Item 1.02
Termination of a Material Definitive Agreement
On June 18, 2007, Grubb & Ellis Realty Advisors, Inc. (the “Company”) entered into a Membership
Interest Purchase Agreement (the “Purchase Agreement”) with its sponsor and affiliate, Grubb &
Ellis Company (“GBE”), and GBE’s wholly owned subsidiary, GERA Property Acquisition, LLC.
The Purchase Agreement contemplated the transfer of three (3) commercial office properties to the
Company from GBE and, if consummated, would constitute the Company’s business combination. The
aggregate purchase price of the three commercial properties pursuant to the Purchase Agreement was
approximately $122.3 million, GBE’s cost, plus reimbursement for GBE’s actual costs and expenses
with respect to the purchase of the properties and imputed interest on cash advanced by the Company
with respect to the properties.
Under the terms of the Purchase Agreement, the Purchase Agreement was subject to termination under
certain circumstances, including but not limited to if the Company failed to obtain the requisite
stockholder consents required under the laws of the State of Delaware and the Company’s charter to
approve the transactions contemplated by the Purchase Agreement.
On February 28, 2008, at a special meeting of the stockholders of the Company held to vote on,
among other things, the proposed transaction with GBE, the Company failed to obtain the requisite
consents of its stockholders to approve its proposed business combination (
i.e
. the
transactions contemplated by the Purchase Agreement). Specifically, of the 23,958,334 shares of
the Company’s common stock eligible to vote with respect to the proposed transaction, stockholders
holding an aggregate of 22,695,082 shares voted on the transaction. Of those stockholders voting,
17,144,944 shares were cast against the proposed business combination, and the holders of all such
17,144,944 shares also elected to convert their shares into a pro rata share of the Company’s trust
account. 4,860,127 shares voted in favor of the proposed business combination, and the remaining
shares did not vote with respect to the proposed transaction.
As a result, the Company, in accordance with Section 8.1(f) of the Purchase Agreement, advised GBE
in a letter effective February 28, 2008, that it was terminating the Purchase Agreement in
accordance with its terms.
As a result of its failure to obtain the requisite stockholder approvals, the Company intends to
promptly begin the process of dissolution and liquidating its trust account in accordance with its
charter and applicable Delaware law. As a consequence, the Company expects that the amounts held
in its trust account, together with the interest thereon (net of applicable taxes) will be returned
to stockholders who bought the Company’s stock. No payments will be made in respect of the
Company’s outstanding warrants or to any of the Company’s initial stockholders with respect to any
shares owned by them prior to the Company’s initial public offering in the first quarter of 2006.
The
Company intends to file a preliminary proxy statement with the SEC
regarding the proposed liquidation and dissolution of the Company. THE COMPANY’S STOCKHOLDERS AND
INVESTORS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND THE DEFINITIVE PROXY STATEMENT WHEN
THEY BECOME AVAILABLE. THE PROXY STATEMENT WILL CONTAIN IMPORTANT INFORMATION. The Company’s
stockholders and investors may obtain free copies of the proxy statement (when available) and other
documents filed by the Company through the Web site maintained by the SEC at
www.sec.gov
.
In addition, the Company’s stockholders and investors may obtain free copies of the definitive
proxy statement (when available), and other documents filed by the Company, from the Company by
contacting the Company c/o Chief Financial Officer at 500 W. Monroe St., Suite 2800, Chicago, IL
60661 or calling 312.698.4900.
Before making any voting decisions with respect to the proposed liquidation or any of the other
matters with respect to which the Company’s stockholders will be asked to vote pursuant to the
proxy statement, the Company’s stockholders are urged to read the definitive proxy statement and
other documents filed by the Company when they become available.
The Company, its directors and named executive officers may be deemed to be participants in the
solicitation of the Company’s security holders in connection with the proposed liquidation and
other matters with respect to which the Company’s stockholders will be asked to vote pursuant to
the proxy statement. Information regarding the names, affiliations and interests of such
individuals will be set forth in the Company’s preliminary proxy statement when it is filed with
the SEC, as such information may be supplemented by the Company’s definitive proxy statement when
it is filed with the SEC, and in the Company’s annual report on Form 10-K for the fiscal year ended
June 30, 2007.