|
SECOND AMENDMENT TO AND WAIVER OF LOAN
AGREEMENT
THIS
SECOND AMENDMENT TO AND WAIVER OF LOAN AGREEMENT (this
“Amendment”), executed and delivered as of
March 31, 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 (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 $10,000,000.00, as evidenced by that certain
Promissory Note dated November 1, 2007 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, L.P.
(formerly known as NNN Apartment REIT Holdings, L.P.), G&E
Apartment REIT Arboleda, LLC, a Delaware limited liability company
(the “ New Property Owner ”), which New Property
Owner will own a multi-family property known as Arboleda Luxury
Apartment Homes, located in Cedar Park, Texas. The Company has
requested an Advance under the Loan Agreement to finance, in part,
the Proposed Acquisition, which Advance shall require the temporary
increase of the aggregate principal amount available under the Loan
Agreement. The Lender has agreed to make such Advance, to agree to
such temporary increase, and to continue to make available to the
Company the credit facilities provided for in the Loan Agreement,
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) Paragraphs 1(a) and 1(b) of the Loan Agreement are hereby
deleted in their entireties and the following paragraphs are hereby
substituted in lieu thereof:
“1(a) Loan . Subject to the conditions set forth
herein, so long as no Event of Default has occurred and is
continuing, Lender may elect, in Lender’s sole and absolute
discretion, to advance to the Company, from time to time from the
date hereof until the day immediately preceding the Maturity Date,
an aggregate principal amount up to the Aggregate Availability
(collectively, the “Loan” and each, an
“Advance”). If the Lender, in its sole and absolute
discretion, refuses to fund a requested Advance, the Lender shall
use its best efforts to provide notice thereof to the Company. So
long as no Event of Default has occurred and is continuing, amounts
repaid by the Company prior to the Maturity Date may, in
Lender’s sole and absolute discretion, be reborrowed by the
Company, provided that (i) the aggregate principal
amount outstanding at any time shall not exceed the Aggregate
Availability, and (ii) the Arboleda Advance Overage, once
repaid in accordance with the terms hereof, may not be reborrowed.
In the event that in connection with any Advance made hereunder,
the Company has not commenced repayment of such Advance within
three (3) months following the applicable Advance Date by a
principal amount of at least $500,000, such amount to consist of
Equity Proceeds, such failure to repay such Advance in such amount
shall constitute an Event of Default hereunder.
1(b) Interest Rate . The Loan shall bear interest as
follows: (i) the outstanding principal amount of that portion
of the Loan consisting of the Arboleda Advance Overage shall bear
interest at a fixed rate equal to fifteen percent (15%) per annum,
and (ii) the remaining outstanding principal amount of the
Loan shall bear interest at the Applicable LIBOR Rate, except as
otherwise provided herein.”
(b) Paragraph 2(a) of the Loan Agreement is hereby
amended by deleting the last sentence of such Section in its
entirety and substituting the following sentence in lieu
thereof:
“It is
hereby acknowledged and agreed that notwithstanding the foregoing,
(i) the proceeds of the Loan made available to the Company
pursuant to the Myrtles and Heights Advance shall finance those
required acquisition costs on the Properties acquired thereby which
are in excess of the costs funded through each Property Loan
related thereto in the approximate principal amount of fifty-six
percent (56%) of each Property’s appraised value;
provided that the sum of such Property Loan proceeds and any
proceeds disbursed hereunder pursuant to the Myrtles and Heights
Advance shall not exceed seventy-four percent (74%) of each such
Property’s appraised value; and (ii) the above
percentages shall not apply to the proceeds of the Loan made
available to the Company pursuant to the Arboleda Advance or the
Arboleda Property Loan.”
(c) Paragraph 2(k)(6) of the Loan Agreement is hereby
deleted in its entirety and the following paragraph is hereby
substituted in lieu thereof:
"(6) Each prepayment or repayment of principal shall be applied as
follows: (i) to the outstanding amount of the Arboleda Advance
Overage, until the Arboleda Advance Overage has been repaid in
full, any excess principal being applied to the Advance then
outstanding which was made on the earliest date as among all
remaining outstanding Advances; (ii) then, to the Advance then
outstanding which was made on the earliest date as among all
outstanding Advances, until such Advance is paid in full, any
excess principal being applied to the Advance then outstanding
which was made on the earliest date as among all remaining
outstanding Advances; (iii) and continuing on in like manner
until all outstanding Advances have been paid in full.”
(d) The following paragraph is hereby added as a new Paragraph
9(j) to the Loan Agreement:
“9(j) Acknowledgments and Agreements Regarding Arboleda
Property Loan and Pledge of Equity interests in G&E Apartment
REIT Arboleda, LLC . The parties hereto agree and acknowledge
that: (i) the Arboleda Property Loan is being made to G&E
Apartment REIT Arboleda, LLC by PNC ARCS, (ii) PNC ARCS
intends to sell the Arboleda Property Loan to Fannie Mae, 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
Arboleda, 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 Arboleda, LLC, and (v) Fannie Mae, as the
lender under the Arboleda Property Loan, has not agreed to permit
the pledge by the Pledgor of any interest in G&E Apartment REIT
Arboleda, LLC other than the pledge of the “Class B
Interest.”
(e) Paragraph 10 of the Loan Agreement is hereby amended
by amending and restating the following defined terms in their
entirety:
" Aggregate Availability ” shall mean, as of any date
of determination, (a) from the date of the making of the
Arboleda Advance until the Arboleda Advance Overage has been repaid
in full, the sum of (i) $10,000,000.00 and (ii) the
outstanding principal amount of the Arboleda Advance Overage
(provided, that the sum of (i) and (ii) shall not exceed
$16,250,000.00 at any time), and (b) after such time as the
Arboleda Advance Overage has been repaid in full, the lesser of (i)
$10,000,000.00 and (ii) the difference of (A) ninety
percent (90%) of the aggregate Appraised Value for all the
Properties (other than the Arboleda Property) as of such date,
minus (B) the aggregate outstanding principal amount of
the Property Loans (other than the Arboleda Property Loan) as of
such date.
" Facility Interest Expense ” shall mean, for any
period, that portion of Interest Expense attributable solely to
interest due and payable on the credit facility evidenced by the
Loan Documents; provided, that for the purpose of this definition,
the principal amount outstanding under this Agreement at any time
shall be deemed to be the sum of (i) $10,000,000.00 plus
(ii) the outstanding principal amount, if any, of the Arboleda
Advance Overage at such time.
" LIBOR Rate Loan ” shall mean the Loan, or any
portion thereof, at such time as it is bearing interest at the
Applicable LIBOR Rate.
" LIBOR Spread ” shall mean (i) solely with
respect to (A) the Myrtles and Heights Advance and
(B) that portion of the Arboleda Advance which is not bearing
interest at the fixed rate provided for in Paragraph 1(b) above,
five percent (5.00%), and (b) otherwise, four and fifty one
hundredths percent (4.50%).”
" Prime Rate Loan ” shall mean the Loan, or any
portion thereof
|
