Attached files
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EX-4.1 - EXHIBIT 4.1 - GRUBB & ELLIS CO | c15672exv4w1.htm |
EX-4.2 - EXHIBIT 4.2 - GRUBB & ELLIS CO | c15672exv4w2.htm |
EX-10.2 - EXHIBIT 10.2 - GRUBB & ELLIS CO | c15672exv10w2.htm |
EX-10.1 - EXHIBIT 10.1 - GRUBB & ELLIS CO | c15672exv10w1.htm |
EX-99.1 - EXHIBIT 99.1 - GRUBB & ELLIS CO | c15672exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 2011 (April 15, 2011)
GRUBB
& ELLIS COMPANY
(Exact name of registrant as specified in its charter)
Delaware | 001-08122 | 94-1424307 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
1551 North Tustin Avenue, Suite 300, Santa Ana, California |
92705 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (714) 667-8252
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
On April 15, 2011, Grubb & Ellis Company (the Company), entered into an $18.0 million senior
secured credit facility (the Credit Facility) pursuant to the terms and conditions of that
certain Credit Agreement (the Credit Agreement), dated as of April 15, 2011, by and among the
Company, Grubb & Ellis Management Services, Inc. (GEMS), the Lenders (as defined in the Credit
Agreement), and ColFin GNE Loan Funding, LLC, an affiliate of Colony Capital LLC (Colony), as the
initial Lender and administrative agent for the Lenders.
The Credit Facility, which matures on March 1, 2012, is comprised of a two draw term
loan of up to $18.0 million, the first $9.0 million of which became immediately available and was drawn upon, with the
remainder becoming available for advance on and after May 15, 2011. Upon the consummation of the
Credit Facility, the Company paid to the Lenders (i) a closing fee equal to 1.00% of the Credit
Facility amount and (ii) warrants (the Warrants) exercisable to purchase 6,712,000 shares of
common stock of the Company.
Availability
under the Credit Facility is generally limited to a defined borrowing
base tied to eligible receivables of the Company and GEMS. The
proceeds of the Credit Facility can be used to finance working capital needs, capital expenditures
and other general corporate purposes of the Company and its
subsidiaries. The interest rate for term loan
advances is 11.00% per annum, increasing by an additional 0.50% at the end of each three-month
period subsequent to the closing date of the Credit Facility for so long as any term loans are
outstanding. In lieu of making a cash interest payment, the Company has the option to accrete any
due and payable interest under the Credit Facility and issue additional warrants (the Additional
Warrants) based on a formula calculation. The loan is not
subject to any required principal amortization payments during the
term.
The Credit Agreement contains customary representations and warranties, as well as customary events
of default, in certain cases subject to negotiated periods to cure and exceptions, including but
not limited to: failure to make certain payments when due, breach of covenants, breach of
representations and warranties, certain insolvency proceedings, judgments and attachments and any
change of control.
The Credit Agreement also contains various customary covenants that, in certain instances, restrict
the ability of the Company and its subsidiaries to: (i) incur indebtedness; (ii) create liens on
assets; (iii) engage in mergers or consolidations; (iv) engage in dispositions of assets; (v) make
investments, loans, guarantees or advances; (vi) pay dividends and distributions with respect to,
or repurchase, its outstanding capital stock; (vii) enter into sale and leaseback transactions;
(viii) engage in transactions with affiliates; and (ix) change the nature of the Companys
business. In addition, the Credit Agreement requires (i) GEMS and its
subsidiaries to maintain, as
on the last day of each fiscal quarter, a minimum net worth of
$20,000,000 and (ii) the outstanding
loan to remain in compliance with the defined borrowing base at the end of each fiscal month (subject
to periods to cure).
As a condition to the entering into of the Credit Agreement, the Company, GEMS and certain other
subsidiaries of the Company simultaneously entered into a Guarantee and Collateral Agreement, dated
as of April 15, 2011 with Colony, in its capacity as administrative agent (the Guarantee and
Collateral Agreement), pursuant to which each subsidiary of the Company party thereto (other than
GEMS) guaranteed the obligations of the Company and GEMS under
the Credit Agreement and each of the Company and its subsidiaries party thereto granted a first
priority security interest in substantially all of its assets.
The Warrants have an exercise price equal to $0.01 per share and a maturity date of three years
from the date of issuance (the Expiration Date), but are exercisable prior to the Expiration Date
upon the satisfaction of certain events as set forth in the Warrants, including, but not limited
to, if the volume weighted average price of the Companys common stock equals or exceeds $1.10 for
any consecutive 30 calendar day period prior to the date of exercise. The Warrants are
exercisable, at the option of the holder of such Warrant, (a) by paying the exercise price in cash,
(b) pursuant to a cashless exercise of the Warrant or (iii) by reduction of the principal amount
of loans under the Credit Facility payable to the holder of such Warrant, or by a combination of
the foregoing methods. The number of shares of the Companys common stock issuable upon exercise
of the Warrants or Additional Warrants is subject to adjustment in certain cases. All Additional
Warrants issued pursuant to the Credit Agreement shall contain the same terms as the Warrants.
The Company also entered into a Registration Rights Agreement (Registration Rights Agreement)
with the holder of the Warrants, pursuant to which holders of the Warrants have the right to
require the Company, subject to certain limitations, to effect the registration under the
Securities Act of 1933, as amended (the Securities Act), of all or any portion of the shares of
the Companys common stock issued as a result of the exercise of all or a portion of the Warrants
or the Additional Warrants. The Registration Rights Agreement contains piggy-back
registration rights and demand registration rights with respect to the shares underlying the Warrants and the
Additional Warrants.
The foregoing is a summary of the terms and conditions of each of the Credit Agreement, the
Guarantee and Collateral Agreement, the Warrants and the Registrations Rights Agreement and does
not purport to be a complete discussion of any of the documents. Accordingly, the foregoing is
qualified in its entirety by reference to the full text of the foregoing documents, each of which
is annexed to this Current Report on Form 8-K as exhibits and incorporated by reference herein.
The Warrant and the Additional Warrants have not been registered under the Securities Act and may
not be offered or sold in the United States absent registration or an applicable exemption from the
registration requirements of the Securities Act. This current report on Form 8-K does not
constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in which such offering would be
unlawful.
Item 2.03 | Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is incorporated herein by reference into this
Section 2.03 of this Report.
Item 3.02 | Unregistered Sale of Equity Securities |
The information regarding the Warrants set forth under Item 1.01 above is incorporated herein by
reference into this Section 3.02 of this Report.
Item 8.01 | Other Events |
On April 18, 2011, the Company issued a press release announcing its entry into the Credit
Facility, a copy of which is filed herewith as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) The following are filed as Exhibits to this Current Report on Form 8-K:
4.1
|
Form of Warrant Agreement, dated as of April 15, 2011, among Grubb & Ellis Company and CDCF II GNE Holding, LLC and CFI GNE Warrant Investor, LLC | |
4.2
|
Registration Rights Agreement, dated as of April 15, 2011, among Grubb & Ellis Company and CDCF II GNE Holding, LLC and CFI GNE Warrant Investor, LLC | |
10.1
|
Credit Agreement, dated as of April 15, 2011, by and among Grubb & Ellis Company, Grubb & Ellis Management Services, Inc., the lenders party thereto, and ColFin GNE Loan Funding, LLC, an affiliate of Colony Capital LLC | |
10.2
|
Guarantee and Collateral Agreement, dated as of April 15, 2011, by and among Grubb & Ellis Company, & Ellis Management Services, Inc., certain other subsidiaries of Grubb & Ellis Company, and ColFin GNE Loan Funding, LLC, in its capacity as administrative agent | |
99.1
|
Press release of Grubb & Ellis Company dated April 18, 2011 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
authorized and caused the undersigned to sign this Report on the Registrants behalf.
GRUBB & ELLIS COMPANY |
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By: | /s/ Michael J. Rispoli | |||
Michael J. Rispoli | ||||
Executive Vice President and Chief Financial Officer |
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Dated: April 20, 2011