-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HVq1ebRs32fjwhGFCPb7WvinAnvU3RrE6L118AmsW3Xv6/kWF7oMaMat4lpqK684 BH91aIN0XOLJ2a23Kv1tNA== 0000912057-94-003715.txt : 19941108 0000912057-94-003715.hdr.sgml : 19941108 ACCESSION NUMBER: 0000912057-94-003715 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19941107 SROS: NYSE SROS: PSE GROUP MEMBERS: E.M. WARBURG, PINCUS & CO., INC GROUP MEMBERS: E.M. WARGBURG, PINCUS & COMPANY GROUP MEMBERS: WARBURG PINCUS INVESTORS LP GROUP MEMBERS: WARBURG, PINCUS & CO. GROUP MEMBERS: WARBURG, PINCUS INVESTORS, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRUBB & ELLIS CO CENTRAL INDEX KEY: 0000216039 STANDARD INDUSTRIAL CLASSIFICATION: 6531 IRS NUMBER: 941424307 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-32339 FILM NUMBER: 94557933 BUSINESS ADDRESS: STREET 1: ONE MONTGOMERY ST-STE3100 STREET 2: TELESIS TWR 9TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4159561990 MAIL ADDRESS: STREET 1: ONE MONTGOMERY ST-STE 3100 STREET 2: TELESIS TWR 9TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS INVESTORS LP CENTRAL INDEX KEY: 0000929658 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 133549187 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------------------- SCHEDULE 13D (Amendment No. 6) 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) November 1, 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: [ ] SCHEDULE 13D CUSIP No. 40009-51-0 ---------- 1. Name of Reporting Person Warburg, Pincus Investors, L.P. 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] 3. SEC Use Only 4. Source of Funds WC 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization Delaware 7. Sole Voting Power -0- shares of Common Stock (See Item 5) Number of Shares 8. Shared Voting Power Beneficially Owned By 10,118,339 shares of Common Stock (See Item 5) Each Reporting 9. Sole Dispositive Power Person With -0- shares of Common Stock (See Item 5) 10. Shared Dispositive Power 10,118,339 shares of Common Stock (See Item 5) 11. Aggregate Amount Beneficially Owned by Each Reporting Person See Item 5 below 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11) See Item 5 below 14. Type of Reporting Person PN 2 SCHEDULE 13D CUSIP No. 40009-51-0 ---------- 1. Name of Reporting Person E.M. Warburg, Pincus & Company 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] 3. SEC Use Only 4. Source of Funds AF 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization New York 7. Sole Voting Power -0- shares of Common Stock (See Item 5) Number of Shares 8. Shared Voting Power Beneficially Owned By 10,118,339 shares of Common Stock (See Item 5) Each Reporting 9. Sole Dispositive Power Person With -0- shares of Common Stock (See Item 5) 10. Shared Dispositive Power 10,118,339 shares of Common Stock (See Item 5) 11. Aggregate Amount Beneficially Owned by Each Reporting Person See Item 5 below 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11) See Item 5 below 14. Type of Reporting Person PN 3 SCHEDULE 13D CUSIP No. 40009-51-0 ---------- 1. Name of Reporting Person Warburg, Pincus & Co. 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] 3. SEC Use Only 4. Source of Funds AF 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization New York 7. Sole Voting Power -0- shares of Common Stock (See Item 5) Number of Shares 8. Shared Voting Power Beneficially Owned By 10,118,339 shares of Common Stock (See Item 5) Each Reporting 9. Sole Dispositive Power Person With -0- shares of Common Stock (See Item 5) 10. Shared Dispositive Power 10,118,339 shares of Common Stock (See Item 5) 11. Aggregate Amount Beneficially Owned by Each Reporting Person See Item 5 below 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11) See Item 5 below 14. Type of Reporting Person PN 4 SCHEDULE 13D CUSIP No. 40009-51-0 ---------- 1. Name of Reporting Person E.M. Warburg, Pincus & Co., Inc. 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [X] 3. SEC Use Only 4. Source of Funds AF 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization Delaware 7. Sole Voting Power -0- shares of Common Stock (See Item 5) Number of Shares 8. Shared Voting Power Beneficially Owned By 10,118,339 shares of Common Stock (See Item 5) Each Reporting 9. Sole Dispositive Power Person With -0- shares of Common Stock (See Item 5) 10. Shared Dispositive Power 10,118,339 shares of Common Stock (See Item 5) 11. Aggregate Amount Beneficially Owned by Each Reporting Person See Item 5 below 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row (11) See Item 5 below 14. Type of Reporting Person CO 5 This Amendment No. 6 to Schedule 13D is being filed on behalf of (i) Warburg, Pincus Investors, L.P. ("WPI"), (ii) Warburg, Pincus & Co. ("WPC"), (iii) E.M. Warburg, Pincus & Company ("EMW") and (iv) E.M. Warburg, Pincus & Co., Inc. ("E.M. Warburg," and together with WPI, WPC, and EMW, the "Reporting Entities") to amend the Schedule 13D filed by the Reporting Entities 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 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 to the Schedule 13D is hereby amended, in pertinent part, as follows: On November 1, 1994, WPI acquired 4,277,433 shares of Common Stock of the Company in exchange for (a) $4 million, furnished from WPI's investment capital and (b) cancellation of $6 million of principal and $158,904 of accrued interest owed to WPI by the Company under the Loan and Security Agreement dated March 29, 1994 between the Company and Warburg (the "Bridge Loan"). The amounts advanced to the Company under the Bridge Loan were furnished from WPI's investment capital. Item 4. PURPOSE OF TRANSACTION. Item 4 to the Schedule 13D is hereby amended, in pertinent part, as follows: STANDBY AGREEMENT On November 1, 1994, the parties consummated the transactions contemplated by the Standby Agreement dated July 21, 1994 between WPI and the Company (the "Standby Agreement"). Information in Item 6 concerning the Standby Agreement is incorporated herein by reference. The Standby Agreement was filed as an exhibit to Amendment No. 5 to this Schedule 13D and is incorporated herein by reference. STOCKHOLDERS' AGREEMENT On November 1, 1994, the Company, WPI, The Prudential Insurance Company of America ("Prudential"), and Joe F. Hanauer entered into the Second Amendment to the Stockholders' Agreement (the "Stockholders Amendment"). Information in Item 6 concerning the Stockholders Amendment is incorporated herein by reference. The Stockholders Amendment is attached hereto as Exhibit 2 and is incorporated herein by reference. 6 Item 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 to the Schedule 13D is hereby amended, in pertinent part, as follows: (a) By reason of the provisions of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Act"), WPI, Hanauer and Prudential may be deemed to be a "group." By reason of the provisions of Rule 13d-5 under the Act, the group consisting of these entities may be deemed to own all shares of Common Stock beneficially owned by WPI, Prudential and Hanauer. WPI does not affirm the existence of such a group and disclaims beneficial ownership of shares of Common Stock beneficially owned by Prudential and Hanauer. As of the date of this Report, WPI is the beneficial owner of 10,118,339 shares of Common Stock through its direct ownership of (i) 4,277,433 shares of Common Stock, (ii) 127,150 shares of Senior Preferred Stock which are convertible into an aggregate of 4,828,548 shares of Common Stock, and (iii) currently exercisable Warrants to purchase an aggregate of 1,012,358 shares of Common Stock. The shares of Senior Preferred Stock and Warrants, upon conversion and exercise, when combined with the Common Stock currently held by WPI, represent approximately 69.1% of the shares of Common Stock calculated in accordance with Rule 13d-3(d)(1)(i) in the manner described below. By reason of the provisions of Rule 13d-5 under the Act, WPC, EMW and E.M. Warburg may be deemed to own beneficially the shares of Common Stock beneficially owned by WPI. The shares of Senior Preferred Stock and Common Stock held by WPI represent 54.7% of the outstanding voting power of the Company. As of the date of this Report, Hanauer is the beneficial owner of 767,741 shares of Common Stock through ownership of (i) 42,306 shares of Common Stock, (ii) 8,817 shares of Senior Preferred Stock which are convertible into an aggregate of 332,908 shares of Common Stock, (iii) currently exercisable Warrants to purchase an aggregate of 310,571 shares of Common Stock, (iv) Contingent Warrants to purchase 36,956 shares of Common Stock and (v) a stock option under the Company's Amended and Restated Stock Option Plan (the "Stock Option") currently exercisable for 45,000 shares of Common Stock. In addition, the Stock Option entitles Hanauer to acquire an additional 90,000 shares of Common Stock, which have been excluded from Hanauer's beneficial holdings reported on this Schedule 13D as the Stock Option will not be exercisable with respect to the additional 90,000 shares within 60 days of the date hereof. The shares of Senior Preferred Stock and Warrants, upon conversion and exercise, when combined with the shares of Common Stock currently held by Hanauer, represent approximately 8.1% of the shares of Common Stock calculated in accordance with Rule 13d-3(d)(1)(i) in the manner described below. The shares of Senior Preferred Stock and the shares of Common Stock held by Hanauer represent 2.3% of the outstanding voting power of the Company. As of the date of this Report, Prudential is the beneficial owner of 3,422,060 shares of Common Stock through its direct ownership of (i) 397,549 shares of Common Stock, (ii) 150,000 shares of Junior Preferred Stock which are convertible into an aggregate of 2,674,511 shares of Common Stock, and (iii) currently exercisable Warrants to purchase an aggregate of 350,000 shares of Common Stock. Such shares of Junior Preferred Stock 7 and Warrants, upon conversion and exercise, when combined with the shares of Common Stock currently held by Prudential, represent approximately 28.9% of the shares of Common Stock calculated in accordance with Rule 13d-3(d)(1)(i) in the manner described below. The shares of Junior Preferred Stock and the shares of Common Stock held by Prudential represent 18.5% of the outstanding voting power of the Company. The percentages used in this paragraph 5(a) are calculated based upon the 8,796,207 shares of Common Stock issued and outstanding at the close of business on November 1, 1994. Such information has been provided to the Reporting Entities by the Company. The number of shares beneficially owned by Prudential as of the date hereof has been provided to the Reporting Entities by the Company. Pursuant to Rule 13d-3(d)(1)(i), shares of Common Stock which are not outstanding which are subject to convertible securities are deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the shares of Common Stock owned by the person holding such convertible securities, but are not deemed to be outstanding for purposes of computing the percentage of such shares owned by any other person. (b) The Reporting Entities share the power to vote or to direct the vote, and share the power to dispose or to direct the disposition of the shares of Common Stock and Senior Convertible Preferred Stock and Warrants held by WPI, but neither have nor share such powers with respect to any shares beneficially owned by Hanauer or Prudential. (c) Except in connection with the transactions described herein, none of the Reporting Entities nor, to the best of their knowledge, any person listed in Schedule I hereto, has effected any transactions in the Common Stock during the preceding 60 days. (d) Except as set forth in this Item 5, no person other than each respective record owner referred to herein of securities is known to have the right to receive or the power to direct the receipt of dividends from or the proceeds of sale of such securities. 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: STANDBY AGREEMENT On November 1, 1994, the Company and WPI consummated the financing transactions described in Amendment No. 5 to the 13D (the "Financing Transactions"), including the transactions contemplated by the Standby Agreement. The Standby Agreement was filed as an exhibit to Amendment No. 5 to the Schedule 13D and is incorporated herein by reference. Pursuant to the Standby Agreement, on November 1, 1994, WPI purchased at a price of $2.375 per share 4,277,433 shares of Common Stock not acquired by the Company's stockholders in the Company's Rights Offering. In addition, on November 1, 1994, WPI exchanged its warrants to purchase 340,000 shares of Common Stock at an 8 exercise price of $5.00 per share and its warrants to purchase 142,000 shares of Common Stock at an exercise price of $5.50 per share (collectively, the "Old WPI Warrants") for a new warrant (the "New WPI Warrant") to purchase 687,358 shares of Common Stock at an exercise price of $3.50 per share. The anti-dilution provisions contained in the New WPI Warrant do 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. In addition, on November 1, 1994, the Company issued to WPI a warrant to purchase 325,000 shares of Common Stock at an exercise price of $2.375 per share, as consideration for WPI's acquisition of unsubscribed shares of Common Stock in connection with the Rights Offering and agreeing to the other transactions contemplated by the Standby Agreement, and WPI surrendered its Contingent Warrant to purchase 373,818 shares of Common Stock. Also on November 1, 1994, the Company filed with the Delaware Secretary of State the Certificate of Amendment of Restated Certificate of Incorporation (the "Charter Amendment"), providing for certain amendments to the 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. As a result of the Financing Transactions and upon application of the anti-dilution provisions contained in the Preferred Stock, the conversion price of the Senior Preferred Stock held by WPI and Mr. Hanauer was adjusted from $3.0137 to $2.6564 and $2.6716, respectively, which resulted in the Senior Preferred Stock held by WPI and Mr. Hanauer being convertible into an aggregate of 4,828,548 and 332,908, respectively. The Junior Preferred Stock held by Prudential continues to be convertible into 2,674,511 shares of Common Stock and the conversion price remains $5.6085 per share. The terms of the Preferred Stock are set forth in the Charter Amendment filed as Exhibit 3 to Amendment No. 5 to this Schedule 13D, and are incorporated herein by reference. AMENDMENT TO PRUDENTIAL AGREEMENT On November 1, 1994, the Company and Prudential consummated the transactions pursuant to the Amendment (the "Amendment") to the Senior Note, Subordinated Note and Revolving Credit Note Agreement between the Company and Prudential, which transactions were previously described in Amendment No. 4 to this Schedule 13D. AMENDMENT TO STOCKHOLDERS' AGREEMENT On November 1, 1994, WPI, the Company, The Prudential Insurance Company of America ("Prudential"), and Joe F. Hanauer entered into the Second Amendment to the Stockholders' Agreement (the "Stockholders Amendment"), pursuant to which the Stockholders Agreement was amended to provide WPI and Prudential with registration rights for the New Warrants, the Common Stock issuable upon exercise of the New Warrants, and shares of Common Stock acquired in connection with the Rights Offering. The Common Stock issuable upon exercise of the New Warrants and the Common Stock acquired by WPI in connection with the Rights Offering are subject to the voting requirements and other terms of the Stockholders' Agreement. The Stockholders Amendment is attached hereto as Exhibit 2 and is incorporated herein by reference. 9 TERMINATION OF BRIDGE LOAN AND RELATED AGREEMENTS On November 1, 1994, the Company, WPI and Prudential terminated the Loan and Security Agreement dated as of March 29, 1994 by and between the Company and WPI, the Cash Collateral Account Agreement dated as of March 29, 1994 by and among the Company, WPI, Prudential and Bank of America NT & SA, the Intercreditor Agreement dated as of March 28, 1994 by and between WPI and Prudential, and the Modification to Note and Security Agreement dated as of March 28, 1994 by and between the Company and Prudential. 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. Second Amendment to Stockholders Agreement dated as of November 1, 1994 by and among the Company, WPI, Hanauer and Prudential. 10 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: November 4, 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 --------------------------------- Title: Managing Director 11 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. Second Amendment to Stockholders Agreement dated as of November 1, 1994 by and among the Company, WPI, Hanauer and Prudential. 12 EX-2 2 EXHIBIT 2 SECOND AMENDMENT TO STOCKHOLDERS' AGREEMENT Reference is made to that certain Stockholders' Agreement (the "Stockholders' Agreement") dated as of January 29, 1993 and amended as of July 1, 1993 by and among Grubb & Ellis Company, a Delaware corporation (the "Company"), Warburg, Pincus Investors, L.P., a Delaware limited partnership ("Warburg"), Joe F. Hanauer ("Hanauer") and The Prudential Insurance Company of America, a New Jersey insurance corporation ("Prudential"). Capitalized terms used herein without definition shall have the meanings set forth in the Stockholders' Agreement. RECITALS A. On March 28, 1994, the Company, Warburg and Prudential reached agreement (the "Preliminary Agreement") upon the terms of a proposed financing transaction to provide the Company with additional working capital, including: (i) an interim credit facility pursuant to which Warburg agreed to make periodic advances to the Company in an aggregate principal amount for all such advances outstanding not to exceed $10 million (the "Bridge Loan"); (ii) a rights offering by the Company (the "Rights Offering") in which the Company would issue to each holder of Common Stock one nontransferable right (a "Right") to purchase one share of Common Stock at a subscription price of $2.375 per share for each share of Common Stock; (iii) a standby agreement (the "Standby Agreement") pursuant to which Warburg agreed to acquire Rights not purchased by the Company's stockholders in the Rights Offering up to an amount not to exceed $10 million, plus accrued interest on the Bridge Loan; (iv) amendments to the Note Purchase Agreement (as amended from time to time) between Prudential and the Company (the "Prudential Loan Agreement Amendments"); (v) amendments to the New Prudential Warrants, the Warburg Warrants and the Preferred Stock held by Warburg, Hanauer and Prudential; and (vi) subject to certain conditions, the issuance of new warrants to Warburg and Prudential. B. On July 21, 1994, Warburg and the Company entered into the Standby Agreement. C. On September 12, 1994, the stockholders of the Company approved the Financing Transactions, which are more fully described in the Company's Proxy Statement dated July 29, 1994 (the "Proxy Statement"). D. On the date hereof: 1. The Company completed the Rights Offering and Warburg fulfilled its obligations under the Standby Agreement; 2. Prudential and the Company entered into the Prudential Loan Agreement Amendments; -1- 3. The Company filed with the Delaware Secretary of State the Company's Restated Certificate of Incorporation (the "Charter Amendment") and Warburg surrendered to the Company for cancellation certificates representing all of its 128,266 shares of Senior Preferred Stock in exchange for certificates representing 128,266 shares of Series B Senior Preferred Stock; 4. Warburg surrendered to the Company for cancellation the Warburg Warrants in exchange for amended warrants to purchase an aggregate of 687,358 shares of Common Stock at an exercise price of $3.50 per share (the "Warburg Amended Warrants"); 5. Prudential surrendered to the Company for cancellation the New Prudential Warrants in exchange for amended warrants to purchase 200,000 shares of Common Stock at an exercise price of $3.50 per share (the "Prudential Amended Warrants"); 6. The Company issued to Warburg new warrants to purchase 325,000 shares of Common Stock at an exercise price of $2.375 per share (the "Warburg 1994 Warrants"); 7. Warburg surrendered to the Company for cancellation all of its Contingent Warrants (as defined in the Proxy Statement); and 8. The Company issued to Prudential new warrants to purchase 150,000 shares of Common Stock at an exercise price of $2.375 per share (the "Prudential 1994 Warrants"). E. The parties desire to make certain amendments to the Stockholders' Agreement. NOW, THEREFORE, in acknowledgement of the foregoing recitals, the parties hereby agree as follows: 1. Section 1.1(g) of the Stockholders' Agreement is hereby amended to read as follows: (g) "Prudential Securities" shall mean the Junior Preferred Stock, the Prudential Amended Warrants, the Prudential 1994 Warrants and the Prudential Warrant Shares and any and all issued shares of Prudential Registrable Securities. 2. Section 1.1(s) of the Stockholders' Agreement is hereby amended to read as follows: (s) "Warburg Securities" shall mean the Senior Preferred Stock, the Warburg Amended Warrants, the Warburg 1994 Warrants and any and all issued shares of Warburg Registrable Securities. -2- 3. The following definitions are hereby added to Section 1.1 of the Stockholders' Agreement: (t) "Preferred Stock" shall mean the Senior Preferred Stock and the Junior Preferred Stock. (u) "Senior Preferred Stock" shall mean the Series A Senior Preferred Stock and the Series B Senior Preferred Stock. (v) "Series A Senior Preferred Stock" shall mean the Company's Series A Senior Convertible Preferred Stock, par value $.01 per share. (w) "Series B Senior Preferred Stock" shall mean the Company's Series B Senior Convertible Preferred Stock, par value $.01 per share. 4. References to the "date hereof" in the first paragraph of Section 4.1(a) of the Stockholders' Agreement shall mean the date as of which this Second Amendment to Stockholders' Agreement is executed. 5. The beginning of the third paragraph of Section 4.1(a) of the Stockholders' Agreement is hereby amended by deleting the text up to and including the first semi-colon in the second sentence therein and replacing it with the following: "Warburg Registrable Securities" shall include all shares of Common Stock issued or issuable upon conversion of any Senior Preferred Stock, all shares of Common Stock issued or issuable upon exercise of any Warburg Amended Warrants or Warburg 1994 Warrants, any shares of Common Stock acquired by Warburg pursuant to the Standby Agreement and any shares of Common Stock acquired by Hanauer in connection with the Rights Offering and "Prudential Registrable Securities" shall include all shares of Common Stock issued or issuable upon conversion of any Junior Preferred Stock, all shares of Common Stock issued or issuable upon exercise of any of the Old Prudential Warrant, the Prudential Amended Warrants or the Prudential 1994 Warrants and any shares of Common Stock acquired by Prudential in connection with the Rights Offering (Warburg Registrable Securities and Prudential Registrable Securities are sometimes collectively referred to herein as "Registrable Securities"). Registrable Securities shall include all shares of Common Stock, or Common Stock issued or issuable upon conversion or exercise of any securities of the Company, which may be issued or distributed with respect to, or in exchange for, the Preferred Stock, the Warburg Amended Warrants, the Warburg 1994 Warrants, the Prudential Warrant Shares, the Prudential Amended Warrants, the Prudential 1994 Warrants or any of the Common Stock referred -3- to in the preceding sentence pursuant to a stock dividend, stock split or other distribution, merger, consolidation, recapitalization or reclassification or otherwise, and any securities of the Company which may be issued or distributed with respect to, or in exchange for, any such Common Stock or such other securities pursuant to a stock dividend, stock split or other distribution, merger, consolidation, recapitalization or reclassification or otherwise; 6. References to the "date hereof" in Section 5.1(b) of the Stockholders' Agreement shall mean the date as of which this Second Amendment to Stockholders' Agreement is executed. 7. All notices, other communications or documents given to the parties pursuant to Section 5.3 and any copies thereof shall be given as set forth in Section 5.3, except as follows: (a) If to the Company, a copy to: Latham & Watkins 505 Montgomery Street, Suite 1900 San Francisco, California 94111 Attention: Scott R. Haber, Esq. Telecopy number: (415) 395-8095 (b) If to Warburg, a copy to: Stroock & Stroock & Lavan 7 Hanover Square New York, New York 10004 Attention: Martin H. Neidell, Esq. Telecopy number: (212) 806-6006 (c) If to Prudential, a copy to: Sonnenschein, Nath & Rosenthal 800 Sears Tower Chicago, Illinois 60606 Attention: Mitchell L. Hollins, Esq. Telecopy number: (312) 876-7934 8. Except as specifically provided herein, the terms and conditions of the Stockholders' Agreement shall remain in full force and effect. -4- IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Stockholders' Agreement this ___ day of November, 1994. GRUBB & ELLIS COMPANY, a Delaware corporation By: Robert J. Hanlon Name: Robert J. Hanlon Title: Chief Financial Officer WARBURG, PINCUS INVESTORS, L.P., a Delaware limited partnership WARBURG, PINCUS & CO., General Partner By: Reuben S. Leibowitz Name: Reuben S. Leibowitz Title: Partner THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey insurance corporation By: John P. Mullman Name: John P. Mullman Title: Vice President JOE F. HANAUER, an individual By: Joe F. Hanauer -5- -----END PRIVACY-ENHANCED MESSAGE-----