EXHIBIT 6.2(c)
Omnibus Contribution Agreement
GENERAL PARTNER RECOURSE LIABILITY RISK SHARING AGREEMENT
This General Partner Recourse Liability Risk Sharing Agreement (the
"Agreement") is made as of _____________, 1998 by the undersigned (the
"Indemnitors") to Equity Residential Properties Trust, a Maryland real estate
investment trust (the "General Partner") and the general partner of ERP
Operating Limited Partnership, an Illinois limited partnership (the
"Partnership").
RECITALS
The Indemnitors are proposing to become limited partners of the
Partnership (each a "Limited Partner" and together with the other
Indemnitors, the "Limited Partners"). Prior to the admission of the
Indemnitors as Limited Partners of the Partnership, the Partnership has
incurred certain indebtedness in order to finance the Partnership's business
and expects in the future to refinance such indebtedness and to incur
additional indebtedness. The General Partner may, under certain
circumstances, be liable to the holders of such indebtedness to repay the
amounts due thereunder in the event that the Partnership is unable to satisfy
such indebtedness. Because the indebtedness that has been incurred or may in
the future be incurred by the Partnership benefits the partners of the
Partnership, including the Indemnitors, the General Partner is requiring
that, as a condition to the admission of the Indemnitors as Limited Partners
of the Partnership, the Indemnitors execute and deliver this Agreement which,
subject to the terms and conditions set forth herein, will obligate the
Indemnitors to indemnify the General Partner against losses incurred in
satisfying certain indebtedness of the Partnership.
In consideration of the foregoing, and in order to induce the
General Partner to admit the Indemnitors as Limited Partners of the
Partnership, the Indemnitors agree with the General Partner as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following
terms have the meanings set forth below:
"CONTRIBUTION OBLIGATION" means an amount that the General Partner
is obligated to pay to the Partnership or to any other person to whom any
Recourse Liabilities are owed in order to discharge or satisfy such Recourse
Liabilities under circumstances where the Partnership is unable to do so
after exhaustion of all remedies against the Partnership.
"DEBT SERVICE" means for any period the sum of interest expense
and regularly scheduled principal amortization for the most recently
available trailing twelve month period.
"EBITDA" means, for any period, the earnings of the Partnership for
such period from continuing operations, minus associated costs generally
excluding interest expense, income taxes, unallocated depreciation and
amortization), for the most recently available trailing twelve
month period.
"INDEMNITOR MAXIMUM INDEMNIFICATION AMOUNT" means the amount shown
for each Indemnitor on Exhibit A hereto. Exhibit A shall not be amended to
add additional Indemnitors other than as specified pursuant to this
Agreement. Upon the liquidation of any entity Indemnitor listed on Exhibit
A, the Indemnitor Maximum Indemnification Amount of the Indemnitors who have
assumed such entity's Indemnitor Maximum Indemnification Amount shall,
pursuant to Exhibit A, be correspondingly increased, the Indemnitor Maximum
Indemnification Amount of the entity shall be eliminated, and Exhibit A shall
be appropriately amended.
"LIMITED PARTNER MAXIMUM INDEMNIFICATION AMOUNT" means the
aggregate maximum amount as of the date in question that the Limited Partners
listed as Indemnitors on Exhibit A, are obligated to indemnify the General
Partner for payments that the General Partner is obligated to pay in order to
discharge or satisfy Recourse Liabilities of the Partnership under
circumstances where the Partnership is unable to do so after exhaustion of
all remedies against the Partnership.
"MARKET VALUE OF TOTAL EQUITY" means the total value of all
outstanding OP Units, with each OP Unit valued at the current market value of
a Common Share.
"NONRECOURSE LIABILITY" means a liability as defined in Treasury
Regulation Section 1.704-2(b)(3).
"PARTNER NONRECOURSE LIABILITY" means a liability as defined in
Treasury Regulation Section 1.704-2(b)(4).
"PARTNERSHIP AGREEMENT" means the Fourth Amended and Restated ERP
Operating Limited Partnership Agreement of Limited Partnership dated as of
September 30, 1995, as further amended and/or restated from time to time
after the date hereof.
"PROPORTIONATE SHARE" means with respect to each Indemnitor a
percentage determined by dividing the Indemnitor Maximum Indemnification
Amount by the Limited Partner Maximum Indemnification Amount.
"RECOURSE LIABILITIES" means the amount of indebtedness owed by the
Partnership other than Nonrecourse Liabilities and Partner Nonrecourse
Liabilities.
"THRESHOLD AMOUNT" means an amount equal to all Recourse
Liabilities of the Partnership outstanding immediately prior to a
Contribution Obligation reduced by the Limited Partner Maximum
Indemnification Amount set forth on Exhibit A hereto.
"TOTAL LIABILITIES" means, as of the date of determination, all
liabilities of the Partnership.
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Section 2. INDEMNIFICATION.
(a) Each Indemnitor shall indemnify the General Partner and its
successor or assigns for the Indemnitor's Proportionate Share of any
Contribution Obligation of the General Partner in excess of the Threshold
Amount. The indemnification obligation of each Indemnitor under this
Agreement shall be several and not joint and shall be payable by such
Indemnitor upon receipt of written notice from the General Partner of the
Contribution Obligation of the General Partner giving rise to the
Indemnitor's indemnification obligation hereunder. In the event that an
entity Indemnitor listed on Exhibit A fails to satisfy its Proportionate
Share of any Contribution Obligation after a demand for payment by the
General Partner, or is liquidated or dissolved prior to such demand for
payment, such entity's Indemnitor Maximum Indemnification Amount is hereby
assumed by the specified Indemnitors in the amounts and as set forth in
Section 2 of Exhibit A hereto. Upon the liquidation of any entity Indemnitor
listed on Exhibit A, the Indemnitor Maximum Indemnification Amount of the
Indemnitors who have assumed such entity's Indemnitor Maximum Indemnification
Amount shall be correspondingly increased, the Indemnitor Maximum
Indemnification Amount of the entity shall be eliminated, and Exhibit A shall
be appropriately amended.
(b) Each Indemnitor agrees that the indemnity referred to in
Section 2 (a) above shall be satisfied strictly in accordance with the terms
of this Agreement regardless of any law, regulation, or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the General Partner.
(c) The Indemnitors hereby authorize the General Partner to notify
recourse creditors of the existence of this Agreement, and the Indemnitors
and the General Partner jointly agree that this Agreement shall within 15
days of execution, be filed as an Exhibit to a periodic or quarterly report
filed by the General Partner and/or the Partnership under the Securities and
Exchange Act of 1934, as amended.
Section 3. REPRESENTATIONS AND WARRANTIES. Each Indemnitor
represents and warrants to the General Partner as follows:
(a) This Agreement constitutes an actual and binding obligation of
each Indemnitor enforceable against each Indemnitor in accordance with its
terms, except as such enforceability may be qualified by equitable principles
or by bankruptcy, insolvency and similar laws.
(b) No authorization or approval or other action by, and no notice
to, or filing with, any governmental authority is required for due execution,
delivery, and performance by any Indemnitor of this Agreement.
Section 4. MISCELLANEOUS.
(a) No amendment of this Agreement shall be effective unless the
same shall be in writing and signed by the parties hereto and any waiver or
consent shall be effective only in
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the specific instance and for the specific purpose for which it is given.
(b) No failure on the part of the parties hereto to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
(d) Each Indemnitor hereby waives, irrevocably and
unconditionally, all rights of contribution, if any, and any other right of
indemnity, subrogation or any other right it may have to claim or recover in
any legal action or proceeding any amount, if any, against the Partnership,
all partners of the Partnership, or any other party against whom such
Indemnitor may have any such rights.
(e) This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Illinois.
(f) Subject to Section 2(a) hereof, with respect to the assumption
by an individual Indemnitor of the Indemnitor Maximum Indemnification Amount
of an entity Indemnitor as listed in Exhibit A, the obligations of an
Indemnitor hereunder shall terminate upon the earlier of (i) the Indemnitor
agreeing to become an Obligated Partner with a Restoration Amount equal to
its Indemnitor Maximum Indemnification Amount pursuant to an execution by the
General Partner and such Indemnitor of the proposed amendment to the Fourth
Amended and Restated ERP Operating Limited Partnership Agreement of Limited
Partnership attached hereto as Exhibit B, (ii) the death or dissolution of
such Indemnitor, or (iii) the date 6 months after the Indemnitor ceases to be
a Limited Partner of the Partnership, unless at such time, or during the 6
month period following such time, there has been:
i. An entry of a decree or order for relief in respect of
the Partnership by a court having jurisdiction over a
substantial part of the Partnership's assets, or the
appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar
official) of the Partnership or of any substantial part
of its property, or ordering the winding up or
liquidation of the Partnership's affairs, in an
involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar
law; or
ii. The commencement against the Partnership of an
involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar
law; or
iii. The commencement by the Partnership of a voluntary case
under the federal bankruptcy laws, as now or hereafter
constituted, or any
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other applicable federal or state bankruptcy, insolvency
or other similar law, or the consent by it to the entry
of an order for relief in an involuntary case under any
such law or the consent by it to the appointment of or
taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar
official) of the Partnership or of any substantial part
of its property, or the making by it of a general
assignment for the benefit of creditors, or the failure
of the Partnership generally to pay its debts as such
debts become due or the taking of any action in
furtherance of any of the foregoing; or
iv. A failure by the Partnership to maintain a ratio of Total
Liabilities to Market Value of Total Equity of less than
400%; or
v. A failure by the Partnership to maintain a ratio of
EBITDA to Debt Service of greater than 110%.
; PROVIDED, THAT, after the passage of such six (6) months, the obligations
of such Indemnitor shall terminate at the first time, if any, that all of the
conditions set forth (i) through (v) above are no longer in existence.
The Indemnitors have caused this Agreement to be duly executed as
of the date first above written.
Equity Residential Properties Trust INDEMNITORS:
------------------------------------ ----------------------------
by: Douglas Crocker II Preston Butcher
President, Chief Executive Officer
and Trustee
----------------------------
W. Dean Henry
------------------------------------
by: Bruce C. Strohm
Executive Vice President, General Counsel
and Secretary
----------------------------
Denny McLarry
------------------------------------
by: Michael J. McHugh
Executive Vice President, Chief Accounting
Officer and Treasurer
----------------------------
Edward O'Brien
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----------------------------
Jim Woodson
----------------------------
M. Zoellner
----------------------------
Blake Pogue
----------------------------
Brent Pogue
----------------------------
Blair Pogue
----------------------------
John Igoe
----------------------------
Richard Fore
----------------------------
Esther Dunton
----------------------------
Stuart L. Leeder
----------------------------
Gary J. Rossi
----------------------------
Jane Hiber
----------------------------
Roy L. Titchworth
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----------------------------
Edward T. Hewitt
----------------------------
Richard H. Semple Jr.
----------------------------
Guy Hays
----------------------------
Jeffrey Byrd
Mack Pogue, Inc.
by:
----------------------------
[Mack Pogue, President]
LPC# 232, a California Limited Partnership
by:
----------------------------
Preston Butcher, General Partner
LPC# 265, a California Limited Partnership
by:
----------------------------
Gary J. Rossi, General Partner
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LPC# 1213, a California Limited Partnership
by:
----------------------------
Stuart L. Leeder, General Partner
LPC# 619, a California Limited Partnership
by:
----------------------------
Gary J. Rossi, General Partner
LPC# 234, a California Limited Partnership
by:
----------------------------
Preston Butcher, General Partner
LPC# 276, a California Limited Partnership
by:
----------------------------
Stuart L. Leeder, General Partner
LPC# 292, a California Limited Partnership
by:
----------------------------
Stuart L. Leeder, General Partner
LPC# 2232, a California Limited Partnership
by:
----------------------------
Preston Butcher, General Partner
LPC# 2236, a California Limited Partnership
by:
----------------------------
Preston Butcher, General Partner
LPC# 2252, a California Limited Partnership
by:
----------------------------
Gary J. Rossi, General Partner
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LPC# 1389, a California Limited Partnership
by:
----------------------------
Gary J. Rossi, General Partner
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