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SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
(MEMBERSHIP AND PARTNERSHIP INTERESTS)
THIS
SECOND 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 31st day of March, 2008,
by and between WACHOVIA BANK, N.A., a national banking association
(“Lender”), and GRUBB & ELLIS APARTMENT REIT
HOLDINGS, L.P., a Virginia limited partnership (formerly known as
NNN Apartment REIT Holdings, LP) (“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 (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 (“The Heights”) and
G&E APARTMENT REIT THE MYRTLES AT OLDE TOWNE, LLC, a Delaware
limited liability company (“The Myrtles”)
(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 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 has acquired one hundred percent (100%) of the membership
interests in G&E APARTMENT REIT ARBOLEDA, LLC, a Delaware
limited liability company (“Arboleda”; Arboleda,
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 Second Amendment to and Waiver
of Loan Agreement of even date herewith between Borrower and Lender
(the “Second Amendment,” and the Existing Loan
Agreement, as amended by the Second 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 Arboleda; and
WHEREAS,
Pledgor has agreed not to sell, convey, transfer or encumber in any
way any of the Membership Interests owned by Pledgor in Arboleda so
long as the Loan Agreement remains in effect; and
WHEREAS,
in connection with the amendment of the Existing Loan Agreement
pursuant to the Second 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 Company by reason of this
Agreement.
4.
Representations and Warranties . Pledgor represents and
warrants that:
(a) Pledgor owns one hundred percent (100%) of the membership
interests in, and is the sole member of, each of the Owned
LLC’s.
(b) Pledgor (i) owns one hundred percent (100%) of the
limited partnership interests in, and is the sole limited partner
of, each of the Owned LP’s, and (ii) owns one hundred
percent (100%) of the membership
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