Exhibit 10.(a)
ASSET CONTRIBUTION AGREEMENT
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THIS AGREEMENT is made as of August 27, 1997 by and between XXXXX
XXXXXXXXXX RESIDENTIAL, L.P., a Delaware limited partnership ("EWOP"), and ERP
OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership ("ERP").
R E C I T A L S:
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A. To induce the general partner of ERP to enter into an agreement of
merger with the general partner of EWOP pursuant to the Agreement and Plan of
Merger dated August 27, 1997 between the general partners of ERP and EWOP (the
"Merger Agreement"), EWOP desires to contribute to ERP, at the option of ERP,
all of its assets pursuant to the terms and conditions of this Agreement.
Section 5.18 of the Merger Agreement provides certain assurances given to induce
EWOP to enter into this Agreement.
B. EWOP intends to dissolve after the contribution of its assets to ERP.
A G R E E M E N T S:
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In consideration of the foregoing premises and the respective agreements,
covenants and obligations herein contained and other good and valuable
consideration, the parties agree as follows:
1. Contribution. Subject to Section 6 of this Agreement, EWOP hereby
agrees to contribute all of its assets (the "Contributed Assets"), subject to
its liabilities (including liabilities which are non-recourse in nature), to ERP
in exchange for units of partnership interest in ERP of the type and in the
amount set forth in Sections 3 hereof.
The aforesaid contribution is made without any representation or warranty,
express or implied, all of which are expressly disclaimed.
2. Assumption of Liabilities. Subject to Section 6 of this Agreement, ERP
shall assume the liabilities of EWOP (other than liabilities which are non-
recourse in nature) and agrees to pay and perform such liabilities when due and
when required to be performed. Such liabilities include, without limitation, all
obligations under the Indenture dated as of April 2, 1997 between EWOP and Bank
One, Columbus, N.A., as trustee. The liabilities assumed pursuant to this
Section are referred to collectively as the "Assumed Liabilities".
3. Consideration for Contribution to ERP. Solely in exchange for the
contribution of the Contributed Assets, EWOP shall receive such number of common
units of ERP as shall
equal the number of EWOP units of partnership interest issued and outstanding
immediately prior to the effective time of the Contribution multiplied by the
Exchange Ratio (as defined in the Merger Agreement). No fractional ERP Units
shall be issued in connection with the contribution by any Contributor. Instead,
at the time of the effectiveness of the Contribution, EWOP shall be paid an
amount in cash equal to the Closing Price (as hereinafter defined) multiplied by
the fraction of a ERP Unit to which EWOP would otherwise be entitled. For
purposes of this Paragraph 2, "Closing Price" shall mean the unweighted average
closing price of a share of Equity Residential Properties Trust ("EQR") common
stock as reported on the New York Stock Exchange (Composite Tape) for the five
(5) trading days preceding the Effective Time (as defined in the Merger
Agreement), and "Trading Days" shall mean any day on which the EQR common shares
of beneficial interest is traded on the New York Stock Exchange and reported on
its Composite Tape.
4. Transfer Documents. At the Closing (as defined herein), EWOP shall
execute a Warranty Deed for each of the EWR Properties (as defined in the Merger
Agreement) owned by it and a general assignment and assumption agreement, in
form and substance satisfactory to ERP, as assignor, for EWR Properties owned by
it and ERP shall sign such general assignment and assumption agreement as
assignee.
5. Additional Agreements. EWOP and ERP shall execute, deliver (or cause
to be executed or delivered) and record, all agreements, documents and
instruments necessary or appropriate to effect the contribution and assumption
contemplated hereby, including any assignments, assumptions, supplemental
indentures, deeds, agreements or instruments.
6. Limitation on Contribution. To the extent any assignment, transfer,
conveyance or delivery of a Contributed Asset or the assumption of an Assumed
Liability shall violate or cause an event of default under any agreement between
EWOP or ERP on one hand, and any other person on the other hand, such asset
shall not be contributed or such liability shall not be assumed pursuant to the
terms of this Agreement and the parties shall cooperate to effect the
contributions promptly following the Effective Time hereof as practicable.
Nothing herein shall be deemed to require the contribution of any asset or the
assumption of any liability which by its term or operation cannot be assigned,
transferred, conveyed or delivered, provided the parties shall use their
reasonable efforts to seek or obtain any such approvals as soon as practicable
after the date hereof. In the event any contribution of an asset has not been
consummated on the date hereof, EWOP shall continue in existence and hold such
asset in trust for the use and benefit of ERP and shall take any other action as
reasonably requested by ERP, as applicable, in order to place ERP, as
applicable, as reasonably possible, in the same position that would have existed
had such Contributed Asset been contributed immediately following the Effective
Time as contemplated by this Agreement. If any assumption of a liability has not
been consummated on the date hereof, then ERP which was to assume such liability
shall reimburse the Contributor for all amounts paid by the Contributor with
respect to such liability until such liability has been assigned to ERP, as the
case may be. As and when any such Contributed Asset or Assumed Liability is able
to be
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assigned, transferred, conveyed or delivered, as the case may be, such
contribution and assumption shall be effective forthwith. The parties agree
that, as of the Closing, ERP shall be deemed to have acquired complete and sole
beneficial ownership of all Contributed Assets to be contributed to it
hereunder, together with all rights, powers and privileges incident thereto and
all duties and obligations and responsibilities incident thereto including,
without limitation, the liabilities assumed by ERP hereunder. The failure to
contribute any Contributed Asset hereunder shall not reduce the consideration to
be received by EWOP.
7. Lack of Representation. Each of the parties hereto understands and
agrees that no party hereto is, in this Agreement or any other agreement or
document contemplated by this Agreement or otherwise, making any representation
or warranty whatsoever including, without limitation, as to title, value or
legal sufficiency, except that title to all real estate included in the
Contributed Assets is warranted and shall be conveyed by warranty deeds.
8. Further Assurances. Each of the parties hereto shall use its
reasonable best efforts, on and after the date hereof, to take or cause to be
taken, all actions, and to do, or cause to be done all things, necessary, proper
or desirable under applicable laws and regulations to carry out the purposes of
this Agreement and to vest ERP, with full title to all Contributed Assets as of
the Closing. Without limiting the foregoing, ERP shall use its best efforts to
obtain all consents and approvals, to enter into all amendatory agreements and
to make all filings and applications and take all other actions which may be
required for the consummation of the transactions contemplated by this
Agreement, including, without limitation, all applicable regulatory filings.
9. Closing. The Closing of the transaction shall occur at such date after
the Transfer Date (as hereinafter defined), as ERP may give notice to EWOP that
it desires to consummate the transaction contemplated by this Agreement. As used
in this Agreement, "Transfer Date" shall mean the first to occur of (i) the date
twelve months after the Effective Time, (ii) the date on which EQR receives an
opinion of Xxxxxxx & Xxxxx or other nationally recognized tax counsel
satisfactory to it or a ruling from the Internal Revenue Service that the
transaction to be undertaken pursuant to this Agreement may be effected without
adversely affecting the qualification of the Merger as a tax-free reorganization
within the meaning of Section 368 of the Code or (iii) the date on which
regulations are promulgated by the Department of the Treasury which, in the
opinion of Xxxxxxx & Xxxxx or other nationally recognized tax counsel to EQR,
would permit the transaction contemplated by this Agreement without adversely
affecting the qualification of the Merger as a tax-free reorganization within
the meaning of Section 368 of the Code. Notwithstanding the provisions of this
Paragraph 9, in no event shall ERP be required to give any notice with respect
to the Contribution and if ERP fails to give such notice by December 31, 1999,
this Agreement shall terminate and EWOP shall have no further obligations
pursuant to this Agreement.
10. Approval by Limited Partners of EWOP. The parties acknowledge and
agree that the obligations of ERP pursuant to this Agreement shall be subject to
the approval of this
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Agreement and the transaction contemplated hereby by the limited partners of
EWOP pursuant to the terms of the partnership agreement of EWOP. EWOP agrees to
present this Agreement, the transaction contemplated hereby and any other matter
specified in Section 1.8(e) of the Merger Agreement for approval by the partners
of EWOP pursuant to the terms of the partnership agreement of EWOP as soon as
practicable after the date hereof in the manner contemplated by the Merger
Agreement. In the event that the Merger Agreement is terminated for any reason
prior to the consummation of the Merger (as defined in the Merger Agreement),
this Agreement shall terminate.
11. Distribution of Units Received from ERP. The parties acknowledge and
agree that the consummation of the Contribution contemplated by this Agreement,
subject to the provisions of Section 6 hereof, EWOP shall dissolve pursuant to
the terms of its Partnership Agreement and distribute the ERP units to the
partners of EWOP pursuant to the terms of the Amended and Restated Partnership
Agreement of EWOP. Each holder of units shall become a holder under that certain
Registration Rights Agreement entered into by EQR and certain former holders of
units of EWOP upon the effectiveness of the merger of EQR and Xxxxx Xxxxxxxxxx
Residential, Inc. to the extent the holders of units of EWOP will receive
Registrable Securities (as defined in the Registration Rights Agreement) upon
the distribution of ERP Units to the partners of EWOP. In the event that EWOP is
required to continue to hold any asset pursuant to Section 6 hereof after the
Closing for the benefit of ERP, EWOP shall distribute to the partners of EWOP,
other than EQR and ERP, their pro rata share of the ERP Units received by EWOP
in partial dissolution of the EWOP and the partners receiving such ERP Unit
shall have no further interest in EWOP as a partner, including any interest in
its assets, profits and losses.
12. Complete Agreement; Construction. This Agreement, including the
exhibits, constitutes the entire agreement between the parties with respect to
the subject matter hereof, and supersedes all previous negotiations, commitments
and writings with respect to such subject matter.
13. Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the parties contained in this
Agreement will survive the consummation of the transactions contemplated hereby.
14. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Illinois, without regard to the
principles of conflicts of laws thereof.
15. Notices. All notices and other communications hereunder must be in
writing and must be delivered by hand, mailed by registered or certified mail
(return receipt requested) or sent by facsimile transmission to the party for
whom it is intended at the following address (or at such other address for a
party as may be specified by like notice) and will be deemed given on the date
on which such notice is received:
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(a) If to ERP: Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
With a copy to: Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
(b) If to EWOP: Xxxxx Xxxxxxxxxx Residential, L.P.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Partner
Fax: (000) 000-0000
With a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (213/000-0000
16. Amendments. This Agreement may not be modified or amended except by an
agreement in writing signed by the parties.
17. Successors and Assigns. This Agreement shall not be assignable, in
whole or in part, directly or indirectly, by any party hereto without the prior
written consent of the other, and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void;
provided, however, that the provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.
18. No Third-Party Beneficiaries. The provisions of this Agreement are
solely for the benefit of the parties hereto and their respective successors and
permitted assigns and should not be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.
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19. Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
20. Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without prejudice to any
rights or remedies otherwise available to any party hereto, each party hereto
acknowledges that damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder are specifically enforceable.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties Trust,
its general partner
By: /s/Xxxxx X. Xxxxxx
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Executive Vice President
XXXXX XXXXXXXXXX RESIDENTIAL, L.P.
By: Xxxxx Xxxxxxxxxx Residential, Inc.,
its general partner
By: /s/Xxxxxxx X. Xxxxx
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Its: Chairman & Chief Executive Officer
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