Exhibit 10.6
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
"Amendment") is entered into as of April 29, 2000 by and among VANTAS
Incorporated, a Nevada corporation ("VANTAS"), and FrontLine Capital Group, a
Delaware corporation (formerly known as Reckson Services Industries, Inc.)
("RSI"), on the one hand, and HQ Global Workplaces, Inc., a Delaware corporation
(the "Company"), and CarrAmerica Realty Corporation, a Maryland corporation
("CarrAmerica"), on the other hand.
W I T N E S S E T H
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WHEREAS, VANTAS and RSI, on the one hand, and the Company and
CarrAmerica, on the other hand, have executed the Agreement and Plan of Merger
dated as of January 20, 2000 (such agreement, as heretofore, hereby or
hereinafter amended, the "Merger Agreement") pursuant to which VANTAS is to
merge with and into the Company, with the Company being the Surviving
Corporation;
WHEREAS, VANTAS, RSI, the Company and CarrAmerica have executed an
Agreement dated as of March 13, 2000, as amended, pursuant to which such parties
agreed to authorize certain actions governed by the Merger Agreement;
WHEREAS, the parties hereto wish to amend the Merger Agreement as
provided herein; and
WHEREAS, capitalized terms used herein but not defined herein shall
have the meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the aforesaid and the respective
representations, warranties, covenants and agreements hereinafter set forth, the
parties, intending to be legally bound, agree as follows:
A. AMENDMENTS TO MERGER AGREEMENT
The Merger Agreement is hereby amended as follows:
1. The fifth WHEREAS clause of the Merger Agreement is hereby
deleted in its entirety and replaced by the following:
"WHEREAS, immediately following the consummation of the HQ Merger and
the transactions contemplated by the Stock Purchase Agreement and the
UK Agreement, the Company (being sometimes
referred to as the "HQ Surviving Corporation" following the HQ Merger)
will merge (the "Second Step Merger") with and into a to-be formed
Delaware corporation ("M Sub") that will be a wholly-owned subsidiary
of another to-be formed Delaware corporation ("Holdco"), which will be
wholly-owned by the Company, pursuant to the terms and conditions of
an Agreement and Plan of Merger (the "Second Step Plan of Merger"),
substantially in the form of Exhibit A to this Agreement, with M Sub
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being the surviving corporation (being sometimes referred to as the
"Second Step Surviving Corporation") in the Second Step Merger."
2. The reference to "Holdco" in the first sentence of Section 4(c)
of the Merger Agreement is hereby deleted and replaced with "Holdco or M Sub."
3. The second sentence of Section 4(d) of the Merger Agreement is
hereby deleted in its entirety and replaced by the following:
"Except as set forth on Schedule 4(d), upon the filing of the
Recapitalization Amendments and immediately prior to the Effective
Time, the authorized capital stock of the Company shall consist of
75,000,000 shares of Voting Common Stock, 25,000,000 shares of Non-
Voting Common Stock and 7,800,00 shares of preferred stock (the
"Company Preferred Stock"), of which an aggregate of 7,359,526 shares
of Voting Common Stock and Non-Voting Common Stock will be duly
authorized and validly issued and outstanding, fully paid and
nonassessable."
4. Section 4(bb) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"(bb) Immediately prior to the Effective Time, each of M Sub and
Holdco will be a corporation duly organized, validly existing and in
good standing under the laws of Delaware. The authorized capital stock
of M Sub will consist of 1,000 shares of voting common stock, par
value $.01 per share (the "M Sub Voting Common Stock"), of which 1,000
shares of M Sub Voting Common Stock will be duly authorized for
issuance, and upon such issuance will be validly issued and
outstanding, fully paid and nonassessable. All such issued and
outstanding shares of M Sub Voting Common Stock will be owned as of
record by Holdco. The authorized capital stock of Holdco will consist
of 75,000,000 shares of voting common stock, par value $.01 per share
("Holdco Voting Common Stock"), 25,000,000 shares of Class C
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convertible non-voting common stock, par value $.01 per share ("Holdco
Non-Voting Common Stock") and 7,800,000 shares of preferred stock, par
value $.01 per share ("Holdco Preferred Stock"), and the shares of
Holdco capital stock issued pursuant to the Second Step Merger will be
validly issued and outstanding, fully paid and nonassessable. Prior to
the effective time of the Second Step Merger, only Holdco Voting
Common Stock will be issued and outstanding and all of such
outstanding shares will be owned of record by the Company."
5. Section 6(i) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"(ii) M Sub and Holdco. The Company shall cause the formation of
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each of Holdco and M Sub by filing with the Secretary of State of the
State of Delaware a certificate of incorporation in substantially the
form of Exhibit K-1 to this Agreement for Holdco (the "Holdco
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Charter") and a certificate of incorporation for M Sub (the "M Sub
Charter") in substantially the form of Exhibit K-2 to this Agreement,
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and shall cause each of M Sub and Holdco to adopt by-laws, in
substantially the form of Exhibits K-3 and K-4, respectively, to this
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Agreement. The Company shall cause M Sub and Holdco to have a
sufficient number of shares of M Sub Voting Common Stock, Holdco
Voting Common Stock and Holdco Non-Voting Common Stock to be
authorized and unissued to effectuate the terms and conditions of the
Second Step Merger. The Company shall cause Holdco to have a
sufficient number of shares of the Holdco Preferred Stock (the terms
and conditions of such Holdco Preferred Stock being set forth in the
Holdco Charter) authorized and unissued to effectuate the terms and
conditions of the exchange contemplated by the term sheet contained in
the Financing Exhibits (as defined herein). Other than (i) the shares
of M Sub Voting Common Stock issued to Holdco, (ii) the shares of
Holdco Voting Common Stock issued to the Company, and (iii) the shares
of Holdco Voting Common Stock and Holdco Non-Voting Common Stock to be
issued in the Second Step Merger, the Company shall cause no
additional shares of M Sub Voting Common Stock, Holdco Voting Common
Stock, Holdco Non-Voting Common Stock or Holdco Preferred Stock to be
issued by M Sub or Holdco prior to Closing."
6. Section 7(k) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
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"Upon consummation of the HQ Merger, the UK Agreement and the Stock
Purchase Agreement, the HQ Surviving Company shall make the necessary
filings with the Secretary of State of the State of Delaware as
contemplated by Section 251(g) of the Delaware General Corporation Law
to effect the merger of HQ Global with and into M Sub."
7. Section 9(b)(iv) of the Merger Agreement is hereby deleted in
its entirety and replaced by the following:
"The Indemnification and Escrow Agreement, by and among certain
stockholders, warrantholders and optionees who are electing to sell at
least 4,000 options to purchase shares of common stock of the Company
who hold their shares, warrants or options in the Company immediately
prior to Closing, RSI and such escrow agent as shall be mutually
agreed to by the parties (the "Indemnification Escrow Agent"),
substantially in the form of Exhibit E hereto (the "Indemnification
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Escrow Agreement"), shall have been duly executed and delivered by
such stockholders, warrantholders and optionees, RSI and the
Indemnification Escrow Agent and the shares required to be delivered
by RSI pursuant thereto shall have been delivered to the
Indemnification Escrow Agent pursuant thereto."
8. Section 9(b)(vii) of the Merger Agreement is hereby deleted in
its entirety and replaced by the following:
"The Registration Rights Agreement by and among RSI and certain
holders of shares in Holdco, substantially in the form of Exhibit H
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hereto (the "RSI Registration Rights Agreement"), shall have been
executed at the Closing."
9. Section 9(b)(xi) of the Merger Agreement is hereby deleted in
its entirety and replaced by the following:
"(xi) Reckson Associates Realty Corp. ("RA"), or an affiliate
thereof, and RSI, as the case may be, shall have executed and
delivered the RA/RSI Intercompany Agreements, substantially in the
form of Exhibits J-1, J-2, and J-3, respectively, to this Agreement
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(collectively, the "RSI Intercompany Agreements")."
10. The number "3,000,000" in Section 9(c)(xiv) of the Merger
Agreement is hereby deleted and replaced with the number "5,100,000."
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11. All references to "April 30, 2000" in Sections 14(a)(ii),
14(a)(v) and 14(a)(vi) of the Merger Agreement are hereby replaced with "May 31,
2000."
12. All references to "May 1, 2000" in Section 14(a)(ii) of the
Merger Agreement are hereby replaced with "June 1, 2000."
13. All references to "May 15, 2000" in Section 14(d) of the Merger
Agreement are hereby replaced with "June 15, 2000."
B. AMENDMENTS TO FORM EXHIBITS AND DISCLOSURE SCHEDULES
The forms of agreements attached as exhibits to the Merger Agreement
and the Disclosure Schedules attached to the Merger Agreement hereby are amended
as follows:
1. Exhibit A to the Merger Agreement is hereby deleted in its
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entirety and replaced by Exhibit A attached to this Amendment.
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2. Exhibit C to the Merger Agreement is hereby deleted in its
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entirety.
3. The preamble of the form of Stockholders Agreement attached to
the Merger Agreement as Exhibit D (the "Stockholders Agreement") is hereby
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deleted in its entirety and replaced by the following:
"THIS STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of
_________, 2000, is made by and among FrontLine Capital Group
(formerly known as Reckson Services Industries, Inc.) ("RSI"), HQ
Global Holdings, Inc. (the "Company"), CarrAmerica Realty Corporation
("CarrAmerica" or the "Designated Holder") and the undersigned holders
of common stock of the Company (the "Common Stock") (together with
CarrAmerica, the "Holders")."
4. The first WHEREAS clause of the Stockholders Agreement is hereby
deleted in its entirety and replaced by the following:
"WHEREAS, RSI and [the/certain] Holders have entered into that certain
Stock Purchase Agreement dated as of January 20, 2000 pursuant to
which RSI is acquiring on the date hereof certain shares of common
stock of HQ Global Workplaces, Inc. ("HQ Global") owned by such
Holders (the "Transaction");"
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5. Clause 7.1(a)(iii) of the Stockholders Agreement is hereby
deleted in its entirety and replaced by the following:
"the highest price per share of Common Stock (or the implied value of
the Common Stock in connection with the issuance of any convertible
security of the Company) (subject to future adjustment in the event of
stock splits, stock dividends and other similar events) received by
RSI or the Company in any sale or issuance thereof (i) in connection
with the Transaction or (ii) from and after the date hereof through
the last day of the 2000 Put Period."
6. The preamble of the form of Indemnification and Escrow Agreement
attached to the Merger Agreement as Exhibit E (the "Indemnification Agreement')
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is hereby deleted in its entirety and replaced by the following:
"THIS INDEMNIFICATION AND ESCROW AGREEMENT (this "Agreement") is
entered into as of the _______ day of _________ by and among FrontLine
Capital Group (formerly known as Reckson Services Industries, Inc.), a
Delaware corporation ("RSI"), CarrAmerica Realty Corporation, a
Maryland corporation ("CarrAmerica"), and [other shareholders,
warrantholders and optionees of HQ Global Workplaces, Inc. to be added
per CarrAmerica' instructions, collectively the "Shareholders" and
individually a "Shareholder")] and ___________, a ______ corporation,
as escrow agent (the "Escrow Agent") hereunder."
7. The second, third and fourth WHEREAS clauses of the
Indemnification Agreement are hereby deleted in their entirety and replaced by
the following:
"WHEREAS, on the date hereof, pursuant to an agreement among
[the/certain] Shareholders and RSI dated as of January __, 2000 (the
"Stock Purchase Agreement"), [certain/each] of the Shareholders are
selling to RSI, and RSI is purchasing from such Shareholders, that
number of the shares of voting common stock, par value $.01 per share,
and non-voting common stock, par value $.01 per share, of HQGW as set
forth in, and subject to the terms and conditions of, the Stock
Purchase Agreement for $____ per share in cash for an aggregate
purchase price of $______ (the "Share Consideration");
WHEREAS, on the date hereof, pursuant to the Merger Agreement, each
issued and outstanding share of (A) common stock, par value $.01 per
share ("VANTAS Common Stock"), of VANTAS shall be converted into the
right to receive $_____ per share in cash and (B) (i) Series A
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Convertible Preferred Stock, par value $.01 per share, of VANTAS (the
"Series A Stock"), (ii) Series B Convertible Preferred Stock, par
value $.01 per share, of VANTAS (the "Series B Stock"), (iii) Series C
Convertible Preferred Stock, par value $.01 per share, of VANTAS (the
"Series C Stock"), (iv) Series D Convertible Preferred Stock, par
value $.01 per share, of VANTAS (the "Series D Stock"), and (v)
Series E Convertible Preferred Stock, par value $.01 per share of
VANTAS (the "Series E Stock"), other than shares of Series A Stock,
Series B Stock, Series C Stock, Series D Stock and Series E Stock held
in the treasury of VANTAS, are, by virtue of the Merger and without
any action on the part of the holder thereof, being converted into
the right to receive ______ shares of voting common stock of HQGW
("VANTAS' Share Consideration");
WHEREAS, as a condition to the consummation by VANTAS and/or RSI, as
applicable, of the transactions contemplated by the Merger Agreement,
the Stock Purchase Agreement, and that certain Stock Purchase
Agreement by and among VANTAS, RSI, CarrAmerica, OmniOffices (UK)
Limited ("Omni UK") and OmniOffices (Lux) 1929 Holding Company S.A.
("LuxCo") (the "UK Agreement"), (i) the Shareholders have hereby
agreed to indemnify and hold harmless RSI from and against certain
losses related to the Merger Agreement and the Stock Purchase
Agreement, and (ii) CarrAmerica has hereby agreed to indemnify and
hold harmless RSI from and against certain losses related to the UK
Agreement, upon the terms and conditions provided herein;"
8. The sixth and seventh WHEREAS clauses of the Indemnification
Agreement are hereby deleted in their entirety and replaced by the following:
"WHEREAS, in connection with the Shareholders' indemnification
obligations, the parties have agreed that the Shareholders are
depositing an aggregate of ___ shares of voting common stock of Holdco
(the "Voting Common Stock") and ____ shares of non-voting common stock
of Holdco (the "Non-Voting Common Stock") (collectively, the
"Shareholder Indemnification Shares") and $____________ in cash (the
"Shareholder Cash Collateral") with the Escrow Agent to be held and
disbursed by the Escrow Agent in accordance with this Agreement, with
such Shareholder Indemnification Shares and Shareholder Cash
Collateral having an aggregate initial value of $30,000,000 as of the
Closing;
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WHEREAS, in connection with RSI's indemnification obligations, the
parties have agreed that RSI is depositing an aggregate of ___ shares
of Voting Common Stock (the "RSI Indemnification Shares," and together
with the Shareholder Indemnification Shares, the "Indemnification
Shares") with the Escrow Agent to be held and disbursed by the Escrow
Agent in accordance with this Agreement, with the RSI Indemnification
Shares having an aggregate initial value of $30,000,000 as of the
Closing;"
9. All references to "Surviving Corporation" in the definition of
"Direct Loss" set forth in Section 1 and in Section 2(a) of the Indemnification
Agreement are hereby changed to "Holdco."
10. All references to "Surviving Corporation" or "Surviving Company"
set forth in Sections 5(a), 6(a), 6(b), 6(c), 6(d) and 7(b) of the
Indemnification Agreement are hereby changed to "Second Step Surviving
Corporation."
11. All references to "HQGW" in Section 2(a) of the Indemnification
Agreement are hereby changed to "Holdco."
12. Section 3 of the Indemnification Agreement is hereby amended by
adding the following subparagraph (d):
"RSI shall indemnify each of the Shareholder Indemnitees for any Extra
Tax Costs incurred by such Shareholder Indemnitees in connection with
the HQ Merger, the Second Step Merger, and/or the sale of shares by
such Shareholder Indemnitee pursuant to the Stock Purchase Agreement.
For purposes of this Section 3(d), "Extra Tax Costs" shall be defined
as (i) all interest, penalties, and similar charges actually payable
by a Shareholder Indemnitee to any applicable taxing authority with
respect to Extra Taxes attributable to the period ending on the
earlier of January 1, 2003 or the date all of such Shareholder
Indemnitee's shares of stock in HQGW not sold pursuant to the Stock
Purchase Agreement actually are sold (in either case, the "Deemed Sale
Date"), plus (ii) in the event that such interest, penalties, and
similar charges have not been paid on or prior to the Deemed Sale
Date, all interest, penalties and similar charges accruing with
respect to such interest, penalties and similar charges until the
earlier of the actual date on which the interest, penalties, and
similar charges described in clause (i) are paid or thirty (30) days
following a "final determination" within the meaning of Section 1313
of the Code that the Shareholder Indemnitee is required to pay Extra
Taxes, plus (iii) if
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and to the extent that a Shareholder Indemnitee is required to pay any
Extra Taxes prior to the applicable Deemed Sale Date, interest on such
Extra Taxes from the date the Shareholder Indemnitee makes such
payment of Extra Taxes to and including the applicable Deemed Sale
Date, computed at a rate equal to the rate applicable under Section
6621 of the Code with respect to underpayments of federal income tax,
plus (iv) an amount equal to all federal, state and local income taxes
(net of the federal income tax benefit, if any, resulting to the
Shareholder Indemnitee from any deduction allowed to such Shareholder
Indemnitee for any such state and local income taxes) required to be
paid by such Shareholder Indemnitee with respect to the payment
received pursuant to this Section 3(d). For purposes of this Section
3(d), "Extra Taxes" shall be defined as the excess of (i) the amount
of all Taxes (other than stock transfer Taxes) payable (determined as
described below) by a Shareholder Indemnitee by reason of the Second
Step Merger and/or the sale of shares of stock by the Shareholder
Indemnitee pursuant to the Stock Purchase Agreement over (ii) the
amount of Taxes (other than stock transfer Taxes) that would have been
payable by such Shareholder Indemnitee by such reason if (a) the
exchange into Holdco Preferred Stock described on the Financing
Exhibits were not to have taken place and (b) the surviving
corporation in the Second Step Merger were the HQ Surviving
Corporation rather than M Sub. The amount of Extra Taxes and the Extra
Tax Costs for purposes of this Section 3(d) shall be determined and
certified to by an independent accountant selected by the applicable
Shareholder Indemnitee, as may be reasonably acceptable to RSI. Extra
Taxes and Extra Tax Costs shall be considered payable for the purposes
hereof on the earlier of (i) the date on which the Shareholder
Indemnitee notifies RSI in writing of any assertion by the Internal
Revenue Service, formal or informal, of a position to the effect that
such amounts might be required to be paid, or (ii) the date on which
the Shareholder Indemnitee delivers to RSI a copy of an opinion of the
tax advisor to such Indemnitee providing that it is more likely than
not that the Shareholder Indemnitee is liable for such Extra Taxes and
Extra Tax Costs (in either case, a "Potential Adverse Determination
Date"), unless in either event RSI notifies such Shareholder
Indemnitee in writing within ten days of the Potential Adverse
Determination Date that, pursuant to the provisions of this section,
it will indemnify the Shareholder Indemnitee for (a) all interest,
penalties, and similar charges accruing with respect to such Extra
Taxes and Extra Tax Costs from the Potential Adverse Determination
Date until the earlier of thirty (30) days following a
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"final determination" within the meaning of Section 1313 of the Code
that the Shareholder is required to pay Extra Taxes and/or Extra Tax
Costs or ten (10) days following written notice from RSI to such
Shareholder Indemnitee to pay all such Extra Taxes and Extra Tax Costs
as to which a Potential Adverse Determination Date has occurred (in
either case, the "Delayed Payment Date"), and (b) all legal and
accounting costs and expenses incurred in connection with any
challenge or assertion by the Internal Revenue Service (it being
understood that the Shareholder Indemnitee shall not in any event have
any duty to contest any such challenge except, and only to the extent
that, RSI bears any and all costs associated therewith), in which
event Extra Taxes and Extra Tax Costs shall be considered payable for
purposes hereof on the Delayed Payment Date. The obligations of RSI
pursuant to this Section 3(d) are in addition to, and not in lieu of,
the obligations of HQ Surviving Corporation and HQGW under Section
7(j) of the Merger Agreement. The provisions of Section 5(a), 5(b),
5(c) and 5(d) shall not apply with respect to this Section 3(d)."
13. Section 4(a)(X) of the Indemnification Agreement is hereby
amended by deleting clause (i) therein in its entirety.
14. Clause 4(b)(Z) of the Indemnification Agreement is hereby amended
by adding the following language at the end of such clause:
", or (iii) arising from, relating to, or otherwise in respect of the
offer or sale of equity securities of HQGW or Holdco to any third
party in connection with the transactions contemplated by the Merger
Agreement, the Stock Purchase Agreement or the UK Agreement; provided
that any recovery under the foregoing shall be reduced by the amount
of any claim of the RSI Indemnitees under Section 4(a) above."
15. The preamble of the form of Registration Rights Agreement
attached to the Merger Agreement as Exhibit G (the "Holdco Registration Rights
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Agreement") is hereby deleted in its entirety and replaced with the following:
"THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of ________, 2000 by and among HQ Global Holdings,
Inc., a Delaware corporation (the "Company") [the Company will be
formed as a wholly owned subsidiary of HQ Global immediately prior to
the closing under the Merger Agreement and will become the parent
company of M Sub in connection with the second
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step merger], and CarrAmerica Realty Corporation, a Maryland
corporation ("Xxxx") and _____________________ (each, a "Seller" and
collectively, including Xxxx, the "Sellers")."
16. The second paragraph of the Holdco Registration Rights Agreement
is hereby deleted in its entirety and replaced with the following:
"This Agreement is in connection with (i) the Stockholders Agreement
of even date herewith (the "Stockholders Agreement") between the
Company, as issuer of the common stock, par value $[.01] per share
(the "Securities"), FrontLine Capital Group (formerly known as Reckson
Services Industries, Inc.) ("RSI"), Xxxx and certain other
stockholders of the Company, (ii) the Agreement and Plan of Merger
among RSI, VANTAS Incorporated, a Nevada corporation ("VANTAS"), Xxxx
and HQ Global Workplaces, Inc., a Delaware corporation ("HQ Global"),
(iii) the Stock Purchase Agreement dated as of January 20, 2000 by and
between RSI and Xxxx, and (iv) the Stock Purchase Agreement dated as
of January 20, 2000 by and among RSI, VANTAS, Xxxx, OmniOffices (UK)
Limited and OmniOffices (Lux) 1929 Holding Company S.A.. In order to
induce the Sellers to consummate the transactions contemplated by the
foregoing agreements, the Company has agreed to provide to the Sellers
the registration rights set forth in this Agreement."
17. The first recital of the form of Registration Rights Agreement
attached to the Merger Agreement as Exhibit H is hereby deleted in its entirety
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and replaced with the following:
"This Agreement is in connection with (i) the Stockholders Agreement
of even date herewith (the "Stockholders Agreement") between FrontLine
Capital Group (formerly known as Reckson Services Industries, Inc.)
(the "Company"), as issuer of the common stock, par value $[.01] per
share (the "Securities") pursuant to the put rights set forth in
Section 7.1, 7.2 and 7.3 of the Stockholders Agreement among HQ Global
Holdings, Inc. ("HQ"), Xxxx and certain other stockholders of HQ, (ii)
the Agreement and Plan of Merger among the Company, VANTAS
Incorporated, a Nevada corporation ("VANTAS"), Xxxx and HQ Global,
(iii) the Stock Purchase Agreement dated as of January 20, 2000 by and
between the Company and Xxxx, and (iv) the Stock Purchase Agreement
dated as of January 20, 2000 by and among VANTAS, the Company, Xxxx,
OmniOffices (UK) Limited and OmniOffices (Lux) 1929 Holding Company
S.A.. In order to induce the Sellers to consummation the transactions
contemplated by the
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foregoing agreements, the Company has agreed to provide to the Sellers
the registration rights set forth in this Agreement."
18. The Merger Agreement is hereby amended by adding Exhibits K-1, K-
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2, K-3 and K-4 to the Merger Agreement in the forms attached to this Amendment.
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19. Schedule 1(e) to the Merger Agreement is hereby amended by
deleting such Schedule in its entirety and replacing it with Schedule 1(e)
attached to this Amendment.
20. Schedule 4(c) to the Merger Agreement is hereby amended by
deleting such Schedule in its entirety and replacing it with Schedule 4(c)
attached to this Amendment.
21. Schedule 4(a) to the Merger Agreement is hereby amended by
deleing such Schedule in its entirety and replacing it with Schedule 4(a)
attached to this Amendment.
22. Schedule 4(o) to the Merger Agreement is hereby amended by
deleting such Schedule in its entirety and replacing it with Schedule 4(o)
attached to this Amendment.
23. Schedule 4(p) to the Merger Agreement is hereby amended by
deleting such Schedule in its entirety and replacing it with Schedule 4(p)
attached to this Amendment.
C. OTHER AGREEMENTS
The Merger Agreement is hereby amended to add the following
provisions:
1. Simultaneously with the execution of this Amendment, VANTAS shall
deliver to the Company immediately available funds in the aggregate amount of
$12,500,000 as an additional initial deposit under the Merger Agreement. VANTAS
shall have the right to deliver to the Company a replacement letter of credit in
the face amount of $47,500,000 (the "Replacement LOC"). The Replacement LOC
shall replace the additional $12,500,000 initial deposit hereunder and the
existing letter of credit previously delivered to the Company by VANTAS, which
additional initial deposit and existing letter of credit shall be returned to
VANTAS upon the Company's receipt of the Replacement LOC. Any references to
"Letter of Credit" in the Merger Agreement shall be deemed to refer to the
Replacement LOC, and any reference to "Initial Deposit" shall be deemed to refer
to
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$47,500,000 and to include the additional initial deposit hereunder from and
after the date hereof.
2. Simultaneously with the execution of this Amendment, RSI shall
contribute an aggregate of $250,000 to VANTAS, and VANTAS shall pay the Company
$125,000 and CarrAmerica $125,000 (the "Legal Fees Allowance") as an allowance
for certain additional legal costs and expenses incurred by such parties as a
result of the extension of the outside Closing Date from April 30, 2000 to May
31, 2000. The Legal Fees Allowance is nonrefundable and will not be used to
adjust the consideration otherwise payable in connection with the Merger
Transactions.
3. At Closing, the Second Step Surviving Corporation shall pay to
CarrAmerica, as agent for all of the stockholders of the Company immediately
prior to the effective time of the HQ Merger, an amount in cash equal to the
amount of all tenant improvement costs ("TI Costs") paid by the Company on or
prior to April 30, 2000 that are reimbursable by the landlords but which have
not been reimbursed prior to Closing and are not the subject of dispute with the
relevant landlord (the "TI Reimbursement"), which TI Reimbursement shall be
distributed to such stockholders based on each such stockholder's proportionate
interest in the Company immediately prior to the effective time of the HQ
Merger. Any such TI Costs paid to the Second Step Surviving Corporation
following the resolution of any dispute with a landlord shall be paid by the
Second Step Surviving Corporation to CarrAmerica, as agent for all of the
stockholders of the Company immediately prior to the effective time of the HQ
Merger, within five business days after receipt of such amounts by the Second
Step Surviving Corporation. The Company will provide the Second Step Surviving
Corporation with a schedule of the TI Costs (including the identification of any
TI Cost that is the subject of dispute with the relevant landlord) prior to the
Closing. With respect to projects of the Company for which TI Costs are paid by
the Company both on or before April 30, 2000 and after April 30, 2000 (the
"Straddle Projects"), the amount of the TI Reimbursement with respect to such
Straddle Projects shall be calculated as the total reimbursable amount
multiplied by a fraction, the numerator of which is the TI Costs paid by the
Company on or before April 30, 2000, and the denominator of which is the total
TI Costs.
4. At Closing, the Second Step Surviving Corporation shall pay to
CarrAmerica, as agent for all of the stockholders of the Company immediately
prior to the effective time of the HQ Merger, an amount in cash equal to the
amount of all capital expenditures and development costs (including TI Costs,
whether or not reimbursable by landlords) paid by the Company after April 30,
2000 and prior to Closing (net of any amounts the Company actually receives from
landlords prior to Closing as reimbursements of such TI Costs); provided that
the Second Step
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Surviving Corporation is provided with a schedule of such amounts at or prior to
the Closing.
5. RSI and VANTAS hereby represent, warrant, acknowledge and agree
that (a) neither RSI nor VANTAS is aware of any failure on the part of the
Company, CarrAmerica, Omni UK or LuxCo to perform any of their respective
obligations under the Merger Agreement, the Stock Purchase Agreement or the UK
Agreement, (ii) RSI and VANTAS hereby waive any and all rights and claims, fixed
or contingent, with respect to circumstances existing on the date of this
Amendment, relating to any failure by the Company, CarrAmerica, Omni UK or LuxCo
to perform any obligations under the Merger Agreement, the Stock Purchase
Agreement or the UK Agreement, and (iii) neither RSI or VANTAS is aware of any
current right of RSI or VANTAS to terminate (or give notice of its intent to
terminate) the Merger Agreement, the Stock Purchase Agreement or the UK
Agreement. Notwithstanding anything to the contrary contained in this paragraph
5, nothing in this paragraph 5 shall modify, supplement or amend the
Indemnification Agreement or otherwise affect any of the parties' rights
thereunder from and after the Closing.
6. RSI and VANTAS jointly and severally shall indemnify and defend
the Company, CarrAmerica, Omni UK, LuxCo and the respective stockholders,
officers and directors of such entities against all losses, liabilities, claims,
damages and expenses that arise from any claims made by any stockholders,
employees, officers or directors of RSI or VANTAS to the extent relating to (i)
any failure of the parties to consummate any of the Merger Transactions for any
reason other than as a result of a breach by the Company, CarrAmerica, Omni UK
or LuxCo of the Merger Agreement, the Stock Purchase Agreement or the UK
Agreement after the date of this Amendment, and (ii) the integration of
operations of the Company, Omni UK, LuxCo and VANTAS, including wrongful
discharge claims by any current or former employees of VANTAS. The provisions
of this paragraph 6 shall terminate on the Closing Date; provided that the
indemnification obligations with respect to any claim covered by this paragraph
6 that is asserted by any of the foregoing indemnified parties after the date
hereof (whether or not the underlying action giving rise to the claim occurred
before or after the date hereof) and on or prior to the Closing Date shall
survive until such claim is finally resolved.
7. RSI and VANTAS represent and warrant that attached hereto as
Exhibits L and M are correct and complete copies of all term sheets and
----------------
commitment letters setting forth all material terms of all debt and equity
arrangements (including all joint venture and other ancillary arrangements)
proposed to be implemented by VANTAS to finance (or in connection with the
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financing of) the Merger Transactions (the "Financing Exhibits"). RSI and VANTAS
shall cause the terms and conditions of any issuances of debt or equity
(including the execution of any joint venture agreement, operating agreement or
other ancillary arrangement) prior to or in connection with the Merger
Transactions to be the same in all material respects as the terms and conditions
set forth in such Financing Exhibits and shall not make or permit any material
additional term not included in the Financing Exhibits without the prior written
consent of the Company and CarrAmerica. Prior to the Closing, RSI and VANTAS
shall, and shall cause their respective Subsidiaries to, use commercially
reasonable efforts to give the Company and CarrAmerica and their respective
officers, employees, representatives, counsel and accountants and their
respective counsel, auditors and authorized representatives full access, during
normal business hours and upon reasonable notice, to the proposed financing
sources of RSI and VANTAS. RSI and VANTAS shall use commercially reasonable
efforts to ensure that their proposed financing sources are available to and
cooperate with the Company and CarrAmerica. Prior to the Closing, RSI and VANTAS
shall provide weekly reports on the first business day of each week regarding
the status of the financing arrangements. RSI and VANTAS hereby (i) authorize
the Company and CarrAmerica to discuss the terms of the proposed financing
arrangements with the proposed financing sources of RSI and VANTAS, and (ii)
agree that any such discussions by the Company, CarrAmerica and any proposed
financing sources of RSI and VANTAS shall not be deemed to constitute
interference by the Company or CarrAmerica with the proposed financing
arrangements of RSI or VANTAS.
8. Attached as Exhibit N is a summary term sheet containing possible
---------
joint venture terms involving one of the proposed equity financing sources for
VANTAS. Prior to the Closing and thereafter for as long as the stockholders of
the Company immediately prior to the Closing who retain an interest in Holdco
immediately following the Closing (the "Continuing Stockholders") collectively
retain a direct or indirect 10% interest in Holdco, neither RSI nor VANTAS, as
applicable, directly or indirectly shall make or permit any term or condition to
deviate in any material respect from any of the terms or conditions set forth in
the JV Term Sheet or make or permit any additional term not included in the JV
Term Sheet without the prior written consent of the Company and CarrAmerica (if
at or prior to the Closing) or Continuing Stockholders owning a majority of the
aggregate number of shares of Holdco owned by the Continuing Stockholders at the
time such approval is required (if after the Closing), which consent will not be
unreasonably withheld.
9. The Company and CarrAmerica represent and warrant, each as to
itself only, that each of the Company and CarrAmerica has the requisite capacity
and authority, and has taken all action necessary in order, to execute, deliver
and
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perform its respective obligations under this Amendment. This Amendment is a
legal, valid and binding obligation of each of CarrAmerica and the Company,
enforceable in accordance with its terms, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights generally including such general equitable
principles as may apply in the enforcement of creditors' rights.
10. RSI and VANTAS represent and warrant, each as to itself only,
that each of RSI and VANTAS has the requisite capacity and authority, and has
taken all action necessary in order, to execute, deliver, and perform its
respective obligations under this Amendment. This Amendment is a legal, valid
and binding obligation of each of RSI and VANTAS, enforceable in accordance with
its terms, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement of creditors'
rights generally including such general equitable principals as may apply in the
enforcement of creditors' rights.
11. This Amendment and the other agreements referred to herein
represent the entire understanding of the parties with respect to the subject
matter contained herein. This Amendment may not be amended, modified or waived
except in a writing signed by the party against whom enforcement of such
amendment, modification or waiter is sought. This Amendment shall be construed
and interpreted in accordance with the internal laws of the State of Delaware,
without reference to the conflict of laws principles contained therein. This
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which, when taken together, shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first written above.
HQ GLOBAL WORKPLACES, INC.
By: /s/ Xxxx X. Xxxxx
--------------------
Name: Xxxx X. Louis
Title: Vice President and General Counsel
VANTAS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
CARRAMERICA REALTY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
FRONTLINE CAPITAL GROUP
By: /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
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