RESTATED CERTIFICATE OF INCORPORATION

                                      OF

                             GRUBB & ELLIS COMPANY

                             ---------------------

 

 

   Grubb & Ellis Company, a corporation organized and existing under the laws of

the State of Delaware, hereby certifies as follows:

 

 

   1. The name of the Corporation is Grubb & Ellis Company, and the original

Certificate of Incorporation of the Corporation was filed with the Secretary of

State of Delaware on December 5, 1980.

 

   2. This Restated Certificate of Incorporation was duly adopted pursuant to

Section 245 of the General Corporation Law of the State of Delaware.  This

Restated Certificate of Incorporation restates and integrates and does not

further amend the provisions of the Certificate of Incorporation of this

Corporation as heretofore amended and supplemented.  There is no discrepancy

between such provisions and the provisions of this Restated Certificate of

Incorporation.

 

   3. The text of the Restated Certificate of Incorporation as heretofore

amended and supplemented is hereby restated and further amended to read in its

entirety as follows:

 

                                 ARTICLE I

                                 ---------

 

   The name of the Corporation is Grubb & Ellis Company.

 

 

                                 ARTICLE II

                                 ----------

 

   The registered office of the Corporation in the State of Delaware is located

at 32 Loockerman Square, Suite L-100 in the City of Dover, County of Kent.  The

name of the Corporation's registered agent at such address is The Prentice Hall

Corporation System, Inc.

 

 

                                 ARTICLE III

                                 -----------

 

   The purposes of the Corporation are to engage in any lawful act or activity

for which corporations may be organized under the General Corporation Law of the

State of Delaware.

 

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                                 ARTICLE IV

                                 ----------

 

          The total number of shares of capital stock which the Corporation

shall have authority to issue is twenty-six million (26,000,000) shares, of

which twenty-five million (25,000,000) shares with a par value of $.01 each

shall be designated Common Stock, and of which one million (1,000,000) shares

with a par value of $.01 each shall be designated Preferred Stock, of which

Preferred Stock fifty thousand (50,000) shares with a par value of $.01 each

shall be designated Series A Senior Convertible Preferred Stock ("Series A

Senior Preferred Stock"), two hundred thousand (200,000) shares with a par value

of $.01 each shall be designated Series B Senior Convertible Preferred Stock

("Series B Senior Preferred Stock") and two hundred thousand (200,000) shares

with a par value of $.01 each shall be designated Junior Convertible Preferred

Stock. Except as noted in the second following paragraph, as used herein,

"Senior Convertible Preferred Stock," shall mean collectively, the Series A

Senior Preferred Stock and the Series B Senior Preferred Stock, or either of

them. As used herein, "Convertible Preferred Stock" shall mean collectively, the

Senior Convertible Preferred Stock and the Junior Convertible Preferred Stock,

or either of them.

 

          Upon the filing on January 29, 1993 of the Certificate of Amendment of

Certificate of Incorporation (the "Amendment"), every five shares of outstanding

Common Stock were automatically reclassified, changed and converted into one

share of Common Stock. No fractional shares of Common Stock were issued upon

such conversion, but in lieu thereof, the Corporation paid a cash adjustment in

respect of such fractional interest in an amount equal to such fractional

interest multiplied by the Market Price of a share of Common Stock on the date

on which the Amendment was filed. Unless otherwise requested by the holders

thereof, the share certificates representing the shares of Common Stock

outstanding prior to the filing of the Amendment represent such shares as

reclassified, changed and converted following the filing of the Amendment. In

addition, on December 8, 1993, the Company filed a Restated Certificate of

Incorporation restating, integrating, and not further amending the provisions of

the Company's certificate of incorporation as amended and supplemented before

that date.

 

          Upon the filing on November 1, 1994 of the Certificate of Amendment of

Restated Certificate of Incorporation (the "Certificate of Amendment"), Warburg,

Pincus Investors, L.P. ("Warburg") exchanged all of its shares of Senior

Convertible Preferred Stock held prior to such filing ("Existing Senior

 

                                                                              87

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Convertible Preferred Stock") for an equal number of shares of Series B Senior

Preferred Stock.  Effective immediately after the issuance of such shares of

Series B Senior Preferred Stock, each remaining share of Existing Senior

Convertible Preferred Stock shall be automatically reclassified, changed and

converted into one share of Series A Senior Preferred Stock.  Unless otherwise

requested by the holders thereof, the share certificates representing the shares

of Existing Senior Convertible Preferred Stock outstanding prior to the filing

of the Certificate of Amendment which have not been exchanged for Series B

Senior Convertible Stock shall represent shares of Series A Senior Convertible

Preferred Stock as reclassified, changed and converted following the issuance of

the Series B Senior Convertible Stock.

 

          The class of capital stock of the Corporation designated Common Stock

shall have (i) subject to the proviso at the end of this sentence, full voting

rights, with one vote represented by each share of stock; (ii) rights to payment

of dividends without preference if, as, and when declared by the Board of

Directors of the Corporation; and (iii) rights to liquidation distributions of

the Corporations's assets without preference after payment of preferential

liquidation distributions, if any, payable on any issued and outstanding series

of Preferred Stock; provided, however, that, notwithstanding the provisions of

clause (i) of this sentence, the holders of Common Stock shall not have the

right to vote on any of the matters described in Section 4(b)(i) or 4(b)(ii)

below in this Article IV except in clauses (A) and (D) thereof, except as

otherwise required by the laws of the State of Delaware.

 

          The Preferred Stock may be issued from time to time in one or more

series. The Board of Directors is hereby expressly vested with authority to fix

by resolution or resolutions the designations and the powers, preferences and

relative, participating, optional or other special rights, and the

qualifications, limitations or restrictions thereof (including, without

limitation, the voting powers, if any, the dividend rate, conversion rights,

redemption price, or liquidation preference), of any wholly unissued series of

Preferred Stock, to fix the number of shares constituting any such series, and

to increase or decrease the number of shares of any such series (but not below

the number of shares thereof then outstanding). In case the number of shares of

any such series shall be so decreased, the shares constituting such decrease

shall resume the status which they had prior to the adoption of the resolution

or resolutions originally fixing the number of shares of such series.

 

          A statement of the designations and the voting powers, preferences and

relative, participating, optional and other

 

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special rights of the shares of the Senior Convertible Preferred Stock and the

Junior Convertible Preferred Stock, and the qualifications, limitations or

restrictions thereof are as follows:

 

          1.  Rank.  The Senior Convertible Preferred Stock shall, with respect

              ----

to dividend rights and rights on liquidation, winding up and dissolution, rank

prior to any other equity securities of the Corporation, including all classes

of Common Stock and any other series of Preferred Stock of the Corporation, with

the Series A Senior Preferred Stock and the Series B Senior Preferred Stock

ranking on an equal priority in all such foregoing respects. The Junior

Convertible Preferred Stock shall, with respect to dividend rights and rights on

liquidation, winding up and dissolution, rank prior to any other equity

securities of the Corporation, including all classes of Common Stock and any

other series of Preferred Stock of the Corporation other than the Senior

Convertible Preferred Stock which shall rank prior to the Junior Convertible

Preferred Stock (all of such equity securities of the Corporation to which the

Junior Convertible Preferred Stock ranks prior are collectively referred to

herein as the "Junior Stock").

 

          2.  Dividends

              ---------

 

          (a) Senior Convertible Preferred Stock. The holders of Senior

              ----------------------------------

Convertible Preferred Stock shall be entitled to receive, when and as declared

by the Board of Directors out of funds legally available therefor, cumulative

dividends at a rate (the "Senior Dividend Rate") equal to the greater of 12% or

the Junior Preferred Dividend Rate (as defined below). Such dividends shall be

computed on the basis of the Series A Senior Preferred Stock Stated Value and

the Series B Senior Preferred Stock Stated Value, respectively, and shall be

payable annually on the first day of each October commencing on the first of

such dates to occur after the Issue Date. Dividends shall accrue on each share

of Senior Convertible Preferred Stock from the Issue Date and shall accrue from

day to day, whether or not earned or declared. Accrued but unpaid dividends on

the Senior Convertible Preferred Stock shall increase at a compounding rate

equal to the Senior Dividend Rate compounded annually. Dividends paid on the

shares of Senior Convertible Preferred Stock in an amount less than the total

amount of such dividends at the time accrued and payable on such shares shall be

allocated pro rata on a share-by-share basis among all such shares at the time

outstanding. The Board of Directors may fix a record date for the determination

of holders of all, but not less than all shares of Senior Convertible Preferred

Stock entitled to receive payment of a dividend or distribution declared

thereon, which record date shall be not more than 30 days prior to the date

fixed for the

 

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<PAGE>

 

payment thereof. During such time as any shares of the Senior Convertible

Preferred Stock are outstanding, the Corporation shall not declare, pay or set

apart for payment any dividend on any of the Junior Convertible Preferred Stock

or Junior Stock, other than a redemption pursuant to Section 5(h), or make any

payment on account of, or set apart money for a sinking or other similar fund or

make any payment for, the purchase, redemption or other retirement of, any of

the Junior Convertible Preferred Stock or Junior Stock or any warrants, rights,

calls or options exercisable for or convertible into any of the Junior

Convertible Preferred Stock or Junior Stock, or make any distribution in respect

thereof, either directly or indirectly, and whether in cash, obligations or

shares of the Corporation or other property (other than distributions or

dividends in Junior Convertible Preferred Stock or Junior Stock to the holders

of Junior Convertible Preferred Stock or Junior Stock), and shall not permit any

corporation or other entity directly or indirectly controlled by the Corporation

to purchase or redeem any of the Junior Convertible Preferred Stock or Junior

Stock or any warrants, rights, calls or options exercisable for or convertible

into any of the Junior Convertible Preferred Stock or Junior Stock, other than a

redemption pursuant to Section 5(h), unless prior to or concurrently with such

declaration, payment, setting apart for payment, purchase, redemption or

distribution, as the case may be, the full cumulative dividends on all

outstanding shares of Senior Convertible Preferred Stock shall have been paid in

full or contemporaneously are declared and paid through the most recent dividend

payment date. Notwithstanding the foregoing, a redemption pursuant to Section

5(h) may be effected prior to the payment in full of cumulative dividends on all

outstanding shares of Senior Convertible Preferred Stock. The dividend rights of

the Series A Senior Preferred Stock and Series B Senior Preferred Stock shall be

on an equal priority.

 

          (b) Junior Convertible Preferred Stock. The holders of Junior

              ---------------------------------- 

Convertible Preferred Stock shall be entitled to receive, when and as declared

by the Board of Directors out of funds legally available therefor, cumulative

dividends payable in cash at a rate (the "Junior Preferred Dividend Rate") of 5%

per annum through December 31, 2001, 10% per annum from January 1, 2002 through

December 31, 2002, 11% per annum from January 1, 2003 through December 31, 2003,

12% per annum from January 1, 2004 through December 31, 2004, and commencing on

January 1, 1995 and on each January 1 thereafter, such rate shall increase by

2%. Such dividends shall be computed on the basis of the Junior Convertible

Preferred Stock Stated Value and shall be payable annually on the first day of

each October commencing on the first of such dates to occur after the shares of

Junior Convertible Preferred Stock are initially issued. Dividends shall accrue

on each share of Junior Convertible Preferred Stock from the date of

 

                                                                              90

<PAGE>

 

issuance thereof and shall accrue from day to day, whether or not earned or

declared. Accrued but unpaid dividends shall increase at a compounding rate

equal to the Junior Preferred Dividend Rate compounded annually. Dividends paid

on the shares of Junior Convertible Preferred Stock in an amount less than the

total amount of such dividends at the time accrued and payable on such shares

shall be allocated pro rata on a share-by-share basis among all such shares at

the time outstanding. The Board of Directors may fix a record date for the

determination of holders of shares of Junior Convertible Preferred Stock

entitled to receive payment of a dividend or distribution declared thereon,

which record date shall be not more than 30 days prior to the date fixed for the

payment thereof. During such time as any shares of the Junior Convertible

Preferred Stock are outstanding, the Corporation shall not declare, pay or set

apart for payment any dividend on any of the Junior Stock or make any payment on

account of, or set apart money for a sinking or other similar fund or make any

payment for, the purchase, redemption or other retirement of, any of the Junior

Stock or any warrants, rights, calls or options exercisable for or convertible

into any of the Junior Stock, or make any distribution in respect thereof,

either directly or indirectly, and whether in cash, obligations or shares of the

Corporation or other property (other than distributions or dividends in Junior

Stock to the holders of Junior Stock), and shall not permit any corporation or

other entity directly or indirectly controlled by the Corporation to purchase or

redeem any of the Junior Stock or any warrants, rights, calls or options

exercisable for or convertible into any of the Junior Stock, unless prior to or

concurrently with such declaration, payment, setting apart for payment,

purchase, redemption or distribution, as the case may be, the full cumulative

dividends on all outstanding shares of Junior Convertible Preferred Stock shall

have been paid in full or contemporaneously are declared and paid through the

most recent dividend payment date.

 

          3.  Liquidation Preference

              ----------------------

 

          (a) Senior Convertible Preferred Stock.  In the event of any voluntary

              ---------------------------------- 

or involuntary liquidation, dissolution or winding up of the affairs of the

Corporation, the holders of the shares of Series A Senior Preferred Stock and

Series B Senior Preferred Stock then outstanding shall be entitled to be first

paid out of the assets of the Corporation available for distribution to its

stockholders an amount in cash equal to $100.00 per share of Series A Senior

Preferred Stock (the "Series A Senior Preferred Stock Stated Value") and $100.00

per share of Series B Senior Preferred Stock (the "Series B Senior Preferred

Stock Stated Value"), respectively, plus an amount equal to all dividends

(whether or not earned or declared) on such shares

 

                                                                              91

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accrued and unpaid thereon to the date of final distribution, before any payment

shall be made or any assets distributed to the holders of the Junior Convertible

Preferred Stock or Junior Stock. Except as provided in the preceding sentence,

holders of the Senior Convertible Preferred Stock shall not be entitled to any

distribution in the event of liquidation, dissolution or winding up of the

affairs of the Corporation. If, upon any such liquidation, dissolution or

winding up of the Corporation, the remaining assets of the Corporation available

for distribution to its stockholders shall be insufficient to pay the holders of

the Senior Convertible Preferred Stock the full amount to which they shall be

entitled, the holders of any of the Senior Convertible Preferred Stock shall

share ratably in any distribution of the remaining assets and funds of the

Corporation in proportion to the respective amounts which would otherwise be

payable in respect of the shares held by them upon such distribution if all

amounts payable on or with respect to such shares were paid in full. The

distribution rights of the Series A Senior Preferred Stock and Series B Senior

Preferred Stock shall be on an equal priority.

 

          (b) Junior Convertible Preferred Stock.  In the event of any voluntary

              ----------------------------------

or involuntary liquidation, dissolution or winding up of the affairs of the

Corporation, if assets are remaining after the payment in full of the

preferential amount of the Series A Senior Preferred Stock Stated Value and the

Series B Senior Preferred Stock Stated Value set forth in Section 3(a) plus an

amount equal to all dividends (whether or not earned or declared) on such shares

accrued and unpaid thereon, the holders of the shares of Junior Convertible

Preferred Stock then outstanding shall be next entitled to be first paid out of

the assets of the Corporation available for distribution to its stockholders an

amount in cash equal to $100.00 per share (the "Junior Convertible Preferred

Stock Stated Value") plus an amount equal to all dividends (whether or not

earned or declared) on such shares accrued and unpaid thereon to the date of

final distribution, before any payment shall be made or any assets distributed

to the holders of any of the Junior Stock. Except as provided in the preceding

sentence, holders of the Junior Convertible Preferred Stock shall not be

entitled to any distribution in the event of liquidation, dissolution or winding

up of the affairs of the Corporation. If, upon any such liquidation, dissolution

or winding up of the Corporation, the remaining assets of the Corporation

available for distribution to its stockholders shall be insufficient to pay the

holders of the Junior Convertible Preferred Stock the full amount to which they

shall be entitled, the holders of the Junior Convertible Preferred Stock shall

share ratably in any distribution of the remaining assets and funds of the

Corporation in proportion to the respective amounts which would otherwise be

payable in

 

                                                                              92

<PAGE>

 

respect of the shares held by them upon such distribution if all amounts payable

on or with respect to such shares were paid in full.

 

          (c) For the purposes of this Section 3, neither the voluntary sale,

conveyance, exchange or transfer (for cash, shares of stock, securities or other

consideration) of all or substantially all the property or assets of the

Corporation nor the consolidation or merger of the Corporation with one or more

other corporations shall be deemed a liquidation, dissolution or winding up,

voluntary or involuntary.

 

          (d) The liquidation payment with respect to each outstanding

fractional share of Convertible Preferred Stock shall be equal to a ratably

proportionate amount of the liquidation payment with respect to each outstanding

share of Convertible Preferred Stock.

 

          4.  Voting Rights

              -------------

 

          (a) Right to Vote.  Except as otherwise required by law, the Senior

              -------------                                                 

Convertible Preferred Stock, the Junior Convertible Preferred Stock, the Common

Stock and any other capital stock of the Corporation entitled to vote with the

Common Stock shall be deemed to be one class for the purpose of voting, or

giving written consent in lieu of voting, on all matters submitted for the

approval of the stockholders of the Corporation.  Each person in whose name

shares of Convertible Preferred Stock shall be registered on the record date for

determining the holders of the Convertible Preferred Stock entitled to vote at

any meeting of stockholders (or adjournment thereof) or to consent to corporate

action in writing without a meeting shall be entitled to, at such meeting or

with respect to such action, one vote for each share of Common Stock of the

Corporation into which each share of Convertible Preferred Stock registered in

the name of such person on such record date could be converted (with any

fractional share determined on an aggregate conversion basis being rounded to

the nearest whole share).

 

          (b) Significant Events

              ------------------

 

              (i) During such time as any shares of Senior Convertible

     Preferred Stock are outstanding, the Corporation will not, without the

     affirmative vote or consent of the holders of at least two-thirds of the

     issued and outstanding shares of Senior Convertible Preferred Stock voting

     together as one single and separate class, (A) create, authorize or issue

     (including on conversion or exchange of any convertible or exchangeable

     securities or by

 

                                                                              93

<PAGE>

 

     reclassification) any class or series of shares ranking on a parity with or

     prior to the Senior Convertible Preferred Stock, either as to dividends

     upon voluntary or involuntary liquidation, dissolution or winding up, (B)

     increase the authorized shares of, or issue (including on conversion or

     exchange of any convertible or exchangeable securities or by

     reclassification) any shares of Senior Convertible Preferred Stock, (C)

     amend, alter, waive the application of, or repeal (whether by merger,

     consolidation or otherwise) any provision of the Certificate of

     Incorporation of the Corporation, enter into any agreement or take any

     other corporate action which in any manner would alter, change or otherwise

     adversely affect the powers, rights or preferences of the Senior

     Convertible Preferred Stock, (D) effect the reorganization,

     recapitalization, liquidation, dissolution or winding up of the

     Corporation, or the sale, lease, conveyance or exchange of all or

     substantially all of the assets, property or business of the Corporation,

     or the merger or consolidation of the Corporation with or into any other

     corporation, if such transaction in any manner would alter, change or

     otherwise adversely affect the powers, rights or preferences of the Senior

     Convertible Preferred Stock or (E) take any action which would cause a

     dividend or other distribution to be deemed to be received by the holders

     of the Senior Convertible Preferred Stock for federal income tax purposes

     unless such dividend or other distribution is actually received by such

     holders.

 

                    (ii) During such time as any shares of Junior Convertible

     Preferred Stock are outstanding, the Corporation will not, without the

     affirmative vote or consent of the holders of at least two-thirds of the

     issued and outstanding shares of Junior Convertible Preferred Stock voting

     together as a separate class, (A) create, authorize or issue (including on

     conversion or exchange of any convertible or exchangeable securities or by

     reclassification) any class or series of shares ranking on a parity with or

     prior to the Junior Convertible Preferred Stock, either as to dividends or

     redemption or upon voluntary or involuntary liquidation, dissolution or

     winding up, (B) increase the authorized shares of, or issue (including on

     conversion or exchange of any convertible or exchangeable securities or by

     reclassification) any shares of Junior Convertible Preferred Stock, (C)

     amend, alter, waive the application of, or repeal (whether by merger,

     consolidation or otherwise) any provision of the Certificate of

     Incorporation of the Corporation, enter into any agreement or take any

     other corporate action which in any manner would alter, change or otherwise

     adversely affect the powers, rights or preferences of the Junior

     Convertible Preferred Stock, (D) effect the

 

                                                                              94

<PAGE>

 

     reorganization, recapitalization, liquidation, dissolution or winding up of

     the Corporation, or the sale, lease, conveyance or exchange of all or

     substantially all of the assets, property or business of the Corporation,

     or the merger or consolidation of the Corporation with or into any other

     corporation, if such transaction in any manner would alter, change or

     otherwise adversely affect the powers, rights or preferences of the Junior

     Convertible Preferred Stock or (E) take any action which would cause a

     dividend or other distribution to be deemed to be received by the holders

     of the Junior Convertible Preferred Stock for federal income tax purposes

     unless such dividend or other distribution is actually received by such

     holders.

 

          (c) Written Consent.  Whenever holders of the Convertible Preferred

              ---------------                                               

Stock are required or permitted to take any action by vote, such action may be

taken without a meeting by written consent, setting forth the action so taken

and signed by the holders of the outstanding Senior Convertible Preferred Stock

or Junior Convertible Preferred Stock, as the case may be, having not less than

the minimum number of votes that would be necessary to authorize or take such

action at a meeting at which all such shares entitled to vote thereon were

present and voted.

 

          5.  Conversion.  Holders of the Convertible Preferred Stock shall

              ----------                                                  

have the following conversion rights (collectively, the "Conversion Rights"):

 

          (a) Right to Convert.  Each share of Series A Senior Preferred Stock,

              ----------------                                                

Series B Senior Preferred Stock and Junior Convertible Preferred Stock shall be

convertible, at the option of the holder thereof, at any time and from time to

time, into such number of validly issued, fully paid and nonassessable shares of

Common Stock of the Corporation, as is determined by dividing the Series A

Senior Preferred Stock Stated Value, the Series B Senior Preferred Stock Stated

Value or the Junior Convertible Preferred Stock Stated Value, as the case may

be, by the respective "Conversion Prices" (as defined below) in effect at the

time of the conversion; provided, however, that if such share shall be called

for redemption pursuant to Section 5(h), it may not be converted after the

redemption date unless the Corporation shall have failed to pay or provide for

the payment of the redemption price therefor (in accordance with Section 5(h)).

The Conversion Prices initially in effect shall be $ 2.6716 for the Series A

Senior Preferred Stock (the "Series A Senior Preferred Stock Conversion Price"),

$ 2.6564 for the Series B Senior Preferred Stock (the "Series B Senior Preferred

Stock Conversion Price"), and $5.6085 for the Junior Convertible Preferred Stock

(the "Junior Preferred Stock Conversion Price") (the Series A Senior Preferred

Stock Conversion Price, the Series

 

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<PAGE>

 

B Senior Preferred Stock Conversion Price, and the Junior Preferred Stock

Conversion Price, collectively the "Conversion Prices" and each individually, a

"Conversion Price"). Such initial Conversion Prices, and the rate at which

shares of Convertible Preferred Stock may be converted into shares of Common

Stock, shall be subject to adjustment as provided in Section 5(d) below.

 

          (b) Fractional Shares.  No fractional shares of Common Stock shall be

              -----------------                                               

issued upon conversion of the Convertible Preferred Stock, but in lieu thereof,

the Corporation shall pay a cash adjustment in respect of such fractional

interest in an amount equal to such fractional interest multiplied by the Market

Price of a share of Common Stock on the date on which such shares of Convertible

Preferred Stock are deemed to have been converted.

 

          (c) Mechanics of Conversion

              -----------------------

 

               (i) In order for a holder of the Convertible Preferred Stock to

     convert shares of Convertible Preferred Stock into shares of Common Stock,

     such holder shall surrender the certificate or certificates for such shares

     of Convertible Preferred Stock, at the office of the transfer agent for the

     Convertible Preferred Stock (or at the principal office of the Corporation

     if the Corporation serves as its own transfer agent), together with written

     notice that such holder elects to convert all or any number of the shares

     of the Convertible Preferred Stock represented by such certificate or

     certificates. Such notice shall state such holder's name or the names of

     the nominees in which such holder wishes the certificate or certificates

     for shares of Common Stock to be issued. If required by the Corporation,

     certificates surrendered for conversion shall be endorsed or accompanied by

     a written instrument or instruments of transfer, in form satisfactory to

     the Corporation, duly executed by the registered holder or his or its

     attorney duly authorized in writing. The date on which the transfer agent

     (or the Corporation, if the Corporation serves as its own transfer agent)

     receives such certificate or certificates and notice shall be the

     conversion date ("Conversion Date"). As soon as practicable, and in any

     event within five business days, after the Conversion Date, the Corporation

     shall issue and deliver, or cause to be issued and delivered, to such

     holder of Convertible Preferred Stock, or to his or its nominees, (i) a

     certificate or certificates for the number of validly issued, fully paid

     and nonassessable shares of Common Stock to which such holder shall be

     entitled upon conversion and (ii) if fewer than the full number of shares

     of Convertible Preferred Stock evidenced by the surrendered certificate or

 

                                                                              96

<PAGE>

 

     certificates are being converted, a new certificate or certificates of like

     tenor for the number of shares evidenced by such surrendered certificate or

     certificates less the number of shares converted.

 

               (ii) During such times as any shares of Convertible Preferred

     Stock are outstanding, the Corporation shall reserve and keep available out

     of its authorized but unissued stock, for the purpose of effecting the

     conversion of Convertible Preferred Stock, such number of its duly

     authorized shares of Common Stock as shall from time to time be sufficient

     to effect the conversion of all outstanding shares of Convertible Preferred

     Stock.

 

               (iii)   All shares of Convertible Preferred Stock which shall

     have been surrendered for conversion as herein provided shall no longer be

     deemed to be outstanding and all rights with respect to such shares

     (including the rights, if any, to receive notices and to vote) shall

     immediately cease and terminate on the Conversion Date, except only the

     right of the holders thereof to receive shares of Common Stock in exchange

     therefor. Such conversions shall be deemed to have been made at the close

     of business on the Conversion Date and the converting holder shall be

     treated for all purposes as having become the record holder of such Common

     Stock at such time. Any shares of Convertible Preferred Stock so converted

     shall be retired and canceled and shall not be reissued, and the

     Corporation may from time to time take such appropriate action as may be

     necessary to reduce the authorized Convertible Preferred Stock accordingly.

 

          (d)  Anti-dilution Provisions

               ------------------------

 

               (i)  Adjustments; Capital Stock. The Series A Senior Preferred

                    --------------------------

     Stock Conversion Price set forth above shall be subject to adjustment from

     time to time as hereinafter provided. For purposes of this Section 5, the

     term "Capital Stock" as used herein includes the Corporation's Common Stock

     and shall also include any capital stock of any class of the Corporation

     thereafter authorized which shall not be limited to a fixed sum or

     percentage in respect of the rights of the holders thereof to participate

     in dividends and in the distribution of assets upon the voluntary or

     involuntary liquidation, dissolution or winding up of the Corporation.

 

               (ii) Adjustment of Series A Senior Preferred Stock Conversion

                    --------------------------------------------------------

     Price Upon Issuance of Additional Shares of Capital Stock

     ---------------------------------------------------------

 

                                                                              97

<PAGE>

 

                    (A) In case the Corporation, at any time or from time to

          time after the Issue Date shall issue or sell Additional Shares of

          Capital Stock without considera-tion or for a consideration per share

          less than the greater of the Series A Senior Preferred Stock

          Conversion Price or the Market Price in effect, in each case, on the

          date of such issue or sale, then, and in each such case, subject to

          Section 5(d)(viii), the Series A Senior Preferred Stock Conversion

          Price shall be reduced, concurrently with such issue or sale, to a

          price (calculated to the nearest .001 of a cent) determined by

          multiplying such Series A Senior Preferred Stock Conversion Price by a

          fraction:

 

                    (1) the numerator of which shall be (a) the number of shares

               of Capital Stock outstanding immediately prior to such issue or

               sale plus (b) the number of shares of Capital Stock which the

               aggregate consideration received by the Corporation for the total

               number of such Additional Shares of Capital Stock so issued or

               sold would purchase at the greater of such Market Price or such

               Series A Senior Preferred Stock Conversion Price, and

 

                    (2) the denominator of which shall be the number of shares

               of Capital Stock outstanding immediately after such issue or

               sale,

 

     provided that, for the purposes of this Section 5(d)(ii)(A), (w)

     immediately after any Additional Shares of Capital Stock are deemed to have

     been issued pursuant to Section 5(d)(iii) or 5(d)(iv), such Additional

     Shares shall be deemed to be outstanding, and (x) treasury shares shall not

     be deemed to be outstanding; and provided further that, for the purposes of

     this Section 5(d)(ii)(A), (y) the crediting of shares of the Corporation's

     Common Stock to participating real estate salespersons under the

     Corporation's Deferred Equity Program which was adopted by the Corporation

     on October 18, 1989 shall cause an adjustment in the Series A Senior

     Preferred Stock Conversion Price concurrently with such crediting of the

     shares of the Corporation's Common Stock and (z) the issuance of such

     shares previously credited to participating real estate salespersons under

     the Corporation's Deferred Equity Program shall not cause an adjustment in

     the Series A Senior Preferred Stock Conversion Price.

 

                    (B) In case the Corporation, at any time or from time to

          time after the Issue Date, shall declare,

 

                                                                              98

<PAGE>

 

          order, pay or make a dividend or other distribution (including,

          without limitation, any distribution of other or additional stock or

          other securities or property or Options by way of dividend or spinoff,

          reclassification, recapitalization or similar corporate rearrangement)

          on the Capital Stock, other than (1) a dividend payable in Additional

          Shares of Capital Stock or in Options for Capital Stock or Convertible

          Securities or (2) a dividend payable in cash or other property and

          declared out of retained earnings of the Corporation, then, and in

          each such case, subject to Section 5(d)(viii), the Series A Senior

          Preferred Stock Conversion Price in effect immediately prior to the

          close of business on the record date fixed for the determination of

          holders of any class of securities entitled to receive such dividend

          or distribution shall be reduced, effective as of the close of

          business on such record date, to a price (calculated to the nearest

          .001 of a cent) determined by multiplying the Series A Senior

          Preferred Stock Conversion Price by a fraction:

 

                    (1)  the numerator of which shall be the Market Price in

               effect on such record date or, if any class of Capital Stock

               trades on an ex-dividend basis, on the date prior to the

               commencement of ex-dividend trading, less the value of such

               dividend or distribution which has not been declared out of

               retained earnings (as determined in good faith by the Board of

               Directors of the Corporation) applicable to one share of Capital

               Stock, and

 

          (2)  the denominator of which shall be such Market Price.

 

               (iii)  Treatment of Options and Convertible Securities.  In case

                      -----------------------------------------------

     the Corporation, at any time or from time to time after the Issue Date,

     shall issue, sell, grant or assume, or shall fix a record date for the

     determination of holders of any class of securities entitled to receive,

     any Options or Convertible Securities, then, and in each such case, the

     maximum number of Additional Shares of Capital Stock (as set forth in the

     instrument relating thereto, without regard to any provisions contained

     therein for a subsequent adjustment of such number) issuable upon the

     exercise of such Options or, in the case of Convertible Securities and

     Options therefor, the conversion or exchange of such Convertible

     Securities, shall be deemed to be Additional Shares of Capital Stock issued

     as of the time of such issue, sale, grant or assumption or, in case such a

    

 

                                                                              99

 

<PAGE>

 

     record date shall have been fixed, as of the close of business on such

     record date, provided that such Additional Shares of Capital Stock shall

     not be deemed to have been issued unless the consideration per share

     (determined pursuant to Section 5(d)(v)) of such shares would be less than

     the greater of the applicable Conversion Price or the Market Price in

     effect, in each case, on the date of and immediately prior to such issue,

     sale, grant or assumption or immediately prior to the close of business on

     such record date or, if the Capital Stock trades on an ex-dividend basis,

     on the date prior to the commencement of ex-dividend trading, as the case

     may be, and provided, further, that in any such case in which Additional

     Shares of Capital Stock are deemed to be issued,

 

                    (A) no further adjustment of the Series A Senior Preferred

          Conversion Price shall be made upon the subsequent issue or sale of

          Additional Shares of Capital Stock or Convertible Securities upon the

          exercise of such Options or the conversion or exchange of such

          Convertible Securities;

 

                    (B) if such Options or Convertible Securities by their terms

          provide, with the passage of time or otherwise, for any change in the

          consideration payable to the Corporation, or change in the number of

          Additional Shares of Capital Stock issuable, upon the exercise,

          conversion or exchange thereof (by change of rate or otherwise), the

          Conversion Price computed upon the original issue, sale, grant or

          assumption thereof (or upon the occurrence of the record date with

          respect thereto), and any subsequent adjustments based thereon, shall,

          upon any such change becoming effective, be recomputed to reflect such

          change insofar as it affects such Options, or the rights of conversion

          or exchange under such Convertible Securities, which are outstanding

          at such time;

 

                    (C) upon the expiration of any such Options or of the rights

          of conversion or exchange under any such Convertible Securities which

          shall not have been exercised (or upon purchase by the Corporation and

          cancellation or retirement of any such Options which shall not have

          been exercised or of any such Convertible Securities the rights of

          conversion or exchange under which shall not have been exercised), the

          Conversion Price computed upon the original issue, sale, grant or

          assumption thereon (or upon the occurrence of the record date with

          respect thereto), and any subsequent adjustments based thereon, shall,

 

                                                                             100

<PAGE>

 

          upon such expiration (or such cancellation or retirement, as the case

          may be), be recomputed as if:

 

                    (1) in the case of Options for Capital Stock or of

               Convertible Securities, the only Additional Shares of Capital

               Stock issued or sold (or deemed issued or sold) were the

               Additional Shares of Capital Stock, if any, actually issued or

               sold upon the exercise of such Options or the conversion or

               exchange of such Convertible Securities and the consideration

               received therefor were (a) an amount equal to (i) the

               consideration actually received by the Corporation for the issue,

               sale, grant or assumption of all such Options, whether or not

               exercised, plus (ii) the consideration actually received by the

               Corporation upon such exercise, minus (iii) the consideration

               paid by the Corporation for any purchase of such Options which

               were not exercised, or (b) an amount equal to (i) the

               consideration actually received by the Corporation for the issue,

               sale, grant or assumption of all such Convertible Securities

               which were actually converted or exchanged, plus (ii) the

               additional consideration, if any, actually received by the

               Corporation upon such conversion or exchange, minus (iii) the

               excess, if any, of the consideration paid by the Corporation for

               any purchase of such Convertible Securities, the rights of

               conversion or exchange under which were not exercised, over an

               amount that would be equal to the fair value (as determined in

               good faith by the Board of Directors of the Corporation) of the

               Convertible Securities so purchased if such Convertible

               Securities were not convertible into or exchangeable for

               Additional Shares of Capital Stock, and

 

                    (2) in the case of Options for Convertible Securities, only

               the Convertible Securities, if any, actually issued or sold upon

               the exercise of such Options were issued at the time of the

               issue, sale, grant or assumption of such Options, and the

               consideration received by the Corporation for the Additional

               Shares of Capital Stock deemed to have then been issued were an

               amount equal to (a) the consideration actually received by the

               Corporation for the issue, sale, grant or assumption of all such

               Options, whether or not exercised, plus (b) the consideration

               deemed to have been received by the Corporation (pursuant to

               Section 5(d)(v)) upon

 

                                                                             101

<PAGE>

 

               the issue or sale of the Convertible Securities with respect to

               which such Options were actually exer-cised, minus (c) the

               consideration paid by the Corporation for any purchase of such

               Options which were not exercised.

 

               (iv) Treatment of Stock Dividends, Stock Splits, Etc.; Certain

                    ---------------------------------------------------------

Stock Repurchases

-----------------

 

                    (A) In case the Corporation, at any time or from time to

          time after the Issue Date, shall declare or pay any dividend or other

          distribution on the Capital Stock payable in Capital Stock, or shall

          effect a subdivision of the outstanding shares of Capital Stock into a

          greater number of shares of Capital Stock (by reclassification or

          otherwise than by payment of a dividend in Capital Stock), then, and

          in each such case, Additional Shares of Capital Stock shall be deemed

          to have been issued (1) in the case of any such dividend, immediately

          after the close of business on the record date for the determination

          of holders of any class of securities entitled to receive such

          dividend, or (2) in the case of any such subdivision, at the close of

          business on the day immediately prior to the day upon which such

          corporate action becomes effective.

 

                    (B) If the Corporation at any time or from time to time

          after the Issue Date shall, directly or indirectly, including through

          a Subsidiary (as defined below) or otherwise, purchase, redeem or

          otherwise acquire (a "Repurchase") any of its Capital Stock at a price

          per share greater than the Market Price, then the Series A Senior

          Preferred Stock Conversion Price upon each such Repurchase shall be

          adjusted to the price determined by multiplying the Series A Senior

          Preferred Stock Conversion Price by a fraction (1) the numerator of

          which shall be the number of shares of Capital Stock outstanding

          immediately prior to the such Repurchase minus the number of shares of

          Capital Stock which the aggregate consideration for total repurchased

          Capital Stock would purchase at the Market Price; and (2) the

          denominator of which shall be the number of shares of Capital Stock

          outstanding immediately after such Repurchase. For the purposes of

          this Subsection 5(d)(iv)(B), the date as of which the Series A Senior

          Preferred Stock Conversion Price shall be computed shall be the

          earlier of (x) the date on which the Corporation shall enter into

          contract for the Repurchase of such Capital Stock, or (y) the date of

          the actual Repurchase of such Capital Stock. For

 

                                                                             102

<PAGE>

 

          purposes of this Section 5(d)(iv)(B), a Repurchase of Convertible

          Securities shall be deemed to be a Repurchase of the underlying

          Capital Stock, and the computation herein required shall be made on

          the basis of the full exercise, conversion or exchange for such

          Convertible Securities on the date as of which such computation is

          required hereby to be made even if such Convertible Securities are not

          exercisable, convertible or exchangeable on such date.

 

               (v)  Computation of Consideration. For the purposes of this

                    ----------------------------                          

Section 5:

 

                    (A) The consideration for the issue or sale of any

          Additional Shares of Capital Stock or for the issue, sale, grant or

          assumption of any Options or Convertible Securities, irrespective of

          the accounting treatment of such consideration,

 

                    (1) insofar as it consists of cash, shall be computed as the

               amount of cash received by the Corporation, and insofar as it

               consists of securities or other non-cash consideration, shall be

               computed as of the date immediately preceding such issue, sale,

               grant or assumption as the fair value (as determined in good

               faith by the Board of Directors of the Corporation) of such

               consideration (or, if such consideration is received for the

               issue or sale of Additional Shares of Capital Stock and the

               Market Price thereof is less than the fair value, as so

               determined, of such consideration, then such con-sideration shall

               be computed as the Market Price of such Additional Shares of

               Capital Stock), in each case without deducting any expenses paid

               or incurred by the Corporation, any commissions or compensation

               paid or concessions or discounts allowed to underwriters, dealers

               or others performing similar services and any accrued interest or

               dividends in connection with such issue or sale, and

 

                    (2) in case Additional Shares of Capital Stock are issued or

               sold or Options or Convertible Securities are issued, sold,

               granted or assumed together with other stock or securities or

               other assets of the Corporation for a consideration which covers

               both, shall be the proportion of such consideration so received,

               computed as provided in

 

                                                                             103

<PAGE>

 

               subsection (1) above, allocable to such Additional Shares of

               Capital Stock or Options or Convertible Securities, as the case

               may be, all as determined in good faith by the Board of Directors

               of the Corporation.

 

                    (B) All Additional Shares of Capital Stock, Options or

          Convertible Securities issued in payment of any dividend or other

          distribution on any class of stock of the Corporation and all

          Additional Shares of Capital Stock issued to effect a subdivision of

          the outstanding shares of Capital Stock into a greater number of

          shares of Capital Stock (by reclassification or otherwise than by

          payment of a dividend in Capital Stock) shall be deemed to have been

          issued without consideration.

 

                    (C) Additional Shares of Capital Stock deemed to have been

          issued for consideration pursuant to Section 5(d)(iii), relating to

          Options and Convertible Securities, shall be deemed to have been

          issued for a consideration per share determined by dividing

 

                    (1) the total amount, if any, received and receivable by the

               Corporation as consideration for the issue, sale, grant or

               assumption of the Options or Convertible Securities in question,

               plus the minimum aggregate amount of additional consideration (as

               set forth in the instruments relating thereto, without regard to

               any provision contained therein for a subsequent adjustment of

               such consideration) payable to the Corporation upon the exercise

               in full of such Options or the conversion or exchange of such

               Convertible Securities or, in the case of Options for Convertible

               Securities, the exercise of such Options for Convertible

               Securities and the conversion or exchange of such Convertible

               Securities, in each case comprising such consideration as

               provided in the foregoing subsection (A), by

 

                    (2) the maximum number of shares of Capital Stock (as set

               forth in the instruments relating thereto, without regard to any

               provision contained therein for a subsequent adjustment of such

               number) issuable upon the exercise of such Options or the

               conversion or exchange of such Convertible Securities.

 

                                                                             104

<PAGE>

 

                    (D) In case the Corporation shall issue any Additional

          Shares of Capital Stock, Options or Convertible Securities in

          connection with the acquisition by the Corporation of the stock or

          assets of any other corporation or the merger of any other corporation

          into the Corporation under circumstances where on the date of issue of

          such Additional Shares of Capital Stock, Options or Convertible

          Securities the consideration received for such Additional Shares of

          Capital Stock or deemed to have been received for the Additional

          Shares of Capital Stock deemed to be issued pursuant to Section

          5(d)(iii) is less than the Market Price of the Capital Stock in effect

          immediately prior to such issue but on the date the number of

          Additional Shares of Capital Stock or the amount and the exercise

          price or conversion price of such Options or Convertible Securities to

          be so issued were set forth in a binding agreement between the

          Corporation and the other party or parties to such transaction the

          consideration received for such Additional Shares of Capital Stock or

          deemed to have been received for the Additional Shares of Capital

          Stock deemed to be issued pursuant to Section 5(d)(iii) would not have

          been less than the Market Price of the Capital Stock then in effect,

          such Additional Shares of Capital Stock shall not be deemed to have

          been issued for less than the Market Price of the Capital Stock if

          such terms so set forth in such binding agreement are not changed

          prior to the date of issue.

 

                    (vi) Adjustments for Combinations, Etc.  In case the

                         ---------------------------------

     outstanding shares of Capital Stock shall be combined or consolidated, by

     reclassification or otherwise, into a lesser number of shares of Capital

     Stock, the Conversion Prices in effect immediately prior to such

     combination or consolidation shall, concurrently with the effectiveness of

     such combination or consolidation, be proportionately increased.

 

                    (vii)  Dilution in Case of Other Securities.  In case any

                           ------------------------------------       

     Other Securities shall be issued or sold or shall become subject to issue

     or sale upon the conversion or ex-change of any securities of the

     Corporation or to subscription, purchase or other acquisition pursuant to

     any options issued or granted by the Corporation for a consideration such

     as to dilute, on a basis to which the standards established in the other

     provisions of this Section 5 are applicable, the conversion rights of the

     holders of the Series A Senior Preferred Stock, then, and in

 

                                                                             105

<PAGE>

 

     each such case, the computations, adjustments and readjustments provided

     for in this Section 5 with respect to the applicable Conversion Price shall

     be made as nearly as possible in the manner so provided and applied to

     determine the amount of Other Securities from time to time receivable upon

     the conversion of the Series A Senior Preferred Stock, so as to protect the

     holders of the Series A Senior Preferred Stock against the effect of such

     dilution.

 

                    (viii)  Minimum Adjustment and Timing of Adjustment of

                            ----------------------------------------------

Conversion Price

----------------

 

                    (A) If the amount of any adjustment of the Series A Senior

          Preferred Stock Conversion Price required pursuant to this Section 5

          would be less than one percent (1%) of such Conversion Price in effect

          at the time such adjustment is otherwise so required to be made, such

          amount shall be carried forward and adjustment with respect thereto

          made at the time of and together with any subsequent adjustment which,

          together with such amount and any other amount or amounts so carried

          forward, shall aggregate at least one percent (1%) of such Conversion

          Price; provided that, upon the conversion of any shares of Series A

          Senior Preferred Stock, all adjustments carried forward and not

          theretofore made up to and including the date of such conversion

          shall, with respect to the Series A Senior Preferred Stock then

          converted, be made to the nearest .001 of a cent.

 

                    (B) Each Series A Senior Preferred Conversion Price shall be

          adjusted within 90 days of the end of each fiscal year of the

          Corporation with respect to events subject to the anti-dilution

          provisions of the Series A Senior Preferred Stock which have occurred

          during such fiscal year; provided that, upon the conversion of any

          shares of Series A Senior Preferred Stock, all adjustments carried

          forward and not theretofore made up to and including the date of such

          conversion shall, with respect to the shares of Series A Senior

          Preferred Stock then converted, be made to the nearest .001 of a cent

          and provided further that the applicable Series A Senior Preferred

          Conversion Price shall also be adjusted prior to any transfer or other

          disposition of any Series A Senior Preferred Stock and promptly at any

          time upon the request of the holder of any Series A Senior Preferred

          Stock, subject to the provisions of clause 5(d)(viii)(A) above.

 

                                                                             106

<PAGE>

 

               (ix) Changes in Capital Stock; Series A Senior Preferred Stock. 

                    ---------------------------------------------------------

     In case at any time the Corporation shall be a party to any transaction

     (including, without limitation, a merger, consolidation, sale of all or

     substantially all of the Corporation's assets, liquidation or

     recapitalization of the Capital Stock) in which the previously outstanding

     Capital Stock shall be changed into or exchanged for different securities

     of the Corporation or common stock or other securities of another

     corporation or interests in a noncorporate entity or other property

     (including cash) or any combination of any of the foregoing or in which the

     Capital Stock ceases to be a publicly traded security either listed on the

     New York Stock Exchange or the American Stock Exchange or quoted by NASDAQ

     or any successor thereto or comparable system (each such transaction being

     herein called the "Transaction," the date of consummation of the

     Transaction being herein called the "Consummation Date," the Corporation

     (in the case of a recapitalization of the Capital Stock or any other such

     transaction in which the Corporation retains substantially all of its

     assets and survives as a corporation) or such other corporation or entity

     (in each other case) being herein called the "Acquiring Company," and the

     common stock (or equivalent equity interests) of the Acquiring Company

     being herein called the "Acquirer's Common Stock"), then, as a condition of

     the consummation of the Transaction, lawful and adequate provisions shall

     be made so that each holder of Series A Senior Preferred Stock, upon the

     conversion thereof at any time on or after the Consummation Date (but

     subject, in the case of an election pursuant to clause (B) or (C) below, to

     the time limitation hereinafter provided for such election),

 

                    (A) shall be entitled to receive, and any Series A Senior

          Preferred Stock shall thereafter represent the right to receive, in

          lieu of the Common Stock issuable upon such conversion prior to the

          Consummation Date, such number of shares of the Acquirer's Common

          Stock as are issuable in exchange for each share of Common Stock,

          unless the Acquiring Company fails to meet the requirements set forth

          in clauses (D), (E) and (F) below, in which case shares of the common

          stock of the corporation (herein called a "Parent") which directly or

          indirectly controls the Acquiring Company if it meets the requirements

          set forth in clauses (D), (E) and (F) below, at an aggregate

          conversion price for such number of shares equal to the lesser of (1)

          the Conversion Price in effect immediately prior to the Consummation

          Date multiplied by a fraction the numerator of which is the aggregate

          market price for such number of shares

 

                                                                             107

<PAGE>

 

          (determined in the same manner as provided in the definition of Market

          Price) of the Acquirer's Common Stock or the Parent's common stock, as

          the case may be, immediately prior to the Consummation Date and the

          denominator of which is the Market Price per share of Common Stock

          immediately prior to the Consummation Date, or (2) the aggregate

          market price for such number of shares (as so determined) of the

          Acquirer's Common Stock or the Parent's common stock, as the case may

          be, immediately prior to the Consummation Date (subject in each case

          to adjustments from and after the Consummation Date as nearly

          equivalent as possible to the adjustments provided for in this Section

          5),

 

     or at the election of the holder of such Series A Senior Preferred Stock

     pursuant to notice given to the Corporation on or before the later of (1)

     the thirtieth day following the Consummation Date, and (2) the sixtieth day

     following the date of delivery or mailing to such holder of the last proxy

     statement relating to the vote on the Transaction by the holders of the

     Capital Stock,

 

                    (B) shall be entitled to receive, and any Series A Senior

          Preferred Stock shall thereafter represent the right to receive, in

          lieu of the Capital Stock issuable upon such conversion prior to the

          Consummation Date, the highest amount of securities or other property

          to which such holder would actually have been entitled as a

          stockholder upon the consummation of the Transaction if such holder

          had converted such Series A Senior Preferred Stock immediately prior

          thereto (subject to adjustments from and after the Consummation Date

          as nearly equivalent as possible to the adjustments provided for in

          this Section 5), provided that if a purchase, tender or exchange offer

          shall have been made to and accepted by the holders of more than 50%

          of the outstanding shares of Capital Stock, and if the holder of such

          Series A Senior Preferred Stock so designates in such notice given to

          the Corporation, the holder of such Series A Senior Preferred Stock

          shall be entitled to receive in lieu thereof, the highest amount of

          securities or other property to which such holder would actually have

          been entitled as a stockholder if such holder had converted such

          Series A Senior Preferred Stock prior to the expiration of such

          purchase, tender or exchange offer and accepted such offer (subject to

          adjustments from and after the consummation of such purchase, tender

          or exchange offer as nearly equivalent as possible to the adjustments

          provided for in this Section 5),

 

                                                                             108

<PAGE>

 

     or, if neither the Acquiring Company nor the Parent meets the requirements

     set forth in clauses (D), (E) and (F) below, at the election of the holder

     of Series A Senior Preferred Stock pursuant to notice given to the

     Corporation on or before the later of (1) the thirtieth day following the

     Consummation Date, and (2) the sixtieth day following the date of delivery

     or mailing to such holder of the last proxy statement relating to the vote

     on the Transaction by the holders of the Common Stock,

 

                    (C) shall be entitled to receive, within 15 days after such

          election, in full satisfaction of the Conversion Rights afforded to

          the Series A Senior Preferred Stock held by such holder under this

          Section 5, an amount equal to the fair market value of such conversion

          rights as determined by an independent investment banker (with an

          established national reputation as a valuer of equity securities)

          selected by the Corporation, such fair market value to be determined

          with regard to all material relevant factors but without regard to the

          effects on such value of the Transaction.

 

     The Corporation agrees to obtain, and deliver to each holder of Series A

     Senior Preferred Stock a copy of, the determination of an independent

     investment banker (selected by the Corporation and reasonably satisfactory

     to the holders of Series A Senior Preferred Stock) necessary for the

     valuation under clause (C) above within 15 days after the Consummation Date

     of any Transaction to which clause (C) is applicable.

 

                    The requirements referred to above in the case of the

     Acquiring Company or its Parent are that immediately after the Consummation

     Date:

 

                    (D) it is a solvent corporation organized under the laws of

          any State of the United States of America having its common stock

          listed on the New York Stock Exchange or the American Stock Exchange

          or quoted by NASDAQ or any successor thereto or comparable system, and

          such common stock continues to meet such requirements for such listing

          or quotation,

 

                    (E) it is required to file, and in each of its three fiscal

          years immediately preceding the Consummation Date has filed, reports

          with the Securities and Exchange Commission pursuant to Section

 

                                                                             109

<PAGE>

 

          13 or 15(d) of the Securities Exchange Act of 1934, as amended, and

 

                    (F) in the case of the Parent, such Parent is required to

          include the Acquiring Company in the consolidated financial statements

          contained in the Parent's Annual Report on Form 10-K as filed with the

          Securities and Exchange Commission and is not itself included in the

          consolidated financial statements of any other Person (other than its

          consolidated subsidiaries).

 

     Notwithstanding anything contained herein to the contrary, the Corporation

     shall not effect any Transaction unless prior to the consummation thereof

     each corporation or entity (other than the Corporation) which may be

     required to deliver any securities or other property upon the conversion of

     Series A Senior Preferred Stock, the surrender of Series A Senior Preferred

     Stock or the satisfaction of conversion rights as provided herein shall

     assume, by written instrument delivered to each holder of Series A Senior

     Preferred Stock, the obligation to deliver to such holder such securities

     or other property to which, in accordance with the foregoing provisions,

     such holder may be entitled, and such corporation or entity shall have

     similarly delivered to each holder of Series A Senior Preferred Stock an

     opinion of counsel for such corporation or entity, satisfactory to each

     holder of Series A Senior Preferred Stock, which opinion shall state that

     all the outstanding Series A Senior Preferred Stock, including, without

     limitation, the conversion provisions applicable thereto, if any, shall

     thereafter continue in full force and effect and shall be enforceable

     against such corporation or entity in accordance with the terms hereof and

     thereof, together with such other matters as such holders may reasonably

     request.

 

               (x) Treatment of Stock Dividends, Stock Splits, Etc.; Certain

                   ---------------------------------------------------------

     Transactions.  In case the Corporation, at any time or from time to time

     ------------                                                       

     after the Issue Date, shall be a party to any Transaction, each holder of

     Series B Senior Preferred Stock and each holder of Junior Convertible

     Preferred Stock, upon the exercise thereof at any time on or after the

     Consummation Date shall be entitled to receive, and such Series B Senior

     Preferred Stock and Junior Convertible Preferred Stock shall thereafter

     represent the right to receive, in lieu of the Common Stock issuable upon

     conversion prior to the Consummation Date the kind and amount of securities

     or property (including cash) which it would have owned or have been

     entitled to receive after the happening of such Transaction had such Series

     B Senior

 

                                                                             110

<PAGE>

 

     Preferred Stock or Junior Convertible Preferred Stock been converted

     immediately prior to such Transaction.

 

               Notwithstanding anything contained herein to the contrary, the

     Corporation shall not effect any Transaction unless prior to the

     consummation thereof each corporation or entity (including, without

     limitation, the Corporation) which may be required to deliver any

     securities or property (including cash) upon the conversion of Series B

     Senior Preferred Stock or Junior Convertible Preferred Stock, the surrender

     of Series B Senior Preferred Stock or Junior Convertible Preferred Stock or

     the satisfaction of conversion rights as provided herein shall assume, by

     written instrument delivered to each holder of Series B Senior Preferred

     Stock or Junior Convertible Preferred Stock, the obligation to deliver to

     such holder such securities or other property to which, in accordance with

     the foregoing provisions, such holder may be entitled, and such corporation

     or entity shall have similarly delivered to each holder of Series B Senior

     Preferred Stock or Junior Convertible Preferred Stock an opinion of counsel

     for such corporation or entity, satisfactory to each such holder, which

     opinion shall state that all the rights and privileges, including without

     limitation, conversion privileges of the Series B Senior Preferred Stock

     and the Junior Convertible Preferred Stock shall thereafter continue in

     full force and effect and shall be enforceable against such corporation or

     entity in accordance with the terms hereof and thereof, together with such

     other matters as such holders may reasonably request.

 

               In case the Corporation shall (i) pay a dividend in shares of

     Capital Stock or securities convertible into Capital Stock or make a

     distribution to all holders of shares of Capital Stock in shares of Capital

     Stock or securities convertible into Capital Stock, (ii) subdivide its

     outstanding shares of Capital Stock, (iii) combine its outstanding shares

     of Capital Stock into a smaller number of shares of Capital Stock or (iv)

     issue by reclassification of its shares of Capital Stock other securities

     of the Corporation, the Series B Preferred Stock Conversion Price and the

     Junior Preferred Stock Conversion Price shall be adjusted (to the nearest

     cent) by multiplying, (x) in the case of the Series B Senior Preferred

     Stock, the Series B Preferred Stock Conversion Price immediately prior to

     such adjustment by a fraction, of which the numerator shall be the number

     of shares of Capital Stock outstanding immediately prior to the occurrence

     of such event, and of which the denominator shall be the number of shares

     of Capital Stock outstanding (including any convertible 

 

                                                                             111

<PAGE>

 

     securities issued pursuant to clause (i) or (iv) above on an as converted

     basis) immediately thereafter, or (y) in the case of the Junior Preferred

     Stock Conversion Price, the Junior Preferred Stock Conversion Price

     immediately prior to such adjustment by a fraction, of which the numerator

     shall be the number of shares of Capital Stock outstanding immediately

     prior to the occurrence of such event, and of which the denominator shall

     be the number of shares of Capital Stock outstanding (including any

     convertible securities issued pursuant to clause (i) or (iv) above on an as

     converted basis) immediately thereafter. An adjustment made pursuant to the

     foregoing sentence shall become effective immediately after the effective

     date of such event retroactive to the record date, if any, for such event.

 

               (xi) Certain Issues and Repurchases Excepted.  Anything herein

                    ---------------------------------------             

     to the contrary notwithstanding, the Corporation shall not be required to

     make any adjustment of the Series A Senior Preferred Conversion Prices in

     the case of (A) the issuance of shares of the Senior Convertible Preferred

     Stock on the Issue Date and the issuance of shares of Series A Senior

     Preferred Stock and Series B Senior Preferred Stock pursuant to this

     Article IV upon the filing of the Certificate of Amendment as described

     herein, (B) the issuance of shares of the Junior Convertible Preferred

     Stock on the Issue Date, (C) the issuance of warrants to purchase shares of

     Common Stock (the "Warburg Warrants") concurrently with the issuance of the

     Senior Convertible Preferred Stock on January 29, 1993 (the "Restructuring

     Date"), and any amendments to such Warburg Warrants through the date of

     filing of the Certificate of Amendment, (D) the issuance to The Prudential

     Insurance Company of America ("Prudential") of warrants to purchase shares

     of Common Stock (the "New Prudential Warrants") concurrently with the

     issuance of the Junior Convertible Preferred Stock, and any amendments to

     such New Prudential Warrants through the date of filing of the Certificate

     of Amendment, (E) the issuance of warrants to purchase shares of Common

     Stock (the "1994 Warrants") concurrently with the filing of this

     Certificate of Amendment, and any amendments to such 1994 Warrants, (F) the

     issuance of shares of Capital Stock issuable upon conversion of the

     Convertible Preferred Stock or upon exercise of the Warburg Warrants, the

     New Prudential Warrants, the 1994 Warrants, the Stock Subscription Warrant,

     dated as of November 25, 1986, by the Corporation to Prudential or any

     other Option or right outstanding on the Issue Date to purchase or

     otherwise acquire Capital Stock, (G) the granting by the Corporation, after

     the Issue Date, of Options to purchase Capital Stock or the sale or grant,

     after the Issue Date, of Capital Stock, pursuant to option 

 

                                                                             112

<PAGE>

 

     or stock purchase plans or agreements, or other incentive compensation

     plans or agreements, heretofore or hereafter adopted in respect of, or

     entered into with, directors, officers, employees or salespersons (other

     than pursuant to the Corporation's Preferred Equity Program) of the

     Corporation or any of its Subsidiaries in connection with their employment,

     being directors or acting as salesperson, provided that the consideration

     for the sale or grant of any such Options or Capital Stock (including the

     exercise price of any Option) is at least equal to the Market Price of such

     shares of Capital Stock on the date such Options are granted or the date

     established by any such plan for a purchase thereunder, as the case may be,

     (H) the Repurchase from any director, officer, employee or salesperson of

     the Corporation or any Subsidiary of any Option or share of Capital Stock

     upon his resignation or other termination from being a director, officer,

     employee or salesperson of the Corporation or any Subsidiary or (I) the

     issuance of shares of Common Stock in payment of the redemption price of

     the Rights issued pursuant to the Rights Agreement, dated as of March 13,

     1989, as amended, between the Corporation and Bank of America N.T. & S.A.,

     as Rights Agent.

 

               (xii)  Notice of Adjustment.  Upon the occurrence of any event

                      --------------------                                  

     requiring an adjustment of any Conversion Price, then and in each such case

     the Corporation shall promptly deliver to each holder of Convertible

     Preferred Stock a certificate signed by the President or any Vice President

     and the Secretary or any Assistant Secretary of the Corporation (an

     "Officers' Certificate") stating the applicable Conversion Price resulting

     from such adjustment and the increase or decrease, if any, in the number of

     shares of Common Stock issuable upon conversion of such Convertible

     Preferred Stock, setting forth in reasonable detail the method of

     calculation and the facts upon which such calculation is based. Within 90

     days after each fiscal year in which any such adjustment shall have

     occurred, or within 30 days after any request therefor by any holder of

     Convertible Preferred Stock stating that such holder contemplates

     conversion of such Convertible Preferred Stock, the Corporation will obtain

     and deliver to each holder of Convertible Preferred Stock the opinion of

     its regular independent auditors or another firm of independent public

     accountants of recognized national standing selected by the Corporation's

     Board of Directors who are satisfactory to the registered holders of a

     majority of the Convertible Preferred Stock, which opinion shall confirm

     the statements in the most recent Officers' Certificate delivered under

     this Section 5(d)(xi). It is understood and agreed that the independent

     public accountant rendering any such opinion 

 

                                                                             113

<PAGE>

 

     shall be entitled expressly to assume in such opinion the accuracy of any

     determination of fair value made by the Board of Directors of the

     Corporation pursuant to Section 5(d)(v).

 

               (xiii)  Other Notices.  In case at any time:

                       -------------                      

 

                    (A) the Corporation shall declare or pay to the holders of

          Capital Stock any dividend other than a regular periodic cash dividend

          or any periodic cash dividend in excess of 115% of the cash dividend

          for the comparable fiscal period in the immediately preceding fiscal

          year;

 

                    (B) the Corporation shall declare or pay any dividend upon

          Capital Stock payable in stock or make any special dividend or other

          distribution (other than regular cash dividends) to the holders of

          Capital Stock;

 

                    (C) the Corporation shall offer for subscription pro rata to

          the holders of Capital Stock any additional shares of stock of any

          class or other rights;

 

                    (D) there shall be any capital reorganization, or

          reclassification of the Capital Stock of the Corporation, or

          consolidation or merger of the Corporation with, or sale of all or

          substantially all of its assets to, another corporation or other

          entity;

 

                    (E) there shall be a voluntary or involuntary dissolution,

          liquidation or winding-up of the Corporation; or

 

                    (F) there shall be any other Transaction;

 

     then, in any one or more of such cases, the Corporation shall give to each

     holder of Convertible Preferred Stock (1) at least 15 days prior to any

     event referred to in clause (A) or (B) above, at least 30 days prior to any

     event referred to in clause (C), (D) or (E) above, and within five business

     days after it has knowledge of any pending Transaction, written notice of

     the date on which the books of the Corporation shall close or a record

     shall be taken for such dividend, distribution or subscription rights or

     for determining rights to vote in respect of any such reorganization,

     reclassification, consolidation, merger, sale, dissolution, liquidation,

     winding-up or Transaction

 

                                                                             114

<PAGE>

 

     and (2) in the case of any such reorganization, reclassification,

     consolidation, merger, sale, dissolution, liquidation, winding-up or

     Transaction known to the Corporation, at least 30 days prior written notice

     of the date (or, if not then known, a reasonable approximation thereof by

     the Corporation) when the same shall take place. Such notice in accordance

     with the foregoing clause (1) shall also specify, in the case of any such

     dividend, distribution or subscription rights, the date on which the

     holders of Capital Stock shall be entitled thereto, and such notice in

     accordance with the foregoing clause (2) shall also specify the date on

     which the holders of Capital Stock shall be entitled to exchange their

     Capital Stock for securities or other property deliverable upon such

     reorganization, reclassification, consolidation, merger, sale, dissolution,

     liquidation, winding-up or Transaction, as the case may be. Such notice

     shall also state that the action in question or the record date is subject

     to the effectiveness of a registration statement under the Securities Act

     of 1933, as amended, or to a favorable vote of security holders, if either

     is required.

 

               (xiv)   Certain Events.  If any event occurs as to which, in

                       --------------                                  

     the good faith judgment of the Board of Directors of the Corporation, the

     other provisions of this Section 5 are not strictly applicable or if

     strictly applicable would not fairly protect the conversion rights of the

     holders of the Series A Senior Preferred Stock in accordance with the

     essential intent and principles of such provisions, then the Board of

     Directors of the Corporation shall appoint its regular independent auditors

     or another firm of independent public accountants of recognized national

     standing who are satisfactory to the holders of a majority of the Series A

     Senior Preferred Stock which shall give their opinion upon the adjustment,

     if any, on a basis consistent with such essential intent and principles,

     necessary to preserve, without dilution, the rights of the holders of the

     Series A Senior Preferred Stock. Upon receipt of such opinion, the Board of

     Directors of the Corporation shall forthwith make the adjustments described

     therein; provided, that no such adjustment shall have the effect of

     increasing any Series A Senior Preferred Stock Conversion Price as

     otherwise determined pursuant to this Section 5. The Corporation may make

     such reductions in the Series A Senior Preferred Conversion Price or

     increase in the number of shares of Common Stock purchasable here-under as

     it deems advisable, including any reductions or increases, as the case may

     be, necessary to ensure that any event treated for Federal income tax

     purposes as a

 

                                                                             115

<PAGE>

 

     distribution of stock or stock rights not be taxable to recipients.

 

          (e) No Impairment.  The Corporation shall not, by amendment of its

              --------------                                               

Certificate of Incorporation or through any reorganization, transfer of assets,

consolidation, merger, dissolution, issue or sale of securities or any other

voluntary action, avoid or seek to avoid the observance or performance of any of

the terms to be observed or performed hereunder by the Corporation, but shall at

all times in good faith assist in the carrying out of all the provisions of this

Section 5 and in the taking of all such action as may be necessary or

appropriate in order to protect the Conversion Rights of the holders of the

Series A Senior Preferred Stock against impairment.

 

          (f) Mandatory Conversion.  If (i) at all times during a two-year

              --------------------                                       

period prior to the date of conversion the ratio of Consolidated Debt to EBITDA

(each as defined below) of the Corporation has not exceeded 3.0:1.0, (ii) on

each Trading Day during a six-month period prior to the date of conversion the

Daily Market Price of the Common Stock has exceeded $8.75 per share, subject to

proportionate adjustment whenever there shall occur a stock split, combination,

reclassification or other similar event involving the Common Stock, and (iii)

the Corporation is in full compliance with all of the terms and conditions of

all agreements pursuant to which the Corporation or any Subsidiary shall have

incurred Indebtedness for borrowed money all, but not less than all, of the then

outstanding shares of Convertible Preferred Stock shall be converted into shares

of Common Stock as provided below. The Corporation shall provide written notice

of the occurrence of the foregoing events giving rise to such mandatory

conversion by United States certified or registered mail, postage prepaid,

mailed not more than 30 days thereafter to all holders of record of the shares

to be converted at such holders' addresses as the same appear on the stock

register of the Corporation. Each such notice shall state the proposed date on

which such mandatory conversion will occur (which date shall not be fewer than

30 days after the date notice thereof is received), the applicable Conversion

Price and the place or places where certificates for shares of the Convertible

Preferred Stock are to be surrendered for conversion. From and after the date of

mandatory conversion, the certificates for the Convertible Preferred Stock shall

be deemed to represent only the shares of Common Stock into which such shares of

Convertible Preferred Stock shall have been converted. The Holder of such

certificates shall surrender such certificates for conversion upon and pursuant

to the request of the Corporation.

 

          (g) Certain Definitions.  For purposes of this Article IV, the

              -------------------                                      

following terms shall have the following meanings:

 

                                                                             116

<PAGE>

 

               (i)  "Additional Shares of Capital Stock" shall mean all shares

                    ------------------------------------             

          (including treasury shares) of Capital Stock issued or sold (or,

          pursuant to Sections 5(d)(iii) or 5(d)(iv) deemed to be issued) by the

          Corporation after the Issue Date, whether or not subsequently

          reacquired or retired by the Corporation, other than shares of Common

          Stock issued upon the conversion of the Convertible Preferred Stock.

 

                    (ii)  "Consolidated Debt" shall mean with respect to any

                          -------------------                               

          Person, the total Indebtedness of such Person and its Subsidiaries on

          a consolidated basis determined in accordance with GAAP.

 

               (iii)  "Convertible Securities" shall mean any evidences of

                      ------------------------                        

          indebtedness, shares of stock (other than Common Stock) or securities

          directly or indirectly convertible into or exchangeable for Additional

          Shares of Capital Stock.

 

               (iv)  "Daily Market Price" shall mean, on any date specified

                     --------------------                                 

          herein, (A) if any class of Capital Stock is listed or admitted to

          trading on any national securities exchange, the average of the high

          and low sale price of shares of each such class of Capital Stock or if

          no such sale takes place on such date, the average of the highest

          closing bid and lowest closing asked prices thereof on such date, in

          each case as officially reported on all national securities exchanges

          on which each such class of Capital Stock is then listed or admitted

          to trading, or (B) if no shares of any class of Capital Stock are then

          listed or admitted to trading on any national securities exchange, the

          highest closing price of any class of Capital Stock on such date in

          the over-the-counter market as shown by NASDAQ or, if no such shares

          of any class of Capital Stock are then quoted in such system, as

          published by the National Quotation Bureau, Incorporated or any

          similar successor organization, and in either case as reported by any

          member firm of the New York Stock Exchange selected by the

          Corporation. If no shares of any class of Capital Stock are then

          listed or admitted to trading on any national securities exchange and

          if no closing bid and asked prices thereof are then so quoted or

          published in the over-the-counter market, "Daily Market Price" shall

          mean the higher of (x) the book value per share of Capital Stock

          (assuming for the purposes of this

 

                                                                             117

<PAGE>

 

          calculation the economic equivalence of all shares of all classes of

          Capital Stock) as determined on a fully diluted basis in accordance

          with generally accepted accounting principles by a firm of independent

          public accountants of recognized standing (which may be its regular

          auditors) selected by the Board of Directors of the Corporation as of

          the last day of any month ending within 60 days preceding the date as

          of which the determination is to be made or (y) the fair value per

          share of Capital Stock (assuming for the purposes of this calculation

          the economic equivalence of all shares of all classes of Capital

          Stock), as determined on a fully diluted basis in good faith by an

          independent brokerage firm or Standard & Poor's Corporation (as

          selected by the Board of Directors of the Corporation), as of a date

          which is 15 days preceding the date as of which the determination is

          to be made.

 

               (v)  "EBITDA" shall mean, with respect to any Person, for any

                    --------                                         

          period, the sum of (A) the net income of such Person and its

          Subsidiaries on a consolidated basis before taxes, excluding

          extraordinary items and income or loss from discontinued operations,

          (B) total interest expense of such Person and its Subsidiaries on a

          consolidated basis and (C) depreciation and amortization for such

          Person and its Subsidiaries on a consolidated basis.

 

               (vi)  "GAAP" shall mean generally accepted accounting principles

                     ------                                                  

          set forth in the opinions and pronouncements of the Accounting

          Principles Board of the American Institute of Certified Public

          Accountants and statements and pronouncements of the Financial

          Accounting Standards Board or in such other statements by such other

          entity as may be approved by a significant segment of the accounting

          profession.

 

               (vii)  "Indebtedness" shall mean, with respect to any Person, all

                      --------------                                           

          items (excluding items of contingency reserves or of reserves for

          deferred income taxes) which in accordance with GAAP would be included

          in determining total liabilities as shown on the liability side of a

          balance sheet of such Person as of the date on which Indebtedness is

          to be determined.

 

               (viii)  "Issue Date" shall mean the date on which shares of

                       ------------                                     

          Convertible Preferred Stock are first issued by the Corporation.

          "Issue Date" with respect to the shares of Series A Senior Preferred

          Stock and Series B Senior Preferred Stock outstanding on the date of

 

                                                                             118

<PAGE>

 

          filing of the Certificate of Amendment shall be deemed to be the date

          of issuance of the respective shares of Existing Senior Convertible

          Preferred Stock which were exchanged for or converted into such shares

          of Series A Senior Preferred Stock and Series B Senior Preferred

          Stock.

 

               (ix)  "Market Price" shall mean, on any date specified herein,

                     --------------                                   

          (A) if any class of Capital Stock is listed or admitted to trading on

          any national securities exchange, the highest price obtained by taking

          the arithmetic mean over a period of 20 consecutive Trading Days

          ending the second Trading Day prior to such date of the average, on

          each such Trading Day, of the high and low sale price of shares of

          each such class of Capital Stock or if no such sale takes place on

          such date, the average of the highest closing bid and lowest closing

          asked prices thereof on such date, in each case as officially reported

          on all national securities exchanges on which each such class of

          Capital Stock is then listed or admitted to trading, or (B) if no

          shares of any class of Capital Stock are then listed or admitted to

          trading on any national securities exchange, the highest closing price

          of any class of Capital Stock on such date in the over-the-counter

          market as shown by NASDAQ or, if no such shares of any class of

          Capital Stock are then quoted in such system, as published by the

          National Quotation Bureau, Incorporated or any similar successor

          organization, and in either case as reported by any member firm of the

          New York Stock Exchange selected by the Corporation. If no shares of

          any class of Capital Stock are then listed or admitted to trading on

          any national securities exchange and if no closing bid and asked

          prices thereof are then so quoted or published in the over-the-counter

          market, "Market Price" shall mean the higher of (x) the book value per

          share of Capital Stock (assuming for the purposes of this calculation

          the economic equivalence of all shares of all classes of Capital

          Stock) as determined on a fully diluted basis in accordance with

          generally accepted accounting principles by a firm of independent

          public accountants of recognized standing (which may be its regular

          auditors) selected by the Board of Directors of the Corporation as of

          the last day of any month ending within 60 days preceding the date as

          of which the determination is to be made or (y) the fair value per

          share of Capital Stock (assuming for the purposes of this calculation

          the economic equivalence of all shares of all classes of Capital

          Stock), as determined on a

 

                                                                             119

<PAGE>

 

          fully diluted basis in good faith by an independent brokerage firm or

          Standard & Poor's Corporation (as selected by the Board of Directors

          of the Corporation), as of a date which is 15 days preceding the date

          as of which the determination is to be made.

 

                    (x)  "Options" shall mean rights, options or warrants to

                         ---------                                          

          subscribe for, purchase or otherwise acquire either Additional Shares

          of Capital Stock or Convertible Securities.

 

               (xi)  "Other Securities" shall mean any stock (other than

                     ------------------                                   

          Capital Stock) and any other securities of the Corporation or any

          other Person (corporate or otherwise) which the holders of the

          Convertible Preferred Stock at any time shall be entitled to receive,

          or shall have received, upon the conversion or partial conversion of

          the Convertible Preferred Stock, in lieu of or in addition to Common

          Stock, or which at any time shall be issuable or shall have been

          issued in exchange for or in replacement of Common Stock or Other

          Securities pursuant to Section 5(d)(ix) or otherwise.

 

                    (xii)  "Person" shall mean any individual, firm,

                           --------                                  

          corporation or other entity, and shall include any successor (by

          merger or otherwise) of such entity.

 

               (xiii)  "Subsidiary" shall mean any corporation or other entity

                       ------------                                   

          the majority of the outstanding voting shares of which is at the time

          owned (either alone or through Subsidiaries or together with

          Subsidiaries) by the Corporation or another Subsidiary.

 

               (xiv)  "Trading Day" shall mean any day on which the New York

                      -------------                                     

          Stock Exchange is open for trading on a regular basis.

 

               (xv)  "Transaction" shall have the meaning set forth in Section

                     -------------                                          

          5(d)(ix).

 

          (h) Junior Convertible Preferred Stock

              ----------------------------------

 

               (i) In the event that the Corporation undertakes to sell its

     Common Stock through an underwritten public offering (an "Offering"), and

     if the underwriter advises the Corporation that in order to complete such

     Offering on the most favorable terms to the Corporation it is necessary for

     the Junior Convertible Preferred Stock to be retired, then the Corporation

     may so notify the holders of the Junior Convertible Preferred Stock (the

     "Conversion Notice"), and

 

                                                                             120

<PAGE>

 

     such holders shall, on or prior to the Conversion Date (as defined below)

     convert their Junior Convertible Preferred Stock into Common Stock pursuant

     to the terms of this Article IV. The holders of the Junior Convertible

     Preferred Stock shall be obligated to convert their Junior Convertible

     Preferred Stock only if (A) on or prior to the Conversion Date, all the

     holders of the Series B Senior Preferred Stock shall have converted their

     Series B Senior Preferred Stock into Common Stock, or all Series B Senior

     Preferred Stock shall otherwise have been retired, and (B) the Market Price

     of the Common Stock at the Conversion Date is greater than the sum of the

     Junior Preferred Stock Stated Value plus accrued dividends per share of

     Junior Convertible Preferred Stock (such sum being referred to herein as

     the "Accreted Value"); provided that if at the Conversion Date, the Market

                            --------             

     Price of the Common Stock is less than the Accreted Value, then each holder

     of the Junior Convertible Preferred Stock must either, at its option (A)

     convert the Junior Convertible Preferred Stock into Common Stock on or

     prior to the Conversion Date or (B) require the Corporation to redeem the

     Junior Convertible Preferred Stock at the Accreted Value, in which case

     such holder shall notify the Corporation of its election on or prior to the

     Conversion Date. If a holder elects to require the Corporation to redeem

     the Junior Convertible Preferred Stock, then the Corporation shall make

     such redemption within 60 days after the Conversion Date; provided that the

                                                               --------        

     Corporation shall be obligated to redeem the Junior Convertible Preferred

     Stock only if it has sufficient funds legally available on the redemption

     date in order to redeem shares of Junior Convertible Preferred Stock

     pursuant to this Section 5(h); provided further that if the Board

                                    -------- -------

     determines not to proceed with the Offering any notice of redemption shall

     be withdrawn and the Corporation's obligation to redeem such shares shall

     terminate. "Conversion Date" shall mean the date stated in the Conversion

     Notice on or prior to which the holders of the Junior Convertible Preferred

     Stock shall be required to convert their Junior Convertible Preferred Stock

     in accordance with this Section 5(h). Without the consent of each holder of

     Junior Convertible Preferred Stock, the Conversion Date may not be a date

     earlier than the closing date of the Offering; provided that the

                                                    --------

     Conversion Notice may identify the Offering's closing date as "the closing

     date," in lieu of using a calendar date.

 

               (ii) If the Corporation shall be required to redeem shares Junior

     Convertible Preferred Stock pursuant to Section 5(h)(i), then notice of

     such redemption shall be given by United States certified or registered

     mail, postage prepaid, mailed not less than thirty (30) days nor more

     than 

 

                                                                             121

<PAGE>

 

     sixty (60) days prior to the redemption date, to all holders of record of

     the shares to be redeemed at such holders' addresses as the same appear on

     the stock register of the Corporation. Each such notice shall state: (A)

     the redemption date; (B) the number of shares of Junior Convertible

     Preferred Stock to be redeemed and, if less than all the shares held by

     such holder are to be redeemed from such holder, the number of shares to be

     redeemed from such holder; (C) the redemption price; and (D) the place or

     places where certificates for shares of the Junior Convertible Preferred

     Stock are to be surrendered for payment of the redemption price.

 

               (iii)  Notice having been mailed as aforesaid, from and after the

     redemption date (unless default shall be made by the Corporation in

     providing payment of the redemption price by deposit with a bank or trust

     company having capital and surplus of at least $50,000,000 of the shares

     called for redemption) said shares shall no longer be deemed to be

     outstanding, and all rights of the holders thereof as stockholders of the

     Corporation (except the right to receive from the Corporation the

     redemption price) shall cease. Upon surrender, in accordance with the

     above-mentioned notice, of the certificates for any shares so redeemed

     (properly endorsed or signed for transfer, if the Board of Directors of the

     Corporation shall so require and the notice shall so state), such shares

     shall be redeemed by the Corporation at the redemption price provided for

     in this Section 5(h). In the event fewer than all of the shares represented

     by any such certificate are redeemed, a new certificate shall be issued,

     without cost to the holder thereof, representing the unredeemed shares. The

     provisions of this Section 5(h)(iii) shall be subject to Section 5(h)(i).

 

          (i) Reacquired Shares.  Shares of Convertible Preferred Stock which

              ------------------                                            

have been issued and reacquired in any manner, including shares purchased or

redeemed or exchanged, shall (upon compliance with any applicable provisions of

the laws of the State of Delaware) have the status of authorized and unissued

shares of Preferred Stock undesignated as to series and may be redesignated and

reissued as part of any series of the Preferred Stock; provided, however, that

no such issued and reacquired shares of Senior Convertible Preferred Stock shall

be reissued or sold as Series A Senior Preferred Stock and no such issued and

reacquired shares of Junior Convertible Preferred Stock shall be reissued or

sold as Junior Convertible Preferred Stock.

 

                                                                             122

<PAGE>

 

                                 ARTICLE V

                                 ---------

 

   Bylaws of the Corporation may be amended, altered or repealed, and new Bylaws

may be adopted, (i) by the affirmative vote of the holders of at least a

majority of the outstanding shares of capital stock of the Corporation entitled

to vote generally in the election of directors (considered for this purpose as

one class) or (ii) by an affirmative vote of a majority of the Board of

Directors but such right of the directors shall not divest or limit the right of

the stockholders to adopt, alter or repeal Bylaws.

 

                                 ARTICLE VI

                                 ----------

 

   The property, business and affairs of the Corporation shall be managed by or

under the direction of the Board of Directors.  The number of directors of the

Corporation (exclusive of directors to be elected, if any, by the holders of any

one or more series of Preferred Stock voting separately as a class or classes)

shall not be less than six nor more than eighteen, the exact number of directors

to be determined from time to time by a resolution adopted by the Board of

Directors.

 

   Unless the Bylaws of the Corporation are amended by the stockholders of the

Corporation after the effectiveness of this provision to provide for the

division of the directors into classes, at each annual meeting all directors

shall be elected to hold office until their respective successors are elected

and qualified or until their earlier resignation or removal.  Any vacancies in

the Board of Directors for any reason, and any newly created directorships

resulting from any increase in the number of directors, may be filled by the

Board of Directors, acting by a majority of the directors then in office,

although less than a quorum, and any directors so chosen shall hold office until

the next election of directors and until their successors shall have been duly

elected and qualified.  No decrease in the number of directors shall shorten the

term of any incumbent director.   Notwithstanding the foregoing, and except as

otherwise required by law, whenever the holders of any one or more series of

Preferred Stock shall have the right, voting separately as a class, to elect one

or more directors of the Corporation, the terms of the director or directors

elected by such holders shall expire at the next succeeding annual meeting of

stockholders.  The stockholders of the Corporation shall not have cumulative

voting rights.

 

                                 ARTICLE VII

                                 -----------

 

   The Corporation reserves the right to repeal, alter, amend, or rescind any

provision contained in this Certificate of Incorporation, in the manner now or

hereafter prescribed by statute or this Certificate of Incorporation, and all

rights conferred on stockholders herein are granted subject to this reservation.

 

                                                                             123

<PAGE>

 

                                 ARTICLE VIII

                                 ------------

 

   The Corporation is to have perpetual existence.

 

                                 ARTICLE IX

                                 ----------

 

   Special meetings of the stockholders of the Corporation for any purpose or

purposes may be called at any time by the Board of Directors, or by a majority

of the members of the Board of Directors or by a committee of the Board of

Directors which has been duly designated by the Board of Directors, whose powers

and authority, as provided in a resolution of the Board of Directors or in the

Bylaws of the Corporation, include the power to call such meetings, or by the

affirmative vote of the holders of at least a majority of the outstanding shares

of capital stock of the Corporation entitled to vote generally in the election

of directors (considered for this purpose as one class), but such special

meetings may not be called by any other person or persons.

 

 

                                 ARTICLE X

                                 ---------

 

      The Corporation shall, to the full extent permitted by any applicable law,

including without limitation the General Corporation Law of the State of

Delaware as amended from time to time, indemnify each director and officer,

present or former, of the Corporation (as defined in the General Corporation Law

of the State of Delaware) whom it may indemnify pursuant to such applicable law.

The foregoing shall not be construed to limit the powers of the Board of

directors to provide any other rights of indemnity which it may deem

appropriate.

 

      A director of the Corporation shall not be personally liable to the

Corporation or its stockholders for monetary damages for breach of fiduciary

duty as a director, except for liability (i) for any breach of the director's

duty of loyalty to the Corporation or its stockholders, (ii) for acts or

omissions not in good faith or which involve intentional misconduct or a knowing

violation of law, (iii) under Section 174 of the Delaware General Corporation

Law; or (iv) for any transaction from which the director derived an improper

personal benefit.

 

                                                                             124

<PAGE>

 

      IN WITNESS WHEREOF, GRUBB & ELLIS COMPANY has caused this certificate to

be signed by Robert J. Walner, its Senior Vice President, and Carol M.

Vanairsdale, its Assistant Secretary, this ___ day of ________________, 1995.

 

 

 

                                     GRUBB & ELLIS COMPANY

 

 

                                     --------------------------------------

                                     Robert J. Walner, Senior Vice President

 

President

[As Filed: 03/31/1995]

 

 

                      

 

                               CERTIFICATE OF AMENDMENT
                                           
                                          OF
                                           
                        RESTATED CERTIFICATE OF INCORPORATION
                                           
                                          OF
                                           
                                GRUBB & ELLIS COMPANY
                                           
                                           
 
It is hereby certified that:
 
    1.   The name of the corporation (the "Corporation") is Grubb & Ellis
Company, and the original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 5, 1980.
 
    2.   The Restated Certificate of Incorporation of the Corporation is hereby
amended by striking out Article IV thereof and by substituting in lieu of said
Article the following new Article:
 
    "ARTICLE IV
         
         The total number of shares of capital stock which the Corporation
    shall have authority to issue is fifty-one million (51,000,000)
    shares, of which fifty million (50,000,000) shares with a par value of
    $0.01 per share shall be designated Common Stock, and of which one
    million (1,000,000) shares with a par value of $0.01 per share shall
    be designated Preferred Stock.
         
         The Preferred Stock may be issued from time to time in one or
    more series.  The Board of Directors is hereby expressly vested with
    authority to fix by resolution or resolutions the designations and the
    powers, preferences and relative, participating, optional or other
    special rights, and the qualifications, limitations or restrictions
    thereof (including, without limitation, the voting powers, if any, the
    dividend rate, conversion rights, redemption price, or liquidation
    preference), of any wholly unissued series of Preferred Stock, to fix
    the number of shares constituting any such series, and to increase or
    decrease the number of shares of any such series (but not below the
    number of shares thereof then outstanding).  In case the number of
    shares of any such series shall be so decreased, the shares
    constituting such decrease shall resume the status which they had
    prior to the adoption of the resolution or resolutions originally
    fixing the number of shares of such series."
 
 
 
    3.   The amendment of the Restated Certificate of Incorporation herein has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
 
Signed:  December 8, 1997.
 
 
 
                                    /s/ Carol Vanairsdale
                                  ------------------------------
                                  Carol Vanairsdale
                                  Assistant Secretary
[End]
 
 

 

 

 

 

 

 

 

Certificate of Amendment

Of

Restated Certificate of Incorporation

Of

Grubb & Ellis Company

It is hereby certified that:

 

1.

 

The name of the corporation (the “Corporation”) is Grubb & Ellis Company, and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on December 5, 1980.

 

 

2.

 

The Restated Certificate of Incorporation of the Corporation is hereby amended by striking out Article IV thereof and by substituting in lieu of said Article the following new Article:

“Article IV

     The total number of shares of capital stock which the Corporation shall have authority to issue is one hundred ten million (110,000,000) shares, of which one hundred million (100,000,000) shares with a par value of $.01 per share each shall be designated Common Stock, and of which ten million (10,000,000) shares with a par value of $.01 per share shall be designated Preferred Stock.

     The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly vested with authority to fix by resolution or resolutions the designations and the powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof (including, without limitation, the voting powers, if any, the dividend rate, conversion rights, redemption price, or liquidation preference), of any wholly unissued series of Preferred Stock, to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series.”

 

 

3.

 

The Restated Certificate of Incorporation of the Corporation is further amended by striking out Article VI thereof and by substitution in lieu of said Article the following new Article:

“Article VI

     The property, business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors of the Corporation shall be nine.

     The Corporation’s Board of Directors shall be divided into three equal classes designated as Class A, Class B, and Class C, respectively. The initial Class A, Class B and Class C directors shall be the Class A, Class B and Class C directors elected at the Corporation’s special meeting in lieu of an annual meeting held in 2007 at which this Certificate of Amendment was approved. At the annual meeting of the stockholders to be held in 2008, the term of office of the initial Class A directors shall expire and Class A directors shall thereafter be elected for a full term of three years. At the annual meeting of the stockholders to be held in 2009, the term of office of the initial Class B directors shall expire and Class B directors shall thereafter be elected for a full term of three years. At the annual meeting of the stockholders to be held in 2010, the term of office of the initial Class C directors shall expire and Class C directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

     Notwithstanding the foregoing provisions of this Article VI, each director shall serve until his or her successor is duly elected and qualified or until his or her earlier resignation, or removal. Any vacancies in the Board of Directors for any reason, and any newly created directorships resulting from any increase in the number of directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office for the remaining term of office for the applicable class of directors to which such director was assigned and until their successors shall have been duly elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. The stockholders of the Corporation shall not have cumulative voting rights. ”

 

4.

 

The amendment of the Restated Certificate of Incorporation herein has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

[Signature Page Follows]

2

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this 7th day of December, 2007.

 

 

 

 

 

 

 

GRUBB & ELLIS COMPANY

 

 

 

 

 

 

 

By:

 

     /s/ Robert Z. Slaughter

 

 

 

 

 

 

 

Name: Robert Z. Slaughter

 [End]

 

Title: Executive Vice President and General Counsel

 

 

CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
GRUBB & ELLIS COMPANY

It is hereby certified that:

     1. The name of the corporation (the “Corporation”) is Grubb & Ellis Company and the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on May 19, 1995 and was amended on each of December 9, 1997 and December 7, 2007.

     2. The Restated Certificate of Incorporation of the Corporation is hereby further amended by striking out Article IV thereof and by substituting in lieu of said Article the following new Article:

     “Article IV

     The total number of shares of capital stock which the Corporation shall have authority to issue is two hundred twenty million (220,000,000) shares, of which two hundred million (200,000,000) shares with a par value of $0.01 per share shall be designated Common Stock, and of which twenty million (20,000,000) shares with a par value of $.01 per share shall be designated Preferred Stock. 1,000,000 shares of the authorized Preferred Stock have been designated as the “12% Cumulative Participating Perpetual Convertible Preferred Stock” and shall have the powers, preferences and relative rights, qualifications, limitations and restrictions set forth in the Certificate of the Powers, Designations, Preferences and Rights of the 12% Cumulative Participating Perpetual Convertible Preferred Stock filed on November 4, 2009 (the “12% Preferred Stock Certificate of Designations”).

     The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly vested with authority to fix by resolution or resolutions the designations and the powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof (including, without limitation, the voting powers, if any, the dividend rate, conversion rights, redemption price, or liquidation preference), of any wholly unissued series of Preferred Stock, to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series.”

 

     3. The Restated Certificate of Incorporation of the Corporation is further amended by striking out Article VI thereof and by substituting in lieu of said Article the following new Article:

     “Article VI

     The property, business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors of the Corporation shall be no less than three (3) and no more than eight (8), as determined from time to time solely by the Board of Directors as set forth in a resolution of the Board of Directors; provided, however that the number of directors set by resolution of the Board of Directors shall automatically be increased by two (2) directors in the event that holders of the 12% Cumulative Participating Perpetual Convertible Preferred Stock (voting as a separate class or with other series or classes of Preferred Stock with similar voting rights), are entitled to elect two (2) directors (such directors, the “Preferred Stock Directors”) in accordance with the terms of the 12% Preferred Stock Certificate of Designations.

     Notwithstanding the foregoing provisions of this Article VI, each director, excluding the Preferred Stock Directors, if any, shall serve until his or her successor is duly elected and qualified or until his or her earlier resignation, or removal. Any vacancies in the Board of Directors for any reason excluding vacancies relating to the Preferred Stock Directors, if any, and any newly created directorships resulting from any increase in the number of directors other than increases relating to the Preferred Stock Directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office for the remaining term of office of directors or the applicable class of directors to which such director was assigned, if applicable, and until their successors shall have been duly elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director, other than the term of Preferred Stock Directors in connection with a decrease of the number of directors as contemplated in the 12% Preferred Stock Certificate of Designations. The stockholders of the Corporation shall not have cumulative voting rights.”

     4. The amendments of the Restated Certificate of Incorporation herein certified have been duly adopted by the board of directors and approved by stockholders in accordance with the provisions of 242 of the General Corporation Law of the State of Delaware.

[Signature Page Follows]

 

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this 17th day of December 2009.

 

 

 

 

 

 

GRUBB & ELLIS COMPANY 

 

 

 

By:  

/s/ Andrea R. Biller  

 

 

 

Name:  

Andrea R. Biller 

 

 

 

Title:  

Executive Vice President,
General Counsel and Corporate Secretary 

 

[End]