SECOND AMENDMENT TO CONVERSION
AND NOTE AGREEMENT
THIS SECOND AMENDMENT TO CONVERSION AND NOTE AGREEMENT ('Second Amendment") is
made and entered into effective as of August 13, 1997, by and among GABLES
REALTY LIMITED PARTNERSHIP, a Delaware limited partnership ("GRLP"),
GABLES-TENNESSEE PROPERTIES, a Tennessee general partnership ("GTP"), (GRLP and
GTP being sometimes collectively referred to herein as "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").
RECITALS:
Reference is here made to that certain Conversion and Note Agreement dated as of
December 29, 1995 by and among GRLP, GTP, the Company, and the Lender, as
amended by that certain First Amendment to Conversion and Note Agreement dated
as of December 30, 1996 (as so amended, the "Existing Agreement"). Words with
initial capital letters used but not defined herein shall have the respective
meanings ascribed to them in the Existing Agreement.
The Loan has been fully dispersed and Borrower intends to proceed with the
exercise of the Conversion Option. Company requested certain changes to the
Existing Agreement and, subject to the terms and provisions hereof, Lender has
agreed to said changes. Borrower, Company and Lender execute and deliver this
Second Amendment to effectuate their agreement and understandings.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein and in the Existing Agreement, Borrower, Company, and Lender
hereby agree as follows:
1. Section 4.01(k) of the Existing Agreement is hereby amended by deleting the
text thereof in its entirety and substituting therefor the following:
"(k) Assets of Company. The Company's only assets (other than cash held for
distribution) shall, subject to the provisions of this subparagraph (k), at all
times remain its ownership interest in Borrower, its indirect ownership interest
in assets held by Borrower or a wholly owned Subsidiary of Borrower, its
existing 100% ownership interest in Candle Creek, Inc., a Georgia corporation
(now known as GRT Villas Gen Par, Inc.), its 100% ownership interest in
Candlewood Gen Par, Inc., its 100% ownership interest of Gables GP, Inc., and
its one percent (1%) interests (held through Gables GP, Inc.) in Pin Oak Green
and Pin Oak Apartments, respectively (each a Texas general partnership). Except
as provided below in this subparagraph (k), all assets acquired, owned or held
after the date of this Agreement shall be held by Borrower, or by a wholly owned
Subsidiary of Borrower. Each Partnership shall at all times remain a
Consolidated Subsidiary of the Company. GRLP shall at all times retain at least
a 99% general partnership interest in GTP. The Company shall have the right to
acquire other assets (i.e. other than those listed in the first sentence of this
subparagraph (k)) provided that the Total Book Capitalization of the Company
shall not, either before or after giving effect to such acquisition, exceed 120%
of the Total Book Capitalization of the Borrower."
2. The parties hereto acknowledge and agree that, notwithstanding the
provisions of Section 2.01 of the Existing Loan Agreement, which among other
things require that the Conversion Date shall be the first day of a calendar
month, in accordance with Borrower's request the Conversion Date shall instead
occur as soon as practicable after the conditions precedent set forth in Section
2.02 of the Existing Agreement have been satisfied. Borrower has further
requested that the Conversion Date not be delayed until the completion of
documentation and recordation of the release of the mortgages, assignments and
security interests securing the Loan, and Borrower has assumed responsibility
for preparing and recording such documentation. Accordingly, the occurrence of
the Conversion Date prior to the completion of such matters shall not constitute
a breach of any obligation of Lender in connection with such matters, provided
that Lender shall continue to cooperate reasonably with Borrower in connection
with such matters.
3. Except as amended hereby, the Existing Agreement shall remain in full
force and effect. The Existing Agreement, as amended by this Second Amendment,
and all rights, powers, and remedies created thereby or thereunder is hereby
ratified and confirmed in all respects. This Second Amendment shall be governed
by and construed in accordance with 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. This Second
Amendment may be executed in multiple counterparts by the parties hereto, each
of which when so executed and delivered shall constitute an original, but all
such counterparts taken together constituting one and the same instrument.
GABLES REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Gables GP, Inc., a Texas corporation,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title: Vice President
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GABLES-TENNESSEE PROPERTIES,
a Tennessee general partnership
By: Gables GP, Inc., a Texas corporation,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title: Vice President
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GABLES RESIDENTIAL TRUST, a Maryland REIT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Title: Vice President
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TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Director
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