EX-10.12






THIRD AMENDMENT TO AND WAIVER OF LOAN AGREEMENT




THIS THIRD AMENDMENT TO AND WAIVER OF LOAN AGREEMENT (this “Amendment”), executed and
delivered as of June 26, 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 and by that certain Second Amendment to and Waiver of Loan Agreement dated
as of March 31, 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
$16,250,000.00, 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.), (i) a multi-family property known as Creekside Crossing
Apartments, located in Lithonia, Georgia, which property will be owned by G&E Apartment REIT
Creekside Crossing, LLC, a Delaware limited liability company (the “Creekside Crossing_Property
Owner”), and (ii) a multi-family property known as Kedron Village Apartments, located in
Peachtree City, Georgia, which property will be owned by G&E Apartment REIT Kedron Village, LLC, a
Delaware limited liability company (the “Kedron Village Property Owner” and, together with
the Creekside Crossing Property Owner, the “New Property Owners”). 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) neither the Arboleda Advance Overage nor the Creekside and
Kedron Advance Overage, once repaid in accordance with the terms hereof, may 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 Creekside
and Kedron Advance Overage shall bear interest at a fixed rate equal to eighteen
percent (18%) 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 (A) the proceeds
of the Loan made available to the Company pursuant to the Arboleda Advance, or to
the Arboleda Property Loan, or (B) the proceeds of the Loan made available to the
Company pursuant to the Creekside and Kedron Advance, or to the Creekside Property
Loan or the Kedron 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 Creekside and Kedron Advance
Overage, until the Creekside and Kedron 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) 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, that notwithstanding the foregoing prohibition, the Pledgor
shall be permitted to incur Indebtedness in the form of an unsecured loan in the
maximum principal amount of $10,000,000.00 from NNN Realty Advisors, Inc. a Delaware
corporation (the “NNN Advisor Loan”) so long as (i) the NNN Advisor
Loan remains at all times unsecured, (ii) the NNN Advisor Loan is expressly
subordinated by the terms of its constituent documents to the Loan, the terms of
such subordination to be reasonably acceptable to the Lender, and (iii) at any time
at which any principal amount is outstanding under the Loan, the Pledgor shall not
make any repayment of any principal amount outstanding under the NNN Advisor Loan,
whether from Equity Proceeds or from any other source of funding”



(e) The following paragraph is hereby added as a new Paragraph 9(k) to the Loan Agreement:



“9(k) Acknowledgments and Agreements Regarding Creekside Property Loan and
Kedron Property Loan and Pledge of Equity interests in G&E Apartment REIT Creekside
Crossing, LLC and G&E Apartment REIT Kedron Village, LLC. The parties hereto
agree and acknowledge that: (i) the Creekside Property Loan is being made to G&E
Apartment REIT Creekside Crossing, LLC by Capmark Bank, (ii) Capmark Bank intends to
sell the Creekside Property Loan to Freddie Mac, who will become the lender
thereunder, (iii) the Kedron Property Loan is being made to G&E Apartment REIT
Kedron Village, LLC by Capmark Bank, (iv) Capmark Bank intends to sell the Kedron
Property Loan to Freddie Mac, who will become the lender thereunder, (v) 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 each of G&E
Apartment REIT Creekside Crossing, LLC and G&E Apartment REIT Kedron Village, LLC
(as the term “Class B Interest” is defined in the operating agreement of each such
limited liability company), (vi) the “Class B Interest” so pledged constitutes a
forty-nine percent (49%) interest in each of G&E Apartment REIT Creekside Crossing,
LLC and G&E Apartment REIT Kedron Village, LLC, and (vii) Freddie Mac, as the lender
under each of the Creekside Property Loan and the Kedron Property Loan, has not
agreed to permit the pledge by the Pledgor of any interest in either G&E Apartment
REIT Creekside Crossing, LLC or G&E Apartment REIT Kedron Village, LLC, other than
the pledge of the “Class B Interest” in each such limited liability company.”



(f) 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 Creekside and Kedron Advance until the
Creekside and Kedron Advance Overage has been repaid in full, the sum of (i)
$10,000,000.00 and (ii) the outstanding principal amount of the Creekside and Kedron
Advance Overage (provided, that the sum of (i) and (ii) shall not exceed
$16,000,000.00 at any time), and (b) after such time as the Creekside and Kedron
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, the Creekside Property and the
Kedron Property) as of such date, minus (B) the aggregate outstanding
principal amount of the Property Loans (other than the Arboleda Property Loan, the
Creekside Property Loan and the Kedron Property Loan) as of such date.



“Arboleda 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 Arboleda Advance; provided, that the Arboleda Advance
Overage, and the Arboleda Advance, have been repaid in full and the Arboleda Advance
Overage may not be reborrowed.



"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 Creekside and Kedron Advance Overage at such time.



"LIBOR Spread” shall mean five and fifty one hundredths percent
(5.50%).



“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 and to any other
Person which may become the fee owner of a Property on or after the date hereof.



(g) Paragraph 10 of the Loan Agreement is hereby amended by adding the following new
definitions in appropriate alphabetical order:



"Creekside and Kedron Advance” means that certain Advance in an
aggregate principal amount not to exceed $16,000,000.00 made to the Company on or
following June 26, 2008 to finance the acquisition of (i) a multi-family property
known as Creekside Crossing Apartments, located in Lithonia, Georgia, which Property
shall be owned by G&E Apartment REIT Creekside Crossing, LLC and (ii) a multi-family
property known as Kedron Village Apartments, located in Peachtree City, Georgia,
which Property shall be owned by G&E Apartment REIT Kedron Village, LLC.



"Creekside and Kedron Advance Overage” means that portion of the
outstanding principal amount of the Loan which is in excess of $10,000,000.00 as a
result of the making of the Creekside and Kedron Advance; provided that such
excess amount shall not exceed $6,000,000.00 at any time.



"Creekside Property” means that certain multi-family property known as
Creekside Crossing Apartments, located in Lithonia, Georgia, which Property shall be
owned by G&E Apartment REIT Creekside Crossing, LLC.



"Creekside 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 Creekside Crossing, LLC , which loan is secured by a first priority lien on the
Creekside Property.



“Kedron Property” means that certain multi-family property known as
Kedron Village Apartments, located in Peachtree City, Georgia, which Property shall
be owned by G&E Apartment REIT Kedron Village, LLC.



“Kedron 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 Kedron Village, LLC, which loan is secured by a first priority lien on the
Kedron 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
each of the New Property Owners 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 each of
the New Property Owners is a party specifically permit and consent to the pledge of one hundred
percent (100%) of the Ownership Interests in such New Property Owner in favor of Lender;
provided, that not less than forty-nine (49%) of the Ownership Interests in each of the
New Property Owners shall be pledged in favor of Lender pursuant to and in accordance with the
terms of Paragraph 6(i) of the Loan Agreement, and all other provisions of Paragraph 6(i) of the
Loan Agreement shall apply. For avoidance of doubt, this waiver shall apply solely with respect
to the Proposed Acquisition and shall not apply to the acquisition of any Property or of any
Property Owner after the date of this Amendment.



Section 3. Amendment to Schedules to Loan Agreement. Each of Schedule II and
Schedule 5(d) to the Loan Agreement are hereby amended and restated in their
entireties as set forth on Exhibit A to this Agreement.



Section 4. Conditions Precedent to Closing of Amendment. In addition to such other
requirements as may be set forth in the Loan Documents, the Lender’s obligation to close this
Amendment (the “Closing”), and to continue to make the Loan available, is subject to
satisfaction of the following conditions:




(a) Executed Documents. Delivery to the Lender of a duly executed counterpart
of (i) this Agreement from the Company, and (ii) the Pledge Agreement, as amended and
restated as of the date hereof, from the Pledgor.




(b) Officer’s Certificates. Delivery to the Lender of:




(1) a certificate of the Secretary or Assistant Secretary of the Company
certifying (i) that the Articles of Incorporation and Bylaws or Certificate of
Limited Partnership and Limited Partnership Agreement, as applicable, of each Credit
Party previously delivered to the Lender remain accurate and complete and in full
force and effect, (ii) that the Resolutions of each Credit Party previously
delivered to the Lender remain in full force and effect and authorize the execution
and delivery of this Amendment and the amended and restated Pledge Agreement, as
applicable, and the consummation of the transactions contemplated hereby and thereby
and (iii) as to such other items and conditions as the Lender may reasonably
request, and otherwise in form and content reasonably acceptable to the Lender; and




(2) a certificate in form and substance satisfactory to the Lender from a
Responsible Officer of the Company certifying that as of the date hereof and after
giving effect to the Advance requested in connection with the Proposed Acquisition,
each Credit Party is in compliance with the covenants set forth in Paragraphs 6 and
7 of the Loan Agreement.




(c) Good Standing Certificates. Delivery to the Lender of (i) a certificate of
the Secretary of State of the State of Maryland, certifying as of a recent date that the
Company is in good standing and (ii) a certificate of the State Corporation Commission of
the Commonwealth of Virginia, certifying as of a recent date that the Pledgor is in good
standing.




(d) Property Loan Documents and Organization Documents. Delivery to the Lender
of (i) the Property Loan Documents executed in connection with the acquisition of the
Property owned by each of the New Property Owners and (ii) the organizational documents of
each of the New Property Owners, in each case, which documents shall be on terms and
conditions reasonably satisfactory to the Lender.




(e) Opinion of Counsel. Delivery to the Lender of an opinion of counsel to the
Company and the Pledgor, in form and content reasonably satisfactory to the Lender.




(f) Payment of Fees, Costs and Expenses. Payment by the Company of (i) a fee
in connection with the increase in Aggregate Availability provided hereunder, such fee to be
in an amount equal to one-half of one percent (0.50%) of the Creekside and Kedron Advance
Overage as of the date of funding of the Creekside and Kedron Advance, which fee shall be
fully earned as of the date of Closing and shall be non-refundable, (ii) any and all other
fees, if any, due the Lender or otherwise due and payable under the terms of the Loan
Documents and (iii) all costs, expenses, and fees (including without limitation, the
Lender’s attorneys’ fees and expenses) associated with this Amendment or otherwise due and
payable.




(g) No Event of Default. No Event of Default shall exist under the Loan
Documents, nor would occur as a result of the execution and performance of this Amendment to
the Loan Agreement, as amended hereby.




(h) Representations and Warranties. The representations and warranties
contained in the Loan Documents shall be true and correct in all material respects as of the
date of Closing, except for those representation and warranties which relate to a specific
date, in which case such representations and warranties shall be true and correct in all
material respects as of such date.




(i) Additional Documentation. Delivery to Lender of such other documentation or
information as may reasonably be required by the Lender and its counsel.



Section 5. Representations, Warranties and Covenants. The Company hereby acknowledges
and agrees that:




(a) Loan Balance. As of the Closing date, the outstanding aggregate principal
amount of the Loan is $0.00.




(b) Myrtles and Heights Advance and Arboleda Advance. The Myrtles and Heights
Advance, the Arboleda Advance, and the Arboleda Advance Overage (as such term is defined in
the Loan Agreement prior to its modification pursuant to this Amendment) have been repaid in
full, and the Arboleda Advance Overage may not be reborrowed.




(c) Aggregate Availability. Following the funding of the requested Advance,
the aggregate principal amount outstanding under the Loan Documents shall not exceed the
Aggregate Availability.




(d) Reaffirmation of Representations, Warranties and Covenants. The Company
reaffirms and remakes as of the date hereof (taking into consideration the effects of the
transactions contemplated in this Amendment), each of the representations and warranties
contained in the Loan Agreement, as amended hereby, as being true and correct in all
respects. The Company agrees that until payment in full of all Obligations, the Company
shall comply with all covenants as set forth in the Loan Agreement, as amended hereby.



Section 6. Miscellaneous.




(a) Representations and Warranties Accurate; Compliance; No Material Adverse
Effect. Each of the representations and warranties of the Credit Parties contained in
the Loan Documents, as such Loan Documents may have been amended, modified, replaced,
restated, renewed or extended from time to time, including by this Amendment and by any
documents, instruments or agreements executed in connection with the Amendment, is true,
accurate and complete on and as of the date hereof with the same effect as though such
representations and warranties had been made on and as of the date hereof (except for
representations and warranties which relate to a specific date, in which case such
representations and warranties shall be true, accurate and complete as of such date). Each
Credit Party has performed in all material respects all its obligations under the Loan
Documents, as so amended, modified, replaced, restated, renewed or extended, required to be
performed by such Credit Party at or prior to the date hereof. Each Credit Party is in
compliance in all material respects with all the terms and provisions set forth in the Loan
Documents, as so amended, modified, replaced, restated, renewed or extended, on its part to
be observed and performed. No proceedings are pending or, to the Company’s knowledge,
threatened which might materially adversely affect the ability of the any Credit Party to
perform (a) its obligations under the Loan Documents, as amended, modified, replaced,
restated, renewed or extended as set forth above, or (b) its contractual obligations with
any other person or entity.




(b) No Event of Default. The Company hereby represents and warrants that as of
the effective date hereof, there exists no Event of Default, and no Credit Party has any
claim or cause of action against the Lender arising out of or relating in any way to the
Loan Agreement (as amended hereby) or the other Loan Documents, and each Credit Party hereby
waives and releases any and all claims or causes of action which such Credit Party may have
as of the effective date hereof against the Lender arising out of or relating in any way to
the Loan Agreement (as amended hereby) or the other Loan Documents.




(c) Limited Effect. Except as expressly provided herein, the Loan Agreement
and each other Loan Document shall continue to be, and shall remain, in full force and
effect. Except as expressly provided herein, this Amendment shall not be deemed (i) to be a
waiver of, or consent to, or a modification or amendment of, any other term or condition of
the Loan Agreement or any other Loan Document or (ii) to prejudice any right or rights which
the Lender may now have or may have in the future under or in connection with the Loan
Agreement or the other Loan Documents or any of the instruments or agreements referred to
therein, as the same may be amended or modified from time to time. References in the Loan
Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”,
“herein”, and “hereof”) and in any Loan Document to the “Loan Agreement” shall be deemed to
be references to the Loan Agreement as modified hereby.




(d) Counterparts. This Amendment may be executed in any number of counterparts
by the different parties hereto on separate counterparts, each of which counterparts when
executed and delivered shall be an original, but all of which together shall constitute one
and the same instrument. A complete set of counterparts shall be lodged with the Company
and the Lender.




(e) Governing Law. This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed by the laws of the
State of North Carolina.




(j) Electronic Transmission. A facsimile, telecopy or other reproduction of
this Amendment may be executed by one or more parties hereto, and an executed copy of this
Amendment may be delivered by one or more parties hereto by facsimile or similar
instantaneous electronic transmission device pursuant to which the signature of or on behalf
of such party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute an original of this Amendment as well as any facsimile, telecopy or
other reproduction hereof.




(k) WAIVER OF JURY TRIAL. THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AMENDMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AMENDMENT.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the undersigned have
executed this Amendment as of the day and year first above written.




COMPANY:




GRUBB & ELLIS APARTMENT REIT, INC. (formerly known as
NNN Apartment REIT, Inc.), a Maryland corporation




By: /s/ Gus G. Remppies

Name: Gus G. Remppies

Title: Chief Investment Officer





LENDER:




WACHOVIA BANK, NATIONAL ASSOCIATION, a national




banking association




By: /s/ Chris B. Troutman

Name: Chris Troutman

Title: Managing Director





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