Exhibit 1.2
CARRAMERICA REALTY CORPORATION
(a Maryland Corporation)
5.261% Senior Notes due 2007
TERMS AGREEMENT
Dated: November 15, 2002
Banc of America Securities LLC
Bank of America Corporate Center
100 North Tryon Street, 8th Floor
Charlotte, North Carolina 28255
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Fleet Securities, Inc.
100 Federal Street
Boston, Massachusetts 12110
HSBC Securities (USA) Inc.
452 Fifth Avenue
Tower 10
New York, New York 10018
Wachovia Securities, Inc.
301 South College Street, DC-8
Charlotte, North Carolina 28288
Ladies and Gentlemen:
CarrAmerica Realty Corporation, a Maryland corporation (the "Company"),
hereby confirms its agreement with Banc of America Securities LLC, J.P. Morgan
Securities Inc., Fleet Securities, Inc., HSBC Securities (USA) Inc. and Wachovia
Securities, Inc., each as an agent of the Company (collectively, the "Placement
Agents"), with respect to the issue and sale by the Company of, and the
solicitation by the Placement Agents on behalf of the Company of offers to
purchase, subject to the terms and conditions set forth or incorporated by
reference herein, $50,000,000.00 aggregate principal amount of the Company's
5.261% Senior Notes due 2007 (the "Senior Notes") to Core Investment Grade Bond
Trust I (the "Trust"). CarrAmerica Realty, L.P. (the "Guarantor") has agreed to
guarantee the Senior Notes (the "Guarantees") as to payments of principal,
premium, if any, and interest. With respect to the issuance and sale of the
Senior Notes and the related Guarantees to the Placement Agents, the Guarantor
agrees to be jointly and severally liable with the Company as to the Company's
obligations contained in this Terms Agreement (other than the second, fourth and
fifth paragraphs of this Terms Agreement) and in Sections 1, 3, 4, 5 and 6 of
the Basic Provisions referred to below, as if the Guarantor were originally
named as a party hereto and thereto.
1
The Company hereby appoints the Placement Agents as its exclusive agents
for the solicitation of offers to purchase the Senior Notes from the Company by
the Trust, and each Placement Agent hereby accepts such appointment. The Company
shall not appoint any other entity or person to act on its behalf, or to assist
it, in the placement of the Senior Notes. Notwithstanding anything to the
contrary contained herein, the parties hereto agree that no Placement Agent
shall be obligated, under any circumstance, to purchase Senior Notes from the
Company, as principal or otherwise.
Except as otherwise provided herein, all the provisions contained in the
document attached as Schedule A hereto entitled "CarrAmerica Realty Corporation
- -- Common Stock, Preferred Stock, Common Stock Warrants, Debt Warrants,
Depositary Shares and Debt Securities Underwriting Agreement" (the "Basic
Provisions") are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein; provided, however, that
Sections 2 and 9 shall not apply and shall not be deemed to be a part of this
Terms Agreement. Terms defined in the Basic Provisions are used herein as
defined in the Basic Provisions, except that the terms "Underwriters" and
"Representatives" in the Basic Provisions shall be deemed to refer to the
Placement Agents, and the term "Underwritten Securities" in the Basic Provisions
shall be deemed to refer to the Senior Notes and the Guarantees.
On the basis of the representations and warranties set forth or
incorporated by reference herein, but subject to the terms and conditions set
forth or incorporated by reference herein, each Placement Agent, acting solely
as an agent of the Company, will use its reasonable efforts to solicit offers
from the Trust for the purchase of the aggregate principal amount of the Senior
Notes from the Company specified opposite its name in Schedule B attached
hereto. Each Placement Agent will communicate to the Company, orally, each offer
for the purchase of Senior Notes it has solicited on an agency basis. In the
event that a Placement Agent orally communicates to the Company that it has
received an offer for the purchase of Senior Notes at a price at least equal to
100% of the principal amount thereof, then the Company shall accept such offer
in whole, provided that the aggregate of all such offers does not exceed
$50,000,000.00 aggregate principal amount of Senior Notes. If the Company shall
default on its obligation to deliver Senior Notes to a purchaser whose offer has
been solicited by a Placement Agent on an agency basis and accepted by the
Company or fails to satisfy any condition to its issuance and sale of the Senior
Notes hereunder, the Company shall (i) hold such Placement Agent harmless
against any loss, claim or damage arising from, or as a result of, such default
or failure and (ii) pay to such Placement Agent the commission to which it would
otherwise be entitled absent such default or failure.
The Company hereby agrees to pay to each Placement Agent a commission equal
to 0.30% of the principal amount of each Note to be delivered to a purchaser
whose offer has been solicited by such Placement Agent on an agency basis and
has been accepted, or is required to be accepted in accordance with the terms
hereof, by the Company. Such commission shall be payable, at the option of the
applicable Placement Agent, either in the form of a discount from the price
received from purchasers of Senior Notes or directly from the Company. Delivery
of Senior Notes sold through a Placement Agent as an agent of the Company shall
be made by the Company to such Placement Agent for the account of the purchaser
thereof only against payment therefor in immediately available funds. In the
event that the purchaser of Senior Notes fails to accept delivery of such Senior
Notes or fails to make payment in full therefor on the Closing Time, the
applicable Placement Agent shall promptly notify the Company and return such
Senior Notes to the Company. If such Placement Agent has theretofore paid the
Company for such Senior Notes, the Company shall promptly return the related
funds to such Placement Agent and shall reimburse such Placement Agent on an
equitable basis for its loss of the use of funds for the period such funds were
credited to the Company's account.
The Company acknowledges that the placement of Senior Notes arranged by the
Placement Agents for the Company on an agency basis is being conducted by the
Placement Agents in reliance upon the representations, warranties, covenants and
agreements contained or incorporated by reference herein.
The Senior Notes shall have the following terms:
Title: 5.261% Senior Notes due 2007
Principal amount to be issued: $50,000,000.00
Current ratings: Moody's Investors Service, Inc.: Baa2(-);
Standard & Poor's Corporation: BBB; Fitch,
Inc.: BBB.
Interest Rate: 5.261% per annum
Interest Payment Date(s): Each May 30 and November 30, commencing
May 30, 2003.
Record Dates: The close of business on the 15/th/
calendar day preceding the particular
Interest Payment Date.
Maturity Date: November 30, 2007
Redemption provisions: The Senior 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 Senior Notes being redeemed
plus accrued interest thereon to the
redemption date and (ii) the Make-Whole
Amount, if any, with respect to those
Senior Notes, as more fully described in
the Prospectus Supplement relating to the
Senior Notes dated November 15, 2002.
Sinking fund requirements: None
Delayed Delivery Contracts: Not authorized
Form: Global Note through the facilities of The
Depository Trust Company (in the United
States), for the accounts of its
participants, including Clearstream
Banking societe anonyme or Euroclear Bank
S.A./N.V., as operator of the Euroclear
System.
Listing: None
Closing Time and Location: November 20, 2002, 10:00 a.m., New York
City time, at the offices of Clifford
Chance US LLP, 200 Park Avenue, New York,
New York 10166.
Additional Covenants of the Company.
The Company hereby authorizes and directs the Placement Agents to deliver a
copy of the Prospectus to each purchaser of Pass-Through Certificates (the
"Certificates") issued under the Trust Agreement, dated as of November 20, 2002
(the "Trust Agreement"), among Core Bond Products LLC, as depositor (the
"Depositor"), Banc of America Securities LLC, as administrative agent, and The
Bank of New York, as trustee (the "Certificates Trustee"). Furthermore, each of
the Company and the Placement Agents (i) acknowledges that the Certificates
Trustee has assigned to purchasers and subsequent holders of the Certificates
its rights against the Company and such Placement Agent under U.S. federal and
state securities laws with respect to its purchase of the Senior Notes and (ii)
agrees not to contest the enforceability of such assignment.
In addition to the covenants of the Company set forth in the Basic
Provisions, the Company represents, covenants and agrees with the Placement
Agents that notwithstanding anything contained in the Basic Provisions to the
contrary, nothing expressed herein or in the Basic Provisions is intended or
shall be construed to give any entity or other person any legal or equitable
right, remedy or claim hereunder or in respect hereof or any provision herein or
therein contained, other than the parties hereto and their respective successors
and the controlling persons, officer and directors referred to in Section 6(e)
of the Basic Provisions and their heirs and legal representatives; provided,
however; that the Company covenants and agrees that Core Bond Products LLC, as
depositor in respect of the Trust and The Bank of New York, as trustee (on
behalf of holders and beneficial owners of Trust certificates) in respect of the
Trust, are third party beneficiaries of the Company's obligation to accept in
whole each offer to purchase Senior Notes at a price at least equal to 100% of
the principal amount thereof that a Placement Agent orally communicates to the
Company, not to exceed $50,000,000.00 aggregate principal amount of Senior
Notes.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication.
Notices to the Placement Agents shall be directed to:
Banc of America Securities LLC
Bank of America Corporate Center
100 North Tryon Street, 8th Floor
Charlotte, North Carolina 28255
Attention: Transaction Management
Facsimile: (704) 388-9939
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Attention: Investment Grade Syndicate Desk, 8th Floor
Facsimile: (212) 834-6081
Please accept this offer by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
CARRAMERICA REALTY CORPORATION
By: /s/ Thomas A. Carr
----------------------------------
Name: Thomas A. Carr
Title: CEO
CARRAMERICA REALTY, L.P.
By: CarrAmerica Realty, G.P. Holdings, Inc.,
its General Partner
By: /s/ Thomas A. Carr
----------------------------------
Name: Thomas A. Carr
Title: CEO
CONFIRMED AND ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC,
as Placement Agent
By: /s/ Lily Chang
---------------------------------
Name: Lily Chang
Title: Principal
J.P. MORGAN SECURITIES INC.,
as Placement Agent
By: /s/ Maria Sramek
---------------------------------
Name: Maria Sramek
Title: Vice President
FLEET SECURITIES, INC.,
as Placement Agent
By: /s/ John Crees
---------------------------------
Name: John Crees
Title: Managing Director
HSBC SECURITIES (USA) INC.,
as Placement Agent
By: /s/ James Brucia
---------------------------------
Name: James Brucia
Title: MD
WACHOVIA SECURITIES, INC.,
as Placement Agent
By: /s/ Keith J. Mauney
---------------------------------
Name: Keith J. Mauney
Title: Managing Director