Exhibit 10.1
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
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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
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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 ("SC-
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Realty"), (the "Stockholders Agreement") and to which Security Capital Group
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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 in good
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standing under the laws of the State of Maryland.
(b) Authorization. Xxxx has the requisite corporate power to enter into
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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 outstanding
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61,030,442 shares of common stock, $01 par value per share.
(d) REIT Status. Xxxx further represents and warrants that (i) it intends
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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 Revenue Code
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of 1986, as amended (the "Code"), (ii) it has operated, and intends to
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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:
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(a) Due Organization. Security Capital and Sub are each duly organized,
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validly existing and in good standing under the laws of the State of
Maryland.
(b) Authorization. Security Capital and Sub each have the requisite power
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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
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 Affiliates
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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
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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
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Section 6 and Section 7, the purchase and sale of the Securities (the
"Closing") shall occur, at 10:00am (New York City time) on Monday,
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November, 19, 2001 (such date being the "Closing Date"). The Closing shall
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take place at the 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 to
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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;
(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"), in
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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 Capital
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shall deliver or cause to be delivered the following to Xxxx:
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(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 performed
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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 final
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order by any United States federal or state court shall have been
issued which prevents the consummation of the transactions
contemplated hereby.
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 material
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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 final
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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).
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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
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party, and each of their affiliates and their respective officers,
directors, employees, agents and representatives (each, an
"Indemnified Party" and together the "Indemnified Parties") against,
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and agrees to hold each of them harmless 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")
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(i) incurred or suffered 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 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
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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
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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.
(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
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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
