GRUBB & ELLIS REALTY ADVISORS,
INC.
Deutsche Bank
Securities Inc.
As Representative of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005
Grubb & Ellis
Realty Advisors, Inc., a Delaware corporation (the
“Company”), proposes to sell to the several
underwriters (the “Underwriters”) named in
Schedule I hereto for whom you are acting as representative
(the “Representative”) an aggregate of nineteen million
one hundred sixty-six thousand six hundred sixty-seven (19,166,667)
units of the Company, with each unit consisting of one share of the
Company’s common stock, $.0001 par value (the “Common
Stock”), and two warrants (the “Warrants”) to
purchase Common Stock (the “Firm Units”). The
respective amounts of the Firm Units to be so purchased by the
several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the
Underwriters’ option an aggregate of up to three million one
hundred twenty-five thousand (3,125,000) additional units of the
Company (the “Option Units”) as set forth below. The
terms of the Warrants are provided for in the form of Warrant
Agreement (defined herein).
As the
Representative, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several
Underwriters, and (b) that the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers
of Firm Units set forth opposite their respective names in
Schedule I, plus their pro rata portion of the Option Units if
you elect to exercise the over-allotment option in whole or in part
for the accounts of the several Underwriters. The Firm Units and
the Option Units (to the extent the aforementioned option is
exercised) are herein collectively called the “Units,”
and the Units, the shares of Common Stock and the Warrants included
in the Units and the shares of Common Stock issuable upon exercise
of the Warrants are hereinafter referred to as the
“Securities.”
Deutsche Bank
Securities Inc. (“DBSI”) has agreed to reserve up to
seven hundred fifty thousand (750,000) of the Units to be purchased
by it under this Agreement for sale to the Company’s
directors, officers, employees and business associates and other
parties related to the Company (collectively,
“Participants”), as set forth in the Prospectus (as
defined below) under
the heading
“Underwriting” (the “Directed Unit
Program”). The Units to be sold by DBSI and its affiliates
pursuant to the Directed Unit Program are referred to hereinafter
as the “Directed Units.” Any Directed Units not orally
confirmed for purchase by any Participants by the end of the
business day on which this Agreement is executed will be offered to
the public by the Underwriters as set forth in the
Prospectus.
In consideration
of the mutual agreements contained herein and of the interests of
the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .
The Company
represents and warrants to each of the Underwriters as
follows:
(a) A
registration statement on Form S-11 (File No. 333-129190) with
respect to the Securities and the Representative’s Securities
(as defined below) has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended
(the “Act”), and the rules and regulations (the
“Rules and Regulations”) of the Securities and Exchange
Commission (the “Commission”) thereunder and has been
filed with the Commission. The Company and the transactions
contemplated by this Agreement meet the requirements and comply
with the conditions for the use of Form S-11. Copies of such
registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to you. Such registration
statement, together with any registration statement filed by the
Company pursuant to Rule 462(b) of the Act, which shall be deemed
to include all information omitted therefrom in reliance upon
Rule 430A and contained in the Prospectus referred to below,
has become effective under the Act (the “Registration
Statement”), and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement (the “Effective Date”).
“Prospectus” means the form of prospectus first filed
with the Commission pursuant to and within the time limits
described in Rule 424(b). Each preliminary prospectus included
in the Registration Statement prior to the time it becomes
effective is herein referred to as a “Preliminary
Prospectus.” Any reference herein to any Prospectus, also
shall be deemed to include any supplements or amendments thereto,
filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination
of the offering of the Securities and the Representative’s
Securities by the Underwriters.
The Company has
filed with the Commission a Form 8-A (File Number 001-32753)
providing for the registration under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), of the
Securities and the Representative’s Securities. The Units,
the Warrants and the Common Stock have been duly listed, and
admitted and authorized for trading, subject only to official
notice of issuance, on the American Stock Exchange, and the Company
knows of no reason or set of facts which is likely to adversely
affect such approval. Neither the Commission nor any state
regulatory authority has issued any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or has
instituted or, to the Company’s knowledge, threatened to
institute any proceedings with respect to such an order. Neither
the Commission nor any state regulatory authority has issued any
order preventing or suspending the
2
effectiveness
of the Registration Statement and no proceeding for that purpose or
pursuant to Section 8A of the Act has been instituted or is
pending or is contemplated or threatened by the
Commission.
As
of the Applicable Time (as defined below), the Statutory Prospectus
(as defined below) and the information included on Exhibit D,
all considered together (collectively, the “General
Disclosure Package”) did not include any untrue statement of
a material fact or omit to state any 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 this representation and warranty shall not apply to
information contained in or omitted from the General Disclosure
Package, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter through the Representative, specifically for use
therein. As used in this paragraph and elsewhere in this
Agreement:
“Applicable
Time” means [ ]:00 [a/p]m (New York
time) on [ ] or such other time as agreed
by the Company and the Representative.
“Statutory
Prospectus” as of any time means the Preliminary Prospectus
relating to the Securities that is included in the Registration
Statement immediately prior to that time.
(b) At the
time the Registration Statement and any amendment thereto became
effective and at all times subsequent thereto up to the Closing
Date and the Option Closing Date, if any, the Registration
Statement contains, and the Prospectus and any amendments or
supplements thereto will contain, all statements which are required
to be stated therein by, and will conform to, the requirements of
the Act and the Rules and Regulations. The Registration Statement
and any amendment thereto, on such dates, do not contain, and will
not contain, any untrue statement of a material fact and do not
omit, and will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendments and supplements
thereto, on such dates, do not contain, and will not contain, any
untrue statement of material fact; and do not omit, and will not
omit, to state any 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; provided,
however, that the Company makes no representations or warranties as
to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through
the Representative, specifically for use therein, it being
understood and agreed that the only such information is that
described in Section 13 herein.
The agreements and
documents described in the Registration Statement, the General
Disclosure Package and the Prospectus conform in all material
respects to the descriptions thereof contained therein and there
are no agreements or other documents required to be described in
the Registration Statement, the General Disclosure Package or the
Prospectus or to be filed with the Commission as exhibits to the
Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property
or business is or may be bound or affected and (i) that is
referred to in the General Disclosure Package or the Prospectus, or
(ii) is
3
material to the
Company’s business, has been duly and validly executed by the
Company, is in full force and effect and is enforceable against the
Company and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought, and none
of such agreements or instruments has been assigned by the Company,
and neither the Company nor, to the Company’s knowledge, any
other party is in breach or default thereunder and, to the
Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
breach or default thereunder. To the Company’s knowledge,
performance by the Company of the material provisions of such
agreements or instruments will not result in a violation of any
existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to
environmental laws and regulations.
No securities of
the Company have been sold by the Company or by or on behalf of, or
for the benefit of, any person or persons controlling, controlled
by, or under common control with the Company within the three years
prior to the date hereof, except as disclosed in the Registration
Statement.
(c) Since the
respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and the
Prospectus, except as otherwise specifically stated therein:
(i) there has been no material adverse change in the earnings,
business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company;
(ii) there have been no material transactions or agreements entered
into by the Company other than as contemplated therein or pursuant
to this Agreement; and (iii) no member of the Company’s
management has resigned from any position with the
Company.
Subsequent to the
respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and the
Prospectus, except as otherwise specifically stated therein or in
this Agreement, the Company has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made
any other distribution on or in respect to its capital
stock.
(d) Ernst
& Young, LLP (“E&Y”), who have certified
certain of the financial statements filed with the Commission as
part of the Registration Statement, is an independent registered
public accounting firm with respect to the Company within the
meaning of the Act and the applicable Rules and Regulations and the
Public Company Accounting Oversight Board (United States) (the
“PCAOB”).
Solely to the
extent that the Sarbanes-Oxley Act of 2002, as amended, and the
rules and regulations promulgated by the Commission and the
American Stock Exchange thereunder (the “Sarbanes-Oxley
Act”) has been applicable to the Company, there is and has
been no failure on
4
the part of the
Company to comply in all material respects with any provision of
the Sarbanes-Oxley Act. The Company has taken all necessary actions
to ensure that it is in compliance with all provisions of the
Sarbanes-Oxley Act that are in effect and with which the Company is
required to comply and is actively taking steps to ensure that it
will be in compliance with other provisions of the Sarbanes-Oxley
Act not currently in effect or which will become applicable to the
Company.
(e) The
financial statements, including the notes thereto and supporting
schedules, if any, included in the Registration Statement, the
General Disclosure Package and Prospectus fairly present the
financial position, results of operations and cash flows of the
Company at the dates and for the periods to which they apply; such
financial statements and related schedules comply with the
applicable accounting requirements of the Act and the Rules and
Regulations; such financial statements and related schedules have
been prepared in conformity with generally accepted accounting
principles, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a
fair presentation of results for such periods have been made; and
the supporting schedules included in the Registration Statement, if
any, present fairly the information required to be stated therein.
The Registration Statement discloses all off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with
unconsolidated entities or other persons, if any, that would
reasonably be expected to have a material current or future effect
on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or
expenses. There are no financial statements (historical or pro
forma) that are required to be included in the Registration
Statement, the General Disclosure Package or the Prospectus that
are not included as required.
(f) Giving
effect to the filing of the amended and restated certificate of
incorporation with the Secretary of State of Delaware in the form
filed as an exhibit to the Registration Statement, the Company had
at the date or dates indicated in the Registration Statement, the
General Disclosure Package and the Prospectus the capitalization as
set forth in the Registration Statement, the General Disclosure
Package and the Prospectus. Based on the assumptions stated in the
Registration Statement, the General Disclosure Package and the
Prospectus, the Company will have on the Closing Date the adjusted
capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the General Disclosure
Package and the Prospectus, on the Effective Date and on the
Closing Date, there will be no options, warrants, or other rights
to purchase or otherwise acquire any authorized, but unissued,
shares of Common Stock of the Company or any security convertible
into shares of Common Stock of the Company, or any contracts or
commitments to issue or sell shares of Common Stock or any such
options, warrants, rights or convertible securities.
(g) All
issued and outstanding securities of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company. The offers and sales of the outstanding Common Stock
were at all relevant times either
5
registered
under the Act and the applicable state securities or Blue Sky laws
or exempt from such registration requirements.
The Securities
have been duly authorized, and the shares of Common Stock included
as part of the Units and issuable upon exercise of the Warrants,
when issued and paid for in accordance with the terms thereof, will
be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by
reason of being such holders; the Securities are not and will not
be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the
Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly
and validly taken. The Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement, the General Disclosure Package and the
Prospectus. The form of certificates for the Securities conform to
the corporate law of the jurisdiction of the Company’s
incorporation. When issued, the Representative’s Purchase
Option, the Representative’s Warrants and the Warrants will
constitute valid and binding obligations of the Company to issue
and sell, upon exercise thereof and payment of the respective
exercise prices therefor in accordance with the terms thereof, the
number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s
Purchase Option, Representative’s Warrants and Warrants are
enforceable against the Company in accordance with their respective
terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
(h) Except as
set forth in the Registration Statement, the General Disclosure
Package and the Prospectus, no holders of any securities of the
Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to
require the Company to register any such securities of the Company
under the Act or to include any such securities in a registration
statement to be filed by the Company.
(i) This
Agreement, the Warrant Agreement, the Trust Agreement (as defined
herein), the Services Agreement (as defined herein), the Master
Agreement for Services (as defined herein), the Property Management
Agreement (as defined herein), the Project Management Services
Agreement (as defined herein) and the Escrow Agreement (as defined
herein) have been duly and validly authorized by the Company and
constitute, and the Representative’s Purchase Option, has
been duly and validly authorized by the Company and, when executed
and delivered, will constitute, the valid and binding agreements of
the Company, enforceable against the Company in accordance with
their respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws; and
(iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the
equitable
6
defenses and to
the discretion of the court before which any proceeding therefor
may be brought. This Agreement has been duly executed and delivered
by the Company.
(j) The
execution, delivery, and performance by the Company of this
Agreement, the Warrant Agreement, the Representative’s
Purchase Option, the Trust Agreement, the Services Agreement, the
Master Agreement for Services, the Property Management Agreement,
the Project Management Services Agreement and the Escrow Agreement,
the consummation by the Company of the transactions herein and
therein contemplated and the compliance by the Company with the
terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a
breach of, or conflict with any of the terms and provisions of, or
constitute a default under, or result in the creation,
modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to
the terms of any agreement or instrument to which the Company is a
party except pursuant to the Trust Agreement; (ii) result in
any violation of the provisions of the certificate of incorporation
or the by-laws of the Company; or (iii) violate any existing
applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or
business.
(k) No
default exists in the due performance and observance of any term,
covenant or condition of any license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other agreement or instrument to which the Company is
a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject that, individually
or in the aggregate, could have a material adverse effect on the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company. The Company is not in violation of any term or provision
of its certificate of incorporation or by-laws or, in violation of
any material franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of
its properties or businesses.
(l) The
Company has all requisite corporate power and authority, and has
all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory
officials and bodies that it needs as of the date hereof to conduct
its business purpose as described in the Registration Statement,
the General Disclosure Package and the Prospectus.
The Company has
all corporate power and authority to enter into this Agreement and
to carry out the provisions and conditions hereof, and all
consents, authorizations, approvals and orders required in
connection therewith have been obtained. No consent, authorization
or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery,
of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement,
the Representative’s Purchase Option, the Trust Agreement,
the Services Agreement, the Master Agreement for Services, the
Property Management Agreement, the Project Management Services
Agreement and the Escrow Agreement and as contemplated by the
Registration Statement, the General
7
Disclosure
Package and the Prospectus, except with respect to applicable
federal and state securities laws.
(m) To the
Company’s knowledge, all information contained in the
questionnaires completed by each of the Company’s
stockholders immediately prior to the offering (the “Initial
Stockholders”) and provided to the Underwriter as an exhibit
to his or her Insider Letter (as defined herein) is true and
correct in all material respects and the Company has not become
aware of any information which would cause the information
disclosed in the questionnaires completed by each Initial
Stockholder to become inaccurate and incorrect in any material
respect.
(n) There is
no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the
Company’s knowledge, threatened against, or involving the
Company, which has not been disclosed in the Registration
Statement, the General Disclosure Package and the
Prospectus.
(o) The
Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of its state of
incorporation, and is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of business requires
such qualification.
(p) Neither
the Company, nor to the Company’s knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Units.
(q) Except as
described in the Registration Statement, the General Disclosure
Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment
of a finder’s, consulting or origination fee by the Company
or any Initial Stockholder with respect to the sale of the
Securities hereunder or any other arrangements, agreements or
understandings of the Company or, to the Company’s knowledge,
any Initial Stockholder that may affect the Underwriter’s
compensation, as determined by the National Association of
Securities Dealers, Inc. (the “NASD”).
The Company has
not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) any person, as a finder’s fee,
consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) to
any NASD member; or (iii) to any person or entity that has any
direct or indirect affiliation or association with any NASD member,
within the twelve months prior to the Effective Date.
None of the net
proceeds of the offering will be paid by the Company to any
participating NASD member or its affiliates, except as specifically
authorized herein and except as may be paid in connection with an
initial Business Combination (as defined herein) and/or one or more
other transactions after the initial Business Combination,
including without limitation in
8
connection with
the payment of investment banking fees, fees in connection with
fairness opinions and the like.
Based on
questionnaires distributed to such persons, no officer, director or
any beneficial owner of the Company’s unregistered securities
has any direct or indirect affiliation or association with any NASD
member. The Company will advise the Representative if it learns
that any officer or director is or becomes an affiliate or
associated person of an NASD member participating in the
offering.
(r) The
Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principals and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(s) The
statistical, industry-related and market-related data included in
the Registration Statement, the General Disclosure Package and the
Prospectus are based on or derived from sources which the Company
reasonably and in good faith believes are reliable and accurate,
and such data agree with the sources from which they are
derived.
(t) Neither
the Company nor any of the Initial Stockholders or any other person
acting on behalf of the Company (other than the Underwriters, as to
which this representation shall not apply) has, directly or
indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or
agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic
or foreign) or any political party or candidate for office
(domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is, or may be
in a position to help or hinder the business of the Company (or
assist it in connection with any actual or proposed transaction)
that (i) might subject the Company to any damage or penalty in
any civil, criminal or governmental litigation or proceeding;
(ii) if not given in the past, might have had a material
adverse effect on the assets, business or operations of the Company
as reflected in any of the financial statements contained in the
Registration Statement, the General Disclosure Package and the
Prospectus; or (iii) if not continued in the future, might
adversely affect the assets, business, operations or prospects of
the Company. The Company’s internal accounting controls and
procedures are sufficient to cause the Company to comply with the
Foreign Corrupt Practices Act of 1977, as amended.
(u) Any
certificate signed by any duly authorized officer of the Company
and delivered to you or to your counsel in connection with this
Agreement shall be deemed a representation and warranty by the
Company to the Underwriter as to the matters covered
thereby.
9
(v) The
Company has entered into a warrant agreement with respect to the
Warrants and the Representative’s Warrants with Continental
Stock Transfer & Trust Company substantially in the form of
Exhibit 4.4 to the Registration Statement (the “Warrant
Agreement”).
(w) The
Company has caused to be duly executed legally binding and
enforceable agreements (except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally, (ii) as
enforceability of any indemnification, contribution or noncompete
provision may be limited under the federal and state securities
laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought) annexed as Exhibits
10.1 through 10.7 to the Registration Statement (the “Insider
Letters”), pursuant to which each of the Initial Stockholders
of the Company agrees to certain matters including, but not limited
to, certain matters described as being agreed to by him under the
“Proposed Business” section of the Registration
Statement, the General Disclosure Package and the
Prospectus.
(x) The
Company has caused the Initial Stockholders to enter into an escrow
agreement (the “Escrow Agreement”) with Continental
Stock Transfer & Trust Company (the “Escrow Agent”)
substantially in the form of Exhibit 10.9 to the Registration
Statement, whereby the Common Stock owned by each of the Initial
Stockholders immediately prior to the execution of this Agreement
will be held in escrow by the Escrow Agent, until the third
anniversary of the Effective Date (subject to certain exceptions
set forth in the Escrow Agreement). During such escrow period, the
Initial Stockholders shall be prohibited from selling or otherwise
transferring such shares (except to spouses and children of Initial
Stockholders and trusts established for their benefit and as
otherwise set forth in the Escrow Agreement), but will retain the
right to vote such shares. To the Company’s knowledge, the
Escrow Agreement is enforceable against each of the Initial
Stockholders (except: (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws; and
(iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought) and will not, with or without
the giving of notice or the lapse of time or both, result in a
breach of, or conflict with any of the terms and provisions of, or
constitute a default under, any agreement or instrument to which
any of the Initial Stockholders is a party.
(y) The
Company has entered into the Trust Agreement with respect to
certain proceeds of the offering substantially in the form of
Exhibit 10.8 to the Registration Statement.
(z) Except as
provided in the Registration Statement, the General Disclosure
Package and the Prospectus, no Initial Stockholder, employee,
officer or director of the Company is subject to any
non-competition or non-solicitation agreement with any employer or
prior employer which could materially affect his ability to be an
Initial Stockholder, employee, officer and/or director of the
Company.
10
(aa) The
Company is not and, after giving effect to the offering and sale of
the Units contemplated hereunder and the application of the net
proceeds from such sale as described in the Registration Statement,
the General Disclosure Package and the Prospectus, will not be an
“investment company” within the meaning of such term
under the Investment Company Act of 1940 (as amended, the
“Investment Company Act”) and the rules and regulations
of the Commission thereunder.
(bb) The
Company does not own an interest in any corporation, partnership,
limited liability company, joint venture, trust or other business
entity.
(cc) There
are no business relationships or related party transactions
involving the Company or any other person required to be described
in the Registration Statement, the General Disclosure Package and
the Prospectus that have not been described as required.
(dd) Upon
delivery and payment for the Firm Units on the Closing Date, the
Company will not be subject to Rule 419 under the Act and none
of the Company’s outstanding securities will be deemed to be
a “penny stock” as defined in Rule 3a-51-1 under
the Exchange Act.
(ee) There is
and has been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such,
to comply with (as and when applicable), and immediately following
the effectiveness of the Registration Statement the Company will be
in compliance with, Sections 301, 402, 802 and 1102 of the
Sarbanes-Oxley Act and Part 8 of the American Stock
Exchange’s “AMEX Company Guide,” as amended.
Further, there is and has been no failure on the part of the
Company or any of the Company’s directors or officers, in
their capacities as such, to comply with (as and when applicable),
and immediately following the effectiveness of the Registration
Statement the Company will be in compliance with, all other
provisions of the Sarbanes-Oxley Act and the American Stock
Exchange corporate governance requirements set forth in the AMEX
Company Guide, as amended.
(ff) The
Company does not have any specific Business Combination under
consideration and the Company does not (nor has anyone on its
behalf) contacted any prospective acquisition candidate or had any
discussions, formal or otherwise, with respect to such a
transaction.
(gg) On or
prior to the Closing Date, the Company has entered into an
agreement (the “Services Agreement”) with Grubb &
Ellis Company (the “Corporate Stockholder”), pursuant
to which the Corporate Stockholder will make available to the
Company certain office space and certain office and secretarial
services, as the Company may require time to time, for an amount
not to exceed $7,500 per month.
(hh) On or
prior to the Closing Date, the Company has entered into a Master
Agreement for Services (the “Master Agreement for
Services”) with Corporate Stockholder, pursuant to which the
Corporate Stockholder shall serve as our exclusive agent with
respect to commercial real estate brokerage and consulting services
relating to real property acquisitions
11
and
dispositions as well as agency listing services with respect to the
leasing of space within any of the properties the Company may own
or acquire.
(ii) On or
prior to the Closing Date, the Company has entered into a Property
Management Agreement (the “Property Management
Agreement”) with Grubb & Ellis Management Services, Inc.
(“GEMS”), whereby GEMS shall serve as the sole and
exclusive managing agent for all real property the Company may
acquire.
(jj) On or
prior to the Closing Date, the Company has entered into a Master
Agreement for Project Management Services (the “Project
Management Services Agreement”) with GEMS, whereby GEMS shall
be retained to perform, as the Company may require time to time,
project management services with respect to consulting and project
management of interior office space and/or building infrastructure
improvements, including organizational, resource and project
planning, with respect to any properties the Company may
acquire.
(kk) No
consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained,
is required in connection with the offering of the Directed Units
in any jurisdiction where the Directed Units are being
offered.
(ll) The
Company has not offered, or caused DBSI or its affiliates to offer,
Units to any person pursuant to the Directed Unit Program with the
specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer’s or
supplier’s level or type of business with the Company, or
(ii) a trade journalist or publication to write or publish
favorable information about the Company or its products.
2. PURCHASE,
SALE AND DELIVERY OF THE UNITS .
(a) On the
basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter
agrees, severally and not jointly, to purchase, at a price of $6.00
per Unit, the number of Firm Units set forth opposite the name of
each Underwriter in Schedule I hereof, subject to adjustments
in accordance with Section 9 hereof.
(b) Payment
for the Firm Units to be sold hereunder is to be made in Federal
(same day) funds against delivery of certificates therefor to the
Representative for the several accounts of the Underwriters. Such
payment and delivery are to be made through the facilities of The
Depository Trust Company (“DTC”), New York, New York at
10:00 a.m., New York time, on the third business day after the
date of this Agreement (or the fourth business day following the
date of this Agreement, if the Registration Statement is declared
effective after 4:30 p.m., New York time) or at such other time and
date not later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein referred
to as the “Closing Date.” (As used herein,
“business day” means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are
open for business and are not permitted by law or executive order
to be closed.) Payment for the Firm Units shall be made on the
Closing Date by wire transfer in Federal (same day) funds, as
follows: one hundred seven million one hundred eighty-seven
thousand five hundred and two dollars ($107,187,502) (without
giving effect to the over-allotment option) of the
12
proceeds
received by the Company for the Firm Units shall be deposited in
the trust fund established by the Company for the benefit of the
public securityholders as described in the Registration Statement
(“Trust Fund”) pursuant to the terms of an Investment
Management Trust Agreement (the “Trust Agreement”)
(including two million three hundred thousand dollars ($2,300,000)
of which to be held in the Trust Fund as deferred discount to be
paid to the Underwriters upon consummation of the initial Business
Combination) and the remaining two million sixty-two thousand five
hundred dollars ($2,062,500) of the proceeds shall be paid to the
Company upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Firm Units (or
through the facilities of DTC) for the account of the Underwriters.
The Firm Units shall be registered in such name or names and in
such authorized denominations as the Representative may request in
writing at least two full business days prior to the Closing Date.
The Company will permit the Representative to examine and package
the Firm Units for delivery, at least one full business day prior
to the Closing Date. The Company shall not be obligated to sell or
deliver the Firm Units except upon tender of payment by the
Representative for all the Firm Units.
(c) In
addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the several Underwriters to
purchase the Option Units at the price per Unit as set forth in the
first paragraph of this Section 2. The option granted hereby
may be exercised in whole or in part by giving written notice
(i) at any time before the Closing Date and (ii) only
once thereafter within 30 days after the date of this
Agreement, by you, as Representative of the several Underwriters,
to the Company setting forth the number of Option Units as to which
the several Underwriters are exercising the option and the time and
date at which such certificates are to be delivered. The time and
date at which certificates for Option Units are to be delivered
shall be determined by the Representative but shall not be earlier
than three nor later than 10 full business days after the exercise
of such option, nor in any event prior to the Closing Date (such
time and date being herein referred to as the “Option Closing
Date”). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set
the Closing Date as the Option Closing Date. The number of Option
Units to be purchased by each Underwriter shall be in the same
proportion to the total number of Option Units being purchased as
the number of Firm Units being purchased by such Underwriter bears
to the total number of Firm Units, adjusted by you in such manner
as to avoid fractional units. The option with respect to the Option
Units granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Units by the Underwriters.
You, as Representative of the several Underwriters, may cancel such
option at any time prior to its expiration by giving written notice
of such cancellation to the Company. To the extent, if any, that
the option is exercised, payment for the Option Units shall be made
on the Option Closing Date in Federal (same day funds) through the
facilities of DTC in New York, New York drawn to the order of the
Company. Payment for the Option Units shall be made on the Option
Closing Date by wire transfer in Federal (same day) funds, as
follows: $5.70 per Option Unit sold shall be deposited in the Trust
Fund pursuant to the Trust Agreement (including $0.12 per Option
Unit to be held in the Trust Fund as deferred discount to be paid
to the Underwriters upon consummation of the initial Business
Combination) upon delivery to you of certificates (in form and
substance satisfactory to the Underwriters) representing the Option
Units sold (or through the facilities of DTC) for the account of
the Underwriters. The Company
13
shall not be
obligated to sell or deliver any Option Units except upon tender of
payment by the Representative for all such Option Units.
The Company hereby
agrees to issue and sell to the Representative on the Effective
Date an option (“Representative’s Purchase
Option”) for the purchase of an aggregate of nine hundred
fifty-eight thousand three hundred thirty-three (958,333) units
(the “Representative’s Units”) for an aggregate
purchase price of $100.00. Each of the Representative’s Units
is identical to the Firm Units, except that the Warrants included
in the Representative’s Units (“Representative’s
Warrants”) have an exercise price of six dollars and
twenty-five cents ($6.25), which is equal to one hundred and
twenty-five percent (125%) of the exercise price of warrants sold
to the public. The Representative’s Purchase Option shall be
exercisable, in whole or in part, commencing on the later of the
consummation of an acquisition by the Company, through a purchase,
asset acquisition or other business combination, of one or more
commercial real estate properties and/or assets, including by
acquisition of an operating company (“Business
Combination”), or one year from the Effective Date and
expiring on the five-year anniversary of the Effective Date (or, if
earlier, the date on which the Warrants shall have been redeemed)
at an initial exercise price per Representative’s Unit of six
dollars and sixty cents ($6.60), which is equal to one hundred and
twenty five percent (125%) of the initial public offering price of
a Unit. The Representative’s Purchase Option, the
Representative’s Units, the Representative’s Warrants
and the shares of Common Stock issuable up
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