FIRST AMENDMENT TO
CONVERSION AND NOTE AGREEMENT
This FIRST AMENDMENT TO CONVERSION AND NOTE AGREEMENT (this "Amendment") dated
as of December 30, 1996, among GABLES REALTY LIMITED PARTNERSHIP, a Delaware
limited partnership ("GRLP"), GABLES - TENNESSEE PROPERTIES, a Tennessee general
partnership ("GTP," and collectively with GRLP, "Borrower"), GABLES RESIDENTIAL
TRUST, a Maryland real estate investment trust (the "Company"), and TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation ("Lender");
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan Application and Commitment Agreement
dated June 14, 1995 (as amended from time to time, the "Commitment"), Lender has
agreed to make certain loans to Borrower subject to the terms and conditions set
forth in the Commitment (collectively, the "Loan");
WHEREAS, Borrower and Lender have entered into that certain Loan Agreement dated
December 29, 1995, with respect to the Loan (the "Loan Agreement");
WHEREAS, Borrower, Company and Lender have entered into that certain Conversion
and Note Loan Agreement dated December 29, 1995, with respect to the Loan (the
"Conversion Agreement");
WHEREAS, GRLP has executed and delivered to Lender two or more promissory notes
(collectively, "Note No.1"), dated December 29, 1995, in the aggregate amount of
$90,204,000 (the "First Disbursement"), which First Disbursement is secured by
first priority liens on those certain apartment projects commonly known as
Gables Great Hills, Austin, Texas ("Community A"), Gables Xxxxx Park, Houston,
Texas ("Community B"), Wall Street Gables, San Antonio, Texas ("Community C"),
Spalding Gables, Atlanta, Georgia ("Community D"), Roswell Gables, Atlanta,
Georgia ("Community E") and Dunwoody Gables, Atlanta, Georgia ("Community I");
WHEREAS, pursuant to the terms of the Loan Agreement, GTP has executed and
delivered to Lender a promissory note dated June 6, 1996 ("Note No. 2"), in the
aggregate amount of $13,481,000 (the "Second Disbursement"), which sum is
secured in part by a first priority lien on that certain apartment project and
commonly known as Brentwood Gables, Brentwood, Tennessee ("Community H");
WHEREAS, in accordance with the provisions and conditions of the Commitment and
the Loan Agreement, Lender exercised its option not to advance that portion of
the Loan in connection with those certain apartment projects commonly known as
Germantown Gables, Germantown, Tennessee ("Community F") and Gables at Daybreak,
Bartlett, Tennessee ("Proposed Community G");
WHEREAS, in lieu of the disbursement of that portion of the Loan secured in part
by Community F and Proposed Community G, Borrower has requested, and Lender has
agreed, that upon compliance with the terms of the Commitment and the Loan
Agreement, GRLP will execute and deliver to Lender a promissory note ("Note
No.3"), in the sum of $12,342,000.00 (the "Third Disbursement"), which Third
Disbursement will be secured in part by a first priority lien on that certain
apartment project commonly known as Gables Town Lake, Austin, Texas ("Community
G");
WHEREAS, upon the funding of the Third Disbursement, the total outstanding Loan
will be $116,027,000.00;
WHEREAS, Borrower and Lender desire to modify the Conversion Agreement to
reflect the deletion of Community F and Proposed Community G as collateral for
the Loan, the modification of the amount of the Third Disbursement and the total
amount of the Loan, and the substitution of Community G for Proposed Community G
as collateral for the Third Disbursement and the Loan;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. The amount of the Commitment is hereby capped at $116,027,000.00, which is
the aggregate principal amount of the Loan outstanding on the date hereof.
2. The sixth paragraph of the Conversion Agreement, which paragraph begins on
page 1 of the Conversion Agreement and reads as follows:
WHEREAS, pursuant to the terms of the Loan Agreement, GTP will execute and
deliver to Lender one or more promissory notes (collectively, "Note No. 3"), in
the aggregate amount of $27,004,000 (the "Third Disbursement"), which sum (or
some lesser amount) will be advanced by Lender to Borrower no later than
September 30, 1996, upon compliance by Borrower with the terms and conditions of
the Loan Agreement, which Third Disbursement will be secured in part by first
priority liens on those certain apartment projects commonly known as Germantown
Gables, Germantown, Tennessee ("Community F") and Gables at Daybreak, Bartlett,
Tennessee ("Community G");
is hereby deleted in its entirety, and substituted in lieu thereof is the
following new paragraph:
WHEREAS, upon compliance with the terms of the Loan Agreement, GTP will
execute and deliver to Lender a promissory note ("Note No. 3"), in the aggregate
amount of $12,342,000 (the "Third Disbursement"), which Third Disbursement will
be secured in part by first a priority lien on that certain apartment project
commonly known as Gables Town Lake, Austin, Texas ("Community ");
3. Section 2.01 of the Conversion Agreement, which section reads as follows:
Subject to and upon compliance with the provisions of this Agreement,
Borrower may, at its option, exercisable upon not less than ninety (90) days'
prior written notice to Lender, convert the Loan into an unsecured joint and
several obligation of Borrower to be evidenced by an unsecured note in the
aggregate amount of the then outstanding principal balances of those portions of
the Mortgage Notes allocated to Communities A, C, D, E, F, G and I ("Unsecured
Note No.1"), and an unsecured note in the aggregate amount of the then
outstanding principal balances of those portions of the Mortgage Notes allocated
to Communities B and H ("Unsecured Note No.2") (collectively, the "Unsecured
Notes"). The date on which such conversion (the "Conversion") shall become
effective, which shall be the first day of a calendar month, is hereinafter
referred to as the "Conversion Date." If such conversion does not become
effective due to the failure of Borrower to satisfy any condition precedent set
forth in Section 2.02 of this Agreement, Borrower shall not be precluded thereby
from subsequently attempting to exercise its Conversion Option in accordance
with this Article Two unless such failure is not susceptible of cure.
is hereby deleted in its entirety, and substituted in lieu thereof is the
following new section:
Subject to and upon compliance with the provisions of this Agreement,
Borrower may, at its option, exercisable upon not less than ninety (90) days'
prior written notice to Lender, convert the Loan into an unsecured joint and
several obligation of Borrower to be evidenced by an unsecured note in the
aggregate amount of the then outstanding principal balances of those portions of
the Mortgage Notes allocated to Communities A, C, D, E, G and I ("Unsecured Note
No. 1"), and an unsecured note in the aggregate amount of the then outstanding
principal balances of those portions of the Mortgage Notes allocated to
Communities B and H ("Unsecured Note No.2") (collectively, the "Unsecured
Notes"). The date on which such conversion (the "Conversion") shall become
effective, which shall be the first day of a calendar month, is hereinafter
referred to as the "Conversion Date." If such conversion does not become
effective due to the failure of Borrower to satisfy any condition precedent set
forth in Section 2.02 of this Agreement, Borrower shall not be precluded thereby
from subsequently attempting to exercise its Conversion Option in accordance
with this Article Two unless such failure is not susceptible of cure.
4. Paragraph (e) of Section 2.02 of the Conversion Agreement, which paragraph
reads as follows:
(e) On the Conversion Date, Borrower shall have executed and delivered to
Lender Unsecured Note No.1 in the aggregate amount of the then outstanding
principal balances of those portions of the Mortgage Notes allocated to
Communities X, X, X, X, X, X and I and Unsecured Note No.2 in the aggregate
amount of the then outstanding principal balances of those portions of the
Mortgage Notes allocated to Communities B and H, substantially in the form of
Exhibit B and Exhibit C hereto, respectively, appropriately completed.
is hereby deleted in its entirety, and substituted in lieu thereof is the
following new paragraph:
(e) On the Conversion Date, Borrower shall have executed and delivered to
Lender Unsecured Note No.1 in the aggregate amount of the then outstanding
principal balances of those portions of the Mortgage Notes allocated to
Communities A, C, D, E, G and I and Unsecured Note No.2 in the aggregate amount
of the then outstanding principal balances of those portions of the Mortgage
Notes allocated to Communities B and H, substantially in the form of Exhibit B
and Exhibit C hereto, respectively, appropriately completed.
5. GOVERNING LAW -This Amendment shall be governed and construed in accordance
with, and the rights of the parties shall be governed by, the laws of the
State of Georgia excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction
other than such State.
6. EXECUTION IN COUNTERPARTS - This Amendment may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed
by all, of the parties hereto.
7. SUCCESSORS AND ASSIGNS - All covenants and other agreements contained in
this Amendment by or on behalf of any of the parties hereto bind and inure
to the benefit of their respective successors and assigns whether so
expressed or not.
8. NO NOVATION - Except as amended by this Amendment, the provisions of the
Conversion Agreement remain in full force and effect in accordance with
their original tenor, and Borrower hereby ratifies and confirms each and
every provision of the Conversion Agreement, as amended by this Amendment.
This instrument constitutes an amendment to the Conversion Agreement and is
not a novation. The execution of this instrument does not and shall not
constitute a waiver of any rights or remedies to which Lender is entitled
pursuant to the Conversion Agreement, as amended by this Amendment, or any
other instrument or document evidencing, securing or otherwise relating to
the Loan.
9. REFERENCES TO CONVERSION AGREEMENT - Each reference to "the Agreement" or
"the Conversion Agreement" or words of similar import in the Conversion
Agreement or the other Loan Documents (as defined in the Conversion
Agreement), shall be deemed, unless the context otherwise requires, to be a
reference to the Conversion Agreement, as amended, supplemented and
otherwise modified hereby, and as the same may hereafter be amended,
supplemented or otherwise modified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
BORROWER:
GABLES REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership
By:Gables GP, Inc., a Texas corporation, its sole
general partner
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: CEO
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GABLES-TENNESSEE PROPERTIES,
a Tennessee general partnership
By: Gables GP, Inc., a Texas corporation,
a general partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
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Title: CEO
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COMPANY:
GABLES RESIDENTIAL TRUST, a Maryland REIT
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: CEO
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LENDER:
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Director
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