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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
SCHEDULE 13D
(Amendment No. 5)
Under the Securities Exchange Act of 1934
GRUBB & ELLIS COMPANY
__________________
(Name of Issuer)
Common Stock, par value $.01 per share
___________________________
(Title of Class of Securities)
40009-52-0
_____________
(CUSIP Number)
Reuben S. Leibowitz
E.M. Warburg, Pincus & Company
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
______________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 21, 1994
__________________________________________________
(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 subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Check the following box if a fee is being paid with the statement: [ ]
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This Amendment No. 5 to Schedule 13D is being filed on behalf of (i)
Warburg, Pincus Investors, L.P. ("WPI"), (ii) Warburg, Pincus & Co., (iii) E.M.
Warburg, Pincus & Company and (iv) E.M. Warburg, Pincus & Co., Inc.
(collectively, the "Reporting Persons") to amend the Schedule 13D filed by the
Reporting Persons on November 11, 1992, as amended (the "Schedule 13D"),
relating to the common stock, par value $.01 per share (the "Common Stock"), of
Grubb & Ellis Company, a Delaware corporation (the "Company"). Unless otherwise
indicated, all capitalized terms used herein but not defined herein shall have
the same meanings as set forth in the Schedule 13D.
Item 4. PURPOSE OF TRANSACTION.
Item 4 to the Schedule 13D is hereby amended, in pertinent part, as
follows:
On July 21, 1994, the Company and WPI entered into the Standby
Agreement. A copy of the Standby Agreement is attached hereto as Exhibit 2 and
is incorporated herein by reference. Information in Item 6 concerning the
Standby Agreement is incorporated herein by reference.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 to the Schedule 13D is hereby amended, in pertinent part, as
follows:
On July 21, 1994, the Company and WPI entered into the Standby
Agreement, which provides for a commitment by WPI to purchase up to
approximately 4,250,000 shares of Common Stock not acquired by the Company's
stockholders in connection with a proposed plan of financing for the Company
(the "Financing Transactions"). A copy of the Standby Agreement is attached
hereto as Exhibit 2 and is incorporated herein by reference.
RIGHTS OFFERING AND STANDBY AGREEMENT. The Company has announced that
subject to the approval of the holders of a majority of the outstanding shares
of the Company's capital stock (other than shares held by WPI and Prudential),
the Company would consummate the Financing Transactions, including the issuance
by the Company to each holder of Common Stock of one nontransferable right (a
"Right") to purchase one share of Common Stock at $2.375 for each share of
Common Stock held of record on September 13, 1994 (the "Rights Offering").
Pursuant to the Rights Offering, a stockholder who validly exercises all of his
or her Rights may, subject to certain limitations, oversubscribe for additional
shares of Common Stock at $2.375 per share to the extent that unsubscribed
shares are available as a result of other stockholders not electing to exercise
their Rights. In connection with the Financing Transactions, WPI and the Company
have entered into the Standby Agreement, pursuant to which WPI has agreed to
purchase at $2.375 per share shares of Common Stock reserved pursuant to the
exercise of the Rights and not purchased by holders of Common Stock in the
Rights Offering, subject to a maximum number of shares that will result in an
aggregate purchase price paid by WPI being equal to $10 million plus
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accrued interest under the Loan and Security Agreement between WPI and the
Company dated as of March 29, 1994 (the "Bridge Loan"), which was filed
previously as an Exhibit to this Schedule 13D. WPI will pay for such shares
first through the cancellation of indebtedness outstanding under the Bridge
Loan, including accrued interest on the Bridge Loan, and thereafter through
payments of funds directly to the Company.
EXCHANGE OF WARRANTS AND ISSUANCE OF NEW WARRANTS. Pursuant to the
Standby Agreement, WPI has agreed to exchange its warrants to purchase an
aggregate of 340,000 shares of Common Stock at an exercise price of $5.00 per
share and its warrants to purchase an aggregate of 142,000 shares of Common
Stock at an exercise price of $5.50 per share (collectively, the "Old WPI
Warrants") in exchange for a new warrant (the "New WPI Warrant") to purchase at
an exercise price of $3.50 per share the number of shares of Common Stock that
the Old WPI Warrants would have represented the right to purchase as calculated
in accordance with the terms of the Old WPI Warrants, except that WPI has waived
application of the anti-dilution provisions contained in the Old WPI Warrants
with respect to issuances by the Company from January 29, 1993 through
consummation of the Financing Transactions pursuant to the Company's 1990 Stock
Option Plan (including securities issued upon the exercise of stock options
granted pursuant to such Plan) and the Company's Employee Stock Purchase Plan.
The anti-dilution provisions contained in the New WPI Warrant will not include
anti-dilution protection upon issuance of shares of Common Stock at a price
which is less than the greater of the market price and the exercise price.
Pursuant to the Standby Agreement, if WPI purchases at least 500,000 shares of
Common Stock pursuant to the Standby Agreement, the Company would issue to WPI a
warrant to purchase 325,000 shares of Common Stock at an exercise price of
$2.375 per share, and WPI would surrender its Contingent Warrants.
AMENDMENTS TO PREFERRED STOCK. The Financing Transactions also
contemplate the Company's filing with the Delaware Secretary of State the
Certificate of Amendment of Restated Certificate of Incorporation (the "Charter
Amendment"), providing for certain amendments to the existing Senior Convertible
Preferred Stock held by WPI, including, among other things, eliminating the
mandatory redemption provisions, increasing the dividend rate commencing in
2005, and amending the anti-dilution provisions so as not to include
anti-dilution protection upon issuance of shares at a price which is less than
the greater of the market price and the conversion price. The proposed form of
the Charter Amendment is attached as Exhibit 6.1 to the Standby Agreement and is
incorporated herein by reference. The Charter Amendment, which is subject to the
approval of the Company's stockholders, provides that WPI will exchange all of
its shares of Senior Convertible Preferred Stock for an equal number of shares
of Series B Senior Preferred Stock. WPI has waived application of the
anti-dilution provisions contained in the Senior Convertible Preferred Stock
with respect to issuances by the Company from January 29, 1993 through
consummation of the Financing Transactions pursuant to the Company's 1990 Stock
Option Plan (including securities issued upon the exercise of stock options
granted pursuant to such Plan) and the Company's Employee Stock Purchase Plan.
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Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Agreement relating to the filing of joint acquisition
statements as required by Rule 13d-1(f)(1) under the Act (previously filed as
Exhibit 1 to Amendment No. 4 to Schedule 13D dated April 1, 1994).
Exhibit 2. Standby Agreement dated as of July 21, 1994 by and
between the Company and WPI.
Exhibit 3. Form of Certificate of Amendment of Restated
Certificate of Incorporation of the Company (attached as Exhibit 6.1 to the
Standby Agreement).
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SIGNATURE
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned certify that the information set forth in
this statement is true, complete and correct.
Dated: August 8, 1994
WARBURG, PINCUS INVESTORS, L.P.
Warburg, Pincus & Co.,
General Partner
By: /s/ Reuben S. Leibowitz
---------------------------------------
Title: Partner
WARBURG, PINCUS & CO.
By: /s/ Reuben S. Leibowitz
---------------------------------------
Title: Partner
E.M. WARBURG, PINCUS & COMPANY
By: /s/ Reuben S. Leibowitz
---------------------------------------
Title: Partner
E.M. WARBURG, PINCUS & CO., INC.
By: /s/ Reuben S. Leibowitz
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Title: Managing Director
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EXHIBIT INDEX
Exhibit 1. Agreement relating to the filing of joint acquisition
statements as required by Rule 13d-1(f)(1) under the Act (previously filed as
Exhibit 1 to Amendment No. 4 to Schedule 13D dated April 1, 1994).
Exhibit 2. Standby Agreement dated as of July 21, 1994 by and
between the Company and WPI.
Exhibit 3. Form of Certificate of Amendment of Restated Certificate
of Incorporation of the Company (attached as Exhibit 6.1 to the Standby
Agreement).
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Exhibit 2
STANDBY AGREEMENT
THIS STANDBY AGREEMENT (as it may be amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of July 21,
1994 by and between GRUBB & ELLIS COMPANY, a Delaware corporation (the
"Company") and WARBURG, PINCUS INVESTORS, L.P., a Delaware limited partnership
("Warburg").
RECITAL
A. On March 28, 1994, the Company, Warburg and The Prudential
Insurance Company of America ("Prudential") entered into a Term Sheet (the "Term
Sheet") pursuant to which, among other things, the Company, subject to certain
conditions, has agreed to undertake a rights offering (the "Rights Offering") in
which the Company would issue to each holder of common stock (the "Common
Stockholders") one nontransferable right (a "Right") for each share of Common
Stock. Each Right would entitle the holder to purchase prior to the expiration
date of such Right one share of Common Stock at a subscription price equal to
$2.375 per share (the "Subscription Price"). Each Common Stockholder who
validly exercises all of his or her Rights would have the right to oversubscribe
at the Subscription Price for any additional shares of Common Stock to the
extent that unsubscribed shares are available, up to a maximum number equal to
the number of shares of Common Stock held by such holder as of the record date
and subject to proration.
B. Warburg and the Company have entered into a Loan and Security
Agreement dated as of March 29, 1994 (the "Loan Agreement") pursuant to which
Warburg agreed to make advances to the Company from time to time in an aggregate
principal amount for all such advances outstanding not to exceed $10 million at
any time (the "Bridge Loan").
C. Warburg and the Company deem it desirable for Warburg to purchase
shares of Common Stock not purchased by Common Stockholders in the Rights
Offering, subject to a maximum obligation, as described herein.
D. Warburg and the Company have agreed that concurrently with the
purchase of Common Stock by Warburg, certain existing warrants and preferred
stock of the Company held by Warburg would be amended. The number of shares
issuable upon the exercise of such warrants and upon the conversion of such
preferred stock will not be finally determined until the expiration of the
rights offering.
E. As consideration for agreeing to acquire unsubscribed shares of
Common Stock in connection with the Rights Offering, the Company has agreed to
issue to Warburg a warrant to purchase up to 325,000 shares of Common Stock;
provided that the issuance of such warrant will be conditioned upon Warburg
acquiring at least 500,000 shares of Common Stock pursuant to the stand-by
commitment described in Section 2 below.
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AGREEMENT
NOW, THEREFORE, the Company and Warburg hereby agree as follows:
1. DEFINITIONS. The following terms used herein shall have the
meanings set forth below:
"CHARTER AMENDMENT" shall have the meaning set forth in Section 6.
"CLOSING" shall mean the Closing of the transactions described in this
Agreement, which shall be held at 9:00 a.m. on the Closing Date at the
offices of Latham & Watkins, 505 Montgomery Street, Suite 1900, San
Francisco, California, or such other time as may be agreed to by the
parties hereto.
"CLOSING DATE" shall mean the date that is one business day after the
Rights Offering Termination Date, or such other date as may be agreed to by
the parties hereto.
"CONTINGENT WARRANTS" shall mean Contingent Stock Subscription
Warrants Nos. ___ and ___ issued by the Company to Warburg that provide for
the purchase of an aggregate of 373,818 shares of Common Stock at an
exercise price of $5.00 per share.
"FINANCING TRANSACTIONS" shall mean the transactions contemplated by
the Term Sheet, including the Rights Offering, the amendments to the
Preferred Stock, the amendments to the Warburg 1993 Warrants and the
issuance of the New Warrants.
"$5.00 WARRANTS" shall mean Stock Subscription Warrants Nos. 6 and 14
issued by the Company to Warburg that provide for the purchase of an
aggregate of 340,000 shares of Common Stock at an exercise price of $5.00
per share.
"$5.50 WARRANTS" shall mean Stock Subscription Warrants Nos. 7 and 12
issued by the Company to Warburg that provide for the purchase of an
aggregate of 142,000 shares of Common Stock at an exercise price of $5.50
per share.
"PREFERRED STOCK" shall mean the Senior Preferred Stock and the 5%
Junior Convertible Preferred Stock
"PROSPECTUS" shall mean the final prospectus included in the
Registration Statement for use in connection with the issuance of the
Rights.
"REGISTRATION STATEMENT" shall mean the Company's Registration
Statement on Form S-3 under the Securities Act of 1933, as amended (the
"1933 Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder (the "1933 Act Regulations"), or
such other appropriate Form under the 1933 Act and the 1933 Act
Regulations, pursuant to which the Rights and underlying shares of Common
Stock will be registered pursuant to the 1933 Act.
"RIGHTS OFFERING TERMINATION DATE" shall mean the date on which the
subscription period (as the same may be extended by the Company) under the
Rights Offering expires.
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"SECURITIES" shall mean the shares of Common Stock acquired by Warburg
pursuant to the standby commitment, the Series B Senior Preferred Stock,
the Warburg Amended Warrant and the Warburg New Warrant.
"SENIOR PREFERRED STOCK" shall mean the Company's 12% Senior
Convertible Preferred Stock.
"SERIES B SENIOR PREFERRED STOCK" shall mean the Company's Series B
Senior Preferred Stock to be issued to Warburg in exchange for the Senior
Preferred Stock as contemplated herein and in the Charter Amendment.
"SUBSCRIPTION SHARES" shall mean the shares of Common Stock registered
pursuant to the Registration Statement and issuable upon exercise of
Rights.
"WARBURG AMENDED WARRANT" shall have the meaning set forth in
Section 4.
"WARBURG NEW WARRANT" shall have the meaning set forth in Section 5.
"WARBURG 1993 WARRANTS" shall mean the $5.00 Warrants and the $5.50
Warrants.
2. STANDBY COMMITMENT. Subject to the terms and conditions of this
Agreement, on the Closing Date, Warburg shall purchase at $2.375 per share all
shares of Common Stock reserved for issuance pursuant to the exercise of the
Rights and not validly purchased by Common Stockholders in the Rights Offering,
subject to a maximum number of shares that will result in an aggregate purchase
price paid by Warburg being equal to $10 million plus accrued interest on the
Bridge Loan as of the Closing Date. The purchase price for such shares of
Common Stock shall be paid by Warburg (i) first, through cancellation of the
outstanding principal of and accrued interest on the Bridge Loan and (ii)
thereafter through payment of funds directly to the Company (the "Additional
Funds"). On the Rights Offering Termination Date, the Company shall notify
Warburg of the number of shares of Common Stock validly purchased by Common
Stockholders in the Rights Offering together with the number of shares of Common
Stock that Warburg will be obligated to purchase pursuant to this Section 2,
including a calculation of accrued interest on the Bridge Loan. The
determination of the number of shares shall be made based upon the assumption
that all Rights subject to guaranteed delivery (including payment of the
exercise price related thereto) will be duly and validly exercised. On the
Rights Offering Termination Date, the Company shall notify Warburg of the amount
of Additional Funds, if any, that are required pursuant to clause (ii) above.
3. REPAYMENT OF BRIDGE LOAN. Subject to the terms and conditions of
this Agreement, on the Closing Date the Company shall repay any indebtedness
outstanding under the Bridge Loan after giving effect to the transactions set
forth in Section 2 above, and, upon such payment, any and all indebtedness
outstanding under the Bridge Loan shall be deemed repaid and cancelled. Warburg
shall deliver to the Company the Promissory Notes evidencing indebtedness under
the Bridge Loan, marked "paid in full."
4. EXCHANGE OF 1993 WARRANTS. Subject to the terms and conditions
of this Agreement, on the Closing Date, Warburg shall surrender the Warburg 1993
Warrants to the Company in exchange for a new warrant (the "Warburg Amended
Warrant"), which shall be in the form of Exhibit 4.1 hereto and shall provide
for an exercise price of $3.50 per share. On the Rights Offering Termination
Date, the Company shall notify Warburg of the number of shares of Common
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Stock which will be issuable upon exercise of the Warburg Amended Warrant, which
will be calculated to be that number of shares that the $5.00 Warrant would have
represented the right to purchase plus the number of shares that the $5.50
Warrant would have represented the right to purchase, in both cases if the anti-
dilution provisions of such Warburg 1993 Warrants had been applied through the
Rights Offering Termination Date, including the issuances of securities
contemplated by the Financing Transactions but excluding issuances of securities
waived in the Letter Agreement Regarding Waiver of Certain Anti-Dilution
Provisions among the Company, Warburg, Prudential and Joe F. Hanauer.
5. ISSUANCE OF WARBURG NEW WARRANTS. Subject to the terms and
conditions of this Agreement, in the event that the number of shares Warburg
purchases pursuant to Section 2 equals or exceeds 500,000 shares, on the Closing
Date, the Company shall issue to Warburg a warrant in the form of Exhibit 5.1 to
purchase 325,000 shares of Common Stock for an exercise price of $2.375 per
share (the "Warburg New Warrant").
6. AMENDMENTS TO PREFERRED STOCK. Subject to the terms and
conditions of this Agreement, on the Closing Date, the Company shall file with
the Secretary of State of the State of Delaware an Amendment to the Company's
Restated Certificate of Incorporation in the form of Exhibit 6.1 (the "Charter
Amendment"), providing for certain amendments to the terms of the Preferred
Stock. Upon the filing of the Charter Amendment, Warburg shall exchange
certificates representing all of its shares of Senior Preferred Stock for an
equal number of shares of Series B Senior Preferred Stock. On the Rights
Offering Termination Date, the Company shall notify Warburg of the Series B
Senior Preferred Stock Conversion Price (as defined in the Charter Amendment),
which will be calculated based on the application through the Closing Date of
the anti-dilution provisions of the Senior Preferred Stock, including after
giving effect to the issuances of securities contemplated by the Financing
Transactions but excluding issuances of securities waived in the Letter
Agreement Regarding Waiver of Certain Anti-Dilution Provisions among the
Company, Warburg, Prudential and Joe F. Hanauer.
7. CANCELLATION OF CONTINGENT WARRANT. On the Closing Date, in the
event that the Company is obligated to issue the Warburg New Warrant pursuant to
Section 5, Warburg shall surrender to the Company for cancellation the
Contingent Warrants and the Company shall cancel such Contingent Warrants. The
determination as to whether Warburg shall be obligated to surrender the
Contingent Warrants shall be made on the Closing Date concurrently with the
determination as to whether the condition set forth in Section 5 has been
satisfied.
8. REPRESENTATIONS AND WARRANTIES. (a) The Company hereby
represents and warrants to Warburg as follows, which representations and
warranties are, as of the date hereof, and will be, as of the Closing Date, true
and correct:
(1) At the time the Registration Statement becomes effective,
the Registration Statement will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Prospectus, at the time the Registration Statement becomes effective and at
the Closing Date, will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration Statement or
the Prospectus made in
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reliance upon and in conformity with the information furnished to the Company in
writing by Warburg expressly for use in the Registration Statement or in the
Prospectus.
(2) The documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they were filed
with the Commission complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations of the Commission thereunder (the "1934 Act Regulations"), and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and any documents hereafter filed deemed to be
incorporated by reference into the Prospectus will, when they are filed with the
Commission, comply in all material respects with the requirements of the 1934
Act and the 1934 Act Regulations, and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(3) The consolidated financial statements (which term, as used
herein, includes all related notes) included in the Registration Statement and
the Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the results of operations
of the Company and its consolidated subsidiaries for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting schedules included
in the Registration Statement present fairly the information required to be
stated therein.
(4) This Agreement has been duly authorized, executed and
delivered by the Company.
(b) Warburg hereby represents and warrants to the Company, which
representations and warranties are, as of the date hereof, and will be, as of
the Closing Date, true and correct, that this Agreement has been duly
authorized, executed and delivered by Warburg.
9. ACTIONS ON OR PRIOR TO CLOSING. Each of Warburg and the Company
covenant to take the following actions prior to Closing:
(a) CONSENTS AND REASONABLE EFFORTS. Each of the Company and
Warburg shall use its best efforts to obtain all consents, approvals,
authorizations or waivers of any public, governmental or regulatory body or
authority, including, without limitation, the filing, if required, of a
Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act"), and any and all consents, approvals or waivers from
parties to contracts as may be necessary for the consummation of the
transactions contemplated by this Agreement (the "Consents").
(b) STOCKHOLDER APPROVAL. The Company shall use its best
efforts to obtain approval of the transactions contemplated by this Agreement of
holders of a majority of the Common Stock present in person or by proxy at the
Company's Annual Meeting of Stockholders and entitled to vote on the Financing
Transactions, other than Warburg and Prudential.
(c) RIGHTS OFFERING. The Company shall take all steps
reasonably required to complete the Rights Offering as contemplated by the Term
Sheet. The commencement of
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the mailing of the Rights Certificates (as defined in the Prospectus) to the
holders of record of the Common Stock shall take place as promptly as
practicable after the day on which the Registration Statement becomes effective.
The subscription period under the Rights Offering shall be at least 16 days.
10. DELIVERIES AT CLOSING. (a) At the Closing, the Company shall
deliver to Warburg the following:
(1) The duly executed Warburg Amended Warrant;
(2) Subject to satisfaction of the conditions set forth in
Section 5, the duly executed Warburg New Warrant;
(3) A certificate representing the number of shares of Common
Stock issued to Warburg pursuant to Section 2;
(4) Payment of any amounts outstanding under the Bridge Loan
after giving effect to the transactions described in Section 2;
(5) A certificate representing 128,266 shares of Series B Senior
Preferred Stock as contemplated by the Charter Amendment.
(6) A certificate setting forth calculations of the number of
shares and accrued interest as contemplated by Sections 2, 4 and 6;
(7) Copies of the Restated Certificate of Incorporation,
including all amendments thereto, of the Company certified by the Secretary of
State of the State of Delaware as being in full force and effect on a recent
date prior to the Closing Date, together with the by-laws of the Company,
including all amendments thereto, certified by the Secretary or Assistant
Secretary of the Company;
(8) A copy of the Charter Amendment in the form filed with the
Secretary of State of the State of Delaware.
(9) Certificates of incumbency and corporate resolutions
authorizing the execution, delivery and performance of this Agreement, the
Warburg Amended Warrant and the Warburg New Warrant, and all other documents
contemplated hereby and thereby, all in form and substance satisfactory to
Warburg and its counsel.
(10) A certificate of an officer of the Company certifying
(a) the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Date and (b)
that the subscription period under the Rights Offering has expired.
(b) At the Closing, Warburg shall deliver to the Company the
following:
(1) Any Additional Funds required to be paid pursuant to clause
(ii) of Section 2 above.
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(2) All Promissory Notes delivered pursuant to the Loan
Agreement, which Notes shall be irrevocably cancelled;
(3) The Contingent Warrant, to be cancelled;
(4) The Warburg 1993 Warrants, to be cancelled; and
(5) Certificates No. 3 and No. 6 representing 128,266 shares of
Senior Preferred Stock, to be cancelled.
(6) A certificate of a duly authorized representative of Warburg
certifying that Warburg has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date.
11. CONDITIONS TO OBLIGATIONS OF WARBURG AND THE COMPANY. The
obligations of the Company and Warburg to effect the transactions described in
this Agreement are subject to the satisfaction of the following conditions,
unless waived in writing by both Warburg and the Company:
(a) The Registration Statement shall have become effective not
later than the date it is mailed to the Common Stockholders; and at the Closing
Date no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
(b) Holders of shares of Common Stock representing a majority of
the shares of Common Stock present in person or by proxy at the Annual Meeting
and entitled to vote on the Financing Transactions, other than Warburg and
Prudential, shall have voted to approve the transactions set forth in this
Agreement.
(c) The Rights Offering Termination Date shall have occurred.
(d) All necessary Consents shall have been obtained and the
applicable notification period under the HSR Act shall have terminated.
(e) The Company and Prudential shall have entered into the
Amendment to the Prudential Debt Agreement in the form attached hereto as
Exhibit 11.1 and shall have consummated the transactions contemplated thereby.
12. CONDITIONS TO OBLIGATIONS OF WARBURG. The obligations of Warburg
to effect the transactions described in this Agreement are subject to the
satisfaction of the following conditions, unless waived in writing by Warburg:
(a) The Company shall have duly delivered to Warburg the funds
and the documents set forth in Section 10(a).
(b) The Company shall have filed with the Secretary of State of
the State of Delaware the Charter Amendment.
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(c) The Stockholders' Agreement among the Company, Warburg,
Prudential and Joe F. Hanauer shall have been amended as described in the
Company's Proxy Statement with respect to the 1994 Annual Meeting of
Stockholders.
13. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to effect the transactions described in this Agreement are subject to
the satisfaction of the following conditions, unless waived in writing by the
Company:
(a) Warburg shall have duly delivered to the Company the funds
and the documents set forth in Section 10(b).
14. ACTIONS AFTER CLOSING.
(a) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) for the twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the Registration
Statement.
(b) The Company will use the net proceeds received by it from
the sale of the Subscription Shares in the manner specified in the Prospectus
under "Use of Proceeds."
(c) The Company agrees to indemnify and hold harmless, to the
full extent permitted by law, Warburg and each person, if any, who controls
Warburg within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, against all losses, liabilities, claims, damages and expenses
whatsoever (including, but not limited to, reasonable attorneys' fees and any
and all expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever (which fees and expenses shall be reimbursed to Warburg on a current
basis within 30 days of invoice therefor), and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or any
of them may become subject under the 1933 Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any amendment
thereto), or any related preliminary prospectus or the Prospectus, or in any
amendment thereof or supplement thereto or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by Warburg
expressly for use therein.
(d) Warburg agrees to indemnify and hold harmless, to the full
extent permitted by law, the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, against all losses, liabilities, claims, damages and expenses
whatsoever (including, but not limited to, reasonable attorneys' fees and any
and all expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever (which fees and expenses shall be reimbursed to the Company on a
current basis within 30 days of invoice therefor), and any
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and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or any related preliminary prospectus or
the Prospectus, or in any amendment thereof or supplement thereto or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information furnished in writing by
Warburg to the Company specifically for inclusion in such Registration Statement
or Prospectus and has not been corrected in a subsequent writing prior to or
concurrently with the effective date of the Registration Statement.
(e) Promptly after receipt by an indemnified party under
subsection (c) or (d) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section except to the extent that it has
been prejudiced in any material respect by such failure or from any liability
which it may have otherwise). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) in the
reasonable judgment of the indemnified party, based upon advice of its counsel,
a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims (in which case, the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the indemnifying parties; provided that, with respect
to clause (iii), the indemnifying party has consented in writing to the
indemnified party's choice of counsel, which consent shall not be unreasonably
withheld. In the event one or more law firms has represented both the
indemnifying party and the indemnified party (the "Joint Counsel"), and the
indemnified party retains separate counsel, the indemnified party agrees that it
shall not object to the continued use of the Joint Counsel by the indemnifying
party and further agrees to waive any conflicts of interest. Under no
circumstances shall any indemnified party take a position or make an argument in
any proceeding in which such party is being indemnified that is inconsistent
with or prejudicial to any position or argument advanced by the indemnifying
party. If so requested by the indemnifying party, the indemnified party shall
appeal a judgment rendered against such indemnified party; provided that the
cost of such appeal shall be borne by the indemnifying party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. Anything in this Section to the contrary
notwithstanding, an indemnifying party (A) shall not be liable for any
settlement of any claim or action effected without its written consent;
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<PAGE>
provided, however, that such consent was not unreasonably withheld; (B) shall be
liable for the cost of appealing any judgment rendered against an indemnified
party, or for any increase in the amount of a judgment resulting from such
appeal, only if the indemnifying party has consented in writing to such appeal,
which consent may be withheld in the indemnifying parties's sole discretion; and
(C) shall be liable for a judgment rendered against an indemnified party only if
such judgment is final and nonappealable.
15. TRANSFER OF SECURITIES.
(a) REPRESENTATION OF WARBURG. Warburg represents that it is an
"Accredited Investor" as defined in Rule 501 of the General Rules and
Regulations under the Securities Act of 1933.
(b) INVESTMENT PURPOSE. Warburg is acquiring the Securities for
its own account and not with a view to, or for offer or sale in connection with,
any distribution thereof in violation of the Securities Act of 1933, as amended.
(c) TRANSFER OF SECURITIES. The Securities shall not be
transferable except upon the conditions specified in this Section 15, which
conditions are intended to insure compliance with the provisions of the
Securities Act and state securities laws in respect of the transfer of any such
Securities.
(d) RESTRICTIVE LEGENDS. (i) Unless and until otherwise
permitted by this Section 15, each certificate for Securities shall be stamped
or otherwise imprinted with a legend in substantially the following form:
"THIS [SHARE OF PREFERRED/COMMON STOCK] [STOCK SUBSCRIPTION WARRANT
AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS STOCK SUBSCRIPTION
WARRANT] AND [ANY SHARES ISSUABLE UPON CONVERSION OF SUCH SHARES] HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS [SHARE OF PREFERRED/COMMON STOCK] [STOCK SUBSCRIPTION
WARRANT] NOR ANY OF SUCH SHARES MAY BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
ACT."
(ii) Each certificate for Series B Senior Preferred Stock shall
also be stamped or otherwise imprinted with a legend satisfying the
requirements of Section 151(f) of the General Corporation Law of the State
of Delaware.
(iii) The Company may order its transfer agents for the Securities
to stop the transfer of any Securities bearing the legend set forth in
Section 15(d)(i) until the conditions of this Section 15 with respect to
the transfer of such Securities have been satisfied.
(e) NOTICE OF PROPOSED TRANSFER. At the time of any transfer or
sale or proposed transfer or sale of any Securities, the Company may require
written notice describing briefly the manner of such transfer or sale and a
written opinion of counsel for the holder thereof (who may be inside counsel) to
the effect that such transfer or sale may be effected without the registration
of such Securities under the Securities Act and will be made in compliance with
applicable state
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<PAGE>
securities and blue sky laws. The Company shall thereupon permit or cause its
transfer agent (if any) to permit such transfer or sale to be effected unless
the Company, within five days after receipt of such notice and opinion, shall
furnish to such holder and such holder's counsel (if any) an opinion of the
Company's outside counsel which (i) states that such sale or transfer may not be
effected without the registration of such Securities under the Securities Act
(or will not be made in compliance with applicable securities and blue sky laws)
and (ii) specifies the reasons, factual, legal or both, why such counsel's
opinion differs from that of holder's counsel. However, if in such written
notice to the Company the transferring holder informs the Company that the
transfer or sale is to a purchaser or transferee whom the transferring holder
knows or reasonably believes to be a "qualified institutional buyer," as that
term is defined in Rule 144A promulgated under the Securities Act, no opinion of
counsel shall be required.
(f) TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of this Section 15, the restrictions imposed by this Section 15 upon
the transferability of the Securities shall terminate as to any particular
Securities when (i) such Securities shall have been effectively registered under
the Securities Act and sold by the holder thereof in accordance with such
registration, (ii) such Securities have been sold in accordance with Rule 144 or
Rule 144A promulgated under the Securities Act, or (iii) written opinions to the
effect that such restrictions are no longer required or necessary under any
federal or state law or regulation have been received from counsel for the
holder thereof (who may be inside counsel) and, if the Company shall so require,
from counsel for the Company.
(g) EXCHANGE, TRANSFER AND REPLACEMENT OF CERTIFICATES. Subject
to this Section 15, upon surrender of any certificate representing Securities
duly endorsed for exchange or transfer, the Company will, at its expense, or
will cause its transfer agent, at the Company's expense, to issue in exchange
therefor new certificates in such denominations as may be requested representing
in the aggregate the same number of Securities represented by the certificate so
surrendered and registered as such Stockholder may request. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any certificate representing Securities and, in the case of any
such loss, theft or destruction, upon delivery of an agreement of indemnity
satisfactory to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such certificate, the Company will issue, at its
expense, or will cause its transfer agent, at the Company's expense, to issue a
new certificate representing the same aggregate number of Securities represented
by such lost, stolen, destroyed or mutilated certificate; PROVIDED, HOWEVER,
that in the event of any loss, theft or destruction of any certificate
representing Securities registered in the name of Warburg or any of its
affiliates, or in the name of any other holder which is an institutional
investor or its nominee, the Company shall not require such person or Affiliate
or any other holder which is an institutional investor or its nominee to furnish
any indemnity or surety bond in connection with the issuance of a new
certificate therefor if the Company is furnished with an affidavit of the holder
(if the holder is an individual) or, otherwise, the Chairman of the Board,
President, any Vice President, Treasurer or any Assistant Treasurer of the
holder (or, in the case of a nominee, the beneficial owner for which such holder
is serving as nominee) setting forth the fact of such loss, theft or destruction
and, together with such affidavit, such holder furnishes (or, in the case of a
nominee, the beneficial owner for which such holder is serving as nominee
furnishes) to the Company its written agreement to indemnify the Company with
respect to such loss, theft or destruction; the Company shall, however, have the
right to require any holder of Securities other than Warburg or any of its
affiliates or any other holder which is an institutional investor or its nominee
to furnish such an indemnity or surety bond. The party delivering any
certificate representing Securities
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pursuant to this Section 15 will pay the cost of such delivery (including the
cost of insurance against loss or theft in an amount satisfactory to the
sender).
16. MISCELLANEOUS.
(a) NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following addresses:
The Company: Grubb & Ellis Company
One Montgomery Street
Telesis Tower
San Francisco, California 94104
Telephone Number: (415) 956-4699
Telecopier Number: (415) 274-9700
Attn: General Counsel
Warburg: Warburg, Pincus Investors, L.P.
c/o E.M. Warburg, Pincus & Co., Inc.
466 Lexington Avenue
10th Floor
New York, NY 10017
Telephone Number: (212) 878-0653
Telecopier Number: (212) 878-9200
Attn: Reuben S. Leibowitz
or to such other address as any party may designate by written notice to each
other party. Each such notice, request and demand shall be deemed given or made
as follows: (a) if sent by hand delivery or courier service, upon delivery; (b)
if sent by mail, upon the earlier of the date of receipt or three (3) days after
deposit in the U.S. mail, first class and postage prepaid; or (c) if sent by
telecopy, upon receipt.
(b) SUCCESSORS, ASSIGNMENT. This Agreement shall be binding on
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
the Company may not assign or transfer its interest or obligations hereunder
without the prior written consent of Warburg.
(c) ENTIRE AGREEMENT; COUNTERPARTS; AMENDMENT. This Agreement,
the Loan Agreement, and each of the other Loan Documents (as defined in the Loan
Agreement) constitute the entire agreement between the Company and Warburg with
respect to the subject matter hereof and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be executed in any number of counterparts and may be
amended or modified only by a written instrument executed by each party hereto.
(d) NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or
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<PAGE>
indirect cause of action or claim in connection with, this Agreement or any
other of the Loan Documents to which it is not a party.
(e) TIME IS OF THE ESSENCE. Time is of the essence of each and
every provision of this Agreement.
(f) SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Standby
Agreement to be duly executed on its behalf by its officer thereunto duly
authorized, as of the day and year first above written.
WARBURG, PINCUS INVESTORS, L.P.
By: Warburg, Pincus & Co., General Partner
By:__________________________________________
Name:
Title:
GRUBB & ELLIS COMPANY
By:__________________________________________
Name:
Title:
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<PAGE>
EXHIBITS
EXHIBIT 4.1 - FORM OF WARBURG AMENDED WARRANTS
EXHIBIT 5.1 - FORM OF WARBURG NEW WARRANT
EXHIBIT 6.1 - FORM OF CHARTER AMENDMENT
EXHIBIT 11.1 - AMENDMENT TO PRUDENTIAL DEBT AGREEMENT
15
<PAGE>
Exhibit 4.1 and 5.1 to Standby Agreement
Stock Subscription Warrant to Subscribe for
________ Shares of Common Stock
FORM OF RESTATED STOCK SUBSCRIPTION WARRANT
THIS STOCK SUBSCRIPTION WARRANT AND ANY SHARES ACQUIRED UPON THE
EXERCISE OF THIS STOCK SUBSCRIPTION WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS STOCK SUBSCRIPTION WARRANT NOR
ANY OF SUCH SHARES MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
STOCK SUBSCRIPTION WARRANT
To Subscribe for and Purchase Shares
of Common Stock of
GRUBB & ELLIS COMPANY
THIS CERTIFIES THAT, for value received,
[WARBURG, PINCUS INVESTORS, L.P. ("WARBURG")/THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA ("PRUDENTIAL")] or registered assigns, is entitled
to subscribe for and purchase from GRUBB & ELLIS COMPANY (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, at any time or from time to time during the period specified in
paragraph 2 hereof, up to
_______________ THOUSAND
fully paid and nonassessable shares of the Company's Common Stock (the "Common
Stock") at an exercise price per share of $3.50 (the "Exercise Price"). The
number of shares purchasable hereunder and the Exercise Price are subject to
adjustment as provided in paragraph 4 hereof. These Stock Subscription Warrants
were originally issued pursuant to the Agreement. The term "Warrants", as used
herein, shall mean this Stock Subscription Warrant, including all amendments
hereto. The term "Warrant Shares", as used herein, refers to the shares
purchasable upon the exercise of the Warrants.
Certain terms used herein and not elsewhere defined are defined
in paragraph 15 hereof.
This Warrant is subject to the following provisions, terms and
conditions:
1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR
SHARES. The rights represented by this Warrant may be exercised by the holder
hereof in whole or in part (but not as to a fractional Warrant Share), by the
surrender of this Warrant, together with a completed Exercise
16
<PAGE>
Agreement in the form attached hereto, during normal business hours on any
business day at the principal office of the Company (or such other office or
agency of the Company in New York, New York or San Francisco, California as it
may designate by notice in writing to the holder hereof at the address of such
holder appearing on the books of the Company) at any time during the period set
forth in paragraph 2 hereof and upon payment to the Company by certified check
or bank draft of the Exercise Price for such shares, or, at the election of the
holder hereof, by delivery of other Warrants equal in value to the aggregate
Exercise Price with respect to such Warrants being exercised, the value of which
other Warrants shall be deemed to equal the difference between the Market Price
of a share of Common Stock on the date immediately preceding the date of
exercise and the then current Exercise Price. The Company agrees that the
shares so purchased shall be and are deemed to be issued to the holder hereof or
its designee as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been surrendered and payment made for
such shares as aforesaid. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in said Exercise
Agreement, shall be delivered to the holder hereof within a reasonable time, not
exceeding five business days, after the rights represented by this Warrant shall
have been so exercised. Each stock certificate so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of said holder or such other name (upon compliance with the transfer
requirements hereinafter set forth) as shall be designated by said holder. If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of said
stock certificates, deliver to said holder a new Warrant representing the number
of shares with respect to which this Warrant shall not then have been exercised.
The Company shall pay all taxes and other expenses and charges payable in
connection with the preparation, execution and delivery of stock certificates
(and any new Warrants) pursuant to this paragraph except that, in case such
stock certificates shall be registered in a name or names other than the holder
of this Warrant or its nominee, funds sufficient to pay all stock transfer taxes
which shall be payable in connection with the execution and delivery of such
stock certificates shall be paid by the holder hereof to the Company at the time
of the delivery of such stock certificates by the Company as mentioned above.
2. PERIOD OF EXERCISE. This Warrant is exercisable at any time
or from time to time prior to January 29, 1998.
3. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all Warrant Shares will, upon issuance, be fully paid
and nonassessable and free from preemptive rights and all taxes, liens and
charges with respect to the issue thereof; and without limiting the generality
of the foregoing, the Company covenants and agrees that it will from time to
time take all such action as may be required to assure that the par value per
Warrant Share is at all times equal to or less than the effective Exercise
Price. The Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of issue upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant. The Company shall take all such action as may be
necessary to assure that such shares of Common Stock may be so issued without
violation of any applicable law or regulation and will be approved for listing
on any domestic securities exchange upon which the Common Stock may be listed.
The Company further covenants and agrees that it will, at any time, at its
expense, promptly list on each national securities exchange on which any Capital
Stock is at the time listed, upon official notice of issuance, Common Stock
issuable upon the exercise of any Warrant as provided in paragraph 1 hereof, and
maintain such listing of all shares of Common Stock from time to time issuable
upon such exercise, and will, at any time, register under the Securities
Exchange Act of 1934, as amended, all shares of Common Stock
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<PAGE>
from time to time issuable upon such exercise if and at the time that any
existing shares of Capital Stock are so registered.
4. ANTI-DILUTION PROVISIONS. The Exercise Price set forth above
shall be subject to adjustment from time to time as hereinafter provided. For
purposes of this paragraph 4, the term "Capital Stock" as used herein includes
the Company's Common Stock and shall also include any capital stock of any class
of the Company hereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company; provided that the shares
purchasable pursuant to this Warrant shall include only Common Stock. Upon each
adjustment of the Exercise Price, this Warrant shall thereafter represent the
right to purchase, at the Exercise Price resulting from such adjustment, the
largest number of shares of Common Stock obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock purchasable thereunder immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
In case the Company, at any time, shall be a party to any
Transaction, each holder hereof, upon the exercise hereof at any time on or
after the Consummation Date shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of the Common Stock issuable
upon exercise prior to the Consummation Date, the kind and amount of securities
or property (including cash) which it would have owned or have been entitled to
receive after the happening of such Transaction had this Warrant been exercised
immediately prior to such Transaction.
Notwithstanding anything contained herein to the contrary, the
Company shall not effect any Transaction unless prior to the consummation
thereof each corporation or entity (other than the Company) which may be
required to deliver any securities or other property upon the exercise of
Warrants, the surrender of Warrants or the satisfaction of exercise rights as
provided herein, shall assume, by written instrument delivered to each holder of
Warrants, the obligation to deliver to such holder such securities or other
property to which, in accordance with the foregoing provisions, such holder may
be entitled, and such corporation or entity shall have similarly delivered to
each holder of Warrants an opinion of counsel for such corporation or entity,
satisfactory to each holder of Warrants, which opinion shall state that all the
outstanding Warrants, including, without limitation, the exercise provisions
applicable thereto, if any, shall thereafter continue in full force and effect
and shall be enforceable against such corporation or entity in accordance with
the terms hereof and thereof and, together with such other matters as such
holders may reasonably request.
In case the Company shall (i) pay a dividend in shares of Capital
Stock or securities convertible into Capital Stock or make a distribution to all
holders of shares of Capital Stock in shares of Capital Stock or securities
convertible into Capital Stock, (ii) subdivide its outstanding shares of Capital
Stock, (iii) combine its outstanding shares of Capital Stock into a smaller
number of shares of Capital Stock or (iv) issue by reclassification of its
shares of Capital Stock other securities of the Corporation, the Exercise Price
shall be adjusted (to the nearest cent) by multiplying the Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of shares of Capital Stock outstanding immediately prior to the
occurrence of such event, and of which the denominator shall be the number of
shares of Capital Stock outstanding (including any convertible securities issued
pursuant to clause (i) or (iv) above on an as converted basis) immediately
thereafter. An adjustment made pursuant to the foregoing sentence shall become
effective
18
<PAGE>
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(d) NOTICE OF ADJUSTMENT. Upon the occurrence of any event
requiring an adjustment of the Exercise Price, then and in each such case the
Company shall promptly deliver to each holder of Warrants a certificate signed
by the President or any Vice President and the Secretary or any Assistant
Secretary of the Company (an "Officers' Certificate") stating the Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares of Common Stock issuable upon exercise of the Warrants, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Within 90 days after each fiscal year in which any
such adjustment shall have occurred, or within 30 days after any request
therefor by any holder of Warrants stating that such holder contemplates
exercise of such Warrants, the Company will obtain and deliver to each holder of
Warrants the opinion of its regular independent auditors or another firm of
independent public accountants of recognized national standing selected by the
Company's Board of Directors who are satisfactory to the registered holder of
this Warrant, which opinion shall confirm the statements in the most recent
Officers' Certificate delivered under this paragraph 4(d).
(e) OTHER NOTICES. In case at any time:
(i) the Company shall declare or pay to the holders of Capital
Stock any dividend other than a regular periodic cash dividend or any
periodic cash dividend in excess of 115% of the cash dividend for the
comparable fiscal period in the immediately preceding fiscal year;
(ii) the Company shall declare or pay any dividend upon Capital
Stock payable in stock or make any special dividend or other distribution
(other than regular cash dividends) to the holders of Capital Stock;
(iii) the Company shall offer for subscription pro rata to the
holders of Capital Stock any additional shares of stock of any class or
other rights;
(iv) there shall be any capital reorganization, or
reclassification of the Capital Stock of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its
assets to, another corporation or other entity;
(v) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(vi) there shall be any other Transaction;
then, in any one or more of such cases, the Company shall give to the holder of
each Warrant (a) at least 15 days prior to any event referred to in clause (i)
or (ii) above, at least 30 days prior to any event referred to in clause (iii),
(iv) or (v) above, and within five business days after it has knowledge of any
pending Transaction, written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or Transaction and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or Transaction known to the Company, at least 30 days
prior written notice of the date (or, if not then known, a reasonable
approximation thereof by the Company) when the same shall take place. Such
notice in
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<PAGE>
accordance with the foregoing clause (a) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the
holders of Capital Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Capital Stock shall be entitled to exchange their Capital Stock
for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or Transaction, as the case may be. Such notice shall also state
that the action in question or the record date is subject to the effectiveness
of a registration statement under the Securities Act or to a favorable vote of
security holders, if either is required.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company covenants and
agrees that:
(a) CERTAIN ACTIONS PROHIBITED. The Company will not by
amendment of its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of any Warrant in order to protect the
exercise rights of the holders of the Warrants. Without limiting the generality
of the foregoing, the Company (i) will not increase the par value of any shares
of Common Stock receivable upon the exercise of the Warrants above the Exercise
Price then in effect, (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of all Warrants from
time to time outstanding, (iii) will not take any action which results in any
adjustment of the number of shares of Common Stock issuable after the action
upon the exercise of all of the Warrants would exceed the total number of shares
of Common Stock then authorized by the Company's certificate of incorporation
and available for the purpose of issue upon such exercise, and (iv) will not
issue any capital stock of any class which has the right to more than one vote
per share or any capital stock of any class which is preferred as to dividends
or as to the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless the rights of the holders thereof shall be
limited to a fixed sum or percentage (or floating rate related to market yields)
of par value or stated value in aspect of participation in dividends and a fixed
sum or percentage of par value or stated value in any such distribution of
assets.
(b) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets.
(c) ISSUANCE OF WARRANT SECURITIES. If the issuance of any
Warrant Shares required to be reserved for purposes of exercise of this Warrant
or for the conversion of such Warrant Shares requires registration with or
approval of any Federal governmental authority under any Federal or state law
(other than any registration under the Securities Act) or listing on any
national securities exchange, before such shares may be issued upon exercise of
this Warrant, the Company will, at its expense, use its best efforts to cause
such shares to be duly registered or approved, or listed on the relevant
national securities exchange, as the case may be, at such time, so that such
shares may be issued in accordance with the terms hereof and so converted.
6. ISSUE TAX. The issuance of certificates for Warrant Shares
upon the exercise of Warrants shall be made without charge to the holders of
such Warrants or such shares for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax which
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may be payable in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than the holder of the Warrant exercised.
7. CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of any Warrant, of any Warrant Shares issued
or issuable upon the exercise of any Warrant or in any manner which interferes
with the timely exercise of this Warrant.
8. AMENDMENTS TO TERMS OF WARRANT SHARES. The Company will not
amend the terms of the Warrant Shares.
9. AVAILABILITY OF INFORMATION. The Company will cooperate with
each holder of any Warrants or Warrant Shares in supplying such information as
may be necessary for such holder to complete and file any information reporting
forms presently or hereafter required by the Securities and Exchange Commission
as a condition to the availability of an exemption from the Securities Act for
the sale of any Warrants or Warrant Shares. The Company will deliver to any
person at the time holding any Warrants, promptly upon their becoming available,
copies of all financial statements, reports, notices and proxy statements sent
or made available generally by the Company to its stockholders, and copies of
all regular and periodic reports and all registration statements and
prospectuses filed by the Company with any securities exchange or with the
Securities and Exchange Commission.
10. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
11. TRANSFER AND EXCHANGE.
(a) (1) The transfer of this Warrant and all rights hereunder,
in whole or in part, is registrable at the office or agency of the Company
referred to below by the holder hereof in person or by his duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable, and that the
holder hereof, when this Warrant shall have been so endorsed, may be treated by
the Company and all other persons dealing with this Warrant as the absolute
owner and holder hereof for any purpose and as the person entitled to exercise
the rights represented by this Warrant, or to the registration of transfer
hereof on the books of the Company; and until due presentment for registration
of transfer on such books the Company may treat the registered holder hereof as
the owner and holder for all purposes, and the Company shall not be affected by
notice to the contrary.
(2) The holder of this Warrant, by acceptance hereof,
understands that the Warrant Securities are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being or will
be acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such Warrant Securities may
be resold without registration under the Securities Act only in certain limited
circumstances. The holder of this Warrant, by acceptance hereof, agrees to
comply with all applicable laws (including, without
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limitation, any filing required by the Hart-Scott-Rodino Antitrust Improvements
Act of 1976) upon exercise hereof.
The holder of this Warrant, by acceptance hereof, represents that
such holder is acquiring this Warrant and any Warrant Shares to be issued upon
exercise hereof for its own account (including any separate account) for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof. The holder hereof further represents that such holder has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Warrant Securities as
required by Section (b)(2)(ii)(v) of Rule 502 of Regulation D under the
Securities Act.
Without in any way limiting the foregoing, the holder hereof
further agrees not to make any disposition of all or any portion of the Warrant
Securities unless and until:
(x) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such Registration Statement; or
(y) (i) The holder hereof shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company (it being understood that if the holder of this
Warrant is a party to the Agreement, counsel who is such party's employee shall
be deemed reasonably satisfactory to the Company), that such disposition will
not require registration of such Warrant Securities under the Securities Act.
(b) REGISTER. The Company shall maintain, at the principal
office of the Company (or such other office or agency of the Company in New
York, New York or San Francisco, California as it may designate by notice to the
holder hereof), a register for the Warrants, in which the Company shall record
the name and address of the person in whose name a Warrant has been issued, as
well as the name and address of each transferee and each prior owner of such
Warrant. Within 10 days after any holder of Warrants shall by notice request
the same, the Company will deliver to such holder a certificate, signed by one
of its officers, listing the name and address of every other holder of Warrants
and/or Warrant Shares, as such information appears in said register and in the
stock transfer books of the Company at the close of business on the day before
such certificate is signed.
(c) WARRANTS EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in paragraph 11(b), for new Warrants
of like tenor representing in the aggregate the right to subscribe for and
purchase the number of shares which may be subscribed for and purchased
hereunder of Common Stock, each of such new Warrants to represent the right to
subscribe for and purchase such number of shares as shall be designated by said
holder hereof at the time of such surrender.
(d) REPLACEMENT OF WARRANTS. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity bond (or, in the case of any
institutional holder, an indemnity agreement) reasonably satisfactory in form
and amount to the Company or, in
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<PAGE>
the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
(e) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of
this Warrant in connection with any exchange, transfer or replacement as
provided in this paragraph 11, this Warrant shall be promptly cancelled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses and charges payable in connection with the preparation,
execution and delivery of Warrants pursuant to this paragraph 11.
12. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered to the holders of Warrants shall
be in writing, and shall be delivered, or shall be sent by certified or
registered mail, postage prepaid and addressed, to each holder at the address
shown on the register for the Warrants, or at such other address as shall have
been furnished to the Company by notice from such holder. All notices, requests
and other communications required or permitted to be given or delivered to the
Company shall be in writing, and shall be delivered, or shall be sent by
certified or registered mail, postage prepaid and addressed, to the office of
the Company, at One Montgomery Street, San Francisco, California 94104,
Attention: Chief Financial Officer, with a copy to General Counsel, or at such
other address as shall have been furnished to the holders of Warrants by notice
from the Company. Any such notice, request or other communication may be sent
by telegram or telex, but shall in such case be subsequently confirmed by a
writing delivered or sent by certified or registered mail as provided above.
All notices shall be deemed to have been given either at the time of the
delivery thereof to (or the receipt by, in the case of a telegram or telex) any
officer or employee of the person entitled to receive such notice at the address
of such person for purposes of this paragraph 12, or, if mailed, at the
completion of the third full day following the time of such mailing thereof to
such address, as the case may be.
13. GOVERNING LAW. This Warrant shall be construed in
accordance with and governed by the laws of the State of New York without regard
to the principles of conflicts of laws.
14. REMEDIES. The Company stipulates that the remedies at law
of the holder of this Warrant in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
15. DEFINITIONS. For the purpose of this Warrant, the following
terms shall have the following meanings:
"ADDITIONAL SHARES OF CAPITAL STOCK" shall mean all shares
(including treasury shares) of Capital Stock issued or sold (or, pursuant to
paragraph 4(a) deemed to be issued) by the Company after the date hereof,
whether or not subsequently reacquired or retired by the Company, other than
shares of Common Stock issued upon the exercise of the Warrants.
"CAPITAL STOCK" shall have the meaning assigned to such term in
paragraph 4.
"CONSUMMATION DATE" shall mean the date of the consummation of a
Transaction.
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<PAGE>
"CONVERTIBLE SECURITIES" shall mean any evidences
of indebtedness, shares of stock (other than Common Stock) or securities
directly or indirectly convertible into or exchangeable for Additional Shares of
Capital Stock.
"MARKET PRICE" shall mean, on any date specified herein, (A) if
any class of Capital Stock is listed or admitted to trading on any national
securities exchange, the highest price obtained by taking the arithmetic mean
over a period of twenty consecutive Trading Days ending the second Trading Day
prior to such date of the average, on each such Trading Day, of the high and low
sale price of shares of each such class of Capital Stock or if no such sale
takes place on such date, the average of the highest closing bid and lowest
closing asked prices thereof on such date, in each case as officially reported
on all national securities exchanges on which each such class of Capital Stock
is then listed or admitted to trading, or (B) if no shares of any class of
Capital Stock are then listed or admitted to trading on any national securities
exchange, the highest closing price of any class of Capital Stock on such date
in the over-the-counter market as shown by NASDAQ or, if no such shares of any
class of Capital Stock are then quoted in such system, as published by the
National Quotation Bureau, Incorporated or any similar successor organization,
and in either case as reported by any member firm of the New York Stock Exchange
selected by the Company. If no shares of any class of Capital Stock are then
listed or admitted to trading on any national securities exchange and if no
closing bid and asked prices thereof are then so quoted or published in the
over-the-counter market, "Market Price" shall mean the higher of (x) the book
value per share of Capital Stock (assuming for the purposes of this calculation
the economic equivalence of all shares of all classes of Capital Stock) as
determined on a fully diluted basis in accordance with generally accepted
accounting principles by a firm of independent public accountants of recognized
standing (which may be its regular auditors) selected by the Board of Directors
of the Company as of the last day of any month ending within 60 days preceding
the date as of which the determination is to be made or (y) the fair value per
share of Capital Stock (assuming for the purposes of this calculation the
economic equivalence of all shares of all classes of Capital Stock), as
determined on a fully diluted basis in good faith by an independent brokerage
firm or Standard & Poor's Corporation (as selected by the Board of Directors of
the Company), as of a date which is 15 days preceding the date as of which the
determination is to be made.
"OPTIONS" shall mean rights, options or warrants to subscribe
for, purchase or otherwise acquire either Additional Shares of Capital Stock or
Convertible Securities.
"OTHER SECURITIES" shall mean any stock (other than Capital
Stock) and any other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise or partial exercise of the
Warrants, in lieu of or in addition to Common Stock.
["PRUDENTIAL WARRANTS" SHALL MEAN ALL WARRANTS, INCLUDING ANY
AMENDMENTS THERETO, ISSUED PURSUANT TO THE SECURITIES PURCHASE AGREEMENT DATED
NOVEMBER 2, 1992 BETWEEN THE COMPANY AND PRUDENTIAL.]
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"TRADING DAY" shall mean any day on which the New York Stock
Exchange is open for trading on a regular basis.
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<PAGE>
"TRANSACTION" shall mean any transaction to which the Company is
a party at any time (including, without limitation, a merger, consolidation,
sale of all or substantially all of the Company's assets, liquidation or
recapitalization of the Capital Stock) in which the previously outstanding
Capital Stock shall be changed into or exchanged for different securities of the
Company or common stock or other securities of another corporation or interests
in a noncorporate entity or other property (including cash) or any combination
of any of the foregoing or in which the Capital Stock ceases to be a publicly
traded security either listed on the New York Stock Exchange or the American
Stock Exchange or quoted by NASDAQ or any successor thereto or comparable
system.
["WARBURG WARRANTS" SHALL MEAN ALL WARRANTS, INCLUDING ANY
AMENDMENTS THERETO, ISSUED PURSUANT TO THE SECURITIES PURCHASE AGREEMENT DATED
NOVEMBER 2, 1992 BY AND AMONG THE COMPANY, WARBURG AND JOE F. HANAUER.]
"WARRANT SECURITIES" shall mean the Warrants and the Warrant
Shares.
16. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant and any provision hereof may be
amended or waived only by an instrument in writing signed by the holders of then
outstanding [PRUDENTIAL] [WARBURG] Warrants representing the right to purchase
not less than a majority of the total number of shares of Common Stock issuable
upon exercise of all then outstanding [PRUDENTIAL] [WARBURG] Warrants then not
transferable without registration under the Securities Act and, if it is to be
bound thereby, by the Company.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, GRUBB & ELLIS COMPANY has caused this Stock
Subscription Warrant to be signed by its duly authorized officer under its
corporate seal, attested by its duly authorized officer, and the Warrant to be
dated as of _____________, 1994.
GRUBB & ELLIS COMPANY
By ____________________________
Title:
Attest:
By ____________________________
Title:
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FORM OF EXERCISE AGREEMENT
Date
To:
The undersigned, pursuant to the provisions set forth in the
within Stock Subscription Warrant, hereby agrees to subscribe for and purchase
________ shares of Common Stock covered by such Stock Subscription Warrant, and
makes payment herewith in full therefor at the price per share provided by
such Stock Subscription Warrant [in cash] [by delivery of $_____ principal
amount of ______ Notes] [by cancellation of $______ of accrued and unpaid
interest on ______ Notes].
Name__________________________
Title_________________________
Company_______________________
Signature_____________________
Address_______________________
______________________________
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Stock Subscription Warrant, with respect to the number of Warrant
Shares covered thereby set forth hereinbelow to:
Name of Assignee Address No. of Shares
- ---------------- ------- -------------
Dated: ___________, 19__.
Name__________________________
Title_________________________
Company_______________________
Signature_____________________
Witness_______________________
<PAGE>
Exhibit 6.1 to Standby Agreement
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
GRUBB & ELLIS COMPANY, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That on June 1, 1994, the Board of Directors of said
Corporation duly adopted the following resolution setting forth proposed
amendments to the Restated Certificate of Incorporation of said Corporation,
declaring said amendments to be advisable and calling a meeting of the
stockholders of said Corporation for consideration thereof. The resolution
setting forth the proposed amendments is as follows:
RESOLVED, that Article IV of the Certificate of Incorporation of this
Corporation is hereby amended to read in its entirety as follows:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is twenty-six million (26,000,000) shares, of
which twenty-five million (25,000,000) shares with a par value of $.01 each
shall be designated Common Stock, and of which one million (1,000,000) shares
with a par value of $.01 each shall be designated Preferred Stock, of which
Preferred Stock fifty thousand (50,000) shares with a par value of $.01 each
shall be designated Series A Senior Convertible Preferred Stock ("Series A
Senior Preferred Stock"), two hundred thousand (200,000) shares with a par value
of $.01 each shall be designated Series B Senior Convertible Preferred Stock
("Series B Senior Preferred Stock") and two hundred thousand (200,000) shares
with a par value of $.01 each shall be designated Junior Convertible Preferred
Stock. Except as noted in the second following paragraph, as used herein,
"Senior Convertible Preferred Stock," shall mean collectively, the Series A
Senior Preferred Stock and the Series B Senior Preferred Stock, or either of
them. As used herein, "Convertible Preferred Stock" shall mean collectively,
the Senior Convertible Preferred Stock and the Junior Convertible Preferred
Stock, or either of them.
Upon the filing on January 29, 1993 of the Certificate of Amendment of
Certificate of Incorporation (the "Amendment"), every five shares of outstanding
Common Stock were automatically reclassified, changed and converted into one
share of Common Stock. No fractional shares of Common Stock were issued upon
such conversion, but in lieu thereof, the Corporation paid a cash adjustment in
respect of such fractional interest in an amount equal to such fractional
interest multiplied by the Market Price of a share of Common Stock on the date
on which the Amendment was filed. Unless otherwise requested by the holders
thereof, the share certificates representing the shares of Common Stock
outstanding prior to the filing of the Amendment represent such shares as
reclassified, changed and converted following the filing of the Amendment. In
addition, on December 8, 1993, the Company filed a Restated Certificate of
Incorporation restating, integrating, and not further amending the provisions of
the Company's certificate of incorporation as amended and supplemented before
that date.
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Upon the filing of this Certificate of Amendment of Restated
Certificate of Incorporation (the "Certificate of Amendment"), Warburg, Pincus
Investors, L.P. ("Warburg") will exchange all of its shares of Senior
Convertible Preferred Stock held prior to such filing ("Existing Senior
Convertible Preferred Stock") for an equal number of shares of Series B Senior
Preferred Stock. Effective immediately after the issuance of such shares of
Series B Senior Preferred Stock, each remaining share of Existing Senior
Convertible Preferred Stock shall be automatically reclassified, changed and
converted into one share of Series A Senior Preferred Stock. Unless otherwise
requested by the holders thereof, the share certificates representing the shares
of Existing Senior Convertible Preferred Stock outstanding prior to the filing
of the Certificate of Amendment which have not been exchanged for Series B
Senior Convertible Stock shall represent shares of Series A Senior Convertible
Preferred Stock as reclassified, changed and converted following the issuance of
the Series B Senior Convertible Stock.
The class of capital stock of the Corporation designated Common Stock
shall have (i) subject to the proviso at the end of this sentence, full voting
rights, with one vote represented by each share of stock; (ii) rights to payment
of dividends without preference if, as, and when declared by the Board of
Directors of the Corporation; and (iii) rights to liquidation distributions of
the Corporations's assets without preference after payment of preferential
liquidation distributions, if any, payable on any issued and outstanding series
of Preferred Stock; provided, however, that, notwithstanding the provisions of
clause (i) of this sentence, the holders of Common Stock shall not have the
right to vote on any of the matters described in Section 4(b)(i) or 4(b)(ii)
below in this Article IV except in clauses (A) and (D) thereof, except as
otherwise required by the laws of the State of Delaware.
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby expressly vested with authority to fix
by resolution or resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof (including, without
limitation, the voting powers, if any, the dividend rate, conversion rights,
redemption price, or liquidation preference), of any wholly unissued series of
Preferred Stock, to fix the number of shares constituting any such series, and
to increase or decrease the number of shares of any such series (but not below
the number of shares thereof then outstanding). In case the number of shares of
any such series shall be so decreased, the shares constituting such decrease
shall resume the status which they had prior to the adoption of the resolution
or resolutions originally fixing the number of shares of such series.
A statement of the designations and the voting powers, preferences and
relative, participating, optional and other special rights of the shares of the
Senior Convertible Preferred Stock and the Junior Convertible Preferred Stock,
and the qualifications, limitations or restrictions thereof are as follows:
1. RANK. The Senior Convertible Preferred Stock shall, with respect
to dividend rights and rights on liquidation, winding up and dissolution, rank
prior to any other equity securities of the Corporation, including all classes
of Common Stock and any other series of Preferred Stock of the Corporation, with
the Series A Senior Preferred Stock and the Series B Senior Preferred Stock
ranking on an equal priority in all such foregoing respects. The Junior
Convertible Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution, rank prior to any other equity
securities of the Corporation, including all classes of Common Stock and any
other series of Preferred Stock of the Corporation other than the Senior
Convertible Preferred Stock which shall rank prior to the Junior Convertible
Preferred Stock (all of such equity securities of the
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Corporation to which the Junior Convertible Preferred Stock ranks prior are
collectively referred to herein as the "Junior Stock").
2. DIVIDENDS.
(a) SENIOR CONVERTIBLE PREFERRED STOCK. The holders of Senior
Convertible Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor, cumulative
dividends at a rate (the "Senior Dividend Rate") equal to the greater of 12% or
the Junior Preferred Dividend Rate (as defined below). Such dividends shall be
computed on the basis of the Series A Senior Preferred Stock Stated Value and
the Series B Senior Preferred Stock Stated Value, respectively, and shall be
payable annually on the first day of each October commencing on the first of
such dates to occur after the Issue Date. Dividends shall accrue on each share
of Senior Convertible Preferred Stock from the Issue Date and shall accrue from
day to day, whether or not earned or declared. Accrued but unpaid dividends on
the Senior Convertible Preferred Stock shall increase at a compounding rate
equal to the Senior Dividend Rate compounded annually. Dividends paid on the
shares of Senior Convertible Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of all, but not less than all shares of Senior Convertible Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 30 days prior to the date
fixed for the payment thereof. During such time as any shares of the Senior
Convertible Preferred Stock are outstanding, the Corporation shall not declare,
pay or set apart for payment any dividend on any of the Junior Convertible
Preferred Stock or Junior Stock, other than a redemption pursuant to Section
5(h), or make any payment on account of, or set apart money for a sinking or
other similar fund or make any payment for, the purchase, redemption or other
retirement of, any of the Junior Convertible Preferred Stock or Junior Stock or
any warrants, rights, calls or options exercisable for or convertible into any
of the Junior Convertible Preferred Stock or Junior Stock, or make any
distribution in respect thereof, either directly or indirectly, and whether in
cash, obligations or shares of the Corporation or other property (other than
distributions or dividends in Junior Convertible Preferred Stock or Junior Stock
to the holders of Junior Convertible Preferred Stock or Junior Stock), and shall
not permit any corporation or other entity directly or indirectly controlled by
the Corporation to purchase or redeem any of the Junior Convertible Preferred
Stock or Junior Stock or any warrants, rights, calls or options exercisable for
or convertible into any of the Junior Convertible Preferred Stock or Junior
Stock, other than a redemption pursuant to Section 5(h), unless prior to or
concurrently with such declaration, payment, setting apart for payment,
purchase, redemption or distribution, as the case may be, the full cumulative
dividends on all outstanding shares of Senior Convertible Preferred Stock shall
have been paid in full or contemporaneously are declared and paid through the
most recent dividend payment date. Notwithstanding the foregoing, a redemption
pursuant to Section 5(h) may be effected prior to the payment in full of
cumulative dividends on all outstanding shares of Senior Convertible Preferred
Stock. The dividend rights of the Series A Senior Preferred Stock and Series B
Senior Preferred Stock shall be on an equal priority.
(b) JUNIOR CONVERTIBLE PREFERRED STOCK. The holders of Junior
Convertible Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor, cumulative
dividends payable in cash at a rate (the "Junior Preferred Dividend Rate") of 5%
per annum through December 31, 2001, 10% per annum from January 1, 2002 through
December 31, 2002, 11% per annum from January 1, 2003 through December 31, 2003,
12% per annum from January 1, 2004 through December 31, 2004, and commencing on
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<PAGE>
January 1, 1995 and on each January 1 thereafter, such rate shall increase by
2%. Such dividends shall be computed on the basis of the Junior Convertible
Preferred Stock Stated Value and shall be payable annually on the first day of
each October commencing on the first of such dates to occur after the shares of
Junior Convertible Preferred Stock are initially issued. Dividends shall accrue
on each share of Junior Convertible Preferred Stock from the date of issuance
thereof and shall accrue from day to day, whether or not earned or declared.
Accrued but unpaid dividends shall increase at a compounding rate equal to the
Junior Preferred Dividend Rate compounded annually. Dividends paid on the
shares of Junior Convertible Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Junior Convertible Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be not more than 30 days prior to the date fixed for the payment thereof.
During such time as any shares of the Junior Convertible Preferred Stock are
outstanding, the Corporation shall not declare, pay or set apart for payment any
dividend on any of the Junior Stock or make any payment on account of, or set
apart money for a sinking or other similar fund or make any payment for, the
purchase, redemption or other retirement of, any of the Junior Stock or any
warrants, rights, calls or options exercisable for or convertible into any of
the Junior Stock, or make any distribution in respect thereof, either directly
or indirectly, and whether in cash, obligations or shares of the Corporation or
other property (other than distributions or dividends in Junior Stock to the
holders of Junior Stock), and shall not permit any corporation or other entity
directly or indirectly controlled by the Corporation to purchase or redeem any
of the Junior Stock or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Stock, unless prior to or concurrently with
such declaration, payment, setting apart for payment, purchase, redemption or
distribution, as the case may be, the full cumulative dividends on all
outstanding shares of Junior Convertible Preferred Stock shall have been paid in
full or contemporaneously are declared and paid through the most recent dividend
payment date.
3. LIQUIDATION PREFERENCE.
(a) SENIOR CONVERTIBLE PREFERRED STOCK. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of the shares of Series A Senior Preferred Stock
and Series B Senior Preferred Stock then outstanding shall be entitled to be
first paid out of the assets of the Corporation available for distribution to
its stockholders an amount in cash equal to $100.00 per share of Series A Senior
Preferred Stock (the "Series A Senior Preferred Stock Stated Value") and $100.00
per share of Series B Senior Preferred Stock (the "Series B Senior Preferred
Stock Stated Value"), respectively, plus an amount equal to all dividends
(whether or not earned or declared) on such shares accrued and unpaid thereon to
the date of final distribution, before any payment shall be made or any assets
distributed to the holders of the Junior Convertible Preferred Stock or Junior
Stock. Except as provided in the preceding sentence, holders of the Senior
Convertible Preferred Stock shall not be entitled to any distribution in the
event of liquidation, dissolution or winding up of the affairs of the
Corporation. If, upon any such liquidation, dissolution or winding up of the
Corporation, the remaining assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of the Senior
Convertible Preferred Stock the full amount to which they shall be entitled, the
holders of any of the Senior Convertible Preferred Stock shall share ratably in
any distribution of the remaining assets and funds of the Corporation in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full. The distribution rights of the
Series A Senior Preferred Stock and Series B Senior Preferred Stock shall be on
an equal priority.
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(b) JUNIOR CONVERTIBLE PREFERRED STOCK. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, if assets are remaining after the payment in full of the
preferential amount of the Series A Senior Preferred Stock Stated Value and the
Series B Senior Preferred Stock Stated Value set forth in Section 3(a) plus an
amount equal to all dividends (whether or not earned or declared) on such shares
accrued and unpaid thereon, the holders of the shares of Junior Convertible
Preferred Stock then outstanding shall be next entitled to be first paid out of
the assets of the Corporation available for distribution to its stockholders an
amount in cash equal to $100.00 per share (the "Junior Convertible Preferred
Stock Stated Value") plus an amount equal to all dividends (whether or not
earned or declared) on such shares accrued and unpaid thereon to the date of
final distribution, before any payment shall be made or any assets distributed
to the holders of any of the Junior Stock. Except as provided in the preceding
sentence, holders of the Junior Convertible Preferred Stock shall not be
entitled to any distribution in the event of liquidation, dissolution or winding
up of the affairs of the Corporation. If, upon any such liquidation,
dissolution or winding up of the Corporation, the remaining assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the holders of the Junior Convertible Preferred Stock the full amount to
which they shall be entitled, the holders of the Junior Convertible Preferred
Stock shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(c) For the purposes of this Section 3, neither the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property or assets of the
Corporation nor the consolidation or merger of the Corporation with one or more
other corporations shall be deemed a liquidation, dissolution or winding up,
voluntary or involuntary.
(d) The liquidation payment with respect to each outstanding
fractional share of Convertible Preferred Stock shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Convertible Preferred Stock.
4. VOTING RIGHTS.
(a) RIGHT TO VOTE. Except as otherwise required by law, the Senior
Convertible Preferred Stock, the Junior Convertible Preferred Stock, the Common
Stock and any other capital stock of the Corporation entitled to vote with the
Common Stock shall be deemed to be one class for the purpose of voting, or
giving written consent in lieu of voting, on all matters submitted for the
approval of the stockholders of the Corporation. Each person in whose name
shares of Convertible Preferred Stock shall be registered on the record date for
determining the holders of the Convertible Preferred Stock entitled to vote at
any meeting of stockholders (or adjournment thereof) or to consent to corporate
action in writing without a meeting shall be entitled to, at such meeting or
with respect to such action, one vote for each share of Common Stock of the
Corporation into which each share of Convertible Preferred Stock registered in
the name of such person on such record date could be converted (with any
fractional share determined on an aggregate conversion basis being rounded to
the nearest whole share).
(b) SIGNIFICANT EVENTS.
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(i) During such time as any shares of Senior Convertible
Preferred Stock are outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least two-thirds of the
issued and outstanding shares of Senior Convertible Preferred Stock voting
together as one single and separate class, (A) create, authorize or issue
(including on conversion or exchange of any convertible or exchangeable
securities or by reclassification) any class or series of shares ranking on
a parity with or prior to the Senior Convertible Preferred Stock, either as
to dividends upon voluntary or involuntary liquidation, dissolution or
winding up, (B) increase the authorized shares of, or issue (including on
conversion or exchange of any convertible or exchangeable securities or by
reclassification) any shares of Senior Convertible Preferred Stock,
(C) amend, alter, waive the application of, or repeal (whether by merger,
consolidation or otherwise) any provision of the Certificate of
Incorporation of the Corporation, enter into any agreement or take any
other corporate action which in any manner would alter, change or otherwise
adversely affect the powers, rights or preferences of the Senior
Convertible Preferred Stock, (D) effect the reorganization,
recapitalization, liquidation, dissolution or winding up of the
Corporation, or the sale, lease, conveyance or exchange of all or
substantially all of the assets, property or business of the Corporation,
or the merger or consolidation of the Corporation with or into any other
corporation, if such transaction in any manner would alter, change or
otherwise adversely affect the powers, rights or preferences of the Senior
Convertible Preferred Stock or (E) take any action which would cause a
dividend or other distribution to be deemed to be received by the holders
of the Senior Convertible Preferred Stock for federal income tax purposes
unless such dividend or other distribution is actually received by such
holders.
(ii) During such time as any shares of Junior Convertible
Preferred Stock are outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least two-thirds of the
issued and outstanding shares of Junior Convertible Preferred Stock voting
together as a separate class, (A) create, authorize or issue (including on
conversion or exchange of any convertible or exchangeable securities or by
reclassification) any class or series of shares ranking on a parity with or
prior to the Junior Convertible Preferred Stock, either as to dividends or
redemption or upon voluntary or involuntary liquidation, dissolution or
winding up, (B) increase the authorized shares of, or issue (including on
conversion or exchange of any convertible or exchangeable securities or by
reclassification) any shares of Junior Convertible Preferred Stock,
(C) amend, alter, waive the application of, or repeal (whether by merger,
consolidation or otherwise) any provision of the Certificate of
Incorporation of the Corporation, enter into any agreement or take any
other corporate action which in any manner would alter, change or otherwise
adversely affect the powers, rights or preferences of the Junior
Convertible Preferred Stock, (D) effect the reorganization,
recapitalization, liquidation, dissolution or winding up of the
Corporation, or the sale, lease, conveyance or exchange of all or
substantially all of the assets, property or business of the Corporation,
or the merger or consolidation of the Corporation with or into any other
corporation, if such transaction in any manner would alter, change or
otherwise adversely affect the powers, rights or preferences of the Junior
Convertible Preferred Stock or (E) take any action which would cause a
dividend or other distribution to be deemed to be received by the holders
of the Junior Convertible Preferred Stock for federal income tax purposes
unless such dividend or other distribution is actually received by such
holders.
(c) WRITTEN CONSENT. Whenever holders of the Convertible Preferred
Stock are required or permitted to take any action by vote, such action may be
taken without a meeting by written consent, setting forth the action so taken
and signed by the holders of the outstanding Senior
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Convertible Preferred Stock or Junior Convertible Preferred Stock, as the case
may be, having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all such shares entitled
to vote thereon were present and voted.
5. CONVERSION. Holders of the Convertible Preferred Stock shall
have the following conversion rights (collectively, the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Series A Senior Preferred Stock,
Series B Senior Preferred Stock and Junior Convertible Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time to
time, into such number of validly issued, fully paid and nonassessable shares of
Common Stock of the Corporation, as is determined by dividing the Series A
Senior Preferred Stock Stated Value, the Series B Senior Preferred Stock Stated
Value or the Junior Convertible Preferred Stock Stated Value, as the case may
be, by the respective "Conversion Prices" (as defined below) in effect at the
time of the conversion; provided, however, that if such share shall be called
for redemption pursuant to Section 5(h), it may not be converted after the
redemption date unless the Corporation shall have failed to pay or provide for
the payment of the redemption price therefor (in accordance with Section 5(h)).
The Conversion Prices initially in effect shall be $______(1) for the Series A
Senior Preferred Stock (the "Series A Senior Preferred Stock Conversion Price"),
$_______ for the Series B Senior Preferred Stock (the "Series B Senior Preferred
Stock Conversion Price"), and $5.6085 for the Junior Convertible Preferred Stock
(the "Junior Preferred Stock Conversion Price") (the Series A Senior Preferred
Stock Conversion Price, the Series B Senior Preferred Stock Conversion Price,
and the Junior Preferred Stock Conversion Price, collectively the "Conversion
Prices" and each individually, a "Conversion Price"). Such initial Conversion
Prices, and the rate at which shares of Convertible Preferred Stock may be
converted into shares of Common Stock, shall be subject to adjustment as
provided in Section 5(d) below.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued upon conversion of the Convertible Preferred Stock, but in lieu thereof,
the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to such fractional interest multiplied by the Market
Price of a share of Common Stock on the date on which such shares of Convertible
Preferred Stock are deemed to have been converted.
(c) MECHANICS OF CONVERSION.
(i) In order for a holder of the Convertible Preferred Stock to
convert shares of Convertible Preferred Stock into shares of Common Stock,
such holder shall surrender the certificate or certificates for such shares
of Convertible Preferred Stock, at the office of the transfer agent for the
Convertible Preferred Stock (or at the principal office of the Corporation
if the Corporation serves as its own transfer agent), together with written
notice that such holder elects to convert all or any number of the shares
of the Convertible Preferred Stock represented by such certificate or
certificates. Such notice shall state such holder's name or the names of
the nominees in which such holder wishes the certificate or certificates
for shares of Common Stock to be issued. If required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
a written instrument or instruments of transfer, in form satisfactory to
the Corporation, duly executed
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1. The Series A Senior Preferred Conversion Price and the Series B Senior
Preferred Conversion Price shall be determined in accordance with Article 4 of
the Restated Certificate of Incorporation immediately prior to the filing of
this Amendment after giving effect to the Financing Transactions.
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by the registered holder or his or its attorney duly authorized in writing.
The date on which the transfer agent (or the Corporation, if the
Corporation serves as its own transfer agent) receives such certificate or
certificates and notice shall be the conversion date ("Conversion Date").
As soon as practicable, and in any event within five business days, after
the Conversion Date, the Corporation shall issue and deliver, or cause to
be issued and delivered, to such holder of Convertible Preferred Stock, or
to his or its nominees, (i) a certificate or certificates for the number of
validly issued, fully paid and nonassessable shares of Common Stock to
which such holder shall be entitled upon conversion and (ii) if fewer than
the full number of shares of Convertible Preferred Stock evidenced by the
surrendered certificate or certificates are being converted, a new
certificate or certificates of like tenor for the number of shares
evidenced by such surrendered certificate or certificates less the number
of shares converted.
(ii) During such times as any shares of Convertible Preferred
Stock are outstanding, the Corporation shall reserve and keep available out
of its authorized but unissued stock, for the purpose of effecting the
conversion of Convertible Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of Convertible Preferred
Stock.
(iii) All shares of Convertible Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares
(including the rights, if any, to receive notices and to vote) shall
immediately cease and terminate on the Conversion Date, except only the
right of the holders thereof to receive shares of Common Stock in exchange
therefor. Such conversions shall be deemed to have been made at the close
of business on the Conversion Date and the converting holder shall be
treated for all purposes as having become the record holder of such Common
Stock at such time. Any shares of Convertible Preferred Stock so converted
shall be retired and canceled and shall not be reissued, and the
Corporation may from time to time take such appropriate action as may be
necessary to reduce the authorized Convertible Preferred Stock accordingly.
(d) ANTI-DILUTION PROVISIONS.
(i) ADJUSTMENTS; CAPITAL STOCK. The Series A Senior Preferred
Stock Conversion Price set forth above shall be subject to adjustment from
time to time as hereinafter provided. For purposes of this Section 5, the
term "Capital Stock" as used herein includes the Corporation's Common Stock
and shall also include any capital stock of any class of the Corporation
thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate
in dividends and in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation.
(ii) ADJUSTMENT OF SERIES A SENIOR PREFERRED STOCK CONVERSION
PRICE UPON ISSUANCE OF ADDITIONAL SHARES OF CAPITAL STOCK.
(A) In case the Corporation, at any time or from time to
time after the Issue Date shall issue or sell Additional Shares of
Capital Stock without consideration or for a consideration per share
less than the greater of the Series A Senior Preferred Stock
Conversion Price or the Market Price in effect, in each case, on the
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date of such issue or sale, then, and in each such case, subject to
Section 5(d)(viii), the Series A Senior Preferred Stock Conversion
Price shall be reduced, concurrently with such issue or sale, to a
price (calculated to the nearest .001 of a cent) determined by
multiplying such Series A Senior Preferred Stock Conversion Price by a
fraction:
(1) the numerator of which shall be (a) the number of
shares of Capital Stock outstanding immediately prior to such
issue or sale plus (b) the number of shares of Capital Stock
which the aggregate consideration received by the Corporation for
the total number of such Additional Shares of Capital Stock so
issued or sold would purchase at the greater of such Market Price
or such Series A Senior Preferred Stock Conversion Price, and
(2) the denominator of which shall be the number of shares
of Capital Stock outstanding immediately after such issue or
sale,
provided that, for the purposes of this Section 5(d)(ii)(A),
(w) immediately after any Additional Shares of Capital Stock are deemed to
have been issued pursuant to Section 5(d)(iii) or 5(d)(iv), such Additional
Shares shall be deemed to be outstanding, and (x) treasury shares shall not
be deemed to be outstanding; and provided further that, for the purposes of
this Section 5(d)(ii)(A), (y) the crediting of shares of the Corporation's
Common Stock to participating real estate salespersons under the
Corporation's Deferred Equity Program which was adopted by the Corporation
on October 18, 1989 shall cause an adjustment in the Series A Senior
Preferred Stock Conversion Price concurrently with such crediting of the
shares of the Corporation's Common Stock and (z) the issuance of such
shares previously credited to participating real estate salespersons under
the Corporation's Deferred Equity Program shall not cause an adjustment in
the Series A Senior Preferred Stock Conversion Price.
(B) In case the Corporation, at any time or from time to
time after the Issue Date, shall declare, order, pay or make a
dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or
property or Options by way of dividend or spinoff, reclassification,
recapitalization or similar corporate rearrangement) on the Capital
Stock, other than (1) a dividend payable in Additional Shares of
Capital Stock or in Options for Capital Stock or Convertible
Securities or (2) a dividend payable in cash or other property and
declared out of retained earnings of the Corporation, then, and in
each such case, subject to Section 5(d)(viii), the Series A Senior
Preferred Stock Conversion Price in effect immediately prior to the
close of business on the record date fixed for the determination of
holders of any class of securities entitled to receive such dividend
or distribution shall be reduced, effective as of the close of
business on such record date, to a price (calculated to the nearest
.001 of a cent) determined by multiplying the Series A Senior
Preferred Stock Conversion Price by a fraction:
(1) the numerator of which shall be the Market Price in
effect on such record date or, if any class of Capital Stock
trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, less the value of such
dividend or distribution which has not been declared out of
retained earnings (as determined in good faith by the Board of
Directors of the Corporation) applicable to one share of Capital
Stock, and
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(2) the denominator of which shall be such Market Price.
(iii) TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES. In
case the Corporation, at any time or from time to time after the Issue
Date, shall issue, sell, grant or assume, or shall fix a record date for
the determination of holders of any class of securities entitled to
receive, any Options or Convertible Securities, then, and in each such
case, the maximum number of Additional Shares of Capital Stock (as set
forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon
the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securi-
ties, shall be deemed to be Additional Shares of Capital Stock issued as of
the time of such issue, sale, grant or assumption or, in case such a record
date shall have been fixed, as of the close of business on such record
date, provided that such Additional Shares of Capital Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to Section 5(d)(v)) of such shares would be less than the greater
of the applicable Conversion Price or the Market Price in effect, in each
case, on the date of and immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business on such record
date or, if the Capital Stock trades on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading, as the case may be, and
provided, further, that in any such case in which Additional Shares of
Capital Stock are deemed to be issued,
(A) no further adjustment of the Series A Senior Preferred
Conversion Price shall be made upon the subsequent issue or sale of
Additional Shares of Capital Stock or Convertible Securities upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any change
in the consideration payable to the Corporation, or change in the
number of Additional Shares of Capital Stock issuable, upon the
exercise, conversion or exchange thereof (by change of rate or
otherwise), the Conversion Price computed upon the original issue,
sale, grant or assumption thereof (or upon the occurrence of the
record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such change becoming effective, be
recomputed to reflect such change insofar as it affects such Options,
or the rights of conversion or exchange under such Convertible
Securities, which are outstanding at such time;
(C) upon the expiration of any such Options or of the
rights of conversion or exchange under any such Convertible Securities
which shall not have been exercised (or upon purchase by the
Corporation and cancellation or retirement of any such Options which
shall not have been exercised or of any such Convertible Securities
the rights of conversion or exchange under which shall not have been
exercised), the Conversion Price computed upon the original issue,
sale, grant or assumption thereon (or upon the occurrence of the
record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if:
(1) in the case of Options for Capital Stock or of
Convertible Securities, the only Additional Shares of Capital
Stock issued or sold (or
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deemed issued or sold) were the Additional Shares of Capital
Stock, if any, actually issued or sold upon the exercise of such
Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor were (a) an
amount equal to (i) the consideration actually received by the
Corporation for the issue, sale, grant or assumption of all such
Options, whether or not exercised, plus (ii) the consideration
actually received by the Corporation upon such exercise, minus
(iii) the consideration paid by the Corporation for any purchase
of such Options which were not exercised, or (b) an amount equal
to (i) the consideration actually received by the Corporation for
the issue, sale, grant or assumption of all such Convertible
Securities which were actually converted or exchanged, plus (ii)
the additional consideration, if any, actually received by the
Corporation upon such conversion or exchange, minus (iii) the
excess, if any, of the consideration paid by the Corporation for
any purchase of such Convertible Securities, the rights of
conversion or exchange under which were not exercised, over an
amount that would be equal to the fair value (as determined in
good faith by the Board of Directors of the Corporation) of the
Convertible Securities so purchased if such Convertible
Securities were not convertible into or exchangeable for
Additional Shares of Capital Stock, and
(2) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued or sold upon
the exercise of such Options were issued at the time of the
issue, sale, grant or assumption of such Options, and the
consideration received by the Corporation for the Additional
Shares of Capital Stock deemed to have then been issued were an
amount equal to (a) the consideration actually received by the
Corporation for the issue, sale, grant or assumption of all such
Options, whether or not exercised, plus (b) the consideration
deemed to have been received by the Corporation (pursuant to
Section 5(d)(v)) upon the issue or sale of the Convertible
Securities with respect to which such Options were actually exer-
cised, minus (c) the consideration paid by the Corporation for
any purchase of such Options which were not exercised.
(iv) TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC.; CERTAIN
STOCK REPURCHASES.
(A) In case the Corporation, at any time or from time to time
after the Issue Date, shall declare or pay any dividend or other
distribution on the Capital Stock payable in Capital Stock, or shall
effect a subdivision of the outstanding shares of Capital Stock into a
greater number of shares of Capital Stock (by reclassification or
otherwise than by payment of a dividend in Capital Stock), then, and
in each such case, Additional Shares of Capital Stock shall be deemed
to have been issued (1) in the case of any such dividend, immediately
after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such
dividend, or (2) in the case of any such subdivision, at the close of
business on the day immediately prior to the day upon which such
corporate action becomes effective.
(B) If the Corporation at any time or from time to time after
the Issue Date shall, directly or indirectly, including through a
Subsidiary (as defined below) or
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otherwise, purchase, redeem or otherwise acquire (a "Repurchase") any
of its Capital Stock at a price per share greater than the Market
Price, then the Series A Senior Preferred Stock Conversion Price upon
each such Repurchase shall be adjusted to the price determined by
multiplying the Series A Senior Preferred Stock Conversion Price by a
fraction (1) the numerator of which shall be the number of shares of
Capital Stock outstanding immediately prior to the such Repurchase
minus the number of shares of Capital Stock which the aggregate
consideration for total repurchased Capital Stock would purchase at
the Market Price; and (2) the denominator of which shall be the number
of shares of Capital Stock outstanding immediately after such
Repurchase. For the purposes of this Subsection 5(d)(iv)(B), the date
as of which the Series A Senior Preferred Stock Conversion Price shall
be computed shall be the earlier of (x) the date on which the
Corporation shall enter into contract for the Repurchase of such
Capital Stock, or (y) the date of the actual Repurchase of such
Capital Stock. For purposes of this Section 5(d)(iv)(B), a Repurchase
of Convertible Securities shall be deemed to be a Repurchase of the
underlying Capital Stock, and the computation herein required shall be
made on the basis of the full exercise, conversion or exchange for
such Convertible Securities on the date as of which such computation
is required hereby to be made even if such Convertible Securities are
not exercisable, convertible or exchangeable on such date.
(v) COMPUTATION OF CONSIDERATION. For the purposes of this
Section 5:
(A) The consideration for the issue or sale of
any Additional Shares of Capital Stock or for the issue, sale, grant
or assumption of any Options or Convertible Securities, irrespective
of the accounting treatment of such consideration,
(1) insofar as it consists of cash, shall be computed as
the amount of cash received by the Corporation, and insofar as it
consists of securities or other non-cash consideration, shall be
computed as of the date immediately preceding such issue, sale,
grant or assumption as the fair value (as determined in good
faith by the Board of Directors of the Corporation) of such
consideration (or, if such consideration is received for the
issue or sale of Additional Shares of Capital Stock and the
Market Price thereof is less than the fair value, as so
determined, of such consideration, then such consideration shall
be computed as the Market Price of such Additional Shares of
Capital Stock), in each case without deducting any expenses paid
or incurred by the Corporation, any commissions or compensation
paid or concessions or discounts allowed to underwriters, dealers
or others performing similar services and any accrued interest or
dividends in connection with such issue or sale, and
(2) in case Additional Shares of Capital Stock are issued
or sold or Options or Convertible Securities are issued, sold,
granted or assumed together with other stock or securities or
other assets of the Corporation for a consideration which covers
both, shall be the proportion of such consideration so received,
computed as provided in subsection (1) above, allocable to such
Additional Shares of Capital Stock or Options or Convertible
Securities, as the case may be, all as determined in good faith
by the Board of Directors of the Corporation.
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(B) All Additional Shares of Capital Stock, Options or
Convertible Securities issued in payment of any dividend or other
distribution on any class of stock of the Corporation and all
Additional Shares of Capital Stock issued to effect a subdivision of
the outstanding shares of Capital Stock into a greater number of
shares of Capital Stock (by reclassification or otherwise than by
payment of a dividend in Capital Stock) shall be deemed to have been
issued without consideration.
(C) Additional Shares of Capital Stock deemed to have been
issued for consideration pursuant to Section 5(d)(iii), relating to
Options and Convertible Securities, shall be deemed to have been
issued for a consideration per share determined by dividing
(1) the total amount, if any, received and receivable by
the Corporation as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in question,
plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise
in full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible
Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible
Securities, in each case comprising such consideration as
provided in the foregoing subsection (A), by
(2) the maximum number of shares of Capital Stock (as set
forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(D) In case the Corporation shall issue any Additional
Shares of Capital Stock, Options or Convertible Securities in
connection with the acquisition by the Corporation of the stock or
assets of any other corporation or the merger of any other corporation
into the Corporation under circumstances where on the date of issue of
such Additional Shares of Capital Stock, Options or Convertible
Securities the consideration received for such Additional Shares of
Capital Stock or deemed to have been received for the Additional
Shares of Capital Stock deemed to be issued pursuant to Section
5(d)(iii) is less than the Market Price of the Capital Stock in effect
immediately prior to such issue but on the date the number of
Additional Shares of Capital Stock or the amount and the exercise
price or conversion price of such Options or Convertible Securities to
be so issued were set forth in a binding agreement between the
Corporation and the other party or parties to such transaction the
consideration received for such Additional Shares of Capital Stock or
deemed to have been received for the Additional Shares of Capital
Stock deemed to be issued pursuant to Section 5(d)(iii) would not have
been less than the Market Price of the Capital Stock then in effect,
such Additional Shares of Capital Stock shall not be deemed to have
been issued for less than the Market Price of the Capital Stock if
such terms so set forth in such binding agreement are not changed
prior to the date of issue.
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(vi) ADJUSTMENTS FOR COMBINATIONS, ETC. In case the outstanding
shares of Capital Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Capital
Stock, the Conversion Prices in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
(vii) DILUTION IN CASE OF OTHER SECURITIES. In case
any Other Securities shall be issued or sold or shall become subject to
issue or sale upon the conversion or exchange of any securities of the
Corporation or to subscription, purchase or other acquisition pursuant to
any options issued or granted by the Corporation for a consideration such
as to dilute, on a basis to which the standards established in the other
provisions of this Section 5 are applicable, the conversion rights of the
holders of the Series A Senior Preferred Stock, then, and in each such
case, the computations, adjustments and readjustments provided for in this
Section 5 with respect to the applicable Conversion Price shall be made as
nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable upon the conversion
of the Series A Senior Preferred Stock, so as to protect the holders of the
Series A Senior Preferred Stock against the effect of such dilution.
(viii) MINIMUM ADJUSTMENT AND TIMING OF ADJUSTMENT OF CONVERSION
PRICE.
(A) If the amount of any adjustment of the Series A Senior
Preferred Stock Conversion Price required pursuant to this Section 5
would be less than one percent (1%) of such Conversion Price in effect
at the time such adjustment is otherwise so required to be made, such
amount shall be carried forward and adjustment with respect thereto
made at the time of and together with any subsequent adjustment which,
together with such amount and any other amount or amounts so carried
forward, shall aggregate at least one percent (1%) of such Conversion
Price; provided that, upon the conversion of any shares of Series A
Senior Preferred Stock, all adjustments carried forward and not
theretofore made up to and including the date of such conversion
shall, with respect to the Series A Senior Preferred Stock then
converted, be made to the nearest .001 of a cent.
(B) Each Series A Senior Preferred Conversion Price shall
be adjusted within 90 days of the end of each fiscal year of the
Corporation with respect to events subject to the anti-dilution
provisions of the Series A Senior Preferred Stock which have occurred
during such fiscal year; provided that, upon the conversion of any
shares of Series A Senior Preferred Stock, all adjustments carried
forward and not theretofore made up to and including the date of such
conversion shall, with respect to the shares of Series A Senior
Preferred Stock then converted, be made to the nearest .001 of a cent
and provided further that the applicable Series A Senior Preferred
Conversion Price shall also be adjusted prior to any transfer or other
disposition of any Series A Senior Preferred Stock and promptly at any
time upon the request of the holder of any Series A Senior Preferred
Stock, subject to the provisions of clause 5(d)(viii)(A) above.
(ix) CHANGES IN CAPITAL STOCK; SERIES A SENIOR PREFERRED STOCK.
In case at any time the Corporation shall be a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation or
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recapitalization of the Capital Stock) in which the previously outstanding
Capital Stock shall be changed into or exchanged for different securities
of the Corporation or common stock or other securities of another
corporation or interests in a noncorporate entity or other property (in-
cluding cash) or any combination of any of the foregoing or in which the
Capital Stock ceases to be a publicly traded security either listed on the
New York Stock Exchange or the American Stock Exchange or quoted by NASDAQ
or any successor thereto or comparable system (each such transaction being
herein called the "Transaction," the date of consummation of the
Transaction being herein called the "Consummation Date," the Corporation
(in the case of a recapitalization of the Capital Stock or any other such
transaction in which the Corporation retains substantially all of its
assets and survives as a corporation) or such other corporation or entity
(in each other case) being herein called the "Acquiring Company," and the
common stock (or equivalent equity interests) of the Acquiring Company
being herein called the "Acquirer's Common Stock"), then, as a condition of
the consummation of the Transaction, lawful and adequate provisions shall
be made so that each holder of Series A Senior Preferred Stock, upon the
conversion thereof at any time on or after the Consummation Date (but
subject, in the case of an election pursuant to clause (B) or (C) below, to
the time limitation hereinafter provided for such election),
(A) shall be entitled to receive, and any Series A Senior
Preferred Stock shall thereafter represent the right to receive, in
lieu of the Common Stock issuable upon such conversion prior to the
Consummation Date, such number of shares of the Acquirer's Common
Stock as are issuable in exchange for each share of Common Stock,
unless the Acquiring Company fails to meet the requirements set forth
in clauses (D), (E) and (F) below, in which case shares of the common
stock of the corporation (herein called a "Parent") which directly or
indirectly controls the Acquiring Company if it meets the requirements
set forth in clauses (D), (E) and (F) below, at an aggregate
conversion price for such number of shares equal to the lesser of (1)
the Conversion Price in effect immediately prior to the Consummation
Date multiplied by a fraction the numerator of which is the aggregate
market price for such number of shares (determined in the same manner
as provided in the definition of Market Price) of the Acquirer's
Common Stock or the Parent's common stock, as the case may be,
immediately prior to the Consummation Date and the denominator of
which is the Market Price per share of Common Stock immediately prior
to the Consummation Date, or (2) the aggregate market price for such
number of shares (as so determined) of the Acquirer's Common Stock or
the Parent's common stock, as the case may be, immediately prior to
the Consummation Date (subject in each case to adjustments from and
after the Consummation Date as nearly equivalent as possible to the
adjustments provided for in this Section 5),
or at the election of the holder of such Series A Senior Preferred Stock
pursuant to notice given to the Corporation on or before the later of (1)
the thirtieth day following the Consummation Date, and (2) the sixtieth day
following the date of delivery or mailing to such holder of the last proxy
statement relating to the vote on the Transaction by the holders of the
Capital Stock,
(B) shall be entitled to receive, and any Series A Senior
Preferred Stock shall thereafter represent the right to receive, in
lieu of the Capital Stock issuable upon such conversion prior to the
Consummation Date, the highest amount of securities or other property
to which such holder would actually have been entitled as
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a stockholder upon the consummation of the Transaction if such holder
had converted such Series A Senior Preferred Stock immediately prior
thereto (subject to adjustments from and after the Consummation Date
as nearly equivalent as possible to the adjustments provided for in
this Section 5), provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than 50%
of the outstanding shares of Capital Stock, and if the holder of such
Series A Senior Preferred Stock so designates in such notice given to
the Corporation, the holder of such Series A Senior Preferred Stock
shall be entitled to receive in lieu thereof, the highest amount of
securities or other property to which such holder would actually have
been entitled as a stockholder if such holder had converted such
Series A Senior Preferred Stock prior to the expiration of such
purchase, tender or exchange offer and accepted such offer (subject to
adjustments from and after the consummation of such purchase, tender
or exchange offer as nearly equivalent as possible to the adjustments
provided for in this Section 5),
or, if neither the Acquiring Company nor the Parent meets the requirements
set forth in clauses (D), (E) and (F) below, at the election of the holder
of Series A Senior Preferred Stock pursuant to notice given to the
Corporation on or before the later of (1) the thirtieth day following the
Consummation Date, and (2) the sixtieth day following the date of delivery
or mailing to such holder of the last proxy statement relating to the vote
on the Transaction by the holders of the Common Stock,
(C) shall be entitled to receive, within 15 days after such
election, in full satisfaction of the Conversion Rights afforded to
the Series A Senior Preferred Stock held by such holder under this
Section 5, an amount equal to the fair market value of such conversion
rights as determined by an independent investment banker (with an
established national reputation as a valuer of equity securities)
selected by the Corporation, such fair market value to be determined
with regard to all material relevant factors but without regard to the
effects on such value of the Transaction.
The Corporation agrees to obtain, and deliver to each holder of Series A
Senior Preferred Stock a copy of, the determination of an independent
investment banker (selected by the Corporation and reasonably satisfactory
to the holders of Series A Senior Preferred Stock) necessary for the
valuation under clause (C) above within 15 days after the Consummation Date
of any Transaction to which clause (C) is applicable.
The requirements referred to above in the case of the Acquiring
Company or its Parent are that immediately after the Consummation Date:
(D) it is a solvent corporation organized under the laws of
any State of the United States of America having its common stock
listed on the New York Stock Exchange or the American Stock Exchange
or quoted by NASDAQ or any successor thereto or comparable system, and
such common stock continues to meet such requirements for such listing
or quotation,
(E) it is required to file, and in each of its three fiscal
years immediately preceding the Consummation Date has filed, reports
with the Securities and Exchange Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, and
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(F) in the case of the Parent, such Parent is required to
include the Acquiring Company in the consolidated financial statements
contained in the Parent's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission and is not itself included in the
consolidated financial statements of any other Person (other than its
consolidated subsidiaries).
Notwithstanding anything contained herein to the contrary, the Corporation
shall not effect any Transaction unless prior to the consummation thereof
each corporation or entity (other than the Corporation) which may be
required to deliver any securities or other property upon the conversion of
Series A Senior Preferred Stock, the surrender of Series A Senior Preferred
Stock or the satisfaction of conversion rights as provided herein shall
assume, by written instrument delivered to each holder of Series A Senior
Preferred Stock, the obligation to deliver to such holder such securities
or other property to which, in accordance with the foregoing provisions,
such holder may be entitled, and such corporation or entity shall have
similarly delivered to each holder of Series A Senior Preferred Stock an
opinion of counsel for such corporation or entity, satisfactory to each
holder of Series A Senior Preferred Stock, which opinion shall state that
all the outstanding Series A Senior Preferred Stock, including, without
limitation, the conversion provisions applicable thereto, if any, shall
thereafter continue in full force and effect and shall be enforceable
against such corporation or entity in accordance with the terms hereof and
thereof, together with such other matters as such holders may reasonably
request.
(x) TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC.; CERTAIN
TRANSACTIONS. In case the Corporation, at any time or from time to time
after the Issue Date, shall be a party to any Transaction, each holder of
Series B Senior Preferred Stock and each holder of Junior Convertible
Preferred Stock, upon the exercise thereof at any time on or after the
Consummation Date shall be entitled to receive, and such Series B Senior
Preferred Stock and Junior Convertible Preferred Stock shall thereafter
represent the right to receive, in lieu of the Common Stock issuable upon
conversion prior to the Consummation Date the kind and amount of securities
or property (including cash) which it would have owned or have been
entitled to receive after the happening of such Transaction had such Series
B Senior Preferred Stock or Junior Convertible Preferred Stock been
converted immediately prior to such Transaction.
Notwithstanding anything contained herein to the contrary, the
Corporation shall not effect any Transaction unless prior to the
consummation thereof each corporation or entity (including, without
limitation, the Corporation) which may be required to deliver any secu-
rities or property (including cash) upon the conversion of Series B Senior
Preferred Stock or Junior Convertible Preferred Stock, the surrender of
Series B Senior Preferred Stock or Junior Convertible Preferred Stock or
the satisfaction of conversion rights as provided herein shall assume, by
written instrument delivered to each holder of Series B Senior Preferred
Stock or Junior Convertible Preferred Stock, the obligation to deliver to
such holder such securities or other property to which, in accordance with
the foregoing provisions, such holder may be entitled, and such corporation
or entity shall have similarly delivered to each holder of Series B Senior
Preferred Stock or Junior Convertible Preferred Stock an opinion of counsel
for such corporation or entity, satisfactory to each such holder, which
opinion shall state that all the rights and privileges, including without
limitation, conversion privileges of the Series B Senior Preferred Stock
and the Junior Convertible Preferred Stock shall thereafter continue in
full force and effect and shall be enforceable against such
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corporation or entity in accordance with the terms hereof and thereof,
together with such other matters as such holders may reasonably request.
In case the Corporation shall (i) pay a dividend in shares of
Capital Stock or securities convertible into Capital Stock or make a
distribution to all holders of shares of Capital Stock in shares of Capital
Stock or securities convertible into Capital Stock, (ii) subdivide its
outstanding shares of Capital Stock, (iii) combine its outstanding shares
of Capital Stock into a smaller number of shares of Capital Stock or (iv)
issue by reclassification of its shares of Capital Stock other securities
of the Corporation, the Series B Preferred Stock Conversion Price and the
Junior Preferred Stock Conversion Price shall be adjusted (to the nearest
cent) by multiplying, (x) in the case of the Series B Senior Preferred
Stock, the Series B Preferred Stock Conversion Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the number
of shares of Capital Stock outstanding immediately prior to the occurence
of such event, and of which the denominator shall be the number of shares
of Capital Stock outstanding (including any convertible securities issued
pursuant to clause (i) or (iv) above on an as converted basis) immediately
thereafter, or (y) in the case of the Junior Preferred Stock Conversion
Price, the Junior Preferred Stock Conversion Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the number
of shares of Capital Stock outstanding immediately prior to the occurrence
of such event, and of which the denominator shall be the number of shares
of Capital Stock outstanding (including any convertible securities issued
pursuant to clause (i) or (iv) above on an as converted basis) immediately
thereafter. An adjustment made pursuant to the foregoing sentence shall
become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(xi) CERTAIN ISSUES AND REPURCHASES EXCEPTED. Anything herein to
the contrary notwithstanding, the Corporation shall not be required to make
any adjustment of the Series A Senior Preferred Conversion Prices in the
case of (A) the issuance of shares of the Senior Convertible Preferred
Stock on the Issue Date and the issuance of shares of Series A Senior
Preferred Stock and Series B Senior Preferred Stock pursuant to this
Article IV upon the filing of the Certificate of Amendment as described
herein, (B) the issuance of shares of the Junior Convertible Preferred
Stock on the Issue Date, (C) the issuance of warrants to purchase shares of
Common Stock (the "Warburg Warrants") concurrently with the issuance of the
Senior Convertible Preferred Stock on January 29, 1993 (the "Restructuring
Date"), and any amendments to such Warburg Warrants through the date of
filing of the Certificate of Amendment, (D) the issuance to The Prudential
Insurance Company of America ("Prudential") of warrants to purchase shares
of Common Stock (the "New Prudential Warrants") concurrently with the
issuance of the Junior Convertible Preferred Stock, and any amendments to
such New Prudential Warrants through the date of filing of the Certificate
of Amendment, (E) the issuance of warrants to purchase shares of Common
Stock (the "1994 Warrants") concurrently with the filing of this
Certificate of Amendment, and any amendments to such 1994 Warrants, (F) the
issuance of shares of Capital Stock issuable upon conversion of the
Convertible Preferred Stock or upon exercise of the Warburg Warrants, the
New Prudential Warrants, the 1994 Warrants, the Stock Subscription Warrant,
dated as of November 25, 1986, by the Corporation to Prudential or any
other Option or right outstanding on the Issue Date to purchase or
otherwise acquire Capital Stock, (G) the granting by the Corporation, after
the Issue Date, of Options to purchase Capital Stock or the sale or grant,
after the Issue Date, of Capital Stock, pursuant to option or stock
purchase plans or agreements, or other incentive compensation plans or
agreements, heretofore or hereafter
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adopted in respect of, or entered into with, directors, officers, employees
or salespersons (other than pursuant to the Corporation's Preferred Equity
Program) of the Corporation or any of its Subsidiaries in connection with
their employment, being directors or acting as salesperson, provided that
the consideration for the sale or grant of any such Options or Capital
Stock (including the exercise price of any Option) is at least equal to the
Market Price of such shares of Capital Stock on the date such Options are
granted or the date established by any such plan for a purchase thereunder,
as the case may be, (H) the Repurchase from any director, officer, employee
or salesperson of the Corporation or any Subsidiary of any Option or share
of Capital Stock upon his resignation or other termination from being a
director, officer, employee or salesperson of the Corporation or any
Subsidiary or (I) the issuance of shares of Common Stock in payment of the
redemption price of the Rights issued pursuant to the Rights Agreement,
dated as of March 13, 1989, as amended, between the Corporation and Bank of
America N.T. & S.A., as Rights Agent.
(xii) NOTICE OF ADJUSTMENT. Upon the occurrence of any event
requiring an adjustment of any Conversion Price, then and in each such case
the Corporation shall promptly deliver to each holder of Convertible
Preferred Stock a certificate signed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Corporation (an
"Officers' Certificate") stating the applicable Conversion Price resulting
from such adjustment and the increase or decrease, if any, in the number of
shares of Common Stock issuable upon conversion of such Convertible
Preferred Stock, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Within 90
days after each fiscal year in which any such adjustment shall have
occurred, or within 30 days after any request therefor by any holder of
Convertible Preferred Stock stating that such holder contemplates
conversion of such Convertible Preferred Stock, the Corporation will obtain
and deliver to each holder of Convertible Preferred Stock the opinion of
its regular independent auditors or another firm of independent public
accountants of recognized national standing selected by the Corporation's
Board of Directors who are satisfactory to the registered holders of a
majority of the Convertible Preferred Stock, which opinion shall confirm
the statements in the most recent Officers' Certificate delivered under
this Section 5(d)(xi). It is understood and agreed that the independent
public accountant rendering any such opinion shall be entitled expressly to
assume in such opinion the accuracy of any determination of fair value made
by the Board of Directors of the Corporation pursuant to Section 5(d)(v).
(xiii) OTHER NOTICES. In case at any time:
(A) the Corporation shall declare or pay to the holders of
Capital Stock any dividend other than a regular periodic cash dividend
or any periodic cash dividend in excess of 115% of the cash dividend
for the comparable fiscal period in the immediately preceding fiscal
year;
(B) the Corporation shall declare or pay any dividend upon
Capital Stock payable in stock or make any special dividend or other
distribution (other than regular cash dividends) to the holders of
Capital Stock;
(C) the Corporation shall offer for subscription pro rata
to the holders of Capital Stock any additional shares of stock of any
class or other rights;
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(D) there shall be any capital reorganization, or
reclassification of the Capital Stock of the Corporation, or
consolidation or merger of the Corporation with, or sale of all or
substantially all of its assets to, another corporation or other
entity;
(E) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Corporation; or
(F) there shall be any other Transaction;
then, in any one or more of such cases, the Corporation shall give to each
holder of Convertible Preferred Stock (1) at least 15 days prior to any
event referred to in clause (A) or (B) above, at least 30 days prior to any
event referred to in clause (C), (D) or (E) above, and within five business
days after it has knowledge of any pending Transaction, written notice of
the date on which the books of the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization, re-
classification, consolidation, merger, sale, dissolution, liquidation,
winding-up or Transaction and (2) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or Transaction known to the Corporation, at least 30 days prior
written notice of the date (or, if not then known, a reasonable
approximation thereof by the Corporation) when the same shall take place.
Such notice in accordance with the foregoing clause (1) shall also specify,
in the case of any such dividend, distribution or subscription rights, the
date on which the holders of Capital Stock shall be entitled thereto, and
such notice in accordance with the foregoing clause (2) shall also specify
the date on which the holders of Capital Stock shall be entitled to
exchange their Capital Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding-up or Transaction, as the case may be.
Such notice shall also state that the action in question or the record date
is subject to the effectiveness of a registration statement under the
Securities Act of 1933, as amended, or to a favorable vote of security
holders, if either is required.
(xiv) CERTAIN EVENTS. If any event occurs as to which, in
the good faith judgment of the Board of Directors of the Corporation, the
other provisions of this Section 5 are not strictly applicable or if
strictly applicable would not fairly protect the conversion rights of the
holders of the Series A Senior Preferred Stock in accordance with the
essential intent and principles of such provisions, then the Board of
Directors of the Corporation shall appoint its regular independent auditors
or another firm of independent public accountants of recognized national
standing who are satisfactory to the holders of a majority of the Series A
Senior Preferred Stock which shall give their opinion upon the adjustment,
if any, on a basis consistent with such essential intent and principles,
necessary to preserve, without dilution, the rights of the holders of the
Series A Senior Preferred Stock. Upon receipt of such opinion, the Board
of Directors of the Corporation shall forthwith make the adjustments
described therein; provided, that no such adjustment shall have the effect
of increasing any Series A Senior Preferred Stock Conversion Price as
otherwise determined pursuant to this Section 5. The Corporation may make
such reductions in the Series A Senior Preferred Conversion Price or
increase in the number of shares of Common Stock purchasable hereunder as
it deems advisable, including any reductions or increases, as the case may
be, necessary to ensure that any event treated for Federal income tax
purposes as a distribution of stock or stock rights not be taxable to
recipients.
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(e) NO IMPAIRMENT. The Corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but shall at
all times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Senior Preferred Stock against impairment.
(f) MANDATORY CONVERSION. If (i) at all times during a two-year
period prior to the date of conversion the ratio of Consolidated Debt to EBITDA
(each as defined below) of the Corporation has not exceeded 3.0:1.0, (ii) on
each Trading Day during a six-month period prior to the date of conversion the
Daily Market Price of the Common Stock has exceeded $8.75 per share, subject to
proportionate adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Common Stock, and (iii)
the Corporation is in full compliance with all of the terms and conditions of
all agreements pursuant to which the Corporation or any Subsidiary shall have
incurred Indebtedness for borrowed money all, but not less than all, of the then
outstanding shares of Convertible Preferred Stock shall be converted into shares
of Common Stock as provided below. The Corporation shall provide written notice
of the occurrence of the foregoing events giving rise to such mandatory
conversion by United States certified or registered mail, postage prepaid,
mailed not more than 30 days thereafter to all holders of record of the shares
to be converted at such holders' addresses as the same appear on the stock
register of the Corporation. Each such notice shall state the proposed date on
which such mandatory conversion will occur (which date shall not be fewer than
30 days after the date notice thereof is received), the applicable Conversion
Price and the place or places where certificates for shares of the Convertible
Preferred Stock are to be surrendered for conversion. From and after the date
of mandatory conversion, the certificates for the Convertible Preferred Stock
shall be deemed to represent only the shares of Common Stock into which such
shares of Convertible Preferred Stock shall have been converted. The Holder of
such certificates shall surrender such certificates for conversion upon and
pursuant to the request of the Corporation.
(g) CERTAIN DEFINITIONS. For purposes of this Article IV, the
following terms shall have the following meanings:
(i) "ADDITIONAL SHARES OF CAPITAL STOCK" shall mean all
shares (including treasury shares) of Capital Stock issued or sold
(or, pursuant to Sections 5(d)(iii) or 5(d)(iv) deemed to be issued)
by the Corporation after the Issue Date, whether or not subsequently
reacquired or retired by the Corporation, other than shares of Common
Stock issued upon the conversion of the Convertible Preferred Stock.
(ii) "CONSOLIDATED DEBT" shall mean with respect to any
Person, the total Indebtedness of such Person and its Subsidiaries on
a consolidated basis determined in accordance with GAAP.
(iii) "CONVERTIBLE SECURITIES" shall mean any evidences
of indebtedness, shares of stock (other than Common Stock)
or securities directly or indirectly convertible into or exchangeable
for Additional Shares of Capital Stock.
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(iv) "DAILY MARKET PRICE" shall mean, on any date specified
herein, (A) if any class of Capital Stock is listed or admitted to
trading on any national securities exchange, the average of the high
and low sale price of shares of each such class of Capital Stock or if
no such sale takes place on such date, the average of the highest
closing bid and lowest closing asked prices thereof on such date, in
each case as officially reported on all national securities exchanges
on which each such class of Capital Stock is then listed or admitted
to trading, or (B) if no shares of any class of Capital Stock are then
listed or admitted to trading on any national securities exchange, the
highest closing price of any class of Capital Stock on such date in
the over-the-counter market as shown by NASDAQ or, if no such shares
of any class of Capital Stock are then quoted in such system, as
published by the National Quotation Bureau, Incorporated or any
similar successor organization, and in either case as reported by any
member firm of the New York Stock Exchange selected by the
Corporation. If no shares of any class of Capital Stock are then
listed or admitted to trading on any national securities exchange and
if no closing bid and asked prices thereof are then so quoted or
published in the over-the-counter market, "Daily Market Price" shall
mean the higher of (x) the book value per share of Capital Stock
(assuming for the purposes of this calculation the economic
equivalence of all shares of all classes of Capital Stock) as
determined on a fully diluted basis in accordance with generally
accepted accounting principles by a firm of independent public
accountants of recognized standing (which may be its regular auditors)
selected by the Board of Directors of the Corporation as of the last
day of any month ending within 60 days preceding the date as of which
the determination is to be made or (y) the fair value per share of
Capital Stock (assuming for the purposes of this calculation the
economic equivalence of all shares of all classes of Capital Stock),
as determined on a fully diluted basis in good faith by an independent
brokerage firm or Standard & Poor's Corporation (as selected by the
Board of Directors of the Corporation), as of a date which is 15 days
preceding the date as of which the determination is to be made.
(v) "EBITDA" shall mean, with respect to any Person, for
any period, the sum of (A) the net income of such Person and its
Subsidiaries on a consolidated basis before taxes, excluding
extraordinary items and income or loss from discontinued operations,
(B) total interest expense of such Person and its Subsidiaries on a
consolidated basis and (C) depreciation and amortization for such
Person and its Subsidiaries on a consolidated basis.
(vi) "GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession.
(vii) "INDEBTEDNESS" shall mean, with respect to any
Person, all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with GAAP
would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined.
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(viii) "ISSUE DATE" shall mean the date on which shares of
Convertible Preferred Stock are first issued by the Corporation.
"Issue Date" with respect to the shares of Series A Senior Preferred
Stock and Series B Senior Preferred Stock outstanding on the date of
filing of the Certificate of Amendment shall be deemed to be the date
of issuance of the respective shares of Existing Senior Convertible
Preferred Stock which were exchanged for or converted into such shares
of Series A Senior Preferred Stock and Series B Senior Preferred
Stock.
(ix) "MARKET PRICE" shall mean, on any date specified
herein, (A) if any class of Capital Stock is listed or admitted to
trading on any national securities exchange, the highest price
obtained by taking the arithmetic mean over a period of 20 consecutive
Trading Days ending the second Trading Day prior to such date of the
average, on each such Trading Day, of the high and low sale price of
shares of each such class of Capital Stock or if no such sale takes
place on such date, the average of the highest closing bid and lowest
closing asked prices thereof on such date, in each case as officially
reported on all national securities exchanges on which each such class
of Capital Stock is then listed or admitted to trading, or (B) if no
shares of any class of Capital Stock are then listed or admitted to
trading on any national securities exchange, the highest closing price
of any class of Capital Stock on such date in the over-the-counter
market as shown by NASDAQ or, if no such shares of any class of
Capital Stock are then quoted in such system, as published by the
National Quotation Bureau, Incorporated or any similar successor
organization, and in either case as reported by any member firm of the
New York Stock Exchange selected by the Corporation. If no shares of
any class of Capital Stock are then listed or admitted to trading on
any national securities exchange and if no closing bid and asked
prices thereof are then so quoted or published in the over-the-counter
market, "Market Price" shall mean the higher of (x) the book value per
share of Capital Stock (assuming for the purposes of this calculation
the economic equivalence of all shares of all classes of Capital
Stock) as determined on a fully diluted basis in accordance with
generally accepted accounting principles by a firm of independent
public accountants of recognized standing (which may be its regular
auditors) selected by the Board of Directors of the Corporation as of
the last day of any month ending within 60 days preceding the date as
of which the determination is to be made or (y) the fair value per
share of Capital Stock (assuming for the purposes of this calculation
the economic equivalence of all shares of all classes of Capital
Stock), as determined on a fully diluted basis in good faith by an
independent brokerage firm or Standard & Poor's Corporation (as
selected by the Board of Directors of the Corporation), as of a date
which is 15 days preceding the date as of which the determination is
to be made.
(x) "OPTIONS" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Additional Shares
of Capital Stock or Convertible Securities.
(xi) "OTHER SECURITIES" shall mean any stock (other than
Capital Stock) and any other securities of the Corporation or any
other Person (corporate or otherwise) which the holders of the
Convertible Preferred Stock at any time shall be entitled to receive,
or shall have received, upon the conversion or partial conversion of
the Convertible Preferred Stock, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in
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replacement of Common Stock or Other Securities pursuant to Section
5(d)(ix) or otherwise.
(xii) "PERSON" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(xiii) "SUBSIDIARY" shall mean any corporation or other
entity the majority of the outstanding voting shares of which is at
the time owned (either alone or through Subsidiaries or together with
Subsidiaries) by the Corporation or another Subsidiary.
(xiv) "TRADING DAY" shall mean any day on which the New
York Stock Exchange is open for trading on a regular basis.
(xv) "TRANSACTION" shall have the meaning set forth in
Section 5(d)(ix).
(h) JUNIOR CONVERTIBLE PREFERRED STOCK.
(i) In the event that the Corporation undertakes to sell its
Common Stock through an underwritten public offering (an "Offering"), and
if the underwriter advises the Corporation that in order to complete such
Offering on the most favorable terms to the Corporation it is necessary for
the Junior Convertible Preferred Stock to be retired, then the Corporation
may so notify the holders of the Junior Convertible Preferred Stock (the
"Conversion Notice"), and such holders shall, on or prior to the Conversion
Date (as defined below) convert their Junior Convertible Preferred Stock
into Common Stock pursuant to the terms of this Article IV. The holders of
the Junior Convertible Preferred Stock shall be obligated to convert their
Junior Convertible Preferred Stock only if (A) on or prior to the
Conversion Date, all the holders of the Series B Senior Preferred Stock
shall have converted their Series B Senior Preferred Stock into Common
Stock, or all Series B Senior Preferred Stock shall otherwise have been
retired, and (B) the Market Price of the Common Stock at the Conversion
Date is greater than the sum of the Junior Preferred Stock Stated Value
plus accrued dividends per share of Junior Convertible Preferred Stock
(such sum being referred to herein as the "Accreted Value"); PROVIDED that
if at the Conversion Date, the Market Price of the Common Stock is less
than the Accreted Value, then each holder of the Junior Convertible
Preferred Stock must either, at its option (A) convert the Junior
Convertible Preferred Stock into Common Stock on or prior to the Conversion
Date or (B) require the Corporation to redeem the Junior Convertible
Preferred Stock at the Accreted Value, in which case such holder shall
notify the Corporation of its election on or prior to the Conversion Date.
If a holder elects to require the Corporation to redeem the Junior
Convertible Preferred Stock, then the Corporation shall make such
redemption within 60 days after the Conversion Date; PROVIDED that the
Corporation shall be obligated to redeem the Junior Convertible Preferred
Stock only if it has sufficient funds legally available on the redemption
date in order to redeem shares of Junior Convertible Preferred Stock
pursuant to this Section 5(h); PROVIDED FURTHER that if the Board
determines not to proceed with the Offering any notice of redemption shall
be withdrawn and the Corporation's obligation to redeem such shares shall
terminate. "Conversion Date" shall mean the date stated in the Conversion
Notice on or prior to which the holders of the Junior Convertible Preferred
Stock shall be required to convert their Junior Convertible Preferred Stock
in accordance with this Section 5(h). Without the consent of
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each holder of Junior Convertible Preferred Stock, the Conversion Date may
not be a date earlier than the closing date of the Offering; PROVIDED that
the Conversion Notice may identify the Offering's closing date as "the
closing date," in lieu of using a calendar date.
(ii) If the Corporation shall be required to redeem shares Junior
Convertible Preferred Stock pursuant to Section 5(h)(i), then notice of
such redemption shall be given by United States certified or registered
mail, postage prepaid, mailed not less than thirty (30) days nor more than
sixty (60) days prior to the redemption date, to all holders of record of
the shares to be redeemed at such holders' addresses as the same appear on
the stock register of the Corporation. Each such notice shall state: (A)
the redemption date; (B) the number of shares of Junior Convertible
Preferred Stock to be redeemed and, if less than all the shares held by
such holder are to be redeemed from such holder, the number of shares to be
redeemed from such holder; (C) the redemption price; and (D) the place or
places where certificates for shares of the Junior Convertible Preferred
Stock are to be surrendered for payment of the redemption price.
(iii) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing payment of the redemption price by deposit with a bank or trust
company having capital and surplus of at least $50,000,000 of the shares
called for redemption) said shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender, in accordance with the
above-mentioned notice, of the certificates for any shares so redeemed
(properly endorsed or signed for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the redemption price provided for
in this Section 5(h). In the event fewer than all of the shares
represented by any such certificate are redeemed, a new certificate shall
be issued, without cost to the holder thereof, representing the unredeemed
shares. The provisions of this Section 5(h)(iii) shall be subject to
Section 5(h)(i).
(i) REACQUIRED SHARES. Shares of Convertible Preferred Stock which
have been issued and reacquired in any manner, including shares purchased or
redeemed or exchanged, shall (upon compliance with any applicable provisions of
the laws of the State of Delaware) have the status of authorized and unissued
shares of Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of the Preferred Stock; provided, however, that
no such issued and reacquired shares of Senior Convertible Preferred Stock shall
be reissued or sold as Series A Senior Preferred Stock and no such issued and
reacquired shares of Junior Convertible Preferred Stock shall be reissued or
sold as Junior Convertible Preferred Stock.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, a meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendments.
THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
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IN WITNESS WHEREOF, GRUBB & ELLIS COMPANY has caused this certificate
to be signed by Robert J. Walner, its Senior Vice President, and Carol M.
Vanairsdale, its Assistant Secretary, this _____ day of _________, 1994.
GRUBB & ELLIS COMPANY
------------------------------
Robert J. Walner
Senior Vice President
Attest:
- -----------------------------
Carol M. Vanairsdale
Assistant Secretary
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