithstanding
any other provision in this Indenture, the Holder of any Note shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium or Make-Whole Amount, if any) and (subject to Sections 305 and 307)
interest on, and any Additional Amounts in respect of such Note on the
respective due dates expressed in such Note (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Note has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, the Company, the Trustee and the Holders of Notes
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes in the last paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Notes is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders may
<PAGE>
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Notes, as the case may be.
SECTION 512. Control by Holders of Notes. The Holders of not less than a
majority in principal amount of the Outstanding Notes of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee with respect to the Notes of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in personal
liability or be unduly prejudicial to the Holders of Notes of such series not
joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Notes of any series may on
behalf of the Holders of all the Notes of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium or Make-Whole Amount, if
any) or interest on or Additional Amounts payable in respect of any Note of such
series, or
(2) in respect of a covenant or provision hereof which under Article 10
cannot be modified or amended without the consent of the Holder of each
Outstanding Note of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture the Company, Guarantor, Trustee and Holders shall be restored
to their former positions and rights hereunder; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
<PAGE>
SECTION 515. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Notes, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium or Make-Whole Amount, if any) or
interest on any Note on or after the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on or after the Redemption Date). The
Company agrees to pay or reimburse the Trustee for paying all reasonable costs
and expenses (including reasonable counsels' fees) of the Trustee in connection
with (a) any default and any enforcement or collection proceedings resulting
therefrom and (b) the enforcement of this Section 515.
ARTICLE VI
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence of any
default hereunder with respect to the Notes of any series, the Trustee shall
transmit in the manner and to the extent provided in TIA Section 313(c), notice
of such default hereunder known to the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of (or premium or Make-Whole Amount, if any) or
interest on or any Additional Amounts with respect to any Note of such series,
the Trustee shall be protected in withholding such notice if and so long as a
committee of trust officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Notes of
such series; and provided further that in the case of any default or breach of
the character specified in Section 501(3) with respect to the Notes of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to the Notes of such series.
SECTION 602. Acceptance of Trusts; Certain Rights and Duties of Trustee.
Subject to the provisions of TIA Section 315(a) through 315(d):
(1) except during the continuance of an Event of Default, the Trustee shall
perform only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee;
(2) in case a default or an Event of Default has occurred and is continuing
of which a Responsible Officer of the Trustee has actual knowledge or of which
written notice of such default or
<PAGE>
Event of Default shall have been given to the Trustee by the Company, any other
obligor of the Notes or by any Holder, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent Person would exercise or use
under the circumstances in the conduct of his own affairs;
(3) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(4) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Note to the Trustee for authentication and delivery pursuant to
Section 303 which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(5) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(6) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Notes of any series pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(7) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company personally or by agent or attorney;
(8) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to he Trustee and
conforming to the requirement of this Indenture;
(9) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
<PAGE>
(10) no provision of this Indenture shall be construed to relieve the
Trustee from liaibility for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(a) this pagraph (10) shall not be construed to limit the effect of
paragraph (1) of this Section;
(b) the Trustee shall not be liable for any errors of judgment or any acts,
omissions, mistakes of fact or law taken or omitted in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in aggregate principal amount of the Outstanding Notes of
such series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and
(d) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(11) Whether nor not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
The permissive right of the Trustee to do the things enumerated in this
Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificate of
authentication shall be taken as the statements of the Company and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity, legality
or sufficiency of this Indenture or of the Notes or of any contracts referred to
herein to which the Company or the Guarantor is a party, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Notes or the proceeds thereof.
<PAGE>
SECTION 604. May Hold Notes. The Trustee, any Paying Agent, Security
Registrar, Authenticating Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with
the same rights it would have if it were not the Trustee, Paying Agent, Security
Registrar, Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company and the Guarantor
agree:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Holders of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (or premium or Make-Whole
Amount, if any) or interest on particular Notes.
Notwithstanding any provision in this Indenture, the Trustee's right to
immunities and protection from liability hereunder and its rights to payment of
its fees, expenses and indemnities shall survive its resignation or removal and
the final payment or defeasance of the Notes and the termination
<PAGE>
of the Indenture and all indemnification and releases from liability granted
herein shall extend to its directors, officers, employees and agents.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Notes of one or
more series by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time with respect to the Notes of any
series by Act of the Holders of a majority in principal amount of the
Outstanding Notes of such series delivered to the Trustee and the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Note who has been a bona fide Holder of a Note for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company or by any
Holder of a Note who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
<PAGE>
then, in any such case, (i) the Company by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with
respect to all Notes, or (ii) subject to TIA Section 315(e), any Holder of
a Note who has been a bona fide Holder of a Note for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect
to all Notes and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Notes of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Notes of one or more or
all of such series and that at any time there shall be only one Trustee with
respect to the Notes of any particular series). If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Notes of any series shall be appointed by
Act of the Holders of a majority in principal amount of the Outstanding Notes of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance or such appointment,
become the successor Trustee with respect to the Notes of such series and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Notes of any series shall have been so
appointed by the Company or the Holders of Notes and accepted appointment in the
manner hereinafter provided, any Holder of a Note who has been a bona fide
Holder of a Note of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to Notes of
such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Notes of any series and each appointment of a
successor Trustee with respect to the Notes of any series in the manner provided
for notices to the Holders of Notes in Section 106. Each notice shall include
the name of the successor Trustee with respect to the Notes of such series and
the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Notes, every
such successor Trustee shall execute, acknowledge and deliver to the Company and
the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Notes of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Notes of one or
more series shall execute and deliver an indenture supplemental
<PAGE>
hereto, pursuant to Article Nine hereof, wherein each successor Trustee shall
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Notes of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Notes, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all of the rights, powers,
trusts and duties of the retiring Trustee with respect to the Notes of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Notes of that or those series to
which the appointment of such successor Trustee relates; but, on request of the
Company, or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Notes of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes. In case any Notes
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Notes, in either its own
name or that of its predecessor Trustee, with the full force and effect which
this Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when any of
the Notes remain Outstanding, the Trustee may appoint an Authenticating Agent or
Agents with respect to one or more series of Notes which shall be authorized to
act on behalf of the Trustee to authenticate
<PAGE>
Notes of such series issued upon exchange, registration of transfer or partial
redemption or repayment thereof, except upon original issuance or in replacement
of mutilated, lost, stolen or destroyed Notes, and Notes so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Except on original issuance or in replacement of
mutilated, lost, stolen or destroyed Notes, wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States of America or of any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to applicable law or
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Notes may at any time resign by
giving written notice of resignation to the Trustee for such series and to the
Company. The Trustee for any series of Notes may at any time terminate the
agency of an Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Notes of the series with respect to
which such Authenticating Agent will serve in the manner set forth in Section
106. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
<PAGE>
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Notes of such series may have endorsed thereon, in addition to
or in lieu of the Trustee's certificate of authentication, an alternate
certificate of authentication substantially in the following form:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee,
By: _______________________________
as Authenticating Agent
By: _______________________________
as Authorized Signatory
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every Holder of
Notes, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any Authenticating Agent
nor any Paying Agent nor any Security Registrar shall be held accountable by
reason of the disclosure of any information as to the names and addresses of the
Holders of Notes in accordance with TIA Section 312, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after June 30 of each year
commencing with the first June 30 after the first issuance of Notes pursuant to
this Indenture, the Trustee shall transmit by mail to all Holders of Notes as
provided in TIA Section 313(c) a brief report dated as of such June 30 if
required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or if the Company is not required to file
<PAGE>
information, documents or reports pursuant to either of such Sections, then
it will file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Notes, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided
in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
SECTION 704. The Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record
Date for interest for each series of Notes, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders
of Registered Notes of such series as of such Regular Record Date, or if
there is no Regular Record Date for interest for such series of Notes,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in Writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished, provided, however, that, so long as the
Trustee is the Security Registrar, no such list shall be required to be
furnished.
<PAGE>
ARTICLE VIII
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of the Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other entity, provided that in any such
case, (1) either the Company shall be the continuing entity, or (2) the
successor entity shall be an entity organized and existing under the laws of the
United States or a State thereof and such successor entity shall expressly
assume the due and punctual payment of the principal of (and premium or
Make-Whole Amount, if any) and any interest (including all Additional Amounts,
if any, payable pursuant to Section 1012) on all of the Notes, according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company, by
supplemental indenture, complying with Article Nine hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such entity and immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any Subsidiary as a result thereof as
having been incurred by the Company or such Subsidiary at the time or such
transaction, no Event of Default, and no event which, after notice or the lapse
of time, or both, would become an Event of Default, shall have occurred and be
continuing.
SECTION 802. Rights and Duties of Successor Entity. In case of any
consolidation, merger, sale, lease or conveyance permitted under Section 801 and
upon any assumption by the successor entity, such successor entity shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the Company, and the predecessor entity, except in the event of
a lease, shall be relieved of any further obligation under this Indenture and
the Notes. Such successor entity thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor entity,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Notes which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Notes which such
successor entity thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Notes so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Notes theretofore
issued in accordance with the terms of this Indenture as though all of such
Notes had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
of the Company and an Opinion of Counsel to the effect that any such
<PAGE>
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders. Without
the consent of any Holders of Notes, the Company and the Guarantor, when
authorized by or pursuant to a Board Resolution and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company or the
Guarantor and the assumption by any such successor of the covenants of the
Company or the Guarantor, respectively, herein and in the Notes contained;
or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Notes (and if such covenants are to be for
the benefit of less than all series of Notes, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Notes (and if such Events of Default are to
be for the benefit of less than all series of Notes, stating that such
Events of Default are expressly being included solely for the benefit of
such series); provided, however, that in respect of any such additional
Events of Default such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of that or those series of Notes to
which such additional Events of Default apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
permit or facilitate the issuance of Notes in uncertificated form, provided
that any such action shall not adversely affect the interests of the
Holders of Notes of any series in any material respect; or
(5) to change or eliminate any of the provisions or this Indenture,
provided that any such change or elimination shall become effective only
when there is no Note Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Notes; or
<PAGE>
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes of one or more
series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided such provisions shall not
adversely affect the interests of the Holders of Notes of any series in any
material respect; or
(9) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Notes pursuant to Sections 401, 1402 and 1403;
provided that any such action shall not adversely affect the interests of
the Holders of Notes of such series or any other series of Notes in any
material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Notes of such series affected by such supplemental indenture, by Act
of said Holders delivered to the Company, the Guarantor and the Trustee, the
Company, and the Guarantor when authorized by or pursuant to a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note of such series affected thereby:
(1) change the Stated Maturity of the principal of (or premium or
Make-Whole Amount, if any, on), or any installment of principal of or
interest on or any Additional Amounts payable in respect thereof, any Note;
or reduce the principal amount thereof or the rate or amount of interest
thereon, or any premium payable upon the redemption thereof, or change any
obligation of the Company to pay Additional Amounts pursuant to Section
1012 (except as contemplated by Section 801(1) or 1205 and permitted by
Section 901(1)), or adversely affect any right of repayment at the option
of the Holder of any Note, or change any Place of Payment where, or the
currency or currencies, currency unit or units or composite currency or
currencies in which, any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof, or
(2) reduce the percentage in principal amount of the Outstanding Notes
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or reduce the requirements of Section 1504
for quorum or voting, or
(3) make any change in any material provision of Article 12 that
adversely affects the interests of any Holder of the Notes, or
<PAGE>
(4) modify any of the provisions of this Section, Section 513 or
Section 1013, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Note affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Notes, or which modifies the rights
of the Holders of Notes of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Notes of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution and
delivery of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with TIA. Every supplemental indenture executed
pursuant to this Article shall conform to the requirements of the TIA as then in
effect.
SECTION 906. Reference in Notes to Supplemental Indentures. Notes of any
series authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall, if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Notes of any
series so modified as to conform, in the opinion of the Trustee and the Company,
to any such supplemental indenture may be prepared and executed by the Company
and the Guarantor and authenticated and delivered by the Trustee in exchange for
Outstanding Notes of such series.
<PAGE>
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium (if any), Make-Whole Amount (if
any), Interest and Additional Amounts (if any). The Company covenants and agrees
for the benefit of the Holders of each series of Notes that it will duly and
punctually pay the principal of (and premium or Make-Whole Amount, if any) and
interest on and any Additional Amounts payable in respect of the Notes of that
series in accordance with the terms of such series of Notes and this Indenture.
Payment of the principal of and interest on the Notes will be made at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York (which shall initially be an office or agency of
the Trustee), in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
SECTION 1002. Maintenance of Office or Agency. The Company shall maintain
in each Place of Payment for any series of Notes an office or agency where Notes
of that series may be presented or surrendered for payment, where Notes of that
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes of that
series and this Indenture may be served.
The Company may from time to time designate one or more other offices or
agencies where the Notes of one or more series may be presented or surrendered
for any or all of such purposes, and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in accordance with the requirements set forth above for Notes of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby designates as a Place of Payment
where the Notes may be presented or surrendered for payment, where the Notes may
be surrendered for registration of transfer or exchange or where notices and
demands to and upon the Company in respect of the Notes and this Indenture, the
office or agency of the Company in the Borough of Manhattan, The City of New
York, and initially appoints the Trustee at its Corporate Trust Office as Paying
Agent in such city and as its agent to receive all such presentations,
surrenders, notices and demands.
SECTION 1003. Money for Notes Payments to Be Held in Trust. If the Company
shall at any time act as its own Paying Agent with respect to any series of the
Notes the Company will, on or before each due date of the principal of and
premium or Make-Whole Amount, if any, or interest on or Additional Amounts in
respect of, any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium or
Make-Whole Amount, if any) or interest or Additional Amounts so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of the Company's action or
failure so to act.
<PAGE>
Whenever the Company shall have one or more Paying Agents for any series of
Notes it will, on or before each due date of the principal of (and premium or
Make-Whole Amount, if any), or interest on or Additional Amounts in respect of,
any Notes of that series, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium or Make-Whole Amount, if any) or interest or
Additional Amounts, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest or
Additional Amounts and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will
(1) hold all sums held by it for the payment of principal of (and
premium or Make-Whole Amount, if any) or interest on the Notes in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any such payment of
principal (or premium or Make-Whole Amount, if any) or interest; and
(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Except as otherwise provided in the Notes, any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of (and premium or Make-Whole Amount, if any) or
interest on or Additional Amounts in respect of, any Note of any series and
remaining unclaimed for two years after such principal (or premium or Make-Whole
Amount, if any) or interest or Additional Amounts has become due and payable
shall be paid to the Company upon Company Request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment of such principal of (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts in respect of, on any Note, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
<PAGE>
SECTION 1004. Limitations on Incurrence of Indebtedness. Neither the
Company nor any Subsidiary will incur any Indebtedness if, immediately after
giving effect to the incurrence of that additional Indebtedness and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Indebtedness of the Company and its Subsidiaries on a consolidated
basis determined in accordance with GAAP is greater than 60% of the sum of
(without duplication) (i) the Total Assets of the Company and its Subsidiaries
as of the end of the calendar quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if the filing is not permitted under the Exchange
Act, with the Trustee) prior to the incurrence of the additional Indebtedness
and (ii) the purchase price of any real estate assets or mortgages receivable
acquired and the amount of any securities offering proceeds received (to the
extent that the proceeds were not used to acquire real estate assets or
mortgages receivable or used to reduce Indebtedness), by the Company or any
Subsidiary since the end of the calendar quarter, including those proceeds
obtained in connection with the incurrence of the additional Indebtedness.
In addition to the foregoing limitation on the incurrence of Indebtedness,
neither the Company nor any Subsidiary will incur any Indebtedness secured by
any Encumbrance upon any of the property of the Company or any Subsidiary if,
immediately after giving effect to the incurrence of the additional Indebtedness
and the application of the proceeds thereof, the aggregate principal amount of
all outstanding Indebtedness of the Company and its Subsidiaries on a
consolidated basis which is secured by any Encumbrance on property of the
Company or any Subsidiary is greater than 40% of the sum of (without
duplication) (i) the Total Assets of the Company and its Subsidiaries as of the
end of the calendar quarter covered in the Company's Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, as the case may be, most recently filed with
the Commission (or, if the filing is not permitted under the Exchange Act, with
the Trustee) prior to the incurrence of the additional Indebtedness and (ii) the
purchase price of any real estate assets or mortgages receivable acquired and
the amount of any securities offering proceeds received (to the extent that the
proceeds were not used to acquire real estate assets or mortgages receivable or
used to reduce Indebtedness), by the Company or any Subsidiary since the end of
the calendar quarter, including those proceeds obtained in connection with the
incurrence of the additional Indebtedness.
The Company and its Subsidiaries may not at any time own Total Unencumbered
Assets equal to less than 150% of the aggregate outstanding principal amount of
the Unsecured Indebtedness of the Company and its Subsidiaries on a consolidated
basis.
In addition to the foregoing limitations on the incurrence of Indebtedness,
neither the Company nor any Subsidiary will incur any Indebtedness if the ratio
of Consolidated Income Available for Debt Service to the Annual Service Charge
for the four consecutive fiscal quarters most recently ended prior to the date
on which the additional Indebtedness is to be incurred shall have been less than
1.5:1 on a pro forma basis after giving effect thereto and to the application of
the proceeds therefrom, and calculated on the assumption that (i) the
Indebtedness and any other Indebtedness incurred by the Company and its
Subsidiaries since the first day of the four-quarter period and the application
of the proceeds therefrom, including to finance other Indebtedness, had occurred
at the beginning of the period, (ii) the repayment or retirement of any other
Indebtedness by the Company and its Subsidiaries since the first day of the
four-quarter period had been repaid or retired at the beginning of that period
<PAGE>
(except that, in making the computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average daily
balance of the Indebtedness during that period), (iii) in the case of Acquired
Indebtedness or Indebtedness incurred in connection with any acquisition since
the first day of the four-quarter period, the related acquisition had occurred
as of the first day of the period with the appropriate adjustments with respect
to the acquisition being included in the pro forma calculation, and (iv) in the
case of any acquisition or disposition by the Company or its Subsidiaries of any
asset or group of assets since the first day of the four-quarter period, whether
by merger, stock purchase or sale, or asset purchase or sale, the acquisition or
disposition and any related repayment of Indebtedness had occurred as of the
first day of the period with the appropriate adjustments with respect to the
acquisition or disposition being included in the pro forma calculation.
SECTION 1005. [Omitted].
SECTION 1006. Existence. Subject to Article Eight, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights and franchises; provided, however, that the Company
shall not be required to preserve any right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1007. Maintenance of Properties. The Company will cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company or any Subsidiary from selling or otherwise disposing for
value its properties in the ordinary course of its business.
SECTION 1008. Insurance. The Company will, and will cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value with financially sound
and reputable insurers.
SECTION 1009. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1010. Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act, the Company will,
to the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents
<PAGE>
which the Company would have been required to file with the Commission pursuant
to such Section 13 or 15(d) (the "Financial Statements") if the Company were so
subject, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required so to file such documents if the Company were so subject. The
Company and the Guarantor will, for so long as any of the Initial Notes are
outstanding, furnish to Holders of the Initial Notes and to security analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) of the Securities Act.
The Company will also in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders copies of the
annual reports and quarterly reports which the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Company were subject to such Sections, and (ii) file with the Trustee
copies of the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such Sections and
(y) if filing such documents by the Company with the Commission is not permitted
under the Exchange Act, promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents to
any prospective Holder.
SECTION 1011. Statement as to Compliance. The Company and the Guarantor
will deliver to the Trustee, within 120 days after the end of each fiscal year,
a brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 1011, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1012. Additional Amounts. If any Notes of a series provide for the
payment of Additional Amounts, the Company will pay to the Holder of any Note of
such series such Additional Amounts as may be specified in this Indenture.
Whenever in this Indenture there is mentioned, in any context except in the case
of Section 502(1), the payment of interest on, or in respect of, any Note of any
series, any such mention shall be deemed to include mention of the payment of
Additional Amounts provided by the terms of such series established pursuant to
this Indenture to the extent that, in such context, Additional Amounts are, were
or would be payable in respect thereof pursuant to such terms and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
If the Notes of a series provide for the payment of Additional Amounts, at
least 10 days prior to the first Interest Payment Date with respect to that
series of Notes (or if the Notes of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying
<PAGE>
Agent or Paying Agents whether such payment of principal of and any premium or
interest on the Notes of that series shall be made to Holders of Notes of that
series who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Notes of
the series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Notes of that series and the Company will
pay to the Trustee or such Paying Agent the Additional Amounts required by the
terms of such Notes. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned certificate, then the Trustee or such
Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Notes of a series until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Notes of a series without withholding or deductions until
otherwise advised. The Company covenants to indemnify the Trustee and any Paying
Agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any them or in reliance on any
Officers' Certificate furnished pursuant to this Section or in reliance on the
Company's not furnishing such an Officers' Certificate.
SECTION 1013. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1010, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Notes of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE XI
REDEMPTION OF NOTES
SECTION 1101. Applicability of Article. The Notes may be redeemed at any
time at the option of the Company, in whole or in part, at a redemption price
equal to the sum of (i) the principal amount of the Notes being redeemed plus
accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount,
if any, with respect to such Notes (the "Redemption Price"). The Notes shall be
redeemable in accordance with their terms and in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Notes shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Notes of any series, the Company shall, at least 45 days prior
to the giving of the notice of redemption required by Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Notes of such series to be
redeemed. In the case of any redemption of Notes prior to the expiration of any
restriction on such redemption provided in the terms of such Notes or
<PAGE>
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Notes to Be Redeemed. If less than
all of the Notes of any series are to be redeemed, the particular Notes to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Notes of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Notes of that series or any integral
multiple thereof) of the principal amount of Notes of such series of a
denomination larger than the minimum authorized denomination for Notes of that
series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Notes selected for redemption and, in
the case of any Notes selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Notes shall relate, in the case of
any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 106, not less than 30 days nor more than 60 days
prior to the Redemption Date to each Holder of Notes to be redeemed, but failure
to give such notice in the manner herein provided to the Holder of any Note
designated for redemption as a whole or in part, or any defect in the notice to
any such Holder, shall not affect the validity of the proceedings for the
redemption of any other such Note or portion thereof.
Any notice that is mailed to the Holders of Registered Notes in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if
any,
(3) if less than all Outstanding Notes of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Note or Notes to be redeemed,
(4) in case any Note is to be redeemed in part only, the notice which
relates to such Note shall state that on and after the Redemption Date,
upon surrender of such Note, the holder
<PAGE>
will receive, without a charge, a new Note or Notes of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if
any, will become due and payable upon each such Note, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after said date,
(6) the Place or Places of Payment where such Notes maturing after the
Redemption Date, are to be surrendered for payment of the Redemption Price,
(7) that the redemption is for a sinking fund, if such is that case,
(8) the CUSIP number of such Note, and
(9) that such securities will cease to accrue interest after the
Redemption Date.
Notice of redemption of Notes to be redeemed shall be given by the Company
or, at the Company's request, may be given by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one Business Day prior
to any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money sufficient to
pay on the Redemption Date the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all of
the Notes or portions thereof which are to be redeemed on that date.
SECTION 1106. Notes Payable on Redemption Date. Notice of redemption having
been given as aforesaid, the Notes so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price, and from and after such
date (unless the Company shall default in the payment of the Redemption Price)
such Notes shall, if the same were interest-bearing, cease to bear interest.
Upon surrender of any such Note for redemption in accordance with said notice,
such Note shall be paid by the Company at the Redemption Price; provided,
however, that installments of interest on Registered Notes whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
Subject to Section 1113, if any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium or
Make-Whole Amount, if any) shall, until paid, bear interest from the Redemption
Date at the rate borne by the Note.
SECTION 1107. Notes Redeemed in Part. Any Registered Note which is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the
<PAGE>
Holder thereof or his or her attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note without service charge a new Note or Notes of the same
series, of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
ARTICLE XII
GUARANTY
SECTION 1201. Guaranty. The Guarantor, as primary obligor and not merely as
surety, hereby irrevocably and unconditionally guarantees to each Holder and to
the Trustee and its successors and assigns (a) the full and punctual payment
when due, whether at Stated Maturity, by acceleration or otherwise, of all
obligations of the Company now or hereafter existing under this Indenture
whether for principal of or interest on the Notes, (and premium and Make-Whole
Amount if any) and all other monetary obligations of the Company under this
Indenture and the Notes in respect of the Notes and (b) the full and punctual
performance within the applicable grace periods of all other obligations of the
Company under this Indenture and the Notes (all such obligations guaranteed
hereby by the Guarantor being the "Guaranteed Obligations"). The guaranty of the
Guarantor under this Article 12 is herein referred to as this "Guaranty".
The Guarantor agrees to pay any and all fees and expenses (including
reasonable attorney's fees and expenses) incurred by the Trustee or the Holders
in enforcing any rights under this Article 12 with respect to the Guarantor.
Without limiting the generality of the foregoing, this Guaranty guarantees,
to the extent provided herein, the payment of all amounts which constitute part
of the Guaranteed Obligations and would be owed by the Company under this
Indenture or the Notes but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company.
SECTION 1202. Guaranty Absolute. This Guaranty is irrevocable, absolute and
unconditional. The Guarantor guarantees that the Guaranteed Obligations will be
performed strictly in accordance with the terms of this Indenture, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Trustee or the Holders with
respect thereto. The obligations of the Guarantor under this Guaranty are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Company or any other
guarantor or whether the Company or any other guarantor is joined in any such
action or actions. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of this Indenture or the
Notes with respect to the Company or any agreement or instrument relating
thereto;
<PAGE>
(b) any change in the time, manner or place of payment of, or in any
other term of any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from this Indenture;
(c) the failure to give notice to the Guarantor of the occurrence of a
default under the provisions of this Indenture or the Notes;
(d) any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(e) any failure, omission, delay by or inability on the part of the
Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the Notes;
(f) any change in the corporate or other structure, or termination,
dissolution, consolidation or merger of the Company or the Guarantor with
or into any other entity, the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the
assets of the Company or the Guarantor, the marshaling of the assets and
liabilities of the Company or the Guarantor, the receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors, or readjustments of, or other
similar proceedings affecting the Company or the Guarantor, or any of the
assets of any of them;
(g) the assignment of any right, title or interest of the Trustee or
any Holder in this Indenture or the Notes to any other Person; or
(h) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or
dissimilar to any of the foregoing, that might otherwise constitute a
defense available to, or a discharge of, the Company or the Guarantor,
other than performance in full of the Guaranteed Obligations for the
payment of money; it being the intent of the Guarantor that its obligations
hereunder shall not be discharged except by payment of all amounts owing
pursuant to this Indenture or the Notes.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment or performance with respect to any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the
Trustee, any Holder or any other Person upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment or
performance had not been made or occurred. The obligations of the Guarantor
under this Guaranty shall not be subject to reduction, termination or other
impairment by any set-off, recoupment, counterclaim or defense or for any other
reason.
<PAGE>
SECTION 1203. Waivers. The Guarantor hereby irrevocably waives, to the
extent permitted by applicable law:
(a) promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty;
(b) any requirement that the Trustee, any Holder or any other Person
protect, secure, perfect or insure any Encumbrance or any property subject
thereto or exhaust any right or take any action against the Company or any
other Person, or obtain any relief pursuant to this Indenture or pursue any
other available remedy;
(c) all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Indenture or the Notes;
(d) any defense arising by reason of any claim or defense based upon
an election of remedies by the Trustee or any Holder which in any manner
impairs, reduces, releases or otherwise adversely affects its subrogation,
contribution or reimbursement rights or other rights to proceed against the
Company or any other Person; and
(e) any duty on the part of the Trustee or any Holder to disclose to
the Guarantor any matter, fact or thing relating to the business, operation
or condition of the Company and its assets now known or hereafter known by
the Trustee or such Holder.
SECTION 1204. Waiver of Subrogation and Contribution. Until this Indenture
has been discharged, the Guarantor hereby irrevocably waives any claim or other
right which it may now or hereafter acquire against the Company or any guarantor
that arise from the existence, payment, performance or enforcement of the
Guarantor's obligations under this Guaranty, including any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Trustee or any Holder against the
Company or any guarantor which the Trustee or any Holder now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from the
Company, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence and the Guaranteed Obligations shall not have been paid in full, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for the benefit of, the Trustee, and the Holders, and shall
forthwith be paid to the Trustee for the benefit of the Holders to be credited
and applied to the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of this Indenture. The Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waivers set forth in this Section
1204 are knowingly made in contemplation of such benefits.
The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. The Guarantor
further agrees that, as between itself, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 5 hereof for the purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as
<PAGE>
provided in Article 5 hereof, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantor for the purpose of this
Guaranty.
SECTION 1205. Certain Agreements. The Guarantor covenants and agrees that,
as a condition to the acceptability of this Guaranty to the Trustee and the
Holders, the Guarantor will:
(a) comply in all material respects with all applicable laws, rules,
regulations and orders, such compliance to include paying when due all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent contested in good faith; and
(b) preserve and maintain its existence, rights (contractual and
statutory) and franchises; provided, however, that the Guarantor shall not
be required to preserve any right or franchise if the general partner of
the Guarantor shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Guarantor and the loss
thereof is not disadvantageous in any material respect to the Guarantor or
the Holders.
(c) not consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person whether or not affiliated
with such Guarantor unless:
(i) the Person formed by or surviving any such consolidation or
merger (if other than a Guarantor or the Company) unconditionally
assumes all the obligations of the Guarantor, pursuant to a
supplemental indenture in form and substance satisfactory to the
Trustee, under the Notes, the Indenture and the Guaranty on the terms
set forth herein or therein; and
(ii) immediately after giving effect to such transaction, no
default or Event of Default exists.
Any such consolidation, merger, sale, lease or conveyance is subject to
the condition that the Trustee receive an Officers' Certificate of the Guarantor
and an Opinion of Counsel to the effect that the merger, sale, lease or
conveyance, and the assumption by any successor entity, complies with the
provisions of this Article and that all conditions precedent herein provided for
relating to such transactions have been complied with.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Guaranty endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. The Guaranty
shall in all respects have the same legal rank and benefit under this Indenture
theretofore and thereafter issued in accordance with the terms of this Indenture
as though such Guaranty had been issued at the date of the execution hereof.
Except as set forth in Articles 8 and 10 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of the Guarantor with or into
the Company or shall prevent any sale or conveyance of the property of the
Guarantor as an entirety or substantially as an entirety to the Company.
<PAGE>
SECTION 1206. No Waiver; Cumulative Remedies. No failure on the part of the
Trustee or any Holder to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. The Trustee and the Holders
shall have all of the rights and remedies granted in this Indenture and
available at law or in equity, and these same rights and remedies may be pursued
separately, successively or concurrently against the Company or the Guarantor.
SECTION 1207. Continuing Guaranty. The Guaranty is a continuing guaranty
and, except as otherwise provided herein, shall (a) remain in full force and
effect until the satisfaction of the Guaranteed Obligations, (b) be binding upon
the Guarantor and (c) enure to the benefit of and be enforceable by the Trustee,
the Holders and their successors, transferees and assigns.
SECTION 1208. Severability. Any provisions of this Article 12 which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
SECTION 1209. Limitation on Guarantor Liability. The Guarantor, and by its
acceptance hereof, each Holder, hereby confirms that it is the intention of all
such parties that the guaranty by such Guarantor pursuant to its Guaranty not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Holders and the Guarantor hereby irrevocably agree that the obligations of such
Guarantor under this Article 12 shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 12, if
any, result in the obligations of the Guarantor under the Guaranty not
constituting a fraudulent transfer or conveyance.
ARTICLE XIII
[OMITTED]
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. The provisions of this Article shall be
applicable to the Notes, and the Company may at its option by Board Resolution,
at any time, with respect to the Notes, elect to have Section 1402 or Section
1403 applied to such Outstanding Notes upon compliance with the conditions set
forth below in this Article.
<PAGE>
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise of the
above option applicable to this Section with respect to any Notes of or within a
series, the Company shall be deemed to have been discharged from its obligations
with respect to such Outstanding Notes on the date the conditions set forth in
Section 1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Notes, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 1405
and the other Sections of this Indenture referred to in clauses (A) and (B)
below, and to have satisfied all of its other obligations under such Notes and
this Indenture insofar as such Notes are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of such Outstanding Notes to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of (and premium
or Make-Whole Amount, if any) and interest, if any, on such Notes appertaining
thereto when such payments are due, (B) the Company's obligations with respect
to such Notes under Sections 305, 306, 1002 and 1003 and with respect to the
payment of Additional Amounts, if any, on such Notes as contemplated by Section
1012, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including Section 606 and (D) this Article. Subject to compliance
with this Article Fourteen, the Company may exercise its option under this
Section notwithstanding the prior exercise of its option under Section 1403 with
respect to such Notes.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of the above
option applicable to this Section with respect to any Notes, the Company shall
be released from its obligations under Sections 1004 to 1010, inclusive, with
respect to such Outstanding Notes on and after the date the conditions set forth
in Section 1404 are satisfied (hereinafter, "covenant defeasance"), and such
Notes shall thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 1004 to 1010,
inclusive, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant or by
reason of reference in any Section or such other covenant to any other provision
herein or in any other document and such omission to comply shall not constitute
a default or an Event of Default under Section 501(6) but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Notes of or within a series:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article 14 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the
<PAGE>
Holders of such Notes, (1) an amount of money or (2) Government Obligations
applicable to such Notes which through the scheduled payment of principal
and interest in respect thereof in accordance with the terms will provide,
not later than one day before the due date of any payment of principal of
and premium or Make-Whole Amount, if any and interest on such Notes, money
in an amount, or (3) a combination thereof, any case, in an amount
sufficient, without consideration of any reinvestment of such principal and
interest, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the principal
of (and premium or Make-Whole Amount, if any), and interest on such
Outstanding Notes on the Stated Maturity of such principal or installment
of principal or interest or analogous payments applicable to such
Outstanding Notes on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Notes.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Notes shall have
occurred and be continuing on the date of such deposit or, insofar as
Sections 501(5) and 501(6) are concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of execution of this
Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Outstanding Notes will not
recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance
under Section 1403 (as the case may be) have been complied with and an
Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Company's
option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Company Act of 1940, as
amended, by the
<PAGE>
Company with respect to the trust funds representing such deposit or by the
Trustee for such trust funds or (ii) all necessary registrations under said
Act have been effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith.
SECTION 1405. Deposited Money and Government Obligations to be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 1003, all money and Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 1405, the "Trustee") pursuant to
Section 1404 in respect of any Outstanding Notes of any series shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent as the Trustee may determine, to the Holders of such Notes of all sums due
and to become due thereon in respect of principal (and premium or Make-Whole
Amount, if any) and interest but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Notes.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon the Company Request any money or Government Obligations (or other property
and any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE XV
MEETINGS OF HOLDERS OF NOTES
SECTION 1501. Purposes for which Meetings May be Called. A meeting of
Holders of Notes of any series may be called at any time and from time to time
pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Notes of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee may at
any time call a meeting of Holders of Notes of any series for any purpose
specified in Section 1501, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of Holders of Notes of any
series, setting forth the time and the place of such meeting and in general
terms the
<PAGE>
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Notes of any
series shall have requested the Trustee to call a meeting of the Holders of
Notes of such series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Notes of such series in the amount above specified, as
the case may be, may determine the time and the place for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled to vote
at any meeting of Holders of Notes of any series, a Person shall be (1) a Holder
of one or more Outstanding Notes of such series, or (2) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
outstanding Notes of such series by such Holder or Holders. The only Persons who
shall be entitled to be present or to speak at any meeting of Holders of Notes
of any series shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and the Guarantor and their counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a majority in
principal amount of the Outstanding Notes of a series shall constitute a quorum
for a meeting of Holders of Notes of such series; provided, however, that if any
Act is to be taken at such meeting with respect to a consent or waiver which
this Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Notes of a series,
the Persons entitled to vote such specified percentage in principal amount of
the Outstanding Notes of such series shall constitute a quorum. In the absence
of a quorum within 30 minutes after the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Notes of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1502(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
any adjourned meeting shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Notes of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Notes of that series; provided, however,
that, except as limited by the proviso to Section 902, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specific percentage,
<PAGE>
that is less than a majority in principal amount of the Outstanding Notes of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Notes of
that series.
Any resolution passed or decision taken at any meeting of Holders of Notes
of any series duly held in accordance with this Section shall be binding on all
of the Holders of Notes of such series, whether or not present or represented at
the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Notes of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other act that this Indenture expressly provides may be made, given or
taken by the Holders of a specified percentage in principal amount of all
Outstanding Notes affected thereby, or of the Holders of such series and one or
more additional series:
(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the Outstanding Notes of such series that
vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent,
waiver or other action has been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Notes of a series in regard to proof of the holding of Notes of such
series and of the appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of Notes
shall be proved in the manner specified in Section 104 and the appointment of
any proxy shall be proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Notes provided in Section 1502(b), in which case the
Company or the Holders of Notes of the series calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Notes of such
series represented at the meeting.
(c) At any meeting each Holder of a Note of such series or proxy shall be
entitled to one vote for each $1,000 principal amount of the Outstanding Notes
of such series held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Note challenged as not
Outstanding and ruled by the chairman of the meeting to be not
<PAGE>
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Note of such series or proxy.
(d) Any meeting of Holders of Notes of any series duly called pursuant to
Section 1502 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding Notes
of such series represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Notes of any series
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Notes of such series or of their representatives by proxy and the
principal amounts and serial numbers of the Outstanding Notes of such series
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record, at least in duplicate, of the proceedings of each meeting of
Holders of Notes of any Series shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the fact, setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in Section 1502
and, if applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of meeting and one such copy
shall be delivered to the Company and another to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 1507. Evidence of Action Taken by Holders. Any request, demand,
authorization, direction, notice, consent, waiver or other Act provided by this
Indenture to be given or taken by a specified percentage in principal amount of
the Holders of any or all series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage
of Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such Act shall become effective when such
instrument or instruments are delivered to the Trustee. Proof and execution of
any instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Article 6) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments. Subject to Article 6, the
execution of any instrument by a Holder or his or her agent or proxy may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in manner as shall be satisfactory to the Trustee.
**********
This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed 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
CARRAMERICA REALTY, L.P., as Guarantor
By: CARRAMERICA REALTY GP
HOLDINGS, INC., as General Partner
By: /s/ Brian K. Fields
------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
BANKERS TRUST COMPANY, as Trustee
By: /s/ Sandra J. Shaffer
------------------------------
Name: Sandra J. Shaffer
Title: Assistant Vice President
<PAGE>
ANNEX A TO INDENTURE
[FORM OF INITIAL NOTE]
[INCLUDE IF A GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
55 WATER STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE IF A GLOBAL NOTE -- THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS
NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS NOMINEE.]
[RESTRICTED SECURITIES LEGEND]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. NOTES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"), (2)
AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE
TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY EXCEPT (A) TO CARRAMERICA REALTY CORPORATION (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER ("QIB") IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE NOTES A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE
<PAGE>
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE) OR
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SUCH NOTE
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR
THE NOTES. IF THE PROPOSED TRANSFEREE IS NOT THE COMPANY, A SUBSIDIARY THEREOF
OR A QIB TO WHICH THIS NOTE IS BEING TRANSFERRED IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE FOR THE NOTES SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UNLESS THE
TRANSFER HAS BEEN REGISTERED UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.
Registered No.
PRINCIPAL AMOUNT
CUSIP No.:
CARRAMERICA REALTY CORPORATION
6.625% NOTE DUE 2005
CARRAMERICA REALTY CORPORATION, a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________ or registered assigns, upon presentation, the principal sum of
__________________ on March 1, 2005 and to pay interest on the outstanding
principal amount thereon from February 23, 1998, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on March 1 and September 1 in each year,
commencing September 1, 1998, at the rate of 6.625% per annum, until the entire
principal hereof is paid or made available for payment; provided, however, that
if the Company or the Guarantor fail to fulfill their obligations in accordance
with and under the Registration Rights Agreement, additional interest will
accrue on this Note at the rate and to the extent set forth in the Registration
Rights Agreement. The interest so payable and punctually paid or duly provided
for on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note is registered at
<PAGE>
the close of business on the Regular Record Date for such interest which shall
be the February 15 or August 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Note is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of the Notes not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made at the office
or agency maintained for that purpose in the City of New York, New York, or
elsewhere as provided in the Indenture, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payments of principal and interest on the Notes (other than payments of
principal and interest due at Maturity) may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Notes of this series are one of a duly authorized issue of securities of
the Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of February 23, 1998 (the "Indenture"),
among the Company, CarrAmerica Realty, L.P., as Guarantor (herein called the
"Guarantor"), and Banker Trust Company (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are authenticated and delivered. This Note is one of
the series designated therein.
Notes of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Note.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously
<PAGE>
given written notice to the Trustee of a continuing Event of Default with
respect to the Notes, the Holders of not less than 25% in principal amount of
the Notes of this series at the time Outstanding shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not
have received from the Holders of a majority in principal amount of Notes of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of
any payment of principal hereof or any interest on or after the respective due
dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Notes of each series of Notes then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes of each series at the time
Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair (i) the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed, or (ii) the obligations of the Guarantor, which are
unconditional, in respect of the Guaranteed Obligations.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any Place of Payment where the principal of (and Make-Whole
Amount, if any, on) and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his or
her attorney duly authorized in writing, and thereupon one or more new Notes of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
<PAGE>
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Note, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future stockholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Note by the Holder thereof and as part of the consideration
for the issue of the Notes of this series.
All capitalized terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a "CUSIP" number to
be printed on the Notes of this series as a convenience to the Holders of such
Notes. No representation is made as to the correctness or accuracy of such CUSIP
number as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, CARRAMERICA REALTY CORPORATION has caused this
instrument to be duly executed under its corporate seal.
Dated: February 23, 1998
CARRAMERICA REALTY CORPORATION
By: ____________________________
Name:
Title:
[Corporate Seal]
Attest:
___________________________
Secretary
CARRAMERICA REALTY, L.P., as Guarantor
By: CARRAMERICA REALTY GP HOLDINGS,
INC., as General Partner
By: __________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By: ___________________________________
Name:
Title:
<PAGE>
================================================================================
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
|-----------------------------------------------|
| |
|-----------------------------------------------|...............................
................................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Note of CarrAmerica Realty Corporation and hereby does irrevocably
constitute and appoint
...................................Attorney to transfer said Note on the books
of the within-named Company with full power of substitution in the premises.
Dated: ..................... ................................................
................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
================================================================================
<PAGE>
ANNEX B TO INDENTURE
[FORM OF INITIAL NOTE]
[INCLUDE IF A GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
55 WATER STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE IF A GLOBAL NOTE -- THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS
NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS NOMINEE.]
[RESTRICTED SECURITIES LEGEND]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"), (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER
THE NOTE EVIDENCED HEREBY EXCEPT (A) TO CARRAMERICA REALTY CORPORATION (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER
("QIB") IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE
<PAGE>
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE) OR
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SUCH NOTE
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR
THE NOTES. IF THE PROPOSED TRANSFEREE IS NOT THE COMPANY, A SUBSIDIARY THEREOF
OR A QIB TO WHICH THIS NOTE IS BEING TRANSFERRED IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE FOR THE NOTES SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UNLESS THE
TRANSFER HAS BEEN REGISTERED UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.
Registered No.
PRINCIPAL AMOUNT
CUSIP No.:
CARRAMERICA REALTY CORPORATION
6.875% NOTE DUE 2008
CARRAMERICA REALTY CORPORATION, a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________ or registered assigns, upon presentation, the principal sum of
__________________ on March 1, 2008 and to pay interest on the outstanding
principal amount thereon from February 23, 1998, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on March 1 and September 1 in each year,
commencing September 1, 1998, at the rate of 6.875% per annum, until the entire
principal hereof is paid or made available for payment; provided, however, that
if the Company or the Guarantor fail to fulfill their obligations in accordance
with and under the Registration Rights Agreement, additional interest will
accrue on this note at the rate and to the extent set forth in the Registration
Rights Agreement. The interest so payable and punctually paid or duly provided
for on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note is registered at the close of business on the
Regular Record Date for such interest which shall be the February 15 or August
15
<PAGE>
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may either be paid to the Person in whose name this Note is registered
at the close of business on a Special Record Date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given to
Holders of the Notes not more than 15 days and not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. Payment of the principal of and
interest on this Note will be made at the office or agency maintained for that
purpose in the City of New York, New York, or elsewhere as provided in the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payments of principal and
interest on the Notes (other than payments of principal and interest due at
Maturity) may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Notes of this series are one of a duly authorized issue of securities of
the Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of February 23, 1998 (the "Indenture"),
among the Company, CarrAmerica Realty, L.P., as Guarantor (herein called the
"Guarantor"), and Bankers Trust Company (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are authenticated and delivered. This Note is one of
the series designated therein.
Notes of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Note.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with respect to the
Notes,
<PAGE>
the Holders of not less than 25% in principal amount of the Notes of this series
at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from
the Holders of a majority in principal amount of Notes of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any interest on or after the respective due dates expressed
herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Notes of each series of Notes then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes of each series at the time
Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair (i) the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed, or (ii) the obligations of the Guarantor, which are
unconditional, in respect of the Guaranteed Obligations.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any Place of Payment where the principal of (and Make-Whole
Amount, if any, on) and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his or
her attorney duly authorized in writing, and thereupon one or more new Notes of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
<PAGE>
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Note, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future stockholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Note by the Holder thereof and as part of the consideration
for the issue of the Notes of this series.
All capitalized terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a "CUSIP" number to
be printed on the Notes of this series as a convenience to the Holders of such
Notes. No representation is made as to the correctness or accuracy of such CUSIP
number as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, CARRAMERICA REALTY CORPORATION has caused this
instrument to be duly executed under its corporate seal.
Dated: February 23, 1998
CARRAMERICA REALTY CORPORATION
By: ____________________________
Name:
Title:
[Corporate Seal]
Attest:
___________________________
Secretary
CARRAMERICA REALTY, L.P., as Guarantor
By: CARRAMERICA REALTY GP HOLDINGS,
INC., as General Partner
By: __________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By: ___________________________________
Authorized Signatory
<PAGE>
================================================================================
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
|-----------------------------------------------|
| |
|-----------------------------------------------|...............................
................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Note of CarrAmerica Realty Corporation and hereby does irrevocably
constitute and appoint
....................................Attorney to transfer said Note on the books
of the within-named Company with full power of substitution in the premises.
Dated: ..................... ................................................
................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
================================================================================
<PAGE>
ANNEX C TO INDENTURE
[INCLUDE IF A GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
55 WATER STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE IF A GLOBAL NOTE -- THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS
NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS NOMINEE.]
[INCLUDE IF A PRIVATE EXCHANGE SECURITY -- THE NOTE EVIDENCED HEREBY HAS
NOT BEEN REGISTERED UNDER THE U.S. NOTES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES
THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY EXCEPT (A) TO CARRAMERICA REALTY CORPORATION (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER ("QIB") IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE NOTES A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRUSTEE) OR
<PAGE>
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SUCH NOTE
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR
THE NOTES. IF THE PROPOSED TRANSFEREE IS NOT THE COMPANY, A SUBSIDIARY THEREOF
OR A QIB TO WHICH THIS NOTE IS BEING TRANSFERRED IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE FOR THE NOTES SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UNLESS THE
TRANSFER HAS BEEN REGISTERED UNDER THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.]
Registered No.
PRINCIPAL AMOUNT
CUSIP No.:
CARRAMERICA REALTY CORPORATION
6.625% NOTE DUE 2005
CARRAMERICA REALTY CORPORATION, a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________ or registered assigns, upon presentation, the principal sum of
_______________ on March 1, 2005 and to pay interest on the outstanding
principal amount thereon from February 23, 1998, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on March 1 and September 1 in each year,
commencing September 1, 1998, at the rate of 6.625% per annum, until the entire
principal hereof is paid or made available for payment. The interest so payable
and punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person
<PAGE>
in whose name this Note is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of the Notes not more than 15
days and not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payment of the principal of and interest on this Note will be made at
the office or agency maintained for that purpose in the City of New York, New
York, or elsewhere as provided in the Indenture, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payments of principal and interest on the Notes (other than payments of
principal and interest due at Maturity) may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Notes of this series are one of a duly authorized issue of securities of
the Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of February 23, 1998 (the "Indenture"),
among the Company, CarrAmerica Realty, L.P., as Guarantor (herein called the
"Guarantor"), and Bankers Trust Company (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are authenticated and delivered. This Note is one of
the series designated therein.
Notes of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Note.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes of this
series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received
<PAGE>
from the Holders of a majority in principal amount of Notes of this series at
the time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any interest on or after the respective due dates expressed
herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Notes of each series of Notes then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes of each series at the time
Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair (i) the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed, or (ii) the obligations of the Guarantor, which are
unconditional, in respect of the Guaranteed Obligations.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any Place of Payment where the principal of (and
Make-Whole Amount, if any) and interest on this Note are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of this
series, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose
<PAGE>
name this Note is registered as the owner hereof for all purposes, whether or
not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Note, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Note by the Holder thereof and as part of the consideration
for the issue of the Notes of this series.
All capitalized terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a "CUSIP" number to
be printed on the Notes of this series as a convenience to the Holders of such
Notes. No representation is made as to the correctness or accuracy of such CUSIP
number as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, CARRAMERICA REALTY CORPORATION has caused this
instrument to be executed under its corporate seal.
Dated:
CARRAMERICA REALTY CORPORATION
By: ____________________________
Name:
Title:
[Corporate Seal]
Attest:
___________________________
Secretary
CARRAMERICA REALTY, L.P., as Guarantor
By: CARRAMERICA REALTY GP HOLDINGS,
INC., as General Partner
By: __________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By: ___________________________________
Authorized Signatory
<PAGE>
================================================================================
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
|-----------------------------------------------|
| |
|-----------------------------------------------|...............................
................................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Note of CarrAmerica Realty Corporation and hereby does irrevocably
constitute and appoint
................................... Attorney to transfer said Note on the books
of the within-named Company with full power of substitution in the premises.
Dated: ..................... .......................................
.......................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
================================================================================
<PAGE>
ANNEX D TO INDENTURE
[INCLUDE IF A GLOBAL NOTE -- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
55 WATER STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE IF A GLOBAL NOTE -- THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS
NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS NOMINEE.]
[INCLUDE IF A PRIVATE EXCHANGE SECURITY -- THE NOTE EVIDENCED HEREBY HAS
NOT BEEN REGISTERED UNDER THE U.S. NOTES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES
THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY EXCEPT (A) TO CARRAMERICA REALTY CORPORATION (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER ("QIB") IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE NOTES A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM SUCH TRUSTEE) OR (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND
(3) AGREES THAT IT WILL DELIVER
<PAGE>
TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF
THE NOTE EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SUCH NOTE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE NOTES. IF THE PROPOSED TRANSFEREE IS NOT THE
COMPANY, A SUBSIDIARY THEREOF OR A QIB TO WHICH THIS NOTE IS BEING TRANSFERRED
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE NOTES SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT UNLESS THE TRANSFER HAS BEEN REGISTERED UNDER THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT.]
Registered No.
PRINCIPAL AMOUNT
CUSIP No.:
CARRAMERICA REALTY CORPORATION
6.875% NOTE DUE 2008
CARRAMERICA REALTY CORPORATION, a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________ or registered assigns, upon presentation, the principal sum of
__________________ on March 1, 2008 and to pay interest on the outstanding
principal amount thereon from February 23, 1998, or from the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on ____ and _____ in each year, commencing
_________, 1998, at the rate of ___% per annum, until the entire principal
hereof is paid or made available for payment. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the Regular Record Date for such interest
which shall be the _____ or ______ (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Note is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of the Notes not more than 15 days and
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made at the office
or agency maintained for that purpose in the City of New York, New York, or
elsewhere as provided in the Indenture, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payments of principal and interest on the Notes (other than payments of
principal and interest due at Maturity) may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
<PAGE>
Notes of this series are one of a duly authorized issue of securities of
the Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture, dated as of February 23, 1998 (the "Indenture"),
among the Company, CarrAmerica Realty, L.P., as Guarantor (herein called the
"Guarantor"), and Bankers Trust Company (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are authenticated and delivered. This Note is one of
the series designated therein.
Notes of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Note.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes of this
series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from
the Holders of a majority in principal amount of Notes of this series at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any interest on or after the respective due dates expressed
herein.
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be affected
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Notes of each series of Notes then Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes of each series at the time
Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair (i) the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Note at the times, place and rate, and in the coin or
currency, herein prescribed, or (ii) the obligations of the Guarantor, which are
unconditional, in respect of the Guaranteed Obligations.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any Place of Payment where the principal of (and Make-Whole
Amount, if any) and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of this
series, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in registered form in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Note, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or director, as
<PAGE>
such, of the Company or of any successor, either directly or through the Company
or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Note by the Holder thereof and as part of the consideration
for the issue of the Notes of this series.
All capitalized terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a "CUSIP" number to
be printed on the Notes of this series as a convenience to the Holders of such
Notes. No representation is made as to the correctness or accuracy of such CUSIP
number as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, CARRAMERICA REALTY CORPORATION has caused this
instrument to be executed under its corporate seal.
Dated:
CARRAMERICA REALTY CORPORATION
By: ____________________________
Name:
Title:
[Corporate Seal]
Attest:
___________________________
Secretary
CARRAMERICA REALTY, L.P., as Guarantor
By: CARRAMERICA REALTY GP HOLDINGS,
INC., as General Partner
By: __________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, as Trustee
By: ___________________________________
Authorized Signatory
<PAGE>
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
|-----------------------------------------------|
| |
|-----------------------------------------------|...............................
................................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Note of CarrAmerica Realty Corporation and hereby does irrevocably
constitute and appoint
................................... Attorney to transfer said Note on the books
of the within-named Company with full power of substitution in the premises.
Dated: ..................... ................................................
................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
================================================================================
<PAGE>
EXHIBIT [A]
FORM OF CERTIFICATE OF TRANSFER
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust Department
Re: 6.625% Notes due 2005
6.875% Notes due 2008
Reference is hereby made to the Indenture, dated as of February 23, 1998
(the "Indenture"), between CarrAmerica Realty Corporation, as issuer (the
"Company"), CarrAmerica Realty L.P., as Guarantor, and Bankers Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. Check if Transferee will take delivery of a beneficial interest in a
Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant
to and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the beneficial interest or Definitive Note is being
transferred to a Person that the Transferor reasonably believed and believes is
purchasing the beneficial interest or Definitive Note for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Restricted Securities
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
<PAGE>
2. Check and complete if Transferee will take delivery of a beneficial
interest in a Definitive Note pursuant to any provision of the Securities Act
other than Rule 144A. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global
Notes and Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a subsidiary thereof;
or
(c) such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional Accredited Investor
and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144, and the Transferor hereby
further certifies that the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of
a principal amount of Notes at the time of transfer of less than $100,000, an
Opinion of Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Restricted securities Legend printed on the
Definitive Notes and in the Indenture and the Securities Act.
<PAGE>
3. Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Restricted
Securities Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Restricted Securities Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.
(b) Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144 and in
compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any State of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Restricted
Securities Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will not be subject to the restrictions on transfer enumerated in the
Restricted Securities Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
Dated: _________________, ___
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the 144A Global Note (CUSIP ______), or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ________), or
(ii) Unrestricted Global Note (CUSIP ________); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
<PAGE>
EXHIBIT [B]
FORM OF CERTIFICATE OF EXCHANGE
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust Department
Re: 6.625% Notes due 2005
6.875% Notes due 2008
(CUSIP ______________)
Reference is hereby made to the Indenture, dated as of February 23, 1998
(the "Indenture"), among CarrAmerica Realty Corporation, as issuer (the
"Company"), CarrAmerica Realty, L.P., as Guarantor, and Bankers Trust Company,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
______________, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) Check if Exchange is from beneficial interest in a Restricted Global
Note to beneficial interest in an Unrestricted Global Note. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Restricted Securities Legend are not required
in order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
<PAGE>
(b) Check if Exchange is from beneficial interest in a Restricted Global
Note to Unrestricted Definitive Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Restricted Securities Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(c) Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Restricted Securities Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner's Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Restricted Securities Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a) Check if Exchange is from beneficial interest in a Restricted Global
Note to Restricted Definitive Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Restricted
Securities Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive
<PAGE>
Note for a beneficial interest in the 144A Global Note IAI, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Restricted Securities Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By: _________________________
Name:
Title:
Dated: __________________, ___
<PAGE>
EXHIBIT [D]
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Bankers Trust Company
Four Albany Street
New York, NY 10006
Attn: Corporate Trust Department
Re: 6.625% Notes due 2005
6.875% Notes due 2008
Reference is hereby made to the Indenture, dated as of February 23, 1998
(the "Indenture"), between CarrAmerica Realty Corporation, as issuer (the
"Company"), CarrAmerica Realty L.P., as Guarantor, and Bankers Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) a beneficial interest in a Global Note, or
(b) a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we
<PAGE>
will do so only (A) to the Company or any subsidiary thereof, (B) in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that is purchasing at least $100,000 principal amount of Notes and that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter and an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) pursuant to the provisions of Rule 144(k) under the
Securities Act or (E) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (D) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect. We further understand that any subsequent
transfer by us of the Notes or beneficial interest therein acquired by us must
be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion, and are so acquiring or purchasing at least $100,000
principal amount of Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By: __________________________
Name:
Title:
Dated: _________________, ___
EXHIBIT 10.2
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CARRAMERICA REALTY, L.P.
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF CARRAMERICA REALTY, L.P. (this "First Amendment"), dated
October 6, 1997, is entered into by CarrAmerica Realty GP Holdings, Inc., a
Delaware corporation, as general partner (the "General Partner") of CarrAmerica
Realty, L.P. (the "Partnership"), for itself and on behalf of the limited
partners of the Partnership, and 2600 West Olive Partnership, Ltd., a California
limited partnership (the "Contributor").
WHEREAS, on the date hereof, the Contributor is receiving Class D
units of limited partnership interest ("Class D Units") in the Partnership in
exchange for the property known as 2600 West Olive Avenue, Burbank, California
(the "Contributed Property") and certain other assets pursuant to a closing
under that certain Contribution Agreement dated as of July 15, 1997 by and
between the Partnership and the Contributor (the "Contribution Agreement");
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to Section 14.1 of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Units, to be entitled Class D Units, and to set forth the designations, rights,
powers, preferences and duties of such Class D Units, (ii) to admit the
Contributor as an Additional Limited Partner of the Partnership, and (iii) to
amend and restate Exhibit A to reflect the admission of the Contributor as an
Additional Limited Partner and the holder of a specified number of Class D
Units;
WHEREAS, the Contributor is agreeing to become, upon execution
hereof, a party to the Partnership Agreement and to be bound by all of the
terms, conditions and other provisions of the Partnership Agreement; and
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement as
follows:
1. Article I hereby is amended to add the following definition:
<PAGE>
"Class D Unit" means a Partnership Unit with such
designations, preferences, rights, powers and duties as are
described in Section 4.2.C hereof and that is specifically
designated by the General Partner as being a Class D Unit.
2. Section 4.2 hereby is amended by renumbering Section 4.2.D to
be Section 4.2.E and adding after Section 4.2.C the following section:
D. Class D Units. Under the authority granted to it by
Section 4.2.A hereof, the General Partner hereby establishes an additional class
of Partnership Units entitled "Class D Units." Class D Units shall have the
designations, preferences, rights, powers and duties as set forth in Exhibit F
hereto.
3. Section 5.1 hereby is amended by inserting "Subject to the
provisions of Exhibit F hereto," at the beginning of the first sentence.
4. Exhibit A hereby is amended by replacing such Exhibit A with
the Exhibit A attached to this First Amendment, and the Contributor hereby is
admitted to the Partnership as an Additional Limited Partner.
5. Exhibit F hereby is added, and shall read as follows:
EXHIBIT F
CLASS D UNITS
Notwithstanding any other provision of the Partnership Agreement,
including the provisions of Exhibits A through E thereof, Class D Units shall
have the following designations, preferences, rights, powers and duties:
(1) General. Except as otherwise provided below, each Class D Unit
shall have the same designations, preferences, rights, powers and duties as each
Class A Unit.
(2) Distributions. Prior to any distribution to Class A Units
pursuant to Section 5.1 of the Agreement, the General Partner shall distribute,
to the extent that there is sufficient Available Cash, to each holder of Class D
Units, a distribution per Class D Unit (multiplied by the Conversion Factor)
equal to the dividend per REIT Share paid by the General Partner for such
quarter multiplied by a fraction, the numerator of which is the number of days
in the quarter or shorter period to which such distribution relates that the
Class D Unit was issued and outstanding, and the denominator of which is the
total number of days in the quarter or shorter period to which such distribution
<PAGE>
relates. To the extent that there is not sufficient Available Cash to pay the
distributions to holders of Class D Units, CarrAmerica Realty GP Holdings, Inc.
and CarrAmerica Realty LP Holdings, Inc. jointly and severally agree (i) to the
extent they have previously received distributions of Available Cash, they will
recontribute such funds, [and (ii) if there remains insufficient Available Cash
after the application of clause (i) above, they will make an additional Capital
Contribution in an amount sufficient to provide sufficient Available Cash to pay
the distribution to all holders of Class D Units].
(3) Redemption Right. A holder of Class D Units shall not have the
Redemption Right under Section 8.6 of the Agreement with respect to such Class D
Units until on or after the date two (2) years after each Class D Unit is
issued.
(4) Conversion to Class A Units. If the Partnership consummates
the sale of the Contributed Property (other than in a transaction that would not
trigger gain under Section 704(c) of the Internal Revenue Code of 1986, as
amended), then, on the date that is sixty (60) days following the date of
closing of any such sale, each Class D Unit shall automatically convert to a
Class A Unit, and each Class D Unit shall be canceled and retired.
6. Any amendments to this First Amendment shall require the
consent of the holders of a majority of the Class D Units.
7. The Contributor hereby agrees to become a party to the
Partnership Agreement and to be bound by all of the terms, conditions and other
provisions of the Partnership Agreement.
* * * *
All capitalized terms used in this First Amendment and not
otherwise defined shall have the meanings assigned in the Partnership Agreement.
Except as modified herein, all terms and conditions of the Partnership Agreement
shall remain in full force and effect, which terms and conditions the General
Partner hereby ratifies and affirms.
IN WITNESS WHEREOF, the undersigned has executed this First
Amendment as of the date first set forth above.
CARRAMERICA REALTY GP HOLDINGS, INC.,
as General Partner of CarrAmerica Realty, L.P.
and on behalf of existing Limited Partners
By: /s/ Robert G. Stuckey
------------------------------------
Name: Robert G. Stuckey
------------------------------------
Title: Managing Director and Vice President
------------------------------------
<PAGE>
2600 WEST OLIVE PARTNERSHIP, LTD.
By: /s/ Gary S. Carr
---------------------------------------
Gary S. Carr, Trustee of Carr Family
Trust u/d/t dated June 20, 1985, its
Managing Joint Venturer
By: /s/ Jack D. McCormick
---------------------------------------
Jack D. McCormick, Trustee of the
McCormick Family Trust u/d/t dated
January 20, 1982, its Managing Joint
Venturer
EXHIBIT 10.3
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CARRAMERICA REALTY, L.P.
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF CARRAMERICA REALTY, L.P. (this
"Second Amendment"), dated December 12, 1997, is entered into by CarrAmerica
Realty GP Holdings, Inc., a Delaware corporation, as general partner (the
"General Partner") of CarrAmerica Realty, L.P. (the "Partnership"), for itself
and on behalf of the limited partners of the Partnership, and PhoenixWest
Associates, Ltd. (formerly known as Cypress Lakes of Boca Rio Associates,
Limited Partnership), a Florida limited partnership, Versailles Associates
Limited Partnership, a Florida limited partnership, Lakeview 436 Associates
Ltd., a Florida limited partnership and Pines Realty Associates, Ltd., a Florida
limited partnership (each a "Contributor," and collectively, "Contributors").
WHEREAS, on the date hereof, each Contributor is receiving Class E
units of limited partnership interest ("Class E Units") in the Partnership in
exchange for the property known as the U.S. West Communication Group office
portfolio (the "Contributed Property") pursuant to a closing under that certain
Contribution Agreement dated as of September 30, 1997 by and among the
Partnership and the Contributors (the "Contribution Agreement");
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to Section 14.1 of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Units, to be entitled Class E Units, and to set forth the designations, rights,
powers, preferences and duties of such Class E Units, (ii) to admit each of the
Contributors as an Additional Limited Partner of the Partnership, and (iii) to
amend and restate Exhibit A to reflect the admission of each of the Contributors
as an Additional Limited Partner and the holder of a specified number of Class E
Units; and
WHEREAS, each of the Contributors is agreeing to become, upon
execution hereof, a party to the Partnership Agreement and to be bound by all of
the terms, conditions and other provisions of the Partnership Agreement;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement as
follows:
1. Article I hereby is amended to add the following definition:
"Class E Unit" means a Partnership Unit with such
designations, preferences, rights, powers and duties as are
described in Section 4.2.E hereof and that is specifically
designated by the General Partner as being a Class E Unit.
<PAGE>
2. Section 4.2 hereby is amended by renumbering Section 4.2.E to
be Section 4.2.F and adding after Section 4.2.D the following section:
E. Class E Units. Under the authority granted to it by
Section 4.2.A hereof, the General Partner hereby establishes an additional class
of Partnership Units entitled "Class E Units." Class E Units shall have the same
designations, preferences, rights, powers and duties as Class A Units.
Notwithstanding the preceding sentence, holders of Class E Units shall be
entitled to a special allocation of losses from the Partnership in the aggregate
amount of $50,000 per year for a period of twenty-eight (28) years from the date
of issuance of such Class E Units.
3. Exhibit A hereby is amended by replacing such Exhibit A with
the Exhibit A attached to this Second Amendment, and each of the Contributors
hereby is admitted to the Partnership as an Additional Limited Partner.
4. Each of the Contributors hereby agrees to become a party to the
Partnership Agreement and to be bound by all of the terms, conditions and other
provisions of the Partnership Agreement.
All capitalized terms used in this Second Amendment and not
otherwise defined shall have the meanings assigned in the Partnership Agreement.
Except as modified herein, all terms and conditions of the Partnership Agreement
shall remain in full force and effect, which terms and conditions the General
Partner hereby ratifies and affirms.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Second
Amendment as of the date first set forth above.
CARRAMERICA REALTY GP HOLDINGS, INC.,
as General Partner of CarrAmerica Realty, L.P.
and on behalf of existing Limited Partners
By: /s/ Robert G. Stuckey
------------------------------------
Name: Robert G. Stuckey
Title: Managing Director and Vice President
PHOENIXWEST ASSOCIATES, LTD. (formerly known
as Cypress Lakes at Boca Rio Associates,
Limited Partnership)
By: G-P PhoenixWest, Inc.
General Partner
By: /s/ Norton Herrick
-------------------------------
Name: Norton Herrick
Title: President
VERSAILLES ASSOCIATES LIMITED
PARTNERSHIP
By: G-P Versailles, Inc.
General Partner
By: /s/ Norton Herrick
-------------------------------
Name: Norton Herrick
Title: President
LAKEVIEW 436 ASSOCIATES, LTD.
By: Lakeview-Nort, Ltd.
General Partner
By: 436, Inc.
General Partner
By: /s/ Norton Herrick
-------------------------------
Name: Norton Herrick
Title: President
3
<PAGE>
PINES REALTY ASSOCIATES, LTD.
By: 7425, Inc.
General Partner
By: /s/ Norton Herrick
-------------------------------
Name: Norton Herrick
Title: President
4
EXHIBIT 10.4
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CARRAMERICA REALTY, L.P.
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF CARRAMERICA REALTY, L.P. (this "Third Amendment"), dated
December 31, 1997, is entered into by CarrAmerica Realty GP Holdings, Inc., a
Delaware corporation, as general partner (the "General Partner") of CarrAmerica
Realty, L.P. (the "Partnership"), for itself and on behalf of the limited
partners of the Partnership, and the additional limited partners shown below.
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to the First Amended and Restated Agreement of Limited Partnership of
the Partnership (the "Partnership Agreement"), the General Partner desires to
amend the Partnership Agreement to amend and restate Exhibit A thereto to
reflect various transfers involving holders of Class D Units and to reflect
various issuances of Class B Units to the General Partner and CarrAmerica Realty
LP Holdings, Inc.; and
WHEREAS, certain transferees of Class D Units desire to become
parties to the Partnership Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends Exhibit A to the Partnership
Agreement by replacing such Exhibit A with the Exhibit A attached to this Third
Amendment. Each limited partner executing this Third Amendment below hereby
agrees to become a party to the Partnership Agreement, as such agreement is in
effect on the date hereof and as such agreement may be amended from time to time
in accordance with the provisions thereof, and to be bound by all of the terms,
conditions and other provisions of the Partnership Agreement.
All capitalized terms used in this Third Amendment and not
otherwise defined shall have the meanings assigned in the Partnership Agreement.
Except as modified herein, all terms and conditions of the Partnership Agreement
shall remain in full force and effect, which terms and conditions the General
Partner hereby ratifies and affirms.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Amendment as
of the date first set forth above.
CARRAMERICA REALTY GP HOLDINGS, INC.,
as General Partner of CarrAmerica Realty, L.P.
and on behalf of existing Limited Partners
By: /s/ Brain K. Fields
----------------------------------
Name: Brian K. Fields
----------------------------------
Title: Chief Financial Officer, Treasurer
and Vice President
----------------------------------
/s/ Gary S. Carr
-----------------------------------
Gary S. Carr, Trustee of the CARR FAMILY
TRUST u/d/t dated June 20, 1985
/s/ Jack D. McCormick
-----------------------------------
Jack D. McCormick, Trustee of the McCORMICK
FAMILY TRUST u/d/t dated January 20, 1982
/s/ Robert D. Lambert
-----------------------------------
Robert D. Lambert, Trustee of the LAMBERT
FAMILY TRUST u/d/t dated September 3, 1980
and
/s/ Patricia M. Lambert
-----------------------------------
Patricia M. Lambert, Trustee of the LAMBERT
FAMILY TRUST u/d/t dated September 3, 1980
/s/ Raymond S. Lambert
-----------------------------------
Raymond S. Lambert, Trustee of the LAMBERT
FAMILY TRUST u/d/t dated November 14, 1980
and
/s/ Rose M. Lambert
-----------------------------------
Rose M. Lambert, Trustee of the LAMBERT
FAMILY TRUST u/d/t dated November 14, 1980
/s/ Patricia S. Carr
-----------------------------------
Patricia S. Carr, Trustee of the PATRICIA S.
CARR LIVING TRUST u/d/t dated May 19, 1993
-2-
EXHIBIT 10.15
================================================================================
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of March 11, 1998
among
CARRAMERICA REALTY CORPORATION,
CARR REALTY, L.P.,
CARRAMERICA REALTY, L.P.,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Bank and as Lead Agent for the Banks,
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH,
as Bank and as Co-Agent for the Banks,
NATIONSBANK, N.A.,
as Bank and as Co-Agent for the Banks,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Bank and as Co-Agent for the Banks,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Bank and as Co-Agent for the Banks,
and
THE BANKS LISTED HEREIN
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS................................................ 2
SECTION 1.1. Definitions.............................................................................. 2
SECTION 1.2. Accounting Terms and Determinations...................................................... 30
SECTION 1.3. Types of Borrowings...................................................................... 30
ARTICLE II
THE CREDITS................................................ 31
SECTION 2.1. Commitments to Lend...................................................................... 31
SECTION 2.2. Notice of Committed Borrowing............................................................ 32
SECTION 2.3. Money Market Borrowings.................................................................. 34
SECTION 2.4. Notice to Banks; Funding of Loans........................................................ 40
SECTION 2.5. Notes.................................................................................... 41
SECTION 2.6. Maturity of Loans........................................................................ 42
SECTION 2.7. Interest Rates........................................................................... 42
SECTION 2.8. Fees..................................................................................... 45
SECTION 2.9. Mandatory Termination.................................................................... 46
SECTION 2.10. Mandatory Prepayment.................................................................... 46
SECTION 2.11. Optional Prepayments.................................................................... 48
SECTION 2.12. General Provisions as to Payments....................................................... 50
SECTION 2.13. Funding Losses.......................................................................... 51
SECTION 2.14. Computation of Interest and Fees........................................................ 52
SECTION 2.15. Method of Electing Interest Rates....................................................... 52
SECTION 2.16. Letters of Credit....................................................................... 53
SECTION 2.17. Letter of Credit Usage Absolute......................................................... 57
ARTICLE III
CONDITIONS................................................. 58
SECTION 3.1. Closing.................................................................................. 58
SECTION 3.2. Borrowings............................................................................... 61
SECTION 3.3 New Acquisitions......................................................................... 62
ARTICLE IV
REPRESENTATIONS AND WARRANTIES....................................... 62
SECTION 4.1. Existence and Power...................................................................... 63
SECTION 4.2. Existence and Power...................................................................... 63
SECTION 4.3. Power and Authority of Carr.............................................................. 63
SECTION 4.4. Power and Authority of Carr LP........................................................... 63
SECTION 4.5. No Violation............................................................................. 64
SECTION 4.6. Financial Information.................................................................... 64
SECTION 4.7. Litigation............................................................................... 65
SECTION 4.8. Compliance with ERISA.................................................................... 65
SECTION 4.9. Environmental Matters.................................................................... 66
SECTION 4.10. Taxes................................................................................... 66
SECTION 4.11. Full Disclosure......................................................................... 67
SECTION 4.12. Solvency................................................................................ 67
<PAGE>
SECTION 4.13. Use of Proceeds; Margin Regulations..................................................... 67
SECTION 4.14. Governmental Approvals.................................................................. 67
SECTION 4.15. Investment Company Act; Public Utility Holding Company Act.............................. 68
SECTION 4.16. Closing Date Transactions............................................................... 68
SECTION 4.17. Representations and Warranties in Loan Documents........................................ 68
SECTION 4.18. Patents, Trademarks, etc................................................................ 68
SECTION 4.19. No Default.............................................................................. 69
SECTION 4.20. Licenses, etc........................................................................... 69
SECTION 4.21. Compliance With Law..................................................................... 69
SECTION 4.22. No Burdensome Restrictions.............................................................. 69
SECTION 4.23. Brokers' Fees........................................................................... 69
SECTION 4.24. Labor Matters........................................................................... 70
SECTION 4.25. Organizational Documents................................................................ 70
SECTION 4.26. Principal Offices....................................................................... 70
SECTION 4.27. REIT Status............................................................................. 70
SECTION 4.28. Ownership of Property................................................................... 70
SECTION 4.29. Insurance............................................................................... 71
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS...........................................71
SECTION 5.1. Information.............................................................................. 71
SECTION 5.2. Payment of Obligations................................................................... 75
SECTION 5.3. Maintenance of Property.................................................................. 76
SECTION 5.4. Conduct of Business...................................................................... 76
SECTION 5.5. Compliance with Laws..................................................................... 76
SECTION 5.6. Inspection of Property, Books and Records................................................ 76
SECTION 5.7. Existence................................................................................ 77
SECTION 5.8. Financial Covenants...................................................................... 77
SECTION 5.9. Restriction on Fundamental Changes....................................................... 79
SECTION 5.10. Changes in Business..................................................................... 79
SECTION 5.11. Fiscal Year; Fiscal Quarter............................................................. 79
SECTION 5.12. Margin Stock............................................................................ 80
SECTION 5.13. Sale of Unencumbered Asset Pool Properties.............................................. 80
SECTION 5.14. Liens................................................................................... 80
SECTION 5.15 Use of Proceeds.......................................................................... 80
SECTION 5.16 Development Activities................................................................... 81
SECTION 5.17 Restrictions on Secured Debt............................................................. 81
SECTION 5.18. Carr's Status........................................................................... 81
SECTION 5.19 Certain Requirements for the Unencumbered Asset Pool Properties.......................... 81
SECTION 5.20 Hedging Requirements..................................................................... 82
SECTION 5.21. Transfer of Real Property Assets......................................................... 82
SECTION 5.22. CarrAmerica Realty GP Holdings, Inc...................................................... 82
<PAGE>
ARTICLE VI
DEFAULTS.................................................. 82
SECTION 6.1. Events of Default........................................................................ 82
SECTION 6.2. Rights and Remedies...................................................................... 86
SECTION 6.3. Notice of Default........................................................................ 87
SECTION 6.4. Actions in Respect of Letters of Credit.................................................. 87
ARTICLE VII
THE LEAD AGENT............................................... 90
SECTION 7.1. Appointment and Authorization............................................................ 90
SECTION 7.2. Lead Agent and Affiliates................................................................ 90
SECTION 7.3. Action by Lead Agent..................................................................... 91
SECTION 7.4. Consultation with Experts................................................................ 91
SECTION 7.5. Liability of Lead Agent.................................................................. 91
SECTION 7.6. Indemnification.......................................................................... 91
SECTION 7.7. Credit Decision.......................................................................... 92
SECTION 7.8. Successor Lead Agent..................................................................... 92
SECTION 7.9. Lead Agent's Fee......................................................................... 93
SECTION 7.10. Copies of Notices....................................................................... 93
SECTION 7.11. Removal of Lead Agent.................................................................... 93
ARTICLE VIII
CHANGE IN CIRCUMSTANCES.......................................... 93
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair................................. 93
SECTION 8.2. Illegality............................................................................... 94
SECTION 8.3. Increased Cost and Reduced Return........................................................ 95
SECTION 8.4. Taxes.................................................................................... 96
SECTION 8.5. Base Rate Loans Substituted for Affected Euro-Dollar Loans............................... 99
ARTICLE IX
MISCELLANEOUS.............................................. 100
SECTION 9.1. Notices................................................................................. 100
SECTION 9.2. No Waivers...............................................................................100
SECTION 9.3. Expenses; Indemnification................................................................101
SECTION 9.4. Sharing of Set-Offs......................................................................102
SECTION 9.5. Amendments and Waivers...................................................................104
SECTION 9.6. Successors and Assigns...................................................................105
SECTION 9.7. Governing Law; Submission to Jurisdiction................................................108
Section 9.8. Marshalling; Recapture...................................................................109
SECTION 9.9. Counterparts; Integration; Effectiveness.................................................109
SECTION 9.10. WAIVER OF JURY TRIAL....................................................................109
SECTION 9.11. Survival................................................................................110
SECTION 9.12. Domicile of Loans.......................................................................110
SECTION 9.13. Limitation of Liability.................................................................110
SECTION 9.14. Confidentiality.........................................................................110
SECTION 9.15. Co-Agents................................................................................111
SECTION 9.16. No Bankruptcy Proceedings................................................................ 81
</TABLE>
<PAGE>
Schedule 4.28 - Ownership of Property
Exhibit A-1 Form of Tranche A Note
Exhibit A-2 Form of Tranche B Note
Exhibit A-3 Form of Tranche A Designated Lender Note
Exhibit A-4 Form of Tranche B Designated Lender Note
Exhibit B-1 Carr Unencumbered Asset Pool Properties
Exhibit B-2 Carr LP Unencumbered Asset Pool Properties
Exhibit C-1 Assignment and Assumption Agreement
Exhibit D-1 Money Market Quote Request
Exhibit E-1 Invitation for Money Market Quotes
Exhibit F-1 Money Market Quote Request
Exhibit G-1 Designation Agreement
<PAGE>
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated
as of March 11, 1998, among CARRAMERICA REALTY CORPORATION ("Carr"), CARR
REALTY, L.P. ("Carr LP"; Carr and Carr LP each, a "Borrower" and collectively,
the "Borrowers"), CARRAMERICA REALTY, L.P. ("CarrAmerica LP"), MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Bank and as Lead Agent for the Banks, COMMERZBANK
AKTIENGESELLSCHAFT, NEW YORK BRANCH, as Bank and as Co-Agent for the Banks,
NATIONSBANK, N.A., as Bank and as Co-Agent for the Banks, WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Bank and as Co-Agent for the Banks, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION (successor by merger to Bank of America
Illinois), as Bank and as Co-Agent for the Banks (collectively, the
"Co-Agents"), and the BANKS listed on the signature pages hereof (the "Banks").
W I T N E S S E T H:
WHEREAS, the Borrowers, CarrAmerica LP and the Lead Agent
entered into the Revolving Credit Agreement , dated as of May 23, 1996 which was
amended and restated by the Borrowers, CarrAmerica LP, the Lead Agent, the
Co-Agents and the Banks as that certain Amended and Restated Revolving Credit
Agreement, dated as of August 23, 1996, as amended by the First Amendment to
Amended and Restated Revolving Credit Agreement, dated as of October 18, 1996,
the Second Amendment to Amended and Restated Revolving Credit Agreement, dated
as of March 31, 1997, the Third Amendment to Amended and Restated Revolving
Credit Agreement, dated as of July 29, 1997, and the Second Amended and Restated
Revolving Credit Agreement, dated as of September 15, 1997 (collectively, the
"Existing Credit Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate
the terms and conditions contained in the Existing Credit Agreement in their
entirety as hereinafter set forth.
1
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I. The Existing Credit Agreement is hereby modified so that
all of the terms and conditions of the aforesaid Existing Credit Agreement shall
be restated in their entirety as set forth herein, and the Borrowers and
CarrAmerica LP agree to comply with and be subject to all of the terms,
covenants and conditions of this Agreement.
II. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, and
shall be deemed to be effective as of the date hereof.
III. Any reference in the Notes, any other Loan Document or
any other document executed in connection with this Agreement to the Existing
Credit Agreement shall be deemed to refer to this Agreement.
ARTICLE I
DEFINITIONS
SECTION 1.1. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.7(b).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Lead Agent and
submitted to the Lead Agent (with a copy to the Borrowers) duly completed by
such Bank.
"Agreement" means this Third Amended and Restated Revolving
Credit Agreement as the same may from time to time hereafter be modified,
supplemented or amended.
2
<PAGE>
"Annual EBITDA" means, measured as of the last day of each
calendar quarter, an amount equal to (i) total revenues relating to all Real
Property Assets of the Borrowers and their Consolidated Subsidiaries or to the
Borrowers' interest in Minority Holdings for the previous four consecutive
calendar quarters including the quarter then ended, calculated in accordance
with GAAP, plus (ii) interest and other income of the Borrowers and their
Consolidated Subsidiaries, including, without limitation, real estate service
revenues, for such period, less (iii) total operating expenses and other
expenses relating to such Real Property Assets and to the Borrowers' interest in
Minority Holdings for such period (other than interest, income taxes,
depreciation, amortization, and other non-cash items), less (iv) total corporate
operating expenses (including general overhead expenses) and other expenses of
the Borrowers, their Consolidated Subsidiaries and the Borrowers' interest in
Minority Holdings (other than interest, taxes, depreciation, amortization and
other non-cash items), for such period.
"Applicable Interest Rate" means the lesser of (x) the rate at
which the interest rate applicable to any floating rate Indebtedness could be
fixed, at the time of calculation, by the applicable Borrower entering into an
unsecured interest rate swap agreement (or, if such rate is incapable of being
fixed by entering into an unsecured interest rate swap agreement at the time of
calculation, a reasonably determined fixed rate equivalent), and (y) the rate at
which the interest rate applicable to such floating rate Indebtedness is
actually capped, at the time of calculation, if such Borrower has entered into
an interest rate cap agreement with respect thereto.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the
case of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" means, with respect to each Loan, the
respective percentages per annum determined based on the range into which the
rating or "shadow" rating on Carr's senior long-term unsecured debt then falls,
in accordance with the following table. Any change in Carr's Investment Grade
3
<PAGE>
Rating causing it to move to a different range on the table shall effect an
immediate change in the Applicable Margin. In the event that Carr receives two
(2) Investment Grade Ratings that are not equivalent, the Applicable Margin
shall be determined by the lower of such two (2) Investment Grade Ratings, at
least one of which shall be an Investment Grade Rating from S&P or Moody's. In
the event Carr receives more than two (2) ratings (from S&P, Moody's, Duff &
Phelps or Fitch) and such ratings are not equivalent, the Applicable Margin
shall be determined by the lower of the two highest ratings; provided that each
of said two (2) highest ratings shall be Investment Grade Ratings and at least
one of which shall be an Investment Grade Rating from S&P or Moody's.
Range of Applicable
Carr's Margin for Applicable
Credit Rating Base Rate Margin for Euro
(S&P/Moody's Loans Dollar Loans
Ratings) (% per annum) (% per annum)
- -------- ------------- -------------
BBB-/Baa3 0 .85
BBB/Baa2 0 .70
BBB+/Baa1 0 .60
The Applicable Margin for so long as Carr shall not have
obtained two Investment Grade Ratings (at least one of which shall be from S&P
or Moody's) or after Borrower loses its Investment Grade Rating, shall be as
follows:
Applicable
Margin for Applicable
Base Rate Margin for Euro
Loans Dollar Loans
------------- -------------
0 1.175
Lead Agent shall notify the Banks in writing promptly after it
obtains knowledge of any change in Carr's Investment Grade Rating which shall
effect a change in the Applicable Margin.
"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors and each Designated Lender; provided, however, that the
4
<PAGE>
term "Bank" shall exclude each Designated Lender when used in reference to a
Committed Loan, the Commitments or terms relating to the Committed Loans and the
Commitments and shall further exclude each Designated Lender for all other
purposes hereunder except that any Designated Lender which funds a Money Market
Loan shall, subject to Section 9.6(d), have the rights (including the rights
given to a Bank contained in Section 9.3 and otherwise in Article 9) and
obligations of a Bank associated with holding such Money Market Loan.
"Bankruptcy Code" means Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank
as a Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means either (i) Carr and its successors or (ii)
Carr LP and its successors, and, collectively, "Borrowers" shall mean both
Borrowers.
"Borrowers LTV Ratio" means the ratio, expressed as a
percentage and calculated on a quarterly basis by Carr, of the aggregate amount
of all Unsecured Debt (inclusive of the Loans) of Borrowers, CarrAmerica LP,
their Consolidated Subsidiaries and Borrowers' and CarrAmerica LP's pro rata
share of all Unsecured Debt of any Subsidiaries which are not Consolidated
Subsidiaries outstanding as of the date of determination, to the Unencumbered
Asset Pool Properties Value as of the date of determination.
5
<PAGE>
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrowers or CarrAmerica LP at the same time by the Banks pursuant
to Article II. A Borrowing is a "Domestic Borrowing" if such Loans are Base Rate
Loans, a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans or a "Money
Market Borrowing" if such Loans are Money Market Loans.
"Capital Expenditures" means, for any period, the sum of all
expenditures (whether paid in cash or accrued as a liability) by Carr, Carr LP
or CarrAmerica LP, as applicable, which are capitalized on the consolidated
balance sheet of such Borrower in conformity with GAAP, but less all
expenditures made with respect to the acquisition by Carr or Carr LP and their
Consolidated Subsidiaries of any interest in real property within nine months
after the date such interest in real property is acquired.
"Carr LP LTV Ratio" means the ratio, expressed as a percentage
and calculated on a quarterly basis by Carr LP, of the aggregate amount of the
sum of the Tranche B Loans outstanding and all other Unsecured Debt of Carr LP
and its Consolidated Subsidiaries and Carr LP's pro rata share of all Unsecured
Debt of any Subsidiaries which are not Consolidated Subsidiaries of Carr LP as
of the date of determination, to the Carr LP Unencumbered Asset Pool Properties
Value as of the date of determination.
"Carr LP Maximum Total Debt Ratio" means the ratio as of the
date of determination of (i) the sum of (x) the aggregate Debt of Carr LP and
its Consolidated Subsidiaries and (y) Carr LP's pro rata share of the Debt of
any Subsidiaries of Carr LP which are not Consolidated Subsidiaries, at the time
of determination to (ii) Carr LP Tangible FMV.
6
<PAGE>
"Carr LP Tangible FMV" means the sum of (x) (i) with respect
to Real Property Assets owned by Carr LP or its Consolidated Subsidiaries for a
period of at least six months, the quotient of Net Operating Income with respect
to such Real Property Assets determined as of the last day of the previous
calendar quarter, less reserves for Capital Expenditures of $.50 per square foot
per annum for Real Property Asset, as divided by the FMV Cap Rate, and (ii) with
respect to Real Property Assets owned by Carr LP or its Consolidated
Subsidiaries for a period of less than six months, the purchase price of such
Real Property Assets and (y) Cash or Cash Equivalents of Carr LP and its
Consolidated Subsidiaries as of the date of determination.
"Carr LP Unencumbered Asset Pool Properties" means, as of any
date, the Real Property Assets listed in Exhibit B-2 attached hereto and made a
part hereof, each of which is 100% owned in fee (or leasehold in the case of
assets listed as such on Exhibit B-2) by Carr LP or any Consolidated Subsidiary
of Carr LP and each of which is not subject to any Lien (other than Permitted
Liens), subject to adjustment as set forth herein, together with all New
Acquisitions or Real Property Assets which have become part of the Carr LP
Unencumbered Asset Pool Properties as of such date in accordance with Section
3.3 and excluding any Carr LP Unencumbered Asset Pool Properties which have been
released from this Agreement and the other Loan Documents as of such date in
accordance with Sections 5.13 and 5.14 and all other terms of this Agreement.
"Carr LP Unencumbered Asset Pool Properties Value" means the
aggregate of (i) with respect to the Carr LP Unencumbered Asset Pool Properties
owned by Carr LP or any of its Consolidated Subsidiaries for a period of at
least six months, the quotient of (x) Net Operating Income with respect to the
Carr LP Unencumbered Asset Pool Properties less reserves for Capital
Expenditures of $.50 per square foot per annum for each Carr LP Unencumbered
Asset Pool Property and (y) the FMV Cap Rate and (ii) with respect to the Carr
LP Unencumbered Asset Pool Properties owned by Carr LP or any of its
Consolidated Subsidiaries for a period of less than six months, the lesser of
(A) the quotient of (x) Net Operating Income with respect to the Carr LP
Unencumbered Asset Pool Properties less reserves for Capital Expenditures of
$.50 per square foot per annum for each Carr LP Unencumbered Asset Pool Property
and (y) the FMV Cap Rate and (B) the purchase price of such Carr LP Unencumbered
Asset Pool Property.
"Carr LTV Ratio" means the ratio, expressed as a percentage
and calculated on a quarterly basis by Carr, of the aggregate amount of the sum
of the Tranche A Loans and all other Unsecured Debt of Carr and its Consolidated
Subsidiaries (other than Carr LP) and Carr's pro rata share of all Unsecured
Debt of any Subsidiaries which are not Consolidated Subsidiaries of Carr,
outstanding as of the date of determination, to the Carr Unencumbered Asset Pool
Properties Value as of the date of determination.
7
<PAGE>
"Carr Maximum Total Debt Ratio" means the ratio as of the date
of determination of (i) the sum of (x) the aggregate Debt of Carr and its
Consolidated Subsidiaries (other than Carr LP) and (y) Carr's pro rata share of
the Debt of any Subsidiaries of Carr which are not Consolidated Subsidiaries, at
the time of determination to (ii) Carr Tangible FMV.
"Carr Tangible FMV" means the sum of (x) (i) with respect to
Real Property Assets owned by Carr or its Consolidated Subsidiaries (other than
Carr LP) for a period of at least six months, the quotient of Net Operating
Income with respect to such Real Property Assets determined as of the last day
of the previous calendar quarter, less reserves for Capital Expenditures of $.50
per square foot per annum for each Real Property Asset, as divided by the FMV
Cap Rate, and (ii) with respect to Real Property Assets owned by Carr or its
Consolidated Subsidiaries (other than Carr LP) for a period of less than six
months, the purchase price of such Real Property Assets and (y) Cash or Cash
Equivalents of Carr and its Consolidated Subsidiaries (other than Carr LP) as of
the date of determination.
"Carr Unencumbered Asset Pool Properties" means, as of any
date, the Real Property Assets listed in Exhibit B-1 attached hereto and made a
part hereof, each of which is 100% owned in fee (or leasehold in the case of
assets listed as such on Exhibit B-1) by Carr or any Consolidated Subsidiary of
Carr (other than Carr LP) and each of which is not subject to any Lien (other
than Permitted Liens), subject to adjustment as set forth herein, together with
all New Acquisitions or Real Property Assets which have become part of the Carr
Unencumbered Asset Pool Properties as of such date in accordance with Section
3.3 and excluding any Carr Unencumbered Asset Pool Properties which have been
released from this Agreement and the other Loan Documents as of such date in
accordance with Sections 5.13 and 5.14 and all other terms of this Agreement.
"Carr Unencumbered Asset Pool Properties Value" means the
aggregate of (i) with respect to the Carr Unencumbered Asset Pool Properties
owned by Carr or any of its Consolidated Subsidiaries (other than Carr LP) for a
period of at least six months, the quotient of (x) Net Operating Income with
respect to the Carr Unencumbered Asset Pool Properties less reserves for Capital
Expenditures of $.50 per square foot per annum for each Carr Unencumbered Asset
Pool Property and (y) the FMV Cap Rate and (ii) with respect to the Carr
Unencumbered Asset Pool Properties owned by Carr or any of its Consolidated
Subsidiaries (other than Carr LP) for a period of less than six months, the
lesser of (A) the quotient of (x) Net Operating Income with respect to the Carr
Unencumbered Asset Pool Properties less reserves of $.50 per square foot per
annum for each Carr Unencumbered Asset Pool Property and (y) the FMV Cap Rate
and (B) the purchase price of such Carr Unencumbered Asset Pool Property.
8
<PAGE>
"Cash or Cash Equivalents" means (i) cash, (ii) direct
obligations of the United States Government, including, without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and Government sponsored entities or pools of
such instruments offered by banks rated AA or better by S&P or Aa2 by Moody's
and dealers, including, without limitation, Federal Home Loan Mortgage
Corporation participation sale certificates, Government National Mortgage
Association modified pass-through certificates, Federal National Mortgage
Association bonds and notes, Federal Farm Credit System securities, (iv) time
deposits, domestic and Eurodollar certificates of deposit, bankers acceptances,
commercial paper rated at least A-1 by S&P and P-1 by Moody's, and/or guaranteed
by an Aa rating by Moody's, an AA rating by S&P, or better rated credit,
floating rate notes, other money market instruments and letters of credit each
issued by banks which have a long-term debt rating of at least AA by S&P or Aa2
by Moody's, (v) obligations of domestic corporations, including, without
limitation, commercial paper, bonds, debentures, and loan participations, each
of which is rated at least AA by S&P, and/or Aa2 by Moody's, and/or
unconditionally guaranteed by an AA rating by S&P, an Aa2 rating by Moody's, or
better rated credit, (vi) obligations issued by states and local governments or
their agencies, rated at least MIG-1 by Moody's and/or SP-1 by S&P and/or
guaranteed by an irrevocable letter of credit of a bank with a long-term debt
rating of at least AA by S&P or Aa2 by Moody's, (vii) repurchase agreements with
major banks and primary government securities dealers fully secured by U.S.
Government or agency collateral equal to or exceeding the principal amount on a
daily basis and held in safekeeping, and (viii) real estate loan pool
participations, guaranteed by an entity with an AA rating given by S&P or an Aa2
rating given by Moody's, or better rated credit.
"Closing Date" means the date on which the Lead Agent shall
have received the documents specified in or pursuant to Section 3.1.
"Commitment" means, collectively, the Tranche A Commitment and
the Tranche B Commitment with respect to each Bank.
"Committed Loan" means a Loan made by a Bank pursuant to
Section 2.1; provided that, if any such Loan or Loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.
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"Consolidated Subsidiary" means at any date any Subsidiary or
other entity which is consolidated with either Borrower in accordance with GAAP.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of Carr (determined on a book basis), less its
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition "Intangible Assets" means with respect to any such intangible
assets, the amount (to the extent reflected in determining such consolidated
stockholders' equity) of all write-ups subsequent to December 31, 1995 in the
book value of any asset owned by either Borrower or a Consolidated Subsidiary
and (ii) goodwill, patents, trademarks, service marks, trade names, anticipated
future benefit of tax loss carry forwards, copyrights, organization or
developmental expenses and other intangible assets.
"Contingent Obligation" as to any Person means, without
duplication, (i) any contingent obligation of such Person required to be shown
on such Person's balance sheet in accordance with GAAP, and (ii) any obligation
required to be disclosed in the footnotes to such Person's financial statements,
guaranteeing partially or in whole any non-recourse Debt, lease, dividend or
other obligation, exclusive of contractual indemnities (including, without
limitation, any indemnity or price-adjustment provision relating to the purchase
or sale of securities or other assets) and guarantees of non-monetary
obligations (other than guarantees of completion) which have not yet been called
on or quantified, of such Person or of any other Person. The amount of any
Contingent Obligation described in clause (ii) shall be deemed to be (a) with
respect to a guaranty of interest or interest and principal, or operating income
guaranty, the sum of all payments required to be made thereunder (which in the
case of an operating income guaranty shall be deemed to be equal to the debt
service for the note secured thereby), calculated at the Applicable Interest
Rate, through (i) in the case of an interest or interest and principal guaranty,
the stated date of maturity of the obligation (and commencing on the date
interest could first be payable thereunder), or (ii) in the case of an operating
income guaranty, the date through which such guaranty will remain in effect, and
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<PAGE>
(b) with respect to all guarantees not covered by the preceding clause (a), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of the applicable
Borrower required to be delivered pursuant to Section 5.1 hereof.
Notwithstanding anything contained herein to the contrary, guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment or performance has been made thereunder, at which time any
such guaranty of completion shall be deemed to be a Contingent Obligation in an
amount equal to any such claim. Subject to the preceding sentence, (i) in the
case of a joint and several guaranty given by such Person and another Person
(but only to the extent such guaranty is recourse, directly or indirectly to the
applicable Borrower), the amount of the guaranty shall be deemed to be 100%
thereof unless and only to the extent that such other Person has delivered Cash
or Cash Equivalents to secure all or any part of such Person's guaranteed
obligations, (ii) in the case of joint and several guarantees given by a Person
in whom the applicable Borrower owns an interest (which guarantees are
non-recourse to the applicable Borrower), to the extent the guarantees, in the
aggregate, exceed 15% of total real estate investments, the amount in excess of
15% shall be deemed to be a Contingent Obligation of the applicable Borrower,
and (iii) in the case of a guaranty (whether or not joint and several) of an
obligation otherwise constituting Debt of such Person, the amount of such
guaranty shall be deemed to be only that amount in excess of the amount of the
obligation constituting Debt of such Person. Notwithstanding anything contained
herein to the contrary, "Contingent Obligations" shall not be deemed to include
guarantees of Unused Commitments or of construction loans to the extent the same
have not been drawn.
"Credit Rating" means the ratings assigned by not less than
two of the Rating Agencies (at least one of which shall be S&P) to Carr's senior
long-term unsecured indebtedness.
"Debt" of any Person means, without duplication, (A) as shown
on such Person's consolidated balance sheet (i) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property and, (ii) all
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<PAGE>
indebtedness of such Person evidenced by a note, bond, debenture or similar
instrument (whether or not disbursed in full in the case of a construction
loan), (B) the face amount of all letters of credit issued for the account of
such Person and, without duplication, all unreimbursed amounts drawn thereunder,
(C) all Contingent Obligations of such Person, (D) all payment obligations of
such Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements which were not entered
into specifically in connection with Debt set forth in clauses (A), (B) or (C)
hereof. For purposes of this Agreement, Debt (other than Contingent Obligations)
of the applicable Borrower shall be deemed to include only the applicable
Borrower's pro rata share (such share being based upon the applicable Borrower's
percentage ownership interest as shown on the applicable Borrower's annual
audited financial statements) of the Debt of any Person in which the applicable
Borrower, directly or indirectly, owns an interest, provided that such Debt is
nonrecourse, both directly and indirectly, to the applicable Borrower.
"Debt Service" means, measured as of the last day of each
calendar quarter, an amount equal to the sum of (i) interest (whether accrued,
paid or capitalized) actually payable by either Borrower or the Borrowers on its
Debt for the previous four consecutive quarters including the quarter then
ended, plus (ii) scheduled payments of principal on such Debt, whether or not
paid by either Borrower or the Borrowers (excluding balloon payments) for the
previous four consecutive quarters including the quarter then ended.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Designated Lender" means a special purpose corporation that
(i) shall have become a party to this Agreement pursuant to Section 9.6(d), and
(ii) is not otherwise a Bank.
"Designated Lender Notes" means promissory notes of the
Borrower, substantially in the form of Exhibit A-3 and Exhibit A-4 hereto,
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<PAGE>
evidencing the obligation of the Borrower to repay Money Market Loans made by
Designated Lenders, and "Designated Lender Note" means any one of such
promissory notes issued under Section 9.6(d) hereof.
"Designating Lender" has the meaning set forth in Section
9.6(d) hereof.
"Designation Agreement" means a designation agreement in
substantially the form of Exhibit G attached hereto, entered into by a Bank and
a Designated Lender and accepted by the Lead Agent.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized by
law to close.
"Domestic Lending Office" means, as to each Bank, its office
located within the United States at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Domestic
Lending Office) or such other office within the United States as such Bank may
hereafter designate as its Domestic Lending Office by notice to the Borrowers
and the Lead Agent.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. or any
successor thereto.
"Environmental Affiliate" means any partnership, or joint
venture, trust or corporation in which an equity interest is owned by either
Borrower or CarrAmerica LP, either directly or indirectly.
"Environmental Approvals" means any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
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"Environmental Claim" means, with respect to any Person, any
notice, claim, demand or similar communication (written or oral) by any other
Person alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damage, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by such Person or
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law, in each case as to which there is a reasonable likelihood
of an adverse determination with respect thereto and which, if adversely
determined, would have a Material Adverse Effect.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
hazardous wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
hazardous wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrowers, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrowers or any Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Euro-Dollar Borrowing" has the meaning set forth in Section
1.3.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
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"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrowers and the Lead Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
"Facility Fee" has the meaning set forth in Section 2.8(a).
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to Morgan Guaranty Trust Company
of New York on such day on such transactions as determined by the Lead Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System as constituted from time to time.
"FFO" means "funds from operations," defined to mean net
income (loss) (computed in accordance with GAAP), excluding gains (or losses)
from debt restructurings and sales of properties, plus depreciation and
amortization, after adjustments for Minority Holdings. Adjustments for Minority
Holdings will be calculated to reflect FFO on the same basis.
"Fitch" means Fitch Investors Services, L.P. or any successor
thereto.
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<PAGE>
"FMV Cap Rate" means 9%.
"Fronting Bank" shall mean Morgan or such other Bank which
Borrower is notified by the Lead Agent may be a Fronting Bank and which is
designated by Borrower in its Notice of Borrowing as the Bank which shall issue
a Letter of Credit with respect to such Notice of Borrowing.
"GAAP" means generally accepted accounting principles
recognized as such in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
Board or in such other statements by such other entity as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Group of Loans" means, at any time, a group of Loans
consisting of (i) all Committed Loans which are Base Rate Loans at such time or
(ii) all Committed Loans which are Euro-Dollar Loans having the same Interest
Period at such time; provided that, if a Committed Loan of any particular Bank
is converted to or made as a Base Rate Loan pursuant to Section 8.2 or 8.4, such
Loan shall be included in the same Group or Groups of Loans from time to time as
it would have been in if it had not been so converted or made.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing specified in the
Notice of Committed Borrowing or the date of continuation or conversion
specified in the Notice of Interest Rate Election, as the case may be, and
ending one, two, three or six months thereafter, as each Borrower or CarrAmerica
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<PAGE>
LP, as the case may be, may elect in the applicable Notice of Committed
Borrowing or in the Notice of Interest Rate Election; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.10 but
does not end on such date, then (i) the principal amount (if any) of
each Euro-Dollar Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder (if any) of
each such Euro-Dollar Loan shall have an Interest Period determined as
set forth above.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing specified in the Notice of Committed Borrowing or the date of
conversion specified in the Notice of Interest Rate Election, as the case may
be, and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (c)(i) above) which would otherwise end
on a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.10 but
does not end on such date, then (i) the principal amount (if any) of
each Base Rate Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder (if any) of
each such Base Rate Loan shall have an Interest Period determined as
set forth above.
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<PAGE>
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of such Borrowing specified in the applicable Notice of Money Market
Borrowing and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable Notice of Money Market Borrowing in accordance with
Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month;
(c) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.10 but
does not end on such date, then (i) the principal amount (if any) of
each Money Market LIBOR Loan required to be repaid on such date shall
have an Interest Period ending on such date, and (ii) the remainder (if
any) of each such Money Market LIBOR Loan shall have an Interest Period
determined as set forth above; and
(d) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of such Borrowing specified in the applicable Notice of Money Market
Borrowing and ending such number of days thereafter (but not less than 14 days
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<PAGE>
or more than 180 days) as the Borrower may elect in the applicable Notice of
Money Market Borrowing in accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made under Section 2.10 but
does not end on such date, then (i) the principal amount (if any) of
each Money Market Absolute Rate Loan required to be repaid on such date
shall have an Interest Period ending on such date, and (ii) the
remainder (if any) of each such Money Market Absolute Rate Loan shall
have an Interest Period determined as set forth above; and
(c) any Interest Period which would otherwise end after the
Maturity Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Investment Grade Rating" means a rating for a Person's senior
long-term unsecured debt, or if no such rating has been issued, a "shadow"
rating, of BBB- or better from S&P, and a rating or "shadow" rating of Baa3 or
better from Moody's or a rating or "shadow" rating equivalent to the foregoing
from either Duff & Phelps or Fitch. Any such "shadow" rating shall be evidenced
by a letter from the applicable Rating Agency or by such other evidence as may
be reasonably acceptable to the Lead Agent (as to any such other evidence, the
Lead Agent shall present the same to, and discuss the same with, the Banks).
"Invitation for Money Market Quotes" has the meaning set forth
in Section 2.3.
"Lead Agent" means Morgan Guaranty Trust Company of New York
in its capacity as Lead Agent for the Banks hereunder, and its successors in
such capacity.
"Letter(s) of Credit" has the meaning provided in Section
2.2(b).
"Letter of Credit Collateral" has the meaning provided in
Section 6.4.
"Letter of Credit Collateral Account" has the meaning provided
in Section 6.4.
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"Letter of Credit Documents" has the meaning provided in
Section 2.17.
"Letter of Credit Usage" means at any time the sum of (i) the
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrowers' unpaid obligations
under this Agreement in respect of the Letters of Credit.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, each of
the Borrowers or any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"Loan Amount" means the aggregate of the Tranche A Loan Amount
and the Tranche B Loan Amount.
"Loan Documents" means this Agreement, the Notes, Letters of
Credit and Letter of Credit Documents.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(b).
"Margin Stock" shall have the meaning provided such term in
Regulation U and Regulation G of the Federal Reserve Board.
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<PAGE>
"Material Adverse Effect" means a material adverse effect upon
(i) the business, operations, properties or assets of either Borrower or (ii)
the ability of either Borrower to perform its obligations hereunder in all
material respects, including to pay interest and principal.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.
"Materials of Environmental Concern" means and includes
pollutants, contaminants, hazardous wastes, toxic and hazardous substances,
petroleum and petroleum by-products.
"Maturity Date" has the meaning set forth in Section 2.9.
"Maximum Total Debt Ratio" means the ratio as of the date of
determination of (i) the sum of (x) the aggregate Debt of the Borrowers and
their Consolidated Subsidiaries and (y) the Borrowers' pro rata share of the
Debt of any Subsidiaries of the Borrowers which are not Consolidated
Subsidiaries, at the time of determination to (ii) the Tangible FMV of the
Borrowers and their Consolidated Subsidiaries.
"Minority Holdings" means partnerships, limited liability
companies and corporations held or owned by either Borrower which are not
consolidated with such Borrower on such Borrower=s financial statements, other
than Bond Texas Limited Partnership and Carr Square 225 Associates.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
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<PAGE>
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Lead Agent; provided that any Bank may from time to time by
notice to the Borrower and the Lead Agent designate separate Money Market
Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case all references
herein to the Money Market Lending Office of such Bank shall be deemed to refer
to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 2.3).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.3.
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.3.
"Money Market Quote Request" has the meaning set forth in
Section 2.3.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Morgan" means Morgan Guaranty Trust Company of New York, in
its individual capacity.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"Net Offering Proceeds" means all cash or other assets
received by Carr or Carr LP as a result of the sale of common shares of
beneficial interest, preferred shares of beneficial interest, partnership
interests, limited liability company interests, Convertible Securities or other
ownership or equity interests in Carr or Carr LP less customary costs and
discounts of issuance paid by Carr or Carr LP, as the case may be.
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<PAGE>
"Net Operating Cash Flow" means, as of any date of
determination, with respect to all Real Property Assets and Minority Holdings of
Carr and its Consolidated Subsidiaries, the product of (A) Property Income for
the previous quarter in the case of all Real Property Assets of Carr and its
Consolidated Subsidiaries, and Carr's pro rata share in the case of Minority
Holdings, but less (x) Property Expenses (or in the case of Minority Holdings,
Carr's pro rata share thereof) for the previous quarter and (y) the greater of
(i) Capital Expenditures which are not related to new construction for the
previous quarter, and (ii) reserves for such quarter for Capital Expenditures of
$1.50 per square foot per annum for each Real Property Asset, and (B) four (4).
"Net Operating Income" means as of any date of determination
with respect to any Real Property Asset, the product of (A) Property Income for
the previous quarter, but less Property Expenses for the previous quarter and
(B) four (4).
"New Acquisition" has the meaning set forth in Section 5.15.
"Non-Recourse Debt" means Debt of either Borrower on a
consolidated basis for which the right of recovery of the obligee thereof is
limited to recourse against the Real Property Assets securing such Debt (subject
to such limited exceptions to the non-recourse nature of such Debt such as
fraud, misappropriation, misapplication and environmental indemnities, as are
usual and customary in like transactions at the time of the incurrence of such
Debt).
"Notes" means collectively, the Tranche A Notes, the Tranche B
Notes, and any Designated Lender Notes.
"Notice of Borrowing" means a Notice of Committed Borrowing
(as defined in Section 2.2 and 2.3) or a Notice of Money Market Borrowing (as
defined in Section 2.3(f)).
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.15 hereof.
"Obligations" means all obligations, liabilities and
indebtedness of every nature of the Borrowers or CarrAmerica LP, from time to
time owing to any Bank under or in connection with this Agreement or any other
Loan Document, including, without limitation, (i) the outstanding principal
amount of the Committed Loans at such time, plus (ii) the Letter of Credit Usage
at such time, plus (iii) the outstanding principal amount of any Money Market
Loans at such time.
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<PAGE>
"Outstanding Balance" means the sum of (i) the aggregate
outstanding and unpaid principal balance of all Loans and (ii) the Letter of
Credit Usage.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" means (a) Liens in favor of either or both
of the Borrowers or CarrAmerica LP on all or any part of the assets of
Subsidiaries of either Borrower or CarrAmerica LP, provided that (i) such
Subsidiary shall be a co-maker of the Tranche A Notes or Tranche B Notes, as
applicable, (ii) the Debt to which such Lien relates is held by a Borrower or
CarrAmerica LP, (iii) such Debt is not otherwise pledged or encumbered and (iv)
no more than 25% of the Unencumbered Asset Pool Properties Value may be subject
to any such Liens; (b) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds, completion bonds, government
contracts or other obligations of a like nature, including Liens in connection
with workers' compensation, unemployment insurance and other types of statutory
obligations or to secure the performance of tenders, bids, leases, contracts
(other than for the repayment of Debt) and other similar obligations incurred in
the ordinary course of business; (c) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded; provided, that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor; (d)
Liens on property of either Borrower or any Subsidiary thereof in favor of the
Federal or any state government to secure certain payments pursuant to any
contract, statute or regulation; (e) easements (including, without limitation,
reciprocal easement agreements and utility agreements), rights of way,
covenants, consents, reservations, encroachments, variations and zoning and
other restrictions, charges or encumbrances (whether or not recorded), which do
not interfere materially with the ordinary conduct of the business of the
applicable Borrower or any Subsidiary thereof and which do not materially
detract from the value of the property to which they attach or materially impair
the use thereof by the applicable Borrower or Subsidiary; (f) statutory Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
Liens imposed by law and arising in the ordinary course of business, for sums
not then due and payable (or which, if due and payable are being contested in
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good faith and with respect to which adequate reserves are being maintained to
the extent required by GAAP); (g) Liens not otherwise permitted by this
definition and incurred in the ordinary course of business of either or both of
the Borrowers or any Subsidiary with respect to obligations which do not exceed
$2,000,000 in principal amount in the aggregate at any one time outstanding; (h)
Liens existing on the date of this Agreement which have been disclosed on
Schedule 4.28; (i) the interests of lessees and lessors under leases of real or
personal property made in the ordinary course of business which would not have a
material adverse effect on the Borrowers and their Subsidiaries taken as a
whole; and (j) judgment and attachment Liens not giving rise to an Event of
Default.
"Permitted LTV Ratio" means, with respect to the Borrowers'
LTV Ratio, the Carr LTV Ratio and the Carr LP LTV Ratio, a ratio, expressed as a
percentage, which is 50% or lower.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
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"Pro-Forma Debt Service" means the amount determined by
applying a 25 year mortgage style amortization schedule to all Unsecured Debt of
the Borrowers, CarrAmerica LP and their Consolidated Subsidiaries and their pro
rata share of all Unsecured Debt of Subsidiaries that are not Consolidated
Subsidiaries outstanding as of the last day of each calendar quarter, using an
interest rate equal to the greater of (i) the Treasury Rate plus 1.75%, and (ii)
the actual rate of interest in effect with respect to such Unsecured Debt as of
the last day of such quarter, all determined on an annualized basis.
"Property Expenses" means, when used with respect to any Real
Property Asset, the costs of maintaining and operating such Real Property Asset,
calculated in accordance with GAAP, which are the responsibility of the owner
thereof and that are not paid directly by the tenant thereof, including, without
limitation, real estate taxes, insurance, repairs and maintenance, but provided
that if such tenant is more than 60 days in arrears in the payment of base or
fixed rent, then such costs will also constitute "Property Expenses", but
excluding depreciation, amortization and interest costs.
"Property Income" means, when used with respect to any Real
Property Asset, rents and other revenues earned in accordance with GAAP, in the
ordinary course therefrom, including, without limitation, revenues from any
parking leases and lease termination fees amortized over the remaining term of
the lease for which such termination fee was received (other than the paid rents
and revenues and security deposits except to the extent applied in satisfaction
of tenants' obligations for rent).
"Rating Agencies" means, collectively, S&P, Moody's, Duff &
Phelps and Fitch.
"Real Property Assets" means as of any time, the real property
assets (including interests in participating mortgages in which either
Borrower's interest therein is characterized as equity according to GAAP) owned
directly or indirectly by either Borrower at such time.
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"Recourse Debt" shall mean Debt of the Borrower or any
Consolidated Subsidiary that is not Non-Recourse Debt.
"Reference Bank" means the principal London offices of Morgan
Guaranty Trust Company of New York.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Solvent" means, with respect to any Person, that the fair
saleable value of such Person's assets exceeds the Debts of such Person.
"S&P" means Standard & Poor's Ratings Group, or any successor
thereto.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests representing either (i) ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions or (ii) a majority of the economic interest therein, are at
the time directly or indirectly owned by Carr or Carr LP.
"Tangible FMV" means the aggregate of (i) Carr Tangible FMV
and (ii) Carr LP Tangible FMV.
"Term" has the meaning set forth in Section 2.9.
"Third Amendment" has the meaning set forth in Section 5.4.
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"Tranche A Commitment" means, with respect to each Bank, the
amount committed by such Bank pursuant to this Agreement with respect to any
Tranche A Loans, as such amount may be reduced from time to time pursuant to
Sections 2.10 and 2.11.
"Tranche A Loan" means the loan or loans to be made to Carr
and CarrAmerica LP for the purposes set forth in Section 5.15 hereof which loan
or loans shall be a Base Rate Loan or Loans, a Euro-Dollar Loan or Loans, or a
Money Market Loan or Loans.
"Tranche A Loan Amount" has the meaning set forth in Section
2.1.
"Tranche A Notes" means the promissory notes of Carr and
CarrAmerica LP, each substantially in the form of Exhibits A-1 or A-3 hereto,
evidencing the joint and several obligation of Carr and CarrAmerica LP to repay
the Tranche A Loans, and "Tranche A Note" means any one of such promissory notes
issued hereunder.
"Tranche B Commitment" means, with respect to each Bank, the
amount committed by such Bank pursuant to this Agreement with respect to any
Tranche B Loans, as such amount may be reduced from time to time pursuant to
Sections 2.10 and 2.11.
"Tranche B Loan" means the loan or loans to be made to Carr LP
and Carr for the purposes set forth in Section 5.15 hereof which loan or loans
shall be a Base Rate Loan or Loans, a Euro-Dollar Loan or Loans, or a Money
Market Loan or Loans.
"Tranche B Loan Amount" has the meaning set forth in Section
2.1.
"Tranche B Notes" means the promissory notes of Carr LP and
Carr, each substantially in the form of Exhibits A-2 or A-4 hereto, evidencing
the joint and several obligation of Carr LP and Carr to repay the Tranche B
Loans, and "Tranche B Note" means any one of such promissory notes issued
hereunder.
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"Treasury Rate" means, as of any date, a rate equal to the
annual yield to maturity on the U.S. Treasury Constant Maturity Series with a
ten year maturity, as such yield is reported in Federal Reserve Statistical
Release H.15 -- Selected Interest Rates, published most recently prior to the
date the applicable Treasury Rate is being determined. Such yield shall be
determined by straight line linear interpolation between the yields reported in
Release H.15, if necessary. In the event Release H.15 is no longer published,
the Lead Agent shall select, in its reasonable discretion, an alternate basis
for the determination of Treasury yield for U.S. Treasury Constant Maturity
Series with ten year maturities.
"Unencumbered Asset Pool Net Operating Cash Flow" means as of
any date of determination with respect to the Unencumbered Asset Pool
Properties, the product of (A) Property Income with respect to the Unencumbered
Assets for the previous quarter, but less (x) Property Expenses with respect to
the Unencumbered Asset Pool Properties for the previous quarter and (y) the
greater of (i) Capital Expenditures which are not related to new construction
for the previous quarter and (ii) reserves for such quarter for Capital
Expenditures of $1.50 per square foot per annum for each Unencumbered Asset Pool
Property, and (B) four (4). For purposes of Section 5.1(m) hereof, the
calculation of Unencumbered Asset Pool Net Operating Cash Flow shall be made
separately as to each Unencumbered Asset Pool Property.
"Unencumbered Asset Pool Properties" means, as of any date,
collectively the Carr Unencumbered Asset Pool Properties and the Carr LP
Unencumbered Asset Pool Properties.
"Unencumbered Asset Pool Minimum Debt Service Coverage" means
as of the last day of each calendar quarter, Unencumbered Asset Pool Net
Operating Cash Flow equal to or greater than 200% of Pro-Forma Debt Service.
"Unencumbered Asset Pool Properties Value" means the aggregate
of (i) the Carr Unencumbered Asset Pool Properties Value and (ii) the Carr LP
Unencumbered Asset Pool Properties Value.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
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of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
"Unsecured Debt" means all Debt which is not secured by a
Lien.
"Unused Commitments" means an amount equal to all unadvanced
funds (other than unadvanced funds in connection with any construction loan)
which any third party is obligated to advance to either of the Borrowers or
otherwise, pursuant to any loan document, written instrument or otherwise.
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrowers' independent public accountants) with the most recent audited
consolidated financial statements of Carr delivered to the Lead Agent and the
Banks; provided that, if Carr notifies the Lead Agent and the Banks that Carr
wishes to amend any covenant in Article V to eliminate the effect of any change
in generally accepted accounting principles on the operation of such covenant
(or if the Lead Agent notifies Carr that the Required Banks wish to amend
Article V for such purpose), then Carr's compliance with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to Carr and the Required Banks.
SECTION 1.3. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrowers
pursuant to Article II on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such
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Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.3.
ARTICLE II
THE CREDITS
SECTION 2.1. Commitments to Lend. Each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to make the Tranche A
Loans to Carr and CarrAmerica LP and participate in Letters of Credit issued by
the Fronting Bank on behalf of Carr or CarrAmerica LP pursuant to this Section
from time to time, but, together with the Tranche B Loans, not more frequently
than four times monthly, during the Term in amounts such that the aggregate
principal amount of Tranche A Loans by such Bank at any one time outstanding
together with such Bank's pro rata share of Letter of Credit Usage with respect
to Carr and CarrAmerica LP shall not exceed the amount of its Tranche A
Commitment. The aggregate amount of Tranche A Loans to be made hereunder
together with the Letter of Credit Usage with respect to Carr and CarrAmerica
LP, shall not exceed Three Hundred Seventy-Six Million Dollars ($376,000,000)
(the "Tranche A Loan Amount"). Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make the Tranche B Loans to Carr LP
and Carr and participate in Letters of Credit issued by the Fronting Bank on
behalf of Carr LP pursuant to this Section from time to time, but, together with
the Tranche A Loans, not more frequently than four times monthly, during the
Term in amounts such that the aggregate principal amount of Tranche B Loans by
such Bank at any one time outstanding, together with such Bank's pro rata share
of Letter of Credit Usage with respect to Carr LP, shall not exceed the amount
of its Tranche B Commitment. The aggregate amount of Tranche B Loans to be made
hereunder, together with the Letter of Credit Usage with respect to Carr LP,
shall not exceed Seventy-Four Million Dollars ($74,000,000) (the "Tranche B Loan
Amount"). Each Borrowing under this subsection (a) shall be in an aggregate
principal amount of at least $2,500,000, or an integral multiple of $1,000,000
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in excess thereof (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.2(c)) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Subject to the
limitations set forth herein, any amounts repaid may be reborrowed.
Notwithstanding anything to the contrary, the number of new Borrowings shall be
limited to four Borrowings per month and no more than ten Borrowings shall be
outstanding at any time.
SECTION 2.2. Notice of Committed Borrowing. (a) The applicable
Borrower or CarrAmerica LP, as the case may be, shall give the Lead Agent notice
(a "Notice of Committed Borrowing") not later than 10:00 a.m. (New York City
time) (x) one Domestic Business Day before each Base Rate Borrowing or (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be Base
Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Either Borrower or CarrAmerica LP shall give the Lead
Agent, and the designated Fronting Bank, written notice in the event that it
desires to have Letters of Credit (each, a "Letter of Credit") issued hereunder
no later than 10:00 a.m., New York City time, at least four (4) Domestic
Business Days prior to the date of such issuance. Each such notice shall specify
(i) the designated Fronting Bank, (ii) the aggregate amount of the requested
Letters of Credit, (iii) the individual amount of each requested Letter of
Credit and the number of Letters of Credit to be issued, (iv) the date of such
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issuance (which shall be a Domestic Business Day), (v) the name and address of
the beneficiary, (vi) the expiration date of the Letter of Credit (which in no
event shall be later than twelve (12) months after the issuance of such Letter
of Credit or the Maturity Date, whichever is earlier), (vii) the purpose and
circumstances for which such Letter of Credit is being issued, (viii) the terms
upon which each such Letter of Credit may be drawn down (which terms shall not
leave any discretion to Fronting Bank), and (ix) whether such Letters of Credit
shall be attributable to Tranche A Loan Amount or Tranche B Loan Amount. Each
such notice may be revoked telephonically by the applicable Borrower or
CarrAmerica LP, as the case may be, to the applicable Fronting Bank and the Lead
Agent any time prior to the date of issuance of the Letter of Credit by the
applicable Fronting Bank, provided such revocation is confirmed in writing by
such Borrower or CarrAmerica LP to the Fronting Bank and the Lead Agent within
one (1) Domestic Business Day by facsimile. No later than 10:00 a.m., New York
City time, on the date that is four (4) Domestic Business Days prior to the date
of issuance, the applicable Borrower or CarrAmerica LP shall specify a precise
description of the documents and the verbatim text of any certificate to be
presented by the beneficiary of such Letter of Credit, which if presented by
such beneficiary prior to the expiration date of the Letter of Credit would
require the Fronting Bank to make a payment under the Letter of Credit; provided
that Fronting Bank may, in its reasonable judgment, require changes in any such
documents and certificates only in conformity with changes in customary and
commercially reasonable practice or law and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made thereunder on
the following Domestic Business Day that such draft is presented if such
presentation is made later than 10:00 A.M. New York City time (except that if
the beneficiary of any Letter of Credit requests at the time of the issuance of
its Letter of Credit that payment be made on the same Domestic Business Day
against a conforming draft, such beneficiary shall be entitled to such a same
day draw, provided such draft is presented to the applicable Fronting Bank no
later than 10:00 A.M. New York City time and provided further that, prior to the
issuance of such Letter of Credit, such Borrower or CarrAmerica LP shall have
requested to Fronting Bank and the Lead Agent that such beneficiary shall be
entitled to a same day draw). In determining whether to pay on such Letter of
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Credit, the Fronting Bank shall be responsible only to determine that the
documents and certificates required to be delivered under the Letter of Credit
have been delivered and that they comply on their face with the requirements of
that Letter of Credit.
SECTION 2.3. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.1 and Section 2.2 hereof, the applicable
Borrower or CarrAmerica LP, as the case may be, may, as set forth in this
Section, request the Banks at any time or from time to time during the Term to
make offers to make Money Market Loans to such Borrower or CarrAmerica LP, as
the case may be, not to exceed $225,000,000 in the aggregate outstanding at any
one time. The Banks may, but shall have no obligation to, make such offers and
the applicable Borrower or CarrAmerica LP, as the case may be, may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section.
(b) Money Market Quote Request. When the applicable Borrower
or CarrAmerica LP, as the case may be, wishes to request offers to make Money
Market Loans under this Section, it shall transmit to the Lead Agent by telex or
facsimile transmission a request for Money Market Quotes substantially in the
form of Exhibit D hereto (a "Money Market Quote Request") so as to be received
not later than 10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of a
LIBOR Auction or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrowers and the Lead Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Money Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
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(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or a larger multiple of $500,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period,
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate,
(v) whether the Money Market Loan will consist in full or in
part of the Tranche A Loan and/or the Tranche B Loan, and if consisting
in part of each, the portions consisting of Tranche A Loans and Tranche
B Loans, and
(vi) whether a Bank may designate a Designated Lender in
connection with such Money Market Loan.
The applicable Borrower or CarrAmerica LP, as the case may be, may request
offers to make Money Market Loans for more than one Interest Period in a single
Money Market Quote Request. No Money Market Quote Request shall be given within
five Euro-Dollar Business Days (or such other number of days as the Borrowers
and the Lead Agent may agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt
of a Money Market Quote Request, but no later than 1:00 p.m. (New York City
time) on (i) the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, or (ii) the Domestic Business next preceding the date of the proposed
Borrowing, the Lead Agent shall send to the Banks by telex or facsimile
transmission an Invitation for Money Market Quotes substantially in the form of
Exhibit E hereto (an "Invitation for Money Market Quotes"), which shall
constitute an invitation by the applicable Borrower or CarrAmerica LP, as the
case may be, to each Bank to submit Money Market Quotes offering to make the
Money Market Loans to which such Money Market Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Lead Agent by telex or facsimile transmission at its offices
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specified in or pursuant to Section 9.1 not later than (x) 10:00 A.M. (New York
City time) on the third Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 10:00 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrowers and the Lead Agent
shall have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided that
Money Market Quotes submitted by the Lead Agent (or any affiliate of the Lead
Agent) in its capacity of a Bank may be submitted, and may only be submitted, if
the Lead Agent or such affiliate notifies the applicable Borrower or CarrAmerica
LP, as the case may be, of the terms of the offer or offers contained therein
not later than thirty (30) minutes prior to the applicable deadline for the
other Banks. Subject to Articles III and VI, any Money Market Quote so made
shall be irrevocable except with the written consent of the Lead Agent given on
the instructions of the applicable Borrower or CarrAmerica LP, as the case may
be. If, and only if, the applicable Borrower or CarrAmerica LP, as the case may
be, elected in the applicable Money Market Quote Request to permit the Banks to
designate Designated Lenders to fund such Money Market Loans, such Money Market
Loans may be funded by such Bank's Designated Lender (if any) as provided in
Section 9.6(d), however such Bank shall not be required to specify in its Money
Market Quote whether such Money Market Loans will be funded by such Designated
Lender.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit F hereto and shall in any case specify:
(1) the proposed date of Borrowing,
(2) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment of the quoting Bank, (x) must
be $5,000,000 or a larger multiple of $500,000, (y) may not exceed the
principal amount of Money Market Loans for which offers were requested
and (z) may be subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by such
quoting Bank may be accepted,
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(3) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added to
or subtracted from the applicable London Interbank Offered Rate,
(4) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market Loan,
and
(5) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(1) is not substantially in conformity with Exhibit F
hereto or does not specify all of the information required by
subsection (d)(ii) above;
(2) contains qualifying, conditional or similar language;
(3) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(4) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Lead Agent shall promptly notify
the applicable Borrower or CarrAmerica LP, as the case may be, (x) with respect
to each Money Market Quote submitted in accordance with subsection (d), of the
terms of such Money Market Quote and the identity of the Bank submitting such
Money Market Quote and (y) of any Money Market Quote that amends, modifies or is
otherwise inconsistent with a previous Money Market Quote submitted by such Bank
with respect to the same Money Market Quote Request. Any such subsequent Money
Market Quote shall be disregarded by the Lead Agent unless such subsequent Money
Market
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Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Lead Agent's notice to the applicable Borrower or CarrAmerica
LP, as the case may be, shall specify (A) the aggregate principal amount of
Money Market Loans for which Money Market Quotes have been received for each
Interest Period specified in the related Money Market Quote Request, (B) the
respective principal amounts and Money Market Margins or Money Market Absolute
Rates, as the case may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which offers in any single
Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 12:00
noon (New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrowers and the Lead Agent shall have mutually
agreed and shall have notified the Banks not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective), the applicable Borrower, or CarrAmerica
LP, as the case may be, shall notify the Lead Agent of its acceptance or
non-acceptance of the Money Market Quotes specified in the Lead Agent's notice
to the applicable Borrower or CarrAmerica LP, as the case may be, pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted and shall specify whether such offer is
to be allocated to Tranche A or Tranche B. The applicable Borrower or
CarrAmerica LP, as the case may be, may accept any Money Market Quote in whole
or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request;
(ii) the principal amount of each Money Market Borrowing
must be $10,000,000 or a larger multiple of $500,000;
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(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute Rates,
as the case may be; and
(iv) the applicable Borrower or CarrAmerica LP, as the
case may be, may not accept any Money Market Quote that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
For the purposes of Section 2.1 hereof, all Money Market Loans
made on the same date of Borrowing for the same Interest Period shall constitute
a single Borrowing.
(g) Allocation by Lead Agent. If Money Market Quotes are made
by two or more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which such Money Market Quotes are accepted for the related
Interest Period, the principal amount of Money Market Loans in respect of which
such Money Market Quotes are accepted shall be allocated by the Lead Agent among
such Banks as nearly as possible (in multiples of $500,000, as the Lead Agent
may deem appropriate) in proportion to the aggregate principal amounts of such
Money Market Quotes. Determinations by the Lead Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
(h) Notification by Lead Agent. Upon receipt of a Notice of
Money Market Borrowing in accordance with Section 2.3(f) hereof, the Lead Agent
shall, on the date such Notice of Money Market Borrowing is received by the Lead
Agent, notify each Bank of the principal amount of the Money Market Borrowing
accepted by the applicable Borrower or CarrAmerica LP, as the case may be, and
of such Bank's share (if any) of such Money Market Borrowing and such Notice of
Money Market Borrowing shall not thereafter be revocable by the applicable
Borrower or CarrAmerica LP, as the case may be. Provided that the applicable
Borrower or CarrAmerica LP, as the case may be, elected in the applicable Money
Market Quote Request to permit the Banks to designate Designated Lenders to fund
such Money Market Loans, a Bank who is notified that it has been selected to
make a Money Market Loan may designate its Designated Lender (if any) to fund
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such Money Market Loan on its behalf, as described in Section 9.6(d). Any
Designated Lender which funds a Money Market Loan shall on and after the time of
such funding become the obligee under such Money Market Loan and be entitled to
receive payment thereof when due. No Bank shall be relieved of its obligation to
fund a Money Market Loan, and no Designated Lender shall assume such obligation,
prior to the time the applicable Money Market Loan is funded.
SECTION 2.4. Notice to Banks; Funding of Loans
(a) Upon receipt of a Notice of Committed Borrowing, the Lead
Agent shall notify each Bank on the same day as it receives such Notice of
Committed Borrowing of the contents thereof and of such Bank's share of such
Borrowing and such Notice of Committed Borrowing shall not thereafter be
revocable by the applicable Borrower or CarrAmerica LP.
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(b) Not later than 2:00 P.M. (New York City time) on the date
of each Committed Borrowing as indicated in the Notice of Committed Borrowing,
each Bank shall (except as provided in subsection (c) of this Section) make
available its share of such Borrowing, in Federal or other funds immediately
available in New York City, to the Lead Agent at its address referred to in
Section 9.1. The Lead Agent will make the funds so received from the Banks
available to the applicable Borrower or CarrAmerica LP, as applicable, at the
Lead Agent's aforesaid address. If a Borrower or CarrAmerica LP has requested
the issuance of a Letter of Credit, no later than 12:00 Noon (New York City
time) on the date of such issuance as indicated in the Notice of Committed
Borrowing, the Fronting Bank shall issue such Letter of Credit in the amount so
requested and deliver the same to the applicable Borrower or CarrAmerica LP with
a copy thereof to the Lead Agent. Immediately upon the issuance of each Letter
of Credit by the Fronting Bank, such Fronting Bank shall be deemed to have sold
and transferred to each other Bank, and each such other Bank shall be deemed to,
and hereby agrees to, have irrevocably and unconditionally purchased and
received from Fronting Bank, without recourse or warranty, an undivided interest
and a participation in such Letter of Credit, any drawing thereunder, and the
obligations of the applicable Borrower or CarrAmerica LP hereunder with respect
thereto, and any security therefor or guaranty pertaining thereto, in an amount
equal to such Bank's ratable share thereof (based upon the ratio its Commitment
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bears to the aggregate of all Commitments). Upon any change in any of the
Commitments in accordance herewith, there shall be an automatic adjustment to
such participations to reflect such changed shares. The Fronting Bank shall have
the primary obligation to fund any and all draws made with respect to such
Letter of Credit notwithstanding any failure of a participating Bank to fund its
ratable share of any such draw. The Lead Agent will instruct the Fronting Bank
to make such Letter of Credit available to such Borrower and the Fronting Bank
shall make such Letter of Credit available to the applicable Borrower or
CarrAmerica LP at the applicable Borrower's or CarrAmerica's LP aforesaid
address on the date of the Borrowing.
(c) Unless the Lead Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Lead Agent such Bank's share of such Borrowing, the Lead Agent may assume
that such Bank has made such share available to the Lead Agent on the date of
such Borrowing in accordance with subsection (b) of this Section 2.4 and the
Lead Agent may, in reliance upon such assumption, make available to the
applicable Borrower or CarrAmerica LP, as applicable, on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Lead Agent, such Bank and the applicable Borrower or
CarrAmerica LP severally agree to repay to the Lead Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the applicable Borrower or CarrAmerica LP
until the date such amount is repaid to the Lead Agent, at (i) in the case of
either Borrower or CarrAmerica LP, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Lead Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.5. Notes.
(a) The Tranche A Loans shall be evidenced by the Tranche A
Notes, each of which shall be payable to the order of each Bank for the account
of its Applicable Lending Office in an amount equal to each such Bank's Tranche
A Commitment.
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(b) The Tranche B Loans shall be evidenced by the Tranche B
Notes, each of which shall be payable to the order of each Bank for the account
of its Applicable Lending Office in an amount equal to each such Bank's Tranche
B Commitment.
(c) Each Bank may, by notice to the Borrowers and CarrAmerica
LP and the Lead Agent, request that its Loans of a particular type be evidenced
by a separate Note in an amount equal to the aggregate unpaid principal amount
of such Loans. Each such Note shall be in substantially the form of Exhibit A-1
or Exhibit A-2 hereto, as applicable, with appropriate modifications to reflect
the fact that it evidences solely Loans of the relevant type. Each reference in
this Agreement to the "Note" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(d) Upon receipt of each Bank's Note pursuant to Section
3.1(a) or (b), the Lead Agent shall forward such Note to such Bank. Each Bank
shall record the date, amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made by either Borrower or
CarrAmerica LP with respect thereto, and may, if such Bank so elects in
connection with any transfer or enforcement of its Note, endorse on the schedule
forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
failure of any Bank to make any such recordation or endorsement shall not affect
the obligations of the Borrowers hereunder or under the Notes. Each Bank is
hereby irrevocably authorized by the Borrowers and CarrAmerica LP so to endorse
its Note and to attach to and make a part of its Note a continuation of any such
schedule as and when required.
(e) There shall be no more than ten (10) Euro-Dollar
Borrowings outstanding at any one time pursuant to this Agreement.
SECTION 2.6. Maturity of Loans. The Loans shall mature, and
the principal amount thereof shall be due and payable, on the Maturity Date.
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SECTION 2.7. Interest Rates.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the sum of the Applicable Margin for
Base Rate Loans for such day plus the Base Rate for such day. Such interest
shall be payable for each Interest Period on the last day thereof.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin for Euro-Dollar Loans for such day plus the Adjusted London Interbank
Offered Rate applicable to such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
"Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered Rate
shall be adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Percentage.
"London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to the Reference Bank in the London interbank market at approximately
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11:00 a.m. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
(c) Subject to Section 8.1, each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.7(b) as if the related Money Market LIBOR Loan were a Euro-Dollar
Loan) plus (or minus) the Money Market Margin quoted by the Bank making such
Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Money Market
Absolute Rate quoted by the Bank making such Loan in accordance with Section
2.3. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than ninety days, at intervals of
ninety days after the first day thereof.
(d) In the event that, and for so long as, any Event of
Default shall have occurred and be continuing, the outstanding principal amount
of the Loans, and, to the extent permitted by law, overdue interest in respect
of all Loans, shall bear interest at the annual rate of the sum of the Prime
Rate and four percent (4%).
(e) The Lead Agent shall determine each interest rate
applicable to the Loans (other than Money Market Loans) hereunder. The Lead
Agent shall give prompt notice to the applicable Borrower or CarrAmerica LP and
the Banks of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(f) The Reference Bank agrees to use its best efforts to
furnish quotations to the Lead Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.
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SECTION 2.8. Fees.
(a) Facility Fee. Effective as of the date hereof, during the
Term, the Borrowers and/or CarrAmerica LP shall pay to the Lead Agent for the
account of the Banks ratably in proportion to their respective Commitments a
facility fee (the "Facility Fee") equal to .20% per annum on the aggregate
Commitments. The Facility Fee shall be payable in arrears on each January 1,
April 1, July 1 and October 1 during the Term.
(b) Letter of Credit Fee. During the Term, the Borrowers
and/or CarrAmerica LP shall pay to the Lead Agent, for the account of the Banks
ratably in proportion to their respective interests in undrawn issued Letters of
Credit, a fee (a "Letter of Credit Fee") in an amount, provided that no Event of
Default shall have occurred and be continuing, equal to a rate per annum equal
to the Applicable Margin for Euro-Dollar Loans on the daily average of such
issued and undrawn Letters of Credit, which fee shall be payable, in arrears, on
each January 1, April 1, July 1 and October 1 during the term. From the
occurrence, and during the continuance, of an Event of Default, such fee shall
be increased to be equal to four percent (4%) per annum on the daily average of
such issued and undrawn Letters of Credit.
(c) Fronting Bank Fee. The Borrowers and/or CarrAmerica LP
shall pay any Fronting Bank, for its own account, a fee (a "Fronting Bank Fee")
at a rate per annum equal to .15% of the issued and undrawn amount of such
Letter of Credit, which fee shall be in addition to and not in lieu of, the
Letter of Credit Fee. The Fronting Bank Fee shall be payable in arrears on each
January 1, April 1, July 1 and October 1 during the Term.
(d) Fees Non-Refundable. All fees set forth in this Section
2.8 shall be deemed to have been earned on the date payment is due in accordance
with the provisions hereof and shall be non-refundable. The obligation of the
Borrowers and CarrAmerica LP to pay such fees in accordance with the provisions
hereof shall be binding upon the Borrowers and CarrAmerica LP and shall inure to
the benefit of the Lead Agent and the Banks regardless of whether any Loans are
actually made.
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SECTION 2.9. Mandatory Termination. The term (the "Term") of
the Commitments shall terminate and expire on September 14, 2000 (the "Maturity
Date").
SECTION 2.10. Mandatory Prepayment
(a) If as of the last day of any calendar quarter the
Borrowers LTV Ratio exceeds the Permitted LTV Ratio, but the Borrowers LTV Ratio
is not greater than 52.5%, and provided that no Event of Default has occurred
and is continuing, either (i) Carr or Carr LP shall add additional Real Property
Assets to the Unencumbered Asset Pool Properties within 90 days of the date the
Borrowers LTV Ratio exceeded the Permitted LTV Ratio, in accordance with the
provisions of Section 3.3, or (ii) the Borrowers and/or CarrAmerica LP shall pay
to the Lead Agent, for the account of the Banks, within 90 days of the date the
Borrowers LTV Ratio exceeded the Permitted LTV Ratio, an amount such that the
Loans outstanding subsequent to such payment do not cause the Borrowers LTV
Ratio to exceed the Permitted LTV Ratio. In the event that the Borrowers LTV
Ratio exceeds the Permitted LTV Ratio and is greater than or equal to 52.5%,
then the Borrowers and/or CarrAmerica LP shall, within twenty-five (25) Domestic
Business Days from the last day of any calendar quarter or the date of any New
Acquisition when the Permitted LTV Ratio is exceeded, pay to the Lead Agent, for
the account of the Banks, an amount such that the Loans outstanding subsequent
to such payment do not cause the Borrowers LTV Ratio to exceed the Permitted LTV
Ratio. Failure by the Borrowers to comply with the Borrowers LTV Ratio within 90
days or 25 Domestic Business Days, as the case may be, of the date of such
non-compliance shall be an Event of Default.
(b) In the event that an Unencumbered Asset Pool Property is
sold or released from the restrictions of Section 5.14 hereof, in accordance
with this Agreement, the applicable Borrower shall simultaneously with such sale
or release, prepay to the Lead Agent, for the account of the Banks, an amount
equal to the amount required such that the Tranche A Loans or Tranche B Loans,
as applicable, remain in compliance with the Permitted LTV Ratio after such sale
or release. Notwithstanding the foregoing, a simultaneous like-kind exchange
under Section 1031 of the Internal Revenue Code will not be subject to the
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provisions of this Section 2.10(b) provided that the exchanged property has
qualified as a New Acquisition and any "boot" associated therewith shall be
applied to prepayment of the Tranche A Loans or Tranche B Loans, as applicable.
Sale of a property in violation of this Section 2.10 shall constitute an Event
of Default.
(c) In the event that the Unencumbered Asset Pool Properties
Minimum Debt Service Coverage is not maintained as of the last day of a calendar
quarter, either (i) the Borrowers will add a New Acquisition or a Real Property
Asset to the Unencumbered Asset Pool Properties in accordance with this
Agreement which, on a pro forma basis (i.e. the Unencumbered Asset Pool
Properties Minimum Debt Service Coverage shall be recalculated to include such
New Acquisition or Real Property Asset as though the same had been an
Unencumbered Asset Pool Property for the entire applicable period, with
appropriate pro forma adjustments to Unencumbered Asset Pool Net Operating Cash
Flow) would result in compliance with the Unencumbered Asset Pool Properties
Minimum Debt Service Coverage or (ii) the Borrowers and/or CarrAmerica LP shall
prepay to the Lead Agent, for the account of the Banks, an amount necessary to
cause the Unencumbered Asset Pool Properties Minimum Debt Service Coverage to be
in compliance. Failure by the Borrowers and/or CarrAmerica LP to comply with the
Unencumbered Asset Pool Properties Minimum Debt Service Coverage within 90 days
of the date of such non-compliance shall be an Event of Default.
(d) If as of the last day of any calendar quarter the Carr LTV
Ratio exceeds 50%, but the Carr LTV Ratio is not greater than 52.5%, and
provided that no Event of Default has occurred and is continuing, either (i)
Carr shall add additional Real Property Assets to the Carr Unencumbered Asset
Pool Properties within 90 days of the date the Carr LTV Ratio exceeded 50%, in
accordance with the provisions of Section 3.3, or (ii) Carr shall pay to the
Lead Agent, for the account of the Banks, within 90 days of the date the Carr
LTV Ratio exceeded 50%, an amount such that the Tranche A Loans outstanding
subsequent to such payment shall not cause the Carr LTV Ratio to be greater than
50%. In the event that the Carr LTV Ratio exceeds 50% and is greater than or
equal to 52.5%, then Carr shall, within twenty-five (25) Domestic Business Days
from the last day of any calendar quarter or the date of any New Acquisition
when the Carr LTV Ratio is greater than 50%, pay to the Lead Agent, for the
account of the Banks, an amount such that the Tranche A Loans outstanding
subsequent to such payment shall not cause the Carr LTV Ratio to be greater than
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50%. Failure by Carr to comply with the Carr LTV Ratio within 90 days or 25
Domestic Business Days, as the case may be, of the date of such non-compliance
shall be an Event of Default.
(e) If as of the last day of any calendar quarter the Carr LP
LTV Ratio exceeds 50%, but the Carr LP LTV Ratio is not greater than 52.5%, and
provided that no Event of Default has occurred and is continuing, either (i)
Carr LP shall add additional Real Property Assets to the Carr LP Unencumbered
Asset Pool Properties within 90 days of the date the Carr LP LTV Ratio exceeded
50%, in accordance with the provisions of Section 3.3, or (ii) Carr LP shall pay
to the Lead Agent, for the account of the Banks, within 90 days of the date the
Carr LP LTV Ratio exceeded 50%, an amount such that the Tranche B Loans
outstanding subsequent to such payment shall not cause the Carr LP LTV Ratio to
be greater than 50%. In the event that the Carr LP LTV Ratio exceeds 50% and is
greater than or equal to 52.5%, then Carr LP shall, within twenty-five (25)
Domestic Business Days from the last day of any calendar quarter or the date of
any New Acquisition when the Carr LP LTV Ratio is greater than 50%, pay to the
Lead Agent, for the account of the Banks, an amount such that the Tranche B
Loans outstanding subsequent to such payment shall not cause the Carr LP LTV
Ratio to be greater than 50%. Failure by Carr LP to comply with the Carr LP LTV
Ratio within 90 days or 25 Domestic Business Days, as the case may be, of the
date of such non-compliance shall be an Event of Default.
SECTOPM 2.11. Optional Prepayments
(a) The Borrowers or CarrAmerica LP may, upon at least one
Domestic Business Day's notice to the Lead Agent, prepay to the Lead Agent, for
the account of the Banks, any Base Rate Borrowing in whole at any time, or from
time to time in part in amounts aggregating One Million Dollars ($1,000,000), or
an integral multiple of One Million Dollars ($1,000,000) in excess thereof or,
if less, the outstanding principal balance, by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Loans of the
several Banks included in such Borrowing. Any notice of prepayment delivered
pursuant to this Section 2.11(a) shall set forth the amount of such prepayment
which is applicable to any Loan made for working capital purposes after such
prepayment is made.
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(b) Except as provided in Section 8.2, a Borrower or
CarrAmerica LP may not prepay all or any portion of the principal amount of any
Euro-Dollar Loan prior to the maturity thereof unless the applicable Borrower or
CarrAmerica LP shall also pay any applicable expenses pursuant to Section 2.13.
Any such prepayment shall be upon at least three (3) Euro-Dollar Business Days'
notice to the Lead Agent. Any notice of prepayment delivered pursuant to this
Section 2.11(b) shall set forth the amount of such prepayment which is
applicable to any Loan made for working capital purposes after such prepayment
is made. Each such optional prepayment shall be in the amounts set forth in
Section 2.11(a) above and shall be applied to prepay ratably the Loans of the
Banks included.
(c) The Borrower may not prepay any Money Market Loan pursuant
to this Section 2.11 except with the prior consent of the applicable Bank or
Designated Lender, as the case may be.
(d) A Borrower or CarrAmerica LP may, upon at least one (1)
Domestic Business Day's notice to the Lead Agent (by 11:00 a.m New York time on
such Domestic Business Day), reimburse the Lead Agent for the benefit of the
Fronting Bank for the amount of any drawing under a Letter of Credit in whole or
in part in any amount.
(e) A Borrower or CarrAmerica LP may at any time return any
undrawn Letters of Credit to the Fronting Bank in whole, but not in part, and
the Fronting Bank shall give the Lead Agent and each of the Banks notice of such
return.
(f) Either Borrower may at any time and from time to time
cancel all or any part of the Tranche A Commitments or Tranche B Commitments, as
applicable, in amounts aggregating One Million Dollars ($1,000,000), or an
integral multiple of One Million Dollars ($1,000,000) in excess thereof, by the
delivery to the Lead Agent and the Banks of a notice of cancellation upon at
least three (3) Domestic Business Days' notice to Lead Agent and the Banks,
whereupon, in either event, all or such portion of the Tranche A Commitments or
Tranche B Commitments, as applicable, shall terminate as to the Banks, pro rata
on the date set forth in such notice of cancellation, and, if there are any
Loans then outstanding in an aggregate amount which exceeds the aggregate
Tranche A Commitments or Tranche B Commitments, as applicable (after giving
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effect to any such reduction), the applicable Borrower shall prepay to the Lead
Agent, for the account of the Banks, as applicable, all or such portion of Loans
outstanding on such date in accordance with the requirements of Sections 2.11(a)
and (b). In no event shall either Borrower be permitted to cancel Commitments
for which a Letter of Credit has been issued and is outstanding unless such
Borrower returns (or causes to be returned) such Letter of Credit to the
Fronting Bank. A Borrower shall be permitted to designate in its notice of
cancellation which Loans, if any, are to be prepaid.
(g) Upon receipt of a notice of prepayment or cancellation or
a return of a Letter of Credit pursuant to this Section, the Lead Agent shall
promptly, and in any event within one (1) Domestic Business Day, notify each
Bank of the contents thereof and of such Bank's ratable share (if any) of such
prepayment or cancellation and such notice shall not thereafter be revocable by
the Borrowers or CarrAmerica LP.
(h) Any amounts so prepaid pursuant to this Section 2.11 may
be reborrowed subject to the other terms of this Agreement. In the event either
Borrower elects to cancel all or any portion of the Commitments pursuant to
Section 2.11(e) hereof, such amounts may not be reborrowed.
SECTION 2.12. General Provisions as to Payments
(a) The Borrowers and CarrAmerica LP shall make each payment
of principal of, and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due, in Federal or other
funds immediately available in New York City, to the Lead Agent at its address
referred to in Section 9.1. The Lead Agent will distribute to each Bank its
ratable share of each such payment received by the Lead Agent for the account of
the Banks on the same day as received by the Lead Agent if received by the Lead
Agent by 3:00 p.m. (New York City time), or, if received by the Lead Agent after
3:00 p.m. (New York City time), on the immediately following Domestic Business
Day. Whenever any payment of principal of, or interest on, the Base Rate Loans
or of fees shall be due on a day which is not a Domestic Business Day, the date
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for payment thereof shall be extended to the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest on, the Money
Market Loans shall be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Lead Agent shall have received notice from a
Borrower or CarrAmerica LP prior to the date on which any payment is due to the
Banks hereunder that such Borrower or CarrAmerica LP will not make such payment
in full, the Lead Agent may assume that such Borrower or CarrAmerica LP, as
applicable has made such payment in full to the Lead Agent on such date and the
Lead Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank. If
and to the extent that such Borrower or CarrAmerica LP shall not have so made
such payment, each Bank shall repay to the Lead Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Lead Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If a Borrower or CarrAmerica LP
makes any payment of principal with respect to any Euro-Dollar Loan (pursuant to
Article II, VI or VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.7(b), or if a Borrower fails to borrow any
Euro-Dollar Loans, after notice has been given to any Bank in accordance with
Section 2.4(a), such Borrower or CarrAmerica LP shall reimburse each Bank within
15 days after demand for any resulting loss or expense incurred by it (or by an
existing Participant in the related Loan), including (without limitation) any
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loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
failure to borrow, provided that such Bank shall have delivered to such Borrower
or CarrAmerica LP a certificate as to the amount of such loss or expense and the
calculation thereof, which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Method of Electing Interest Rates.
(a) The Loans included in each Borrowing shall bear interest
initially at the type of rate specified by such Borrower or CarrAmerica LP in
the applicable Notice of Borrowing. Thereafter, such Borrower or CarrAmerica LP,
as applicable, may from time to time elect to change or continue the type of
interest rate borne by each Group of Loans (subject in each case to the
provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, a Borrower or
CarrAmerica LP, as applicable, may elect to convert such Loans to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, a Borrower or
CarrAmerica LP, as applicable, may elect to convert such Loans to
Base Rate Loans or elect to continue such Loans as Euro-Dollar
Loans for an additional Interest Period, in each case effective
on the last day of the then current Interest Period applicable to
such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Lead Agent at least three (3) Euro-Dollar Business Days
before the conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be continued as Base Rate Loans, in which case
such notice shall be delivered to the Lead Agent no later than 12:00 Noon (New
York City time) at least one (1) Domestic Business Day before such continuation
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is to be effective). A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant Group
of Loans; provided that (i) such portion is allocated ratably among the Loans
comprising such Group, (ii) the portion to which such notice applies, and the
remaining portion to which it does not apply, are each $1,000,000 or any larger
multiple of $1,000,000, (iii) subject to Section 2.1, there shall be no more
than ten (10) Borrowings comprised of Euro-Dollar Loans outstanding at any time
under this Agreement, (iv) no Loan may be continued as, or converted into, a
Euro-Dollar Loan when any Event of Default has occurred and is continuing, and
(v) no Interest Period shall extend beyond the Maturity Date.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans are
Euro-Dollar Loans, the duration of the initial Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from a
Borrower or CarrAmerica LP pursuant to subsection (a) above, the Lead Agent
shall notify each Bank on the same day as it receives such Notice of Interest
Rate Election of the contents thereof and such notice shall not thereafter be
revocable by such Borrower or CarrAmerica LP. If such Borrower or CarrAmerica LP
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fails to deliver a timely Notice of Interest Rate Election to the Lead Agent for
any Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate
Loans on the last day of the then current Interest Period applicable thereto.
SECTION 2.16. Letters of Credit. (a) Subject to the terms
contained in this Agreement and the other Loan Documents, upon the receipt of a
notice in accordance with Section 2.2(b) requesting the issuance of a Letter of
Credit, the Fronting Bank shall issue a Letter of Credit or Letters of Credit in
such form as is reasonably acceptable to the applicable Borrower or CarrAmerica
LP, as applicable, in an amount or amounts equal to the amount or amounts
requested by the applicable Borrower or CarrAmerica LP.
(b) Each Letter of Credit shall be issued in the minimum
amount of One Million Dollars ($1,000,000).
(c) The Letter of Credit Usage shall be no more than
$30,000,000 at any one time.
(d) There shall be no more than five (5) Letters of Credit
outstanding at any one time.
(e) In the event of any request for a drawing under any Letter
of Credit by the beneficiary thereunder, the Fronting Bank shall notify the
applicable Borrower and the Lead Agent (and the Lead Agent shall endeavor to
notify each Bank thereof) on or before the date on which the Fronting Bank
intends to honor such drawing, and, except as provided in this subsection (e),
the applicable Borrower shall reimburse the Fronting Bank, in immediately
available funds, on the same day on which such drawing is honored in an amount
equal to the amount of such drawing. Notwithstanding anything contained herein
to the contrary, however, unless such Borrower or CarrAmerica LP shall have
notified the Lead Agent, and the Fronting Bank prior to 11:00 a.m. (New York
time) on the Domestic Business Day immediately prior to the date of such drawing
that such Borrower intends to reimburse the Fronting Bank for the amount of such
drawing with funds other than the proceeds of the Loans, the applicable Borrower
or CarrAmerica LP shall be deemed to have timely given a Notice of Borrowing
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pursuant to Section 2.2 to the Lead Agent, requesting a Borrowing of Base Rate
Loans on the date on which such drawing is honored and in an amount equal to the
amount of such drawing. Each Bank (other than the Fronting Bank) shall, in
accordance with Section 2.4(b), make available its share of such Borrowing to
the Lead Agent, the proceeds of which shall be applied directly by the Lead
Agent to reimburse the Fronting Bank for the amount of such draw. In the event
that any such Bank fails to make available to the Fronting Bank the amount of
such Bank's participation on the date of a drawing, the Fronting Bank shall be
entitled to recover such amount on demand from such Bank together with interest
at the Federal Funds Rate commencing on the date such drawing is honored.
(f) If, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof shall either (a)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against letters of credit issued by, or assets held by, or deposits
in or for the account of, or participations in any letter of credit, upon any
Bank (including the Fronting Bank) or (b) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (a) or (b) shall be to increase
the cost to the Fronting Bank or any Bank of issuing or maintaining any Letter
of Credit or participating therein then the applicable Borrower or CarrAmerica
LP shall pay to the Fronting Bank or such Bank, within 15 days after written
demand by such Bank (with a copy to the Lead Agent), which demand shall be
accompanied by a certificate showing, in reasonable detail, the calculation of
such amount or amounts, such additional amounts as shall be required to
compensate the Fronting Bank or such Bank for such increased costs or reduction
in amounts received or receivable hereunder together with interest thereon at
the Base Rate. The amount specified in the written demand shall, absent manifest
error, be final and conclusive and binding upon the Borrowers and CarrAmerica
LP.
(g) The Borrowers and CarrAmerica LP hereby agree to protect,
indemnify, pay and save the Fronting Bank harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and disbursements) which the Fronting Bank
may incur or be subject to as a result of (i) the issuance of the Letters of
Credit, other than as a result of the gross negligence or wilful misconduct of
the Fronting Bank or (ii) the failure of the Fronting Bank to honor a drawing
under any Letter of Credit as a result of any act or omission, whether rightful
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or wrongful, of any present or future de jure or de facto government or
governmental authority (collectively, "Governmental Acts"), other than as a
result of the gross negligence or wilful misconduct of the Fronting Bank. As
between the Borrowers, CarrAmerica LP and the Fronting Bank, the Borrowers and
CarrAmerica LP assume all risks of the acts and omissions of, or misuses of, the
Letters of Credit issued by the Fronting Bank, by the beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, the
Fronting Bank shall not be responsible (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of such Letters of Credit, even
if it should in fact prove to be in any and all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or insufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) for failure of the beneficiary of any such Letter of Credit to
comply fully with conditions required in order to draw upon such Letter of
Credit; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any message, by mail, cable, telegraph, telex, facsimile
transmission, or otherwise; (v) for errors in interpretation of any technical
terms; (vi) for any loss or delay in the transmission or otherwise of any
documents required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) for the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of such Letter of Credit; and (viii) for
any consequence arising from causes beyond the control of the Fronting Bank,
including any Government Acts, in each case other than as a result of the gross
negligence or willful misconduct of the Fronting Bank. None of the above shall
affect, impair or prevent the vesting of the Fronting Bank's rights and powers
hereunder. In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Fronting
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not put the
Fronting Bank under any resulting liability to the Borrowers or CarrAmerica LP.
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(h) If the Fronting Bank or the Lead Agent is required at any
time, pursuant to any bankruptcy, insolvency, liquidation or reorganization law
or otherwise, to return to the Borrowers or CarrAmerica LP any reimbursement by
the Borrowers or CarrAmerica LP of any drawing under any Letter of Credit, each
Bank shall pay to the Fronting Bank or the Lead Agent, as the case may be, its
share of such payment, but without interest thereon unless the Fronting Bank or
the Lead Agent is required to pay interest on such amounts to the person
recovering such payment, in which case with interest thereon, computed at the
same rate, and on the same basis, as the interest that the Fronting Bank or the
Lead Agent is required to pay.
SECTION 2.17. Letter of Credit Usage Absolute. The obligations
of the Borrowers and CarrAmerica LP under this Agreement in respect of any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement (as the same may be
amended from time to time) and any Letter of Credit Documents (as hereinafter
defined) under all circumstances, including, without limitation, to the extent
permitted by law, the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any other agreement or instrument relating thereto (collectively, the
"Letter of Credit Documents") or any Loan Document;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of either Borrower or
CarrAmerica LP in respect of the Letters of Credit or any other amendment or
waiver of or any consent by either Borrower or CarrAmerica LP to departure from
all or any of the Letter of Credit Documents or any Loan Document, provided that
the Fronting Bank shall not consent to any such change or amendment unless
previously consented to in writing by either Borrower or CarrAmerica LP, as
applicable;
(c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the obligations of either Borrower or CarrAmerica LP in
respect of the Letters of Credit;
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(d) the existence of any claim, set-off, defense or other right
that either Borrower or CarrAmerica LP may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Lead Agent, the
Fronting Bank or any Bank (other than a defense based on the gross negligence or
wilful misconduct of the Lead Agent, the Fronting Bank or such Bank) or any
other Person, whether in connection with the Loan Documents, the transactions
contemplated hereby or by the Letters of Credit Documents or any unrelated
transaction;
(e) any draft or any other document presented under or in
connection with any Letter of Credit or other Loan Document proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; provided that payment by the
Fronting Bank under such Letter of Credit against presentation of such draft or
document shall not have constituted gross negligence or wilful misconduct of the
Fronting Bank;
(f) payment by the Fronting Bank against presentation of a draft
or certificate that does not comply with the terms of the Letter of Credit;
provided that such payment shall not have constituted gross negligence or wilful
misconduct of the Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrowers or CarrAmerica LP; provided that
such other circumstance or happening shall not have been the result of gross
negligence or wilful misconduct of the Fronting Bank.
ARTICLE III
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur on the
date (the "Closing Date") when each of the following conditions is satisfied (or
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waived by the Lead Agent), each document to be dated the Closing Date unless
otherwise indicated:
(a) Carr and CarrAmerica LP shall have executed and
delivered to the Lead Agent a Tranche A Note for the account of
each Bank dated on or before the Closing Date complying with the
provisions of Section 2.5;
(b) Carr and Carr LP shall have executed and delivered to
the Lead Agent a Tranche B Note for the account of each Bank
dated on or before the Closing Date complying with the provisions
of Section 2.5;
(c) the Borrowers and CarrAmerica LP shall have executed and
delivered to the Lead Agent a duly executed original of this
Agreement;
(d) Lead Agent shall have received an opinion of Hogan &
Hartson L.L.P., with respect to certain matters of New York and
Maryland law, acceptable to the Lead Agent, the Banks and their
counsel;
(e) the Lead Agent shall have received all documents the
Lead Agent may reasonably request relating to the existence of
the Borrowers and CarrAmerica LP, the authority for and the
validity of this Agreement and the other Loan Documents, and any
other matters relevant hereto, all in form and substance
reasonably satisfactory to the Lead Agent. Such documentation
shall include, without limitation, the articles of incorporation
and by-laws of Carr and the partnership agreement and limited
partnership certificate of Carr LP and CarrAmerica LP, as
amended, modified or supplemented to the Closing Date, each
certified to be true, correct and complete by a senior officer of
Carr, Carr LP or CarrAmerica LP, as applicable, as of a date not
more than forty-five (45) days prior to the Closing Date,
together with a good standing certificate from the Secretary of
State (or the equivalent thereof) of Maryland with respect to
Carr and a good standing certificate from the Secretary of State
(or the equivalent thereof) of Delaware with respect to Carr LP
and CarrAmerica LP and from the Secretary of State (or the
equivalent thereof) of each other State in which Carr, Carr LP
and CarrAmerica LP is required to be qualified to transact
business, each to be dated not more than forty-five (45) days
prior to the Closing Date;
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(f) the Lead Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
Section 3.2, unless otherwise specified, in sufficient counterparts,
satisfactory in form and substance to the Lead Agent in its sole discretion;
(g) the Borrowers and CarrAmerica LP shall have taken all
actions required to authorize the execution and delivery of this Agreement and
the other Loan Documents and the performance thereof by the Borrowers and
CarrAmerica LP;
(h) the Lead Agent shall have received an unaudited
consolidated balance sheet and income statement of Carr for the fiscal quarter
ended [December 31], 1997;
(i) the Lead Agent shall have received wire transfer
instructions in connection with the Loans to be made on the Closing Date;
(j) the Lead Agent shall have received, for its and any other
Bank's account, all fees due and payable pursuant to Section 2.8 hereof on or
before the Closing Date, and the reasonable fees and expenses accrued through
the Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP;
(k) the Lead Agent shall have received copies of all consents,
licenses and approvals, if any, required in connection with the execution,
delivery and performance by the Borrower and CarrAmerica LP, and the validity
and enforceability, of the Loan Documents, or in connection with any of the
transactions contemplated thereby, and such consents, licenses and approvals
shall be in full force and effect;
(l) the Lead Agent shall have received satisfactory reports of
Uniform Commercial Code filing searches conducted by a search firm acceptable to
the Lead Agent with respect to the Borrowers, such searches to be conducted in
each of the locations specified by the Lead Agent;
(m) no material defaults or Events of Default (as defined
therein) shall exist under the Existing Credit Agreement or any existing
agreement entered into by either Borrower or CarrAmerica LP in connection with
any Debt of such Borrower or CarrAmerica LP;
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(n) the representations and warranties of the Borrowers and
CarrAmerica LP contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date both before and after giving
effect to the making of any Loans;
(o) receipt by the Lead Agent and the Banks of a certificate
of the chief financial officer or the chief accounting officer of Carr
certifying that the Borrowers and CarrAmerica LP are in compliance with all
covenants of the Borrowers and CarrAmerica LP contained in this Agreement,
including, without limitation, the requirements of Section 5.8, as of the
Closing Date.
The Lead Agent shall promptly notify the Borrowers and CarrAmerica LP and the
Banks of the Closing Date, and such notice shall be conclusive and binding on
all parties hereto.
SECTION 3.2. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing or to participate in any Letter of Credit
issued by the Fronting Bank and the obligation of the Fronting Bank to issue a
Letter of Credit on the occasion of any Borrowing is subject to the satisfaction
of the following conditions:
(a) the Closing Date shall have occurred on or prior to
March 30, 1998;
(b) receipt by the Lead Agent of a Notice of Borrowing as
required by Section 2.2 or Section 2.3;
(c) immediately after such Borrowing, the Outstanding
Balance will not exceed the aggregate amount of the Commitments
and with respect to each Bank, such Bank's pro rata portion of
the Loans and Letter of Credit Usage will not exceed such Bank's
Commitment;
(d) immediately before and after such Borrowing, no Default
or Event of Default shall have occurred and be continuing both
before and after giving effect to the making of such Loans;
(e) the representations and warranties of the Borrowers and
CarrAmerica LP contained in this Agreement shall be true and
correct in all material respects on and as of the date of such
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Borrowing both before and after giving effect to the making of
such Loans;
(f) no law or regulation shall have been adopted, no order,
judgment or decree of any governmental authority shall have been
issued, and no litigation shall be pending or threatened, which
does or, with respect to any threatened litigation, seeks to
enjoin, prohibit or restrain, the making or repayment of the
Loans, the issuance of any Letters of Credit or any
participations therein or the consummation of the transactions
contemplated hereby; and
(g) no event, act or condition shall have occurred after the
Closing Date which, in the reasonable judgment of the Lead Agent
or the Required Banks, as the case may be, has had or is likely
to have a Material Adverse Effect.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the applicable Borrower and CarrAmerica LP, if applicable, on the date of such
Borrowing as to the facts specified in clauses (c) through (g) of this Section
(except that with respect to clause (f), such representation and warranty shall
be deemed to be limited to laws, regulations, orders, judgments, decrees and
litigation affecting the Borrowers or CarrAmerica LP and not solely the Banks).
SECTION 3.3. New Acquisitions and Additional Real Property
Assets. All New Acquisitions or Real Property Assets may be added to the
Unencumbered Asset Pool Properties upon written notice from either Borrower to
The Lead Agent specifying that such New Acquisition has been acquired and that
the same qualify as an Unencumbered Asset Pool Property.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lead Agent and each of the other Banks which may
become a party to this Agreement to make the Loans, the applicable Borrower or
CarrAmerica LP makes the following representations and warranties as of the date
hereof. Such representations and warranties shall survive the effectiveness of
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this Agreement, the execution and delivery of the other Loan Documents and the
making of the Loans.
SECTION 4.1. Existence and Power of Carr. Carr is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Maryland and has all powers and all material governmental
licenses, authorizations, consents and approvals required to own its property
and assets and carry on its business as now conducted or as it presently
proposes to conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect.
SECTION 4.2. Existence and Power of Carr LP and CarrAmerica
LP. Carr LP and CarrAmerica LP are each duly organized, validly existing and in
good standing as a limited partnership under the laws of the State of Delaware
and each has all powers and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and carry on its
business as now conducted or as it presently proposes to conduct and each has
been duly qualified and is in good standing in every jurisdiction in which the
failure to be so qualified and/or in good standing is likely to have a Material
Adverse Effect.
SECTION 4.3. Power and Authority of Carr. Carr has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents to which it is a party and has taken
all necessary action to authorize the execution and delivery on behalf of Carr
and the performance by Carr of such Loan Documents. Carr has duly executed and
delivered each Loan Document to which it is a party, and each such Loan Document
constitutes the legal, valid and binding obligation of Carr, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
insolvency, bankruptcy or other laws affecting creditors rights generally, or
general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law.
SECTION 4.4. Power and Authority of Carr LP and CarrAmerica
LP. Carr LP and CarrAmerica LP each have the partnership power and authority to
execute, deliver and carry out the terms and provisions of each of the Loan
Documents to which it is a party and has taken all necessary action to authorize
the execution and delivery on behalf of Carr LP or CarrAmerica LP, as
applicable, and the performance by Carr LP or CarrAmerica LP, as applicable, of
such Loan Documents. Carr LP and CarrAmerica LP have each duly executed and
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delivered each Loan Document to which it is a party, and each such Loan Document
constitutes the legal, valid and binding obligation of Carr LP or CarrAmerica
LP, as applicable, enforceable in accordance with its terms, except as
enforceability may be limited by applicable insolvency, bankruptcy or other laws
affecting creditors rights generally, or general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law.
SECTION 4.5. No Violation. Neither the execution, delivery or
performance by or on behalf of the Borrowers or CarrAmerica LP of the Loan
Documents, nor compliance by the Borrowers or CarrAmerica LP with the terms and
provisions thereof nor the consummation of the transactions contemplated by the
Loan Documents, (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality or (ii) will conflict with or result in any breach
of, any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrowers
or CarrAmerica LP pursuant to the terms of any indenture, mortgage, deed of
trust, or other agreement or other instrument to which the Borrowers or
CarrAmerica LP (or of any partnership of which either Borrower is a partner) is
a party or by which it or any of its property or assets is bound or to which it
is subject or (iii) will cause a default by either Borrower or CarrAmerica LP
under any organizational document of any Subsidiary, or cause a default under
Carr's articles of incorporation or by-laws or Carr LP's or CarrAmerica LP's
agreement of limited partnership.
SECTION 4.6. Financial Information
(a) The unaudited consolidated balance sheet of Carr as of
[December 31], 1997, a copy of which has been delivered to the Lead Agent,
fairly presents, in conformity with generally accepted accounting principles,
the consolidated financial position of Carr as of such date and its consolidated
results of operations for such fiscal year.
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(b) Since [December 31], 1997, (i) there has been no material adverse
change in the business, financial position or results of operations of the
Borrowers and (ii) except as previously disclosed to the Lead Agent or as
publicly disclosed, neither the Borrowers nor CarrAmerica LP have incurred any
material indebtedness or guaranty.
SECTION 4.7. Litigation.
(a) There is no action, suit or proceeding pending against, or
to the knowledge of the Borrowers or CarrAmerica LP, threatened against or
affecting, (i) the Borrowers or CarrAmerica LP or any of their Subsidiaries,
(ii) the Loan Documents or any of the transactions contemplated by the Loan
Documents or (iii) any of their assets, in any case before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable likelihood of an adverse decision which could, individually or in the
aggregate, have a Material Adverse Effect or which in any manner draws into
question the validity of this Agreement or the other Loan Documents.
(b) There are no final nonappealable judgments or decrees in
an aggregate amount of Five Million Dollars ($5,000,000) or more entered by a
court or courts of competent jurisdiction against the Borrowers or either
Borrower or CarrAmerica LP (other than any judgment as to which, and only to the
extent, a reputable insurance company has acknowledged coverage of such claim in
writing).
SECTION 4.8. Compliance with ERISA.
(a) Except as previously disclosed to the Lead Agent in
writing, each member of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue Code with respect to
each Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code with respect to
each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
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ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
(b) The transactions contemplated by the Loan Documents will
not constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the Lead
Agent or the Banks to any tax or penalty or prohibited transactions imposed
under Section 4975 of the Code or Section 502(i) of ERISA.
SECTION 4.9. Environmental Matters. In the ordinary course of
its business, the Borrowers and CarrAmerica LP each review the effect of
Environmental Laws on the business, operations and properties of the Borrowers
and their subsidiaries or CarrAmerica LP, as applicable, in the course of which
they identify and evaluate associated liabilities and costs (including, without
limitation, any capital or operating expenditures required for clean-up or
closure of properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Substances, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review, the Borrowers and
CarrAmerica LP have reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.
SECTION 4.10. Taxes. The initial tax year of each Borrower for
federal income tax purposes was 1993. The initial tax year of CarrAmerica LP for
federal income tax purposes was 1996. The Borrowers and their subsidiaries and
CarrAmerica LP have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received by
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the Borrowers or any subsidiary. The charges, accruals and reserves on the books
of the Borrowers and their subsidiaries and CarrAmerica LP in respect of taxes
or other governmental charges are, in the opinion of the Borrowers and
CarrAmerica LP, adequate.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrowers or CarrAmerica LP to the Lead Agent or any Bank for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is true and accurate in all material respects on the date as of which
such information is stated or certified. The Borrowers and CarrAmerica LP have
disclosed to the Banks in writing any and all facts known to the Borrowers or
CarrAmerica LP which materially and adversely affect or are likely to materially
and adversely affect (to the extent the Borrowers or CarrAmerica LP can now
reasonably foresee), the business, operations or financial condition of the
Borrowers and CarrAmerica LP considered as one enterprise or the ability of the
Borrowers or CarrAmerica LP, as applicable, to perform their obligations under
this Agreement or the other Loan Documents.
SECTION 4.12. Solvency. On the Closing Date and after giving
effect to the transactions contemplated by the Loan Documents occurring on the
Closing Date, each Borrower and CarrAmerica LP is Solvent.
SECTION 4.13. Use of Proceeds; Margin Regulations. All
proceeds of the Loans will be used by the Borrowers only in accordance with the
provisions hereof. No part of the proceeds of any Loan will be used by the
Borrowers to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock. Neither the making
of any Loan nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X of the Federal Reserve Board.
SECTION 4.14. Governmental Approvals. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of any Loan Document
or the consummation of any of the transactions contemplated thereby other than
those that have already been duly made or obtained and remain in full force and
effect.
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SECTION 4.15. Investment Company Act; Public Utility Holding
Company Act. Neither Borrower nor CarrAmerica LP is (x) an "investment company"
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended, (y) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (z) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
SECTION 4.16. Closing Date Transactions. On the Closing Date
and immediately prior to the making of the Loans, the transactions (other than
the making of the Loans) intended to be consummated on the Closing Date will
have been consummated in accordance with all applicable laws. All consents and
approvals of, and filings and registrations with, and all other actions by, any
Person required in order to make or consummate such transactions have been
obtained, given, filed or taken and are in full force and effect.
SECTION 4.17. Representations and Warranties in Loan
Documents. All representations and warranties made by the Borrowers and
CarrAmerica LP in the Loan Documents are true and correct in all material
respects.
SECTION 4.18. Patents, Trademarks, etc. Each Borrower and
CarrAmerica LP has obtained and holds in full force and effect all patents,
trademarks, service marks, trade names, copyrights and other such rights, free
from burdensome restrictions, which are necessary for the operation of its
business as presently conducted, the impairment of which is likely to have a
Material Adverse Effect. To the Borrowers' and CarrAmerica LP's knowledge, no
material product, process, method, substance, part or other material presently
sold by or employed by the Borrowers or CarrAmerica LP in connection with such
business infringes any patent, trademark, service mark, trade name, copyright,
license or other such right owned by any other Person. There is not pending or,
to the Borrowers' and CarrAmerica LP's knowledge, threatened any claim or
litigation against or affecting either Borrower or CarrAmerica LP contesting its
right to sell or use any such product, process, method, substance, part or other
material.
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SECTION 4.19. No Default. No Default or Event of Default
exists under or with respect to any Loan Document. Neither Borrower nor
CarrAmerica LP is in default in any material respect beyond any applicable grace
period under or with respect to any other material agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect, the existence of which default is likely (to the extent
that the Borrowers or CarrAmerica LP, as applicable, can now reasonably foresee)
to result in a Material Adverse Effect.
SECTION 4.20. Licenses, etc. Each Borrower and CarrAmerica LP
has obtained and holds in full force and effect, all franchises, licenses,
permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other consents and approvals which are necessary
for the operation of its businesses as presently conducted, the absence of which
is likely (to the extent that the Borrowers or CarrAmerica LP, as applicable,
can now reasonably foresee) to have a Material Adverse Effect.
SECTION 4.21. Compliance with Law. Each Borrower and
CarrAmerica LP is in compliance with all laws, rules, regulations, orders,
judgments, writs and decrees, including, without limitation, all building and
zoning ordinances and codes, the failure to comply with which is likely (to the
extent that the Borrowers or CarrAmerica LP, as applicable, can now reasonably
foresee) to have a Material Adverse Effect.
SECTION 4.22. No Burdensome Restrictions. Neither Borrower nor
CarrAmerica LP is a party to any agreement or instrument or subject to any other
obligation or any charter or corporate or partnership restriction, as the case
may be, which, individually or in the aggregate, is likely (to the extent that
the Borrowers or CarrAmerica LP, as applicable, can now reasonably foresee) to
have a Material Adverse Effect.
SECTION 4.23. Brokers' Fees. Neither Borrower nor CarrAmerica
LP has dealt with any broker or finder with respect to the transactions
contemplated by the Loan Documents (except with respect to the acquisition or
disposition of Real Property Assets) or otherwise in connection with this
Agreement, and neither Borrower nor CarrAmerica LP has done any acts, had any
negotiations or conversation, or made any agreements or promises which will in
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any way create or give rise to any obligation or liability for the payment by
the Borrower or CarrAmerica LP of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents (except with respect to the acquisition or disposition of Real
Property Assets), other than the fees payable hereunder.
SECTION 4.24. Labor Matters. There are no collective
bargaining agreements or Multiemployer Plans covering the employees of the
Borrowers or CarrAmerica LP and the Borrowers or CarrAmerica LP have not
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five (5) years.
SECTION 4.25. Organizational Documents. The documents
delivered pursuant to Section 3.1(e) constitute, as of the Closing Date, all of
the organizational documents (together with all amendments and modifications
thereof) of the Borrowers. The Borrowers represent that they have delivered to
the Lead Agent true, correct and complete copies of each of the documents set
forth in this Section 4.25. CarrAmerica LP represents that it has delivered to
the Lead Agent and the Banks true, correct and complete copies of all of the
organizational documents (together with all amendments and modifications
thereof) of CarrAmerica LP as of the Closing Date.
SECTION 4.26. Principal Offices. The principal office, chief
executive office and principal place of business of each of the Borrowers and
CarrAmerica LP is 1700 Pennsylvania Avenue, N.W., Washington, D.C.
SECTION 4.27. REIT Status. For the fiscal year ended December
31, 1996, Carr qualified and Carr intends to continue to qualify as a real
estate investment trust under the Code.
SECTION 4.18. Ownership of Property. Schedule 4.28 attached
hereto and made a part hereof sets forth all the real property owned or leased
by the Borrowers and Persons in which the Borrowers, directly or indirectly, own
an interest as of the Closing Date. As of the Closing Date, each Borrower and
such Persons have good and insurable fee simple title (or leasehold title if so
designated on Schedule 4.28) to all of such real property, subject to customary
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encumbrances and liens as of the date of this Agreement. As of the date of this
Agreement, there are no mortgages, deeds of trust, indentures, debt instruments
or other agreements creating a Lien against any of the Real Property Assets
except as disclosed on Schedule 4.28.
SECTION 4.29. Insurance. Each Borrower and CarrAmerica LP
currently maintains, or causes its tenants to maintain, insurance at 100%
replacement cost insurance coverage (subject to customary deductibles) in
respect of each of the Real Property Assets, as well as commercial general
liability insurance (including "builders' risk") against claims for personal,
and bodily injury and/or death, to one or more persons, or property damage, as
well as workers' compensation insurance, in each case with respect to the Real
Property Assets with insurers having an A.M. Best policyholders' rating of not
less than A-IX in amounts that prudent owner of assets such as the Real Property
Assets would maintain.
SECTION 4.30. Year 2000 Compliance. Each Borrower and
CarrAmerica LP has conducted a comprehensive review and assesment of its
computer applications and has made such inquiry as it determined to be advisable
of its key suppliers, vendors and customers or prospects with respect to the
"year 2000 problem" (i.e., the risk that computer applications may not be able
to properly perform date-sensitive functions after December 31, 1999) and, based
on that review and inquiry, neither Borrower nor CarrAmerica LP believes that
the year 2000 problem will result in a material adverse change in its business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the Loans.
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower and CarrAmerica LP covenant and agree that, so long as
any Bank has any Commitment hereunder or any Obligations remain unpaid:
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SECTION 5.1. Information. The applicable Borrower will deliver
to the Lead Agent and to each of the Banks:
(a) as soon as available and in any event within 105 days
after the end of each fiscal year of Carr, an audited
consolidated balance sheet of Carr as of the end of such fiscal
year and the related consolidated statements of cash flow and
operations for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year,
audited by KPMG Peat Marwick LLP or other independent public
accountants of similar standing;
(b) as soon as available and in any event within fifty (50)
days after the end of each quarter of each fiscal year of Carr, a
statement of Carr, prepared on a GAAP basis, setting forth the
operating income and operating expenses of Carr, in sufficient
detail so as to calculate net operating cash flow of Carr for the
immediately preceding quarter;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer or the chief
accounting officer of Carr (i) setting forth in reasonable detail
the calculations required to establish whether the Borrowers were
in compliance with the requirements of Section 5.8 on the date of
such financial statements;(ii) stating whether any Default exists
on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the
applicable Borrower or CarrAmerica LP is taking or proposes to
take with respect thereto; and (iii) certifying (x) that such
financial statements fairly present the financial condition and
the results of operations of Carr as of the dates and for the
periods indicated, on the basis of generally accepted accounting
principles, subject, in the case of interim financial statements,
to normal year-end adjustments, and (y) that such officer has
reviewed the terms of the Loan Documents and has made, or caused
to be made under his or her supervision, a review in reasonable
detail of the business and condition of the applicable Borrower
or CarrAmerica LP during the period beginning on the date through
which the last such review was made pursuant to this Section
5.1(c) (or, in the case of the first certification pursuant to
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this Section 5.1(c), the Closing Date) and ending on a date not
more than ten (10) Domestic Business Days prior to the date of
such delivery and that on the basis of such review of the Loan
Documents and the business and condition of the applicable
Borrower or CarrAmerica LP, to the best knowledge of such
officer, no Default or Event of Default under any other provision
of Section 6.1 occurred or, if any such Default or Event of
Default has occurred, specifying the nature and extent thereof
and, if continuing, the action the applicable Borrower or
CarrAmerica LP proposes to take in respect thereof;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant
to clause (c) above;
(e) (i) within five (5) days after the president, chief
financial officer, treasurer, controller or other executive
officer of either Borrower or CarrAmerica LP obtains knowledge of
any Default, if such Default is then continuing, a certificate of
the chief financial officer or the president of such Borrower or
CarrAmerica LP setting forth the details thereof and the action
which such Borrower or CarrAmerica LP is taking or proposes to
take with respect thereto; (ii) promptly and in any event within
ten (10) days after either Borrower or CarrAmerica LP obtains
knowledge thereof, notice of (x) any litigation or governmental
proceeding pending or threatened against the Borrower or
CarrAmerica LP, as applicable, as to which, if adversely
determined, is likely to individually or in the aggregate, result
in a Material Adverse Effect, and (y) any other event, act or
condition which is likely to result in a Material Adverse Effect;
(f) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii)
receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee
to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the
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Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted
or could result in the imposition of a Lien or the posting of a
bond or other security, a certificate of the chief financial
officer or the chief accounting officer of such Borrower or
CarrAmerica LP setting forth details as to such occurrence and
action, if any, which such Borrower, CarrAmerica LP or applicable
member of the ERISA Group is required or proposes to take;
(g) promptly and in any event within five (5) Domestic
Business Days after either Borrower or CarrAmerica LP obtains
actual knowledge of any of the following events, a certificate of
the applicable Borrower or CarrAmerica LP, executed by an officer
of the applicable Borrower or CarrAmerica LP, specifying the
nature of such condition and such Borrower's or CarrAmerica LP's,
if the applicable Borrower or CarrAmerica LP, as the case may be,
has actual knowledge thereof, the Environmental Affiliate's
proposed initial response thereto: (i) the receipt by the
applicable Borrower or CarrAmerica LP, or, if such Borrower or
CarrAmerica LP has actual knowledge thereof, any of the
Environmental Affiliates, of any communication (written or oral),
whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the applicable Borrower or
CarrAmerica LP, or, if the applicable Borrower or CarrAmerica LP
has actual knowledge thereof, any of the Environmental
Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse
Effect, (ii) the applicable Borrower or CarrAmerica LP shall
obtain actual knowledge that there exists any Environmental Claim
pending or threatened against the applicable Borrower,
CarrAmerica LP or any Environmental Affiliate or (iii) the
applicable Borrower obtains actual knowledge of any release,
emission, discharge or disposal of any Materials of Environmental
Concern that are likely to form the basis of any Environmental
Claim against the applicable Borrower, CarrAmerica LP or any
Environmental Affiliate;
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(h) promptly and in any event within five (5) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to either Borrower or
CarrAmerica LP relating to any material loss or loss in excess of $1,500,000 of
the applicable Borrower or CarrAmerica LP, copies of such notices and
correspondence; and
(i) promptly upon the mailing thereof to the shareholders or partners
of either Borrower or CarrAmerica LP, copies of all financial statements,
reports and proxy statement so mailed;
(j) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which either Borrower or CarrAmerica LP shall have filed with the
Securities and Exchange Commission;
(k) simultaneously with delivery of the certificate required pursuant
to Section 5.1(c), an updated Schedule 4.28, certified by the chief financial
officer or any senior vice president or executive vice president of Carr as
true, correct and complete as of the date such updated schedules are delivered;
(l) within 5 days after filing of the annual income tax return with the
Internal Revenue Service, a certificate of the chief financial officer or chief
accounting officer of Carr certifying that Carr is properly classified and
continues to qualify as a real estate investment trust under the Internal
Revenue Code and has taken all actions consistent with maintaining such status;
(m) simultaneously with delivery of the information required by
Sections 5.1(a) and (b), a statement of Unencumbered Asset Pool Net Operating
Cash Flow with respect to each Unencumbered Asset Pool Property and a list of
all Unencumbered Asset Pool Properties and a statement with respect to the
occupancy at the end of the relevant period for each Unencumbered Asset Pool
Property; and
(n) from time to time such additional information regarding the
financial position or business of the Borrowers as the Lead Agent, at the
request of any Bank, may reasonably request.
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SECTION 5.2. Payment of Obligations. Each Borrower and
CarrAmerica LP will pay and discharge, at or before maturity, all its material
obligations and liabilities including, without limitation, any obligation
pursuant to any agreement by which it or any of its properties is bound and any
tax liabilities, except where such tax liabilities may be contested in good
faith by appropriate proceedings, and will maintain in accordance with generally
accepted accounting principles, appropriate reserves for the accrual of any of
the same, in any case, where failure to do so will likely result in a Material
Adverse Effect.
SECTION 5.3. Maintenance of Property; Insurance.
(a) Each Borrower and CarrAmerica LP will keep, and will cause
each of its Subsidiaries to keep, all property useful and necessary in its
business, including, without limitation, the Real Property Assets, in good
repair, working order and condition, ordinary wear and tear and the provisions
of any mortgage with respect to casualty or condemnation events excepted.
(b) Each Borrower and CarrAmerica LP shall or shall cause the
Subsidiaries to maintain "all risk" insurance covering 100% replacement cost of
its real property assets with insurers having an A.M. Best policyholder's rating
of not less than A-VIII, which insurance shall in any event not provide for
materially less coverage than the insurance in effect on the Closing Date, and
furnish to each Bank from time to time, upon written request, copies of
certificates of insurance under which such insurance is issued and such other
information relating to such insurance as such Bank may reasonably request.
SECTION 5.4. Conduct of Business. Each Borrower and
CarrAmerica LP will continue to engage in business of the same general type as
now conducted by each Borrower and CarrAmerica LP, as the case may be.
SECTION 5.5. Compliance with Laws. Each Borrower and
CarrAmerica LP will comply in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws, all zoning and building
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codes and ERISA and the rules and regulations thereunder) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings.
SECTION 5.6. Inspection of Property, Books and Records. The
Borrowers and CarrAmerica LP will keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit
representatives of any Bank at such Bank's expense to visit and inspect any of
its properties to examine and make abstracts from any of its books and records
and to discuss its affairs, finances and accounts with its officers, employees
and independent public accountants, all at such reasonable times, upon
reasonable notice, and as often as may reasonably be desired.
SECTION 5.7. Existence.
(a) Each Borrower and CarrAmerica LP shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence or its partnership existence, as applicable.
(b) Each Borrower and CarrAmerica LP shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
patents, trademarks, servicemarks, tradenames, copyrights, franchises, licenses,
permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals the
nonexistence of which is likely to have a Material Adverse Effect.
SECTION 5.8. Financial Covenants.
(a) Debt Service Coverage. Measured as of the last day of each
calendar quarter, the ratio of (i) Annual EBITDA to (ii) the sum of (x) Debt
Service plus (y) reserves for Capital Expenditures of $1.50 per square foot per
annum for each Real Property Asset, will not be less than 1.75:1.
(b) Maximum Total Debt to Tangible FMV. As of the last day of
each calendar quarter, the Maximum Total Debt Ratio will not be greater than
50%.
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(c) Carr Maximum Total Debt to Carr Tangible FMV. As of the
last day of each calendar quarter, the Carr Maximum Total Debt Ratio will not be
greater than 50%.
(d) Carr LP Maximum Total Debt to Carr LP Tangible FMV. As of
the last day of each calendar quarter, the Carr LP Maximum Total Debt Ratio will
not be greater than 60%.
(e) EBITDA Interest Coverage. As of the last day of each
calendar quarter, the ratio of (x) Annual EBITDA to (y) interest (whether
accrued, paid or capitalized) actually payable by either Borrower or the
Borrowers on its Debt for the previous four consecutive quarters including the
quarter then ended, will not be less than 2.25:1.
(f) EBITDA Coverage. As of the last day of each calendar
quarter, the ratio of (x) Annual EBITDA to (y) the sum of (i) Debt Service plus
(ii) Capital Expenditures of the Borrowers for the previous four consecutive
quarters including the quarter then ended plus (iii) dividends or other payments
payable by Carr with respect to any preferred stock issued by Carr, will not be
less than 1.25:1.
(g) Dividends. Carr will not, as determined on an aggregate
annual basis, pay any dividends in excess of 90% of Carr's consolidated FFO for
such year. During the continuance of an Event of Default under Section 6.1(a),
Carr shall only pay those dividends necessary to maintain its status as a real
estate investment trust.
(h) Borrowers LTV Ratio. As of the last day of each calendar
quarter and as of the date of any New Acquisition, the Borrowers LTV Ratio shall
not exceed 50%, subject, however, to the Borrowers' rights to cure pursuant to
Section 2.10(a). Failure to restore compliance with this Section 5.8(h) in
accordance with Section 2.10(a) shall be an immediate Event of Default.
(i) Carr LTV Ratio. As of the last day of each calendar
quarter and as of the date of any New Acquisition, the Carr LTV Ratio shall not
exceed 50%, subject, however, to Carr's rights to cure pursuant to Section
2.10(d). Failure to restore compliance with this Section 5.8(i) in accordance
with Section 2.10(d) shall be an immediate Event of Default.
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(j) Carr LP LTV Ratio. As of the last day of each calendar
quarter and as of the date of any New Acquisition, the Carr LP LTV Ratio shall
not exceed 50%, subject, however, to Carr LP's rights to cure pursuant to
Section 2.10(e). Failure to restore compliance with this Section 5.8(j) in
accordance with Section 2.10(e) shall be an immediate Event of Default.
(k) Unencumbered Asset Pool Properties Minimum Debt Service
Coverage. As of the last day of each calendar quarter, the Borrowers shall be in
compliance with the Unencumbered Asset Pool Properties Minimum Debt Service
Coverage, subject, however, to the Borrowers' rights to cure pursuant to Section
2.10(c). Failure to restore compliance with this Section 5.8(k) in accordance
with Section 2.10(c) shall be an immediate Event of Default.
(l) Minimum Consolidated Tangible Net Worth. The Consolidated
Tangible Net Worth will at no time be less the sum of (x) $1,000,000,000 and (y)
90% of the Net Offering Proceeds from and after the date hereof.
SECTION 5.9. Restriction on Fundamental Changes; Operation and
Control. (a) Carr shall carry on its business operations through Carr and its
Subsidiaries. Neither Borrower nor CarrAmerica LP shall enter into any merger or
consolidation, unless such Borrower or CarrAmerica LP, as applicable, is the
surviving entity, or liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution), discontinue its business or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or any
substantial part of its business or property, whether now or hereafter acquired,
hold an interest in any subsidiary which is not controlled by such Borrower or
CarrAmerica LP, as applicable, or enter into other business lines, without the
prior written consent of the Required Banks, except for (i) joint ventures in
which Carr's ownership interest shall be less than 15% of the fair market value
of the Real Property Assets owned by Carr as of the date hereof and (ii) Carr
Real Estate Services, Inc., Carr Development and Construction, Inc. and any
other similar service company. For purposes hereof, "fair market value" shall
mean the quotient of (x) Net Operating Income with respect to the Real Property
Assets owned by Carr as of the date hereof and (y) the FMV Cap Rate.
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(b) Neither Borrower nor CarrAmerica LP shall amend its articles of
incorporation, by-laws or agreement of limited partnership, as applicable, in
any material respect, without the Lead Agent's consent, which shall not be
unreasonably withheld.
SECTION 5.10. Changes in Business. The Borrowers and
CarrAmerica LP shall not enter into any business which is substantially
different from that conducted by the Borrowers and CarrAmerica LP on the Closing
Date after giving effect to the transactions contemplated by the Loan Documents.
SECTION 5.11. Fiscal Year; Fiscal Quarter. The Borrowers and
CarrAmerica LP shall not change their fiscal year or any of their fiscal
quarters.
SECTION 5.12. Margin Stock. None of the proceeds of the Loan
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any Margin Stock.
SECTION 5.13. Sale of Unencumbered Asset Pool Properties.
Prior to the sale or transfer of any Unencumbered Asset Pool Property, the
applicable Borrower shall (i) deliver prior written notice to the Lead Agent and
the Banks, (ii) deliver to the Lead Agent and the Banks a certificate from its
Chief Financial Officer certifying that at the time of such sale or other
disposal (based on pro-forma calculations for the previous period assuming that
such Unencumbered Asset Pool Property was not an Unencumbered Asset Pool
Property for the relevant period) all of the covenants contained in Sections 5.8
through 5.14 and 5.16 through 5.21 are and after giving effect to the
transaction shall continue to be true and accurate in all respects, and (iii)
pay to the Lead Agent an amount equal to that required pursuant to Section
2.10(b).
SECTION 5.14.Liens; Release of Liens. Neither Borrower nor any
of their Subsidiaries shall at any time during the Term directly or indirectly
create, incur, assume or permit to exist any Lien for borrowed monies or any
other Lien other than Permitted Liens unless the same is being contested in good
faith and the same is discharged, bonded off or paid within thirty (30) days of
filing of such Lien, on or with respect to any Unencumbered Asset Pool Property.
Notwithstanding the foregoing, the Borrowers may obtain a release from the terms
of this Agreement of any Unencumbered Asset Pool Property provided that such
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Borrower has complied with Section 2.10(b) and prior to or simultaneously with
such release (i) such Borrower shall pay to the Lead Agent any amounts due
pursuant to Section 2.10(b), and (ii) such Borrower delivers to the Lead Agent
and the Banks a certificate from its Chief Financial Officer certifying that at
the time of the release all of the covenants contained in Sections 5.8 through
5.14 and 5.16 through 5.21 are and after giving effect to the transaction shall
continue to be true and accurate in all respects.
SECTION 5.15. Use of Proceeds. The Borrowers and CarrAmerica
LP shall use the proceeds of the Loans solely (i) to facilitate the acquisition
by Carr (either directly or indirectly through Subsidiaries) of real properties
(or interests therein) (the "New Acquisitions") which are office buildings (it
being understood that Carr LP may distribute, lend or otherwise transfer the
proceeds of a Tranche B Loan to Carr for such purpose, and that Carr may
distribute, lend or otherwise transfer the proceeds of a Tranche A Loan (or the
proceeds of a Tranche B Loan received from Carr LP) to a Subsidiary for such
purpose), (ii) for other purposes related to the acquisition of office buildings
(including, without limitation, the acquisition of property service companies in
connection therewith and the payment of fees and other costs related to such
acquisition), (iii) for working capital purposes, (iv) for development and
construction activities in accordance with Section 5.16 hereof or (v) for
additional investments in Omni Offices, Inc.
SECTION 5.16. Development Activities. Neither the Borrowers
nor CarrAmerica LP shall have invested more than an amount in the aggregate as
to all such Persons in any current development and construction activities,
equal to ten percent (10%) of Tangible FMV at any time other than (i)
development of "build-to-suit" improvements in excess of 85% pre-leased to
tenants (in connection with which the Borrowers and CarrAmerica LP shall have no
construction completion risk) or (ii) development in connection with the
expansion and/or repositioning or restoration following a casualty or
condemnation of existing improvements on Real Property Assets.
SECTION 5.17. Restrictions on Secured Debt. Neither of the
Borrowers nor CarrAmerica LP shall incur Debt secured by a Lien which in the
aggregate exceeds 30% of Tangible FMV.
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SECTION 5.18. Carr's Status. Carr shall at all times (i)
remain a publicly traded company listed on the New York Stock Exchange, and (ii)
maintain its status as a self-directed and self-administered real estate
investment trust under the Internal Revenue Code.
SECTION 5.19. Certain Requirements for the Unencumbered Asset
Pool Properties. At all times, the Unencumbered Asset Pool Properties Value of
the Unencumbered Asset Pool Properties which are less than 85% leased to tenants
(including as leased any space for which a lease termination payment has been
made to either Borrower or CarrAmerica LP but only for the period for which such
payment shall cover the rental income for such space) shall not comprise more
than 20% of the Unencumbered Asset Pool Properties Value. In the event that the
requirements of this Section 5.19 are not satisfied, the Borrowers and
CarrAmerica LP shall be prohibited from further Borrowings unless such Borrower
or CarrAmerica LP adds a New Acquisition or Real Property Asset to the
Unencumbered Asset Pool Properties in accordance with this Agreement in order to
restore compliance with the requirements of this provision. Failure to restore
compliance with the requirements of this Section 5.19 within 90 days of such
non-compliance shall be an Event of Default.
SECTION 5.20. Heging Requirements. The Borrowers and
CarrAmerica LP shall maintain "Interest Rate Hedges" (as defined below) on a
notional amount of the Debt of the Borrowers and CarrAmerica LP and their
Subsidiaries which, when added to the aggregate principal amount of the Debt of
the Borrowers, CarrAmerica LP and their Subsidiaries which bears interest at a
fixed rate, equals or exceeds 75% of the aggregate principal amount of all Debt
of the Borrowers and CarrAmerica LP and their Subsidiaries. "Interest Rate
Hedges" shall mean interest rate exchange, collar, cap, swap, adjustable strike
cap, adjustable strike corridor or similar agreements having terms, conditions
and tenors reasonably acceptable to the Lead Agent entered into by the Borrowers
and/or CarrAmerica LP and/or their Subsidiaries in order to provide protection
to, or minimize the impact upon, the Borrowers and/or CarrAmerica LP and/or such
Subsidiaries of increasing floating rates of interest applicable to Debt.
SECTION 5.21. Transfer of Real Property Assets. Neither Carr
nor CarrAmerica LP shall transfer its interest or any portion of any interest in
any Real Property Asset to Carr LP.
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SECTION 5.22. CarrAmerica Realty GP Holdings, Inc. Carr hereby
covenants that at all times CarrAmerica Realty GP Holdings, Inc. shall remain a
wholly-owned Subsidiary of Carr.
ARTICLE VI
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) either Borrower or CarrAmerica LP shall fail to pay when
due any principal of any Loan, or either Borrower or CarrAmerica
LP shall fail to pay when due any interest on any Loan, provided,
however, that a Borrower shall be entitled to a three (3)
Domestic Business Day grace period with respect thereto but only
as to two (2) payments of interest during the Term, or either
Borrower or CarrAmerica LP shall fail to pay within three (3)
Domestic Business Days after the same is due any fees or other
amounts payable hereunder;
(b) either Borrower or CarrAmerica LP shall fail to observe
or perform any covenant contained in Sections 5.7(a), 5.8 to
5.19, inclusive, or 5.21, subject to any applicable grace periods
set forth therein;
(c) either Borrower or CarrAmerica LP shall fail to observe
or perform any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above) for 30 days
after written notice thereof has been given to such Borrower or
CarrAmerica LP by the Lead Agent;
(d) any representation, warranty, certification or statement
made by either Borrower or CarrAmerica LP in this Agreement or in
any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect in
any material respect when made (or deemed made);
(e) Either Borrower or CarrAmerica LP shall default in the
payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) of any amount
owing in respect of any Recourse Debt or Debt guaranteed by such
party (other than the Obligations and provided that such Debt is
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in an aggregate amount of Ten Million Dollars ($10,000,000) or
more) and such default shall continue beyond the giving of any
required notice and the expiration of any applicable grace period
(as the same may be extended by the applicable lender) and such
default shall not be waived by the applicable lender (which
waiver shall serve to reinstate the applicable loan), or either
Borrower or CarrAmerica LP shall default in the performance or
observance of any obligation or condition with respect to any
such Debt or any other event shall occur or condition exist
beyond the giving of any required notice and the expiration of
any applicable grace period (as the same may be extended by the
applicable lender), if in any such case the effect of such
default, event or condition is to accelerate the maturity of any
such Debt or to permit (without any further requirement of notice
or lapse of time) the holder or holders thereof, or any trustee
or agent for such holders, to accelerate the maturity of any such
Debt and such default shall not be waived by the applicable
lender (which waiver shall serve to reinstate the applicable
loan), or any such Debt shall become or be declared to be due and
payable prior to its stated maturity other than as a result of a
regularly scheduled payment;
(f) either Borrower or CarrAmerica LP shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action to authorize
any of the foregoing;
(g) an involuntary case or other proceeding shall be
commenced against either Borrower or CarrAmerica LP seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and
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unstayed for a period of 60 days; or an order for relief shall be
entered against either Borrower under the federal bankruptcy laws
as now or hereafter in effect;
(h) either Borrower or CarrAmerica LP shall default in its
obligations under any Loan Document other than this Agreement
beyond any applicable notice and grace periods;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $1,000,000 which it
shall have become liable to pay under Title IV of ERISA, or
notice of intent to terminate a Material Plan shall be filed
under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing, or the
PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan, or a condition shall
exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated, or
there shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment
obligation in excess of $1,000,000;
(j) one or more final nonappealable judgments or decrees in
an aggregate amount of six percent (6%) or more of the
Consolidated Tangible Net Worth as of such date shall be entered
by a court or courts of competent jurisdiction against either
Borrower or CarrAmerica LP (other than any judgment as to which,
and only to the extent, a reputable insurance company has
acknowledged coverage of such claim in writing) and (i) any such
judgments or decrees shall not be stayed, discharged, paid,
bonded or vacated within thirty (30) days or (ii) enforcement
proceedings shall be commenced by any creditor on any such
judgments or decrees;
(k) (i) any Environmental Claim shall have been asserted
against either Borrower, CarrAmerica LP or any Environmental
Affiliate, (ii) any release, emission, discharge or disposal of
any Materials of Environmental Concern shall have occurred, and
such event is reasonably likely to form the basis of an
Environmental Claim against either Borrower, CarrAmerica LP or
any Environmental Affiliate, or (iii) either Borrower,
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CarrAmerica LP or the Environmental Affiliates shall have failed
to obtain any Environmental Approval necessary for the ownership,
or operation of its business, property or assets or any such
Environmental Approval shall be revoked, terminated, or otherwise
cease to be in full force and effect, in the case of clauses (i),
(ii) or (iii) above, if the existence of such condition has had
or is reasonably likely to have a Material Adverse Effect;
(l) during any consecutive two year period commencing on or
after the date hereof, individuals who at the beginning of such
period constituted the Board of Directors of Carr (together with
any new directors whose election by the Board of Directors or
whose nomination for election by Carr stockholders was approved
by a vote of at least a majority of the members of the Board of
Directors then in the office who either were members of the Board
of Directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board of
Directors then in office; or
(m) Carr shall cease at any time to qualify as a real estate
investment trust under the Internal Revenue Code.
SECTION 6.2. Rights and Remedies. (a) Upon the occurrence of
any Event of Default described in Sections 6.1(f) or (g), the unpaid principal
amount of, and any and all accrued interest on, the Loans and any and all
accrued fees and other Obligations hereunder shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrowers and CarrAmerica LP; and upon the occurrence and during the continuance
of any other Event of Default, the Lead Agent may exercise any of its rights and
remedies hereunder and by written notice to the Borrowers, declare the unpaid
principal amount of and any and all accrued and unpaid interest on the Loans and
any and all accrued fees and other Obligations hereunder to be, and the same
shall thereupon be, immediately due and payable with all additional interest
from time to time accrued thereon and without presentation, demand, or protest
or other requirements of any kind other than as provided in the Loan Documents
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(including, without limitation, valuation and appraisement, diligence,
presentment, and notice of intent to demand or accelerate), all of which are
hereby expressly waived by the Borrowers and CarrAmerica LP. Notwithstanding
anything contained in this Agreement to the contrary, (i) Carr and CarrAmerica
LP shall be jointly and severally liable for all Obligations arising hereunder
in connection with the Tranche A Loans, (ii) Carr and Carr LP shall be jointly
and severally liable for all Obligations arising hereunder in connection with
the Tranche B Loans and (iii) Carr LP shall not be liable for any Borrowings
made by Carr or CarrAmerica LP pursuant to the terms hereof.
(b) Notwithstanding the foregoing, upon the occurrence and
during the continuance of any Event of Default other than any Event of Default
described in Sections 6.1(f) or (g), the Lead Agent shall not exercise any of
its rights and remedies hereunder nor declare the unpaid principal amount of and
any and all accrued and unpaid interest on the Loans and any and all accrued
fees and other Obligations hereunder to be immediately due and payable, until
such time as the Lead Agent shall have delivered a notice to the Banks
specifying the Event of Default which has occurred and whether Lead Agent
recommends the acceleration of the Obligations due hereunder or the exercise of
other remedies hereunder. The Banks shall notify the Lead Agent if they approve
or disapprove of the acceleration of the Obligations due hereunder or the
exercise of such other remedy recommended by Lead Agent within five (5) Domestic
Business Days after receipt of such notice. If any Bank shall not respond within
such five (5) Domestic Business Day period, then such Bank shall be deemed to
have accepted Lead Agent's recommendation for acceleration of the Obligations
due hereunder or the exercise of such other remedy. If the Required Banks shall
approve the acceleration of the Obligations due hereunder or the exercise of
such other remedy, then Lead Agent shall declare the unpaid principal amount of
and any and all accrued and unpaid interest on the Loans and any and all accrued
fees and other Obligations hereunder to be immediately due and payable or
exercise such other remedy approved by the Required Banks. If the Required Banks
shall neither approve nor disapprove the acceleration of the Obligations due
hereunder or such other remedy recommended by Lead Agent, then Lead Agent may
accelerate the Obligations due hereunder or exercise any of its rights and
remedies hereunder in its sole discretion. If the Required Banks shall
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disapprove the acceleration of the Obligations due hereunder or the exercise of
such other remedy recommended by Lead Agent, but approve of another remedy, then
to the extent permitted hereunder, Lead Agent shall exercise such remedy.
SECTION 6.3. Notice of Default. If the Lead Agent shall not
already have given any notice to the Borrowers under Section 6.1, the Lead Agent
shall give notice to the Borrowers under Section 6.1 promptly upon being
requested to do so by the Required Banks and shall thereupon notify all the
Banks thereof.
SECTION 6.4. Actions in Respect of Letters of Credit. (a) If,
at any time and from time to time, any Letter of Credit shall have been issued
hereunder and an Event of Default shall have occurred and be continuing, then,
upon the occurrence and during the continuation thereof, the Lead Agent may,
whether in addition to the taking by the Lead Agent of any of the actions
described in this Article or otherwise, make a demand upon the Borrowers to, and
forthwith upon such demand (but in any event within ten (10) days after such
demand), the Borrowers and/or CarrAmerica LP shall, pay to the Lead Agent, on
behalf of the Banks, in same day funds at the Lead Agent's office designated in
such demand, for deposit in a special cash collateral account (the "Letter of
Credit Collateral Account") to be maintained in the name of the Lead Agent (on
behalf of the Banks) and under its sole dominion and control at such place as
shall be designated by the Lead Agent, an amount equal to the amount of the
Letter of Credit Usage under the Letters of Credit. Interest shall accrue on the
Letter of Credit Collateral Account at a rate equal to the rate on overnight
funds.
(b) The Borrowers and CarrAmerica LP hereby pledge, assign and
grant to the Lead Agent, as administrative agent for its benefit and the ratable
benefit of the Banks a lien on and a security interest in, the following
collateral (the "Letter of Credit Collateral"):
(i) the Letter of Credit Collateral Account, all cash
deposited therein and all certificates and instruments, if any,
from time to time representing or evidencing the Letter of Credit
Collateral Account;
(ii) all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or otherwise
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possessed by the Lead Agent for or on behalf of either Borrower
or CarrAmerica LP in substitution for or in respect of any or all
of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
then existing Letter of Credit Collateral; and
(iv) to the extent not covered by the above clauses, all
proceeds of any or all of the foregoing Letter of Credit
Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of the Borrowers and CarrAmerica LP now or hereafter existing
hereunder and under any other Loan Document.
(c) The Borrowers and CarrAmerica LP hereby authorize the Lead
Agent for the ratable benefit of the Banks to apply, from time to time after
funds are deposited in the Letter of Credit Collateral Account, funds then held
in the Letter of Credit Collateral Account to the payment of any amounts, in
such order as the Lead Agent may elect, as shall have become due and payable by
the Borrowers and CarrAmerica LP to the Banks in respect of the Letters of
Credit.
(d) Neither Borrower, CarrAmerica LP nor any Person claiming
or acting on behalf of or through either Borrower or CarrAmerica LP shall have
any right to withdraw any of the funds held in the Letter of Credit Collateral
Account, except as provided in Section 6.4(h) hereof.
(e) Each Borrower and CarrAmerica LP agrees that it will not
(i) sell or otherwise dispose of any interest in the Letter of Credit Collateral
or (ii) create or permit to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Letter of Credit Collateral,
except for the security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be
continuing:
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(i) The Lead Agent may, in its sole discretion, without
notice to the Borrowers or CarrAmerica LP except as required by
law and at any time from time to time, charge, set off or
otherwise apply all or any part of first, (x) amounts previously
drawn on any Letter of Credit that have not been reimbursed by
the Borrowers or CarrAmerica LP and (y) any Letter of Credit
Usage described in clause (ii) of the definition thereof that are
then due and payable and second, any other unpaid Obligations
then due and payable against the Letter of Credit Collateral
Account or any part thereof, in such order as the Lead Agent
shall elect. The rights of the Lead Agent under this Section 6.4
are in addition to any rights and remedies which any Bank may
have.
(ii) The Lead Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral
Account, in addition to the other rights and remedies provided
herein or otherwise available to it, all rights and remedies of a
secured party upon default under the Uniform Commercial Code in
effect in the State of New York at that time.
(g) The Lead Agent shall be deemed to have exercised resonable
care in the custody and preservation of the Letter of Credit Collateral if the
Letter of Credit Collateral is accorded treatment substantially equal to that
which the Lead Agent accords its own property, it being understood that,
assuming such treatment, the Lead Agent shall not have any responsibility or
liability with respect thereto.
(h) At such time as all Events of Default have been cured or
waived in writing, all amounts remaining in the Letter of Credit Collateral
Account shall be promptly returned to the Borrowers. Absent such cure or written
waiver, any surplus of the funds held in the Letter of Credit Collateral Account
and remaining after payment in full of all of the Obligations of the Borrowers
and CarrAmerica LP hereunder and under any other Loan Document after the
Maturity Date shall be paid to the Borrowers or to whomsoever may be lawfully
entitled to receive such surplus.
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ARTICLE VII
THE LEAD AGENT
SECTION 7.1. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Lead Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to the Lead Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
SECTION 7.2. Lead Agent and Affiliates. Morgan shall have the
same rights and powers under this Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Lead Agent, and
Morgan and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrowers and/or CarrAmerica LP or any
subsidiary or affiliate of the Borrowers or CarrAmerica LP as if it were not the
Lead Agent hereunder, and the term "Bank" and "Banks" shall include Morgan in
its individual capacity.
SECTION 7.3. Action by Lead Agent. The obligations of the Lead
Agent hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Lead Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article VI.
SECTION 7.4. Consultation with Experts. The Lead Agent may
consult with legal counsel (who may be counsel for the Borrowers or CarrAmerica
LP), independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.5. Liability of Lead Agent. Neither the Lead Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required Banks
or, where required by the terms of this Agreement, all of the Banks, or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Lead
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
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covenants or agreements of the Borrowers or CarrAmerica LP; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Lead Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement, the other Loan Documents or any other
instrument or writing furnished in connection herewith. The Lead Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it in good faith to be genuine or to be signed by the proper party
or parties.
SECTION 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Lead Agent, its affiliates and
their respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers or CarrAmerica LP) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection with
this Agreement, the other Loan Documents or any action taken or omitted by such
indemnitees hereunder.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Lead Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the Lead
Agent or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.8. Successor Lead Agent. The Lead Agent may resign
at any time by giving notice thereof to the Banks and the Borrowers. Upon any
such resignation or the removal of the Lead Agent in accordance with Section
7.11, the Required Banks shall have the right to appoint a successor Lead Agent.
If no successor Lead Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days after the retiring Lead
Agent gives notice of resignation, then the retiring Lead Agent may, on behalf
of the Banks, appoint a successor Lead Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as the Lead Agent hereunder
by a successor Lead Agent, such successor Lead Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Lead Agent, and
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the retiring Lead Agent shall be discharged from its duties and obligations
hereunder first accruing or arising after the effective date of such retirement.
After any retiring Lead Agent's resignation hereunder as Lead Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Lead Agent.
SECTION 7.9. Lead Agent's Fee. The Borrowers shall pay to the
Lead Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrowers and the Lead Agent.
SECTION 7.10. Copies of Notices. Lead Agent shall deliver to
each Bank a copy of any notice sent to either Borrower or CarrAmerica LP by Lead
Agent in connection with the performance of its duties as Lead Agent hereunder.
SECTION 7.11. Removal of Lead Agent. If the Lead Agent shall
breach any of its material obligations under this Agreement, then, upon the
unanimous consent of all the Banks (other than the Lead Agent), the Lead Agent
may be removed as Lead Agent hereunder. Upon any such removal of the Lead Agent
in accordance with this Section 7.11, the Required Banks shall have the right to
appoint a successor Lead Agent in accordance with Section 7.8.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing or Money Market LIBOR Borrowing:
(a) the Lead Agent is advised by the Reference Bank that deposits in
dollars (in the applicable amounts) are not being offered to the Reference Bank
in the relevant market for such Interest Period, or
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(b) Banks having 50% or more of the aggregate amount of the Commitments
advise the Lead Agent that the Adjusted London Interbank Offered Rate as
determined by the Lead Agent will not adequately and fairly reflect the cost to
such Banks of funding their Euro-Dollar Loans for such Interest Period, the Lead
Agent shall forthwith give notice thereof to the Borrowers and the Banks,
whereupon until the Lead Agent notifies the Borrowers that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Euro-Dollar Loans shall be suspended. Unless the applicable Borrower
notifies the Lead Agent at least two Domestic Business Days before the date of
any Euro-Dollar Borrowing or Money Market LIBOR Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
(i) if such Borrowing is a Committed Borrowing, such Borrowing shall instead be
made as a Base Rate Borrowing and (ii) if such Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.2. Illagality. If, after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
existing applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans or Money Market LIBOR Loans or to participate in any Letter of
Credit issued by the Fronting Bank or, with respect to the Fronting Bank, to
issue any Letters of Credit, and such Bank shall so notify the Lead Agent, the
Lead Agent shall forthwith give notice thereof to the other Banks and the
Borrowers, whereupon until such Bank notifies the Borrowers and the Lead Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans or Money Market LIBOR Loans or
to participate in any Letter of Credit issued by the Fronting Bank or, with
respect to the Fronting Bank, to issue any Letters of Credit, shall be
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suspended. With respect to Euro-Dollar Loans or Money Market LIBOR Loans, before
giving any notice to the Lead Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans or Money Market LIBOR Loans (as the case may be) to maturity and shall so
specify in such notice, the Borrowers and/or CarrAmerica LP shall immediately
prepay in full the then outstanding principal amount of each such Euro-Dollar
Loan or Money Market LIBOR Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrowers shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans or Money Market LIBOR Loan of the other Banks), and such Bank
shall make such a Base Rate Loan.
SECTION 8.3. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or (y) the date of the
applicable Money Market Quote, in the case of any Money Market Loan, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System (but excluding with respect to any
Euro-Dollar Loan any such requirement reflected in an applicable Euro-Dollar
Reserve Percentage)), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on any
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Bank (or its Applicable Lending Office) or on the London interbank market any
other condition affecting its Euro-Dollar Loans or Money Market LIBOR Loans, its
Note, or its obligation to make Euro-Dollar Loans, and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any such Loans, or to reduce the amount of any
sum received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Lead Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, the
Borrowers and/or CarrAmerica LP shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Lead Agent), which demand shall be
accompanied by a certificate showing, in reasonable detail, the calculation of
such amount or amounts, the Borrowers and/or CarrAmerica LP shall pay to such
Bank such additional amount or amounts as will compensate such Bank (or its
Parent) for such reduction.
(c) Each Bank will promptly notify the Borrowers and
CarrAmerica LP and the Lead Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming compensation
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under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.4. Taxes
(a) Any and all payments by the Borrowers or CarrAmerica LP to
or for the account of any Bank or the Lead Agent hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Lead Agent, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Bank or
the Lead Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Bank, taxes imposed on its income, and
franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (and, if
different from the jurisdiction of such Bank's Applicable Lending Office, the
jurisdiction of the domicile of its Loans either established by the Bank
pursuant to Section 9.12 or determined by the applicable taxing authorities)(all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrowers and/or CarrAmerica LP shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under any Note or Letter of
Credit or participation therein to any Bank or the Lead Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.4) such Bank, the Fronting Bank or the Lead Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrowers or CarrAmerica LP shall make such
deductions, (iii) the Borrowers or CarrAmerica LP shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
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with applicable law and (iv) the Borrowers or CarrAmerica LP shall furnish to
the Lead Agent, at its address referred to in Section 9.1, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrowers and CarrAmerica LP agree to pay
any present or future stamp or documentary taxes and any other excise or
property taxes, or charges or similar levies which arise from any payment made
hereunder or under any Note or Letter of Credit or participation therein or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note or Letter of Credit or participation therein (hereinafter referred to
as "Other Taxes").
(c) The Borrowers and CarrAmerica LP agree to indemnify each
Bank, the Fronting Bank and the Lead Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 8.4) paid by
such Bank, the Fronting Bank or the Lead Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days from the date
such Bank, the Fronting Bank or the Lead Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrowers or
CarrAmerica LP (but only so long as such Bank remains lawfully able to do so),
shall provide the Borrowers or CarrAmerica LP with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States. If the form provided by a Bank at
the time such Bank first became a party to this Agreement or at any time
thereafter (other than solely by reason of a change in United States law or a
change in the terms of any treaty to which the United States is a party after
the date hereof) indicates a United States interest withholding tax rate in
excess of zero (or would have indicated such a withholding tax rate if such form
had been submitted and completed accurately and completely and either was not
submitted or was not completed accurately and completely), or if a Bank
otherwise is subject to United States interest withholding tax at a rate in
excess of zero at any time for any reason (other than solely by reason of a
change in United States law or regulation or a change in any treaty to which the
United States is a party after the date hereof), withholding tax at such rate
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shall be considered excluded from "Taxes" as defined in Section 8.4(a). In
addition, any amount that otherwise would be considered "Taxes" or "Other Taxes"
for purposes of this Section 8.4 shall be excluded therefrom if the Bank either
has transferred the domicile of its Loans pursuant to Section 9.12 or changed
the Applicable Lending Office with respect to such Loans and such amount would
not have been incurred had such transfer or change not been made.
(e) For any period with respect to which a Bank has failed to provide
the Borrowers or CarrAmerica LP with the appropriate form pursuant to Section
8.4(d) (unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.4(a) with respect to Taxes imposed by the United States; provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrowers and CarrAmerica LP shall take such steps
as such Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrowers or CarrAmerica LP are required to pay additional
amounts to or for the account of any Bank pursuant to this Section 8.4, then
such Bank will change the jurisdiction of its Applicable Lending Office so as to
eliminate or reduce any such additional payment which may thereafter accrue if
such change, in the judgment of such Bank, is not otherwise disadvantageous to
such Bank.
SECTION 8.5. Base Rate Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans
has been suspended pursuant to Sections 8.1 or 8.2 or (ii) any Bank has demanded
compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar Loans and
the Borrowers shall, by at least five Euro-Dollar Business Days' prior notice to
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such Bank through the Lead Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrowers that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans (on
which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay
such Euro-Dollar Loans shall be applied to repay its Base Rate
Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrowers, CarrAmerica LP or the Lead Agent, at
its address or telecopy number set forth on the signature pages hereof, together
with copies thereof, in the case of the Borrowers or CarrAmerica LP, to Hogan &
Hartson L.L.P., 555 13th Street, N.W., Washington, D.C. 20004, Attention: J.
Warren Gorrell, Jr., Esq., Telephone: (202) 637-5600, Telecopy: (202) 637-5910,
and in the case of the Lead Agent, to Skadden, Arps, Slate, Meagher & Flom LLP,
919 Third Avenue, New York, New York 10022, Attention: Martha Feltenstein, Esq.,
Telephone: (212) 735-2272, Telecopy: (212) 735-2000, (y) in the case of any
Bank, at its address or telecopy number set forth on the signature pages hereof
or in its Administrative Questionnaire or (z) in the case of any party, such
other address or telecopy number as such party may hereafter specify for the
purpose by notice to the Lead Agent, the Banks, the Borrowers and CarrAmerica
LP. Each such notice, request or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
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addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Lead Agent
under Article II or Article VIII shall not be effective until received.
SECTION 9.2. No Waivers. No failure or delay by the Lead Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3. Expenses; Indemnification
(a) The Borrowers and CarrAmerica LP shall pay (i) all
reasonable out-of-pocket expenses of the Lead Agent (including, without
limitation, reasonable fees and disbursements of special counsel Skadden, Arps,
Slate, Meagher & Flom, local counsel for the Lead Agent, and travel,
environmental and engineering expenses), in connection with the preparation and
administration of this Agreement, the Loan Documents and the documents and
instruments referred to therein, the syndication of the Loans, any waiver or
consent hereunder or any amendment or modification hereof or any Default or
alleged Default hereunder and (ii) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Lead Agent and each Bank, including,
without limitation, reasonable fees and disbursements of counsel for the Lead
Agent, in connection with the enforcement of the Loan Documents and the
instruments referred to therein and such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrowers and CarrAmerica LP agree to indemnify the Lead Agent
and each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and hold
each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
that may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, asserted against or incurred by any
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Indemnitee as a result of, or arising out of, or in any way related to or by
reason of, (i) any of the transactions contemplated by the Loan Documents or the
execution, delivery or performance of any Loan Document, (ii) any violation by
the Borrowers, CarrAmerica LP or the Environmental Affiliates of any applicable
Environmental Law, (iii) any Environmental Claim arising out of the management,
use, control, ownership or operation of property or assets by the Borrowers,
CarrAmerica LP or any of the Environmental Affiliates, including, without
limitation, all on-site and off-site activities involving Materials of
Environmental Concern, (iv) the breach of any environmental representation or
warranty set forth herein, (v) the grant to the Lead Agent and the Banks of any
Lien in any property or assets of the Borrowers or CarrAmerica LP or any stock
or other equity interest in the Borrowers or CarrAmerica LP, and (vi) the
exercise by the Lead Agent and the Banks of their rights and remedies
(including, without limitation, foreclosure) under any agreements creating any
such Lien (but excluding, as to any Indemnitee, any such losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements incurred solely by reason of (i) the gross negligence or
willful misconduct of such Indemnitee as finally determined by a court of
competent jurisdiction and (ii) any investigative, administrative or judicial
proceeding imposed or asserted against any Indemnitee by any bank regulatory
agency or by any equity holder of such Indemnitee). Carr and CarrAmerica LP
shall be jointly and severally liable for all Obligations arising hereunder in
connection with the Tranche A Loans and Carr and Carr LP shall be jointly and
severally liable for all Obligations arising hereunder in connection with the
Tranche B Loans. Notwithstanding the foregoing, Carr LP shall not be liable for
any Borrowings made by Carr pursuant to the terms hereof. The Borrowers' and
CarrAmerica LP's obligations under this Section shall survive the termination of
this Agreement and the payment of the Obligations.
(c) The Borrowers and CarrAmerica LP shall pay, and hold the Lead Agent
and each of the Banks harmless from and against, any and all present and future
U.S. stamp, recording, transfer and other similar foreclosure related taxes with
respect to the foregoing matters and hold the Lead Agent and each Bank harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes.
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SECTION 9.4. Sharing of Set-Offs. In addition to any rights
now or hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrowers, CarrAmerica LP or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), other than deposits
held for the benefit of third parties, and any other indebtedness at any time
held or owing by such Bank (including, without limitation, by branches and
agencies of such Bank wherever located) to or for the credit or the account of
the Borrowers or CarrAmerica LP against and on account of the Obligations of the
Borrowers or CarrAmerica LP then due and payable to such Bank under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Obligations purchased by such Bank. Each Bank
agrees that if it shall, by exercising any right of set-off or counterclaim or
otherwise, receive payment of a proportion of the aggregate amount of principal
and interest due with respect to any Note held by it or Letter of Credit
participated in by it, or, in the case of the Fronting Bank, Letter of Credit
issued by it, which is greater than the proportion received by any other Bank or
Letter of Credit issued or participated in by such other Bank, in respect of the
aggregate amount of principal and interest due with respect to any Note held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Banks or Letter of
Credit issued or participated in by such other Bank, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks or Letter of Credit issued
or participated in by such other Banks shall be shared by the Banks pro rata;
provided that nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of the Borrowers
or CarrAmerica LP other than their indebtedness under the Notes or the Letters
of Credit. The Borrowers and CarrAmerica LP agree, to the fullest extent they
may effectively do so under applicable law, that any holder of a participation
in a Note or Letter of Credit, whether or not acquired pursuant to the foregoing
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arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of the Borrowers or CarrAmerica LP in the amount of such
participation. Notwithstanding the foregoing, any Bank shall not exercise any
right of set-off or counterclaim or any similar right it may have against any
other indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of Carr LP against and on account of any Obligations
of Carr (whether or not then due and payable) or to apply the amount subject to
such exercise to the payment of indebtedness or other Obligations of Carr.
SECTION 9.5. Amendments and Waivers. Any provision of this
Agreement, the Notes, the Letters of Credit or other Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrowers and the Required Banks (and, if the rights or duties of
the Lead Agent are affected thereby, by the Lead Agent); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation, (ii)
reduce the principal of or rate of interest on any Loan or any fees specified
herein, including, without limitation, the waiver of any Default or Event of
Default in the payment of interest, principal or fees hereunder if such waiver
would result in a permanent reduction in the amount or change in the timing of
the payment of interest, principal or fees payable hereunder by Borrowers or
CarrAmerica LP, unless the Borrowers or CarrAmerica LP have cured such Default
or Event of Default and paid all amounts, including any default interest, due
hereunder at the time a request for consent is made by Lead Agent to the Banks
to the waiver of any Default or Event of Default in the payment of interest,
principal or fees hereunder, in which event only the consent of the Required
Banks to the waiver of such Default or Event of Default shall be required, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any reduction or termination of any Commitment,
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(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be required
for the Banks or any of them to take any action under this Section or any other
provision of this Agreement, or (v) amend the provisions of this Section 9.5.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Designating Lender on behalf of its Designated Lender
affected thereby, (a) subject such Designated Lender to any additional
obligations, (b) reduce the principal of, interest on, or other amounts due with
respect to, the Designated Lender Note made payable to such Designated Lender,
or (c) postpone any date fixed for any payment of principal of, or interest on,
or other amounts due with respect to the Designated Lender Note made payable to
the Designated Lender.
SECTION 9.6. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrowers may not assign or otherwise transfer any of
their rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a Bank
of a participating interest to a Participant, whether or not upon notice to the
Borrowers, CarrAmerica LP and the Lead Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, and the Borrowers, CarrAmerica
LP and the Lead Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrowers and CarrAmerica LP hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of Section
9.5 without the consent of the Participant. The Borrowers and CarrAmerica LP
agree that each Participant shall, to the extent provided in its participation
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agreement, be entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part of all, of
its rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially the form of Exhibit C
attached hereto executed by such Assignee and such transferor Bank, with (and
subject to) the subscribed consent of the Lead Agent and, provided no Event of
Default shall have occurred and be continuing, the Borrowers, which consent
shall not be unreasonably withheld or delayed. Upon execution and delivery of
such instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Lead Agent, the
Borrowers and CarrAmerica LP, if applicable, shall make appropriate arrangements
so that, if required, a new Note or Notes are issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the Lead
Agent an administrative fee for processing such assignment in the amount of
$2,500. If the Assignee is not incorporated under the laws of the United States
of America or a state thereof, it shall deliver to the Borrowers and the Lead
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.4.
(d) Any Bank (each, a "Designating Lender") may at any time
designate one Designated Lender to fund Money Market Loans on behalf of such
Designating Lender subject to the terms of this Section 9.6(d) and the
provisions in Section 9.6(b) and (c) shall not apply to such designation. No
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Bank may designate more than one (1) Designated Lender at a time. The parties to
each such designation shall execute and deliver to the Lead Agent for its
acceptance a Designation Agreement in the form of Exhibit G hereto. Upon such
receipt of an appropriately completed Designation Agreement executed by a
Designating Lender and a designee representing that it is a Designated Lender,
the Lead Agent will accept such Designation Agreement and will give prompt
notice thereof to the Borrowers and CarrAmerica LP, whereupon, (i) the Borrower
shall execute and deliver to the Designating Bank a Designated Lender Note
payable to the order of the Designated Lender, (ii) from and after the effective
date specified in the Designation Agreement, the Designated Lender shall become
a party to this Agreement with a right (subject to the provisions of Section
2.3(d)) to make Money Market Loans on behalf of its Designating Lender pursuant
to Section 2.3 after the Borrower has accepted a Money Market Loan (or portion
thereof) of the Designating Lender, and (iii) the Designated Lender shall not be
required to make payments with respect to any obligations in this Agreement
except to the extent of excess cash flow of such Designated Lender which is not
otherwise required to repay obligations of such Designated Lender which are then
due and payable; provided, however, that regardless of such designation and
assumption by the Designated Lender, the Designating Lender shall be and remain
obligated to the Borrower, the Co-Agents and the Banks for each and every of the
obligations of the Designating Lender and its related Designated Lender with
respect to this Agreement, including, without limitation, any indemnification
obligations under Section 7.6 hereof and any sums otherwise payable to the
Borrower by the Designated Lender. Each Designating Lender shall serve as the
administrative agent of the Designated Lender and shall on behalf of, and to the
exclusion of, the Designated Lender: (i) receive any and all payments made for
the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or relating
to this Agreement and the other Loan Documents. Any such notice, communication,
vote, approval, waiver, consent or amendment shall be signed by the Designating
Lender as administrative agent for the Designated Lender and shall not be signed
by the Designated Lender on its own behalf and shall be binding upon the
Designated Lender to the same extent as if signed by the Designated Lender on
its own behalf. The Borrower, the Lead Agent, the Co-Agents and the Banks may
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rely thereon without any requirement that the Designated Lender sign or
acknowledge the same. No Designated Lender may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Lender or otherwise in accordance with the provisions of Section 9.6
(b) and (c).
(e) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note and the Letters of Credit participated
in by such Bank (as a Fronting Bank) or, in the case of the Fronting Bank,
issued by it, to a Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(f) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrowers' prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.7. Governing Law; Submission to Jurisdiction
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, each Borrower and CarrAmerica
LP hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
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appellate courts from any thereof. Each Borrower and CarrAmerica LP irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the hand delivery, or mailing of copies thereof
by registered or certified mail, postage prepaid, to the applicable Borrower or
CarrAmerica LP at its address set forth below. Each Borrower and CarrAmerica LP
hereby irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Loan Document brought in
the courts referred to above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of the Lead Agent, any Bank or any holder of a
Note to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrowers or CarrAmerica LP in any
other jurisdiction.
SECTION 9.8. Marshalling; Recapture. Neither the Lead Agent
nor any Bank shall be under any obligation to marshall any assets in favor of
the Borrowers, CarrAmerica LP or any other party or against or in payment of any
or all of the Obligations. To the extent any Bank receives any payment by or on
behalf of the Borrowers or CarrAmerica LP, which payment or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to either Borrower or CarrAmerica LP or its estate,
trustee, receiver, custodian or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Obligation or part thereof which has been paid,
reduced or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included within the liabilities of the Borrowers and
CarrAmerica LP to such Bank as of the date such initial payment, reduction or
satisfaction occurred.
SECTION 9.9. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
109
<PAGE>
hereof. This Agreement shall become effective upon receipt by the Lead Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Lead Agent in form satisfactory to it of telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof by
such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS,
CARRAMERICA LP, THE LEAD AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.11. Survival. All indemnities set forth herein shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder.
Section 9.12. Domicile of Loans. Subject to the provisions of
Article VIII, each Bank may transfer and carry its Loans at, to or for the
account of any domestic or foreign branch office, subsidiary or affiliate of
such Bank.
SECTION 9.13. Limitation of Liability. (a) No claim may be
made by the Borrowers, CarrAmerica LP or any other Person against the Lead Agent
or any Bank or the affiliates, directors, officers, employees, attorneys or
agent of any of them for any consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or by the other Loan
Documents, or any act, omission or event occurring in connection therewith; and
each Borrower and CarrAmerica LP hereby waives, releases and agrees not to sue
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
(b) The Lead Agent or any Bank may look to all the assets of
the Borrowers and CarrAmerica LP in seeking to enforce the Borrowers' and
CarrAmerica LP's liability and obligations hereunder, and the lien of any
judgment against the Borrowers and CarrAmerica LP and any proceeding instituted
on, under or in connection with any Note or any of the other Loan Documents
shall extend to all property now or hereafter owned by the Borrowers and
CarrAmerica LP, except as set forth in Sections 6.2 and 9.3.
110
<PAGE>
SECTION 9.14. Confidentiality.
Prior to the occurrence and continuance of an Event of Default
and except in connection with the sale or assignment or potential sale or
assignment of any Bank's Commitment or portion of its Commitment pursuant to
Section 9.6, each Bank agrees that it will use reasonable efforts, consistent
with its customary policies for maintaining information as confidential, not to
disclose without the prior consent of the Borrowers (other than to its
subsidiaries, directors, agents, employees, auditors, counsel or other
professional consultants, provided that each such recipient shall either agree
to be bound by the terms of this Section 9.14 or is otherwise bound to keep such
information confidential on a similar basis pursuant to professional ethical
obligations) any information with respect to the Borrowers, CarrAmerica LP, any
Subsidiary thereof or any of their assets or properties which is furnished
pursuant to this Agreement or any Loan Documents and which is designated as
confidential, provided that any Bank may disclose any such information (a) that
has become generally available to the public (other than as a consequence of any
Bank's breach of this Section 9.14), (b) as may be required or appropriate in
any report, statement or testimony submitted to any local, state or federal
regulatory body having or claiming to have jurisdiction over such Bank, any
nationally recognized rating agency or similar organization, (c) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, or (d) in order to comply with any applicable law, order,
regulation or ruling; provided, further that in the case of the foregoing
clauses (b), (c) and (d), such Bank shall use reasonable efforts to give Carr
prior notice of any such disclosure.
Section 9.15. Co-Agents. Bank of America National Trust and
Savings Association (successor by merger to Bank of America Illinois),
Commerzbank Aktiengesellschaft, New York Branch, Nationsbank, N.A. and Wells
Fargo Realty Advisors Funding Incorporated, each as Bank and as Co-Agent for the
Banks hereunder (collectively, the "Co-Agents") shall have no other rights,
obligations and liabilities under this Agreement except as any other Bank
hereunder. Each Bank shall, ratably in accordance with its Commitment, indemnify
the Co-Agents, their affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Borrowers or CarrAmerica LP)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such indemnitees may suffer or
incur but solely in connection with any such claim that may result pursuant to
the Co-Agents acting as Co-Agents under this Agreement.
Section 9.16. No Bankruptcy Proceedings. Each of the Borrower,
the Banks, the Lead Agent, and the Co-Agents hereby agrees that it will not
institute against any Designated Lender or join any other Person in instituting
against any Designated Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any federal or state bankruptcy or
similar law, until the later to occur of (i) one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Lender and (ii) the Maturity Date.
111
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers 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
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Telecopy number: (202)638-0102
CARR REALTY, L.P.
By: CarrAmerica Realty
Corporation, General Partner
By: /s/ Brian K. Fields
---------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Telecopy number: (202)638-0102
CARRAMERICA REALTY, L.P.
By: CarrAmerica Realty GP
Holdings, Inc.,
General Partner
By: /s/ Brian K. Fields
---------------------------------
Name: Brian K. Fields
Title: Chief Financial Officer
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Telecopy number: (202)638-0102
Commitments
$50,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Timothy V. O'Donovan
--------------------------------
Name: Timothy V. O'Donovan
Title: Vice President
112
<PAGE>
$45,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Michael W. Edwards
--------------------------------
Name: Michael W. Edwards
Title: Vice President
$45,000,000 COMMERZBANK AKTIENGESELLSCHAFT, NEW
YORK BRANCH
By: /s/ Douglas P. Traynor
--------------------------------
Name: Douglas P. Traynor
Title: Vice President
By: /s/ E. Marcus Perry
--------------------------------
Name: E. Marcus Perry
Title: Assistant Treasurer
$45,000,000 NATIONSBANK, N.A.
By: /s/ Leslie Furst
--------------------------------
Name: Leslie Furst
Title: Vice President
$45,000,000 WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/
--------------------------------
Name:
Title:
$37,500,000 BAYERISCHE HYPOTHEKEN -UND WECHSEL-
BANK AKTIENGESELLSCHAFT, NEW YORK
BRANCH
By: /s/ Stephen G. Melidones
--------------------------------
Name: Stephen G. Melidones
Title: Assistant Vice President
By: /s/ Eva Lam
--------------------------------
Name: Eva Lam
Title: Assistant Treasurer
113
<PAGE>
$37,500,000 PNC BANK, NATIONAL ASSOCIATION
By: /s/ Richard B. Trzybiwski
--------------------------------
Name: Richard B. Trzybiwski
Title: Vice President
$30,000,000 WACHOVIA BANK, N.A.
By: /s/ Robert A. Cancelliere
--------------------------------
Name: Robert A. Cancelliere
Title: Vice President
$25,000,000 BANK ONE, ARIZONA, NA
By: /s/ Todd T. Popovich
--------------------------------
Name: Todd T. Popovich
Title: Assistant Vice President
$25,000,000 CORESTATES BANK, N.A.
By: /s/ Glenn W. Gallagher
--------------------------------
Name: Glenn W. Gallagher
Title: Vice President
$25,000,000 THE SAKURA BANK, LIMITED
NEW YORK BRANCH
By: /s/ Tamihiro Kawauchi
--------------------------------
Name: Tamihiro Kawauchi
Title: Senior Vice President &
Group Head
Real Estate Project Finance Group
$25,000,000 SOCIETE GENERALE, A FRENCH BANKING
CORPORATION, ACTING THROUGH ITS
SOUTHWEST AGENCY
By: /s/ Rick Bower
--------------------------------
Name: Rick Bower
Title: Vice President
114
<PAGE>
$15,000,000 KREDIETBANK N.V.
By: /s/ Robert Snauffer
--------------------------------
Name: Robert Snauffer
Title: Vice President
By: /s/ Tod R. Angus
--------------------------------
Name: Tod R. Angus
Title: Vice President
Total Commitments
$450,000,000
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent
By: /s/ Michael W. Edwards
--------------------------------
Name: Michael W. Edwards
Title: Vice President
Bank of America National Trust
and Savings Association
Commercial Real Estate
Services Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Megan McBride
Telecopy: (312) 974-4970
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Lead Agent
By: /s/ Timothy O'Donovan
--------------------------------
Name: Timothy O'Donovan
Title: Vice President
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: Nancy K. Dunbar
Telecopy: (302) 634-4222
115
<PAGE>
Domestic and Euro-Currency
Lending Office:
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107-
Attention: Kevin M. McCann
Telecopy: (302) 634-1852/1872
COMMERZBANK AKTIENGESELLSCHAFT,
NEW YORK BRANCH, as Co-Agent
By: /s/ Douglas P. Traynor
--------------------------------
Name: Douglas P. Traynor
Title: Vice President
By: /s/ E. Marcus Perry
--------------------------------
Name: E. Marcus Perry
Title: Assistant Treasurer
NATIONSBANK, N.A., as Co-Agent
By: /s/ Leslie Furst
--------------------------------
Name: Leslie Furst
Title: Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Agent
By: /s/
--------------------------------
Name:
Title:
116
<PAGE>
SCHEDULE 4.28
Ownership of Property
117
<PAGE>
EXHIBIT A-1
TRANCHE A NOTE
New York, New York
, 1998
For value received, CarrAmerica Realty Corporation, a Maryland
corporation (the "Borrower") and CarrAmerica Realty L.P., a Delaware limited
partnership ("CarrAmerica LP"), jointly and severally promise to pay to the
order of (the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower or CarrAmerica LP pursuant to the Credit Agreement referred to below on
the Maturity Date. The Borrower and CarrAmerica LP jointly and severally promise
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower and
CarrAmerica LP hereunder or under the Credit Agreement.
This Note is one of the Tranche A Notes referred to in the
Third Amended and Restated Revolving Credit Agreement, dated as of March ,
1998, among the Borrower, CarrAmerica LP, Carr Realty, L.P., the Banks parties
thereto, Morgan Guaranty Trust Company of New York, as Lead Agent, Bank of
America National Trust and Savings Association, Commerzbank Aktiengesellschaft,
New York Branch, Nationsbank, N.A., and Wells Fargo Bank, National Association,
each as Bank and as Co-Agent for the Banks (as the same may be amended from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
A-1
<PAGE>
CARRAMERICA REALTY CORPORATION
By:
--------------------------------
Name:
Title:
CARRAMERICA REALTY L.P.
By:
--------------------------------
Name:
Title:
A-2
<PAGE>
Tranche A Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-3
<PAGE>
EXHIBIT A-2
TRANCHE B NOTE
New York, New York
, 1998
For value received, Carr Realty, L.P., a Delaware limited
partnership (the "Borrower") and CarrAmerica Realty Corporation, a Maryland
corporation ("Carr"), jointly and severally promise to pay to the order of
(the "Bank"), for the account of its Applicable Lending Office, the
unpaid principal amount of each Loan made by the Bank to the Borrower or Carr
pursuant to the Credit Agreement referred to below on the Maturity Date. The
Borrower and Carr jointly and severally promise to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company of
New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower and
Carr hereunder or under the Credit Agreement.
This Note is one of the Tranche B Notes referred to in the
Third Amended and Restated Revolving Credit Agreement, dated as of March ,
1998, among the Borrower, Carr, CarrAmerica Realty, L.P., the Banks parties
thereto, Morgan Guaranty Trust Company of New York, as Lead Agent, Bank of
America National Trust and Savings Association, Commerzbank Aktiengesellschaft,
New York Branch, Nationsbank, N.A., and Wells Fargo Bank, National Association,
each as Bank and as Co-Agent for the Banks (as the same may be amended from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
A-4
<PAGE>
CARR REALTY, L.P.
By:
--------------------------------
Name:
Title:
CARRAMERICA REALTY
CORPORATION
By:
--------------------------------
Name:
Title:
A-5
<PAGE>
Tranche B Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-6
<PAGE>
EXHIBIT A-3
TRANCHE A DESIGNATED LENDER NOTE
New York, New York
, 1998
For value received, CarrAmerica Realty Corporation, a Maryland
corporation (the "Borrower") and CarrAmerica Realty L.P., a Delaware limited
partnership ("CarrAmerica LP"), jointly and severally promise to pay to the
order of (the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower or CarrAmerica LP pursuant to the Credit Agreement referred to below on
the Maturity Date. The Borrower and CarrAmerica LP jointly and severally promise
to pay interest on the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower and
CarrAmerica LP hereunder or under the Credit Agreement.
This Note is one of the Designated Lender Notes referred to
in, and is delivered pursuant to and subject to all of the terms of, the Third
Amended and Restated Revolving Credit Agreement dated as of March , 1998 among
the Borrower, Carr, CarrAmerica LP, Carr Realty L.P., the Banks parties thereto,
Morgan Guaranty Trust Company of New York, as Lead Agent, Bank of America
National Trust and Savings Association, Commerzbank Aktiengesellschaft, New York
Branch, Nationsbank, N.A., and Wells Fargo Bank, National Association, each as
Bank and as Co-Agent for the Banks (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
A-7
<PAGE>
CARRAMERICA REALTY CORPORATION
By:
--------------------------------
Name:
Title:
CARRAMERICA REALTY L.P.
By:
--------------------------------
Name:
Title:
A-8
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-9
<PAGE>
EXHIBIT A-4
TRANCHE B DESIGNATED LENDER NOTE
New York, New York
, 1998
For value received, Carr Realty, L.P., a Delaware limited
partnership (the "Borrower") and CarrAmerica Realty Corporation, a Maryland
corporation ("Carr"), jointly and severally promise to pay to the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower or Carr pursuant to the Credit Agreement referred to below on the
Maturity Date. The Borrower and Carr jointly and severally promise to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower and
Carr hereunder or under the Credit Agreement.
This Note is one of the Designated Lender Notes referred to
in, and is delivered pursuant to and subject to all of the terms of, the Third
Amended and Restated Revolving Credit Agreement dated as of March , 1998 among
the Borrower, Carr, CarrAmerica Realty, L.P., the Banks parties thereto, Morgan
Guaranty Trust Company of New York, as Lead Agent, Bank of America National
Trust and Savings Association, Commerzbank Aktiengesellschaft, New York Branch,
Nationsbank, N.A., and Wells Fargo Bank, National Association, each as Bank and
as Co-Agent for the Banks (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
A-10
<PAGE>
CARR REALTY, L.P.
By:
--------------------------------
Name:
Title:
CARRAMERICA REALTY CORPORATION
By:
--------------------------------
Name:
Title:
A-11
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-12
<PAGE>
EXHIBIT B-1
CARR UNENCUMBERED ASSET POOL PROPERTIES
B-1
<PAGE>
EXHIBIT B-2
CARR LP UNENCUMBERED ASSET POOL PROPERTIES
B-2
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION
C-1
<PAGE>
EXHIBIT D
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York (the "Lead Agent")
From: CarrAmerica Realty Corporation, Carr Realty, L.P.,
and CarrAmerica Realty, L.P.
Re: Third Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of March , 1998 among CarrAmerica Realty
Corporation, Carr Realty, L.P., and CarrAmerica Realty, L.P.,
Morgan Guaranty Trust Company of New York, as Bank and Lead
Agent for the Banks, Bank of America National Trust and
Savings Association, Commerzbank Aktiengesellschaft, New York
Branch, Nationsbank, N.A. and Wells Fargo Bank, National
Association, each as Bank and Co-Agent, and the Banks parties
thereto
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount1 Interest Period2
$
Principal Amount allocated to Tranche A: $________________
Principal Amount allocated to Tranche B: $________________
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
The funding of Money Market Loans made in connection with this
Money Market Quote Request [may/may not] be made by Designated Lenders.
- ----------
1 Amount must be $10,000,000 or a larger multiple of $500,000.
2 Not less than one month (LIBOR Auction) or not less than 14 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
D-2
<PAGE>
Terms used herein have the meanings assigned to them in the
Credit Agreement.
[Borrower]
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT E
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to CarrAmerica Realty Corporation, Carr
Realty, L.P. and CarrAmerica Realty, L.P. (the "Borrower")
Pursuant to Section 2.3 of the Third Amended and Restated
Credit Agreement dated as of March , 1998 among CarrAmerica Realty Corporation,
Carr Realty, L.P., and CarrAmerica Realty, L.P., Morgan Guaranty Trust Company
of New York, as Bank and Lead Agent for the Banks, Bank of America National
Trust and Savings Association, Commerzbank Aktiengesellschaft, New York Branch,
Nationsbank, N.A. and Wells Fargo Bank, National Association, each as Bank and
Co-Agent, and the Banks parties thereto, we are pleased on behalf of the
Borrower and CarrAmerica LP to invite you to submit Money Market Quotes to the
Borrower and/or CarrAmerica LP for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 10:00 A.M.
(New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Lead Agent
By
--------------------------------
Authorized Officer
E-1
<PAGE>
EXHIBIT F
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York, as Lead Agent
Re: Money Market Quote to CarrAmerica Realty Corporation, Carr Realty, L.P.,
and CarrAmerica Realty, L.P. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
____________________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- -------- --------- ------------ --------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set
forth in the Third Amended and Restated Credit Agreement dated as of
March , 1998 among CarrAmerica Realty Corporation, Carr Realty, L.P.,
and CarrAmerica Realty, L.P., Bank of America National Trust and
Savings Association, Commerzbank Aktiengesellschaft, New York Branch,
Nationsbank, N.A. and Wells Fargo Bank, National Association, each as
Bank and Co-Agent, and the Banks parties thereto, and yourselves, as
Lead Agent, irrevocably obligates us to make the Money Market Loan(s)
for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
F-1
<PAGE>
EXHIBIT G
FORM OF DESIGNATION AGREEMENT
Dated _____________, 199___
Reference is made to that certain Third Amended and Restated
Revolving Credit Agreement dated as of March , 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among CARRAMERICA
REALTY CORPORATION, CARR REALTY, L.P., and CARRAMERICA REALTY, L.P., BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Bank and Co-Agent,
COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH, as Bank and Co-Agent,
NATIONSBANK, N.A., as Bank and Co-Agent, WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Bank and Co-Agent, and the Banks parties thereto, and yourselves, as Lead
Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK (the "Lead Agent"), as Lead
Agent. Terms defined in the Credit Agreement are used herein with the same
meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the
"Designee"), the Lead Agent and Borrower agree as follows:
1. The Designor hereby designates the Designee, and the
Designee hereby accepts such designation, to have a right to make Money Market
Loans pursuant to Section 2.3 of the Credit Agreement. Any assignment by
Designor to Designee of its rights to make a Money Market Loan pursuant to such
Article III shall be effective at the time of the funding of such Money Market
Loan and not before such time.
2. Except as set forth in Section 7 below, the Designor makes
no representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of
each Loan Document, together with copies of the financial statements referred to
in Section 5.1 of the Credit Agreement and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Designation Agreement; (b) agrees that it will independently and
G-1
<PAGE>
without reliance upon the Lead Agent, the Designor or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
any Loan Document; (c) confirms that it is a Designated Lender; (d) appoints and
authorizes the Lead Agent to take such action as agent on its behalf and to
exercise such powers and discretion under any Loan Document as are delegated to
the Lead Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; and (e) agrees to be bound by each and every
provision of each Loan Document and further agrees that it will perform in
accordance with their terms all of the obligations which by the terms of any
Loan Document are required to be performed by it as a Bank, subject to Section
9.6(d) of the Credit Agreement.
4. The Designee hereby appoints Designor as Designee's agent
and attorney in fact, and grants to Designor an irrevocable power of attorney,
to receive payments made for the benefit of Designee under the Credit Agreement,
to deliver and receive all communications and notices under the Credit Agreement
and other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and make approvals, waivers, consents of amendments to or under the
Credit Agreement or other Loan Documents, subject to Section 9.5 of the Credit
Agreement. Any document executed by the Designor on the Designee's behalf in
connection with the Credit Agreement or other Loan Documents shall be binding on
the Designee. The Borrower, the Lead Agent and each of the Banks may rely on and
are beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by
the Designor and its Designee, it will be delivered to the Lead Agent for
recording by the Lead Agent. The effective date for this Designation Agreement
(the "Effective Date") shall be the date of receipt hereof by the Lead Agent,
unless otherwise specified on the signature page thereto.
6. The Lead Agent hereby agrees that it will not institute
against any Designated Lender or join any other Person in instituting against
any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law,
until the later to occur of (i) one year and one day after the payment in full
of the latest maturing commercial paper note issued by such Designated Lender
and (ii) the Maturity Date.
G-2
<PAGE>
7. The Designor unconditionally agrees to pay or reimburse the
Designee and save the Designee harmless against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed or asserted
by any of the parties to the Loan Documents against the Designee (except as set
forth in Section 8 below), in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents or any action taken or
omitted by the Designee hereunder or thereunder, provided that the Designor
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
if the same results from the Designee's gross negligence or willful misconduct.
8. Upon such acceptance and recording by the Lead Agent, as of
the Effective Date, the Designee shall be a party to the Credit Agreement with a
right (subject to the provisions of Section 2.3(b)) to make Money Market Loans
as a Bank pursuant to Section 2.3 of the Credit Agreement and the rights and
obligations of a Bank related thereto; provided, however, that the Designee
shall not be required to make payments with respect to such obligations except
to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Designor, as administrative agent
for the Designee, shall be and remain obligated to the Borrower, the Co-Agents
and the Banks for each and every of the obligations of the Designee and its
Designor with respect to the Credit Agreement, including, without limitation,
any indemnification obligations under Section 7.6 of the Credit Agreement and
any sums otherwise payable to the Borrower by the Designee.
9. This Designation Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
10. This Designation Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Designation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Designation Agreement.
G-3
<PAGE>
IN WITNESS WHEREOF, the Designor and the Designee, intending
to be legally bound, have caused this Designation Agreement to be executed by
their officers thereunto duly authorized as of the date first above written.
Effective Date: ________________________, 199__
[NAME OF DESIGNOR], as Designor
By: ______________________________
Title:____________________________
[NAME OF DESIGNEE] as Designee
By:________________________________
Title: ____________________________
Applicable Lending Office
(and address for notices):
[ADDRESS]
Accepted this _____ day
of , 19
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Lead Agent
By:
Title:
G-4
EXHIBIT 21.1
SUBSIDIARIES
Carr Real Estate Services, Inc.
CarrAmerica Development, Inc.
OmniOffices, Inc.
Carr Redmond Corporation
CarrAmerica Realty Services, Inc.
Carr Parkway North I Corporation
CarrAmerica Realty GP Holdings, Inc.
CarrAmerica Realty LP Holdings, Inc.
Carr Realty, L.P.
CarrAmerica Realty, L.P.
Carr Real Estate Services Partnership
Willard Associates
1747 Pennsylvania Avenue Associates, L.P.
Square 24 Associates
Phase I 7th & F Associates
Bond Texas Limited Partnership
Bond Building Limited Partnership
Carr Square 225 Associates
Phase I 456 Associates
Capital 50 Associates
Square 50 Associates
CC-JM II Associates
1717 Pennsylvania Avenue, L.L.C.
Carr Real Estate Services, L.L.C.
CarrAmerica Realty Properties, Inc.
US West, L.L.C.
Carr Development & Construction, LP
ACCOUNTANT'S CONSENT
The Board of Directors
CarrAmerica Realty Corporation:
We consent to incorporation by reference in the registration statement (No.
333-22353) on Form S-3 of CarrAmerica Realty Corporation of our reports dated
February 6, 1998, relating to the consolidated balance sheets of CarrAmerica
Realty Corporation and subsidiaries as of December 31, 1997 and 1996 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1997 and
the related schedule, which reports appear in the December 31, 1997, annual
report on Form 10-K of CarrAmerica Realty Corporation.
KPMG Peat Marwick LLP
Washington, D.C.
March 19, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEET AS OF DECEMBER 31, 1997 AND FROM CARRAMERICA REALTY CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1997
</LEGEND>
<CIK> 0000893577
<NAME> CARRAMERICA REALTY CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Dec-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 41,894
<SECURITIES> 0
<RECEIVABLES> 38,321
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,397,023
<DEPRECIATION> 184,266
<TOTAL-ASSETS> 2,744,060
<CURRENT-LIABILITIES> 0
<BONDS> 1,028,946
0
96
<COMMON> 600
<OTHER-SE> 1,552,001
<TOTAL-LIABILITY-AND-EQUITY> 2,744,060
<SALES> 0
<TOTAL-REVENUES> 359,365
<CGS> 0
<TOTAL-COSTS> 280,879
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 87,013
<INCOME-TAX> 0
<INCOME-CONTINUING> 87,013
<DISCONTINUED> 0
<EXTRAORDINARY> 608
<CHANGES> 0
<NET-INCOME> 78,132
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
<FN>
<F1>
Notes & accounts receivable are presented net of allowance for doubtful
accounts as the allowance is immaterial.
</FN>
</TABLE>
