GRUBB & ELLIS APARTMENT REIT,
INC.
AMENDED AND RESTATED SHARE REPURCHASE PLAN
EFFECTIVE AS OF NOVEMBER 5, 2009
The
Board of Directors (the “Board”) of Grubb & Ellis
Apartment REIT, Inc., a Maryland corporation (the
“Company”), has adopted an amended and restated share
repurchase plan (the “Repurchase Plan”) by which shares
of the Company’s common stock, par value $0.01 per share
(“Share”), may be repurchased by the Company from
stockholders subject to certain conditions and limitations. The
purpose of this Repurchase Plan is to provide limited interim
liquidity for stockholders (under the conditions and limitations
set forth below) until a liquidity event occurs. No stockholder is
required to participate in the Repurchase Plan.
1. Repurchase of Shares. The
Company may, at its sole discretion, repurchase Shares presented to
the Company for cash to the extent it has sufficient proceeds to do
so and subject to the conditions and limitations set forth herein.
Any and all Shares repurchased by the Company shall be canceled,
and will have the status of authorized but unissued Shares. Shares
acquired by the Company through the Repurchase Plan will not be
reissued unless they are first registered with the United States
Securities and Exchange Commission under the Securities Act of
1933, as amended, and other appropriate state securities laws or
otherwise issued in compliance with such laws.
2. Share Repurchases.
Repurchase Price. Unless the Shares are being repurchased in
connection with a stockholder’s death or qualifying
disability (as discussed below), the prices per Share at which the
Company will repurchase Shares will be as follows:
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(1)
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For
stockholders who have continuously held their Shares for at least
one year, the lower of $9.25 or 92.5% of the price paid to acquire
Shares from the Company;
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(2)
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For
stockholders who have continuously held their Shares for at least
two years, the lower of $9.50 or 95.0% of the price paid to acquire
Shares from the Company;
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(3)
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For
stockholders who have continuously held their Shares for at least
three years, the lower of $9.75 or 97.5% of the price paid to
acquire Shares from the Company; and
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(4)
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For
stockholders who have continuously held their Shares for at least
four years, a price determined by our board of directors, but in no
event less than 100% of the price paid to acquire Shares from the
Company.
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At any
time the repurchase price is determined by any method other than
the net asset value of the shares, if we have sold property and
have made one or more special distributions to our stockholders of
all or a portion of the net proceeds from such sales, the per share
repurchase price will be reduced by the net sales proceeds per
share distributed to investors prior to the repurchase
date.
Our
board of directors will, in its sole discretion, determine which
distributions, if any, constitute a special distribution. While our
board of directors does not have specific criteria for determining
a special distribution, we expect that a special distribution will
only occur upon the sale of a property and the subsequent
distribution of the net sale proceeds.
Death or Disability. If Shares are to be repurchased in connection
with a stockholder’s death or qualifying disability as
provided in Section 4, the repurchase price shall be:
(i) for stockholders who have continuously held their Shares
for less than four years, 100% of the price paid to acquire the
Shares from the Company; or (ii) for stockholders who have
continuously held their Shares for at least four years, a price
determined by the Board, but in no event less than 100% of the
price paid to acquire the Shares from the Company. In addition, the
Company will waive the one-year holding period, as described in
Section 4, for Shares to be repurchased in connection with a
stockholder’s death or qualifying disability.
Appropriate legal documentation will be required
for repurchase requests upon death or qualifying
disability.
3. Funding and Operation of Repurchase
Plan. The Company may make purchases under the Repurchase Plan
quarterly, at its sole discretion, on a pro rata basis. Subject to
funds being available, the Company will limit the number of Shares
repurchased during any calendar year to five percent (5.0%) of the
weighted average number of Shares outstanding during the prior
calendar year. Funding for the Repurchase Plan will come
exclusively from cumulative proceeds we receive from the sale of
Shares under the Company’s Distribution Reinvestment
Plan.
4. Stockholder Requirements. Any
stockholder may request a repurchase with respect to all or a
designated portion of these Shares, subject to the following
conditions and limitations:
Holding Period. Only Shares that have been held by the
presenting stockholder for at least one (1) year are eligible
for repurchase by the Company, except for Shares repurchased in
connection with a stockholder’s death or qualifying
disability as described below.
Death or Qualifying Disability.
The Company will repurchase Shares,
including Shares held for less than the one-year holding period,
upon the death of a stockholder who is a natural person, including
Shares held by such stockholder through a revocable grantor trust,
or an IRA or other retirement or profit-sharing plan, after
receiving written notice from the estate of the stockholder, the
recipient of the Shares through bequest or inheritance, or, in the
case of a revocable grantor trust, the trustee of such trust, who
shall have the sole ability to request repurchase on behalf of the
trust. The Company must receive the written notice within one year
after the death of the stockholder. If spouses are joint registered
holders of Shares, the request to repurchase the Shares may be made
if either of the registered holders dies. This waiver of the
one-year holding period will not apply to a stockholder that is not
a natural person, such as a trust (other than a revocable grantor
trust), partnership, corporation or other similar
entity.
Furthermore, and subject to the conditions and
limitations described below, the Company will repurchase Shares,
including Shares held for less than the one-year holding period, by
a stockholder who is a natural person, including Shares held by
such stockholder through a revocable grantor trust, or an IRA or
other retirement or profit-sharing plan, with a “qualifying
disability,” as defined below, after receiving written notice
from such stockholder provided that the condition causing the
qualifying disability was not preexisting on the date that the
stockholder became a stockholder. The Company must receive the
written notice within one year after such stockholder’s
qualifying disability. This waiver of the one-year holding period
will not apply to a stockholder that is not a natural person, such
as a trust (other than a revocable grantor trust), partnership,
corporation or other similar entity.
In
order for a disability to be considered a “qualifying
disability,” (1) the stockholder must receive a
determination of disability based upon a physical or mental
condition or impairment arising after the date the stockholder
acquired the Shares to be redeemed, and (2) such determination
of disability must be made by the governmental agency responsible
for reviewing the disability retirement benefits that the
stock
