Exhibit 10.7
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of May 31, 2000, by and among FrontLine
Capital Group, a Delaware corporation ("FCG"), HQ Global Holdings, Inc., a
Delaware corporation ("Holdco"), and EOP Operating Limited Partnership, a
Delaware limited partnership (the "Investor").
WHEREAS, HQ Global Workplaces Inc., a Delaware corporation ("Old HQ"),
and CarrAmerica Realty Corporation, a Maryland corporation ("CarrAmerica"), on
the one hand, and VANTAS Incorporated, a Nevada corporation ("VANTAS"), and
FCG, on the other hand, have entered into that certain Agreement and Plan of
Merger, dated as of January 20, 2000, as amended as of April 29, 2000 and as
of May 30, 2000 (as amended, the "Merger Agreement").
WHEREAS, pursuant to the Merger Agreement, VANTAS will merge with and
into Old HQ with Old HQ continuing as the surviving corporation with the name
"HQ Global Workplaces, Inc." (the "HQ Merger").
WHEREAS, FCG and CarrAmerica have entered into that certain Stock
Purchase Agreement, dated as of January 20, 2000, as amended as of April 29,
2000 (as amended, the "Stock Purchase Agreement"), whereby FCG agreed to
purchase from CarrAmerica 4,130,530 (subject to recalculation as provided
therein) shares of non-voting common stock, par value $.01 per share (the "Old
HQ Common Stock"), of Old HQ.
WHEREAS, immediately following the consummation of the HQ Merger and the
transactions contemplated by the Stock Purchase Agreement and that certain
Stock Purchase Agreement, dated as of January 20, 2000, as amended as of April
29, 2000, among FCG, VANTAS, CarrAmerica, Omni Offices UK Limited ("Omni UK")
and Omni Offices (Lux) 1929 Holding Company S.A. ("Omni Lux") (the "UK Stock
Purchase Agreement"), Old HQ, as the surviving corporation of the HQ Merger
("HQ Surviving Corporation"), will merge (the "Second Step Merger") with and
into newly formed HQ Merger Subsidiary, Inc., a Delaware corporation ("M-Sub")
that is a wholly owned subsidiary of Holdco, which will theretofore be wholly
owned by HQ Surviving Corporation, with M-Sub continuing as the surviving
corporation under the name "HQ Global Workplaces Inc." pursuant to the
Agreement and Plan of Merger related thereto (the "Second Step Merger
Agreement").
WHEREAS, pursuant to the Exchange Agreement, dated as of May 31, 2000
(the "Exchange Agreement"), Holdco and FCG have agreed to exchange 4,130,530
shares of common stock of Holdco (the "Common Shares") to be received by FCG
in the Second Step Merger in exchange for the Old HQ Common Stock to be
purchased by FCG from CarrAmerica and certain other persons pursuant to the
Stock Purchase Agreement for 3,704,933.820 newly issued shares of Series A
Convertible Cumulative Preferred Stock (the "Preferred Stock") of Holdco and
warrants to purchase up to 1,660,341.752 shares of voting common stock, par
value $.01 per share (the "Voting Common Stock"), of Holdco, the terms of
which are in the form attached as Exhibit B hereto in respect of warrants to
purchase 1,119,660.807 shares of Voting Common Stock (the "Initial Total FCG
Warrants") and in Exhibit C hereto in respect of warrants to purchase
540,680.945 shares of Voting Common Stock (the "Subsequent Total FCG
Warrants").
WHEREAS, upon consummation of the transactions contemplated in the
Exchange Agreement, FCG desires to sell to the Investor, and the Investor
desires to purchase from FCG, certain securities on the terms and conditions
specified in this Agreement.
WHEREAS, Holdco desires to sell to the Investor, and the Investor desires
to purchase from Holdco, certain securities on the terms and conditions
specified in this Agreement.
WHEREAS, capitalized words and phrases used but not otherwise defined
herein shall have the meanings ascribed to them under the Merger Agreement.
Accordingly, Holdco, FCG and the Investor hereby agree as follows:
1. Purchase and Sale of Securities. (a) On the terms and subject to the
conditions of this Agreement, (i) Holdco agrees to sell to the Investor, and
the Investor agrees to purchase from Holdco, for $43,942,374.85 (the "Holdco
Purchase Price") (A) the 1,077,758.180 newly issued shares of Preferred Stock
(the "Holdco Preferred Shares"), the terms of which are contained in the
certificate of designations to Holdco's certificate of incorporation (the
"Certificate of Designations") in the form attached as Exhibit A hereto,
having an initial liquidation preference equal to $43,942,374.85 and (B)
warrants to purchase up to 482,990.248 shares of Voting Common Stock (the
"Holdco Warrants," and together with the Holdco Preferred Shares, the "Holdco
Securities"), the terms of which are in the form attached as Exhibit B hereto
in respect of Holdco Warrants to purchase 325,707.193 shares of Voting Common
Stock (the "Initial Holdco Warrants", and together with the Initial Total FCG
Warrants, the "Initial Warrants") and in Exhibit C hereto in respect of Holdco
Warrants to purchase 157,283.055 shares of Voting Common Stock (the
"Subsequent Holdco Warrants", and together with the Subsequent Total FCG
Warrants, the "Subsequent Warrants").
(b) On the terms and subject to the conditions of this Agreement,
(i) FCG agrees to sell to the Investor, and the Investor agrees to purchase
from FCG, for $31,057,625.15 (the "FCG Purchase Price") (A) 761,738.748 shares
of Preferred Stock purchased by FCG from Holdco pursuant to the Exchange
Agreement (the "FCG Preferred Shares"), the terms of which are contained in
the Certificate of Designations in the form attached as Exhibit A hereto,
having an initial liquidation preference equal to $31,057,625.15 and (B)
warrants to purchase up to 341,368.213 shares of Voting Common Stock purchased
by FCG from Holdco pursuant to the Exchange Agreement (the "FCG Warrants," and
together with the FCG Preferred Shares, the "FCG Securities"), the terms of
which are in the form attached as Exhibit B hereto in respect of FCG Warrants
to purchase 230,203.576 shares of Voting Common Stock and in Exhibit C hereto
in respect of FCG Warrants to purchase 111,164.637 shares of Voting Common
Stock.
(c) The closing (the "Closing") of the purchase and sale of the
securities referred to in clause (a) above shall be held at the offices of
Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
immediately after, and on the same date as, the Closing under the Merger
Agreement, subject to the satisfaction or waiver of the conditions set forth
in Section 6 hereof. The date on which the Closing shall occur, which shall
not extend beyond June 5, 2000, is hereinafter referred to as the "Closing
Date," and, if the Closing Date is not May 31, 2000, Holdco and FCG shall
notify the Investor prior to the close of business on the business day
immediately preceding the Closing Date. On the Closing Date, (i) Holdco shall
deliver certificates issued in the Investor's name representing the Holdco
Preferred Shares and the Holdco Warrants, (ii) FCG shall deliver certificates
issued in the Investor's name representing the FCG Preferred Shares and the
FCG Warrants, and (iii) the Investor shall deposit the Holdco Purchase Price
and the FCG Purchase Price in immediately available funds with Citibank, N.A.,
as escrow agent (the "Escrow Agent") under the Escrow Agreement, dated as of
May 31, 2000 (the "Escrow Agreement") for payment to Holdco and FCG,
respectively, it being understood that the Closing shall occur, and the Holdco
Purchase Price and the FCG Purchase Price only released from escrow, in
accordance with the terms and conditions set forth in the Escrow Agreement.
2. Representations and Warranties of Holdco. Holdco hereby represents and
warrants to the Investor as of the date hereof and as of the Closing Date that
the representations and warranties applicable to Old HQ and VANTAS contained
in Sections 4(A) and 5(A), respectively, of the Merger Agreement are true and
correct with the same force and effect as though made at and as of the date
hereof. In addition, Holdco represents and warrants to the Investor as of the
date hereof and as of the Closing Date as to the following matters:
(a) Organization and Standing. Holdco is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. Holdco and its subsidiaries have all requisite corporate power
and authority necessary to carry on their respective businesses as presently
conducted and to enable them to own, lease or otherwise hold their respective
properties and assets. Holdco and its subsidiaries are duly qualified to do
business and in good standing in each jurisdiction in which the conduct or
nature of their respective businesses or the ownership, leasing or holding of
their respective properties or assets makes such qualification necessary,
except any such jurisdiction where the failure to be so qualified or in good
standing, individually or in the aggregate, would not have a material adverse
effect on the business, financial condition or results of operations of Holdco
and its subsidiaries taken as a whole (a "Holdco Material Adverse Effect").
(b) Authority. Holdco has all requisite corporate power and
authority to enter into this Agreement, the Exchange Agreement, that certain
Registration Rights Agreement, in the form attached as Exhibit D hereto (the
"Registration Rights Agreement"), and the Stockholders Agreement, in the form
attached as Exhibit E hereto (the "Stockholders Agreement"), to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. All corporate acts and other proceedings
required to be taken by Holdco to authorize the execution, delivery and
performance of this Agreement, the Exchange Agreement, the Registration Rights
Agreement and the Stockholders Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and properly
taken. This Agreement and the Exchange Agreement have each been, and, at the
Closing, the Registration Rights Agreement and the Stockholders Agreement will
have each been, duly executed and delivered by Holdco and each constitutes or
will constitute, as applicable, a legal, valid and binding agreement of
Holdco, enforceable against Holdco 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
or by general equitable principles.
(c) No Conflicts; Consents. The execution and delivery of this
Agreement, the Exchange Agreement, the Registration Rights Agreement and the
Stockholders Agreement by Holdco does not, and the consummation of the
transactions contemplated hereby and thereby and compliance with the terms
hereof and thereof will not conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
to a material loss of a benefit under, or result in the creation of any lien,
charge or encumbrance of any kind upon any of the properties or assets of
Holdco or its subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws of Holdco and its subsidiaries, (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which Holdco or any of its subsidiaries is a party
or by which any of them or any of their respective properties or assets is
bound or (iii) subject to the governmental filings and other matters referred
to in the succeeding sentence, any judgment, order or decree, or statute, law,
ordinance, rule or regulation, applicable to Holdco or any of its subsidiaries
or any of their respective properties or assets. Except as set forth on
Schedule 2(c), no consent, approval, license, permit, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Holdco or any of its
subsidiaries in connection with the execution, delivery and performance by
Holdco of this Agreement, the Exchange Agreement, the Registration Rights
Agreement and the Stockholders Agreement or the consummation of the
transactions contemplated hereby and thereby, other than such other consents,
approvals, orders, authorizations, registrations, declarations and filings (i)
as are set forth on Schedule 2(c), (ii) as may be required under the "blue
sky" laws of various states and (iii) as otherwise contemplated in the
Registration Rights Agreement.
(d) Capital Stock. The authorized capital stock of Holdco consists
of 75,000,000 shares of Voting Common Stock, 25,000,000 shares of non-voting
common stock, par value $.01 per share (the "Nonvoting Common Stock," and
together with the Voting Common Stock, the "Common Stock"), and 7,800,000
shares of preferred stock. At the Closing, there shall only be 9,972,827
shares of Voting Common Stock, 2,152,988 shares of Nonvoting Common Stock and
4,782,692 Preferred Shares issued and outstanding. All of the outstanding
shares of Common Stock have been, and at the Closing, all of the shares of
Common Stock issued pursuant to the Second Step Merger Agreement will be,
validly issued and outstanding, fully paid and nonassessable. At the Closing,
(i) the Initial Warrants entitle the holders thereof to purchase 1,445,368
shares of the Common Stock of Holdco, representing 7.875% of the shares of
Common Stock of Holdco on a fully diluted basis, and (ii) the Subsequent
Warrants will entitle the holders thereof to purchase 697,964 shares of the
Common Stock of Holdco, representing 3.375% of the shares of Common Stock of
Holdco on a fully-diluted basis. Except as set forth in Schedule 2(d), none of
the outstanding shares of Common Stock have been issued in violation of, or
are subject to, any preemptive or similar rights under any provision of
applicable law, the certificate of incorporation or by-laws of Holdco or any
agreement, contract or instrument to which Holdco is a party or by which it or
any of its properties or assets is bound. Except as set forth on Schedule
2(d), there are no outstanding warrants, options, rights, convertible or
exchangeable securities or other commitments (other than those contemplated by
this Agreement) (i) pursuant to which Holdco is or may become obligated to
issue, sell, purchase, return or redeem any shares of Common Stock or its
preferred stock or (ii) that give any person the right to receive any benefits
or rights similar to any rights enjoyed by or accruing to the holders of
shares of Common Stock or its preferred stock of Holdco. There are no shares
of Common Stock or preferred stock reserved for issuance by Holdco for any
purpose except for securities reserved for issuance for the purposes set forth
on Schedule 2(d). Except as set forth in Schedule 2(d), there are no
outstanding bonds, debentures, notes or other indebtedness having the right to
vote on any matters on which stockholders of Holdco may vote.
(e) Preferred Shares. The Holdco Preferred Shares and the FCG
Preferred Shares have been duly authorized for issuance by Holdco pursuant to
the terms of this Agreement and, at Closing, (i) will be validly issued, fully
paid and nonassessable, (ii) will be free and clear of all Liens, other than
transfer restrictions relating to the federal securities laws, (iii) will not
be issued in violation of any preemptive or similar rights under any
provisions of applicable law, the certificate of incorporation or by-laws of
Holdco or any agreement, contract or instrument to which Holdco is a party or
by which it or any of its properties or assets is bound and (iv) assuming the
accuracy of the representations and warranties set forth in Section 4 will be
issued in compliance with the registration and qualification requirements of
all applicable federal securities laws as presently in effect.
(f) Warrants. The Holdco Warrants and the FCG Warrants have been
duly authorized for issuance by Holdco pursuant to the terms of this Agreement
and, at Closing, will be legal, valid and binding obligations of Holdco,
enforceable against Holdco in accordance with their terms, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting enforcement of creditors' rights generally or by
general equity principles.
(g) Common Stock. The shares of Common Stock issuable upon
conversion of the Holdco Preferred Shares and FCG Preferred Shares or upon
exercise of the Holdco Warrants or FCG Warrants have been duly authorized by
Holdco and, when issued and delivered in accordance with the terms of the
Holdco Preferred Shares, FCG Preferred Shares, Holdco Warrants or FCG
Warrants, as the case may be, will be validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar rights
under any provision of applicable law, the certificate of incorporation or
by-laws of Holdco or any agreement, contract or instrument to which Holdco is
a party or by which it or any of its properties or assets is bound.
(h) Financial Statements. (i) The audited consolidated balance
sheets of VANTAS as of June 30, 1997, June 30, 1998, December 31, 1998 and
December 31, 1999 and the related consolidated statements of income,
stockholder's equity and cash flows of VANTAS for the fiscal years ended as of
such dates, which financial statements have been examined by
PricewaterhouseCoopers LLP, independent certified public accountants, (ii) the
unaudited consolidated balance sheet of VANTAS as of March 31, 2000 and
related consolidated statements of income, stockholder's equity and cash flows
of VANTAS for the fiscal quarter ended as of such date, (iii) the audited
consolidated balance sheets of Old HQ as of December 31, 1997, December 31,
1998 and December 31, 1999 and the related statements of earnings and cash
flows of Old HQ and its subsidiaries for the fiscal years ended as of such
dates, which financial statements have been examined by KPMG LLP, independent
certified public accountants, (iv) the unaudited consolidated balance sheet of
Old HQ as of March 31, 2000 and the related statements of earnings and cash
flows of Old HQ and its subsidiaries for the fiscal quarter ended as of such
date, and (v) the pro forma (after giving effect to the consummation of the HQ
Merger, the Second Step Merger and related financing and other related
matters) consolidated balance sheets and statements of income and cash flows
of Holdco and its subsidiaries as of December 31, 1999, copies of all of which
financial statements referred to in the preceding clauses (i), (ii), (iii),
(iv) and (v) have heretofore been made available to the Investor, present
fairly the financial position of the respective entities at the dates of said
statements and the results of operations for the period covered thereby (or,
in the case of the pro forma financial statements, present a good faith
estimate of the pro forma financial condition of Holdco and its subsidiaries
(after giving effect to the consummation of the HQ Merger, the Second Step
Merger and related financing and other related matters) on a consolidated
basis at the date thereof). All such financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied except to the extent provided in the notes to said financial
statements and with respect to interim financial statements, subject to normal
year end adjustments.
3. Representations and Warranties of FCG. FCG hereby represents and
warrants to the Investor as of the date hereof and as of the Closing Date as
to the following matters:
(a) Organization and Standing. FCG is a corporation duly organized,
validly existing and in good standing as a corporation under the laws of the
State of Delaware. FCG and its subsidiaries have all requisite corporate power
and authority necessary to carry on their respective businesses as presently
conducted and to enable them to own, lease or otherwise hold their respective
properties and assets. FCG and its subsidiaries are duly qualified to do
business and in good standing in each jurisdiction in which the conduct or
nature of their respective businesses or the ownership, leasing or holding of
their respective properties or assets makes such qualification necessary,
except any such jurisdiction where the failure to be so qualified or in good
standing, individually or in the aggregate, would not have a material adverse
effect on the business, financial condition or results of operations of Holdco
and its subsidiaries taken as a whole (an "FCG Material Adverse Effect").
(b) Authority. FCG has all requisite corporate power and authority
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. All corporate acts and other
proceedings required to be taken by FCG to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement has been
duly executed and delivered by FCG and constitutes a legal, valid and binding
agreement of FCG, enforceable against FCG 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
or by general equitable principles.
(c) FCG Preferred Shares and FCG Warrants. On the Closing Date, FCG
will be the sole record and beneficial owner and holder of the FCG Preferred
Shares and the FCG Warrants, free and clear of all claims, conditional sale or
other title retention agreements, covenants, encumbrances, equitable
interests, liens, options, pledges, rights of first refusal, security
interests, statutory liens or restrictions of any kind, including any
restrictions on voting, transfer, receipt of income, or exercise of any other
attribute of ownership ("Liens"). At the Closing, FCG will transfer to the
Investor good and marketable title to the FCG Preferred Shares and the FCG
Warrants, free and clear of all Liens. Except as contemplated in Section 3(d),
at the Closing, no legend or other reference to any purported Lien will appear
upon any certificate representing the FCG Preferred Shares or the FCG
Warrants. At the Closing, none of the FCG Preferred Shares or the FCG Warrants
will be transferred to FCG in violation of (i) the Securities Act, the
securities laws of any state, or any other federal, state, local, municipal,
foreign, international, multinational, or other constitution, law, rule,
standard, requirement, administrative ruling, order, ordinance, principle of
common law, legal doctrine, code, regulation, statute, treaty or process or
(ii) any award, decision, injunction, judgment, decree, settlement, order,
process, ruling, subpoena or verdict (whether temporary, preliminary or
permanent) entered, issued, made or rendered by any court, administrative
agency, arbitrator, Governmental Entity or other tribunal of competent
jurisdiction.
(d) No Conflicts; Consents. The execution and delivery of this
Agreement by FCG does not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not conflict
with, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a material loss of a
benefit under, or result in the creation of any lien, charge or encumbrance of
any kind upon any of the properties or assets of FCG or its subsidiaries
under, any provision of (i) the certificate of incorporation or by-laws of FCG
and its subsidiaries, (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment, agreement or arrangement to which FCG or
any of its subsidiaries is a party or by which any of them or any of their
respective properties or assets is bound or (iii) subject to the governmental
filings and other matters referred to in the succeeding sentence, any
judgment, order or decree, or statute, law, ordinance, rule or regulation,
applicable to FCG or any of its subsidiaries or any of their respective
properties or assets. Except for disclosure in any reports required pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), no
consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required
to be obtained or made by or with respect to FCG or any of its subsidiaries in
connection with the execution, delivery and performance by Holdco of this
Agreement or the consummation of the transactions contemplated hereby.
4. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to Holdco and FCG as follows:
(a) Organization and Standing. The Investor is a limited partnership
duly established, validly existing and in good standing under the laws of the
State of Delaware. The Investor and its subsidiaries have all requisite
partnership or other power and authority necessary to carry on their
respective businesses as presently conducted and to enable them to own, lease
or otherwise hold their respective properties and assets. The Investor and its
subsidiaries are duly qualified to do business and are in good standing in
each jurisdiction in which the conduct or nature of their respective
businesses or the ownership, leasing or holding of their respective properties
or assets makes such qualification necessary, except any such jurisdiction
where the failure to be so qualified or in good standing, individually or in
the aggregate, would not have a material adverse effect on the business,
financial condition or results of operations of the Investor and its
subsidiaries taken as a whole (an "Investor Material Adverse Effect").
(b) Authority. The Investor has all requisite partnership power and
authority to enter into this Agreement, the Registration Rights Agreement and
the Stockholders Agreement, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
All partnership and other acts and other proceedings required to be taken by
the Investor to authorize the execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Stockholders Agreement
and the consummation of the transactions contemplated hereby and thereby have
been duly and properly taken. This Agreement has been, and, at the Closing,
the Registration Rights Agreement and the Stockholders Agreement will have
each been, duly executed and delivered by the Investor and each constitutes or
will constitute, as applicable, a legal, valid and binding obligation of the
Investor, enforceable against the Investor 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 or by general equity principles.
(c) No Conflicts; Consents. The execution and delivery of this
Agreement, the Registration Rights Agreement and the Stockholders Agreement by
the Investor does not, and the consummation of the transactions contemplated
hereby and thereby and compliance by the Investor with the terms hereof and
thereof will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the creation of any lien,
charge or encumbrance of any kind upon any of the properties or assets of the
Investor or its subsidiaries under, any provision of (i) the declaration of
trust, partnership agreement, certificate of limited partnership, limited
liability company agreement, charter or by-laws of the Investor and its
subsidiaries, (ii) any note, bond, mortgage, indenture, deed of trust, loan
document, license, lease, contract, commitment, agreement or arrangement to
which the Investor or any of its subsidiaries is a party or by which any of
them or any of their respective properties or assets is bound or (iii) any
judgment, order or decree, or statute, law, ordinance, rule or regulation,
applicable to the Investor or any of its subsidiaries or any of their
respective properties or assets. Except for disclosure in any reports required
pursuant to the Exchange Act, no consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
the Investor in connection with the execution, delivery and performance of
this Agreement, the Registration Rights Agreement and the Stockholders
Agreement by the Investor or the consummation of the transactions contemplated
hereby and thereby.
(d) Investment Representation. The Investor is purchasing Holdco
Preferred Shares, FCG Preferred Shares, Holdco Warrants and FCG Warrants
pursuant to this Agreement for its own account for investment only and not
with a view towards their distribution or resale. The Investor represents that
it is an "accredited" investor within the meaning of Rule 501 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), has such
knowledge and experience in financial and business matters that enable it to
evaluate the merits and risks of investment in the Holdco Preferred Shares,
FCG Preferred Shares, Holdco Warrants and FCG Warrants, is able to bear the
economic risk of a loss of its entire investment therein and is prepared to
hold the same for an indefinite period of time. The Investor has received the
opportunity to ask questions, and has obtained the related answers, regarding
the business, financial condition and results of operations of Holdco, VANTAS
and Old HQ and the terms and conditions of the Holdco Preferred Shares, FCG
Preferred Shares, Holdco Warrants and the FCG Warrants. The Investor has
received all of the information regarding Holdco, VANTAS and Old HQ that it
has requested. Holdco and FCG have informed the Investor that the Holdco
Preferred Shares, FCG Preferred Shares, Holdco Warrants and FCG Warrants have
not been registered under the Securities Act and may not be sold, transferred
or otherwise assigned absent such registration or an exemption therefrom.
Holdco and FCG have also informed the Investor that any routine sale of Holdco
Preferred Shares, FCG Preferred Shares, Holdco Warrants and FCG Warrants made
in reliance upon Rule 144 promulgated under the Securities Act can be made
only in accordance with the terms and conditions of such Rule and, further,
that in case such Rule is not applicable to any sale of Holdco Preferred
Shares, FCG Preferred Shares, Holdco Warrants and FCG Warrants, as applicable,
resale thereof may require compliance with some other exemption under the
Securities Act prior to resale. Holdco and FCG have informed the Investor that
certificates representing the Holdco Preferred Shares, FCG Preferred Shares,
Holdco Warrants and FCG Warrants issued pursuant to this Agreement bear the
following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE,
TRANSFERRED OR OTHERWISE ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO UNDER SUCH ACT OR AN EXEMPTION FROM
REGISTRATION FOR SUCH SALE, OFFER, TRANSFER OR OTHER ASSIGNMENT AS SUPPORTED
BY SUCH CERTIFICATIONS, OPINIONS AND OTHER DOCUMENTATION, IF ANY, REASONABLY
REQUESTED AND ACCEPTABLE TO THE CORPORATION."
5. Covenants.
(a) Transfer of Rights. At the Closing, FCG shall transfer, assign
and convey to the Investor any and all rights to which FCG is entitled under
the Exchange Agreement and in respect of the FCG Preferred Shares and the FCG
Warrants, all as set forth in the Assignment Agreement attached as Exhibit F
hereto.
(b) Consummation of the Transactions. Subject to the terms and
conditions of this Agreement, each party shall use its commercially reasonable
efforts to cause the Closing to occur upon the terms and conditions set forth
herein. Holdco and FCG shall cooperate with the Investor, and the Investor
shall cooperate with Holdco and FCG, in filing any necessary applications,
reports or other documents with, giving any notices to, and seeking any
consents from, all Governmental Entities and all third parties as may be
required in connection with the consummation of the transactions contemplated
by this Agreement, and each party requesting such cooperation shall reimburse
the other party's reasonable out-of-pocket expenses in providing such
cooperation.
(c) Lock-Up. In connection with an initial public offering of
Holdco's securities, the Investor agrees, and the Investor shall secure the
agreement of any transferee therefrom, upon request of the lead underwriter,
not to sell or otherwise transfer or dispose of any Common Stock of Holdco
(other than to an affiliate of the Investor or another holder of Preferred
Stock) for a period following the effective date of a registration statement
of Holdco filed under the Securities Act with respect to such offering equal
to the lesser of (i) the lock-up period applicable to (a) FCG, (b) CarrAmerica
(so long as it owns in excess of 9% of the outstanding shares of Common
Stock), (c) holders of Preferred Stock, and (d) senior executive officers of
Holdco and (ii) six (6) months.
6. Conditions to Closing.
(a) Each Party's Obligation. The respective obligations of each
party hereto to effect the transactions contemplated by this Agreement are
subject to the satisfaction (or waiver) as of the Closing of the following
conditions: (i) the HQ Merger and the Second Step Merger shall have been
consummated; (ii) no statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or other
order shall have been enacted, entered, promulgated, enforced or issued by any
Governmental Entity that prohibits the performance of this Agreement or the
consummation of the transactions contemplated by this Agreement; and (iii) no
action, claim, proceeding or investigation shall be pending or threatened by
any Governmental Entity (other than a court acting in response to an action,
claim or proceeding brought by a non-Governmental Entity) that, if successful,
would prohibit the performance of this Agreement or the consummation of the
transactions contemplated by this Agreement.
(b) Obligation of Holdco and FCG. The obligations of Holdco and FCG
hereunder are subject to the satisfaction (or waiver by Holdco or FCG, as the
case may be) as of the Closing of the following conditions:
(i) The representations and warranties of the Investor made in
this Agreement shall be true and correct as of the date hereof and as of the
time of the Closing as though made as of such time, except (1) to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties shall be true and correct on
and as of such earlier date) or (2) where the failure of any representations
and warranties other than the representation and warranty set forth in Section
4(d) to be true and correct would not have the Investor Material Adverse
Effect, and the Investor shall have duly performed, complied with and
satisfied in all material respects all covenants, agreements and conditions
required by this Agreement to be performed, complied with or satisfied by the
Investor by the time of Closing. At the Closing, the Investor shall have
delivered to Holdco and FCG a certificate, dated the Closing Date and signed
by an officer of the Investor, confirming the foregoing.
(ii) At the Closing, the Investor shall have delivered to
Holdco and FCG a secretary's certificate, dated the Closing Date, attesting to
the authorization of the Investor to consummate the transactions contemplated
by this Agreement.
(iii) All filings, registrations, authorizations, permits,
consents and approvals required for the Investor's consummation of the
transactions contemplated by this Agreement shall have been made or obtained,
as applicable.
(iv) At the Closing, the Investor shall have executed and
delivered to Holdco the Stockholders Agreement and the Registration Rights
Agreement and (assuming due execution and delivery by the other parties
thereto) the same shall be in full force and effect.
(v) At the Closing, the Investor shall have deposited the
Holdco Purchase Price and the FCG Purchase Price in immediately available
funds with the Escrow Agent.
(c) Investor's Obligation. The obligations of the Investor hereunder
are subject to the satisfaction (or waiver by the Investor) as of the Closing
of the following conditions:
(i) The representations and warranties of Holdco made in this
Agreement shall be true and correct as of the date hereof and as of the time
of the Closing as though made as of such time, except (1) to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct on and as
of such earlier date), (2) where the failure of any representations and
warranties other than the representations and warranties set forth in Sections
2(d), (e), (f) or (g) to be true and correct would not have a Holdco Material
Adverse Effect, or (3) that the representation and warranty set forth in
Section 2(d) shall be true and correct other than in any de minimis respect,
and Holdco shall have duly performed, complied with and satisfied in all
material respects all covenants, agreements and conditions required by this
Agreement to be performed, complied with or satisfied by Holdco by the time of
Closing. At the Closing, Holdco shall have delivered to the Investor a
certificate, dated the Closing Date and signed by an officer of Holdco,
confirming the foregoing.
(ii) The representations and warranties of FCG made in this
Agreement shall be true and correct as of the date hereof and as of the time
of the Closing as though made as of such time, except (1) to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct on and as
of such earlier date) or (2) where the failure of any representations and
warranties other than the representation and warranty set forth in Section
3(c) to be true and correct would not have a FCG Material Adverse Effect, and
FCG shall have duly performed, complied with and satisfied in all material
respects all covenants, agreements and conditions required by this Agreement
to be performed, complied with or satisfied by FCG by the time of Closing. At
the Closing, FCG shall have delivered to the Investor a certificate, dated the
Closing Date and signed by an officer of FCG, confirming the foregoing.
(iii) At the Closing, each of Holdco and FCG shall have
delivered to the Investor a secretary's certificate, dated the Closing Date,
attesting to its authorization to consummate the transactions contemplated by
this Agreement.
(iv) Since the date of this Agreement, Holdco and its
subsidiaries taken as a whole shall not have suffered a Holdco Material
Adverse Effect.
(v) All filings, registrations, authorizations, permits,
consents and approvals required for Holdco's and FCG's consummation of the
transactions contemplated by this Agreement shall have been made or obtained,
as applicable.
(vi) At the Closing, Holdco shall have executed and delivered
to the Investor the Stockholders Agreement and the Registration Rights
Agreement and (assuming due execution and delivery by the other parties
thereto) the same shall be in full force and effect.
(vii) At the Closing, FCG shall have executed and delivered to
the Investor the Assignment Agreement in the form of Exhibit F hereto and
(assuming due execution and delivery by the Investor) the same shall be in
full force and effect.
(viii) At or prior to the Closing, Holdco or Old HQ shall have
received debt financing the terms of which are substantially to the effect set
forth in the commitment letter of Paribas attached as Exhibit G hereto in
respect of the bank term debt and either the commitment letter of Blackstone
attached as Exhibit H hereto in respect of the high yield or mezzanine debt or
the commitment letter of Warburg Dillon Read LLC attached as Exhibit I hereto
in respect of bridge financing, whether such financing is obtained from such
parties or any other party, and, at the Closing, except as disclosed in
Schedule 5(c), no other indebtedness of Holdco for borrowed money shall be
outstanding.
(ix) At or prior to Closing, the Certificate of Designations in
the form of Exhibit J hereto shall have been accepted for filing by, and duly
filed with, the Secretary of State of the State of Delaware.
(x) At the Closing, the Investor shall have received the
favorable opinion, dated the Closing Date, of Xxxxx & Xxxx LLP, counsel to
Holdco and FCG, substantially in the form attached as Exhibit K hereto.
(xi) At the Closing, the Investor shall have received an agreed
upon procedures letter, dated the Closing Date, from Ernst & Young LLP,
substantially in the form attached as Exhibit L hereto.
(xii) At the Closing, none of the Merger Agreement, the Second
Step Merger Agreement and the UK Stock Purchase Agreement shall have been
amended in any material respect other than an extension of the Closing of the
transactions contemplated thereunder until June 5, 2000, and the conditions
specified in the Merger Agreement, the Second Step Merger Agreement and the UK
Stock Purchase Agreement shall have been satisfied in all material respects,
and there shall have been no waivers to such conditions in any material
respect.
(xiii) At the Closing, Old HQ shall have executed and delivered
to the Investor the Operating Agreement of HQ Global Workplaces Equity Joint
Venture, LLC, in the form attached as Exhibit M hereto, together with all of
the documents to be executed and delivered by Old HQ pursuant thereto, and
(assuming due execution and delivery by the Investor) the same shall be in
full force and effect.
(xiv) At the Closing, one or more parties, other than FCG or
any affiliate thereof or the Investor, shall purchase at least $95 million of
Preferred Stock.
(xv) At the Closing, Holdco shall have delivered the Holdco
Preferred Shares and Holdco Warrants, and FCG shall have delivered the FCG
Preferred Shares and FCG Warrants, to the Investor.
(d) Frustration of Closing Conditions. Neither FCG nor the Investor
may rely on the failure of any condition set forth in Sections 6(a), (b), (c)
or (d), respectively, to be satisfied if such failure was caused by such
party's failure to perform its obligations hereunder or to use its
commercially reasonable efforts to cause the Closing to occur as required by
Section 6.
7. Further Assurances. From time to time, as and when requested by
another party hereto, a party hereto shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
8. Assignment. This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by (i) FCG or Holdco without the prior
written consent of the Investor or (ii) by the Investor without the prior
written consent of Holdco and FCG. Any attempted assignment in violation of
this Section 8 shall be void ab initio and of no further force and effect.
9. No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their successors and permitted assigns, and nothing
herein expressed or implied shall give or be construed to give to any person,
other than the parties hereto and such permitted successors and assigns, any
legal or equitable rights hereunder.
10. Amendments. No amendment, modification or waiver in respect of this
Agreement shall be effective unless it shall be in writing and signed by the
party against whom such amendment, modification or waiver is asserted.
11. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of FCG or the Investor submitted pursuant hereto
shall remain operative and in full force and effect for a period of one year
(or, in the case of the representation and warranty specified in Section
5(A)(b) of the Merger Agreement, for the period of any applicable statute of
limitations) following the Closing. Notwithstanding anything to the contrary
contained in the foregoing, nothing in this Section 11 is intended to indicate
that any representation or warranty will be true at any time other than at the
time of execution of this Agreement and at the Closing.
12. Indemnification.
(a) Indemnity by Holdco and FCG. Holdco and FCG shall, jointly and
severally, indemnify the Investor and its affiliates, controlling persons,
constituent partners and subsidiaries and their directors, officers, members,
employees against all expenses, costs, losses, claims, damages, liabilities
and judgments (including, without limitation, reasonable attorney's fees and
expenses) incurred or sustained by any such party resulting from (i) any
breach of the representations and warranties of Holdco set forth in Section 2
or FCG set forth in Section 3, (ii) FCG's, Holdco's or VANTAS' acts or failure
to act, (iii) any misstatements or omissions made in any disclosure or other
information or materials delivered or made available to the Investor in
connection with the investment contemplated under this Agreement, (iv) the
action or failure to act by an indemnified party with FCG's, Holdco's or
VANTAS' consent or in reliance on FCG's, Holdco's or VANTAS' action or failure
to act or (v) any and all environmental liabilities, costs and expenses
arising out of or incurred in connection with the consummation of the Merger,
the Second Step Merger or the investment contemplated in this Agreement;
provided, however, that such indemnity shall not extend to any expenses,
costs, losses, claims, damages, liabilities or judgments to the extent arising
out of (A) the gross negligence or willful misconduct of any person
indemnified under this Section 12(a) as determined by a court of competent
jurisdiction in a final, non-appealable judgment or (B) a breach by the
Investor of its representations and warranties contained herein.
FCG agrees to indemnify the Investor against any Company Level Loss or
Direct Loss (each as defined below) directly or indirectly suffered or
incurred by it arising out of (i) Rule 10b-5 under the Exchange Act with
respect to VANTAS' failure to file reports with the Securities and Exchange
Commission as required under the Exchange Act prior to the date hereof or (ii)
the Shareholder Litigation (as defined in the Form of Indemnification and
Escrow Agreement attached as Exhibit E to the Merger Agreement (the
"Indemnification Agreement"). FCG shall pay the Investor, in full and complete
satisfaction of FCG's obligation under clause (ii) in this paragraph, an
amount (which, in the case of a Direct Loss, shall not exceed such Direct
Loss) equal to the product of (A) a fraction, the numerator of which equals
the sum of the number of shares of Preferred Stock (determined on an
As-Converted Basis) and the number of shares of Common Stock purchasable upon
exercise of the Initial Warrants, in each case owned by the Investor at the
Closing, and the denominator of which equals the sum of the number of shares
of Preferred Stock (determined on an As-Converted Basis) and the number of
shares of Common Stock purchasable upon exercise of the Initial Warrants, in
each case owned by the Investor at the Closing, and the number of shares of
Common Stock owned by FCG at the Closing, multiplied by (B) the dollar value
of any recovery obtained by FCG from CarrAmerica under the Indemnification
Agreement. A "Company Level Loss" shall mean any loss, liability, claim,
damage or expense (including, without limitation, reasonable attorney's fees
and expenses) incurred by Holdco or Old HQ or its successor; it being
understood that a Company Level Loss shall not include (i) any consequential,
incidental or punitive damages or (ii) any Direct Loss; it being understood
that a Company Level Loss shall include any loss or damage suffered by the
Investor as a result of a diminution in value (either directly or indirectly)
of the interest held by the Investor in Holdco. A "Direct Loss" shall mean any
loss, liability, claim, damage or expense (including reasonable attorney's
fees and expenses) incurred by the Investor; it being understood that a Direct
Loss shall not include (i) any consequential, incidental or punitive damages,
(ii) any Company Level Loss or (iii) any loss or damage suffered by the
Investor as a result of a diminution in value (either directly or indirectly)
of the interest held by the Investor in Holdco.
(b) Indemnity by the Investor. The Investor shall indemnify FCG,
Holdco and their respective directors, officers and employees against all
expenses, costs, losses, claims, damages, liabilities and judgments
(including, without limitation, reasonable attorney's fees and expenses)
incurred or sustained by any such party resulting from any breach of the
representations and warranties of the Investor set forth in Section 4;
provided, however, that such indemnity shall not extend to any expenses,
costs, losses, claims, damages, liabilities and judgments to the extent
arising out of (A) the gross negligence or willful misconduct of any person
indemnified under this Section 12(b) as determined by a court of competent
jurisdiction in a final, non-appealable judgment or (B) a breach by Holdco or
FCG, as the case may be, of the representations and warranties set forth in
Section 2 or Section 3, respectively. Under no circumstances shall the
Investor be liable to FCG, Holdco or any other indemnified party under this
Section 12(b) for any punitive, exemplary, consequential or indirect damages
arising therefrom.
(c) Notice of Actions or Proceedings. In case any action or
proceeding shall be commenced involving any party in respect of which
indemnity may be sought pursuant to Sections 12(a) or 12(b) (the "indemnified
party"), the indemnified party shall promptly notify the party against whom
such indemnity may be sought (the "indemnifying party") in writing of such
action or proceeding; provided, however, that failure of an indemnified party
to provide such notice shall not relieve the indemnifying party of its
obligations under this Section 12 if such failure does not materially and
adversely affect the rights of the indemnifying party.
(d) Defense of Actions and Proceedings. The indemnifying party may
assume the defense of such action or proceeding provided that the expenses of
the indemnified party are reimbursed as they are incurred (including, without
limitation, the payment of all reasonable and documented fees and expenses of
counsel to the indemnified party) and the indemnifying party has not failed to
comply with any such reimbursement request. Any indemnified party shall have
the right to employ separate counsel in any such action or proceeding and
participate in the defense thereof, but the reasonable fees and expenses of
such counsel shall be at the expense of the indemnified party, unless (i) the
employment of such counsel shall have been specifically authorized in writing
by the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or proceeding or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
reasonably advised by such counsel that the representation of the indemnifying
party and the indemnified party by the same counsel would be inappropriate due
to actual or potential differing interests between the indemnifying party and
the indemnified party or there are defenses that are available to the
indemnified party that may be in conflict with or contradict those available
to the indemnifying party (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection with
any one action or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys for all indemnified parties and
all such reasonable fees and expenses shall be reimbursed as they are
incurred. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all expenses, costs, losses,
claims, damages, liabilities and judgments by reason of any settlement made by
the indemnified party of any action effected with the indemnifying party's
written consent. The indemnifying party shall not, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action or proceeding in respect of which the indemnified party is or could
have been a party and indemnity may be or could have been sought hereunder by
the indemnified party, unless (i) such settlement, compromise or judgment
includes an unconditional release of the indemnified party from all liability
on claims that are the subject matter of such action or proceeding and does
not include a statement as to or an admission of fault or culpability by or on
behalf of the indemnified party and (ii) reasonable prior written notice of
settlement, compromise or judgment is given to the indemnified party.
13. Notices. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent
by prepaid telex, cable or telecopy or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be
deemed given when so delivered by hand, telexed, cabled or telecopied, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(i) if to Holdco,
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
(ii) if to FCG,
FrontLine Capital Group
1350 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx. 00000
Attention: Xxxxx X. Xxxxxxx, General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
J. Xxxxxx Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(iii) if to the Investor,
EOP Operating Limited Partnership
Suite 0000
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Legal Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as any party may from time to time specify by written
notice to the other parties hereto.
14. Interpretation; Exhibits and Schedules. The headings contained in
this Agreement and in any Exhibit to this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. All Exhibits annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized term used in any Exhibit but not otherwise defined
therein shall have the meaning ascribed to it in this Agreement. This
Agreement is gender neutral. Any word in this Agreement that refers to a
particular gender shall also refer to all other genders, including masculine,
feminine and neuter.
15. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
16. Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter, except insofar as it relates to the Break-Up Fee specified in
the Term Sheet, dated April 26, 2000. The parties hereto shall not be liable
or bound to any other party in any manner by any representations, warranties
or covenants relating to such subject matter except as specifically set forth
herein.
17. Brokers. Each party hereto hereby represents and warrants that no
brokers or finders have acted for such party in connection with this
Agreement.
18. Severability. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision hereof (or the
remaining portion thereof) or the application of such provision to any other
persons or circumstances.
19. Consent to Jurisdiction. The Investor and FCG agree to commence any
action, suit or proceeding arising out of this Agreement or transactions
contemplated hereby against the other party either in a federal court located
in the State of New York or if such suit, action or other proceeding may not
be brought in such court for jurisdictional reasons, in a New York state
court. Each party to this Agreement submits and consents to personal
jurisdiction in any such litigation. The Investor and FCG further agree that
service of any process, summons, notice or document delivered by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to jurisdiction in this
Section 18. The Investor and FCG irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (i) any New York
state court or (ii) any federal court located in the State of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT.
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
FRONTLINE CAPITAL GROUP
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
HQ GLOBAL HOLDINGS, INC.
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Vice President, General Counsel
and Secretary
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust,
its managing general partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
and Chief Legal Counsel
SCHEDULE 2(c)
-------------
Nothing
SCHEDULE 2(d)
-------------
CAPITAL STOCK OF THE COMPANY
1. Section 5 of the Stockholders Agreement, dated as of the date hereof
(the "CarrAmerica Stockholders Agreement"), by and among FrontLine
Capital Group, HQ Global Holdings, Inc. and CarrAmerica Realty
Corporation contains Participation Rights granting CarrAmerica the
right to purchase its "pro rata share" of any issuance by the
Company of equity securities (subject to certain qualifications).
2. Section 5 of the Stockholders Agreement, dated the date hereof, by
and among FrontLine Capital Group, HQ Global Holdings, Inc. and
certain holders of Series A Preferred Stock contains Participation
Rights granting holders of Series A Preferred Stock the right to
purchase their "pro rata share" of any issuance by the Company of
equity securities (subject to certain qualifications).
3. Warrants to purchase 2,143,332 shares of Common Stock (subject to
antidilution rights), dated the date hereof, issued to holders of
Series A Preferred Stock.
4. Warrants to purchase 1,498,538 shares of Common Stock (subject to
antidilution rights), dated the date hereof, issued to UBS AG
Stamford Branch.
5. Warrant Agreement dated as of March 4, 1998 by and between
OmniOffices, Inc. and Xxxxxx X. Arcoro for the purchase of 100,000
shares at $20.00 per share. Mr. Arcoro has exercised his warrant for
99,000 shares. Only 1,000 shares remain subject to this agreement.
6. Warrant Agreement dated as of March 4, 1998 by and between
OmniOffices, Inc. and Xxxxxx Xxxxxxxx for the purchase of 85,000
shares at $20.00 per share. Xx. Xxxxxxxx has exercised his warrant
for 50,000 shares. Only 35,000 shares remain subject to this
agreement.
7. Warrant Agreement dated as of March 4, 1998 by and between
OmniOffices, Inc. and Xxxxxxxx X. Xxxxxx for the purchase of 32,500
shares at $20.00 per share.
8. Warrant Agreement dated as of March 4, 1998 by and between
OmniOffices, Inc. and Xxxxxx X. Xxxxxx, Xx. for the purchase of
32,500 shares at $20.00 per share.
o The Company is obligated to have authorized and in reserve the
shares of common stock receivable upon exercise of each of the
warrants under the Warrant Agreements.
o In the event the Company issues non-voting common stock of the
Company that is less than fair market value (other than stock
options or restricted stock pursuant to stock options plans) the
warrantholders are entitled to an adjustment of the warrant
shares purchasable under the Warrant.
o The Warrant Agreements contain antidilution provisions that are
triggered by distributions to holders of equity capital stock
(dividends) and the repurchase of common stock by the Company of
common stock at a price that is greater than the fair market
value of common stock on the date of the repurchase.
9. Purchase Right Agreement, dated as of March 4, 1998, by and among
OmniOffices, Inc., Xxxxxx X. Arcoro and Xxxxxx Xxxxxxxx pursuant to
which if immediately prior the first date on which 20% or more of
the outstanding shares of common stock of the Company have been
publicly distributed or registered and such shares are publicly
traded on a national exchange or over-the-counter market, the debt
ratio is less than 55.0% (the Company is obligated to offer the
warrantholders the right to purchase up to an aggregate of 6,818
shares of common stock of the Company per percentage point below the
55.0% (subject to the adjustments set forth in Section 5(a) of the
Warrant Agreement). This Purchase Right is subject to antidilution
protection for the benefit of the Company pursuant to Section 10 of
the CarrAmerica Stockholders Agreement.
10. [Xxxx Xxxxx holds rights to receive 120,000 shares of Class B
Non-Voting Stock and 300,000 options to acquire Non-Voting Common
Stock pursuant to his employment contract. These rights accelerate
in vesting upon a change in control.]
11. Pursuant to the Merger Agreement, at the effective time of the
Merger, each outstanding option to purchase shares of VANTAS Common
Stock granted under the VANTAS 1996 Stock Option Plan (the "VANTAS
1996 Stock Options"), is automatically amended to constitute an
option to acquire the number of shares of Voting Common Stock of the
Company as the holder of such VANTAS 1996 Stock Option would have
been entitled to receive as Merger Consideration in the Merger had
such holder exercised such VANTAS 1996 Stock Option (free of and
without regard to any limitation on the vesting of the right to
exercise such VANTAS 1996 Stock Option) immediately prior to the
effective time of the Merger at an exercise price equal to the
quotient of (a) the applicable exercise price for each such VANTAS
1996 Stock Option immediately prior to the effective time of the
Merger divided by (b) the Conversion Ratio.
The following is a list of options granted under the VANTAS 1996
Stock Option Plan that are subject to the foregoing:
o 36,750 Options at an exercise price of $2.00
o 250 Options at an exercise price of $4.75
o 40,458 Options at an exercise price of $4.00
12. As soon as practicable following the effective time of the Merger,
Xx. Xxxx Xxxxx and Xx. Xxxxx Xxxxxx will receive options to purchase
common stock of the Company with a value equal to 6X and 4X,
respectively, of their respective Base Compensation, or $3,600,000
or $1,600,000, respectively, which will become exercisable over a
four-year period (37.5% after 18 months, then 12.5% every 6 months
up to 100% in total, provided in each case that the executive is
still employed by the Company on the applicable vesting date). The
exercise price per share will equal the per share valuation used for
purposes of the Merger.
13. As soon as practicable following the effective time of the Merger,
Xx. Xxxxx and Xx. Xxxxxx will receive a grant of restricted common
stock in the Company with a value equal to 2.5X and 1.5X,
respectively, of their respective Base Compensation, or $1,500,000
or $600,000, respectively, which will become vested over a four-year
period (37.5% after 18 months, then 12.5% every 6 months up to 100%
in total, provided in each case that the executive is still employed
by the Company on the applicable vesting date).
14. It is anticipated that options and restricted stock with respect to
3% and 1%, respectively, of the outstanding common and preferred
stock of the Company will be issued in connection with employee
incentive compensation.
SCHEDULE 5(c)
HQ Global Holdings, Inc: Outstanding Indebtedness
-------------------------------------------------
Existing Letters of Credit
XX Xxxxxx Letters of Credit
---------------------------
LC# Letter of Credits Issued Beneficiary Maturity Date
868684 $ 828,630 RCPI Trust 6/1/01
868814 $ 500,000 W12/14 Wall Acquisition 6/4/01
Associates L.L.C.
868611 $ 800,000 405 Lexington, L.L.C. 6/23/01
868619 $1,327,000 Charleston Landings Associates L.P. 7/1/01
868877 $ 684,000 Xxx 000 Xxxx, X.X.X. 0/0/00
000000 $ 450,000 Petula Associates, LTD 10/21/00
868896 $ 635,850 Praedium II Broadstone 10/29/00
868931 $1,715,980 Paramount Group, Inc. 11/10/00
868934 $ 800,000 Xxxxxx Xxxxx Xxxx Xxxxxx 00/00/00
000000 $ 526,837.50 000 Xxxxxxxx Owners L.L.C. 12/31/00
868806 $ 800,000 000 Xxxxxx Xxxxxx 12/31/00
868944 $ 600,000 Commerce Plaza Partners 1/24/01
868943 $ 450,000 Cornerstone Two L.C.C. 1/27/01
Total letters of credit issued to XX Xxxxxx $10,118,297.50
Schedule 5(c)
(continued)
First Union Letters of Credit
Subsidiary Issuing Bank LC# Stated Amount Beneficiary Expiry Date
OmniOffices, Inc. First Union S147299 $ 37,192.04 Weeks Realty, L.P. May 31, 2000
OmniOffices, Inc First Union S139489 $ 148,000.00 Connecticut General Life Ins. April 30, 2000
Co.
OmniOffices, Inc First Union S145655 $ 46,000.00 Equitable Life Assurance December 21, 0000
Xxxxxxx xx XXX, Xxxxxx, XX
OmniOffices, Inc First Union S402898 $ 50,000.00 Xxxxx & Company August 31, 0000
XX Xxxxxxxx Xxxxxxx xx Xxxxx Xxxxx X000000 $ 600,000.00 Fairview Associates August 31, 2000
North Carolina, Inc.
OmniOffices, Inc First Union S116794 $ 24,221.33 American National Bank & Trust June 30, 2000
Co. of Chicago
OmniOffices, Inc First Union S108660 $ 240,000.00 Trizechahn Office Holdings August 31, 2000
OmniOffices, Inc First Union S402416 $ 16,000.00 Xxxxxxx Realty I Ltd. June 30, 2000
OmniOffices, Inc First Union SM408124C $ 31,751.76 EOP-Westchase Office Properties May 30, 2000
Trust
OmniOffices, Inc First Union S063275 $ 140,000.00 Realty Xxxxxxx Xxxxx 00, 0000
XxxxXxxxxxx, Inc First Union SM408488C $ 50,000.00 OTR January 31, 2000
Executive Office First Union S163998 $ 775,000.00 Park Avenue Properties October 15, 2000
Network, Ltd.
OmniOffices, Inc First Union S403D44 $ 180,000.00 Xxxxx Management Corp. May 1, 2000
OmniOffices, Inc First Union S101387 $ 750,000.00 Madison Avenue Associates August 30, 2000
OmniOffices, Inc First Union S114735 $ 33,124.05 Xxxxxxx Realty I Ltd. April 30, 2000
OmniOffices, Inc First Union S104374 $ 160,000.00 DRW Chesterbrook Associates November 1, 2000
OmniOffices, Inc First Union S139498 $ 40,000.00 Metro Corp Center, LLC January 31, 2000
OmniOffices, Inc First Union SM408720C $ 250,000.00 Xxxxxxx Properties, LP August 30, 2000
Kiowa, Inc. First Union S151696 $ 800,000.00 Shorenstein Management, Inc. April 15, 2000
OmniOffices, Inc First Union S111557 $ 150,000.00 Acquiport Corp. Ridge, Inc. February 20, 2000
First Union S132017 $ 70,000.00 Airlines Reporting Corp. September 30, 2000
Total Letter of Credit for First Union $4,591,289.18
