EXHIBIT 10
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is entered into as of
February 7, 2000 by and between Reckson Service Industries, Inc., a Delaware
corporation ("RSI"), and VANTAS Incorporated, a Nevada corporation ("VANTAS").
WHEREAS, RSI and VANTAS have entered into that certain Agreement and
Plan of Merger, dated January 20, 2000, with HQ Global Workplaces, Inc., a
Delaware corporation ("HQ"), and CarrAmerica Realty Corporation, a Maryland
corporation, (the "Merger Agreement") pursuant to which VANTAS is to be merged
(the "Merger") with and into HQ, with HQ being the surviving corporation;
WHEREAS, in accordance with the terms of the Merger Agreement, VANTAS
obtained an irrevocable letter of credit from Bankers Trust Company ("Bankers
Trust") in favor of HQ and guaranteed by RSI in the amount of $35 million (the
"Letter of Credit");
WHEREAS, pursuant to the Equity Interest Pledge and Security Agreement,
dated February 7, 2000, by and between RSI and Bankers Trust (the "Security
Agreement"), RSI has pledged 11,299,072 shares of the capital stock in VANTAS,
as more fully set forth on Schedule A to this Agreement, as collateral (the
"Collateral") securing the Letter of Credit;
WHEREAS, if there is a foreclosure on the Collateral, VANTAS has agreed
to issue to RSI, at RSI's election, shares of the capital stock of VANTAS (the
"Securities") to reimburse RSI for the loss of the Collateral; and
WHEREAS, the parties hereto acknowledge that, notwithstanding anything
contained in this agreement, if there is a foreclosure on the Collateral, RSI
shall maintain its subrogation rights with respect to the Letter of Credit. To
the extent that RSI does not exercise its rights pursuant to this agreement, RSI
may pursue such subrogation rights.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Amount and Consideration. In consideration of RSI securing VANTAS'
obligations under the Letter of Credit, VANTAS agrees that, if, and only to the
extent, Bankers Trust forecloses on the Collateral (other than a foreclosure
resulting from RSI's gross negligence), it shall be obligated to issue to RSI,
at RSI's election, the Securities. Such Securities shall have the same terms and
conditions as the securities comprising the Collateral which was foreclosed upon
and not otherwise returned to RSI by Bankers Trust pursuant to the terms of the
Security Agreement with the value of such Securities equal to the value ascribed
to VANTAS common and preferred stock in such foreclosure sale;
2. Restrictions on Transferability of Securities. RSI realizes that the
Securities are not, and will not be, registered under the Securities Act of
1933, as amended (the "Securities
Act"), or the securities laws of any state. RSI agrees that the Securities will
not be sold, offered for sale, transferred, pledged, hypothecated, or otherwise
disposed of except in compliance with the Securities Act and applicable state
securities laws. RSI understands that any sale, transfer, pledge, hypothecation,
or other disposition of the Securities may require in some states specific
approval by the appropriate governmental agency or commission in such states.
RSI has been advised that the Company has no obligation, and does not intend, to
cause the Securities to be registered under the Securities Act or to comply with
the requirements for any exemption under the Securities Act, including but not
limited to those provided by Rule 144 and Rule 144A promulgated under the
Securities Act, which would permit the Securities to be sold by RSI. RSI
understands that it is not anticipated that there will be any market for resale
of the Securities and that the transfer of the Securities is specifically
restricted under this Subscription Agreement and the Securities Act, and may be
restricted by applicable state securities laws. RSI understands the legal
consequences of the foregoing to mean that RSI must bear the economic risk of
its investment in VANTAS for an indefinite period of time. RSI understands that
instruments, if any, representing the Securities may bear legends restricting
the transfer thereof.
3. Acceptance of Subscription. VANTAS understands and agrees that RSI,
in its sole discretion, reserves the right to accept or reject this and any
other subscription for the Securities in whole or in part at any time prior to
the acceptance of such Securities, notwithstanding prior receipt by VANTAS of
notice of acceptance. In the event that this subscription is rejected in whole
or in part or, if the offering of the Securities to RSI is not consummated for
any reason, this subscription shall be deemed to be rejected and this
Subscription Agreement shall thereafter have no force or effect to that extent.
4. Representations and Warranties of VANTAS. In connection with the
transactions contemplated herein, VANTAS warrants and represents to RSI that (a)
VANTAS is a duly organized corporation, validly existing and in good standing
under the laws of the State of Nevada, (b) the execution and delivery of this
Subscription Agreement and the performance of all acts contemplated hereunder
been duly authorized by all necessary actions and, to VANTAS' knowledge, will
not constitute a breach or violation of, or a default under, any agreement by
which VANTAS or any of its properties is bound, nor constitute a violation of
any law, administrative regulation or court decree applicable VANTAS and (c) the
Securities have been duly authorized and shall be validly issued.
5. Notices. Any consent, request, waiver, notice or other communication
or document required or permitted to be given pursuant to any provision of this
Subscription Agreement ("Notice") shall be deemed duly given only when in
writing, signed by or on behalf of RSI giving such Notice, and (i) personally
delivered (with receipt acknowledged by the recipient or its agent), (ii)
deposited in a designated U.S. mail depositary, registered or certified mail,
return receipt requested, postage prepaid, or (iii) sent by overnight courier
(with receipt acknowledged by the recipient or its agent), addressed to VANTAS
to its principal office at 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000. Any such Notice
shall be deemed received (x) upon personal delivery, (y) five (5) days after
mailing as provided above, or (z) one (1) day after sending by overnight
courier.
6. Counterparts. This Subscription Agreement may be executed through
the use of separate signature pages or in any number of counterparts, and each
such counterpart shall, for
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all purposes, constitute one agreement binding on all parties, notwithstanding
that all parties are not signatories to the same counterpart.
7. Entire Agreement. This Subscription Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and there are
no representations, covenants or other agreements except as stated or referred
to herein.
8. Severability. Each provision of this Subscription Agreement is
intended to be severable from every other provision, and the invalidity or
illegality of any portion hereof shall not affect the validity or legality of
the remainder hereof.
9. Assignability. This Subscription Agreement is not transferable or
assignable by either party hereto.
10. Headings and Captions. The headings and captions for the various
sections of this Subscription Agreement are for convenience of reference only
and shall in no way modify or affect the meaning or construction of any of the
terms or provisions hereof.
11. Applicable Law. This Subscription Agreement shall be governed by
and construed in accordance with the law of the State of New York without giving
effect to the conflicts of laws principles thereof.
12. Choice of Jurisdiction. The parties agree that any action or
proceeding arising, directly, indirectly or otherwise, in connection with, out
of or from this Subscription Agreement, any breach hereof or any transaction
covered hereby shall be resolved within the State of New York. Accordingly, the
parties consent and submit to the jurisdiction of the United States federal and
state courts located within the State of New York.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
VANTAS INCORPORATED
By:
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Name:
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Title:
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RECKSON SERVICE INDUSTRIES, INC.
By:
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Name:
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Title:
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