Grubb and Ellis Form 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WOEClYvieoYjDSaQ1aAtN1IuCRo3k7KcZxfyC1txBQ9woXy3NzLrk0V5mz9B9AEC GCzX6VYD+BWzjY/XVo426w== 0000905729-02-000063.txt : 20020419 0000905729-02-000063.hdr.sgml : 20020419 ACCESSION NUMBER: 0000905729-02-000063 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20020419 GROUP MEMBERS: C MICHAEL KOJAIAN GROUP MEMBERS: KOJAIAN VENTURES, L.L.C. GROUP MEMBERS: KOJAIAN VENTURES-MM, INC. GROUP MEMBERS: MICHAEL KOJAIAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRUBB & ELLIS CO CENTRAL INDEX KEY: 0000216039 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531] IRS NUMBER: 941424307 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-32339 FILM NUMBER: 02615016 BUSINESS ADDRESS: STREET 1: 2215 SANDERS RD STREET 2: STE 400 CITY: NORTHBROOK STATE: IL ZIP: 60062 BUSINESS PHONE: 4159561990 MAIL ADDRESS: STREET 1: ONE MONTGOMERY ST STE 3100 STREET 2: TELESIS TWR 9TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KOJAIAN MIKE CENTRAL INDEX KEY: 0001029458 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1400 NORTH WOODWARD AVE SUITE 250 CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 BUSINESS PHONE: 2486447600 MAIL ADDRESS: STREET 1: 1400 NORTH WOODWARD AVE SUITE 250 CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 SC 13D/A 1 grubbs13da2041802.htm SCHEDULE 13D/AMENDMENT #2 Grubb and Ellis Form 13D - 4-18-02

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13D/A
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

(Amendment No. 2)¹

Grubb & Ellis Company

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

40009 52 0

(CUSIP Number)

C. Michael Kojaian
c/o Kojaian Ventures, L.L.C.
39400 Woodward Avenue, Suite 250
Bloomfield Hills, Michigan 48304
Telephone (240) 644-7600

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

April 14, 2002

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

(Continued on the following pages)

(Page 1 of 12 Pages)

_________________
¹ The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 40009 52 0

13D

Page 2 of 12 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Mike Kojaian

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
		(a) x
		(b) o

3	SEC USE ONLY

4	SOURCE OF FUNDS (See Instructions) PF

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

850,844

SHARED VOTING POWER

0

SOLE DISPOSITIVE POWER

850,844

SHARED DISPOSITIVE POWER

0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,844

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.7%*

14	TYPE OF REPORTING PERSON IN

* Based on 14,897,763 shares reported by the Company in its most recent Form 10-Q to have been outstanding as of January 31, 2002.

CUSIP NO. 40009 52 0

13D

Page 3 of 12 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) C. Michael Kojaian

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
		(a) x
		(b) o

3	SEC USE ONLY

4	SOURCE OF FUNDS (See Instructions) PF

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

850,842

SHARED VOTING POWER

0

SOLE DISPOSITIVE POWER

850,842

SHARED DISPOSITIVE POWER

0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,842

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.7%*

14	TYPE OF REPORTING PERSON IN

* Based on 14,897,763 shares reported by the Company in its most recent Form 10-Q to have been outstanding as of January 31, 2002.

CUSIP NO. 40009 52 0

13D

Page 4 of 12 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Kojaian Ventures, L.L.C.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
		(a) x
		(b) o

3	SEC USE ONLY

4	SOURCE OF FUNDS (See Instructions) Not applicable

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

Michigan

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

0

SHARED VOTING POWER

0

SOLE DISPOSITIVE POWER

0

SHARED DISPOSITIVE POWER

0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%

14	TYPE OF REPORTING PERSON OO

CUSIP NO. 40009 52 0

13D

Page 5 of 12 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Kojaian Ventures-MM, Inc.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
		(a) x
		(b) o

3	SEC USE ONLY

4	SOURCE OF FUNDS (See Instructions) Not applicable

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

Michigan

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

SOLE VOTING POWER

0

SHARED VOTING POWER

0

SOLE DISPOSITIVE POWER

0

SHARED DISPOSITIVE POWER

0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%

14	TYPE OF REPORTING PERSON CO

This Amendment No. 2 to Schedule 13D is being filed on behalf of Mike Kojaian, C. Michael Kojaian, Kojaian Ventures, L.L.C., a Michigan limited liability company ("KV"), and Kojaian Ventures-MM, Inc., a Michigan corporation and managing member of KV ("KVMM"), relating to the common stock, par value $.01 per share ("Common Stock"), of Grubb & Ellis Company, a Delaware corporation (the "Company"). This Amendment No. 2 amends in certain respects Amendment No. 1 to Schedule 13D filed by Mike Kojaian and C. Michael Kojaian on February 13, 2001 ("Amendment No. 1"). All items not reported in this Amendment No. 2 are herein incorporated by reference from Amendment No. 1.

Item 2.

Identity and Background

This Amendment No. 2 is being filed by Mike Kojaian, C. Michael Kojaian, KV and KVMM (collectively, the "Reporting Persons").

Mike Kojaian is the President and C. Michael Kojaian is the Executive Vice President and Treasurer of Kojaian Management Corporation, which is engaged in the business of managing commercial real estate. The address of the principal executive offices of Kojaian Management Corporation, which is the business address of each of Mike Kojaian and C. Michael Kojaian, is 39400 Woodward Avenue, Suite 250, Bloomfield Hills, Michigan 48304. During the last five years, neither Mike Kojaian nor C. Michael Kojaian has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, neither Mike Kojaian nor C. Michael Kojaian was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in him being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violat ion with respect to such laws. Each of Mike Kojaian and C. Michael Kojaian is a citizen of the United States of America.

The address of KV's principal business and its principal office is 39400 Woodward Avenue, Suite 250, Bloomfield Hills, Michigan 48304. KV's principal business is investing in real estate and other investments. During the last five years, neither KV nor any of its managers has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, KV has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in KV or any of its managers being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. KV is a limited liability company organized under Michigan law. It is wholly owned by C. Michael Kojaian.

The address of KVMM's principal business and its principal office is 39400 Woodward Avenue, Suite 250, Bloomfield Hills, Michigan 48304. KVMM's principal business is acting as the manager of KV. During the last five years, neither KVMM nor any of its officers or directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, KVMM has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in KVMM or any of its officers or directors being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. KVMM is a corporation incorporated under Michigan law. C. Michael Kojaian is President of KVMM.

Item 3.

Source and Amount of Funds or Other Consideration.

The contents of Item 3 of Amendment No. 1 are herein incorporated by reference. Neither KV nor KVMM is a beneficial owner of any securities of the Company as of the date of this Amendment No. 2. KV intends to use available funds and investments to make the purchases of the Company's securities described in Items 4 and 6 below.

Item 4.

Purpose of Transaction.

The Common Stock currently owned by Mike Kojaian and C. Michael Kojaian was acquired by each of them as an investment. Neither KV nor KVMM is a beneficial owner of any securities of the Company as of the date of this Amendment No. 2.

KV has entered into a Letter Agreement (the "Letter Agreement") with the Company, discussed in Item 6 below, the contents of which are herein incorporated by reference. Pursuant to the Letter Agreement, KV will acquire Common Stock and certain other securities of the Company if the transactions contemplated by the Letter Agreement are consummated. If these transactions are consummated, it is expected that the Reporting Persons would acquire, or would have the ability to acquire, effective voting control of the Company. KV is acquiring the Common Stock and other securities of the Company as an investment.

The Reporting Persons may from time to time in the future acquire or dispose of additional securities of the Company in open market or privately negotiated transactions, depending on market conditions and other considerations that the Reporting Persons deem relevant. As of the date of this Amendment No. 2, the Reporting Persons have no specific plans or proposals to acquire or dispose of securities of the Company, other than the transactions contemplated by the Letter Agreement.

Consummation of the transactions contemplated by the Letter Agreement may require changes to the Company's Certificate of Incorporation in order to authorize and issue the securities contemplated thereby.

C. Michael Kojaian has served as a director of the Company since December 11, 1996. The Reporting Persons may in the future consider changing the size or composition of the Company's Board of Directors. The Reporting Persons have no specific plans with respect to changes in the Company's Board of Directors as of the date of this Amendment No. 2.

In its Form 8-K Current Report dated April 15, 2002, the Company reported that, pursuant to its Listing Agreement with the New York Stock Exchange ("NYSE"), the Company will seek to obtain stockholder approval in connection with the transactions contemplated by the Letter Agreement. The Company further reported that in the event that the Company does not obtain the requisite stockholder approval, or obtain a waiver from the NYSE, the Company would be in violation of its Listing Agreement with the NYSE and its shares may be subject to delisting from the NYSE.

The Reporting Persons reserve the right to take any and all actions with respect to their respective investments in the Company as they from time to time may determine in the future in their sole discretion.

Item 5.

Interest in Securities of the Issuer

(a) Mike Kojaian is the beneficial owner of 850,844 shares of the Company's Common Stock through his direct ownership of 850,844 shares of Common Stock. These shares of Common Stock represent approximately 5.7% of the outstanding shares of Common Stock, based on 14,897,763 outstanding shares of Common Stock as of January 31, 2002, as reported in the Company's Form 10-Q for the quarter ended December 31, 2001.

C. Michael Kojaian is the beneficial owner of 850,842 shares of the Company's Common Stock through his direct ownership of 850,842 shares of Common Stock. These shares of Common Stock represent approximately 5.7% of the outstanding shares of Common Stock, based on 14,897,763 outstanding shares of Common Stock as of January 31, 2002, as reported in the Company's Form 10-Q for the quarter ended December 31, 2001.

Neither KV nor KVMM is a beneficial owner of any securities of the Company as of the date of this Amendment No. 2. KV has entered into a Letter Agreement with the Company, as discussed in Item 6 below, the contents of which are herein incorporated by reference, pursuant to which it will acquire Common Stock and certain other securities of the Company if the transactions contemplated by the Letter Agreement are consummated.

(b) Mike Kojaian has sole voting and dispositive power over 850,844 shares of the Company's Common Stock and shared voting and dispositive power over 0 shares of Common Stock.

C. Michael Kojaian has sole voting and dispositive power over 850,842 shares of the Company's Common Stock and shared voting and dispositive power over 0 shares of Common Stock.

Mike Kojaian and C. Michael Kojaian and certain other persons are parties to a Voting Agreement dated January 24, 1997 concerning the voting of shares of the Company's Common Stock, as described in Item 6 below, the contents of which are herein incorporated by reference. However, each of Mike Kojaian and C. Michael Kojaian reserve the right to act independently with respect to the shares of the Company's Common Stock owned by them and disclaim beneficial ownership of the shares of the Company's Common Stock owned by the other.

(c) In the sixty (60) days prior to the date of this report, none of the Reporting Persons engaged in any transactions with respect to the Company's Common Stock.

(d) Not applicable.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer.

On April 15, 2002, the Company's Board of Directors, upon the recommendation of a special committee of disinterested members of the Board of Directors, ratified the Company's

entering into of the Letter Agreement with KV. Pursuant to the Letter Agreement, KV agreed, subject to the satisfaction of certain terms and conditions, to provide the Company with the funding necessary for the Company to replace the financing (the "Warburg Financing") that it recently received from its majority stockholder, Warburg, Pincus Investors, L.P. ("Warburg").

Pursuant to the terms of the Letter Agreement, KV has agreed to provide the Company with the money necessary for the Company to exercise its option to replace the Warburg Financing upon terms similar to the Warburg Financing, subject to the differences set forth in the Letter Agreement.

Consummation of the transactions contemplated by the Letter Agreement would result in the following, among other things:

• KV would provide the Company with $15,158,431, plus interest accrued on the Company's promissory note dated March 7, 2002 in the principal amount of $5,000,000 issued to Warburg and Warburg's reasonable documented out-of-pocket expenses associated with such promissory note (not to exceed $100,000);

• $11,000,000 of KV's investment would be in the form of convertible subordinated indebtedness in the form used in the Warburg Financing, modified to make KV the payee and with the additional modifications set forth in the Letter Agreement.

• The Company would redeem the 1,337,358 shares of Common Stock issued to Warburg upon its exercise of warrants earlier in 2002 for an aggregate sum of $4,158,431, and issue an equal number of such shares to KV or its designee at a price per share of approximately $3.11.

The $11,000,000 of convertible subordinated debt described above would be convertible, generally at the option of the holder, into shares of the Company's Series A Preferred Stock. The Series A Preferred Stock would have veto rights with respect to certain corporate transactions and voting power equivalent to its liquidation preference on all matters that are subject to a stockholder vote. Upon the closing of the transactions contemplated by the Letter Agreement, after giving effect of the conversion of the $11,000,000 of convertible subordinated debt into Series A Preferred Stock, it is expected that KV and its affiliates would acquire or have the ability to acquire between 50% and 55% of the voting power of the Company.

Consummation of the transactions contemplated by the Letter Agreement is subject to several conditions set forth in the Letter Agreement and there can be no assurance that these transactions will occur.

The foregoing is a summary of the terms of the Letter Agreement and does not purport to be a complete discussion of that document. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as an exhibit to this Amendment No. 2 and herein incorporated by reference. The terms of the Letter Agreement are also described in further detail in Item 1 of the Company's Form 8-K Current Report dated April 15, 2002.

Mike Kojaian and C. Michael Kojaian (collectively, "the Kojaian Shareholders"), Archon Group, L.P. ("ALP"), and Warburg (along with Warburg and ALP, the "Shareholders") are party to a letter agreement, dated January 24, 1997 (the "Voting Agreement"), whereby each agreed to (1) vote all of the shares of Common Stock of the Company owned by such Shareholder, and (2) cause directors nominated by such Shareholder to vote to nominate directors, as follows: (i) if and so long as the Kojaian Shareholders, or any transferee owned or controlled by them that agrees to be bound by the terms of such letter agreement, beneficially owns 1,250,000 shares of the Company's Common Stock, for a director nominee selected by a majority of the Kojaian Shareholders, who shall be a Kojaian Shareholder or an officer or partner of any entity owned or controlled by any of the Kojaian Shareholders, to be nominated and elected to the Company's Board of Directors; (ii) if and so long as Warburg benefi cially owns 5,059,169 shares of the Company's Common Stock, for those nominees designated by Warburg, who shall be officers of Warburg or any of its venture banking affiliates, to be nominated and elected to the Company's Board of Directors; and (iii) if and so long as ALP beneficially owns 1,250,000 shares of the Company's Common Stock, for a director nominee designated by ALP who shall be an employee of ALP, Goldman, Sachs & Co. or an affiliate thereof, to be nominated and elected to the Company's Board of Directors. The Voting Agreement is terminable in the event that all directors nominated by any of Warburg, the Kojaian Shareholders, or ALP either resign or decline to be nominated for reelection and no other nominees are nominated by such Shareholder or such Shareholder fails to nominate any director or directors for election (a "Terminated Shareholder"), in which case (a) the rights and obligations of such Terminated Shareholder under the Voting Agreement shall terminate with respect to such Termin ated Shareholder and (b) each remaining Shareholder shall have no obligation hereunder toward or with respect to such Terminated Shareholder or its nominees.

The Company, Warburg, Joe F. Hanauer, Mike Kojaian and C. Michael Kojaian entered into a Registration Rights Agreement dated as of December 11, 1996. Pursuant to that agreement, Mike Kojaian and C. Michael Kojaian have the right to demand that the Company file up to three registration statements with respect to sales of Common Stock by Mike Kojaian and C. Michael Kojaian, and Mike Kojaian and C. Michael Kojaian also have "piggyback" registration rights to participate in certain other registered offerings of Common Stock.

Item 7.

Material to Be Filed as Exhibits

Exhibit 1	Letter Agreement dated April 14, 2002 between the Company and KV.

Exhibit 2	Joint Filing Agreement dated April 18, 2002 by and among the Reporting Persons.

Exhibit 3	Voting Agreement, dated January 24, 1997, among ALP, Warburg, Mike Kojaian, Kenneth Kojaian and C. Michael Kojaian.

Exhibit 4	Registration Rights Agreement, dated December 11, 1996, among the Company, Warburg, Joe F. Hanauer, Mike Kojaian, Kenneth Kojaian and C. Michael Kojaian. Filed as Exhibit 2 to the Schedule 13D of Mike Kojaian, Kenneth Kojaian and C. Michael Kojaian filed on December 23, 1996 and herein incorporated by reference.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: April 18, 2002	/s/ Mike Kojaian Mike Kojaian


Dated: April 18, 2002	/s/ C. Michael Kojaian C. Michael Kojaian

Dated: April 18, 2002	KOJAIAN VENTURES, L.L.C. By: Kojaian Ventures-MM, Inc., its Managing Member


	By /s/ C. Michael Kojaian C. Michael Kojaian, President


Dated: April 18, 2002	KOJAIAN VENTURES-MM, INC.


	By /s/ C. Michael Kojaian C. Michael Kojaian, President

12 EX-1 3 grubbex1041802.htm EXHIBIT 1 Grubb and Ellis Exhibit 1 to Form 13D - 4-18-02

EXHIBIT 1

April 14, 2002

Grubb & Ellis Company
2215 Sanders Road, Suite 400,
Northbrook, IL 60062
Attention: Barry M. Barovick,
Chief Executive Officer

Re: Warburg, Pincus Investors, L.P. Takeout

Mr. Barovick:

Reference is herein made to that certain Option Agreement, by and among Warburg, Pincus Investors, L.P. ("Warburg"), Grubb & Ellis Company (the "Company") and Bank of America, dated as of March 7, 2002 (the "Option Agreement") pursuant to which the Company has an option ("Refinancing Option") to replace the recent financing provided to the Company by Warburg, including the $5,000,000 Convertible Promissory Note, executed March 7, 2002 (the "Note"), the additional $6,000,000 loan contemplated pursuant to the Option Agreement and the approximately $4,158,431 on common equity investment in the Company (such financings referred to herein collectively as the "Warburg Transaction"). This letter agreement (this "Letter Agreement") sets forth the agreement of the parties hereto with respect to such Refinancing Option.

Kojaian Ventures, L.L.C. ("KV") hereby agrees to provide to the Company the money necessary for the Company to exercise the Refinancing Option as provided in the Option Agreement and replace the Warburg Financing. The terms are:

1. KV shall provide to the Company Fifteen Million One Hundred Fifty-Eight Thousand Four Hundred Thirty-One Dollars ($15,158,431.00) plus interest accrued on the Note and Warburg's reasonable documented out-of-pocket expenses associated with the Note, which expenses shall not exceed $100,000.

Grubb & Ellis Company
April 14, 2002
Page 2

2. Except as specified in paragraph 3, KV's investment shall be in the form of convertible subordinated indebtedness in the form used in the Warburg Transaction, modified to make KV the payee and with the following additional modifications:

	a.	Interest rate of 12% compounded quarterly;
	b.	Upon conversion of the $11,000,000 indebtedness contemplated by this Letter Agreement, the Series A Preferred Stock shall have a dividend rate of 12% per annum; and
	c.	The Series A Preferred Stock shall be adjusted so the dilution component of the Series A Preferred Stock (i) would be reduced from approximately 50% to 40%, (ii) would be based solely on the number of Adjusted Common Shares Outstanding and (iii) until the one (1) year anniversary of the closing of the transactions contemplated by this Letter Agreement, the minimum liquidation preference would be 150% of the Stated Value per share. For purposes of this Letter Agreement, the term "Adjusted Common Shares Outstanding" shall mean (w) the common shares outstanding as of the date hereof plus (x) those common stock options that are outstanding as of the date hereof and that have an exercise price equal to or less than $5.00 (other than those common stock options, if any, that are cancelled within 12 months after the closing of the transactions contemplated by this Letter Agreement) plus (y) all common stock options authorized but unissued as of the date hereof which are issued within 12 months after the closing o f the transactions contemplated by this Letter Agreement plus (z) 50% of additional common stock options, if any, authorized after the date hereof and issued within 12 months after the closing of the transactions contemplated by this Letter Agreement; provided that the number of additional common stock options counted for purposes of this clause (z) shall not exceed that number of common stock options cancelled during such 12-month period.

3. The Company shall redeem at cost the 1,337,358 common stock shares issued to Warburg upon its exercise of warrants earlier this year and issue an equal number of such shares after redemption to KV or its designee at the same price per share paid to Warburg.

4. The Company shall pay down Six Million Dollars on its bank financing.

5. In all other respects KV shall be substituted for, have the rights, privileges and prerogatives of, and have the documentation used (but modified with the foregoing changes, other conforming changes and rewritten to substitute its name for Warburg) for, Warburg in the Warburg Transaction.

6. The consummation of the transactions contemplated by this Letter Agreement is subject to the following conditions:

receipt by the Company of all necessary consents, approvals or waivers required by the lenders pursuant to the Amended and Restated Credit Agreement, by and

Grubb & Ellis Company
April 14, 2002
Page 3

		among the Company and various financial institutions, dated as of December 31, 2000, as amended by the First Amendment, dated as of August 22, 2001, the Second Amendment, dated as of November 29, 2001 and the Third Amendment, dated as of March 7, 2001 (the "Credit Agreement");

	b.	receipt by the Independent Committee of the Company's Board of Directors (the "Independent Committee") from an independent financial advisor of a written opinion to the effect that the transactions contemplated in this Letter Agreement are fair from a financial point of view;

	c.	definitive documentation embodying the terms of this Letter Agreement which is reasonably satisfactory to both parties; provided that the definitive documentation shall be substantially identical to the definitive documentation used in the Warburg Transaction, except as provided in this Letter Agreement and for such other conforming changes as are reasonably necessary to effect the intent of this Letter Agreement;

	d.	satisfaction of all legal requirements, including those under applicable securities laws and regulations; and

	e.	approval of this Letter Agreement by the Board of Directors of the Company in the exercise of their fiduciary duties; provided that in the event such approval is not obtained by 5:00 P.M. Eastern Daylight Savings Time, April 15, 2002, for any reason, KV shall have the right, at its sole option, to terminate immediately this Letter Agreement; and provided further that in the event approval of this Letter Agreement is rejected at any time by the Board of Directors, either party hereto may terminate this Letter Agreement immediately upon such rejection.

7. The Company will use its reasonable best efforts to seek satisfaction of each of the conditions set forth in paragraph 6. The parties shall endeavor in good faith to consummate the transactions contemplated herein, including but not limited to funding, pay off, documentation, filings, approvals and other necessary actions, as soon as possible but in no event later than May 13, 2002, at which date this Letter Agreement and the definitive documentation relating hereto shall become null and void and be of no further force and effect.

8. The Company represents and warrants that: subject to Section 6 herein, it has all necessary power and authority to enter into, execute and deliver this Letter Agreement and to perform all of the obligations to be performed by it hereunder and to consummate the transactions contemplated hereunder; this Letter Agreement has been duly authorized, executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and to general equitable principles; the Independent Committee has

Grubb & Ellis Company
April 14, 2002
Page 4

recommended acceptance of this Letter Agreement; and all documents required to be filed under the U.S. securities laws in respect of the Credit Agreement have been filed with the Securities and Exchange Commission by the Company.

9. Following the date of this Letter Agreement and until the earlier of (a) the closing of the transactions contemplated by this Letter Agreement, (b) the date on which any of the conditions set forth in Sections 6(a), (b) or (e) become not capable of being satisfied by May 13, 2002 (provided that the party asserting that a condition is not capable of being satisfied shall provide reasonable evidence supporting such determination to the other party) and (c) May 13, 2002, the Company shall not, directly or indirectly (i) initiate, solicit or encourage any inquiries or proposals that constitute, or could reasonably be expected to lead to, a proposal or offer for an alternative refinancing transaction of the type contemplated by this Letter Agreement (an "Alternative Proposal"), (ii) engage in negotiations or discussions concerning (and shall cease any current negotiations or discussions), or provide to any person or entity any confidential information or data rela ting to the Company for the purposes of, or otherwise cooperate with or assist or participate in, facilitate or encourage, any inquiries or the making of any Alternative Proposal, or (iii) agree to, approve or recommend any Alternative Proposal. Nothing in this Section 9 shall prevent the Company from providing confidential Company information to any director in connection with the exercise by such director of his fiduciary duties to the Company.

10. Upon execution of this letter by the Company, the amount of $1,000,000 which was delivered to Robert Walner as an earnest money deposit may be negotiated by the Company in a specially designated account to be used solely in connection with the transactions contemplated by this Letter Agreement and shall be credited against the amount described in paragraph 1 of this Letter Agreement. In the event that a closing of the transactions contemplated by this Letter Agreement does not occur for any reason other than solely as a result of a breach by KV of this Letter Agreement or the definitive documentation relating thereto, then upon request therefor by KV, said $1,000,000 shall immediately be returned by the Company to KV without interest or deduction.

This Letter Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by facsimile of an executed counterpart of any signature page to this Letter Agreement to be executed hereunder shall have the same effectiveness as the delivery of a manually executed counterpart thereof.

[Signature page to follow]

Grubb & Ellis Company
April 14, 2002
Page 5

IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

Sincerely, KOJAIAN VENTURES, L.L.C., a Michigan limited liability company

By:	Kojaian Ventures-MM, Inc., a Michigan corporation, Managing Member


	By:	/s/ C. Michael Kojaian C. Michael Kojaian, President

Accepted and agreed:

GRUBB & ELLIS COMPANY

By /s/ Barry M. Barovick

Name: Barry M. Barovick
Title: President, Chief Executive Officer

EX-2 4 grubbex2041802.htm EXHIBIT 2 Grubb and Ellis Exhibit 2 to Form 13D - 4-18-02

EXHIBIT 2

JOINT FILING AGREEMENT

Pursuant to Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to file with the Securities and Exchange Commission Amendment No. 2 to Schedule 13D (the "Amendment"), with respect to the Common Stock of Grubb & Ellis Company. The undersigned agree that the Amendment will be filed on behalf of each and all of them. Each of the undersigned agrees that he or it shall be responsible for the accuracy and completeness of the information concerning him or it contained in the Amendment. This agreement may be executed in any number of counterparts, which taken together shall constitute one and the same document.

Dated: April 18, 2002	/s/ Mike Kojaian Mike Kojaian


Dated: April 18, 2002	/s/ C. Michael Kojaian C. Michael Kojaian

Dated: April 18, 2002	KOJAIAN VENTURES, L.L.C. By: Kojaian Ventures-MM, Inc., its Managing Member


	By /s/ C. Michael Kojaian C. Michael Kojaian, President


Dated: April 18, 2002	KOJAIAN VENTURES-MM, INC.


	By /s/ C. Michael Kojaian C. Michael Kojaian, President

2 EX-3 5 grubbex3041802.htm EXHIBIT 3 Grubb and Ellis Exhibit 3 to Form 13D - 4-18-02

EXHIBIT 3

ARCHON
GROUP

January 24, 1997

John D. Santoleri
Managing Director
E.M. Warburg, Pincus & Co., L.L.C.
466 Lexington Avenue
New York, New York 10017-3147

Mike Kojaian
Kenneth J. Kojaian
C. Michael Kojaian
Kojaian Management Corporation
26600 Telegraphy Road
Suite 450
Southfield, Michigan 48034-5300

RE: Grubb & Ellis - Voting Agreement

Gentlemen:

This letter shall confirm our understanding that, in connection with the $11,250,000 investment in Grubb & Ellis Company (the "Company") by Archon Group, L.P. ("Archon"), Mike Kojaian, Kenneth J. Kojaian, C. Michael Kojaian (collectively, "the Kojaian Shareholders") and Warburg, Pincus Investors, L.P. ("WPI") and Archon (collectively, the "Shareholders") hereby agree to (i) vote all of the shares of common stock of the Company owned by such Shareholder, and (ii) cause directors nominated by such Shareholder to vote to nominate directors, as follows:

	(i)	if and so long as the Kojaian Shareholders, or any transferee owned or controlled by them that agrees to be bound by the terms of this letter agreement, beneficially owns 1,250,000 shares of the Company's common stock, for a director nominee selected by a majority of the Kojaian Shareholders, who shall be a Kojaian Shareholder or an officer or partner of any entity owned or controlled by any of the Kojaian Shareholders, to be nominated and elected to the Company's Board of Directors;

	(ii)	if and so long as WPI beneficially owns 5,059,169 shares of the Company's common stock, for those nominees designated by WPI, who shall be officers of WPI or any of its venture banking affiliates, to be nominated and elected to the Company's Board of Directors; and

January 24, 1997
Page Two

(iii)

if and so long as Archon beneficially owns 1,250,000 shares of the Company's common stock, for a director nominee designated by Archon who shall be an employee of Archon, Goldman, Sachs & Co. or an affiliate thereof, to be nominated and elected to the Company's Board of Directors.

None of the Shareholders shall enter into any other voting arrangement or proxy whereby its voting rights would be vested in any other party, except if such party agrees to be bound by the above.

In the event that all directors nominated by any of WPI, the Kojaian Shareholders, or Archon either resign or decline to be nominated for reelection and no other nominees are nominated by such Shareholder or such Shareholder fails to nominate any director or directors for election (a "Terminated Shareholder"), then (i) the rights and obligations of such Terminated Shareholder under this Agreement shall terminate with respect to such Terminated Shareholder and (ii) each remaining Shareholder shall have no obligation hereunder toward or with respect to such Terminated Shareholder or its nominees.

This Agreement may only be varied by an instrument in writing, and shall be governed under the laws of the State of Delaware.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

Sincerely,

/s/Todd A. Williams

Todd A. Williams
Archon Gen-Par, Inc.

ACCEPTED AND AGREED

WARBURG, PINCUS INVESTORS, L.P.:

Warburg, Pincus & Co.
By:
Name:
Title:

Please countersign one copy indicating your agreement to the above.

Sincerely,

/s/ Todd Williams

Todd Williams
Archon Gen-Par, Inc.

ACCEPTED AND AGREED WARBURG, PINCUS INVESTORS, L.P.: /s/John D. Santoleri Warburg, Pincus & Co.
By:
Name:	John D. Santoleri
Title:	Partner



KOJAIAN SHAREHOLDERS: /s/Mike Kojaian
By:	Mike Kojaian



/s/Kenneth J. Kojaian
By:	Kenneth J. Kojaian



/s/C. Michael Kojaian
By:	C. Michael Kojaian

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