THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY
NOT BE SOLD,
ASSIGNED OR TRANSFERRED EXCEPT (a) PURSUANT TO A
REGISTRATION
STATEMENT UNDER THE ACT WHICH HAS BECOME EFFECTIVE AND IS
CURRENT WITH RESPECT TO THESE SECURITIES, OR (b) PURSUANT TO
A
SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE ACT CONSISTENT
WITH ALL APPLICABLE PROVISIONS OF THE ACT AS WELL AS ANY
APPLICABLE “BLUE SKY” OR SIMILAR STATE SECURITIES
LAWS.
NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY,
NEITHER THE PRINCIPAL OF NOR THE INTEREST ON, NOR ANY OTHER
AMOUNTS PAYABLE IN RESPECT OF, THE INDEBTEDNESS CREATED OR
EVIDENCED BY THIS INSTRUMENT OF RECORD SHALL BECOME DUE OR BE
PAID OR PAYABLE, EXCEPT TO THE EXTENT PERMITTED UNDER THE
SUBORDINATION AGREEMENT DATED AS OF OCTOBER 2, 2009 AMONG THE
SUBORDINATED LENDER DEFINED THEREIN, THE BORROWER DEFINED
THEREIN AND DEUTSCHE BANK TRUST COMPANY AMERICAS, IN ITS
CAPACITY AS ADMINISTRATIVE AGENT (THE “SUBORDINATION
AGREEMENT”), WHICH SUBORDINATION AGREEMENT IS
INCORPORATED
HEREIN WITH THE SAME EFFECT AS IF FULLY SET FORTH
HEREIN.
GRUBB & ELLIS
COMPANY
SENIOR SUBORDINATED CONVERTIBLE NOTE
FOR VALUE
RECEIVED , Grubb & Ellis Company, a corporation organized
and existing under the laws of the State of Delaware (along with
all of its current and future affiliates and subsidiaries
collectively, the “Company”), promises to pay to the
order of Kojaian Management Corporation, a Michigan corporation, or
its assignee or designee (“Investor”), the sum of
FIVE MILLION DOLLARS AND 00/100 ($5,000,000) together with
interest as provided herein due on or before the Maturity Date (as
defined in Section 6 below). All cash payments under this
senior subordinated convertible note (the “Note”) shall
be made in legal tender of the United States in immediately
available funds.
1.
Interest . The outstanding principal amount of this Note
shall earn interest at the rate of twelve percent (12%) per annum,
which shall accrue and be payable, in full, on the Maturity Date.
In the event that there shall occur an Event of Default (as defined
in Section 3 below) the interest rate shall be increased by
six percent (6%) per annum.
2. No
Subordination . Other than with respect to the Credit Facility
(as defined in Section 3 below), the Company hereby expressly
agrees, and it shall be of the essence hereof, that the
indebtedness represented hereby shall not be subordinate to any
other indebtedness of the Company, whether now existing or
hereafter arising, in any manner whatsoever; provided, however, for
so long as the Credit Facility is outstanding, this Note shall be
fully subordinate in
all respects to
the indebtedness evidenced at all times by the Credit Facility.
Accordingly, the Company shall not grant to any other person or
entity, other than to the Administrative Agent for the benefit of
the Secured Parties pursuant to the Security Agreement, any
security interest of any nature whatsoever in the Collateral for so
long as this Note is outstanding.
3.
Definitions . All capitalized terms set forth herein not
otherwise defined shall have the meaning set forth in the Credit
Facility. As used in this Note the following terms have the
meanings set forth below:
(a)
“Administrative Agent” shall have the meaning set forth
in the Security Agreement.
(b)
“Business Day” means any day of the year on which banks
are required or permitted to be open for business in New York
City.
(c)
“Collateral” shall have the meaning set forth in the
Security Agreement.
(d)
“Credit Facility” shall mean the Third Amended and
Restated Credit Agreement dated as of May 18, 2009 among Grubb
& Ellis Company, as Borrower, the Guarantors named therein,
Deutsche Bank Trust Company Americas, as Administrative Agent, the
financial institutions identified therein as Lender Parties,
Deutsche Bank Trust Company Americas as Syndication Agent, and
Deutsche Bank Securities, Inc., as sole book issuing manager and
sole lead manager, as amended by the First Letter Agreement to
Credit Agreement dated as of September 30, 2009 and as
otherwise amended, amended and restated, supplemented or otherwise
modified from time to time.
(e)
“Event of Default” shall be the (A) failure by the
Company to comply with any obligation hereunder, including but not
limited to any payment obligation, or (B) an Event of Default
under the Credit Facility.
(f)
“Maturity Date” shall be the earlier of the Termination
Date (as the same may be extended pursuant to the terms of the
Credit Facility) under the Credit Facility or the termination of
the Credit Facility as a consequence of the Company paying the DPO
Amount during the DPO Option Period.
(g)
“Payment in Full of the Senior Obligations” shall have
the meaning ascribed to it in that certain Subordination Agreement
dated as of October 2, 2009 by and among Investor, the Company
and Deutsche Bank Trust Company Americas, as administrative agent,
in its capacity as administrative agent under the Credit Facility
for the benefit of the Lender Parties.
(h)
“Remaining Period” shall mean any period (i) this
Note is outstanding after the Maturity Date, for any reason
whatsoever, and (ii) after the Payment in Full of the Senior
Obligations..
(i)
“Secured Parties” shall have the meaning set forth in
the Security Agreement.
2
(j)
“Security Agreement” means the Third Amended and
Restated Security Agreement dated May 18, 2009 made by the
Grantors referred to therein in favor of Deutsche Bank Trust
Company Americas, as administrative agent, for the Secured Parties,
as amended by that First Letter Amendment to Security Agreement
dated September 30, 2009 and as otherwise amended, amended and
restated, supplemented or otherwise modified from time to
time.
(k)
“UCC” means the Uniform Commercial Code in effect in
the State of New York.
4. Right
of Conversion . In the event that at any time this Note is
outstanding the Company issues or sells Equity Interests in
connection with or pursuant to a transaction with a non-Affiliate
of the Company (the “Equity Transaction”), the Company
shall give Investor no less than ten (10) days written notice
thereof and Investor shall have the right, upon the closing of the
Equity Transaction, by giving written notice to the Company no
later than three (3) days prior to the closing of the Equity
Transaction to convert the principal amount of this Note then
outstanding, in whole or in part, into the Equity Interests issued
in such Equity Transaction at the same per share price at which the
non-Affili
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