ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On October 17, 2006, BNP Residential Properties, Inc., a Maryland corporation (“BNP”), and BNP Residential Properties Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), entered into an Amended and Restated Agreement and Plan of Merger, by and among BNP, Operating Partnership, Babcock & Brown Bravo Holdings LLC, Babcock & Brown Bravo Acquisition LLC and Babcock & Brown Bravo Operating Partnership LP (the "Amended and Restated Merger Agreement") which amends and restates the Agreement and Plan of Merger, dated August 31, 2006. Pursuant to the Amended and Restated Merger Agreement, Babcock & Brown Bravo Holdings LLC, a Delaware limited liability company (“Buyer”), which is an affiliate of international investment and advisory firm Babcock & Brown Limited (ASX:BNB) (“Babcock & Brown”), will acquire BNP through the mergers of BNP and the Operating Partnership with merger subsidiaries of the Buyer (the “Mergers”).

The parties amended and restated the original merger agreement primarily to modify provisions relating to the merger of the Operating Partnership. The original merger agreement had provided that, in the Operating Partnership merger, common units of the Operating Partnership would be converted to cash unless Babcock & Brown determined that it would give holders of common units an option to elect to receive, in lieu of cash for their units, either common or preferred units in the surviving partnership. In the Amended and Restated Merger Agreement, as a result of the Operating Partnership merger, common units in the Operating Partnership will be converted into common units in the surviving partnership unless the holder elects to receive cash or preferred units in the surviving partnership. In addition, in the original merger agreement, BNP was to merge with and into a corporate subsidiary of Babcock & Brown. In the Amended and Restated Merger Agreement, BNP will merge with and into Babcock & Brown Bravo Acquisition LLC, which is a Delaware limited liability company.

The foregoing description of the Amended and Restated Merger Agreement is qualified in its entirety by reference to the text of the Amended and Restated Merger Agreement, which is incorporated herein by reference. The Amended and Restated Merger Agreement is an attachment to BNP’s preliminary proxy statement filed with the Securities and Exchange Commission (the "SEC") on October 18, 2006.

ADDITIONAL INFORMATION ABOUT THE MERGERS AND WHERE TO FIND IT

In connection with the Mergers, BNP has filed a preliminary proxy statement and other documents with the SEC. Investors and security holders of BNP are urged to read these materials and additional materials, including the definitive proxy statement, when they become available because they contain important information about the Mergers, BNP and the affiliates of Babcock & Brown that are parties to the Mergers. The preliminary proxy statement and other relevant materials (when they become available) and any other documents filed by BNP with the SEC may be obtained free of charge at the SEC's website at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by BNP by

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