Document:

EX-4.3

EXHIBIT 4.3

EXECUTION

SECURITY AGREEMENT

dated as of February 13, 2009

among

XM 1500 ECKINGTON LLC

and

XM INVESTMENT LLC

as Grantors

and

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Trustee

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1. DEFINITIONS
	 	 	4	 
	 
	 	 	 	 
	1.1 General Definitions
	 	 	4	 
	1.2 Definitions; Interpretation
	 	 	9	 
	 
	 	 	 	 
	2. GRANT OF SECURITY
	 	 	9	 
	 
	 	 	 	 
	2.1 Grant of Security
	 	 	9	 
	 
	 	 	 	 
	3. SECURITY FOR OBLIGATIONS
	 	 	10	 
	 
	 	 	 	 
	3.1 Security for Obligations
	 	 	10	 
	3.2 Obligations Remain
	 	 	11	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES AND COVENANTS
	 	 	11	 
	 
	 	 	 	 
	4.1 Generally
	 	 	11	 
	4.2 Intellectual Property
	 	 	13	 
	4.3 Investment Property
	 	 	14	 
	4.4 Documents, Chattel Paper, Instruments and Deposit Accounts
	 	 	16	 
	 
	 	 	 	 
	5. FURTHER ASSURANCES
	 	 	17	 
	 
	 	 	 	 
	5.1 Further Assurances
	 	 	17	 
	 
	 	 	 	 
	6. ATTORNEY-IN-FACT
	 	 	19	 
	 
	 	 	 	 
	6.1 Power of Attorney
	 	 	19	 
	6.2 No Duty on the Part of Collateral Trustee
	 	 	20	 
	 
	 	 	 	 
	7. REMEDIES
	 	 	20	 
	 
	 	 	 	 
	7.1 Generally
	 	 	20	 
	7.2 Application of Proceeds
	 	 	21	 
	7.3 Investment Property
	 	 	21	 
	7.4 Intellectual Property
	 	 	22	 
	7.5 FCC Licenses
	 	 	23	 
	 
	 	 	 	 
	8. CONTINUING SECURITY INTEREST; TERMINATION AND RELEASE
	 	 	24	 
	 
	 	 	 	 
	9. STANDARD OF CARE; SECURED PARTY MAY PERFORM
	 	 	24	 
	 
	 	 	 	 
	10. INDEMNITY
	 	 	25	 
	 
	 	 	 	 
	11. MISCELLANEOUS
	 	 	26	 

 

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	 	 	Page
	11.1 Notices
	 	 	26	 
	11.2 Expenses
	 	 	26	 
	11.3 Amendments and Waivers
	 	 	26	 
	11.4 Successors and Assigns
	 	 	26	 
	11.5 Independence of Covenants
	 	 	27	 
	11.6 Survival of Representations, Warranties and Agreements
	 	 	27	 
	11.7 No Waiver; Remedies Cumulative
	 	 	27	 
	11.8 Marshaling; Payments Set Aside
	 	 	27	 
	11.9 Severability
	 	 	27	 
	11.10 Headings
	 	 	27	 
	11.11 Applicable law
	 	 	27	 
	11.12 Consent To Jurisdiction
	 	 	27	 
	11.13 Waiver of Jury Trial
	 	 	28	 
	11.14 Counterparts
	 	 	28	 
	11.15 Effectiveness
	 	 	28	 
	11.16 Entire Agreement
	 	 	28	 
	11.17 Trust Indenture Act Controls
	 	 	28	 
	 
	 	 	 	 
	 
	SCHEDULE 1.1 - FCC LICENSE
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 4.1 - FINANCING STATEMENTS
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 4.2 - INTELLECTUAL PROPERTY
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 4.3 - INVESTMENT PROPERTY
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 4.4(e) -COMMERCIAL TORT CLAIMS
	 	 	 	 
	 
	 	 	 	 
	 
	EXHIBIT A
– FORM OF SECURITY AGREEMENT SUPPLEMENT
	 	 	 	 

 

 

SECURITY AGREEMENT

          This SECURITY AGREEMENT (this “Agreement”), dated as of February 13, 2009, made among
XM 1500 ECKINGTON LLC, a Delaware limited liability company (“XM Eckington”), XM INVESTMENT
LLC, a Delaware Limited Liability Company (“XM Investment” and together with XM Eckington,
the “Grantors”) and U.S. Bank National Association, acting as collateral trustee
(“Collateral Trustee”) for the benefit of the Secured Parties (as defined below).

RECITALS

          A. XM SATELLITE RADIO HOLDINGS INC., a Delaware corporation (the “Company”), SIRIUS XM
RADIO INC., a Delaware corporation, (the “Parent”),the Grantors and U.S. Bank National
Association, as Trustee (“Trustee”), have entered into that certain Indenture dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the
“Indenture”), pursuant to which the Company may issue up to $250,000,000 aggregate
principal amount at maturity of its Senior PIK Secured Notes due 2011 (the “Notes”).

          B. The Grantors have guaranteed the obligations of the Company under the Indenture and the
Notes.

          NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, each Grantor and Collateral Trustee, for and on behalf of itself and the Secured
Parties, agree as follows:

1. DEFINITIONS.

     1.1 General Definitions. In this Agreement, the following terms shall have the
following meanings:

          “Accounts” shall mean all “accounts” as defined in Article 9 of the UCC, excluding
assets described in the definition of Excluded Collateral.

          “Agreement” shall have the meaning set forth in the preamble.

          “Books” shall mean books and records of Grantors (including all of their Records
indicating, summarizing, or evidencing assets (including the Collateral) or liabilities, all
Records relating to Grantor’s business operations or financial conditions, and all of their goods.
or General Intangibles related to such information.

          “Capital Lease Obligations” shall mean a liability in respect of a capital lease that
at the time any determination thereof is to be made would be required to be capitalized on a
balance sheet in accordance with GAAP.

          “Capital Stock” shall mean:

          (1) in the case of a corporation, corporate stock;

 

 

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          (2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;

          (3) in the case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and

          (4) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.

          “Chattel Paper” shall mean all “chattel paper” as defined in Article 9 of the UCC,
including, without limitation, “electronic chattel paper” or “tangible chattel piper”, as each term
is defined in Article 9 of the UCC, excluding assets described in the definition of Excluded
Collateral.

          “Collateral” shall have the meaning set forth in Section 2.1.

          “Collateral Trustee” shall have the meaning set forth in the preamble.

          “Commercial Tort Claims” shall mean all “commercial tort claims” as defined in Article
9 of the UCC, including, without limitation, the commercial tort claims listed on Schedule
4.4(e), excluding assets described in the definition of Excluded Collateral.

          “Commodities Accounts” shall mean all “commodity accounts” as defined in Article 9 of
the UCC, excluding assets described in the definition of Excluded Collateral.

          “Communications Act” shall mean the Communications Act of 1934, as amended, and the
rules and regulations of the FCC, as from time to time in effect.

          “Controlled Foreign Corporation” shall mean “controlled foreign corporation” as
defined in the United States Internal Revenue Code of 1986, as amended from time to time.

          “Copyrights” shall mean (i) copyrights and copyright registrations, including, without
limitation, the copyright registrations listed on Schedule 4.2(A) and (A) all renewals
thereof, (B) all income, royalties, damages and payments now and hereafter due or payable under and
with respect thereto, including, without limitation, payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements or dilutions
thereof, (C) the right to sue for past, present and future infringements and dilutions thereof, (D)
the goodwill of any Grantor’s business symbolized by the foregoing and connected therewith, and (E)
all of any Grantor’s rights corresponding thereto throughout the world; and (ii) all proceeds of
any and all of the foregoing, including, without limitation, licensed royalties and proceeds of
infringement suits, in each case, excluding assets described in the definition of Excluded
Collateral.

          “Deposit Accounts” shall mean all “deposit accounts” as defined in Article 9 of the
UCC, excluding assets described in the definition of Excluded Collateral.

          “Document” shall mean “document” as defined in Article 9 of the UCC, excluding assets
described in the definition of Excluded Collateral.

 

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          “Equipment” shall mean all equipment (whether or not any such equipment is so attached
to the real property that it constitutes fixtures), machinery, machine tools, motors, furniture,
satellites, furnishings, vehicles (including motor vehicles), tools, parts, goods (other than
consumer goods, farm products, or Inventory), wherever located, including all attachments,
accessories, accessions, replacements, substitutions, additions, and improvements to any of the
foregoing, excluding assets described in the definition of Excluded Collateral.

          “Excluded Collateral” shall mean all of each Grantor’s right, title, and interest in
and to each of the following:

          (a) any licenses issued by the FCC to any Grantor, including, without limitation, the licenses
more fully described on Schedule 1.1 to the extent, but only to the extent that such
Grantor is prohibited from granting a security interest therein pursuant to the Communications Act
of 1934, as amended, and the policies and regulations promulgated thereunder, but the Collateral
expressly includes, to the maximum extent permitted by law, all rights incident or appurtenant to
such licenses and the rights to receive all proceeds derived from or in connection with the sale,
assignment or transfer of such licenses;

          (b) any assets, agreements, leases, permits or licenses or other property that are not
permitted to be subjected to a Lien hereunder without the consent of third parties, which consent
has not been obtained, to the extent that the requirement of such consent is not rendered
ineffective (meaning that such Lien would not create a default with respect to such assets,
agreements, leases, permits or licenses or other property) by Article 9 of the UCC; and

          (c) the outstanding capital stock of a Controlled Foreign Corporation in excess of 65% of the
voting power of all classes of capital stock of such Controlled Foreign Corporation entitled to
vote; provided that immediately upon the amendment of the United States Internal Revenue
Code of 1986, as amended, to allow the pledge of a greater percentage of the voting power of
capital stock in a Controlled Foreign Corporation without adverse tax consequences, the Collateral
shall include, and each Grantor shall be deemed to have granted a security interest in, such
greater percentage of capital stock of the applicable Controlled Foreign Corporation.

          “FCC” shall mean the Federal Communications Commission or any Governmental Body
succeeding to the functions thereof.

          “Financial Asset” shall mean any “financial asset” as defined in Article 8 of the UCC,
excluding assets described in the definition of Excluded Collateral.

          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time.

          “General Intangibles” shall mean any “general intangible” as defined in Article 9 of
the UCC, excluding assets described in the definition of Excluded Collateral.

 

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          “Governmental Body” shall mean any nation or government, any state or other political
subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or arbitrator.

          “Grantor” shall have the meaning set forth in the preamble hereof.

          “Instrument” shall mean any “instrument” as defined in Article 9 of the UCC, excluding
assets described in the definition of Excluded Collateral.

          “Intellectual Property” shall mean, collectively, the Copyrights, the Patents, the
Trademarks and the Intellectual Property Licenses.

          “Intellectual Property Licenses” shall mean all rights under or interest in any
Patent, Trademark or Copyright license agreements with any other party, whether a Grantor is a
licensee or licensor under any such license agreement, excluding assets described in the definition
of Excluded Collateral; provided, however, that Intellectual Property Licenses
shall not include any license agreement in effect as of the date hereof which by its terms
prohibits the grant of the security interest contemplated by this Agreement and which prohibition
is not rendered ineffective (meaning that such Lien would not create a default under such license
agreement) by Article 9 of the UCC, except that upon the termination of such prohibitions for any
reason whatsoever, such license agreement shall be deemed to be included in Intellectual Property
Licenses.

          “Inventory” shall mean any “inventory” as defined in Article 9 of the UCC, excluding
assets described in the definition of Excluded Collateral.

          “Investment Property” shall mean all “investment property” as defined in Article 9 of
the UCC, including all Securities, Securities Accounts and Commodities Accounts, excluding assets
described in the definition of Excluded Collateral.

          “Letter-of-Credit Right” shall mean any “letter-of-credit right” as defined in Article
9 of the UCC, excluding assets described in the definition of Excluded Collateral.

          “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest and any filing of or agreement to give any financing statement, under the UCC (or
equivalent statutes) of any jurisdiction.

          “Material” shall mean, with respect to any subject matter in the context of any
representation, warranty or covenant under this Agreement that can be expressed in monetary terms,
an amount in excess of $5,000,000.

          “Money” shall mean “money” as defined in Article 9 of the UCC, excluding assets
described in the definition of Excluded Collateral.

          “Notes” shall have the meaning set forth in the Recitals hereof.

 

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          “Patents” shall mean all (i) patents and patent applications, including, without
limitation, the patents and patent applications listed on Schedule 4.2(B), and (A) all
extensions and adjustments thereof, (B) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including, without limitation, payments
under all licenses entered into in connection therewith and damages and payments for past or future
infringements thereof, (C) the right to sue for past, present and future infringements thereof, and
(D) all of Grantor’s rights corresponding thereto throughout the world; and (ii) proceeds of any
and all of the foregoing, including, without limitation, license royalties and proceeds of
infringement suits, excluding assets described in the definition of Excluded Collateral.

          “Permitted Liens” shall mean Liens that constitute “Permitted Liens” within the
meaning of each of the Secured Agreements or are otherwise not prohibited under any of the Secured
Agreements.

          “Purchase Money Obligations” shall mean obligations incurred in accordance with the
Secured Agreements for the purpose of financing all or any part of the purchase price or cost of
acquisition, construction, installation or improvement of property, plant equipment or other assets
used in the business of any Grantor; provided that the Liens attributable to such
obligations cover only the assets acquired, constructed, installed or improved with such financing.

          “Record” shall mean information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

          “Secured Obligations” shall have the meaning specified in Section 3.1.

          “Secured Parties” shall mean (a) the Holders, (b) the Collateral Trustee, and (c) the
permitted successors and assigns of each of the foregoing.

          “Securities Accounts” shall mean all “securities accounts” as defined in Article 8 of
the UCC, excluding assets described in the definition of Excluded Collateral.

          “Security” shall mean any “security” as defined in Article 8 of the UCC, excluding
assets described in the definition of Excluded Collateral.

          “Security Agreement Supplement” shall mean any supplement to this agreement in
substantially the form of Exhibit A.

          “Subsidiary” shall have the meaning set forth in the Indenture.

          “Supporting Obligation” shall mean any “supporting obligation” as defined in Article 9
of the UCC, excluding assets described in the definition of Excluded Collateral.

          “Trademarks” shall mean (i) all trademarks, trade names, registered trademarks.
trademark applications, service marks, registered service marks and service mark applications,
including, without limitation, the trade names, registered trademarks, trademark applications,
registered service marks and service mark applications listed on Schedule 4.2(C), and (A)
all renewals thereof, (B) all income, royalties, damages and payments now and hereafter due or

 

9

payable under and with respect thereto, including, without limitation, payments under all
licenses entered into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (C) the right to sue for past, present and future infringements
and dilutions thereof, (D) the goodwill of any Grantor’s business symbolized by the foregoing and
connected therewith, and (E) all of any Grantor’s rights corresponding thereto throughout the
world; and (ii) all proceeds of any and all of the foregoing, including, without limitation,
license royalties and proceeds of infringement suits, in each case, excluding assets described in
the definition of Excluded Collateral.

          “Trustee” shall have the meaning set forth in the Recitals.

          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York or, when the context requires, the Uniform Commercial Code as in effect from time
to time in any other applicable jurisdiction.

     1.2 Definitions; Interpretation. All capitalized terms used herein (including the
preamble and recitals hereto) and not otherwise defined herein shall have the meanings ascribed
thereto in the Indenture or, if not defined therein, in the UCC. References to “Sections,”
“Exhibits” and “Schedules” shall be to Sections, Exhibits and Schedules, as the case may be, of
this Agreement unless otherwise specifically provided. Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural, depending on the reference.
The use herein of the word “include” or “including”, when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or words of similar
import) is used with reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement, term or matter. All
references herein to provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.

2. GRANT OF SECURITY.

     2.1 Grant of Security. Each Grantor hereby grants to Collateral Trustee for its
benefit and the benefit of the Secured Parties, a first priority security interest and continuing
lien on all of such Grantor’s right, title and interest in, to and under all property of such
Grantor including, but not limited to the following, in each case whether now owned or existing or
hereafter acquired or arising and wherever located (collectively, “Collateral”):

	 	(A)	 	Accounts;
	 
	 	(B)	 	Books;
	 
	 	(C)	 	Chattel Paper;
	 
	 	(D)	 	Commercial Tort Claims;
	 
	 	(E)	 	Deposit Accounts;

 

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	 	(F)	 	Documents;
	 
	 	(G)	 	Equipment;
	 
	 	(H)	 	Financial Assets;
	 
	 	(I)	 	General Intangibles;
	 
	 	(J)	 	Intellectual Property;
	 
	 	(K)	 	Inventory;
	 
	 	(L)	 	Investment Property;
	 
	 	(M)	 	Instruments;
	 
	 	(N)	 	Letter-of-Credit Rights;
	 
	 	(O)	 	Money;
	 
	 	(P)	 	Cash Equivalent Investments, or other assets of
any Grantor that now or hereafter come into the possession, custody, or
control of Collateral Trustee;
	 
	 	(Q)	 	to the extent not otherwise included above, all
Supporting Obligations relating to any of the foregoing;
	 
	 	(R)	 	to the extent not otherwise included above, all
other personal property of the Grantors of any kind or description; and
	 
	 	(S)	 	to the extent not otherwise included above, all
of the proceeds and products, whether tangible or intangible, of any of
the foregoing, including proceeds of insurance covering any or all of
the foregoing;

provided, however, notwithstanding anything herein to the contrary, in no event
shall the Collateral include any Excluded Collateral.

3. SECURITY FOR OBLIGATIONS.

     3.1 Security for Obligations. With respect to each Grantor, this Agreement secures,
and the Collateral granted by such Grantor is collateral security for, the prompt and complete
payment or performance in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts that would become
due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C, §362(a) (and any successor provision thereof)), of all obligations of such Grantor hereunder
and under the Note, the Note Guarantee, the Indenture and the other Security Documents (the
“Secured Obligations”).

 

 

11

     3.2  Obligations Remain. Anything contained herein to the contrary notwithstanding (a)
each Grantor shall remain liable under any partnership agreement or limited liability company
agreement relating to any partnership interest or limited liability company interest included in
the Collateral and any other contracts and agreements included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed; and (b) Collateral Trustee shall not have any obligation or
liability under any partnership agreement or limited liability company agreement relating to any
partnership interest or limited liability company interest included in the Collateral and any other
contracts and agreements included in the Collateral by reason of this Agreement, nor shall
Collateral Trustee be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

     4.1  Generally.

          (a) Representations and Warranties. Each Grantor hereby represents and warrants on the
date hereof that:

	 	(A)	 	it is the sole legal and beneficial owner of
the Collateral with respect to which it is granting a security interest
hereunder free and clear of all Liens other than Permitted Liens;
	 
	 	(B)	 	upon the filing of all UCC financing statements
naming such Grantor as “Debtor” and Collateral Trustee as “Secured
Party” and describing the Collateral, in the filing offices set forth
opposite such Grantor’s name on Schedule 4.1 hereof and, to the
extent not subject to Article 9 of the UCC, upon the recordation of the
security interest granted hereunder in Patents, Trademarks and
Copyrights in the applicable patent, trademark and copyright registries
(including the United States Patent and Trademark Office and the United
States Copyright Office), the security interests granted to Collateral
Trustee hereunder will constitute valid and, to the extent that a
security interest in such Collateral can be perfected by the filing of
financing statements under the UCC, perfected first priority Liens
(subject in the case of priority only to Permitted Liens);
	 
	 	(C)	 	no authorization, approval or other action by.
and no notice to or filing with, any Governmental Body is required for
either (i) the pledge or grant by any Grantor of the Liens purported to
be created in favor of Collateral Trustee hereunder or (ii) the
exercise by Collateral Trustee of any rights or remedies in respect of
any Collateral (whether specifically granted or created hereunder or
created or provided for by applicable law), except (A) for the filings
contemplated by Section 4.1(a)(ii) above, (B) as may be
required, in connection with the disposition of any Investment

 

12

	 	 	 	Property, by laws generally affecting the offering and sale of
Securities and (C) to the extent any consents or approvals are
required under the Assignment of Claims Act of 1940 or the
Communications Act; and
	 
	 	(D)	 	in the case of Material Instruments and
Material Investment Property consisting of certificated securities,
upon delivery of such instruments and the certificates representing
such certificated securities (in the case of such certificated
securities, duly endorsed or accompanied by duly executed instruments
of assignment of transfer in blank) Collateral Trustee will have a
first priority perfected security interest in such Instruments and
Investment Property (subject in the case of priority only to Permitted
Liens).

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

	 	(A)	 	except for the security interest created by
this Agreement, it shall not create or suffer to exist any Lien upon or
with respect to any of the Collateral, except Permitted Liens, and such
Grantor shall (A) defend the Collateral against all Persons at any time
claiming any interest therein and (B) file such financing or
continuation statements, or amendments thereto, as may be requested by
the Collateral Trustee to preserve the perfection of the security
interests granted hereunder;
	 
	 	(B)	 	it shall not use or permit any Collateral to be
used unlawfully or in violation of any provision of this Agreement or
any applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral;
	 
	 	(C)	 	it shall not change Grantor’s name or
jurisdiction of organization unless it shall have (a) notified
Collateral Trustee in writing, by executing and delivering to
Collateral Trustee a completed Security Agreement Supplement,
substantially in the form of Exhibit A attached hereto,
together with a supplement to Schedule 4.1, at least thirty
(30) days prior to any such change, identifying such new proposed name
or jurisdiction of organization and (b) taken all actions necessary to
maintain the continuous validity and perfection of Collateral Trustee’s
security interest in the Collateral intended to be granted hereby;
	 
	 	(D)	 	it shall make payment of (i) all taxes,
assessments, license fees, levies and other charges of Governmental
Bodies imposed upon it which if unpaid, would be reasonably likely to
become a Lien on the Collateral that is not a Permitted Lien, and (ii)
all claims (including, without limitation, claims for labor, services,
materials

 

13

	 	 	 	and supplies) for sums which have become due and payable and which by
law have or are reasonably likely to become a Lien upon any of the
Collateral other than a Permitted Lien; and
	 
	 	(E)	 	upon such Grantor or any officer of such
Grantor obtaining knowledge thereof, it shall promptly notify
Collateral Trustee in writing of the levy of any legal process against
the Collateral or any portion thereof.

     4.2  Intellectual Property.

          (a) Representations and Warranties. Except with respect to any patents that have
expired or been abandoned on the date hereof, each Grantor hereby represents and warrants, on the
date hereof, that Schedule 4.2 sets forth a true and complete list of all United States
federal registrations of and applications for Patents, Trademarks, and registered Copyrights owned
by such Grantor and material to the business of such Grantor.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees as follows:

	 	(A)	 	except as permitted under the Indenture and the
Security Documents, it shall not do any act or omit to do any act
whereby any of the Intellectual Property which is material to the
business of such Grantor may lapse, or become abandoned, dedicated to
the public, or unenforceable, or which would adversely affect the
validity, grant, or enforceability of the security interest granted
therein or herein;
	 
	 	(B)	 	it shall take all reasonable steps in the
United States Patent and Trademark Office and the United States
Copyright Office, to pursue any application and maintain any
registration of each Trademark, Patent, and Copyright owned by such
Grantor and material to its business which is now or shall become
included in the Collateral constituting Intellectual Property (except
for such Intellectual Property with respect to which such Grantor has
determined in the exercise of its commercially reasonable judgment that
it shall not seek registration) including, but not limited to, those
items on Schedule 4.2(A), (B) and (C);
	 
	 	(C)	 	it shall (i) within 15 calendar days after
either the end of each calendar year or the request of the Collateral
Trustee (at the written direction of the Secured Parties), report to
Collateral Trustee (1) any new application that has been filed during
the preceding calendar year in the name of such Grantor to register any
Intellectual Property not constituting Excluded Collateral with the
United States Patent and Trademark Office or the United States
Copyright Office, and (2) any new registration of such Intellectual

 

14

	 	 	 	Property by any such office, in each case, by executing and
delivering to Collateral Trustee a completed Security Agreement
Supplement, substantially in the form of Exhibit A attached
hereto, together with a supplement to Schedule 4.2 and (ii)
provide Collateral Trustee, within ten (10) days prior to any filing
described in clause (i)(1) of this Paragraph (C), written notice of
such filing; provided, however, that any failure to
comply with the requirements of this clause (ii) shall not constitute
a Default if (I) the actions previously taken in connection with this
Agreement are effective, and following such filing will continue to
be effective, to create and perfect the security interest intended to
be created hereby in the Intellectual Property to which such filing
relates, (II) such filing relates to Intellectual Property that is
not reasonably expected to be material to the business of such
Grantor at the time of such filing, or (III) such failure is
subsequently remedied at a time when no other Lien (other than a
Permitted Lien) on the Intellectual Property to which such filing
relates shall have attached and become perfected; and

	 	(D)	 	if requested by the Collateral Trustee (such
request to be given at the written request of the Holders) in
connection with the actions required pursuant to Section
4.2(b)(C), it shall promptly execute and deliver to Collateral
Trustee any document required to acknowledge, confirm, register,
record, or perfect Collateral Trustee’s interest in any part of the new
Intellectual Property, whether now owned or hereafter acquired.

     4.3  Investment Property.

          (a) Representations and Warranties. Each Grantor hereby represents and warrants, that
on the date hereof:

	 	(A)	 	Schedule 4.3 sets forth under the
headings “Pledged Stock,” “Pledged LLC Interests,” and “Pledged
Partnership Interests”, all equity interests of Subsidiaries and all
other Material equity interests owned by any Grantor included in the
Collateral and such equity interests constitute the percentage of
issued and outstanding shares of stock, percentage of membership
interests, percentage of partnership interests or percentage of
beneficial interest of the respective companies thereof to the extent
indicated on such Schedule;
	 
	 	(B)	 	it is the record and beneficial owner of the
equity interests included in the Collateral free of all Liens, rights
or claims of other Persons other than Permitted Liens; and

 

15

	 	(C)	 	Schedule 4.3 sets forth under the
heading “Pledged Debt” all of the Material issued and outstanding
Indebtedness evidenced by an instrument or certificated security of the
respective issuers thereof owing to such Grantor.

          (b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

	 	(A)	 	it shall not vote to enable or take any other
action to: (a) amend or terminate any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or
other organizational documents in any way that adversely affects the
validity, perfection or priority of Collateral Trustee’s security
interest, (b) permit any of its Subsidiaries to dispose of all or a
material portion of their assets in a manner which would be prohibited
under the Indenture or (c) cause any issuer of any partnership
interests or limited liability company interests included in the
Collateral which are not securities (for purposes of the UCC) on the
date hereof to elect or otherwise take any action to cause such
partnership interests or limited liability company interests to be
treated as securities for purposes of the UCC unless such Grantor shall
take all steps necessary to establish Collateral Trustee’s “control”
thereof;
	 
	 	(B)	 	it shall report to the Collateral Trustee the
acquisition of any new Material Investment Property not previously
disclosed hereunder promptly following the acquisition thereof by
delivering to Collateral Trustee a completed Security Agreement
Supplement, substantially in the form of Exhibit A attached
hereto, together with a supplement to Schedule 4.3, reflecting
such new Investment Property. To the extent that any Investment
Property specified on such Schedule 4.3 constitutes
certificated Capital Stock of a Subsidiary or Material certificated
Securities, such Grantor shall deliver such certificates to the
Collateral Trustee, together with undated stock powers executed in
blank. Notwithstanding the foregoing, it is understood and agreed that
the security interest of Collateral Trustee shall attach to all
Investment Property immediately upon any Grantor’s acquisition of
rights therein and shall not be affected by the failure of any Grantor
to deliver a supplement to Schedule 4.3 as required hereby;
	 
	 	(C)	 	in the event such Grantor receives any
dividends, interest, distributions or any securities or other property
on account of any Collateral, then such dividends, interest,
distributions, securities and other property shall be included in the
definition of Collateral without further action; and

 

16

	 	(D)	 	each Grantor consents to the grant by any other
Grantor of a security interest in all Investment Property to Collateral
Trustee.

     (c) Voting and Distributions.

	 	(A)	 	So long as no Event of Default shall have
occurred and be continuing. subject to applicable laws:

	 	(A)	 	each Grantor shall be entitled to
exercise or refrain from exercising any and all voting and otter
consensual rights pertaining to the Investment Property or any
part thereof for any purpose not inconsistent with the terms of
this Agreement or any Secured Agreement; and
	 
	 	(B)	 	Collateral Trustee shall promptly
execute and deliver (or cause to be executed and delivered) to
each Grantor all proxies and other instruments as such Grantor
may from time to time reasonably request for the purpose of
enabling such Grantor to exercise the voting and other
consensual rights it is entitled to exercise pursuant to clause
(A) above.

	 	(B)	 	Upon the occurrence and during the continuation
of an Event of Default, subject to applicable laws and the terms of the
Indenture:

	 	(A)	 	all rights of each Grantor to
exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in Collateral Trustee who shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
	 
	 	(B)	 	in order to permit Collateral
Trustee to exercise the voting and other consensual rights which
it may be entitled to exercise pursuant hereto and to receive
all dividends and other distributions which it may be entitled
to receive hereunder: (1) each Grantor shall promptly execute
and deliver (or cause to be executed and delivered) to
Collateral Trustee all proxies, dividend payment orders and
other instruments as necessary or as Collateral Trustee (at the
written direction of the Secured Parties) may from time to time
reasonably request and (2) each Grantor acknowledges that
Collateral Trustee may utilize the power of attorney set forth
in Section 6.

4.4  Documents, Chattel Paper, Instruments and Deposit Accounts.

 

17

          (a) If requested by the Collateral Trustee in writing (such request to be given at the written
direction of the Holders), each Grantor shall deliver to the Collateral Trustee all Collateral
consisting of Material Documents, Material Chattel Paper, Material promissory notes and Material
Instruments (in each case, accompanied by stock powers, allonges or other instruments of transfer
executed in blank, as applicable) promptly after such Grantor receives the same.

          (b) If requested by the Collateral Trustee in writing (such request to be given at the written
direction of the Holders), each Grantor shall use commercially reasonable efforts (which shall be
deemed to not include any obligation to pay money to any third party other than reasonable
attorney’s fees and expenses of the third party or other de minimus payments) to obtain
authenticated control agreements from each issuer of uncertificated Securities, securities
intermediary, or commodities intermediary issuing or holding any Material Financial Assets for the
account of such Grantor.

          (c) If requested by the Collateral Trustee in writing (such request to be given at the written
direction of the Holders), each Grantor shall use commercially reasonable efforts (which shall
include customary fees charged by third parties that act as intermediaries but shall not be deemed
to include any obligation to pay money to any third party other than reasonable attorney’s fees and
expenses of the third party or other de minimus payments) to obtain a control agreement with each
bank or financial institution holding a Material Deposit Account for such Grantor, which agreement
shall be in form and substance reasonably satisfactory to the Collateral Trustee.

          (d) Each Grantor shall take all steps necessary to grant the Collateral Trustee control of all
Material electronic chattel paper in accordance with the UCC.

          (e) Each Grantor hereby represents and warrants, on the date hereof, that Schedule
4.4(e) sets forth all Material Commercial Tort Claims held by such Grantor against third
parties. If requested by the Collateral Trustee in writing (such request to be given at the written
request of the Holders), each Grantor shall identify any new Material Commercial Tort Claims held
by it at such time and shall deliver a completed Security Agreement Supplement, substantially in
the form of Exhibit A attached hereto, together with a supplement to Schedule
4.4(e) identifying such new Commercial Tort Claims.

Upon the occurrence and during the continuance of an Event of Default, each Grantor shall not,
without the Collateral Trustee’s prior written consent (such consent to be given at the written
direction of the Holders), grant any extension of the time of payment for any of the Accounts,
compromise, compound or settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or discount whosoever
thereon, other than extensions, credit, discounts, compromises or settlements granted or made in
the ordinary course of business and consistent with its current practices and in accordance with
prudent and standard practices used in the industry in which such Grantor is engaged.

5. FURTHER ASSURANCES.

     5.1  Further Assurances

 

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          (a) Each Grantor agrees. that from time to time, at the expense of such Grantor, it shall
promptly execute and deliver all further instruments and documents, and take all further action,
that may be necessary or reasonably requested by Collateral Trustee (such request to be given at
the written request of the Secured Parties) in order to create and/or maintain the validity,
perfection or priority of and protect or enforce any security interest granted or purported to be
granted hereby or to enable Collateral Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Collateral; provided, however, that (i) so long as no
Default of Event of Default shall have occurred and be continuing, such Grantor shall not be
required to take any actions to perfect or protect the security interest granted hereunder or
enable the Collateral Trustee to exercise and enforce its rights and remedies with respect to the
Collateral other than as is expressly required pursuant to Sections 4.1, 4.2,
4.3 and 4.4 hereof and (ii) in no event shall such Grantor be obligated to obtain
consents, waivers, acknowledgment or access agreements from any landlord, bailee or other similar
party. Without limiting the generality of the foregoing, each Grantor shall:

	 	(A)	 	at any reasonable time and upon reasonable
notice by Collateral Trustee, exhibit the Collateral to and allow
inspection of the Collateral by Collateral Trustee, or persons
designated by Collateral Trustee; and
	 
	 	(B)	 	appear in and defend any action or proceeding
that may affect Grantor’s title to or Collateral Trustee’s security
interest in all or any part of the Collateral.

          (b) Each Grantor hereby authorizes Collateral Trustee to file a Record or Records, including,
without limitation, financing or continuation statements, and amendments thereto, in all
jurisdictions and with all filing offices as are necessary or advisable to perfect the security
interest granted to Collateral Trustee herein, and the Collateral Trustee hereby authorizes each
Grantor to make any such filings contemplated by this Section 5.1(b). Such financing
statements may describe the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any other manner as is
necessary, advisable or customary to ensure the perfection of the security interest in the
Collateral granted to Collateral Trustee herein. Each Grantor shall, promptly upon request by
Collateral Trustee (such request to be given at the written request of the Holders), furnish to
Collateral Trustee statements and schedules further identifying and describing the Collateral, all
in reasonable detail.

          (c) Each Grantor hereby authorizes Collateral Trustee to modify this Agreement after obtaining
such Grantor’s approval of or signature to such modification by amending Schedule 4.2 to
include reference to any right, title or interest in any existing Intellectual Property or any
Intellectual Property acquired or developed by any Grantor after the execution hereof or to delete
any reference to any right, title or interest in any Intellectual Property in which any Grantor no
longer has or claims any right, title or interest; provided such approval or signature of Grantor
shall not be required so long as an Event of Default exists.

 

19

6. ATTORNEY-IN-FACT.

     6.1  Power of Attorney. Each Grantor hereby irrevocably appoints Collateral Trustee
(such appointment being coupled with an interest) as such Grantor’s attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor then in effect,
from time to time in its discretion to take any action permitted under this Agreement and to
execute any instrument that it may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, the following:

          (a) upon the occurrence and during the continuance of any Event of Default, to obtain and
adjust insurance required to be maintained by Grantors pursuant to the Secured Agreements;

          (b) upon the occurrence and during the continuance of any Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the Collateral;

          (c) upon the occurrence and during the continuance of any Event of Default, to receive,
endorse and collect any drafts or other instruments, documents and chattel paper in connection with
clause (b) above, subject in all respects to the rights of any lender under the Credit Agreement to
receive, endorse and collect the same;

          (d) upon the occurrence and during the continuance of any Event of Default, to file any claims
or take any action or institute any proceedings necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Collateral Trustee with respect to any of the
Collateral;

          (e) to prepare and file any UCC financing statements against such Grantor as debtor;

          (f) to prepare, sign, and file for recordation in any intellectual property registry,
appropriate evidence of the lien and security interest granted herein in the Intellectual Property
in the name of such Grantor as assignor;

          (g) to take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without limitation, access
to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts necessary to discharge the
same, any such payments made by Collateral Trustee to become obligations of such Grantor to
Collateral Trustee, due and payable immediately without demand; and

          (h) upon the occurrence and during the continuance of any Event of Default and subject to the
provisions of the UCC, generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though Collateral Trustee were
the absolute owner thereof for all purposes, and to do, at Collateral Trustee’s option ,and such
Grantor’s expense, at any time or from time to time, all acts and things necessary to protect,
preserve or realize upon the Collateral and Collateral Trustee’s

 

20

security interest therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

     6.2  No Duty on the Part of Collateral Trustee. The powers conferred on Collateral
Trustee hereunder are solely to protect the interests of Collateral Trustee in the Collateral and
shall not impose any duty upon Collateral Trustee to exercise any such powers. Collateral Trustee
shall be accountable only for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder, except for their own gross negligence or
willful misconduct. No provision of this Agreement shall require Collateral Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

7. REMEDIES.

     7.1  Generally.

          (a) Upon the occurrence and during the continuation of any Event of Default, Collateral
Trustee may, subject to the requirements of the Indenture and applicable law, including regulatory
requirements, exercise any and all remedies and other rights provided under this Agreement and by
applicable law, including, without limitation, the following:

	 	(A)	 	require Grantors to, and Grantors hereby agree
that they shall at their expense and promptly upon request of
Collateral Trustee forthwith, assemble all or part of the Collateral as
directed by Collateral Trustee and make it available to Collateral
Trustee at a place to be designated by Collateral Trustee that is
reasonably convenient to all parties;
	 
	 	(B)	 	enter onto the property where any Collateral is
located and take possession thereof with or without judicial process if
such may be done without a breach of the peace; and
	 
	 	(C)	 	prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent
Collateral Trustee may deem commercially reasonable.

          (b) The Collateral Trustee may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the UCC or any other applicable laws and also may without
notice, except as specified below, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker’s board or at any of Collateral Trustee’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as Collateral Trustee may deem
commercially reasonable. Each Grantor agrees that, to the extent

 

 

 21

notice of sale shall be required by law, at least ten days’ notice to the each Grantor of the
time and place of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Trustee shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Collateral Trustee may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to which it was so
adjourned.

               (c) All amounts and proceeds (including checks and other instruments) received by any Grantor
in respect of amounts due to such Grantor in respect of the Collateral or any portion thereof
following the occurrence and during the continuance of an Event of Default shall be received in
trust for the benefit of Collateral Trustee, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Collateral Trustee in the same form as so received
(with any necessary endorsement) to be held as cash Collateral and applied as provided by
Section 7.2 following the occurrence and during the continuance of an Event of Default.
Upon demand from Collateral Trustee, Grantors shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect thereto or allow
any credit or discount thereon.

               (d) Each Grantor hereby expressly waives and covenants not to assert any appraisement,
valuation, extension, redemption or similar laws, now or at any time hereafter in force, which
might delay, prevent or otherwise impede the performance or enforcement of this Agreement.

     7.2 Application of Proceeds. Any cash held by Collateral Trustee as Collateral and
all cash proceeds received by Collateral Trustee in respect of any sale of, collection from or
other realization upon all or any part of the Collateral shall be held by Collateral Trustee as
Collateral for, and then or at any time thereafter applied (after the payment of any amounts
payable to Collateral Trustee pursuant to Section 11.2 hereof) in whole or in part by
Collateral Trustee for the benefit of the Secured Parties against the Secured Obligations in such
order of application as is required by the Indenture. Any surplus of such cash or cash proceeds
held by Collateral Trustee and remaining after payment of all of the Secured Obligations shall be
paid over to the Grantors or to whomsoever may be lawfully entitled to receive such surplus.

     7.3 Investment Property. Each Grantor acknowledges and agrees that Collateral
Trustee may elect, with respect to the offer or sale of any or all of the Collateral constituting
Investment Property or Securities, to conduct such offer and sale in such a manner as to avoid the
need for registration or qualification of the Collateral or the offer and sale thereof under any
federal or state securities laws and that Collateral Trustee is authorized to comply with any
limitation or restriction in connection with such sale as counsel may advise Collateral Trustee is
necessary in order to avoid any violation of applicable law or avoid obtaining approval of the sale
or of the purchaser by any Governmental Body, including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders and purchasers, requiring that such
prospective bidders and purchasers have certain qualifications, and restricting such prospective
bidders and purchasers to Persons who will represent and agree that they are purchasing for their
own account for investment and not with a view to the distribution or resale of such Collateral,
Each Grantor further acknowledges and agrees that any such transaction may be at prices and on

 

22

terms less favorable than those which may be obtained through a public sale and not subject to
such restrictions and agrees that, notwithstanding the foregoing, Collateral Trustee is under no
obligation to conduct any such public sale and may elect to impose any or all of the foregoing
restrictions, or any other restrictions which may be necessary or desirable in order to avoid any
such registration or qualification, at its sole discretion or with the consent or direction of the
Secured Parties.

     7.4 Intellectual Property.

               (a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during
the continuation of an Event of Default:

	 	(A)	 	Collateral Trustee shall have the right (but
not the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, Collateral Trustee or otherwise,
in Collateral Trustee’s sole discretion, to enforce any Intellectual
Property which is material to such Grantor’s business, in which event
such Grantor shall, at the request of Collateral Trustee, do any and
all lawful acts and execute any and all documents required by
Collateral Trustee in aid of such enforcement and such Grantor shall
promptly, upon demand, reimburse and indemnify Collateral Trustee as
provided in Section 10 hereof in connection with the exercise
of its rights under this Section, and, to the extent that Collateral
Trustee shall elect not to bring suit to enforce any Intellectual
Property which is material to such Grantor’s business as provided in
this Section, such Grantor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the
infringement of any such Intellectual property by others and for that
purpose agrees to diligently maintain any action, suit or proceeding
against any Person so infringing as shall be necessary to prevent such
infringement;
	 
	 	(B)	 	upon written demand from Collateral Trustee,
each Grantor shall grant, assign, convey or otherwise transfer to
Collateral Trustee all of such Grantor’s right, title and interest in
and to the Intellectual Property and shall execute and deliver to
Collateral Trustee such documents as are necessary or appropriate to
carry out the intent and purposes of this Agreement;
	 
	 	(C)	 	each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that Collateral Trustee receives cash
proceeds in respect of the sale of, or other realization upon, the
Intellectual Property; and
	 
	 	(D)	 	Collateral Trustee shall have the right to
notify, or require each Grantor to notify, any obligors with respect to
amounts due or to

 

23

	 	 	 	become due to such Grantor in respect of the Intellectual Property,
of the existence of the security interest created herein, to direct
such obligors to make payment of all such amounts directly to
Collateral Trustee, and, upon such notification and at the expense of
such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as such Grantor might have done.

               (b) If (i) an Event of Default shall have occurred and no longer be continuing, (ii) no other
Event of Default shall have occurred and be continuing, (iii) an assignment or other transfer to
Collateral Trustee of any rights, title and interests in and to the Intellectual Property shall
have been previously made and shall have become absolute and effective, and (iv) the Secured
Obligations shall not have become immediately due and payable, upon the written request of any
Grantor, Collateral Trustee shall promptly execute and deliver to such Grantor, at such Grantor’s
sole cost and expense, such assignments or other transfers as may be necessary to reassign to such
Grantor any such rights, title and interests as may have been assigned to Collateral Trustee as
aforesaid, subject to any disposition thereof that may have been made by Collateral Trustee;
provided, after giving effect to such reassignment, Collateral Trustee’s security interest
granted pursuant hereto, as well as all other rights and remedies of Collateral Trustee granted
hereunder, shall continue to be in full force and effect; and provided further, the rights, title
and interests so reassigned shall be free and clear of any Liens granted by or on behalf of
Collateral Trustee.

               (c) Solely for the purpose of enabling Collateral Trustee to exercise rights and remedies
under this Section 7 and at such time as Collateral Trustee shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to Collateral Trustee, to the extent
it has the right to do so an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to such Grantor), subject, in the ease of Trademarks, to sufficient
rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation
of said Trademarks, to use, operate under, license, or sublicense any Intellectual Property now
owned or hereafter acquired by such Grantor, and wherever the same may be located.

     7.5 FCC Licenses.

               Notwithstanding anything to the contrary contained in this Agreement or the Indenture, to the
extent that any FCC license is included in the Collateral, the Collateral Trustee will not take any
action pursuant to any document referred to above which would constitute or result in any
assignment of any FCC license or any change of control (whether de jure or de facto) of any Grantor
or subsidiary of any Grantor if such assignment of any FCC license or change of control would
require, under then existing law, the prior approval of the FCC without first obtaining such prior
approval of the FCC. Upon the occurrence of an Event of Default or at any time thereafter during
the continuance thereof, subject to terms and conditions of this Agreement, each Grantor agrees to
take any action that Collateral Trustee may reasonably request in order to obtain from the FCC such
approval as may be necessary to enable Collateral Trustee to exercise and enjoy the full rights and
benefits granted to Collateral Trustee by this Agreement and the other documents referred to above,
including specifically, at the cost and

 

24

expense of each Grantor, the use of its best efforts to assist in obtaining approval of the
FCC for any action or transaction contemplated by this Agreement for which such approval is or
shall be required by law, and specifically, without limitations, upon request, to prepare, sign and
file with the FCC the assignor’s or transferor’s portion of any application or applications for
consent to the assignment of license or transfer of control necessary or appropriate under the
FCC’s rules and regulations for approval of (i) any sale or other disposition of the Collateral by
or on behalf of Collateral Trustee, or (ii) any assumption by Collateral Trustee of voting rights
in the Collateral effected in accordance with the terms of this Agreement. It is understood and
agreed that all foreclosure and related actions will be made in accordance with the Communications
Act and other applicable FCC regulations and published policies and decisions.

8. CONTINUING SECURITY INTEREST; TERMINATION AND RELEASE.

               (a) This Agreement shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect until the payment in full of all of the Secured Obligations, (ii)
be binding upon the each Grantor, its successors and assigns and (iii) inure, together with the
rights and remedies of Collateral Trustee hereunder, to the benefit of Collateral Trustee, the
Secured Parties and their respective successors, transferees and assigns.

               (b) Subject to Section 314(d) of the Trust Indenture Act of 1939, notwithstanding anything to
the contrary in this Section 8, (i) the security interests created under this Agreement
shall terminate upon the discharge of the Note Guarantee by the Subsidiary Grantors and the release
of the Note Guarantee with respect to the Notes related thereto, pursuant to Section 3.5 of the
Indenture, and (ii) the security interests created under this Agreement with respect to any
Collateral that is permitted to be released pursuant to Section 12.5 of the Indenture shall
automatically be released and, in each case, the Collateral Trustee shall, at the request and
expense of any Grantor (and, if requested by the Collateral Trustee, upon the delivery of an
officer’s certificate by the Company certifying that such release is permitted under the Secured
Agreements), cause to be assigned, transferred and delivered, against receipt but without recourse,
warranty or representation whatsoever, all Collateral subject to such termination or release, as
applicable, to or on the order of such Grantor, and shall execute and deliver to such Grantor at
Grantor’s expense such documents and instruments as such Grantor may reasonably request to evidence
the release of such Collateral from the Lien of this Agreement, including, without limitation, any
UCC termination statements and any filings with the United States Patent and Trademark Office or
the United States Copyright Office.

9. STANDARD OF CARE; SECURED PARTY MAY PERFORM.

               The powers conferred on Collateral Trustee hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. Except for the
exercise of reasonable care in the custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, Collateral Trustee shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Collateral Trustee accords its
own similar property. None of the Collateral Trustee, any Secured Party or any of their

 

25

respective directors, officers, employees or agents shall be liable for failure to demand.
collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor
or otherwise. If any Grantor fails to perform any agreement contained herein, Collateral Trustee
may itself perform, or cause performance of, such agreement, and the expenses of Collateral Trustee
incurred in connection therewith shall be payable by each Grantor under Section 11.2
hereof. The Collateral Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.

10. INDEMNITY.

               (a) Each Grantor agrees to jointly and severally indemnify and hold harmless Collateral
Trustee and the Secured Parties, the respective affiliates of Collateral Trustee and the Secured
Parties, and the respective officers, directors, employees, agents (including, without limitation
each of their counsel), and controlling persons of Collateral Trustee and the Secured Parties, and
each such affiliate (each, an “Indemnified Party”) from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and costs and expenses (including, without limitation, the reasonable fees and
disbursements of counsel and with respect to Collateral Trustee, reasonably allocated costs and
expenses of in-house counsel and legal staff) of every nature and character arising out of or in
connection with any actual or threatened claim, litigation, investigation or proceeding relating to
this Agreement or the Secured Agreements or the transactions contemplated hereby or thereby (other
than any such actions or expenses resulting, as determined by a final order of a court of competent
jurisdiction, from the gross negligence or willful misconduct of the Indemnified Party seeking
indemnification hereunder), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of in-house counsel and legal staff incurred in
connection with any such claim investigation, litigation or other proceeding whether or not such
Indemnified Party is a party thereto, and each Grantor agrees to reimburse each Indemnified Party,
upon demand, for all out-of-pocket costs and expenses (including, without limitation, the
reasonable fees and disbursements of counsel and with respect to Collateral Trustee and the Secured
Parties, reasonably allocated costs and expenses of in-house counsel and legal staff) incurred in
connection with any of the foregoing. In litigation, or the preparation therefor, Indemnified
Parties shall each be entitled to select their own counsel and, in addition to the foregoing
indemnity, each Grantor agrees to pay promptly the reasonable fees and expenses of such counsel.
If, and to the extent that the obligations of any Grantor under this Section 10 are unenforceable
for any reason, such Grantor hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.

               (b) No Grantor shall make any claim against any Indemnified Party for any special, indirect or
consequential damages in respect of any breach or wrongful conduct (whether the claim therefor is
based in contract, tort or duty imposed by law) in connection with, arising out of or in any way
related to the transactions contemplated by, and the relationship established by the Secured
Agreements, or any act, omission or event occurring in connection therewith, and

 

26

hereby waives, releases and agrees not to sue upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in such Grantor’s favor.

               (c) The covenants contained in this Section 10 shall survive payment or satisfaction in full
of all other of the Secured Obligations.

11. MISCELLANEOUS.

     11.1 Notices. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to a Grantor or Collateral Trustee shall be
sent to such Person’s address as set forth in the Indenture. All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in the mails or
transmitted by telecopier, respectively.

     11.2 Expenses. Each Grantor will upon demand make payment to Collateral Trustee of
any and all reasonable out-of-pocket sums, costs and expenses, which Collateral Trustee may pay or
incur pursuant to the provisions of this Agreement or in perfecting, defending, protecting or
enforcing this Agreement or the security interests granted herein or in enforcing payment of all of
the Secured Obligations or otherwise in connection with the provisions hereof, including, but not
limited to court costs, reasonable collection charges, reasonable travel expenses, and reasonable
attorneys’ fees and expenses (including with respect to Collateral Trustee, the reasonable
allocated posts and expenses of in-house counsel and legal staff) all of which together with
interest at the highest rate then payable under the Indenture, shall be part of the Secured
Obligations. The covenants in this Section 11.2 shall survive payment or satisfaction in full of
all other of the Secured Obligations.

     11.3 Amendments and Waivers. Subject to the requirements of Article 11 of the
Indenture, any consent or approval required or permitted by this Agreement to be given by
Collateral Trustee may be given, and any term of this Agreement, may be amended, and the
performance or observance by the Grantors of any terms of this Agreement, or the continuance of any
Default or Event of Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the Grantors and the
written consent of Collateral Trustee. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or delay or omission
on the part of Collateral Trustee or any Secured Party in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon the Grantors shall
entitle the Grantors to other or further notice or demand in similar or other circumstances. Upon
the delivery of any Security Agreement Supplement, the supplemental schedules thereto shall be
incorporated into and become a part of and supplement the respective schedules to this Agreement;
and each reference to such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to such Security Agreement Supplement.

     11.4 Successors and Assigns. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns including all persons who become bound as Grantor to
this Agreement. No Grantor shall, except as permitted under the Secured Agreements, assign any
right, duty or obligation hereunder.

 

27

     11.5 Independence of Covenants. All covenants hereunder shall have given independent
effect so that if a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within the limitations
of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.

     11.6 Survival of Representations, Warranties and Agreements. All representations,
warranties and agreements made herein shall survive the execution and delivery hereof.
Notwithstanding anything herein or implied by law to the contrary, the agreements of Grantors set
forth in Sections 10 and 11.2 shall survive the payment of the Secured Obligations
under the Indenture and the termination hereof.

     11.7 No Waiver; Remedies Cumulative. No failure or delay on the part of Collateral
Trustee in the exercise of any power, right or privilege hereunder or under any Secured Agreement
shall impair such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power, right or privilege. All
rights, powers and remedies existing under this Agreement and the Secured Agreements are
cumulative, and not exclusive of, any rights or remedies otherwise available, Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not
impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

     11.8 Marshaling; Payments Set Aside. The Collateral Trustee shall not be under any
obligation to marshal any assets in favor of any Grantor or any other Person or against or in
payment of any or all of the Secured Obligations.

     11.9 Severability. In case any provision in or obligation hereunder shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

     11.10 Headings. Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or be given any
substantive effect.

     11.11 Applicable law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any conflicts of laws
principles thereof other than New York General Obligations Law Sections 5-1401 and 5-1402.

     11.12 Consent To Jurisdiction. Each Grantor agrees to irrevocably appoint CT
Corporation System or another similar Person in New York, New York as its authorized agent for
service of process. Each Grantor submits to the non-exclusive jurisdiction of the courts of the
State of New York and the courts of the United States of America, in each case located in the
Borough of Manhattan, New York, New York over any suit, action or proceeding arising under or in
connection with this Indenture or the transactions contemplated hereby or the Notes or the

 

28

Note Guarantees. Each Grantor waives any objection that it may have to the venue of any suit,
action or proceeding arising under or in connection with this Agreement, the Indenture, the
Security Documents or the transactions contemplated hereby or the Notes or the Note Guarantees in
the courts of the State of New York or the courts of the United States of America, in each case
located in the Borough of Manhattan, New York, New York, or that such suit, action or proceeding
brought in the courts of the State of New York or the courts of the United States of America, in
each case located in the Borough of Manhattan, New York, New York, was brought in an inconvenient
court and agrees not to plead or claim the same.

     11.13 Waiver of Jury Trial. Each of the Grantors hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement, the Indenture, the Notes, the Note
Guarantees, the Security Documents or the transaction contemplated hereby.

     11.14 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.

     11.15 Effectiveness. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Collateral Trustee of written or
telephonic notification of such execution and authorization of delivery thereof.

     11.16 Entire Agreement. This Agreement and the Indenture embody the entire agreement
and understanding between Grantors and Collateral Trustee and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and thereof. There are no
unwritten oral agreements between the parties.

     11.17 Trust Indenture Act Controls. If any provision of this Agreement limits,
qualifies or conflicts with the duties imposed by the Trust Indenture Act of 1939 as in effect on
the date of this Agreement, the imposed duties shall control.

(Remainder of page intentionally left blank; signature page follows]

 

29

               IN WITNESS WHEREOF, Grantors and Collateral Trustee have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date first
written above.

	 	 	 	 	 
	 	XM 1500 ECKINGTON LLC.

 	 
	 	By:  	/s/ Patrick L. Donnelly
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Secretary 	 
	 
	 	XM INVESTMENT LLC

 	 
	 	By:  	/s/ Patrick L. Donnelly
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Secretary 	 
	 

 

30

(Continuation of Signature Page)

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as Collateral Trustee

 	 
	 	By:  	/s/ Thomas E. Tabor
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

SCHEDULE 1.1

TO SECURITY AGREEMENT

Current FCC Licenses, Special Temporary Authorizations

(“STAs”), and Pending Applications

	1.	 	Satellite

None

	2.	 	Earth Stations

None

	3.	 	Terrestrial Repeaters

None

	4.	 	Experimental Licenses to Test Terrestrial Repeaters

None

 

 

SCHEDULE 4.1

TO SECURITY AGREEMENT

Financing Statement Filing Offices:

	 	 	 
	Name of Grantor	 	Filing Jurisdiction(s)
	XM 1500 Eckington LLC

	 	Secretary of State of the State of Delaware
	 
	XM Investment LLC

	 	Secretary of State of the State of Delaware

 

 

SCHEDULE 4.2

TO SECURITY AGREEMENT

INTELLECTUAL PROPERTY

	A.	 	Copyrights:

No registered copyrights.

	B.	 	Patents:

No registered patents.

	C.	 	Federally Registered Trademarks/Service Marks, and Trademark/Service Mark Applications:

No registered trademarks or applications.

 

 

SCHEDULE 4.3

TO SECURITY AGREEMENT

MATERIAL INVESTMENT PROPERTY

Pledged Stock:

None.

Pledged Partnership Interests:

None.

Pledged LLC Interests:

None.

Pledged Debt:

None.

 

 

SCHEDULE 4.4(e)

TO SECURITY AGREEMENT

COMMERCIAL TORT CLAIMS

None.

 

 

EXHIBIT A

TO SECURITY AGREEMENT

FORM OF SECURITY AGREEMENT SUPPLEMENT

     This SECURITY AGREEMENT SUPPLEMENT, dated [mm/dd/yy] (the “Supplement”), is delivered
pursuant to the Security Agreement, dated as of February 13, 2009, made among XM 1500 ECKINGTON
LLC, XM INVESTMENT LLC and U.S. Bank National Association, as Collateral Trustee. Capitalized
terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement. This Supplement is being delivered pursuant to Section [___]1 of the
Security Agreement.

     Grantor hereby confirms, as of the date first written above, the grant to Collateral Trustee
set forth in the Security Agreement of, does hereby grant to Collateral Trustee, for the benefit of
itself and the Secured Parties, a security interest in all of Grantor’s right, title and interest
in and to all Collateral to secure the Secured Obligations, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be
located and hereby agrees, as of the date first above written, to continue to be bound as a Grantor
by all of the terms and provisions of the Security Agreement, as supplemented by this Security
Agreement Supplement. Grantor hereby represents and warrants that the attached Supplements to
Schedules accurately and completely set forth all additional information with respect to the
Grantor currently required pursuant to the Security Agreement and hereby agrees that such
Supplements to Schedules shall constitute part of the Schedules to the Security Agreement.

          IN WITNESS WHEREOF, Grantor has caused this Security Agreement Supplement to be duly executed
and delivered by its duly authorized officer as of [mm/dd/yy].

	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

			
	1	 	Insert Section 4.1(b)(iii), 4.2(b)(iii), 4.3(b)(ii),
4.4(e), as applicable.

 

 

SUPPLEMENT TO SCHEDULE 4.1

TO SECURITY AGREEMENT

Additional Information:

Financing Statements:

	 	 	 
	Name of Grantor	 	Filing Jurisdiction(s)
	 
	 	 

 

 

SUPPLEMENT TO SCHEDULE 4.2

TO SECURITY AGREEMENT

Additional Information:

	(A)	 	Copyrights:
	 
	(B)	 	Patents:
	 
	(C)	 	Trademarks:

 

 

SUPPLEMENT TO SCHEDULE 4.3

TO SECURITY AGREEMENT

MATERIAL INVESTMENT PROPERTY

 

 

SUPPLEMENT TO SCHEDULE 4.3

TO SECURITY AGREEMENT

Additional Information:

Pledged Stock:

Pledged Partnership Interests:

Pledged LLC Interests:

Pledged Debt:

 

 

SUPPLEMENT TO SCHEDULE 4.4

TO SECURITY AGREEMENT

COMMERCIAL TORT CLAIMS

 

 

 10

SUPPLEMENT TO SCHEDULE 4.4(e)

TO SECURITY AGREEMENT

COMMERCIAL TORT CLAIMSEX-4.4

EXHIBIT 4.4

EXECUTION COPY

 

 

XM 1500 ECKINGTON LLC,

as Grantor,

to

STEWART TITLE OF MARYLAND INC., as Trustee

for the benefit of

U.S. BANK NATIONAL ASSOCIATION

as Collateral Trustee,

as Beneficiary

 

DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

Dated:
As of February 13, 2009

Location: 1500 Eckington Place NE

Washington, DC 20002-2194

PREPARED BY AND UPON

RECORDATION RETURN TO:

Brown, Rudnick LLP

One Financial Center

Boston, Massachusetts 02111

Attention: Steven B. Levine, Esquire

 Edward S. Hershfield, Esquire

 

 

 

 

          THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS SECURITY AGREEMENT AND FIXTURE FILING (the
“Security Instrument”) is made as of the 13th day of February, 2009, by XM 1500 ECKINGTON LLC, a
Delaware limited liability company having an address c/o XM Satellite Radio Holdings Inc., 1221
Avenue of the Americas, 36th Floor, New York, New York 10020, Attention: General Counsel, as
grantor (“Grantor”) in favor of STEWART TITLE OF MARYLAND INC., a Maryland corporation, having its
principal place of business at 409 Washington Avenue, Towson, Maryland 21204, as trustee
(“Trustee”) for the benefit of U.S. BANK NATIONAL ASSOCIATION, having an address at 100 Wall
Street, Suite 1600, New York, NY 10005, Attention: Corporate Trust Services, as Collateral Trustee
(in such capacity, “Beneficiary”) for the ratable benefit of the holders of the Notes referred to
below (collectively, the “Holders”, each of which is severally called “Holder”).

RECITALS:

          Grantor is party to that certain Indenture dated as of February 13, 2009 (together with all
extensions, renewals, modifications, substitutions, amendments, restatements, and replacements
thereof, the “Indenture”) among XM Satellite Radio Holdings Inc., a Delaware corporation (the
“Company”), Sirius XM Radio Inc., a Delaware corporation (the “Parent”), Grantor, as a Subsidiary
Guarantor, XM Investment LLC, a Delaware limited liability company, as a Subsidiary Guarantor, and
U.S. BANK National Association, as Indenture Trustee, pursuant to which, among other things,
Grantor guarantees full payment and performance of all of the obligations of the Company to the
Holders of the promissory notes (together with all extensions, renewals, modifications,
substitutions, amendments, restatements, and replacements thereof, collectively, the “Notes”)
issued under the Indenture, including without limitation the repayment of the principal sum of TWO
HUNDRED FIFTY MILLION AND 00/100 DOLLARS ($250,000,000.00) in lawful money of the United States of
America, with interest from the date thereof at the rates set forth in the Indenture, with
principal and interest to be payable in accordance with the terms and conditions provided in the
Indenture.

          Grantor desires to secure the payment of the Debt (as defined in Article 2) and the
performance of all of its obligations under the Indenture and the Other Obligations (as defined in
Article 2).

ARTICLE — 1. GRANTS OF SECURITY

     1.1 Property Mortgaged. Grantor does hereby irrevocably mortgage, grant, bargain, sell,
pledge, assign, warrant, transfer and convey to Trustee, its successors and assigns, for the
benefit of Beneficiary, and grant a security interest to Beneficiary and Trustee in, the following
property, rights, interests and estates now owned, or hereafter acquired by Grantor (collectively,
the “Property”) with power of sale and right of entry and possession:

          (a) Real Estate. The land more particularly described on Exhibit A which is annexed
hereto and made a part hereof (“Land”) together with the improvements and other structures now or
hereafter situated thereon (such improvements being sometimes called the “Improvements”) together
with all rights, privileges, tenements, hereditaments, appurtenances,

-1-

 

easements, including, but not limited to, rights and easements for access and egress and
utility connections, and other rights now or hereafter appurtenant thereto (“Real Estate”);

          (b) Fixtures. All real estate fixtures or items which by agreement of the parties may
be deemed to be such fixtures, now or hereafter owned by Grantor, or in which Grantor has or
hereafter obtains an interest, and now or hereafter located in or upon the Real Estate, or now or
hereafter attached to, installed in, or used in connection with any of the Real Estate, including,
but not limited to, any and all portable or sectional buildings, bathroom, plumbing, heating,
lighting, refrigerating, ventilating and air-conditioning apparatus and equipment, garbage
incinerators and receptacles, elevators and elevator machinery, boilers, furnaces, stoves, tanks,
motors, sprinkler and fire detection and extinguishing systems, doorbell and alarm systems, window
shades, screens, awnings, screen doors, storm and other detachable windows and doors, mantels,
partitions, built-in cases, counters and other fixtures whether or not included in the foregoing
enumeration (“Fixtures”);

          (c) Additional Appurtenances. All bridges, easements, rights of way, licenses,
privileges, hereditaments, permits and appurtenances hereafter belonging to or enuring to the
benefit of the Real Estate and all right, title and interest of Grantor in and to the land lying
within any street or roadway adjoining any of the Real Estate and all right, title and interest of
Grantor in and to any vacated or hereafter vacated streets or roads adjoining any of the Real
Estate and any and all reversionary or remainder rights (“Additional Appurtenances”);

          (d) Awards. All of the right, title and interest of Grantor in and to any award or
awards heretofore made or hereafter to be made by any municipal, county, state or federal
authorities to the present or any subsequent owners of any of the Real Estate or the Land, or the
Improvements, or the Fixtures, or the Additional Appurtenances, or the Leases or the Personal
Property, including, without limitation, any award or awards, or settlements or payments, or other
compensation hereafter made resulting from (x) condemnation proceedings or the taking of the Real
Estate, or the Land, or the Improvements, or the Fixtures, or the Additional Appurtenances, or the
Leases or the Personal Property, or any part thereof, under the power of eminent domain, or (y) the
alteration of grade or the location or discontinuance of any street adjoining the Land or any
portion thereof, or (z) any other injury to or decrease in value of the Property (“Awards”);

          (e) Leases. All leases now or hereafter entered into of the Real Estate, or any
portion thereof, and all rents, issues, profits, revenues, earnings and royalties therefrom
(collectively, “Rents”), and all right, title and interest of Grantor thereunder, including,
without limitation, cash, letters of credit, or securities deposited thereunder to secure
performance by the tenants or occupants of their obligations thereunder, whether such cash, letters
of credit, or securities are to be held until the expiration of the terms of such leases or
occupancy agreements or applied to one or more of the installments of rent coming due prior to the
expiration of such terms including, without limitation, the right to receive and collect the rents
thereunder (“Leases”); and

          (f) Personal Property. All tangible and intangible personal property now owned or at any time
hereafter acquired by Grantor of every nature and description, and location whether or not used in
any way in connection with the Real Estate, the Fixtures, the Additional

-2-

 

Appurtenances, or any other portion of the Property, including, without limitation express or
implied upon the generality of the foregoing, all Equipment, Goods, Inventory, Fixtures, Accounts,
Instruments, Documents and General Intangibles (as each such capitalized term is defined in the
Uniform Commercial Code in effect in the District of Columbia (“Uniform Commercial Code”)) and
further including, without any such limitation, the following whether or not included in the
foregoing: materials; supplies; furnishings; chattel paper; money; bank accounts; security
deposits; utility deposits; any insurance or tax reserves deposited with Beneficiary; any cash
collateral deposited with Beneficiary; claims to rebates, refunds or abatements of real estate
taxes or any other taxes; contract rights; plans and specifications; licenses, permits, approvals
and other rights; the rights of Grantor under contracts with respect to the Real Estate or any
other portion of the Property; signs, brochures, advertising, the name by which the Property is
known and any variation of the words thereof, and good will; copyrights, service marks, and all
goodwill associates therewith; and trademarks; all proceeds paid for any damage or loss to all or
any portion of the Real Estate, the Fixtures, the Additional Appurtenances, any other Personal
Property or any other portion of the Property (“Insurance Proceeds”); all Awards; all Leases; all
books and records; and all proceeds, products, additions, accessions, substitutions and
replacements to any one or more of the foregoing (collectively, the “Personal Property”).

     1.2 Assignment of Rents. Grantor hereby absolutely and unconditionally assigns to
Beneficiary and Trustee Grantor’s right, title and interest in and to all current and future Leases
and Rents; it being intended by Grantor that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only. Nevertheless, subject to the terms
of this Section 1.2, Beneficiary and Trustee grants to Grantor a revocable license to
collect and receive the Rents.

     1.3 Security Agreement. Grantor hereby grants to Beneficiary a continuing security
interest in all of the Property in which a security interest may be granted under the Uniform
Commercial Code as including, without limitation, the Fixtures and the Personal Property, together
with all proceeds and products, whether now or at any time hereafter acquired and whether or not
used in any way in connection with the development, construction, marketing or operation of the
Real Estate, to secure all Obligations (as defined in Section 2.3).

          This instrument is intended to take effect as a security agreement pursuant to the Uniform
Commercial Code and is to be filed as a financing statement pursuant to the Uniform Commercial
Code.

     1.4 Pledge of Monies Held. Grantor hereby pledges to Beneficiary any Net Proceeds (as
defined in Section 4.2) and condemnation awards or payments described in Section
3.5 which are held by Beneficiary, as additional security for the Obligations until expended or
applied as provided in this Security Instrument.

CONDITIONS TO GRANT

          TO HAVE AND TO HOLD the above granted and described Property unto and to the use and benefit
of Beneficiary and Trustee, and the successors and assigns of Beneficiary and Trustee, forever;

-3-

 

          IN TRUST, WITH POWER OF SALE, to secure all of Grantor’s obligations under the Indenture,
including without limitation Grantor’s obligation to pay to the Holders the Debt at the time and in
the manner provided for its payment in the Indenture and in this Security Instrument.

          PROVIDED, HOWEVER, these presents are upon the express condition that, if Grantor shall well
and truly pay to the Holders the Debt at the time and in the manner provided in the Indenture and
this Security Instrument, shall well and truly perform the Other Obligations as set forth in this
Security Instrument and shall well and truly abide by and comply with each and every covenant and
condition set forth herein and in the Indenture, these presents and the estate hereby granted shall
cease, terminate and be void.

ARTICLE — 2. DEBT AND OBLIGATIONS SECURED

     2.1 Debt. This Security Instrument and the grants, assignments and transfers made in
Article 1 are given for the purpose of securing the following, in such order of priority as
is set forth in the Indenture (the “Debt”):

          (a) the payment of the indebtedness evidenced by the Indenture which Grantor guaranties in the
Indenture in lawful money of the United States of America;

          (b) the payment of interest, default interest, late charges and other sums, as provided in the
Indenture, this Security Instrument or the Other Security Documents (as defined in Section
3.2);

          (c) the payment of all other moneys agreed or provided to be paid by Grantor in the Indenture,
this Security Instrument or the Other Security Documents;

          (d) the payment of all sums advanced pursuant to this Security Instrument to protect and
preserve the Property and the lien and the security interest created hereby; and

          (e) the payment of all sums advanced and costs and expenses incurred by the Holders in
connection with the Debt or any part thereof, any renewal, extension, or change of or substitution
for the Debt or any part thereof, or the acquisition or perfection of the security therefor,
whether made or incurred at the request of Grantor or the Holders.

     2.2 Other Obligations. This Security Instrument and the grants, assignments and
transfers made in Article 1 are also given for the purpose of securing the following (the
“Other Obligations”):

          (a) the performance of all other obligations of Grantor contained herein;

          (b) the performance of each obligation of Grantor contained in the Indenture or in any other
agreement given by Grantor to the Holders which is for the purpose of further securing the
obligations secured hereby, and any amendments, modifications and changes thereto; and

-4-

 

          (c) the performance of each obligation of Grantor contained in any renewal, extension,
amendment, modification, consolidation, change of, or substitution or replacement for, all or any
part of the Indenture, this Security Instrument or the Other Security Documents.

     2.3 Debt and Other Obligations. Grantor’s obligations for the payment of the Debt and
the performance of the Other Obligations shall be referred to collectively below as the
“Obligations.”

ARTICLE — 3. GRANTOR COVENANTS

          Grantor covenants and agrees that:

     3.1 Payment of Debt. Grantor will pay the Debt at the time and in the manner provided
in the Indenture and in this Security Instrument.

     3.2 Incorporation by Reference. All the covenants, conditions and agreements
contained in (a) the Indenture and (b) all and any of the documents other than the Indenture or
this Security Instrument now or hereafter executed by Grantor and/or others and by or in favor of
Beneficiary, including without limitation the Indenture and any other documents which wholly or
partially secure or guaranty payment of the Indenture (the “Other Security Documents”), are hereby
made a part of this Security Instrument to the same extent and with the same force as if fully set
forth herein.

     3.3 Insurance.

          (a) Grantor shall obtain and maintain, or cause to be maintained, insurance for Grantor and
the Property providing at least the following coverages:

               (i) comprehensive all risk insurance on the Improvements and the Personal Property, including
contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements, in each case (A) in an amount equal to 100% of the “Full Replacement
Cost,” which for purposes of this Security Instrument shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver
of depreciation, (B) containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; and (C) providing for no deductible in
excess of $250,000;

               (ii) commercial general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such insurance (A) to be on the
so-called “occurrence” form with a combined single limit of not less than $2,000,000; and (B) to
cover at least the following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; and (4) blanket contractual liability
for all written and oral contracts;

               (iii) at all times during which structural construction, repairs or alterations are being made
with respect to the Improvements (A) owner’s contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of the above mentioned commercial general
liability insurance policy; and (B) the insurance

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provided for in Subsection 3.3(a)(i) written in a so-called builder’s risk completed
value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to
Subsection 3.3 (a)(i), (3) including permission to occupy the Property, and (4) with an
agreed amount endorsement waiving co-insurance provisions;

               (iv) workers’ compensation, subject to the statutory limits of the state in which the Property
is located, and employer’s liability insurance with a limit of at least $1,000,000 per accident and
per disease per employee, and $1,000,000 for disease aggregate in respect of any work or operations
on or about the Property, or in connection with the Property or its operation (if applicable);

               (v) comprehensive boiler and machinery insurance, if applicable, in amounts as shall be
reasonably required by Beneficiary; and

               (vi) flood hazard insurance if any portion of the Improvements is currently or at any time in
the future located in a federally designated “special flood hazard area”; and

               (vii) such other insurance as may be required pursuant to the terms of the Indenture.

          (b) All insurance provided for in Subsection 3.3 (a) hereof shall be obtained under
valid and enforceable policies (the “Policies” or in the singular, the “Policy”), in such forms and
as may be reasonably satisfactory to Beneficiary, issued by financially sound and responsible
insurance companies authorized to do business in the state in which the Property is located and
approved by Beneficiary. The insurance companies must have a general policy rating of A or better
and a financial class of VI or better by A.M. Best Company, Inc.. Not less than thirty (30) days
prior to the expiration dates of the Policies theretofore furnished to Beneficiary pursuant to
Subsection 3.3(a), certified copies of the Policies (or certificates evidencing the
coverage afforded thereby) marked “premium paid” or accompanied by evidence reasonably satisfactory
to Beneficiary of payment of the premiums due thereunder (the “Insurance Premiums”), shall be
delivered by Grantor to Beneficiary.

          (c) Grantor shall not obtain (i) any umbrella or blanket liability or casualty Policy unless
Beneficiary’s interest is included therein as provided in this Security Instrument and such Policy
is issued by a Qualified Insurer, or (ii) separate insurance concurrent in form or contributing in
the event of loss with that required in Subsection 3.3(a) to be furnished by, or which may
be reasonably required to be furnished by, Grantor. In the event Grantor obtains separate
insurance or an umbrella or a blanket Policy, Grantor shall notify Beneficiary of the same and
shall cause certified copies of each Policy (or certificates evidencing the coverage afforded
thereby) to be delivered as required in Subsection 3.3(a). Any blanket insurance Policy
shall specifically allocate to the Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Subsection 3.3(a).

          (d) All Policies of insurance provided for or contemplated by Subsection 3.3(a),
except for the Policy referenced in Subsection 3.3(a)(v), shall name Beneficiary and

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Grantor as the insured or additional insured, as their respective interests may appear, and in
the case of property damage, boiler and machinery, and flood insurance, shall contain a so-called
New York standard non-contributing mortgagee clause in favor of Beneficiary providing that the loss
thereunder shall be payable to Beneficiary.

          (e) All Policies of insurance provided for in Subsection 3.3(a) shall contain clauses
or endorsements to the effect that:

                    (i) the Policy shall not be materially changed (other than to increase the coverage provided
thereby) or cancelled without at least 30 days’ written notice to Beneficiary; and

                    (ii) each Policy shall provide that the issuers thereof shall give written notice to
Beneficiary if the Policy has not been renewed thirty (30) days prior to its expiration.

          (f) If at any time Beneficiary is in receipt of written evidence that all insurance required
hereunder is not in full force and effect, Beneficiary shall have the right, without notice to
Grantor to obtain such insurance coverage as is required hereunder, and all expenses incurred by
Beneficiary in connection with such action or in obtaining such insurance and keeping it in effect
shall be paid by Grantor to Beneficiary upon demand.

          (g) If the Property shall be damaged or destroyed, in whole or in part, by fire or other
casualty, Grantor shall give prompt notice of such damage to Beneficiary and, at the election of
Grantor, either redeem Notes in the principal amount equal to the Net Proceeds payable in
connection with such fire or other casualty, or shall promptly commence and diligently prosecute
the completion of the repair and restoration of the Property as nearly as possible to the condition
the Property was in immediately prior to such fire or other casualty, with such alterations as may
be reasonably approved by Beneficiary (the “Restoration”) and otherwise in accordance with
Section 4.2 of this Security Instrument; it being understood, however, that if Grantor
elects to restore the Property, Grantor shall not be obligated to restore the Property to the
precise condition of the Property prior to any casualty or other damage or injury to the Property
if the restoration or repair to be performed shall have no material effect on the fair market value
of the Property as compared to the fair market value of the Property if the same had been restored
or repaired to its precise condition immediately prior to such taking or casualty. If Grantor
elects to restore the Property, Grantor shall pay all costs of such Restoration whether or not such
costs are covered by insurance.

     3.4 Payment of Taxes, etc.

          (a) Subject to Grantor’s rights to contest the same as provided below, Grantor shall pay all
taxes, assessments, water rates, sewer rents, governmental impositions, and other charges,
including without limitation vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Land, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the “Taxes”), all ground rents, maintenance charges and similar
charges, now or hereafter levied or assessed or imposed against the Property or any part thereof
(the “Other Charges”), and all charges for utility services provided to the Property prior to the
date the same would become delinquent. Grantor will deliver to Beneficiary, within ten (10)

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days of a request by Beneficiary’s, evidence reasonably satisfactory to Beneficiary that the
Taxes, Other Charges and utility service charges have been so paid, are not then delinquent or are
being contested. Upon request of Beneficiary, Grantor shall furnish to Beneficiary paid receipts
for the payment of the Taxes and Other Charges prior to the date the same shall become delinquent,
unless the same are being contested in accordance with the terms hereof.

          (b) After prior written notice to Beneficiary, Grantor, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of the Taxes or Other
Charges, provided that (i) no Event of Default (as defined in Article 9) has occurred and
is continuing, (ii) Grantor is permitted to do so under the provisions of any other mortgage, deed
of trust or deed to secure debt affecting the Property, (iii) such proceeding shall suspend the
collection of the Taxes from Grantor and from the Property or Grantor shall have paid all of the
Taxes under protest, (iv) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Grantor is subject and shall not constitute a
default thereunder, and (v) neither the Property nor any part thereof or interest therein will be
in danger of being sold, forfeited, terminated, cancelled or lost.

     3.5 Condemnation. Grantor, within ten (10) days of becoming aware of the institution
of the actual or threatened commencement of any condemnation or eminent domain proceeding, shall
notify Beneficiary of the pendency of such proceedings, and shall deliver to Beneficiary copies of
any and all papers served in connection with such proceedings. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise, the Debt shall not be reduced
until any award or payment therefor shall have been actually received and applied by Beneficiary,
after the deduction of expenses of collection, to the reduction or discharge of the Debt. If the
Property or any portion thereof is taken by a condemning authority, Grantor shall, at its option,
either redeem Notes in the principal amount equal to the Net Proceeds (as defined in Section
4.2(b)) payable in connection with such condemnation, or promptly commence and diligently
prosecute the restoration of the Property in accordance with, and otherwise comply with the
provisions of, Section 4.2. If the Property is sold, through foreclosure or otherwise,
prior to the receipt by Beneficiary of the award or payment, Beneficiary shall have the right,
whether or not a deficiency judgment on the Indenture shall have been sought, recovered or denied,
to receive the award or payment, or a portion thereof sufficient to redeem the Notes and repay and
other outstanding Debt.

     3.6 Leases and Rents. No future Lease shall be executed without Beneficiary’s
approval, which shall not be unreasonably withheld. Upon request, Grantor shall furnish
Beneficiary with executed copies of all Leases. All future Leases shall provide that they are
subordinate to this Security Instrument and that the lessee shall attorn to the Beneficiary, and by
acceptance of this Security Instrument, Beneficiary agrees to enter into a customary
non-disturbance agreement with the tenant under any such future Lease, which agreement shall be in
form and substance reasonably satisfactory to Beneficiary.

     3.7 Maintenance of Property. Grantor shall cause the Property to be maintained in a
good and safe condition and repair, reasonable wear and tear excepted. The Improvements shall not
be removed or demolished without the consent of Beneficiary. Grantor shall, in accordance with
prudent business practices, repair, replace or rebuild any part of the Property which may be

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destroyed by any casualty, or become damaged, worn or dilapidated, or which may be affected by
any proceeding of the character referred to in Section 3.5 hereof, and shall complete and
pay for any structure at any time in the process of construction or repair on the Land.

     3.8 Waste. Grantor shall not commit or suffer any waste of the Property or make any
change in the use of the Property which will in any way materially increase the risk of fire or
other hazard arising out of the operation of the Property, or take any action that might invalidate
or give cause for cancellation of any Policy.

     3.9 Compliance With Laws. Grantor shall comply in all material respects with all
existing and future federal, state and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting or which may be interpreted to affect the Property, or the
use thereof (“Applicable Laws”).

     3.10 Liens. Grantor will never permit to be created or exist in respect of the
Property or any part thereof any lien or security interest other than the liens or security
interests hereof and other than Permitted Exceptions (as defined in Section 5.1).

ARTICLE — 4. — SPECIAL COVENANTS

     Grantor covenants and agrees that:

     4.1 Single Purpose Entity. It has not and shall not:

          (a) engage in any business or activity other than the ownership, operation, leasing and
maintenance of the Property, and activities incidental thereto;

          (b) acquire or own any material assets other than (i) the Property, and (ii) such incidental
Personal Property as may be necessary for the operation of the Property;

          (c) merge into or consolidate with any person or entity or dissolve, terminate or liquidate in
whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change
its legal structure, without in each case Beneficiary’s consent;

          (d) fail to preserve its existence as an entity duly organized, validly existing and in good
standing (if applicable) under the laws of the jurisdiction of its organization or formation, or
without the prior written consent of Beneficiary, amend, modify, terminate or fail to comply with
the provisions of Grantor’s organizational documents, as same may be further amended or
supplemented, if such amendment, modification, termination or failure to comply would adversely
affect the ability of Grantor to perform its obligations hereunder, under the Indenture or under
the Other Security Documents;

          (e) own any subsidiary or make any investment in, any person or entity without the consent of
Beneficiary;

          (f) commingle its assets with the assets of any of its members, general partners, affiliates,
principals or of any other person or entity;

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          (g) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than the Debt, except for trade payables and leases of personal property in the
ordinary course of its business of owning, leasing and operating the Property, provided that such
debt is paid when due;

          (h) become insolvent and fail to pay its debts and liabilities from its assets as the same
shall become due;

          (i) fail to maintain its records, books of account and bank accounts separate and apart from
those of the members, general partners, principals and affiliates of Grantor and any other person
or entity;

          (j) enter into any contract or agreement with any member, general partner, principal or
affiliate of Grantor, except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length basis with third parties
other than any member, general partner, principal or affiliate of Grantor;

          (k) seek the dissolution or winding up in whole, or in part, of Grantor;

          (l) except pursuant to the Indenture and the Security Documents, hold itself out to be
responsible for the debts of another person;

          (m) make any loans or advances to any third party, including any member, general partner,
principal or affiliate of Grantor;

          (n) fail to file its own tax returns;

          (o) fail either to hold itself out to the public as a legal entity separate and distinct from
any other entity or person or to conduct its business solely in its own name in order not (i) to
mislead others as to the identity with which such other party is transacting business, or (ii) to
suggest that Grantor is responsible for the debts of any third party (including any member, general
partner, principal or affiliate of Grantor, or any member, general partner, principal or affiliate
thereof), except pursuant to the Indenture and the Security Documents ;

          (p) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business operations; or

          (q) file or consent to the filing of any petition, either voluntary or involuntary, to take
advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make
an assignment for the benefit of creditors.

     4.2 Restoration. The following provisions shall apply in connection with any
Restoration of the Property which Grantor elects to do:

          (a) If the Net Proceeds (as defined in Section 4.2(b)) shall be less than $500,000
(the “Net Proceeds Threshold”) and the costs of completing the Restoration shall be less
than the Net Proceeds Threshold, the Net Proceeds will be disbursed by Beneficiary to

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Grantor upon receipt, provided that all of the conditions set forth in Subsection
4.1(b)(i) are met and Grantor delivers to Beneficiary a written undertaking to commence and
complete, with all due diligence, the Restoration in accordance with the terms of this Security
Instrument.

          (b) If the Net Proceeds are equal to or greater than the Net Proceeds Threshold or the costs
of completing the Restoration is equal to or greater than the Net Proceeds Threshold, Beneficiary
shall make the net amount of all insurance or condemnation proceeds received by Beneficiary
pursuant to this Security Instrument as a result of such damage, destruction or condemnation, after
deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel
fees), if any, in collecting the same (the “Net Proceeds”) available for the Restoration in
accordance with the provisions of this Subsection 4.1(b).

               (i) The Net Proceeds shall be made available to Grantor for the Restoration, provided that
each of the following conditions are met:

     (A) no Event of Default shall have occurred and be continuing;

     (B) Grantor shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after such damage or
destruction occurs) and shall diligently pursue the same to satisfactory
completion;

     (C) Beneficiary shall be reasonably satisfied that the Net Proceeds and
other funds of Grantor are available to complete the Restoration and that
the Restoration will be completed on or before the maturity date of the
Notes;

     (D) the Property and the use thereof after the Restoration will be in
compliance in all material respects with and permitted under all applicable
zoning laws, ordinances, rules and regulations;

     (E) in the event that the Net Proceeds are proceeds of condemnation
(I) the portion of the Land that is subject to such condemnation does not
include any material means of access, facilities or amenities that are
necessary for the continued use, occupation and operation of the
Improvements in a manner substantially the same as immediately prior to such
condemnation, and (II) the nature and scope of such condemnation would not
make it impracticable, in Beneficiary’s reasonable determination, even after
Restoration, to use, occupy and operate the Improvements as an economically
viable whole; and

     (F) the Restoration shall be done and completed by Grantor in an
expeditious and diligent fashion and in compliance in all material respects
with all applicable governmental laws, rules and regulations.

               (ii) The Net Proceeds shall be held by Beneficiary and, until disbursed in accordance with the
provisions of this Subsection 4.2(b), shall constitute additional security for the
Obligations. The Net Proceeds shall be disbursed by Beneficiary to, or as directed by,

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Grantor from time to time during the course of the Restoration, upon receipt of evidence
reasonably satisfactory to Beneficiary that (A) all materials installed and work and labor
performed (except to the extent that they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full, and (B) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or
any other liens or encumbrances of any nature whatsoever on the Property arising out of the
Restoration which have not either been fully bonded to the reasonable satisfaction of Beneficiary
and discharged of record, or in the alternative fully insured to the reasonable satisfaction of
Beneficiary by the title company insuring the lien of this Security Instrument.

               (iii) For any Restoration expected to cost in excess of $2,500,000 (a “Material Restoration”),
the plans and specifications required in connection with the Restoration shall be subject to prior
review and acceptance by Beneficiary and by an independent consulting engineer selected by
Beneficiary (the “Casualty Consultant”), such acceptance not to be unreasonably withheld,
conditioned or delayed. Beneficiary shall have the use of the plans and specifications and all
permits, licenses and approvals required or obtained in connection with the Material Restoration.
The identity of the contractors, subcontractors and materialmen engaged in any Material
Restoration, as well as the contracts under which they have been engaged, shall be subject to prior
review and acceptance by Beneficiary and the Casualty Consultant, not to be unreasonably withheld,
conditioned or delayed. All costs and expenses incurred by Beneficiary in connection with making
the Net Proceeds available for the Restoration including, without limitation, reasonable counsel
fees and disbursements and the Casualty Consultant’s fees, shall be paid by Grantor.

               (iv) In no event shall Beneficiary be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for work in place as
part of the Restoration, as certified by the Casualty Consultant, minus, at the option of
Beneficiary, the Casualty Retainage. The term “Casualty Retainage” as used in this Subsection
4.2(b) shall mean an amount equal to 10% of the costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant, until such time as the Casualty
Consultant certifies to Beneficiary that Net Proceeds representing 50% of the required Restoration
have been disbursed. There shall be no Casualty Retainage with respect to costs actually incurred
by Grantor for work in place in completing the last 50% of the required Restoration. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this
Subsection 4.2(b), be less than the amount actually held back by Grantor from contractors,
subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be
released until the Casualty Consultant certifies to Beneficiary that the Restoration has been
completed in accordance with the provisions of this Subsection 4.2(b) and that all
approvals necessary for the re-occupancy and use of the Property have been obtained from all
appropriate governmental and quasi-governmental authorities, and Beneficiary receives evidence
reasonably satisfactory to Beneficiary that the costs of the Restoration have been paid in full or
will be paid in full out of the Casualty Retainage, provided, however, that Beneficiary will
release the portion of the Casualty Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Beneficiary that the contractor, subcontractor or materialman has
satisfactorily completed all work and has supplied all materials in accordance with the provisions
of the contractor’s, subcontractor’s or materialman’s contract, and the contractor,

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subcontractor or materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably requested by
Beneficiary or by the title company insuring the lien of this Security Instrument.

               (v) Beneficiary shall not be obligated to make disbursements of the Net Proceeds more
frequently than once every calendar month.

               (vi) The excess, if any, of the Net Proceeds deposited with Beneficiary after the Casualty
Consultant certifies to Beneficiary that the Restoration has been completed in accordance with the
provisions of this Subsection 4.2(b), and the receipt by Beneficiary of evidence
satisfactory to Beneficiary that all costs incurred in connection with the Restoration have been
paid in full, shall be remitted by Beneficiary to Grantor, provided no Event of Default shall have
occurred and shall be continuing.

          (c) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be
returned to Grantor as excess Net Proceeds pursuant to Subsection 4.2(b)(vi) may be
retained and applied by Beneficiary toward redemption of the Notes, whether or not then due and
payable in such order, priority and proportions as Beneficiary in its discretion shall deem proper
or, at the discretion of Beneficiary, the same may be paid, either in whole or in part, to Grantor
for such purposes as Beneficiary shall designate, in its discretion. If Beneficiary shall receive
and retain Net Proceeds, the lien of this Security Instrument shall be reduced only by the amount
thereof received and retained by Beneficiary and actually applied by Beneficiary in redemption of
the Notes and repayment of any other outstanding Debt.

ARTICLE — 5. REPRESENTATIONS AND WARRANTIES

          Grantor represents and warrants to Beneficiary that:

     5.1 Warranty of Title. Grantor has good title to the Property and has the right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same and that
Grantor possesses an unencumbered fee simple absolute estate in the Land and the Improvements, and
that it owns the Property free and clear of all liens, encumbrances and charges whatsoever except
for those exceptions shown in the title insurance policy insuring the lien of this Security
Instrument (the “Permitted Exceptions”). Grantor shall forever warrant, defend and
preserve the title and the validity and priority of the lien of this Security Instrument and shall
forever warrant and defend the same to Beneficiary and/or Trustee against the claims of all persons
whomsoever (other than the holders of Permitted Exceptions).

     5.2 Status of Property. No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended, or any successor law, or, if located within any such
area, Grantor has obtained and will maintain the insurance prescribed in Section 3.3
hereof.

     5.3 No Foreign Person. Grantor is not a “foreign person” within the meaning of
Sections 1445(f)(3) of the Internal Revenue Code of 1986, as amended and the related
Treasury Department regulations, including temporary regulations.

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     5.4 Separate Tax Lot. The Property is assessed for real estate tax purposes as one or
more wholly independent tax lot or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or improvements is assessed and taxed
together with the Property or any portion thereof.

     5.5 Leases. (a)  Grantor is the sole owner of the entire lessor’s interest in the
Leases; (b) the Leases are valid and enforceable; and (c) none of the Rents reserved in the Leases
have been assigned or otherwise pledged or hypothecated.

ARTICLE — 6. OBLIGATIONS AND RELIANCES

     6.1 Relationship of Grantor and Beneficiary. The relationship between Grantor and
Beneficiary is solely that of debtor and creditor, and Beneficiary has no fiduciary or other
special relationship with Grantor, and no term or condition of any of the Indenture, this Security
Instrument and the Other Security Documents shall be construed so as to deem the relationship
between Grantor and Beneficiary to be other than that of debtor and creditor.

     6.2 No Reliance on Beneficiary. The members, general partners, principals and (if
Grantor is a trust) beneficial owners of Grantor are experienced in the ownership and operation of
properties similar to the Property, and Grantor and Beneficiary are relying solely upon such
expertise and business plan in connection with the ownership and operation of the Property.
Grantor is not relying on Beneficiary’s expertise, business acumen or advice in connection with the
Property.

     6.3 No Beneficiary Obligations.

          (a) Notwithstanding the provisions of Subsections 1.1(f) and (l) or Section
1.2, Beneficiary is not undertaking the performance of (i) any obligations under the Leases; or
(ii) any obligations with respect to such agreements, contracts, certificates, instruments,
franchises, permits, trademarks, licenses and other documents.

          (b) By accepting or approving anything required to be observed, performed or fulfilled or to
be given to Beneficiary pursuant to this Security Instrument, the Indenture or the Other Security
Documents, including without limitation any officer’s certificate, balance sheet, statement of
profit and loss or other financial statement, survey, appraisal, or insurance policy, Beneficiary
shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or
effectiveness of same, and such acceptance or approval thereof shall not constitute any warranty or
affirmation with respect thereto by Beneficiary.

ARTICLE — 7. FURTHER ASSURANCES

     7.1 Recording of Security Instrument, etc. Grantor forthwith upon the execution and
delivery of this Security Instrument and thereafter, from time to time, will cause this Security
Instrument and any of the Other Security Documents creating a lien or security interest or
evidencing the lien hereof upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be reasonably required by any
present or future law in order to publish notice of and fully to protect and perfect the lien or
security interest hereof upon, and the interest of Beneficiary in, the Property. Grantor will pay

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all taxes, filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of the Indenture, this Security Instrument,
the Other Security Documents, any note, deed of trust or mortgage supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection with the execution
and delivery of this Security Instrument, any deed of trust or mortgage supplemental hereto, any
security instrument with respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited by law so to do.

     7.2 Further Acts, etc. Grantor will, at the cost of Grantor, and without expense to
Beneficiary, do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and
assurances as Beneficiary shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Beneficiary and Trustee the property and
rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which Grantor may be or may
hereafter become bound to convey or assign to Beneficiary, or for carrying out the intention or
facilitating the performance of the terms of this Security Instrument or for filing, registering or
recording this Security Instrument, or for complying with all Applicable Laws. Grantor, on demand,
will execute and deliver and hereby authorizes Beneficiary to execute in the name of Grantor or
without the signature of Grantor to the extent Beneficiary may lawfully do so, one or more
financing statements to evidence more effectively the security interest of Beneficiary in the
Property. Grantor grants to Beneficiary an irrevocable power of attorney, coupled with an
interest, and after the occurrence and during the continuance of an Event of Default, Beneficiary
may use such power of attorney for the purpose of exercising and perfecting any and all rights and
remedies available to Beneficiary at law and in equity, including, without limitation such rights
and remedies available to Beneficiary pursuant to this Section 7.2.

     7.3 Debt Credit and Documentary Stamp Laws.

          (a) Grantor will not claim or demand or be entitled to any credit or credits on account of the
Debt for any part of the Taxes or Other Charges assessed against the Property, or any part thereof,
and no deduction shall otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this Security Instrument or the Debt.

          (b) If at any time the United States of America, any State thereof or any subdivision of any
such State shall require revenue or other stamps to be affixed to this Security Instrument or
impose any other tax or charge on the same, Grantor will pay for the same, with interest and
penalties thereon, if any.

     7.4 Flood Area. After Beneficiary’s request, Grantor shall deliver evidence
satisfactory to Beneficiary that no portion of the Improvements is situated in a federally
designated “special flood hazard area.”

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ARTICLE — 8. — DUE ON SALE/ENCUMBRANCE

     8.1 No Sale/Encumbrance. Grantor agrees that Grantor shall not, sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or any part
thereof or permit the Property or any part thereof to be sold, conveyed, mortgaged, granted,
bargained, encumbered, pledged, assigned, or otherwise transferred, in each case except as
expressly permitted by the Indenture.

ARTICLE — 9. DEFAULT

     9.1 Events of Default. The term “Event of Default” as used in this Security
Instrument shall mean an “Event of Default” as defined in the Indenture or any default under any
other term, covenant or condition of this Security Agreement which remains uncured for sixty (60)
days after written notice of such default has been given, by certified mail to the XM Satellite
Radio Holdings Inc. and Sirius XM Radio Inc., by the Beneficiary.

ARTICLE — 10. RIGHTS AND REMEDIES

     10.1 Remedies. Upon the occurrence of any Event of Default, Grantor agrees that
Beneficiary may or acting by or through Trustee may, take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Grantor and in and to the Property,
including, but not limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Beneficiary may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of Beneficiary:

          (a) in accordance with the terms of the Indenture, declare the entire unpaid Debt to be
immediately due and payable;

          (b) institute proceedings, judicial or otherwise, for the complete foreclosure of this
Security Instrument under any applicable provision of law in which case the Property or any
interest therein may be sold for cash or upon credit in one or more parcels or in several interests
or portions and in any order or manner;

          (c) with or without entry, to the extent permitted and pursuant to the procedures provided by
applicable law, institute proceedings for the partial foreclosure of this Security Instrument for
the portion of the Debt then due and payable, subject to the continuing lien and security interest
of this Security Instrument for the balance of the Debt not then due, unimpaired and without loss
of priority;

          (d) sell for cash or upon credit the Property or any part thereof and all estate, claim,
demand, right, title and interest of Grantor therein and rights of redemption thereof, pursuant to
power of sale or otherwise, at one or more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or permitted by law;

          (e) institute an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein;

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          (f) recover judgment on the Indenture either before, during or after any proceedings for the
enforcement of this Security Instrument or the Other Security Documents;

          (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security for the Debt and
without regard for the solvency of Grantor or of any person, firm or other entity liable for the
payment of the Debt;

          (h) subject to any applicable law, the license granted to Grantor under Section 1.2
shall automatically be revoked and Beneficiary may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess Grantor and its agents and
servants therefrom, without liability for trespass, damages or otherwise and exclude Grantor and
its agents or servants wholly therefrom, and take possession of all books, records and accounts
relating thereto and Grantor agrees to surrender possession of the Property and of such books,
records and accounts to Beneficiary upon demand, and thereupon Beneficiary may (i) use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of
the Property and conduct the business thereat; (ii) complete any construction on the Property in
such manner and form as Beneficiary deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights and powers of Grantor
with respect to the Property, whether in the name of Grantor or otherwise, including, without
limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and
demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require
Grantor to pay monthly in advance to Beneficiary, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of the Property as may
be occupied by Grantor; (vi) require Grantor to vacate and surrender possession of the Property to
Beneficiary or to such receiver and, in default thereof, Grantor may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property to the payment of the
Debt, in such order, priority and proportions as Beneficiary shall deem appropriate in its sole
discretion after deducting therefrom all expenses (including reasonable attorneys’ fees) incurred
in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other
Charges, insurance and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Beneficiary, its counsel, agents and employees;

          (i) exercise any and all rights and remedies granted to a secured party upon default under the
Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right
to take possession of the Personal Property or any part thereof, and to take such other measures as
Beneficiary or Trustee may deem necessary for the care, protection and preservation of the Personal
Property, and (ii) request Grantor at its expense to assemble the Personal Property and make it
available to Beneficiary at a convenient place acceptable to Beneficiary. Any notice of sale,
disposition or other intended action by Beneficiary or Trustee with respect to the Personal
Property sent to Grantor in accordance with the provisions hereof at least ten (10) days prior to
such action, shall constitute commercially reasonable notice to Grantor;

          (j) surrender the Policies maintained pursuant to Article 3 hereof, collect the
unearned Insurance Premiums and apply such sums as a credit on the Debt in such priority and

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proportion as Beneficiary in its discretion shall deem proper, and in connection therewith,
Grantor hereby appoints Beneficiary as agent and attorney-in-fact (which is coupled with an
interest and is therefore irrevocable) for Grantor to collect such Insurance Premiums; or

          (k) pursue such other remedies as Beneficiary may have under applicable law.

In the event of a sale, by foreclosure, power of sale, or otherwise, of less than all of the
Property, this Security Instrument shall continue as a lien and security interest on the remaining
portion of the Property unimpaired and without loss of priority.

     10.2 Application of Proceeds. The purchase money, proceeds and avails of any
disposition of the Property, or any part thereof, or any other sums collected by Beneficiary
pursuant to the Indenture, this Security Instrument or the Other Security Documents, shall be
applied by Beneficiary to the redemption of the Notes and the payment of any other outstanding Debt
in accordance with the terms and provisions of the Indenture.

     10.3 Right to Cure Defaults. Upon the occurrence of any Event of Default or if
Grantor fails to make any payment or to do any act as herein provided, Beneficiary may, but without
any obligation to do so and without notice to or demand on Grantor and without releasing Grantor
from any obligation hereunder, make or do the same in such manner and to such extent as Beneficiary
may deem necessary to protect the security hereof. Beneficiary or Trustee is authorized to enter
upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or collect the Debt,
and the cost and expense thereof (including reasonable attorneys’ fees to the extent permitted by
law), with interest as provided in this Section 10.3, shall constitute a portion of the
Debt and shall be due and payable to Beneficiary upon demand. All such costs and expenses incurred
by Beneficiary shall be deemed to constitute a portion of the Debt and be secured by this Security
Instrument and the Other Security Documents and shall be immediately due and payable upon demand by
Beneficiary therefor.

     10.4 Actions and Proceedings. Beneficiary or Trustee has the right to appear in and
defend any action or proceeding brought with respect to the Property and to bring any action or
proceeding, in the name and on behalf of Grantor, which Beneficiary, in its discretion, decides
should be brought to protect its interest in the Property.

     10.5 Recovery of Sums Required To Be Paid. Beneficiary shall have the right from time
to time to take action to recover any sum or sums which constitute a part of the Debt as the same
become due, without regard to whether or not the balance of the Debt shall be due, and without
prejudice to the right of Beneficiary or Trustee thereafter to bring an action of foreclosure, or
any other action, for a default or defaults by Grantor existing at the time such earlier action was
commenced.

     10.6 Other Rights, etc.

          (a) The failure of Beneficiary or Trustee to insist upon strict performance of any term hereof
shall not be deemed to be a waiver of any term of this Security Instrument. Grantor shall not be
relieved of Grantor’s obligations hereunder by reason of (i) the failure of Beneficiary or Trustee
to comply with any request of Grantor to take any action to foreclose this

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Security Instrument or otherwise enforce any of the provisions hereof or of the Indenture or
the Other Security Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any person liable for the Debt or any portion thereof, or (iii) any
agreement or stipulation by Beneficiary extending the time of payment or otherwise modifying or
supplementing the terms of the Indenture, this Security Instrument or the Other Security Documents.

          (b) It is agreed that the risk of loss or damage to the Property is on Grantor, and
Beneficiary shall have no liability whatsoever for decline in value of the Property, for failure to
maintain the Policies, or for failure to determine whether insurance in force is adequate as to the
amount of risks insured. Possession by Beneficiary shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any Property or collateral
not in Beneficiary’s possession.

          (c) The rights of Beneficiary or Trustee under this Security Instrument shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the others. No act of
Beneficiary shall be construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Neither Beneficiary nor Trustee shall be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and remedy now or
hereafter afforded at law or in equity.

     10.7 Right to Release Any Portion of the Property. Beneficiary may release any
portion of the Property for such consideration as Beneficiary may require without, as to the
remainder of the Property, in any way impairing or affecting the lien or priority of this Security
Instrument, or improving the position of any subordinate lienholder with respect thereto, except to
the extent that the obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Beneficiary for such release, and may accept by assignment,
pledge or otherwise any other property in place thereof as Beneficiary may require without being
accountable for so doing to any other lienholder. This Security Instrument shall continue as a
lien and security interest in the remaining portion of the Property.

ARTICLE — 11. INDEMNIFICATION

     11.1 Mortgage and/or Intangible Tax. Grantor shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties (as defined in this
Section below) from and against any and all losses imposed upon or incurred by or asserted against
any such party and directly or indirectly arising out of or in any way relating to any tax on the
making and/or recording of this Security Instrument. For purposes of this Security Instrument, the
term “Indemnified Parties” means Beneficiary, any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded, persons and entities who may
hold or acquire or will have held a full or partial interest in the Debt (including, but not
limited to, Holders, as well as custodians, trustees and other fiduciaries who hold or have held a
full or partial interest in the Debt for the benefit of third parties), as well as the respective
directors, officers, shareholders, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any
and all of the foregoing.

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ARTICLE — 12. ENVIRONMENTAL MATTERS

     12.1 Environmental Covenants. Grantor covenants and agrees that: (a) all uses and
operations on or of the Property, whether by Grantor or any other person or entity, shall be in
compliance in all material respects with all Environmental Laws and permits issued pursuant
thereto; (b) there shall be no Releases of Hazardous Substances in, on, under or from the Property;
(c) there shall be no Hazardous Substances in, on, or under the Property, except those that are
both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto and
(ii) fully disclosed to Beneficiary in writing; (d) Grantor shall keep the Property free and clear
of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any
act or omission of Grantor or any other person or entity (the “Environmental Liens”); (e) Grantor
shall, at its sole cost and expense, comply with all reasonable written requests of Beneficiary to
(i) reasonably effectuate Remediation of any condition (including but not limited to a Release of a
Hazardous Substance) in, on, under or from the Property; (ii) comply in all material respects with
any Environmental Law; (iii) comply in all material respects with any directive from any
governmental authority; and (iv) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (f) Grantor shall not do or allow any tenant or
other user of the Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any person or entity (whether on or off the
Property), impairs or may impair the value of the Property, is contrary to any requirement of any
insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property; and (g) Grantor shall promptly notify
Beneficiary in writing of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or potential Environmental
Lien; (D) any required or proposed Remediation of environmental conditions relating to the
Property; and (E) any written or oral notice or other communication of which Grantor becomes aware
from any source whatsoever (including but not limited to a governmental entity) relating in any way
to Hazardous Substances or Remediation thereof, possible liability of any person or entity pursuant
to any Environmental Law, other environmental conditions in connection with the Property, or any
actual or potential administrative or judicial proceedings in connection with anything referred to
in this Article 12. “Environmental Law” means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating
to protection of human health or the environment, relating to Hazardous Substances, relating to
liability for or costs of Remediation or prevention of Releases of Hazardous Substances or relating
to liability for or costs of other actual or threatened danger to human health or the environment.
“Environmental Law” includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any state or local
statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and
Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the
Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act;
the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act;
the National Environmental Policy Act; and the River and Harbors

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Appropriation Act. “Environmental Law” also includes, but is not limited to, any present and
future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as
well as common law: conditioning transfer of property upon a negative declaration or other approval
of a governmental authority of the environmental condition of the property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental condition of the Property
to any governmental authority or other person or entity, whether or not in connection with transfer
of title to or interest in property; imposing conditions or requirements in connection with permits
or other authorization for lawful activity; relating to nuisance, trespass or other causes of
action related to the Property; and relating to wrongful death, personal injury, or property or
other damage in connection with any physical condition or use of the Property. “Hazardous
Substances” include but are not limited to any and all substances (whether solid, liquid or gas)
defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect
under any present or future Environmental Laws or that may have a negative impact on human health
or the environment, including but not limited to petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives. “Release” of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.
“Remediation” includes but is not limited to any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous
Substance, any actions to prevent, cure or mitigate any Release of any Hazardous Substance, any
action to comply with any Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory
or other analysis, or evaluation relating to any Hazardous Substances or to anything referred to in
Article 12.

     12.2 Beneficiary’s Rights. Beneficiary and any other person or entity designated by
Beneficiary, including but not limited to any receiver, any representative of a governmental
entity, and any environmental consultant, shall have the right, but not the obligation, to enter
upon the Property at all reasonable times to assess any and all aspects of the environmental
condition of the Property and its use, including but not limited to, conducting any environmental
assessment or audit (the scope of which shall be determined in Beneficiary’s sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or building materials, and
conducting other invasive testing. Grantor shall cooperate with and provide access to Beneficiary
and any such person or entity designated by Beneficiary.

     12.3 Environmental Indemnification. Grantor shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any
and all Losses and costs of Remediation (whether or not performed voluntarily), engineers’ fees,
environmental consultants’ fees, and costs of investigation (including but not limited to sampling,
testing, and analysis of soil, water, air, building materials and other materials and substances
whether solid, liquid or gas) imposed upon or incurred by or asserted against any Indemnified
Parties, and directly or indirectly arising out of or in any way relating to any one or more of the
following: (a) any presence of any Hazardous Substances in, on, above, or under the Property; (b)
any past, present or threatened Release of Hazardous Substances in, on, above, under or from the
Property; (c) any activity by Grantor, any person or entity affiliated with

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Grantor or any tenant or other user of the Property in connection with any actual, proposed or
threatened use, treatment, storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement, removal, handling,
transfer or transportation to or from the Property of any Hazardous Substances at any time located
in, under, on or above the Property; (d) any activity by Grantor, any person or entity affiliated
with Grantor or any tenant or other user of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or above the Property,
whether or not such Remediation is voluntary or pursuant to court or administrative order,
including but not limited to any removal, remedial or corrective action; (e) any past, present or
threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to
any Environmental Law) in connection with the Property or operations thereon, including but not
limited to any failure by Grantor, any person or entity affiliated with Grantor or any tenant or
other user of the Property to comply with any order of any governmental authority in connection
with any Environmental Laws; (f) the imposition, recording or filing or the threatened imposition,
recording or filing of any Environmental Lien encumbering the Property; (g) any administrative
processes or proceedings or judicial proceedings in any way connected with any matter addressed in
this Article 12; (h) any past, present or threatened injury to, destruction of or loss of
natural resources in any way connected with the Property, including but not limited to costs to
investigate and assess such injury, destruction or loss; (i) any acts of Grantor or other users of
the Property in arranging for disposal or treatment, or arranging with a transporter for transport
for disposal or treatment, of Hazardous Substances owned or possessed by such Grantor or other
users, at any facility or incineration vessel owned or operated by another person or entity and
containing such or similar Hazardous Materials; (j) any acts of Grantor or other users of the
Property, in accepting any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Grantor or such other users, from which there is a
Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs
for Remediation; (k) any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an abnormally dangerous
activity on or near the Property; and (l) any misrepresentation or inaccuracy in any representation
or warranty or material breach or failure to perform any covenants or other obligations pursuant to
Article 12.

ARTICLE — 13. WAIVERS

     13.1 Marshalling and Other Matters. Grantor hereby waives, to the extent permitted by
law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws
now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Grantor hereby expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure of this Security
Instrument on behalf of Grantor, and on behalf of each and every person acquiring any interest in
or title to the Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.

     13.2 Waiver of Notice. Grantor shall not be entitled to any notices of any nature
whatsoever from Beneficiary or Trustee except with respect to matters for which this Security
Instrument specifically and expressly provides for the giving of notice by Beneficiary or Trustee

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to Grantor and except with respect to matters for which Beneficiary or Trustee is required by
applicable law to give notice, and Grantor hereby expressly waives the right to receive any notice
from Beneficiary or Trustee with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Beneficiary or Trustee to Grantor.

     13.3 WAIVER OF TRIAL BY JURY. GRANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE DEBT EVIDENCED BY THE INDENTURE, THIS
SECURITY INSTRUMENT, THE INDENTURE, OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF
BENEFICIARY, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

ARTICLE — 14. NOTICES

     14.1 Notices. All notices or other written communications hereunder shall be given in
the manner set forth in the Indenture.

ARTICLE — 15. APPLICABLE LAW

     15.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED
INTO PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED
HOWEVER, THAT WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN OF
THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE LAWS OF THE STATE
WHERE THE PROPERTY IS LOCATED SHALL APPLY.

     15.2 Usury Laws. This Security Instrument and the Indenture are subject to the
express condition that at no time shall Grantor be obligated or required to pay interest on the
Debt at a rate which could subject the holder of the Indenture to either civil or criminal
liability as a result of being in excess of the maximum interest rate which Grantor is permitted by
applicable law to contract or agree to pay. If by the terms of this Security Instrument or the
Indenture, Grantor is at any time required or obligated to pay interest on the Debt at a rate in
excess of such maximum rate, the rate of interest under the Security Instrument and the Indenture
shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such maximum rate shall
be applied and shall be deemed to have been payments in reduction of the principal balance of the
Indenture. All sums paid or agreed to be paid to Beneficiary for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Indenture until payment in full so
that the rate or amount of interest on account of the Debt does not exceed the maximum lawful rate
of interest from time to time in effect and applicable to the Debt for so long as the Debt is
outstanding.

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     15.3 Provisions Subject to Applicable Law. All rights, powers and remedies provided
in this Security Instrument may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of law and are intended to be limited to the extent necessary so
that they will not render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any term of this
Security Instrument or any application thereof shall be invalid or unenforceable, the remainder of
this Security Instrument and any other application of the term shall not be affected thereby.

ARTICLE — 16. DEFINITIONS

     16.1 General Definitions. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Security Instrument may be used
interchangeably in singular or plural form and the word “Grantor” shall mean “each Grantor and any
subsequent owner or owners of the Property or any part thereof or any interest therein,” the word
“Beneficiary” shall mean “Beneficiary and any subsequent trustee under the Indenture,” the word
“Trustee” shall mean “Trustee and any substitute trustee of the estates, properties, powers, trusts
and rights conferred upon Trustee pursuant to this Security Instrument,” the word “Indenture” shall
mean “the Indenture and any other evidence of indebtedness secured by this Security Instrument,”
the word “person” shall include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority, and any other entity, the
word “Property” shall include any portion of the Property and any interest therein, and the phrases
“attorneys’ fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk
fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial,
trial and appellate levels incurred or paid by Beneficiary in protecting its interest in the
Property, the Leases and the Rents and enforcing its rights hereunder.

ARTICLE — 17. MISCELLANEOUS PROVISIONS

     17.1 No Oral Change. This Security Instrument, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Grantor or Beneficiary, but only by an agreement in writing signed by
the party against whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.

     17.2 Liability. If Grantor consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several. This Security Instrument
shall be binding upon and inure to the benefit of Grantor and Beneficiary and their respective
successors and assigns forever.

     17.3 Inapplicable Provisions. If any term, covenant or condition of the Indenture or
this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the
Indenture and this Security Instrument shall be construed without such provision.

     17.4 Headings, etc. The headings and captions of various Sections of this Security
Instrument are for convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.

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     17.5 Duplicate Originals; Counterparts. This Security Instrument may be executed in
any number of duplicate originals and each duplicate original shall be deemed to be an original.
This Security Instrument may be executed in several counterparts, each of which counterparts shall
be deemed an original instrument and all of which together shall constitute a single Security
Instrument. The failure of any party hereto to execute this Security Instrument, or any
counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

     17.6 Number and Gender. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural and vice versa.

     17.7 Subrogation. If any or all of the proceeds of the Indenture have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the
extent of the funds so used, Beneficiary shall be subrogated to all of the rights, claims, liens,
titles, and interests existing against the Property heretofore held by, or in favor of, the holder
of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of Beneficiary and are merged
with the lien and security interest created herein as cumulative security for the repayment of the
Debt, the performance and discharge of Grantor’s obligations hereunder, under the Indenture and the
Other Security Documents and the performance and discharge of the Other Obligations.

ARTICLE — 18. LOCAL LAW PROVISIONS

     The Indenture, this Security Instrument and the Other Security Documents evidence a business
transaction and not a transaction for personal, family, household, or agricultural purposes.

     Notwithstanding anything contained elsewhere in this Security Instrument to the contrary, the
maximum aggregate amount of principal to be secured hereunder at any one time is $50,000,000.

ARTICLE — 19. DEED OF TRUST PROVISIONS

     19.1 Concerning the Trustee. Trustee shall be under no duty to take any action
hereunder except as expressly required hereunder or by law, or to perform any act which would
involve Trustee in any expense or liability or to institute or defend any suit in respect hereof,
unless properly indemnified to Trustee’s reasonable satisfaction. Trustee, by acceptance of this
Security Instrument, covenants to perform and fulfill the trusts herein created, being liable,
however, only for gross negligence or willful misconduct, and hereby waives any statutory fee and
agrees to accept reasonable compensation, in lieu thereof, for any services rendered by Trustee in
accordance with the terms hereof. Trustee may resign at any time upon giving notice to Grantor and
to Beneficiary. Beneficiary may remove Trustee at any time or from time to time and select a
successor trustee. In the event of the death, removal, resignation, refusal to act, or inability
to act of Trustee, or in its sole discretion for any reason whatsoever Beneficiary may, without
notice and without specifying any reason therefor and without applying to any court, select and
appoint a successor trustee, by an instrument recorded wherever this Security Instrument is
recorded and all powers, rights, duties and authority of Trustee, as aforesaid, shall

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thereupon become vested in such successor. Such substitute trustee shall not be required to
give bond for the faithful performance of the duties of Trustee hereunder unless required by
Beneficiary. The procedure provided for in this paragraph for substitution of Trustee shall be in
addition to and not in exclusion of any other provisions for substitution, by law or otherwise.

     19.2 Trustee’s Fees. Grantor shall pay all reasonable costs, fees and expenses
incurred by Trustee and Trustee’s agents and counsel in connection with the performance by Trustee
of Trustee’s duties hereunder and all such costs, fees and expenses shall be secured by this
Security Instrument.

     19.3 Certain Rights. With the approval of Beneficiary, Trustee shall have the right
to take any and all of the following actions: (i) to select, employ, and advise with counsel (who
may be, but need not be, counsel for Beneficiary) upon any matters arising hereunder, including the
preparation, execution, and interpretation of the Indenture, this Security Instrument or the Other
Security Documents, and shall be fully protected in relying as to legal matters on the advice of
counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder
either directly or through his/her agents or attorneys, (iii) to select and employ, in and about
the execution of his/her duties hereunder, suitable accountants, engineers and other experts,
agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of
Trustee, and Trustee shall not be answerable for any act, default, negligence, or misconduct of any
such accountant, engineer or other expert, agent or attorney-in-fact, if selected with reasonable
area, or for any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever, except for Trustee’s gross
negligence or bad faith, and (iv) any and all other lawful action as Beneficiary may instruct
Trustee to take to protect or enforce Beneficiary’s rights hereunder. Trustee shall not be
personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein
granted to Trustee, upon the Property for debts contracted for or liability or damages incurred in
the management or operation of the Property. Trustee shall have the right to rely on any
instrument, document, or signature authorizing or supporting an action taken or proposed to be
taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be
entitled to reimbursement for actual expenses incurred by Trustee in the performance of Trustee’s
duties hereunder and to reasonable compensation for such of Trustee’s services hereunder as shall
be rendered.

     19.4 Retention of Money. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required by applicable law)
and Trustee shall be under no liability for interest on any moneys received by Trustee hereunder.

     19.5 Perfection of Appointment. Should any deed, conveyance, or instrument of any
nature be required from Grantor by any Trustee or substitute trustee to more fully and certainly
vest in and confirm to the Trustee or substitute trustee such estates rights, powers, and duties,
then, upon request by the Trustee or substitute trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded
and/or filed by Grantor.

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     19.6 Succession Instruments. Any substitute trustee appointed pursuant to any of the
provisions hereof shall, without any further act, deed, or conveyance, become vested with all the
estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder
with like effect as if originally named as Trustee herein; but nevertheless, upon the written
request of Beneficiary or of the substitute trustee, the Trustee ceasing to act shall execute and
deliver any instrument transferring to such substitute trustee, upon the trusts herein expressed,
all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall
duly assign, transfer and deliver any of the property and moneys held by such Trustee to the
substitute trustee so appointed in the Trustee’s place.

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          IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by Grantor the day and year
first above written.

	 	 	 	 	 
	 	XM 1500 ECKINGTON LLC, a Delaware limited
liability company

 	 
	 	BY:  	/s/ Patrick L. Donnelly
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Secretary 	 
	 

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EXHIBIT A

(Description of Land)

All of those lots or parcels of land located in County, District of Columbia and more particularly
described as follows:

ALL that certain real property and the improvements thereon located in the District of Columbia and
further described as follows:

Lots numbered Twenty-nine (29) and Thirty (30) in square numbered Thirty-five Hundred Eighteen
(3518), in the subdivision made by Judd and Detwiler, incorporated, as per plat recorded in the
Office of the Surveyor for the District of Columbia in fiber 159 at folio 159.

AND BEING the same property conveyed to Consortium One Eckington, LLC., by Deed from Judd &
Detwiler, Inc., a District of Columbia corporation, dated June 29, 1998 and recorded July 6, 1998
as Instrument No. 9800052509.

-1-

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