-----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, J/UhQ5WfiP7FkfSdlNWQ/xOozSCBmb/z3P5VCKRqp4AUkT7VnuZgeiht6z9KWr3/ nmx5mDs0zNJWrIwERrBK2Q== 0000930413-02-001269.txt : 20020419 0000930413-02-001269.hdr.sgml : 20020419 ACCESSION NUMBER: 0000930413-02-001269 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020415 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020419 FILER: 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08122 FILM NUMBER: 02614978 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 8-K 1 c24212_8k.txt FORM 8-K 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) APRIL 15, 2002 GRUBB & ELLIS COMPANY ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-8122 94-1424307 ------------------------------------------------------ (STATE OR OTHER (COMMISSION (IRS EMPLOYER JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.) FORMATION) 2215 SANDERS ROAD, SUITE 400, NORTHBROOK, ILLINOIS 60062 ---------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (847) 753-7500 -------------- NOT APPLICABLE ------------------------------------------------------------ (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) Item 1. CHANGE IN CONTROL OF REGISTRANT. On April 15, 2002, the Board of Directors of Grubb & Ellis Company (the "Company"), upon the recommendation of a special committee of disinterested members of the Board of Directors ("Special Committee"), ratified the Company's entering into a binding letter agreement dated April 14, 2002 (the "Letter Agreement") with Kojaian Ventures, L.L.C. ("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 that it recently received from its majority stockholder, Warburg Pincus Investors, L.P. ("Warburg Pincus"). KV is wholly owned by C. Michael Kojaian, who is a Director of the Company and, along with his father, currently owns approximately 11.4% of the Company's issued and outstanding Common Stock. In addition, certain affiliated real estate entities of KV, in the aggregate, are substantial clients of the Company. As more fully described below, subsequent to the closing of the transactions contemplated by the Letter Agreement, it can reasonably be expected that a change in control of the Company will effectively occur. As previously disclosed by the Company in its Current Report on Form 8-K filed on March 12, 2002, on March 7, 2002 the Company, upon the approval of the Company's Board of Directors, including a majority of its disinterested Directors, entered into a third amendment (the "Credit Amendment") to restructure the terms and conditions of its amended and restated term loan and revolving credit facility (the "Credit Facility") dated as of December 31, 2000, among the Company, various financial institutions and Bank of America, N.A. as agent and lender (collectively the "Banks"). Pursuant to the Credit Amendment, Warburg Pincus loaned the Company $5,000,000, at the rate of 15% per annum, compounded quarterly, in exchange for a convertible secured promissory note (the "$5,000,000 Subordinated Note"), and thereby became an additional, junior lender under the Credit Facility. Simultaneously with the entering into of the Credit Amendment, upon the approval of a majority of the disinterested members of the Board of Directors, the Company, Warburg Pincus and Bank of America, N.A. ("Bank of America"), as agent for the Banks, entered into an option agreement (the "Option Agreement") pursuant to which the Company has the absolute, unconditional and irrevocable right, to cause Warburg Pincus on June 3, 2002, to purchase from the Company a promissory note in the amount of $6,000,000 upon substantially similar terms and conditions as the $5,000,000 Subordinated Note (the "$6,000,000 Subordinated Note"). The entire $11,000,000 of indebtedness represented by the $5,000,000 Subordinated Note and the $6,000,000 Subordinated Note (collectively, the "$11,000,000 Subordinated Debt") is convertible, generally at the option of the holder, into (i) 11,000 shares of the Company's Series A Preferred Stock, having a coupon of 15% per annum, compounded quarterly, and a stated value of $1,000 per share, plus (ii) additional shares of Series A Preferred Stock representing accrued interest on, and 1 reasonable costs of the holder attributable to, the $11,000,000 Subordinated Debt ((i) and (ii), collectively, the "Conversion Amount"). The $11,000,000 Subordinated Debt is also convertible in part, from time to time and generally at the option of the holder, into a pro rated portion of the Conversion Amount of Series A Preferred Stock. The Series A Preferred Stock is not convertible into any other securities of the Company or subject to redemption under any circumstances, but has a preference upon liquidation, dissolution and certain change in control transactions. In addition, the Series A Preferred Stock has 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. The liquidation preference of the Series A Preferred Stock issuable to the holder of the Series A Preferred Stock is the greater of (i) two (2) times the Conversion Amount, plus the accrued dividend thereon at the rate of 15% per annum, or (ii) the equivalent of 50% of the consideration to be paid to all equity holders of the Company on a fully diluted basis as if liquidation, dissolution or a change of control transaction occurred on March 7, 2002, subject to adjustments. Accordingly, the voting power of this Series A Preferred Stock, upon issuance, is currently 50% of the Company on a fully diluted basis, or approximately 58% on a primary share basis. Also pursuant to the Option Agreement, provided that the Company receives approximately $15,200,000 from the sale of equity or subordinated debt securities, the Company has the right to replace Warburg Pincus with respect to its $11,000,000 Subordinated Debt by tendering to Warburg Pincus, or its assigns, on or before April 30, 2002 (subject to extension to May 14, 2002): (i) the entire principal amount of the $5,000,000 Subordinated Note, plus accrued interest thereon and reasonable costs of Warburg Pincus with respect thereto, and (ii) the sum of $4,158,431, to repurchase 1,337,358 shares of Common Stock held by Warburg Pincus and/or its assigns, whereupon the $5,000,000 Subordinated Note will be cancelled and the Option Agreement, including the additional $6,000,000 Subordinated Note issuable thereunder, will automatically be terminated. Accordingly, pursuant to the Letter Agreement, KV has agreed to provide the Company $15,158,431, plus accrued interest on the $5,000,000 Subordinated Note, and reimburse the Company for Warburg Pincus' reasonable, documented out-of-pocket expenses associated with the $5,000,000 Subordinated Note, not to exceed $100,000. The Company has been advised by KV that the source of these funds are from the working capital of KV, and are not borrowed from a lending institution or any other source. The Special Committee recommended that the Board of Directors approve the financing offered by KV, pursuant to the Letter Agreement, subject to conditions set forth below, as it is on more favorable terms and conditions to the Company than the financing provided by Warburg Pincus pursuant to the Option Agreement. The form of KV's proposed investment shall be substantially identical to the form of the $11,000,000 Subordinated Debt that Warburg Pincus was to provide pursuant to the Option Agreement, PROVIDED, HOWEVER, that the 2 proposed $11,000,000 Subordinated Debt to be provided by KV is more favorable to the Company in two (2) material respects. First, the interest rate on the $11,000,000 Subordinated Debt to be provided by KV will be 12% per annum as opposed to the current 15% per annum. Similarly, the Series A Preferred Stock into which the $11,000,000 Subordinated Debt is convertible will have a coupon of 12% per annum rather than 15% per annum, as is currently the case with the Series A Preferred Stock issuable to Warburg Pincus. Second, the Series A Preferred Stock that KV is entitled to receive, like the Series A Preferred Stock issuable to Warburg Pincus, will also have preference on liquidation, dissolution and certain change in control transactions, but it will be equal to the greater of (i) 1.5 times the Conversion Amount, plus the accrued dividend thereon at the rate of 12% per annum (provided such liquidation, dissolution, or change of control transaction takes place within twelve (12) months after the closing of the transactions contemplated by the Letter Agreement, and thereafter it will increase to 2 times the Conversion Amount plus the accrued dividend thereon at the rate of 12% per annum), or (ii) the equivalent of 40% percent of the consideration to be paid to all the equity holders of the Company, not on a fully diluted basis, but rather, on an "Adjusted Outstanding Basis." For purposes of determining this liquidation preference, the Adjusted Outstanding Basis is equal to the shares of Common Stock outstanding as of the date of the closing of the transactions contemplated by the Letter Agreement (the "Closing of the KV Transaction") plus the shares of Common Stock underlying the following options (i) those Common Stock options that have been granted and are outstanding as of the Closing of the KV Transaction that have an exercise price equal to or less than $5.00 per share (other than those Common Stock options, if any, that are cancelled within 12 months after the Closing of the KV Transaction), plus (ii) all Common Stock options that are currently authorized and subsequently issued within twelve (12) months of the Closing of the KV Transaction, plus (iii) 50% of all Common Stock options, if any, subsequently authorized and issued within twelve (12) months after the Closing of the KV Transaction ("Newly Authorized Options"), provided that the number of Newly Authorized Options to be taken into account for the purposes of this calculation shall not exceed the number of any Common Stock options cancelled during such 12-month period. Accordingly, the voting power of the Series A Preferred Stock, upon issuance to KV, would currently be 40% of the Company on an Adjusted Outstanding Basis, and approximately 44% on a primary share basis. Upon receipt of $15,158,431 (plus accrued interest and expenses) from KV, the Company will redeem, at cost, the 1,337,358 shares of Common Stock issued to Warburg Pincus earlier this year and reissue an equal number of shares of Common Stock to KV at the same per share price of approximately $3.11. The Company will also pay down $6,000,000 of revolving debt under its Credit Facility. 3 Accordingly, upon the Closing of the KV Transaction, KV and its affiliated parties would have the power to acquire voting control over the Company's shares by converting the $11,000,000 Subordinated Debt. In the event of the conversion of the $11,000,000 Subordinated Debt into Series A Preferred Stock, there would be a change in control of the Company, as KV and its affiliated parties would have in excess of 50% of the voting power of the Company (subject to adjustment) and Warburg Pincus, which currently owns approximately 48% of the issued and outstanding Common Stock of the Company (and upon issuance of the Series A Preferred Stock, would have had approximately 78% of the voting power), would have approximately 22% of the voting power of the Company (subject to adjustment). In connection with the KV Transaction, that certain voting agreement (the "Voting Agreement") entered into on January 24th, 1997, by C. Michael Kojaian and his father (collectively, the "Kojaians"), Warburg Pincus and the Goldman Sachs Group, Inc. ("Goldman Sachs"), pursuant to which each of the parties to the Voting Agreement have agreed to vote all of their shares for the other's Board nominees, is not being amended. Presently, Warburg Pincus has two (2) nominees on the Board of Directors, and each of the Kojaians and Goldman Sachs has one nominee on the Board of Directors. The entering into of definitive agreements with KV is subject to certain terms and conditions. Specifically, those conditions are: receipt by the Company of all necessary consents, approvals or waivers required by the Banks pursuant to the Credit Facility; receipt by the Special Committee from an independent financial advisor of a written opinion to the effect that the transactions contemplated by the Letter Agreement are fair to the Company from a financial point of view (the "Fairness Opinion"); satisfaction of all legal requirements, including those under applicable securities laws and regulations; and definitive documentation embodying the terms of the Letter Agreement satisfactory to the Company and KV; PROVIDED, HOWEVER, that such definitive documentation shall be substantially identical to the definitive documentation entered into by the Company with Warburg Pincus, except as otherwise provided for in the Letter Agreement and with such conforming changes as are reasonably necessary to effect the intent of the Letter Agreement. The Special Committee is currently negotiating the retention of an independent financial advisor with respect to seeking to obtain the required Fairness Opinion. Each of the Company and KV have agreed to use their reasonable best efforts to consummate the Closing of the KV Transaction on or before May 13, 2002, after which date, if not consummated, the Letter Agreement and all definitive documentation relating thereto become null and void. The Company also agreed, upon the entering into of the Letter Agreement, and during the duration of the foregoing period, not to initiate, solicit or encourage any alternative proposals to the financing proposed by KV, engage in any discussions concerning an alternative financing proposal, or to provide to any person any confidential information with respect thereto or in contemplation thereof, or agree to, approve or recommend any alternative proposal. 4 The Company received a $1,000,000 earnest money deposit from KV in connection with the entering into of the Letter Agreement. In the event that a Closing of the KV Transaction does not occur for any reason, other than a breach by KV of the Letter Agreement or the definitive documentation, then upon request by KV, the $1,000,000 shall be immediately returned by the Company to KV without interest or deduction. The Company's Common Stock is currently listed on the New York Stock Exchange ("NYSE") pursuant to a listing agreement (the "Listing Agreement"). As previously disclosed by the Company on January 22, 2002, the NYSE accepted the Company's proposed business plan to attain compliance with the NYSE's listing standards on or before July 4, 2003. As a result, the Company's common stock continues to be traded on the NYSE, subject to the Company maintaining compliance with its business plan, which is subject to periodic review by the NYSE. The Company had received notification from the NYSE of non-compliance with its listing standards on January 4, 2002. Pursuant to its Listing Agreement, the Company will seek to obtain stockholder approval in connection with the transactions contemplated by the Letter Agreement. In the event that the Company does not obtain the requisite stockholder approval, or obtain a waiver from the NYSE, the Company will be in violation of its Listing Agreement and its shares may be subject to delisting from the NYSE. The foregoing is only intended to be a summary of the terms of the Letter Agreement and is not a complete discussion of the Letter Agreement. Accordingly, the foregoing is qualified by reference to the full text of the Letter Agreement, which is attached hereto as an Exhibit to this Current Report on Form 8-K. 5 Item 7. Financial Statements and Exhibits The following are filed as Exhibits to this Current Report on Form 8-K: 1. Letter Agreement dated April 14, 2002 by and between Grubb & Ellis Company and Kojaian Ventures, L.L.C. 2. Press Release issued by Grubb & Ellis Company dated April 19, 2002. 6 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly authorized and caused the undersigned to sign this Report on the Registrant's behalf. GRUBB & ELLIS COMPANY By: /s/ BARRY M. BAROVICK --------------------- Barry M. Barovick Chief Executive Officer and President /s/ IAN BRESS ------------- Ian Y. Bress Chief Financial Officer Dated: April 19, 2002 7 EX-1 3 c24212_ex-1.txt 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 of 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: a. 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 among the Company and various financial institutions, dated as of December 31, Grubb & Ellis Company April 14, 2002 Page 3 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 recommended acceptance of this Letter Agreement; and all documents required to be filed under Grubb & Ellis Company April 14, 2002 Page 4 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 relating 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 c24212_ex-2.txt KOJAIAN INCREASES EQUITY Exhibit 2 [LOGO] GRUBB&ELLIS MEDIA RELEASE Property Solutions Worldwide FOR IMMEDIATE RELEASE CONTACT: Tim Gallen - Gallen.Neilly & Assoc. tim@gallen.com, 925.930.9848 KOJAIAN INCREASES EQUITY POSITION IN GRUBB & ELLIS INVESTMENT REPLACES $15.2 MILLION DEBT AND EQUITY INVESTMENT AND COMMITMENTS RECENTLY MADE BY WARBURG PINCUS; GIVES KOJAIAN AN OPPORTUNITY TO OBTAIN MAJORITY STOCKHOLDER VOTING POWER NEW YORK, NY (Thursday, April 19, 2002) -- Grubb & Ellis Company (NYSE: GBE) said in an 8-K filing today that it has entered into an agreement with Bloomfield Hills, Michigan-based Kojaian Ventures, LLC to invest $15.2 million in the globally-integrated real estate services firm. The investment will replace debt and equity investments and commitments made earlier this year by Warburg Pincus on financial terms more favorable to GBE than the Warburg Pincus investments. The GBE Board authorized the Kojaian Ventures investment after receiving the recommendation of a Special Committee of GBE's disinterested directors. The capital investment by Kojaian Ventures, which is headed by C. Michael Kojaian, a long time GBE stockholder, member of the Grubb & Ellis Board and a significant client of the company, will position Kojaian with the opportunity to exercise the voting power of a majority stockholder. According to GBE management, the investment also provides an opportunity to further develop relationships between the two firms, and Grubb & Ellis leadership access to additional high level real estate market connections that can accelerate its quest to become a global provider of integrated real estate services. The capital injection, according to GBE Chief Financial Officer, Ian Bress (ian.bress@grubb-ellis.com, (212) 326-4784), will be used to retire $5 million in principal amount of debt currently owed to the Company's largest stockholder, Warburg Pincus. The remainder will be used to replace a $4.2 million Warburg Pincus equity investment in GBE and to pay down the $6 million in principal -more- 2-2-2 4/17/02 KOJAIAN INCREASES EQUITY POSITION IN GRUBB & ELLIS amount of debt outstanding on the Company's credit facility. Bress added that the closing of the transaction is subject to receipt by GBE of an opinion from an independent financial advisor as to the fairness of the transaction and is subject to certain third-party approvals and standard closing conditions, but is not contingent on financing. Grubb & Ellis CEO, Barry Barovick (barry.barovick@grubb-ellis.com, (212) 326-4744), said Kojaian has been an active leader and major investor in the firm since 1996. "This is more than just an investment of capital," said Barovick. "It's a demonstration of Michael Kojaian's confidence in our company's ability to establish an innovative new business platform, and increase our client base, market share and revenues. Michael's leadership and real estate experience on the Board is also viewed by the entire Grubb & Ellis Board and the executive management team as well timed and important to the completion of the company's mission." "As real estate investors, the Kojaian Companies know from firsthand experience that the industry needs a resource that can deliver an integrated approach to advisory, transaction and management services globally. Grubb & Ellis has made significant progress during the past year to fully develop that capability," said C. Michael Kojaian. "As clients and Board Members for many years, we've had a firsthand look at how good this company can be. Under Barry Barovick's leadership, Grubb & Ellis has assembled a determined team of top-notch people who are using their vision to change the way this industry does business. As a part of that team, we at Kojaian Ventures see our primary role as helping other businesses, investors and property owners discover the same insight about this company." BACKGROUND: KOJAIAN COMPANIES: As one of the nation's largest privately-held real estate investment companies, Bloomfield Hills, Michigan-based Kojaian Companies controls a significant domestic portfolio of income producing properties, including a diversified mix of office, industrial and retail assets. GRUBB & ELLIS COMPANY (NYSE: GBE): Grubb & Ellis is one of the world's leading providers of integrated real estate services. Through its comprehensive global array of consulting, transaction and management solutions, Grubb & Ellis has established an innovative "continuum" of multi-level services for businesses and corporations worldwide, including strategic planning, property and asset management services, and transaction expertise in both corporate and investment real estate. With the collective resources of more than 8,000 people in over 200 offices in 30 countries, including its -more- 3-3-3 4/17/02 KOJAIAN INCREASES EQUITY POSITION IN GRUBB & ELLIS domestic affiliates and a strategic initiative with Knight Frank, one of the leading property consulting firms in Europe, Africa and Asia Pacific, Grubb & Ellis provides a unique "single point of contact" approach for clients that empowers its professionals to approach commercial real estate issues seamlessly. For more information, visit the company's Web site at WWW.GRUBB-ELLIS.COM. - o - STATEMENTS CONTAINED IN THIS PRESS RELEASE, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: issues affecting real estate on both on a national and local basis, general economic conditions, the ability of the Company to fully implement its business plan, the ability of the Company to satisfy the contractual conditions to the proposed investment by Kojaian Ventures, and other factors that are discussed in the Company's Annual Report on Form 10-K that has been filed with the Securities and Exchange Commission. ### -----END PRIVACY-ENHANCED MESSAGE-----