FOURTH AMENDMENT TO
REDEMPTION AGREEMENT
THIS FOURTH AMENDMENT TO REDEMPTION AGREEMENT (this "AMENDMENT"), made
as of April 22, 2004 (the "EFFECTIVE DATE"), between POST APARTMENT HOMES, L.P.,
a Georgia limited partnership ("POST"), and JRC ACQUISITION CORPORATION, an
Illinois corporation ("JUPITER").
W I T N E S S E T H: That,
WHEREAS, Post and Jupiter entered into that certain Redemption Agreement
dated as of February 27, 2004, as amended by First Amendment to Redemption
Agreement dated as of March 30, 2004, as amended by Second Amendment to
Redemption Agreement dated as of April 16, 2004, and as amended by Third
Amendment to Redemption Agreement dated as of April 19, 2004 (as amended herein
called the "AGREEMENT"); and
WHEREAS, in accordance with the Agreement, Post and Jupiter desire to
amend certain terms and provisions of the Agreement as provided herein, and
ratify the Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the sum of TEN DOLLARS ($10.00), and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS. All capitalized terms utilized in this Amendment, and
not otherwise defined in this Amendment, have the meanings ascribed to such
capitalized terms in the Agreement.
2. CREDIT FOR ANTICIPATED CAPITAL EXPENDITURES. At Closing, Post shall
provide to Jupiter a credit against the Property Value in the amount of Seven
Million Two Hundred Fifty Thousand Dollars ($7,250,000.00) for capital
expenditures anticipated to be incurred by Jupiter following the Closing (the
"CAP EX CREDIT"). In partial consideration for Post's agreement to provide the
Cap Ex Credit, all matters of which Jupiter has knowledge relating to the
physical condition of the Property or otherwise relating to the Property as of
the Closing shall be deemed to be set forth on Post's Disclosure Statement and
all representations, warranties and agreements of Post set forth in the
Agreement shall be subject to such matters.
3. SECOND DEPOSIT OF OPTION MONEY. The Second Deposit of Option Money
shall be increased from One Million Dollars ($1,000,000.00) to Three Million
Dollars ($3,000,000.00), so that the total amount of Option Money shall be Five
Million Dollars ($5,000,000.00). Accordingly, Section 1.4(b) of the Agreement is
hereby restated in its entirety to read as follows:
"(b) If Jupiter does not exercise the right to terminate this
Agreement in accordance with Section 4.2 hereof, then Jupiter shall,
on or before April 26, 2004, deposit with such office of Escrow
Agent the additional sum of THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) (the "SECOND DEPOSIT") by wire transfer of
immediately available funds. Accordingly, the total amount of the
Option Money, consisting of the First Deposit and the Second
Deposit, shall be FIVE MILLION DOLLARS ($5,000,000.00)."
In addition, Section 1.7 of the Agreement is hereby amended to replace the
phrase "the sum of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00)" with the
phrase "the sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00)"
Jupiter shall deliver the Second Deposit to Escrow Agent in the manner
provided above on April 26, 2004. Jupiter has informed Post that it intends to
make such deposit by increasing the letter of credit currently held by Escrow
Agent. Jupiter agrees that it shall fax such increased letter of credit to Post
on April 23, 2004 and shall deposit the original of such increased letter of
credit with Escrow Agent on or before April 26, 2004.
4. EXERCISE OF CASH OPTION. The parties hereto have elected to close
the transaction contemplated herein under the Cash Option described in Section
2.8 of the Agreement, and the transaction shall not be a redemption. Taking into
account the Cap Ex Credit, the parties anticipate that the Cash Balance will be
ONE HUNDRED FIVE MILLION SIX HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS
($105,665,000.00) (i.e., $112,915,000 - $7,250,000.00 = $105,665,000.00). Post
and Jupiter hereby acknowledge and agree that this Amendment shall constitute
adequate notice under Section 2.10 that the parties have elected the Cash
Option. The parties hereto further acknowledge and agree that Section 2.9 of the
Agreement is no longer relevant and shall have no effect.
5. POST CORNERS PHASE II REPORT. The parties acknowledge that
environmental testing conducted on behalf of Jupiter at the Post Corners Project
has resulted in a finding that groundwater in one location at the Post Corners
Project contains tetrachloroethylene at levels requiring reporting to the State
of Georgia Environmental Protection Division (the "EPD") under the Regulations
implementing the Georgia Hazardous Site Response Act (the "CONTAMINATION"). The
parties believe such Contamination originated off-site at a dry cleaning
facility. Accordingly, Post agrees to file with the EPD a release notification
as soon as reasonably practical following the date of this Agreement, but in no
event later than May 8, 2004. The parties currently anticipate that following
such filing, the EPD will issue a determination that a release exceeding the
reportable quantity has not occurred, such determination to be subject to the
reasonable approval of Jupiter, GMAC Commercial Mortgage Affordable Housing
Division ("GMAC") and Fannie Mae, such approval not to be unreasonably withheld,
conditioned or delayed (as approved by Jupiter, GMAC and Fannie Mae, a "NO
ACTION LETTER"). As of the Closing Date the following shall occur:
(i) Jupiter shall acquire all the Projects other than the
Post Corners Project on the Closing Date (the "INITIAL CLOSING") in
accordance with and subject to the terms of this Agreement in the
same manner as if the Post Corners Project were not included in the
Property under this Agreement except that the following terms shall
apply:
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(A) The Property Value allocated to the other Projects
shall be TWO HUNDRED THREE MILLION ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($203,125,000.00) and the Cap Ex Credit
allocated to such other Projects shall be SIX MILLION THREE
HUNDRED SEVENTY-FIVE DOLLARS ($6,375,000.00). The Assumed
Project Financing at the Initial Closing shall not include the
Post Corners bond financing. At the Initial Closing, the
amount of the Other Assumed Debt or the Cash Balance, as
applicable, shall be reduced to take into account the
reduction in the Property Value.
(B) The Property Value allocated to the Post Corners
Project shall be TWENTY-EIGHT MILLION EIGHT HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS ($28,875,000.00) (the "POST
CORNERS VALUE") and the Cap Ex Credit allocated to the Post
Corners shall be EIGHT HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
($875,000.00) (the "POST CORNERS CAP EX CREDIT").
(C) At the Initial Closing, FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00) of the Option Money ("POST CORNERS
OPTION MONEY") . shall be retained by Escrow Agent as Option
Money for the purchase of the Post Corners Project.
(D) Jupiter shall acquire the Post Corners Project
from Post in the form of a purchase on the Post Corners
Closing Date.
6. CLOSING DATES. Section 5.1 of the Agreement is hereby amended and
restated in full as follows:
5.1 CLOSING TIME AND PLACE.
(a) The Initial Closing shall be held at the at the office of King &
Spalding LLP, 191 Peachtree Street, Atlanta, Georgia 30303 at 10:00 A.M.
(Atlanta, Georgia local time) on the earlier to occur of (i) the thirtieth
(30th) day following the date on which the Authorities have given such
consents as are necessary for the Assumption and Release Transaction in
accordance with this Agreement ("AUTHORITY CONSENTS") or (ii) June 30,
2004. (or such extended date as may be provided under other provisions of
this Agreement). At Closing, Post and Jupiter shall perform the
obligations set forth in, respectively, Section 5.2 and Section 5.3. The
Closing may be held at such other place or such earlier time and date as
Seller and Purchaser shall mutually approve in writing. The date on which
the Closing is scheduled to occur hereunder (or, if earlier, the date on
which Closing occurs) is sometimes referred to herein as the "CLOSING
DATE". Jupiter shall make diligent and commercially reasonable efforts to
obtain the Authority Consents as soon as practical and with the goal of
causing the Initial Closing Date to occur on or before June 1, 2004.
(b) The consummation of the transaction related to the Post Corners
Project (the "POST CORNERS CLOSING") shall be held at the office of King &
Spalding LLP, 191 Peachtree Street, Atlanta, Georgia 30303 at 10:00 A.M.
(Atlanta, Georgia local time) on
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the later of (i) the date that is seven (7) days after the Closing Date or
(ii) the earlier of (y) the date that is fifteen (15) days after the
issuance of a No Action Letter or (z) five (5) business days after Jupiter
provides written notice to Post of its election to close. If, however, the
Post Corners Closing has not occurred by September 24, 2004, then the
Agreement as it relates to the Post Corners Project shall terminate, the
Post Corners Option Money shall be refunded to Jupiter and neither Jupiter
nor Post shall have any other obligations under the Agreement with respect
to the Post Corners Project other than those provisions that expressly
survive termination. If the No Action Letter has not been obtained by
September 9, 2004, and Jupiter provides Post written notice of its
election to close, then if the No Action Letter is not obtained by the
date for the Post Corners Closing, Post shall be obligated to fund at
Closing the lesser of (i) one-half of Jupiter's premium for environmental
insurance on the Post Corners Project or (ii) Fifty Thousand Dollars
($50,000.00); provided, however, Post shall be furnished with reasonable
evidence of such premium prior to the Post Corners Closing, and Jupiter
shall be obligated to fund the balance of such premium at the Post Corners
Closing. If the No Action Letter has not been obtained by September 9,
2004, and Jupiter provides Post written notice of its election to
terminate this Agreement with respect to the Post Corners Project, then
the Post Corners Option Money shall be refunded to Jupiter and neither
Jupiter nor Post shall have any other obligations under the Agreement with
respect to the Post Corners Project other than those provisions that
expressly survive termination.
7. POST'S TAX DEFERRED EXCHANGE. Post may convey the Post Corners
Project (and only the Post Corners Project) as part of a tax deferred exchange
for the benefit of Post pursuant to Section 1031 of the Internal Revenue Code.
Post may assign all contract rights and obligations related to Post Corners
Project under the Agreement to a qualified intermediary, as part of, and in
furtherance of, such tax deferred exchange. JUPITER agrees to assist and
cooperate in such exchange for the benefit of Post at no cost, expense or
liability TO Jupiter and without reduction or alteration of the rights of
Jupiter under this Agreement and with respect to Post; and Jupiter further
agrees to execute any and all documents (subject to the reasonable approval of
JUPITER'S legal counsel) as are reasonably necessary in connection with such
exchange at Post's sole expense provided that Jupiter shall not be required to
undertake any material liability or obligation in so doing and provided that
such exchange does not extend the Closing Date. As part of such exchange, Post
shall convey the Post Corners Project directly to Jupiter and Jupiter shall not
be obligated to acquire or convey any other property as part of such exchange.
Post shall indemnify, hold harmless and defend Jupiter from and against any and
all claims, demands, causes of action, liabilities, losses, costs, damages and
expenses (including reasonable attorneys' fees and expenses and court costs
incurred in defending any such claim or in enforcing this indemnity) that may be
incurred by Jupiter and arising out of Jupiter's participation in such exchange
for the benefit of Post. Notwithstanding the foregoing, should Post fail to
effect a tax deferred exchange as contemplated in this Section 7 for any reason,
then the sale by Post of the Post Corners Project shall be consummated in
accordance with terms and conditions of this Amendment just as though the
provisions of this Section 7 had been omitted from this Amendment, except that
Jupiter shall be reimbursed and indemnified from resulting costs and expenses as
provided in this Section. Nothing contained in this Section 7 shall release Post
of any of its obligations or liabilities under the Agreement or this Amendment,
whether arising before, at or after Closing, nor shall anything contained in
this Section 7 impose any liability or obligation on Jupiter with respect to the
tax consequences of this transaction to Post.
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8. ALTERNATIVE TRANSACTION STRUCTURE. In partial consideration for
Post's agreement to provide the Cap Ex Credit, Jupiter agrees that at Post's
request Jupiter shall cooperate with Post fully and in good faith to effect
Jupiter's acquisition of the Property in an alternative transaction structure as
designated by Post which allows Post to redeem the Preferred Units either at
Closing or thereafter (the "ALTERNATIVE TRANSACTION STRUCTURE"). Without
limitation, the Alternative Transaction Structure may require Jupiter to
purchase the Property by assuming the Assumed Project Financing, delivering a
promissory note to Post in an amount approximately equal to the liquidation
value of the Preferred Units, and paying cash to Post for the balance of the
Property Value. As collateral for such promissory note, the Alternative
Transaction Structure may require Jupiter to deliver to Post a letter of credit
in the amount of the note. In connection with the Alternative Transaction
Structure, Jupiter shall not be required to pay transaction costs in excess of
those currently contemplated under the Agreement (such as, for example, a letter
of credit fee) but might be compensated by Post for any increased transaction
costs. Similarly, in connection with the Alternative Transaction Structure,
Jupiter shall not be required to incur material risk or exposure (such as tax
risk) greater than currently contemplated in the Agreement.
9. NO OTHER CHANGES. Except as herein expressly amended or otherwise
provided, each and every term, condition, warranty and provision of the
Agreement remains in full force and effect, and such are hereby ratified,
confirmed and approved by the parties to this Amendment. Without limitation on
the foregoing, Post and Jupiter agree that the Closing Date is not extended or
affected by this Amendment.
10. MISCELLANEOUS. The miscellaneous provisions of Article 12 of the
Agreement, to the extent applicable to this Amendment, shall govern the
execution, construction, interpretation and enforcement of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the Effective Date.
POST:
POST APARTMENT HOMES, L.P.,
a Georgia limited partnership
By: Post GP Holdings, Inc.,
a Georgia corporation,
sole General Partner
By: __________________________
Name: ________________________
Title: _______________________
Date of Execution: April 22, 2004
THIS IS A SIGNATURE PAGE TO, AND MAY BE ATTACHED TO A MASTER COUNTERPART
OF, THE FOURTH AMENDMENT TO REDEMPTION AGREEMENT, DATED AS OF APRIL 22,
2004, BETWEEN POST APARTMENT HOMES, L.P. AND JRC ACQUISITION CORPORATION,
WITH RESPECT TO POST CANYON(R) APARTMENTS, POST CHASE(R) APARTMENTS, POST
CORNERS(R) APARTMENTS, POST COURT(R) APARTMENTS, POST LANE(R) APARTMENTS,
AND POST MILL(R) APARTMENTS IN METROPOLITAN ATLANTA, GEORGIA, AND POST
LAKE(R) APARTMENTS IN METROPOLITAN ORLANDO, FLORIDA.
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
JUPITER:
JRC ACQUISITION CORPORATION, an
Illinois corporation
By: ________________________________
Name: _____________________________
Title: ______________________________
Date of Execution: April 22, 2004
THIS IS A SIGNATURE PAGE TO, AND MAY BE ATTACHED TO A MASTER COUNTERPART
OF, THE FOURTH AMENDMENT TO REDEMPTION AGREEMENT, DATED AS OF APRIL 22,
2004, BETWEEN POST APARTMENT HOMES, L.P. AND JRC ACQUISITION CORPORATION,
WITH RESPECT TO POST CANYON(R) APARTMENTS, POST CHASE(R) APARTMENTS, POST
CORNERS(R) APARTMENTS, POST COURT(R) APARTMENTS, POST LANE(R) APARTMENTS,
AND POST MILL(R) APARTMENTS IN METROPOLITAN ATLANTA, GEORGIA, AND POST
LAKE(R) APARTMENTS IN METROPOLITAN ORLANDO, FLORIDA.
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