EXHIBIT 17
EXECUTION COPY
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
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November 15, 2001, is by and between CarrAmerica Realty Corporation, a Maryland
real estate investment trust ("Xxxx"), Security Capital Group Incorporated, a
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Maryland corporation ("Security Capital") and Security Capital Office Business
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Trust, a Maryland real estate investment trust and indirect subsidiary of
Security Capital ("Sub").
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WHEREAS, Security Capital is the beneficial owner of 28,603,417 shares
of Xxxx common stock, $.01 par value per share, of which Security Capital
desires to sell and Xxxx desires to purchase 9,200,000 of such shares (the "Xxxx
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Shares") subject to the terms described herein;
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NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and warranties herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
1. (a) Purchase and Sale. Subject to the terms and upon the conditions herein
set forth, Xxxx agrees to purchase and Security Capital agrees to sell on
the Closing Date (as hereinafter defined) the Xxxx Shares, free and clear
of all liens, encumbrances, claims and security interests, in exchange for
the delivery by Xxxx to Security Capital of $265,420,000 in immediately
available funds, payable by wire transfer.
(b) Security Capital Purchase Restriction. Notwithstanding anything to the
contrary in the stockholders agreement, dated as of April 30, 1996 by and
among Xxxx Realty Corporation (now Xxxx), Xxxx Realty, L.P., and Security
Capital Holdings S.A. ("Holdings") and Security Capital U.S. Realty
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("SC-Realty"), (the "Stockholders Agreement") and to which Security Capital
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Group has become party as a result of the transactions between Security
Capital Group, SC-Realty and Holdings and the consent granted by Xxxx
pursuant to that certain letter agreement dated July 28, 2000 between Xxxx
and Security Capital Group, on and after the date hereof Security Capital
will not, will cause each of its controlled Affiliates not to, and will use
its reasonable best efforts to cause each of its other Affiliates not to,
directly or indirectly, purchase or otherwise acquire shares of Xxxx common
stock as a result of which, after giving effect to such purchase or
acquisition, Security Capital and its Affiliates will beneficially own more
than 37.44% of the outstanding shares of Xxxx common stock. For purposes of
this Agreement, "Affiliates" shall have the meaning ascribed thereto in
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Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as
amended, and as in effect on the date hereof.
2. Representations and Warranties of Xxxx. Xxxx hereby represents and warrants
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to Security Capital as follows:
(a) Due Organization. Xxxx is duly organized, validly existing and
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in good standing under the laws of the State of Maryland.
(b) Authorization. Xxxx has the requisite corporate power to enter
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into this Agreement and the transactions and agreements
contemplated hereby and to carry out its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by
Xxxx and constitutes a valid and binding agreement enforceable
against Xxxx in accordance with its terms. Neither the execution
and delivery of this Agreement, the consummation of the
transactions and agreements contemplated hereby, nor compliance
with the terms, conditions or provisions of this Agreement will be
a violation of any of the terms, conditions or provisions of Xxxx'x
Articles of Amendment and Restatement, as amended, or bylaws or of
any material agreement or instrument to which it or one of its
subsidiaries is a party or by which it or one of its subsidiaries
or its or their material properties may be bound, or constitute a
default or create a right of termination or acceleration
thereunder, except for any such violation, default or right of
termination or acceleration which has been waived or consented to
in connection with the transactions contemplated hereby. A special
committee of the Board of Directors of Xxxx has authorized and
approved the transactions contemplated by this Agreement.
(c) Xxxx Shares Outstanding. As of the date hereof, Xxxx has
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outstanding 61,030,442 shares of common stock, $.01 par value per
share.
(d) REIT Status. Xxxx further represents and warrants that (i) it
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intends in its federal income tax return for the tax year that will
end on December 31, 2001 to be taxed as a real estate investment
trust (a "REIT") within the meaning of Section 856 of the Internal
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Revenue Code of 1986, as amended (the "Code"), (ii) it has
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operated, and intends to continue to operate, in such a manner as
to qualify as a REIT for 2001, and (iii) the consummation of the
transactions contemplated by this Agreement will not prevent or
prohibit Xxxx from continuing to qualify as a REIT for federal
income tax purposes, or result in the loss of Xxxx'x status as a
REIT for federal income tax purposes.
3. Representations and Warranties of Security Capital. Security Capital and
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Sub hereby represent and warrant to Xxxx as follows:
(a) Due Organization. Security Capital and Sub are each duly
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organized, validly existing and in good standing under the laws of
the State of Maryland.
(b) Authorization. Security Capital and Sub each have the requisite
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power to enter into this Agreement and the transactions and
agreements contemplated hereby and to carry out its obligations
hereunder and thereunder. This Agreement has been duly authorized,
executed and delivered by each of Security Capital and by Sub and
constitutes a valid and binding agreement of Security Capital and
Sub enforceable against Security Capital and Sub in accordance with
its terms. Neither the execution and delivery of this Agreement,
consummation of the transactions and agreements contemplated
hereby, nor compliance with the terms, conditions or provisions of
this Agreement, will be a violation of any of the terms, conditions
or provisions of either Security Capital's or Sub's charter or
bylaws; or of any material agreement or instrument to which
Security Capital or Sub is a party or
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by which Security Capital or Sub or any of their respective
material properties may be bound, or constitute a default or create
a right of termination or acceleration thereunder.
(c) Title. Sub owns the Xxxx Shares free and clear of all liens,
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encumbrances, claims and security interests.
(d) Ownership. Sub is the sole legal owner and owner of record and
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Security Capital and its subsidiaries (including Sub) are the sole
beneficial owners of the Xxxx Shares. For purposes of applying
Section 302(b)(2) of the Code, neither Security Capital or Sub owns
in excess of 28,603,417 shares of Xxxx common stock, par value $.01
per share (determined taking into account the ownership attribution
rules of Section 318(a) of the Code including for this purpose any
common stock that would be issued upon conversion of any shares of
Xxxx'x Series A Convertible Preferred Stock that are owned by
Security Capital, Sub or any Affiliate thereof, either actually or
by attribution pursuant to the ownership attribution rules of
Section 318(a) of the Code).
(e) Purchases. None of Security Capital, Sub or any of their
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Affiliates has a current plan or intention to purchase any equity
securities of Xxxx.
4. Public Announcements. The parties hereto will consult with each other
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before issuing, and provide each other with the reasonable opportunity to
review and comment upon, any press release or other written public
statements with respect to the transactions contemplated by this Agreement,
and shall not issue any such press release or make any such public
statement without the reasonable consent of the other party, except as may
be required by applicable law, rule or regulation by court process or by
obligations pursuant to any listing agreement with any national securities
exchange or transaction reporting system so long as the other party is
notified promptly by the disclosing party of such press release or public
statement. For the avoidance of doubt, the parties acknowledge that
Security Capital and Sub will be filing, with respect to these
transactions, an amendment to its report on Schedule 13D, and Xxxx will be
filing, with respect to these transactions, a Current Report on Form 8-K.
5. Closing. Subject to the satisfaction of the conditions set forth in Section
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6 and Section 7, the purchase and sale of the Securities (the "Closing")
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shall occur, at 10:00am (New York City time) on Monday, November, 19, 2001
(such date being the "Closing Date"). The Closing shall take place at the
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offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
XX 00000, at which time the parties shall make the deliveries described
below. At the Closing, in addition to any other documents required to be
delivered under this Agreement, the parties hereto shall deliver the
documents described below:
(a) Deliveries by Xxxx. At the Closing, Xxxx shall deliver or cause
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to be delivered the following to Security Capital:
(1) $265,420,000 by wire transfer of immediately available
funds to the account specified by Security Capital;
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(2) a certificate of Xxxx'x secretary certifying resolutions of
the special committee of the Board of Directors of Xxxx
approving this Agreement and the transactions contemplated
hereby (together with an incumbency and signature
certificate regarding the officer(s) signing on behalf of
Xxxx);
(3) a certificate, dated the Closing Date, of an executive
officer of Xxxx, certifying that, as of such date, the
representations and warranties of Xxxx contained herein are
accurate, true and correct with the same force and effect
as though made on and as of such date; and
(4) an opinion of Xxxxx & Xxxxxxx L.L.P. (the "Tax Opinion"),
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in form and substance reasonably satisfactory to Security
Capital, to the effect that the purchase by Xxxx of the
Xxxx Shares from Security Capital as contemplated by this
Agreement will not result in the deemed payment by Xxxx to
Security Capital of a dividend for federal income tax
purposes that would prevent or prohibit Xxxx from
satisfying the distribution requirements applicable to
REITs under Section 857(a)(1)(a) of the Code for Xxxx'x
taxable year ending December 31, 2001.
(b) Deliveries by Security Capital. At the Closing, Security
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Capital shall deliver or cause to be delivered the following to
Xxxx:
(1) the Xxxx Shares, to be delivered by DWAC to an account
specified by Xxxx;
(2) a certificate, dated the Closing Date, of an executive
officer of Security Capital, certifying that, as of such
date, the representations and warranties of Security
Capital contained herein are accurate, true and correct
with the same force and effect as though made on and as of
such date; and
(3) a certificate of Sub's secretary certifying resolutions of
the Boards of Trustees of Sub approving this Agreement and
the transactions contemplated hereby (together with an
incumbency and signature certificate regarding the
officer(s) signing on behalf of Sub and Security Capital).
6. Conditions to the Obligations of Xxxx. The obligations of Xxxx under this
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Agreement are subject to the fulfillment of each of the following
conditions:
(a) Performance. Each of Security Capital and Sub shall have
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performed and complied in all material respects with all
agreements, covenants, obligations and conditions required by this
Agreement to be performed or complied with by it.
(b) Injunctions. No preliminary or permanent injunction or other
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final order by any United States federal or state court shall have
been issued which prevents the consummation of the transactions
contemplated hereby.
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7. Conditions to the Obligations of Security Capital. The obligations of
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Security Capital under this Agreement are subject to the fulfillment of
each of the following conditions:
(a) Performance. Xxxx shall have performed and complied in all
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material respects with all agreements, covenants, obligations and
conditions required by this Agreement to be performed or complied
with by it.
(b) Injunctions. No preliminary or permanent injunction or other
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final order by any United States federal or state court shall have
been issued which prevents the consummation of the transactions
contemplated hereby.
(c) Tax Opinion. Receipt by Security Capital of the Tax Opinion
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described in Section 5(a)(4).
8. Dividends. Xxxx represents and warrants that, at a duly held meeting of the
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Board of Directors of Xxxx on November 1, 2001, it passed certain
resolutions regarding the payment of a regular quarterly dividend (the
"Dividend") to shareholders of record on November 16, 2001 and that a copy
of such resolutions has been provided to Security Capital. The parties
hereto agree and acknowledge that for all purposes Sub is and will be the
record holder of the Xxxx Shares until the Closing. Xxxx will not take any
action between the date hereof and the Closing to cause Sub not to be the
record holder of the Xxxx Shares during such period or to in anyway
adversely affect Sub's right to receive the Dividend.
9. Survival. The representations and warranties of the parties shall survive
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the Closing forever.
10. Indemnification.
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(a) Each party (the "Indemnifying Party") agrees to indemnify the other party,
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and each of their affiliates and their respective officers, directors,
employees, agents and representatives (each, an "Indemnified Party" and together
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the "Indemnified Parties") against, and agrees to hold each of them harmless
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from, any and all liabilities, losses, costs, claims, damages, penalties and
expenses (including, without limitation, reasonable attorneys' fees and expenses
and costs of investigation and litigation) ("Losses") (i) incurred or suffered
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by them relating to or arising out of or in connection with any breach of or any
inaccuracy in any representation or warranty made by the Indemnifying Party in
this Agreement or any document delivered by it at the Closing pursuant to
Section 5 hereof or (ii) arising out of or in connection with any action, suit,
inquiry, or proceeding against or involving any Indemnified Party as a result of
any Indemnifying Party's actions (or lack thereof) in connection with the
negotiation or execution of this Agreement or any of the transactions
contemplated hereby, or based upon any allegation or claim that the Indemnified
Party is in any way responsible or liable for any action (or lack thereof) of
the Indemnifying Party. No person shall be entitled to indemnification hereunder
to the extent that the act or omission of such person for which indemnification
is claimed arises out of such person's fraud, bad faith or willful misconduct.
(b) As soon as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement, the Indemnified Party shall promptly give
notice to the Indemnifying Party
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of such claim and the amount the Indemnified Party will be entitled to receive
hereunder from the Indemnifying Party; provided that the failure of the
Indemnified Party to give notice shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent (if any) that the Indemnifying Party
shall have been prejudiced thereby. If the Indemnifying Party agrees that it has
an indemnification obligation but objects that it is obligated to pay only a
lesser amount, the Indemnified Party shall nevertheless be entitled to recover
promptly from the Indemnifying Party the lesser amount, without prejudice to the
Indemnified Party's claim for the difference.
(c) After receiving a claim as set forth above, the Indemnifying Party may, at
its own expense, (i) participate in the defense of any claim, suit, action or
proceeding and (ii) except in the case of a claim indemnification for which is
available pursuant to clause (ii) of paragraph (a) above, as to which this
clause (ii) shall be inapplicable, upon notice to the Indemnified Party and the
Indemnifying Party's delivering to the Indemnified Party a written agreement
that the Indemnified Party is entitled to indemnification for all Losses arising
out of such claim, suit, action or proceeding, assume the defense thereof;
provided, however, that (x) the Indemnifying Party's counsel is reasonably
satisfactory to the Indemnified Party, and (y) the Indemnifying Party shall
thereafter consult with the Indemnified Party upon the Indemnified Party's
reasonable request for such consultation from time to time with respect to such
claim, suit, action or proceeding. If the Indemnifying Party assumes such
defense, the Indemnified Party shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party. If, however, the
Indemnified Party reasonably determines in its judgment that representation by
the Indemnifying Party's counsel of both the Indemnifying Party and the
Indemnified Party would present such counsel with a conflict of interest, then
such Indemnified Party may employ separate counsel to represent or defend it in
any such claim, action, suit or proceeding and the Indemnifying Party shall pay
the reasonable fees and disbursements of such separate counsel. Whether or not
the Indemnifying Party chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.
(d) Notwithstanding anything in this Section 10 to the contrary, neither the
Indemnifying Party nor the Indemnified Party shall, without the written consent
of the other, settle or compromise any claim or permit a default or consent to
entry of any judgment unless the claimant and such party provide to such other
party an unqualified release from all liability in respect of such claim.
Notwithstanding the foregoing, if a settlement offer solely for money damages is
made by the applicable third party claimant, and the Indemnifying Party notifies
the Indemnified Party in writing of the Indemnifying Party's willingness to
accept the settlement offer and pay the amount called for by such offer, and the
Indemnified Party declines to accept such offer, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such claim that
the Indemnifying Party has an obligation to pay hereunder shall be limited to
the lesser of (i) the amount of the settlement offer that the Indemnified Party
declined to accept or (ii) the aggregate Losses of the Indemnified Party with
respect to such claim. If the Indemnifying Party makes any payment on any claim,
the Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such claim.
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(e) In the event that the Indemnifying Party does not elect to assume the
defense of any claim, suit, action or proceeding, then any failure of the
Indemnified Party to defend or to participate in the defense of any such claim,
suit, action or proceeding or to cause the same to be done, shall not relieve
the Indemnifying Party of its obligations hereunder.
11. Successors and Assigns. This Agreement shall be binding upon, and inure to
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the benefit of, the parties hereto and their respective heirs, personal
representatives, successors, assigns and affiliates.
12. Notices. Any notice or other communication provided for herein or given
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hereunder to a party hereto shall be in writing and shall be given by
delivery, by telex, telecopier or by mail (registered or certified mail,
postage prepaid, return receipt requested) to the respective parties as
follows:
If to Xxxx:
CarrAmerica Realty Corporation
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, Xxxxxxxx xx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: J. Xxxxxx Xxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
If to Security Capital:
Security Capital Group Incorporated
000 Xxxxxxx Xxxxxx
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
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with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address with respect to a party as such party shall notify the
other in writing.
13. Waiver. No party may waive any of the terms or conditions of this
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Agreement, nor may this Agreement be amended or modified, except by a duly
signed writing referring to the specific provision to be waived, amended or
modified.
14. Entire Agreement. This Agreement constitutes the entire agreement with
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respect to the subject matter hereof, and supersedes all other prior
agreements and understandings, both written and oral, among the parties
hereto and their affiliates.
15. Expenses. Regardless of whether the transactions contemplated hereby are
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consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
16. Captions. The Section and Paragraph captions herein are for convenience of
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reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
17. Counterparts. This Agreement may be executed in one or more counterparts,
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each of which shall be deemed an original but all of which shall constitute
one and the same instrument.
18. Governing Law. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of Maryland.
19. No Presumption Against Drafter. Each of the parties hereto has jointly
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participated in the negotiation and drafting of this Agreement. In the
event of an ambiguity or a question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by each of the
parties hereto and no presumptions or burdens of proof shall arise favoring
any party by virtue of the authorship of any of the provisions of this
Agreement.
20. Joint and Several Liability. All representations, warranties, obligations
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and liabilities of Security Capital or Sub herein or hereunder shall be
joint and several.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the day and year first executed.
CARRAMERICA REALTY CORPORATION
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: CEO
SECURITY CAPITAL GROUP INCORPORATED
By: /s/ C. Xxxxxx Xxxxxxxxxxx
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Name: C. Xxxxxx Xxxxxxxxxxx
Title: Vice Chairman
SECURITY CAPITAL OFFICE BUSINESS TRUST
By: /s/ Xxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxx X. Xxxxx
Title: President
[Signature Page to Purchase and Sale Agreement]
