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EXHIBIT 10.2
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of August 11, 2000, by and among HQ Global
Holdings, Inc., a Delaware corporation ("Holdco"), FrontLine Capital Group, a
Delaware corporation ("FCG"), and ____________, a Delaware limited liability
company (the "Investor").
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 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"), by and among HQ
Global Workplaces, Inc. ("Old HQ"), CarrAmerica Realty Corporation
("CarrAmerica"), VANTAS Incorporated ("VANTAS") and Reckson Service Industries
Inc.
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 $________ (the "Purchase Price")
(A) ___________ newly issued shares of Series A Convertible Cumulative Preferred
Stock (the "Preferred Shares"), the terms of which are contained in the amended
and restated certificate of designations to Holdco's certificate of
incorporation (the "Amended and Restated Certificate of Designations") in the
form attached as Exhibit A hereto, having an initial liquidation preference
equal to $ ________ and (B) warrants (the "Warrants") to purchase up to
_________ shares of voting common stock, par value $.01 per share (the "Voting
Common Stock"), the terms of which are in the form attached as Exhibit B hereto
in respect of Warrants to purchase __________ shares of Voting Common Stock (the
"Initial Warrants") and in Exhibit C hereto in respect of Warrants to purchase
___________ shares of Voting Common Stock (the "Subsequent Warrants").
(b) 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, on August 11, 2000 (the
"Closing Date"), subject to the satisfaction or waiver of the conditions set
forth in Section 5 hereof. On the Closing Date, (i) Holdco shall deliver
certificates issued in the Investor's name representing the Preferred Shares and
the Warrants, and (ii) the Investor shall deposit the Purchase Price in
immediately available funds with Citibank, N.A., as escrow agent (the "Escrow
Agent") under the Escrow Agreement, dated as of August 11, 2000 (the "Escrow
Agreement"), for payment to Holdco; it being understood that the closing shall
occur, and the Preferred Shares, Warrants and 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),
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respectively, of the Merger Agreement (it being understood that references to
Old HQ and VANTAS in such sections shall be, in the aggregate, to Holdco and its
subsidiaries where the context so requires) are true and correct with the same
force and effect as though made at and as of the date hereof except with respect
to those representations and warranties that can not be reaffirmed as of the
date hereof due solely to the consummation of the Merger (as such term is
defined in the Merger Agreement), which such representations are reaffirmed as
of the date hereof as having been true and correct as of June 1, 2000. 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, that certain Amended and Restated
Registration Rights Agreement, in the form attached as Exhibit D hereto (the
"Registration Rights Agreement"), and the Amended and Restated 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 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 Stockholders Agreement have each been, and, on the Closing
Date, the Registration Rights Agreement will have 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 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
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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 Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any national securities or commodities exchange or other regulatory
or self-regulatory body or association (a "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 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. On the Closing Date, there shall only be 9,972,827
shares of Voting Common Stock, 2,152,988 shares of Nonvoting Common Stock and
5,395,858 Preferred Shares issued and outstanding. All of the outstanding shares
of Common Stock have been validly issued and outstanding, fully paid and
nonassessable. On the Closing Date, (i) the Total Initial Warrants (as such term
is defined in the Written Consent and Waiver by the Holders of Series A
Convertible Cumulative Preferred Stock of HQ Global Holdings, Inc., dated as of
the date hereof (the "Written Consent")) entitle the holders thereof to purchase
1,757,630 shares of the Common Stock of Holdco, representing 8.8846% of the
shares of Common Stock of Holdco on a fully diluted basis after taking into
account the number of shares of Common Stock issuable upon conversion of the
5,395,858 Preferred Shares at a conversion price of $40.772017 per share and the
number of shares of Common Stock issuable upon the exercise of the Total Initial
Warrants and the Mezzanine Warrants (as such term is defined in the Written
Consent) for the purchase of 503,545 shares of Common Stock initially
exercisable on the date hereof (the "Initial Mezzanine Warrants"), and (ii) the
Total Subsequent Warrants (as such term is defined in the Written Consent) will
entitle the holders thereof to purchase 862,776 shares of the Common Stock of
Holdco, representing, together with the Total Initial Warrants, 12.6923% of the
shares of Common Stock of Holdco on a fully-diluted basis after taking into
account the number of shares of Common Stock issuable upon conversion of the
5,395,858 Preferred Shares at a conversion price of $40.772017 per share and the
number of shares of Common Stock issuable upon the exercise of the Total Initial
Warrants, the Total
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Subsequent Warrants and the Initial Mezzanine Warrants. 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 Preferred Shares have been duly
authorized for issuance by Holdco pursuant to the terms of this Agreement and,
on the Closing Date, (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 3 will be issued in compliance with the
registration and qualification requirements of all applicable federal securities
laws as presently in effect.
(f) Warrants. The Warrants have been duly authorized for
issuance by Holdco pursuant to the terms of this Agreement and, on the Closing
Date, 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 Preferred Shares or upon exercise of the Warrants have been
duly authorized by Holdco and, when issued and delivered in accordance with the
terms of the Preferred Shares or 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
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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 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 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 the Investor. The Investor hereby
represents and warrants to Holdco as follows:
(a) Organization and Standing. The Investor is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Investor and its subsidiaries have all
requisite limited liability company 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 limited
liability company 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 limited liability company 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
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Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly and properly taken. This Agreement and the Stockholders
Agreement have each been, and, on the Closing Date, the Registration Rights
Agreement will have 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 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 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 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
Preferred Shares and 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
Preferred Shares, and 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 Preferred Shares and the Warrants. The Investor has received
all of the information regarding Holdco, VANTAS and Old HQ that it has
requested. Holdco has informed the Investor that the Preferred Shares and
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 has also informed the Investor that any routine sale of
Preferred Shares and Warrants made in
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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 Preferred Shares and Warrants, as
applicable, resale thereof may require compliance with some other exemption
under the Securities Act prior to resale. Holdco has informed the Investor that
certificates representing the Preferred Shares and 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."
4. Covenants.
(a) 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 of the transaction to which this Agreement relates
to occur upon the terms and conditions set forth herein. Holdco shall cooperate
with the Investor, and the Investor shall cooperate with Holdco, 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.
(b) 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 any shares of Series A
Convertible Cumulative Preferred Stock (the "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) FrontLine Capital Group, (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.
5. 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 Date of the following
conditions: (i) no statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
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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 (ii) 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. The obligations of Holdco hereunder
are subject to the satisfaction (or waiver by Holdco) as of the Closing Date 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 Closing Date 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(d)
to be true and correct would not have an 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
Closing Date. On the Closing Date, the Investor shall have delivered to Holdco a
certificate, dated the Closing Date and signed by an officer of the Investor,
confirming the foregoing.
(ii) On the Closing Date, the Investor shall have
delivered to Holdco 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 Date, the Investor shall have
executed and delivered to Holdco 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 Date, the Investor shall have
deposited the 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 Date 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 Date as though made as of such time, except (1) to the
extent such representations and warranties expressly
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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 Closing Date. On the Closing Date, Holdco shall have delivered to the
Investor a certificate, dated the Closing Date and signed by an officer of
Holdco, confirming the foregoing.
(ii) At the Closing Date, Holdco 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.
(iii) Since the date of this Agreement, Holdco and
its subsidiaries taken as a whole shall not have suffered a Holdco Material
Adverse Effect.
(iv) All filings, registrations, authorizations,
permits, consents and approvals required for Holdco's consummation of the
transactions contemplated by this Agreement shall have been made or obtained, as
applicable.
(v) On the Closing Date, Holdco shall have executed
and delivered to the Investor the Registration Rights Agreement and (assuming
due execution and delivery by the other parties thereto) the same shall be in
full force and effect.
(vi) On or prior to the Closing Date, Holdco shall
have received an executed copy of each of the Note and Warrant Purchase
Agreement, attached hereto as Exhibit F, and, on the Closing Date, except as
disclosed in Schedule 5(c), no other indebtedness of Holdco for borrowed money
shall be outstanding.
(vii) On or prior to Closing Date, the Certificate of
Designations in the form of Exhibit A hereto shall have been accepted for filing
by, and duly filed with, the Secretary of State of the State of Delaware.
(viii) On the Closing Date, the Investor shall have
received the favorable opinion, dated the Closing Date, of Xxxxx & Wood LLP,
counsel to Holdco, substantially in the form attached as Exhibit G hereto.
(ix) On the Closing Date, Holdco shall have delivered
the Preferred Shares and Warrants to the Investor.
(d) Frustration of Closing Conditions. The Investor may not
rely on the failure of any condition set forth in Sections 5(a), (b) or (c),
respectively, to be satisfied if such failure was caused by such party's failure
to perform its obligations hereunder or to use its commercially
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reasonable efforts to cause the closing of the transaction to which this
Agreement relates to occur as required by Section 5.
6. 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.
7. Assignment. This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by (i) Holdco without the prior written
consent of the Investor or (ii) by the Investor without the prior written
consent of Holdco. Any attempted assignment in violation of this Section 7 shall
be void ab initio and of no further force and effect.
8. 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.
9. 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.
10. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in the
certificates of officers of 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 Date. Notwithstanding anything to the contrary contained in the
foregoing, nothing in this Section 10 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 on the Closing Date.
11. Indemnification.
(a) Indemnity by FCG and Holdco. FCG and Holdco, jointly and
severally, shall indemnify the Investor and its affiliates, controlling persons,
constituent partners and subsidiaries and their directors, officers, members,
employees, attorneys and representatives 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 in
Section 2, (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,
10
11
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 11(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) 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 June 1, 2000
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) of 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 3; 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
11
12
person indemnified under this Section 11(b) as determined by a court of
competent jurisdiction in a final, non-appealable judgment or (B) a breach by
Holdco of the representations and warranties set forth in Section 2 of this
Agreement. Under no circumstances shall the Investor be liable to FCG, Holdco or
any other indemnified party under this Section 11(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 11(a) or 11(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 11 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
12
13
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.
12. 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
with copies to:
Xxxxx & Xxxx 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,
-------------------------------
-------------------------------
----------
New York, New York
--------
Tel: (212)
----------------
Fax: (212)
----------------
Attn: Chief Financial Officer
13
14
with copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxx Israel
Xxxxxx X. Xxxxxxxx
or such other address as any party may from time to time specify by written
notice to the other parties hereto.
13. 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.
14. 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.
15. 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. 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.
16. Brokers. Each party hereto hereby represents and warrants that no
brokers or finders have acted for such party in connection with this Agreement.
17. 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.
18. Consent to Jurisdiction. The Investor agrees 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
14
15
litigation. The Investor further agrees 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 irrevocably and
unconditionally waives 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.
19. 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.
15
16
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:
------------------------------
Name:
Title:
HQ GLOBAL HOLDINGS, INC.
By:
------------------------------
Name:
Title:
-------------------
By:
------------------------------
Name:
Title:
17
SCHEDULE 2(c)
Nothing
18
SCHEDULE 2(d)
CAPITAL STOCK OF THE COMPANY
1. Section 5 of the Stockholders Agreement, dated as of May 31,
2000 (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 Amended and Restated 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 May 31, 2000, and warrants to
purchase 477,073.908 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 (upon the closing of the purchase and sale
of the securities referred to in Section 1(a) of the
Agreement, these warrants will be canceled and the Mezzanine
Warrants for the purchase of 503,545 shares of Common Stock
(subject to antidilution rights) will be issued to Blackstone
Mezzanine Partners L.P. and other lenders).
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.
19
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. 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
2
20
o 250 Options at an exercise price of $4.75
o 40,458 Options at an exercise price of $4.00
11. 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.
12. 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).
13. 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.
3
21
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 Associates 6/4/01
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
22
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
