FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT
(MEMBERSHIP AND PARTNERSHIP INTERESTS)
THIS
FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT (MEMBERSHIP AND
PARTNERSHIP INTERESTS) (as amended, modified, replaced, renewed,
restated or extended from time to time, this
“Agreement”), dated as of the 15th day of September,
2008, by and between WACHOVIA BANK, N.A., a national banking
association (“Lender”), and GRUBB & ELLIS APARTMENT
REIT HOLDINGS, LP, a Virginia limited partnership (formerly known
as NNN Apartment REIT Holdings, L.P.)
(“Pledgor”).
RECITALS
WHEREAS, pursuant to that certain Loan Agreement
dated as of November 1, 2007 by and between GRUBB & ELLIS
APARTMENT REIT, INC. (formerly known as NNN Apartment REIT, Inc.),
a Maryland corporation (“Borrower”) and Lender, as
amended by that certain First Amendment to and Waiver of Loan
Agreement dated as of December 21, 2007, by that certain
Second Amendment to and Waiver of Loan Agreement dated as of
March 31, 2008 and by that certain Third Amendment to and
Waiver of Loan Agreement dated as of June 26, 2008 (as so
amended and as otherwise amended, modified, renewed, restated,
extended or replaced from time to time, the “Existing Loan
Agreement”), Lender agreed to extend credit to Borrower on
the terms and subject to the conditions set forth therein;
and
WHEREAS, Pledgor owns one hundred percent (100%)
of (i) the limited partnership interests in each of APARTMENT
REIT WALKER RANCH, L.P., a Texas limited partnership (“Walker
Ranch”), APARTMENT REIT HIDDEN LAKES, L.P., a Texas limited
partnership (“Hidden Lakes”), APARTMENT REIT PARK AT
NORTH GATE, L.P., a Texas limited partnership (“North
Gate”) and APARTMENT REIT TOWNE CROSSING, L.P., a Texas
limited partnership (“Towne Crossing”) (collectively,
the “Owned LP’s”), (ii) the membership
interests in each of Apartment REIT Walker Ranch GP, LLC, a
Delaware limited liability company, Apartment REIT Hidden Lakes GP,
LLC, a Delaware limited liability company, Apartment REIT Park at
North Gate GP, LLC, a Delaware limited liability company and
Apartment REIT Towne Crossing GP, LLC, a Delaware limited liability
company (collectively, the “Property Owner
GP’s”), each of which Property Owner GP’s is the
sole general partner of the respective Owned LP, and (iii) the
membership interests in each of G&E APARTMENT REIT THE HEIGHTS
AT OLDE TOWNE, LLC, a Delaware limited liability company, G&E
APARTMENT REIT THE MYRTLES AT OLDE TOWNE, LLC, a Delaware limited
liability company, G&E APARTMENT REIT ARBOLEDA, LLC, a Delaware
limited liability company, G&E APARTMENT REIT CREEKSIDE
CROSSING, LLC, a Delaware limited liability company and G&E
APARTMENT REIT KEDRON VILLAGE, LLC, a Delaware limited liability
company (collectively, the “Existing Owned
LLC’s”); and
WHEREAS, as consideration for the credit
facilities made available to Borrower pursuant to the Existing Loan
Agreement, Pledgor agreed, as required pursuant to Paragraph 3
of the Existing Loan Agreement, to pledge as security for
Borrower’s obligations under the Existing Loan Agreement
certain of the Partnership Interests Pledgor owns in the Owned
LP’s and certain of the Membership Interests Pledgor owns in
the Existing Owned LLC’s; and
WHEREAS, Pledgor agreed not to sell, convey,
transfer or encumber in any way any of the general or limited
partnership interests, or membership interests, as applicable,
owned by Pledgor in any of the Property Owner GP’s, the Owned
LP’s or the Existing Owned LLC’s, so long as the
Existing Loan Agreement remained in effect; and
WHEREAS, in furtherance of the above-referenced
agreements of Pledgor, Pledgor executed that certain Pledge
Agreement (Partnership Interests) dated as of November 1, 2007
between Pledgor and Lender, as amended and restated pursuant to
that certain First Amended and Restated Pledge Agreement
(Membership and Partnership Interests) dated as of
December 21, 2007, as further amended and restated pursuant to
that certain Second Amended and Restated Pledge Agreement
(Membership and Partnership Interests) dated as of March 31,
2008, and as further amended and restated pursuant to that certain
Third Amended and Restated Pledge Agreement (Membership and
Partnership Interests) dated as of June 26, 2008 (as so
amended and restated and as otherwise amended, modified, renewed,
restated, extended or replaced from time to time, the
“Existing Pledge Agreement”), pursuant to which Pledgor
granted a security interest in favor of Lender, in certain of the
Partnership Interests Pledgor owns in the Owned LP’s and
certain of the Membership Interests Pledgor owns in the Existing
Owned LLC’s; and
WHEREAS, Pledgor owns one hundred percent (100%)
of the membership interests in G&E APARTMENT REIT CANYON RIDGE,
LLC, a Delaware limited liability company (the “New Owned
LLC”; the New Owned LLC, together with the Existing Owned
LLC’s, the “Owned LLC’s” and each an
“Owned LLC”; the Owned LLC’s, together with the
Owned LP’s, the “Owned Companies” and each an
“Owned Company”); and
WHEREAS, Borrower and Lender have agreed to
amend the Existing Loan Agreement pursuant to that certain Fourth
Amendment to and Waiver of Loan Agreement of even date herewith
between Borrower and Lender (the “Fourth Amendment,”
and the Existing Loan Agreement, as amended by the Fourth
Amendment, and as the same may be further amended, modified,
renewed, restated, extended or replaced from time to time, the
“Loan Agreement”); and
WHEREAS, as consideration for the credit
facilities continuing to be made available to Borrower pursuant to
the Loan Agreement, Pledgor has agreed, as required pursuant to
Paragraph 3 of the Loan Agreement, to pledge as security for
Borrower’s obligations under the Loan Agreement certain of
the Membership Interests Pledgor owns in the New Owned LLC;
and
WHEREAS, Pledgor has agreed not to sell, convey,
transfer or encumber in any way any of the Membership Interests
owned by Pledgor in the New Owned LLC so long as the Loan Agreement
remains in effect; and
WHEREAS, in connection with the amendment of the
Existing Loan Agreement pursuant to the Fourth Amendment, Pledgor
and Lender have agreed to amend and restate the Existing Pledge
Agreement pursuant to this Agreement. The parties hereto agree that
from and after the date hereof, this Agreement shall supersede the
Existing Pledge Agreement in all respects and shall constitute the
entire agreement among the parties hereto with respect to the
subject matter contained therein; and
WHEREAS, one hundred percent (100%) of the
general partnership interests in Pledgor are owned by Borrower, and
one hundred percent (100%) of the limited partnership interests in
Pledgor are owned by NNN Apartment REIT Advisor, LLC, a limited
liability company which is under common ownership with Borrower,
and Pledgor will derive benefit from the credit facilities to be
made available to Borrower by Lender pursuant to the Loan
Agreement;
NOW,
THEREFORE, in consideration of the credit facilities continuing to
be made available pursuant to the Loan Agreement and other good and
valuable consideration, the receipt of which is hereby acknowledged
by the parties hereto, the parties do hereby agree as
follows:
1. Definitions . All capitalized
undefined terms used herein shall have the respective meanings
assigned thereto in the Loan Agreement. In addition, the following
terms, when used herein, shall have the following
meanings:
“Collateral” means, collectively,
(i) with respect to each of the Owned LLC’s, one hundred
percent (100%) of those Membership Interests of Pledgor in such
Owned LLC which are designated as “Class B
Interests” in the operating agreement of such Owned LLC,
whether now owned or hereafter acquired, (ii) with respect to
each of Walker Ranch, Hidden Lakes and Towne Crossing, forty-nine
percent (49%) of the Partnership Interests of Pledgor in such Owned
LP, whether now owned or hereafter acquired, (iii) with
respect to North Gate, one hundred percent (100%) of the
Partnership Interests of Pledgor in such Owned LP, whether now
owned or hereafter acquired, and (iv) all proceeds of the
property described in each of items (i), (ii) and
(iii) above, including, without limitation, proceeds from any
permitted sale or other disposition thereof (including without
limitation all payment intangibles relating thereto).
“Membership Interests” means the
entire membership interests of Pledgor in each of the Owned
LLC’s, including, without limitation, Pledgor’s capital
account, its interest as a member in the net cash flow, net profit
and net loss, and items of income, gain, loss, deduction and credit
of each of the Owned LLC’s, its interest in all distributions
made or to be made by any of the Owned LLC’s to Pledgor and
all of the other rights, titles and interests of Pledgor as a
member of each of the Owned LLC’s, whether set forth in the
operating agreement of such Owned LLC, by separate agreement or
otherwise.
“Partnership Interests” means the
entire limited partnership interests of Pledgor in each of the
Owned LP’s, including, without limitation, Pledgor’s
capital account, its interest as a limited partner in the net cash
flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of each of the Owned LP’s, its interest
in all distributions made or to be made by any of the Owned
LP’s to Pledgor and all of the other rights, titles and
interests of Pledgor as a limited partner of each of the Owned
LP’s, whether set forth in the partnership agreement of such
Owned LP, by separate agreement or otherwise.
“UCC” means the North Carolina
Uniform Commercial Code, or as to any matter governed by the
Uniform Commercial Code of another jurisdiction, the Uniform
Commercial Code of such other jurisdiction.
2. Pledge and Security Interest .
As collateral security for the due and punctual payment and
performance by Borrower of all of its obligations under the Loan
Agreement and the other Loan Documents (collectively, the
“Obligations”), Pledgor hereby pledges and assigns to
Lender a continuing first priority security interest in and to the
Collateral.
3. Pledgor Remains Liable .
Anything herein to the contrary notwithstanding, (a) Pledgor shall
remain liable to perform all of its duties and obligations as a
member of each of the Owned LLC’s, and all of its duties and
obligations as a limited partner of each of the Owned LP’s,
to the same extent as if this Agreement had not been executed,
(b) the exercise by Lender of any of its rights hereunder
shall not release Pledgor from any of its duties or obligations as
a member or limited partner, as applicable, of any Owned Company,
and (c) Lender shall not have any obligation or liability as a
member or limited partner, as applicable, of any Owned
Com
