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) July 15, 1997
CAPITAL TRUST
(Exact Name of Registrant as Specified in its Charter)
California 1-8063 94-6181186
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
incorporation)
885 Third Avenue, 12th Floor
New York, NY 10022
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(Address of Principal Executive Offices) (Zip Code)
(212) 593-5400
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(Registrant's Telephone Number, Including Area Code)
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(Former name or former address, if changed since last report)
612385.1
ITEM 1. Changes in Control Registrant
On July 15, 1997, following the Registrant's annual meeting of
shareholders, Veqtor Finance Company, LLC ("Veqtor") purchased from the
Registrant 12,267,658 class A 9.5% cumulative convertible preferred shares of
beneficial interest, $1.00 par value, in the Registrant (the "Class A Preferred
Shares") pursuant to the terms of the preferred share purchase agreement, dated
as of June 16, 1997, by and between the Registrant and Veqtor. The aggregate
purchase price for the Class A Preferred Shares was $33,000,000. In addition,
concurrently with the foregoing, pursuant to the terms of a common share
purchase agreement, Veqtor purchased from CalREIT Investors Limited Partnership
("CRIL") 6,959,593 common shares of beneficial interest, $1.00 par value, in the
Registrant (such shares were reclassified on July 15, 1997 as class A common
shares of beneficial interest, $1.00 par value, upon the execution of the
amended and restated declaration of trust of the Registrant (the "Restated
Declaration") that was approved at the annual meeting (the "Class A Common
Shares")). The aggregate purchase price for the Class A Common Shares was
$21,298,815.
As a result of the foregoing transactions, Veqtor beneficially owns
19,227,251 or approximately 90% of the outstanding voting shares of the
Registrant. With such voting power Veqtor will therefore have the ability to
control the election of trustees of the Registrant and the vote on actions
requiring shareholder approval including (i) amendments to the Restated
Declaration and (ii) mergers or sales of all or substantially all of the assets
of the Registrant, and will otherwise be in a position to control the policies
and affairs of the Registrant.
The sole managing members of Veqtor are CRIL and V2 Holdings LLC
("V2H"). The general partner of CRIL is SZ Investments, LLC, the sole
managing member of which is Zell General Partnership, Inc. The Samuel Zell
Revocable Trust, for which Samuel Zell serves as trustee, is the sole
stockholder of Zell General Partnership, Inc. John R. Klopp and Craig M. Hatkoff
are the sole members of V2H. Veqtor funded the $54,298,815 aggregate purchase
price for the Class A Preferred Shares and the Class A Common Shares with funds
obtained from the $5,000,000 of capital contributions of its members and from
the $50,000,000 of borrowings under notes issued to BankAmerica Investment
Corporation, Banc Boston Investments, Inc., First Chicago Capital Corporation
and Wells Fargo & Company.
Veqtor is a party to the VFC Investment Agreement, among Veqtor, CRIL,
V2H, and Messrs. Klopp and Hatkoff, dated as of July 15, 1997 (the "Investment
Agreement"). The Investment Agreement contains buy/sell provisions pursuant to
which one member of Veqtor may purchase from or sell to the other member its
interests in Veqtor or one member of V2H or CRIL may purchase the other V2H
member's interest in V2H. A transfer of the membership interests in either
Veqtor or V2H could result in a change in voting control of the Registrant. A
copy of the Investment Agreement is filed as Exhibit 99.1 (by means of
incorporation by reference and is incorporated herein by reference).
612385.1
ITEM 2. Acquisition or Disposition of Assets
On July 15, 1997, pursuant to an Interest Purchase Agreement, dated as
of June 16, 1997 (the "Interest Purchase Agreement"), by and between John R.
Klopp ("Klopp"), Craig M. Hatkoff ("Hatkoff") and Valentine Wildove & Company,
Inc. ("Valentine" and collectively with Klopp and Hatkoff, the "Sellers")) and
the Registrant, the Registrant acquired all of the partnership interests in and
to Victor Capital Group, L.P.; (ii) all membership interests in and to 970
Management LLC; (iii) all membership interests in and to Victor Asset Management
Partners, L.L.C.; and (iv) all membership interests in and to VP Metropolis
Services, L.L.C. (collectively, the "Interests"). The aggregate purchase price
for the Interests was $5,000,000 which was paid by delivery to the Sellers of
non-interest bearing notes (the "Acquisition Notes"). The purchase price was
determined through arms length negotiations. The board of trustees of the
Registrant received a fairness opinion, dated May 23, 1997, from Coopers &
Lybrand L.L.C. that stated that the consideration paid by the Registrant was
fair, from a financial point of view, to the Registrant.
The Acquisition Notes will provide for ten semi-annual principal
amortization payments in equal installments. Messrs. Klopp and Hatkoff each
received an Acquisition Note in the principal amount of $2,162,500. Valentine
Wildove & Company, Inc., in which Messrs. Klopp and Hatkoff are each 50% owners,
received $675,000 in principal amount of the Acquisition Notes.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
2.1 Interest Purchase Agreement, dated as of June 16, 1997, by and
between John R. Klopp, Craig M. Hatkoff, and Valentine Wildove &
Company, Inc. and the Registrant.
10.1 Preferred Share Purchase Agreement, dated as of June 16, 1997,
by and between the Registrant and Veqtor Finance Company, LLC.
10.2 Non-Negotiable Notes of the Registrant payable to John R. Klopp,
Craig M. Hatkoff and Valentine Wildove & Company, Inc.
99.1. VFC Investment Agreement, dated as of July 15, 1997, among Veqtor
Finance Company, LLC, CalREIT Investors Limited Partnership, V2
Holdings LLC, John R. Klopp and Craig M. Hatkoff (Incorporated
by reference to Exhibit 4 to the Schedule 13D filed by Veqtor
Finance Company, LLC, CalREIT Investors Limited Partnership, SZ
Investments, LLC, Zell General Partnership, Inc., Samuel Zell
Revocable Trust, Samuel Zell, John R. Klopp and Craig M. Hatkoff
on July 25, 1997) .
612385.1
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 hereunto duly authorized.
CAPITAL TRUST
(Registrant)
Date: July 30, 1997 By: /s/ John R. Klopp
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Name: John R. Klopp
Title: Chief Executive Officer
612385.1