EXHIBIT 2.3 TERMINATION AGREEMENT
EXECUTION COPY
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TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Agreement"), dated as of December 13,
2001, is by and between CarrAmerica Realty Corporation, a Maryland corporation
("Xxxx"), and Security Capital Group Incorporated, a Maryland corporation
("Security Capital").
WHEREAS, Security Capital had been the beneficial owner of 28,603,417
shares of Xxxx common stock, $.01 par value per share, and pursuant to that
certain Purchase and Sale Agreement dated as of November 15, 2001 Security
Capital sold to Xxxx 9,200,000 of such shares;
WHEREAS, Security Capital has requested that Xxxx file, and pursuant to
such request Xxxx has filed, a registration statement on Form S-3 with respect
to the Security Capital's remaining 19,403,417 shares of Xxxx;
WHEREAS, Xxxx has filed a prospectus supplement relating to the sale of
16,872,537 shares pursuant to an underwritten public offering (the "Offering"),
which also includes the grant of an option to the underwriters to purchase up to
an additional 2,530,880 shares to cover overallotments (the "Overallotment
Option")
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. Termination of Agreements. Effective on the closing of the Offering,
irrespective of whether the Overallotment Option is exercised, and without
further action by the parties hereto, all agreements and understandings
between Security Capital or any of its affiliates on the one hand and Xxxx
or any of its affiliates on the other hand, shall be immediately terminated
and be of no force and effect, provided however, that notwithstanding the
preceding, the following agreements shall remain in effect: (a) this
Agreement, (b) the Registration Rights Agreement, dated as of April 30,
1996, by and among Security Capital U.S. Realty ("US Realty"), Security
Capital Holdings SA ("Holdings") and Xxxx, and to which Security Capital
(both as to itself and as successor to all the rights of USRealty and
Holdings under the Strategic Alliance Agreement) has become party as a
result of the transactions between Security Capital, USRealty and Holdings
and the consent granted by Xxxx pursuant to that certain letter agreement
dated July 28, 2000 between Xxxx and Security Capital (the "Registration
Rights Agreement") (including without limitation the provisions with
respect to indemnification and allocation of registration expenses) and (c)
that certain Underwriting Agreement between Xxxxxxx, Xxxxx & Co., Security
Capital, Xxxx and the other underwriters listed on Schedule 1 thereto,
dated as of December 13, 2001 (the "Underwriting Agreement").
2. Resignation of Directors. Effective on the closing of the Offering,
irrespective of whether the Overallotment Option is exercised, Security
Capital shall cause the resignation of Xxxxxxx X. Xxxxxxx, C. Xxxxxx
Xxxxxxxxxxx, and Xxxxxxxx X. XxXxxxx (the "Security Capital Nominees") from
the Board of Directors of Xxxx, such resignations to be effective on the
closing of the Offering.
3. Financial Statements/Cooperation. Xxxx agrees to deliver, and to cause its
advisors, representatives and agents to deliver, to Security Capital, as
soon as reasonably practicable, after December 31, 2001, such financial and
other information with respect to 2001 as Security Capital may reasonably
request for Security Capital to comply with its reporting obligations under
applicable securities laws, including without limitation, causing its
auditors to provide their written consent to the inclusion of Xxxx
financial information in Security Capital securities filings.
4. Ownership Limit. Effective on the closing of the Offering, Security Capital
agrees that (i) it waives any rights that it may have to be subject to the
Special Shareholder Limit (as that term is defined in Xxxx'x articles of
incorporation, as amended (the "Xxxx Charter")), and it shall be subject to
the Ownership Limit (as that term is defined in the Xxxx Charter) in effect
from time to time with respect to Xxxx'x capital stock, and (ii) Security
Capital consents to, and will vote any shares of common stock owned or
controlled by it in favor of, any amendment by Xxxx of the Xxxx Charter
that would (a) increase the Ownership Limit to 9.8% and/or (b) delete
references to the Special Shareholder Limit.
5. Confidentiality. Security Capital agrees that all information previously
provided to it pursuant to the Stockholders Agreement, dated as of April
30, 1996, by and among US Realty, Holdings and Xxxx, and to which Security
Capital (both as to itself and as successor to all the rights of USRealty
and Holdings under the Strategic Alliance Agreement) has become party as a
result of the transactions between Security Capital, USRealty and Holdings
and the consent granted by Xxxx pursuant to that certain letter agreement
dated July 28, 2000 between Xxxx and Security Capital, and all information
provided to Security Capital pursuant to Section 3 of this Agreement, shall
be kept confidential, and Security Capital shall not disclose such
information to any persons other than the directors, officers, employees,
financial advisors, legal advisors, accountants, consultants and affiliates
of Security Capital who reasonably need to have access to the information
and who are advised of the confidential nature of such information;
provided, however, the foregoing obligation of Security Capital shall not
(a) relate to any information that (i) is or becomes generally available
other than as a result of unauthorized disclosure by Security Capital or by
persons to whom Security Capital has made such information available, or
(ii) is or becomes available to Security Capital on a non-confidential
basis from a third party that is not, to Security Capital's knowledge,
bound by any other confidentiality agreement with the Company, or (b)
prohibit disclosure of any information if required by law, rule,
regulation, court order or other legal or governmental process.
6. Indemnification Obligations. The parties agree that, with regard to the
Underwriting Agreement, it is each their understanding and intent that
nothing contained in Section 6 (Indemnification) of the Underwriting
Agreement shall in anyway modify or amend the Registration Rights
Agreement, including without limitation, the respective rights and
obligations of each of Security Capital and Xxxx under Section 8
(Indemnification) thereunder.
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7. Successors and Assigns. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective heirs, personal
representatives, successors, assigns and affiliates.
8. Notices. Any notice or other communication provided for herein or given
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, Esq.
Facsimile: (000) 000-0000
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.
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9. Waiver. No party may waive any of the terms or conditions of this
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.
10. Entire Agreement. This Agreement constitutes the entire agreement with
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.
12. Captions. The Section and Paragraph captions herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute
one and the same instrument.
14. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Maryland.
15. No Presumption Against Drafter. Each of the parties hereto has jointly
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.
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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:
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Name:
Title:
SECURITY CAPITAL GROUP INCORPORATED
By:
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Name:
Title:
[SIGNATURE PAGE TO TERMINATION AGREEMENT]
