EXHIBIT 10.1
STOCK SUBSCRIPTION AGREEMENT
AGREEMENT made this 16th day of May, 1997, by and between
Chelsea GCA Realty, Inc., a Maryland corporation (the "Company"),
and Xxxxx XxXxxxxxx Group, L.P. (the "Buyer").
W I T N E S S E T H :
WHEREAS, concurrently herewith Buyer and Chelsea GCA
Realty Partnership, L.P. are entering into a Limited Liability
Company Agreement of Simon/Chelsea Development Co., L.L.C. (the
"Venture Agreement"); and
WHEREAS, the Company, the general partner of Chelsea GCA
Realty Partnership, L.P., desires to issue and sell to Buyer
shares (the "Shares") of Common Stock of the Company, $.01 par
value per share (the "Common Stock"), and the Buyer desires to
purchase the Shares from the Company;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties hereby agree as
follows:
1. PURCHASE OF THE SHARES. The Company hereby agrees to
issue and sell to Buyer, and Buyer hereby agrees to
purchase from the Company, an aggregate of 1,408,450
Shares of the Company. The purchase price to be paid by
Buyer for the Shares is $35.50 per share, or an aggregate
of $49,999,975. The purchase price will be paid by the
delivery by Buyer to the Company of a certified or bank
cashier's check in such amount payable to the order of
the Company or by wire transfer to an account designated
by the Company. The purchase price will be payable
concurrently with the delivery of the Shares to Buyer,
which delivery shall occur as promptly as practicable
after such Shares have been listed on the New York Stock
Exchange.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to Buyer as follows:
2.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Maryland.
2.2 All corporate and other proceedings required to be taken
by or on the part of the Company to authorize it to carry
out this Agreement have been duly and properly taken.
2.3 This Agreement has been duly and validly executed and
delivered by the Company and constitutes the valid and
binding obligation of the Company enforceable against the
Company in accordance with its terms.
2.4 The Shares, when delivered pursuant to Section 1 hereof,
will be validly issued and outstanding, fully paid and
nonassessable. The Company agrees to cause the Shares to
be issued promptly after such Shares have been listed or
approved for listing on the New York Stock Exchange,
together with evidence of such listing to Buyer.
Promptly after the date hereof, the Company shall apply
for listing of the Shares on the New York Stock Exchange.
2.5 Neither the execution and delivery of this Agreement nor
the carrying out of the transactions contemplated hereby
will result in violation of, or be in conflict with, the
Articles of Incorporation or By-Laws of the Company or
any agreement or indenture of any kind binding upon the
Company.
2.6 The Company has filed with the Securities and Exchange
Commission and made available to Buyer its Annual Report
on Form 10-K for the fiscal year ended December 31, 1996
and its Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997 (collectively, the "SEC
Documents"). The SEC Documents, when filed (a) did not
contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading, and (b) complied in all material respects
with the applicable requirements of the Securities
Exchange Act of 1934. Since March 31, 1997, there has
not been any material adverse change in the financial
condition or operations of the Company.
2.7 The Company has qualified as a Real Estate Investment
Trust ("REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"), for its taxable year ended
December 31, 1996, and the Company is organized and
operates in a manner that will enable it to continue to
qualify to be taxed as a REIT under the Code.
2.8 Without the Buyer's consent, the Company will not take
any action to reduce the number of outstanding shares of
Common Stock if such reduction would cause Buyer's
ownership of Common Stock to constitute 10% or more of
the outstanding Common Stock of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyer
hereby represents and warrants to the Company as follows:
3.1 All proceedings required to be taken by or on the part of
the Buyer to authorize it to carry out this Agreement
have been duly and properly taken.
3.2 This Agreement has been duly and validly executed and
delivered by Buyer and constitutes the valid and binding
obligation of Buyer enforceable against Buyer in
accordance with its terms.
3.3 Neither the execution and delivery of this Agreement nor
the carrying out of the transactions contemplated hereby
will result in violation of, or be in conflict with, the
Agreement of Limited Partnership of Buyer or any
agreement or indenture of any kind binding upon the
Buyer.
3.4 Buyer is acquiring the Shares for its own account for
investment without any intention of distribution thereof
within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"); Buyer will not sell,
transfer, assign or pledge any Shares (but may pledge
dividends or distributions thereon) except pursuant to an
effective registration statement or an exemption from
registration under the Securities Act and the rules and
regulations thereunder and understands that the
certificates for the Shares will bear a legend to such
effect. Buyer acknowledges that it is aware that the
Shares must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from
such registration is available; that although the Company
now makes publicly available the information required by
Rule 144 under the Securities Act, it may not be under an
obligation to do so in the future and that any routine
sales of any of the Shares made in reliance upon Rule 144
under the Securities Act may be made only in limited
quantities in accordance with the terms and conditions of
Rule 144.
3.5 Buyer has knowledge and experience in financial and
business matters, is capable of evaluating the merits and
risks of the investment in the Company and is able to
bear the economic risk of such investment. Buyer is an
accredited investor as defined under the Securities Act.
4. INVESTIGATION BY BUYER. Buyer has had and has availed
itself of the opportunity to conduct such examination of
the business and financial condition of the Company as
Buyer has deemed necessary in connection with Buyer's
investment in the Company and has had the opportunity to
acquire such additional information about the business
and financial condition of the Company as Buyer deems
appropriate.
5. SUBSEQUENT SHARES. If at any time and from time to time
while the Venture Agreement remains in full force and
effect, the Company sells for cash any equity securities
(or securities convertible into or exercisable or
exchangeable for equity securities) (the "Offered
Shares") in a public or private offering either
registered pursuant to the Securities Act or exempt from
registration under the Securities Act (the "Offering"),
then Buyer shall have the right to purchase concurrently
with the closing of, and on the same terms as, the
Offering a number of Offered Shares equal to the number
of Offered Shares multiplied by a fraction, the numerator
of which is the number of shares of Common Stock then
owned by Buyer and the denominator of which is the total
number of issued and outstanding shares of Common Stock
of the Company prior to the Offering. The Company shall
notify the Buyer of the proposed terms of the Offered
Shares (which may consist of the mechanism for
establishing the offering price) not less than 30 days
prior to the anticipated date of closing of the Offering.
If the Buyer desires to purchase any of the Offered
Shares, it shall notify the Company within 20 days after
receipt of the notice from the Company how many Offered
Shares it wishes to purchase. If the Buyer does not so
notify the Company, the Company may sell the Offered
Shares free from the Buyer's rights under this Section.
If at any time Buyer does not elect to purchase Offered
Shares in two consecutive Offerings or in a total of
three Offerings, the provisions of this Section shall be
terminated and of no further force or effect and Buyer
shall no longer have rights under this Section 5 to
purchase any equity securities in the future. The rights
granted to Buyer pursuant to this Section 5 shall not
apply to any equity securities (or securities convertible
into or exercisable or exchangeable for equity
securities) (a) issued pro rata to all holders of Common
Stock; (b) upon the conversion or exercise of options,
warrants or convertible securities; (c) issued to
employees, officers or directors of the Company pursuant
to stock option plans or other plans approved by the
Board of Directors of the Company; or (d) issued in
connection with the acquisition of any property or
acquisition (by merger, consolidation, purchase,
reorganization or otherwise) of all of the stock or other
equity securities of a company or all or substantially
all the assets of a business.
6. RESTRICTIONS ON CERTAIN ACTIONS. During the earlier of
(a) five years from the date of this Agreement or (b) two
years after the termination of the Venture Agreement,
except as permitted pursuant to Section 5 hereof, Buyer,
without the prior consent of the Company's Board of
Directors will not, nor will it permit any affiliate (as
such term is defined in Rule 12b-2 of Regulation 12B
under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of Buyer to:
(a) acquire (other than through stock splits or stock
dividends), directly or indirectly or in conjunction with
or through any other person, by purchase or otherwise,
beneficial ownership of any additional shares of Common
Stock or any other securities of the Company entitled to
vote generally for the election of directors ("Voting
Securities");
(b) directly or indirectly or through any other person,
solicit proxies with respect to Voting Securities under
any circumstance; or become a "participant" in any
"election contest" relating to the election of directors
of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act); provided,
however, that the foregoing shall not prohibit Buyer from
soliciting proxies for the purpose of opposing any
increase in the ownership limitation currently contained
in the Company's Articles of Incorporation.
(c) deposit any Voting Securities in a voting trust, or
subject any Voting Securities to a voting or similar
agreement;
(d) directly or indirectly or through or in conjunction with
any other person, engage in a tender or exchange offer
for the Company's Voting Securities made by any other
person or entity without the prior written approval of
the Company, or engage in any proxy solicitation with any
person or entity relating to the Company;
(e) take any action alone or in concert with any other person
to acquire or change the control of the Company or,
directly or indirectly, participate in any group seeking
to obtain or take control of the Company; or
(f) sell, transfer, pledge or otherwise dispose of or
encumber any Voting Securities except (i) as set forth in
Section 7 hereof, (ii) to an affiliate of the Buyer,
provided that the transferee agrees to be bound by all
the provisions of this Agreement, or (iii) pursuant to a
public offering of the Shares registered under the
Securities Act.
7. SALE OF VOTING SECURITIES. Except as otherwise provided
in Section 6(f) hereof, if, during the period set forth
in Section 6, Buyer desires to sell all or part of its
holdings of Voting Securities, such sale shall be made
only as follows. Buyer may sell all or part of its
holdings of Common Stock: (i) in a public offering
registered under the Securities Act or (ii) in accordance
with the volume limitations of Rule 144 under the
Securities Act or any successor rule. Buyer shall give
the Company at least five days' prior written notice of
any such proposed sale.
8. TERMINATION OF RESTRICTIONS. The restrictions contained
in Sections 6 and 7 hereof shall terminate in any of the
following events:
(a) the Company enters into an agreement calling for the
merger or consolidation of the Company with or into any
other corporation (other than a wholly-owned subsidiary
of the Company) in which the Company shall not be the
survivor or in which the Company's outstanding capital
stock shall be converted into cash or other property or
if the Company enters into an agreement to sell all or
substantially all of its assets to another corporation
(other than a wholly-owned subsidiary of the Company);
provided, however, that this provision shall not apply to
a merger, consolidation or sale in which the securities
received by the holders of Voting Securities of the
Company in such consolidation, merger or sale constitute
a majority of such other corporation's Voting Securities
immediately after the merger, consolidation or sale (in
which event the provisions of this Agreement shall apply
to the Voting Securities of such other corporation);
provided, further, however, that during the period set
forth in Section 6 the Company agrees to notify the Buyer
of any of the events described in this subparagraph (a)
or subparagraph (c) at least two business days prior to
entering into any such agreement;
(b) a person or group of persons unaffiliated with the Buyer
shall make an offer to purchase a number of shares of
Common Stock of the Company or other Voting Securities
which would entitle such person or persons to vote a
majority of the Voting Securities of the Company and a
majority of the members of the board of directors of the
Company does not oppose such offer or recommend against
acceptance thereof by the shareholders of the Company; or
(c) the Company shall enter into an agreement with any party
providing for an offer to be made to purchase at least a
majority of the shares of Common Stock of the Company and
a majority of the Board of Directors approves or
recommends acceptance of such tender offer.
9. RIGHT TO APPOINT DIRECTOR. If during the period set
forth in Section 6 Buyer acquires at any time or from
time to time equity securities (or securities convertible
into or exercisable or exchangeable for equity
securities) of the Company for an aggregate purchase
price of $100 million or more, then the Company shall use
its best efforts to cause a designee of Buyer to be
elected as a director of the Company and shall use its
best efforts to cause its officers and directors to enter
into an agreement promptly after the date hereof agreeing
to vote for Buyer's designee as a director.
10. LEGENDS AND STOP TRANSFER ORDER.
(a) Buyer agrees:
(i) to the placement of the following legends on each
certificate representing Voting Securities owned by
Buyer or any affiliate:
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO, AND MAY BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF ONLY UPON COMPLIANCE
WITH THE TERMS AND THE PROVISIONS OF A
CERTAIN AGREEMENT DATED MAY, __ 1997 BETWEEN
CHELSEA GCA REALTY, INC. AND XXXXX XXXXXXXXX
GROUP, L.P., A COPY OF WHICH AGREEMENT IS ON
FILE AND MAY BE EXAMINED AT THE OFFICE OF THE
SECRETARY OF CHELSEA GCA REALTY, INC.
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED OR SOLD
UNLESS (i) A REGISTRATION STATEMENT UNDER
SUCH ACT IS THEN IN EFFECT WITH RESPECT
THERETO, (ii) A WRITTEN OPINION FROM COUNSEL
FOR THE ISSUER, MESSRS. STROOCK & STROOCK &
XXXXX LLP, OR COUNSEL FOR THE HOLDER
REASONABLY ACCEPTABLE TO THE ISSUER HAS BEEN
OBTAINED TO THE EFFECT THAT NO SUCH
REGISTRATION IS REQUIRED OR (iii) A `NO
ACTION' LETTER OR ITS THEN EQUIVALENT HAS
BEEN ISSUED BY THE STAFF OF THE SECURITIES
AND EXCHANGE COMMISSION."
(ii) that the Company may give stop transfer orders to
its transfer agent with respect to the Shares.
(b) The transfer of any Voting Securities which are sold in
contravention of the provisions of this Agreement shall
not be registered on the books of the Company, and no
person to whom any such sale is made shall be recognized
as the holder of such Voting Securities or acquire any
voting, dividend or other rights in respect thereof.
11. SPECIFIC ENFORCEMENT. The parties hereto recognize and
agree that , in the event that any of the terms of
Sections 5, 6, 7 or 9 hereof were not performed in
accordance with their specific terms or were otherwise
breached, immediate irreparable injury would be caused,
for which there is no adequate remedy at law. It is
accordingly agreed that in the event of a failure by any
party to perform its obligations thereunder, any other
party shall be entitled to specific performance through
injunctive relief to prevent breaches of the terms of
such sections and to specifically enforce such sections
and the terms and provisions thereof in any action
instituted in any court of the United States or any state
thereof having subject matter jurisdiction, in addition
to any other remedy to which the party may be entitled,
at law or in equity.
12. MISCELLANEOUS.
12.1. Buyer, on the one hand, and the Company, on the other
hand, represent and warrant to each other that no
brokerage commission or finder's fees have been incurred
in connection with the sale of the Shares to the Buyer.
Buyer shall be responsible for, and shall hold the
Company harmless from and against, any fees or expenses
which Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
may allege to be due and owing to it in connection with
this Agreement or the Venture Agreement or the
transactions contemplated by such agreements.
12.2. All fees and expenses incurred by any party in connection
with this Agreement will borne by such party.
12.3. This Agreement will be binding upon, inure to the benefit
of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that
without the consent of the other, neither Buyer nor the
Company shall assign its rights or delegate its
obligations hereunder to any other person.
12.4. This Agreement contains the entire understanding of the
parties and supersedes all prior agreements and
understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a
written instrument duly executed by both parties.
12.5. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an
original, but all of which together will constitute one
and the same instrument.
12.6. All notices hereunder shall be given as provided in the
Venture Agreement.
12.7. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the
State of Maryland.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
CHELSEA GCA REALTY, INC.
BY: /S/ XXXXX X. XXXXX
ITS CHIEF EXECUTIVE OFFICER
XXXXX XXXXXXXXX GROUP, L.P.
By: Xxxxx XxXxxxxxx Group, Inc.,
its General Partner
By: /S/ XXXXX XXXXX
ITS CHIEF EXECUTIVE OFFICER
