SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 13, 2000
FRONTLINE CAPITAL GROUP
(Exact name of Registrant as specified in its Charter)
Delaware 0-30162 11-3383642
(State of Incorporation) (Commission File Number) (IRS Employer Id. Number)
1350 Avenue of the Americas 10019
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 931-8000
(Registrant's telephone number, including area code)
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Item 5. Other Events
On December 13, 2000, FrontLine Capital Group (the "Company") announced
that it had closed on a $25 million preferred equity facility (the "Facility")
with Deutsche Bank Sharps Pixley Inc. (the "Purchaser"), an affiliate of
Deutsche Bank AG, of which an initial $15 million was drawn upon on the date
of the closing. The Company may, at its option (subject to customary
conditions), draw upon the remaining $10 million on or prior to February 12,
2001.
The Facility is comprised of a new series of preferred stock designated as
the Company's 9.25% Series B Convertible Cumulative Preferred Stock, liquidation
preference $1,000 per share (the "Series B Preferred Stock"). The Series B
Preferred Stock may be redeemed at the Company's option at a premium (as
described below) prior to December 13, 2001. Quarterly dividends accrue during
this twelve-month period at an annual rate of 9.25%, but are not payable if the
Series B Preferred Stock is redeemed prior to December 13, 2001. While the
Series B Preferred Stock is outstanding, the holders have consent rights for
certain significant transactions.
The Series B Preferred Stock includes a redemption premium that gradually
increases from an initial rate of 6.0% for the first three months to a maximum
rate of 27.5% after eleven months. If the Series B Preferred Stock is not
redeemed prior to December 13, 2001, (i) the Series B Preferred Stock
(including the amount of the redemption premium) becomes convertible at the
holder's option into the Company's common stock at the rate of $13.3875 per
share, (ii) the Series B Preferred Stock becomes a voting security on an
"as-converted" basis and (iii) quarterly dividends become payable from the
date of initial issuance at the annual rate of 9.25%. The Series B Preferred
Stock has a mandatory redemption requirement after five years at a 27.5%
premium, although certain capital events or uncured events of default would
accelerate this period. The Company also granted certain registration rights
to holders of the Series B Preferred Stock.
Under the terms of the Facility, the Company paid a placement fee equal
to 3% of the total amount of the Facility.
Item 7. Financial Statements and Exhibits
(c) Exhibits
4.1 Certificate of Designation of the powers and preferences and
other special rights of the Company's 9.25% Series B Convertible
Cumulative Preferred Stock, dated December 13, 2000.
4.2 Form of Series B Preferred Stock certificate (attached as Exhibit
A to Exhibit 4.1)
10.1 Securities Purchase Agreement, dated as of December 13, 2000, by
and between FrontLine Capital Group (the "Company") and Deutsche
Bank Sharps Pixley Inc. (the "Purchaser").
10.2 Registration Rights Agreement, dated as of December 13, 2000, by
and between the Company and the Purchaser.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRONTLINE CAPITAL GROUP
By: /s/ Scott H. Rechler
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Scott H. Rechler
President and Chief
Executive Officer
Date: December 15, 2000
