AMENDMENT NO. 1 TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
XXXXX XXXXXXXXXX RESIDENTIAL, L.P.
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF XXXXX XXXXXXXXXX RESIDENTIAL, L.P. (this "Amendment"),
effective as of the Effective Time (as defined in the Agreement and Plan of
Merger dated as of August 27, 1997 ("Merger Agreement") between Equity
Residential Properties Trust and Xxxxx Xxxxxxxxxx Residential, Inc.).
R E C I T A L S:
X. Xxxxx Xxxxxxxxxx Residential, L.P., a Delaware limited
partnership (the "Partnership"), is governed by that certain Amended and
Restated Agreement of Limited Partnership of Xxxxx Xxxxxxxxxx Residential,
L.P. dated as of August 17, 1994 (the "Agreement").
X. Xxxxx Xxxxxxxxxx Residential, Inc., a Maryland corporation
("EWR") and the general partner of the Partnership, and Equity Residential
Properties Trust, a Maryland real estate investment ("EQR"), have merged
pursuant to the Merger Agreement (the "Merger").
C. Pursuant to the Merger Agreement, the limited partners of the
Partnership have approved the contribution of all the assets of the
Partnership, subject to its liabilities, to ERP Operating Partnership, an
Illinois limited partnership, on the terms and conditions provided for in
the Merger Agreement (the "Asset Contribution").
D. In connection with the Merger and the Asset Contribution, the
limited partners of the Partnership desire to amend the Agreement as
hereinafter set forth.
E. The limited partners of the Partnership further desire to ratify
and confirm the decision of the Board of Directors of Xxxxx Xxxxxxxxxx
Residential, Inc., in its capacity as general partner of the Partnership,
not to present for consideration by the limited partners of the Partnership
that certain proposed Amendment to the Agreement dated as of June 18, 1997
(the "11.2 Amendment").
A G R E E M E N T S:
1. AMENDMENTS TO ARTICLE 1: PROVISIONS RELATING TO DEFINED TERMS.
(a) Article 1 of the Partnership Agreement is hereby amended by
adding thereto the following definitions:
"ASSET CONTRIBUTION AGREEMENT" means the Asset Contribution
Agreement dated August 27, 1997 between the Partnership and ERP.
"EFFECTIVE TIME" means the time the State Department of
Assessments and Taxation of Maryland accepts for record the Articles
of Merger between EQR and Xxxxx Xxxxxxxxxx Residential, Inc.
"EQR" means Equity Residential Properties Trust, a Maryland real
estate investment trust, as successor by merger to Xxxxx Xxxxxxxxxx
Residential, Inc., a Maryland corporation.
"ERP" means ERP Operating Limited Partnership, an Illinois
limited partnership of which EQR is the general partner.
"ERP COMMON UNITS" mean units of common partnership interest in
ERP.
"ERP UNITS" mean units of partnership interest in ERP.
(b) The definitions of "Option Plans", "Partnership Record Date"
and "Value" are hereby amended to change the references therein to
"General Partner" to "EQR".
(c) The definition of "Common Shares" is hereby amended to read
as follows:
"`COMMON SHARES' mean common shares of beneficial interest, $.01
par value per share, of EQR."
(d) The definition of "General Partner" is hereby amended to
read as follows:
"`GENERAL PARTNER' means EQR and ERP, as co-general partners, and
their respective successors as co-general partners of the
Partnership."
(e) The definition of "Transaction" in Article I is hereby
deleted.
(f) The definition of "Unit Adjustment Factor" is hereby amended
to read as follows:
"`UNIT ADJUSTMENT FACTOR' means 1.00 until the Effective Time and
from and after the Effective Time 0.50; PROVIDED that in the event
that EQR (a) declares or pays a dividend on its outstanding Common
Shares in Common Shares or makes a distribution to all holders of its
outstanding Common Shares in Common Shares, (b) subdivides its
outstanding Common Shares or (c) combines its outstanding Common
Shares into a smaller number of Common Shares, the Unit Adjustment
Factor shall be adjusted by multiplying the Unit Adjustment Factor by
a fraction, the numerator of which shall be the number of Common
Shares issued and outstanding on the record date (assuming for such
purpose that such dividend, distribution, subdivision or combination
has occurred as of such time), and the denominator of which shall be
the actual number of Common Shares (determined without the above
assumption) issued and outstanding on the record date for such
dividend, contribution, subdivision or combination. In addition,
while Section 7.5 hereof provides that EQR shall not directly or
indirectly enter into or conduct any business except as permitted in
said Section, if an event were to occur that would significantly
affect the economic relationship between a Partnership Unit and a
Common Share, the Unit Adjustment Factor shall also be appropriately
adjusted. Any such adjustment to the Unit Adjustment Factor shall be
determined by the Board of Trustees of EQR, whose determination as to
whether an adjustment is necessary and the amount of such adjustment
shall be conclusive absent manifest error. Any adjustment to the Unit
Adjustment Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any,
for such event."
2. CHANGE OF PRINCIPAL OFFICE. The second sentence of Section 2.3
of the Agreement is hereby amended to read as follows:
"The principal office of the Partnership is located at Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, or such other
place as the General Partner may from time to time designate by notice
to the Limited Partners."
3. AMENDMENTS TO CHANGE REFERENCES FROM GENERAL PARTNER TO EQR. The
following Sections of the Agreement are hereby amended to change
references therein to "General Partner" to references to "EQR".
(a) Section 3.1;
(b) Section 3.2;
(c) Section 4.2(e) (renumbered pursuant to this Amendment as
Section 4.2(b);
(d) the last sentence of Section 4.5;
(e) Section 7.1(a)(1);
(f) the penultimate sentence of Section 7.7(a);
(g) Section 8.3(a);
(h) Section 9.3;
(i) Section 10.3; and
(j) Section 14.1(b)(6).
4. GENERAL PARTNERSHIP INTERESTS. The last sentence of
Section 4.1(a) is hereby amended to read as follows:
"A number of Partnership Units held by EQR equal to one percent
(1%) of all outstanding Partnership Units shall be deemed to be a
General Partnership Interest and a number of Partnership Units
held by ERP equal to one percent (1%) of all outstanding
Partnership Units shall be deemed to be a General Partnership
Interest."
5. DELETION OF REQUIREMENT TO CONTRIBUTE FUNDS. Section 4.1(b)(2)
of the Agreement is hereby deleted in its entirety.
6. EQR'S SHARES NOT EQUATED TO PARTNERSHIP UNITS. Sections 4.2(b),
4.2(c) and 4.2(d) of the Agreement are hereby deleted in their entirety
and paragraph (e) of Section 4.2 is hereby redesignated as paragraph
(b) of Section 4.2.
7. DISTRIBUTION OF ERP COMMON UNITS IN LIQUIDATION. The Agreement
is hereby amended by adding thereto a new Section 5.5, which shall read as
follows:
"5.5 DISTRIBUTION OF ERP COMMON UNITS. Notwithstanding anything
to the contrary in this Agreement, the ERP Common Units which may be
received by the Partnership pursuant to the Asset Contribution
Agreement may be distributed to the Partners in liquidation of the
Partnership on the basis of one ERP Common Unit for each Partnership
Unit then outstanding."
8. CONFORMING AMENDMENT. The proviso at the end of Section
7.1(a)(3) is hereby amended to read as follows:
"provided, further, that the sale of all or substantially all of
the assets of the Partnership shall require the Consent of a
majority of the Percentage Interests of the Limited Partnership
Interests (including Limited Partnership Interests held by the
General Partner)."
9. SALE OF ALL ASSETS PERMITTED. Section 7.2(a) of the Agreement is
hereby amended to read as follows:
"(a) take any action which would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise provided
in this Agreement (it being understood and agreed that, subject to
Section 7.1(a)(3), a sale of any or all of the assets of the
Partnership, for example, would be an ordinary part of the
Partnership's business and affairs and is specifically permitted
hereby);"
10. OUTSIDE ACTIVITIES OF EQR. Section 7.5 of the Agreement is
hereby deleted in its entirety and the following is substituted in
lieu thereof:
"Section 7.5 INTENTIONALLY OMITTED."
11. ASSET CONTRIBUTION AGREEMENT PERMITTED. Section 7.6(c) of the
Agreement is hereby amended to read as follows:
"(c) CONTRACT WITH GENERAL PARTNER. Except as expressly
permitted by this Agreement and except as contemplated by the Asset
Contribution Agreement, neither the General Partner nor any of its
Affiliates shall sell, transfer or convey any property to, or purchase
any property from, the Partnership, directly or indirectly, except
pursuant to transactions that are on terms that are fair and
reasonable and no less favorable to the Partnership than would be
obtained from an unaffiliated third party in connection therewith."
12. ACTION TO MAINTAIN REIT STATUS OF EQR. Section 7.9(d) of the
Agreement is hereby amended to read as follows:
"(d) ACTIONS TO MAINTAIN REIT STATUS OR AVOID TAXATION OF EQR.
Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of
the Partnership, undertaken in the good faith belief that such action
or omission is necessary or advisable in order (i) to protect the
ability of EQR to continue to qualify as a REIT or (ii) to avoid the
incurrence of any taxes by EQR under Section 857 or Section 4981 of
the Code, is expressly authorized under this Agreement and is deemed
approved by all of the Limited Partners."
13. TITLE TO PARTNERSHIP ASSETS TRANSFERRED TO ERP PURSUANT TO ASSET
CONTRIBUTION AGREEMENT. The third sentence of Section 7.10 of the
Agreement is hereby amended to read as follows:
"The General Partner hereby declares and warrants that, except
for Partnership assets contributed to ERP pursuant to the Asset
Contribution Agreement, any Partnership assets for which legal
title is held in the name of the General Partner or any nominee
or Affiliate of the General Partner shall be held by the General
Partner for the use and benefit of the Partnership in accordance
with the provisions of this Agreement; PROVIDED, HOWEVER, that
the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable."
14. ADJUSTMENT TO OUTSTANDING UNITS. Section 8.5(b) of the Agreement
is hereby amended to read as follows:
"(b) ADJUSTMENTS TO OUTSTANDING PARTNERSHIP UNITS AND
NOTIFICATION OF CHANGES IN UNIT ADJUSTMENT FACTOR. The number of
outstanding Partnership Units shall be subject to adjustment from time
to time by the Unit Adjustment Factor. The Partnership shall notify
each Limited Partner in writing of any change made to the Unit
Adjustment Factor within ten (10) Business Days of the date such
change becomes effective."
15. TRANSFER OF GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) Section 11.2(a) of the Agreement is hereby amended to read as
follows:
"(a) GENERAL. In no event may the General Partner at any time
assign, sell, transfer, pledge, hypothecate or otherwise dispose of
all or any portion of its General Partnership Interest except by
operation of law."
(b) Section 11.2(c) of the Agreement is hereby deleted in its
entirety.
16. NO REQUIREMENT TO SELL ERP UNITS RECEIVED UPON LIQUIDATION.
Section 13.2 of the Agreement is hereby amended by adding at the end
thereof a new sentence which reads as follows:
"Notwithstanding anything to the contrary contained herein
(including, without limiting the generality of the foregoing,
Section 13.2(a)(4)), the General Partner shall cause the
Partnership to distribute the ERP Common Units received by the
Partnership pursuant to the Asset Contribution Agreement in
liquidation of the Partnership Units on the basis of one ERP Unit
for each outstanding Partnership Unit. The General Partner shall
be under no obligation to sell such ERP Common Units. The
Partnership may remain in existence and undertake the activities
as contemplated by Section 6 of the Asset Contribution Agreement
as part of its winding up."
17. NO PRIOR AMENDMENT. The Limited Partners of the Partnership
hereby ratify, approve and confirm in all respects the decision of the
Board of Directors of Xxxxx Xxxxxxxxxx Residential, Inc. not to present the
11.2 Amendment to the Limited Partners of the Partnership, with the same
force and effect as if the Limited Partners of the Partnership had voted
against the adoption of the 11.2 Amendment.
18. ELIMINATION OF CERTIFICATES FOR UNIT.
(a) The definition of Partnership Unit is hereby amended by deleting
the second sentence thereof.
(b) The Agreement is hereby amended by deleting Exhibit D thereof in
its entirety.
19. REFERENCE TO AND EFFECT ON THE PARTNERSHIP AGREEMENT.
(a) At and after the Effective Time, each reference in the
Partnership Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import referring to the Partnership Agreement shall mean
and be a reference to the Partnership Agreement as amended by this
Amendment.
(b) The Partnership Agreement as amended and restated as of
August 17, 1994 and as amended by this Amendment shall remain in full force
and effect and is hereby ratified and confirmed.
20. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose or be given any substantive
effect.
21. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
22. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
IN WITNESS WHEREOF, the Partners have executed this Amendment as of
the Effective Time.
GENERAL PARTNERS:
EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust, General
Partner
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Vice President
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
a Maryland real estate investment trust,
its general partner
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Vice President
LIMITED PARTNERS:
EQUITY RESIDENTIAL PROPERTIES TRUST, a
Maryland real estate investment trust, Limited
Partner, as attorney-in-fact for the Limited
Partners
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Vice President
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership, Limited Partner, as
attorney-in-fact for the Limited Partners
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
a Maryland real estate investment trust,
its general partner
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Vice President
