Exhibit 10.62
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
Dated May 18, 2009
From
The Grantors referred to herein
as Grantors
to
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent

 

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T A B L E O F C O N T E N T S

              Section       Page
 
           
Section 1.
  Grant of Security     2  
 
           
Section 2.
  Security for Obligations     6  
 
           
Section 3.
  Grantors Remain Liable     6  
 
           
Section 4.
  Delivery and Control of Security Collateral     6  
 
           
Section 5.
  Maintaining the Account Collateral     8  
 
           
Section 6.
  Investing of Amounts in the Collateral Account and the L/C Collateral Account
    9  
 
           
Section 7.
  Release of Amounts     9  
 
           
Section 8.
  Maintaining Electronic Chattel Paper, Transferable Records and
Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims     10  
 
           
Section 9.
  Representations and Warranties     10  
 
           
Section 10.
  Further Assurances     14  
 
           
Section 11.
  As to Equipment and Inventory     16  
 
           
Section 12.
  Insurance     16  
 
           
Section 13.
  Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables
and Related Contracts     17  
 
           
Section 14.
  As to Intellectual Property Collateral     18  
 
           
Section 15.
  Voting Rights; Dividends; Etc.     19  
 
           
Section 16.
  As to the Assigned Agreements     21  
 
           
Section 17.
  Payments Under the Assigned Agreements     21  
 
           
Section 18.
  As to Letter-of-Credit Rights     22  
 
           
Section 19.
  Transfers and Other Liens; Additional Shares     22  
 
           
Section 20.
  Administrative Agent Appointed Attorney-in-Fact     22  
 
           
Section 21.
  Administrative Agent May Perform     23  
 
           
Section 22.
  The Administrative Agent’s Duties     23  
 
           
Section 23.
  Remedies     23  

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              Section       Page  
Section 24.
  Indemnity and Expenses     25  
 
           
Section 25.
  Amendments; Waivers; Additional Grantors; Etc.     25  
 
           
Section 26.
  Notices, Etc.     26  
 
           
Section 27.
  Continuing Security Interest; Assignments under the Credit Agreement     26  
 
           
Section 28.
  Release; Termination     26  
 
           
Section 29.
  Execution in Counterparts     27  
 
           
Section 30.
  The Mortgages     27  
 
           
Section 31.
  Governing Law     27  

         
Schedules I
  -   Location, Chief Executive Office, Place Where Agreements Are Maintained,
Type Of
Organization, Jurisdiction Of Organization And Organizational Identification
Number
Schedule II
  -   Pledged Equity and Pledged Debt
Schedule III
  -   Assigned Agreements
Schedule IV
  -   Locations of Equipment and Inventory
Schedule V
  -   Changes in Name, Location, Etc.
Schedule VI
  -   Patents, Trademarks and Trade Names, Copyrights and IP Agreements
Schedule VII
  -   Account Collateral
Schedule VIII
  -   Intentionally Omitted
Schedule IX
  -   Commercial Tort Claims
Schedule X
  -   Letters of Credit
 
       
Exhibits
       
 
       
Exhibit A
  -   Form of Security Agreement Supplement
Exhibit B
  -   Form of Account Control Agreement
Exhibit C
  -   Form of Consent and Agreement
Exhibit D
  -   Form of Securities Account Control Agreement
Exhibit E
  -   Form of Commodity Account Control Agreement
Exhibit F
  -   Form of Intellectual Property Security Agreement
Exhibit G
  -   Form of Intellectual Property Security Agreement Supplement
Exhibit H
  -   Form of Consent to Assignment of Letter of Credit Rights
Exhibit I
  -   Form of Account Control Ratification
Exhibit J
  -   Form of ACH Account Control Agreement

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THIRD AMENDED AND RESTATED SECURITY AGREEMENT
          THIRD AMENDED AND RESTATED SECURITY AGREEMENT dated May 18, 2009 made
by GRUBB & ELLIS COMPANY, a Delaware corporation (the “Borrower”), the other
Persons listed on the signature pages hereof and the Additional Grantors (as
defined in Section 25) (the Borrower, the Persons so listed and the Additional
Grantors being, collectively, the “Grantors”), to DEUTSCHE BANK TRUST COMPANY
AMERICAS, as administrative agent (in such capacity, together with any successor
administrative agent appointed pursuant to Article VII of the Credit Agreement
(as hereinafter defined), the “Administrative Agent”) for the Secured Parties
(as defined in the Credit Agreement).
          PRELIMINARY STATEMENTS.
          (1) The Borrower has entered into a Third Amended and Restated Credit
Agreement dated as of May 18, 2009 (said Agreement, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to
time, being the “Credit Agreement”) with the Lender Parties and the
Administrative Agent (each as defined therein).
          (2) Pursuant to the Credit Agreement, the Grantors are entering into
this Agreement in order to grant to the Administrative Agent for the ratable
benefit of the Secured Parties a security interest in the Collateral (as
hereinafter defined).
          (3) Each Grantor is the owner of the shares of stock or other Equity
Interests (the “Initial Pledged Equity”) set forth opposite such Grantor’s name
on and as otherwise described in Part I of Schedule II hereto and issued by the
Persons named therein and of the indebtedness (the “Initial Pledged Debt”) set
forth opposite such Grantor’s name on and as otherwise described in Part II of
Schedule II hereto and issued by the obligors named therein.
          (4) The Borrower has security entitlements (the “Pledged Security
Entitlements”) with respect to all the financial assets (the “Pledged Financial
Assets”) credited from time to time to the Borrower’s accounts (the “Securities
Accounts”), as described in Part III of Schedule VII hereto.
          (5) The Borrower has opened the Automated Clearing House deposit
accounts (the “ACH Deposit Accounts”), as described in Part I of Schedule VII
hereto, and the other deposit accounts (the “Other Deposit Accounts” and,
together with the ACH Deposit Accounts, the “Deposit Accounts”), as described in
Part II of Schedule VII hereto.
          (6) A Letter of Credit collateral deposit account has been opened with
Deutsche Bank Trust Company Americas, in the name of the Administrative Agent
and under the sole control and dominion of the Administrative Agent (the “L/C
Collateral Account”).
          (7) It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Secured Hedge Agreements by the Hedge Banks from time to time
that the Grantors shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.
          (8) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
          (9) Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise

 

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defined in this Agreement or in the Credit Agreement, terms defined in Article 8
or 9 of the UCC (as defined below) and/or in the Federal Book Entry Regulations
(as defined below) are used in this Agreement as such terms are defined in such
Article 8 or 9 and/or the Federal Book Entry Regulations. “UCC” means the
Uniform Commercial Code as in effect, from time to time, in the State of New
York; provided that, if perfection or the effect of perfection or non-perfection
or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority. The term
“Federal Book Entry Regulations” means (a) the federal regulations contained in
Subpart B (“Treasury/Reserve Automated Debt Entry System (TRADES)”) governing
book-entry securities consisting of U.S. Treasury bills, notes and bonds and
Subpart D (“Additional Provisions”) of 31 C.F.R. Part 357, 31 C.F.R. § 357.2, §
357.10 through § 357.15 and § 357.40 through § 357.45 and (b) to the extent
substantially identical to the federal regulations referred to in clause
(a) above (as in effect from time to time), the federal regulations governing
other book-entry securities.
          NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and issue Letters of Credit under the
Credit Agreement and to induce the Hedge Banks to enter into Secured Hedge
Agreements from time to time, each Grantor hereby agrees with the Administrative
Agent for the ratable benefit of the Secured Parties as follows:
          Section 1. Grant of Security. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, such Grantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):
     (a) all equipment in all of its forms, including, without limitation, all
machinery, tools, motor vehicles, vessels, aircraft, furniture and fixtures, and
all parts thereof and all accessions thereto and all software related thereto,
including, without limitation, software that is embedded in and is part of the
equipment (any and all such property being the “Equipment”);
     (b) all inventory in all of its forms, including, without limitation,
(i) all raw materials, work in process, finished goods and materials used or
consumed in the manufacture, production, preparation or shipping thereof,
(ii) goods in which such Grantor has an interest in mass or a joint or other
interest or right of any kind (including, without limitation, goods in which
such Grantor has an interest or right as consignee) and (iii) goods that are
returned to or repossessed or stopped in transit by such Grantor), and all
accessions thereto and products thereof and documents therefor, and all software
related thereto, including, without limitation, software that is embedded in and
is part of the inventory (any and all such property being the “Inventory”);
     (c) all accounts, chattel paper (including, without limitation, tangible
chattel paper and electronic chattel paper), instruments (including, without
limitation, promissory notes), deposit accounts, letter-of-credit rights,
general intangibles (including, without limitation, payment intangibles) and
other obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general intangibles and
other obligations, to the extent not referred to in clause (d), (e) or
(f) below, being the “Receivables”,

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and any and all such supporting obligations, security agreements, mortgages,
Liens, leases, letters of credit and other contracts being the “Related
Contracts”); provided however that the security interest granted under this
Section 1(c) shall not attach to any of the Receivables or Related Contracts
that by their terms, prohibit or require the consent of any Person (other than
the Grantor) as a condition to the creation by such Grantor of a lien thereon,
but only, in all cases, to the extent, and for so long as, such prohibition is
not terminated or rendered unenforceable or otherwise deemed ineffective by the
UCC or any other applicable law;
(d) the following (the “Security Collateral”):
     (i) the Initial Pledged Equity and the certificates, if any, representing
the Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all subscription warrants, rights or options issued thereon
or with respect thereto;
     (ii) the Initial Pledged Debt and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Initial Pledged Debt;
     (iii) all additional shares of stock and other Equity Interests from time
to time acquired by such Grantor in any manner (such shares and other Equity
Interests, together with the Initial Pledged Equity, being the “Pledged
Equity”), and the certificates, if any, representing such additional shares or
other Equity Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto;
     (iv) all additional indebtedness from time to time owed to such Grantor
(such indebtedness, together with the Initial Pledged Debt, being the “Pledged
Debt”) and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness;
     (v) the Securities Accounts, all Pledged Security Entitlements with respect
to all Pledged Financial Assets from time to time credited to the Securities
Accounts, and all Pledged Financial Assets, and all dividends, distributions,
return of capital, interest, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Pledged Security Entitlements or such Pledged Financial
Assets and all subscription warrants, rights or options issued thereon or with
respect thereto; and
     (vi) all other investment property (including, without limitation, all (A)
securities, whether certificated or uncertificated, (B) security entitlements,
(C) securities accounts, (D) commodity contracts and (E) commodity accounts) in
which such Grantor has now, or acquires from time to time hereafter, any right,
title or interest in any manner, and the certificates or instruments, if any,
representing or evidencing such investment property, and all dividends,
distributions, return of capital, interest, distributions, value, cash,
instruments and other property from time to time received, receivable or
otherwise

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distributed in respect of or in exchange for any or all of such investment
property and all subscription warrants, rights or options issued thereon or with
respect thereto;
     (e) each of the Material Contracts to which such Grantor is now or may
hereafter become a party, the IP Agreements (as hereinafter defined), and each
Hedge Agreement to which such Grantor is now or may hereafter become a party, in
each case as such agreements may be amended, amended and restated, supplemented
or otherwise modified from time to time (collectively, the “Assigned
Agreements”), including, without limitation, (i) all rights of such Grantor to
receive moneys due and to become due under or pursuant to the Assigned
Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the “Agreement Collateral”); provided, however, that this
Section 1(e) shall not apply to any Material Contract pursuant to the terms of
which it would be a breach or default for Grantor to grant the security interest
contemplated by this Section 1(e) or would require the consent of any Person
(other than the Grantor) as a condition to the creation by the Grantor of a lien
thereunder.
     (f) the following (collectively, the “Account Collateral”):
     (i) any collateral deposit account opened by the Borrower with Deutsche
Bank Trust Company Americas (or such other financial institution as the
Administrative Agent may direct), in the name of the Administrative Agent and
under the sole control and dominion of the Administrative Agent and subject to
the terms of this Agreement (the “Collateral Account”), the L/C Collateral
Account and the Deposit Accounts and all funds and financial assets from time to
time credited thereto (including, without limitation, all Cash Equivalents), all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such funds and financial assets, and all certificates
and instruments, if any, from time to time representing or evidencing the
Collateral Account, the L/C Collateral Account and the Deposit Accounts;
     (ii) all promissory notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time delivered to or otherwise
possessed by the Administrative Agent for or on behalf of such Grantor,
including, without limitation, those delivered or possessed in substitution for
or in addition to any or all of the then existing Account Collateral;
     (iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Account
Collateral; and
     (g) the following (collectively, the “Intellectual Property Collateral”):
     (i) all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and all
improvements thereto (“Patents”);
     (ii) all trademarks, service marks, domain names, trade dress, logos,
designs, slogans, trade names, business names, corporate names and other source
identifiers,

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whether registered or unregistered (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent
that, and solely during the period in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use
trademark applications under applicable federal law), together, in each case,
with the goodwill symbolized thereby (“Trademarks”);
     (iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);
     (iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data
files), firmware and documentation and materials relating thereto, together with
any and all maintenance rights, service rights, programming rights, hosting
rights, test rights, improvement rights, renewal rights and indemnification
rights and any substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing (“Computer Software”);
     (v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and
data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information (collectively, “Trade Secrets”), and
all other intellectual, industrial and intangible property of any type,
including, without limitation, industrial designs and mask works;
     (vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications
for registration set forth in Schedule VI hereto (as such Schedule VI may be
supplemented from time to time by supplements to this Agreement, each such
supplement being substantially in the form of Exhibit G hereto (an “IP Security
Agreement Supplement”) executed by such Grantor to the Administrative Agent from
time to time), together with all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations thereof;
     (vii) all tangible embodiments of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
     (viii) all agreements, permits, consents, orders and franchises relating to
the license, development, use or disclosure of any of the foregoing to which
such Grantor, now or hereafter, is a party or a beneficiary, including, without
limitation, the agreements set forth in Schedule VI hereto (“IP Agreements”);
and
     (ix) any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages;

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     (h) all commercial tort claims described in Schedule IX hereto
(collectively the “Commercial Tort Claims Collateral”);
     (i) all books and records (including, without limitation, customer lists,
credit files, printouts and other computer output materials and records) of such
Grantor pertaining to any of the Collateral; and
     (j) all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting obligations
relating to, any and all of the Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property of the
types described in clauses (a) through (i) of this Section 1 and this clause
(j)) and, to the extent not otherwise included, all (A) payments under insurance
(whether or not the Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, (B) tort claims,
including, without limitation, all commercial tort claims and (C) cash.
          Section 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of each Loan Party now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the “Secured
Obligations”).
          Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
          Section 4. Delivery and Control of Security Collateral. (a) All
certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Administrative Agent pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent. The
Administrative Agent shall have the right, at any time in its discretion and
without notice to any Grantor, to transfer to or to register in the name of the
Administrative Agent or any of its nominees any or all of the Security
Collateral, subject only to the revocable rights specified in Section 15(a). For
the better perfection of the Administrative Agent’s rights in and to the
Security Collateral, each Grantor shall forthwith, upon the pledge hereunder of
any Security Collateral in which it has any right, title or interest, cause such
Security Collateral to be registered in the name of the Administrative Agent or
such of its nominees as the Administrative Agent shall direct, subject only to
the revocable rights specified in Section 15(a). In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments
of smaller or larger denominations. Also, the Administrative Agent shall have
the right at any time to convert Security Collateral consisting of financial
assets credited to the Securities Accounts to Security Collateral consisting of
financial assets held directly by the Administrative Agent, and to convert
Security Collateral consisting of financial assets held directly by the

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Administrative Agent to Security Collateral consisting of financial assets
credited to the Securities Accounts.
          (b) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes an uncertificated security,
such Grantor will cause the issuer thereof either (i) to register the
Administrative Agent as the registered owner of such security or (ii) to agree
in an authenticated record with such Grantor and the Administrative Agent that
such issuer will comply with instructions with respect to such security
originated by the Administrative Agent without further consent of such Grantor,
such authenticated record to be in form and substance satisfactory to the
Administrative Agent. With respect to any Security Collateral in which any
Grantor has any right, title or interest and that is not an uncertificated
security, upon the request of the Administrative Agent, such Grantor will notify
each such issuer of Pledged Equity that such Pledged Equity is subject to the
security interest granted hereunder.
          (c) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a security entitlement in
which the Administrative Agent is not the entitlement holder, such Grantor will
cause the securities intermediary with respect to such security entitlement
either (i) to identify in its records the Administrative Agent as the
entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in an authenticated record with such Grantor and
the Administrative Agent that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities
intermediary directing transfer or redemption of the financial asset to which
such Grantor has a security entitlement) originated by the Administrative Agent
without further consent of such Grantor, such authenticated record to be in
substantially the form of Exhibit D hereto or otherwise in form and substance
satisfactory to the Administrative Agent (such agreement being a “Securities
Account Control Agreement”).
          (d) With respect to any Security Collateral in which any Grantor has
any right, title or interest and that constitutes a commodity contract, such
Grantor shall cause the commodity intermediary with respect to such commodity
contract to agree in an authenticated record with such Grantor and the
Administrative Agent that such commodity intermediary will apply any value
distributed on account of such commodity contract as directed by the
Administrative Agent without further consent of such Grantor, such authenticated
record to be in substantially the form of Exhibit E hereto or otherwise in form
and substance satisfactory to the Administrative Agent (such agreement being a
“Commodity Account Control Agreement”, and all such authenticated records,
together with all Securities Account Control Agreements being, collectively,
“Security Control Agreements”).
          (e) No Grantor will change or add any securities intermediary or
commodity intermediary that maintains any securities account or commodity
account in which any of the Collateral is credited or carried, or change or add
any such securities account or commodity account, in each case without first
complying with the above provisions of this Section 4 in order to perfect the
security interest granted hereunder in such Collateral.
          (f) Upon the request of the Administrative Agent, such Grantor will
notify each such issuer of Pledged Debt that such Pledged Debt is subject to the
security interest granted hereunder.
          (g) Notwithstanding anything to the contrary herein, each Grantor
shall not be required to comply with Section 1 and this Section 4 with respect
to Initial Pledged Equity that is identified as “Pledged Joint Venture
Investments” and “Pledged REIT Investments” so long as such Grantor promptly
uses commercially reasonable efforts to seek all consents and other required
approvals for the pledge of such Initial Pledged Equity and fail to obtain same.
Upon receipt of such required approvals, such Grantor shall comply with
Section 1 and this Section 4 with respect to such Initial

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Pledged Equity. If any Grantor fails to obtain any required approval within
forty-five days from the date hereof, such Grantor shall provide a report to the
Administrative Agent on the date that is forty-five days from the date hereof
showing in reasonable detail the efforts undertaken by such Grantor to seek such
approval.
          (h) Notwithstanding anything to the contrary herein, Grantor shall
have the right to (i) modify the terms of and forgive the indebtedness of, the
Initial Pledged Debt identified as “Promissory notes issued from time to time by
various TIC and Master Lease Programs” and (ii) modify the terms of, including,
but not limited to, extending the maturity date of, the Initial Pledged Debt
issued by Grubb & Ellis Apartment REIT, Inc., in each case in the ordinary
course of business consistent with past practice without the consent of any
Lender Party.
          Section 5. Maintaining the Account Collateral. So long as any Advance
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding, any Secured Hedge Agreement
shall be in effect or any Lender Party shall have any Commitment:
     (a) Each Grantor will maintain all Account Collateral only with the
Administrative Agent or with banks (the “Pledged Account Banks”) that have
agreed, in a record authenticated by the Grantor, the Administrative Agent and
the Pledged Account Banks, to (i) comply with instructions originated by the
Administrative Agent directing the disposition of funds in the Account
Collateral without the further consent of the Grantor and (ii) waive or
subordinate in favor of the Administrative Agent all claims of the Pledged
Account Banks (including, without limitation, claims by way of a security
interest, lien or right of setoff or right of recoupment) to the Account
Collateral, which authenticated record shall be substantially in the form of
Exhibit J hereto for ACH Deposit Accounts or Exhibit B hereto for Other Deposit
Accounts, or shall otherwise be in form and substance satisfactory to the
Administrative Agent (the “Account Control Agreement”).
     (b) Each Grantor will (i) immediately instruct each Person obligated at any
time to make any payment to such Grantor for any reason (an “Obligor”) to make
such payment to a Deposit Account and (ii) deposit in a Deposit Account or pay
to the Administrative Agent for deposit in a Deposit Account, at the end of each
Business Day, all proceeds of Collateral and all other cash of such Grantor.
     (c) Each Grantor agrees that it will not add any bank that maintains a
deposit account for such Grantor or open any new deposit account with any then
existing Pledged Account Bank unless (i) the Administrative Agent shall have
received at least 10 days’ prior written notice of such additional bank or such
new deposit account and (ii) the Administrative Agent shall have received, in
the case of a bank or Pledged Account Bank that is not the Administrative Agent,
an Account Control Agreement authenticated by such new bank and such Grantor, or
a supplement to an existing Account Control Agreement with such then existing
Pledged Account Bank, covering such new deposit account (and, upon the receipt
by the Administrative Agent of such Account Control Agreement or supplement,
Schedule VII hereto shall be automatically amended to include such Deposit
Account). Each Grantor agrees that it will not terminate any bank as a Pledged
Account Bank or terminate any Account Collateral.
     (d) Upon any termination by a Grantor of any Deposit Account by such
Grantor, or any Pledged Account Bank with respect thereto, such Grantor will
immediately (i) transfer all funds and property held in such terminated Deposit
Account to another Deposit Account listed in Part II of Schedule VII and
(ii) notify all Obligors that were making payments to such Deposit

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Account to make all future payments to another Deposit Account listed in Part II
of Schedule VII hereto so that the Administrative Agent shall have a
continuously perfected security interest in such Account Collateral, funds and
property. Each Grantor agrees to terminate any or all Account Collateral and
Account Control Agreements upon request by the Administrative Agent.
     (e) The Borrower may draw checks on, and otherwise withdraw amounts only
from, the Deposit Accounts and in such amounts as may be required in the
ordinary course of business (including, without limitation, to pay or prepay
Debt outstanding under the Loan Documents).
     (f) The Administrative Agent shall have sole right to direct the
disposition of funds with respect to the Collateral Account and the L/C
Collateral Account; and it shall be a term and condition of each of the
Collateral Account and the L/C Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Collateral
Account and the L/C Collateral Account, as the case may be, that no amount
(including, without limitation, interest on Cash Equivalents credited thereto)
will be paid or released to or for the account of, or withdrawn by or for the
account of, the Borrower or any other Person from the Collateral Account and the
L/C Collateral Account, as the case may be.
     (g) The Administrative Agent may, (i) at any time and without notice to, or
consent from, the Grantor, transfer, or direct the transfer of, funds from the
Account Collateral to satisfy the Grantor’s obligations under the Loan Documents
if an Event of Default shall have occurred and be continuing and (ii) at any
time after the Collateral Account has been opened and without notice to, or
consent from, the Grantor, transfer, or direct the transfer of, funds from the
Deposit Accounts to the Collateral Account.
          Section 6. Investing of Amounts in the Collateral Account and the L/C
Collateral Account. The Administrative Agent will, subject to the provisions of
Sections 5, 7 and 23, at any time after the Collateral Account or L/C Collateral
Account, as the case may be, has been opened, from time to time (a) invest, or
direct the applicable Pledged Account Bank to invest, amounts received with
respect to the Collateral Account and the L/C Collateral Account in such Cash
Equivalents credited to (A) the Collateral Account and the L/C Collateral
Account, respectively, as the Borrower may select and the Administrative Agent
may approve or (B) in the case of Cash Equivalents consisting of Securities
Collateral, a securities account in which the Administrative Agent is the
securities intermediary or a securities account subject to a Securities Account
Control Agreement, and (b) invest interest paid on the Cash Equivalents referred
to in clause (a) above, and reinvest other proceeds of any such Cash Equivalents
that may mature or be sold, in each case in such Cash Equivalents credited in
the same manner. Interest and proceeds that are not invested or reinvested in
Cash Equivalents as provided above shall be deposited and held in the relevant
Collateral Account or L/C Collateral Account. In addition, the Administrative
Agent shall have the right at any time to exchange, or direct the applicable
Pledged Account Bank to exchange, such Cash Equivalents for similar Cash
Equivalents of smaller or larger determinations, or for other Cash Equivalents,
credited to the Collateral Account or the L/C Collateral Account, as the case
may be.
          Section 7. Release of Amounts. So long as no Default under
Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall have
occurred and be continuing, the Administrative Agent will pay and release, or
direct the applicable Pledged Account Bank to pay and release, to the Borrower
or at its order or, at the request of the Borrower, to the Administrative Agent
to be applied to the Obligations of the Borrower under the Loan Documents, in
the case of the L/C Collateral Account, such amount, if any, as is then on
deposit in the L/C Collateral Account to the extent permitted to be released
under the terms of the Credit Agreement and, in the case of the Collateral
Account, the amount, if any, by which the aggregate principal amount of the Cash
Equivalents credited to the Collateral

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Account exceeds all amounts then due and payable under the Loan Documents
together with all accrued and unpaid interest and fees under the Credit
Agreement.
          Section 8. Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims. So long
as any Advance or any other Obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement shall be in effect or any Lender Party shall have any
Commitment:
     (a) Each Grantor will maintain all (i) electronic chattel paper so that the
Administrative Agent has control of the electronic chattel paper in the manner
specified in Section 9-105 of the UCC and (ii) all transferable records so that
the Administrative Agent has control of the transferable records in the manner
specified in Section 16 of the Uniform Electronic Transactions Act, as in effect
in the jurisdiction governing such transferable record (“UETA”);
     (b) Each Grantor will maintain all letter-of-credit rights assigned to the
Administrative Agent, including, without limitation, all letter-of-credit rights
associated with each letter of credit that is designated on Schedule X as
constituting Collateral (each, a “Collateral L/C”), if any, so that the
Administrative Agent has control of the letter-of-credit rights in the manner
specified in Section 9-107 of the UCC; and
     (c) Each Grantor will immediately give notice to the Administrative Agent
of any commercial tort claim that may arise in the future and will immediately
execute or otherwise authenticate a supplement to this Agreement, and otherwise
take all necessary action, to subject such commercial tort claim to the first
priority security interest created under this Agreement.
          Section 9. Representations and Warranties. Each Grantor represents and
warrants as follows:
     (a) Such Grantor’s exact legal name, as defined in Section 9-503(a) of the
UCC, is correctly set forth in Schedule I hereto. Such Grantor has only the
trade names, domain names and marks listed on Schedule VI hereto. Such Grantor
is located (within the meaning of Section 9-307 of the UCC) and has its chief
executive office and the office in which it maintains the original copies of
each Assigned Agreement and Related Contract to which such Grantor is a party
and all originals of all chattel paper that evidence Receivables of such
Grantor, in the state or jurisdiction set forth in Schedule I hereto. The
information set forth in Schedule I hereto with respect to such Grantor is true
and accurate in all respects. Such Grantor has not previously changed its name,
location, chief executive office, place where it maintains its agreements, type
of organization, jurisdiction of organization or organizational identification
number from those set forth in Schedule I hereto except as disclosed in
Schedule V hereto.
     (b) All of the Equipment and Inventory of such Grantor are located at the
places specified therefor in Schedule IV hereto, as such Schedule IV may be
amended from time to time pursuant to Section 11(a). Within the 3 years
preceding the execution of this Agreement, such Grantor has not previously
changed the location of its Equipment and Inventory except as set forth in
Schedule V hereto. All Security Collateral consisting of certificated securities
and instruments have been delivered to the Administrative Agent. Original copies
of each Assigned Agreement and all originals of all chattel paper that evidence
Receivables have been delivered to the Administrative Agent, in each case to the
extent that delivery thereof to the Administrative Agent is required under the
Credit Agreement. None of the Receivables or Agreement Collateral

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is evidenced by a promissory note or other instrument that has not been
delivered to the Administrative Agent.
     (c) Such Grantor is the legal and beneficial owner of the Collateral of
such Grantor free and clear of any Lien, claim, option or right of others,
except for the security interest created under this Agreement or permitted under
the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of such Collateral or listing such
Grantor or any trade name of such Grantor as debtor is on file in any recording
office, except such as may have been filed in favor of the Administrative Agent
relating to the Loan Documents or as otherwise permitted under the Credit
Agreement.
     (d) Such Grantor has exclusive possession and control of the Equipment and
Inventory other than Inventory stored at any leased premises or warehouse for
which a landlord’s or warehouseman’s agreement, in form and substance
satisfactory to the Administrative Agent, is in effect and which leased premises
or warehouse is so indicated by an asterisk on Schedule IV hereto, as such
Schedule IV may be amended from time to time pursuant to Section 11(a). In the
case of Equipment and Inventory located on leased premises or in warehouses, no
lessor or warehouseman of any premises or warehouse upon or in which such
Equipment or Inventory is located has (i) issued any warehouse receipt or other
receipt in the nature of a warehouse receipt in respect of any Equipment or
Inventory, (ii) issued any document for any of such Grantor’s Equipment or
Inventory, (iii) received notification of any secured party’s interest (other
than the security interest granted hereunder) in such Grantor’s Equipment or
Inventory or (iv) any Lien, claim or charge (based on contract, statute or
otherwise) on such Equipment and Inventory.
     (e) The Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and is fully paid and non-assessable. With respect
to the Pledged Equity that is an uncertificated security, such Grantor has
caused the issuer thereof either (i) to register the Administrative Agent as the
registered owner of such security or (ii) to agree in an authenticated record
with such Grantor and the Administrative Agent that such issuer will comply with
instructions with respect to such security originated by the Administrative
Agent without further consent of such Grantor. If such Grantor is an issuer of
Pledged Equity, such Grantor confirms that it has received notice of such
security interest. The Pledged Debt pledged by such Grantor hereunder has been
duly authorized, authenticated or issued and delivered, is the legal, valid and
binding obligation of the issuers thereof, is evidenced by one or more
promissory notes (which notes have been delivered to the Administrative Agent)
and is not in default.
     (f) The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule II hereto. The Initial Pledged Debt constitutes all of the
outstanding indebtedness owed to such Grantor by the issuers thereof and is
outstanding in the principal amount indicated on Schedule II hereto.
     (g) All of the investment property and all shares of stock or other Equity
Interests, including without limitation equity ownership interests in tenant in
common ownership vehicles and unconsolidated joint ventures holding real estate,
owned by such Grantor and all Debt owed to such Grantor is listed on Schedule II
hereto.
     (h) The Assigned Agreements to which such Grantor is a party, true and
complete copies of which (other than the Hedge Agreements) have been furnished
to each Secured Party, have been duly authorized, executed and delivered by such
Grantor and, to such Grantor’s knowledge, by all other parties thereto, have not
been amended, amended and restated, supplemented or otherwise modified, are in
full force and effect and are binding upon and

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enforceable against such Grantor and, to such Grantor’s knowledge, against all
other parties thereto in accordance with their terms. There exists no default
under any Assigned Agreement to which such Grantor is a party by such Grantor
or, to such Grantor’s knowledge, by any other party thereto.
     (i) Such Grantor has no deposit accounts, other than the Account Collateral
listed on Schedule VII hereto, as such Schedule VII may be amended from time to
time pursuant to Section 5(d), and legal, binding and enforceable Account
Control Agreements are in effect for each deposit account that constitutes
Account Collateral (other than Account Collateral consisting of deposit accounts
maintained with the Administrative Agent). With respect to Account Control
Agreements executed prior to December 2007, where the ownership of the account
holder has changed or as requested by the Administrative Agent, legal, binding
and enforceable account control ratifications, substantially in the form of
Exhibit I hereto, or shall otherwise be in form and substance satisfactory to
the Administrative Agent (each, an “Account Control Ratification”) are in
effect. Such Grantor has instructed all existing Obligors to make all payments
to a Deposit Account.
     (j) Such Grantor is not a beneficiary or assignee under any letter of
credit, other than the letters of credit described in Schedule X hereto, as such
Schedule X may be amended from time to time, and legal, binding and enforceable
Consents to Assignment of Letter of Credit Rights, in the form of the Consent to
Assignment of Letter of Credit Rights attached hereto as Exhibit H, are in
effect for each Collateral L/C. Such Grantor has instructed all issuers and
nominated persons under any Collateral L/C in which the Grantor is the
beneficiary or assignee to make all payments to a Deposit Account.
     (k) All filings and other actions (including, without limitation,
(A) actions necessary to obtain control of Collateral as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and Section 16 of UETA and
(B) actions necessary to perfect the Administrative Agent’s security interest
with respect to Collateral evidenced by a certificate of ownership) necessary to
perfect the security interest in the Collateral of such Grantor created under
this Agreement have been duly made or taken and are in full force and effect,
and this Agreement creates in favor of the Administrative Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected first priority security interest in the Collateral of such
Grantor, securing the payment of the Secured Obligations.
     (l) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection or maintenance of the security
interest created hereunder (including the first priority nature of such security
interest), except for the filing of financing and continuation statements under
the UCC, the recordation of the Intellectual Property Security Agreements
referred to in Section 14(f) with the U.S. Patent and Trademark Office and the
U.S. Copyright Office and the actions described in Section 4 with respect to
Security Collateral, or (iii) the exercise by the Administrative Agent of its
voting or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security Collateral by
laws affecting the offering and sale of securities generally.
     (m) The Inventory that has been produced or distributed by such Grantor has
been produced in compliance with all requirements of applicable law, including,
without limitation, the Fair Labor Standards Act.

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     (n) As to itself and its Intellectual Property Collateral:
     (i) The operation of such Grantor’s business as currently conducted or as
contemplated to be conducted and the use of the Intellectual Property Collateral
in connection therewith, to such Grantor’s knowledge, do not conflict with,
infringe, misappropriate, dilute, misuse or otherwise violate the intellectual
property rights of any third party.
     (ii) Such Grantor is the exclusive owner of all right, title and interest
in and to the Intellectual Property Collateral, and is entitled to use all
Intellectual Property Collateral subject only to the terms of the IP Agreements.
     (iii) The Intellectual Property Collateral set forth on Schedule VI hereto
includes all of the patents, patent applications, domain names, trademark
registrations and applications, copyright registrations and applications and IP
Agreements owned by such Grantor.
     (iv) The Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or part, and to the best of such
Grantor’s knowledge, is valid and enforceable. Such Grantor is not aware of any
uses of any item of Intellectual Property Collateral that could be expected to
lead to such item becoming invalid or unenforceable.
     (v) Such Grantor has made or performed all filings, recordings and other
acts and has paid all required fees and taxes to maintain and protect its
interest in each and every item of Intellectual Property Collateral in full
force and effect throughout the world, and to protect and maintain its interest
therein including, without limitation, recordations of any of its interests in
the Patents and Trademarks with the U.S. Patent and Trademark Office and in
corresponding national and international patent offices, and recordation of any
of its interests in the Copyrights with the U.S. Copyright Office and in
corresponding national and international copyright offices. Such Grantor has
used proper statutory notice in connection with its use of each patent,
trademark and copyright in the Intellectual Property Collateral.
     (vi) No claim, action, suit, investigation, litigation or proceeding has
been asserted or is pending or threatened in writing against such Grantor
(i) based upon or challenging or seeking to deny or restrict the Grantor’s
rights in or use of any of the Intellectual Property Collateral, (ii) alleging
that the Grantor’s rights in or use of the Intellectual Property Collateral or
that any services provided by, processes used by, or products manufactured or
sold by, such Grantor infringe, misappropriate, dilute, misuse or otherwise
violate any patent, trademark, copyright or any other proprietary right of any
third party, or (iii) alleging that the Intellectual Property Collateral is
being licensed or sublicensed in violation or contravention of the terms of any
license or other agreement. To such Grantor’s knowledge, no Person is engaging
in any activity that infringes, misappropriates, dilutes, misuses or otherwise
violates the Intellectual Property Collateral or the Grantor’s rights in or use
thereof. Except as set forth on Schedule VI hereto, such Grantor has not granted
any license, release, covenant not to sue, non-assertion assurance, or other
right to any Person with respect to any part of the Intellectual Property
Collateral. The consummation of the transactions contemplated by the Transaction
Documents will not result in the termination or impairment of any of the
Intellectual Property Collateral.

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     (vii) With respect to each IP Agreement: (A) such IP Agreement is valid and
binding and in full force and effect and represents the entire agreement between
the respective parties thereto with respect to the subject matter thereof;
(B) such IP Agreement will not cease to be valid and binding and in full force
and effect on terms identical to those currently in effect as a result of the
rights and interest granted herein, nor will the grant of such rights and
interest constitute a breach or default under such IP Agreement or otherwise
give any party thereto a right to terminate such IP Agreement; (C) such Grantor
has not received any notice of termination or cancellation under such IP
Agreement; (D) such Grantor has not received any notice of a breach or default
under such IP Agreement, which breach or default has not been cured; (E) such
Grantor has not granted to any other third party any rights, adverse or
otherwise, under such IP Agreement; and (F) neither such Grantor nor any other
party to such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement.
     (viii) To the best of such Grantor’s knowledge, (A) none of the Trade
Secrets of such Grantor has been used, divulged, disclosed or appropriated to
the detriment of such Grantor for the benefit of any other Person other than
such Grantor; (B) no employee, independent contractor or agent of such Grantor
has misappropriated any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent contractor or agent
of such Grantor; and (C) no employee, independent contractor or agent of such
Grantor is in default or breach of any term of any employment agreement,
non-disclosure agreement, assignment of inventions agreement or similar
agreement or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual Property Collateral.
     (ix) No Grantor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral or that would impair
the validity or enforceability of such Intellectual Property Collateral.
     (o) Such Grantor has no commercial tort claims (as defined in
Section 9-102(13) of the UCC) other than those listed in Schedule IX hereto.
     (p) Such Grantor has no commodity contracts or commodity accounts.
     (q) Such Grantor has no security entitlements with respect to any financial
assets other than Pledged Equity, Pledged Debt and entitlements credited to the
Securities Accounts identified in Part III of Schedule VII and legal, binding
and enforceable Securities Control Agreements are in effect for each Securities
Account. With respect to Securities Control Agreements executed prior to
December 2007, where the ownership of the account holder has changed or as
requested by the Administrative Agent, legal, binding and enforceable Account
Control Ratifications are in effect.
     (r) All of the Assigned Agreements are listed on Schedule III hereto.
          Section 10. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be necessary or desirable, or that the
Administrative Agent may request, in order to perfect and protect any pledge or
security interest

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granted or purported to be granted by such Grantor hereunder or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral of such Grantor. Without limiting the generality
of the foregoing, each Grantor will promptly with respect to Collateral of such
Grantor: (i) mark conspicuously each document included in Inventory, each
chattel paper included in Receivables, each Related Contract, each Assigned
Agreement and, at the request of the Administrative Agent, each of its records
pertaining to such Collateral with a legend, in form and substance satisfactory
to the Administrative Agent, indicating that such document, chattel paper,
Related Contract, Assigned Agreement or Collateral is subject to the security
interest granted hereby; (ii) if any such Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge to the
Administrative Agent hereunder such note or instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Administrative Agent;
(iii) execute or authenticate and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Administrative Agent may request, in order
to perfect and preserve the security interest granted or purported to be granted
by such Grantor hereunder; (iv) deliver and pledge to the Administrative Agent
for benefit of the Secured Parties certificates representing Security Collateral
that constitutes certificated securities, accompanied by undated stock or bond
powers executed in blank; (v) take all action necessary to ensure that the
Administrative Agent has control of Collateral consisting of deposit accounts,
electronic chattel paper, investment property, letter-of-credit rights and
transferable records as provided in Sections 9-104, 9-105, 9-106 and 9-107 of
the UCC and in Section 16 of UETA; (vi) at the request of the Administrative
Agent, take all action to ensure that the Administrative Agent’s security
interest is noted on any certificate of ownership related to any Collateral
evidenced by a certificate of ownership; (vii) at the request of the
Administrative Agent, cause the Administrative Agent to be the beneficiary under
Collateral L/Cs, with the exclusive right to make all draws under the Collateral
L/Cs, and with all rights of a transferee under Section 5-114(e) of the UCC; and
(viii) deliver to the Administrative Agent evidence that all other action that
the Administrative Agent may deem reasonably necessary or desirable in order to
perfect and protect the security interest created by such Grantor under this
Agreement has been taken. From time to time upon request by the Administrative
Agent, each Grantor will, at such Grantor’s expense, cause to be delivered to
the Administrative Agent, for the benefit of the Secured Parties, an opinion of
counsel, from outside counsel reasonably satisfactory to the Administrative
Agent, as to such matters relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request.
          (b) Each Grantor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Administrative Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.
          (c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Collateral
of such Grantor and such other reports in connection with such Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.

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          (d) Within two Business Days after the request of the Administrative
Agent, the Borrower shall open the Collateral Account and the L/C Collateral
Account with Deutsche Bank Trust Company Americas, or such other financial
institution as the Administrative Agent may direct.
          Section 11. As to Equipment and Inventory. (a) Each Grantor will keep
the Equipment and Inventory of such Grantor (other than Inventory sold in the
ordinary course of business) at the places therefor specified in Section 9(b) or
at such other locations designated by the Grantor by written notice to the
Administrative Agent within 10 days of the placement of any Equipment and
Inventory at such other locations. Upon the giving of such notice, Schedule IV
shall be automatically amended to add any new locations specified in the notice.
          (b) Each Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working order as when
new, ordinary wear and tear excepted, and in accordance with any manufacturer’s
manual, and will forthwith, or in the case of any loss or damage to any of such
Equipment as soon as practicable after the occurrence thereof, make or cause to
be made all repairs, replacements and other improvements in connection therewith
that are necessary or desirable to such end. Each Grantor will promptly furnish
to the Administrative Agent a statement respecting any loss or damage to any of
the Equipment or Inventory of such Grantor.
          (c) Each Grantor will pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of such Grantor, except to the extent
payment thereof is not required by Section 5.01(b) of the Credit Agreement. In
producing its Inventory, each Grantor will comply with all requirements of
applicable law, including, without limitation, the Fair Labor Standards Act.
          Section 12. Insurance. (a) Each Grantor will, at its own expense,
maintain insurance with respect to the Equipment and Inventory of such Grantor
in such amounts, against such risks, in such form and with such insurers, as
shall be satisfactory to the Administrative Agent from time to time. Each policy
of each Grantor for liability insurance shall provide for all losses to be paid
on behalf of the Administrative Agent and such Grantor as their interests may
appear, and each policy for property damage insurance shall provide for all
losses (except for losses of less than $500,000 per occurrence) to be paid
directly to the Administrative Agent. Each such policy shall in addition
(i) name such Grantor and the Administrative Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the Administrative
Agent) as their interests may appear, (ii) contain the agreement by the insurer
that any loss thereunder shall be payable to the Administrative Agent
notwithstanding any action, inaction or breach of representation or warranty by
such Grantor, (iii) provide that there shall be no recourse against the
Administrative Agent for payment of premiums or other amounts with respect
thereto and (iv) provide that at least 10 days’ prior written notice of
cancellation or of lapse shall be given to the Administrative Agent by the
insurer. Each Grantor will, at the request of the Administrative Agent, duly
execute and deliver instruments of assignment of such insurance policies to
comply with the requirements of Section 11 and cause the insurers to acknowledge
notice of such assignment.
          (b) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 12 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 12 is not
applicable, the applicable Grantor will make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of
insurance properly received by or released to such Grantor shall be used by such
Grantor, except as otherwise required hereunder or by the Credit Agreement, to
pay or as reimbursement for the costs of such repairs or replacements.

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          (c) So long as no Event of Default shall have occurred and be
continuing, all insurance payments received by the Administrative Agent in
connection with any loss, damage or destruction of any Inventory or Equipment
will be released by the Administrative Agent to the applicable Grantor for the
repair, replacement or restoration thereof, subject to such terms and conditions
with respect to the release thereof as the Administrative Agent may reasonably
require. To the extent that (i) the amount of any such insurance payments
exceeds the cost of any such repair, replacement or restoration, or (ii) such
insurance payments are not otherwise required by the applicable Grantor to
complete any such repair, replacement or restoration required hereunder, the
Administrative Agent will not be required to release the amount thereof to such
Grantor and may hold or continue to hold such amount in the Collateral Account
as additional security for the Secured Obligations of such Grantor (except that
the Administrative Agent will direct the applicable Pledged Account Bank to
release to such Grantor any such amount if and to the extent that any prepayment
of Obligations is required under the Credit Agreement in connection with the
receipt of such amount and such prepayment has been made). Upon the occurrence
and during the continuance of any Event of Default or the actual or constructive
total loss (in excess of $500,000 per occurrence) of any Equipment or Inventory,
all insurance payments in respect of such Equipment or Inventory shall be paid
to the Administrative Agent and shall, in the Administrative Agent’s sole
discretion, (i) be released to the applicable Grantor to be applied as set forth
in the first sentence of this subsection (c) or (ii) be held as additional
Collateral hereunder or applied as specified in Section 23(b).
          Section 13. Post-Closing Changes; Bailees; Collections on Assigned
Agreements, Receivables and Related Contracts. (a) No Grantor will change its
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 9(a) of this
Agreement without first giving at least 30 days’ prior written notice to the
Administrative Agent and taking all action required by the Administrative Agent
for the purpose of perfecting or protecting the security interest granted by
this Agreement. No Grantor will change the location of the Equipment and
Inventory or the place where it keeps the originals of the Assigned Agreements
and Related Contracts to which such Grantor is a party and all originals of all
chattel paper that evidence Receivables of such Grantor from the locations
therefor specified in Sections 9(a) and 9(b) without first giving the
Administrative Agent 30 days’ prior written notice of such change. No Grantor
will become bound by a security agreement authenticated by another Person
(determined as provided in Section 9-203(d) of the UCC) without giving the
Administrative Agent 30 days’ prior written notice thereof and taking all action
required by the Administrative Agent to ensure that the perfection and first
priority nature of the Administrative Agent’s security interest in the
Collateral will be maintained. Each Grantor will hold and preserve its records
relating to the Collateral, including, without limitation, the Assigned
Agreements and Related Contracts, and will permit representatives of the
Administrative Agent at any time during normal business hours to inspect and
make abstracts from such records and other documents. If the Grantor does not
have an organizational identification number and later obtains one, it will
forthwith notify the Administrative Agent of such organizational identification
number.
          (b) If any Collateral of any Grantor is at any time in the possession
or control of a warehouseman, bailee or agent, or if the Administrative Agent so
requests such Grantor will (i) notify such warehouseman, bailee or agent of the
security interest created hereunder, (ii) instruct such warehouseman, bailee or
agent to hold all such Collateral solely for the Administrative Agent’s account
subject only to the Administrative Agent’s instructions (which shall permit such
Collateral to be removed by such Grantor in the ordinary course of business
until the Administrative Agent notifies such warehouseman, bailee or agent that
an Event of Default has occurred and is continuing), (iii) use commercially
reasonable efforts, to cause such warehouseman, bailee or agent to authenticate
a record acknowledging that it holds possession of such Collateral for the
Administrative Agent’s benefit and shall act solely on the instructions of the
Administrative Agent without the further consent of the Grantor or any other
Person, and (iv) make such authenticated record available to the Administrative
Agent.

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          (c) Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take (and, at the
Administrative Agent’s direction, will take) such action as such Grantor or the
Administrative Agent may deem necessary or advisable to enforce collection of
the Assigned Agreements, Receivables and Related Contracts; provided, however,
that the Administrative Agent shall have the right at any time, upon written
notice to such Grantor of its intention to do so, to notify the Obligors under
any Assigned Agreements, Receivables and Related Contracts of the assignment of
such Assigned Agreements, Receivables and Related Contracts to the
Administrative Agent and to direct such Obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Administrative
Agent and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Assigned Agreements, Receivables and Related Contracts,
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done, and to otherwise
exercise all rights with respect to such Assigned Agreements, Receivables and
Related Contracts, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice from the
Administrative Agent referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including, without limitation, instruments)
received by such Grantor in respect of the Assigned Agreements, Receivables and
Related Contracts of such Grantor shall be received in trust for the benefit of
the Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith, but in no event prior to the date on which the
Collateral Account has been opened, paid over to the Administrative Agent in the
same form as so received (with any necessary indorsement) to be deposited in the
Collateral Account and either (A) released to such Grantor on the terms set
forth in Section 7 so long as no Event of Default shall have occurred and be
continuing or (B) if any Event of Default shall have occurred and be continuing,
applied as provided in Section 23(b) and (ii) such Grantor will not adjust,
settle or compromise the amount or payment of any Receivable or amount due on
any Assigned Agreement or Related Contract, release wholly or partly any Obligor
thereof, or allow any credit or discount thereon. No Grantor will permit or
consent to the subordination of its right to payment under any of the Assigned
Agreements, Receivables and Related Contracts to any other indebtedness or
obligations of the Obligor thereof.
          Section 14. As to Intellectual Property Collateral. (a) With respect
to each item of its Intellectual Property Collateral, each Grantor agrees to
take, at its expense, all necessary steps, including, without limitation, in the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authority, to (i) maintain the validity and enforceability of such
Intellectual Property Collateral and maintain such Intellectual Property
Collateral in full force and effect, and (ii) pursue the registration and
maintenance of each patent, trademark, or copyright registration or application,
now or hereafter included in such Intellectual Property Collateral of such
Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities,
the filing of applications for renewal or extension, the filing of affidavits
under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent of
the Administrative Agent, discontinue use of or otherwise abandon any
Intellectual Property Collateral, or abandon any right to file an application
for patent, trademark, or copyright, unless such Grantor shall have previously
determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of such Grantor’s
business and that the loss thereof would not be reasonably likely to have a
Material Adverse Effect, in which case, such Grantor will give prompt notice of
any such abandonment to the Administrative Agent.

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          (b) Each Grantor agrees promptly to notify the Administrative Agent if
such Grantor becomes aware (i) that any item of the Intellectual Property
Collateral may have become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development regarding such
Grantor’s ownership of any of the Intellectual Property Collateral or its right
to register the same or to keep and maintain and enforce the same, or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the U.S. Patent and
Trademark Office or any court) regarding any item of the Intellectual Property
Collateral.
          (c) In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral is being infringed or misappropriated by a
third party, such Grantor shall promptly notify the Administrative Agent and
shall take such actions, at its expense, as such Grantor or the Administrative
Agent deems reasonable and appropriate under the circumstances to protect or
enforce such Intellectual Property Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against such
infringement or misappropriation.
          (d) Each Grantor shall use proper statutory notice in connection with
its use of each item of its Intellectual Property Collateral. No Grantor shall
do or permit any act or knowingly omit to do any act whereby any of its
Intellectual Property Collateral may lapse or become invalid or unenforceable or
placed in the public domain.
          (e) Each Grantor shall take all steps which it or the Administrative
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
          (f) With respect to its Intellectual Property Collateral, each Grantor
agrees to execute or otherwise authenticate an agreement, in substantially the
form set forth in Exhibit F hereto or otherwise in form and substance
satisfactory to the Administrative Agent (an “Intellectual Property Security
Agreement”), for recording the security interest granted hereunder to the
Administrative Agent in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
          (g) Each Grantor agrees that should it obtain an ownership interest in
any item of the type set forth in Section 1(g) that is not on the date hereof a
part of the Intellectual Property Collateral (“After-Acquired Intellectual
Property”) (i) the provisions of this Agreement shall automatically apply
thereto, and (ii) any such After-Acquired Intellectual Property and, in the case
of trademarks, the goodwill symbolized thereby, shall automatically become part
of the Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. Each Grantor shall give prompt written
notice to the Administrative Agent identifying the After-Acquired Intellectual
Property, and such Grantor shall execute and deliver to the Administrative Agent
with such written notice, or otherwise authenticate, an agreement substantially
in the form of Exhibit G hereto or otherwise in form and substance satisfactory
to the Administrative Agent (an “IP Security Agreement Supplement”) covering
such After-Acquired Intellectual Property which IP Security Agreement Supplement
shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
          Section 15. Voting Rights; Dividends; Etc. (a) So long as no Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing:

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     (i) Each Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of such Grantor or any
part thereof for any purpose other than originate Entitlement Orders (as defined
in any Securities Account Control Agreement) with respect to the Securities
Account or the Commodity Account; provided however, that such Grantor will not
exercise or refrain from exercising any such right if such action would have a
material adverse effect on the value of the Security Collateral or any part
thereof.
     (ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided, however, that
any and all
     (A) dividends, interest and other distributions paid or payable other than
in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Security
Collateral,
     (B) dividends and other distributions paid or payable in cash in respect of
any Security Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus and
     (C) cash paid, payable or otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Administrative Agent to hold
as, Security Collateral and shall, if received by such Grantor, be received in
trust for the benefit of the Administrative Agent, be segregated from the other
property or funds of such Grantor and be forthwith delivered to the
Administrative Agent as Security Collateral in the same form as so received
(with any necessary indorsement).
     (iii) The Administrative Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other instruments
as such Grantor may reasonably request for the purpose of enabling such Grantor
to exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or interest payments that it
is authorized to receive and retain pursuant to paragraph (ii) above.
          (b) Upon the occurrence and during the continuance of a Default under
Section 6.01(a) or (f) of the Credit Agreement or an Event of Default:
     (i) All rights of each Grantor (x) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 15(a)(i) shall, upon notice to such Grantor by the
Administrative Agent, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 15(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Administrative Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.
     (ii) All dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of paragraph (i) of this Section 15(b)
shall be received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and

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shall be forthwith paid over to the Administrative Agent as Security Collateral
in the same form as so received (with any necessary indorsement).
     (iii) The Administrative Agent shall be authorized to send to each
Securities Intermediary or Commodity Intermediary as defined in and under any
Security Control Agreement a Notice of Exclusive Control as defined in and under
such Security Control Agreement.
     Section 16. As to the Assigned Agreements. (a) Each Grantor will at its
expense:
     (i) perform and observe all terms and provisions of the Assigned Agreements
to be performed or observed by it, maintain the Assigned Agreements to which it
is a party in full force and effect, enforce the Assigned Agreements to which it
is a party in accordance with the terms thereof and take all such action to such
end as may be requested from time to time by the Administrative Agent; and
     (ii) furnish to the Administrative Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by such Grantor
under or pursuant to the Assigned Agreements to which it is a party, and from
time to time (A) furnish to the Administrative Agent such information and
reports regarding the Assigned Agreements and such other Collateral of such
Grantor as the Administrative Agent may reasonably request and (B) upon request
of the Administrative Agent make to each other party to any Assigned Agreement
to which it is a party such demands and requests for information and reports or
for action as such Grantor is entitled to make thereunder.
          (b) Each Grantor agrees that it will not, except to the extent
otherwise permitted under the Credit Agreement:
     (i) cancel or terminate any Assigned Agreement to which it is a party or
consent to or accept any cancellation or termination thereof;
     (ii) amend, amend and restate, supplement or otherwise modify any such
Assigned Agreement or give any consent, waiver or approval thereunder;
     (iii) waive any default under or breach of any such Assigned Agreement; or
     (iv) take any other action in connection with any such Assigned Agreement
that would impair the value of the interests or rights of such Grantor
thereunder or that would impair the interests or rights of any Secured Party.
          (c) Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Administrative Agent for
benefit of the Secured Parties of each Assigned Agreement to which it is a party
by any other Grantor hereunder.
          Section 17. Payments Under the Assigned Agreements. (a) Each Grantor
agrees, and has effectively so instructed each other party to each Assigned
Agreement to which it is a party, that all payments due or to become due under
or in connection with such Assigned Agreement will be made directly to a Deposit
Account.
          (b) All moneys received or collected pursuant to subsection (a) above
shall be (i) released to the applicable Grantor on the terms set forth in
Section 7 so long as no Default under

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Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall have
occurred and be continuing or (ii) if any Default under Section 6.01(a) or
(f) of the Credit Agreement or Event of Default shall have occurred and be
continuing, applied as provided in Section 23(b).
          Section 18. As to Letter-of-Credit Rights. (a) Each Grantor, by
granting a security interest in its Receivables consisting of letter-of-credit
rights to the Administrative Agent, intends to (and hereby does) assign to the
Administrative Agent its rights (including its contingent rights) to the
proceeds of all Related Contracts consisting of letters of credit of which it is
or hereafter becomes a beneficiary or assignee. Each Grantor will promptly cause
the issuer of each Collateral L/C and each nominated person (if any) with
respect thereto to consent to such assignment of the proceeds thereof in
substantially the form of the Consent to Assignment of Letter of Credit Rights
attached hereto as Exhibit H or otherwise in form and substance satisfactory to
the Administrative Agent and deliver written evidence of such consent to the
Administrative Agent.
          (b) Upon the occurrence of a Default under Section 6.01(a) or (f) of
the Credit Agreement or Event of Default, each Grantor will, promptly upon
request by the Administrative Agent, (i) notify (and such Grantor hereby
authorizes the Administrative Agent to notify) the issuer and each nominated
person with respect to each of the Related Contracts consisting of Collateral
L/Cs and any payments due or to become due in respect thereof are to be made
directly to the Administrative Agent or its designee and (ii) arrange for the
Administrative Agent to become the transferee beneficiary of the Collateral
L/Cs.
          Section 19. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Credit Agreement, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under
this Agreement and Permitted Liens.
          (b) In the case where a subsidiary of a Loan Party is the issuer of
Pledged Equity each Grantor agrees that it will (i) cause each issuer of the
Pledged Equity pledged by such Grantor not to issue any Equity Interests or
other securities in addition to or in substitution for the Pledged Equity issued
by such issuer, except to such Grantor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities.
          Section 20. Administrative Agent Appointed Attorney-in-Fact . Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of a Default, in the Administrative Agent’s
discretion, to take any action and to execute any instrument that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:
     (a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 12,
     (b) to ask for, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,
     (c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and

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     (d) to file any claims or take any action or institute any proceedings that
the Administrative Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Administrative Agent
with respect to any of the Collateral.
          Section 21. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Administrative Agent
incurred in connection therewith shall be payable by such Grantor under
Section 24.
          Section 22. The Administrative Agent’s Duties. (a) The powers
conferred on the Administrative Agent hereunder are solely to protect the
Secured Parties’ interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Administrative Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral. The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property.
          (b) Anything contained herein to the contrary notwithstanding, the
Administrative Agent may from time to time, when the Administrative Agent deems
it to be necessary, appoint one or more subagents (each a “Subagent”) for the
Administrative Agent hereunder with respect to all or any part of the
Collateral. In the event that the Administrative Agent so appoints any Subagent
with respect to any Collateral, (i) the assignment and pledge of such Collateral
and the security interest granted in such Collateral by each Grantor hereunder
shall be deemed for purposes of this Security Agreement to have been made to
such Subagent, in addition to the Administrative Agent, for the ratable benefit
of the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the
Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term “Administrative Agent,” when used herein in relation to any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to any
such Collateral unless and except to the extent expressly authorized in writing
by the Administrative Agent.
          Section 23. Remedies. If any Event of Default shall have occurred and
be continuing:
     (a) The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Administrative Agent forthwith, assemble all or
part of the Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place and time to be designated by
the Administrative Agent that is reasonably convenient to both parties;
(ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon

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such other terms as the Administrative Agent may deem commercially reasonable;
(iii) occupy any premises owned or leased by any of the Grantors where the
Collateral or any part thereof is assembled or located for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise any
and all rights and remedies of any of the Grantors under or in connection with
the Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of, the
Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with
respect to the Account Collateral and (C) exercise all other rights and remedies
with respect to the Assigned Agreements, the Receivables, the Related Contracts
and the other Collateral, including, without limitation, those set forth in
Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days’ notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
     (b) Any cash held by or on behalf of the Administrative Agent and all cash
proceeds received by or on behalf of the Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Administrative Agent
pursuant to Section 24) in whole or in part by the Administrative Agent for the
ratable benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner:
     (i) first, paid to the Administrative Agent for any amounts then owing to
the Administrative Agent pursuant to Section 9.04 of the Credit Agreement or
otherwise under the Loan Documents; and
     (ii) second, ratably (A) paid to the Lender Parties and the Hedge Banks,
respectively, for any amounts then owing to them, in their capacities as such,
under the Loan Documents ratably in accordance with such respective amounts then
owing to such Lender Parties and the Hedge Banks, provided that, for purposes of
this Section 23, the amount owing to any such Hedge Bank pursuant to any Secured
Hedge Agreement to which it is a party (other than any amount therefore accrued
and unpaid) shall be deemed to be equal to the Agreement Value therefor and
(B) deposited as Collateral in the L/C Collateral Account up to an amount equal
to 100% of the aggregate Available Amount of all outstanding Letters of Credit,
provided that in the event that any such Letter of Credit is drawn, the
Administrative Agent shall pay to the Issuing Bank that issued such Letter of
Credit the amount held in the L/C Collateral Account in respect of such Letter
of Credit, provided further that, to the extent that any such Letter of Credit
shall expire or terminate undrawn and as a result thereof the amount of the
Collateral in the L/C Collateral Account shall exceed 100% of the aggregate
Available Amount of all then outstanding Letters of Credit, such excess amount
of such Collateral shall be applied in accordance with the remaining order of
priority set out in this Section 23(b).

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Any surplus of such cash or cash proceeds held by or on the behalf of the
Administrative Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.
     (c) All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received
in trust for the benefit of the Administrative Agent, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
indorsement).
     (d) The Administrative Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Account Collateral or in any other deposit account.
     (e) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized by any
Trademarks subject to such sale or other disposition shall be included therein,
and such Grantor shall supply to the Administrative Agent or its designee such
Grantor’s know-how and expertise, and documents and things relating to any
Intellectual Property Collateral subject to such sale or other disposition, and
such Grantor’s customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of products and services of such Grantor.
          Section 24. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final, non-
appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party’s gross negligence or willful misconduct.
          (b) Each Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Administrative Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the other Secured Parties hereunder or (iv) the failure
by such Grantor to perform or observe any of the provisions hereof.
          Section 25. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Administrative
Agent or any other Secured Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.

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          (b) Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each a “Security Agreement Supplement”), (i) such Person shall be referred to
as an “Additional Grantor” and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to “Grantor” shall also
mean and be a reference to such Additional Grantor, and each reference in this
Agreement and the other Loan Documents to “Collateral” shall also mean and be a
reference to the Collateral of such Additional Grantor, and (ii) the
supplemental schedules I-X attached to each Security Agreement Supplement shall
be incorporated into and become a part of and supplement Schedules I-X,
respectively, hereto, and the Administrative Agent may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Security
Agreement Supplement.
          Section 26. Notices, Etc. All notices and other communications
provided for hereunder shall be either (i) in writing (including telegraphic,
telecopier or telex communication) and mailed, telegraphed, telecopied, telexed
or otherwise delivered or (ii) by electronic mail (if electronic mail addresses
are designated as provided below) confirmed immediately in writing, in the case
of the Borrower or the Administrative Agent, addressed to it at its address
specified in the Credit Agreement and, in the case of each Grantor other than
the Borrower, addressed to it at its address specified in the Credit Agreement
or on the signature page to the Security Agreement Supplement pursuant to which
it became a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and other communications shall, when mailed, telegraphed, telecopied,
telexed, sent by electronic mail or otherwise, be effective when deposited in
the mails, delivered to the telegraph company, telecopied, confirmed by telex
answerback, sent by electronic mail and confirmed in writing, or otherwise
delivered (or confirmed by a signed receipt), respectively, addressed as
aforesaid; except that notices and other communications to the Administrative
Agent shall not be effective until received by the Administrative Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or of any Security Agreement Supplement or
Schedule hereto shall be effective as delivery of an original executed
counterpart thereof.
          Section 27. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations, (ii) the Termination
Date and (iii) the termination or expiration of all Letters of Credit and all
Secured Hedge Agreements, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender Party may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party herein or otherwise, in
each case as provided in Section 8.07 of the Credit Agreement.
          Section 28. Release; Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral of any Grantor in accordance with
the terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Administrative Agent will, at such Grantor’s expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at
the time of such request and such release no Default shall have occurred and be
continuing, (ii) such Grantor shall have delivered to the Administrative Agent,
at least ten Business Days prior to the date of the proposed release, a written
request for release describing

26

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the item of Collateral and the terms of the sale, lease, transfer or other
disposition in reasonable detail, including, without limitation, the price
thereof and any expenses in connection therewith, together with a form of
release for execution by the Administrative Agent and a certificate of such
Grantor to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Administrative Agent may request
and (iii) the proceeds of any such sale, lease, transfer or other disposition
required to be applied, or any payment to be made in connection therewith, in
accordance with Section 2.06 of the Credit Agreement shall, to the extent so
required, be paid or made to, or in accordance with the instructions of, the
Administrative Agent when and as required under Section 2.06 of the Credit
Agreement.
          (b) Upon the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Termination Date and (iii) the termination or expiration
of all Letters of Credit and all Secured Hedge Agreements, the pledge and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor. Upon any such termination,
the Administrative Agent will, at the applicable Grantor’s expense, execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.
          Section 29. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
          Section 30. The Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.
          Section 31. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
[Signature Pages Follow]

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          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                  GRUBB & ELLIS COMPANY    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: EVP & CFO    
 
                GRUBB & ELLIS AFFILIATES, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS MANAGEMENT SERVICES, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS OF ARIZONA, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS CONSULTING SERVICES COMPANY    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS INSTITUTIONAL PROPERTIES, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    

28

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                GRUBB & ELLIS OF MICHIGAN, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS MORTGAGE GROUP, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS OF NEVADA, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS NEW YORK, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS ADVISERS OF CALIFORNIA, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
   
 
      Name: Richard W. Pehlke    
 
      Title: CFO    
 
                HSM INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
   
 
      Name: Richard W. Pehlke    
 
      Title: CFO    

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                WM. A. WHITE/GRUBB & ELLIS INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                LANDAUER HOSPITALITY INTERNATIONAL, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                LANDAUER SECURITIES, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS MANAGEMENT SERVICES OF MICHIGAN, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GRUBB & ELLIS EUROPE, INC.    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                NNN REALTY ADVISORS, INC.    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    

30

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                GRUBB & ELLIS REALTY INVESTORS, LLC    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                TRIPLE NET PROPERTIES REALTY, INC.    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                GRUBB & ELLIS RESIDENTIAL MANAGEMENT, INC.    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                GERA PROPERTY ACQUISITION LLC    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GERA 6400 SHAFER LLC    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
   
 
      Name: Richard W. Pehlke    
 
      Title: CFO    
 
                GERA ABRAMS CENTRE LLC    
 
           
 
  By   /s/ Richard W. Pehlke    
 
     
 
Name: Richard W. Pehlke    
 
      Title: CFO    

31

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                GRUBB & ELLIS ALESCO GLOBAL ADVISORS, LLC    
 
           
 
  By   /s/ Joseph Welsh    
 
     
 
Name: Joseph Welsh    
 
      Title: Chief Financial Officer    
 
                NNN/ROC APARTMENT HOLDINGS, LLC    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                GRUBB & ELLIS HOUSING, LLC    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                GRUBB & ELLIS APARTMENT REIT ADVISOR, LLC    
 
           
 
  By   /s/ Stanley J. Olander, Jr.    
 
     
 
Name: Stanley J. Olander, Jr.    
 
      Title: CEO and President    
 
                GRUBB & ELLIS HEALTHCARE REIT ADVISOR, LLC    
 
           
 
  By   /s/ Jeffrey T. Hanson    
 
     
 
Name: Jeffrey T. Hanson    
 
      Title: CEO    
 
                GRUBB & ELLIS HEALTHCARE REIT II ADVISOR, LLC    
 
           
 
  By   /s/ Jeffrey T. Hanson    
 
     
 
Name: Jeffrey T. Hanson    
 
      Title: CEO    

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                NNN ROCKY MOUNTAIN EXCHANGE, LLC.    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    
 
                NNN 200 GALLERIA MEMBER, LLC.    
 
           
 
  By   /s/ Michael J. Rispoli    
 
     
 
Name: Michael J. Rispoli    
 
      Title: CFO    

33