FOURTH AMENDMENT TO AND WAIVER OF LOAN
AGREEMENT
THIS
FOURTH AMENDMENT TO AND WAIVER OF LOAN AGREEMENT (this
“Amendment”), executed and delivered as of
September 15, 2008, is between GRUBB & ELLIS APARTMENT
REIT, INC. (formerly known as NNN Apartment REIT, Inc.), a
Maryland corporation (the “ Company ”), and
WACHOVIA BANK, NATIONAL ASSOCIATION , a national banking
association (the “ Lender ”).
RECITALS:
A. Pursuant to that certain Loan Agreement
between the Company and the Lender dated as of November 1,
2007, 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, the “ Loan Agreement ”), the Lender
made available to the Company a revolving line of credit in an
outstanding aggregate principal amount not to exceed
$16,000,000.00, as evidenced by that certain Amended and Restated
Promissory Note dated as of March 31, 2008 made by the Company and
payable to the order of the Lender (the “ Note
”).
B. The Company has notified the Lender that
it intends to acquire (the “ Proposed Acquisition
”), through its subsidiary Grubb & Ellis Apartment REIT
Holdings, LP (formerly known as NNN Apartment REIT Holdings, L.P.),
a multi-family property known as Canyon Ridge Apartments, located
in Nashville, Tennessee, which property will be owned by G&E
Apartment REIT Canyon Ridge, LLC, a Delaware limited liability
company (the “ New Property Owner ”). The
Company has requested an Advance under the Loan Agreement to
finance, in part, the Proposed Acquisition. The Company has also
requested an extension of the maturity date of the credit
facilities extended pursuant to the Credit Agreement. The Lender
has agreed to make such Advance, to agree to such extension, and to
continue to make available to the Company the credit facilities
provided for in the Loan Agreement, subject to and on the terms and
conditions stated herein.
C. Capitalized terms not otherwise defined
herein shall have such meaning as assigned to them in the Loan
Agreement.
AGREEMENT:
NOW,
THEREFORE, in consideration of the mutual promises herein contained
and for other valuable consideration, the parties hereto agree as
follows:
Section 1. Amendments to Loan
Agreement.
(a) Paragraph 7(c) of the Loan
Agreement is hereby amended by adding the following proviso to the
end thereof immediately preceding the period at the end of the
sentence:
“; provided further , that
notwithstanding the foregoing prohibition, the Company shall be
permitted to incur Indebtedness from time to time in the
form of a limited guaranty of any Property Owner’s
obligations under its Property Loan in favor of the lender thereof,
with respect to any Property the acquisition of which is financed
in part with the proceeds of an Advance hereunder, so long
as (i) the Company’s obligations thereunder are
limited to guaranteeing the recourse obligations and the
environmental liabilities of such Property Owner under
such Property Loan and liabilities arising from a voluntary
bankruptcy or the bankruptcy of an Affiliate, and
(ii) such guaranty is otherwise in form and content acceptable
to the Lender”
(b) The following paragraph is hereby added
as a new Paragraph 9(l) to the Loan Agreement:
“9(l) Acknowledgments and
Agreements Regarding Canyon Ridge Property Loan and Pledge of
Equity Interests in G&E Apartment REIT Canyon Ridge, LLC .
The parties hereto agree and acknowledge that: (i) the Canyon
Ridge Property Loan is being made to G&E Apartment REIT Canyon
Ridge, LLC by Capmark Bank, (ii) Capmark Bank intends to sell
the Canyon Ridge Property Loan to Freddie Mac, who will become the
lender thereunder, (iii) pursuant to the Pledge Agreement, the
Pledgor has pledged in favor of the Lender all right, title and
interest in the “Class B Interest” the Pledgor
owns in G&E Apartment REIT Canyon Ridge, LLC (as the term
“Class B Interest” is defined in the operating
agreement of such limited liability company), (iv) the
“Class B Interest” so pledged constitutes a
forty-nine percent (49%) interest in G&E Apartment REIT Canyon
Ridge, LLC, and (v) Freddie Mac, as the lender under the
Canyon Ridge Property Loan, has not agreed to permit the pledge by
the Pledgor of any interest in G&E Apartment REIT Canyon Ridge,
LLC, other than the pledge of the “Class B
Interest” in such limited liability
company.”
(c) Paragraph 10 of the Loan Agreement
is hereby amended by amending and restating the following defined
terms in their entirety:
“Creekside and Kedron
Advance Overage” means that portion of the outstanding principal
amount of the Loan which was in excess of $10,000,000.00 as a
result of the making of the Creekside and Kedron Advance;
provided that such excess amount did not exceed
$6,000,000.00 at any time; provided further , that the
Creekside and Kedron Advance Overage has been repaid in full and
may not be reborrowed.
“ Maturity Date ”
shall mean (i) in the event that on November 1, 2008 the
Company shall have repaid the outstanding Advances under the Loan
in an amount sufficient to cause the outstanding principal amount
of the Loan to be less than or equal to Six Million Dollars
($6,000,000.00), then the Maturity Date shall be November 1,
2009, as such date may be extended by the Lender, in its sole and
absolute discretion, and (ii) in the event that on
November 1, 2008 the Company shall not have repaid the
outstanding Advances under the Loan in an amount sufficient to
cause the outstanding principal amount of the Loan to be less than
or equal to Six Million Dollars ($6,000,000.00), then the Maturity
Date shall be November 1, 2008.
“ Property Owners
” shall mean the collective reference to: Apartment REIT
Walker Ranch, L.P., Apartment REIT Hidden Lakes, L.P., Apartment
REIT Park at North Gate, L.P., Apartment REIT Residences at
Braemar, LLC, Apartment REIT Bay Point Resort, LLC, Apartment REIT
Towne Crossing, L.P., Apartment REIT Villas of El Dorado, LLC,
G&E Apartment REIT The Myrtles at Olde Towne, LLC, G&E
Apartment REIT The Heights at Olde Towne, LLC, G&E Apartment
REIT Arboleda, LLC, G&E Apartment REIT Creekside Crossing, LLC,
G&E Apartment REIT Kedron Village, LLC, G&E Apartment REIT
Canyon Ridge, LLC and to any other Person which may become the fee
owner of a Property on or after the date hereof.
(d) Paragraph 10 of the Loan Agreement
is hereby amended by adding the following new definitions in
appropriate alphabetical order:
“ Canyon Ridge Property
” means that certain multi-family property known as Canyon
Ridge Apartments, located in Nashville, Tennessee, which Property
shall be owned by G&E Apartment REIT Canyon Ridge,
LLC.
“ Canyon Ridge Property
Loan ” means that certain first priority real
estate-secured loan made or to be made by a financial institution
to G&E Apartment REIT Canyon Ridge, LLC, which loan is secured
by a first priority lien on the Canyon Ridge Property.
Section 2. Waiver . Pursuant to
Paragraph 9(b) of the Loan Agreement and solely with respect to the
Proposed Acquisition, the Lender hereby waives (a) the
requirement set forth in Paragraph 6(i)(i) of the Loan
Agreement that Pledgor pledge of all of the Ownership Interests in
the New Property Owner in favor of Lender, and (b) the
requirement set forth in Paragraph 6(i)(ii) of the Loan
Agreement that the provisions of the Property Loan Documents to
which the New Property Owner is a party specifically permit and
consent to the pledge of one hundred percent (100%)
