SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2000
VANTAS INCORPORATED
(Exact name of Registrant as specified in its Charter)
Nevada
(State of Incorporation)
0-18274 13-3353508
(Commission File Number) (IRS Employer Id. Number)
90 Park Avenue
New York, New York 10016
(Address of principal executive offices) (Zip Code)
(212) 907-6400
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
VANTAS Incorporated (the "Company") has extended the outside closing date
of its merger with and into HQ Global Workplaces, Inc. ("HQGW"), and all
related transactions from April 30, 2000 to May 31, 2000. In connection with
this extension, the deposit was increased from $35 million to $47.5 million
and $2.5 million was paid to CarrAmerica Realty Corporation and the other
stockholders of HQGW who are to receive cash pursuant to the merger.
As indicated above, the merger is scheduled to close on or prior to May
31, 2000. However, there can be no assurance that the financing required under
the merger agreement will be successfully obtained or that the merger will be
consummated.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10.1 First Amendment to Agreement and Plan of Merger by and among VANTAS
Incorporated and FrontLine Capital Group (formerly known as Reckson
Services Industries, Inc.), on the one hand, and HQ Global
Workplaces, Inc. and CarrAmerica Realty Corporation, on the other
hand.
10.2 First Amendment to the Stock Purchase Agreement by and between
CarrAmerica Realty Corporation and FrontLine Capital Group (formerly
known as Reckson Services Industries, Inc.)
10.3 First Amendment to the Stock Purchase Agreement by and between
CarrAmerica Realty Corporation, OmniOffices (UK) Limited,
OmniOffices (Lux) 1929 Holding Company S.A., VANTAS Incorporated and
FrontLine Capital Group (formerly known as Reckson Services
Industries, Inc.)
99.1 Press Release
<PAGE>
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.
VANTAS INCORPORATED
By: /s/ David Rupert
---------------------------
David Rupert
Chief Executive Officer
Date: May 12, 2000
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment")
is entered into as of April 29, 2000 by and among VANTAS Incorporated, a
Nevada corporation ("VANTAS"), and FrontLine Capital Group, a Delaware
corporation (formerly known as Reckson Services Industries, Inc.) ("RSI"), on
the one hand, and HQ Global Workplaces, Inc., a Delaware corporation (the
"Company"), and CarrAmerica Realty Corporation, a Maryland corporation
("CarrAmerica"), on the other hand.
W I T N E S S E T H
WHEREAS, VANTAS and RSI, on the one hand, and the Company and
CarrAmerica, on the other hand, have executed the Agreement and Plan of Merger
dated as of January 20, 2000 (such agreement, as heretofore, hereby or
hereinafter amended, the "Merger Agreement") pursuant to which VANTAS is to
merge with and into the Company, with the Company being the Surviving
Corporation;
WHEREAS, VANTAS, RSI, the Company and CarrAmerica have executed an
Agreement dated as of March 13, 2000, as amended, pursuant to which such
parties agreed to authorize certain actions governed by the Merger Agreement;
WHEREAS, the parties hereto wish to amend the Merger Agreement as
provided herein; and
WHEREAS, capitalized terms used herein but not defined herein shall have
the meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the aforesaid and the respective
representations, warranties, covenants and agreements hereinafter set forth,
the parties, intending to be legally bound, agree as follows:
A. AMENDMENTS TO MERGER AGREEMENT
The Merger Agreement is hereby amended as follows:
1. The fifth WHEREAS clause of the Merger Agreement is hereby deleted in
its entirety and replaced by the following:
"WHEREAS, immediately following the consummation of the HQ Merger and the
transactions contemplated by the Stock Purchase Agreement and the UK
Agreement, the Company (being sometimes referred to as the "HQ Surviving
Corporation" following the HQ Merger) will merge (the "Second Step
Merger") with and into a to-be formed Delaware corporation ("M Sub") that
will be a wholly-owned subsidiary of another to-be formed Delaware
corporation ("Holdco"), which will be wholly-owned by the Company,
pursuant to the terms and conditions of an Agreement and Plan of Merger
(the "Second Step Plan of Merger"), substantially in the form of Exhibit
A to this Agreement, with M Sub being the surviving corporation (being
sometimes referred to as the "Second Step Surviving Corporation") in the
Second Step Merger."
2. The reference to "Holdco" in the first sentence of Section 4(c) of the
Merger Agreement is hereby deleted and replaced with "Holdco or M Sub."
3. The second sentence of Section 4(d) of the Merger Agreement is hereby
deleted in its entirety and replaced by the following:
"Except as set forth on Schedule 4(d), upon the filing of the
Recapitalization Amendments and immediately prior to the Effective Time,
the authorized capital stock of the Company shall consist of 75,000,000
shares of Voting Common Stock, 25,000,000 shares of Non-Voting Common
Stock and 7,800,00 shares of preferred stock (the "Company Preferred
Stock"), of which an aggregate of 7,359,526 shares of Voting Common Stock
and Non-Voting Common Stock will be duly authorized and validly issued
and outstanding, fully paid and nonassessable."
4. Section 4(bb) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"(bb)Immediately prior to the Effective Time, each of M Sub and Holdco
will be a corporation duly organized, validly existing and in good
standing under the laws of Delaware. The authorized capital stock of M
Sub will consist of 1,000 shares of voting common stock, par value $.01
per share (the "M Sub Voting Common Stock"), of which 1,000 shares of M
Sub Voting Common Stock will be duly authorized for issuance, and upon
such issuance will be validly issued and outstanding, fully paid and
nonassessable. All such issued and outstanding shares of M Sub Voting
Common Stock will be owned as of record by Holdco. The authorized capital
stock of Holdco will consist of 75,000,000 shares of voting common stock,
par value $.01 per share ("Holdco Voting Common Stock"), 25,000,000
shares of Class C convertible non-voting common stock, par value $.01 per
share ("Holdco Non-Voting Common Stock") and 7,800,000 shares of
preferred stock, par value $.01 per share ("Holdco Preferred Stock"), and
the shares of Holdco capital stock issued pursuant to the Second Step
Merger will be validly issued and outstanding, fully paid and
nonassessable. Prior to the effective time of the Second Step Merger,
only Holdco Voting Common Stock will be issued and outstanding and all of
such outstanding shares will be owned of record by the Company."
5. Section 6(i) of the Merger Agreement is hereby deleted in its entirety
and replaced by the following:
"(ii) M Sub and Holdco. The Company shall cause the formation of each of
Holdco and M Sub by filing with the Secretary of State of the State of
Delaware a certificate of incorporation in substantially the form of
Exhibit K-1 to this Agreement for Holdco (the "Holdco Charter") and a
certificate of incorporation for M Sub (the "M Sub Charter") in
substantially the form of Exhibit K-2 to this Agreement, and shall cause
each of M Sub and Holdco to adopt by-laws, in substantially the form of
Exhibits K-3 and K-4, respectively, to this Agreement. The Company shall
cause M Sub and Holdco to have a sufficient number of shares of M Sub
Voting Common Stock, Holdco Voting Common Stock and Holdco Non-Voting
Common Stock to be authorized and unissued to effectuate the terms and
conditions of the Second Step Merger. The Company shall cause Holdco to
have a sufficient number of shares of the Holdco Preferred Stock (the
terms and conditions of such Holdco Preferred Stock being set forth in
the Holdco Charter) authorized and unissued to effectuate the terms and
conditions of the exchange contemplated by the term sheet contained in
the Financing Exhibits (as defined herein). Other than (i) the shares of
M Sub Voting Common Stock issued to Holdco, (ii) the shares of Holdco
Voting Common Stock issued to the Company, and (iii) the shares of Holdco
Voting Common Stock and Holdco Non-Voting Common Stock to be issued in
the Second Step Merger, the Company shall cause no additional shares of M
Sub Voting Common Stock, Holdco Voting Common Stock, Holdco Non-Voting
Common Stock or Holdco Preferred Stock to be issued by M Sub or Holdco
prior to Closing."
6. Section 7(k) of the Merger Agreement is hereby deleted in its entirety
and replaced by the following:
"Upon consummation of the HQ Merger, the UK Agreement and the Stock
Purchase Agreement, the HQ Surviving Company shall make the necessary
filings with the Secretary of State of the State of Delaware as
contemplated by Section 251(g) of the Delaware General Corporation Law to
effect the merger of HQ Global with and into M Sub."
7. Section 9(b)(iv) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"The Indemnification and Escrow Agreement, by and among certain
stockholders, warrantholders and optionees who are electing to sell at
least 4,000 options to purchase shares of common stock of the Company who
hold their shares, warrants or options in the Company immediately prior
to Closing, RSI and such escrow agent as shall be mutually agreed to by
the parties (the "Indemnification Escrow Agent"), substantially in the
form of Exhibit E hereto (the "Indemnification Escrow Agreement"), shall
have been duly executed and delivered by such stockholders,
warrantholders and optionees, RSI and the Indemnification Escrow Agent
and the shares required to be delivered by RSI pursuant thereto shall
have been delivered to the Indemnification Escrow Agent pursuant
thereto."
8. Section 9(b)(vii) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"The Registration Rights Agreement by and among RSI and certain holders
of shares in Holdco, substantially in the form of Exhibit H hereto (the
"RSI Registration Rights Agreement"), shall have been executed at the
Closing."
9. Section 9(b)(xi) of the Merger Agreement is hereby deleted in its
entirety and replaced by the following:
"(xi) Reckson Associates Realty Corp. ("RA"), or an affiliate thereof,
and RSI, as the case may be, shall have executed and delivered the RA/RSI
Intercompany Agreements, substantially in the form of Exhibits J-1, J-2,
and J-3, respectively, to this Agreement (collectively, the "RSI
Intercompany Agreements")."
10. The number "3,000,000" in Section 9(c)(xiv) of the Merger Agreement
is hereby deleted and replaced with the number "5,100,000."
11. All references to "April 30, 2000" in Sections 14(a)(ii), 14(a)(v)
and 14(a)(vi) of the Merger Agreement are hereby replaced with "May 31, 2000."
12. All references to "May 1, 2000" in Section 14(a)(ii) of the Merger
Agreement are hereby replaced with "June 1, 2000."
13. All references to "May 15, 2000" in Section 14(d) of the Merger
Agreement are hereby replaced with "June 15, 2000."
B. AMENDMENTS TO FORM EXHIBITS AND DISCLOSURE SCHEDULES
The forms of agreements attached as exhibits to the Merger Agreement and
the Disclosure Schedules attached to the Merger Agreement hereby are amended
as follows:
1. Exhibit A to the Merger Agreement is hereby deleted in its entirety
and replaced by Exhibit A attached to this Amendment.
2. Exhibit C to the Merger Agreement is hereby deleted in its entirety.
3. The preamble of the form of Stockholders Agreement attached to the
Merger Agreement as Exhibit D (the "Stockholders Agreement") is hereby deleted
in its entirety and replaced by the following:
"THIS STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of _________,
2000, is made by and among FrontLine Capital Group (formerly known as
Reckson Services Industries, Inc.) ("RSI"), HQ Global Holdings, Inc. (the
"Company"), CarrAmerica Realty Corporation ("CarrAmerica" or the
"Designated Holder") and the undersigned holders of common stock of the
Company (the "Common Stock") (together with CarrAmerica, the "Holders")."
4. The first WHEREAS clause of the Stockholders Agreement is hereby
deleted in its entirety and replaced by the following:
"WHEREAS, RSI and [the/certain] Holders have entered into that certain
Stock Purchase Agreement dated as of January 20, 2000 pursuant to which
RSI is acquiring on the date hereof certain shares of common stock of HQ
Global Workplaces, Inc. ("HQ Global") owned by such Holders (the
"Transaction");"
5. Clause 7.1(a)(iii) of the Stockholders Agreement is hereby deleted in
its entirety and replaced by the following:
"the highest price per share of Common Stock (or the implied value of the
Common Stock in connection with the issuance of any convertible security
of the Company) (subject to future adjustment in the event of stock
splits, stock dividends and other similar events) received by RSI or the
Company in any sale or issuance thereof (i) in connection with the
Transaction or (ii) from and after the date hereof through the last day
of the 2000 Put Period."
6. The preamble of the form of Indemnification and Escrow Agreement
attached to the Merger Agreement as Exhibit E (the "Indemnification
Agreement') is hereby deleted in its entirety and replaced by the following:
"THIS INDEMNIFICATION AND ESCROW AGREEMENT (this "Agreement") is entered
into as of the _______ day of _________ by and among FrontLine Capital
Group (formerly known as Reckson Services Industries, Inc.), a Delaware
corporation ("RSI"), CarrAmerica Realty Corporation, a Maryland
corporation ("CarrAmerica"), and [other shareholders, warrantholders and
optionees of HQ Global Workplaces, Inc. to be added per CarrAmerica'
instructions, collectively the "Shareholders" and individually a
"Shareholder")] and ___________, a ______ corporation, as escrow agent
(the "Escrow Agent") hereunder."
7. The second, third and fourth WHEREAS clauses of the Indemnification
Agreement are hereby deleted in their entirety and replaced by the following:
"WHEREAS, on the date hereof, pursuant to an agreement among
[the/certain] Shareholders and RSI dated as of January __, 2000 (the
"Stock Purchase Agreement"), [certain/each] of the Shareholders are
selling to RSI, and RSI is purchasing from such Shareholders, that number
of the shares of voting common stock, par value $.01 per share, and
non-voting common stock, par value $.01 per share, of HQGW as set forth
in, and subject to the terms and conditions of, the Stock Purchase
Agreement for $____ per share in cash for an aggregate purchase price of
$______ (the "Share Consideration");
WHEREAS, on the date hereof, pursuant to the Merger Agreement, each
issued and outstanding share of (A) common stock, par value $.01 per
share ("VANTAS Common Stock"), of VANTAS shall be converted into the
right to receive $_____ per share in cash and (B) (i) Series A
Convertible Preferred Stock, par value $.01 per share, of VANTAS (the
"Series A Stock"), (ii) Series B Convertible Preferred Stock, par value
$.01 per share, of VANTAS (the "Series B Stock"), (iii) Series C
Convertible Preferred Stock, par value $.01 per share, of VANTAS (the
"Series C Stock"), (iv) Series D Convertible Preferred Stock, par value
$.01 per share, of VANTAS (the "Series D Stock"), and (v) Series E
Convertible Preferred Stock, par value $.01 per share of VANTAS (the
"Series E Stock"), other than shares of Series A Stock, Series B Stock,
Series C Stock, Series D Stock and Series E Stock held in the treasury of
VANTAS, are, by virtue of the Merger and without any action on the part
of the holder thereof, being converted into the right to receive ______
shares of voting common stock of HQGW ("VANTAS' Share Consideration");
WHEREAS, as a condition to the consummation by VANTAS and/or RSI, as
applicable, of the transactions contemplated by the Merger Agreement, the
Stock Purchase Agreement, and that certain Stock Purchase Agreement by
and among VANTAS, RSI, CarrAmerica, OmniOffices (UK) Limited ("Omni UK")
and OmniOffices (Lux) 1929 Holding Company S.A. ("LuxCo") (the "UK
Agreement"), (i) the Shareholders have hereby agreed to indemnify and
hold harmless RSI from and against certain losses related to the Merger
Agreement and the Stock Purchase Agreement, and (ii) CarrAmerica has
hereby agreed to indemnify and hold harmless RSI from and against certain
losses related to the UK Agreement, upon the terms and conditions
provided herein;"
8. The sixth and seventh WHEREAS clauses of the Indemnification Agreement
are hereby deleted in their entirety and replaced by the following:
"WHEREAS, in connection with the Shareholders' indemnification
obligations, the parties have agreed that the Shareholders are depositing
an aggregate of ___ shares of voting common stock of Holdco (the "Voting
Common Stock") and ____ shares of non-voting common stock of Holdco (the
"Non-Voting Common Stock") (collectively, the "Shareholder
Indemnification Shares") and $____________ in cash (the "Shareholder Cash
Collateral") with the Escrow Agent to be held and disbursed by the Escrow
Agent in accordance with this Agreement, with such Shareholder
Indemnification Shares and Shareholder Cash Collateral having an
aggregate initial value of $30,000,000 as of the Closing;
WHEREAS, in connection with RSI's indemnification obligations, the
parties have agreed that RSI is depositing an aggregate of ___ shares of
Voting Common Stock (the "RSI Indemnification Shares," and together with
the Shareholder Indemnification Shares, the "Indemnification Shares")
with the Escrow Agent to be held and disbursed by the Escrow Agent in
accordance with this Agreement, with the RSI Indemnification Shares
having an aggregate initial value of $30,000,000 as of the Closing;"
9. All references to "Surviving Corporation" in the definition of "Direct
Loss" set forth in Section 1 and in Section 2(a) of the Indemnification
Agreement are hereby changed to "Holdco."
10. All references to "Surviving Corporation" or "Surviving Company" set
forth in Sections 5(a), 6(a), 6(b), 6(c), 6(d) and 7(b) of the Indemnification
Agreement are hereby changed to "Second Step Surviving Corporation."
11. All references to "HQGW" in Section 2(a) of the Indemnification
Agreement are hereby changed to "Holdco."
12. Section 3 of the Indemnification Agreement is hereby amended by
adding the following subparagraph (d):
"RSI shall indemnify each of the Shareholder Indemnitees for any Extra
Tax Costs incurred by such Shareholder Indemnitees in connection with the
HQ Merger, the Second Step Merger, and/or the sale of shares by such
Shareholder Indemnitee pursuant to the Stock Purchase Agreement. For
purposes of this Section 3(d), "Extra Tax Costs" shall be defined as (i)
all interest, penalties, and similar charges actually payable by a
Shareholder Indemnitee to any applicable taxing authority with respect to
Extra Taxes attributable to the period ending on the earlier of January
1, 2003 or the date all of such Shareholder Indemnitee's shares of stock
in HQGW not sold pursuant to the Stock Purchase Agreement actually are
sold (in either case, the "Deemed Sale Date"), plus (ii) in the event
that such interest, penalties, and similar charges have not been paid on
or prior to the Deemed Sale Date, all interest, penalties and similar
charges accruing with respect to such interest, penalties and similar
charges until the earlier of the actual date on which the interest,
penalties, and similar charges described in clause (i) are paid or thirty
(30) days following a "final determination" within the meaning of Section
1313 of the Code that the Shareholder Indemnitee is required to pay Extra
Taxes, plus (iii) if and to the extent that a Shareholder Indemnitee is
required to pay any Extra Taxes prior to the applicable Deemed Sale Date,
interest on such Extra Taxes from the date the Shareholder Indemnitee
makes such payment of Extra Taxes to and including the applicable Deemed
Sale Date, computed at a rate equal to the rate applicable under Section
6621 of the Code with respect to underpayments of federal income tax,
plus (iv) an amount equal to all federal, state and local income taxes
(net of the federal income tax benefit, if any, resulting to the
Shareholder Indemnitee from any deduction allowed to such Shareholder
Indemnitee for any such state and local income taxes) required to be paid
by such Shareholder Indemnitee with respect to the payment received
pursuant to this Section 3(d). For purposes of this Section 3(d), "Extra
Taxes" shall be defined as the excess of (i) the amount of all Taxes
(other than stock transfer Taxes) payable (determined as described below)
by a Shareholder Indemnitee by reason of the Second Step Merger and/or
the sale of shares of stock by the Shareholder Indemnitee pursuant to the
Stock Purchase Agreement over (ii) the amount of Taxes (other than stock
transfer Taxes) that would have been payable by such Shareholder
Indemnitee by such reason if (a) the exchange into Holdco Preferred Stock
described on the Financing Exhibits were not to have taken place and (b)
the surviving corporation in the Second Step Merger were the HQ Surviving
Corporation rather than M Sub. The amount of Extra Taxes and the Extra
Tax Costs for purposes of this Section 3(d) shall be determined and
certified to by an independent accountant selected by the applicable
Shareholder Indemnitee, as may be reasonably acceptable to RSI. Extra
Taxes and Extra Tax Costs shall be considered payable for the purposes
hereof on the earlier of (i) the date on which the Shareholder Indemnitee
notifies RSI in writing of any assertion by the Internal Revenue Service,
formal or informal, of a position to the effect that such amounts might
be required to be paid, or (ii) the date on which the Shareholder
Indemnitee delivers to RSI a copy of an opinion of the tax advisor to
such Indemnitee providing that it is more likely than not that the
Shareholder Indemnitee is liable for such Extra Taxes and Extra Tax Costs
(in either case, a "Potential Adverse Determination Date"), unless in
either event RSI notifies such Shareholder Indemnitee in writing within
ten days of the Potential Adverse Determination Date that, pursuant to
the provisions of this section, it will indemnify the Shareholder
Indemnitee for (a) all interest, penalties, and similar charges accruing
with respect to such Extra Taxes and Extra Tax Costs from the Potential
Adverse Determination Date until the earlier of thirty (30) days
following a "final determination" within the meaning of Section 1313 of
the Code that the Shareholder is required to pay Extra Taxes and/or Extra
Tax Costs or ten (10) days following written notice from RSI to such
Shareholder Indemnitee to pay all such Extra Taxes and Extra Tax Costs as
to which a Potential Adverse Determination Date has occurred (in either
case, the "Delayed Payment Date"), and (b) all legal and accounting costs
and expenses incurred in connection with any challenge or assertion by
the Internal Revenue Service (it being understood that the Shareholder
Indemnitee shall not in any event have any duty to contest any such
challenge except, and only to the extent that, RSI bears any and all
costs associated therewith), in which event Extra Taxes and Extra Tax
Costs shall be considered payable for purposes hereof on the Delayed
Payment Date. The obligations of RSI pursuant to this Section 3(d) are in
addition to, and not in lieu of, the obligations of HQ Surviving
Corporation and HQGW under Section 7(j) of the Merger Agreement. The
provisions of Section 5(a), 5(b), 5(c) and 5(d) shall not apply with
respect to this Section 3(d)."
13. Section 4(a)(X) of the Indemnification Agreement is hereby amended by
deleting clause (i) therein in its entirety.
14. Clause 4(b)(Z) of the Indemnification Agreement is hereby amended by
adding the following language at the end of such clause:
", or (iii) arising from, relating to, or otherwise in respect of the
offer or sale of equity securities of HQGW or Holdco to any third party
in connection with the transactions contemplated by the Merger Agreement,
the Stock Purchase Agreement or the UK Agreement; provided that any
recovery under the foregoing shall be reduced by the amount of any claim
of the RSI Indemnitees under Section 4(a) above."
15. The preamble of the form of Registration Rights Agreement attached to
the Merger Agreement as Exhibit G (the "Holdco Registration Rights Agreement")
is hereby deleted in its entirety and replaced with the following:
"THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of ________, 2000 by and among HQ Global Holdings, Inc., a
Delaware corporation (the "Company") [the Company will be formed as a
wholly owned subsidiary of HQ Global immediately prior to the closing
under the Merger Agreement and will become the parent company of M Sub in
connection with the second step merger], and CarrAmerica Realty
Corporation, a Maryland corporation ("Carr") and _____________________
(each, a "Seller" and collectively, including Carr, the "Sellers")."
16. The second paragraph of the Holdco Registration Rights Agreement is
hereby deleted in its entirety and replaced with the following:
"This Agreement is in connection with (i) the Stockholders Agreement of
even date herewith (the "Stockholders Agreement") between the Company, as
issuer of the common stock, par value $[.01] per share (the
"Securities"), FrontLine Capital Group (formerly known as Reckson
Services Industries, Inc.) ("RSI"), Carr and certain other stockholders
of the Company, (ii) the Agreement and Plan of Merger among RSI, VANTAS
Incorporated, a Nevada corporation ("VANTAS"), Carr and HQ Global
Workplaces, Inc., a Delaware corporation ("HQ Global"), (iii) the Stock
Purchase Agreement dated as of January 20, 2000 by and between RSI and
Carr, and (iv) the Stock Purchase Agreement dated as of January 20, 2000
by and among RSI, VANTAS, Carr, OmniOffices (UK) Limited and OmniOffices
(Lux) 1929 Holding Company S.A.. In order to induce the Sellers to
consummate the transactions contemplated by the foregoing agreements, the
Company has agreed to provide to the Sellers the registration rights set
forth in this Agreement."
17. The first recital of the form of Registration Rights Agreement
attached to the Merger Agreement as Exhibit H is hereby deleted in its
entirety and replaced with the following:
"This Agreement is in connection with (i) the Stockholders Agreement of
even date herewith (the "Stockholders Agreement") between FrontLine
Capital Group (formerly known as Reckson Services Industries, Inc.) (the
"Company"), as issuer of the common stock, par value $[.01] per share
(the "Securities") pursuant to the put rights set forth in Section 7.1,
7.2 and 7.3 of the Stockholders Agreement among HQ Global Holdings, Inc.
("HQ"), Carr and certain other stockholders of HQ, (ii) the Agreement and
Plan of Merger among the Company, VANTAS Incorporated, a Nevada
corporation ("VANTAS"), Carr and HQ Global, (iii) the Stock Purchase
Agreement dated as of January 20, 2000 by and between the Company and
Carr, and (iv) the Stock Purchase Agreement dated as of January 20, 2000
by and among VANTAS, the Company, Carr, OmniOffices (UK) Limited and
OmniOffices (Lux) 1929 Holding Company S.A.. In order to induce the
Sellers to consummation the transactions contemplated by the foregoing
agreements, the Company has agreed to provide to the Sellers the
registration rights set forth in this Agreement."
18. The Merger Agreement is hereby amended by adding Exhibits K-1, K-2,
K-3 and K-4 to the Merger Agreement in the forms attached to this Amendment.
19. Schedule 1(e) to the Merger Agreement is hereby amended by deleting
such Schedule in its entirety and replacing it with Schedule 1(e) attached to
this Amendment.
20. Schedule 4(c) to the Merger Agreement is hereby amended by deleting
such Schedule in its entirety and replacing it with Schedule 4(c) attached to
this Amendment.
21. Schedule 4(a) to the Merger Agreement is hereby amended by deleing
such Schedule in its entirety and replacing it with Schedule 4(a) attached to
this Amendment.
22. Schedule 4(o) to the Merger Agreement is hereby amended by deleting
such Schedule in its entirety and replacing it with Schedule 4(o) attached to
this Amendment.
23. Schedule 4(p) to the Merger Agreement is hereby amended by deleting
such Schedule in its entirety and replacing it with Schedule 4(p) attached to
this Amendment.
C. OTHER AGREEMENTS
The Merger Agreement is hereby amended to add the following provisions:
1. Simultaneously with the execution of this Amendment, VANTAS shall
deliver to the Company immediately available funds in the aggregate amount of
$12,500,000 as an additional initial deposit under the Merger Agreement.
VANTAS shall have the right to deliver to the Company a replacement letter of
credit in the face amount of $47,500,000 (the "Replacement LOC"). The
Replacement LOC shall replace the additional $12,500,000 initial deposit
hereunder and the existing letter of credit previously delivered to the
Company by VANTAS, which additional initial deposit and existing letter of
credit shall be returned to VANTAS upon the Company's receipt of the
Replacement LOC. Any references to "Letter of Credit" in the Merger Agreement
shall be deemed to refer to the Replacement LOC, and any reference to "Initial
Deposit" shall be deemed to refer to $47,500,000 and to include the additional
initial deposit hereunder from and after the date hereof.
2. Simultaneously with the execution of this Amendment, RSI shall
contribute an aggregate of $250,000 to VANTAS, and VANTAS shall pay the
Company $125,000 and CarrAmerica $125,000 (the "Legal Fees Allowance") as an
allowance for certain additional legal costs and expenses incurred by such
parties as a result of the extension of the outside Closing Date from April
30, 2000 to May 31, 2000. The Legal Fees Allowance is nonrefundable and will
not be used to adjust the consideration otherwise payable in connection with
the Merger Transactions.
3. At Closing, the Second Step Surviving Corporation shall pay to
CarrAmerica, as agent for all of the stockholders of the Company immediately
prior to the effective time of the HQ Merger, an amount in cash equal to the
amount of all tenant improvement costs ("TI Costs") paid by the Company on or
prior to April 30, 2000 that are reimbursable by the landlords but which have
not been reimbursed prior to Closing and are not the subject of dispute with
the relevant landlord (the "TI Reimbursement"), which TI Reimbursement shall
be distributed to such stockholders based on each such stockholder's
proportionate interest in the Company immediately prior to the effective time
of the HQ Merger. Any such TI Costs paid to the Second Step Surviving
Corporation following the resolution of any dispute with a landlord shall be
paid by the Second Step Surviving Corporation to CarrAmerica, as agent for all
of the stockholders of the Company immediately prior to the effective time of
the HQ Merger, within five business days after receipt of such amounts by the
Second Step Surviving Corporation. The Company will provide the Second Step
Surviving Corporation with a schedule of the TI Costs (including the
identification of any TI Cost that is the subject of dispute with the relevant
landlord) prior to the Closing. With respect to projects of the Company for
which TI Costs are paid by the Company both on or before April 30, 2000 and
after April 30, 2000 (the "Straddle Projects"), the amount of the TI
Reimbursement with respect to such Straddle Projects shall be calculated as
the total reimbursable amount multiplied by a fraction, the numerator of which
is the TI Costs paid by the Company on or before April 30, 2000, and the
denominator of which is the total TI Costs.
4. At Closing, the Second Step Surviving Corporation shall pay to
CarrAmerica, as agent for all of the stockholders of the Company immediately
prior to the effective time of the HQ Merger, an amount in cash equal to the
amount of all capital expenditures and development costs (including TI Costs,
whether or not reimbursable by landlords) paid by the Company after April 30,
2000 and prior to Closing (net of any amounts the Company actually receives
from landlords prior to Closing as reimbursements of such TI Costs); provided
that the Second Step Surviving Corporation is provided with a schedule of such
amounts at or prior to the Closing.
5. RSI and VANTAS hereby represent, warrant, acknowledge and agree that
(a) neither RSI nor VANTAS is aware of any failure on the part of the Company,
CarrAmerica, Omni UK or LuxCo to perform any of their respective obligations
under the Merger Agreement, the Stock Purchase Agreement or the UK Agreement,
(ii) RSI and VANTAS hereby waive any and all rights and claims, fixed or
contingent, with respect to circumstances existing on the date of this
Amendment, relating to any failure by the Company, CarrAmerica, Omni UK or
LuxCo to perform any obligations under the Merger Agreement, the Stock
Purchase Agreement or the UK Agreement, and (iii) neither RSI or VANTAS is
aware of any current right of RSI or VANTAS to terminate (or give notice of
its intent to terminate) the Merger Agreement, the Stock Purchase Agreement or
the UK Agreement. Notwithstanding anything to the contrary contained in this
paragraph 5, nothing in this paragraph 5 shall modify, supplement or amend the
Indemnification Agreement or otherwise affect any of the parties' rights
thereunder from and after the Closing.
6. RSI and VANTAS jointly and severally shall indemnify and defend the
Company, CarrAmerica, Omni UK, LuxCo and the respective stockholders, officers
and directors of such entities against all losses, liabilities, claims,
damages and expenses that arise from any claims made by any stockholders,
employees, officers or directors of RSI or VANTAS to the extent relating to
(i) any failure of the parties to consummate any of the Merger Transactions
for any reason other than as a result of a breach by the Company, CarrAmerica,
Omni UK or LuxCo of the Merger Agreement, the Stock Purchase Agreement or the
UK Agreement after the date of this Amendment, and (ii) the integration of
operations of the Company, Omni UK, LuxCo and VANTAS, including wrongful
discharge claims by any current or former employees of VANTAS. The provisions
of this paragraph 6 shall terminate on the Closing Date; provided that the
indemnification obligations with respect to any claim covered by this
paragraph 6 that is asserted by any of the foregoing indemnified parties after
the date hereof (whether or not the underlying action giving rise to the claim
occurred before or after the date hereof) and on or prior to the Closing Date
shall survive until such claim is finally resolved.
7. RSI and VANTAS represent and warrant that attached hereto as Exhibits
L and M are correct and complete copies of all term sheets and commitment
letters setting forth all material terms of all debt and equity arrangements
(including all joint venture and other ancillary arrangements) proposed to be
implemented by VANTAS to finance (or in connection with the financing of) the
Merger Transactions (the "Financing Exhibits"). RSI and VANTAS shall cause the
terms and conditions of any issuances of debt or equity (including the
execution of any joint venture agreement, operating agreement or other
ancillary arrangement) prior to or in connection with the Merger Transactions
to be the same in all material respects as the terms and conditions set forth
in such Financing Exhibits and shall not make or permit any material
additional term not included in the Financing Exhibits without the prior
written consent of the Company and CarrAmerica. Prior to the Closing, RSI and
VANTAS shall, and shall cause their respective Subsidiaries to, use
commercially reasonable efforts to give the Company and CarrAmerica and their
respective officers, employees, representatives, counsel and accountants and
their respective counsel, auditors and authorized representatives full access,
during normal business hours and upon reasonable notice, to the proposed
financing sources of RSI and VANTAS. RSI and VANTAS shall use commercially
reasonable efforts to ensure that their proposed financing sources are
available to and cooperate with the Company and CarrAmerica. Prior to the
Closing, RSI and VANTAS shall provide weekly reports on the first business day
of each week regarding the status of the financing arrangements. RSI and
VANTAS hereby (i) authorize the Company and CarrAmerica to discuss the terms
of the proposed financing arrangements with the proposed financing sources of
RSI and VANTAS, and (ii) agree that any such discussions by the Company,
CarrAmerica and any proposed financing sources of RSI and VANTAS shall not be
deemed to constitute interference by the Company or CarrAmerica with the
proposed financing arrangements of RSI or VANTAS.
8. Attached as Exhibit N is a summary term sheet containing possible
joint venture terms involving one of the proposed equity financing sources for
VANTAS. Prior to the Closing and thereafter for as long as the stockholders of
the Company immediately prior to the Closing who retain an interest in Holdco
immediately following the Closing (the "Continuing Stockholders") collectively
retain a direct or indirect 10% interest in Holdco, neither RSI nor VANTAS, as
applicable, directly or indirectly shall make or permit any term or condition
to deviate in any material respect from any of the terms or conditions set
forth in the JV Term Sheet or make or permit any additional term not included
in the JV Term Sheet without the prior written consent of the Company and
CarrAmerica (if at or prior to the Closing) or Continuing Stockholders owning
a majority of the aggregate number of shares of Holdco owned by the Continuing
Stockholders at the time such approval is required (if after the Closing),
which consent will not be unreasonably withheld.
9. The Company and CarrAmerica represent and warrant, each as to itself
only, that each of the Company and CarrAmerica has the requisite capacity and
authority, and has taken all action necessary in order, to execute, deliver
and perform its respective obligations under this Amendment. This Amendment is
a legal, valid and binding obligation of each of CarrAmerica and the Company,
enforceable in accordance with its terms, except insofar as enforcement
thereof may be limited by bankruptcy, insolvency or other laws relating to or
affecting enforcement of creditors' rights generally including such general
equitable principles as may apply in the enforcement of creditors' rights.
10. RSI and VANTAS represent and warrant, each as to itself only, that
each of RSI and VANTAS has the requisite capacity and authority, and has taken
all action necessary in order, to execute, deliver, and perform its respective
obligations under this Amendment. This Amendment is a legal, valid and binding
obligation of each of RSI and VANTAS, enforceable in accordance with its
terms, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement of creditors'
rights generally including such general equitable principals as may apply in
the enforcement of creditors' rights.
11. This Amendment and the other agreements referred to herein represent
the entire understanding of the parties with respect to the subject matter
contained herein. This Amendment may not be amended, modified or waived except
in a writing signed by the party against whom enforcement of such amendment,
modification or waiter is sought. This Amendment shall be construed and
interpreted in accordance with the internal laws of the State of Delaware,
without reference to the conflict of laws principles contained therein. This
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which, when taken together, shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
HQ GLOBAL WORKPLACES, INC.
By: /s/ Jill B. Louis
-------------------------
Name: Jill B. Louis
Title: Vice President
VANTAS INCORPORATED
By: /s/ Stephen M. Rathkopf
-------------------------
Name: Stephen M. Rathkopf
Title: Secretary
CARRAMERICA REALTY CORPORATION
By: /s/ Karen B. Dorigan
--------------------------
Name: Karen B. Dorigan
Title: Managing Director
FRONTLINE CAPITAL GROUP
By: /s/ Jason Barnett
--------------------------------
Name: Jason Barnett
Title: Executive Vice President
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment") is
entered into by and between CarrAmerica Realty Corporation ("Seller") and
FrontLine Capital Group (formerly known as Reckson Services Industries, Inc.)
("Buyer") as of April 29, 2000.
RECITALS:
WHEREAS, Seller and Buyer entered into a Stock Purchase Agreement dated
as of January 20, 2000 (such agreement as heretofore, hereby and hereinafter
amended, the "Stock Purchase Agreement") pursuant to which Seller agreed to
sell shares of common stock of HQ Global Workplaces, Inc. (the "Company")
owned by it to Buyer on the terms set forth therein;
WHEREAS, the parties hereto wish to make certain amendments to the Stock
Purchase Agreement; and
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings set forth in the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth herein, the parties, intending to be
legally bound, agree as follows:
1. The second sentence of Section 4(c)(ii) of the Stock Purchase
Agreement is hereby deleted in its entirety and replaced by the following:
"Other than (i) this Agreement, (ii) the Amended and
Restated Stockholders Agreement dated as of September 29,
1998 by and among the Company, Seller and certain other
stockholders of the Company (the "Existing Stockholders
Agreement"), and (iii) any stockholders agreement to be
executed in connection with the Closing hereunder, none of
the Shares are subject to any agreement, contract,
commitment, understanding or arrangement, including any such
agreement, contract, commitment, understanding or
arrangement restricting or otherwise relating to the voting,
dividend rights or disposition of the Shares."
2. The last sentence of Section 5(c) of the Stock Purchase Agreement is
hereby deleted in its entirety and replaced with the following:
"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 Buyer in connection with the
execution, delivery, performance of this Agreement by the
Buyer or the consummation of the transactions contemplated
hereby."
3. Section 5 of the Stock Purchase Agreement is hereby amended by adding
the following section:
"(d) Investment Representation. Each party acquiring Shares hereunder
will be receiving the Shares for his or its own account for
investment only and not with a view towards distribution or resale.
Each party acquiring Shares hereunder will either be an "accredited"
investor within the meaning of Rule 501 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or will
have such knowledge and experience in financial and business matters
that such party is capable of evaluating the merits and risks of
investment in the Shares and will be able to bear the economic risk
of its investment in the Shares. Each party acquiring Shares
hereunder acknowledges that any routine sale of such Shares 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
the Shares, resale thereof may require compliance with some other
exemption under the Securities Act prior to resale. Each party
acquiring Shares hereunder acknowledges that the certificates
representing the Shares issued pursuant to this Agreement shall bear
the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR
OFFERED FOR SALE, TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO UNDER SUCH ACT OR AN OPINION
OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION FOR SUCH
SALE, OFFER, TRANSFER, HYPOTHECATION OR OTHER ASSIGNMENT IS
AVAILABLE UNDER SUCH ACT.""
4. Section 12(a)(iv) is hereby deleted in its entirety and replaced with
the following:
"by the Seller or Buyer (provided, however, in the case of Buyer,
only if Buyer has given the Seller at least five business days' prior
written notice of its intention to terminate pursuant to this Section
12(a)(iv), which notice may not be given prior to June 1, 2000), if
the Closing does not occur on or prior to May 31, 2000;"
5. Section 24 is hereby deleted in its entirety and replaced with the
following:
"24. Additional Signature Parties. At any time after the date hereof
and at or prior to five (5) business days prior to the Closing, any
other holder of Non-Voting Common Stock, any holder of voting common
stock, par value $.01 per share of the Company (the "Voting Common
Stock") and any holder of warrants to acquire shares of Non-Voting
Common Stock (the "Warrants") as of the date hereof shall be
permitted to execute and deliver to the Buyer an Additional Party
Signature Page substantially in the form of Annex B hereto (each such
party who executes and delivers to the Buyer such document, an
"Additional Stockholder Party"), pursuant to which such Additional
Stockholder Party shall be entitled, subject to the terms and
conditions herein, to become a "Seller" for all purposes of this
Agreement, and shall be entitled to sell to Buyer the number of
shares of Non-Voting Common Stock or Voting Common Stock or the
number of Warrants, held by such Additional Stockholder Party and set
forth on such Additional Party Signature Page on the same terms set
forth in this Agreement; provided that each holder of Warrants that
elects to sell Warrants hereunder shall be entitled to receive a
price per Warrant, equal to the Per Share Purchase Price, as adjusted
hereunder, minus the exercise price of such Warrant. Each Additional
Stockholder Party shall be deemed to have made the representations
and warranties of Seller herein and be bound by the other agreements
of Seller herein, and the shares of Non-Voting Common Stock and
Voting Common Stock and the Warrants sold by each such party shall be
deemed "Shares" for all purposes hereunder. To the extent that any
Additional Stockholder Party elects to sell shares of Non-Voting
Common Stock, shares of Voting Common Stock or Warrants, the number
of shares of Non-Voting Common Stock to be sold by CarrAmerica
pursuant to this Agreement shall be decreased by the number of shares
of Non-Voting Common Stock, shares of Voting Common Stock or
Warrants, as applicable, to be sold by such Additional Stockholder
Party, it being intended that the Buyer shall be entitled to and
required to purchase only the number of shares of Non-Voting Common
Stock, shares of Voting Common Stock and Warrants, in the aggregate
from CarrAmerica and all Additional Stockholder Parties, shown as
being proposed to be sold by CarrAmerica on Exhibit A as delivered on
January 20, 2000; provided that, notwithstanding anything to the
contrary contained herein, in the event any Additional Stockholder
Party shall breach any representation or warranty or otherwise fail
to perform any of its obligations under this Agreement, CarrAmerica
shall have the right to make such representation or warranty and
otherwise perform such obligations on behalf of such Additional
Stockholder Party. If Warrants are sold to Buyer pursuant to this
Section 24, Buyer will immediately exercise such Warrants and pay the
exercise price therefor to the Company (or its successors)."
6. Simultaneously with the execution of this Amendment, RSI shall
contribute $1,350,000 to VANTAS and VANTAS shall pay $1,350,000 in cash (the
"Company Stockholder Extension Payment") to the Company, as agent for the
stockholders of the Company who have elected to sell all or a portion of their
shares in the Company, as compensation for the extension of the Closing Date
from April 30, 2000 to May 31, 2000, which funds shall be distributed by the
Company on a pro rata basis to such stockholders based on the percentage of
shares being sold by each such stockholder divided by the total number of
shares being sold. The Company Stockholder Extension Payment is nonrefundable
and will not be used to adjust the consideration otherwise payable in
connection with the consummation of the transactions contemplated by the Stock
Purchase Agreement.
7. Seller represents and warrants that Seller has the requisite capacity
and authority, and has taken all actions necessary in order, to execute,
deliver and perform its obligations under this Amendment. This Amendment is a
legal, valid and binding obligation of Seller, enforceable in accordance with
its terms, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement of creditors'
rights generally including such general equitable principles as may apply in
the enforcement of creditors' rights.
8. Buyer represents and warrants that Buyer has the requisite capacity
and authority, and has taken all actions necessary in order, to execute,
deliver and perform its obligations under this Amendment. This Amendment is a
legal, valid and binding obligation of Buyer, enforceable in accordance with
its terms, except insofar as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement of creditors'
rights generally including such general equitable principles as may apply in
the enforcement of creditors' rights.
9. This Amendment and the other agreements referred to herein represent
the entire understanding of the parties with respect to the subject matter
contained herein. This Amendment may not be amended, modified or waived except
in a writing signed by the party against whom enforcement of such amendment,
modification or waiver is sought. This Amendment shall be construed and
interpreted in accordance with the laws of the State of Delaware, without
reference to the conflict of laws principles contained therein. This Amendment
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which, when taken together, shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
CARRAMERICA REALTY CORPORATION
By: /s/ Karen B. Dorigan
--------------------------
Name: Karen B. Dorigan
Title: Managing Director
FRONTLINE CAPITAL GROUP
By: /s/ Jason Barnett
--------------------------------
Name: Jason Barnett
Title: Executive Vice President
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment") is
entered into by and among CarrAmerica Realty Corporation ("CarrAmerica"),
OmniOffices (UK) Limited ("Omni UK"), OmniOffices (Lux) 1929 Holding Company
S.A. ("LuxCo"), VANTAS Incorporated ("VANTAS") and FrontLine Capital Group
(formerly known as Reckson Services Industries, Inc.) ("RSI") as of April
____, 2000.
RECITALS:
WHEREAS, CarrAmerica, Omni UK, LuxCo, VANTAS and RSI entered into a Stock
Purchase Agreement dated as of January 20, 2000 (such agreement, as
heretofore, hereby and hereinafter amended, the "UK Agreement") pursuant to
which CarrAmerica agreed to sell shares of common stock of Omni UK and LuxCo
owned by it together with its interest in certain loans made by it to Omni UK
and LuxCo to VANTAS on the terms set forth therein;
WHEREAS, VANTAS, RSI, CarrAmerica, Omni UK and LuxCo have executed an
Agreement dated as of March 13, 2000, as amended, pursuant to which such
parties agreed to authorize certain actions governed by the UK Agreement;
WHEREAS, the parties hereto wish to make certain additional amendments to
the UK Agreement; and
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings set forth in the UK Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth herein, the parties, intending to be
legally bound, agree as follows:
1. The second and third recitals of the UK Agreement are hereby deleted
in their entirety and replaced with the following:
"WHEREAS, CarrAmerica has made certain loans to Omni UK and
LuxCo as described on Exhibit B attached hereto, and may
make additional loans to Omni UK and LuxCo as contemplated
by Section 4.1(b)(iii) hereof (collectively, the "Loans"),
which Loans are or will be evidenced by promissory notes,
the date and denominations of which as of the date hereof
are set forth on Exhibit B (the "Notes");
WHEREAS, CarrAmerica desires to sell and transfer to VANTAS
and VANTAS desires to purchase from CarrAmerica (i) the
Notes in exchange for an amount equal to the principal
amount of, and any accrued and unpaid interest with respect
to, the Notes outstanding as of the Closing Date in
accordance with Section 1.2 (the "Loan Consideration"), and
(ii) all of the shares of non-voting common stock, par value
(pound).01 per share, of Omni UK (which represents
approximately 95% of the equity interest in Omni UK) (the
"UK Non-Voting Common Stock") and all of the shares of
non-voting common stock, par value $250 per share, of LuxCo
(which represents approximately 95% of the equity interest
in LuxCo) (the "Lux Non-Voting Common Stock"; and together
with the UK Non-Voting Common Stock, collectively, the
"Shares") owned of record by the Seller for total
consideration equal to the "Share Consideration" as
calculated pursuant to Annex A (the "Share Consideration");"
2. Section 2.3 of the UK Agreement is hereby amended by inserting the
following at the end of Section 2.3:
"Notwithstanding anything to the contrary contained herein,
the parties acknowledge that, in connection with the
consummation of the transactions contemplated by the Merger
Agreement, the consent of the general partner of Mercury
Executive Offices, L.P. may be required under the Limited
Partnership Agreement dated November 16, 1998 and the
management agreements related thereto; it being understood
that Omni UK, LuxCo, VANTAS and RSI shall use commercially
reasonable efforts to obtain such consent."
3. Section 2.12(a) of the UK Agreement is hereby amended by deleting the
first sentence in its entirety and replacing it with the following:
"Neither of the Companies nor any of their respective
Subsidiaries owns any real property or interests in real
property, other than OmniUK Real Property Leases (as defined
below), LuxCo Real Property Leases (as defined below), the
OmniUK Owned Property (as defined below) and certain
interests in certain real property assets held directly or
indirectly through the MAM Investment (as defined below)."
4. The provision immediately following Section 2.13(j) on page 12 of the
UK Agreement is hereby deleted in its entirety and replaced with the
following:
"; provided, however, that notwithstanding anything to the
contrary contained herein other than any contracts relating
to office equipment, maintenance or service for any
individual business center of the Companies or their
respective Subsidiaries which does not require annual
payments in excess of $25,000, the sum of the aggregate
future liabilities and costs of termination associated with
all contracts, arrangements, agreements or understandings to
which either of the Companies or any of their respective
Subsidiaries is a party or by which they or any of their
respective properties or assets which are not set forth on
Schedule 5.2, 2.13 or 2.16 is bound does not exceed
$5,000,000."
5. Section 2.28 of the UK Agreement is hereby deleted in its entirety and
replaced with the following:
"Section 2.28 MAM Investment. OmniUK and certain of its
Subsidiaries have agreed to invest up to (pound)20 million
in Mercury Executive Offices, L.P. on the terms and
conditions set forth in the limited partnership agreement,
dated November 16, 1998 (the "MAM Investment"), of which at
least (pound)15,594,241 has been funded. Notwithstanding
anything to the contrary contained herein, the parties
acknowledge that, in connection with the consummation of the
transactions contemplated by the Merger Agreement, the
consent of the general partner of Mercury Executive Offices,
L.P. may be required under the Limited Partnership Agreement
dated November 16, 1998 and the management agreements
related thereto; it being understood that Omni UK, LuxCo,
VANTAS and RSI shall use commercially reasonable efforts to
obtain such consent."
6. Section 4.1(b)(iii) of the UK Agreement is hereby deleted in its
entirety and replaced with the following:
"incur or assume any liabilities or incur any indebtedness
for borrowed money, assume, guarantee, endorse or otherwise
as an accommodation become responsible for the obligations
of any other individual, corporation or entity (other than a
wholly owned Subsidiary) except pursuant to contracts or
agreements listed in Schedule 2.13 or except for loans and
equity investments (which shall be deemed to be included on
Exhibit A or Exhibit B, as applicable, attached hereto) by
CarrAmerica necessary to fund the business of the Companies
in the ordinary course or to fund committed developments;"
7. Section 4.1(b)(v) of the UK Agreement is hereby deleted in its
entirety and replaced with the following:
"make any material change in any Omni UK Real Property Lease
or LuxCo Real Property Lease, as applicable, or other
contracts or enter into, renew, fail to renew, terminate or
permit to be terminated any Omni UK Real Property Lease or
LuxCo Real Property Lease, as applicable, any other contract
or agreement that calls for aggregate annual payments of
$25,000 or more and which either (i) is not terminable by
either of the Companies or their respective Subsidiary, as
applicable, at will on 60 days or less notice without
payment of a penalty or (ii) has a term of more than six
months, other than the operating leases and related letters
of comfort executed by Omni UK, LuxCo or any Subsidiaries
thereof with respect to development and refurbishment
projects identified in the CapEx Budget, as contemplated by
the operating budgets for those projects;"
8. Section 5.5 of the UK Agreement is hereby amended by inserting the
following sentence at the end of such section:
"Not later than six months after the Closing, the Second
Step Surviving Corporation shall reimburse CarrAmerica, as
agent for itself and the stockholders of HQ Global
Workplaces, Inc. ("HQ Global") immediately prior to the
Closing (based on their proportionate indirect beneficial
interests in Omni UK and LuxCo), for any additional lease
deposits of Omni UK and LuxCo that are not identified on the
disclosure schedules delivered in connection with the
execution of this Agreement; provided that the Second Step
Surviving Corporation is provided with a schedule of such
additional lease deposits at or prior to Closing."
9. Article 5 of the UK Agreement is hereby amended by adding the
following sections at the end of such Article 5:
"Section 5.6 MAM Hammersmith Center. RSI and VANTAS hereby
consent to the development of the MAM Hammersmith center.
Immediately subsequent to the Closing, the Second Step
Surviving Corporation shall reimburse CarrAmerica, as agent
for itself and the stockholders of HQ Global immediately
prior to the Closing (based on their proportionate indirect
beneficial interests in Omni UK and LuxCo), for any costs
that have been or will be incurred prior to Closing in
connection with the development of the MAM Hammersmith
center; provided that the Second Step Surviving Corporation
is provided with a schedule of such amounts at or prior to
Closing.
Section 5.7 Prepaid Rent; Tenant Reimbursement. Immediately
subsequent to the Closing, the Second Step Surviving
Corporation shall pay to CarrAmerica, as agent for itself
and the stockholders of HQ Global immediately prior to the
Closing (based on their proportionate indirect beneficial
interests in Omni UK and LuxCo), $576,000, which represents
the amount of rent of Omni UK and LuxCo that was prepaid for
the period after Closing;; provided that the Second Step
Surviving Corporation is provided with a schedule of such
amounts at or prior to Closing.
Section 5.8 Capital Expenditures and Cash Fundings.
Immediately subsequent to the Closing, the Second Step
Surviving Corporation shall reimburse CarrAmerica, as agent
for itself and the stockholders of HQ Global immediately
prior to the Closing (based on their proportionate indirect
beneficial interests in Omni UK and LuxCo), for all capital
expenditures and development expenses of Omni UK or LuxCo
incurred after April 30, 2000 and prior to Closing,
including amounts funded to enable Omni UK to satisfy its
capital commitments with respect to the MAM Investment;
provided that the Second Step Surviving Corporation is
provided with a schedule of such amounts at or prior to
Closing.
Section 5.9 Side Letter. At Closing, VANTAS shall assume the
obligations of CarrAmerica with respect to that certain Side
Letter dated as of November 16, 1998 by and among HQMerc UK
Management Limited ("HQ Merc"), P.R.A. Investments Limited
("PRA"), P.K. Investments Limited ("PKL"), Peter Allport
("Allport"), Peter Kershaw ("Kershaw"), HQ Holdings Limited
("HQ Holdings") and CarrAmerica and that certain Side Letter
dated as of November 16, 1998 by and among HQ Merc UK
Partnership Limited, PRA, PKL, Allport, Kershaw, HQ Holdings
and CarrAmerica."
10. Section 6.2(b) of the UK Agreement is hereby deleted in its entirety
and replaced with the following:
"CarrAmerica shall have received the cash required by Sections 1.2,
5.3, 5.5, 5.6, 5.7 and 5.8."
11. All references to "April 30, 2000" in Article X(a)(iv), Article
X(a)(vi) and Article X(a)(vii) of the UK Agreement are hereby changed to "May
31, 2000."
12. All references to "May 1, 2000" in Article X(a)(iv) of the UK
Agreement are hereby changed to "June 1, 2000."
13. The amount of the Loan Notes identified in Annex A to the UK
Agreement is hereby deleted and replaced with "21,229,392 (reduced by the
amount of any payments thereto prior to Closing)."
14. Simultaneously with the execution of this Amendment, RSI shall
contribute $900,000 to VANTAS and VANTAS shall pay $900,000 in cash (the "UK
Stockholder Extension Payment") to CarrAmerica, as compensation for the
extension of the Closing Date from April 30, 2000 to May 31, 2000. The UK
Stockholder Extension Payment is nonrefundable and will not be used to adjust
the consideration otherwise payable in connection with the consummation of the
transactions contemplated by the UK Agreement.
15. CarrAmerica, Omni UK and LuxCo represent and warrant, each as to
itself only, that each of CarrAmerica, Omni, UK and LuxCo has the requisite
capacity and authority, and has taken all actions necessary in order, to
execute, deliver and perform its obligations under this Amendment. This
Amendment is a legal, valid and binding obligation of each of CarrAmerica,
Omni UK and LuxCo, enforceable in accordance with its terms, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting enforcement of creditors' rights generally including
such general equitable principles as may apply in the enforcement of
creditors' rights.
16. VANTAS and RSI represent and warrant that each of VANTAS and RSI has
the requisite capacity and authority, and has taken all actions necessary in
order, to execute, deliver and perform its obligations under this Amendment.
This Amendment is a legal, valid and binding obligation of each of VANTAS and
RSI, enforceable in accordance with its terms, except insofar as enforcement
thereof may be limited by bankruptcy, insolvency or other laws relating to or
affecting enforcement of creditors' rights generally including such general
equitable principles as may apply in the enforcement of creditors' rights.
17. This Amendment, the Merger Agreement, as amended, the Stock Purchase
Agreement, as amended, and the other agreements referred to herein and therein
represent the entire understanding of the parties with respect to the subject
matter contained herein. This Amendment may not be amended, modified or waived
except in a writing signed by the party against whom enforcement of such
amendment, modification or waiver is sought. This Amendment shall be construed
and interpreted in accordance with the laws of the State of Delaware, without
reference to the conflict of laws principles contained therein. This Amendment
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which, when taken together, shall constitute one and the
same instrument.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.
CARRAMERICA REALTY CORPORATION
By: /s/ Karen B. Dorigan
--------------------------
Name: Karen B. Dorigan
Title: Managing Director
OMNIOFFICES (UK) LIMITED
By: /s/ Thomas A. Carr
------------------------------
Name: Thomas A. Carr
Title: Director
OMNIOFFICES (LUX) 1929 HOLDING
COMPANY S.A.
By: /s/ Thomas A. Carr
------------------------------
Name: Thomas A. Carr
Title: Director
FRONTLINE CAPITAL GROUP
By: /s/ Jason Barnett
--------------------------------
Name: Jason Barnett
Title: Executive Vice President
VANTAS INCORPORATED
By: /s/ Stephen M. Rathkopf
-------------------------
Name: Stephen M. Rathkopf
Title: Secretary
Exhibit 99.1
CarrAmerica, FrontLine Capital Extend Closing of
Executive Office Suites Merger and Sale to May 31st
May 1, 2000 08:05 AM Eastern Time
WASHINGTON, May 1 /PRNewswire/--CarrAmerica Realty Corporation CRE and
FrontLine Capital Group FLCG today announced that the outside closing date for
the merger of HQ Global Workplaces, Inc., CarrAmerica's executive office
suites affiliate, with Vantas Incorporated, FrontLine's executive office
suites subsidiary, and all related transactions has been extended from April
30 to May 31, 2000. In connection with the extension, Vantas increased its
deposit from $35 million to $47.5 million and paid $2.5 million to
CarrAmerica and the other stockholders of HQ Global Workplaces who are to
receive cash in the transaction.
When the merger is completed, HQ Global Workplaces will emerge as the world's
largest workplace solutions provider with 463 executive office suites centers
in 17 countries, 2,500 employees and 43,000 customers. The merged company will
retain the HQ Global Workplaces name.
CarrAmerica also indicated that implementation of its previously announced
$100 million share repurchase program would be delayed pending closing of the
HQ Global Workplaces transaction.
CarrAmerica owns, develops and operates office properties in 14 markets
throughout the United States. The Company is committed to becoming America's
leading office workplace company by meeting the rapidly changing needs of its
customers with superior service, a large portfolio of quality office
properties, extraordinary development capabilities and land positions.
CarrAmerica is a leading office innovator with interests and strategic
relationships with Broadband Office, Inc., a national telecommunications
company, HQ Global Workplaces, a global leader in executive office suites and
DukeSolutions, a Duke Energy subsidiary providing comprehensive energy
management programs. Currently, CarrAmerica and its affiliates own a
controlling interest in a portfolio of 276 operating office properties and
have 12 office buildings under development in six key growth markets.
CarrAmerica's markets include Atlanta, Austin, Chicago, Dallas, Denver, Los
Angeles/Orange County, Phoenix, Portland, Salt Lake City, San Diego, San
Francisco Bay Area, Seattle, South Florida and metropolitan Washington, D.C.
For additional information on CarrAmerica, including space availability, visit
our web site at www.carramerica.com.
FrontLine Capital Group is a publicly-traded Internet-related operating
company that identifies, acquires interests in, develops and manages a network
of e-commerce and e-services companies that service small and medium-size
enterprises and the mobile workforces of larger companies. FrontLine generally
acquires significant interests in companies to influence their long-term
direction and value creation and has committed $360 million in 12 partner
companies, including OnSite Access, Digital/Work.com, EmployeeMatters,
LiveCapital.com, VANTAS and Opus360. To maximize the potential of its partner
companies, FrontLine provides them with operational support and strategic
guidance through its internal management resources, advisory board, and
proprietary business development resources. FrontLine also actively works with
its partner companies to foster a collaborative environment and facilitate
strategic relationships that provide access to the resources and customer base
of its entire network. For more information about FrontLine Capital Group,
visit www.FrontLineCapital.com.
Certain statements in this release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Reform Act"). Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance, achievements or transactions of the Companies and their
affiliates or industry results to be materially different from any future
results, performance, achievements or transactions expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: national and local economic, business and real estate conditions
that will, among other things, affect demand for office properties,
availability and creditworthiness of tenants, the level of lease rents and the
availability of financing for both tenants and the Companies, adverse changes
in the real estate markets including, among other things, competition with
other companies, risks of real estate acquisition and development (including
the failure of pending acquisitions to close and pending developments to be
completed on time and within budget), actions, strategies and performance of
affiliates that the Companies may not control, governmental actions and
initiatives, and environmental/safety requirements.
