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EXHIBIT 10.11
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of May 31, 2000, by and between FrontLine
Capital Group, a Delaware corporation ("FCG"), and Fortress HQ LLC, a Delaware
limited liability company (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 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 and Omni
Offices (Lux) 1929 Holding Company S.A. (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 HQ Global Holdings, Inc., a Delaware corporation ("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 ("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.
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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, the 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, 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) FCG agrees to sell to the Investor, and the
Investor agrees to purchase from FCG, for $45 million (the "Purchase Price") (A)
1,103,698.157 newly issued shares of Preferred Stock (the "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
$45 million and (B) warrants to purchase up to 494,615.077 shares of Voting
Common Stock (the "Warrants"), the terms of which are in the form attached as
Exhibit B hereto in respect of Warrants to purchase 333,546.462 shares of Common
Stock (the "Initial Warrants") and in Exhibit C hereto in respect of Warrants to
purchase 161,068.615 shares of Common Stock.
(b) 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 5 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, FCG shall notify the Investor prior to the close of the
business on the business day immediately preceding the Closing Date. On the
Closing Date, (i) FCG 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 May
31, 2000 (the "Escrow Agreement"), for payment to FCG; 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 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
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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) Preferred Shares and Warrants. (A) The Preferred Shares
have been duly authorized for issuance by Holdco pursuant to the terms of the
Exchange 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 3 of the Exchange Agreement
will be issued in compliance with the registration and qualification
requirements of all applicable federal securities laws as presently in effect.
The Warrants have been duly authorized for issuance by Holdco pursuant to the
terms of the Exchange 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.
(B) On the Closing Date, FCG will be the sole record and
beneficial owner and holder of the Preferred Shares and the 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 Preferred Shares
and the 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 Preferred Shares or the
Warrants. At the Closing, none of the Preferred Shares or the Warrants will be
transferred to FCG in violation of (i) the Securities Act of 1933, as amended
(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
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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.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to FCG 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, that certain
Registration Rights Agreement, in the form attached as Exhibit D hereto (the
"Registration Rights Agreement"), and that certain
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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 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 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
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 Preferred Shares and
the Warrants for an indefinite period of time. The Investor has received the
opportunity to ask questions, and has obtained the related answers, regarding
the business,
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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. FCG has informed the Investor that the Preferred Shares and the
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. FCG has also informed the Investor that any routine sale of Preferred
Shares and 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
Preferred Shares and Warrants, as applicable, resale thereof may require
compliance with some other exemption under the Securities Act prior to resale.
FCG 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, AS ARE REASONABLY
REQUESTED AND ACCEPTABLE TO THE CORPORATION."
4. 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 Preferred Shares and the
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. FCG shall cooperate with the Investor, and the Investor shall cooperate
with 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
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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 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) FCG's Obligation. The obligations of FCG hereunder are
subject to the satisfaction (or waiver by FCG) 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 representations and warranties set forth in Sections
3(b) and 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 time of Closing. At the Closing, the Investor shall have delivered to FCG a
certificate, dated the Closing Date and signed by a representative of the
Investor, confirming the foregoing.
(ii) At the Closing, the Investor shall have delivered to
Holdco a 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.
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(v) At the Closing, the Investor shall have deposited the
Purchase Price in immediately available funds with the Escrow Agent.
(c) The 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 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 representations and warranties set forth in Section
2(c) to be true and correct would not have an 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.
(ii) The representations and warranties of Holdco made in the
Exchange Agreement shall be true and correct as of the date of the Exchange
Agreement 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) of the Exchange Agreement to be true and
correct would not have a Holdco Material Adverse Effect (as defined in the
Exchange Agreement) or (3) that the representation and warranty set forth in
Section 2(d) of the Exchange Agreement shall be true and correct other than in
any de minimis respect, the acquisition by FCG of the Preferred Shares and
Warrants pursuant to the Exchange Agreement shall have been consummated, and all
conditions specified in the Exchange Agreement shall have been satisfied, and
there shall have been no waivers to such conditions.
(iii) At the Closing, FCG shall have delivered to the Investor
a secretary's certificate, dated the Closing Date, attesting to the
authorization of FCG 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 FCG's consummation of the transactions
contemplated by this Agreement shall have been made or obtained, as applicable.
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(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 K 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 J 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 K 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, EOP Operating Limited Partnership or an
affiliate thereof shall purchase Preferred Stock and Warrants from Holdco and
FCG for an aggregate amount of $75 million.
(xiv) At the Closing, the Investor shall have received an
executed Management Rights Letter substantially in the form attached as Exhibit
L hereto and an opinion of counsel from Holdco stating that Holdco is an
operating company within the meaning of the Plan Asset Regulations.
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(xv) At the Closing, FCG shall have delivered the Preferred
Shares and the 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 Section 5(a),
Section 5(b) or Section 5(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 reasonable efforts to cause the Closing 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) FCG 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
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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
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 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 at the Closing.
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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 FCG set
forth in Section 2 or of Holdco in Section 2 of the Exchange Agreement, (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 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 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) 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)
11
12
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 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 FCG or Holdco, as the case may be, of the representations and
warranties set forth in Section 2 of this Agreement or Section 2 of the Exchange
Agreement, respectively. 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
12
13
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.
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 FCG,
FrontLine Capital Group
1350 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx. 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxxxxx, Xx., Esq.
J. Xxxxxx Xxxxxxx, Esq.
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
13
14
(ii) if to the Investor,
Fortress Investment Group LLC
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Financial Officer
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.
14
15
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 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.
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.,
solely as to its express obligations
under Section 11
By:
---------------------------------
Name:
Title:
FORTRESS HQ LLC
By:
---------------------------------
Name:
Title:
16
17
SCHEDULE 2(C)
Nothing
18
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
19
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
2
20
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.
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 Tst 300 Park, L.L.C. 9/1/00
----------------------------------------------------------------------------------------------------------------------
868897 $ 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 Ranch Town Center 12/23/00
----------------------------------------------------------------------------------------------------------------------
868805 $ 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, 2000
------------------------------------------------------------------------------------------------------------------------------------
HQ Business Centers of First Union S148598 $ 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 Bancorp March 15, 2000
------------------------------------------------------------------------------------------------------------------------------------
OmniOffices, 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
