Exhibit 10.1





Exhibit 10.1




Execution Copy




GRUBB & ELLIS COMPANY




$30,000,000




7.95% CONVERTIBLE SENIOR NOTES DUE 2015




PURCHASE AGREEMENT




May 3, 2010




JMP Securities LLC

600 Montgomery Street, Suite 1100

San Francisco, California 94111




Ladies and Gentlemen:



Grubb & Ellis Company, a Delaware corporation (the “Company”), confirms its agreement with JMP
Securities LLC (the “Initial Purchaser”) with respect to the issuance and sale by the Company to
the Initial Purchaser of $30 million principal amount of the Company’s 7.95% Convertible Senior
Notes due 2015 (the “Initial Securities”). In addition, the Company has granted to the Initial
Purchaser an option to purchase up to an additional $4.5 million principal amount of the Company’s
7.95% Convertible Senior Notes due 2015 (the “Option Securities” and, together with the Initial
Securities, the “Securities”). The Securities, including under certain circumstances accrued
interest thereon, will be convertible into shares (the “Underlying Shares”) of the common stock,
par value $0.01 per share, of the Company (the “Common Stock”), subject to and in accordance with
the terms and conditions of the Indenture (as defined below). The Securities will be issued
pursuant to an Indenture (the “Indenture”) to be dated on or about May 7, 2010 by and between the
Company and U.S. Bank, in its capacity as trustee (the “Trustee”). This Agreement, the Securities,
the Indenture, and the Registration Rights Agreement (as defined below) are herein referred to
collectively as the “Operative Documents.”



Upon original issuance of the Securities, and until such time as the same is no longer
required under the applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act”) and the rules and regulations thereunder (the “Securities Act Regulations”), the
Securities (and all securities issued in exchange therefor or in substitution thereof) shall bear
the following legend:




“THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.




BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:




	 	(1)	 	REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT (“RULE 144A”)), (B) IT IS AN INSTITUTIONAL “ACCREDITED
INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT), OR
(C) IT IS AN INDIVIDUAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a) (4), (5) OR
(6) UNDER THE SECURITIES ACT); AND





 


 









 






	 	(2)	 	AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE
THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY
SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW, EXCEPT:







	 	(A)	 	TO GRUBB & ELLIS COMPANY (THE “COMPANY”) OR ANY SUBSIDIARY
THEREOF, OR







	 	(B)	 	PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT, OR







	 	(C)	 	TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR







	 	(D)	 	PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.







PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND
THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS
OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED
TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”



The Securities will be offered and sold to the Initial Purchaser pursuant to an exemption from the
registration requirements under the Securities Act. The Company has prepared a preliminary offering
memorandum, dated April 22, 2010 (as subsequently supplemented, if applicable, and including all
information incorporated by reference therein, the “Preliminary Offering Memorandum”), and will
prepare a final offering memorandum, dated the date hereof (such final offering memorandum, and
including all information incorporated by reference therein, the “Offering Memorandum”), relating
to the Company and its Subsidiaries (as defined below) and the Securities. For purposes of this
Agreement, “Time of Sale Memorandum” means the Preliminary Offering Memorandum together with any
Issuer Written Information (as defined below) issued at or prior to 5:00 P.M., New York City time,
on May 3, 2010 or such other time as agreed by the Company and the Initial Purchaser (such date and
time, the “Time of Sale”). The Company will prepare a final term sheet (the “Final Term Sheet”), in
the form set forth in Schedule C hereto, reflecting the final terms of the Securities, in form and
substance satisfactory to the Initial Purchaser. “Issuer Written Information” means (i) any writing
intended for general distribution to investors as evidenced by its being specified in Schedule A
hereto, (ii) any “road show” that is a “written communication” within the meaning of the Securities
Act and (iii) the Final Term Sheet. The Time of Sale Memorandum and the Offering Memorandum are
collectively referred to as the “Offering Memorandums.” In addition, any reference to the Time of
Sale Memorandum or the Offering Memorandum shall be deemed to refer to any documents incorporated
by reference therein as of the date of such Time of Sale Memorandum or the Offering Memorandum, as
the case may be. Any reference to


 


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any amendment or supplement to any Time of Sale Memorandum or the Offering Memorandum shall be
deemed to refer to and include any document filed by the Company under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), with the U.S. Securities and Exchange Commission (the
"Commission”) after the date of such Time of Sale Memorandum or the Offering Memorandum, as the
case may be, but prior to the date of such amendment or supplement, as and to the extent
incorporated by reference in such Time of Sale Memorandum or the Offering Memorandum, as the case
may be.



The Initial Purchaser has advised the Company that the Initial Purchaser will make offers to
sell the Securities on the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to persons whom the Initial Purchaser reasonably believes to be (i) “qualified institutional
buyers,” as defined in Rule 144A under the Securities Act (such persons referred to in clause (i)
above, “QIBs,” and such sales referenced in clause (i), the “Exempt Resales”), (ii) institutional
“accredited investors,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, or
(iii) individual “accredited investors,” as defined in Rule 501(a)(4), (5) or (6) under the
Securities Act) (such persons referred to in clauses (ii) and (iii) above, “Accredited Investors,”
and such sales referenced in clauses (ii) and (iii), the “Exempt Sales”). The QIBs and Accredited
Investors are collectively referred to herein as “Eligible Purchasers.” The Initial Purchaser will
offer the Securities to such Eligible Purchasers on the terms set forth in the Time of Sale
Memorandum. Sales, if any, to Accredited Investors will be made by the Company directly to those
Accredited Investors pursuant to a separate purchase agreement between the Company and such
Accredited Investors dated as of the date hereof (the “Accredited Investor Purchase Agreement”),
but the Initial Purchaser shall receive a placement agency fee for such sales as set forth therein.



The holders of the Securities will have registration rights with respect to the Securities and
the Underlying Shares, as set forth in the registration rights agreement (the “Registration Rights
Agreement”) to be dated as of the Closing Time (as defined below), by and among the Company and the
Initial Purchaser for the benefit of the holders of the Securities and the Underlying Shares.




Section 1. Representations and Warranties.



(a) Representations and Warranties by the Company. The Company represents and warrants to the
Initial Purchaser as of the date hereof as of 5:00 p.m., the Time of Sale, the Closing Time (as
defined below) and any Additional Closing Time (as defined below), and agrees with the Initial
Purchaser as follows:



(i) Time of Sale Memorandum and Offering Memorandum. Neither (A) the Time of Sale Memorandum,
as of the Time of Sale, nor (B) any amendments or supplements to the Time of Sale Memorandum, as of
the date of such amendment or supplement, nor (C) the Time of Sale Memorandum, as so amended or
supplemented, if applicable, as of the Closing Time, nor (D) the Offering Memorandum, as of its
date and as of the Closing Time, nor the Time of Sale Memorandum or Offering Memorandum as of any
Additional Closing Time, in each instance, after giving effect to the filing by the Company with
the Commission on April 29, 2010 of an amendment on Form 10-K/A to the Company’s annual report on
Form 10-K for the fiscal year ended December 31, 2009, included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply to statements in or omissions
from the Time of Sale Memorandum or the Offering Memorandum made solely in reliance upon and in
conformity with written information furnished to the Company by the Initial Purchaser expressly for
use therein. For purposes of this Agreement, the only information so furnished shall be (a) the
information in the second paragraph under the heading “Where You Can Find More Information” in the
Offering Memorandum, (b) the information in the first sentence in the sixth paragraph under the


 


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heading “Plan of Distribution” in the Offering Memorandums, (c) the information in the third
sentence in the seventh paragraph under the heading “Plan of Distribution” in the Offering
Memorandums and (d) the information in the last paragraph under the heading “Plan of Distribution”
in the Offering Memorandums (collectively, the “Initial Purchaser Information”).



(ii) Incorporated Documents. The documents incorporated or deemed to be incorporated by
reference in the Time of Sale Memorandum and the Offering Memorandum, at the time such documents
were or hereafter are filed with the Commission, complied and will comply in all material respects
with the requirements of the Securities Act and the rules and regulations of the Commission
thereunder (the “Securities Act Regulations”) or the Exchange Act and the rules and regulations of
the Commission thereunder (the “Exchange Act Regulations”), as applicable.



(iii) Good Standing of the Company. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of Delaware and has the
corporate power and authority to own, lease and operate its properties and to conduct its business
as described in each of the Offering Memorandums and to enter into and perform its obligations
under the Operative Documents. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except where the failure to so
qualify or to be licensed would not have a material adverse effect on the condition (financial or
otherwise), business, earnings, properties, assets, results of operations or prospects of the
Company and its Subsidiaries (as defined below) taken as a whole (a “Material Adverse Effect”).



(iv) Good Standing and Capitalization of Subsidiaries. Each subsidiary of the Company (each a
"Subsidiary” and collectively, the “Subsidiaries”), which includes, without limitation, each
significant subsidiary (as defined in Rule 1-02(w) of Regulation S-X) of the Company (the
"Significant Subsidiaries”), which Significant Subsidiaries are listed on Exhibit A, has been duly
incorporated, formed or organized and is validly existing as a corporation, limited liability
company, or limited partnership (as the case may be) in good standing under the laws of the
jurisdiction of its formation with all requisite corporate, limited liability company, or limited
partnership (as applicable) power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandums. Each such Subsidiary is duly
qualified as a foreign corporation to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of property requires
such qualification, except where the failure to so qualify or be licensed would not have a Material
Adverse Effect. All of the issued and outstanding capital stock or other ownership interests of
each such Subsidiary has been duly authorized and validly issued and is fully paid and
non-assessable, and have been issued in compliance with all federal and state securities laws. The
capital stock or other ownership interests of each such Subsidiary owned by the Company directly or
through its Subsidiaries are owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of capital stock of any wholly-owned
Subsidiary and, to the knowledge of the Company, any other Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary.



(v) Independent Accountants. Ernst & Young LLP, the accountants who have certified the audited
financial statements and supporting schedules of the Company incorporated by reference in the
Offering Memorandums, are independent registered public accountants as required by the Securities
Act, Securities Act Regulations, Exchange Act, Exchange Act Regulations and the Public Accounting
Oversight Board.



(vi) Financial Statements. The financial statements and schedules, including the notes
thereto, incorporated by reference in the Offering Memorandums present fairly in all material


 


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respects the combined financial position of the Company and its Subsidiaries presented therein
as of and at the dates indicated, and the consolidated results of operations, shareowners’ equity
and cash flows for the Company and its Subsidiaries for the periods specified. Such financial
statements and schedules have been prepared in conformity with accounting principles generally
accepted in the United States (“GAAP”) applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. The supporting schedules
present fairly in all material respects the information required to be stated therein and in
accordance with GAAP. The selected consolidated financial data included in the Offering Memorandums
present fairly in all material respects the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included therein. No other
financial statements or schedules would be required to be included in the Offering Memorandums if
the financial statements and schedules incorporated by reference in the Offering Memorandums were
included in a registration statement filed by the Company on Form S-1 under the Securities Act and
the Securities Act Regulations on the respective dates of the Offering Memorandums. All disclosures
contained in the Offering Memorandums regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply in all material respects with
Regulation G under the Exchange Act and Item 10 of Regulation S-K of the Securities Act
Regulations, to the extent applicable.



(vii) Absence of Certain Changes. Since the date as of which information is given in the Time
of Sale Memorandum: (A) neither the Company nor any of its Subsidiaries have incurred any material
liability or obligation, direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (B) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital
stock other than ordinary and customary dividends stated in the Time of Sale Memorandum; (C) there
has not been any change in the capital stock or material short-term debt or long-term debt of the
Company and its Subsidiaries; and (D) the Company has not altered materially its method of
accounting or the manner in which it keeps its accounting books and records



(viii) Material Adverse Effect. Neither the Company nor any Subsidiary has sustained since the
date of the latest audited financial statements included in the Time of Sale Memorandum any
material loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Time of Sale Memorandum. Since
the date as of which information is given in the Time of Sale Memorandum, there has not been any
(A) change in the capital stock or members’ equity, as applicable, or long-term debt of the Company
or any of its Subsidiaries, or (B) Material Adverse Effect.



(ix) Capitalization. The authorized, issued and outstanding capital stock of the Company is as
set forth under column entitled “Actual” under the heading “Capitalization” and conforms in all
material respects to the description thereof under “Description of Capital Stock,” in each case as
set forth in the Offering Memorandums or in the Registration Statement on Form S-1/A filed with the
Commission on March 26, 2010, as such description is incorporated by reference in the Offering
Memorandums. As of the date hereof and the Closing Time, the issued and outstanding capital stock
of the Company will be in all material respects as set forth in the Time of Sale Memorandum. The
outstanding shares of Common Stock and Preferred Stock and the other outstanding securities of the
Company have been duly authorized and validly issued and are fully paid and non-assessable, and
have been issued in compliance with all federal and state securities laws. None of such outstanding
shares of Common Stock or Preferred Stock or other outstanding securities were issued in violation
of preemptive or other similar rights of any securityholder of the Company. There are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities.


 


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(x) Authorization of Operative Documents. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Operative
Documents to which it is a party and otherwise to carry out its obligations hereunder and
thereunder, including, without limitation, to issue the Securities in accordance with the terms
hereof. The Company’s execution and delivery of each of the Operative Documents to which it is a
party and the consummation by it of the transactions contemplated hereby and thereby (including,
but not limited to, the sale and delivery of the Securities) have been duly authorized by all
necessary corporate action on the part of the Company, and no further corporate action is required
by the Company, its Board of Directors or its shareowners in connection therewith, including,
without limitation, under the rules and regulations of the New York Stock Exchange (the “NYSE”).
Each of the Operative Documents have been duly authorized, executed, and delivered by the Company.



(xi) Binding Obligation. Each of the Operative Documents, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will be the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles, and except to the extent that the
indemnification and contribution provisions may be limited by federal or state securities laws and
public policy considerations in respect thereof. At the Closing Time, the Indenture will conform in
all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act”), under rules and regulations of the Commission applicable to an Indenture
that it qualified thereunder.



(xii) Authorization of Securities. The Securities have been duly and validly authorized by the
Company for issuance and sale to the Initial Purchaser pursuant to this Agreement and, when duly
executed, issued, authenticated and delivered in accordance with the terms of the Indenture against
payment therefor in accordance with the terms of this Agreement and the Indenture, will constitute
valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally, and by general equitable principles, and except
to the extent that the indemnification and contribution provisions may be limited by federal or
state securities laws and public policy considerations in respect thereof and will be in the form
contemplated by, and entitled to the benefits of the Indenture.



(xiii) Authorization of Underlying Shares. Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indenture, the Securities will be convertible at the option
of the holder thereof into shares of the Underlying Shares in accordance with the terms of the
Securities and the Indenture. The Underlying Shares have been duly authorized and reserved for
issuance upon such conversion by all necessary corporate action and such shares, when issued in
accordance with the terms of the Indenture and the Securities, will be validly issued, fully paid
and non-assessable, free and clear of all liens, encumbrances, equities or claims, and the issuance
of the Underlying Shares will not be subject to any preemptive or similar rights, provided that the
issuance of the Securities will entitle certain holders of the Company’s 12% Cumulative
Participating Perpetual Convertible Preferred Stock to purchase up to approximately $1.9 million of
12% Convertible Senior Notes in accordance with the terms of that certain Registration Rights
Agreement dated as of October 27, 2009 by and among the Company and such holders (the “Limited
Preemptive Right”). The certificates to be used to evidence the Underlying Shares will comply in
all material respects with all applicable legal requirements, the requirements of the charter and
bylaws of the Company, and the requirements of the NYSE. No holder of Underlying Shares will be
subject to personal liability solely by reason of being such a holder.


 


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(xiv) Description of Operative Documents. Each of the Operative Documents conforms in all
material respects to the description thereof contained in each of the Offering Memorandums.



(xv) Absence of Defaults and Conflicts. Neither the Company nor any of its Subsidiaries is in
(A) violation of its organizational documents, (B) material and adverse default (whether with or
without the giving of notice or passage of time or both) in the performance or observance of any
obligation, agreement, covenant or condition contained in any license, lease, indenture, mortgage,
deed of trust, loan agreement, credit agreement, operating agreement, property management
agreement, franchise agreement or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound, (C) violation of any order of which the Company has been
made aware in writing of any court, arbitrator or governmental body having jurisdiction over the
Company or its properties or assets, or (D) violation of, or in receipt of written notice that it
is in violation of, any statute, rule or regulation of any governmental authority applicable to the
Company. The issuance and sale of the Securities by the Company, the issuance of the Underlying
Shares by the Company, and the compliance by the Company with all of the provisions of the
Operative Documents and all other transactions contemplated by the Operative Documents do not and
will not: (A) conflict with, or result in any breach of, or constitute a default under nor
constitute any event which (with notice, lapse of time, or both) would constitute a breach of or
default under (i) any provisions of the charter or bylaws or other organizational documents of the
Company or any Subsidiary, (ii) any provision of any license, lease, indenture, mortgage, deed of
trust, loan agreement, credit agreement, operating agreement, property management agreement,
franchise agreement or other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their respective properties or assets may be bound or affected
after giving effect to the use of proceeds as set forth in the Offering Memorandums, (iii) any law
or regulation binding upon or applicable to the Company or any Subsidiary or any of their
respective properties or assets (including, without limitation, the rules and regulations of the
NYSE, except for fulfilling the shareowner notice requirements under the rules and regulations of
the NYSE) or (iv) any decree, judgment or order applicable to the Company or any Subsidiary; or (B)
except as contemplated in the Operative Documents, result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or assets of the Company or any Subsidiary.



(xvi) Absence of Proceedings; Accuracy of Exhibits. There are no legal or governmental
proceedings pending or, to the Company’s knowledge, threatened to which the Company or any of its
Subsidiaries or any of their respective officers or directors is a party or to which any of the
properties of the Company or any of its Subsidiaries is subject that would be required by
applicable law or regulation to be described in the documents incorporated by reference in each of
the Offering Memorandums that are not described in each of the Offering Memorandums or any
affiliate transactions, off-balance sheet transactions, statutes, regulations, contracts, licenses,
agreements, leases or other documents that would be required by applicable law or regulation to be
described in the documents incorporated by reference in each of the Offering Memorandums that are
not described in each of the Offering Memorandums.



(xvii) Possession of Intellectual Property. The Company and its Subsidiaries own or possess,
or can acquire on reasonable terms, all material licenses, inventions, copyrights, know-how
(including trade secrets and other confidential information, systems or procedures), trademarks,
service marks, and trade names currently employed by them in connection with the business now
operated by them, and neither the Company nor any of its Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any of the foregoing.



(xviii) Absence of Further Requirements. No consent, approval, authorization or order of, or
filing, registration or qualification with, any governmental body or agency or body or any


 


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court is required for the execution, delivery, performance or consummation by the Company of
its obligations under the Operative Documents, including the issuance and sale of the Securities to
be issued and sold by the Company hereunder and the issuance of the Underlying Shares by the
Company, except (A) such consents, approvals, authorizations, orders, filings, qualifications or
registration as may be required by the securities or Blue Sky laws of the various states, (B) such
consents, approvals, authorizations, orders, filings, qualifications or registration as will be
obtained or completed by the Closing Time, (C) filings with the Commission and the NYSE to be made
in connection with the issuance of the Underlying Shares and pursuant to the Registration Rights
Agreement and orders or approvals related thereto, or (D) a Form D as may be required under federal
securities laws.



(xix) Absence of Manipulation. Neither the Company nor any of its affiliates has taken, nor
will the Company or any affiliate take, directly or indirectly, any action designed to, or which
constituted, or might reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the
Securities.



(xx) Obligations to Issue Securities. Except for the Underlying Shares, shares reserved for
issuance upon exercise of outstanding options under publicly disclosed option plans and shares
reserved for convertible, exchangeable or exercisable securities disclosed in the Time of Sale
Memorandum, no shares of capital stock of the Company or its Subsidiaries are reserved for any
purpose. Except as described in the immediately preceding sentence or in the Time of Sale
Memorandum, there are no outstanding (A) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for any capital stock, partnership interests, membership
interests, or other equity interests, as the case may be, in the Company or any of its
Subsidiaries, (B) options, rights (preemptive or otherwise, other than the Limited Preemptive
Right) or warrants to purchase or subscribe for shares of Common Stock, Preferred Stock, or any
other securities of the Company, or (C) obligations of the Company or any of its Subsidiaries to
issue any such securities, options, rights or warrants.



(xxi) No Integration. There has been no sale, offer for sale, solicitation of an offer to buy
or negotiation by the Company or any of its Subsidiaries in respect of any security that would be
integrated with the offering of the Securities in a manner that would require the registration of
the Securities under the Securities Act. When the Securities are issued and delivered pursuant to
this Agreement and the Indenture, the Securities will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.



(xxii) Possession of Licenses and Permits. Each of the Company and its Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made all necessary filings
required under any foreign, federal, state or local law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other persons, required in order to conduct
its business as described in the Offering Memorandums, except where the failure to have such
license, authorization, consent or approval or to make such filing would not have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is in violation of, in default
under, or has received any notice regarding a possible violation, default or revocation of any such
license, authorization, consent or approval of any foreign, federal, state or local law, regulation
or rule or any decree, order or judgment applicable to the Company or any Subsidiary, except where
the failure to have such license, authorization, consent or approval or to make such filing would
not have a Material Adverse Effect.



(xxiii) Title to Property. The Company and its Subsidiaries have good and marketable title in
fee simple to, or a valid leasehold interest in, all real property described in the Offering
Memorandums as owned by them (the “Company Properties”), and good and marketable title to all


 


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personal property owned by them that is material to the business of the Company, in each case
free and clear of all liens, encumbrances, security interests and defects except such as are
described in each of the Offering Memorandums or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property
by the Company and its Subsidiaries; and any Company Properties, buildings and equipment held under
lease by the Company and its Subsidiaries and described in each of the Offering Memorandums are
held by them under valid, subsisting and enforceable leases (such leases, the “Company Leases”)
with such exceptions as are not material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company and its Subsidiaries. Neither the
Company nor any of its Subsidiaries is in default under any of the Company Leases, relating to, or
any of the mortgages or other security documents or other agreements encumbering or otherwise
recorded against, the Company Properties, and neither the Company nor any of its Subsidiaries knows
of any event, which, but for the passage of time or the giving of notice, or both, would constitute
a default under any of such documents.



(xxiv) Title Insurance. The Company or its Subsidiaries have either (A) an owner’s or
leasehold title insurance policy, from a nationally recognized title insurance company licensed to
issue such policy, on each of the Company Properties that insures the fee or leasehold interest, as
the case may be, in the Company Properties, which policies include only commercially reasonable
exceptions, and with coverage in amounts at least equal to amounts that are generally deemed in the
Company’s industry to be commercially reasonable in the markets where the Company Properties are
located, or (B) one or more lender’s title insurance policies insuring the lien of the mortgages
encumbering the Company Properties with coverage, in the aggregate, equal to the maximum aggregate
principal amount of indebtedness incurred by the Company or its Subsidiaries and secured by the
Company Properties.



(xxv) Code Compliance. Each of the Company Properties complies in all material respects with
all applicable codes, laws and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the Company Properties); and neither the
Company nor any of its Subsidiaries has knowledge of any pending or threatened condemnation
proceeding, zoning change or other proceeding or action.



(xxvi) Environmental Laws. Each of the Company and its Subsidiaries (A) is in compliance in
all material respects with any and all applicable foreign, federal, state and local laws,
regulations and rules relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (B) has
received all permits, licenses or other approvals required of it under applicable Environmental
Laws to conduct its business and (C) is in compliance with all terms and conditions of any such
permit, license or approval. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required for clean up,
closure of properties or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to third parties).



The Company has received no notice of, and has no knowledge of, any occurrence or circumstance
which, with notice or passage of time, or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute or regulation or under common law, pertaining to
Hazardous Materials (as defined below) on or originating from any of the Company Properties or
arising out of the conduct of the Company, including, without limitation, a claim under or pursuant
to any Environmental Statute (as defined below). None of the Company Properties is included or, to
the Company’s knowledge, is proposed for inclusion on the National Priorities List issued pursuant
to CERCLA (as defined below) by the U.S. Environmental Protection Agency or on any similar list or


 


 9.









 






inventory issued pursuant to any other Environmental Statute or issued by any other
governmental authority.



As used herein, “Hazardous Materials” shall include, without limitation, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes, toxic substances, or
related materials, asbestos or any hazardous material as defined by any federal, state or local
environmental law, ordinance, rule or regulation including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections
1801-1819, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the
Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-330j-26, and the Occupational Safety and Health Act, 29
U.S.C. Sections 651-678, as any of the above statutes may be amended from time to time, and in the
regulations promulgated pursuant to each of the foregoing (individually, an “Environmental
Statute”) or by any federal, state or local governmental authority having or claiming jurisdiction
over any of the Company Properties and other assets described in the Offering Memorandums.



(xxvii) Absence of Labor Dispute. No material labor dispute with the employees of the Company
or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent. The Company is
not aware of any existing, threatened, or imminent labor disturbance by the employees of any of
their principal suppliers, manufacturers, customers or contractors.



(xxviii) Mortgage Loans. The Company and its Subsidiaries are in compliance with all of their
mortgage loans and all covenants therein, financial and otherwise.



(xxix) Property Improvement Plans. Neither the Company nor any of its Subsidiaries is subject
to any material property improvement plan required by franchisors.



(xxx) Investment Company Act. Neither the Company nor any of its Subsidiaries is, or after
giving effect to the offering and sale of the Securities and the application of the proceeds
thereof as described in the Offering Memorandums will be, required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder (the “Investment Company Act”).



(xxxi) Insurance. The Company and its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as the Company believes
are prudent and customary in the businesses in which they are engaged, and neither the Company nor
any of its Subsidiaries has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a similar cost.



(xxxii) Material Contracts. Except as set forth in the Company’s Annual Report on Form 10-K/A
for the year ended December 31, 2009, the Company has not sent or received any communication
regarding termination of, or intent not to renew, any of the material contracts or agreements
referred to, described in or filed as an exhibit to the Company’s Annual Report on Form 10-K/A for
the year ended December 31, 2009, or any other filing made by the Company with the Commission
during the period from January 1, 2010 to the date immediately preceding the Closing Time (such
filings, the “SEC Filings”), including, without limitation, any ground lease, franchise agreement
or


 


 10.









 






management agreement with respect to the Company Properties, and no such termination or
non-renewal has been threatened by the Company or, to the Company’s knowledge, to any other party
to such contract or agreement.



(xxxiii) Internal Control Over Financial Reporting. The Company and each of its Subsidiaries
maintains a system of internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, and such internal control over financial reporting is effective
to perform the functions for which it was established.



(xxxiv) Registration Rights. There are no persons with registration or other similar rights to
have any securities issued by the Company registered under the Securities Act except for (A)
registration rights contained in agreements filed as exhibits to the Company’s Annual Report on
Form 10-K/A for the year ended December 31, 2009, including exhibits incorporated by reference
therein and (B) pursuant to the Registration Rights Agreement.



(xxxv) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of
the Company or its Subsidiaries, or directors or officers of the Company or any of its Subsidiaries
in their capacity as such, to comply in all material respects with any applicable provision of the
Sarbanes-Oxley Act of 2002, as amended, and the applicable rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”) including, without limitation, Section 402 related
to loans, and Sections 302 and 906 related to certifications.



(xxxvi) Independent Directors. The members of the Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee of the Board of Directors of the Company are
“independent directors” within the meaning of the listing standards and rules of the NYSE, and,
with respect to the Audit Committee, the Commission. All of the members of the Audit Committee are
financially literate within the meaning of the listing standards and rules of the NYSE and at least
one member of the Audit Committee is an “audit committee financial expert,” within the meaning of
Item 401(h) of Regulation S-K promulgated under the Exchange Act.



(xxxvii) ERISA Liabilities. The Company does not have, and does not anticipate incurring, any
material liabilities under the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of
the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder.



(xxxviii) Plan Assets. The assets of the Company and its Subsidiaries do not constitute “plan
assets” of an ERISA regulated employee benefit plan.



(xxxix) Taxes. The Company and each of its Subsidiaries have accurately prepared and timely
filed all federal, state and other tax returns and extensions (“Returns”) that are required to be
filed by each such entity; all such Returns are true, correct and complete in all material
respects; and all foreign, federal, state, county or local taxes, charges, fees, levies, fines,
penalties or other assessments, including all net income, gross income, sales and use, ad valorem,
transfer, gains, profits, excise, franchise, real and personal property, gross receipts, capital
stock, disability, employment, payroll, license, estimated, stamp, custom duties, severance or
withholding taxes or charges imposed by any governmental authority (including any interest and
penalties (civil or criminal) on or additions to any such taxes and any expenses incurred in
connection with the determination, settlement or litigation of any tax liability), in each case, to
the extent material (“Taxes”), shown in such Returns or on assessments


 


 11.









 






received by the Company or any of its Subsidiaries or otherwise due and payable or claimed to
be due and payable by any governmental authority, have been paid, except for any such tax, charge,
fee, levy, fine, penalty or other assessment that (A) is currently being contested in good faith,
or (B) is immaterial in amount. Neither the Company nor any of its Subsidiaries has requested any
extension of time within which to file any Return, which Return has not since been filed. Neither
the Company nor any of its Subsidiaries has executed any outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to any Taxes or Returns. No
audits or other administrative proceedings or court proceedings are presently pending nor
threatened against the Company or any of its Subsidiaries with regard to any Taxes or Returns of
the Company or any of its Subsidiaries, and no taxing authority has notified the Company or any of
its Subsidiaries in writing that it intends to investigate its tax affairs.



(xl) Litigation. Except as disclosed in each of the Offering Memorandums, there are no pending
actions, suits or proceedings against or affecting the Company, any of its Subsidiaries or any of
their respective properties that (a) if determined adversely to the Company or any of its
Subsidiaries, would reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (b) would materially and adversely affect the ability of the Company or its
Subsidiaries to perform their respective obligations under the Operative Documents, or (c) are
otherwise material in the context of the sale of the Securities; and no such actions, suits or
proceedings are, to the knowledge of the Company, threatened or contemplated.



(xli) Proceeds. None of the proceeds received by the Company from the offering of the
Securities will be used to further any action in violation or contravention of the U.S.A. Patriot
Act or otherwise violate or contravene the rules, regulations, or policies of the U.S. Office of
Foreign Assets Control.



(xlii) No Relationships. No material relationship, direct or indirect, exists between or among
any of the Company, on the one hand, and the directors, officers, shareowners, customers or
suppliers of the Company, on the other hand, which would be required pursuant to the regulations
applicable to Form 10-K to be described in an annual report filed by the Company on Form 10-K with
the Commission (if such Form 10-K were filed on the date hereof) which is not so described in each
of the Offering Memorandums.



(xliii) Registration of Securities and Listing Approval. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and, prior to or upon the Closing Time, the
Underlying Shares will be approved for listing on the NYSE, subject to official notice of issuance.



(xliv) Disclosure Controls. The Company maintains disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act); such disclosure controls
and procedures are designed to ensure that information required to be disclosed by the Company in
the reports that it files under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms and is accumulated and
communicated to the Company’s management, including its Chief Executive Officer and its Chief
Financial Officer, as appropriate to allow timely decisions regarding disclosure and such
disclosure controls and procedures are effective to perform the functions for which they were
established.



(xlv) Statistical and Market-Related Data. The statistical and market-related data included in
each of the Offering Memorandums are based on or derived from sources which the Company believes to
be reliable and accurate, and the Company has received all consents necessary to use such
statistical and market-related data in the Offering Memorandums.


 


 12.









 





(xlvi) Commission Comment Letters. There are no comments outstanding under any letters from
the staff of the Commission relating to the Company’s filings with the Commission other than
comments which (i) have been responded to by the Company and (ii) are not material to the Company.



(xlvii) No Registration. No registration under the Securities Act of the Securities is
required for the sale of the Securities to the Initial Purchaser as contemplated hereby or for the
Exempt Resales contemplated hereunder assuming (A) that the purchasers who buy the Securities in
the Exempt Resales are QIBs and (B) the accuracy of the Initial Purchaser’s representations
regarding the absence of general solicitation in connection with the sale of Securities to the
Initial Purchaser and the Exempt Resales contained herein. No form of general solicitation or
general advertising (as defined in Regulation D under the Securities Act) was used by the Company
or any of its representatives in connection with the offer and sale of any of the Securities or in
connection with Exempt Resales or Exempt Sales, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.



(xlviii) Rule 144A. Each of the Offering Memorandums as of their dates, contains the
information specified in, and meets the requirements of, Rule 144A(d)(4) under the Securities Act.



(xlix) Regulations T, U and X. Neither of the execution, delivery and performance of this
Agreement, nor the issuance and sale of the Securities, nor the issuance of the Underlying Shares,
nor the application of the proceeds from the issuance and sale of the Securities, nor the
consummation of the transactions contemplated thereby as set forth in each of the Offering
Memorandums, will violate Regulations T, U or X promulgated by the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.



(l) Finder’s Fees. Except pursuant to this Agreement, there are no contracts, agreements or
understandings between the Company or its Subsidiaries and any other person that would give rise to
a valid claim against the Company or any of its Subsidiaries or the Initial Purchaser for a
brokerage commission, finder’s fee or like payment in connection with the issuance, purchase and
sale of the Securities or the Underlying Shares. The Company shall indemnify, pay, and hold the
Initial Purchaser harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim.



(li) Money Laundering Laws. The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company or any
of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.



(lii) Office of Foreign Assets Control. Neither the Company nor any of its Subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee, or affiliate of the
Company or any of its Subsidiaries is currently subject to any sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department.


 


 13.









 





(liii) Foreign Corrupt Practices Act. Neither the Company nor any of the Subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee, or affiliate of the Company
or any of the Subsidiaries, is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA, and the Company, the
Subsidiaries and, to the knowledge of the Company, its affiliates have conducted their businesses
in compliance with the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.



(liv) Reservation of Underlying Shares. The Company has reserved, and will continue to
reserve, free of any preemptive or similar rights of shareowners of the Company, a number of
unissued shares of Common Stock, sufficient to issue and deliver the Underlying Shares into which
the Securities are convertible and has taken all such actions required and permitted to be taken to
reserve for issuance all Underlying Shares issuable upon conversion of the Securities in accordance
with their terms.



(lv) Application of Takeover Protections; Rights Agreements. The Company has not adopted any
shareowner rights plan or similar arrangement relating to accumulations of beneficial ownership of
Common Stock or a change in control of the Company. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s certificate of incorporation or other
organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is
or could become applicable to the Initial Purchaser solely as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s issuance of the
Securities and the Initial Purchaser’s ownership of the Securities.



(lvi) Shell Company Status. The Company is not, and has never been, an issuer identified in
Rule 144(i)(1) of the Securities Act.



(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of its
Subsidiaries delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall be
deemed a representation and warranty by the Company, or such Subsidiary, to the Initial Purchaser
as to the matters covered thereby.



(c) Representations and Warranties by the Initial Purchaser. The Initial Purchaser represents,
warrants, and covenants to the Company and agrees that:



(i) The Initial Purchaser will offer the Securities for sale solely to QIBs upon the terms and
conditions set forth in this Agreement and the Offering Memorandums. The Initial Purchaser is a
QIB, with such knowledge and experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Securities.



(ii) The Initial Purchaser (A) is not acquiring the Securities with a view to any distribution
thereof that would violate the Securities Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (b) will be reoffering and reselling the Securities


 


 14.









 






only to QIBs in reliance on the exemption from the registration requirements of the Securities
Act provided by Rule 144A.



(iii) No form of general solicitation or general advertising (within the meaning of Regulation
D under the Securities Act) has been or will be used by the Initial Purchaser or any of its
representatives in connection with the offer and sale of any of the Securities, including, but not
limited to, articles, notices or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by a general solicitation or general advertising.



(iv) In connection with the Exempt Resales, the Initial Purchaser will solicit offers to buy
the Securities only from, and will offer to sell the Securities only to, QIBs. The Initial
Purchaser further (A) agrees that it will offer to sell the Securities only to, and will solicit
offers to buy the Securities only from Eligible Purchasers that the Initial Purchaser reasonably
believes are QIBs; (B) acknowledges and agrees that, in the case of such QIBs, that such Securities
will not have been registered under the Securities Act and may be resold, pledged or otherwise
transferred only (I) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A
under the Securities Act, (II) in a transaction meeting the requirements of Rule 144 under the
Securities Act, (III) in accordance with another exemption from the registration requirements of
the Securities Act, (IV) to the Company or any of its Subsidiaries, or (V) pursuant to an effective
registration statement under the Securities Act and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other applicable jurisdiction;
and (C) acknowledges that it will notify any purchaser of the Securities of the resale restrictions
set forth in clause (B) above.



The Initial Purchaser acknowledges that the Company and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Section 5 hereof, counsel for the Company and
counsel for the Initial Purchaser will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.




Section 2. Sale and Delivery to Initial Purchaser; Closing.



(a) Initial Securities. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to
the Initial Purchaser and the Initial Purchaser agrees to purchase from the Company, the Initial
Securities at the purchase price set forth in Schedule B attached hereto.



(b) Option Securities. In addition, on the basis of the representations and warranties herein
contained and upon the terms and subject to the conditions herein set forth, the Company hereby
grants an option to the Initial Purchaser to purchase the Option Securities, at the purchase price
set forth in Schedule B attached hereto. The option hereby granted will expire 45 days
after the date hereof and may be exercised in whole or in part from time to time only for the
purpose of covering overallotments made in connection with the offering and distribution of the
Initial Securities upon notice by the Initial Purchaser to the Company setting forth the amount of
Option Securities as to which the Initial Purchaser is then exercising the option and the time and
date of payment and delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery”) shall be determined by the Initial Purchaser, but shall not be later than June
17, 2010, nor in any event prior to the Closing Time.



(c) Payment and Delivery. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the Initial Purchaser in the
case of the Initial Securities, at the offices of Cooley LLP, at 10:00 a.m., New York City time, on


 


 15.









 






May 7, 2010, or at such other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Initial Purchaser and the Company may agree upon in writing,
or, in the case of the Option Securities, on the date and at the time and place specified by the
Initial Purchaser in the written notice of the Initial Purchaser’s election to purchase such Option
Securities. The time and date of such payment for the Initial Securities is referred to herein as
the “Closing Time” and the time and date for such payment for the Option Securities, if other than
the Closing Time, is herein referred to as the “Additional Closing Time”. Payment for the
Securities to be purchased at the Closing Time or the Additional Closing Time, as the case may be,
shall be made against delivery to the nominee of The Depository Trust Company (“DTC”), for the
account of the Initial Purchaser of the Securities to be purchased on such date of one or more
global securities representing the Securities (collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of such Securities duly paid by the Company. The Global
Note will be made available for inspection by the Initial Purchaser at the office of Cooley LLP not
later than 10:00 a.m., New York City time, on the business day prior to the Closing Time or the
Additional Closing Time, as the case may be.



Section 3. Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:



(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to
Section 3(b) hereof, will notify the Initial Purchaser promptly, and confirm the notice in writing
(i) of the issuance by any securities commission of any stop order suspending the qualification or
exemption from qualification of any Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceedings for such purposes by any securities commission or
other regulatory authority and (ii) at any time prior to the completion of the initial resale by
the Initial Purchaser of all of the Securities (which shall be the Closing Time unless the Company
is notified otherwise by the Initial Purchaser by not later than the Closing Time), of the
happening of any event that makes any statement of a material fact made in the Time of Sale
Memorandum or the Offering Memorandum untrue or that requires the making of any additions to or
changes in the Time of Sale Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made, not misleading. The Company
shall use its reasonable best efforts to prevent the issuance of any order suspending the
qualification or exemption of any Securities under any securities or Blue Sky laws and, if at any
time any securities commission or other regulatory authority shall issue an order suspending the
qualification or exemption of any Securities under any securities or Blue Sky laws, the Company
shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.



(b) Filing of Amendments and Exchange Act Documents. At any time prior to the completion of
the initial resale by the Initial Purchaser of all of the Securities (which shall be the Closing
Time unless the Company is notified otherwise by the Initial Purchaser prior to the Closing Time),
the Company will not amend or supplement the Offering Memorandums (other than pursuant to the
filing of all reports required by the Exchange Act) unless the Initial Purchaser shall previously
have been advised thereof and shall not have objected thereto within a reasonable time after being
furnished a copy thereof. The Company shall promptly prepare or cause to be prepared, upon the
Initial Purchaser’s request, any amendment or supplement to the Time of Sale Memorandum or the
Offering Memorandum that may be necessary in connection with such Exempt Resales.



(c) Delivery of Offering Memorandum. The Company has delivered to the Initial Purchaser,
without charge, as many copies of the Preliminary Offering Memorandum as the Initial Purchaser has
reasonably requested and will deliver to the Initial Purchaser, without charge, as many copies of
the Offering Memorandum as the Initial Purchaser may reasonably request, and the Company consents
to the use of the Time of Sale Memorandum and the Offering Memorandum, and any


 


 16.









 






amendments and supplements thereto required pursuant hereto, by the Initial Purchaser in
connection with the Exempt Resales made in compliance with this Agreement.



(d) Continued Compliance with Securities Laws. If any event shall occur as a result of which,
in the judgment of the Company or in the reasonable opinion of counsel for the Company or counsel
for the Initial Purchaser, it becomes necessary to amend or supplement the Time of Sale Memorandum
or the Offering Memorandum in order to make the statements therein, in the light of the
circumstances when such Time of Sale Memorandum or Offering Memorandum is delivered to Eligible
Purchasers, not misleading, or if it is necessary to amend or supplement the Time of Sale
Memorandum or the Offering Memorandum to comply with applicable law, (i) to notify the Initial
Purchaser (ii) forthwith to prepare an appropriate amendment or supplement to such Time of Sale
Memorandum or the Offering Memorandum so that the statements therein as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be misleading, or so that such
Time of Sale Memorandum or the Offering Memorandum will comply with applicable law. If the Time of
Sale Memorandum is being used to solicit offers to buy the Securities at a time when the Offering
Memorandum is not yet available to prospective purchasers and any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the Time of Sale Memorandum in
order to make the statements therein, in the light of the circumstances, not misleading, or if, in
the opinion of counsel for the Initial Purchaser, it is necessary to amend or supplement the Time
of Sale Memorandum to comply with applicable law, forthwith to prepare and furnish to the Initial
Purchaser upon request, either amendments or supplements to the Time of Sale Memorandum so that the
statements in the Time of Sale Memorandum as so amended or supplemented will not, in the light of
the circumstances when delivered to a prospective purchaser, be misleading or so that the Time of
Sale Memorandum, as amended or supplemented, will comply with applicable law.



(e) Blue Sky Qualifications. The Company will use its reasonable best efforts, in cooperation
with the Initial Purchaser, to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Initial Purchaser may designate and
to maintain such qualifications in effect for a period of not less than one year from the date
hereof; provided, however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The Company will also supply
the Initial Purchaser with such information as is necessary for the determination of the legality
of the Securities for investment under the laws of such jurisdictions as the Initial Purchaser may
request.



(f) Integration. The Company will not sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities Act) that would be
integrated with the sale of the Securities in a manner that would require the registration under
the Securities Act of the sale to the Initial Purchaser or the Eligible Purchasers of the
Securities or to take any other action that would result in the Exempt Resales not being exempt
from registration under the Securities Act.



(g) General Solicitation. The Company will not solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.



(h) Rule 144 Information. For so long as any of the Securities remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act, the
Company will make available to any holder or beneficial owner of Securities in connection with any


 


 17.









 






sale thereof and any prospective purchaser of such Securities from such holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act.



(i) Regulation M. The Company will not take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Securities contemplated hereby.



(j) PORTAL. The Company will use its commercially reasonable best efforts to assist the
Initial Purchaser in effecting the inclusion of the Securities in The PORTALSM Market
and to obtain approval of the Securities by DTC for “book-entry” transfer.



(k) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the
Securities substantially in the manner specified in the Time of Sale Memorandum under “Use of
Proceeds.”



(l) Listing. The Company will use its commercially reasonable best efforts to promptly effect
the listing of the Underlying Shares on the NYSE.



(m) Restriction on Sale of Securities. During a period of 90 days from the date of the
Offering Memorandum, the Company will not, without the prior written consent of the Initial
Purchaser, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of any share of Common Stock or other security of the
Company or any of its Subsidiaries or any security convertible into or exercisable or exchangeable
for Common Stock or other securities of the Company or any of its Subsidiaries or file any
registration statement under the Securities Act (other than a Registration Statement on Form S-8 or
filed pursuant to the Registration Rights Agreement or in satisfaction of any outstanding
registration right referenced in the Offering Memorandums) with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) any Securities to be sold by the Company hereunder, (B) issuances of equity incentive awards
pursuant to the Company’s equity incentive plans, (C) issuance of any Underlying Shares upon
conversion of Securities, (D) the issuance of any Common Stock or other securities upon the
exercise of any outstanding options or warrants or upon the conversion of the Company’s 12%
Cumulative Participating Perpetual Convertible Preferred Stock, (E) issuances of any equity awards
pursuant to an employment agreement or arrangement or equity compensation plan approved by the
Company’s Board of Directors, (F) any securities of the Company and/or any Subsidiary issued in
connection with any merger, acquisition, joint venture or other strategic transaction approved by
the Company’s Board of Directors, or (G) any securities of the Company or any Subsidiary issued,
pledged or hypothecated in connection with any credit facility entered into by the Company and/or
any Subsidiary.



(n) Sarbanes-Oxley Act. The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the Sarbanes-Oxley Act, and
use its reasonable best efforts to cause the Company’s directors and officers, in their capacities
as such, to comply with such laws, rules, and regulations, including, without limitation, the
provisions of the Sarbanes-Oxley Act.



(o) Available Shares. The Company will reserve and keep available at all times, free of
preemptive rights and other similar rights, but subject to the Limited Preemptive Right, a
sufficient


 


 18.









 






number of shares of Common Stock for the purpose of enabling the Company to satisfy any
obligations to issue the Underlying Shares.



(p) Transfer Agent. The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common Stock.



(q) Investment Company. The Company will take such steps as shall be necessary to ensure that
the Company does not become an “investment company” as such term is defined under the Investment
Company Act.



(r) Usury Laws. The Company will not voluntarily claim the benefit of any usury laws against
the holders of any Securities.



(s) DTC. The Company will comply in all material respects with its agreements set forth in the
representation letter to DTC relating to the approval of the Securities by DTC for “book-entry”
transfer.



(t) Further Assurances. The Company will use its reasonable best efforts to do and perform all
things to be done or performed under this Agreement by it prior to or after the Closing Time and to
satisfy all conditions precedent on its part to the delivery of the Securities.




Section 4. Payment of Expenses.



(a) Expenses. The Company will reimburse the Initial Purchaser at the Closing Time for all
reasonable, documented expenses incurred by the Initial Purchaser in carrying out the terms of this
Agreement, including but not limited to travel, telephone, facsimile, courier and disbursements,
and any legal expenses and disbursements payable to the Initial Purchaser’s counsel in connection
with the preparation of and transactions contemplated by the Offering Memorandum; provided,
however, that notwithstanding the foregoing or anything else set forth in this Agreement to
the contrary, under no circumstances whatsoever shall the Company be obligated to reimburse the
Initial Purchaser for any expenses incurred by the Initial Purchaser pursuant to this Agreement, or
otherwise in connection with the transactions contemplated by this Agreement or the Offering
Memorandum, in excess of Two Hundred Thousand Dollars ($200,000) in the aggregate (the “Expense
Cap”).



(b) Termination of Agreement. If this Agreement is terminated by the Initial Purchaser in
accordance with the provisions of Section 5 or 11 hereof, the Company shall reimburse the Initial
Purchaser for all of its reasonable out of pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchaser, subject in all instances, however, to the
Expense Cap.



Section 5. Conditions of Initial Purchaser’s Obligations. The obligations of
the Initial Purchaser hereunder are subject to the accuracy of the representations and warranties
of the Company contained in Section 1 hereof or in certificates of any officer of the Company or
any Subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the following further
conditions:



(a) Opinion of Counsel for Company. At the Closing Time, the Initial Purchaser shall have
received the opinion, dated as of the Closing Date, of Zukerman Gore Brandeis & Crossman, LLP,
counsel for the Company, substantially in the form attached as Exhibit B hereto, subject to
customary qualifications, and such other opinions as the Initial Purchaser may reasonably request.
With respect to this Section 5(a), Zukerman Gore Brandeis & Crossman, LLP may state that its
beliefs are based upon its participation in the preparation of the Offering Memorandums and any
amendments or


 


 19.









 






supplements thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.



(b) Opinion of Counsel for Initial Purchaser. At the Closing Time, the Initial Purchaser shall
have received the opinion, dated as of the Closing Date, of Cooley LLP, counsel for the Initial
Purchaser, in form and substance satisfactory to the Initial Purchaser. With respect to this
Section 5(b), Cooley LLP may state that its beliefs are based upon its participation in the
preparation of the Offering Memorandums and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or verification, except as
specified.



(c) Officers’ Certificate. At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the Offering Memorandum or
the Time of Sale Offering Memorandum, (i) any downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review for a possible change that does not indicate
the direction of the possible change, in the rating according any of the Company’s securities by
any “nationally recognized statistical rating organization,” as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, (ii) any adverse change, or any development involving a
prospective adverse change, in the condition, financial or otherwise, or in the earnings, assets,
business affairs, business prospects, or operations of the Company and its Subsidiaries, taken as a
whole, or in the fee, ground lease, and mortgage interests, in the properties which the Company and
its Subsidiaries will own and/or operate as of the Closing Time, whether or not arising in the
ordinary course of business, which would be material to the Company and its Subsidiaries, taken as
a whole, (iii) transactions or acquisitions entered into by the Company or any of its Subsidiaries,
other than those in the ordinary course of business which would not reasonably be expected to be
material to the Company and its Subsidiaries, taken as a whole, (iv) any dividend or distribution
of any kind, declared, paid or made by the Company on any class of its capital stock, or (v) any
change in the capital stock of the Company or any increase in indebtedness of Company or any of its
Subsidiaries or in the indebtedness encumbering the properties which the Company and its
Subsidiaries will own and/or operate as of the Closing Time, which would reasonably be expected to
have a Material Adverse Effect, and the Initial Purchaser shall have received a certificate of the
chief financial or chief accounting officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the statements above are true
and correct as of the Closing Time, (iii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at and as of the
Closing Time, and (iv) the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Time.



(d) Officers’ Certificates Regarding Financials. The Initial Purchaser shall have received
from the Company certificates, dated as of the Closing Time, from each of the (i) Chief Executive
Officer and (ii) Chief Accounting Officer or Interim Chief Financial Officer of the Company in the
form of such certificates as delivered by such officers, and agreed upon by the Initial Purchaser,
on the date of this Agreement.



(e) Accountant’s Comfort Letter. Prior to the time of the execution of this Agreement, the
Initial Purchaser shall have received from Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Initial Purchaser, together with signed or reproduced copies of such
letter for the Initial Purchaser containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to initial purchasers in offerings of securities made
pursuant to Rule 144A with respect to the financial statements and certain financial information
contained in the Offering Memorandums.


 


 20.









 





(f) Bring-down Comfort Letter. On the Closing Date, the Initial Purchaser shall have received
from Ernst & Young LLP a letter, dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to Section 5(d) hereof, except that the specified
date referred to shall be a date not more than three business days prior to the Closing Date.



(g) Approval of Listing. At the Closing Time, the Underlying Shares shall have been approved
for listing on the NYSE, subject only to official notice of issuance.



(h) Additional Documents. At the Closing Time, counsel for the Initial Purchaser shall have
been furnished with such documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities and authorization of the
Underlying Shares as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the Initial Purchaser and
counsel for the Initial Purchaser.




(i) Indenture. The Company and the Trustee shall have entered into the Indenture.



(j) Registration Rights Agreement. The Company and the Initial Purchaser shall have entered
into the Registration Rights Agreement.



(k) Termination of Agreement. If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Initial
Purchaser by notice to the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other party except as provided in
Section 4 hereof and except that Sections 1, 6, 7 and 8 hereof shall survive any such termination
and remain in full force and effect.




Section 6. Indemnification.



(a) Indemnification of Initial Purchaser. The Company agrees to indemnify and hold harmless
the Initial Purchaser, its affiliates, as such term is defined in Rule 501(b) under the Securities
Act (each, an “Affiliate”), the selling agents of the Initial Purchaser and each person, if any,
who controls the Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, as follows:



(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading;



(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue statement or omission;



(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Initial Purchaser, as applicable), reasonably incurred in


 


 21.









 






investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;



provided, however, that this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made solely in reliance upon and in conformity with the Initial Purchaser
Information.



(b) Indemnification of Company, Directors, and Officers. The Initial Purchaser agrees to
indemnify and hold harmless the Company, its directors and officers, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 6(a) hereof, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the Preliminary Offering
Memorandum (or any amendment or supplement thereto) or the Offering Memorandum (or any amendment or
supplement thereto) solely in reliance upon and in conformity with the Initial Purchaser
Information.



(c) Actions against Parties; Notification. Each indemnified party shall give notice promptly
in writing to each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. Upon the request of the indemnified party,
the indemnifying party shall retain counsel reasonably satisfactory to the indemnified party. In
the case of parties indemnified pursuant to Section 6(a) hereof, counsel to the indemnified parties
shall be selected by the Initial Purchaser and, in the case of parties indemnified pursuant to
Section 6(b) hereof, counsel to the indemnified parties shall be selected by the Company. In any
such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and the representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them. In
no event shall the indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.



(d) Settlement without Consent if Failure to Reimburse. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by reason of such
settlement of judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have


 


 22.









 






requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 6(c) hereof, such indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.



Section 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one hand, and the
Initial Purchaser, on the other hand, from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Initial Purchaser, respectively, in
connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.



The relative benefits received by the Company, on the one hand, and the Initial Purchaser, on
the other hand, in connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses, but exclusive of accrued
interest amounts), as described under the heading “Use of Proceeds” in the Offering Memorandum bear
to the aggregate original principal amount of the Securities as set forth on the cover of the
Offering Memorandum.



The relative fault of the Company, on the one hand, and the Initial Purchaser, on the other
hand, shall be determined by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchaser and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.



The Company and the Initial Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable considerations referred to above
in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.



Notwithstanding the provisions of this Section 7, the Initial Purchaser shall not be required
to contribute any amount in excess of the amount by which the total price at which the Securities
purchased by it and resold by it pursuant to the terms and conditions of this Agreement exceeds the
amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.


 


 23.









 





No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.



For purposes of this Section 7, each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the Initial
Purchaser’s Affiliates and selling agents shall have the same rights to contribution as the Initial
Purchaser, and each director and officer of the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company.



Section 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its Subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
(A) the Initial Purchaser or any of its Affiliates, selling agents, officers or directors, or any
person controlling the Initial Purchaser, or (B) the Company or any of its Affiliates and (ii)
delivery of and payment for the Securities.




Section 9. Termination of Agreement.



(a) Termination; General. The Initial Purchaser may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Offering
Memorandums (exclusive of any supplement thereto), any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Company
and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each case, the effect of
which is such as to make it, in the judgment of the Initial Purchaser, impracticable or inadvisable
to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially limited by the Commission
or the NYSE, or if trading generally on the NYSE has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the Commission, FINRA, or any
other governmental authority, or (iv) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (v) if a banking moratorium
has been declared by either Federal or New York authorities.



(b) Liabilities. If this Agreement is terminated pursuant to this Section 9, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7, 8 and 9 shall survive such termination and remain in
full force and effect.



Section 10. Default by the Initial Purchaser. If the Initial Purchaser shall
fail at the Closing Time to purchase the Securities that it is obligated to purchase hereunder,
then this Agreement shall terminate without liability on the part of any non-defaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7, 8 and 11 shall remain in full force
and effect. No action taken pursuant to this Section 10 shall relieve the Initial Purchaser from
liability, if any, in respect of such default.


 


 24.









 





Section 11. Default by the Company. If the Company shall fail at the Closing
Time to sell the Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any non-defaulting party; provided, however, that
the provisions of Sections 1, 4, 6, 7, 8 and 11 shall remain in full force and effect. No action
taken pursuant to this Section 11 shall relieve the Company from liability, if any, in respect of
such default.



Section 12. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchaser shall be directed to the Initial
Purchaser at JMP Securities LLC, 600 Montgomery Street, Suite 1100, San Francisco, California
94111, Facsimile: (415) 835-8920, Attention: Kent Ledbetter, David Fullerton, Anthony Wayne and
Stephanie Shum, with a copy to Cooley LLP, 101 California Street, Fifth Floor, San
Francisco, California 94111, Facsimile: (415) 693-2222, Attention: Gian-Michele a Marca, Esq.;
notices to the Company shall be directed to Grubb & Ellis Company, 1551 North Tustin Avenue, Suite
300, Santa Ana, California 92705, Facsimile: (714) 918-9170, Attention: Thomas D’Arcy, President
and Chief Executive Officer, with a copy to: Zukerman Gore Brandeis & Crossman, LLP, 875 Third
Avenue, New York, New York 10022, Facsimile: (212) 223-6433, Attention: Clifford A. Brandeis, Esq.
and Joseph E. Maloney, Esq.



Section 13. No Advisory or Fiduciary Relationship. The Company acknowledges
and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including
the determination of the offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the Initial Purchaser, on the other hand, (b) in connection with the purchase and sale of the
Securities pursuant to this Agreement and the process leading to such transaction the Initial
Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the
Company or its shareowners, creditors, employees, or any other party, (c) the Initial Purchaser has
not assumed and will not assume any advisory or fiduciary responsibility in favor of the Company
with respect to the purchase and sale of the Securities pursuant to this Agreement or the process
leading thereto (irrespective of whether the Initial Purchaser has advised or is currently advising
the Company on other matters) and the Initial Purchaser has no obligation to the Company with
respect to the purchase and sale of the Securities pursuant to this Agreement except the
obligations expressly set forth in this Agreement, (d) the Initial Purchaser and its Affiliates may
be engaged in a broad range of transactions that involve interests that differ from those of the
Company, and (e) the Initial Purchaser has not provided any legal, accounting, regulatory, or tax
advice with respect to the offering contemplated hereby and the Company has consulted its own
legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.



Section 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Initial Purchaser with respect
to the subject matter hereof.



Section 15. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Initial Purchaser, the Company, and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Initial Purchaser, the Company, and their respective successors and
the controlling persons and officers and directors referred to in Sections 6 and 7 hereof and their
heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the Initial Purchaser,
the Company, and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no other person, firm,
or corporation. No Eligible Purchaser shall be deemed to be a successor by reason merely of such
purchase.


 


 25.









 





Section 16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.



Section 17. Time. Time shall be of the essence of this Agreement. Except as
otherwise set forth herein, specified times of day refer to New York City time.



Section 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.



Section 19. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction of this Agreement.



[Signature page follows.]



 


 26.









 





If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Initial Purchaser and the Company in accordance with
its terms.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	Grubb & Ellis Company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas P. D’Arcy
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Thomas P. D’Arcy
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Chief Executive Officer and President
	 

	 	 	 	 






Confirmed And Accepted, 

as of the date first above written:



JMP Securities LLC




	 	 	 	 	 
	By:

	 	/s/ David Fullerton
 

	 	 
	 
	 	 	 	 
	Name:

	 	David Fullerton
 

	 	 
	 
	 	 	 	 
	Title:

	 	MD
 

	 	 






[Signature Page to Purchase Agreement]



 


 









 





Schedule A

ADDITIONAL TIME OF SALE INFORMATION




None



 


 









 





Schedule B




1. The purchase price for the Securities to be paid by the Initial Purchaser shall be the sum
of (a) 95% of the original principal amount of the Securities plus (b) accrued interest on the
Securities from May 7, 2010.



 


 









 







Schedule C

FINAL TERM SHEET