exv10w20



 





EXHIBIT 10.20




October 31,
2006




NNN Apartment REIT Holdings, L.P.

1606 Santa Rosa Road

Suite 109

Richmond, Virginia 23229

Attn: J. Jay Olander





			
	Re:	 	Credit Agreement dated as of October 31, 2006 among NNN Apartments REIT Holdings, L.P.
(“Borrower”), Wachovia Bank, National Association, as Agent, and the lenders from time to time a
party thereto (the “Credit Agreement”)




Gentlemen:




     Terms used herein but not otherwise defined herein shall have the meanings set forth in the Credit
Agreement. Borrower desires to obtain an advance of proceeds of the Revolving Loan and the
Mezzanine Loan to acquire property commonly known as Walker Ranch. Following such acquisition,
Borrower would not be able to comply with the covenants set forth in Section 9.1(a) (the Debt to
Total Asset Value Ratio), Section 9.1(b) (the Fixed Charge Coverage Ratio) and Section 9.1(c) (the
Implied Debt Service Coverage Ratio) (collectively, the “Financial Covenants”). Borrower has
requested that the Lenders provide a temporary waiver of the Financial Covenants.



     Based upon the foregoing and subject to the execution and delivery of this letter by Borrower,
Guarantors, Agent and the Lenders, this letter shall confirm that the Lenders shall waive
compliance with the Financial Covenants through the period ending December 31, 2006. Until such
time as the Borrower is able to comply with the Financial Covenants,
Borrower shall, except as
otherwise provided in the Mezzanine Loan Agreement, cause the net proceeds of any Equity Issuance
(gross proceeds less reasonable and customary costs of sale and issuance paid to Persons not
Affiliates of any Obligor) to be paid to the Agent under the Mezzanine Loan Agreement for the
account of the applicable lenders thereunder within three days of receipt of such proceeds as a
prepayment of the Mezzanine Loans.



     By execution hereof Borrower and Guarantors certify that each such Person is and will be in
compliance with all covenants under the Loan Documents after the execution and delivery of this
letter, and that no Default or Event of Default has occurred and is continuing.



     Except as hereinabove set forth, all terms, covenants and provisions of the Credit Agreement and
the other Loan Documents remain unaltered and in full force and effect and the parties hereto do
hereby expressly ratify and confirm the Credit Agreement and the other Loan Documents. Nothing in
this letter shall be deemed or construed to constitute, and there has not otherwise occurred, a
novation, cancellation, satisfaction, release, extinguishment, or substitution of the indebtedness
evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan
Documents. By execution hereof, Borrower and Guarantors acknowledge that the Agent and the Lenders
have made no agreement, and are in no way obligated, to grant any future extension, waiver,
indulgence or consent. This letter shall constitute a Loan Document. This letter may be executed in
any number of counterparts which shall together constitute but one and the same agreement.



 









 





NNN Apartment REIT Holdings, L.P.

October 31, 2006

Page 2




	 	 	 	 	 	 	 
	 	 	LENDERS:  
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
individually and as Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Cathy A. Casey	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Cathy A. Casey
	 	 	Title: Managing Director






	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:  
	 
	 	 	 	 	 	 	 	 
	 	 	NNN APARTMENT REIT HOLDINGS, L.P.,a Virginia
limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	NNN Apartment REIT, Inc., a Maryland corporation, its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Shannon K S Johnson	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Shannon K S Johnson	 	 
	 	 	 	 	Title: Chief Financial Officer	 	 






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NNN Apartment REIT Holdings, L.P.

October 31, 2006

Page 3




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NNN APARTMENT REIT, INC., a Maryland corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Shannon K S Johnson	 	 
	 	 	 	 	 	 	 
	 	 	Name: Shannon K S Johnson	 	 
	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	APARTMENT REIT WALKER RANCH, LP, a Texas limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Apartment REIT Walker Ranch GP, LLC, a
Delaware limited liability company, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	NNN Apartment REIT, Inc., a Maryland corporation, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Shannon K S Johnson	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Name: Shannon K S Johnson	 	 
	 	 	 	 	 	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	APARTMENT REIT WALKER RANCH, GP, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	NNN Apartment REIT Holdings, L.P., a Virginia limited partnership, its Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	NNN Apartment REIT, Inc., a Maryland corporation, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Shannon K S Johnson	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name: Shannon K S Johnson	 	 
	 	 	 	 	 	 	Title: Chief Financial Officer