EDUCATION REALTY OPERATING
PARTNERSHIP, LP
FIRST AMENDMENT TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
This Amendment is
made as of June 11, 2008, by EDUCATION REALTY OP GP, INC., a
Delaware corporation, as general partner (the “ General
Partner ”) of EDUCATION REALTY OPERATING PARTNERSHIP, LP,
a Delaware limited partnership (the “ Partnership
”), for the purpose of amending the Amended and Restated
Agreement of Limited Partnership of the Partnership dated January
31, 2005, as amended (the “ Partnership Agreement
”). All capitalized terms used herein and not defined shall
have the respective meanings ascribed to them in the Partnership
Agreement.
WHEREAS,
Section 11.1(a) of the Partnership Agreement permits
the General Partner, without the consent of the Limited Partners,
to amend the Partnership Agreement for the purpose of setting forth
and reflecting in the Partnership Agreement the designations,
rights, powers, duties, and preferences of holders of any
additional Partnership Interests issued pursuant to Section
4.3 of the Partnership Agreement;
WHEREAS, the
General Partner desires by this Amendment to so amend the
Partnership Agreement as of this 11th day of June, 2008 to be
effective as of January 1, 2008 (the “ Effective
Date ”);
WHEREAS, Education
Realty OP Limited Partner Trust, a Maryland business trust, is a
limited partner of the Partnership and is a wholly-owned subsidiary
(and a disregarded entity for United States federal income tax
purposes) of Education Realty Trust, Inc., a Maryland corporation
(together, the “ Company ”) that has filed an
election to be taxed as a real estate investment trust under United
States federal income tax laws;
WHEREAS, pursuant
to the Education Realty Trust, Inc. 2004 Incentive Plan, as amended
and/or one or more successor or additional equity incentive plans
or programs that the Company or the Partnership may adopt after the
date hereof, as amended (each individually and all of them
collectively, as the context requires, the “ Plan
”), the General Partner resolved to grant to employees of the
Company and its subsidiaries, including the Partnership, Incentive
Awards (as defined in the Plan) which include the issuance to such
employees of a Partnership Interest having the rights, voting
powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption and
conversion set forth herein and in the Partnership Agreement, such
Partnership Interest to be expressed as a number of Common
Partnership Units to be referred to as Profits Interest Units
(“ PIUs ”); and
WHEREAS, the
issuance of PIUs is permitted by Section 4.3(a)(iii) of
the Partnership Agreement.
NOW, THEREFORE,
the General Partner has set forth in this Amendment pursuant to its
authority under Section 11.1(a) of the Partnership
Agreement the following description of the rights, voting powers,
restrictions, limitations as to distributions, qualifications and
terms and conditions of redemption and conversion of a class and
series of Partnership Interest which shall
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be referred to
as “PIUs”:
1. Additional Defined Terms . The following
additional defined terms shall be inserted in Article I of the
Partnership Agreement, in alphabetical order:
“Adjustment Event ” shall mean any of the
following: (i) the Partnership makes a distribution on all
outstanding Common Partnership Units in Partnership Units,
(ii) the Partnership subdivides the outstanding Common
Partnership Units into a greater number of units or combines the
outstanding Common Partnership Units into a smaller number of
units, or (iii) the Partnership issues any Partnership Units
in exchange for its outstanding Common Partnership Units by way of
a reclassification or recapitalization of its Common Partnership
Units. For the avoidance of doubt, the following shall not be
Adjustment Events: (x) the issuance of Partnership Units in a
financing, reorganization, acquisition or other similar business
transaction, (y) the issuance of Partnership Units pursuant to
any employee benefit or compensation plan or distribution
reinvestment plan, or (z) the issuance of any Partnership
Units to the Company in respect of a capital contribution to the
Partnership of proceeds from the sale of securities by the
Company.
“Capital
Account Limitation” shall have the meaning set forth in
Section 7.9(b) hereof.
“Common
Unit Distribution ” shall have the meaning set forth in
Section 4.3(d)(ii) hereof.
“Common
Unit Economic Balance ” shall mean (i) the Capital
Account balance of the Company, plus the amount of the
Company’s share of any Partner Minimum Gain or Partnership
Minimum Gain (as defined in Exhibit B to this
Agreement), in either case to the extent attributable to the
Company’s ownership of Common Partnership Units and computed
on a hypothetical basis after taking into account all allocations
through the date on which any allocation is made under Section
A(12) of Exhibit B to the Partnership Agreement,
divided by (ii) the number of the Company’s Common
Partnership Units.
“Constituent Person ” shall have the meaning set
forth in Section 7.9(f) hereof.
“Conversion Date ” shall have the meaning set
forth in Section 7.9(b) hereof.
“Distribution Payment Date ” shall mean the
dates upon which the General Partner makes distributions in
accordance with Section 8.1 of the Partnership
Agreement.
“Distribution Period ” shall mean any period to
which a distribution pursuant to Section 8.1
relates.
“Economic Capital Account Balance ” of the PIU
Unitholder will be equal to its Capital Account balance, plus the
amount of its share of any Partner Minimum Gain or Partnership
Minimum Gain (as defined in Exhibit B to the
Partnership Agreement), in either case to the extent attributable
to its ownership of PIUs.
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“ PIU
” means a Partnership Unit which is designated as a PIU and
which has the rights, preferences and other privileges designated
in Section 4.3(d) hereof and elsewhere in the
Partnership Agreement in respect of the PIU Unitholder. The number
of PIUs issued to the PIU Unitholder shall be set forth on
Exhibit A to the Partnership Agreement, as may be
amended from time to time.
“ PIU
Unitholder ” means Education Realty Limited Partner, LLC,
a Delaware limited liability company.
“Plan” shall have the meaning set forth in the
recitals to this Amendment.
“Rights” shall mean rights, options, warrants or
convertible or exchangeable securities entitling the
Company’s shareholders to subscribe for or purchase REIT
Common Shares, or any other securities or property.
2. Amendments to Existing Definitions . The
definition of “REIT Common Shares Amount” shall be
restated as follows:
“REIT
COMMON SHARES AMOUNT” shall mean a whole number of REIT
Common Shares equal to the product of the number of Common
Partnership Units offered for redemption by a Redeeming Partner,
multiplied by the Conversion Factor in effect on the Specified
Redemption Date (rounded down to the nearest whole number in the
event such product is not a whole number). Notwithstanding the
foregoing, in the event the Company at any time issues Rights to
all holders of REIT Common Shares, which Rights have not expired
pursuant to their terms, then the REIT Common Shares Amount
thereafter shall also include such Rights that a holder of that
number of REIT Common Shares would be entitled to
receive.
3. Conforming Changes. All references to the
term “Common Partnership Units” in Section
4.3(a)(iii)(A) shall be changed to “PIUs.”
Section 4.3(a)(iii)(B) shall be restated as
follows:
(B) the
aggregate number of Common Partnership Units and PIUs held by
Education Realty Limited Partner, LLC immediately after the
issuance of such PIUs will not exceed two percent (2%) of the
aggregate issued and outstanding Common Partnership Units and PIUs
immediately after such issuance.
4. Issuance of PIUs . Any Common Partnership
Units held by the PIU Unitholder as of the Effective Date shall be
treated as PIUs. The following subsection (d) shall be
appended to Section 4.3 of the Partnership Agreement:
(d) ISSUANCE OF
PIUs . The General Partner shall from time to time issue PIUs
to Education Realty Limited Partner, LLC on the account of its
members who provide services to the Company or the Partnership and
who have received an award of Units under the Company’s 2004
Incentive Plan, subject to such conditions as may be set
3
forth in any
award agreement entered into thereunder. Subject to the following
provisions of this Section 4.3(d) and the special
provisions of Sections 7.9 and 7.10 and
Section A(12) of Exhibit B to the
Partnership Agreement, PIUs shall be treated as Common Partnership
Units, with all of the rights, privileges and obligations attendant
thereto. For purposes of computing the Partners’ Common
Percentage Interests, the PIU Unitholder shall be treated as a
holder of Common Partnership Units and the PIUs shall be treated as
Common Partnership Units. In particular, the Partnership shall
maintain at all times a one-to-one correspondence between PIUs and
Common Partnership Units for conversion, distribution and other
purposes, including without limitation complying with the following
procedures:
(i) If an
Adjustment Event occurs, then the General Partner shall make a
corresponding adjustment to the PIUs to maintain a one-for-one
conversion and economic equivalence ratio between Common
Partnership Units a
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