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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-12252
EQUITY RESIDENTIAL PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
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MARYLAND 13-3675988
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
(Address of Principal Executive Offices) (Zip Code)
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(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Common Shares of Beneficial Interest, $0.01 Par Value New York Stock Exchange
(Title of Class) (Name of Each Exchange on Which Registered)
Preferred Shares of Beneficial Interest, $0.01 Par Value New York Stock Exchange
(Title of Class) (Name of Each Exchange on Which Registered)
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting and non-voting shares held by
non-affiliates of the Registrant was approximately $5.1 billion based upon the
closing price on March 1, 2000 of $40 using beneficial ownership of shares rules
adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude
voting shares owned by Trustees and Officers, some of whom may not be held to be
affiliates upon judicial determination.
At March 1, 2000, 127,911,989 of the Registrant's Common Shares of Beneficial
Interest were outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference information to be contained in the Company's
definitive proxy statement, which the Company anticipates will be filed no later
than March 31, 2000, and thus these items have been omitted in accordance with
General Instruction G(3) to Form 10-K.
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EQUITY RESIDENTIAL PROPERTIES TRUST
TABLE OF CONTENTS
PART I. PAGE
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Item 1. Business 4
Item 2. The Properties 28
Item 3. Legal Proceedings 32
Item 4. Submission of Matters to a Vote of Security Holders 32
PART II.
Item 5. Market for Registrant's Common Equity and Related 33
Shareholder Matters
Item 6. Selected Financial Data 33
Item 7. Management's Discussion and Analysis of Financial Condition 36
and Results of Operations
Item 7A. Quantitative and Qualitative Disclosure about Market Risk 47
Item 8. Financial Statements and Supplementary Data 48
Item 9. Changes in and Disagreements with Accountants on Accounting and 48
Financial Disclosure
PART III.
Item 10. Trustees and Executive Officers of the Registrant 49
Item 11. Executive Compensation 49
Item 12. Security Ownership of Certain Beneficial Owners and Management 49
Item 13. Certain Relationships and Related Transactions 49
PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 50
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PART I
ITEM 1. BUSINESS
GENERAL
Equity Residential Properties Trust ("EQR") is a self-administered and
self-managed equity real estate investment trust ("REIT"). EQR was organized in
March 1993 and commenced operations on August 18, 1993 upon completion of its
initial public offering (the "EQR IPO") of 13,225,000 common shares of
beneficial interest, $0.01 par value per share ("Common Shares"). EQR was formed
to continue the multifamily property business objectives and acquisition
strategies of certain affiliated entities controlled by Mr. Samuel Zell,
Chairman of the Board of Trustees of EQR. These entities had been engaged in the
acquisition, ownership and operation of multifamily residential properties since
1969. As used herein, the term "Company" includes EQR and those entities owned
or controlled by it, as the survivor of the mergers between EQR and each of
Wellsford Residential Property Trust ("Wellsford") (the "Wellsford Merger"),
Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land &
Investment Company, Inc. ("MRY") (the "MRY Merger") and Lexford Residential
Trust ("LFT") ("the LFT Merger") (collectively, the "Mergers").
The Company has formed a series of partnerships (the "Financing
Partnerships") which beneficially own certain Properties (see definition below)
that may be encumbered by mortgage indebtedness. In general, these are
structured so that ERP Operating Limited Partnership (the "Operating
Partnership"), a subsidiary of EQR, owns a 1% limited partner interest and a 98%
general partner interest in each, with the remaining 1% general partner interest
in each Financing Partnership owned by various qualified REIT subsidiaries
wholly owned by the Company (each a "QRS Corporation"). Rental income from the
Properties that are beneficially owned by a Financing Partnership is used first
to service the applicable mortgage debt and pay other operating expenses and any
excess is then distributed 1% to the applicable QRS Corporation, as the general
partner of such Financing Partnership, and 99% to the Operating Partnership, as
the sole 1% limited partner and as the 98% general partner. The Company has also
formed a series of limited liability companies that own certain Properties
(collectively, the "LLCs"). The Operating Partnership is a 99% managing member
of each LLC and a QRS Corporation is a 1% member of each LLC.
The Company's subsidiaries include the Operating Partnership, a series
of management limited partnerships and companies (collectively, the "Management
Partnerships" or the "Management Companies"), the Financing Partnerships, the
LLC's and certain other entities.
As of December 31, 1999, the Company owned or had interests in 1,062
multifamily properties containing 225,708 units, of which it wholly-owned a
portfolio of 983 multifamily properties (individually, a "Property" and
collectively, the "Properties") containing 214,060 units. The remaining 79
properties represent investments in partnership interests and/or subordinated
mortgages containing 11,648 units. The Company's Properties are located in 35
states throughout the United States. The Company is one of the largest publicly
traded REIT's (based on the aggregate market value of its outstanding Common
Shares) and is the largest publicly traded REIT owner of multifamily properties
(based on the number of apartment units wholly owned and total revenues earned).
Since the EQR IPO and through December 31, 1999, the Company, through
the Operating Partnership, has acquired direct interests in 988 properties
containing 209,975 units in the aggregate for a total purchase price of
approximately $12 billion, including the assumption of approximately $3.2
billion of mortgage indebtedness and $848.2 million of unsecured notes. Since
the EQR IPO and through December 31, 1999, the Company has disposed of 74
properties, containing 17,640 units for a total sales price of approximately
$654.2 million.
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PART I
The Company's corporate headquarters and executive offices are located
in Chicago, Illinois. In addition, the Company has 31 management offices in the
following cities:
- Scottsdale and Tucson, Arizona;
- Irvine, Sacramento and San Francisco, California;
- Denver, Colorado;
- Tampa, Jacksonville, Ft. Lauderdale and Orlando, Florida;
- Atlanta and Augusta, Georgia;
- Chicago, Illinois;
- Kansas City, Kansas;
- Louisville, Kentucky;
- Bethesda, Maryland;
- Ypsilanti, Michigan;
- Minneapolis, Minnesota;
- Las Vegas, Nevada;
- Charlotte and Raleigh, North Carolina;
- Reynoldsburg, Ohio
- Tulsa, Oklahoma;
- Portland, Oregon;
- Nashville and Memphis, Tennessee.
- Dallas, Houston and San Antonio, Texas; and
- Seattle and Redmond, Washington
The Company has approximately 6,700 employees. An on-site manager, who
supervises the on-site employees and is responsible for the day-to-day
operations of the Property, directs each of the Company's Properties. A leasing
administrator and/or property administrator generally assists the manager. In
addition, a maintenance director at each Property supervises a maintenance staff
whose responsibilities include a variety of tasks, including responding to
service requests, preparing vacant apartments for the next resident and
performing preventive maintenance procedures year-round.
BUSINESS OBJECTIVES AND OPERATING STRATEGIES
The Company seeks to maximize both current income and long-term growth
in income, thereby increasing:
- the value of the Properties;
- distributions on a per Common Share basis; and
- shareholders' value.
The Company's strategies for accomplishing these objectives are:
- maintaining and increasing Property occupancy while increasing
rental rates;
- controlling expenses, providing regular preventive maintenance,
making periodic renovations and enhancing amenities;
- maintaining a ratio of consolidated debt-to-total market
capitalization of less than 50%;
- strategically acquiring and disposing of properties; and
- purchasing newly developed, as well as co-investing in the
development of, multifamily communities.
The Company is committed to tenant satisfaction by striving to
anticipate industry trends and implementing strategies and policies consistent
with providing quality tenant services. In addition, the
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PART I
Company continuously surveys rental rates of competing properties and
conducts satisfaction surveys of residents to determine the factors they
consider most important in choosing a particular apartment unit.
ACQUISITION STRATEGIES
The Company anticipates that future property acquisitions will be
located in the continental United States. Management will continue to use market
information to evaluate acquisition opportunities. The Company's market database
allows it to review the primary economic indicators of the markets where the
Company currently manages Properties and where it expects to expand its
operations. Acquisitions may be financed from various sources of capital, which
may include retained cash flow, issuance of additional equity securities, sales
of Properties and collateralized and uncollateralized borrowings. In addition,
the Company may acquire additional multifamily properties in transactions that
include the issuance of limited partnership interests in the Operating
Partnership ("OP Units") as consideration for the acquired properties. Such
transactions may, in certain circumstances, partially defer the sellers' tax
consequences.
When evaluating potential acquisitions, the Company will consider:
- the geographic area and type of community;
- the location, construction quality, condition and design of the
property;
- the current and projected cash flow of the property and the ability
to increase cash flow;
- the potential for capital appreciation of the property;
- the terms of resident leases, including the potential for rent
increases;
- the potential for economic growth and the tax and regulatory
environment of the community in which the property is located;
- the occupancy and demand by residents for properties of a similar
type in the vicinity (the overall market and submarket);
- the prospects for liquidity through sale, financing or refinancing
of the property;
- the benefits of integration into existing operations; and
- competition from existing multifamily properties and the potential
for the construction of new multifamily properties in the area.
The Company expects to purchase multifamily properties with physical
and market characteristics similar to the Properties.
DEVELOPMENT STRATEGIES
The Company seeks to acquire newly constructed properties and make
investments towards the development of properties in markets where it discerns
strong demand, which the Company believes will enable it to achieve superior
rates of return. The Company's current communities under development and future
developments are in markets or will be in markets where certain market
demographics justify the development of high quality multifamily communities. In
evaluating whether to develop an apartment community in a particular location,
the Company analyzes relevant demographic, economic and financial data.
Specifically, the Company considers the following factors, among others, in
determining the viability of a potential new apartment community:
- income levels and employment growth trends in the relevant market;
- uniqueness of location;
- household growth and net migration of the relevant market's
population;
- supply/demand ratio, competitive housing alternatives, sub-market
occupancy and rent levels;
- barriers to entry that would limit competition; and
- purchase prices and yields of available existing stabilized
communities, if any.
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PART I
DISPOSITION STRATEGIES
Management will use market information to evaluate dispositions.
Factors the Company considers in deciding whether to dispose of its Properties
include the following:
- potential increases in new construction;
- areas where the economy is expected to decline substantially; and
- markets where the Company does not intend to establish long-term
concentrations.
The Company will reinvest the proceeds received from property
dispositions primarily to fund property acquisitions as well as fund development
activities. In addition, when feasible the Company may structure these
transactions as tax deferred exchanges.
FINANCING STRATEGIES
The Company intends to maintain a ratio of consolidated debt-to-total
market capitalization of 50% or less. At December 31, 1999, the Company had a
ratio of approximately 42.75% based on the market value of equity equal to the
closing price of the Company's Common Shares on the New York Stock Exchange and
assuming conversion of all OP Units plus the liquidation preference of the
Company's preferred shares of beneficial interest, $0.01 par value per share
("Preferred Shares") and the Operating Partnership's preference units and
interests. It is the Company's policy that EQR shall not incur indebtedness
other than short-term trade, employee compensation, dividends payable or similar
indebtedness that will be paid in the ordinary course of business, and that
indebtedness shall instead be incurred by the Operating Partnership to the
extent necessary to fund the business activities conducted by the Operating
Partnership and its subsidiaries.
EQUITY OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
During 1997, the Company issued 84,183 Common Shares pursuant to the
Employee Share Purchase Plan at net prices which ranged from $35.63 per share to
$42.08 per share and raised approximately $3.2 million in connection therewith.
In March 1997, the Company completed three separate public offerings
relating to an aggregate of 1,921,000 publicly registered Common Shares, which
were sold to the public at a price of $46 per share. The Company received net
proceeds of approximately $88.3 million therefrom.
In May 1997, the Company sold 7,000,000 depositary shares (the "Series
D Depositary Shares"). Each Series D Depositary Share represents a 1/10
fractional interest in a 8.60% Series D Cumulative Redeemable Preferred Share of
Beneficial Interest, $0.01 par value per share (the "Series D Preferred
Shares"). The liquidation preference of each of the Series D Preferred shares is
$250.00 (equivalent to $25 per Series D Depositary Share). The Company received
net proceeds of approximately $169.5 million from this offering (the "Series D
Preferred Share Offering").
In June 1997, the Company completed five separate public offerings
comprising an aggregate of 8,992,023 publicly registered Common Shares, which
were sold to the public at prices ranging from $44.06 to $45.88 per share. The
Company received net proceeds of approximately $398.9 million therefrom.
In September 1997, the Company completed the sale of 498,000 publicly
registered Common Shares, which were sold to the public at a price of $51.125
per share. The Company received net proceeds of approximately $24.2 million in
connection with this offering.
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PART I
In September 1997, the Company sold 11,000,000 depositary shares (the
"Series G Depositary Shares"). Each Series G Depositary Share represents a 1/10
fractional interest in a 7 1/4% Series G Convertible Cumulative Preferred Share
of Beneficial Interest, $0.01 par value per share (the "Series G Preferred
Shares"). Series G Depositary Shares representing Series G Preferred Shares are
convertible at the option of the holder thereof at any time into Common Shares
at a conversion price of $58.58 per Common Share (equivalent to a conversion
rate of approximately .4268 Common Shares for each Series G Depositary Share).
The liquidation preference of each of the Series G Preferred Shares is $250.00
per share (equivalent to $25 per Series G Depositary Share). The Company
received net proceeds of approximately $264 million from this offering (the
"Series G Preferred Share Offering"). In addition, in October 1997, the Company
sold 1,650,000 additional Series G Depositary Shares pursuant to an
over-allotment option granted to the underwriters and received net proceeds of
approximately $39.6 million therefrom.
In October 1997, in connection with the acquisition of a portfolio of
Properties, the Company issued 3,315,500 publicly registered Common Shares,
which were issued at a price of $45.25 per share with a value of approximately
$150 million.
On November 3, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register 7,000,000 Common Shares pursuant to a
Distribution Reinvestment and Share Purchase Plan. This registration statement
was declared effective on November 25, 1997. The Distribution Reinvestment and
Share Purchase Plan (the "DRIP Plan") of the Company provides holders of record
and beneficial owners of Common Shares, Preferred Shares, and limited
partnership interests in the Operating Partnership with a simple and convenient
method of investing cash distributions in additional Common Shares (which is
referred to herein as the "Dividend Reinvestment - DRIP Plan"). Common Shares
may also be purchased on a monthly basis with optional cash payments made by
participants in the Plan and interested new investors, not currently
shareholders of the Company, at the market price of the Common Shares less a
discount ranging between 0% and 5%, as determined in accordance with the DRIP
Plan (which is referred to herein as the "Share Purchase - DRIP Plan").
In December 1997, in connection with an acquisition of a Property, the
Company issued 736,296 publicly registered Common Shares, which were issued at a
price of $48.85 per share with a value of approximately $36 million.
Also in December 1997, the Company completed the sale of 467,722
publicly registered Common Shares, which were sold at a price of $51.3125 per
share. The Company received net proceeds of approximately $22.8 million in
connection with this offering.
During 1998, the Company issued 93,521 Common Shares pursuant to the
Employee Share Purchase Plan and received net proceeds of approximately $3.7
million.
During 1998, the Company issued 1,023,184 Common Shares pursuant to the
Share Purchase - DRIP Plan and received net proceeds of approximately $50.7
million.
During 1998, the Company issued 10,230 Common Shares pursuant to the
Dividend Reinvestment - DRIP Plan and received net proceeds of approximately
$0.4 million.
On January 27, 1998, the Company completed an offering of 4,000,000
publicly registered Common Shares, which were sold to the public at a price of
$50.4375 per share. The Company received net proceeds of approximately $195.3
million in connection therewith.
On February 3, 1998, the Company filed with the SEC a Form S-3
Registration Statement to register $1 billion of equity securities. The SEC
declared this registration statement effective on February
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PART I
27, 1998. In addition, the Company carried over $272 million related to the
registration statement effective on August 4, 1997. As of December 31, 1999,
$1.1 billion remained outstanding under this registration statement.
On February 18, 1998, the Company completed two offerings of 988,340
publicly registered Common Shares, which were sold to the public at a price of
$50.625 per share. On February 23, 1998, the Company completed an offering of
1,000,000 publicly registered Common Shares, which were sold to the public at a
price of $48 per share. The Company received net proceeds from these offerings
of approximately $95 million.
On March 30, 1998, the Company completed an offering of 495,663
publicly registered Common Shares, which were sold at a price of $47.9156 per
share. The Company received net proceeds of approximately $23.7 million in
connection therewith.
On April 29, 1998, the Company completed an offering of 946,565
publicly registered Common Shares, which were sold at a price of $46.5459 per
share. The Company received net proceeds of approximately $44.1 million in
connection therewith.
On September 20, 1998, the Company completed its repurchase of
2,367,400 of its Common Shares of beneficial interest, on the open market, for
an average price of $40 per share. The purchases were made between August 5 and
September 17, 1998. The Company paid approximately $94.7 million in connection
therewith. These shares were subsequently retired.
During 1999, the Company issued 147,885 Common Shares pursuant to the
Employee Share Purchase Plan and received net proceeds of approximately $5.2
million.
During 1999, the Company issued 22,534 Common Shares pursuant to the
Share Purchase - DRIP Plan and received net proceeds of approximately $1.0
million.
During 1999, the Company issued 36,132 Common Shares pursuant to the
Dividend Reinvestment - DRIP Plan and received net proceeds of approximately
$1.5 million.
On October 12, 1999, the Company repurchased and retired 148,453 Common
Shares previously issued in connection with the LFT Merger. These Common Shares
were owned by various LFT employees and trustees. The Company paid approximately
$6.3 million in connection therewith.
DEBT OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
In October 1997, the Operating Partnership issued $150 million of
unsecured fixed rate notes (the "2017 Notes") in a public debt offering. The
2017 Notes are due on October 15, 2017 and bear interest at 7.125%, which is
payable semiannually in arrears on April 15 and October 15, commencing April 15,
1998. The 2017 Notes are redeemable at any time by the Operating Partnership
pursuant to the terms thereof. The Operating Partnership received net proceeds
of approximately $147.4 million in connection with this issuance.
In November 1997, the Operating Partnership issued $200 million of
unsecured fixed rate notes in a public debt offering. Of the $200 million
issued, $150 million of these notes are due November 15, 2001 (the "2001 Notes")
and bear interest at a rate of 6.55%, which is payable semiannually in arrears
on May 15 and November 15, commencing on May 15, 1998. The remaining $50 million
of these notes are due November 15, 2003 (the "2003 Notes") and bear interest at
a rate of 6.65%, which is payable semiannually
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PART I
in arrears on May 15 and November 15, commencing on May 15, 1998. The Operating
Partnership received net proceeds of approximately $198.5 million in connection
with the 2001 Notes and the 2003 Notes.
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998. As of
December 31, 1999, $430 million remained outstanding under this registration
statement.
In April 1998, the Operating Partnership issued $300 million of
unsecured fixed rate notes (the "2015 Notes") in a public debt offering. The
2015 Notes were issued at a discount, which is being amortized over the life of
the notes on a straight-line basis. The 2015 Notes are due April 13, 2015. The
annual interest rate on the 2015 Notes to April 13, 2005 (the "Remarketing
Date") is 6.63%, which is payable semi-annually in arrears on October 13 and
April 13, commencing October 13, 1998. The 2015 Notes are subject to mandatory
tender to the remarketing agent on the Remarketing Date, at the election of the
remarketing dealer and subject to certain limitations. If the remarketing
dealer, initially Salomon Brothers Inc., does not purchase all tendered 2015
Notes on the Remarketing Date, or in certain other limited circumstances, the
Operating Partnership will be required to repurchase the 2015 Notes at 100% of
their principal amount plus accrued interest. If the 2015 Notes are remarketed,
the 2015 Notes will bear interest at the rate determined by the remarketing
dealer on and after the Remarketing Date. The Operating Partnership received net
proceeds of approximately $298.1 million in connection with this issuance. The
Operating Partnership also received approximately $8.1 million from the sale of
the option to remarket the 2015 Notes on the Remarketing Date, which is being
amortized over the term of the 2015 Notes. Prior to the issuance of the 2015
Notes, the Operating Partnership entered into an interest rate protection
agreement to effectively fix the interest rate cost of such issuance at the
Remarketing Date. The Operating Partnership received a one-time settlement
payment from this transaction, which was approximately $0.6 million and is being
amortized over seven years.
In August 1998, the Operating Partnership issued $100 million of
Remarketed Reset Notes (the "August 2003 Notes") in a public debt offering. The
August 2003 Notes were issued at a discount, which is being amortized over the
life of the notes on a straight-line basis. The August 2003 Notes are due August
21, 2003. During the period from and including August 21, 1998 to but excluding
August 23, 1999 (the "Initial Spread Period") the interest rate on the August
2003 Notes was LIBOR plus 0.45%. The current interest rate for the period from
August 23, 1999 to August 22, 2000 is LIBOR plus 0.75%. Beginning August 23,
1999, the Operating Partnership is entitled to redeem the August 2003 Notes on
certain dates and in certain circumstances. The Operating Partnership received
net proceeds of approximately $99.7 million in connection with this issuance.
In September 1998, the Operating Partnership issued $145 million of
unsecured fixed rate notes (the "2000 Notes") in a public debt offering. The
2000 Notes were issued at a discount, which is being amortized over the life of
the notes on a straight-line basis. The 2000 Notes are due September 15, 2000.
The annual interest rate on the 2000 Notes is 6.15%, which is payable
semi-annually in arrears on March 15 and September 15, commencing March 15,
1999. The Operating Partnership received net proceeds of approximately $144.5
million in connection with this issuance.
In June 1999, the Operating Partnership issued $300 million of
redeemable unsecured fixed rate notes (the "June 2004 Notes") in connection with
the Debt Shelf Registration in a public debt offering. The June 2004 Notes were
issued at a discount, which is being amortized over the life of the notes on a
straight-line basis. The June 2004 Notes are due June 23, 2004. The annual
interest rate on the June 2004 Notes is 7.10%, which is payable semiannually in
arrears on December 23 and June 23, commencing December 23, 1999. The Operating
Partnership received net proceeds of approximately $298.0 million in connection
with this issuance.
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PART I
CREDIT FACILITY
On August 12, 1999 the Company obtained a new three year $700 million
unsecured revolving credit facility, with Bank of America Securities LLC and
Chase Securities Inc. acting as joint lead arrangers. The new line of credit
replaced the Company's $500 million unsecured revolving credit facility, as well
as the $120 million unsecured revolving credit facility which the Company
assumed in the MRY Merger. The prior existing revolving credit facilities were
repaid in full and terminated upon the closing of the new facility. This new
credit facility matures in August 2002 and will be used to fund property
acquisitions, costs for certain properties under development and short term
liquidity requirements. Advances under the credit facility bear interest at
variable rates based upon LIBOR available at various interest periods, plus a
certain spread dependent upon the Company's credit rating. As of March 7, 2000,
$110 million was outstanding under this new facility bearing interest at a
weighted average rate of 6.28%.
BUSINESS COMBINATIONS
On May 30, 1997, the Company completed the acquisition of the
multifamily property business of Wellsford through the Wellsford Merger. The
transaction was valued at approximately $1 billion and included 72 Properties of
Wellsford containing 19,004 units. The purchase price consisted of:
- 10.8 million Common Shares issued by the Company with a market value,
at the date of closing, of $443.7 million;
- liquidation value of $157.5 million for the following:
a) Wellsford Series A Cumulative Convertible Preferred Shares of
Beneficial Interest;
b) Wellsford Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $345 million;
- assumption of other liabilities of approximately $33.5 million; and
- other merger related costs of approximately $23.4 million.
In the Wellsford Merger, each outstanding common share of beneficial
interest of Wellsford was converted into .625 of a Common Share. In addition,
Wellsford Series A Cumulative Convertible Preferred Shares of Beneficial
Interest were redesignated as the Company's 3,999,800 Series E Cumulative
Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series E Preferred Shares") and Wellsford's Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest were redesignated as the Company's
2,300,000 9.65% Series F Cumulative Redeemable Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series F Preferred Shares").
On December 23, 1997, the Company completed the acquisition of the
multifamily property business of EWR through the EWR Merger. The transaction was
valued at approximately $1.2 billion and included 53 Properties of EWR
containing 15,331 units and three Properties under construction or expansion
containing 953 units. The purchase price consisted of:
- 10.3 million Common Shares issued by the Company with a market value,
at the date of closing, of approximately $501.6 million;
- assumption of EWR's minority interest with a market value of
approximately $107.3 million;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $498 million;
- assumption of other liabilities of approximately $28.2 million; and
- other merger related costs of approximately $16.7 million.
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PART I
In the EWR Merger, each outstanding common share of beneficial interest
of EWR was converted into .50 of a Common Share.
On October 19, 1998, the Company completed the acquisition of the
multifamily property business of MRY through the MRY Merger. The transaction
was valued at approximately $2.2 billion and included 108 Properties
containing 32,315 units, three Properties under construction and/or expansion
anticipated to contain 872 units and six Additional Properties containing
1,297 units that were contributed to six joint ventures. The purchase price
consisted of:
- 21.8 million Common Shares issued by the Company with a market value,
at the date of closing, of approximately $1 billion;
- liquidation value of $369.1 million for the following:
a) MRY Series A Cumulative Convertible Preferred Shares of Beneficial
Interest;
b) MRY Series B Cumulative Convertible Preferred Shares of Beneficial
Interest;
c) MRY Series C Cumulative Convertible Preferred Shares of Beneficial
Interest;
d) MRY Series D Cumulative Redeemable Preferred Shares of Beneficial
Interest;
e) MRY Series E Cumulative Redeemable Preferred Shares of Beneficial
Interest;
- assumption of MRY's minority interest with a market value of
approximately $40.2 million.
- assumption of mortgage indebtedness, unsecured notes and the
outstanding balance under a line of credit in the amount of $723.5
million;
- assumption of other liabilities of approximately $46.5 million; and
- other merger related costs of approximately $51.9 million.
In the MRY Merger, each outstanding common share of beneficial interest
of MRY was converted into .53 of a Common Share. In addition, MRY spun-off
certain assets and liabilities to Merry Land Properties, Inc. ("MRYP Spinco").
In connection with this spin-off, each holder of MRY common shares received one
share of MRYP Spinco for each twenty shares of MRY common held. As partial
consideration for the transfer, the Company extended a $25 million, one year,
non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement. As
additional consideration, the Company extended an additional $20 million of
indebtedness to MRYP Spinco under a 15-year Subordinated Debt Agreement, bearing
interest payable quarterly. The Company also entered into the Preferred Stock
Agreement and received 5,000 shares of MRYP Spinco Preferred Stock with a
liquidation preference of $1,000 per share. In June 1999, MRYP Spinco repaid the
entire outstanding Senior Note balance of $18.3 million and the Subordinated
Debt Agreement balance of $20.0 million and repurchased all 5,000 shares of the
preferred stock for $2.7 million. There is no further obligation by either party
in connection with these agreements.
In addition, MRY Series A Cumulative Convertible Preferred Shares of
Beneficial Interest were redesignated as the Company's 164,951 Series H
Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series H Preferred Shares"), the MRY Series B Cumulative
Convertible Preferred Shares of Beneficial Interest were redesignated as the
Company's 4,000,000 Series I Cumulative Convertible Preferred Shares of
Beneficial Interest, $0.01 par value per share (the "Series I Preferred
Shares"), the MRY Series C Cumulative Convertible Preferred Shares of Beneficial
Interest were redesignated as the Company's 4,599,400 Series J Cumulative
Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series J Preferred Shares"), the MRY Series D Cumulative Redeemable
Preferred Shares of Beneficial Interest were redesignated as the Company's
1,000,000 Series K Cumulative Redeemable Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series K Preferred Shares") and the
MRY Series E Cumulative Redeemable Preferred Shares of Beneficial Interest were
redesignated as the Company's 4,000,000 Series L Cumulative Redeemable Preferred
Shares of
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PART I
Beneficial Interest, $0.01 par value per share (the "Series L Preferred
Shares"). During 1999, all of the Series I Preferred Shares were converted into
2,566,797 Common Shares of the Company.
On August 23, 1999, the Company sold its entire interest in the six
joint venture properties to MRYP Spinco and received $54.1 million. There is no
further obligation by either party in connection with the joint venture
agreements.
On October 1, 1999, the Company completed the acquisition of the
multifamily property business of LFT through the LFT Merger. The transaction was
valued at approximately $738 million and included 402 Properties of LFT
containing 36,609 units. The purchase price consisted of:
- 4.0 million Common Shares issued by the Company with a market value,
at the date of closing, of approximately $181.1 million;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $528.3 million;
- acquisition of other assets of approximately $40.9 million and
assumption of other liabilities of approximately $25.3 million; and
- other merger related costs of approximately $24.5 million.
In the LFT Merger, each outstanding common share of beneficial interest
of LFT was converted into .463 of a Common Share.
RECENT TRANSACTIONS
On January 14, 2000, the Company entered into an agreement to acquire,
in an all cash and debt transaction, Globe Business Resources, Inc. ("Globe"),
one of the nation's largest providers of temporary corporate housing and
furniture rental. The shareholders of Globe will receive $13.00 per share upon
closing and up to an additional $0.50 per share post closing, upon final
determination of costs, if any, relating to any potential breaches of certain
representations and covenants. At full funding of $13.50 per share, the Company
would pay approximately $64.8 million in cash for Globe. In addition, the
Company will assume approximately $69.4 million in debt. The acquisition, which
is expected to close during the second quarter of 2000, requires Globe
shareholder approval.
From January 1, 2000 through March 3, 2000, the Company acquired
Windmont Apartments, a 178-unit property located in Atlanta, GA from an
unaffiliated party for a total purchase price of approximately $10.3 million.
From January 1, 2000 through March 3, 2000, the Company disposed of six
Properties for a total sales price of $46.7 million.
On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary
of the Operating Partnership, issued 1.1 million units of 8.50% Series B
Cumulative Convertible Redeemable Preference Units with an equity value of $55.0
million. Lexford Properties, L.P. received $53.6 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company.
The Series M-1 Preferred Shares are not convertible to EQR Common Shares.
Dividends for the Series B Preference Units or the Series M-1 Preferred Shares
are payable quarterly at the rate of $4.25 per unit/share per year. The net
proceeds received from this transaction will be used for scheduled mortgage and
line of credit repayments.
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PART I
COMPETITION
All of the Properties are located in developed areas that include other
multifamily properties. The number of competitive multifamily properties in a
particular area could have a material effect on the Company's ability to lease
units at the Properties or at any newly acquired properties and on the rents
charged. The Company may be competing with other entities that have greater
resources than the Company and whose managers have more experience than the
Company's officers and trustees. In addition, other forms of multifamily
properties, including multifamily properties and manufactured housing controlled
by Mr. Zell, and single-family housing, provide housing alternatives to
potential residents of multifamily properties.
RISK FACTORS
THE FOLLOWING RISK FACTORS OMIT THE USE OF DEFINED TERMS USED ELSEWHERE HEREIN
AND CONTAIN DEFINED TERMS THAT ARE DIFFERENT FROM THOSE USED IN THE OTHER
SECTIONS OF THIS REPORT. UNLESS OTHERWISE INDICATED, WHEN USED IN THIS SECTION,
THE TERMS "WE" AND "US" REFER TO EQUITY RESIDENTIAL PROPERTIES TRUST AND ITS
SUBSIDIARIES, INCLUDING ERP OPERATING LIMITED PARTNERSHIP.
Set forth below are the risks that we believe are important to
investors who purchase or own our common shares of beneficial interest or
preferred shares of beneficial interest (which we refer to collectively as
"Shares") or units of limited partnership interest ("Units") of ERP Operating
Limited Partnership, our operating partnership, which are redeemable on a
one-for-one basis for common shares or their cash equivalent. In this section,
we refer to the Shares and the Units together as our "securities," and the
investors who own Shares and/or Units as our "security holders."
DEBT FINANCING AND PREFERRED SHARES COULD ADVERSELY AFFECT OUR PERFORMANCE
GENERAL
As of December 31, 1999, certain of our multifamily properties were
subject to approximately $2.9 billion of mortgage indebtedness and our total
debt equaled approximately $5.5 billion. Of our total debt outstanding, $700.9
million (including the balance of $300 million outstanding on our $700 million
unsecured line of credit) was floating rate debt, and $965.8 million was issued
at tax exempt rates. In addition to debt, we have issued preferred shares of
beneficial interest. Our use of debt and preferred equity financing creates
certain risks, including the following.
SCHEDULED DEBT PAYMENTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION
In the future, our cash flow could be insufficient to meet required
payments of principal and interest or to pay distributions on our securities at
expected levels. We may not be able to refinance existing debt (which in
virtually all cases requires substantial principal payments at maturity) and, if
we can, the terms of such refinancing might not be as favorable as the terms of
existing indebtedness. If principal payments due at maturity cannot be
refinanced, extended or paid with proceeds of other capital transactions, such
as new equity capital, our cash flow will not be sufficient in all years to
repay all maturing debt. As a result, we may be forced to postpone capital
expenditures necessary for the maintenance of our properties and may have to
dispose of one or more properties on terms that would otherwise be unacceptable
to us.
FINANCIAL COVENANTS COULD ADVERSELY AFFECT THE COMPANY'S FINANCIAL
CONDITION
If a property we own is mortgaged to secure payment of indebtedness and
we are unable to meet
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<PAGE>
PART I
the mortgage payments, the holder of the mortgage could foreclose on the
property, resulting in loss of income and asset value. Foreclosure on mortgaged
properties or an inability to refinance existing indebtedness would likely have
a negative impact on our financial condition and results of operations. A
foreclosure could also result in our recognition of taxable income without our
actually receiving cash proceeds from the disposition of the property with which
to pay the tax. This could adversely affect our cash flow and could make it more
difficult for us to meet our distribution requirements as a real estate
investment trust (a "REIT").
The mortgages on our properties contain customary negative covenants
that, among other things, limit our ability, without the prior consent of the
lender, to further mortgage the property and to discontinue insurance coverage.
In addition, our credit facilities contain certain customary restrictions,
requirements and other limitations on our ability to incur indebtedness. The
indentures under which a substantial portion of our debt was issued contain
certain financial and operating covenants including, among other things,
maintenance of certain financial ratios, as well as limitations on our ability
to incur secured and unsecured indebtedness (including acquisition financing),
sell all or substantially all of our assets and engage in mergers,
consolidations and certain acquisitions. Accordingly, in the event that we are
unable to raise additional equity or borrow money because of these restrictions,
our ability to acquire additional properties may be limited. If we are unable to
acquire additional properties, our ability to increase the distributions to
security holders, as we have done in the past, will be limited to management's
ability to increase funds from operations, and thereby cash available for
distributions, from the existing properties in our portfolio at such time.
Some of the properties were financed with tax-exempt bonds that contain
certain restrictive covenants or deed restrictions. We have retained an
independent outside consultant to monitor compliance with the restrictive
covenants and deed restrictions that affect these properties. If these bond
compliance requirements require us to lower our rental rates to attract low or
moderate income tenants, or eligible/qualified tenants, then our income from
these properties may be limited.
OUR DEGREE OF LEVERAGE COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING
Our debt to market capitalization ratio (total debt as a percentage of
total debt plus the market value of the outstanding common and preferred shares
and units) was approximately 42.75% as of December 31, 1999. We have a policy of
incurring indebtedness for borrowed money only through the Operating Partnership
and its subsidiaries and only if upon such incurrence our debt to market
capitalization ratio would be approximately 50% or less. Our degree of leverage
could have important consequences to security holders. For example, the degree
of leverage could affect our ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, development or
other general corporate purposes, making us more vulnerable to a downturn in
business or the economy generally.
RISING INTEREST RATES COULD ADVERSELY AFFECT CASH FLOW
Advances under our credit facility bear interest at variable rates
based upon LIBOR available at various interest periods, plus a certain spread
dependent upon the Company's credit rating. Certain of our senior unsecured debt
instruments also, from time to time, bear interest at floating rates. We may
also borrow additional money with variable interest rates in the future.
Increases in interest rates would increase our interest expenses under these
debt instruments and would increase the costs of refinancing existing
indebtedness and of issuing new debt. Accordingly, higher interest rates would
adversely affect cash flow and our ability to service our debt and to make
distributions to security holders.
15
<PAGE>
PART I
CONTROL AND INFLUENCE BY SIGNIFICANT SHAREHOLDERS COULD BE EXERCISED IN A MANNER
ADVERSE TO OTHER SHAREHOLDERS
GENERAL
As of March 1, 2000, (1) Samuel Zell and certain of the current holders
of Units issued to affiliates of Mr. Zell, who contributed 33 properties to us
at the time of our initial public offering, owned in the aggregate approximately
2.85% of our common shares (Mr. Zell and these affiliates are described herein
as the "Zell Original Owners"); (2) certain entities controlled by Starwood
Capital Partners LP ("Starwood") and its affiliates, who contributed 23
properties to us at the time of our initial public offering, owned less than 1%
of our common shares; and (3) our executive officers and trustees, excluding Mr.
Zell (see disclosure above), owned approximately 4.37% of our common shares.
These percentages assume all options are exercised for common shares and all
Units are converted to common shares. In addition, the consent of certain
affiliates of Mr. Zell and Starwood is required for certain amendments to the
Fifth Amended and Restated ERP Operating Limited Partnership Agreement of
Limited Partnership (the "Partnership Agreement"). As a result of their security
ownership and rights concerning amendments to the Partnership Agreement, Mr.
Zell and the Starwood owners may have substantial influence over the Company.
Although these security holders have not agreed to act together on any matter,
they would be in a position to exercise even more influence over the Company's
affairs if they were to act together in the future. This influence might be
exercised in a manner that is inconsistent with the interests of other security
holders.
MR. ZELL AND OTHERS ARE EXEMPT FROM THE 5% OWNERSHIP LIMIT GENERALLY
APPLICABLE TO SECURITIES HOLDERS
In order to maintain its qualification as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"), not more than 50% of the value of
the outstanding Shares may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities). To assure
compliance with this test, our Declaration of Trust restricts the ownership of
more than 5% of the lesser of the number or value of the outstanding Shares by
any single security holder, subject to certain exceptions. These restrictions do
not apply to the ownership of common shares that may be acquired by the holders
of Units issued to the Zell Original Owners and the Starwood owners.
Additionally, our Declaration of Trust exempts any transferees of such common
shares from the 5% ownership limit, provided such transfers do not result in an
increased concentration in the ownership.
ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND CAN BE COSTLY
Federal, state and local laws and regulations relating to the
protection of the environment may require a current or previous owner or
operator of real estate to investigate and clean up hazardous or toxic
substances or petroleum product releases at such property. The owner or operator
may have to pay a governmental entity or third parties for property damage and
for investigation and clean-up costs incurred by such parties in connection with
the contamination. These laws typically impose clean-up responsibility and
liability without regard to whether the owner or operator knew of or caused the
presence of the contaminants. Even if more than one person may have been
responsible for the contamination each person covered by the environmental laws
may be held responsible for all of the clean-up costs incurred. In addition,
third parties may sue the owner or operator of a site for damages and costs
resulting from environmental contamination emanating from that site.
Environmental laws also govern the presence, maintenance and removal of
asbestos. These laws require that owners or operators of buildings containing
asbestos properly manage and maintain the asbestos, that they notify and train
those who may come into contact with asbestos and that they
16
<PAGE>
PART I
undertake special precautions, including removal or other abatement, if asbestos
would be disturbed during renovation or demolition of a building. These laws may
impose fines and penalties on building owners or operators who fail to comply
with these requirements and may allow third parties to seek recovery from owners
or operators for personal injury associated with exposure to asbestos fibers.
Substantially all of our properties have been the subject of
environmental assessments completed by qualified independent environmental
consultant companies. These environmental assessments have not revealed, nor are
we aware of, any environmental liability that our management believes would have
a material adverse effect on our business, results of operations, financial
condition or liquidity.
We cannot assure you that existing environmental assessments of our
properties reveal all environmental liabilities, that any prior owner of any of
our properties did not create a material environmental condition not known to
us, or that a material environmental condition does not otherwise exist as to
any one or more of our properties.
OUR PERFORMANCE AND SHARE VALUE ARE SUBJECT TO RISKS ASSOCIATED WITH THE REAL
ESTATE INDUSTRY
GENERAL
Real property investments are subject to varying degrees of risk and
are relatively illiquid. Several factors may adversely affect the economic
performance and value of our properties. These factors include changes in the
national, regional and local economic climate, local conditions such as an
oversupply of multifamily properties or a reduction in demand for our
multifamily properties, the attractiveness of our properties to tenants,
competition from other available multifamily property owners and changes in
market rental rates. Our performance also depends on our ability to collect rent
from tenants and to pay for adequate maintenance, insurance and other operating
costs, including real estate taxes, which could increase over time. Also, the
expenses of owning and operating a property are not necessarily reduced when
circumstances such as market factors and competition cause a reduction in income
from the property.
WE MAY BE UNABLE TO RENEW LEASES OR RELET SPACE AS LEASES EXPIRE
When our tenants decide not to renew their leases upon expiration, we
may not be able to relet their space. Even if the tenants do renew or we can
relet the space, the terms of renewal or reletting may be less favorable than
current lease terms. If we are unable to promptly renew the leases or relet the
space, or if the rental rates upon renewal or reletting are significantly lower
than expected rates, then our results of operations and financial condition will
be adversely affected. Consequently, our cash flow and ability to service debt
and make distributions to security holders would be reduced.
NEW ACQUISITIONS OR DEVELOPMENTS MAY FAIL TO PERFORM AS EXPECTED AND
COMPETITION FOR ACQUISITIONS MAY RESULT IN INCREASED PRICES FOR
PROPERTIES
We intend to continue to actively acquire or develop multifamily
properties. Newly acquired or developed properties may fail to perform as
expected. We may underestimate the costs necessary to bring an acquired property
up to standards established for its intended market position or to develop a
property. Additionally, we expect that other major real estate investors with
significant capital will compete with us for attractive investment
opportunities. This competition has increased prices for multifamily properties.
We may not be in a position or have the opportunity in the future to make
suitable property acquisitions on favorable terms.
17
<PAGE>
PART I
BECAUSE REAL ESTATE INVESTMENTS ARE ILLIQUID, WE MAY NOT BE ABLE TO
SELL PROPERTIES WHEN APPROPRIATE
Real estate investments generally cannot be sold quickly. We may not be
able to vary our portfolio promptly in response to economic or other conditions.
This inability to respond promptly to changes in the performance of our
investments could adversely affect our financial condition and ability to make
distributions to our security holders.
CHANGES IN LAWS COULD AFFECT OUR BUSINESS
We are generally not able to pass through to our tenants under existing
leases increases in real estate taxes, income taxes and service or other taxes.
Consequently, any such increases may adversely affect our financial condition
and limit our ability to make distributions to our security holders. Similarly,
changes that increase our potential liability under environmental laws or our
expenditures on environmental compliance would adversely affect our cash flow
and ability to make distributions on our securities.
SHAREHOLDERS' ABILITY TO EFFECT CHANGES IN CONTROL OF THE COMPANY IS LIMITED
PROVISIONS OF OUR DECLARATION OF TRUST AND BYLAWS COULD INHIBIT CHANGES
IN CONTROL
Certain provisions of our Declaration of Trust and Bylaws may delay or
prevent a change in control of the Company or other transactions that could
provide the security holders with a premium over the then-prevailing market
price of their securities or which might otherwise be in the best interest of
our security holders. These include a staggered Board of Trustees and the 5%
Ownership Limit described below. See "--We Have a Share Ownership Limit for REIT
Tax Purposes." Also, any future series of preferred shares of beneficial
interest may have certain voting provisions that could delay or prevent a change
of control or other transactions that might otherwise be in the interest of our
security holders.
WE HAVE A SHARE OWNERSHIP LIMIT FOR REIT TAX PURPOSES
To remain qualified as a REIT for federal income tax purposes, not more
than 50% in value of our outstanding Shares may be owned, directly or
indirectly, by five or fewer individuals at any time during the last half of any
year. To facilitate maintenance of our REIT qualification, our Declaration of
Trust, subject to certain exceptions, prohibits ownership by any single
shareholder of more than 5% of the lesser of the number or value of the
outstanding class of common or preferred shares. See "--Control and Influence by
Significant Shareholders--Mr. Zell and Others are Exempt from the 5% Ownership
Limit Generally Applicable to Securities Holders." We refer to this restriction
as the "Ownership Limit." Absent any exemption or waiver, securities acquired or
held in violation of the Ownership Limit will be transferred to a trust for the
exclusive benefit of a designated charitable beneficiary, and the security
holder's rights to distributions and to vote would terminate. A transfer of
Shares may be void if it causes a person to violate the Ownership Limit. The
Ownership Limit could delay or prevent a change in control and, therefore, could
adversely affect our security holders' ability to realize a premium over the
then-prevailing market price for their Shares.
OUR PREFERRED SHARES OF BENEFICIAL INTEREST MAY AFFECT CHANGES IN
CONTROL
Our Declaration of Trust authorizes the Board of Trustees to issue up
to 100 million preferred shares of beneficial interest, and to establish the
preferences and rights (including the right to vote and the right to convert
into common shares) of any preferred shares issued. The Board of Trustees may
use its powers to issue preferred shares and to set the terms of such securities
to delay or prevent a change in control of the Company, even if a change in
18
<PAGE>
PART I
control were in the interest of security holders. As of December 31, 1999,
25,085,652 preferred shares were issued and outstanding.
INAPPLICABILITY OF MARYLAND LAW LIMITING CERTAIN CHANGES IN CONTROL
Certain provisions of Maryland law applicable to real estate investment
trusts prohibit "business combinations" (including certain issuances of equity
securities) with any person who beneficially owns ten percent or more of the
voting power of outstanding securities, or with an affiliate who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of ten percent or more of the voting power of the trust's outstanding
voting securities (an "Interested Shareholder"), or with an affiliate of an
Interested Shareholder. These prohibitions last for five years after the most
recent date on which the Interested Shareholder became an Interested
Shareholder. After the five-year period, a business combination with an
Interested Shareholder must be approved by two super-majority shareholder votes
unless, among other conditions, the trust's holders of common shares receive a
minimum price for their shares and the consideration is received in cash or in
the same form as previously paid by the Interested Shareholder for its common
shares. As permitted by Maryland law, however, the Board of Trustees of the
Company has opted out of these restrictions with respect to any business
combination involving the Zell Original Owners and persons acting in concert
with any of the Zell Original Owners. Consequently, the five-year prohibition
and the super-majority vote requirements will not apply to a business
combination involving us and any of them. Such business combinations may not be
in the best interest of our security holders.
OUR SUCCESS AS A REIT IS DEPENDENT ON COMPLIANCE WITH FEDERAL INCOME TAX
REQUIREMENTS
OUR FAILURE TO QUALIFY AS A REIT WOULD HAVE SERIOUS ADVERSE
CONSEQUENCES TO OUR SECURITY HOLDERS
We believe that we have qualified for taxation as a REIT for federal
income tax purposes since our taxable year ended December 31, 1992. We plan to
continue to meet the requirements for taxation as a REIT. Many of these
requirements, however, are highly technical and complex. We cannot, therefore,
guarantee that we have qualified or will qualify in the future as a REIT. The
determination that we are a REIT requires an analysis of various factual matters
that may not be totally within our control. For example, to qualify as a REIT,
at least 95% of our gross income must come from sources that are itemized in the
REIT tax laws. We are also required to distribute to security holders at least
95% of our REIT taxable income excluding capital gains. The fact that we hold
our assets through ERP Operating Limited Partnership and its subsidiaries
further complicates the application of the REIT requirements. Even a technical
or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress
and the IRS might make changes to the tax laws and regulations, and the courts
might issue new rulings that make it more difficult, or impossible, for us to
remain qualified as a REIT. We do not believe, however, that any pending or
proposed tax law changes would jeopardize our REIT status.
If we fail to qualify as a REIT, we would be subject to federal income
tax at regular corporate rates. Also, unless the IRS granted us relief under
certain statutory provisions, we would remain disqualified as a REIT for four
years following the year we first failed to qualify. If we fail to qualify as a
REIT, we would have to pay significant income taxes. We, therefore, would have
less money available for investments or for distributions to security holders.
This would likely have a significant adverse affect on the value of our
securities. In addition, we would no longer be required to make any
distributions to security holders.
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<PAGE>
PART I
WE COULD BE DISQUALIFIED AS A REIT OR HAVE TO PAY TAXES IF OUR MERGER
PARTNERS DID NOT QUALIFY AS REIT'S
If any of our recent merger partners had failed to qualify as a REIT
throughout the duration of their existence, then they might have had
undistributed "C corporation earnings and profits" at the time of their merger
with us. If that was the case and we did not distribute those earnings and
profits prior to the end of the year in which the merger took place, we might
not qualify as a REIT. We believe that each of our merger partners qualified as
a REIT and that, in any event, none of them had any undistributed "C corporation
earnings and profits" at the time of their merger with us. If any of our merger
partners failed to qualify as a REIT, an additional concern would be that they
would have recognized taxable gain at the time they were merged with us. We
would be liable for the tax on such gain. In this event, we would have to pay
corporate income tax on any gain existing at the time of the applicable merger
on assets acquired in the merger if the assets are sold within ten years of the
merger. Finally, we could be precluded from electing REIT status for up to four
years after the year in which the predecessor entity failed to qualify for REIT
status.
OTHER TAX LIABILITIES
Even if we qualify as a REIT, we will be subject to certain federal,
state and local taxes on our income and property. In addition, our third-party
management operations, which are conducted through subsidiaries, generally will
be subject to federal income tax at regular corporate rates.
WE DEPEND ON OUR KEY PERSONNEL
We depend on the efforts of the Chairman of our Board of Trustees,
Samuel Zell, and our executive officers, particularly Douglas Crocker II and
Gerald A. Spector. If they resign, our operations could be temporarily adversely
effected. Mr. Crocker and Mr. Spector have entered into Deferred Compensation
Agreements with the Company which provide both with a salary benefit after their
respective termination of employment with the Company. In addition, Mr. Zell,
Mr. Crocker and Mr. Spector have entered into Noncompetition Agreements with the
Company.
COMPLIANCE WITH REIT DISTRIBUTION REQUIREMENTS MAY AFFECT OUR FINANCIAL
CONDITION
DISTRIBUTION REQUIREMENTS MAY INCREASE THE INDEBTEDNESS OF THE COMPANY
We may be required from time to time, under certain circumstances, to
accrue as income for tax purposes interest and rent earned but not yet received.
In such event, or upon our repayment of principal on debt, we could have taxable
income without sufficient cash to enable us to meet the distribution
requirements of a REIT. Accordingly, we could be required to borrow funds or
liquidate investments on adverse terms in order to meet these distribution
requirements.
WE ARE DEPENDENT ON EXTERNAL SOURCES OF CAPITAL
Because of our annual REIT distribution requirements, we may not be
able to fund all future capital needs, including for acquisitions and
developments, from income generated by operations and the disposition of certain
assets. We therefore may have to rely on third-party sources of capital, which
may or may not be available on favorable terms or at all. Our access to
third-party sources of capital depends on a number of things, including the
market's perception of our growth potential and our current and potential future
earnings. Moreover, additional equity offerings, if pursued, may result in
dilution of security holders' interests, and additional debt financing may
increase our leverage.
20
<PAGE>
PART I
FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following discussion summarizes all of the federal income tax
considerations material to a holder of common shares. It is not exhaustive of
all possible tax considerations. For example, it does not give a detailed
discussion of any state, local or foreign tax considerations. The following
discussion also does not address all tax matters that may be relevant to
prospective shareholders in light of their particular circumstances. Moreover,
it does not address all tax matters that may be relevant to shareholders who are
subject to special treatment under the tax laws, such as insurance companies,
tax-exempt entities, financial institutions or broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States.
The specific tax attributes of a particular shareholder could have a
material impact on the tax considerations associated with the purchase,
ownership and disposition of common shares. Therefore, it is essential that each
prospective shareholder consult with his or her own tax advisors with regard to
the application of the federal income tax laws to the shareholder's personal tax
situation, as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
OUR TAXATION
We elected REIT status beginning with the year that ended December 31,
1992. In any year in which we qualify as a REIT, we generally will not be
subject to federal income tax on the portion of our REIT taxable income or
capital gain that we distribute to our shareholders. This treatment
substantially eliminates the double taxation that applies to most corporations,
which pay a tax on their income and then distribute dividends to shareholders
who are in turn taxed on the amount they receive. However, we will be subject to
federal income tax at regular corporate rates upon our REIT taxable income or
capital gain that we do not distribute to our shareholders. We also may be
subject to the corporate "alternate minimum tax" on items of preference under
this alternative tax regime. In addition, we will be subject to a 4% excise tax
if we do not satisfy specific REIT distribution requirements. Moreover, we may
be subject to taxes in certain situations and on certain transactions that we do
not presently contemplate.
If we fail to qualify for taxation as a REIT in any taxable year, we
will be subject to tax on our taxable income at regular corporate rates. We also
may be subject to the corporate "alternate minimum tax." As a result, our
failure to qualify as a REIT would significantly reduce the cash we have
available to distribute to our shareholders. Unless entitled to statutory
relief, we would be disqualified from qualification as a REIT for the four
taxable years following the year during which qualification was lost. It is not
possible to state whether we would be entitled to statutory relief.
Our qualification and taxation as a REIT depend on our ability to
satisfy various requirements under the Internal Revenue Code. We are required to
satisfy these requirements on a continuing basis through actual annual operating
and other results. These requirements relate to the sources of our gross income,
the composition of our assets, the amount of dividends we pay to shareholders,
the diversity of our share ownership, and other aspects of our operations. The
purpose of these requirements is to allow the tax benefit of REIT status only to
companies that:
(a) primarily own, and primarily derive income from, real
estate-related assets and certain other assets which are passive in
nature, and
(b) distribute 95% of the taxable income, computed without regard to
net capital gain, to shareholders.
21
<PAGE>
PART I
On December 17, 1999, as part of a larger bill, the President signed
into law the REIT Modernization Act ("RMA"). Effective beginning January 1,
2001, the RMA will amend the tax rules relating to the composition of a REIT's
assets. Under current law, a REIT is precluded from owning more than 10% of the
outstanding voting securities of any one issuer, other than a wholly owned
subsidiary or another REIT. Beginning in 2001, a REIT will remain subject to the
current restriction and be precluded from owning more than 10% of the value of
all classes of any one issuer.
There is an exception to this prohibition. A REIT will be allowed to
own up to 100% of the securities of a taxable REIT subsidiary ("TRS") that can
provide services to REIT tenants and others without disqualifying the rents that
a REIT receives from its tenants. However, no more than 20% of the value of a
REIT's total assets can be represented by securities of one or more TRS. The
amount of debt and rental payments from a TRS to a REIT will be limited to
ensure that a TRS is subject to an appropriate level of corporate tax. The new
10% asset test will not apply to certain arrangements (including third party
subsidiaries) in place on July 12, 1999, provided that a subsidiary does not
engage in a "substantial" new line of business, its existing business does not
increase, and a REIT does not acquire any new securities in the subsidiary.
Under the RMA, a third party subsidiary will be able to convert tax free into a
TRS.
In addition to the above legislative changes, effective January 1,
2001, the distribution of taxable income requirement of a REIT will be reduced
from 95% to 90%. Further, effective January 1, 2001, the 15% personal property
test (which generally requires that the adjusted basis of a REIT's personal
property not exceed 15% of its real and personal property in order for income to
be considered rents from real property) will be based on fair market values
instead of adjusted tax basis.
We believe that we have qualified as a REIT for all of our taxable
years beginning with 1992. We also believe that our current structure and method
of operation is such that we will continue to qualify as a REIT. However, we
cannot guarantee that the actual results of our operations have satisfied or
will satisfy the requirements under the Internal Revenue Code.
Piper, Marbury, Rudnick & Wolfe, our special tax counsel, will provide
an opinion to the effect that we were organized and have operated in conformity
with the requirements for qualification and taxation as a REIT under the
Internal Revenue Code for each of our taxable years beginning in 1992. The
opinion will also provide that our current organization and method of operation
should enable us to continue to meet the requirements for qualification and
taxation as a REIT. It must be emphasized that the opinion will be based on
various assumptions and factual representations relating to our organization and
our prior and expected operations. In each case, these representations include
representations about our predecessors. Piper, Marbury, Rudnick & Wolfe will not
review our compliance with these requirements on a continuing basis.
TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS
General. If we qualify as a REIT, distributions made to our taxable
domestic shareholders with respect to their common shares, other than capital
gain distributions, will be treated as ordinary income to the extent that the
distributions come out of earnings and profits. These distributions will not be
eligible for the dividends received deduction for shareholders that are
corporations. In determining whether distributions are out of earnings and
profits, we will allocate our earnings and profits first to preferred shares and
second to the common shares. We cannot guarantee that we will have sufficient
earnings and profits to cover distributions on the preferred shares.
To the extent we make distributions to our taxable domestic
shareholders in excess of our earnings and profits, such distributions will be
considered a return of capital. Such distributions will be
22
<PAGE>
PART I
treated as a tax free distribution and will reduce the tax basis of a
shareholder's common shares by the amount of the distribution so treated. To the
extent that such distributions cumulatively exceed a taxable domestic
shareholder's tax basis, such distributions are taxable as a gain from the sale
of his shares. Shareholders may not include in their individual income tax
returns any of our net operating losses or capital losses.
Distributions made by us that we properly designate as capital gain
dividends will be taxable to taxable domestic shareholders as gain from the sale
or exchange of a capital asset held for more than one year. This treatment
applies only to the extent that the designated distributions do not exceed our
actual net capital gain for the taxable year. It applies regardless of the
period for which a domestic shareholder has held his or her common shares.
Despite this general rule, corporate shareholders may be required to treat up to
20% of certain capital gain dividends as ordinary income.
Generally, we will classify a portion of our designated capital gains
dividend as a 20% rate gain distribution and the remaining portion as an
unrecaptured Section 1250 gain distribution. As the names suggest, a 20% rate
gain distribution would be taxable to taxable domestic shareholders that are
individuals, estates or trusts at a maximum rate of 20%. An unrecaptured Section
1250 gain distribution would be taxable to taxable domestic shareholders that
are individuals, estates or trusts at a maximum rate of 25%.
If, for any taxable year, we elect to designate as capital gain
dividends any portion of the dividends paid or made available for the year to
holders of all classes of shares of beneficial interest, then the portion of the
capital gains dividends that will be allocable to the holders of common shares
will be the total capital gain dividends multiplied by a fraction. The numerator
of the fraction will be the total dividends paid or made available to the
holders of the common shares for the year. The denominator of the fraction will
be the total dividends paid or made available to holders of all classes of
shares of beneficial interest.
In general, a shareholder will recognize gain or loss for federal
income tax purposes on the sale or other disposition of common shares in an
amount equal to the difference between:
(a) the amount of cash and the fair market value of any property
received in the sale or other disposition, and
(b) the shareholder's adjusted tax basis in the common shares.
The gain or loss will be capital gain or loss if the common shares were
held as a capital asset. Generally, the capital gain or loss will be long-term
capital gain or loss if the common shares were held for more than one year. The
Taxpayer Relief Act of 1997 allows the IRS to issue regulations relating to the
manner in which capital gain rates will apply to sales of capital assets by
REIT's and to sales of interests in REIT's. The IRS has not issued these
regulations. However, if the IRS does issue these regulations, they could affect
the taxation of gain and loss realized on the disposition of common shares.
Shareholders are urged to consult with their own tax advisors with respect to
the rules contained in the Taxpayer Relief Act.
In general, a loss recognized by a shareholder upon the sale of common
shares that were held for six months or less, determined after applying certain
holding period rules, will be treated as long-term capital loss to the extent
that the shareholder received distributions that were treated as long-term
capital gains. For shareholders who are individuals, trusts and estates, the
long-term capital loss will be apportioned among the applicable long-term
capital gain rates to the extent that distributions received by the shareholder
were previously so treated.
23
<PAGE>
PART I
We may elect to retain (rather than distribute as is generally
required) net capital gain for a taxable year and pay the income tax on that
gain. If we make this election, shareholders must include in income, as
long-term capital gain, their proportionate share of the undistributed net
capital gain. Shareholders will be treated as having paid their proportionate
share of the tax paid by us on these gains. Accordingly, they will receive a
credit or refund for the amount. Shareholders will increase the basis in their
common shares by the difference between the amount of capital gain included in
their income and the amount of the tax they are treated as having paid. Our
earnings and profits will be adjusted appropriately.
TAXATION OF TAX-EXEMPT SHAREHOLDERS
Most tax-exempt organizations are not subject to federal income tax
except to the extent of their unrelated business taxable income, which is often
referred to as UBIT. Unless a tax-exempt shareholder holds its common shares as
debt financed property or uses the common shares in an unrelated trade or
business, distributions to the shareholder should not constitute UBIT.
Similarly, if a tax-exempt shareholder sells common shares, the income from the
sale should not constitute UBIT unless the shareholder held the shares as debt
financed property or used the shares in a trade or business.
However, for tax-exempt shareholders that are social clubs, voluntary
employee benefit associations, supplemental unemployment benefit trusts, and
qualified group legal services plans, income from owning or selling common
shares will constitute UBIT unless the organization is able to properly deduct
amounts set aside or placed in reserve so as to offset the income generated by
its investment in common shares. These shareholders should consult their own tax
advisors concerning these set aside and reserve requirements which are set forth
in the Internal Revenue Code.
In addition, certain pension trusts that own more than 10% of a
pension-held REIT must report a portion of the distributions that they receive
from the REIT as UBIT. We have not been and do not expect to be treated as a
pension-held REIT for purposes of this rule.
TAXATION OF FOREIGN SHAREHOLDERS
The following is a discussion of certain anticipated United States
federal income tax consequences of the ownership and disposition of common
shares applicable to a foreign shareholder. It is based on current law and is
for general information only. A "foreign shareholder" is any person other than:
(a) a citizen or resident of the United States,
(b) a corporation or partnership created or organized in the United
States or under the laws of the United States or of any state
thereof, or
(c) an estate or trust whose income is includable in gross income for
United States federal income tax purposes regardless of its
source.
Distributions by Us. Distributions by us to a foreign shareholder that
are neither attributable to gain from sales or exchanges by us of United States
real property interests nor designated by us as capital gains dividends will be
treated as dividends of ordinary income to the extent that they are made out of
our earnings and profits. These distributions ordinarily will be subject to
withholding of United States federal income tax on a gross basis at a 30% rate,
or a lower treaty rate, unless the dividends are treated as effectively
connected with the conduct by the foreign shareholder of a United States trade
or business. Please note that under certain treaties lower withholding rates
generally applicable to dividends do not apply to dividends from REIT's.
Dividends that are effectively connected with a United States trade or business
will be subject to tax on a net basis at graduated rates, and are generally not
subject to
24
<PAGE>
PART I
withholding. Certification and disclosure requirements must be satisfied
before a dividend is exempt from withholding under this exemption. A foreign
shareholder that is a corporation also may be subject to an additional branch
profits tax at a 30% rate or a lower treaty rate.
We expect to withhold United States income tax at the rate of 30% on
any distributions made to a foreign shareholder unless:
(a) a lower treaty rate applies and any required form or certification
evidencing eligibility for that reduced rate is filed with us, or
(b) the foreign shareholder files an IRS Form 4224 with us claiming
that the distribution is effectively connected income.
A distribution in excess of our current or accumulated earnings and
profits will not be taxable to a foreign shareholder to the extent that the
distribution does not exceed the adjusted basis of the shareholder's common
shares. Instead, the distribution will reduce the adjusted basis of the common
shares. To the extent that the distribution exceeds the adjusted basis of the
common shares, it will give rise to gain from the sale or exchange of the
shareholder's common shares. The tax treatment of this gain is described below.
As a result of a legislative change made by the Small Business Job
Protection Act of 1996, it appears that we will be required to withhold 10% of
any distribution in excess of our earnings and profits. Consequently, although
we intend to withhold at a rate of 30%, or a lower applicable treaty rate, on
the entire amount of any distribution, to the extent that we do not do so,
distributions will be subject to withholding at a rate of 10%. However, a
foreign shareholder may seek a refund of the withheld amount from the IRS if it
subsequently determined that the distribution was, in fact, in excess of our
earnings and profits, and the amount withheld exceeded the foreign shareholder's
United States tax liability with respect to the distribution.
Distributions to a foreign shareholder that we designate at the time of
the distributions as capital gain dividends, other than those arising from the
disposition of a United States real property interest, generally will not be
subject to United States federal income taxation unless:
(a) the investment in the common shares is effectively connected with
the foreign shareholder's United States trade or business, in
which case the foreign shareholder will be subject to the same
treatment as domestic shareholders, except that a shareholder that
is a foreign corporation may also be subject to the branch profits
tax, as discussed above, or
(b) the foreign shareholder is a nonresident alien individual who is
present in the United States for 183 days or more during the
taxable year and has a "tax home" in the United States, in which
case the nonresident alien individual will be subject to a 30% tax
on the individual's capital gains.
Under the Foreign Investment in Real Property Tax Act, which is known
as FIRPTA, distributions to a foreign shareholder that are attributable to gain
from sales or exchanges of United States real property interests will cause the
foreign shareholder to be treated as recognizing the gain as income effectively
connected with a United States trade or business. This rule applies whether or
not a distribution is designated as a capital gain dividend. Accordingly,
foreign shareholders generally would be taxed on these distributions at the same
rates applicable to U.S. shareholders, subject to a special alternative minimum
tax in the case of nonresident alien individuals. In addition, a foreign
corporate shareholder might be subject to the branch profits tax discussed
above. We are required to withhold 35% of these distributions. The withheld
amount can be credited against the foreign shareholder's United States federal
income tax liability.
25
<PAGE>
PART I
Although the law is not entirely clear on the matter, it appears that
amounts we designate as undistributed capital gains in respect of the common
shares held by U.S. shareholders would be treated with respect to foreign
shareholders in the same manner as actual distributions of capital gain
dividends. Under that approach, foreign shareholders would be able to offset as
a credit against the United States federal income tax liability their
proportionate share of the tax paid by us on these undistributed capital gains.
In addition, foreign shareholders would be able to receive from the IRS a refund
to the extent their proportionate share of the tax paid by us were to exceed
their actual United States federal income tax liability.
SALES OF COMMON SHARES. Gain recognized by a foreign shareholder upon
the sale or exchange of common shares generally will not be subject to United
States taxation unless the shares constitute a "United States real property
interest" within the meaning of FIRPTA. The common shares will not constitute a
United States real property interest so long as we are a domestically controlled
REIT. A domestically controlled REIT is a REIT in which at all times during a
specified testing period less than 50% in value of its stock is held directly or
indirectly by foreign shareholders. We believe that we are a domestically
controlled REIT. Therefore, we believe that the sale of common shares will not
be subject to taxation under FIRPTA. However, because common shares and
preferred shares are publicly traded, we cannot guarantee that we will continue
to be a domestically controlled REIT. In any event, gain from the sale or
exchange of common shares not otherwise subject to FIRPTA will be taxable to a
foreign shareholder if either:
(a) the investment in the common shares is effectively connected with
the foreign shareholder's United States trade or business, in
which case the foreign shareholder will be subject to the same
treatment as domestic shareholders with respect to the gain, or
(b) the foreign shareholder is a nonresident alien individual who is
present in the United States for 183 days or more during the
taxable year and has a tax home in the United States, in which
case the nonresident alien individual will be subject to a 30% tax
on the individual's capital gains.
Even if we do not qualify as or cease to be a domestically controlled
REIT, gain arising from the sale or exchange by a foreign shareholder of common
shares still would not be subject to United States taxation under FIRPTA as a
sale of a United States real property interest if:
(a) the class or series of shares being sold is "regularly traded," as
defined by applicable IRS regulations, on an established
securities market such as the New York Stock Exchange, and
(b) the selling foreign shareholder owned 5% or less of the value of
the outstanding class or series of shares being sold throughout
the five-year period ending on the date of the sale or exchange.
If gain on the sale or exchange of common shares were subject to
taxation under FIRPTA, the foreign shareholder would be subject to regular
United States income tax with respect to the gain in the same manner as a
taxable U.S. shareholder, subject to any applicable alternative minimum tax, a
special alternative minimum tax in the case of nonresident alien individuals and
the possible application of the branch profits tax in the case of foreign
corporations. The purchaser of the common shares would be required to withhold
and remit to the IRS 10% of the purchase price.
OTHER TAX CONSIDERATIONS
CLINTON ADMINISTRATION PROPOSAL. The Clinton Administration's fiscal
year 2001 budget proposal was announced on February 1, 2000. One part of the
proposed budget would amend the tax rules relating to the distribution of a
REIT's income. Under current law, a REIT is required to distribute
26
<PAGE>
PART I
at least 85% of its ordinary income and 95% of its capital gains during a
taxable year in order to avoid a 4% excise tax on the undistributed amount.
Under the Clinton Administration proposal, a REIT would be required to
distribute 98% of both ordinary income and capital gain net income to avoid the
excise tax. If this proposal were enacted, it would be effective for calendar
years beginning after December 31, 2000.
As in previous Clinton Administration proposals, the administration
proposes a "closely held REIT" ownership test, under which no "person" (i.e., a
corporation, partnership or trust, including a pension or profit sharing trust)
could own stock of a REIT possessing 50% or more of the total combined voting
power of all classes of voting stock or 50% or more of the total value of shares
of all classes of stock. This 2001 proposal contains an exception for REIT's
owning more than 50% of another REIT. Further, there is a newly proposed
"limited look-through rule" for partnerships that own REIT's. There is no
exception for publicly traded REIT's. This proposal, if enacted, would be
effective for entities electing REIT status for taxable years beginning on or
after the date of first committee action (an entity that has elected REIT status
prior to this date will avoid these restrictions so long as it has sufficient
business assets or activities as of such date). It is presently uncertain
whether these REIT proposals, or any other proposals regarding REIT's, will be
enacted.
OUR MANAGEMENT COMPANY AND OTHER SUBSIDIARIES. A small portion of the
cash to be used by the Operating Partnership to fund distributions to us is
expected to come from payments of dividends on non-voting stock of management
companies and other companies held by the Operating Partnership. These companies
pay federal and state income tax at the full applicable corporate rates. They
will attempt to minimize the amount of these taxes, but we cannot guarantee
whether or the extent to, which measures taken to minimize these taxes, will be
successful. To the extent that these companies are required to pay taxes, the
cash available for distribution from these management companies by us to
shareholders will be reduced accordingly.
STATE AND LOCAL TAXES. We and our shareholders may be subject to state
or local taxation in various jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of us and our
shareholders may not conform to the federal income tax consequence discussed
above. Consequently, prospective shareholders should consult their own tax
advisors regarding the effect of state and local tax laws on an investment in
common shares.
27
<PAGE>
PART I
ITEM 2. THE PROPERTIES
As of December 31, 1999, the Company owned or had interests in a
portfolio of 1,062 multifamily Properties located in 35 states containing
225,708 apartment units. The Company has:
<TABLE>
<CAPTION>
AVERAGE AVERAGE AVERAGE
NUMBER OF NUMBER OCCUPANCY MONTHLY RENT
TYPE PROPERTIES OF UNITS PERCENTAGE
------------------------- ---------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
GARDEN 652 282 94.9% $ 764
MID/HIGH-RISE 24 360 95.4% $ 1,239
RANCH 386 85 93.3% $ 463
----------------
TOTAL 1,062
================
</TABLE>
Tenant leases are generally year-to-year and require security deposits.
The garden-style properties are generally defined as properties with two and/or
three floors while the mid-rise/high-rise properties are defined as properties
greater than three floors. These two property types typically provide residents
with amenities, which may include a clubhouse, swimming pool, laundry facilities
and cable television access. Certain of these properties offer additional
amenities such as saunas, whirlpools, spas, sports courts and exercise rooms.
The ranch-style properties, which are defined as single story properties,
generally do not provide additional amenities for its residents.
It is management's role to monitor compliance with Property policies
and to provide preventive maintenance of the Properties including common areas,
facilities and amenities. The Company holds periodic meetings of its Property
management personnel for training and implementation of the Company's
strategies. The Company believes that, due in part to this strategy, the
Properties historically have had high occupancy rates.
The distribution of the Properties throughout the United States
reflects the Company's belief that geographic diversification helps insulate the
portfolio from regional and economic influences. At the same time, the Company
has sought to create clusters of Properties within each of its primary markets
in order to achieve economies of scale in management and operation; however, the
Company may acquire additional multifamily properties located anywhere in the
United States.
The Company beneficially owns fee simple title to 976 of the 983
controlled properties and holds a 99-year leasehold interest with respect to
one Property (Mallgate). In addition, with respect to two Properties, the
Company owns the debt collateralized by such Properties and with respect to
four Properties, the Company owns an interest in the debt collateralized by
the Properties. The remaining 79 properties represent investments in
partnership interests and/or subordinated mortgages containing 11,648 units.
Direct fee simple title for certain of the Properties is owned by
single-purpose nominee corporations, LLC's or land trusts that engage in no
business other than holding title to the Property for the benefit of the
Company. Holding title in such a manner is expected to make it less costly to
transfer such Property in the future in the event of a sale and should
facilitate financing, since lenders often require title to a Property to be held
in a single purpose entity in order to isolate that Property from potential
liabilities of other Properties. Direct fee simple title for certain other
Properties is owned by a single LLC.
The Company also leases (under operating leases) various management,
regional and corporate offices throughout the United States. See Item 1 for the
locations of these offices.
The following table sets forth certain information by type and by state
relating to the Properties owned by the Company or in which the Company had a
direct equity or mortgage interest at December 31, 1999.
28
<PAGE>
PART I
<TABLE>
<CAPTION>
GARDEN-STYLE PROPERTIES
AVERAGE DECEMBER 31, 1999
OCCUPANCY AVERAGE MONTHLY
NUMBER OF NUMBER PERCENTAGE OF PERCENTAGE AS OF RENTAL RATE PER
STATE PROPERTIES OF UNITS TOTAL UNITS DECEMBER 31, 1999 UNIT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama 12 2,483 1.10 % 87.4 % $507
Arizona 65 19,513 8.65 94.9 734
California 70 18,215 8.07 96.5 1,061
Colorado 31 8,102 3.59 95.0 733
Connecticut 1 156 0.07 93.6 814
Florida 85 24,448 10.83 94.5 717
Georgia 40 13,112 5.81 94.7 769
Illinois 6 2,154 0.95 96.1 978
Indiana 1 320 0.14 94.7 627
Iowa 1 200 0.09 93.0 596
Kansas 6 2,392 1.06 96.5 721
Kentucky 7 1,941 0.86 94.0 583
Maine 5 672 0.30 97.1 770
Maryland 27 6,587 2.92 95.9 786
Massachusetts 6 1,214 0.54 96.4 1,141
Michigan 11 4,084 1.81 94.4 821
Minnesota 17 3,641 1.61 95.4 907
Missouri 8 1,590 0.70 95.7 654
Nevada 11 3,595 1.59 93.8 677
New Hampshire 1 390 0.17 96.2 842
New Jersey 1 704 0.31 97.9 959
New Mexico 4 1,073 0.48 93.5 667
North Carolina 38 10,358 4.59 94.8 652
Ohio 1 827 0.37 92.7 836
Oklahoma 9 2,324 1.03 95.8 559
Oregon 11 3,448 1.53 94.1 694
South Carolina 8 1,473 0.65 94.4 543
Tennessee 18 5,081 2.25 94.6 662
Texas 84 26,158 11.59 94.3 704
Utah 4 1,426 0.63 93.5 612
Virginia 16 4,837 2.14 95.4 769
Washington 43 10,367 4.59 95.5 788
Wisconsin 4 1,281 0.57 95.6 897
------------ ------------ ------------
TOTAL GARDEN-STYLE 652 184,166 81.59 %
------------ ------------ ------------
------------ ------------- -----------
AVERAGE GARDEN-STYLE 282 94.9 % $764
------------ ------------- -----------
</TABLE>
29
<PAGE>
PART I
<TABLE>
<CAPTION>
MID-RISE/HIGH-RISE PROPERTIES
AVERAGE DECEMBER 31, 1999
OCCUPANCY AVERAGE MONTHLY
NUMBER OF NUMBER PERCENTAGE OF PERCENTAGE AS OF RENTAL RATE PER
STATE PROPERTIES OF UNITS TOTAL UNITS DECEMBER 31, 1999 UNIT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Arizona 1 611 0.27 % 91.2 % $581
California 1 164 0.07 94.0 1,670
Connecticut 2 407 0.18 95.3 1,939
Florida 2 457 0.20 97.0 973
Illinois 1 1,420 0.63 95.4 838
Iowa 1 186 0.08 95.1 799
Massachusetts 4 2,181 0.97 98.2 1,467
Minnesota 1 162 0.07 98.8 1,246
New Jersey 2 684 0.30 96.0 1,954
Ohio 1 765 0.34 79.3 987
Oregon 1 525 0.23 93.9 915
Texas 2 333 0.15 97.3 1,061
Virginia 1 277 0.12 97.8 1,031
Washington 4 472 0.21 95.0 985
------------ ------------ ------------
TOTAL MID-RISE/HIGH-RISE 24 8,644 3.83 %
------------ ------------ ------------
------------ ------------- -------------
AVERAGE MID-RISE/HIGH-RISE 360 95.4 % $1,239
------------ ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
RANCH-STYLE PROPERTIES
<S> <C> <C> <C> <C> <C>
Alabama 2 159 0.07 % 94.0 % $388
Florida 97 8,922 3.95 94.4 468
Georgia 60 4,964 2.20 93.6 494
Illinois 4 281 0.12 91.9 444
Indiana 51 4,415 1.96 90.6 450
Kentucky 27 2,026 0.90 95.2 428
Maryland 4 413 0.18 92.7 537
Michigan 21 1,720 0.76 97.3 539
Ohio 100 8,337 3.69 92.3 439
Pennsylvania 7 580 0.26 93.2 534
South Carolina 3 269 0.12 93.9 444
Tennessee 5 348 0.15 96.5 453
Texas 1 67 0.03 93.0 467
West Virginia 4 397 0.18 91.1 423
------------ ------------ ------------
TOTAL RANCH-STYLE 386 32,898 14.58 %
------------ ------------ ------------
------------ ------------- -------------
AVERAGE RANCH-STYLE 85 93.3 % $463
------------ ------------- -------------
TOTAL EQR RESIDENTIAL PORTFOLIO ------------ ------------ ------------
1,062 225,708 100.00 %
============ ============ ============
</TABLE>
30
<PAGE>
PART I
The properties currently under development (see discussion in Item 7) are
included in the following table.
<TABLE>
<CAPTION>
DEVELOPMENT ESTIMATED EQR TOTAL EQR
ESTIMATED COST FUNDED FUTURE FUNDING FUNDING
DEVELOPMENT COST AT 12/31/1999 OBLIGATION OBLIGATION ESTIMATED
DEVELOPMENT NUMBER OF NUMBER (IN (IN (IN (IN COMPLETION
PROJECT NAME LOCATION PROPERTIES OF UNITS MILLIONS) MILLIONS)(1) MILLIONS)(1) MILLIONS)(1) DATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
La Mirage IV (3) San Diego, CA 1 340 $ 54.4 $ 1.6 $ 52.8 $ 54.4 Q1 2001
Town Center II (2) Houston, TX 1 260 15.2 15.2 0.0 15.2 Completed
Prospect Towers II (3) Hackensack, NJ 1 203 33.8 0.6 33.2 33.8 Q2 2001
--- ----- ---------- -------- -------- --------
EXPANSION PROJECTS 3 803 $ 103.4 $ 17.4 $ 86.0 $ 103.4
--- ----- ---------- -------- -------- --------
Peachtree Atlanta, GA 1 355 $ 35.3 $ 8.8 $ 0.0 $ 8.8 Completed
Lincoln Park Lawrence, MA 1 174 17.8 4.5 0.0 4.5 Q2 2000
Mount Laurel Crossing Mt. Laurel, NJ 1 296 25.2 6.3 0.0 6.3 Q2 2000
Fairfax Corners Fairfax, VA 1 652 63.9 16.0 0.0 16.0 Q3 2001
Lakeside Park Tampa, FL 1 264 17.7 4.4 0.0 4.4 Q4 2000
Eden Village Loudon County, VA 1 298 28.7 0.0 7.2 7.2 Q4 2001
Landings, The Lake Zurich, IL 1 206 20.9 5.2 0.0 5.2 Q3 2000
Regents Court San Diego, CA 1 251 37.1 9.3 0.0 9.3 Q1 2001
Potomac Yard Alexandria, VA 1 588 65.7 0.0 16.4 16.4 Q3 2001
Waltham Terrace Waltham, MA 1 192 27.0 0.0 6.7 6.7 Q4 2001
Braintree Woods Braintree, MA 1 202 27.4 6.8 0.0 6.8 Q4 2000
Savannah at Park Place Atlanta, GA 1 416 43.9 9.9 1.1 11.0 Q4 2000
--- ----- ---------- -------- -------- --------
LINCOLN PROPERTY COMPANY
JOINT VENTURE PROJECTS 12 3,894 $ 410.6 $ 71.2 $ 31.4 $ 102.6
----- ----- -------- ------ ------ ------
Hampden Town Center Aurora, CO 1 444 $ 44.8 $ 9.5 $ 1.7 $ 11.2 Q1 2001
Warner Ridge Woodland Hills, CA 1 579 111.2 27.8 0.0 27.8 Q4 2001
----- ----- -------- ------ ------ ------
LEGACY PARTNERS JOINT VENTURE PROJECTS 2 1,023 $ 156.0 $ 37.3 $ 1.7 $ 39.0
----- ----- -------- ------ ------ ------
Parkfield Denver, CO 1 476 $ 37.9 $ 0.0 $ 37.9 $ 37.9 Q4 2000
----- ----- -------- ------ ------ ------
EARNOUT PROJECTS 1 476 $ 37.9 $ 0.0 $ 37.9 $ 37.9
----- ----- -------- ------ ------ ------
----- ----- -------- ------ ------ ------
TOTAL PROJECTS 18 6,196 $ 707.9 $ 125.9 $ 157.0 $ 282.9
===== ====== ====== ====== ====== =========
</TABLE>
(1) The Company's funding of Lincoln Property Company Joint Venture
and Legacy Partners Joint Venture Projects is limited to 25% of
the total development cost.
(2) Town Center II was substantially completed and acquired on
December 22, 1999 and is included in the outstanding property and
unit counts as of that date.
(3) Estimated development cost does not include the cost of land
previously acquired by the Company.
31
<PAGE>
PART I
ITEM 3. LEGAL PROCEEDINGS
Only ordinary routine litigation incidental to the business, which is
not deemed material, was initiated during the year ended December 31, 1999. As
of December 31, 1999, the Company does not believe there is any other litigation
threatened against the Company other than routine litigation arising out of the
ordinary course of business, some of which is expected to be covered by
liability insurance, none of which is expected to have a material adverse effect
on the consolidated financial statements of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
32
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The following table sets forth, for the periods indicated, the high and
low sales prices for and the distributions paid on the Company's Common Shares
which trade on the New York Stock Exchange under the trading symbol EQR.
<TABLE>
<CAPTION>
SALES PRICE
HIGH LOW DISTRIBUTIONS
<S> <C> <C> <C>
FISCAL YEAR 1999
Fourth Quarter Ended December 31, 1999 $43 1/4 $38 1/4 $0.76
Third Quarter Ended September 30, 1999 $45 1/4 $40 11/16 $0.76
Second Quarter Ended June 30, 1999 $48 3/8 $40 1/4 $0.71
First Quarter Ended March 31, 1999 $41 15/16 $39 7/8 $0.71
</TABLE>
<TABLE>
<CAPTION>
SALES PRICE
HIGH LOW DISTRIBUTIONS
<S> <C> <C> <C>
FISCAL YEAR 1998
Fourth Quarter Ended December 31, 1998 $43 1/4 $38 7/8 $0.71
Third Quarter Ended September 30, 1998 $47 1/2 $34 11/16 $0.67
Second Quarter Ended June 30, 1998 $52 9/16 $44 1/2 $0.67
First Quarter Ended March 31, 1998 $52 7/16 $47 $0.67
</TABLE>
In addition, on February 17, 2000, the Company declared a $0.76
distribution per Common Share payable on April 14, 2000 to shareholders of
record on March 20, 2000.
The number of beneficial holders of Common Shares at March 1, 2000, was
approximately 61,000. The number of outstanding Common Shares as of March 1,
2000 was 127,911,989.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating
information on a historical basis for the Company. The following information
should be read in conjunction with all of the financial statements and notes
thereto included elsewhere in this Form 10-K. The historical operating and
balance sheet data for the year ended December 31, 1995 have been derived from
the historical Financial Statements of the Company. The historical operating and
balance sheet data for the years ended December 31, 1999, 1998, 1997 and 1996
have been derived from the historical Financial Statements of the Company
audited by Ernst & Young LLP, independent auditors. Certain capitalized terms as
used herein, are defined in the Notes to the Consolidated Financial Statements.
33
<PAGE>
PART II
<TABLE>
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(FINANCIAL INFORMATION IN THOUSANDS EXCEPT FOR PER SHARE AND PROPERTY DATA)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Total revenues $ 1,753,118 $ 1,336,996 $ 747,078 $ 478,385 $390,384
=============== ============== ============= ============ ========
Income before gain on disposition of
properties, net, extraordinary items and
allocation to Minority Interests $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738
=============== ============== ============= ============ ========
Net income $ 393,881 $ 258,206 $ 176,592 $ 101,624 $ 67,719
=============== ============== ============= ============ ========
Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580 $ 72,609 $ 57,610
=============== ============== ============= ============ ========
Net income per share - basic $ 2.30 $ 1.65 $ 1.79 $ 1.70 $ 1.68
=============== ============== ============= ============ ========
Net income per share - diluted $ 2.29 $ 1.63 $ 1.76 $ 1.69 $ 1.67
=============== ============== ============= ============ ========
Weighted average Common Shares outstanding 122,175 100,370 65,729 42,586 34,358
- basic =============== ============== ============= ============ ========
Weighted average Common Shares outstanding 135,655 112,578 74,281 51,102 43,983
- diluted =============== ============== ============= ============ ========
Distributions declared per Common Share $ 2.94 $ 2.72 $ 2.55 $ 2.40 $ 2.18
outstanding =============== ============== ============= ============ ========
</TABLE>
<TABLE>
BALANCE SHEET DATA (at end of period):
<S> <C> <C> <C> <C> <C>
Real estate, before accumulated $ 12,238,963 $ 10,942,063 $ 7,121,435 $ 2,983,510 $ 2,188,939
depreciation(1)
Real estate, after accumulated $ 11,168,476 $ 10,223,572 $ 6,676,673 $ 2,681,998 $ 1,970,600
depreciation(1)
Total assets $ 11,715,689 $ 10,700,260 $ 7,094,631 $ 2,986,127 $ 2,141,260
Total debt $ 5,473,868 $ 4,680,527 $ 2,948,323 $ 1,254,274 $ 1,002,219
Minority Interests $ 456,979 $ 431,374 $ 273,404 $ 150,637 $ 168,963
Shareholders' equity $ 5,504,934 $ 5,330,447 $ 3,689,991 $ 1,458,830 $ 884,517
OTHER DATA:
Total properties (at end of period) (2) 983 653 463 218 174
Total apartment units (at end of 214,060 186,496 135,200 67,705 53,294
period)(2)
Funds from operations available to Common
Shares and OP Units (3) $ 619,603 $ 458,841 $ 270,763 $ 160,267 $ 120,965
Cash flow provided by (used for):
Operating activities $ 785,219 $ 543,213 $ 348,997 $ 210,930 $ 141,534
Investing activities $ (523,551) $ (1,047,374) $ (1,552,390) $ (635,655) $ (324,018)
Financing activities $ (236,516) $ 474,831 $ 1,089,417 $ 558,568 $ 175,874
</TABLE>
34
<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL DATA (CONSOLIDATED HISTORICAL (CONTINUED))
(1) Includes approximately $18.0 million and $96.3 million of construction
in progress as of December 31, 1999 and 1998, respectively.
(2) Totals exclude properties which the Company had investments in
partnership interests and/or subordinated mortgages. As of December 31,
1999, this represented 79 properties containing 11,648 units. As of
December 31, 1998, this represented 27 properties containing 5,193
units. As of December 31, 1997, this represented 26 properties
containing 5,267 units.
(3) The Company generally considers funds from operations ("FFO") to be one
measure of the performance of real estate companies, including an
equity REIT. The definition of FFO adopted in March 1995 by the Board
of Governors of the National Association of Real Estate Investment
Trusts ("NAREIT") defines FFO as net income (loss) (computed in
accordance with generally accepted accounting principles ("GAAP")),
excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis. The Company believes that
FFO is helpful to investors as a measure of the performance of an
equity REIT because, along with cash flows from operating activities,
financing activities and investing activities, it provides investors an
understanding of the ability of the Company to incur and service debt
and to make capital expenditures. FFO, in and of itself, does not
represent cash generated from operating activities in accordance with
GAAP and therefore should not be considered an alternative to net
income as an indication of the Company's performance or to net cash
flows from operating activities as determined by GAAP as a measure of
liquidity and is not necessarily indicative of cash available to fund
cash needs. The Company's calculation of FFO represents net income
available to Common Shares, excluding gains on dispositions of
properties, gains on early extinguishment of debt, and write-off of
unamortized costs on refinanced debt, plus depreciation on real estate
assets, income allocated to Minority Interests and amortization of
deferred financing costs related to the Predecessor Business. The
Company's calculation of FFO may differ from the methodology for
calculating FFO utilized by other REIT's and, accordingly, may not be
comparable to such other REIT's. The Company's calculation of FFO for
1995 has been restated to reflect the effects of the definition as
mentioned above. The Company will adopt, effective January 1, 2000,
NAREIT's updated recommended definition of FFO as approved in the
fourth quarter of 1999.
35
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7. OVERVIEW
The following discussion and analysis of the results of operations and
financial condition of the Company should be read in connection with the
Consolidated Financial Statements and Notes thereto. Due to the Company's
ability to control the Operating Partnership, the Management Partnerships and
Management Companies, the Financing Partnerships, the LLC's and certain other
entities, each entity has been consolidated with the Company for financial
reporting purposes. Capitalized terms used herein and not defined are as defined
elsewhere in this Annual Report on Form 10-K for the year ended December 31,
1999.
Forward-looking statements in this Item 7 as well as Item 1 of this
Annual Report on Form 10-K are intended to be made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The words
"believes", "expects" and "anticipates" and other similar expressions which are
predictions of or indicate future events and trends and which do not relate
solely to historical matters identify forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties which could
cause actual results, performance, or achievements of the Company to differ
materially from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements. Factors that might
cause such differences include, but are not limited to, the following:
- alternative sources of capital to the Company are higher than
anticipated;
- occupancy levels and market rents may be adversely affected by local
economic and market conditions, which are beyond the Company's
control; and
- additional factors as discussed in Part I of the Annual Report on
Form 10-K.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release any revisions to these
forward-looking statements, which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
RESULTS OF OPERATIONS
The acquired properties are presented in the Consolidated Financial
Statements of the Company from the date of each acquisition or the closing dates
of the Mergers. The following table summarizes the number of Acquired and
Disposed Properties and related units for the prior three years:
<TABLE>
<CAPTION>
ACQUISITIONS DISPOSITIONS
---------------------------------- -------------------------------
Number of Number of Units Number of Number of
YEAR Properties Properties Units
--------------------------- ---------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
1997 252 68,830 7 1,336
1998 210 56,015 20 4,719
1999 366 35,450 36 7,886
</TABLE>
36
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
In addition, during the year ended December 31, 1999, the Company
also sold its entire interest in six MRY joint venture properties (to MRYP
Spinco) containing 1,297 units for approximately $54.1 million.
The Company's overall results of operations for the year ended December
31, 1999 and 1998 have been significantly impacted by the Company's acquisition
and disposition activity. The significant changes in rental revenues, property
and maintenance expenses, real estate taxes and insurance, depreciation expense,
property management and interest expense can all primarily be attributed to the
acquisition of the 1998 Acquired Properties and the 1999 Acquired Properties,
partially offset by the disposition of the 1998 Disposed Properties and the 1999
Disposed Properties. The impact of the 1998 Acquired Properties, the 1999
Acquired Properties, the 1998 Disposed Properties and the 1999 Disposed
Properties is discussed in greater detail in the following paragraphs.
Properties that the Company owned for all of both 1999 and 1998 (the
"1999 Same Store Properties"), which represented 121,490 units, impacted the
Company's results of operations. Properties that the Company owned for all of
both 1998 and 1997 (the "1998 Same Store Properties"), which represented 63,243
units, also impacted the Company's results of operations. Both the 1999 Same
Store Properties and 1998 Same Store Properties are discussed in the following
paragraphs.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED
DECEMBER 31, 1998
For the year ended December 31, 1999, income before gain on disposition
of properties, net, extraordinary item and allocation to Minority Interests
increased by $75.3 million when compared to the year ended December 31, 1998.
This increase was primarily due to the acquisition of the 1998 Acquired
Properties and the 1999 Acquired Properties as well as increases in rental
revenues net of increases in property and maintenance expenses, real estate
taxes and insurance, property management expenses, depreciation expense,
interest expense and general and administrative expenses.
In regard to the 1999 Same Store Properties, total revenues increased
by approximately $35.8 million to $1.1 billion or 3.48% primarily as a result of
higher rental rates charged to new tenants and tenant renewals and an increase
in income from billing tenants for their share of utility costs as well as other
ancillary services provided to tenants. Overall, property operating expenses,
which include property and maintenance, real estate taxes and insurance and an
allocation of property management expenses, increased approximately $0.1 million
or 0.03%. This increase was primarily the result of higher expenses for on-site
compensation costs and an increase in real estate taxes on certain properties,
but was partially offset by lower leasing and advertising, administrative,
maintenance and property management costs.
Property management represents expenses associated with the
self-management of the Company's Properties. These expenses increased by
approximately $8.5 million primarily due to the continued expansion of the
Company's property management business. During 1999, the Company assumed a
management office in Reynoldsburg, Ohio related to the LFT Merger.
Fee and asset management revenues and fee and asset management expenses
are associated with the management of properties not owned by the Company that
are managed for affiliates. These revenues and expenses decreased due to the
Company acquiring certain of these properties that were formerly fee-managed.
37
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Interest expense, including amortization of deferred financing costs,
increased by approximately $91.9 million. This increase was primarily the result
of an increase in the Company's average indebtedness outstanding which increased
by $1.3 billion. However, the Company's effective interest costs decreased from
7.10% for the year ended December 31, 1998 to 7.05% for the year ended December
31, 1999.
General and administrative expenses, which include corporate operating
expenses, increased approximately $1.7 million between the periods under
comparison. This increase was primarily due to the addition of corporate
personnel. However, by gaining certain economies of scale with a much larger
operation these expenses as a percentage of total revenues were 1.27% for the
year ended December 31, 1999 compared to 1.54% of total revenues for the year
ended December 31, 1998.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED
DECEMBER 31, 1997
For the year ended December 31, 1998, income before gain on disposition
of properties, net, extraordinary item and allocation to Minority Interests
increased by $79 million when compared to the year ended December 31, 1997. This
increase was primarily due to increases in rental revenues net of increases in
property and maintenance expenses, real estate taxes and insurance, property
management expenses, depreciation expense, interest expense and general and
administrative expenses.
In regard to the 1998 Same Store Properties rental income increased by
approximately $23.1 million to $527.3 million or 4.59% primarily as a result of
higher rental rates charged to new tenants and tenant renewals, a 1.01% increase
in average economic occupancy levels and an increase in income from billing
tenants for their share of utility costs. Overall, property operating expenses,
which include property and maintenance, real estate taxes and insurance and an
allocation of property management expenses, increased approximately $5.3 million
or 2.65%. This increase was primarily the result of higher compensation costs,
leasing and advertising costs, utilities, and maintenance charges.
Property management represents expenses associated with the
self-management of the Company's Properties. These expenses increased by
approximately $26.3 million primarily due to the continued expansion of the
Company's property management business. The 1998 amounts include a full year
effect of the various offices the Company opened in 1997, including the
Scottsdale Office, which had a significant expansion resulting from the EWR
Merger. During 1998, the Company opened new management offices in Jacksonville
and Orlando, Florida and the Company assumed a management office in Augusta,
Georgia related to the MRY Merger.
Fee and asset management revenues and fee and asset management expenses
are associated with the management of properties not owned by the Company that
are managed for affiliates. These net revenues decreased due to the disposition
of certain of these properties, resulting in the Company no longer providing fee
and asset management services to such properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately $125.5 million. This increase was primarily the
result of an increase in the Company's average indebtedness outstanding which
increased by $1.9 billion. However, the Company's effective interest costs
decreased from 7.50% for the year ended December 31, 1997 to 7.10% for the year
ended December 31, 1998.
38
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
General and administrative expenses, which include corporate operating
expenses, increased approximately $5.8 million between the periods under
comparison. This increase was primarily due to the addition of corporate
personnel in the Company's Human Resources, Accounting, Legal and Management
Information Systems groups, as well as higher compensation costs, shareholder
reporting costs and professional fees. However, by gaining certain economies of
scale with a much larger operation these expenses as a percentage of total
revenues were 1.54% for the year ended December 31, 1998 compared to 1.98% of
total revenues for the year ended December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
FOR THE YEAR ENDED DECEMBER 31, 1999
As of January 1, 1999, the Company had approximately $4 million of cash
and cash equivalents and $330 million available on its lines of credit, of which
$12 million was restricted. After taking into effect the various transactions
discussed in the following paragraphs, the Company's cash and cash equivalents
balance at December 31, 1999 was approximately $29.1 million and the amount
available on the Company's line of credit was $400 million, of which $65.8
million was restricted. The following discussion also explains the changes in
net cash provided by operating activities, net cash used for investing
activities and net cash provided by (used for) financing activities, all of
which are presented in the Company's Statements of Cash Flows.
Part of the Company's strategy in funding the purchase of multifamily
properties, funding its Properties in the development stage and the funding of
the Company's investment in two joint ventures with multifamily real estate
developers is to utilize its line of credit and to subsequently repay the line
of credit from the issuance of additional equity or debt securities or the
disposition of Properties. Utilizing this strategy during 1999, the Company:
- issued the June 2004 Notes and received net proceeds of $298.0 million;
- refinanced seven Properties and received additional proceeds of $78.5
million;
- obtained new mortgage financing on eleven previously unencumbered
properties and received net proceeds of $126.5 million;
- disposed of forty-two properties (including the sale of the Company's
interest in six MRY joint venture properties) and received net proceeds
of $383 million;
- issued approximately 1.2 million Common Shares and received net proceeds
of $38.5 million; and
- issued 800,000 8.00% Series A Cumulative Convertible Redeemable
Preference Interests of EQR-Mosaic, L.L.C. and received net proceeds of
$39 million.
All of these proceeds were utilized to either:
- purchase additional properties;
- provide funding for properties in the development stage; and/or
- repay the line of credit and mortgage indebtedness on certain Properties.
With respect to the 1999 Acquired Properties, the Company assumed
and/or entered into new mortgage indebtedness of approximately $69.9 million,
issued OP Units with a value of $25.2 million and issued Junior Convertible
Preference Units with a value of $3.0 million. The total purchase price of the
1999 Acquired Properties was approximately $1.4 billion.
39
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Subsequent to December 31, 1999 and through March 3, 2000, the Company
acquired one additional property containing 178 units for a total purchase price
of approximately $10.3 million.
Subsequent to December 31, 1999 and through March 3, 2000, the Company
disposed of six properties for a total sales price of $46.7 million. These
proceeds will be utilized to purchase additional properties. The Company
anticipates that it will continue to sell certain Properties in the portfolio.
On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary
of the Operating Partnership, issued 1.1 million units of 8.50% Series B
Cumulative Convertible Redeemable Preference Units with an equity value of $55.0
million. Lexford Properties, L.P. received $53.6 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company.
The Series M-1 Preferred Shares are not convertible to EQR Common Shares.
Dividends for the Series B Preference Units or the Series M-1 Preferred Shares
are payable quarterly at the rate of $4.25 per unit/share per year. The net
proceeds received from this transaction will be used for scheduled mortgage and
line of credit repayments.
In regard to the joint venture agreements with two multifamily
residential real estate developers during the year ended December 31, 1999, the
Company funded a total of $88.6 million and during 2000 the Company expects to
fund approximately $32.7 million in connection with these agreements. In
connection with the first agreement, the Company has an obligation to fund up to
an additional $20 million to guarantee third party construction financing.
In regard to certain other properties that were under development
and/or expansion during the year ended December 31, 1999, the Company funded
$47.5 million. During 2000, the Company expects to fund $44.9 million related to
the continued development and/or expansion of as many as three Properties.
In regard to certain properties that were under earnout/development
agreements, during the year ended December 31, 1999, the Company funded the
following:
- $17.2 million relating to the acquisition of Copper Canyon
Apartments, which included a $1.0 million earnout payment to the
developer;
- $24.9 million relating to the acquisition of Skyview Apartments,
which included a $3.1 million earnout payment to the developer; and
- $18.3 million relating to the acquisition of Rosecliff Apartments.
Subsequent to December 31, 1999, the Company funded $2.3 million for an
initial earnout payment to the developer of Rosecliff Apartments. During 2000,
the Company expects to fund $33.4 million related to the continued
earnout/development of one Property.
In May 1999, the Company repaid its 1999 Notes that matured on May 15,
1999. The $125 million repayment was initially funded from borrowings under the
Company's lines of credit.
In November 1999, the Company repaid the 1999-A Notes that matured on
November 24, 1999. The $25 million repayment was initially funded from
borrowings under the Company's line of credit.
40
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
During 1999, the Company repaid approximately $60.8 million of mortgage
indebtedness on 31 Properties. These repayments were funded from the Company's
line of credit and/or certain proceeds from dispositions.
In addition, the Company refinanced the debt on six existing properties
totaling $45.0 million with new mortgage indebtedness totaling $65.7 million.
As of December 31, 1999, the Company had total indebtedness of
approximately $5.5 billion, which included mortgage indebtedness of $2.9 billion
(including premiums of $2.1 million), of which $838 million represented
tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (including net
discounts and premiums in the amount of $2.5 million), of which $127.8 million
represented tax-exempt bond indebtedness.
Subsequent to December 31, 1999, the Company settled on a $100 million
interest rate protection agreement and received approximately $7.0 million in
connection therewith.
In the second quarter of 2000, the Company anticipates repaying
mortgage indebtedness of approximately $85 million assumed in connection with
the LFT Merger. These repayments will also be primarily funded from additional
borrowings under the line of credit and/or additional mortgage borrowings.
The Company has, from time to time, entered into interest rate
protection agreements (financial instruments) to reduce the potential impact of
increases in interest rates but believes it has limited exposure to the extent
of non-performance by the counterparties of each protection agreement since each
counterparty is a major U.S. financial institution, and the Company does not
anticipate their non-performance. No such financial instrument has been used for
trading purposes.
In August 1996, the Company entered into an interest rate protection
agreement to effectively fix the interest rate cost of the Company's 2026 Notes.
The agreement was for a notional amount of $150 million with a locked in
treasury rate of 7.57%.
In July 1997, the Company entered into two interest rate protection
agreements to effectively fix the interest rate cost of the Company's 2001 Notes
and 2003 Notes. One agreement was for a notional amount of $100 million with a
locked in treasury rate of 6.134%. The second agreement was for a notional
amount of $75 million with a locked in treasury rate of 6.287%.
In April 1998, the Company entered into an interest rate protection
agreement to effectively fix the interest rate cost of the Company's 2015 Notes.
The agreement was for a notional amount of $300 million with a locked in
treasury rate of 6.63%.
In May 1998, the Company entered into an interest rate protection
agreement to effectively fix the interest rate cost of the Evans Withycombe
Financing Limited Partnership indebtedness to within a range of 5.6% to 6.0%
upon its refinancing. The agreement was for a notional amount of $131 million
with a settlement date of August 2001. There was no initial cost to the Company
for entering into this agreement.
In August 1998, the Company entered into an interest rate protection
agreement to effectively fix the interest rate cost of the Company's planned
financing in the fourth quarter of 1998. This agreement was
41
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
canceled in November at a cost of approximately $3.7 million. This cost is
being amortized over the life of the financing for the 15 previously
unencumbered Properties that occurred in November 1998.
In August 1998, the Company entered into an interest rate swap
agreement that fixed the Company's interest rate risk on a portion of the
Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of
3.65125%. This agreement was for a notional amount of $150 million with a
termination date of August 2003.
In August 1998, the Company entered into an interest rate swap
agreement that fixed the Company's interest rate risk on a portion of the
Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of
3.683%. This agreement was for a notional amount of $150 million with a
termination date of August 2005.
The fair value of these instruments, discussed above, as of December
31, 1999 approximates their carrying or contract values.
The Company has a policy of capitalizing expenditures made for new
assets, including newly acquired properties and the costs associated with
placing these assets into service. Expenditures for improvements and renovations
that significantly enhance the value of existing assets or substantially extend
the useful life of an asset are also capitalized. Expenditures for in-the-unit
replacement-type items such as appliances, draperies, carpeting and floor
coverings, mechanical equipment and certain furniture and fixtures is also
capitalized. Expenditures for ordinary maintenance and repairs are expensed to
operations as incurred. With respect to acquired properties, the Company has
determined that it generally spends $1,000 per unit during its first three years
of ownership to fully improve and enhance these properties to meet the Company's
standards. In regard to replacement-type items described above, the Company
generally expects to spend $250 per unit on an annual recurring basis.
During the year ended December 31, 1999, total capital expenditures for
the Company approximated $141.9 million. Of this amount, approximately $34.5
million, or $427 per unit, related to capital improvements and major repairs for
the 1997, 1998 and 1999 Acquired Properties. Capital improvements and major
repairs for all of the Company's pre-EQR IPO properties and 1993, 1994, 1995 and
1996 Acquired Properties approximated $40.8 million, or $362 per unit. Capital
spent for replacement-type items approximated $53.5 million, or $277 per unit.
In addition, approximately $5.9 million was spent on four specific assets
related to major renovations and repositioning of these assets. Also included in
total capital expenditures was approximately $7.2 million expended for non-real
estate additions such as computer software, computer equipment, and furniture
and fixtures and leasehold improvements for the Company's property management
offices and its corporate headquarters. Such capital expenditures were primarily
funded from working capital reserves and from net cash provided by operating
activities. Total capital expenditures for 2000 are budgeted to be approximately
$110.0 million for all Properties.
Minority Interests as of December 31, 1999 increased by $25.6 million
when compared to December 31, 1998. The primary factors that impacted this
account during the year were:
- distributions declared to Minority Interests, which amounted to $37.4
million for 1999 (excluding preference unit/interest distributions);
- the allocation of income from operations in the amount of $29.5
million;
- the conversion of OP Units into Common Shares; and
- the issuance of Common Shares, OP Units, Preference Units and
Preference Interests during 1999.
42
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Total distributions paid in 1999 amounted to $514.9 million, which
included certain distributions declared in the fourth quarters of 1998 and 1999.
The Company paid a $0.76 per Common Share distribution on December 31, 1999 for
the quarter ended December 31, 1999 to Common Shareholders and Minority Interest
holders of record as of December 20, 1999.
The Company expects to meet its short-term liquidity requirements,
including capital expenditures related to maintaining its existing Properties
and certain scheduled unsecured note and mortgage note repayments, generally
through its working capital, net cash provided by operating activities and
borrowings under its line of credit. The Company considers its cash provided by
operating activities to be adequate to meet operating requirements and payments
of distributions. The Company also expects to meet its long-term liquidity
requirements, such as scheduled unsecured note and mortgage debt maturities,
property acquisitions, financing of construction and development activities and
capital improvements through the issuance of unsecured notes and equity
securities including additional OP Units as well as from undistributed FFO and
proceeds received from the disposition of certain Properties. In addition, the
Company has certain uncollateralized Properties available for additional
mortgage borrowings in the event that the public capital markets are unavailable
to the Company or the cost of alternative sources of capital to the Company is
too high.
On August 12, 1999 the Company obtained a new three year $700 million
unsecured revolving credit facility, with Bank of America Securities LLC and
Chase Securities Inc. acting as joint lead arrangers. The new line of credit
replaced the Company's $500 million unsecured revolving credit facility, as well
as the $120 million unsecured revolving credit facility which the Company
assumed in the MRY Merger. The prior existing revolving credit facilities were
repaid in full and terminated upon the closing of the new facility. This new
credit facility matures in August 2002 and will be used to fund property
acquisitions, costs for certain properties under development and short term
liquidity requirements. Advances under the credit facility bear interest at
variable rates based upon LIBOR at various interest periods, plus a certain
spread dependent upon the Company's credit rating. As of March 7, 2000, $110
million was outstanding under this new facility bearing interest at a weighted
average rate of 6.28%.
Pursuant to the LFT Merger, the Company assumed a line of credit that
had an outstanding balance of approximately $26.4 million. On October 1, 1999,
the Company repaid the outstanding balance and terminated this facility.
In connection with the Wellsford Merger, the Company has provided a
$14.8 million credit enhancement with respect to certain tax-exempt bonds issued
to finance certain public improvements at a multifamily development project.
Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real
Properties, Inc. ("WRP Newco"), the Company has agreed to purchase up to
1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. These preferred
shares would be convertible to WRP Newco common shares under certain
circumstances. As of December 31, 1999, no shares of WRP Newco Series A
Preferred had been acquired by the Company. The Company expects to fund this $25
million investment in April 2000.
In connection with the MRY Merger, the Company extended a $25 million,
one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement.
On June 24, 1999, MRYP Spinco repaid the entire outstanding Senior Note balance
of $18.3 million and there is no further obligation by either party in
connection with this agreement.
Also, in connection with the MRY Merger, the Company entered into six
joint venture
43
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
agreements with MRYP Spinco. The Company contributed six properties with an
initial value of $52.7 million in return for an ownership interest in each joint
venture. On August 23, 1999, the Company sold its entire interest in these six
properties to MRYP Spinco and received $54.1 million. There is no further
obligation by either party in connection with these agreements.
FOR THE YEAR ENDED DECEMBER 31, 1998
As of January 1, 1998, the Company had approximately $33.3 million of
cash and cash equivalents and $265 million available on its line of credit of
which $24.7 million was restricted. After taking into effect the various
transactions discussed in the following paragraphs, cash and cash equivalents at
December 31, 1998 were approximately $4 million and the amounts available on the
Company's lines of credit were $330 million of which $12 million was restricted.
The following discussion also explains the changes in net cash provided by
operating activities, net cash (used for) investing activities and net cash
provided by financing activities, all of which are presented in the Company's
Consolidated Statements of Cash Flows.
Part of the Company's strategy in funding the purchase of multifamily
properties, funding its Properties in the development stage and the funding of
the Company's investment in a joint venture with a multifamily real estate
developer, excluding those Properties acquired through the Mergers, is to
utilize its line of credit and to subsequently repay the line of credit from the
issuance of additional equity or debt securities or the disposition of
Properties. Utilizing this strategy during 1998 the Company:
- issued a total of approximately 8.5 million Common Shares through
various offerings and received total net proceeds of $412.5 million;
- issued the 2015 Notes, the August 2003 Notes and the 2000 Notes and
received net proceeds of $542.3 million;
- mortgaged fifteen previously unencumbered Properties and received
net proceeds of $223.5 million; and
- disposed of twenty properties, which generated net proceeds of
approximately $177 million.
All of these proceeds were utilized to either:
- purchase additional properties;
- provide funding for properties in the development stage; and/or
- repay the lines of credit and mortgage indebtedness on certain
Properties.
With respect to the 1998 Acquired Properties, the Company issued 21.8
million Common Shares having a value of $1.0 billion and issued the following
preferred shares having a combined liquidation value of $369.1 million:
- Series H Preferred Shares;
- Series I Preferred Shares;
- Series J Preferred Shares;
- Series K Preferred Shares; and
- Series L Preferred Shares.
The Company also assumed mortgage indebtedness, unsecured notes and a
line of credit of approximately $1.2 billion, issued OP Units having a value of
approximately $205.2 million and issued
44
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Junior Convertible Preference Units having a value of approximately $4.8
million. The cash portion of these acquisitions were primarily funded from
amounts drawn on the Company's lines of credit and proceeds received in
connection with the transactions mentioned in the previous paragraphs.
In December 1997, the Company entered into a joint venture agreement
with a multifamily residential real estate developer whereby the Company will
make investments in a limited partnership to fund its portion of the project
cost. During 1998, the Company funded a total of $23.9 million in connection
with this agreement.
In regards to certain other properties that were under development
and/or expansion in 1998, the Company funded $31.6 million.
In regards to certain properties that were under earnout/development
agreements in 1998, no amounts were funded.
As of December 31, 1998, the Company had total indebtedness of
approximately $4.7 billion, which included mortgage indebtedness of $2.3 billion
(including premiums of $4.5 million), of which $878.3 million represented
tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (net of a $5.3
million discount), of which $35.6 million represented tax-exempt bond
indebtedness. During the year, the Company repaid an aggregate of $63.8 million
of mortgage indebtedness on nine of its Properties. These repayments were funded
from the Company's line of credit or from proceeds received from the various
capital transactions mentioned in the previous paragraphs.
YEAR 2000 ISSUE
In prior years, the Company discussed the nature and progress of its
plans to become Year 2000 ready. In late 1999, the Company completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Company experienced no significant disruptions in
mission critical information technology and non-information technology systems
and believes those systems successfully responded to the Year 2000 date change.
The Company expensed approximately $184,000 and $700,000 during 1999 and 1998,
respectively, in connection with remediating its systems. The Company is not
aware of any material problems resulting from Year 2000 issues, either with its
products, its internal systems, or the products and services of third parties.
The Company will continue to monitor its mission critical computer applications
and those of its suppliers and vendors throughout the year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed promptly.
FUNDS FROM OPERATIONS
Commencing in 1996, the Company implemented the definition of FFO
adopted by the Board of Governors of NAREIT in March 1995. The definition
primarily eliminates the amortization of deferring financing costs and
depreciation of non-real estate assets as items added back to net income when
calculating FFO.
45
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FUNDS FROM OPERATIONS (CONTINUED)
The Company generally considers FFO to be one measure of the
performance of real estate companies. The resolution adopted by the Board of
Governors of NAREIT defines FFO as net income (loss) (computed in accordance
with GAAP), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect FFO
on the same basis. The Company believes that FFO is helpful to investors as a
measure of the performance of a real estate company because, along with cash
flows from operating activities, financing activities and investing
activities, it provides investors an understanding of the ability of the
Company to incur and service debt and to make capital expenditures. FFO in
and of itself does not represent cash generated from operating activities in
accordance with GAAP and therefore should not be considered an alternative to
net income as an indication of the Company's performance or to net cash flows
from operating activities as determined by GAAP as a measure of liquidity and
is not necessarily indicative of cash available to fund cash needs. The
Company's calculation of FFO represents net income available to Common
Shares, excluding gains on dispositions of properties and gains/losses on
early extinguishment of debt, plus depreciation on real estate assets, income
allocated to Minority Interests and amortization of deferred financing costs
related to the Predecessor Business. The Company's calculation of FFO may
differ from the methodology for calculating FFO utilized by other real estate
companies and, accordingly, may not be comparable to such other real estate
companies.
The Company will adopt, effective January 1, 2000, NAREIT's updated
recommended definition of FFO as approved in the fourth quarter of 1999.
For the year ended December 31, 1999, FFO increased $160.8 million
representing a 35% increase when compared to the year ended December 31, 1998.
For the year ended December 31, 1998, FFO increased by $188.1 million
representing a 69.5% increase when compared to the year ended December 31, 1997.
The following is a reconciliation of net income available to Common
Shares to FFO available to Common Shares and OP Units for the years ended
December 31, 1999, 1998 and 1997 (amounts are in thousands):
<TABLE>
<CAPTION>
--------------------------------------------------------- --- -------------- -- -------------- -- --------------
Year Ended Year Ended Year Ended
12/31/99 12/31/98 12/31/97
--------------------------------------------------------- --- -------------- -- -------------- -- --------------
<S> <C> <C> <C>
Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580
Adjustments:
Income allocated to Minority Interests 29,536 18,529 13,260
Depreciation on real estate assets* 402,466 296,691 153,526
Amortization of deferred financing
costs related to predecessor business -- 35 235
Loss on early extinguishment of debt 451 -- --
Gain on disposition of properties (93,535) (21,703) (13,838)
--------------------------------------------------------- --- -------------- -- -------------- -- --------------
FFO available to Common Shares and OP Units $ 619,603 $ 458,841 $ 270,763
--------------------------------------------------------- --- -------------- -- -------------- -- --------------
</TABLE>
* Includes $1,009,000 and $183,000 related to the Company's share of
depreciation from unconsolidated joint ventures and limited partnerships for
the years ended December 31, 1999 and 1998, respectively.
46
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company's future earnings, cash flows and fair values relevant to
financial instruments are dependent upon prevalent market rates. Market risk is
the risk of loss from adverse changes in market prices and interest rates. The
Company manages its market risk by matching projected cash inflows from
operating properties, financing activities and investing activities with
projected cash outflows to fund debt payments, acquisitions, capital
expenditures, distributions and other cash requirements. The Company also
utilizes certain derivative financial instruments to limit market risk. Interest
rate protection agreements are used to convert floating rate debt to a fixed
rate basis. Derivatives are used for hedging purposes rather than speculation.
The Company does not enter into financial instruments for trading purposes.
The Company has total outstanding debt of approximately $5.5 billion at
December 31, 1999, of which approximately $700.9 million, or 12.8% is floating
rate debt, including the effects of any interest rate protection agreements. If
market rates of interest on the Company's floating rate debt increase by 55
basis points (a 10% increase), the increase in interest expense on the Company's
floating rate debt would decrease future earnings and cash flows by
approximately $3.9 million. If market rates of interest on the Company's
floating rate debt decrease by 55 basis points (a 10% decrease), the decrease in
interest expense on the Company's floating rate debt would increase future
earnings and cash flows by approximately $3.9 million.
These amounts were determined by considering the impact of hypothetical
interest rates and equity prices on the Company's financial instruments. These
analyses do not consider the effects of the reduced level of overall economic
activity that could exist in such an environment. Further, in the event of a
change of such magnitude, management would likely take actions to further
mitigate its exposure to the change. However, due to the uncertainty of the
specific actions that would be taken and their possible effects, this analysis
assumes no changes in the Company's financial structure.
47
<PAGE>
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Consolidated Financial Statements on page F-1 of this Form
10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
48
<PAGE>
PART III
ITEMS 10, 11, 12 AND 13.
TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE COMPENSATION,
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN
RELATIONSHIP AND RELATED TRANSACTIONS.
The information required by Item 10, Item 11, Item 12 and Item 13 are
incorporated by reference to, and will be contained in, the Company's definitive
proxy statement, which the Company anticipates will be filed no later than March
31, 2000, and thus these items have been omitted in accordance with General
Instruction G(3) to Form 10-K.
49
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a)
(1 & 2) See Index to Financial Statements and Schedules on page F-1 of
this Form 10-K.
(3) Exhibits:
2.1# Agreement and Plan of Merger by and between Equity Residential
Properties Trust and Wellsford Residential Property Trust
dated as of January 16, 1997.
2.2## Articles of Merger by and between Equity Residential
Properties Trust and Wellsford Residential Property Trust.
2.3### Agreement and Plan of Merger by and between Equity Residential
Properties Trust and Evans Withycombe Residential, Inc. dated
as of August 27, 1997.
2.4#### Articles of Merger by and between Equity Residential
Properties Trust and Evans Withycombe Residential, Inc.
2.5^ Agreement and Plan of Merger and First Amendment Thereto by
and between Equity Residential Properties Trust and Merry Land
& Investment Company, Inc. dated as of July 8, 1998 and
September 4, 1998, respectively.
2.6^^ Articles of Merger by and between Equity Residential
Properties Trust and Merry Land & Investment Company, Inc.
2.7^^^ Agreement and Plan of Merger between Equity Residential
Properties Trust and Lexford Residential Trust dated as of
June 30, 1999.
2.8^^^^ Articles of Merger by and between Equity Residential
Properties Trust and Lexford Residential Trust.
3.1+ Second Amended and Restated Declaration of Trust of Equity
Residential Properties Trust dated May 30, 1997.
3.2++ Third Amended and Restated Bylaws of Equity Residential
Properties Trust.
4.1* Indenture, dated as of May 16, 1994, by and among the
Operating Partnership, as obligor, the Company, as guarantor
and The First National Bank of Chicago, as trustee in
connection with 8 1/2% senior notes due May 15, 1999.
4.2* Indenture, dated October 1, 1994, between the Operating
Partnership, as obligor and The First National Bank of
Chicago, as trustee.
10.1** Fifth Amended and Restated Agreement of Limited Partnership of
ERP Operating Limited Partnership.
10.2*** Agreement of Limited Partnership of Equity Residential
Properties Management Limited Partnership.
10.3**** Agreement of Limited Partnership of Equity Residential
Properties Management Limited Partnership II.
10.4*** Noncompetition Agreement (Zell).
10.5*** Noncompetition Agreement (Crocker).
10.6*** Noncompetition Agreement (Spector).
10.7*** Form of Noncompetition Agreement (other officers).
10.8*** Services Agreement between Equity Residential Properties Trust
and Equity Group Investments, Inc.
10.9*** Form of Property Management Agreement (REIT properties).
10.10* Form of Property Management Agreement (Non-REIT properties).
10.11+++ Amended and Restated Master Reimbursement Agreement, dated as
of November 1, 1996 by and between Federal National Mortgage
Association and EQR-Bond Partnership.
10.12 Revolving Credit Agreement dated as of August 12, 1999 among
the Operating Partnership, the Banks listed therein, Bank of
America, National Association, as administrative agent, The
Chase Manhattan Bank, as syndication agent, Morgan Guaranty
Trust Company of New York, as documentation agent, Bank of
America Securities LLC, as joint lead arranger, and Chase
Securities Inc., as joint lead arranger.
50
<PAGE>
PART IV
10.13 First Amendment to Revolving Credit Agreement dated November
10, 1999 between the Operating Partnership, Bank of America,
National Association, as administrative agent, The Chase
Manhattan Bank, as syndication agent, Morgan Guaranty Trust
Company of New York, as documentation agent and the Banks
listed as signatories thereto.
10.14#### Employment Agreement dated August 27, 1997 between Equity
Residential Properties Management Limited Partnership and
Richard G. Berry.
10.15++++ Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership of Evans Withycombe Residential, LP.
10.16 Amended and Restated Limited Partnership Agreement of Lexford
Properties, L.P.
12 Computation of Ratio of Earnings to Fixed Charges
21 List of Subsidiaries of Equity Residential Properties Trust
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney for James D. Harper, Jr. dated February 29,
2000
24.2 Power of Attorney for Errol R. Halperin dated February 29,
2000
24.3 Power of Attorney for John W. Alexander dated March 13, 2000
24.4 Power of Attorney for B. Joseph White dated March 9, 2000
24.5 Power of Attorney for Henry H. Goldberg dated March 1, 2000
24.6 Power of Attorney for Jeffrey H. Lynford dated March 1, 2000
24.7 Power of Attorney for Edward Lowenthal dated March 2, 2000
24.8 Power of Attorney for Stephen O. Evans dated March 2, 2000
24.9 Power of Attorney for Boone A. Knox dated February 29, 2000
24.10 Power of Attorney for Michael N. Thompson dated March 6, 2000
________________________________
# Included as an exhibit to the Company's Form 8-K dated January
16, 1997, filed on January 17, 1997.
## Included as Appendix B in the Company's Form S-4 filed on
April 29, 1997.
### Included as an exhibit to the Company's Form 8-K dated August
27, 1997, filed on August 29, 1997.
#### Included as Appendix B in the Company's Form S-4 filed on
September 18, 1997.
^ Included as Appendix A in the Company's Form S-4 filed on
September 14, 1998.
^^ Included as Appendix B in the Company's Form S-4 filed on
September 14, 1998.
^^^ Included as Appendix A in the Company's Form S-4 filed on July
23, 1999.
^^^^ Included as an exhibit to the Company's Form 8-K dated October
1, 1999, filed on October 5, 1999.
+ Included as an exhibit to the Company's Form 8-K dated May 30,
1997, filed on June 5, 1997.
++ Included as an exhibit to the Company's Form 10-Q for the
quarterly period ended June 30, 1999.
+++ Included as an exhibit to the Company's Form 10-K for the year
ended December 31, 1996.
++++ Included as an exhibit to the Company's Form 10-K for the
year ended December 31, 1997.
* Included as an exhibit to the Operating Partnership's Form
10/A, dated December 12, 1994, File No. 0-24920, and
incorporated herein by reference.
** Included as an exhibit to the Operating Partnership's Form
8-K/A dated July 23, 1998, filed on August 18, 1998.
*** Included as an exhibit to the Company's Form S-11 Registration
Statement, File No. 33-63158, and incorporated herein by
reference.
**** Included as an exhibit to the Company's Form 10-K for the year
ended December 31, 1994.
51
<PAGE>
PART IV
(b) Reports on Form 8-K:
A Report on Form 8-K dated October 5, 1999, reporting the closing of the merger
between Equity Residential Properties Trust and Lexford Residential Trust.
A Report on Form 8-K dated December 3, 1999, disclosing additional financial
information of Lexford Residential Trust as of September 30, 1999.
(c) Exhibits:
See Item 14(a)(3) above.
(d) Financial Statement Schedules:
See Index to Financial Statements attached hereto on page F-1 of this
Form 10-K.
52
<PAGE>
PART IV
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.
EQUITY RESIDENTIAL PROPERTIES TRUST
Date: MARCH 13, 2000 By: /S/ DOUGLAS CROCKER II
-------------- --------------------------------------
Douglas Crocker II
President, Chief Executive Officer,
Trustee and *Attorney-in-Fact
Date: MARCH 13, 2000 By: /S/ DAVID J. NEITHERCUT
-------------- --------------------------------------
David J. Neithercut
Executive Vice President and
Chief Financial Officer
Date: MARCH 13, 2000 By: /S/ MICHAEL J. MCHUGH
-------------- --------------------------------------
Michael J. McHugh
Executive Vice President, Chief Accounting
Officer, Treasurer and *Attorney-in-fact
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: MARCH 13, 2000 By: /S/ SAMUEL ZELL
--------------- ---------------------------------------
Samuel Zell
Chairman of the Board of Trustees
Date: MARCH 13, 2000 By: /S/ GERALD A. SPECTOR
-------------- ---------------------------------------
Gerald A. Spector
Executive Vice President, Chief
Operating Officer and Trustee
Date: MARCH 13, 2000 By: /S/ SHELI Z. ROSENBERG
-------------- ---------------------------------------
Sheli Z. Rosenberg
Trustee
53
<PAGE>
PART IV
SIGNATURES-CONTINUED
Date: MARCH 13, 2000 By: /S/ JAMES D. HARPER*
-------------- --------------------------------------
James D. Harper
Trustee
Date: MARCH 13, 2000 By: /S/ ERROL R. HALPERIN*
-------------- --------------------------------------
Errol R. Halperin
Trustee
Date: MARCH 13, 2000 By: /S/ JOHN W. ALEXANDER*
-------------- --------------------------------------
John W. Alexander
Trustee
Date: MARCH 13, 2000 By: /S/ B. JOSEPH WHITE*
-------------- ---------------------------------------
B. Joseph White
Trustee
Date: MARCH 13, 2000 By: /S/ HENRY H. GOLDBERG*
-------------- ---------------------------------------
Henry H. Goldberg
Trustee
Date: MARCH 13, 2000 By: /S/ JEFFREY H. LYNFORD*
-------------- ---------------------------------------
Jeffrey H. Lynford
Trustee
Date: MARCH 13, 2000 By: /S/ EDWARD LOWENTHAL*
-------------- ---------------------------------------
Edward Lowenthal
Trustee
Date: MARCH 13, 2000 By: /S/ STEPHEN O. EVANS*
-------------- ---------------------------------------
Stephen O. Evans
Trustee
Date: MARCH 13, 2000 By: /S/ BOONE A. KNOX*
-------------- ---------------------------------------
Boone A. Knox
Trustee
Date: MARCH 13, 2000 By: /S/ MICHAEL N. THOMPSON*
-------------- ----------------------------------------
Michael N. Thompson
Trustee
* By: /S/ MICHAEL J. MCHUGH OR DOUGLAS CROCKER II
----------------------------------------------------
Michael J. McHugh or Douglas Crocker II,
as Attorney-in-fact
54
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
EQUITY RESIDENTIAL PROPERTIES TRUST
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Auditors........................................................ F-2
Consolidated Balance Sheets as of
December 31, 1999 and 1998........................................................ F-3
Consolidated Statements of Operations for
the years ended December 31, 1999, 1998 and 1997.................................. F-4
Consolidated Statements of Cash Flows for
the years ended December 31, 1999, 1998 and 1997.................................. F-5 to F-7
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 1999, 1998 and 1997.............................. F-8 to F-9
Notes to Consolidated Financial Statements............................................ F-10 to F-44
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III - Real Estate and Accumulated Depreciation............................... S-1 to S-21
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders
Equity Residential Properties Trust
We have audited the accompanying consolidated balance sheets of Equity
Residential Properties Trust (the "Company") as of December 31, 1999 and 1998
and the related consolidated statements of operations, changes in shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1999. Our audits also included the financial statement schedule listed in
the Index at Item 14(a). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Equity
Residential Properties Trust at December 31, 1999 and 1998, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
ERNST & YOUNG LLP
Chicago, Illinois
February 16, 2000
except for Note 23, as to which the date is
March 3, 2000
F-2
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
----------------- ----------------
<S> <C> <C>
ASSETS
Investment in real estate
Land $ 1,550,378 $ 1,326,148
Depreciable property 10,670,550 9,519,579
Construction in progress 18,035 96,336
----------------- ----------------
12,238,963 10,942,063
Accumulated depreciation (1,070,487) (718,491)
----------------- ----------------
Investment in real estate, net of accumulated depreciation 11,168,476 10,223,572
Real estate held for disposition 12,868 29,886
Cash and cash equivalents 29,117 3,965
Investment in mortgage notes, net 84,977 88,041
Rents receivable 1,731 4,758
Deposits - restricted 111,270 69,339
Escrow deposits - mortgage 75,328 68,725
Deferred financing costs, net 33,968 27,569
Other assets 197,954 184,405
----------------- ----------------
TOTAL ASSETS $ 11,715,689 $ 10,700,260
================= ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,883,583 $ 2,341,011
Notes, net 2,290,285 2,049,516
Lines of credit 300,000 290,000
Accounts payable and accrued expenses 102,955 100,926
Accrued interest payable 44,257 46,176
Rents received in advance and other liabilities 74,196 54,616
Security deposits 39,687 37,439
Distributions payable 18,813 18,755
----------------- ----------------
TOTAL LIABILITIES 5,753,776 4,938,439
----------------- ----------------
COMMITMENTS AND CONTINGENCIES
Minority Interests 456,979 431,374
----------------- ----------------
----------------- ----------------
Shareholders' equity:
Preferred Shares of beneficial interest, $.01 par value; 100,000,000
shares authorized; 25,085,652 shares issued and outstanding as of
December 31, 1999 and 29,097,951
shares issued and outstanding as of December 31, 1998 1,310,266 1,410,574
Common Shares of beneficial interest, $.01 par value;
350,000,000 shares authorized; 127,450,798 shares issued
and outstanding as of December 31, 1999 and 118,230,009
shares issued and outstanding as of December 31, 1998 1,275 1,182
Paid in capital 4,523,919 4,169,102
Employee notes (4,670) (4,873)
Distributions in excess of accumulated earnings (325,856) (245,538)
----------------- ----------------
Total shareholders' equity 5,504,934 5,330,447
----------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,715,689 $ 10,700,260
================= ================
</TABLE>
SEE ACOMPANYING NOTES
F-3
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
---------------------------------------------
<S> <C> <C> <C>
REVENUES
Rental income $ 1,711,738 $ 1,293,560 $ 707,733
Fee and asset management 4,970 5,622 5,697
Interest income - investment in mortgage notes 12,559 18,564 20,366
Interest and other income 23,851 19,250 13,282
------------ ------------ -------------
Total revenues 1,753,118 1,336,996 747,078
EXPENSES
Property and maintenance 414,026 326,733 176,075
Real estate taxes and insurance 171,289 126,009 69,520
Property management 61,626 53,101 26,793
Fee and asset management 3,587 4,279 3,364
Depreciation 408,688 301,869 156,644
Interest:
Expense incurred 337,189 246,585 121,324
Amortization of deferred financing costs 4,084 2,757 2,523
General and administrative 22,296 20,631 14,821
------------ ------------ -------------
Total expenses 1,422,785 1,081,964 571,064
Income before gain on disposition of properties, net,
extraordinary item and allocation to
Minority Interests 330,333 255,032 176,014
Gain on disposition of properties, net 93,535 21,703 13,838
------------ ------------ -------------
Income before extraordinary item and allocation to
Minority Interests 423,868 276,735 189,852
Loss on early extinguishment of debt (451) - -
------------ ------------ -------------
Income before allocation to Minority Interests 423,417 276,735 189,852
Income allocated to Minority Interests (29,536) (18,529) (13,260)
------------ ------------ -------------
Net income 393,881 258,206 176,592
Preferred distributions (113,196) (92,917) (59,012)
------------ ------------ -------------
Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580
============ ============ =============
Weighted average Common Shares outstanding - basic 122,175 100,370 65,729
============ ============ =============
Distributions declared per Common Share outstanding $ 2.94 $ 2.72 $ 2.55
============ ============ =============
Tax treatment of distributions (unaudited)
Ordinary income $ 2.56 $ 2.14 $ 2.24
============ ============ =============
Return of capital $ 0.26 $ 0.52 $ 0.26
============ ============ =============
Long-term capital gain $ 0.09 $ 0.01 $ 0.05
============ ============ =============
Unrecaptured section 1250 gain $ 0.03 $ 0.05 $ -
============ ============ =============
Net income per share - basic $ 2.30 $ 1.65 $ 1.79
============ ============ =============
Net income per share - diluted $ 2.29 $ 1.63 $ 1.76
============ ============ =============
</TABLE>
SEE ACCOMPANYING NOTES
F-4
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1999 1998 1997
----------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 393,881 $ 258,206 $ 176,592
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING
ACTIVITIES:
Income allocated to Minority Interests 29,536 18,529 13,260
Depreciation 408,688 301,869 156,644
Amortization of deferred financing costs 4,084 2,757 2,523
Amortization of discounts and premiums on debt (2,322) (1,958) (353)
Amortization of treasury locks and options on debt 987 1,649 818
Amortization of discount on investment in mortgage notes (1,165) (3,015) (3,100)
Gain on disposition of properties, net (93,535) (21,703) (13,838)
Compensation paid with Company Common Shares 9,625 803 2,325
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in rents receivable 3,559 (1,456) (1,373)
(Increase) in deposits - restricted (9,953) (13,147) (23,183)
Decrease (increase) in other assets 47,670 (8,787) (13,708)
(Decrease) increase in accounts payable and accrued expenses (5,610) (3,601) 20,235
(Decrease) increase in accrued interest payable (6,387) 7,546 12,224
Increase (decrease) in rents received in advance and other
liabilities 7,963 (2,077) 12,112
(Decrease) increase in security deposits (1,802) 7,598 7,819
------------ --------------- --------------
Net cash provided by operating activities 785,219 543,213 348,997
------------ --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate, net (632,474) (990,728) (1,190,933)
Improvements to real estate (134,716) (90,608) (50,246)
Additions to non-real estate property (7,219) (11,412) (9,754)
Interest capitalized for real estate under construction (1,493) (1,620) -
Proceeds from disposition of real estate, net 329,342 174,796 35,758
Decrease (increase) in investment in mortgage notes 4,229 2,853 (86,367)
(Increase) decrease in deposits on real estate acquisitions, net (25,563) (18,451) 7,946
Decrease (increase) in mortgage deposits 11,117 (20,499) (25,521)
Investment in limited partnerships (40,480) (23,946) (6,900)
Decrease in mortgage receivables 7,150 - -
Purchase of management contract rights (285) (119) (5,000)
Costs related to Mergers (18,274) (50,139) (176,908)
Other investing activities (14,885) (17,501) (44,465)
------------ --------------- --------------
Net cash (used for) investing activities (523,551) (1,047,374) (1,552,390)
------------ --------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES
F-5
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997
-------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan and bond acquisition costs $ (9,522) $ (9,021) $ (11,617)
MORTGAGE NOTES PAYABLE:
Proceeds 204,986 223,491 16,460
Lump sum payoffs (105,846) (63,785) (113,389)
Monthly principal payments (21,147) (12,624) (7,157)
NOTES, NET:
Proceeds 298,014 542,227 348,303
Payoffs (152,266) (120,000) (100,000)
LINES OF CREDIT:
Proceeds 1,372,000 859,000 442,500
Repayments (1,388,383) (881,000) (207,500)
Proceeds from treasury locks and options on debt 1,380 8,130 -
Proceeds from sale of Common Shares 7,717 425,253 540,010
Proceeds from sale of Preferred Shares/Units, net 39,000 - 491,250
Proceeds from exercise of options 30,750 14,482 4,999
Common Shares repurchased and retired (6,252) (94,705) -
Payment of offering costs (625) (12,370) (22,470)
DISTRIBUTIONS:
Common Shares (364,183) (277,815) (217,229)
Preferred Shares/Units (113,153) (95,952) (50,024)
Minority Interests (37,580) (30,752) (24,829)
Principal receipts on employee notes, net 203 272 110
Principal receipts on other notes receivable, net 8,391 - -
-------------- -------------- --------------
Net cash (used for) provided by financing activities (236,516) 474,831 1,089,417
-------------- -------------- --------------
Net increase (decrease) in cash and cash equivalents 25,152 (29,330) (113,976)
Cash and cash equivalents, beginning of year 3,965 33,295 147,271
-------------- -------------- --------------
Cash and cash equivalents, end of year $ 29,117 $ 3,965 $ 33,295
============== ============== ==============
SUPPLEMENTAL INFORMATION:
Cash paid during the year for interest $ 341,936 $ 234,318 $ 109,100
============== ============== ==============
Mortgage loans assumed and/or entered into through
acquisitions of real estate $ 69,885 $ 459,820 $ 597,245
============== ============== ==============
Net real estate contributed in exchange for Common Shares $ - $ - $ 185,994
============== ============== ==============
Net real estate contributed in exchange for OP Units or
Preference Units $ 28,232 $ 169,834 $ 5,335
============== ============== ==============
Mortgage loans assumed by purchaser in real estate dispositions $ (12,500) $ - $ -
============== ============== ==============
Transfers to real estate held for disposition $ 12,868 $ 29,886 $ -
============== ============== ==============
</TABLE>
SEE ACCOMPANYING NOTES
F-6
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997
-------------------------------------------------
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION (CONTINUED):
Investment in mortgage notes converted to investment in real
estate $ - $ 88,184 $ -
============== ============== ==============
Refinancing of mortgage notes payable in favor of notes, net $ 92,180 $ 35,600 $ -
============== ============== ==============
Net (assets acquired) liabilities assumed through Mergers $ (15,604) $ 42,955 $ 33,237
============== ============== ==============
Mortgage loans assumed through Mergers $ 499,654 $ 184,587 $ 333,966
============== ============== ==============
Unsecured notes assumed through Mergers $ 2,266 $ 461,956 $ 383,954
============== ============== ==============
Line of credit assumed through Mergers $ 26,383 $ 77,000 $ -
============== ============== ==============
Valuation of Common Shares issued through Mergers $ 181,124 $ 1,010,723 $ 945,312
============== ============== ==============
Valuation of OP Units issued through Mergers $ - $ 40,155 $ 107,270
============== ============== ==============
Liquidation value of Preferred Shares redesignated through
Mergers $ - $ 369,109 $ 157,495
============== ============== ==============
</TABLE>
SEE ACCOMPANYING NOTES
F-7
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------------------------------------------
<S> <C> <C> <C>
PREFERRED SHARES
Balance, beginning of year $ 1,410,574 $ 1,041,713 $ 393,000
Issuance of 8.60% Series D Cumulative Redeemable - - 175,000
Issuance of Series E Cumulative Convertible - - 99,995
Issuance of 9.65% Series F Cumulative Redeemable - - 57,500
Issuance of 7 1/4% Series G Convertible Cumulative - - 316,250
Issuance of 7.00% Series H Cumulative Convertible - 4,124 -
Issuance of 8.82% Series I Cumulative Convertible - 100,000 -
Issuance of 8.60% Series J Cumulative Convertible - 114,985 -
Issuance of 8.29% Series K Cumulative Redeemable - 50,000 -
Issuance of 7.625% Series L Cumulative Redeemable - 100,000 -
Conversion of Series E Cumulative Convertible (75) (38) (32)
Conversion of 7.00% Series H Cumulative Convertible (228) (210) -
Conversion of 8.82% Series I Cumulative Convertible (100,000) - -
Conversion of 8.60% Series J Cumulative Convertible (5) - -
-------------- -------------- -------------
Balance, end of year $ 1,310,266 $ 1,410,574 $1,041,713
============== ============== =============
COMMON SHARES, $.01 PAR VALUE
Balance, beginning of year $ 1,182 $ 891 $ 512
Issuance through proceeds from offerings - 74 119
Issuance in connection with Mergers and acquisitions 40 218 252
Issuance through conversion of OP Units into Common Shares 12 7 5
Issuance through exercise of options 10 5 1
Issuance through restricted share grants 3 - 1
Issuance through Share Purchase - DRIP Plan and Dividend
Reinvestment - DRIP Plan 1 10 -
Issuance through Employee Share Purchase Plan 2 1 1
Issuance through conversion of Preferred Shares into Common 26 - -
Common Shares repurchased and retired (1) (24) -
-------------- -------------- -------------
Balance, end of year $ 1,275 $ 1,182 $ 891
============== ============== =============
</TABLE>
SEE ACCOMPANYING NOTES
F-8
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------------------------------------------
<S> <C> <C> <C>
PAID IN CAPITAL
Balance, beginning of year $ 4,169,102 $ 2,785,661 $ 1,147,214
Issuance of Common Shares through proceeds from
offerings - 370,385 536,645
Issuance of Common Shares in connection with Mergers and
acquisitions 181,084 1,010,505 1,131,054
Issuance of Common Shares through conversion of OP Units
into Common Shares 39,683 19,806 11,267
Issuance of Common Shares through exercise of options 30,740 14,477 4,998
Issuance of Common Shares through restricted share grants 8,374 - 1,741
Issuance of Common Shares through Share Purchase -
DRIP Plan 954 50,674 -
Issuance of Common Shares through Dividend Reinvestment -
DRIP Plan 1,525 419 -
Issuance of Common Shares through Employee Share
Purchase Plan 5,235 3,690 3,245
Issuance of Common Shares through 401(k) Plan 1,248 803 583
Issuance of Common Shares through conversion of Preferred
Shares into Common Shares 100,282 248 32
Common Shares repurchased and retired (6,251) (94,681) -
Offering costs (1,625) (12,370) (22,470)
Principal (advances) on other notes receivable, net (4,045) - -
Adjustment for Minority Interests ownership in
Operating Partnership (2,387) 19,485 (28,648)
-------------- -------------- -------------
Balance, end of year $ 4,523,919 $ 4,169,102 $ 2,785,661
============== ============== =============
EMPLOYEE NOTES
Balance, beginning of year $ (4,873) $ (5,145) $ (5,255)
Principal receipts, net 203 272 110
-------------- -------------- -------------
Balance, end of year $ (4,670) $ (4,873) $ (5,145)
============== ============== =============
DISTRIBUTIONS IN EXCESS OF ACCUMULATED EARNINGS
Balance, beginning of year $ (245,538) $ (133,129) $ (76,641)
Net income 393,881 258,206 176,592
Preference Unit distributions (1,185) - -
Preferred distributions (112,011) (92,917) (59,012)
Distributions on Common Shares (361,003) (277,698) (174,068)
-------------- -------------- -------------
Balance, end of year $ (325,856) $ (245,538) $ (133,129)
============== ============== =============
</TABLE>
SEE ACCOMPANYING NOTES
F-9
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND FORMATION OF THE COMPANY
Equity Residential Properties Trust, formed in March 1993, ("EQR"), is
a self-administered and self-managed equity real estate investment trust
("REIT"). As used herein, the term "Company" means EQR, and its subsidiaries, as
the survivor of the mergers between EQR and each of Wellsford Residential
Property Trust ("Wellsford") (the "Wellsford Merger"), Evans Withycombe
Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land & Investment Company,
Inc. ("MRY") (the "MRY Merger") and Lexford Residential Trust ("LFT") ("the LFT
Merger") (see Note 4). The Company has elected to be taxed as a REIT under
Section 856(c) of the Internal Revenue Code 1986, as amended (the "Code").
The Company is engaged in the acquisition, disposition, ownership,
management and operation of multifamily properties. As of December 31, 1999, the
Company owned or had interests in a portfolio of 1,062 multifamily properties
containing 225,708 apartment units of which it controlled a portfolio of 983
multifamily properties containing 214,060 apartment units (individually a
"Property" and collectively the "Properties"). The Company had an investment in
partnership interests (equity investments) and/or an investment in subordinated
mortgages collateralized by the remaining 79 Properties containing 11,648 units.
These properties are located in 35 states throughout the United States.
The Company has formed a series of partnerships (the "Financing
Partnerships") which beneficially own certain Properties that may be encumbered
by mortgage indebtedness. In general, these are structured so that ERP Operating
Limited Partnership (the "Operating Partnership"), a subsidiary of EQR, owns a
1% limited partner interest and a 98% general partner interest in each, with the
remaining 1% general partner interest in each Financing Partnership owned by
various qualified REIT subsidiaries wholly owned by the Company (each a "QRS
Corporation"). Rental income from the Properties that are beneficially owned by
a Financing Partnership is used first to service the applicable mortgage debt
and pay other operating expenses and any excess is then distributed 1% to the
applicable QRS Corporation, as the general partner of such Financing
Partnership, and 99% to the Operating Partnership, as the sole 1% limited
partner and as the 98% general partner. The Company has also formed a series of
limited liability companies that own certain Properties (collectively, the
"LLCs"). The Operating Partnership is a 99% managing member of each LLC and a
QRS Corporation is a 1% member of each LLC.
2. BASIS OF PRESENTATION
The Wellsford Merger, the EWR Merger, the MRY Merger and the LFT Merger
(collectively, the "Mergers") were treated as purchases in accordance with
Accounting Principles Board Opinion No. 16. The fair value of the consideration
given by the Company in the Mergers was used as the valuation basis for each of
the combinations. The assets acquired and the liabilities assumed of Wellsford
were recorded at their relative fair values as of May 30, 1997 (the "Wellsford
Closing Date"). The assets acquired and the liabilities assumed of EWR were
recorded at their relative fair values as of December 23, 1997 (the "EWR Closing
Date"). The assets acquired and the liabilities assumed of MRY were recorded at
their relative fair values as of October 19, 1998 (the "MRY Closing Date"). The
assets acquired and the liabilities assumed of LFT were recorded at their
relative fair values as of October 1, 1999 (the "LFT Closing Date"). The
accompanying consolidated statements of operations and cash flows include the
results of the Properties purchased through the Mergers from their respective
closing dates.
Due to the Company's ability as general partner to control either
through ownership or by contract the Operating Partnership, a series of
management limited partnerships and companies (collectively, the "Management
Partnerships" or the "Management Companies"), the Financing Partnerships, the
LLCs, and certain other entities, each such entity has been consolidated with
the Company for financial reporting
F-10
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
purposes. In regard to the Management Companies, the Company does not have legal
control; however, these entities are consolidated for financial reporting
purposes, the effects of which are immaterial. Certain reclassifications have
been made to the prior year's financial statements in order to conform to the
current year presentation.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) REAL ESTATE ASSETS AND DEPRECIATION
Real estate is recorded at cost less accumulated depreciation less an
adjustment, if any, for impairment. A land value is assigned based on the
purchase price if acquired separately or based on market research if acquired in
a merger or in a single or portfolio acquisition.
For real estate properties to be disposed of, an impairment loss is
recognized when the fair value of the real estate, less the estimated cost to
sell, is less than the carrying amount of the real estate measured at the time
it is certain that the Company will sell the property. Real estate held for
disposition is reported at the lower of its carrying amount or its estimated
fair value, less its cost to sell.
Depreciation is computed on a straight-line basis over the estimated
useful lives of the assets. The Company uses a 30-year estimated life for
buildings and a five-year estimated life for initial furniture, fixtures and
equipment. Replacements inside a unit such as appliances and carpeting, are
depreciated over a five-year estimated life. Expenditures for ordinary
maintenance and repairs are expensed to operations as incurred and significant
renovations and improvements that improve and/or extend the useful life of the
asset are capitalized over their estimated useful life, generally five to ten
years. Initial direct leasing costs are expensed as incurred as such expense
approximates the deferral and amortization of initial direct leasing costs over
the lease terms. Property sales or dispositions are recorded when title
transfers and sufficient consideration has been received by the Company. Upon
disposition, the related costs and accumulated depreciation are removed from the
respective accounts. Any gain or loss on sale of disposition is recognized in
accordance with accounting principles generally accepted in the United States.
The Company classifies Properties under development and/or expansion
and properties in the lease up phase as construction in progress until
construction on the apartment community has been completed and all certificates
of occupancy permits have been obtained. The Company also classifies land
relating to construction in progress as land on its balance sheet. Land
associated with construction in progress was $18.5 million and $19.4 million as
of December 31, 1999 and 1998, respectively.
(b) CASH AND CASH EQUIVALENTS
The Company considers all demand deposits, money market accounts and
investments in certificates of deposit and repurchase agreements purchased with
a maturity of three months or less, at the date of purchase, to be cash
equivalents. The Company maintains its cash and cash equivalents at financial
institutions. The combined account balances at each institution periodically
exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage,
and, as a result, there is a concentration of credit risk related to amounts on
deposit in excess of FDIC insurance coverage. The Company believes that the risk
is not significant, as the Company does not anticipate their non-performance.
(c) DEFERRED FINANCING COSTS
Deferred financing costs include fees and costs incurred to obtain the
Company's line of credit,
F-11
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
long-term financing and costs for certain interest rate protection agreements.
These costs are amortized over the terms of the related debt. Unamortized
financing costs are written-off when debt is retired before the maturity date.
The accumulated amortization of such deferred financing costs was $11.1 million
and $8.2 million at December 31, 1999 and 1998, respectively.
(d) INTEREST RATE PROTECTION AGREEMENTS
The Company from time to time enters into interest rate protection
agreements to effectively convert floating rate debt to a fixed rate basis, as
well as to hedge anticipated financing transactions. Net amounts paid or
received under these agreements are recognized as an adjustment to interest
expense when such amounts are incurred or earned. Settlement amounts paid or
received in connection with terminated interest rate protection agreements are
deferred and amortized over the remaining term of the related financing
transaction on the straight-line method. The Company believes it has limited
exposure to the extent of non-performance by the counterparties of each
protection agreement since each counterparty is a major U.S. financial
institution, and the Company does not anticipate their non-performance.
(e) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES ("Statement No. 133"). Statement No. 133
requires recording all derivative instruments as assets or liabilities, measured
at fair value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of derivatives will either be offset against
the change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The standard's
effective date was deferred by FASB Statement No. 137 to all fiscal quarters of
all fiscal years beginning after June 15, 2000. The Company is planning to adopt
the standard once it is effective and does not anticipate that the adoption will
have a material impact on the Company's financial condition and results of
operations.
(f) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company's financial instruments, including cash
and cash equivalents, mortgage notes payable, other notes payable, lines of
credit and other financial instruments, approximate their carrying or contract
values. With respect to the Company's investment in mortgage notes, the fair
value as of December 31, 1999 and 1998 was estimated to be approximately $87.0
million and $91.8 million, respectively, compared to the Company's carrying
value of $85 million and $88 million, respectively. The estimated fair value of
the Company's investment in mortgage notes represents the estimated net present
value based on the expected future property level cash flows and an estimated
current market discount rate.
(g) REVENUE RECOGNITION
Rental income attributable to leases is recorded when due from tenants
and is recognized monthly as it is earned, which is not materially different
than on a straight-line basis. Interest income is recorded on an accrual basis.
F-12
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(h) LEASE AGREEMENTS
The majority of the leases entered into between a tenant and a Property
for the rental of an apartment unit are year-to-year, renewable upon consent of
both parties on a year-to-year or month-to-month basis.
(i) INCOME TAXES
Due to the structure of the Company as a REIT and the nature of the
operations of the Properties and Management Business, the results of operations
contain no provision for Federal income taxes. However, the Company is subject
to certain state and local income, excise or franchise taxes. The aggregate cost
of land and depreciable property for Federal income tax purposes as of December
31, 1999 and 1998 was approximately $8.6 billion and $8.5 billion, respectively.
(j) MINORITY INTERESTS
Net income is allocated to the Minority Interests (as defined in Note
5) based on their respective ownership percentage of the Operating Partnership.
Ownership percentage is represented by dividing the number of OP Units held by
the Minority Interests by the total OP Units held by Minority Interests and EQR.
Issuance of additional Common Shares or OP Units changes the ownership interests
of both the Minority Interests and EQR. Such transactions and the proceeds
therefrom are treated as capital transactions and result in an allocation
between shareholders' equity and Minority Interests to account for the change in
the respective percentage ownership of the underlying equity of the Operating
Partnership.
(k) USE OF ESTIMATES
In preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
(l) REPORTABLE SEGMENTS
During the fourth quarter of 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION ("Statement No. 131"). Statement No. 131
superseded FASB Statement of Financial Accounting Standards No. 14, FINANCIAL
REPORTING FOR SEGMENTS OF A BUSINESS ENTERPRISE ("Statement No. 14"). Statement
No. 131 establishes standards for the way that public business enterprises
report information regarding reportable operating segments. The adoption of
Statement No. 131 did not affect the Company's results of operations or
financial position.
The Company has one primary reportable business segment, which consists
of investment in rental real estate. The Company's primary business is owning,
managing and operating multifamily residential properties which includes the
generation of rental and other related income through the leasing of apartment
units to tenants. The Company also has a segment for corporate level activity
including such items as interest income earned on short-term investments,
interest income earned on investment in mortgage notes, general and
administrative expenses, and interest expense on mortgage notes payable and
unsecured note issuances. In addition, the Company has a segment for third party
management activity that is immaterial
F-13
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
and does not meet the threshold requirements of Statement No. 131 as a
reportable segment.
The Company evaluates performance and allocates resources primarily
based on the rental and other income generated from each property less property
and maintenance expenses, real estate taxes and insurance, and property
management expenses, which is considered net operating income ("NOI"). However,
all other segment measurements are disclosed in the Company's consolidated
financial statements, and accordingly the accounting policies of the reportable
segments are the same as those described elsewhere in the Summary of Significant
Accounting Policies.
The Company also considers funds from operations ("FFO") to be a
primary measure of the performance of real estate companies including an equity
REIT. The Company believes that FFO is helpful to investors as a measure of the
performance of an equity REIT because, along with cash flows from operating
activities, financing activities and investing activities, it provides investors
an understanding of the ability of the Company to incur and service debt and to
make capital expenditures. FFO in and of itself does not represent cash
generated from operating activities in accordance with accounting principles
generally accepted in the United States ("GAAP") and therefore should not be
considered an alternative to net income as an indication of the Company's
performance or to net cash flows from operating activities as determined by GAAP
as a measure of liquidity and is not necessarily indicative of cash available to
fund cash needs. The Company's calculation of FFO represents net income
available to Common Shares, excluding gains on dispositions of properties, gains
on early extinguishment of debt, and write-off of unamortized costs on
refinanced debt, plus depreciation on real estate assets, income allocated to
Minority Interests and amortization of deferred financing costs related to the
predecessor business. The Company's calculation of FFO may differ from the
methodology for calculating FFO utilized by other REIT's and, accordingly, may
not be comparable to such other REIT's. The Company will adopt, effective
January 1, 2000, the National Association of Real Estate Investment Trust's
("NAREIT") updated recommended definition of FFO as approved in the fourth
quarter of 1999.
All revenues are from external customers and no revenues are generated
from transactions with other segments. There are no tenants who contributed 10%
or more of the Company's total revenues during 1999, 1998 or 1997. Interest
expense on debt is not allocated to individual Properties, even if the
Properties secure such debt. Further, minority interest in consolidated
subsidiaries is not allocated to the Properties. There is no provision for
income taxes as the Company is organized as a REIT under the Internal Revenue
Code.
4. BUSINESS COMBINATIONS
In connection with the Wellsford Merger each outstanding common share
of beneficial interest of Wellsford was converted into .625 of a Common Share of
the Company. In addition, Wellsford's Series A Cumulative Convertible Preferred
Shares of Beneficial Interest were redesignated as the Company's 3,999,800
Series E Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01
par value per share (the "Series E Preferred Shares") and Wellsford's Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated
as the Company's 2,300,000 9.65% Series F Cumulative Redeemable Preferred Shares
of Beneficial Interest, $0.01 par value per share (the "Series F Preferred
Shares").
On the Wellsford Closing Date, 72 Properties containing 19,004 units
and other related assets were acquired for a total purchase price of
approximately $1 billion. The purchase price consisted of 10.8 million common
shares of beneficial interest, $.01 par value per share ("Common Shares") issued
by the Company with a market value of $443.7 million, the liquidation value of
$157.5 million for the Series E Preferred
F-14
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Shares and the Series F Preferred Shares, the assumption of mortgage
indebtedness and unsecured notes in the amount of $345 million, the assumption
of other liabilities of approximately $33.5 million and other merger related
costs of approximately $23.4 million.
On the EWR Closing Date, 53 Properties containing 15,331 units and
three Properties under construction or expansion containing 953 units and other
related assets were acquired for a total purchase price of approximately $1.2
billion. In connection with the EWR Merger, as of the EWR Closing Date, each
outstanding common share of beneficial interest of EWR was converted into .50 of
a Common Share of the Company. The purchase price consisted of 10.3 million
Common Shares issued by the Company with a total market value of approximately
$501.6 million, the assumption of EWR's minority interest with a market value of
approximately $107.3 million, the assumption of mortgage indebtedness and
unsecured notes in the amount of $498 million, the assumption of other
liabilities of approximately $28.2 million and other EWR Merger related costs of
approximately $16.7 million.
In connection with the MRY Merger, each outstanding common share of
beneficial interest of MRY was converted into 0.53 of a Common Share of the
Company. In addition, MRY spun-off certain assets and liabilities to Merry Land
Properties, Inc. ("MRYP Spinco"). As partial consideration for the transfer, the
Company extended a $25 million, one year, non-revolving loan to MRYP Spinco
pursuant to a Senior Debt Agreement. As of December 31, 1999, the debt agreement
was no longer outstanding.
In addition, MRY Series A Cumulative Convertible Preferred Shares of
Beneficial Interest were redesignated as the Company's 164,951 Series H
Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series H Preferred Shares"), the MRY Series B Cumulative
Convertible Preferred Shares of Beneficial Interest were redesignated as the
Company's 4,000,000 Series I Cumulative Convertible Preferred Shares of
Beneficial Interest, $0.01 par value per share (the "Series I Preferred
Shares"), the MRY Series C Cumulative Convertible Preferred Shares of Beneficial
Interest were redesignated as the Company's 4,599,400 Series J Cumulative
Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series J Preferred Shares"), the MRY Series D Cumulative Redeemable
Preferred Shares of Beneficial Interest were redesignated as the Company's
1,000,000 Series K Cumulative Redeemable Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series K Preferred Shares") and the
MRY Series E Cumulative Redeemable Preferred Shares of Beneficial Interest were
redesignated as the Company's 4,000,000 Series L Cumulative Redeemable Preferred
Shares of Beneficial Interest, $0.01 par value per share (the "Series L
Preferred Shares").
On the MRY Closing Date, 108 Properties containing 32,315 units, three
Properties under construction or expansion expected to contain 872 units, six
Additional Properties that represent an investment in six joint ventures
containing 1,297 units and other related assets were acquired for a total
purchase price of approximately $2.2 billion. The purchase price consisted of
21.8 million Common Shares issued by the Company with a market value of $1
billion, the assumption of MRY's minority interest with a market value of
approximately $40.2 million, the liquidation value of $369.1 million for the
Series H Preferred Shares, the Series I Preferred Shares, the Series J Preferred
Shares, the Series K Preferred Shares and the Series L Preferred Shares, the
assumption of mortgage indebtedness, unsecured notes and a line of credit in the
amount of $723.5 million, the assumption of other liabilities of approximately
$46.5 million and other merger related costs of approximately $51.9 million.
On the LFT Closing Date, 402 Properties containing 36,609 units and
other related assets were acquired for a total purchase price of approximately
$738 million. In connection with the LFT Merger, each outstanding common share
of beneficial interest of LFT was converted into 0.463 of a Common Share of the
Company. The purchase price consisted of 4.0 million Common Shares issued by the
Company with
F-15
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
a market value of $181.1 million, the assumption of mortgage indebtedness, a
term loan and a line of credit in the amount of $528.3 million, the acquisition
of other assets of approximately $40.9 million, the assumption of other
liabilities of approximately $25.3 million and other merger related costs of
approximately $24.5 million.
All of the amounts stated in the previous paragraph are based on
management's current best estimates, which are subject to adjustment within one
year of the respective closing dates.
5. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS
The following table presents the changes in the Company's issued and
outstanding Common Shares for the years ended December 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
---------------------------------------------------- -------------- -------------- --------------
1999 1998 1997
---------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Common Shares outstanding at January 1, 118,230,009 89,085,265 51,154,836
COMMON SHARES ISSUED:
Conversion of LFT common shares 4,018,717 -- --
January 1998 Common Share Offering -- 4,000,000 --
February 1998 Common Share Offerings -- 1,988,340 --
March 1998 Common Share Offering -- 495,663 --
April 1998 Common Share Offering -- 946,565 --
Conversion of MRY common shares -- 21,801,612 --
March 1997 Common Share Offerings -- -- 1,921,000
June 1997 Common Share Offerings -- -- 8,992,023
September 1997 Common Share Offering -- -- 498,000
October 1997 Common Share Offering -- -- 3,315,500
December 1997 Common Share Offerings -- -- 1,204,018
Conversion of Wellsford common shares -- -- 10,823,016
Conversion of EWR common shares -- -- 10,288,583
Conversion of Series E Preferred Shares 1,669 834 723
Conversion of Series H Preferred Shares 6,580 6,078 --
Conversion of all Series I Preferred Shares 2,566,797 -- --
Conversion of Series J Preferred Shares 122 -- --
Employee Share Purchase Plan 147,885 93,521 84,183
Dividend Reinvestment - DRIP Plan 36,132 10,230 --
Share Purchase - DRIP Plan 22,534 1,023,184 --
Exercise of options 1,013,192 431,174 180,138
Restricted share grants, net 306,500 59,060 28,246
Conversion of OP Units 1,217,821 640,337 582,185
Profit-sharing/401(k) Plan contribution 30,260 15,980 13,140
COMMON SHARES OTHER:
Common Shares repurchased and retired (148,453) (2,367,400) --
Common Shares other 1,033 (434) (326)
---------------------------------------------------- -------------- -------------- --------------
COMMON SHARES OUTSTANDING AT DECEMBER 31, 127,450,798 118,230,009 89,085,265
---------------------------------------------------- -------------- -------------- --------------
</TABLE>
On February 3, 1998, the Company filed with the SEC a Form S-3
Registration Statement to register $1 billion of equity securities. The SEC
declared this registration statement effective on February 27, 1998. In
addition, the Company carried over $272 million related to the registration
statement effective on August 4, 1997. As of December 31, 1999, $1.1 billion
remained outstanding under this registration statement.
F-16
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The equity positions of various individuals and entities that
contributed their properties to the Operating Partnership in exchange for a
partnership interest are collectively referred to as the "Minority Interests".
As of December 31, 1999 and 1998, the Minority Interests held 12,483,742 and
13,187,929 OP Units, respectively. As a result, the Minority Interests had an
8.92% and 10.04% interest in the Operating Partnership at December 31, 1999 and
1998, respectively. Assuming conversion of all OP Units into Common Shares,
total Common Shares outstanding at December 31, 1999 and 1998 would have been
139,934,540 and 131,417,938, respectively.
Net proceeds from the Company's Common Share and Preferred Share
offerings are contributed by the Company to the Operating Partnership in return
for an increased ownership percentage and are treated as capital transactions in
the Company's Consolidated Financial Statements. As a result, the net offering
proceeds from Common Shares are allocated between shareholders' equity and
Minority Interests to account for the change in their respective percentage
ownership of the underlying equity of the Operating Partnership.
On October 12, 1999, the Company repurchased and retired 148,453 Common
Shares previously issued in connection with the LFT Merger. Various LFT
employees and trustees owned these Common Shares. The Company paid approximately
$6.3 million in connection therewith.
In connection with certain acquisitions during the year ended December
31, 1999, the Operating Partnership issued 28,795 Series A Junior Convertible
Preference Units and 7,367 Series B Junior Convertible Preference Units having a
combined value of approximately $3.0 million. These units ultimately will
convert to OP Units in accordance with the respective term sheet agreements. The
value of these preference units is included in Minority Interests in the
Consolidated Balance Sheets and the distributions incurred are included in
preferred distributions in the Consolidated Statements of Operations.
On September 27, 1999, EQR-Mosaic, L.L.C., a wholly-owned subsidiary of
the Operating Partnership, issued 800,000 units of 8.00% Series A Cumulative
Convertible Redeemable Preference Interests with an equity value of $40 million.
EQR-Mosaic LLC received $39 million in net proceeds from this transaction. The
liquidation value of these units is $50 per unit. The 800,000 units are
exchangeable into 800,000 shares of 8.00% Series M Cumulative Redeemable
Preferred Shares of Beneficial Interest of the Company. The Series M Preferred
Shares are not convertible to EQR Common Shares. Dividends for the Series A
Preference Interests or the Series M Preferred Shares are payable quarterly at
the rate of $4.00 per unit/share per year. The value of these preference
interests is included in Minority Interests in the Consolidated Balance Sheets
and the distributions incurred are included in preferred distributions in the
Consolidated Statements of Operations.
The declaration of trust of the Company provides that the Company may
issue up to 100,000,000 Preferred Shares with specific rights, preferences and
other attributes as the Board of Trustees may determine, which may include
preferences, powers and rights that are senior to the rights of holders of the
Company's Common Shares.
The following table presents the Company's issued and outstanding
Preferred Shares as of December 31, 1999 and 1998:
F-17
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------- ------------- ----------- -----------
ANNUAL
DIVIDEND
REDEMPTION CONVERSION RATE PER
DATE (1) (2) RATE (2) SHARE (3)
- ------------------------------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
Preferred Shares of beneficial interest, $.01 par value;
100,000,000 shares authorized:
9 3/8% Series A Cumulative Redeemable Preferred; liquidation 6/1/00 N/A $2.34375
value $25 per share; 6,120,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
9 1/8% Series B Cumulative Redeemable Preferred; liquidation 10/15/05 N/A $22.81252
value $250 per share; 500,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
9 1/8% Series C Cumulative Redeemable Preferred; liquidation 9/9/06 N/A $22.81252
value $250 per share; 460,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
8.60% Series D Cumulative Redeemable Preferred; liquidation 7/15/07 N/A $21.50000
value $250 per share; 700,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
Series E Cumulative Convertible Preferred; liquidation value 11/1/98 0.5564 $1.75000
$25 per share; 3,994,000 and 3,997,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
9.65% Series F Cumulative Redeemable Preferred; liquidation 8/24/00 N/A $2.41250
value $25 per share; 2,300,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
7 1/4% Series G Convertible Cumulative Preferred; liquidation 9/15/02 4.2680 $18.12500
value $250 per share; 1,265,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998
7.00% Series H Cumulative Convertible Preferred; liquidation 6/30/98 0.7240 $1.75000
value $25 per share; 147,452 and 156,551 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
8.82% Series I Cumulative Convertible Preferred; liquidation 10/31/99 0.6417 $2.20500
value $25 per share; 0 and 4,000,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively (4)
8.60% Series J Cumulative Convertible Preferred; liquidation 3/31/00 0.6136 $2.15000
value $25 per share; 4,599,200 and 4,599,400 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
8.29% Series K Cumulative Redeemable Preferred; liquidation 12/10/26 N/A $4.14500
value $50 per share; 1,000,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
7.625% Series L Cumulative Redeemable Preferred; liquidation 2/13/03 N/A $1.90625
value $25 per share; 4,000,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
- ------------------------------------------------------------------- ------------- ----------- -----------
- ------------------------------------------------------------------- ------------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------- ------------ --- ------------
DECEMBER DECEMBER
31, 31,
1999 1998
- --------------------------------------------------------------------- ------------ --- ------------
<S> <C> <C>
Preferred Shares of beneficial interest, $.01 par value;
100,000,000 shares authorized:
9 3/8% Series A Cumulative Redeemable Preferred; liquidation $ 153,000 $ 153,000
value $25 per share; 6,120,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
9 1/8% Series B Cumulative Redeemable Preferred; liquidation 125,000 125,000
value $250 per share; 500,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
9 1/8% Series C Cumulative Redeemable Preferred; liquidation 115,000 115,000
value $250 per share; 460,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
8.60% Series D Cumulative Redeemable Preferred; liquidation 175,000 175,000
value $250 per share; 700,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
Series E Cumulative Convertible Preferred; liquidation value 99,850 99,925
$25 per share; 3,994,000 and 3,997,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
9.65% Series F Cumulative Redeemable Preferred; liquidation 57,500 57,500
value $25 per share; 2,300,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
7 1/4% Series G Convertible Cumulative Preferred; liquidation 316,250 316,250
value $250 per share; 1,265,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998
7.00% Series H Cumulative Convertible Preferred; liquidation 3,686 3,914
value $25 per share; 147,452 and 156,551 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
8.82% Series I Cumulative Convertible Preferred; liquidation - 100,000
value $25 per share; 0 and 4,000,000 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively (4)
8.60% Series J Cumulative Convertible Preferred; liquidation 114,980 114,985
value $25 per share; 4,599,200 and 4,599,400 shares issued and
outstanding at December 31, 1999 and December 31, 1998,
respectively
8.29% Series K Cumulative Redeemable Preferred; liquidation 50,000 50,000
value $50 per share; 1,000,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
7.625% Series L Cumulative Redeemable Preferred; liquidation 100,000 100,000
value $25 per share; 4,000,000 shares issued and outstanding
at December 31, 1999 and December 31, 1998
- --------------------------------------------------------------------- ------------ --- ------------
$ 1,310,266 $ 1,410,574
- --------------------------------------------------------------------- ------------ --- ------------
</TABLE>
F-18
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
(1) On or after the redemption date, redeemable preferred shares
(Series A, B, C, D, F, K and L) may be redeemed for cash at
the option of the Company, in whole or in part, at a
redemption price equal to the liquidation price per share,
plus accrued and unpaid distributions, if any.
(2) On or after the redemption date, convertible preferred shares
(Series E, G, H, I & J) may be redeemed under certain
circumstances for cash or Common Shares at the option of the
Company, in whole or in part, at various redemption prices per
share based upon the contractual conversion rate, plus accrued
and unpaid distributions, if any. The conversion rate listed
for Series G is the Preferred Share rate and the equivalent
Depositary Share rate is 0.4268.
(3) Dividends on all series of Preferred Shares are payable
quarterly at various pay dates. Dividend rates listed for
Series B, C, D and G are Preferred Share rates. The equivalent
Depositary Share annual dividend rates are $2.281252,
$2.281252, $2.15 and $1.8125 per Series B, C, D and G
Depositary Share, respectively.
(4) During 1999, all of the Series I Preferred Shares were
converted into 2,566,797 Common Shares of the Company.
6. REAL ESTATE
The following table summarizes the carrying amounts for investment in
real estate as of December 31, 1999 and 1998 (AMOUNTS ARE IN THOUSANDS):
<TABLE>
<CAPTION>
-------------------------------------- ----------------- --------------
1999 1998
-------------------------------------- ----------------- --------------
<S> <C> <C>
Land $ 1,550,378 $ 1,326,148
Buildings and Improvements 10,266,290 9,186,220
Furniture, Fixtures and Equipment 404,260 333,359
Construction in Progress 18,035 96,336
-------------------------------------- ----------------- --------------
Real Estate 12,238,963 10,942,063
Accumulated Depreciation (1,070,487) (718,491)
-------------------------------------- ----------------- --------------
Real Estate, net $11,168,476 $ 10,223,572
-------------------------------------- ----------------- --------------
</TABLE>
The following table summarizes the carrying amounts for the real estate
held for disposition as of December 31, 1999 and 1998 (AMOUNTS ARE IN
THOUSANDS):
<TABLE>
<CAPTION>
------------------------------------- -------------- --------------
1999 1998
------------------------------------- -------------- --------------
<S> <C> <C>
Land $ 2,383 $ 4,189
Buildings and Improvements 14,596 35,620
Furniture, Fixtures and Equipment 1,403 4,389
Construction in Progress -- --
------------------------------------- -------------- --------------
Real Estate 18,382 44,198
Accumulated Depreciation (5,514) (14,312)
------------------------------------- -------------- --------------
Real Estate Held for Disposition $ 12,868 $ 29,886
------------------------------------- -------------- --------------
</TABLE>
In addition to the LFT Merger, during the year ended December 31, 1999,
the Company acquired the twenty-two Properties listed below, of which fourteen
were acquired from unaffiliated third parties and eight were acquired from an
affiliated party. In connection with certain of the acquisitions listed below,
the Company assumed and/or entered into new mortgage indebtedness of
approximately $69.9 million, issued OP Units having a value of approximately
$25.2 million and issued Junior Convertible Preference Units
F-19
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
having a value of approximately $3.0 million. The cash portion of these
transactions was funded primarily from proceeds received from the disposition of
certain properties, working capital and the Company's line of credit.
<TABLE>
<CAPTION>
- --------------- ----------------------------------- --------------------------------- ------------ --------------
PURCHASE
PRICE
DATE NUMBER (IN
ACQUIRED PROPERTY LOCATION OF UNITS THOUSANDS)
- --------------- ----------------------------------- --------------------------------- ------------ --------------
<S> <C> <C> <C>
01/22/99 Fireside Park Rockville, MD 236 $14,279
01/22/99 Mill Pond Glen Burnie, MD 240 11,745
01/28/99 Aspen Crossing Wheaton, MD 192 11,386
02/24/99 Copper Canyon Highlands Ranch, CO 222 16,200
03/04/99 Siena Terrace Lake Forest, CA 356 33,000
03/23/99 Greenbriar Kirkwood, MO 218 12,033
03/24/99 Fairland Gardens Silver Spring, MD 400 25,897
04/28/99 Pine Tree Club Wildwood, MO 150 7,988
04/28/99 Westbrooke Village I & II Manchester, MO 252 12,642
04/29/99 Brookside Frederick, MD 228 10,809
04/30/99 Skyview Rancho Santa Margarita, CA 260 21,800
05/20/99 Lincoln at Defoors Atlanta, GA 300 25,500
05/25/99 Rosecliff Quincy, MA 156 18,263
05/25/99 Canyon Crest Santa Clarita, CA 158 12,500
06/29/99 Greentree I Glen Burnie, MD 350 15,625
06/29/99 Greentree III Glen Burnie, MD 207 9,598
07/14/99 Brookdale Village Naperville, IL 252 19,600
07/29/99 Longfellow Place* Boston, MA 710 237,000
07/30/99 Greentree II Glen Burnie, MD 239 10,907
10/28/99 Granada Highlands Malden, MA 919 128,000
12/16/99 Bridgewater at Wells Crossing Orange Park, FL 288 15,500
12/22/99 Town Center Phase II Houston, TX 260 14,423
- --------------- ----------------------------------- --------------------------------- ------------ --------------
6,593 $684,695
- --------------- ----------------------------------- --------------------------------- ------------ --------------
</TABLE>
* This acquisition also included approximately 264,000 square feet of office and
retail space and two parking garages.
In addition to the MRY Merger, during the year ended December 31, 1998,
the Company acquired 99 Properties, of which 96 were acquired from unaffiliated
third parties and 3 were acquired from an affiliated party. In connection with
certain of these acquisitions, the Company assumed and/or entered into mortgage
indebtedness of approximately $459.8 million, issued OP Units having a value of
approximately $165 million and issued Junior Convertible Preference Units having
a value of approximately $4.8 million. The cash portion of these transactions
was funded primarily from proceeds raised from the various capital transactions
as disclosed in Note 5 of the Notes to Consolidated Financial Statements, the
various debt offerings as disclosed in Note 12 of the Notes to Consolidated
Financial Statements, the Company's line of credit, proceeds received from the
disposition of certain Properties and working capital.
7. REAL ESTATE DISPOSITIONS
During the year ended December 31, 1999, the Company disposed of the
thirty-six Properties listed below to unaffiliated third parties. The Company
recognized a net gain for financial reporting purposes of
F-20
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
approximately $93.5 million. In connection with one of these dispositions, the
purchaser assumed the Company's mortgage indebtedness of approximately $12.5
million.
<TABLE>
<CAPTION>
--------------- --------------------------------------- ------------------------- -------------- -----------------
DISPOSITION
DATE NUMBER PRICE
DISPOSED PROPERTY LOCATION OF UNITS (IN THOUSANDS)
--------------- --------------------------------------- ------------------------- -------------- -----------------
<S> <C> <C> <C> <C>
01/06/99 Fox Run Little Rock, AR 337 $10,623
01/06/99 Greenwood Forest Little Rock, AR 239 7,533
01/06/99 Walnut Ridge Little Rock, AR 252 7,943
01/06/99 Williamsburg Little Rock, AR 211 6,651
01/27/99 The Hawthorne Phoenix, AZ 276 20,500
03/02/99 The Atrium Durham, NC 208 10,750
03/24/99 Greenbriar Kirkwood, MO 218 12,525
05/06/99 Sandstone at Bear Creek Euless, TX 40 2,075
05/12/99 La Costa Brava/Cedar Cove Jacksonville, FL 464 17,650
05/18/99 Lands End Pacifica , CA 260 30,100
07/01/99 The Willows Knoxville, TN 250 11,950
07/26/99 Tivoli Lakes Club Deerfield Beach, FL 278 17,000
07/29/99 The Seasons Boise, ID 120 6,026
08/19/99 Kingswood Manor San Antonio, TX 129 3,800
08/19/99 Hampton Green San Antonio, TX 293 8,000
08/19/99 Trails End San Antonio, TX 308 9,100
08/19/99 Waterford San Antonio, TX 133 4,500
09/23/99 Southbank Mesa, AZ 113 4,550
09/30/99 Governor's Place Augusta, GA 190 5,500
09/30/99 Maxwell House Augusta, GA 216 3,500
10/14/99 Burn Brae Irving, TX 282 10,800
10/15/99 Casa Cordoba Tallahassee, FL 168 5,672
10/15/99 Casa Cortez Tallahassee, FL 66 2,228
11/18/99 Orchards of Landen Maineville, OH 312 19,100
11/23/99 Flying Sun Phoenix, AZ 108 5,100
12/15/99 Sleepy Hollow Kansas City, MO 388 18,050
12/15/99 Harbour Landing Corpus Christi, TX 284 9,500
12/15/99 Doral Louisville, KY 228 9,750
12/20/99 Villa Manana Phoenix, AZ 260 11,350
12/20/99 University Park Toledo, OH 99 2,050
12/20/99 Village of Hampshire Heights Toledo, OH 304 7,000
12/22/99 Superstition Vistas/Heritage Point Mesa, AZ 464 25,000
12/22/99 The Meadows Mesa, AZ 306 14,500
12/28/99 Metropolitan Park Seattle, WA 82 7,000
--------------- --------------------------------------- ------------------------- -------------- -----------------
7,886 $347,376
--------------- --------------------------------------- ------------------------- -------------- -----------------
</TABLE>
In addition, during the year ended December 31, 1999, the Company also
sold its entire interest in six MRY joint venture properties (to MRYP Spinco)
containing 1,297 units for approximately $54.1 million.
F-21
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8. COMMITMENTS TO ACQUIRE/DISPOSE OF REAL ESTATE
As of December 31, 1999, in addition to the Property that was
subsequently acquired as discussed in Note 23 of the Notes to Consolidated
Financial Statements, the Company entered into separate agreements to acquire
three multifamily properties containing 886 units from unaffiliated parties. The
Company expects a combined purchase price of approximately $126 million.
As of December 31, 1999, in addition to the Properties that were
subsequently disposed of as discussed in Note 23 of the Notes to Consolidated
Financial Statements, the Company entered into separate agreements to dispose of
fourteen multifamily properties containing 3,056 units to unaffiliated parties.
The Company expects a combined disposition price of approximately $138.9
million.
The closings of these pending transactions are subject to certain
contingencies and conditions; therefore, there can be no assurance that these
transactions will be consummated or that the final terms thereof will not differ
in material respects from those summarized in the preceding paragraphs.
9. INVESTMENT IN MORTGAGE NOTES, NET
In 1995, the Company made an $89 million investment in partnership
interests and subordinated mortgages collateralized by 21 of the Properties.
These 21 Properties consist of 3,896 units, located in California, Colorado, New
Mexico and Oklahoma. This included an $87.1 million investment in second and
third mortgages (net of an original discount of approximately $12.7 million to
their face amount), $1.6 million represented a one time payment for an interest
rate protection agreement and $0.3 million represented an investment for
primarily a 49.5% limited partnership interest in the title-holding entities. As
the Company does not control the general partners of the title-holding entities
and substantially all of the Company's investment is in second and third
mortgages (which are subordinate to first mortgages owned by third party
unaffiliated entities), the $87.1 million investment is accounted for as an
investment in mortgage notes. The $1.6 million payment made for the interest
rate protection agreement is included in deferred financing costs and is being
amortized over the term of the related debt.
As of December 31, 1999 and 1998, the second mortgage notes had a
combined principal balance of approximately $17.5 million and $21.7 million,
respectively, and currently accrue interest at a rate of 9.45% per annum,
receive principal amortization from excess cash flow and have a stated maturity
date of December 31, 2019. As of December 31, 1999 and 1998, the third mortgage
notes had a combined principal balance of approximately $71.1 million and $71.1
million, respectively, and currently accrue interest at a rate of 6.15% per
annum, plus up to an additional 3% per annum to the extent of available cash
flow. Contingent interest on the third mortgage notes is recognized to the
extent it is received. The third mortgage notes have a stated maturity of
December 31, 2024. Receipt of principal and interest on the second and third
mortgage notes is subordinated to the receipt of all interest on the first
mortgage notes. With respect to the discount on these notes, the unamortized
balance at December 31, 1999 and 1998 was $4.8 million and $6 million,
respectively. During 1999, 1998 and 1997, the Company amortized $1.2 million,
$3.0 million and $3.1 million, respectively, which is included in interest
income-investment in mortgage notes in the consolidated statements of
operations. This discount is being amortized utilizing the effective yield
method based on the expected life of the investment.
10. DEPOSITS-RESTRICTED
Deposits-restricted as of December 31, 1999 primarily included the
following:
F-22
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
- a deposit in the amount of $25 million held in a third party
escrow account to provide collateral for third party construction
financing in connection with two separate joint venture
agreements;
- approximately $48.9 million was held in third party escrow
accounts, representing proceeds received in connection with the
Company's disposition of three properties and earnest money
deposits made for one additional acquisition;
- approximately $29.9 million was for tenant security, utility
deposits, and other deposits for certain of the Company's
Properties; and
- approximately $7.5 million of other deposits.
Deposits-restricted as of December 31, 1998 primarily included the
following:
- a deposit in the amount of $20 million held in a third party
escrow account to provide collateral for third party construction
financing in connection with the Joint Venture Agreement;
- approximately $22.2 million held in third party escrow accounts
representing proceeds received in connection with the Company's
disposition of four properties;
- approximately $15.3 million for tenant security and utility
deposits for certain of the Company's
Properties; and
- approximately $11.8 million of other deposits.
11. MORTGAGE NOTES PAYABLE
As of December 31, 1999, the Company had outstanding mortgage
indebtedness of approximately $2.9 billion encumbering 545 of the Properties.
The carrying value of such Properties (net of accumulated depreciation of $416
million) was approximately $4.7 billion. The mortgage notes payables are
generally due in monthly installments of principal and interest.
During the year ended December 31, 1999 the Company:
- as part of the LFT Merger, assumed the outstanding mortgage
balances on 342 Properties in the aggregate amount of $499.7
million;
- assumed the outstanding mortgage balances on eight additional
properties acquired during 1999 in the aggregate amount of $69.9
million;
- repaid the outstanding mortgage balances on 31 Properties in the
aggregate amount of $60.8 million. In connection with the above
transactions, the Company incurred prepayment penalties of $0.5
million, which have been classified as losses on early
extinguishment of debt;
- refinanced the debt on four existing properties totaling $44.9
million with new mortgage indebtedness totaling $62.9 million;
- obtained new mortgage financing on eleven previously unencumbered
properties in the amount of $126.5 million;
- refinanced the debt totaling $120.8 million on ten existing
properties. In addition, five previously unencumbered properties
cross-collateralize each of the new mortgage notes;
- refinanced the debt on two existing properties and consequently
sold its lender position to a third party, thus receiving
additional net cash proceeds of approximately $2.6 million. The
bond indebtedness on these two properties is now unsecured and
is classified as notes, net at December 31, 1999;
- refinanced the debt on one existing property and consequently sold
its lender position to
F-23
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
a third party, thus receiving additional cash proceeds of
approximately $13.7 million; and
- sold the debt on one property totaling $12.5 million in
conjunction with a real estate disposition.
As of December 31, 1999, scheduled maturities for the Company's
outstanding mortgage indebtedness are at various dates through October 1, 2033.
The interest rate range on the Company's mortgage debt was 4.00% to 10.13% at
December 31, 1999. During the year ended December 31, 1999, the effective
interest cost on all of the Company's debt was 7.05%.
Aggregate payments of principal on mortgage notes payable for each of
the next five years and thereafter are as follows (amounts in thousands):
<TABLE>
<CAPTION>
---------------------------------------------------
YEAR TOTAL
---------------------------------------------------
<S> <C>
2000 $ 49,588
2001 349,223
2002 249,458
2003 97,351
2004 171,597
Thereafter 1,962,966
Net Unamortized Premiums 3,400
---------------------------------------------------
Total $2,883,583
---------------------------------------------------
</TABLE>
During the year ended December 31, 1998, the Company repaid the
outstanding mortgage balances on nine Properties in the aggregate amount of
$63.8 million.
As of December 31, 1998, the Company had outstanding mortgage
indebtedness of approximately $2.3 billion encumbering 216 of the Properties.
The carrying value of such Properties (net of accumulated depreciation of $250
million) was approximately $3.8 billion. The mortgage notes payables are
generally due in monthly installments of principal and interest. In connection
with the Properties acquired during the year ended December 31, 1998, including
the effects of the MRY Merger, the Company assumed the outstanding mortgage
balances on 58 Properties in the aggregate amount of $608.9 million, which
includes a premium of approximately $1.5 million recorded in connection with the
MRY Merger.
As of December 31, 1998, scheduled maturities for the Company's
outstanding mortgage indebtedness are at various dates through October 1, 2033.
The interest rate range on the Company's mortgage debt was 3.00% to 10.00% at
December 31, 1998. During the year ended December 31, 1998, the effective
interest cost on all of the Company's debt was 7.10%.
The Company has, from time to time, entered into interest rate
protection agreements (financial instruments) to reduce the potential impact of
increases in interest rates but believes it has limited exposure to the extent
of non-performance by the counterparties of each protection agreement since each
counterparty is a major U.S. financial institution, and the Company does not
anticipate their non-performance. No such financial instrument has been used for
trading purposes.
Concurrent with the refinancing of certain tax-exempt bonds and as a
requirement of the credit provider of the bonds, the Financing Partnership,
which owns certain of the Properties, entered into interest rate protection
agreements, which were assigned to the credit provider as additional security.
The Financing Partnership pays interest based on a fixed interest rate and the
counterparty of the agreement pays interest to
F-24
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
the Company at a floating rate that is calculated based on the Public Securities
Association Index for municipal bonds ("PSA Municipal Index"). As of December
31, 1999, the aggregate notional amounts of these agreements were approximately
$133.4 million, $27.7 million, $9.1 million. As of December 31, 1998, the
aggregate notional amounts of these agreements were approximately $135.1
million, $28.0 million and $9.2 million. The fixed interest rates for these
agreements were 4.81%, 4.528% and 4.90%. The termination dates are October 1,
2003, January 1, 2004 and April 1, 2004.
The Company simultaneously entered into substantially identical reverse
interest rate protection agreements. Under these agreements the Company pays
interest monthly at a floating rate based on the PSA Municipal Index and the
counterparty pays interest to the Company based on a fixed interest rate. As of
December 31, 1999, the aggregate notional amounts of these agreements were
approximately $133.4 million, $27.7 million, $9.1 million. As of December 31,
1998, the aggregate notional amounts of these agreements were approximately
$135.1 million, $28.0 million and $9.2 million. The fixed interest rates
received by the Company in exchange for paying interest based on the PSA
Municipal Index for these agreements were 4.74%, 4.458% and 4.83%. The
termination dates are October 1, 2003, January 1, 2004 and April 1, 2004.
Collectively, these agreements effectively cost the Company 0.07% per annum on
the current outstanding aggregate notional amount.
The Company also has an interest rate swap agreement for a notional
amount of $228 million, for which it will receive payments if the PSA index
exceeds 8.00%, that terminates on December 1, 2000. Any payments by the
counterparty under this agreement have been collaterally assigned to the
provider of certain sureties related to the tax-exempt bonds secured by certain
of its Properties. The Company has no payment obligations to the counterparty
with respect to this agreement.
In May 1998, the Company entered into an interest rate protection
agreement to effectively fix the interest rate upon its refinancing of the Evans
Withycombe Financing Limited Partnership indebtedness to within a range of 5.6%
to 6.0%. The agreement was for a notional amount of $131 million with a
settlement date of August 2001. There was no initial cost to the Company for
entering into this agreement.
In August 1998, the Company entered into an interest rate protection
agreement to effectively fix the interest rate cost of the Company's planned
financing in the fourth quarter of 1998. This agreement was canceled in November
1998 at a cost of approximately $3.7 million. This cost is being amortized over
the life of the financing for the fifteen previously unencumbered Properties
that occurred in November 1998.
In August 1998, the Company entered into an interest rate swap
agreement that fixed the Company's interest rate risk on a portion of the
Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of
3.65125%. This agreement was for a notional amount of $150 million with a
termination date of August 2003.
In August 1998, the Company entered into an interest rate swap
agreement that fixed the Company's interest rate risk on a portion of the
Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of
3.683%. This agreement was for a notional amount of $150 million with a
termination date of August 2005.
In October 1999, the Company settled on a $50 million treasury lock and
received $1.38 million. This settlement is being amortized over the life of the
financing for the eleven previously unencumbered Properties that occurred in
July 1999.
The Company believes that it has limited exposure to the extent of
non-performance by the
F-25
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
counterparties of the agreements, mentioned in the previous paragraphs, since
each counterparty is a major U.S. financial institution, and the Company does
not anticipate their non-performance.
The fair value of these instruments, discussed above, as of December
31, 1999 approximates their carrying or contract values.
12. NOTES
The following tables summarize the Company's unsecured note balances and
certain interest rate and maturity date information as of and for the years
ended December 31, 1999 and 1998, respectively:
<TABLE>
<CAPTION>
Weighted
December 31, 1999 Net Principal Interest Rate Average Maturity
(AMOUNTS ARE IN THOUSANDS) Balance Ranges Interest Rate Date Ranges
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Public Notes $ 2,062,759 6.150% - 9.375% 6.98% 2000 - 2026
Floating Rate Public Notes 99,746 (1) 5.81% 2003
Fixed Rate Tax-Exempt Bonds 127,780 4.750% - 5.200% 4.99% 2024 - 2029
-------------------
Totals $ 2,290,285
===================
</TABLE>
(1) As of December 31, 1999, floating rate public notes consisted of one
note. The interest rate on this note was LIBOR (reset quarterly) plus a
spread equal to 0.75% at December 31, 1999 (reset annually in August).
<TABLE>
<CAPTION>
Weighted
December 31, 1999 Net Principal Interest Rate Average Maturity
(AMOUNTS ARE IN THOUSANDS) Balance Ranges Interest Rate Date Ranges
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Public Notes $ 1,889,241 6.150% - 9.375% 7.36% 1999 - 2026
Floating Rate Public Notes 124,675 (2) 6.14% 1999 - 2003
Fixed Rate Tax-Exempt Bonds 35,600 4.750% 4.750% 2024
-------------------
Totals $ 2,049,516
===================
</TABLE>
(2) As of December 31, 1998, floating rate public notes consisted of two
separate notes. The interest rate on the first note was LIBOR (reset
quarterly) plus a spread equal to 0.45% at December 31, 1998 (reset
annually in August). The interest rate on the second note was LIBOR
(reset quarterly) plus a spread equal to 0.32% at December 31, 1998.
As of December 31, 1999, the Company had outstanding unsecured notes of
approximately $2.3 billion net of a $4.6 million discount and including a $7.1
million premium.
As of December 31, 1998, the Company had outstanding unsecured notes of
approximately $2.0 billion net of a $5.3 million discount and including a $9.2
million premium.
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998. As of
December 31, 1999, $430 million remained outstanding under this registration
statement.
F-26
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
During the year ended December 31, 1999, the Company:
- issued $300 million of redeemable unsecured fixed rate notes (the
"June 2004 Notes") in connection with the Debt Shelf
Registration in a public debt offering (the "Ninth Public Debt
Offering"). The June 2004 Notes were issued at a discount, which
is being amortized over the life of the notes on a straight-line
basis. As of December 31, 1999, the unamortized discount balance
was approximately $0.2 million. The June 2004 Notes are due June
23, 2004. The annual interest rate on the June 2004 Notes is
7.10%, which is payable semiannually in arrears on December 23
and June 23, commencing December 23, 1999. The Operating
Partnership received net proceeds of approximately $298.0
million in connection with this issuance;
- repaid its $125 million fixed rate notes that matured on May 15,
1999 and its $25 million floating rate notes that matured on
November 24, 1999;
- refinanced the bond indebtedness collateralized by four existing
properties. The bond indebtedness on all four properties totaling
$75.8 million is now unsecured;
- pursuant to the LFT Merger, assumed an unsecured term note in the
approximate amount of $2.3 million and paid it off the same day;
and
- refinanced the bond indebtedness collateralized by two existing
properties. The bond indebtedness on both properties totaling
$16.4 million is now unsecured.
Aggregate payments of principal on unsecured notes payable for each of
the next five years and thereafter are as follows (amounts in thousands):
<TABLE>
<CAPTION>
-----------------------------------------------------
YEAR TOTAL
-----------------------------------------------------
<S> <C>
2000 $ 200,000
2001 150,000
2002 265,000
2003 190,000
2004 415,000
Thereafter 1,067,780
Net Unamortized Premiums 7,056
Net Unamortized Discounts (4,551)
-----------------------------------------------------
Total $2,290,285
=====================================================
</TABLE>
As of December 31, 1999 and 1998, the remaining unamortized balance of
deferred settlement receipts from treasury locks and interest rate protection
agreements was $9.5 million and $8.8 million, respectively.
As of December 31, 1999 and 1998, the remaining unamortized balance of
deferred settlement payments on treasury locks and interest rate protection
agreements was $3.7 million and $5.4 million, respectively.
In regard to the interest rate protection agreements mentioned, the
Company believes that it has limited exposure to the extent of non-performance
by the counterparties of each agreement since each counterparty is a major U.S.
financial institution, and the Company does not anticipate their
non-performance.
F-27
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
13. LINES OF CREDIT
On August 12, 1999 the Company obtained a new three year $700 million
unsecured revolving credit facility, with Bank of America Securities LLC and
Chase Securities Inc. acting as joint lead arrangers, maturing August 11, 2002.
The new line of credit replaced the Company's $500 million unsecured revolving
credit facility, as well as the $120 million unsecured revolving credit facility
which the Company assumed in the MRY Merger. The prior existing revolving credit
facilities were repaid in full and terminated upon the closing of the new
facility. Advances under the credit facility bear interest at variable rates
based upon LIBOR at various interest periods, plus a certain spread dependent
upon the Company's credit rating. As of December 31, 1999 and 1998, $300 million
and $290 million, respectively, was outstanding and $65.8 million and $12
million, respectively, was restricted on the lines of credit. During the years
ended December 31, 1999 and 1998, the weighted average interest rate was 6.42%
and 6.47%, respectively.
Pursuant to the LFT Merger, the Company assumed a line of credit that
had an outstanding balance of approximately $26.4 million. On October 1, 1999,
the Company repaid the outstanding balance and terminated this facility.
14. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE COMMON SHARE
The following tables set forth the computation of net income per share
- - basic and net income per share - diluted.
F-28
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------------------------------------------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NUMERATOR:
Income before gain on disposition of properties, net,
extraordinary item, allocation of income to
Minority Interests and preferred distributions $ 330,333 $ 255,032 $ 176,014
Allocation of income to Minority Interests (29,536) (18,529) (13,260)
Distributions to preferred shareholders (113,196) (92,917) (59,012)
-------------- --------------- -------------
Income before gain on disposition of properties, net
and extraordinary item 187,601 143,586 103,742
Gain on disposition of properties, net 93,535 21,703 13,838
Loss on early extinguishment of debt (451) -- --
-------------- --------------- -------------
Numerator for net income per share - basic 280,685 165,289 117,580
Effect of dilutive securities:
Allocation of income to Minority Interests 29,536 18,529 13,260
-------------- --------------- -------------
Numerator for net income per share - diluted $ 310,221 $ 183,818 $130,840
============== =============== =============
DENOMINATOR:
Denominator for net income per share - basic 122,175 100,370 65,729
Effect of dilutive securities:
Contingent incremental employee share options 654 865 1,099
OP Units 12,826 11,343 7,453
-------------- --------------- -------------
Denominator for net income per share - diluted 135,655 112,578 74,281
============== =============== =============
Net income per share - basic $ 2.30 $ 1.65 $ 1.79
============== =============== =============
Net income per share - diluted $ 2.29 $ 1.63 $ 1.76
============== =============== =============
</TABLE>
F-29
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998 1997
-----------------------------------------------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NET INCOME PER SHARE - BASIC:
Income before gain on disposition of properties, net and
extraordinary item per share - basic $ 1.61 $ 1.45 $ 1.60
Gain on disposition of properties, net 0.69 0.20 0.19
Loss on early extinguishment of debt - - -
------------- -------------- --------------
Net income per share - basic $ 2.30 $ 1.65 $ 1.79
============= ============== ==============
NET INCOME PER SHARE - DILUTED:
Income before gain on disposition of properties, net and
extraordinary item per share - diluted $ 1.60 $ 1.44 $ 1.58
Gain on disposition of properties, net 0.69 0.19 0.18
Loss on early extinguishment of debt - - -
------------- -------------- --------------
Net income per share - diluted $ 2.29 $ 1.63 $ 1.76
============= ============== ==============
</TABLE>
FOR ADDITIONAL DISCLOSURES REGARDING THE EMPLOYEE SHARE OPTIONS, SEE NOTE 16.
CONVERTIBLE PREFERRED SHARES AND JUNIOR CONVERTIBLE PREFERENCE UNITS THAT
COULD BE CONVERTED INTO 12,023,051, 8,739,688 AND 2,763,898 WEIGHTED COMMON
SHARES FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997, RESPECTIVELY,
WERE OUTSTANDING BUT WERE NOT INCLUDED IN THE COMPUTATION OF DILUTED EARNINGS
PER SHARE BECAUSE THE EFFECTS WOULD BE ANTI-DILUTIVE.
15. SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
The following Summarized Pro Forma Condensed Statement of Operations
has been prepared as if the following had occurred on January 1, 1999 (as
described in Note 4, Note 5, Note 6, Note 7, Note 11 and Note 12 of Notes to
Consolidated Financial Statements):
- the acquisition of the 402 LFT properties containing 36,609 units
and other related assets for a total purchase price of
approximately $738 million;
- the acquisition of an additional 22 Properties, including the
related assumption of $69.9 million of mortgage indebtedness, the
issuance of Junior Convertible Preference Units with a value of
$3.0 million and the issuance of OP Units with a value of $25.2
million;
- the disposition of 36 properties;
- the $300 million public debt offering in June 1999;
- the repayment of the 1999 Notes totaling $125 million;
- the repayment of the 1999-A Medium Term Notes totaling $25
million;
- the repayment of LFT's unsecured term note and line of credit
totaling $28.6 million;
- the repayment of the outstanding mortgage balances on 31
properties totaling $60.8 million;
- the mortgage financing of eleven previously unencumbered
Properties for $126.5 million;
- the mortgage refinancing of eight properties increasing mortgage
indebtedness by $21.8 million (net);
F-30
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
- the issuance of the 800,000 units of 8.00% Series A Cumulative
Convertible Redeemable Preference Interests; and
- the conversion of all of the Series I Preferred Shares to
2,566,797 Common Shares during 1999.
This would result in 126,417,761 Common Shares outstanding on January
1, 1999. In management's opinion, the Summarized Pro Forma Condensed Statement
of Operations does not purport to present what actual results would have been
had the above transactions occurred on January 1, 1999, or to project results
for any future period. The amounts presented in the following statement are in
thousands except for per share amounts:
<TABLE>
<CAPTION>
SUMMARIZED PRO FORMA
CONDENSED STATEMENT
OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1999
------------------------------------------------------------------ -----------------------------------
<S> <C>
Total revenues $ 1,883,294
---------
Total expenses 1,547,363
---------
Income before allocation to Minority Interests 335,931
---------
Net income 315,016
Preferred distributions 112,313
---------
Net income available for Common Shares $ 202,703
=========
Net income per Common Share $ 1.60
=========
</TABLE>
<PAGE>
16. SHARE OPTION AND SHARE AWARD PLAN
Pursuant to the Company's Fifth Amended and Restated 1993 Share Option
and Share Award Plan (the "Fifth Amended Option and Award Plan"), officers,
directors, key employees and consultants of the Company may be offered the
opportunity to acquire Common Shares through the grant of share options
("Options") including non-qualified share options ("NQSOs"), incentive share
options ("ISOs") and share appreciation rights ("SARs") or may be granted
restricted or non-restricted shares. Additionally, under the Fifth Amended
Option and Award Plan, officers and key employees of the Company may be awarded
Common Shares, subject to conditions and restrictions as described in the Fifth
Amended Option and Award Plan. Options and SARs are sometimes referred to herein
as "Awards".
As to the Options that have been granted through December 31, 1999,
generally, one-third are exercisable one year after the initial grant, one-third
are exercisable two years following the date such Options were granted and the
remaining one-third are exercisable three years following the date such Options
were granted. As to the restricted shares that have been awarded through
December 31, 1999, these shares fully vest three years from the award date.
During the three year period of restriction, the employee receives quarterly
dividend payments on their shares. If employment is terminated prior to the
lapsing of the restriction, the shares are canceled.
The Company has reserved 12,500,000 Common Shares for issuance under
the Fifth Amended Option and Award Plan. The Options generally are granted at
the fair market value of the Company's
F-31
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Common Shares at the date of grant, vest over a three year period, are
exercisable upon vesting and expire ten years from the date of grant. The
exercise price for all Options under the Fifth Amended Option and Award Plan
shall not be less than the fair market value of the underlying Common Shares at
the time the Option is granted. The Fifth Amended Option and Award Plan will
terminate at such time as no further Common Shares are available for issuance
upon the exercise of Options and all outstanding Options have expired or been
exercised. The Board of Trustees may at any time amend or terminate the Fifth
Amended Option and Award Plan, but termination will not affect Awards previously
granted. Any Options, which had vested prior to such a termination, would remain
exercisable by the holder thereof.
Pursuant to the MRY Merger, the Company assumed MRY's Stock Option and
Incentive Plan, which included existing options granted by MRY prior to the MRY
Merger. As to the Options that have been granted through October 18, 1998,
generally, one-fifth are exercisable one year after the initial grant, one-fifth
are exercisable two years following the date such Options were granted,
one-fifth are exercisable three years following the date such Options were
granted, one-fifth are exercisable four years following the date such Options
were granted and the remaining one-fifth are exercisable five years following
the date such Options were granted.
The Company will not issue common shares under the MRY Stock Option and
Incentive Plan. The Options already granted under the plan were assumed with the
original grant dates. The number of original MRY Options and the original MRY
grant prices were converted to the Company's equivalent using a conversion ratio
of 0.54. They will vest over a five-year period, are exercisable upon vesting
and expire ten years from the date of grant. The MRY Stock Option and Incentive
Plan will terminate at such time all outstanding Options have expired or been
exercised. Any Options, which had vested prior to such assumption, would remain
exercisable by the holder thereof.
Pursuant to the LFT Merger, the Company assumed LFT's Incentive Equity
Plan, which included existing options granted by LFT prior to the LFT Merger. As
to the Options that were granted by LFT from January 1, 1999 through September
30, 1999, generally, one-third are exercisable one year after the initial grant,
one-third are exercisable two years following the date such Options were granted
and the remaining one-third are exercisable three years following the date such
Options were granted.
The Company will not issue common shares under the LFT Incentive Equity
Plan. The Options already granted under the plan were assumed with the original
grant dates. The number of original LFT Options and the original LFT grant
prices were converted to the Company's equivalent using a conversion ratio of
0.463. The Options granted through December 31, 1998 vested immediately upon
closing of the LFT Merger and are exercisable and expire ten years from the date
of grant. The LFT Incentive Equity Plan will terminate at such time all
outstanding Options have expired or been exercised. Any Options, which had
vested prior to such assumption, would remain exercisable by the holder thereof.
The Company has elected to apply the provisions of Accounting
Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB
No. 25"), in the computation of compensation expense. Under APB No. 25's
intrinsic value method, compensation expense is determined by computing the
excess of the market price of the shares over the exercise price on the
measurement date. For the Company's share options, the intrinsic value on the
measurement date (or grant date) is zero, and no compensation expense is
recognized. FASB Statement of Financial Accounting Standards No. 123, ACCOUNTING
FOR STOCK-BASED COMPENSATION ("Statement No. 123"), requires the Company to
disclose pro forma net income and income per share as if a fair value based
accounting method had been used in the computation of compensation expense. The
fair value of the options computed under Statement No. 123 would be recognized
over the vesting period of the options. The fair value for the Company's options
was estimated at the time the
F-32
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
options were granted using the Black Scholes option pricing model with the
following weighted-average assumptions for 1997, 1998 and 1999, respectively:
risk-free interest rates of 6.33%, 5.37% and 5.84%; dividend yields of 5.32%,
5.98% and 6.89%; volatility factors of the expected market price of the
Company's Common Shares of 0.218, 0.212 and 0.209; and a weighted-average
expected life of the option of seven years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's Options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its Options.
For purposes of pro forma disclosures, the estimated fair value of the
Options is amortized to expense over the Options' vesting period. The following
is the pro forma information for the three years ended December 31, 1999, 1998
and 1997 (unaudited):
<TABLE>
<CAPTION>
--------------------------------------------------------------- ----------------- -------------- --------------
1999 1998 1997
--------------------------------------------------------------- ----------------- -------------- --------------
<S> <C> <C> <C>
Pro forma net income available to
Common Shares $ 270,947 $ 155,318 $ 112,156
Pro forma income per weighted Average
Common Share Outstanding $ 2.22 $ 1.55 $ 1.71
--------------------------------------------------------------- ----------------- -------------- --------------
</TABLE>
The table below summarizes the Option activity of the Fifth Amended
Option and Award Plan, the MRY Stock Option and Incentive Plan and the LFT Stock
Option Plan for the three years ended December 31, 1999, 1998 and 1997:
F-33
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
COMMON WEIGHTED AVERAGE EXERCISE
SHARES SUBJECT TO OPTIONS PRICE
OR AWARDS PER COMMON SHARE
- ------------------------------------------ --------------------------- ---------------------------
<S> <C> <C>
Balance at December 31, 1996 2,330,263 $28.75
Options granted 2,035,211 $44.03
Options exercised (180,138) $27.78
Options cancelled (95,013) $36.88
- ------------------------------------------ --------------------------- ---------------------------
Balance at December 31, 1997 4,090,323 $36.21
Options granted 1,964,550 $50.31
MRY Options granted (assumed) 925,830 $38.53
Options exercised (194,021) $29.20
MRY Options exercised (237,153) $37.22
Options cancelled (327,069) $47.21
- ------------------------------------------ --------------------------- ---------------------------
Balance at December 31, 1998 6,222,460 $40.61
Options granted 1,485,903 $40.68
LFT Options granted (assumed) 82,466 $31.43
Options exercised (575,865) $28.87
MRY Options exercised (435,429) $38.21
LFT Options exercised (1,898) $36.90
Options cancelled (268,762) $45.93
MRY Options cancelled (140,010) $41.78
LFT Options cancelled (2,819) $23.31
- ------------------------------------------ --------------------------- ---------------------------
Balance at December 31, 1999 6,366,046 $41.48
</TABLE>
As of December 31, 1999, 1998 and 1997, 3,266,759 shares, 2,841,111
shares and 1,330,150 shares were exercisable, respectively. Exercise prices for
Options outstanding as of December 31, 1999 ranged from $26 to $54.8125 for the
Fifth Amended Option and Award Plan, $15.28 to $41.85 for the MRY Stock Option
and Incentive Plan and $2.83 to $48.60 for the LFT Stock Option Plan. Expiration
dates ranged from August 11, 2003 to November 8, 2009. The remaining
weighted-average contractual life of those Options was 7.3 years. The
weighted-average grant date fair value of Options granted during 1999, 1998 and
1997 was $4.43, $6.28 and $7.37, respectively.
17. EMPLOYEE SHARE PURCHASE PLAN
Under the Company's Employee Share Purchase Plan certain eligible
officers, trustees and employees of the Company may annually acquire up to
$100,000 of Common Shares of the Company. The aggregate number of Common Shares
available under the Employee Share Purchase Plan shall not exceed 1,000,000,
subject to adjustment by the Board of Trustees. The Common Shares may be
purchased quarterly at a price equal to 85% of the lesser of: (a) the closing
price for a share on the last day of such quarter; and (b) the greater of: (i)
the closing price for a share on the first day of such quarter, and (ii) the
average closing price for a share for all the business days in the quarter.
During 1997, the Company issued 84,183 Common Shares at net prices that ranged
from $35.63 per share to $42.08 per share and raised approximately $3.2 million
in connection therewith. During 1998, the Company issued 93,521 Common Shares at
net prices that ranged from $35.70 per share to $42.71 per share and raised
approximately $3.7 million in connection therewith. During 1999, the Company
issued 147,885 Common Shares at net prices that ranged from $34.37 per share to
$36.71 per share and raised approximately $5.2 million in connection therewith.
F-34
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
18. DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN
On November 3, 1997, the Company filed with the SEC a Form S-3
Registration Statement to register 7,000,000 Common Shares pursuant to a
Distribution Reinvestment and Share Purchase Plan (the "DRIP Plan"). The
registration statement was declared effective on November 25, 1997.
The DRIP Plan of the Company provides holders of record and beneficial
owners of Common Shares, Preferred Shares, and limited partnership interests in
the Operating Partnership with a simple and convenient method of investing cash
distributions in additional Common Shares (which is referred to herein as the
"Dividend Reinvestment - DRIP Plan"). Common Shares may also be purchased on a
monthly basis with optional cash payments made by participants in the DRIP Plan
and interested new investors, not currently shareholders of the Company, at the
market price of the Common Shares less a discount ranging between 0% and 5%, as
determined in accordance with the DRIP Plan (which is referred to herein as the
"Share Purchase - DRIP Plan").
19. EMPLOYEE TRANSACTIONS
Douglas Crocker II, President and Chief Executive Officer of the
Company, and three other officers had purchased an aggregate of 190,000 Common
Shares at prices which range from $26 to $31.625 per Common Share. These
purchases were financed by loans made by the Company in the aggregate amount of
approximately $5.3 million. The employee notes accrue interest, payable in
arrears, at rates that range from 6.15% per annum to 7.93% per annum. Scheduled
maturities are at various dates through March 2005. The outstanding balance on
these loans in the aggregate was $4.7 million and $4.9 million for the years
ended December 31, 1999 and 1998, respectively. The employee notes are recourse
to Mr. Crocker and the three other officers and are collateralized by pledges of
the 190,000 Common Shares purchased.
In addition, as of December 31, 1999, the outstanding principal balance
on additional notes issued to Mr. Crocker and three other officers was
approximately $1.2 million. These notes accrue interest, payable in arrears, at
one month LIBOR plus 2% per annum. Scheduled maturities are at various dates
through March 2003. Subsequent to December 31, 1999, Mr. Crocker paid a
principal installment on one of his notes in the amount of $80,570 and repaid
another note in full in the amount of $100,000. The notes are recourse to Mr.
Crocker and the three other officers and are collateralized by pledges of
options and share awards.
Mr. Crocker and Gerald A. Spector, Executive Vice President and Chief
Operating Officer of the Company, have entered into Deferred Compensation
Agreements with the Company which provide both with a salary benefit after their
respective termination of employment with the Company, under certain
circumstances. In addition, Mr. Crocker also has entered into a Share
Distributions Agreement with the Company whereby he was issued options to
purchase 100,000 Common Shares under the terms of the Fifth Amended Option and
Award Plan. Upon exercise of these options, Mr. Crocker will be entitled to
receive dividends on these shares as if they had been outstanding from the grant
date through the exercise date. The Company has recognized $1.1 million, $0.8
million and $0.7 million of compensation expense for the years ended December
31, 1999, 1998 and 1997, respectively, related to these agreements.
The Company has established a defined contribution plan (the "401(k)
Plan") that provides retirement benefits for employees that meet minimum
employment criteria. The Company contributes 100% of the first 4% of eligible
compensation that a participant contributes to the 401(k) Plan. Participants are
vested in the Company's contributions over five years. The Company made
contributions in the amount of $1.4 million and $1.4 million for the years ended
December 31, 1997 and 1998, respectively, and expects
F-35
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
to make contributions in the amount of approximately $3.1 million for the year
ended December 31, 1999.
20. TRANSACTIONS WITH RELATED PARTIES
In connection with the Wellsford Merger, Jeffrey H. Lynford and Edward
Lowenthal (trustees of the Company) each executed a consulting agreement with
the Company. Each consulting agreement has a term of five years from May 30,
1997, the closing date of the Wellsford Merger. Pursuant to the consulting
agreements, each of Messrs. Lynford and Lowenthal will serve as a senior
management consultant to the Company and will receive compensation at the rate
of $200,000 per year plus reimbursement for reasonable out-of-pocket expenses.
In connection with the EWR Merger, in December 1997, Stephen O. Evans
(a trustee of the Company) executed a consulting agreement with an affiliate of
the Company. The consulting agreement had a term of two years and expired on
December 31, 1999. Pursuant to the consulting agreement, Mr. Evans served as a
senior management consultant to the Company and received compensation at the
rate of $225,000 per year. Mr. Evans also received an option to purchase 115,500
Common Shares that will vest in three equal annual installments and will have an
exercise price equal to $50.125 per Common Share. Mr. Evans was also eligible to
participate in all of the Company's employee benefit plans in which persons in
comparable positions participate, treating Mr. Evans as an employee.
In connection with the affiliated lease agreements for various offices
as defined in Note 21, the Company paid Equity Office Holdings, L.L.C. ("EOH")
$126,272, $114,539 and $145,511 in connection with the Chicago Office, $261,040,
$194,506 and $177,793 in connection with the Tampa Office, $131,079, $83,485 and
$55,149 in connection with the Southern California area office and $770,317,
$772,320 and $632,693 in connection with the space occupied by the corporate
headquarters for the years ended December 31, 1999, 1998 and 1997, respectively.
Also, the Company paid EOH $166,328 and $55,117 in connection with the Atlanta
Office for the year ended December 31, 1999 and 1998, respectively. Amounts due
to EOH were $311,345, $136,000 and $59,675 as of December 31, 1999, 1998 and
1997, respectively.
Equity Group Investments, Inc. and certain of its subsidiaries,
including, Equity Properties & Development, L.P. and Equity Properties
Management Corp. (collectively, "EGI"), have provided certain services to the
Company which include, but are not limited to, investor relations, corporate
secretarial, real estate tax evaluation services and market consulting and
research services. Fees paid to EGI for these services amounted to approximately
$708,582, $1.1 million and $1.1 million for the years ended December 31, 1999,
1998 and 1997, respectively. Amounts due to EGI were $175,662, $57,408 and
$74,578 as of December 31, 1999, 1998 and 1997, respectively.
Artery Property Management, Inc., a real estate property management
company ("APMI") in which Mr. Goldberg, a trustee of the Company, is a
two-thirds owner and chairman of the board of directors, provided the Company
consulting services with regard to property acquisitions and additional business
opportunities. In connection with the acquisition of certain Properties from Mr.
Goldberg and his affiliates during 1995, the Company made a loan to Mr. Goldberg
and APMI of $15,212,000 evidenced by two notes and secured by 465,545 OP Units.
At December 31, 1999, approximately $6.2 million was outstanding and 64,948 OP
Units and 123,792 Common Shares secured this loan. In connection with the
acquisition of certain Properties from Mr. Goldberg and his affiliates during
1998, the Company made a $12,000,000 revolving loan to Mr. Goldberg and his wife
in September 1998. On October 1, 1999, this note was fully repaid.
F-36
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
During 1999, the Company acquired eight Properties and the related
management agreements from affiliates of Mr. Goldberg for an aggregate purchase
price of approximately $110.2 million, including the assumption of approximately
$44.3 million of mortgage indebtedness. The purchase price also included the
issuance of 28,795 Series A Junior Convertible Preference Units in the Operating
Partnership which have a liquidation value of $100 per unit and are exchangeable
for OP Units under certain circumstances. On June 29, 1999, Mr. Goldberg
received 8,462 of these units with a liquidation value of approximately $0.8
million.
Certain related entities provided services to the Company. These
included, but were not limited to, Rosenberg & Liebentritt, P.C., which provided
legal services, and Arthur A. Greenberg, which provided tax advisory services.
Fees paid to these related entities in the aggregate amounted to $1.3 million
for the year ended December 31, 1997. In addition, The Riverside Agency, Inc.,
which provided insurance brokerage services, was paid fees and reimbursed
premiums and loss claims in the amount of $0.3 million for the year ended
December 31, 1997.
Piper, Marbury, Rudnick & Wolfe, a law firm in which Mr. Errol
Halperin, a trustee of the Company, is a partner, provided legal services to the
Company. Fees paid to this firm amounted to approximately $1.6 million, $2.2
million and $2.3 million for the years ended December 31, 1999, 1998 and 1997,
respectively.
Seyfarth, Shaw, Fairweather & Geraldson, a law firm in which Ms. Sheli
Rosenberg's (a trustee of the Company) husband is a partner, provided legal
services to the Company. Fees paid to this firm amounted to $34,357 and $29,146,
for the years ended December 31, 1999 and 1998, respectively.
In addition, the Company has provided acquisitions, asset and property
management services to certain related entities for properties not owned by the
Company. Fees received for providing such services were approximately $2.4
million, $3.5 million and $4.6 million for the years ended December 31, 1999,
1998 and 1997, respectively.
21. COMMITMENTS AND CONTINGENCIES
The Company, as an owner of real estate, is subject to various
environmental laws of Federal and local governments. Compliance by the Company
with existing laws has not had a material adverse effect on the Company's
financial condition and results of operations. However, the Company cannot
predict the impact of new or changed laws or regulations on its current
Properties or on properties that it may acquire in the future.
The Company does not believe there is any litigation threatened against
the Company other than routine litigation arising out of the ordinary course of
business, some of which is expected to be covered by liability insurance, none
of which is expected to have a material adverse effect on the consolidated
financial statements of the Company.
In regard to the joint venture agreements with two multifamily
residential real estate developers during the year ended December 31, 1999, the
Company funded a total of $88.6 million and during 2000 the Company expects to
fund approximately $32.7 million in connection with these agreements. In
connection with the first agreement, the Company has an obligation to fund up to
an additional $20 million to guarantee third party construction financing.
F-37
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In regard to certain other properties that were under development
and/or expansion during the year ended December 31, 1999, the Company funded
$47.5 million. During 2000, the Company expects to fund $44.9 million related to
the continued development and/or expansion of as many as three Properties.
In regard to certain properties that were under earnout/development
agreements, during the year ended December 31, 1999, the Company funded the
following:
- $17.2 million relating to the acquisition of Copper Canyon
Apartments, which included a $1.0 million earnout payment to the
developer;
- $24.9 million relating to the acquisition of Skyview Apartments,
which included a $3.1 million earnout payment to the developer;
and
- $18.3 million relating to the acquisition of Rosecliff Apartments.
During 2000, the Company expects to fund $33.4 million related to the
continued earnout/development of one Property.
In connection with the Wellsford Merger, the Company has provided a
$14.8 million credit enhancement with respect to certain tax-exempt bonds issued
to finance certain public improvements at a multifamily development project.
Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real
Properties, Inc. ("WRP Newco"), the Company has agreed to purchase up to
1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. These preferred
shares would be convertible to WRP Newco common shares under certain
circumstances. As of December 31, 1999, no shares of WRP Newco Series A
Preferred had been acquired by the Company.
In connection with the MRY Merger, the Company extended a $25 million,
one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement.
On June 24, 1999, MRYP Spinco repaid the entire outstanding Senior Note balance
of $18.3 million and there is no further obligation by either party in
connection with this agreement.
Also, in connection with the MRY Merger, the Company entered into six
joint venture agreements with MRYP Spinco, the entity spun-off in the MRY
Merger. The Company contributed six properties with an initial value of $52.7
million in return for an ownership interest in each joint venture. On August 23,
1999, the Company sold its entire interest in these six properties to MRYP
Spinco and there is no further obligation by either party in connection with
these agreements.
The Company has lease agreements with an affiliated party covering
office space occupied by the management offices located in Tampa, Florida (the
"Tampa Office"), Atlanta, Georgia (the "Atlanta Office"); and Chicago, Illinois
(the "Chicago Office"). The Company also has a lease agreement with an
affiliated party covering office space occupied by an area office located in
Southern California. The Tampa Office agreement expires on October 31, 2001, the
Atlanta Office agreement expires on June 20, 2001, the Chicago Office agreement
expires on July 11, 2000 and the Southern California agreement expires on July
31, 2000.
The Company also has seven additional lease agreements with
unaffiliated parties covering space occupied by the management offices located
in Dallas, Texas (the "Dallas Office"); Bethesda, Maryland (the "Bethesda
Office"); Denver, Colorado (the "Denver Office"); Seattle, Washington (the
"Seattle Office"); Scottsdale, Arizona (the "Scottsdale Office"), Charlotte,
North Carolina (the "Charlotte Office") and Reynoldsburg, Ohio (the "Lexford
Office"). The lease agreement for the Dallas Office expires on
F-38
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
September 30, 2005, the lease agreement for the Bethesda Office expires on
February 1, 2004, the lease agreement for the Denver Office expires on December
31, 2002, the lease agreement for the Seattle Office expires on June 30, 2003,
the lease agreement for the Scottsdale Office expires on July 31, 2004, the
lease agreement for the Charlotte Office expires on May 31, 2004 and the lease
agreement for the Lexford Office expires on December 31, 2004.
The Company also has a lease agreement with an affiliated party
covering office space occupied by the corporate headquarters located in Chicago,
Illinois. This agreement, as amended, expires on July 31, 2001. In addition,
commencing June 15, 1998, the Company increased the office space occupied by its
corporate personnel. The lease agreement covering the additional space expires
on December 31, 2004.
During the years ended December 31, 1999, 1998 and 1997, total lease
payments incurred, including a portion of real estate taxes, insurance, repairs
and utilities, aggregated $3,271,513, $2,528,150 and $1,491,766, respectively.
The minimum basic aggregate rental commitment under the above described
leases in years succeeding December 31, 1999 is as follows:
<TABLE>
<CAPTION>
--------------- ----------------
Year Amount
--------------- ----------------
<S> <C>
2000 $3,197,959
2001 2,754,510
2002 2,220,692
2003 2,005,051
2004 1,619,293
Thereafter 481,179
--------------- ----------------
Total $12,278,684
--------------- ----------------
</TABLE>
22. REPORTABLE SEGMENTS
The following tables set forth the reconciliation of net income and
total assets for the Company's reportable segments for the years ended December
31, 1999, 1998 and 1997 (see also Note 3 for further discussion).
F-39
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1999 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 1,711,738 $ - $ 1,711,738
Property and maintenance expense (414,026) - (414,026)
Real estate tax and insurance expense (171,289) - (171,289)
Property management expense (61,626) - (61,626)
-----------------------------------------------------
Net operating income 1,064,797 - 1,064,797
Fee and asset management income - 4,970 4,970
Interest income - investment in mortgage notes - 12,559 12,559
Interest and other income - 23,851 23,851
Fee and asset management expense - (3,587) (3,587)
Depreciation expense on non-real estate assets - (7,231) (7,231)
Interest expense:
Expense incurred - (337,189) (337,189)
Amortization of deferred financing costs - (4,084) (4,084)
General and administrative expense - (22,296) (22,296)
Preferred distributions - (113,196) (113,196)
Adjustment for depreciation expense related to
equity in unconsolidated joint ventures - 1,009 1,009
------------------------------------------------------
Funds from operations available to Common Shares and
OP Units (unaudited) 1,064,797 (445,194) 619,603
Depreciation expense on real estate assets (401,457) - (401,457)
Gain on disposition of properties, net 93,535 - 93,535
Loss on early extinguishment of debt - (451) (451)
Income allocated to Minority Interests - (29,536) (29,536)
Adjustment for depreciation expense related to
equity in unconsolidated joint ventures - (1,009) (1,009)
-----------------------------------------------------
Net income available to Common Shares $ 756,875 $ (476,190) $ 280,685
=====================================================
Investment in real estate, net of accumulated depreciation $11,151,167 $ 17,309 $11,168,476
=====================================================
Total assets $11,164,035 $ 551,654 $11,715,689
=====================================================
</TABLE>
F-40
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1998 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 1,293,560 $ - $ 1,293,560
Property and maintenance expense (326,733) - (326,733)
Real estate tax and insurance expense (126,009) - (126,009)
Property management expense (53,101) - (53,101)
-----------------------------------------------------
Net operating income 787,717 - 787,717
Fee and asset management income - 5,622 5,622
Interest income - investment in mortgage notes - 18,564 18,564
Interest and other income - 19,250 19,250
Fee and asset management expense - (4,279) (4,279)
Depreciation expense on non-real estate assets - (5,361) (5,361)
Interest expense:
Expense incurred - (246,585) (246,585)
Amortization of deferred financing costs - (2,757) (2,757)
General and administrative expense - (20,631) (20,631)
Preferred distributions - (92,917) (92,917)
Adjustment for amortization of deferred financing costs
related to predecessor business - 35 35
Adjustment for depreciation expense related to equity in
unconsolidated joint ventures - 183 183
-----------------------------------------------------
Funds from operations available to Common Shares and
OP Units (unaudited) 787,717 (328,876) 458,841
Depreciation expense on real estate assets (296,508) - (296,508)
Gain on disposition of properties, net 21,703 - 21,703
Income allocated to Minority Interests - (18,529) (18,529)
Adjustment for amortization of deferred financing costs
related to predecessor business - (35) (35)
Adjustment for depreciation expense related to equity in
unconsolidated joint ventures - (183) (183)
-----------------------------------------------------
Net income available to Common Shares $ 512,912 $ (347,623) $ 165,289
=====================================================
Investment in real estate, net of accumulated depreciation $10,208,113 $ 15,459 $ 10,223,572
=====================================================
Total assets $10,237,999 $ 462,261 $ 10,700,260
=====================================================
</TABLE>
F-41
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1997 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 707,733 $ - $ 707,733
Property and maintenance expense (176,075) - (176,075)
Real estate tax and insurance expense (69,520) - (69,520)
Property management expense (26,793) - (26,793)
-----------------------------------------------------
Net operating income 435,345 - 435,345
Fee and asset management income - 5,697 5,697
Interest income - investment in mortgage notes - 20,366 20,366
Interest and other income - 13,282 13,282
Fee and asset management expense - (3,364) (3,364)
Depreciation expense on non-real estate assets - (3,118) (3,118)
Interest expense:
Expense incurred - (121,324) (121,324)
Amortization of deferred financing costs - (2,523) (2,523)
General and administrative expense - (14,821) (14,821)
Preferred distributions - (59,012) (59,012)
Adjustment for amortization of deferred financing costs - 235 235
related to predecessor business
-----------------------------------------------------
Funds from operations available to Common Shares and
OP Units (unaudited) 435,345 ( 164,582) 270,763
Depreciation expense on real estate assets (153,526) - (153,526)
Gain on disposition of properties, net 13,838 - 13,838
Income allocated to Minority Interests - (13,260) -
Adjustment for amortization of deferred financing costs
related to predecessor business - (235) (235)
-----------------------------------------------------
Net income available to Common Shares $ 295,657 $ (178,077) $ 117,580
=====================================================
</TABLE>
(1) The Company has one primary reportable business segment, which consists of
investment in rental real estate. The Company's primary business is owning,
managing, and operating multifamily residential properties which includes
the generation of rental and other related income through the leasing of
apartment units to tenants.
(2) The Company has a segment for corporate level activity including such items
as interest income earned on short-term investments, interest income earned
on investment in mortgage notes, general and administrative expenses, and
interest expense on mortgage notes payable and unsecured note issuances. In
addition, the Company has a segment for third party management activity
that is immaterial and does not meet the threshold requirements of a
reportable segment as provided for in Statement No. 131. Interest expense
on debt is not allocated to individual Properties, even if the Properties
secure such debt. Further, income allocated to Minority Interests is not
allocated to the Properties.
F-42
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
23. SUBSEQUENT EVENTS
On January 14, 2000, the Company announced it has entered into an
agreement to acquire, in an all cash and debt transaction, Globe Business
Resources, Inc. ("Globe"), one of the nation's largest providers of temporary
corporate housing and furniture rental. Shareholders of Globe will receive
$13.00 per share upon closing and up to an additional $0.50 per share post
closing, upon final determination of costs, if any, relating to any potential
breaches of certain representations and covenants. At full funding of $13.50 per
share, the Company would pay approximately $64.8 million in cash (based on the
4.8 million Globe shares currently outstanding). In addition, the Company will
assume approximately $69.4 million in debt. The acquisition, which is expected
to close during the second quarter of 2000, does not require approval of the
Company's shareholders but does require Globe shareholder approval.
On January 19, 2000, the Company acquired Windmont Apartments, a
178-unit multifamily property located in Atlanta, GA, from an unaffiliated third
party for a purchase price of approximately $10.3 million.
On January 24, 2000, the Company funded $2.3 million for an initial
earnout payment to the developer of Rosecliff Apartments.
On January 25, 2000, the Company settled on a $100 million forward
starting swap and received $7.1 million in connection therewith. The amount
received is expected to be amortized over the life of a future financing
transaction that the Company expects to close in March 2000.
From January 1, 2000 through March 3, 2000, the Company repaid the
outstanding mortgage balances on three properties in the aggregate amount of
$12.8 million.
On February 4, 2000, the Company disposed of Lakeridge at the Moors
Apartments, a 175-unit multifamily property located in Miami, FL, to an
unaffiliated party for a total sales price of $10 million.
On February 9, 2000, the Company disposed of Sonnet Cove I&II
Apartments, a 331-unit multifamily property located in Lexington, KY, to an
unaffiliated party for a total sales price of $12.3 million.
On February 25, 2000, the Company disposed of Yuma Court Apartments, a
40-unit multifamily property located in Colorado Springs, CO, to an unaffiliated
party for a total sales price of $2.4 million.
On February 25, 2000, the Company disposed of Oaks of Lakebridge
Apartments, a 170-unit multifamily property located in Ormond Beach, FL, to an
unaffiliated party for a total sales price of $7.8 million.
On February 25, 2000, the Company disposed of Indigo Plantation
Apartments, a 304-unit multifamily property located in Daytona Beach, FL, to an
unaffiliated party for a total sales price of $14.2 million.
On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary
of the Operating Partnership, issued 1.1 million units of 8.50% Series B
Cumulative Convertible Redeemable Preference Units with an equity value of $55.0
million. Lexford Properties, L.P. received $53.6 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of
F-43
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Beneficial Interest of the Company. The Series M-1 Preferred Shares are not
convertible to EQR Common Shares. Dividends for the Series B Preference Units
or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25
per unit/share per year.
24. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following unaudited quarterly data has been prepared on the basis
of a December 31 year-end. The 1999 and 1998 net income per weighted average
Common Share amounts have been presented and, where appropriate, restated to
comply with Statement of Financial Accounting Standards No. 128, Earnings Per
Share. For further discussion of net income per share and the impact of
Statement No. 128, see Note 14 of Notes to Consolidated Financial Statements.
Amounts are in thousands, except for per share amounts.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
1999 3/31 6/30 9/30 12/31
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues $416,137 $422,222 $435,188 $479,571
========= ========= ========= ========
Income before allocation to Minority Interests $100,680 $104,050 $102,931 $115,756
======== ========= ========= ========
Net income $93,554 $96,662 $95,891 $107,774
======== ======== ======== ========
Net income available to Common Shares $64,177 $68,928 $67,884 $79,696
======= ======= ======= =======
Weighted average Common Shares outstanding 118,956 120,558 122,312 126,788
======= ======= ======= =======
Net income per share - basic $0.54 $0.57 $0.56 $0.63
===== ===== ===== =====
Net income per share - diluted $0.54 $0.57 $0.55 $0.63
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
1998 3/31 6/30 9/30 12/31
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues $286,291 $306,959 $339,249 $404,497
========= ========= ========= ========
Income before allocation to Minority Interests $61,275 $72,357 $61,102 $82,001
======= ======== ======== =======
Net income $57,587 $67,735 $56,572 $76,312
======== ======== ======== =======
Net income available to Common Shares $35,895 $46,043 $34,881 $48,470
======= ======= ======= =======
Weighted average Common Shares outstanding 93,361 97,405 97,089 113,440
====== ====== ====== =======
Net income per share - basic $0.38 $0.47 $0.36 $0.43
===== ===== ===== =====
Net income per share - diluted $0.38 $0.47 $0.36 $0.42
===== ===== ===== =====
</TABLE>
F-44
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2300 Elliott Seattle, WA $ - $ 796,700 $ 7,173,725
2900 on First Combined Seattle, WA - 1,176,400 10,600,360
3000 Grand Des Moines, IA - 858,305 7,736,013
740 River Drive St. Paul, MN 6,648,364 1,620,000 11,232,943
7979 Westheimer Houston, TX - 1,388,400 12,497,975
Acacia Creek Scottsdale, AZ 20,790,723 6,121,856 35,380,172
Acadia Court Bloomington, IN 2,092,837 257,484 2,317,353
Acadia Court II Bloomington, IN 1,806,908 253,636 2,282,721
Adams Farm Greensboro, NC - 2,350,000 30,073,197
Alderwood Park Lynnwood, WA 4,030,879 3,760,000 8,110,530
Altamonte San Antonio, TX (S) 1,663,100 14,986,474
Amberidge Detroit, MI 919,875 130,844 1,177,598
Amberton Manassas, VA 10,597,067 888,800 8,474,461
Amberwood (OH) Canton, OH 887,691 126,227 1,136,042
Amberwood I (FL) Jacksonville, FL 397,879 101,744 915,696
Amesbury I Columbus, OH 1,228,447 143,039 1,287,355
Amesbury II Columbus, OH 1,275,358 180,588 1,625,293
Amhurst (Tol) Toledo, OH 804,321 161,854 1,456,683
Amhurst I (OH) Dayton, OH 902,927 152,574 1,373,165
Amhurst II (OH) Dayton, OH 934,952 159,416 1,434,748
Andover Court Columbus, OH 719,453 123,875 1,114,873
Annhurst (IN) Indianpolis, IN 1,275,000 189,235 1,703,117
Annhurst (PA) Pittsburgh, PA 1,951,830 307,952 2,771,572
Annhurst II (OH) Columbus, OH 1,064,340 116,739 1,050,648
Annhurst III (OH) Columbus, OH 866,157 134,788 1,213,092
Ansley Oaks St. Louis, IL - 134,522 1,210,697
Apple Ridge I Columbus, OH 1,036,653 139,300 1,253,697
Apple Ridge III Columbus, OH 577,684 72,585 653,268
Apple Run (MI) Jackson, MI 497,314 87,459 787,133
Apple Run II (Col) Columbus, OH - 93,810 844,292
Applegate (Chi) Columbus, OH 529,497 7,738 69,640
Applegate (Col) Bloomington, IN 940,163 171,829 1,546,462
Applegate (Lor) Youngstown, OH 512,809 66,488 598,393
Applegate I (IN) Muncie, IN 924,977 138,506 1,246,551
Applegate II (IN) Muncie, IN 1,236,009 180,017 1,620,150
Applerun (War) Youngstown, OH 670,142 113,303 1,019,729
Applewood I & II Daytona Beach, FL 2,193,626 235,230 2,117,074
Aragon Woods Indianpolis, IN 1,104,739 157,791 1,420,119
Arbor Glen Pittsfield Twp, MI - 1,092,300 9,887,635
Arboretum (AZ) Tucson, AZ (P) 3,453,446 19,020,019
Arboretum (GA) Atlanta, GA - 4,679,400 15,937,649
Arboretum (MA) Canton, MA (S) 4,680,000 10,995,641
Arbors at Century Center Memphis, TN - 2,520,000 15,236,996
Arbors of Brentwood Nashville, TN (D) 404,570 13,536,367
Arbors of Hickory Hollow Nashville, TN (D) 202,285 6,937,209
Arbors of Las Colinas Irving, TX - 1,662,300 15,385,713
Ashford Hill Columbus, OH 1,400,000 184,985 1,664,868
Ashgrove (IN) Indianpolis, IN 866,676 172,924 1,556,316
Ashgrove (KY) Louisville, KY 1,050,088 171,816 1,546,342
Ashgrove (Mar) Battle Creek, MI 839,002 119,823 1,078,405
Ashgrove (OH) Cincinnati, OH 1,261,088 157,535 1,417,811
Ashgrove I (MI) Detroit, MI 3,284,510 403,580 3,632,218
Ashgrove II (MI) Detroit, MI 2,301,646 311,912 2,807,210
Ashton, The Corona Hills, CA - 2,594,264 33,042,398
Aspen Crossing Silver Spring, MD - 2,880,000 8,561,456
Audubon Village Tampa, FL - 3,576,000 26,121,909
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
(IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2300 Elliott $ 100 $ 2,935,619 $ 796,800 $ 10,109,344 $ 10,906,144
2900 on First Combined 1,300 1,221,640 1,177,700 11,822,000 12,999,700
3000 Grand - 1,479,910 858,305 9,215,923 10,074,228
740 River Drive 6,700 667,316 1,626,700 11,900,258 13,526,958
7979 Westheimer 1,700 1,403,830 1,390,100 13,901,805 15,291,905
Acacia Creek - 826,219 6,121,856 36,206,391 42,328,247
Acadia Court - 4,007 257,484 2,321,360 2,578,844
Acadia Court II - 3,287 253,636 2,286,008 2,539,643
Adams Farm - 192,947 2,350,000 30,266,144 32,616,144
Alderwood Park 7,400 251,284 3,767,400 8,361,813 12,129,213
Altamonte 1,970 1,079,239 1,665,070 16,065,713 17,730,783
Amberidge - 2,644 130,844 1,180,241 1,311,085
Amberton 11,800 953,021 900,600 9,427,482 10,328,082
Amberwood (OH) - 3,281 126,227 1,139,323 1,265,550
Amberwood I (FL) - 1,612 101,744 917,309 1,019,053
Amesbury I - 6,063 143,039 1,293,418 1,436,458
Amesbury II - 2,489 180,588 1,627,782 1,808,370
Amhurst (Tol) - 3,345 161,854 1,460,028 1,621,882
Amhurst I (OH) - 5,899 152,574 1,379,064 1,531,638
Amhurst II (OH) - 3,173 159,416 1,437,921 1,597,337
Andover Court - 750 123,875 1,115,623 1,239,498
Annhurst (IN) - 25,662 189,235 1,728,780 1,918,015
Annhurst (PA) - 7,495 307,952 2,779,067 3,087,019
Annhurst II (OH) - 964 116,739 1,051,612 1,168,351
Annhurst III (OH) - 4,691 134,788 1,217,784 1,352,572
Ansley Oaks - 6,779 134,522 1,217,476 1,351,998
Apple Ridge I - 2,067 139,300 1,255,765 1,395,064
Apple Ridge III - 2,113 72,585 655,381 727,967
Apple Run (MI) - 3,227 87,459 790,361 877,820
Apple Run II (Col) - 2,107 93,810 846,399 940,210
Applegate (Chi) - 2,236 7,738 71,876 79,613
Applegate (Col) - 2,971 171,829 1,549,433 1,721,262
Applegate (Lor) - 2,843 66,488 601,236 667,724
Applegate I (IN) - 17,867 138,506 1,264,418 1,402,923
Applegate II (IN) - 10,066 180,017 1,630,216 1,810,233
Applerun (War) - 1,083 113,303 1,020,812 1,134,115
Applewood I & II - 46,153 235,230 2,163,227 2,398,457
Aragon Woods - 8,996 157,791 1,429,115 1,586,906
Arbor Glen 3,764 329,195 1,096,064 10,216,830 11,312,895
Arboretum (AZ) - 602,827 3,453,446 19,622,846 23,076,292
Arboretum (GA) 2,900 505,371 4,682,300 16,443,020 21,125,320
Arboretum (MA) 5,900 110,930 4,685,900 11,106,571 15,792,471
Arbors at Century Center 1,700 326,386 2,521,700 15,563,382 18,085,082
Arbors of Brentwood 100 958,708 404,670 14,495,074 14,899,744
Arbors of Hickory Hollow 700 1,613,360 202,985 8,550,569 8,753,554
Arbors of Las Colinas 1,600 1,163,452 1,663,900 16,549,165 18,213,065
Ashford Hill - 5,143 184,985 1,670,011 1,854,996
Ashgrove (IN) - 4,337 172,924 1,560,653 1,733,577
Ashgrove (KY) - 4,136 171,816 1,550,478 1,722,293
Ashgrove (Mar) - 2,800 119,823 1,081,204 1,201,027
Ashgrove (OH) - 3,088 157,535 1,420,900 1,578,434
Ashgrove I (MI) - 7,742 403,580 3,639,960 4,043,540
Ashgrove II (MI) - 5,130 311,912 2,812,340 3,124,253
Ashton, The - 381,532 2,594,264 33,423,929 36,018,193
Aspen Crossing - 207,627 2,880,000 8,769,083 11,649,083
Audubon Village - 407,722 3,576,000 26,529,631 30,105,631
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIFE USED TO
COMPUTE
- ------------------------------------------------------------------------- DEPRECIATION IN
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2300 Elliott $ (922,189) 1992 30 Years
2900 on First Combined (1,560,994) 1989-91 30 Years
3000 Grand (5,333,188) 1970 30 Years
740 River Drive (904,264) 1962 30 Years
7979 Westheimer (2,580,432) 1973 30 Years
Acacia Creek (2,731,863) 1988-1994 30 Years
Acadia Court (20,996) 1985 30 Years
Acadia Court II (20,862) 1986 30 Years
Adams Farm (1,381,592) 1987 30 Years
Alderwood Park (448,619) 1982 30 Years
Altamonte (3,306,194) 1985 30 Years
Amberidge (10,682) 1985 30 Years
Amberton (1,758,943) 1986 30 Years
Amberwood (OH) (10,627) 1987 30 Years
Amberwood I (FL) (8,521) 1981 30 Years
Amesbury I (12,005) 1986 30 Years
Amesbury II (14,957) 1987 30 Years
Amhurst (Tol) (13,191) 1983 30 Years
Amhurst I (OH) (12,854) 1979 30 Years
Amhurst II (OH) (13,293) 1981 30 Years
Andover Court (10,163) 1982 30 Years
Annhurst (IN) (16,379) 1985 30 Years
Annhurst (PA) (24,948) 1984 30 Years
Annhurst II (OH) (9,682) 1986 30 Years
Annhurst III (OH) (11,136) 1988 30 Years
Ansley Oaks (11,446) 1986 30 Years
Apple Ridge I (11,513) 1987 30 Years
Apple Ridge III (6,005) 1982 30 Years
Apple Run (MI) (7,314) 1982 30 Years
Apple Run II (Col) (7,951) 1980 30 Years
Applegate (Chi) (1,330) 1981 30 Years
Applegate (Col) (13,939) 1982 30 Years
Applegate (Lor) (5,698) 1982 30 Years
Applegate I (IN) (11,476) 1984 30 Years
Applegate II (IN) (15,034) 1987 30 Years
Applerun (War) (9,329) 1983 30 Years
Applewood I & II (22,519) 1982 30 Years
Aragon Woods (13,287) 1986 30 Years
Arbor Glen (814,768) 1990 30 Years
Arboretum (AZ) (1,571,619) 1987 30 Years
Arboretum (GA) (1,264,590) 1970 30 Years
Arboretum (MA) (644,133) 1989 30 Years
Arbors at Century Center (859,174) 1988/1990 30 Years
Arbors of Brentwood (3,465,757) 1986 30 Years
Arbors of Hickory Hollow (2,474,364) 1986 30 Years
Arbors of Las Colinas (3,681,305) 1984/85 30 Years
Ashford Hill (15,312) 1986 30 Years
Ashgrove (IN) (14,028) 1983 30 Years
Ashgrove (KY) (14,040) 1984 30 Years
Ashgrove (Mar) (9,912) 1983 30 Years
Ashgrove (OH) (12,950) 1983 30 Years
Ashgrove I (MI) (32,433) 1985 30 Years
Ashgrove II (MI) (25,053) 1987 30 Years
Ashton, The (2,464,027) 1986 30 Years
Aspen Crossing (307,059) 1979 30 Years
Audubon Village (1,214,035) 1990 30 Years
</TABLE>
<PAGE>
S-1
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Augustine Club Tallahassee, FL - 1,110,000 8,906,841
Autumn Cove Atlanta, GA 741,297 187,220 1,684,983
Autumn Creek Cordova, TN (E) 1,680,000 9,345,282
Auvers Village Orlando, FL - 3,840,000 29,322,243
Bainbridge Durham, NC - 1,042,900 9,688,677
Balcones Club Austin, TX - 2,184,000 10,128,165
Banyan Lake Boynton Beach, FL - 2,736,000 11,227,892
Barrington Atlanta, GA 1,018,645 144,459 1,300,132
Bay Club Phoenix, AZ - 828,100 6,221,786
Bay Ridge San Pedro, CA - 2,385,399 2,176,963
Bayside Lakeland, FL - 73,463 661,165
Bayside at the Islands Gilbert, AZ (O) 3,306,484 15,573,006
Beach Club Fort Myers, FL - 2,080,000 14,800,928
Bear Canyon Tucson, AZ 8,482,946 1,660,608 11,228,524
Beckford Place (IN) Indianpolis, IN 715,911 99,046 891,413
Beckford Place (Pla) Parkersburg, OH 1,013,959 161,161 1,450,447
Beckford Place (Wap) Lima, OH 620,607 76,491 688,419
Beckford Place I (OH) Canton, OH 1,161,993 168,426 1,515,830
Beckford Place II (OH) Canton, OH 1,229,833 172,134 1,549,209
Bel Aire I Miami, FL - 188,343 1,695,084
Bel Aire II Miami, FL - 136,416 1,227,745
Bell Road I & II Nashville, TN - 3,100,000 846,693
Bellevue Meadows Bellevue, WA - 4,500,000 12,574,814
Belmont Crossing Riverdale, GA - 1,580,000 18,449,045
Belmont Landing Riverdale, GA - 2,120,000 21,651,256
Beneva Place Sarasota, FL 8,700,000 1,344,000 9,665,447
Berkshire Place Charlotte, NC - 805,550 12,540,032
Bermuda Cove Jacksonville, FL - 1,503,000 19,561,896
Berry Pines Pensacola, FL 989,344 154,086 1,386,772
Birches, The Lima, OH 973,805 94,798 853,180
Bishop Park Winter Park, FL - 2,592,000 17,982,357
Blue Swan San Antonio, TX (E) 1,424,800 7,596,023
Blueberry Hill I Orlando, FL 738,919 140,370 1,263,328
Boulder Creek Wilsonville, OR - 3,552,000 11,485,309
Bourbon Square Combined Palatine, IL 26,950,227 3,982,600 35,870,194
Bradford Place St. Louis, IL 1,098,789 140,356 1,263,208
Bramblewood San Jose, CA - 5,184,000 9,658,072
Branchwood Orlando, FL - 324,069 2,916,617
Brandon Court Bloomington, IN 1,428,498 170,636 1,535,722
Brandywine E. Lakeland, FL 595,521 88,126 793,138
Breckenridge Lexington, KY 9,162,971 1,645,800 14,845,715
Brentwood Vancouver, WA - 1,318,200 12,202,521
Breton Mill Houston, TX (F) 212,720 8,547,263
Briarwood (CA) Sunnyvale, CA 14,103,692 9,984,000 22,265,278
Bridford Lakes Greensboro, NC - 2,265,314 25,823,941
Bridge Creek Wilsonville, OR - 1,294,600 11,690,114
Bridgeport Raleigh, NC - 1,296,200 11,942,278
Bridgewater at Wells Crossing Orange Park, FL - 2,160,000 13,347,474
Brierwood Jacksonville, FL - 546,100 4,965,856
Brittany Square Tulsa, OK - 625,000 4,236,498
Brixworth Nashville, TN - 1,172,100 10,564,856
Broadway Garland, TX 6,106,827 1,440,000 7,803,082
Brookdale Village Naperville, IL 11,490,000 3,276,000 16,360,060
Brookfield Salt Lake City, UT - 1,152,000 5,682,453
Brookridge Centreville, VA (E) 2,520,000 16,007,356
Brookside (CO) Boulder, CO - 3,600,000 10,212,594
Brookside (MD) Frederick, MD 8,203,145 2,736,000 8,156,453
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
(IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- -----------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Augustine Club - 51,948 1,110,000 8,958,789
Autumn Cove - 1,536 187,220 1,686,519
Autumn Creek 1,900 170,212 1,681,900 9,515,494
Auvers Village - 317,058 3,840,000 29,639,301
Bainbridge 33,400 1,169,267 1,076,300 10,857,944
Balcones Club 1,500 442,458 2,185,500 10,570,623
Banyan Lake 2,600 553,268 2,738,600 11,781,160
Barrington - 8,774 144,459 1,308,906
Bay Club 100 1,595,448 828,200 7,817,234
Bay Ridge 15,901 42,715 2,401,300 2,219,678
Bayside - 6,044 73,463 667,210
Bayside at the Islands - 248,089 3,306,484 15,821,095
Beach Club - 374,079 2,080,000 15,175,007
Bear Canyon - 84,261 1,660,608 11,312,784
Beckford Place (IN) - 15,144 99,046 906,558
Beckford Place (Pla) - 14,180 161,161 1,464,627
Beckford Place (Wap) - 2,224 76,491 690,643
Beckford Place I (OH) - 2,538 168,426 1,518,368
Beckford Place II (OH) - 2,446 172,134 1,551,655
Bel Aire I - 8,251 188,343 1,703,335
Bel Aire II - 6,957 136,416 1,234,702
Bell Road I & II - - 3,100,000 846,693
Bellevue Meadows 7,100 84,737 4,507,100 12,659,552
Belmont Crossing - 122,063 1,580,000 18,571,108
Belmont Landing - 220,121 2,120,000 21,871,377
Beneva Place - 98,710 1,344,000 9,764,156
Berkshire Place - 93,866 805,550 12,633,898
Bermuda Cove - 196,306 1,503,000 19,758,202
Berry Pines - 11,378 154,086 1,398,150
Birches, The - 1,869 94,798 855,048
Bishop Park - 1,217,731 2,592,000 19,200,088
Blue Swan 700 400,660 1,425,500 7,996,683
Blueberry Hill I - 4,073 140,370 1,267,401
Boulder Creek 2,400 544,576 3,554,400 12,029,885
Bourbon Square Combined 2,700 5,323,864 3,985,300 41,194,058
Bradford Place - 8,912 140,356 1,272,120
Bramblewood 6,700 143,451 5,190,700 9,801,522
Branchwood - 3,175 324,069 2,919,791
Brandon Court - 6,044 170,636 1,541,765
Brandywine E. - 2,152 88,126 795,290
Breckenridge 2,500 484,825 1,648,300 15,330,540
Brentwood 39,021 849,109 1,357,221 13,051,631
Breton Mill 100 742,697 212,820 9,289,960
Briarwood (CA) 7,500 63,517 9,991,500 22,328,795
Bridford Lakes - 342,755 2,265,314 26,166,696
Bridge Creek 5,290 1,524,030 1,299,890 13,214,144
Bridgeport 500 297,325 1,296,700 12,239,604
Bridgewater at Wells Crossing - (20,800) 2,160,000 13,326,674
Brierwood 5,800 717,682 551,900 5,683,537
Brittany Square - 650,495 625,000 4,886,993
Brixworth 1,700 356,644 1,173,800 10,921,500
Broadway 3,700 315,030 1,443,700 8,118,112
Brookdale Village - 76,870 3,276,000 16,436,929
Brookfield 1,000 120,039 1,153,000 5,802,492
Brookridge 1,500 238,305 2,521,500 16,245,660
Brookside (CO) 400 36,220 3,600,400 10,248,814
Brookside (MD) - 50,702 2,736,000 8,207,155
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIFE USED TO
COMPUTE
- ------------------------------------------------------------------------------------------------ DEPRECIATION IN
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Augustine Club 10,068,789 (419,933) 1988 30 Years
Autumn Cove 1,873,739 (14,911) 1985 30 Years
Autumn Creek 11,197,394 (803,105) 1991 30 Years
Auvers Village 33,479,301 (1,343,424) 1991 30 Years
Bainbridge 11,934,244 (2,345,416) 1984 30 Years
Balcones Club 12,756,123 (777,309) 1984 30 Years
Banyan Lake 14,519,760 (1,231,543) 1986 30 Years
Barrington 1,453,365 (11,919) 1984 30 Years
Bay Club 8,645,434 (2,061,881) 1976 30 Years
Bay Ridge 4,620,978 (228,161) 1987 30 Years
Bayside 740,672 (6,597) 1982 30 Years
Bayside at the Islands 19,127,579 (1,188,034) 1989 30 Years
Beach Club 17,255,007 (719,580) 1990 30 Years
Bear Canyon 12,973,392 (850,529) 1996 30 Years
Beckford Place (IN) 1,005,603 (8,496) 1984 30 Years
Beckford Place (Pla) 1,625,788 (13,460) 1982 30 Years
Beckford Place (Wap) 767,134 (6,449) 1981 30 Years
Beckford Place I (OH) 1,686,794 (13,733) 1983 30 Years
Beckford Place II (OH) 1,723,789 (13,975) 1985 30 Years
Bel Aire I 1,891,678 (15,413) 1985 30 Years
Bel Aire II 1,371,118 (11,173) 1986 30 Years
Bell Road I & II 3,946,693 - (R) 30 Years
Bellevue Meadows 17,166,652 (686,762) 1983 30 Years
Belmont Crossing 20,151,108 (845,370) 1988 30 Years
Belmont Landing 23,991,377 (1,001,635) 1988 30 Years
Beneva Place 11,108,156 (449,277) 1986 30 Years
Berkshire Place 13,439,448 (581,657) 1982 30 Years
Bermuda Cove 21,261,202 (896,951) 1989 30 Years
Berry Pines 1,552,236 (13,025) 1985 30 Years
Birches, The 949,846 (8,117) 1977 30 Years
Bishop Park 21,792,088 (865,075) 1991 30 Years
Blue Swan 9,422,183 (708,614) 1985-1994 30 Years
Blueberry Hill I 1,407,771 (11,808) 1986 30 Years
Boulder Creek 15,584,285 (1,265,906) 1991 30 Years
Bourbon Square Combined 45,179,358 (9,308,546) 1984-87 30 Years
Bradford Place 1,412,477 (11,769) 1986 30 Years
Bramblewood 14,992,222 (522,533) 1986 30 Years
Branchwood 3,243,860 (26,379) 1981 30 Years
Brandon Court 1,712,401 (14,224) 1984 30 Years
Brandywine E. 883,416 (7,316) 1981 30 Years
Breckenridge 16,978,840 (1,235,360) 1986-1987 30 Years
Brentwood 14,408,852 (2,423,484) 1990 30 Years
Breton Mill 9,502,780 (2,138,545) 1986 30 Years
Briarwood (CA) 32,320,295 (1,102,269) 1985 30 Years
Bridford Lakes 28,432,010 (1,228,501) 1999 30 Years
Bridge Creek 14,514,034 (3,026,340) 1987 30 Years
Bridgeport 13,536,304 (2,691,810) 1990 30 Years
Bridgewater at Wells Crossing 15,486,674 (21,021) 1986 30 Years
Brierwood 6,235,437 (830,482) 1974 30 Years
Brittany Square 5,511,993 (2,683,742) 1982 30 Years
Brixworth 12,095,300 (1,401,742) 1985 30 Years
Broadway 9,561,812 (495,896) 1983 30 Years
Brookdale Village 19,712,929 (276,898) 1986 30 Years
Brookfield 6,955,492 (502,518) 1985 30 Years
Brookridge 18,767,160 (1,310,622) 1989 30 Years
Brookside (CO) 13,849,214 (580,483) 1993 30 Years
Brookside (MD) 10,943,155 (211,691) 1993 30 Years
</TABLE>
S-2
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brookside II (MD) Frederick, MD - 2,448,000 6,929,404
Brunswick (IL) Champaign, IL 1,392,689 199,520 1,795,683
Brunswick I (WV) Pittsburgh, PA 1,693,948 241,739 2,175,654
Brunswick II (WV) Pittsburgh, WV 1,284,805 202,928 1,826,354
Burwick Farms Howell, MI 9,176,084 1,102,200 9,932,207
Calais Dallas, TX - 1,118,900 10,070,076
California Gardens Jacksonville, FL - 105,528 949,754
Cambridge at Hickory Hollow Nashville, TN (U) 3,240,000 17,903,507
Cambridge Commons I Indianapolis, IN - 179,139 1,612,253
Cambridge Commons II Indianapolis, IN 889,905 141,845 1,276,607
Cambridge Commons III Indianapolis, IN - 98,125 883,124
Cambridge Village Lewisville, TX - 800,000 8,762,606
Camden Way I Jacksonville, GA 923,892 109,240 983,156
Camden Way II Jacksonville, GA 745,698 105,552 949,969
Camellero Scottsdale, AZ 11,597,077 1,923,600 17,324,593
Camellia Court (KY) Louisville, KY 593,319 115,620 1,040,578
Camellia Court (OH) Columbus, OH 565,693 68,584 617,254
Camellia Court I (Col) Columbus, OH 1,007,909 133,059 1,197,529
Camellia Court I (Day) Dayton, OH 1,096,022 131,858 1,186,725
Camellia Court II (Col) Columbus, OH 945,285 118,421 1,065,788
Camellia Court II (Day) Dayton, OH 780,269 131,571 1,184,138
Candlelight I Tampa, FL 606,065 105,000 945,002
Candlelight II Tampa, FL 600,666 95,061 855,551
Canterbury Germantown, MD 31,363,911 2,781,300 26,711,251
Canterbury Crossings Orlando, FL - 273,671 2,463,037
Canterchase Nashville, TN 5,627,420 862,200 7,765,192
Canyon Creek (AZ) Tucson, AZ - 834,313 6,083,047
Canyon Crest Santa Clarita, CA - 2,370,000 10,147,286
Canyon Crest Views Riverside, CA - 1,744,640 17,397,194
Canyon Ridge San Diego, CA - 4,869,448 11,955,064
Canyon Sands Phoenix, AZ - 1,475,900 13,436,146
Cardinal, The Greensboro, NC 7,324,402 1,280,000 11,850,557
Carleton Court (PA) Erie, PA - 128,528 1,156,756
Carleton Court (WV) Charleston, WV 1,341,720 196,222 1,766,001
Carmel Terrace San Diego, CA - 2,288,300 20,596,281
Carolina Crossing Greenville, SC - 547,800 4,949,619
Carriage Hill Macon, GA 688,124 131,911 1,187,196
Carriage Homes at Wyndham Glen Allen, VA - 1,736,000 27,448,696
Casa Capricorn San Diego, CA - 1,260,100 11,365,093
Casa Ruiz San Diego, CA - 3,920,000 9,389,153
Cascade at Landmark Alexandria, VA - 3,601,000 19,672,036
Catalina Shores Las Vegas, NV - 1,222,200 11,042,867
Catalina Shores (WRP) Las Vegas, NV - 1,427,200 12,844,277
Cedar Crest Overland Park, KS 14,108,784 2,159,800 19,425,812
Cedar Hill Knoxville, TN 1,452,748 204,792 1,843,131
Cedar Ridge (TX) Arlington, TX 3,537,028 605,000 4,238,427
Cedargate (GA) Atlanta, GA 860,724 205,043 1,845,391
Cedargate (MI) Southbend, IN 798,043 120,378 1,083,403
Cedargate (She) Louisville, KY 1,205,960 158,685 1,428,168
Cedargate I (Cla) Dayton, OH 1,237,463 159,599 1,436,393
Cedargate I (IN) Bloomington, IN 1,115,965 191,650 1,724,853
Cedargate I (KY) Louisville, KY 847,702 165,397 1,488,569
Cedargate I (OH) Columbus, OH 2,249,899 240,587 2,165,281
Cedargate II (IN) Bloomington, IN 1,106,850 165,041 1,485,367
Cedargate II (KY) Louisville, KY 1,160,000 140,895 1,268,055
Cedargate II (OH) Columbus, OH 703,354 87,618 788,563
Cedars, The Charlotte, NC - 2,025,300 18,225,424
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brookside II (MD) 2,800 346,930 2,450,800 7,276,335 9,727,135
Brunswick (IL) - 4,831 199,520 1,800,513 2,000,034
Brunswick I (WV) - 17,670 241,739 2,193,325 2,435,064
Brunswick II (WV) - 9,842 202,928 1,836,196 2,039,125
Burwick Farms 2,400 250,695 1,104,600 10,182,902 11,287,502
Calais - 424,486 1,118,900 10,494,562 11,613,462
California Gardens - 8,619 105,528 958,372 1,063,900
Cambridge at Hickory Hollow 800 211,835 3,240,800 18,115,343 21,356,143
Cambridge Commons I - 23,097 179,139 1,635,349 1,814,488
Cambridge Commons II - 27,778 141,845 1,304,386 1,446,231
Cambridge Commons III - 13,875 98,125 896,999 995,124
Cambridge Village 1,300 410,179 801,300 9,172,786 9,974,086
Camden Way I - 11,408 109,240 994,564 1,103,803
Camden Way II - 1,024 105,552 950,993 1,056,545
Camellero 1,300 2,791,342 1,924,900 20,115,935 22,040,835
Camellia Court (KY) - 1,492 115,620 1,042,070 1,157,690
Camellia Court (OH) - 2,642 68,584 619,896 688,480
Camellia Court I (Col) - 4,245 133,059 1,201,774 1,334,833
Camellia Court I (Day) - 4,285 131,858 1,191,010 1,322,868
Camellia Court II (Col) - 1,315 118,421 1,067,103 1,185,524
Camellia Court II (Day) - 2,417 131,571 1,186,555 1,318,125
Candlelight I - 5,210 105,000 950,213 1,055,213
Candlelight II - 6,404 95,061 861,955 957,016
Canterbury - 2,941,680 2,781,300 29,652,931 32,434,231
Canterbury Crossings - 4,393 273,671 2,467,430 2,741,100
Canterchase 1,400 552,637 863,600 8,317,829 9,181,429
Canyon Creek (AZ) 100 381,397 834,413 6,464,444 7,298,857
Canyon Crest - 180,685 2,370,000 10,327,972 12,697,972
Canyon Crest Views - 239,927 1,744,640 17,637,121 19,381,761
Canyon Ridge - 191,180 4,869,448 12,146,244 17,015,692
Canyon Sands 16,850 510,150 1,492,750 13,946,296 15,439,046
Cardinal, The 1,200 194,770 1,281,200 12,045,327 13,326,527
Carleton Court (PA) - 3,325 128,528 1,160,081 1,288,609
Carleton Court (WV) - 2,820 196,222 1,768,822 1,965,044
Carmel Terrace - 504,482 2,288,300 21,100,763 23,389,063
Carolina Crossing 2,400 219,279 550,200 5,168,898 5,719,098
Carriage Hill - 583 131,911 1,187,779 1,319,690
Carriage Homes at Wyndham - 35,987 1,736,000 27,484,683 29,220,683
Casa Capricorn 2,600 415,546 1,262,700 11,780,639 13,043,339
Casa Ruiz 2,400 173,918 3,922,400 9,563,071 13,485,471
Cascade at Landmark 2,400 386,827 3,603,400 20,058,863 23,662,263
Catalina Shores 4,800 616,049 1,227,000 11,658,916 12,885,916
Catalina Shores (WRP) - 136,297 1,427,200 12,980,574 14,407,774
Cedar Crest 900 1,689,519 2,160,700 21,115,331 23,276,031
Cedar Hill - 6,112 204,792 1,849,243 2,054,036
Cedar Ridge (TX) 3,600 58,401 608,600 4,296,829 4,905,429
Cedargate (GA) - 1,873 205,043 1,847,264 2,052,308
Cedargate (MI) - 2,139 120,378 1,085,542 1,205,920
Cedargate (She) - 4,208 158,685 1,432,376 1,591,061
Cedargate I (Cla) - 3,128 159,599 1,439,521 1,599,120
Cedargate I (IN) - 932 191,650 1,725,785 1,917,435
Cedargate I (KY) - 9,136 165,397 1,497,705 1,663,101
Cedargate I (OH) - 7,465 240,587 2,172,746 2,413,333
Cedargate II (IN) - 501 165,041 1,485,868 1,650,909
Cedargate II (KY) - 2,459 140,895 1,270,514 1,411,409
Cedargate II (OH) - 5,656 87,618 794,219 881,837
Cedars, The 2,879 454,674 2,028,179 18,680,098 20,708,277
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- -----------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brookside II (MD) (425,804) 1979 30 Years
Brunswick (IL) (16,411) 1986 30 Years
Brunswick I (WV) (20,211) 1986 30 Years
Brunswick II (WV) (16,777) 1987 30 Years
Burwick Farms (876,755) 1991 30 Years
Calais (1,052,951) 1986 30 Years
California Gardens (9,393) 1987 30 Years
Cambridge at Hickory Hollow (1,520,957) 1997 30 Years
Cambridge Commons I (15,364) 1986 30 Years
Cambridge Commons II (12,550) 1987 30 Years
Cambridge Commons III (8,971) 1988 30 Years
Cambridge Village (856,706) 1987 30 Years
Camden Way I (9,527) 1985 30 Years
Camden Way II (8,908) 1986 30 Years
Camellero (3,362,648) 1979 30 Years
Camellia Court (KY) (9,638) 1982 30 Years
Camellia Court (OH) (5,902) 1981 30 Years
Camellia Court I (Col) (11,185) 1981 30 Years
Camellia Court I (Day) (10,946) 1981 30 Years
Camellia Court II (Col) (9,591) 1984 30 Years
Camellia Court II (Day) (10,820) 1982 30 Years
Candlelight I (8,874) 1982 30 Years
Candlelight II (8,365) 1985 30 Years
Canterbury (5,545,041) 1986 30 Years
Canterbury Crossings (21,854) 1983 30 Years
Canterchase (1,166,563) 1985 30 Years
Canyon Creek (AZ) (1,596,443) 1986 30 Years
Canyon Crest (226,931) 1993 30 Years
Canyon Crest Views (1,274,377) 1982-1983 30 Years
Canyon Ridge (892,881) 1989 30 Years
Canyon Sands (2,061,724) 1983 30 Years
Cardinal, The (1,247,214) 1994 30 Years
Carleton Court (PA) (10,774) 1985 30 Years
Carleton Court (WV) (16,028) 1985 30 Years
Carmel Terrace (3,931,878) 1988-89 30 Years
Carolina Crossing (460,588) 1988-89 30 Years
Carriage Hill (10,920) 1985 30 Years
Carriage Homes at Wyndham (1,206,396) 1999 30 Years
Casa Capricorn (1,417,659) 1981 30 Years
Casa Ruiz (837,630) 1976-1986 30 Years
Cascade at Landmark (1,895,299) 1990 30 Years
Catalina Shores (2,439,001) 1989 30 Years
Catalina Shores (WRP) (1,246,328) 1989 30 Years
Cedar Crest (2,848,098) 1986 30 Years
Cedar Hill (16,777) 1986 30 Years
Cedar Ridge (TX) (247,895) 1980 30 Years
Cedargate (GA) (16,359) 1983 30 Years
Cedargate (MI) (9,961) 1983 30 Years
Cedargate (She) (13,045) 1984 30 Years
Cedargate I (Cla) (13,087) 1984 30 Years
Cedargate I (IN) (15,546) 1983 30 Years
Cedargate I (KY) (13,653) 1983 30 Years
Cedargate I (OH) (20,157) 1982 30 Years
Cedargate II (IN) (13,370) 1985 30 Years
Cedargate II (KY) (11,597) 1986 30 Years
Cedargate II (OH) (7,599) 1983 30 Years
Cedars, The (1,264,053) 1983 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cedarwood (OH) Parkersburg, OH 429,100 23,916 215,243
Cedarwood I (Bel) Parkersburg, OH - 82,082 738,735
Cedarwood I (FL) Ocala, FL 742,098 119,470 1,075,226
Cedarwood I and II (IN) Elkhart, IN 1,935,444 251,745 2,265,704
Cedarwood I (KY) Lexington, KY 725,701 106,681 960,127
Cedarwood II (FL) Ocala, FL 565,693 98,372 885,352
Cedarwood II (KY) Lexington, KY 996,680 106,724 960,518
Cedarwood III (KY) Lexington, KY 851,423 102,491 922,420
Celebration Westchase Houston, TX - 2,204,590 6,667,960
Centre Lake III Miami, FL 4,746,131 685,601 6,170,412
Champion Oaks Houston, TX 6,594,689 931,900 8,389,394
Champions Club Glen Allen, VA - 954,000 12,417,167
Champion's Park Norcross, GA - 1,134,000 14,570,304
Chandler Court Chandler, AZ - 1,352,600 12,175,173
Chandler's Bay Kent, WA - 1,503,400 13,640,021
Chantecleer Lakes Naperville, IL (E) 6,688,000 16,341,986
Chaparral Largo, FL - 303,100 6,261,338
Chardonnay Park Redmond, WA 3,426,890 1,297,500 6,725,737
Charing Cross Toledo, OH 804,122 154,584 1,391,260
Charter Club Everett, WA - 998,700 9,012,305
Chartwell Court Houston, TX - 1,215,000 12,827,843
Chatelaine Park Duluth, GA - 1,818,000 24,489,671
Chatham Wood High Point, NC - 700,000 8,311,884
Chelsea Court Cleveland, OH 684,336 145,835 1,312,517
Chelsea Square Redmond, WA - 3,390,000 9,289,074
Cherry Creek I,II,&III (TN) Hermitage, TN - 2,942,345 45,483,592
Cherry Glen I & II Indianapolis, IN 3,176,114 335,596 3,020,362
Cherry Hill Seattle, WA - 700,100 6,300,112
Cherry Tree Baltimore, MD 2,009,159 352,003 3,168,025
Chestnut Hills Tacoma, WA - 756,300 6,806,635
Cheyenne Crest Colorado Springs, CO - 73,950 4,131,145
Chicksaw Crossing Orlando, FL 11,707,137 2,044,000 12,366,832
Chimneys Charlotte, NC - 904,700 8,154,674
Cierra Crest Denver, CO 21,409,834 4,800,000 34,894,898
Cimarron Ridge Denver, CO - 1,591,100 14,320,031
Cityscape South Louis Park, MN (U) 1,560,000 10,794,604
Claire Point Jacksonville, FL - 2,048,000 14,649,393
Clarion Decatur, GA - 1,501,900 13,537,919
Clarys Crossing Columbia, MD - 891,000 15,489,721
Classic, The Stamford, CT - 2,880,000 19,918,680
Clearlake Pines II Melbourne, FL 893,282 119,280 1,073,518
Clearview I Indianapolis, IN 1,091,745 182,206 1,639,850
Clearview II Indianapolis, IN - 226,963 2,042,667
Clearwater Cleveland, OH 1,036,652 128,303 1,154,728
Cloisters on the Green Lexington, KY - 187,074 1,746,721
Club at Tanasbourne Hillsboro, OR 10,981,261 3,520,000 16,271,439
Club at the Green Beaverton, OR - 2,030,150 12,622,687
Coach Lantern Scarborough, ME - 450,000 4,405,723
Coachman Trails Plymouth, MN 6,491,117 1,224,000 9,532,005
Coconut Palm Club Coconut Creek, GA - 3,000,000 17,689,319
Colinas Pointe Denver, CO (E) 1,587,400 14,285,902
Colony Place Fort Myers, FL - 1,500,000 20,920,274
Colony Woods Birmingham, AL 12,628,842 1,656,000 21,787,686
Concord Square Cincinnati, OH - 121,509 1,093,577
Concord Square (IN) Kokomo, IN 749,854 123,247 1,109,220
Concord Square I & II (OH) Mansfiled, OH 1,240,279 164,124 1,477,118
Concorde Bridge Overland Park, KS - 1,972,400 17,776,438
<CAPTION>
OST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME AND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cedarwood (OH) - 7,433 23,916 222,676 246,592
Cedarwood I (Bel) - 2,249 82,082 740,983 823,065
Cedarwood I (FL) - 5,118 119,470 1,080,344 1,199,814
Cedarwood I and II (IN) - 5,809 251,745 2,271,513 2,523,258
Cedarwood I (KY) - 6,114 106,681 966,241 1,072,922
Cedarwood II (FL) - 824 98,372 886,177 984,549
Cedarwood II (KY) - 10,626 106,724 971,144 1,077,868
Cedarwood III (KY) - 8,760 102,491 931,180 1,033,671
Celebration Westchase 100 959,088 2,204,690 7,627,048 9,831,738
Centre Lake III - 21,744 685,601 6,192,157 6,877,758
Champion Oaks - 698,062 931,900 9,087,455 10,019,355
Champions Club - 224,038 954,000 12,641,205 13,595,205
Champion's Park - 149,012 1,134,000 14,719,315 15,853,315
Chandler Court 500 1,328,359 1,353,100 13,503,532 14,856,632
Chandler's Bay 3,500 1,114,241 1,506,900 14,754,262 16,261,162
Chantecleer Lakes 1,400 421,596 6,689,400 16,763,582 23,452,982
Chaparral - 3,178,219 303,100 9,439,557 9,742,656
Chardonnay Park - 63,719 1,297,500 6,789,456 8,086,956
Charing Cross - 1,200 154,584 1,392,460 1,547,044
Charter Club 2,400 330,203 1,001,100 9,342,507 10,343,607
Chartwell Court 700 137,139 1,215,700 12,964,982 14,180,682
Chatelaine Park - 126,922 1,818,000 24,616,593 26,434,593
Chatham Wood - 158,743 700,000 8,470,627 9,170,627
Chelsea Court - 2,496 145,835 1,315,014 1,460,849
Chelsea Square 7,100 75,975 3,397,100 9,365,049 12,762,149
Cherry Creek I,II,&III (TN) - 38,332 2,942,345 45,521,924 48,464,269
Cherry Glen I & II - 15,041 335,596 3,035,402 3,370,998
Cherry Hill - 93,802 700,100 6,393,914 7,094,014
Cherry Tree - 8,880 352,003 3,176,905 3,528,908
Chestnut Hills - 166,132 756,300 6,972,767 7,729,067
Cheyenne Crest 100 749,398 74,050 4,880,543 4,954,593
Chicksaw Crossing - 146,530 2,044,000 12,513,362 14,557,362
Chimneys 2,400 434,384 907,100 8,589,058 9,496,158
Cierra Crest 3,100 180,735 4,803,100 35,075,632 39,878,732
Cimarron Ridge - 951,302 1,591,100 15,271,333 16,862,433
Cityscape 3,200 184,970 1,563,200 10,979,573 12,542,773
Claire Point - 214,007 2,048,000 14,863,400 16,911,400
Clarion 2,400 107,696 1,504,300 13,645,616 15,149,916
Clarys Crossing - 98,932 891,000 15,588,653 16,479,653
Classic, The 3,500 313,369 2,883,500 20,232,050 23,115,550
Clearlake Pines II - 1,967 119,280 1,075,484 1,194,764
Clearview I - 4,333 182,206 1,644,183 1,826,388
Clearview II - 5,337 226,963 2,048,005 2,274,968
Clearwater - 2,234 128,303 1,156,962 1,285,265
Cloisters on the Green - 2,315,324 187,074 4,062,045 4,249,119
Club at Tanasbourne 1,300 712,875 3,521,300 16,984,314 20,505,614
Club at the Green 800 610,142 2,030,950 13,232,829 15,263,779
Coach Lantern 2,900 109,901 452,900 4,515,624 4,968,524
Coachman Trails 3,000 163,946 1,227,000 9,695,951 10,922,951
Coconut Palm Club 1,700 322,508 3,001,700 18,011,827 21,013,527
Colinas Pointe - 286,023 1,587,400 14,571,925 16,159,325
Colony Place - 194,577 1,500,000 21,114,851 22,614,851
Colony Woods 1,300 101,463 1,657,300 21,889,148 23,546,448
Concord Square - 1,138 121,509 1,094,715 1,216,223
Concord Square (IN) - 4,837 123,247 1,114,057 1,237,303
Concord Square I & II (OH) - 4,349 164,124 1,481,466 1,645,590
Concorde Bridge 2,400 535,564 1,974,800 18,312,002 20,286,802
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- -------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cedarwood (OH) (2,513) 1982 30 Years
Cedarwood I (Bel) (6,987) 1980 30 Years
Cedarwood I (FL) (10,037) 1978 30 Years
Cedarwood I and II (IN) (20,481) 1983/84 30 Years
Cedarwood I (KY) (9,053) 1984 30 Years
Cedarwood II (FL) (8,056) 1980 30 Years
Cedarwood II (KY) (9,205) 1986 30 Years
Cedarwood III (KY) (8,704) 1986 30 Years
Celebration Westchase (2,157,668) 1979 30 Years
Centre Lake III (55,787) 1986 30 Years
Champion Oaks (1,876,080) 1984 30 Years
Champions Club (574,482) 1988 30 Years
Champion's Park (672,437) 1987 30 Years
Chandler Court (1,968,600) 1987 30 Years
Chandler's Bay (2,950,212) 1989 30 Years
Chantecleer Lakes (1,399,079) 1986 30 Years
Chaparral (6,636,364) 1976 30 Years
Chardonnay Park (597,014) 1982-1989 30 Years
Charing Cross (12,732) 1978 30 Years
Charter Club (2,031,374) 1991 30 Years
Chartwell Court (960,130) 1995 30 Years
Chatelaine Park (1,092,990) 1995 30 Years
Chatham Wood (408,826) 1986 30 Years
Chelsea Court (12,049) 1981 30 Years
Chelsea Square (502,839) 1991 30 Years
Cherry Creek I,II,&III (TN) (1,315,473) 1986/96 30 Years
Cherry Glen I & II (27,894) 1986/87 30 Years
Cherry Hill (608,893) 1991 30 Years
Cherry Tree (28,275) 1986 30 Years
Chestnut Hills (701,302) 1991 30 Years
Cheyenne Crest (1,332,855) 1984 30 Years
Chicksaw Crossing (587,728) 1986 30 Years
Chimneys (757,432) 1974 30 Years
Cierra Crest (2,574,457) 1996 30 Years
Cimarron Ridge (1,569,561) 1984 30 Years
Cityscape (798,782) 1990 30 Years
Claire Point (679,020) 1986 30 Years
Clarion (1,107,543) 1990 30 Years
Clarys Crossing (698,024) 1984 30 Years
Classic, The (1,599,059) 1990 30 Years
Clearlake Pines II (9,861) 1985 30 Years
Clearview I (14,950) 1986 30 Years
Clearview II (18,479) 1987 30 Years
Clearwater (10,381) 1986 30 Years
Cloisters on the Green (2,989,242) 1974 30 Years
Club at Tanasbourne (1,720,349) 1990 30 Years
Club at the Green (1,388,047) 1991 30 Years
Coach Lantern (314,592) 1971/1981 30 Years
Coachman Trails (520,267) 1987 30 Years
Coconut Palm Club (1,038,093) 1992 30 Years
Colinas Pointe (1,396,068) 1986 30 Years
Colony Place (950,675) 1991 30 Years
Colony Woods (1,164,356) 1991/1994 30 Years
Concord Square (9,967) 1982 30 Years
Concord Square (IN) (10,217) 1983 30 Years
Concord Square I & II (OH) (13,691) 1981/83 30 Years
Concorde Bridge (1,507,828) 1973 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Conway Station Orlando, FL - 1,936,000 10,852,858
Copper Canyon Denver, CO - 1,443,000 16,064,368
Copper Creek Phoenix, AZ - 1,017,400 9,148,068
Copper Hill Bedford, TX - 1,020,000 6,001,680
Copper Terrace Orlando, FL - 1,200,000 17,887,868
Copperfield San Antonio, TX - 791,200 7,121,171
Country Brook Chandler, AZ (O) 1,505,219 29,542,535
Country Club Place (FL) Pembroke Pines, FL - 912,000 10,016,543
Country Club Village Seattle, WA - 1,150,500 10,352,179
Country Gables Beaverton, OR 8,204,727 1,580,500 14,248,239
Country Ridge Farmington Hills, MI (U) 1,605,800 14,599,936
Countryside San Antonio, TX - 667,500 6,008,259
Countryside I Daytona Beach, FL - 136,665 1,229,981
Countryside II Daytona Beach, FL - 234,633 2,111,700
Countryside Manor Atlanta, GA 1,163,328 298,186 2,683,678
Coventry at Cityview Fort Worth, TX - 2,160,000 23,072,847
Creekside (San Mateo) San Mateo, CA 14,503,372 9,600,000 21,193,232
Creekside Homes at Legacy Plano. TX - 4,560,000 32,275,748
Creekside Village Mountlake Terrace, WA 14,826,887 2,802,900 25,270,594
Creekwood Charlotte, NC - 1,859,300 16,740,569
Crescent at Cherry Creek Denver, CO (E) 2,592,000 15,149,470
Cross Creek Charlotte, NC 12,628,842 3,150,000 20,299,439
Crossing at Green Valley Las Vegas, NV 10,214,792 2,408,500 21,673,209
Crosswinds St. Petersburg, FL - 1,561,200 5,777,205
Crown Court Phoenix, AZ - 3,156,600 28,414,599
Crystal Creek Phoenix, AZ - 952,900 8,581,704
Crystal Village Attleboro, MA - 1,365,000 4,992,817
Cypress Panama City, FL 1,421,807 171,882 1,546,941
Cypress Cove Melbourne, FL - 1,630,000 19,020,939
Cypress Point Las Vegas, NV - 953,800 8,636,551
Daniel Court Cincinnati, OH 2,339,616 334,101 3,006,906
Dartmouth Place I Akron, OH - 151,771 1,365,939
Dartmouth Place II Akron, OH 835,726 130,102 1,170,914
Dartmouth Woods Denver, CO 4,283,469 1,608,000 10,832,754
Dawntree Carrollton, TX - 1,204,600 10,851,833
Deerbrook Jacksonville, FL - 1,008,000 8,845,716
Deerwood (Corona) Corona, CA - 4,740,000 20,313,008
Deerwood (FL) Orlando, FL 874,672 114,948 1,034,533
Deerwood (SD) San Diego, CA - 2,075,700 18,740,815
Deerwood Meadows Greensboro, NC - 986,643 7,204,362
Defoor Village Atlanta, GA - 2,964,000 10,573,374
Del Coronado Mesa, AZ (N) 1,963,200 17,680,640
Desert Park Las Vegas, NV - 1,085,400 9,759,958
Desert Sands Phoenix, AZ - 1,464,200 13,331,581
Dogwood Glen I Indianpolis, IN 1,750,348 240,855 2,167,693
Dogwood Glen II Indianpolis, IN 1,364,537 202,397 1,821,571
Dos Caminos Phoenix, AZ - 1,727,900 15,567,778
Dover Place I Cleveland, OH 1,126,709 244,294 2,198,644
Dover Place II Cleveland, OH 1,623,551 230,895 2,078,058
Dover Place III Cleveland, OH 769,313 119,835 1,078,516
Dover Place IV Cleveland, OH 1,868,332 261,912 2,357,208
Driftwood Jacksonville, FL 346,206 126,357 1,137,216
Duraleigh Woods Raleigh, NC - 1,629,000 19,917,750
Eagle Canyon Chino Hills, CA - 1,806,800 16,279,860
Eagle Rim Redmond, WA - 976,200 8,801,849
East Pointe Charlotte, NC 9,324,851 1,364,100 12,295,246
Edgewood Woodinville, WA 5,765,994 1,068,200 9,632,980
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Conway Station - 119,516 1,936,000 10,972,375 12,908,375
Copper Canyon - 10,517 1,443,000 16,074,885 17,517,885
Copper Creek - 304,674 1,017,400 9,452,742 10,470,142
Copper Hill 1,800 370,936 1,021,800 6,372,616 7,394,416
Copper Terrace - 387,322 1,200,000 18,275,190 19,475,190
Copperfield - 437,383 791,200 7,558,554 8,349,754
Country Brook - 273,686 1,505,219 29,816,221 31,321,440
Country Club Place (FL) - 318,621 912,000 10,335,164 11,247,164
Country Club Village - 526,284 1,150,500 10,878,463 12,028,963
Country Gables 1,200,000 481,350 2,780,500 14,729,589 17,510,089
Country Ridge 16,150 550,397 1,621,950 15,150,333 16,772,283
Countryside 100 412,423 667,600 6,420,682 7,088,282
Countryside I - 16,073 136,665 1,246,054 1,382,719
Countryside II - 8,391 234,633 2,120,091 2,354,724
Countryside Manor - 52,218 298,186 2,735,896 3,034,083
Coventry at Cityview - 98,094 2,160,000 23,170,941 25,330,941
Creekside (San Mateo) 6,600 135,586 9,606,600 21,328,817 30,935,417
Creekside Homes at Legacy - 105,379 4,560,000 32,381,127 36,941,127
Creekside Village 4,700 1,380,117 2,807,600 26,650,711 29,458,311
Creekwood 2,400 291,533 1,861,700 17,032,101 18,893,801
Crescent at Cherry Creek 2,000 203,737 2,594,000 15,353,207 17,947,207
Cross Creek 1,600 226,589 3,151,600 20,526,028 23,677,628
Crossing at Green Valley - 559,613 2,408,500 22,232,822 24,641,322
Crosswinds - 528,718 1,561,200 6,305,923 7,867,123
Crown Court - 822,085 3,156,600 29,236,684 32,393,284
Crystal Creek 600 689,464 953,500 9,271,168 10,224,668
Crystal Village 4,000 222,939 1,369,000 5,215,756 6,584,756
Cypress - 5,514 171,882 1,552,455 1,724,337
Cypress Cove - 121,373 1,630,000 19,142,312 20,772,312
Cypress Point 5,890 660,432 959,690 9,296,983 10,256,673
Daniel Court - 48,439 334,101 3,055,345 3,389,446
Dartmouth Place I - 673 151,771 1,366,612 1,518,383
Dartmouth Place II - 1,258 130,102 1,172,172 1,302,273
Dartmouth Woods 1,800 170,582 1,609,800 11,003,336 12,613,136
Dawntree 900 1,957,423 1,205,500 12,809,256 14,014,756
Deerbrook - 268,237 1,008,000 9,113,953 10,121,953
Deerwood (Corona) 2,200 443,272 4,742,200 20,756,280 25,498,480
Deerwood (FL) - 2,643 114,948 1,037,176 1,152,124
Deerwood (SD) 6,395 3,100,942 2,082,095 21,841,758 23,923,853
Deerwood Meadows 100 673,335 986,743 7,877,697 8,864,440
Defoor Village 2,400 73,350 2,966,400 10,646,725 13,613,125
Del Coronado 1,200 970,090 1,964,400 18,650,730 20,615,130
Desert Park - 670,709 1,085,400 10,430,667 11,516,067
Desert Sands 16,850 1,139,193 1,481,050 14,470,774 15,951,824
Dogwood Glen I - 8,496 240,855 2,176,189 2,417,043
Dogwood Glen II - 6,718 202,397 1,828,289 2,030,685
Dos Caminos - 644,151 1,727,900 16,211,929 17,939,829
Dover Place I - 4,301 244,294 2,202,945 2,447,239
Dover Place II - 644 230,895 2,078,702 2,309,597
Dover Place III - 51 119,835 1,078,567 1,198,402
Dover Place IV - 117 261,912 2,357,325 2,619,236
Driftwood - 3,381 126,357 1,140,597 1,266,955
Duraleigh Woods - 816,697 1,629,000 20,734,447 22,363,447
Eagle Canyon 2,100 374,756 1,808,900 16,654,615 18,463,515
Eagle Rim 1,600 586,880 977,800 9,388,729 10,366,529
East Pointe 1,800 1,204,794 1,365,900 13,500,040 14,865,940
Edgewood 1,900 482,907 1,070,100 10,115,887 11,185,987
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- --------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Conway Station (512,582) 1987 30 Years
Copper Canyon (464,397) 1999 30 Years
Copper Creek (898,503) 1984 30 Years
Copper Hill (387,204) 1983 30 Years
Copper Terrace (827,643) 1989 30 Years
Copperfield (843,648) 1984 30 Years
Country Brook (2,166,522) 1986-1996 30 Years
Country Club Place (FL) (480,928) 1987 30 Years
Country Club Village (1,016,737) 1991 30 Years
Country Gables (1,571,653) 1991 30 Years
Country Ridge (2,092,845) 1986 30 Years
Countryside (698,035) 1980 30 Years
Countryside I (11,733) 1982 30 Years
Countryside II (19,424) 1982 30 Years
Countryside Manor (24,672) 1985 30 Years
Coventry at Cityview (1,032,613) 1996 30 Years
Creekside (San Mateo) (1,126,487) 1985 30 Years
Creekside Homes at Legacy (1,420,194) 1998 30 Years
Creekside Village (5,117,588) 1987 30 Years
Creekwood (1,441,955) 1987-1990 30 Years
Crescent at Cherry Creek (1,201,679) 1994 30 Years
Cross Creek (1,165,524) 1989 30 Years
Crossing at Green Valley (2,105,455) 1986 30 Years
Crosswinds (637,241) 1986 30 Years
Crown Court (2,810,106) 1987 30 Years
Crystal Creek (1,723,802) 1985 30 Years
Crystal Village (386,720) 1974 30 Years
Cypress (14,243) 1985 30 Years
Cypress Cove (867,992) 1990 30 Years
Cypress Point (1,999,455) 1989 30 Years
Daniel Court (28,239) 1985 30 Years
Dartmouth Place I (12,284) 1982 30 Years
Dartmouth Place II (10,597) 1986 30 Years
Dartmouth Woods (1,104,796) 1990 30 Years
Dawntree (2,696,547) 1982 30 Years
Deerbrook (428,249) 1983 30 Years
Deerwood (Corona) (1,709,155) 1992 30 Years
Deerwood (FL) (9,520) 1982 30 Years
Deerwood (SD) (4,942,798) 1990 30 Years
Deerwood Meadows (2,048,569) 1986 30 Years
Defoor Village (589,285) 1997 30 Years
Del Coronado (3,191,774) 1985 30 Years
Desert Park (1,742,920) 1987 30 Years
Desert Sands (2,077,285) 1982 30 Years
Dogwood Glen I (19,715) 1986 30 Years
Dogwood Glen II (16,643) 1987 30 Years
Dos Caminos (1,563,082) 1983 30 Years
Dover Place I (19,485) 1982 30 Years
Dover Place II (18,414) 1983 30 Years
Dover Place III (9,489) 1983 30 Years
Dover Place IV (20,848) 1986 30 Years
Driftwood (10,643) 1985 30 Years
Duraleigh Woods (948,536) 1987 30 Years
Eagle Canyon (2,016,417) 1985 30 Years
Eagle Rim (1,880,558) 1986-88 30 Years
East Pointe (3,183,576) 1987 30 Years
Edgewood (2,038,593) 1986 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Elmtree Park I Indianpolis, IN 1,488,803 157,687 1,419,184
Elmtree Park II Indianpolis, IN 935,749 114,114 1,027,027
Elmwood (GA) Atlanta, GA 828,235 183,756 1,653,808
Elmwood I (FL) W. Palm Beach, FL 1,338,661 163,389 1,470,498
Elmwood II (FL) W. Palm Beach, FL 1,339,923 179,743 1,617,691
Emerald Bay Winter Park, FL - 2,160,000 13,549,968
Emerald Place Bermuda Dunes, CA - 954,400 8,609,599
Emerson Place Combined Boston, MA - 14,850,000 57,582,798
Enclave, The Tempe, AZ (P) 1,500,192 19,281,399
English Hills Charlotte, NC - 1,260,000 12,554,291
Esprit Del Sol Solana Beach, CA - 5,110,000 11,913,045
Essex Place Overland Park, KS - 1,831,900 16,513,586
Essex Place (FL) Tampa, FL - 1,188,000 7,106,384
Estate at Quarry Lake Austin, TX 12,454,239 1,963,000 18,972,537
Ethans Glen III Kansas City, MO 2,366,364 244,100 2,221,562
Ethans Ridge I Kansas City, MO 16,232,216 1,945,900 17,563,769
Ethans Ridge II Kansas City, MO 10,991,981 1,465,500 13,176,233
Fairfield Combined Stamford, CT - 6,500,000 39,425,167
Fairland Gardens Silver Spring, MD - 6,000,000 19,978,402
Falls Tampa, FL - 1,440,000 8,445,778
Farmington Gates Germantown, TN - 969,700 8,786,180
Farnham Park Houston, TX 11,356,588 1,512,000 14,234,419
Fernbrook Townhomes Plymouth, MN 5,196,328 576,000 6,683,693
Fielder Crossing Arlington, TX 3,373,279 714,000 3,935,453
Firdale Village Seattle, WA - 2,279,400 20,496,049
Fireside Park Rockville, MD 8,749,542 4,248,000 10,099,286
Forest Glen Pensacola, FL 1,078,228 161,548 1,453,936
Forest Place Tampa, FL 10,594,977 1,708,000 8,612,029
Forest Ridge I & II Arlington, TX - 2,339,300 21,266,573
Forest Valley San Antonio, TX - 590,000 5,310,328
Forest Village Macon, GA 1,231,993 224,022 2,016,196
Forsythia Court (KY) Louisville, KY 1,926,833 279,450 2,515,053
Forsythia Court (MD) Baltimore, MD 2,085,646 251,955 2,267,597
Forsythia Court II (MD) Baltimore, MD 2,320,497 239,834 2,158,502
Fountain Creek Phoenix, AZ - 686,000 6,177,920
Fountain Place I Eden Prairie, MN 24,676,652 2,399,900 21,678,609
Fountain Place II Eden Prairie, MN 12,612,600 1,226,500 11,087,407
Fountainhead Combined San Antonio, TX (S) 3,617,449 14,131,386
Fountains at Flamingo Las Vegas, NV - 3,180,900 28,650,076
Four Lakes Lisle, IL 10,344,569 2,465,000 13,091,599
Four Lakes 5 Lisle, IL (S) 600,000 18,717,933
Fox Run (WA) Federal Way, WA - 638,500 5,760,413
Foxchase Grand Prairie, TX - 781,500 7,621,196
Foxcroft Scarborough, ME - 520,000 4,527,409
Foxhaven Canton, OH 1,816,369 256,821 2,311,388
Foxton (MI) Detriot, MI 897,474 156,363 1,407,262
Foxton II (OH) Dayton, OH 1,381,197 165,806 1,492,250
Garden Court Detriot, MI 2,123,809 351,532 3,163,785
Garden Lake Riverdale, GA - 1,464,500 13,186,716
Garden Terrace I Tampa, FL 593,409 93,144 838,295
Garden Terrace II Tampa, FL 678,182 97,120 874,077
Gatehouse at Pine Lake Plantation , FL - 1,886,200 17,070,795
Gatehouse on the Green Pembroke Pines, FL - 2,216,800 20,056,270
Gates at Carlson Center Minnetonka, MN (Q) 4,350,000 23,802,817
Gates of Redmond Redmond, WA 6,222,662 2,305,600 12,122,006
Gateway Villas Scottsdale, AZ - 1,431,048 14,926,833
Geary Court Yard San Francisco, CA 17,709,692 1,719,400 15,606,269
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Elmtree Park I - 4,451 157,687 1,423,636 1,581,323
Elmtree Park II - 7,967 114,114 1,034,995 1,149,109
Elmwood (GA) - 5,018 183,756 1,658,826 1,842,583
Elmwood I (FL) - 5,064 163,389 1,475,562 1,638,951
Elmwood II (FL) - 1,787 179,743 1,619,478 1,799,221
Emerald Bay 1,600 766,134 2,161,600 14,316,102 16,477,702
Emerald Place 2,100 658,459 956,500 9,268,058 10,224,558
Emerson Place Combined 5,000 936,486 14,855,000 58,519,284 73,374,284
Enclave, The - 124,309 1,500,192 19,405,708 20,905,900
English Hills - 241,048 1,260,000 12,795,339 14,055,339
Esprit Del Sol 1,200 153,817 5,111,200 12,066,862 17,178,062
Essex Place 3,500 2,347,676 1,835,400 18,861,261 20,696,661
Essex Place (FL) - 122,091 1,188,000 7,228,476 8,416,476
Estate at Quarry Lake - 179,131 1,963,000 19,151,668 21,114,668
Ethans Glen III 2,400 94,857 246,500 2,316,420 2,562,920
Ethans Ridge I 2,400 706,019 1,948,300 18,269,788 20,218,088
Ethans Ridge II 2,635 231,760 1,468,135 13,407,993 14,876,128
Fairfield Combined 10,200 187,599 6,510,200 39,612,765 46,122,965
Fairland Gardens - 370,801 6,000,000 20,349,202 26,349,202
Falls - 170,773 1,440,000 8,616,551 10,056,551
Farmington Gates 4,098 478,095 973,798 9,264,274 10,238,072
Farnham Park 600 158,866 1,512,600 14,393,284 15,905,884
Fernbrook Townhomes 4,100 - 580,100 6,683,693 7,263,793
Fielder Crossing 4,100 39,730 718,100 3,975,183 4,693,283
Firdale Village - 499,849 2,279,400 20,995,897 23,275,297
Fireside Park - 82,030 4,248,000 10,181,316 14,429,316
Forest Glen - 12,777 161,548 1,466,713 1,628,262
Forest Place - 235,685 1,708,000 8,847,714 10,555,714
Forest Ridge I & II 23,400 1,254,610 2,362,700 22,521,183 24,883,883
Forest Valley - 197,987 590,000 5,508,315 6,098,315
Forest Village - 3,762 224,022 2,019,958 2,243,980
Forsythia Court (KY) - 4,253 279,450 2,519,306 2,798,756
Forsythia Court (MD) - 2,310 251,955 2,269,907 2,521,862
Forsythia Court II (MD) - 4,356 239,834 2,162,858 2,402,691
Fountain Creek 500 423,043 686,500 6,600,963 7,287,463
Fountain Place I 5,168 503,200 2,405,068 22,181,809 24,586,877
Fountain Place II 4,850 205,532 1,231,350 11,292,939 12,524,289
Fountainhead Combined - 1,344,210 3,617,449 15,475,596 19,093,045
Fountains at Flamingo 2,200 782,801 3,183,100 29,432,877 32,615,977
Four Lakes - 8,785,388 2,465,000 21,876,987 24,341,987
Four Lakes 5 - 1,397,362 600,000 20,115,295 20,715,295
Fox Run (WA) 1,200 569,763 639,700 6,330,175 6,969,875
Foxchase 200 549,368 781,700 8,170,564 8,952,264
Foxcroft 3,400 180,361 523,400 4,707,770 5,231,170
Foxhaven - 3,619 256,821 2,315,007 2,571,828
Foxton (MI) - 3,896 156,363 1,411,159 1,567,521
Foxton II (OH) - 5,268 165,806 1,497,518 1,663,324
Garden Court - 4,343 351,532 3,168,128 3,519,660
Garden Lake 2,400 319,603 1,466,900 13,506,319 14,973,219
Garden Terrace I - 4,504 93,144 842,799 935,943
Garden Terrace II - 9,394 97,120 883,471 980,591
Gatehouse at Pine Lake 10,400 514,172 1,896,600 17,584,967 19,481,567
Gatehouse on the Green 11,400 637,607 2,228,200 20,693,877 22,922,077
Gates at Carlson Center 5,200 638,657 4,355,200 24,441,474 28,796,674
Gates of Redmond 500 266,081 2,306,100 12,388,087 14,694,187
Gateway Villas - 88,014 1,431,048 15,014,847 16,445,895
Geary Court Yard 3,000 219,655 1,722,400 15,825,925 17,548,325
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- ----------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Elmtree Park I (13,162) 1986 30 Years
Elmtree Park II (9,742) 1987 30 Years
Elmwood (GA) (14,713) 1984 30 Years
Elmwood I (FL) (13,308) 1984 30 Years
Elmwood II (FL) (14,376) 1984 30 Years
Emerald Bay (1,107,336) 1972 30 Years
Emerald Place (2,146,222) 1988 30 Years
Emerson Place Combined (3,413,919) 1962 30 Years
Enclave, The (1,389,414) 1994 30 Years
English Hills (602,187) 1984 30 Years
Esprit Del Sol (595,282) 1986 30 Years
Essex Place (4,115,387) 1970-84 30 Years
Essex Place (FL) (334,076) 1989 30 Years
Estate at Quarry Lake (865,054) 1995 30 Years
Ethans Glen III (183,034) 1990 30 Years
Ethans Ridge I (1,431,763) 1988 30 Years
Ethans Ridge II (1,024,418) 1990 30 Years
Fairfield Combined (2,423,749) 1996 30 Years
Fairland Gardens (582,927) 1981 30 Years
Falls (414,270) 1985 30 Years
Farmington Gates (723,242) 1976 30 Years
Farnham Park (989,376) 1996 30 Years
Fernbrook Townhomes (328,876) 1993 30 Years
Fielder Crossing (230,318) 1980 30 Years
Firdale Village (2,040,106) 1986 30 Years
Fireside Park (362,944) 1961 30 Years
Forest Glen (13,625) 1986 30 Years
Forest Place (439,668) 1985 30 Years
Forest Ridge I & II (3,355,354) 1984/85 30 Years
Forest Valley (581,196) 1983 30 Years
Forest Village (18,298) 1983 30 Years
Forsythia Court (KY) (22,721) 1985 30 Years
Forsythia Court (MD) (20,235) 1986 30 Years
Forsythia Court II (MD) (19,421) 1987 30 Years
Fountain Creek (1,204,197) 1984 30 Years
Fountain Place I (1,673,205) 1989 30 Years
Fountain Place II (840,451) 1989 30 Years
Fountainhead Combined (6,874,617) 1985/1987 30 Years
Fountains at Flamingo (5,583,649) 1989-91 30 Years
Four Lakes (11,901,961) 1968/1988* 30 Years
Four Lakes 5 (7,936,713) 1968/1988* 30 Years
Fox Run (WA) (1,374,796) 1988 30 Years
Foxchase (851,504) 1983 30 Years
Foxcroft (324,960) 1977/1979 30 Years
Foxhaven (21,160) 1986 30 Years
Foxton (MI) (12,682) 1983 30 Years
Foxton II (OH) (13,965) 1983 30 Years
Garden Court (28,179) 1988 30 Years
Garden Lake (1,136,899) 1991 30 Years
Garden Terrace I (8,090) 1981 30 Years
Garden Terrace II (8,688) 1982 30 Years
Gatehouse at Pine Lake (2,031,874) 1990 30 Years
Gatehouse on the Green (2,382,963) 1990 30 Years
Gates at Carlson Center (1,573,137) 1989 30 Years
Gates of Redmond (1,083,369) 1979 30 Years
Gateway Villas (1,081,046) 1995 30 Years
Geary Court Yard (1,148,571) 1990 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gentian Oaks Columbus, GA 1,203,778 169,268 1,523,416
Georgian Woods Combined (REIT) Wheaton, MD 18,590,806 5,034,000 28,817,818
Glen Arm Manor Albany, GA 1,167,058 166,498 1,498,486
Glen Eagle Greenville, SC - 833,500 7,523,244
GlenGarry Club Bloomingdale, IL (Q) 3,125,000 15,807,889
Glenlake Glendale Heights. IL 14,845,000 5,040,000 16,671,970
Glenridge Colorado Springs, CO (F) 884,688 4,650,939
Glenview Huntsville, AL 1,647,376 184,451 1,660,061
Glenwood Village Macon, GA 1,096,813 167,779 1,510,009
Governor's Pointe Roswell, GA (E) 3,744,000 24,520,965
Granada Highlands Malden, MA - 28,210,000 99,956,182
Grandview I & II Las Vegas, NV - 2,325,600 15,527,187
Greenbriar Glen Altlanta, GA 1,538,287 227,701 2,049,311
Greengate Marietta, GA - 132,979 1,526,005
Greenglen (Day) Dayton, OH 1,141,512 204,289 1,838,604
Greenglen II (Lim) Lima, OH 891,704 87,335 786,015
Greenglen II (Tol) Toledo, OH 814,863 162,264 1,460,373
Greenhaven Union City, CA 10,857,291 7,500,000 15,210,399
Greenhouse - Frey Road Atlanta, GA (S) 2,464,900 22,187,443
Greenhouse - Holcomb Bridge Atlanta, GA (S) 2,142,400 19,291,427
Greenhouse - Roswell Atlanta, GA (S) 1,217,500 10,974,727
Greentree 1 Glen Burnie, MD 11,761,074 3,912,968 11,799,657
Greentree 2 Glen Burnie, MD - 2,700,000 8,261,634
Greentree 3 Glen Burnie, MD 7,245,399 2,380,443 7,294,085
Greenwich Woods Silver Spring, MD 18,426,770 3,095,700 29,226,035
Greenwood Village Tempe, AZ (O) 2,118,781 17,274,216
Grey Eagle Greenville, SC - 725,200 6,547,650
Greystone Atlanta, GA - 2,250,000 5,207,079
Gwinnett Crossing Duluth, GA - 2,632,000 32,016,496
Hall Place Quincy, MA - 3,150,000 5,121,950
Hammock's Place Miami, FL (F) 319,080 12,513,467
Hampshire Court Ft. Wayne, IN - 101,297 911,672
Hampshire II Cleveland, OH 860,000.00 126,231 1,136,082
Hamptons Tacoma, WA 5,857,832 1,119,200 10,075,844
Harbinwood Atlanta, GA 1,627,164 236,761 2,130,849
Harbor Pointe Milwaukee, WI 12,000,000 2,975,000 22,096,546
Harborview San Pedro, CA 12,104,725 6,400,000 12,633,175
Harrison Park Tucson, AZ (O) 1,265,094 16,342,322
Hartwick Anderson, IN 727,948 123,791 1,114,115
Harvest Grove Conyers, GA - 752,000 18,717,899
Harvest Grove I Columbus, OH 1,637,684 170,334 1,533,007
Harvest Grove II Columbus, OH 1,076,969 148,792 1,339,124
Hatcherway Jacksonville, GA 745,042 96,885 871,969
Hathaway Long Beach, CA - 2,512,200 22,611,912
Hayfield Park Cincinnati, KY 1,577,277 261,457 2,353,111
Haywood Pointe Greenville, SC - 480,000 9,163,271
Hearthstone San Antonio, TX - 1,035,700 3,525,388
Heathmoore (Eva) Evansville, IN 1,155,071 162,375 1,461,371
Heathmoore (KY) Louisville, KY 927,105 156,840 1,411,559
Heathmoore (MI) Detriot, MI 1,725,257 227,105 2,043,945
Heathmoore I (IN) Indianapolis, IN 1,229,295 144,557 1,301,010
Heathmoore I (MI) Detriot, MI 1,564,304 232,064 2,088,575
Heathmoore II (MI) Detriot, MI 918,553 170,433 1,533,893
Heritage, The Phoenix, AZ (O) 1,211,205 13,136,903
Heron Cove Coral Springs, FL - 823,000 8,114,762
Heron Landing (J) Lauderhill, FL - 707,100 6,406,776
Heron Pointe Boynton Beach, FL - 1,546,700 7,804,414
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gentian Oaks - 2,617 169,268 1,526,034 1,695,302
Georgian Woods Combined (REIT) 4,400 1,956,090 5,038,400 30,773,909 35,812,309
Glen Arm Manor - 5,299 166,498 1,503,786 1,670,284
Glen Eagle 2,400 138,654 835,900 7,661,897 8,497,797
GlenGarry Club 4,700 750,843 3,129,700 16,558,731 19,688,431
Glenlake 1,700 572,258 5,041,700 17,244,228 22,285,928
Glenridge 100 607,958 884,788 5,258,897 6,143,685
Glenview - 22,546 184,451 1,682,607 1,867,058
Glenwood Village - 8,499 167,779 1,518,508 1,686,287
Governor's Pointe 2,600 813,249 3,746,600 25,334,214 29,080,814
Granada Highlands - (138,357) 28,210,000 99,817,825 128,027,825
Grandview I & II 7,700 233,024 2,333,300 15,760,211 18,093,511
Greenbriar Glen - 5,965 227,701 2,055,276 2,282,977
Greengate - 1,349,931 132,979 2,875,936 3,008,915
Greenglen (Day) - 5,377 204,289 1,843,980 2,048,270
Greenglen II (Lim) - 1,024 87,335 787,039 874,374
Greenglen II (Tol) - 2,255 162,264 1,462,628 1,624,891
Greenhaven 7,000 147,711 7,507,000 15,358,110 22,865,110
Greenhouse - Frey Road 2,300 1,629,230 2,467,200 23,816,673 26,283,873
Greenhouse - Holcomb Bridge 900 1,429,246 2,143,300 20,720,674 22,863,974
Greenhouse - Roswell 2,500 1,023,254 1,220,000 11,997,982 13,217,982
Greentree 1 - 195,706 3,912,968 11,995,363 15,908,331
Greentree 2 - 72,591 2,700,000 8,334,225 11,034,225
Greentree 3 - 62,104 2,380,443 7,356,189 9,736,632
Greenwich Woods 5,300 2,496,472 3,101,000 31,722,507 34,823,507
Greenwood Village - 468,585 2,118,781 17,742,801 19,861,582
Grey Eagle 2,400 126,075 727,600 6,673,725 7,401,325
Greystone 2,000 345,842 2,252,000 5,552,921 7,804,921
Gwinnett Crossing - 331,101 2,632,000 32,347,597 34,979,597
Hall Place 800 30,725 3,150,800 5,152,674 8,303,474
Hammock's Place 100 684,686 319,180 13,198,153 13,517,333
Hampshire Court - 1,812 101,297 913,484 1,014,780
Hampshire II - 2,529 126,231 1,138,612 1,264,843
Hamptons - 250,024 1,119,200 10,325,869 11,445,069
Harbinwood - 5,012 236,761 2,135,861 2,372,622
Harbor Pointe 4,800 937,057 2,979,800 23,033,603 26,013,403
Harborview 2,500 260,840 6,402,500 12,894,015 19,296,515
Harrison Park - 219,481 1,265,094 16,561,803 17,826,897
Hartwick - 8,316 123,791 1,122,431 1,246,222
Harvest Grove - 155,391 752,000 18,873,290 19,625,290
Harvest Grove I - 2,826 170,334 1,535,832 1,706,166
Harvest Grove II - 4,038 148,792 1,343,162 1,491,953
Hatcherway - 4,129 96,885 876,098 972,984
Hathaway 300 747,836 2,512,500 23,359,748 25,872,248
Hayfield Park - 2,958 261,457 2,356,069 2,617,526
Haywood Pointe - 95,060 480,000 9,258,331 9,738,331
Hearthstone 200 674,597 1,035,900 4,199,985 5,235,885
Heathmoore (Eva) - 3,232 162,375 1,464,603 1,626,977
Heathmoore (KY) - 3,290 156,840 1,414,848 1,571,688
Heathmoore (MI) - 2,156 227,105 2,046,102 2,273,207
Heathmoore I (IN) - 5,939 144,557 1,306,950 1,451,506
Heathmoore I (MI) - 3,353 232,064 2,091,928 2,323,992
Heathmoore II (MI) - 3,534 170,433 1,537,427 1,707,860
Heritage, The - 91,266 1,211,205 13,228,170 14,439,375
Heron Cove - 578,453 823,000 8,693,215 9,516,215
Heron Landing (J) 4,700 469,761 711,800 6,876,537 7,588,337
Heron Pointe - 538,442 1,546,700 8,342,856 9,889,556
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- -------------------------------------------------------------------------------------- LATEST INCOME
ACCUMULATED DATE OF STATEMENT (C)
APARTMENT NAME DEPRECIATION CONSTRUCTION
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gentian Oaks (13,817) 1985 30 Years
Georgian Woods Combined (REIT) (4,708,939) 1967 30 Years
Glen Arm Manor (13,819) 1986 30 Years
Glen Eagle (657,971) 1990 30 Years
GlenGarry Club (1,077,078) 1989 30 Years
Glenlake (1,341,810) 1988 30 Years
Glenridge (1,393,882) 1985 30 Years
Glenview (15,893) 1986 30 Years
Glenwood Village (14,184) 1986 30 Years
Governor's Pointe (2,071,813) 1982-1986 30 Years
Granada Highlands (616,003) 1972 30 Years
Grandview I & II (919,023) 1980 30 Years
Greenbriar Glen (18,554) 1988 30 Years
Greengate (1,780,427) 1971 30 Years
Greenglen (Day) (16,738) 1983 30 Years
Greenglen II (Lim) (7,469) 1981 30 Years
Greenglen II (Tol) (13,234) 1982 30 Years
Greenhaven (791,410) 1983 30 Years
Greenhouse - Frey Road (4,903,879) 1985 30 Years
Greenhouse - Holcomb Bridge (4,363,006) 1985 30 Years
Greenhouse - Roswell (2,525,185) 1985 30 Years
Greentree 1 (240,618) 1973 30 Years
Greentree 2 (136,124) 1973 30 Years
Greentree 3 (143,473) 1973 30 Years
Greenwich Woods (6,410,863) 1967 30 Years
Greenwood Village (1,349,731) 1984 30 Years
Grey Eagle (567,982) 1991 30 Years
Greystone (334,766) 1960 30 Years
Gwinnett Crossing (1,483,650) 1989/90 30 Years
Hall Place (198,701) 1998 30 Years
Hammock's Place (3,089,391) 1986 30 Years
Hampshire Court (8,413) 1982 30 Years
Hampshire II (10,487) 1981 30 Years
Hamptons (1,031,315) 1991 30 Years
Harbinwood (19,145) 1985 30 Years
Harbor Pointe (1,608,231) 1970/1990 30 Years
Harborview (1,337,178) 1985 30 Years
Harrison Park (1,256,808) 1985 30 Years
Hartwick (10,246) 1982 30 Years
Harvest Grove (872,861) 1986 30 Years
Harvest Grove I (14,069) 1986 30 Years
Harvest Grove II (12,252) 1987 30 Years
Hatcherway (8,439) 1986 30 Years
Hathaway (3,763,231) 1987 30 Years
Hayfield Park (21,110) 1986 30 Years
Haywood Pointe (435,792) 1985 30 Years
Hearthstone (1,101,530) 1982 30 Years
Heathmoore (Eva) (13,526) 1984 30 Years
Heathmoore (KY) (12,914) 1983 30 Years
Heathmoore (MI) (18,315) 1983 30 Years
Heathmoore I (IN) (11,949) 1983 30 Years
Heathmoore I (MI) (18,517) 1986 30 Years
Heathmoore II (MI) (13,772) 1986 30 Years
Heritage, The (968,755) 1995 30 Years
Heron Cove (1,838,946) 1987 30 Years
Heron Landing (J) (1,099,485) 1988 30 Years
Heron Pointe (849,081) 1989 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heron Pointe (Atl) Jacksonville, Fl 1,610,460 214,332 1,928,989
Heron Run Plantation, FL - 917,800 9,006,476
Hickory Creek Richmond, VA - 1,323,000 18,520,609
Hickory Mill Columbus, OH 1,055,961 161,714 1,455,430
Hickory Mill I Charleston, WV 934,166 129,187 1,162,681
Hickory Place Gainesville, GL 1,338,750 192,453 1,732,080
Hickory Ridge Greenville, SC - 285,800 2,591,930
Hidden Acres Sarasota, FL 1,646,801 253,139 2,278,249
Hidden Lakes Haltom City, TX - 1,872,000 20,242,109
Hidden Oaks Cary, NC - 1,176,200 10,614,135
Hidden Palms Tampa, FL (E) 2,048,000 6,380,289
Hidden Pines Orlando, FL 19,562 176,308 1,586,772
Hidden Valley Club Ann Arbor, MI - 915,000 7,342,020
High Points St. Petersburg, FL 1,056,641 222,308 2,000,769
Highland Creste Seattle, WA - 935,200 8,415,391
Highland Grove Stone Mt., GA - 1,665,700 15,010,714
Highland Point Denver, CO 9,886,746 1,631,900 14,684,439
Highline Oaks Denver, CO 7,100,000 1,055,000 9,748,823
Hillcrest Villas Ft. Walton Bch., FL 978,813 141,603 1,274,427
Hillside Manor Albany, GA 611,803 102,632 923,690
Hillside Trace Tampa, FL 1,058,133 138,888 1,249,992
Hollows Columbia, SC - 450,000 8,835,008
Holly Park Columbus, GA 790,970 138,418 1,245,760
Holly Ridge Miami, FL - 295,596 2,660,361
Holly Sands I Ft. Walton Bch.,FL 1,373,631 190,942 1,718,481
Holly Sands II Ft. Walton Bch., FL 1,037,680 124,578 1,121,198
Hollyview Silver Springs, MD - 189,000 1,506,539
Horizon Place Tampa, FL 12,475,333 2,128,000 12,086,937
Hunt Club Charlotte, NC - 1,090,000 17,992,887
Hunter Glen (IL) Springfield, IL 956,507 158,197 1,423,776
Hunter's Glen Chesterfield, MO - 913,500 8,230,595
Hunter's Green Fort Worth, TX (F) 524,200 3,653,481
Hunters Ridge/South Pointe St. Louis, MO 18,630,250 1,950,000 17,570,346
Huntington Hollow Tulsa, OK - 668,600 6,018,259
Huntington Park Everett, WA - 1,594,500 14,748,864
Idlewood Indianapolis, IN - 2,560,000 11,473,589
Independence Village Columbus, OH - 226,988 2,042,891
Indian Bend Phoenix, AZ - 1,072,500 9,675,133
Indian Lake I Atlanta, GA 4,207,504 839,669 7,557,017
Indian Tree Arvada, CO - 881,125 4,552,815
Indigo Plantation Daytona Beach, FL - 1,520,000 14,650,246
Indigo Springs Kent, WA 7,740,381 1,270,000 11,446,902
Ingleside, The Phoenix, AZ - 1,203,600 10,685,212
Iris Glen Atlanta, GA 1,785,000 270,458 2,434,122
Ironwood at the Ranch Wesminster, CO 5,808,479 1,493,300 13,439,305
Isle at Arrowhead Ranch Glendale, AZ - 1,650,237 19,533,715
Ivy Place (K) Atlanta, GA - 793,200 7,228,257
James Street Crossing Kent, WA 16,395,379 2,078,600 18,738,034
Jefferson at Walnut Creek Austin, TX (E) 2,736,000 14,598,337
Jefferson Way I Jacksonville, Fl 1,028,679 147,799 1,330,189
Junipers at Yarmouth Yarmouth, ME - 1,350,000 7,861,966
Jupiter Cove I W. Palm Beach, FL 1,637,684 233,932 2,105,392
Jupiter Cove III W. Palm Beach, FL 1,723,290 242,010 2,178,090
Kempton Downs Gresham, OR - 1,182,200 10,943,372
Ketwood Dayton, OH 1,605,298 266,443 2,397,989
Keystone Austin, TX 2,789,477 498,000 4,487,295
Kimmerly Glen Charlotte, NC - 1,040,000 12,406,969
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Heron Pointe (Atl) - 6,523 214,332 1,935,511 2,149,844
Heron Run - 806,918 917,800 9,813,395 10,731,195
Hickory Creek - 235,832 1,323,000 18,756,441 20,079,441
Hickory Mill - 13,342 161,714 1,468,772 1,630,486
Hickory Mill I - 931 129,187 1,163,612 1,292,799
Hickory Place - 439 192,453 1,732,519 1,924,973
Hickory Ridge 2,400 125,220 288,200 2,717,150 3,005,350
Hidden Acres - 10,113 253,139 2,288,362 2,541,501
Hidden Lakes - 87,354 1,872,000 20,329,463 22,201,463
Hidden Oaks 2,400 965,785 1,178,600 11,579,921 12,758,521
Hidden Palms 1,600 407,995 2,049,600 6,788,284 8,837,884
Hidden Pines - 2,970 176,308 1,589,741 1,766,049
Hidden Valley Club - 1,395,871 915,000 8,737,891 9,652,891
High Points - 6,383 222,308 2,007,152 2,229,460
Highland Creste - 385,329 935,200 8,800,720 9,735,920
Highland Grove 2,400 213,174 1,668,100 15,223,889 16,891,989
Highland Point - 342,409 1,631,900 15,026,848 16,658,748
Highline Oaks 2,400 337,844 1,057,400 10,086,666 11,144,066
Hillcrest Villas - 13,721 141,603 1,288,148 1,429,751
Hillside Manor - 5,484 102,632 929,173 1,031,806
Hillside Trace - 8,214 138,888 1,258,206 1,397,094
Hollows - 67,279 450,000 8,902,286 9,352,286
Holly Park - 9,271 138,418 1,255,031 1,393,449
Holly Ridge - 4,627 295,596 2,664,988 2,960,583
Holly Sands I - 13,513 190,942 1,731,994 1,922,936
Holly Sands II - 2,297 124,578 1,123,495 1,248,072
Hollyview 2,400 33,512 191,400 1,540,051 1,731,451
Horizon Place - 254,270 2,128,000 12,341,207 14,469,207
Hunt Club - 196,881 1,090,000 18,189,769 19,279,769
Hunter Glen (IL) - 2,428 158,197 1,426,204 1,584,402
Hunter's Glen 1,700 545,410 915,200 8,776,005 9,691,205
Hunter's Green 100 698,698 524,300 4,352,179 4,876,479
Hunters Ridge/South Pointe 5,600 1,115,090 1,955,600 18,685,436 20,641,036
Huntington Hollow - 186,853 668,600 6,205,112 6,873,712
Huntington Park 3,000 292,087 1,597,500 15,040,951 16,638,451
Idlewood 1,800 528,947 2,561,800 12,002,536 14,564,336
Independence Village - 9,506 226,988 2,052,397 2,279,385
Indian Bend 3,200 1,397,968 1,075,700 11,073,101 12,148,801
Indian Lake I - 25,941 839,669 7,582,957 8,422,626
Indian Tree 100 871,891 881,225 5,424,706 6,305,931
Indigo Plantation - 98,980 1,520,000 14,749,225 16,269,225
Indigo Springs 500 648,933 1,270,500 12,095,835 13,366,335
Ingleside, The - 72,304 1,203,600 10,757,516 11,961,116
Iris Glen - 6,212 270,458 2,440,334 2,710,792
Ironwood at the Ranch - 226,423 1,493,300 13,665,728 15,159,028
Isle at Arrowhead Ranch - 120,568 1,650,237 19,654,283 21,304,520
Ivy Place (K) 9,750 323,819 802,950 7,552,076 8,355,026
James Street Crossing 2,654 324,912 2,081,254 19,062,945 21,144,199
Jefferson at Walnut Creek 1,600 203,494 2,737,600 14,801,831 17,539,431
Jefferson Way I - 4,695 147,799 1,334,883 1,482,682
Junipers at Yarmouth 5,700 417,354 1,355,700 8,279,320 9,635,020
Jupiter Cove I - 12,397 233,932 2,117,789 2,351,722
Jupiter Cove III - 3,615 242,010 2,181,705 2,423,715
Kempton Downs 35,149 1,012,310 1,217,349 11,955,682 13,173,031
Ketwood - 11,007 266,443 2,408,996 2,675,439
Keystone 500 695,837 498,500 5,183,133 5,681,633
Kimmerly Glen - 93,533 1,040,000 12,500,502 13,540,502
<CAPTION>
LIFE USED TO
DESCRIPTION COMPUTE
- ----------------------------------------------------------------------------------- DEPRECIATION IN
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Heron Pointe (Atl) (17,926) 1986 30 Years
Heron Run (2,059,502) 1987 30 Years
Hickory Creek (865,310) 1984 30 Years
Hickory Mill (13,515) 1980 30 Years
Hickory Mill I (10,517) 1983 30 Years
Hickory Place (15,620) 1983 30 Years
Hickory Ridge (244,413) 1968 30 Years
Hidden Acres (21,345) 1987 30 Years
Hidden Lakes (909,260) 1996 30 Years
Hidden Oaks (987,908) 1988 30 Years
Hidden Palms (621,560) 1986 30 Years
Hidden Pines (14,253) 1981 30 Years
Hidden Valley Club (5,271,915) 1973 30 Years
High Points (18,484) 1986 30 Years
Highland Creste (931,911) 1989 30 Years
Highland Grove (1,255,285) 1988 30 Years
Highland Point (1,455,251) 1984 30 Years
Highline Oaks (952,996) 1986 30 Years
Hillcrest Villas (12,065) 1985 30 Years
Hillside Manor (8,871) 1985 30 Years
Hillside Trace (11,706) 1987 30 Years
Hollows (419,929) 1987 30 Years
Holly Park (11,912) 1985 30 Years
Holly Ridge (23,909) 1986 30 Years
Holly Sands I (15,944) 1985 30 Years
Holly Sands II (10,289) 1986 30 Years
Hollyview (125,799) 1965 30 Years
Horizon Place (586,978) 1985 30 Years
Hunt Club (829,308) 1990 30 Years
Hunter Glen (IL) (13,004) 1987 30 Years
Hunter's Glen (1,163,664) 1985 30 Years
Hunter's Green (1,229,116) 1981 30 Years
Hunters Ridge/South Pointe (1,866,301) 1986-1987 30 Years
Huntington Hollow (682,525) 1981 30 Years
Huntington Park (3,240,823) 1991 30 Years
Idlewood (1,036,708) 1991 30 Years
Independence Village (19,419) 1978 30 Years
Indian Bend (2,382,653) 1973 30 Years
Indian Lake I (67,778) 1987 30 Years
Indian Tree (1,553,220) 1983 30 Years
Indigo Plantation (681,686) 1989 30 Years
Indigo Springs (1,354,595) 1991 30 Years
Ingleside, The (770,952) 1995 30 Years
Iris Glen (21,884) 1984 30 Years
Ironwood at the Ranch (1,318,351) 1986 30 Years
Isle at Arrowhead Ranch (1,429,829) 1996 30 Years
Ivy Place (K) (1,041,136) 1978 30 Years
James Street Crossing (1,434,987) 1989 30 Years
Jefferson at Walnut Creek (1,220,695) 1994 30 Years
Jefferson Way I (12,134) 1987 30 Years
Junipers at Yarmouth (870,172) 1970 30 Years
Jupiter Cove I (18,963) 1987 30 Years
Jupiter Cove III (19,306) 1987 30 Years
Kempton Downs (2,233,649) 1990 30 Years
Ketwood (21,828) 1979 30 Years
Keystone (1,100,519) 1981 30 Years
Kimmerly Glen (579,229) 1986 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kings Colony Savannah, GA 2,084,325 230,149 2,071,343
Kingsport Alexandria, VA - 1,262,250 12,479,294
Kirby Place Houston, TX (E) 3,620,000 25,914,555
Knox Landing Knoxville, TN 1,551,481 158,589 1,427,298
La Costa Brava (ORL) Orlando, FL - 206,626 4,610,502
La Mariposa Mesa, AZ (O) 2,047,539 12,466,128
La Mirage San Diego, CA - 34,895,200 93,909,311
La Reserve Oro Valley, AZ (O) 3,264,562 4,936,546
La Tour Fontaine Houston, TX 9,610,482 2,916,000 15,917,178
La Valencia Mesa, AZ - 3,553,350 20,542,396
Ladera Mesa, AZ 10,906,931 2,978,879 20,640,453
Lake in the Woods (MI) Ypsilanti, MI - 1,859,625 18,283,831
Lake Point Charlotte, NC - 1,058,975 13,587,338
Lakes at Vinings Atlanta, GA 22,200,684 6,496,000 21,857,927
Lakeshore at Preston Plano, TX 12,933,907 3,322,000 15,211,713
Lakeshore I (GA) Chattanooga, TN 1,236,015 169,375 1,524,375
Lakeville Resort Petaluma, CA 20,367,547 2,734,100 24,610,651
Lakewood Greens Dallas, TX 8,293,081 2,016,000 9,032,159
Lakewood Oaks Dallas, TX - 1,630,200 14,686,192
Lamplight Court Columbus, OH - 70,517 634,654
Landera San Antonio, TX - 766,300 6,896,811
Landings (FL), The Winterhaven, FL 716,235 130,953 1,178,580
Landings (TN) Memphis, TN - 1,314,000 14,090,109
Larkspur I (Hil) Columbus, OH 993,689 179,628 1,616,653
Larkspur I (Mor) Dayton, OH 452,555 55,416 498,745
Larkspur II Dayton, OH - 29,908 269,168
Larkspur Woods Sacramento, CA (E) 5,800,000 14,539,036
Laurel Bay Detroit, MI 859,412 186,004 1,674,035
Laurel Court Toledo, OH 1,116,603 135,736 1,221,621
Laurel Gardens Coral Springs, FL - 4,800,000 25,942,631
Laurel Glen Atlanta, GA 1,701,792 289,509 2,605,582
Laurel Ridge Chapel Hill, NC - 160,000 3,594,635
Legends Tucson, AZ - 2,729,788 17,911,434
Lexington Farm Alpharetta, GA 18,455,654 3,520,000 21,063,101
Lexington Glen Atlanta, GA - 5,760,000 40,190,507
Lexington Park Orlando, FL - 2,016,000 12,346,726
Lincoln at Defoors Atlanta, GA - 5,100,000 20,425,822
Lincoln Green I San Antonio, TX - 947,366 5,833,661
Lincoln Green I & II (CA) Sunnyvale, CA 12,727,505 9,048,000 18,483,642
Lincoln Green II San Antonio, TX - 1,052,340 5,212,696
Lincoln Green III San Antonio, TX - 536,010 1,828,661
Lincoln Heights Quincy, MA 21,409,834 5,925,000 33,595,262
Lincoln Village I & II (CA) Larkspur, CA - 17,100,000 31,399,237
Lindendale Columbus, OH 1,382,143 209,159 1,882,427
Link Terrace Savannah, GA 898,724 121,839 1,096,547
Little Cottonwoods Tempe, AZ (O) 3,050,133 26,991,689
Lodge (OK), The Tulsa, OK - 313,571 3,023,363
Lodge (TX), The San Antonio, TX - 1,363,636 8,737,564
Lofton Place Tampa, FL - 2,240,000 16,679,214
Longfellow Place - Combined Boston, MA - 53,164,160 184,021,737
Longwood Decatur, GA - 1,452,000 13,087,837
Longwood (KY) Lexington,KY 943,932 146,309 1,316,781
Madison at Cedar Springs Dallas, TX - 2,470,000 33,194,620
Madison at Chase Oaks Plano, TX - 3,055,000 28,932,885
Madison at River Sound Lawrenceville, GA - 3,666,999 47,387,106
Madison at Round Grove Austin, TX - 2,626,000 25,682,373
Madison at Stone Creek Lewisville, TX - 2,535,000 22,611,700
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kings Colony - 8,117 230,149 2,079,460 2,309,609
Kingsport - 982,079 1,262,250 13,461,373 14,723,623
Kirby Place 1,600 258,979 3,621,600 26,173,534 29,795,134
Knox Landing - 6,373 158,589 1,433,671 1,592,259
La Costa Brava (ORL) - 2,638,716 206,626 7,249,218 7,455,844
La Mariposa - 318,757 2,047,539 12,784,885 14,832,424
La Mirage - 2,665,264 34,895,200 96,574,575 131,469,775
La Reserve - 218,849 3,264,562 5,155,395 8,419,957
La Tour Fontaine - 107,312 2,916,000 16,024,490 18,940,490
La Valencia - 678,386 3,553,350 21,220,782 24,774,132
Ladera - 82,888 2,978,879 20,723,341 23,702,220
Lake in the Woods (MI) - 5,889,551 1,859,625 24,173,382 26,033,007
Lake Point - 114,443 1,058,975 13,701,781 14,760,756
Lakes at Vinings 2,000 209,564 6,498,000 22,067,492 28,565,492
Lakeshore at Preston 3,800 117,521 3,325,800 15,329,235 18,655,035
Lakeshore I (GA) - 34,990 169,375 1,559,365 1,728,740
Lakeville Resort 2,400 855,402 2,736,500 25,466,053 28,202,553
Lakewood Greens 3,600 254,494 2,019,600 9,286,654 11,306,254
Lakewood Oaks 1,400 870,899 1,631,600 15,557,091 17,188,691
Lamplight Court - 15,753 70,517 650,407 720,924
Landera - 294,058 766,300 7,190,869 7,957,169
Landings (FL), The - 15,445 130,953 1,194,025 1,324,978
Landings (TN) - 249,510 1,314,000 14,339,619 15,653,619
Larkspur I (Hil) - 3,697 179,628 1,620,350 1,799,978
Larkspur I (Mor) - 2,813 55,416 501,558 556,974
Larkspur II - 718 29,908 269,886 299,794
Larkspur Woods 2,900 366,134 5,802,900 14,905,170 20,708,070
Laurel Bay - 2,119 186,004 1,676,154 1,862,158
Laurel Court - 3,331 135,736 1,224,951 1,360,687
Laurel Gardens - 258,894 4,800,000 26,201,525 31,001,525
Laurel Glen - 5,312 289,509 2,610,894 2,900,403
Laurel Ridge 22,551 1,467,459 182,551 5,062,094 5,244,644
Legends - 205,304 2,729,788 18,116,738 20,846,526
Lexington Farm 1,900 146,849 3,521,900 21,209,949 24,731,849
Lexington Glen - 180,007 5,760,000 40,370,514 46,130,514
Lexington Park - 314,673 2,016,000 12,661,398 14,677,398
Lincoln at Defoors - 154,794 5,100,000 20,580,616 25,680,616
Lincoln Green I - 255,937 947,366 6,089,598 7,036,964
Lincoln Green I & II (CA) 9,300 106,511 9,057,300 18,590,153 27,647,453
Lincoln Green II - 705,958 1,052,340 5,918,654 6,970,994
Lincoln Green III - 273,656 536,010 2,102,317 2,638,327
Lincoln Heights 3,400 229,981 5,928,400 33,825,243 39,753,643
Lincoln Village I & II (CA) 7,300 2,054,383 17,107,300 33,453,620 50,560,920
Lindendale - 5,305 209,159 1,887,732 2,096,890
Link Terrace - 3,896 121,839 1,100,443 1,222,282
Little Cottonwoods - 308,845 3,050,133 27,300,534 30,350,667
Lodge (OK), The (200) 930,879 313,371 3,954,242 4,267,613
Lodge (TX), The - 630,444 1,363,636 9,368,009 10,731,645
Lofton Place - 609,388 2,240,000 17,288,602 19,528,602
Longfellow Place - Combined - 424,740 53,164,160 184,446,477 237,610,637
Longwood 2,048 518,830 1,454,048 13,606,667 15,060,715
Longwood (KY) - 4,531 146,309 1,321,312 1,467,621
Madison at Cedar Springs - 69,228 2,470,000 33,263,848 35,733,848
Madison at Chase Oaks - 140,773 3,055,000 29,073,658 32,128,658
Madison at River Sound - 68,178 3,666,999 47,455,284 51,122,283
Madison at Round Grove - 145,729 2,626,000 25,828,103 28,454,103
Madison at Stone Creek - 150,265 2,535,000 22,761,964 25,296,964
</TABLE>
<TABLE>
<CAPTION>
LIFE USED TO
DESCRIPTION COMPUTE
- -------------------------------------------------------------------------------- DEPRECIATION IN
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kings Colony (19,070) 1987 30 Years
Kingsport (2,811,542) 1986 30 Years
Kirby Place (2,033,124) 1994 30 Years
Knox Landing (13,477) 1986 30 Years
La Costa Brava (ORL) (4,129,893) 1967 30 Years
La Mariposa (981,457) 1986 30 Years
La Mirage (8,319,235) 1988/1992 30 Years
La Reserve (455,305) 1988 30 Years
La Tour Fontaine (696,631) 1994 30 Years
La Valencia (1,610,709) 1998 30 Years
Ladera (1,488,588) 1995 30 Years
Lake in the Woods (MI) (13,445,220) 1969 30 Years
Lake Point (640,515) 1984 30 Years
Lakes at Vinings (1,211,285) 1972/1975 30 Years
Lakeshore at Preston (841,484) 1992 30 Years
Lakeshore I (GA) (14,995) 1986 30 Years
Lakeville Resort (3,060,894) 1984 30 Years
Lakewood Greens (531,387) 1986 30 Years
Lakewood Oaks (3,233,391) 1987 30 Years
Lamplight Court (6,401) 1972 30 Years
Landera (740,084) 1983 30 Years
Landings (FL), The (11,203) 1984 30 Years
Landings (TN) (653,435) 1986 30 Years
Larkspur I (Hil) (14,581) 1983 30 Years
Larkspur I (Mor) (4,721) 1982 30 Years
Larkspur II (2,535) 1984 30 Years
Larkspur Woods (1,218,608) 1989/1993 30 Years
Laurel Bay (15,167) 1989 30 Years
Laurel Court (11,448) 1978 30 Years
Laurel Gardens (1,169,799) 1989 30 Years
Laurel Glen (23,262) 1986 30 Years
Laurel Ridge (2,749,488) 1975 30 Years
Legends (1,353,986) 1995 30 Years
Lexington Farm (1,129,048) 1995 30 Years
Lexington Glen (1,792,637) 1990 30 Years
Lexington Park (582,892) 1988 30 Years
Lincoln at Defoors (459,955) 1980 30 Years
Lincoln Green I (3,203,644) 1984/1986 30 Years
Lincoln Green I & II (CA) (980,932) 1979 30 Years
Lincoln Green II (2,703,798) 1984/1986 30 Years
Lincoln Green III (991,219) 1984/1986 30 Years
Lincoln Heights (2,415,021) 1991 30 Years
Lincoln Village I & II (CA) (1,816,235) 1980 30 Years
Lindendale (17,177) 1987 30 Years
Link Terrace (10,110) 1984 30 Years
Little Cottonwoods (1,989,161) 1984 30 Years
Lodge (OK), The (2,419,623) 1979 30 Years
Lodge (TX), The (3,827,792) 1979(#) 30 Years
Lofton Place (780,117) 1988 30 Years
Longfellow Place - Combined (2,668,333) 1975 30 Years
Longwood (2,905,506) 1992 30 Years
Longwood (KY) (12,100) 1985 30 Years
Madison at Cedar Springs (1,451,112) 1995 30 Years
Madison at Chase Oaks (1,299,365) 1995 30 Years
Madison at River Sound (2,096,164) 1996 30 Years
Madison at Round Grove (1,158,009) 1995 30 Years
Madison at Stone Creek (1,026,234) 1995 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Madison at the Arboretum Austin, TX - 1,046,500 9,638,269
Madison on Melrose Richardson, TX - 1,300,000 15,067,256
Madison on the Parkway Dallas, TX - 2,444,000 22,482,051
Mallard Cove Greenville, SC - 803,700 7,322,311
Mallard Cove at Conway Orlando, FL - 600,000 2,555,069
Mallgate Louisville, KY - - 6,702,515
Marabou Mills I Indianpolis, IN 1,412,119 224,178 2,017,602
Marabou Mills II Indianpolis, IN 959,880 192,186 1,729,676
Marabou Mills III Indianpolis, IN 1,176,908 171,557 1,544,010
Marbrisa Tampa, FL - 811,500 7,313,488
Mariner Club (FL) Pembroke Pines, FL 9,501,055 1,824,000 20,771,566
Mariners Wharf Orange Park, FL - 1,858,800 16,744,951
Mark Landing I Miami, FL 1,307,433 191,986 1,727,872
Marks Englewood, CO 20,560,000 4,928,500 44,418,180
Marquessa Corona Hills, CA (U) 6,888,500 21,604,584
Marsh Landing I Brunswick, GA 776,149 133,193 1,198,735
Marshlanding II Brunswick, GA 952,036 111,187 1,000,684
Martha Lake Seattle, WA - 823,200 7,405,070
Martins Landing Roswell, GA 12,745,735 4,800,000 12,949,891
Marymont (MD) Laurel, MD - 1,901,800 17,135,393
McAlpine Ridge Charlotte, NC - 1,283,400 11,557,252
McDowell Place Naperville, IL 15,786,052 2,578,900 23,211,919
Meadow Creek Tigard, OR 8,209,235 1,298,100 11,692,425
Meadowland Athens, GA 983,511 152,395 1,371,552
Meadowood (Cin) Cincinnati, OH 1,776,638 330,734 2,976,610
Meadowood (Cra) Indianpolis, IN 1,098,209 132,471 1,192,235
Meadowood (Cuy) Akron, OH 1,286,594 201,407 1,812,659
Meadowood (FL) Huntington, KY 862,397 96,350 867,146
Meadowood (Fra) Franklin, IN 1,021,963 129,252 1,163,264
Meadowood (Log) Southbend, IN - 93,338 840,044
Meadowood (New) Evansville, IN 981,203 131,546 1,183,914
Meadowood (Nic) Lexington,KY 1,401,249 173,223 1,559,007
Meadowood (Tem) Toledo, MI 1,340,000 173,675 1,563,071
Meadowood (Wel) Youngstown, OH - 58,570 527,133
Meadowood Apts. (Man) Mansfield, OH 937,100 118,504 1,066,538
Meadowood I (GA) Atlanta, GA 986,986 205,468 1,849,208
Meadowood I (MI) Jackson, MI 944,458 146,208 1,315,871
Meadowood I (OH) Columbus, OH 1,016,762 146,912 1,322,211
Meadowood II (FL) Orlando, FL 823,042 160,367 1,443,300
Meadowood II (GA) Atlanta, GA 883,550 176,968 1,592,713
Meadowood II (IN) Indianpolis, IN 708,179 122,626 1,103,630
Meadowood II (OH) Columbus, OH 484,068 57,802 520,217
Meadows I (OH), The Columbus, OH 785,201 150,800 1,357,203
Meadows II (OH), The Columbus, OH 1,158,433 186,636 1,679,728
Meadows in the Park Birmingham, AL - 1,000,000 8,533,099
Meadows on the Lake Birmingham, AL - 1,000,000 8,529,726
Meldon Place Toledo, OH 2,400,695 288,434 2,595,904
Merrifield Hagerstown, MD 2,045,897 268,712 2,418,407
Merrill Creek Tacoma, WA - 814,200 7,330,606
Merrimac Woods Costa Mesa, CA - 673,300 6,081,677
Merritt at Satellite Place Duluth, GA - 3,400,000 29,919,407
Miguel Place St. Petersburg, FL 1,469,356 199,349 1,794,141
Mill Pond Millersville, MD 7,912,334 2,880,000 8,931,260
Mill Run Savannah, GA 1,519,728 198,212 1,783,904
Mill Village Randolph, MA - 6,200,000 13,221,679
Millburn Akron, OH 1,205,695 192,062 1,728,558
Millburn Court II Dayton, OH 908,789 122,870 1,105,834
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Madison at the Arboretum - 166,261 1,046,500 9,804,530 10,851,030
Madison on Melrose - 47,134 1,300,000 15,114,390 16,414,390
Madison on the Parkway - 105,958 2,444,000 22,588,009 25,032,009
Mallard Cove 9,650 664,534 813,350 7,986,845 8,800,195
Mallard Cove at Conway - 4,872,430 600,000 7,427,499 8,027,499
Mallgate - 4,537,936 - 11,240,451 11,240,451
Marabou Mills I - 5,162 224,178 2,022,764 2,246,942
Marabou Mills II - 14,463 192,186 1,744,139 1,936,326
Marabou Mills III - 3,234 171,557 1,547,244 1,718,801
Marbrisa 2,000 2,147,386 813,500 9,460,873 10,274,373
Mariner Club (FL) 500 188,748 1,824,500 20,960,314 22,784,814
Mariners Wharf 2,400 239,255 1,861,200 16,984,206 18,845,406
Mark Landing I - 1,963 191,986 1,729,835 1,921,821
Marks - 882,561 4,928,500 45,300,740 50,229,240
Marquessa - 591,208 6,888,500 22,195,792 29,084,292
Marsh Landing I - 5,347 133,193 1,204,082 1,337,275
Marshlanding II - 8,237 111,187 1,008,920 1,120,108
Martha Lake (2,000) 130,462 821,200 7,535,532 8,356,732
Martins Landing 2,000 247,544 4,802,000 13,197,435 17,999,435
Marymont (MD) 2,000 657,214 1,903,800 17,792,607 19,696,407
McAlpine Ridge 600 838,514 1,284,000 12,395,765 13,679,765
McDowell Place 1,500 930,783 2,580,400 24,142,702 26,723,102
Meadow Creek 1,000 1,198,268 1,299,100 12,890,692 14,189,792
Meadowland - 3,056 152,395 1,374,608 1,527,003
Meadowood (Cin) - 6,878 330,734 2,983,488 3,314,223
Meadowood (Cra) - 17,543 132,471 1,209,778 1,342,248
Meadowood (Cuy) - 2,097 201,407 1,814,756 2,016,162
Meadowood (FL) - 17,574 96,350 884,720 981,069
Meadowood (Fra) - 6,951 129,252 1,170,215 1,299,467
Meadowood (Log) - 8,342 93,338 848,386 941,724
Meadowood (New) - 7,844 131,546 1,191,758 1,323,304
Meadowood (Nic) - 30,448 173,223 1,589,455 1,762,678
Meadowood (Tem) - 2,064 173,675 1,565,136 1,738,810
Meadowood (Wel) - 796 58,570 527,929 586,499
Meadowood Apts. (Man) - 2,403 118,504 1,068,942 1,187,446
Meadowood I (GA) - 3,322 205,468 1,852,530 2,057,997
Meadowood I (MI) - 2,165 146,208 1,318,035 1,464,243
Meadowood I (OH) - 7,343 146,912 1,329,554 1,476,467
Meadowood II (FL) - 1,943 160,367 1,445,243 1,605,609
Meadowood II (GA) - 5,264 176,968 1,597,977 1,774,945
Meadowood II (IN) - 3,501 122,626 1,107,131 1,229,756
Meadowood II (OH) - 471 57,802 520,688 578,490
Meadows I (OH), The - 8,655 150,800 1,365,858 1,516,658
Meadows II (OH), The - 4,861 186,636 1,684,589 1,871,226
Meadows in the Park 900 525,288 1,000,900 9,058,388 10,059,288
Meadows on the Lake 900 24,124 1,000,900 8,553,850 9,554,750
Meldon Place - 7,891 288,434 2,603,794 2,892,228
Merrifield - 5,194 268,712 2,423,601 2,692,313
Merrill Creek - 96,201 814,200 7,426,806 8,241,006
Merrimac Woods 2,400 500,505 675,700 6,582,182 7,257,882
Merritt at Satellite Place - 3,102 3,400,000 29,922,509 33,322,509
Miguel Place - 6,348 199,349 1,800,489 1,999,838
Mill Pond - 289,776 2,880,000 9,221,037 12,101,037
Mill Run - 3,278 198,212 1,787,182 1,985,393
Mill Village (14,700) 302,028 6,185,300 13,523,707 19,709,007
Millburn - 2,457 192,062 1,731,015 1,923,077
Millburn Court II - 6,623 122,870 1,112,457 1,235,327
</TABLE>
<TABLE>
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- --------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Madison at the Arboretum (445,081) 1995 30 Years
Madison on Melrose (666,001) 1995 30 Years
Madison on the Parkway (1,010,063) 1995 30 Years
Mallard Cove (1,164,556) 1983 30 Years
Mallard Cove at Conway (4,733,928) 1974 30 Years
Mallgate (7,354,306) 1969 30 Years
Marabou Mills I (18,412) 1986 30 Years
Marabou Mills II (15,857) 1987 30 Years
Marabou Mills III (14,005) 1987 30 Years
Marbrisa (1,289,391) 1984 30 Years
Mariner Club (FL) (938,007) 1988 30 Years
Mariners Wharf (1,382,369) 1989 30 Years
Mark Landing I (15,636) 1987 30 Years
Marks (4,281,090) 1987 30 Years
Marquessa (1,673,748) 1992 30 Years
Marsh Landing I (11,068) 1984 30 Years
Marshlanding II (9,409) 1986 30 Years
Martha Lake (731,255) 1991 30 Years
Martins Landing (739,426) 1972 30 Years
Marymont (MD) (3,476,900) 1987-88 30 Years
McAlpine Ridge (2,492,628) 1989-90 30 Years
McDowell Place (2,820,106) 1988 30 Years
Meadow Creek (2,731,776) 1985 30 Years
Meadowland (12,492) 1984 30 Years
Meadowood (Cin) (26,751) 1985 30 Years
Meadowood (Cra) (11,341) 1983 30 Years
Meadowood (Cuy) (16,221) 1985 30 Years
Meadowood (FL) (8,532) 1983 30 Years
Meadowood (Fra) (10,820) 1983 30 Years
Meadowood (Log) (7,854) 1984 30 Years
Meadowood (New) (11,187) 1984 30 Years
Meadowood (Nic) (14,491) 1983 30 Years
Meadowood (Tem) (14,019) 1984 30 Years
Meadowood (Wel) (5,088) 1986 30 Years
Meadowood Apts. (Man) (9,775) 1983 30 Years
Meadowood I (GA) (16,546) 1982 30 Years
Meadowood I (MI) (11,846) 1983 30 Years
Meadowood I (OH) (12,120) 1984 30 Years
Meadowood II (FL) (13,009) 1980 30 Years
Meadowood II (GA) (14,319) 1984 30 Years
Meadowood II (IN) (10,529) 1986 30 Years
Meadowood II (OH) (4,727) 1985 30 Years
Meadows I (OH), The (12,593) 1985 30 Years
Meadows II (OH), The (15,199) 1987 30 Years
Meadows in the Park (718,147) 1986 30 Years
Meadows on the Lake (652,281) 1987 30 Years
Meldon Place (24,002) 1978 30 Years
Merrifield (21,850) 1988 30 Years
Merrill Creek (712,427) 1994 30 Years
Merrimac Woods (834,633) 1970 30 Years
Merritt at Satellite Place (256,094) 1999 30 Years
Miguel Place (16,667) 1987 30 Years
Mill Pond (335,570) 1984 30 Years
Mill Run (16,459) 1986 30 Years
Mill Village (1,045,059) 1971/1977 30 Years
Millburn (15,339) 1984 30 Years
Millburn Court II (10,292) 1981 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Millston I Cincinnati, OH 443,126 73,599 662,395
Millston II Cincinnati, OH 329,988 59,830 538,472
Mirador Phoenix, AZ - 2,597,518 23,402,200
Mission Bay Orlando, FL - 2,432,000 21,623,560
Mission Palms Tucson, AZ - 2,023,400 18,209,315
Misty Woods Cary, NC - 720,790 18,063,934
Montgomery Court I (MI) Lansing, MI 1,213,411 156,298 1,406,680
Montgomery Court I (OH) Columbus, OH 1,280,843 163,755 1,473,796
Montgomery Court II (OH) Columbus, OH 795,450 149,734 1,347,604
Montierra Scottsdale, AZ - 3,455,000 17,269,841
Montrose Square Columbus, OH 1,699,852 193,266 1,739,394
Morgan Trace Atlanta, GA 1,437,958 239,102 2,151,922
Morningside Scottsdale, AZ (O) 670,470 12,607,976
Morningside (FL) Titusville, FL - 197,890 1,781,006
Mosswood I Orlando, FL 785,201 163,294 1,469,644
Mosswood II Orlando, FL 1,534,000 275,330 2,477,969
Mountain Park Ranch Phoenix, AZ (P) 1,662,332 18,260,276
Mountain Run Albuquerque, NM - 2,023,400 20,734,818
Mountain Terrace Stevenson Ranch, CA - 3,977,200 35,826,520
Newberry I Lansing, MI 1,144,691 183,509 1,651,580
Newberry II Lansing, MI 1,235,839 142,292 1,280,632
Newport Heights Seattle, WA - 390,700 3,522,780
North Creek (Everett) Evertt, WA 8,157,506 3,960,000 12,411,015
North Creek Heights Seattle, WA - 753,800 6,786,778
North Hill Atlanta, GA 16,060,957 2,520,000 18,550,989
Northampton 1 Largo, MD 20,380,296 1,843,200 17,397,514
Northampton 2 Largo, MD - 1,494,100 14,464,432
Northgate Village San Antonio, TX - 660,000 5,974,145
Northlake (FL) Jacksonville, FL - 1,166,000 10,514,526
Northridge Pleasant Hill, CA - 5,525,000 14,695,328
Northridge (GA) Atlanta, GA 968,755 238,811 2,149,295
Northrup Court I Pittsburgh, PA 1,375,701 189,246 1,703,213
Northrup Court II Pittsburgh, PA 886,769 157,190 1,414,713
Northwoods Village Cary, NC (E) 1,368,000 11,460,337
Nova Glen I Daytona Beach, FL - 142,086 1,278,771
Nova Glen II Daytona Beach, FL 1,284,043 175,168 1,576,511
Novawood I Daytona Beach, FL 310,000 122,311 1,100,803
Novawood II Daytona Beach, FL 720,993 144,401 1,299,613
Oak Gardens Miami, FL - 329,968 2,969,711
Oak Mill 2 Germantown, MD 9,507,486 854,000 8,230,187
Oak Park North Agoura Hills, CA (N) 1,706,500 15,362,666
Oak Park South Agoura Hills, CA (N) 1,683,400 15,154,608
Oak Ridge Orlando, FL 1,217,944 173,617 1,562,552
Oak Shade Daytona Beach, FL 1,467,867 229,403 2,064,627
Oakley Woods Atlanta, GA 1,131,397 165,449 1,489,040
Oaks (NC) Charlotte, NC - 2,196,744 23,601,540
Oaks of Lakebridge Ormond Beach, FL - 413,700 3,912,636
Oakwood Manor Miami, FL - 173,247 1,559,222
Oakwood Village (FL) St. Petersburg, FL 721,523 145,547 1,309,922
Oakwood Village (GA) Augusta, GA 1,054,585 161,174 1,450,567
Ocean Walk Key West, FL 21,099,078 2,834,900 25,531,749
Old Archer Court Gainesville, FL 993,263 170,323 1,532,911
Olde Redmond Place Redmond, WA 9,274,306 4,800,000 14,126,038
Olentangy Commons (OH) Columbus, OH - 3,032,336 22,821,061
Olivewood (MI) Detriot, MI 3,339,425 519,167 4,672,501
Olivewood I Indianapolis, IN 932,086 184,701 1,662,312
Olivewood II Indianapolis, IN 1,292,000 186,235 1,676,111
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Millston I - 4,213 73,599 666,609 740,208
Millston II - (963) 59,830 537,508 597,338
Mirador - 168,298 2,597,518 23,570,498 26,168,016
Mission Bay - 195,874 2,432,000 21,819,435 24,251,435
Mission Palms - 422,331 2,023,400 18,631,646 20,655,046
Misty Woods - 1,111,837 720,790 19,175,771 19,896,561
Montgomery Court I (MI) - 7,186 156,298 1,413,866 1,570,164
Montgomery Court I (OH) - 42,777 163,755 1,516,573 1,680,328
Montgomery Court II (OH) - 3,890 149,734 1,351,494 1,501,228
Montierra - 21,931 3,455,000 17,291,772 20,746,772
Montrose Square - 10,725 193,266 1,750,119 1,943,385
Morgan Trace - 3,035 239,102 2,154,957 2,394,059
Morningside - 155,496 670,470 12,763,472 13,433,942
Morningside (FL) - 18,926 197,890 1,799,932 1,997,821
Mosswood I - 9,206 163,294 1,478,849 1,642,143
Mosswood II - 8,596 275,330 2,486,565 2,761,895
Mountain Park Ranch - 327,404 1,662,332 18,587,680 20,250,012
Mountain Run 280,600 719,179 2,304,000 21,453,997 23,757,997
Mountain Terrace (10,700) 478,785 3,966,500 36,305,304 40,271,804
Newberry I - 8,340 183,509 1,659,920 1,843,429
Newberry II - 6,463 142,292 1,287,095 1,429,387
Newport Heights 500 304,974 391,200 3,827,754 4,218,954
North Creek (Everett) 7,500 172,724 3,967,500 12,583,739 16,551,239
North Creek Heights - 129,466 753,800 6,916,244 7,670,044
North Hill 5,300 3,450,464 2,525,300 22,001,453 24,526,753
Northampton 1 - 2,356,521 1,843,200 19,754,035 21,597,235
Northampton 2 19,400 449,175 1,513,500 14,913,607 16,427,107
Northgate Village 100 698,354 660,100 6,672,499 7,332,599
Northlake (FL) 2,400 218,250 1,168,400 10,732,777 11,901,177
Northridge 2,800 582,926 5,527,800 15,278,254 20,806,054
Northridge (GA) - 4,854 238,811 2,154,149 2,392,960
Northrup Court I - 973 189,246 1,704,186 1,893,432
Northrup Court II - 2,427 157,190 1,417,140 1,574,330
Northwoods Village 1,700 529,690 1,369,700 11,990,027 13,359,727
Nova Glen I - 7,932 142,086 1,286,703 1,428,789
Nova Glen II - 7,642 175,168 1,584,152 1,759,320
Novawood I - 4,051 122,311 1,104,854 1,227,165
Novawood II - 4,217 144,401 1,303,830 1,448,232
Oak Gardens - 5,526 329,968 2,975,237 3,305,205
Oak Mill 2 133 1,192,091 854,133 9,422,277 10,276,410
Oak Park North 400 131,674 1,706,900 15,494,340 17,201,240
Oak Park South 400 266,763 1,683,800 15,421,370 17,105,170
Oak Ridge - 5,442 173,617 1,567,994 1,741,611
Oak Shade - 4,303 229,403 2,068,930 2,298,333
Oakley Woods - 27,803 165,449 1,516,842 1,682,291
Oaks (NC) - 91,742 2,196,744 23,693,282 25,890,026
Oaks of Lakebridge 2,100 460,951 415,800 4,373,586 4,789,386
Oakwood Manor - 5,410 173,247 1,564,633 1,737,880
Oakwood Village (FL) - 6,046 145,547 1,315,967 1,461,514
Oakwood Village (GA) - 3,466 161,174 1,454,033 1,615,207
Ocean Walk 3,849 284,742 2,838,749 25,816,491 28,655,239
Old Archer Court - 5,323 170,323 1,538,234 1,708,558
Olde Redmond Place 7,100 129,092 4,807,100 14,255,130 19,062,230
Olentangy Commons (OH) - 7,556,896 3,032,336 30,377,957 33,410,293
Olivewood (MI) - 27,383 519,167 4,699,883 5,219,050
Olivewood I - 7,258 184,701 1,669,571 1,854,272
Olivewood II - 7,750 186,235 1,683,861 1,870,096
</TABLE>
<TABLE>
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- -------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Millston I (6,563) 1981 30 Years
Millston II (5,088) 1982 30 Years
Mirador (1,709,124) 1995 30 Years
Mission Bay (972,490) 1991 30 Years
Mission Palms (1,832,997) 1980 30 Years
Misty Woods (890,158) 1984 30 Years
Montgomery Court I (MI) (12,993) 1984 30 Years
Montgomery Court I (OH) (14,001) 1985 30 Years
Montgomery Court II (OH) (12,301) 1986 30 Years
Montierra (457,154) 1999 30 Years
Montrose Square (17,088) 1987 30 Years
Morgan Trace (19,367) 1986 30 Years
Morningside (933,893) 1989 30 Years
Morningside (FL) (18,468) 1984 30 Years
Mosswood I (13,463) 1981 30 Years
Mosswood II (22,392) 1982 30 Years
Mountain Park Ranch (1,382,379) 1994 30 Years
Mountain Run (2,141,282) 1985 30 Years
Mountain Terrace (3,982,884) 1992 30 Years
Newberry I (15,010) 1985 30 Years
Newberry II (11,642) 1986 30 Years
Newport Heights (822,936) 1985 30 Years
North Creek (Everett) (647,951) 1986 30 Years
North Creek Heights (661,310) 1990 30 Years
North Hill (2,343,974) 1984 30 Years
Northampton 1 (4,473,537) 1977 30 Years
Northampton 2 (2,884,167) 1988 30 Years
Northgate Village (1,794,088) 1984 30 Years
Northlake (FL) (899,665) 1989 30 Years
Northridge (918,027) 1974 30 Years
Northridge (GA) (19,311) 1985 30 Years
Northrup Court I (15,234) 1985 30 Years
Northrup Court II (12,671) 1985 30 Years
Northwoods Village (1,019,828) 1986 30 Years
Nova Glen I (11,918) 1984 30 Years
Nova Glen II (14,746) 1986 30 Years
Novawood I (10,198) 1980 30 Years
Novawood II (11,956) 1980 30 Years
Oak Gardens (26,651) 1988 30 Years
Oak Mill 2 (1,667,080) 1985 30 Years
Oak Park North (2,252,250) 1990 30 Years
Oak Park South (2,424,736) 1989 30 Years
Oak Ridge (14,326) 1985 30 Years
Oak Shade (18,744) 1985 30 Years
Oakley Woods (13,965) 1984 30 Years
Oaks (NC) (1,056,167) 1996 30 Years
Oaks of Lakebridge (1,117,621) 1984 30 Years
Oakwood Manor (14,203) 1986 30 Years
Oakwood Village (FL) (12,299) 1986 30 Years
Oakwood Village (GA) (13,370) 1985 30 Years
Ocean Walk (1,899,755) 1990 30 Years
Old Archer Court (14,160) 1977 30 Years
Olde Redmond Place (769,558) 1986 30 Years
Olentangy Commons (OH) (19,008,907) 1972 30 Years
Olivewood (MI) (42,683) 1986 30 Years
Olivewood I (15,038) 1985 30 Years
Olivewood II (15,261) 1986 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One Eton Square Tulsa, OK -- 1,570,100 14,130,937
Orange Grove Village Tucson, AZ (O) 1,813,154 14,893,347
Orchard Ridge Seattle, WA -- 482,600 4,372,033
Overlook San Antonio, TX -- 1,100,000 9,901,517
Overlook Manor Frederick, MD -- 1,296,000 3,932,513
Overlook Manor II Frederick, MD 5,860,000 2,184,000 6,284,130
Overlook Manor III Frederick, MD -- 1,024,000 3,029,673
Paces Station Atlanta, GA -- 4,801,500 32,547,553
Palatka Oaks I Gainesville, FL 188,564 49,535 445,818
Palatka Oaks II Gainesville, FL 207,421 42,767 384,899
Palm Place Sarasota, FL 1,353,618 248,315 2,234,833
Palms at South Shore League City, TX -- 1,200,000 16,522,433
Palms, The Phoenix, AZ (O) 3,285,226 11,270,203
Panther Ridge Seattle, WA -- 1,055,800 9,506,117
Paradise Pointe Dania, FL - 1,493,800 17,344,218
Parc Royale Houston, TX 8,766,487 2,223,000 11,936,833
Park Knoll Atlanta, GA -- 2,904,500 26,175,911
Park Meadow Gilbert, AZ (O) 835,217 15,120,769
Park Place I and II (MN) Plymouth, MN 17,525,591 2,428,200 21,918,197
Park Place (TX) Houston, TX 9,976,425 1,603,000 11,961,284
Park West (CA) Los Angeles, CA -- 3,033,300 27,302,383
Park West (TX) Austin, TX -- 648,605 4,738,542
Park West End (VA) Richmond, VA 7,168,169 1,560,000 11,871,449
Parkcrest Southfield, MI 7,110,922 1,260,000 10,404,807
Parkridge Place Las Colinas, TX -- 6,430,800 17,091,674
Parkside Union City, CA -- 6,240,000 11,827,453
Parkview Terrace Redlands, CA -- 4,969,200 35,653,777
Parkville (Col) Columbus, OH 1,745,875 150,433 1,353,897
Parkville (IN) Muncie, IN 745,459 103,434 930,908
Parkville (Par) Dayton, OH 588,286 127,863 1,150,767
Parkville (WV) Parkersburg, WV -- 105,460 949,139
Parkwood East Fort Collins, CO -- 1,644,000 14,790,698
Patchen Oaks Lexington, KY -- 1,344,000 8,129,210
Pelican Pointe I Jacksonville, FL 1,297,844 213,515 1,921,634
Pelican Pointe II Jacksonville, FL 989,685 184,852 1,663,670
Pine Barrens Jacksonville, FL 1,489,659 268,303 2,414,726
Pine Harbour Orlando, FL -- 1,661,000 14,970,915
Pine Knoll Atlanta, GA 1,220,819 138,052 1,242,470
Pine Lake Tampa, FL 655,073 79,877 718,891
Pine Meadow Greensboro, NC 4,696,390 719,300 6,487,043
Pine Meadows I (FL) Ft. Meyers, FL 1,062,399 152,019 1,368,175
Pine Terrace I & II Panama City, FL 2,166,946 288,992 2,600,927
Pine Tree Club Wildwood, MO -- 1,125,000 7,046,441
Pinellas Pines St. Petersburg, FL 1,552,906 174,999 1,574,993
Pines of Cloverlane Pittsfield Township, MI -- 1,906,600 16,880,313
Pines of Springdale West Palm Beach, FL -- 471,200 4,416,174
Plantation (TX) Houston, TX -- 2,320,000 7,718,422
Plantation Ridge Marietta, GA -- 4,086,000 19,206,247
Plantations at Killearn Tallahassee, FL 4,960,829 828,000 7,617,890
Pleasant Ridge Arlington, TX 1,640,061 441,000 1,999,502
Plum Tree Corner, WI (Q) 1,992,000 20,246,205
Plum Tree Park Seattle, WA -- 1,133,400 10,201,652
Plumwood (Che) Anderson, IN 448,333 84,923 764,303
Plumwood (For) Ft. Wayne, IN 604,317 131,351 1,182,157
Plumwood I Columbus, OH 1,711,169 289,814 2,608,329
Plumwood II Columbus, OH 444,366 107,583 968,248
Point (NC) Charlotte, NC -- 1,700,000 25,417,267
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One Eton Square -- 718,912 1,570,100 14,849,849 16,419,949
Orange Grove Village -- 301,882 1,813,154 15,195,228 17,008,382
Orchard Ridge 3,000 254,386 485,600 4,626,418 5,112,018
Overlook 200 631,826 1,100,200 10,533,342 11,633,542
Overlook Manor 3,100 159,057 1,299,100 4,091,571 5,390,671
Overlook Manor II 2,300 49,984 2,186,300 6,334,114 8,520,414
Overlook Manor III 2,300 32,968 1,026,300 3,062,642 4,088,942
Paces Station -- 1,646,648 4,801,500 34,194,201 38,995,701
Palatka Oaks I -- 6,560 49,535 452,378 501,913
Palatka Oaks II -- 5,522 42,767 390,421 433,187
Palm Place -- 10,223 248,315 2,245,056 2,493,371
Palms at South Shore -- 416,281 1,200,000 16,938,714 18,138,714
Palms, The -- 256,071 3,285,226 11,526,273 14,811,499
Panther Ridge -- 453,522 1,055,800 9,959,639 11,015,439
Paradise Pointe 419,614 1,799,747 1,913,414 19,143,965 21,057,379
Parc Royale -- 86,783 2,223,000 12,023,616 14,246,616
Park Knoll 4,300 1,915,780 2,908,800 28,091,691 31,000,491
Park Meadow -- 265,939 835,217 15,386,708 16,221,925
Park Place I and II (MN) 7,800 1,135,866 2,436,000 23,054,063 25,490,063
Park Place (TX) -- 167,908 1,603,000 12,129,192 13,732,192
Park West (CA) 200 944,675 3,033,500 28,247,058 31,280,558
Park West (TX) 100 486,853 648,705 5,225,394 5,874,099
Park West End (VA) 2,500 97,312 1,562,500 11,968,761 13,531,261
Parkcrest 5,000 383,797 1,265,000 10,788,604 12,053,604
Parkridge Place 2,100 558,596 6,432,900 17,650,270 24,083,170
Parkside 6,700 418,035 6,246,700 12,245,488 18,492,188
Parkview Terrace -- 331,371 4,969,200 35,985,148 40,954,348
Parkville (Col) -- 20,995 150,433 1,374,892 1,525,325
Parkville (IN) -- 3,407 103,434 934,316 1,037,750
Parkville (Par) -- 3,144 127,863 1,153,911 1,281,774
Parkville (WV) -- 1,999 105,460 951,138 1,056,598
Parkwood East -- 225,821 1,644,000 15,016,519 16,660,519
Patchen Oaks 1,300 339,237 1,345,300 8,468,447 9,813,747
Pelican Pointe I -- 5,780 213,515 1,927,414 2,140,929
Pelican Pointe II -- 4,000 184,852 1,667,670 1,852,522
Pine Barrens -- 15,659 268,303 2,430,385 2,698,688
Pine Harbour 3,300 1,066,706 1,664,300 16,037,621 17,701,921
Pine Knoll -- 6,355 138,052 1,248,825 1,386,877
Pine Lake -- 1,697 79,877 720,588 800,464
Pine Meadow 1,350 815,015 720,650 7,302,059 8,022,709
Pine Meadows I (FL) -- 12,276 152,019 1,380,450 1,532,470
Pine Terrace I & II -- 76,057 288,992 2,676,983 2,965,975
Pine Tree Club -- 64,569 1,125,000 7,111,010 8,236,010
Pinellas Pines -- (6,430) 174,999 1,568,563 1,743,562
Pines of Cloverlane 1,200 3,957,201 1,907,800 20,837,514 22,745,314
Pines of Springdale 2,667 450,125 473,867 4,866,299 5,340,166
Plantation (TX) 2,900 380,548 2,322,900 8,098,970 10,421,870
Plantation Ridge 2,900 1,087,595 4,088,900 20,293,842 24,382,742
Plantations at Killearn -- 122,109 828,000 7,739,999 8,567,999
Pleasant Ridge 4,100 28,405 445,100 2,027,907 2,473,007
Plum Tree 4,700 436,480 1,996,700 20,682,685 22,679,385
Plum Tree Park -- 195,938 1,133,400 10,397,590 11,530,990
Plumwood (Che) -- 1,854 84,923 766,158 851,080
Plumwood (For) -- 5,105 131,351 1,187,262 1,318,613
Plumwood I -- 20,625 289,814 2,628,954 2,918,768
Plumwood II -- 968 107,583 969,216 1,076,799
Point (NC) -- 55,211 1,700,000 25,472,478 27,172,478
</TABLE>
<TABLE>
<CAPTION>
LIFE USED TO
DESCRIPTION COMPUTE
- ----------------------------------------------------------------------- DEPRECIATION IN
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Eton Square (1,553,505) 1985 30 Years
Orange Grove Village (1,181,558) 1986/1995 30 Years
Orchard Ridge (989,493) 1988 30 Years
Overlook (1,126,151) 1985 30 Years
Overlook Manor (223,567) 1980/1985 30 Years
Overlook Manor II (356,121) 1980/1985 30 Years
Overlook Manor III (165,917) 1980/1985 30 Years
Paces Station (3,030,942) 1984-1988/1989 30 Years
Palatka Oaks I (4,530) 1977 30 Years
Palatka Oaks II (3,804) 1980 30 Years
Palm Place (20,245) 1984 30 Years
Palms at South Shore (751,887) 1990 30 Years
Palms, The (856,248) 1990 30 Years
Panther Ridge (1,041,171) 1980 30 Years
Paradise Pointe (3,798,899) 1987-90 30 Years
Parc Royale (531,529) 1994 30 Years
Park Knoll (6,365,689) 1983 30 Years
Park Meadow (1,127,461) 1986 30 Years
Park Place I and II (MN) (3,094,798) 1986 30 Years
Park Place (TX) (874,889) 1996 30 Years
Park West (CA) (4,573,054) 1987/90 30 Years
Park West (TX) (1,300,192) 1985 30 Years
Park West End (VA) (894,429) 1985 30 Years
Parkcrest (595,297) 1987 30 Years
Parkridge Place (1,480,035) 1985 30 Years
Parkside (713,305) 1979 30 Years
Parkview Terrace (2,637,623) 1986 30 Years
Parkville (Col) (13,505) 1978 30 Years
Parkville (IN) (8,682) 1982 30 Years
Parkville (Par) (10,468) 1982 30 Years
Parkville (WV) (8,796) 1982 30 Years
Parkwood East (1,435,827) 1986 30 Years
Patchen Oaks (485,193) 1990 30 Years
Pelican Pointe I (17,639) 1987 30 Years
Pelican Pointe II (15,161) 1987 30 Years
Pine Barrens (22,241) 1986 30 Years
Pine Harbour (3,633,109) 1991 30 Years
Pine Knoll (11,312) 1985 30 Years
Pine Lake (6,710) 1982 30 Years
Pine Meadow (1,098,597) 1974 30 Years
Pine Meadows I (FL) (12,688) 1985 30 Years
Pine Terrace I & II (25,306) 1983 30 Years
Pine Tree Club (178,421) 1986 30 Years
Pinellas Pines (14,057) 1983 30 Years
Pines of Cloverlane (3,781,260) 1975-79 30 Years
Pines of Springdale (1,092,682) 1985/87(X) 30 Years
Plantation (TX) (625,820) 1969 30 Years
Plantation Ridge (1,232,194) 1975 30 Years
Plantations at Killearn (364,497) 1990 30 Years
Pleasant Ridge (117,006) 1982 30 Years
Plum Tree (1,349,403) 1989 30 Years
Plum Tree Park (999,214) 1991 30 Years
Plumwood (Che) (7,080) 1980 30 Years
Plumwood (For) (10,918) 1981 30 Years
Plumwood I (23,897) 1978 30 Years
Plumwood II (8,669) 1983 30 Years
Point (NC) (1,134,122) 1996 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pointe at South Mountain Phoenix, AZ 11,600,069 2,228,800 20,059,311
Pointe East Redmond, WA - 601,800 5,425,763
Polos Fort Myers, FL - 1,640,000 18,444,966
Polos East Orlando, FL - 1,386,000 19,058,620
Combined Ft. Lauderdale Properties (T) Ft. Lauderdale, FL 10,000,000 10,222,700 39,715,328
Portland Center Combined Portland, OR 21,929,538 6,028,000 43,554,399
Portofino Chino Hills, CA - 3,572,400 14,660,994
Portside Towers Combined Jersey City, NJ 57,560,162 22,440,000 96,842,913
Prairie Creek I & II Richardson, TX - 4,067,292 39,494,373
Preakness Antioch, TN (E) 1,560,000 7,671,710
Preserve at Squaw Peak Phoenix, AZ (O) 517,788 8,533,992
Preston at Willowbend Plano, TX - 872,500 8,107,915
Preston Bend Dallas, TX 8,719,000 1,083,000 10,024,505
Preston Lake Atlanta, GA - 1,430,900 12,918,697
Princeton Court Evansville, IN 906,106 116,696 1,050,264
Princeton Square Jacksonville, FL - 864,000 11,910,478
Promenade (FL) St. Petersburg, FL - 2,124,193 25,804,037
Promenade Terrace Corona Hills, CA 15,661,286 2,281,000 20,546,289
Promontory Pointe I & II Phoenix, AZ (O) 2,355,509 30,421,840
Prospect Towers Hackensack, NJ 14,624,305 8,425,000 27,989,853
Pueblo Villas Albuquerque, NM - 854,300 7,694,320
Quail Call Albany, GA 716,387 104,723 942,511
Quail Cove Salt Lake City, UT - 2,271,800 20,444,381
Ramblewood I (Val) Valdosta, GA 975,751 132,084 1,188,753
Ramblewood II (Aug) Augusta, GA - 169,269 1,523,424
Ramblewood II (Val) Valdosta, GA 483,139 61,672 555,049
Rancho Murietta Tempe, AZ - 1,766,282 17,585,449
Ranchside St. Petersburg, FL 686,474 144,692 1,302,232
Ranchstone Houston, TX - 770,000 15,371,431
Ravens Crest Plainsboro, NJ (N) 4,673,000 42,080,642
Ravenwood Greenville, SC 1,565,791 197,284 1,775,552
Ravinia Greenfield, WI (Q) 1,236,000 12,055,713
Red Deer I Dayton, OH 1,281,868 204,317 1,838,851
Red Deer II Dayton, OH 1,174,345 193,852 1,744,665
Redan Village I Atlanta, GA 1,204,316 274,294 2,468,650
Redan Village II Atlanta, GA 1,080,708 240,605 2,165,449
Redlands Lawn and Tennis Redlands, CA - 4,822,320 26,359,328
Reflections at the Lakes Las Vegas, NV - 1,896,000 17,058,626
Regatta San Antonio, TX - 818,500 7,366,677
Regency Charlotte, NC - 890,000 11,783,920
Regency Palms Huntington Beach, CA - 1,856,500 16,718,292
Regency Woods Des Moines, IA 6,351,345 745,100 7,027,086
Registry Denver, CO - 1,303,100 11,726,478
Reserve at Ashley Lake Boynton Beach, FL 24,150,000 3,519,900 23,345,118
Reserve Square Combined Cleveland, OH - 2,618,352 23,582,869
Retreat, The Phoenix, AZ - 3,475,114 27,268,765
Richmond Townhomes Houston, TX 9,191,494 940,000 13,906,905
Ridgegate Seattle, WA - 805,800 7,323,524
Ridgetop Tacoma, WA - 811,500 7,299,490
Ridgetree Dallas, TX - 2,094,600 19,037,864
Ridgeway Commons Memphis, TN - 568,400 5,396,306
Ridgewood (Lou) Louisville, KY 864,095 163,686 1,473,173
Ridgewood (MI) Detriot, MI 1,200,000 176,969 1,592,721
Ridgewood (Rus) Nashville, KY 763,342 69,156 622,405
Ridgewood I (Bed) Bedford, IN 850,377 107,120 964,079
Ridgewood I (Elk) Elkhart, IN 1,171,440 159,371 1,434,341
Ridgewood I (GA) Atlanta, GA 1,413,648 230,574 2,075,168
</TABLE>
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Pointe at South Mountain - 621,583 2,228,800 20,680,894 22,909,694
Pointe East 800 235,997 602,600 5,661,760 6,264,360
Polos - 301,494 1,640,000 18,746,460 20,386,460
Polos East - 138,739 1,386,000 19,197,359 20,583,359
Combined Ft. Lauderdale Properties (T) 8,600 2,069,004 10,231,300 41,784,332 52,015,632
Portland Center Combined 4,900 722,041 6,032,900 44,276,439 50,309,339
Portofino - 171,655 3,572,400 14,832,649 18,405,049
Portside Towers Combined 15,700 313,184 22,455,700 97,156,097 119,611,797
Prairie Creek I & II - 56,494 4,067,292 39,550,867 43,618,158
Preakness 1,900 1,138,963 1,561,900 8,810,673 10,372,573
Preserve at Squaw Peak - 152,605 517,788 8,686,597 9,204,385
Preston at Willowbend - 1,678,188 872,500 9,786,103 10,658,603
Preston Bend 2,200 189,245 1,085,200 10,213,750 11,298,950
Preston Lake 34,993 1,281,902 1,465,893 14,200,599 15,666,492
Princeton Court - 12,807 116,696 1,063,071 1,179,767
Princeton Square - 113,638 864,000 12,024,115 12,888,115
Promenade (FL) - 140,252 2,124,193 25,944,289 28,068,482
Promenade Terrace 1,800 458,387 2,282,800 21,004,676 23,287,476
Promontory Pointe I & II - 330,742 2,355,509 30,752,581 33,108,090
Prospect Towers 1,600 883,784 8,426,600 28,873,636 37,300,236
Pueblo Villas 1,300 977,991 855,600 8,672,311 9,527,911
Quail Call - 3,483 104,723 945,994 1,050,717
Quail Cove - 551,603 2,271,800 20,995,984 23,267,784
Ramblewood I (Val) - 4,187 132,084 1,192,940 1,325,024
Ramblewood II (Aug) - 19,542 169,269 1,542,967 1,712,236
Ramblewood II (Val) - 1,789 61,672 556,839 618,511
Rancho Murietta - 308,644 1,766,282 17,894,093 19,660,375
Ranchside - 5,878 144,692 1,308,110 1,452,802
Ranchstone - 81,134 770,000 15,452,565 16,222,565
Ravens Crest 2,850 2,252,693 4,675,850 44,333,335 49,009,185
Ravenwood - 3,227 197,284 1,778,779 1,976,062
Ravinia 4,100 264,043 1,240,100 12,319,756 13,559,856
Red Deer I - 2,347 204,317 1,841,198 2,045,515
Red Deer II - 3,194 193,852 1,747,859 1,941,711
Redan Village I - 7,780 274,294 2,476,430 2,750,724
Redan Village II - 1,919 240,605 2,167,368 2,407,974
Redlands Lawn and Tennis - 506,607 4,822,320 26,865,935 31,688,255
Reflections at the Lakes - 384,427 1,896,000 17,443,054 19,339,054
Regatta - 255,057 818,500 7,621,734 8,440,234
Regency - 78,512 890,000 11,862,432 12,752,432
Regency Palms 900 823,622 1,857,400 17,541,914 19,399,314
Regency Woods 8,380 219,695 753,480 7,246,781 8,000,261
Registry - 219,650 1,303,100 11,946,129 13,249,229
Reserve at Ashley Lake 500 452,827 3,520,400 23,797,945 27,318,345
Reserve Square Combined 500 12,070,829 2,618,852 35,653,698 38,272,550
Retreat, The - 38,552 3,475,114 27,307,317 30,782,431
Richmond Townhomes - 94,029 940,000 14,000,934 14,940,934
Ridgegate - 151,483 805,800 7,475,008 8,280,808
Ridgetop - 128,373 811,500 7,427,863 8,239,363
Ridgetree 20,600 1,426,528 2,115,200 20,464,391 22,579,591
Ridgeway Commons 14,840 200,136 583,240 5,596,442 6,179,682
Ridgewood (Lou) - 430 163,686 1,473,603 1,637,289
Ridgewood (MI) - 4,776 176,969 1,597,496 1,774,465
Ridgewood (Rus) - 12,074 69,156 634,478 703,635
Ridgewood I (Bed) - 6,672 107,120 970,751 1,077,871
Ridgewood I (Elk) - 14,808 159,371 1,449,149 1,608,520
Ridgewood I (GA) - 5,968 230,574 2,081,136 2,311,710
</TABLE>
<TABLE>
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- ---------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pointe at South Mountain (2,018,761) 1988 30 Years
Pointe East (1,079,919) 1988 30 Years
Polos (867,299) 1991 30 Years
Polos East (865,308) 1991 30 Years
Combined Ft. Lauderdale Properties (T) (6,224,657) 1988 30 Years
Portland Center Combined (1,717,412) 1965 30 Years
Portofino (1,075,995) 1989 30 Years
Portside Towers Combined (5,181,331) 1992/1997 30 Years
Prairie Creek I & II (1,128,902) 1998/99 30 Years
Preakness (803,978) 1986 30 Years
Preserve at Squaw Peak (649,077) 1990 30 Years
Preston at Willowbend (2,263,021) 1985 30 Years
Preston Bend (980,172) 1986 30 Years
Preston Lake (3,335,031) 1984-86 30 Years
Princeton Court (9,916) 1985 30 Years
Princeton Square (563,868) 1984 30 Years
Promenade (FL) (1,145,473) 1994 30 Years
Promenade Terrace (2,677,571) 1990 30 Years
Promontory Pointe I & II (2,246,711) 1984/1996 30 Years
Prospect Towers (1,907,947) 1995 30 Years
Pueblo Villas (1,210,863) 1975 30 Years
Quail Call (8,893) 1984 30 Years
Quail Cove (2,069,366) 1987 30 Years
Ramblewood I (Val) (10,896) 1983 30 Years
Ramblewood II (Aug) (14,924) 1986 30 Years
Ramblewood II (Val) (5,149) 1983 30 Years
Rancho Murietta (1,329,081) 1983 30 Years
Ranchside (12,306) 1985 30 Years
Ranchstone (684,806) 1996 30 Years
Ravens Crest (9,058,639) 1984 30 Years
Ravenwood (16,278) 1987 30 Years
Ravinia (805,342) 1991 30 Years
Red Deer I (16,553) 1986 30 Years
Red Deer II (15,699) 1987 30 Years
Redan Village I (22,143) 1984 30 Years
Redan Village II (19,377) 1986 30 Years
Redlands Lawn and Tennis (2,012,103) 1986 30 Years
Reflections at the Lakes (1,673,007) 1989 30 Years
Regatta (776,707) 1983 30 Years
Regency (537,602) 1986 30 Years
Regency Palms (2,550,877) 1969 30 Years
Regency Woods (569,679) 1986 30 Years
Registry (1,150,094) 1987 30 Years
Reserve at Ashley Lake (1,814,527) 1990 30 Years
Reserve Square Combined (8,338,981) 1973 30 Years
Retreat, The (489,190) 1999 30 Years
Richmond Townhomes (622,577) 1995 30 Years
Ridgegate (730,185) 1990 30 Years
Ridgetop (747,671) 1988 30 Years
Ridgetree (3,018,446) 1983 30 Years
Ridgeway Commons (435,462) 1970 30 Years
Ridgewood (Lou) (13,306) 1984 30 Years
Ridgewood (MI) (14,383) 1983 30 Years
Ridgewood (Rus) (6,392) 1984 30 Years
Ridgewood I (Bed) (9,041) 1984 30 Years
Ridgewood I (Elk) (13,455) 1984 30 Years
Ridgewood I (GA) (18,548) 1984 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ridgewood I (Lex) Lexington, KY 1,040,373 203,720 1,833,477
Ridgewood I (OH) Columbus, OH 1,191,565 174,066 1,566,593
Ridgewood II (Bed) Bedford, IN 883,318 99,559 896,029
Ridgewood II (Elk) Elkhart, IN 1,297,758 215,335 1,938,012
Ridgewood II (GA) Atlanta, GA 1,008,359 164,999 1,484,991
Ridgewood II (OH) Columbus, OH 1,151,846 162,914 1,466,226
Ridgewood Village San Diego, CA (U) 5,760,000 14,032,511
Rincon Houston, TX - 4,400,000 16,734,746
River Bend Tampa, FL - 602,945 2,916,839
River Glen I Columbus, OH 985,686 171,272 1,541,447
River Glen II Columbus, OH 1,156,468 158,684 1,428,152
River Hill Grand Prairie, TX - 2,004,000 19,272,944
River Oak Louisville, KY - 1,253,900 11,300,386
River Park Fort Worth, TX 7,632,622 2,240,000 8,818,888
Rivers Edge Waterbury, CT - 780,000 6,561,802
Rivers End I Jacksonville, FL 1,406,919 171,745 1,545,703
Rivers End II Jacksonville, FL 1,127,324 190,688 1,716,189
Riverside Park Tulsa, OK (E) 1,440,000 12,389,121
Riverview Estates Toledo, OH 1,057,319 141,210 1,270,890
Roanoke Detriot, MI 40,500 369,911 3,329,200
Rock Creek Corrboro, NC - 895,100 8,062,948
Rolido Parque Houston, TX 7,111,022 2,950,000 7,935,130
Rosecliff Quincy, MA - 5,460,000 12,989,873
Rosehill Pointe Lenexa, KS 12,924,830 2,073,400 18,864,909
Rosewood (KY) Louisville, KY 1,608,243 253,453 2,281,076
Rosewood (OH) Columbus, OH 1,279,827 212,378 1,911,405
Rosewood Commons I Indianapolis, IN 1,864,582 228,644 2,057,800
Rosewood Commons II Indianapolis, IN 1,194,320 220,463 1,984,167
Royal Oak Eagan, MN 13,148,135 1,598,200 14,415,400
Royal Oaks (FL) Jacksonville, FL - 1,988,000 13,645,117
Sabal Palm Pompano Beach, FL - 3,536,000 20,190,650
Sabal Palm at Boot Ranch Palm Harbor, FL 16,631,058 3,888,000 28,923,692
Sabal Palm at Carrollwood Place Tampa, FL - 3,888,000 26,911,542
Sabal Palm at Lake Buena Vista Orlando, Fl 21,170,000 2,800,000 23,687,893
Sabal Palm at Metrowest Orlando, Fl - 4,560,000 38,394,865
Sabal Palm at Metrowest II Orlando, Fl - 4,110,000 33,907,283
Sabal Pointe (L) Coral Springs, FL - 1,941,900 17,570,508
Saddle Creek Carrollton, TX - 703,300 6,375,449
Saddle Ridge Loudoun County, VA - 1,351,800 12,283,616
Sailboat Bay Raleigh, NC - 960,000 8,797,580
San Tropez Phoenix, AZ - 2,738,000 24,650,003
Sandalwood Toledo, OH 1,103,983 151,926 1,367,336
Sandpiper II Fort Pierce, FL 1,033,653 155,496 1,399,461
Sanford Court Orlando, Fl 1,760,829 238,814 2,149,327
Sawgrass Cove Bradenton, FL - 1,671,200 15,060,378
Scarborough Square Rockville, MD 5,119,928 1,815,000 7,540,062
Scottsdale Courtyards Scottsdale, AZ (O) 2,979,269 25,073,538
Scottsdale Meadows Scottsdale, AZ - 1,512,000 11,407,699
Sedona Ridge Ahwatukee, AZ - 5,508,000 9,703,496
Sedona Springs Austin, TX - 2,574,000 23,477,043
Seeley Lake Tacoma, WA - 2,760,400 24,845,286
Settler's Point Salt Lake City, UT - 1,715,100 15,437,046
Seventh & James Seattle, WA - 663,800 5,974,803
Shadow Bay I Jacksonville, FL - 123,319 1,109,867
Shadow Bay II Jacksonville, FL 990,062 139,709 1,257,379
Shadow Brook Phoenix, AZ (O) 3,065,496 18,367,686
Shadow Lake Doraville, GA - 1,140,000 13,117,277
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ridgewood I (Lex) - 1,814 203,720 1,835,291 2,039,010
Ridgewood I (OH) - 6,169 174,066 1,572,762 1,746,828
Ridgewood II (Bed) - 8,806 99,559 904,834 1,004,393
Ridgewood II (Elk) - 19,093 215,335 1,957,105 2,172,440
Ridgewood II (GA) - 794 164,999 1,485,785 1,650,784
Ridgewood II (OH) - 3,176 162,914 1,469,402 1,632,316
Ridgewood Village 1,500 17,709 5,761,500 14,050,220 19,811,720
Rincon 1,900 122,065 4,401,900 16,856,811 21,258,711
River Bend - 1,765,660 602,945 4,682,499 5,285,444
River Glen I - 2,855 171,272 1,544,302 1,715,574
River Glen II - 1,186 158,684 1,429,338 1,588,022
River Hill - 220,879 2,004,000 19,493,823 21,497,823
River Oak 2,700 492,123 1,256,600 11,792,509 13,049,109
River Park 5,400 1,089,629 2,245,400 9,908,517 12,153,917
Rivers Edge 1,900 44,071 781,900 6,605,874 7,387,774
Rivers End I - 3,361 171,745 1,549,064 1,720,809
Rivers End II - 3,186 190,688 1,719,375 1,910,062
Riverside Park 1,400 342,244 1,441,400 12,731,365 14,172,765
Riverview Estates - 3,158 141,210 1,274,048 1,415,258
Roanoke - 6,827 369,911 3,336,028 3,705,939
Rock Creek 600 343,612 895,700 8,406,560 9,302,260
Rolido Parque 5,900 750,516 2,955,900 8,685,646 11,641,546
Rosecliff - 2,717 5,460,000 12,992,590 18,452,590
Rosehill Pointe 22,600 1,690,797 2,096,000 20,555,705 22,651,705
Rosewood (KY) - 16,594 253,453 2,297,670 2,551,123
Rosewood (OH) - 8,425 212,378 1,919,830 2,132,209
Rosewood Commons I - 11,881 228,644 2,069,680 2,298,325
Rosewood Commons II - 16,118 220,463 2,000,285 2,220,749
Royal Oak 4,704 337,982 1,602,904 14,753,382 16,356,285
Royal Oaks (FL) - 138,372 1,988,000 13,783,489 15,771,489
Sabal Palm 2,600 737,738 3,538,600 20,928,388 24,466,988
Sabal Palm at Boot Ranch - 168,353 3,888,000 29,092,045 32,980,045
Sabal Palm at Carrollwood Place - 169,009 3,888,000 27,080,552 30,968,552
Sabal Palm at Lake Buena Vista - 201,215 2,800,000 23,889,108 26,689,108
Sabal Palm at Metrowest (450,000) 205,634 4,110,000 38,600,499 42,710,499
Sabal Palm at Metrowest II 450,000 78,683 4,560,000 33,985,966 38,545,966
Sabal Pointe (L) 9,700 344,893 1,951,600 17,915,401 19,867,001
Saddle Creek 4,800 3,237,209 708,100 9,612,658 10,320,758
Saddle Ridge 13,000 451,702 1,364,800 12,735,318 14,100,118
Sailboat Bay - 183,887 960,000 8,981,467 9,941,467
San Tropez - 310,770 2,738,000 24,960,773 27,698,773
Sandalwood - 1,490 151,926 1,368,826 1,520,752
Sandpiper II - 9,964 155,496 1,409,425 1,564,920
Sanford Court - 8,519 238,814 2,157,846 2,396,660
Sawgrass Cove 2,950 1,420,386 1,674,150 16,480,765 18,154,915
Scarborough Square - 99,143 1,815,000 7,639,205 9,454,205
Scottsdale Courtyards - 293,614 2,979,269 25,367,152 28,346,421
Scottsdale Meadows - 197,072 1,512,000 11,604,771 13,116,771
Sedona Ridge - 311,028 5,508,000 10,014,524 15,522,524
Sedona Springs - 130,113 2,574,000 23,607,156 26,181,156
Seeley Lake - 380,827 2,760,400 25,226,114 27,986,514
Settler's Point - 613,357 1,715,100 16,050,403 17,765,503
Seventh & James - 133,631 663,800 6,108,434 6,772,234
Shadow Bay I - 4,003 123,319 1,113,869 1,237,188
Shadow Bay II - 4,570 139,709 1,261,948 1,401,657
Shadow Brook - 292,506 3,065,496 18,660,192 21,725,688
Shadow Lake - 81,614 1,140,000 13,198,891 14,338,891
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- --------------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- --------------------------------------------------------------------------------------------
<S> <C>
Ridgewood I (Lex) (16,373) 1984 30 Years
Ridgewood I (OH) (14,247) 1984 30 Years
Ridgewood II (Bed) (8,571) 1986 30 Years
Ridgewood II (Elk) (18,206) 1986 30 Years
Ridgewood II (GA) (13,269) 1986 30 Years
Ridgewood II (OH) (13,274) 1985 30 Years
Ridgewood Village (1,021,636) 1997 30 Years
Rincon (1,660,510) 1996 30 Years
River Bend (3,638,171) 1971 30 Years
River Glen I (13,938) 1987 30 Years
River Glen II (12,809) 1987 30 Years
River Hill (878,180) 1996 30 Years
River Oak (945,076) 1989 30 Years
River Park (564,762) 1984 30 Years
Rivers Edge (374,911) 1974 30 Years
Rivers End I (14,079) 1986 30 Years
Rivers End II (15,542) 1986 30 Years
Riverside Park (1,052,333) 1994 30 Years
Riverview Estates (12,199) 1987 30 Years
Roanoke (29,499) 1985 30 Years
Rock Creek (990,522) 1986 30 Years
Rolido Parque (663,254) 1978 30 Years
Rosecliff (276,066) 1990 30 Years
Rosehill Pointe (3,200,631) 1984 30 Years
Rosewood (KY) (20,784) 1984 30 Years
Rosewood (OH) (17,670) 1985 30 Years
Rosewood Commons I (19,123) 1986 30 Years
Rosewood Commons II (18,268) 1987 30 Years
Royal Oak (1,116,654) 1989 30 Years
Royal Oaks (FL) (636,826) 1991 30 Years
Sabal Palm (2,123,534) 1989 30 Years
Sabal Palm at Boot Ranch (1,299,988) 1996 30 Years
Sabal Palm at Carrollwood Place (1,214,963) 1995 30 Years
Sabal Palm at Lake Buena Vista (1,087,252) 1988 30 Years
Sabal Palm at Metrowest (1,685,822) 1998 30 Years
Sabal Palm at Metrowest II (1,513,049) 1997 30 Years
Sabal Pointe (L) (2,540,052) 1995 30 Years
Saddle Creek (3,488,055) 1980 30 Years
Saddle Ridge (1,949,000) 1989 30 Years
Sailboat Bay (419,027) 1986 30 Years
San Tropez (2,325,211) 1989 30 Years
Sandalwood (12,278) 1984 30 Years
Sandpiper II (13,069) 1982 30 Years
Sanford Court (19,922) 1976 30 Years
Sawgrass Cove (3,610,334) 1991 30 Years
Scarborough Square (286,105) 1967 30 Years
Scottsdale Courtyards (1,842,672) 1993 30 Years
Scottsdale Meadows (854,318) 1984 30 Years
Sedona Ridge (1,016,060) 1988 30 Years
Sedona Springs (1,060,492) 1995 30 Years
Seeley Lake (2,429,867) 1990 30 Years
Settler's Point (1,555,999) 1986 30 Years
Seventh & James (577,713) 1992 30 Years
Shadow Bay I (10,279) 1984 30 Years
Shadow Bay II (11,561) 1985 30 Years
Shadow Brook (1,366,383) 1984 30 Years
Shadow Lake (599,606) 1989 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- -----------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shadow Ridge Tallahassee, FL 1,018,858 150,327 1,352,939
Shadow Trace Atlanta, GA - 244,320 2,198,884
Shadowood I Sarasota, FL 1,420,269 157,661 1,418,945
Shadowood II Sarasota, FL 1,920,328 152,031 1,368,278
Sheffield Court Arlington, VA - 3,349,350 31,960,800
Sherbrook (IN) Indianapolis, IN 1,673,663 171,920 1,547,284
Sherbrook (OH) Columbus, OH 1,092,268 163,493 1,471,440
Sherbrook (PA) Pittsburgh, WV 1,278,955 279,665 2,516,985
Shoal Run Birmingham, AL - 1,380,000 12,218,577
Shores at Andersen Springs Chandler, AZ (O) 2,743,816 22,774,646
Siena Terrace Lake Forest, CA - 8,900,000 24,123,024
Sierra Canyon Canyon Cnty, CA - 3,480,000 12,546,066
Silver Creek Phoenix, AZ (O) 712,102 6,707,496
Silver Forest Ocala, FL 859,440 126,536 1,138,821
Silver Shadow Las Vegas, NV - 952,100 8,799,511
Silver Springs (FL) Jacksonville, FL - 1,828,700 16,474,735
Silver Springs (OK) Tulsa, OK - 672,500 6,052,669
Silverwood Mission, KS (S) 1,230,000 11,070,904
Sky Pines I & II Orlando, Fl 2,307,645 349,029 3,141,259
Sky Ridge Atlanta, GA 1,879,443 437,373 3,936,361
Skylark Union City, CA - 1,775,000 16,713,916
Skyline Gateway Tucson, AZ - 1,128,400 10,155,747
Skyview Rancho Santa Margarita, CA - 3,380,000 21,708,875
Slate Run (Bt) Louisville, KY 766,280 96,556 869,006
Slate Run (Hop) Hopkinsville, KY 908,184 91,304 821,734
Slate Run (Ind) Indianapolis, IN 2,028,467 295,593 2,660,337
Slate Run (Leb) Indianapolis, IN 1,232,500 154,061 1,386,549
Slate Run (Mia) Dayton, OH 862,241 136,065 1,224,583
Slate Run I (Lou) Louisville, KY 870,163 179,766 1,617,890
Slate Run II (Lou) Louisville, KY 1,168,080 167,723 1,509,506
Smoketree Polo Club Indio, CA 9,050,000 864,000 6,950,033
Sommerset Place Raleigh, NC - 360,000 7,800,206
Songbird San Antonio, TX 6,554,066 1,080,500 9,734,435
Sonoran Phoenix, AZ (O) 2,361,922 31,841,724
Sonterra at Foothill Ranch Orange Cnty, CA 16,378,029 7,500,000 24,048,507
South Creek Mesa, AZ 15,600,333 2,669,300 24,042,042
Southwood Palo Alto, CA - 6,930,000 14,324,069
Spicewood Indianapolis, IN 1,012,173 128,355 1,155,191
Spicewood Springs Jacksonville, FL - 1,536,000 21,138,009
Spinnaker Cove Hermitage, TN 14,205,000 1,420,500 12,770,421
Spring Gate Panama City, FL 971,750 132,951 1,196,563
Spring Oak Richmond, VA - 3,803,700 7,854,648
Springbrook Anderson, SC 1,702,253 168,959 1,520,630
Springs Colony Orlando, FL (S) 631,900 5,860,157
Springs of Country Woods Salt Lake City, UT - 3,547,400 31,906,637
Springwood (Col) Columbus, OH 1,082,979 189,948 1,709,529
Springwood (IN) Ft. Wayne, IN 773,114 119,199 1,072,791
Springwood (KY) Cincinnati, KY 801,399 117,442 1,056,980
Springwood II (Aus) Youngstown, OH 473 78,057 702,513
Steeplechase Charlotte, NC - 1,111,500 10,180,750
Sterling Point Denver, CO - 935,500 8,419,200
Stewart Way I & II Savannah, GA 2,198,566 290,773 2,616,953
Stillwater Savannah, GA 941,996 151,198 1,360,780
Stonehenge (Day) Dayton, OH 1,180,692 202,294 1,820,645
Stonehenge (Ind) Indianapolis, IN 1,198,930 146,810 1,321,293
Stonehenge (Jas) Jasper, IN 438,289 78,335 705,013
Stonehenge (KY) Nashville, KY 790,000 111,632 1,004,684
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shadow Ridge - 4,518 150,327 1,357,457 1,507,783
Shadow Trace - 21,522 244,320 2,220,406 2,464,726
Shadowood I - 13,534 157,661 1,432,479 1,590,139
Shadowood II - 6,871 152,031 1,375,149 1,527,180
Sheffield Court - 622,255 3,349,350 32,583,055 35,932,405
Sherbrook (IN) - 9,547 171,920 1,556,832 1,728,752
Sherbrook (OH) - 3,084 163,493 1,474,524 1,638,018
Sherbrook (PA) - 2,476 279,665 2,519,462 2,799,127
Shoal Run - 49,790 1,380,000 12,268,367 13,648,367
Shores at Andersen Springs - 288,461 2,743,816 23,063,106 25,806,922
Siena Terrace - 308,655 8,900,000 24,431,678 33,331,678
Sierra Canyon 4,200 678,896 3,484,200 13,224,962 16,709,162
Silver Creek - 102,761 712,102 6,810,256 7,522,358
Silver Forest - 2,222 126,536 1,141,043 1,267,579
Silver Shadow 1,340 216,655 953,440 9,016,166 9,969,606
Silver Springs (FL) 2,400 589,385 1,831,100 17,064,120 18,895,220
Silver Springs (OK) - 116,197 672,500 6,168,867 6,841,367
Silverwood - 979,523 1,230,000 12,050,427 13,280,427
Sky Pines I & II - 19,577 349,029 3,160,836 3,509,864
Sky Ridge - 10,391 437,373 3,946,753 4,384,126
Skylark 6,600 250,652 1,781,600 16,964,567 18,746,167
Skyline Gateway - 287,983 1,128,400 10,443,730 11,572,130
Skyview - 21,933 3,380,000 21,730,807 25,110,807
Slate Run (Bt) - 5,434 96,556 874,441 970,997
Slate Run (Hop) - 19,319 91,304 841,053 932,357
Slate Run (Ind) - 9,937 295,593 2,670,274 2,965,867
Slate Run (Leb) - 17,957 154,061 1,404,505 1,558,566
Slate Run (Mia) - 3,260 136,065 1,227,844 1,363,908
Slate Run I (Lou) - 1,832 179,766 1,619,723 1,799,488
Slate Run II (Lou) - 3,212 167,723 1,512,718 1,680,441
Smoketree Polo Club 3,200 232,119 867,200 7,182,152 8,049,352
Sommerset Place - 71,740 360,000 7,871,945 8,231,945
Songbird 2,000 930,874 1,082,500 10,665,309 11,747,809
Sonoran - 370,955 2,361,922 32,212,679 34,574,601
Sonterra at Foothill Ranch 3,400 38,798 7,503,400 24,087,305 31,590,705
South Creek 2,000 1,002,105 2,671,300 25,044,147 27,715,447
Southwood 6,600 624,987 6,936,600 14,949,056 21,885,656
Spicewood - 37 128,355 1,155,228 1,283,583
Spicewood Springs - 979,925 1,536,000 22,117,934 23,653,934
Spinnaker Cove 41,231 501,696 1,461,731 13,272,117 14,733,849
Spring Gate - 8,708 132,951 1,205,271 1,338,222
Spring Oak - - 3,803,700 7,854,648 11,658,348
Springbrook - 18,100 168,959 1,538,730 1,707,689
Springs Colony 8,500 914,970 640,400 6,775,127 7,415,527
Springs of Country Woods - 1,112,515 3,547,400 33,019,153 36,566,553
Springwood (Col) - 7,351 189,948 1,716,880 1,906,828
Springwood (IN) - 2,848 119,199 1,075,639 1,194,838
Springwood (KY) - 2,215 117,442 1,059,195 1,176,637
Springwood II (Aus) - 731 78,057 703,244 781,301
Steeplechase - 97,056 1,111,500 10,277,806 11,389,306
Sterling Point - 168,200 935,500 8,587,400 9,522,900
Stewart Way I & II - 11,104 290,773 2,628,057 2,918,829
Stillwater - 4,254 151,198 1,365,034 1,516,232
Stonehenge (Day) - 1,857 202,294 1,822,502 2,024,796
Stonehenge (Ind) - 18,388 146,810 1,339,681 1,486,491
Stonehenge (Jas) - 2,403 78,335 707,416 785,751
Stonehenge (KY) - 4,406 111,632 1,009,090 1,120,722
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- --------------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- --------------------------------------------------------------------------------------------
<S> <C>
Shadow Ridge (12,473) 1983 30 Years
Shadow Trace (20,114) 1984 30 Years
Shadowood I (13,296) 1982 30 Years
Shadowood II (12,753) 1983 30 Years
Sheffield Court (5,878,396) 1986 30 Years
Sherbrook (IN) (14,579) 1986 30 Years
Sherbrook (OH) (13,348) 1985 30 Years
Sherbrook (PA) (22,240) 1986 30 Years
Shoal Run (575,058) 1986 30 Years
Shores at Andersen Springs (1,695,090) 1989 30 Years
Siena Terrace (731,866) 1988 30 Years
Sierra Canyon (854,087) 1987 30 Years
Silver Creek (529,648) 1986 30 Years
Silver Forest (10,405) 1985 30 Years
Silver Shadow (1,936,532) 1992 30 Years
Silver Springs (FL) (1,484,647) 1985 30 Years
Silver Springs (OK) (637,471) 1984 30 Years
Silverwood (2,512,138) 1986 30 Years
Sky Pines I & II (29,036) 1986 30 Years
Sky Ridge (35,177) 1987 30 Years
Skylark (821,077) 1986 30 Years
Skyline Gateway (1,041,992) 1985 30 Years
Skyview (469,341) 1999 30 Years
Slate Run (Bt) (8,247) 1984 30 Years
Slate Run (Hop) (8,305) 1984 30 Years
Slate Run (Ind) (23,947) 1984 30 Years
Slate Run (Leb) (13,015) 1984 30 Years
Slate Run (Mia) (11,097) 1985 30 Years
Slate Run I (Lou) (14,642) 1984 30 Years
Slate Run II (Lou) (13,772) 1985 30 Years
Smoketree Polo Club (380,571) 1987-89 30 Years
Sommerset Place (361,991) 1983 30 Years
Songbird (1,393,324) 1981 30 Years
Sonoran (2,360,245) 1995 30 Years
Sonterra at Foothill Ranch (1,495,623) 1997 30 Years
South Creek (3,328,589) 1986-89 30 Years
Southwood (808,666) 1985 30 Years
Spicewood (10,462) 1986 30 Years
Spicewood Springs (1,035,439) 1986 30 Years
Spinnaker Cove (1,371,884) 1986 30 Years
Spring Gate (11,289) 1983 30 Years
Spring Oak - (R) 30 Years
Springbrook (14,782) 1986 30 Years
Springs Colony (1,573,779) 1986 30 Years
Springs of Country Woods (3,167,620) 1982 30 Years
Springwood (Col) (15,468) 1983 30 Years
Springwood (IN) (9,845) 1981 30 Years
Springwood (KY) (9,746) 1986 30 Years
Springwood II (Aus) (6,588) 1982 30 Years
Steeplechase (487,273) 1986 30 Years
Sterling Point (823,591) 1979 30 Years
Stewart Way I & II (24,309) 1986 30 Years
Stillwater (12,351) 1983 30 Years
Stonehenge (Day) (16,375) 1985 30 Years
Stonehenge (Ind) (12,647) 1984 30 Years
Stonehenge (Jas) (6,651) 1985 30 Years
Stonehenge (KY) (9,416) 1983 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stonehenge (Mas) Canton, OH 624,377 145,386 1,308,477
Stonehenge (MI) Jackson, MI 1,068,963 146,554 1,318,985
Stonehenge (Ott) Lima, OH 558,155 97,654 878,884
Stonehenge I (Ric) Dayton, OH 1,122,698 156,343 1,407,087
Stoney Creek Tacoma, WA - 1,215,200 10,938,134
Stratford Lane I Columbus, OH 893,247 206,637 1,867,258
Strawberry Place Tampa, FL 770,474 78,445 706,003
Suffolk Grove I Columbus, OH - 214,107 1,926,961
Suffolk Grove II Columbus, OH 1,050,088 167,683 1,509,147
Sugartree I Daytona Beach, FL 983,117 164,985 1,484,863
Summer Chase Denver, CO 11,830,115 1,708,000 15,382,234
Summer Creek Plymouth, MN 2,303,767 576,000 3,815,800
Summer Ridge Riverside, CA - 600,500 5,422,807
Summerset Village Chatsworth, CA - 2,628,500 23,675,871
Summerwood Hayward, CA - 4,860,000 6,942,421
Summit at Lake Union Seattle, WA - 1,424,600 12,852,461
Summit Chase Coral Springs, FL - 1,120,000 4,433,084
Sun Creek Glendale, AZ (O) 896,929 7,066,940
Sunny Oak Village Overland Park, KS 14,898,087 2,222,600 20,230,536
Sunnyside Albany, GA 1,332,479 166,887 1,501,984
Sunrise Springs Las Vegas, NV - 972,600 8,775,662
Sunset Way I Miami, FL 1,619,086 258,568 2,327,111
Sunset Way II Miami, FL 2,636,031 274,903 2,474,128
Suntree Village Oro Valley, AZ (O) 1,571,745 13,095,941
Surprise Lake Village Tacoma, WA - 1,830,200 16,470,508
Surrey Downs Bellevue, WA - 3,050,000 7,848,618
Sutton Place Dallas, TX - 1,316,500 12,227,725
Sutton Place (FL) Lakeland, FL 855,842 120,887 1,087,987
Sweetwater Glen Lawrenceville, GA - 500,000 10,469,749
Sycamore Creek Scottsdale, AZ (E) 3,150,000 19,087,302
Tabor Ridge Cleveland, OH 1,687,748 235,940 2,123,463
Tamarind at Stoneridge Columbia, SC - 1,053,800 9,489,319
Tamarlane Portland, ME - 690,000 5,153,633
Tanasbourne Terrace Hillsboro, OR 11,982,492 1,873,000 16,891,205
Tanglewood (OR) Portland, OR - 760,000 6,863,649
Tanglewood (VA) Manassas, VA 24,855,587 2,103,400 19,674,833
Terrace Trace Tampa, FL 1,637,684 193,916 1,745,248
Thymewood II Miami, FL (552) 219,661 1,976,949
Timber Hollow Chapel Hill, NC - 800,000 11,219,537
Timbercreek Toledo, OH 1,542,455 203,420 1,830,778
Timberwalk Jacksonville, FL - 1,988,000 13,204,219
Timberwood Aurora, CO - 1,512,000 14,587,786
Timberwood (OH) Macon, GA 555,480 144,299 1,298,695
Town Center (TX) Kingwood, TX - 1,290,000 11,530,216
Town Center II (TX) Kingwood, TX - 1,375,000 13,837,474
Town Centre III & IV Laurel, MD 15,238,742 2,546,500 24,230,152
Towne Square Chandler, AZ - 1,924,710 36,211,417
Townhomes of Meadowbrook Auburn Hills, MI 10,071,742 1,380,000 12,367,314
Trails (CO), The Aurora, CO 10,074,269 1,217,800 8,877,205
Trails (NV), The Las Vegas, NV - 3,076,200 27,712,940
Trails (TX), The Arlington, TX - 616,700 5,745,125
Trails at Briar Forest Houston, TX 14,160,486 2,380,000 24,911,561
Trails at Dominion Park Houston, TX 25,013,613 2,529,000 35,699,589
Trails of Valley Ranch Irving, TX - 2,808,000 7,923,064
Trailway Pond I Burnsville, MN 4,913,909 476,800 4,309,055
Trailway Pond II Burnsville, MN 11,365,354 1,104,700 9,954,266
Trinity Lakes Cordova, TN (E) 1,980,000 14,955,732
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
(IMPROVEMENTS, NET)(I) PERIOD 12/31/99
- ---------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES(A) TOTAL(B)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stonehenge (Mas) - 7,424 145,386 1,315,901 1,461,287
Stonehenge (MI) - 330 146,554 1,319,315 1,465,869
Stonehenge (Ott) - 4,432 97,654 883,316 980,970
Stonehenge I (Ric) - 10,760 156,343 1,417,847 1,574,190
Stoney Creek - 182,572 1,215,200 11,120,706 12,335,906
Stratford Lane I - 1,983 206,637 1,869,241 2,075,878
Strawberry Place - 14,281 78,445 720,283 798,728
Suffolk Grove I - 3,288 214,107 1,930,249 2,144,356
Suffolk Grove II - 2,222 167,683 1,511,369 1,679,051
Sugartree I - 10,917 164,985 1,495,781 1,660,766
Summer Chase 1,200 1,179,229 1,709,200 16,561,462 18,270,662
Summer Creek 3,600 242,638 579,600 4,058,438 4,638,038
Summer Ridge 1,900 223,894 602,400 5,646,701 6,249,101
Summerset Village 262,846 376,991 2,891,346 24,052,863 26,944,208
Summerwood 6,600 224,843 4,866,600 7,167,264 12,033,864
Summit at Lake Union 100 759,034 1,424,700 13,611,495 15,036,195
Summit Chase 2,100 348,037 1,122,100 4,781,121 5,903,221
Sun Creek - 130,685 896,929 7,197,625 8,094,554
Sunny Oak Village 25,150 2,151,058 2,247,750 22,381,595 24,629,345
Sunnyside - 603 166,887 1,502,587 1,669,474
Sunrise Springs 2,700 379,434 975,300 9,155,096 10,130,396
Sunset Way I - 11,739 258,568 2,338,851 2,597,418
Sunset Way II - 4,764 274,903 2,478,892 2,753,795
Suntree Village - 374,645 1,571,745 13,470,586 15,042,331
Surprise Lake Village - 455,216 1,830,200 16,925,724 18,755,924
Surrey Downs 7,100 76,023 3,057,100 7,924,641 10,981,741
Sutton Place 41,900 2,827,457 1,358,400 15,055,182 16,413,582
Sutton Place (FL) - 7,479 120,887 1,095,466 1,216,353
Sweetwater Glen - 76,429 500,000 10,546,178 11,046,178
Sycamore Creek 2,000 429,964 3,152,000 19,517,266 22,669,266
Tabor Ridge - 560 235,940 2,124,022 2,359,962
Tamarind at Stoneridge 2,400 172,709 1,056,200 9,662,028 10,718,228
Tamarlane 900 147,937 690,900 5,301,569 5,992,469
Tanasbourne Terrace 3,700 1,264,592 1,876,700 18,155,797 20,032,497
Tanglewood (OR) 3,000 1,615,686 763,000 8,479,335 9,242,335
Tanglewood (VA) 4,895 2,251,142 2,108,295 21,925,975 24,034,270
Terrace Trace - 3,812 193,916 1,749,060 1,942,976
Thymewood II - 3,459 219,661 1,980,407 2,200,068
Timber Hollow - 130,316 800,000 11,349,853 12,149,853
Timbercreek - 1,371 203,420 1,832,149 2,035,569
Timberwalk - 142,033 1,988,000 13,346,252 15,334,252
Timberwood 6,600 388,286 1,518,600 14,976,073 16,494,673
Timberwood (OH) - 6,087 144,299 1,304,781 1,449,081
Town Center (TX) 1,300 193,375 1,291,300 11,723,592 13,014,892
Town Center II (TX) - 1,590 1,375,000 13,839,065 15,214,065
Town Centre III & IV 4,700 2,034,631 2,551,200 26,264,783 28,815,983
Towne Square - 319,701 1,924,710 36,531,118 38,455,828
Townhomes of Meadowbrook 2,600 469,826 1,382,600 12,837,140 14,219,740
Trails (CO), The 100 1,710,373 1,217,900 10,587,578 11,805,478
Trails (NV), The 3,000 1,146,722 3,079,200 28,859,662 31,938,862
Trails (TX), The 21,300 579,446 638,000 6,324,570 6,962,570
Trails at Briar Forest - 243,736 2,380,000 25,155,297 27,535,297
Trails at Dominion Park 2,800 1,092,971 2,531,800 36,792,560 39,324,360
Trails of Valley Ranch 1,400 205,855 2,809,400 8,128,919 10,938,319
Trailway Pond I 2,484 232,699 479,284 4,541,754 5,021,039
Trailway Pond II 2,588 249,320 1,107,288 10,203,586 11,310,874
Trinity Lakes 2,000 469,324 1,982,000 15,425,056 17,407,056
<CAPTION>
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- ----------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Stonehenge (Mas) (12,102) 1984 30 Years
Stonehenge (MI) (11,807) 1984 30 Years
Stonehenge (Ott) (7,992) 1983 30 Years
Stonehenge I (Ric) (12,848) 1984 30 Years
Stoney Creek (1,071,035) 1990 30 Years
Stratford Lane I (16,695) 1984 30 Years
Strawberry Place (7,096) 1982 30 Years
Suffolk Grove I (17,358) 1985 30 Years
Suffolk Grove II (13,449) 1987 30 Years
Sugartree I (13,702) 1984 30 Years
Summer Chase (2,269,958) 1983 30 Years
Summer Creek (230,197) 1985 30 Years
Summer Ridge (742,851) 1985 30 Years
Summerset Village (2,824,900) 1985 30 Years
Summerwood (400,314) 1982 30 Years
Summit at Lake Union (1,240,993) 1995 - 1997 30 Years
Summit Chase (548,513) 1985 30 Years
Sun Creek (556,216) 1985 30 Years
Sunny Oak Village (3,379,027) 1984 30 Years
Sunnyside (13,731) 1984 30 Years
Sunrise Springs (1,827,290) 1989 30 Years
Sunset Way I (21,465) 1987 30 Years
Sunset Way II (22,424) 1988 30 Years
Suntree Village (1,087,909) 1986 30 Years
Surprise Lake Village (1,666,072) 1986 30 Years
Surrey Downs (432,578) 1986 30 Years
Sutton Place (3,867,574) 1985 30 Years
Sutton Place (FL) (10,198) 1984 30 Years
Sweetwater Glen (486,070) 1986 30 Years
Sycamore Creek (1,589,335) 1984 30 Years
Tabor Ridge (19,335) 1986 30 Years
Tamarind at Stoneridge (832,338) 1985 30 Years
Tamarlane (503,791) 1986 30 Years
Tanasbourne Terrace (3,783,624) 1986-89 30 Years
Tanglewood (OR) (2,101,837) 1976 30 Years
Tanglewood (VA) (4,128,721) 1987 30 Years
Terrace Trace (16,100) 1985 30 Years
Thymewood II (17,760) 1986 30 Years
Timber Hollow (521,951) 1986 30 Years
Timbercreek (16,581) 1987 30 Years
Timberwalk (620,991) 1987 30 Years
Timberwood (874,206) 1983 30 Years
Timberwood (OH) (12,035) 1985 30 Years
Town Center (TX) (1,247,668) 1994 30 Years
Town Center II (TX) (13,563) 1994 30 Years
Town Centre III & IV (5,338,532) 1968, 1969 30 Years
Towne Square (2,700,797) 1987-1996 30 Years
Townhomes of Meadowbrook (756,374) 1988 30 Years
Trails (CO), The (2,767,017) 1986 30 Years
Trails (NV), The (5,629,075) 1988 30 Years
Trails (TX), The (1,466,440) 1984 30 Years
Trails at Briar Forest (1,152,474) 1990 30 Years
Trails at Dominion Park (3,882,199) 1992 30 Years
Trails of Valley Ranch (570,724) 1986 30 Years
Trailway Pond I (345,153) 1988 30 Years
Trailway Pond II (768,364) 1988 30 Years
Trinity Lakes (1,298,278) 1985 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trowbridge Atlanta, GA - 2,520,000 9,489,361
Turf Club Littleton, CO - 2,100,000 15,478,040
Turkscap I Tampa, FL 558,781 125,766 1,131,898
Turkscap III Tampa, FL 768,804 135,850 1,222,651
Tyrone Gardens Randolph, MA - 4,950,000 5,800,235
University Square I Tampa, FL 917,645 197,457 1,777,109
Valencia Plantation Orlando, FL - 873,000 12,819,377
Valley Creek I Woodbury, MN 12,827,815 1,622,600 14,626,770
Valley Creek II Woodbury, MN 10,110,100 1,229,500 11,091,476
Valleybrook Atlanta, GA 1,525,843 254,490 2,290,411
Valleyfield (KY) Lexington, KY 1,835,776 252,329 2,270,959
Valleyfield (PA) Pittsburg, PA - 274,317 2,468,850
Valleyfield I Atlanta, GA 1,629,018 252,413 2,271,717
Valleyfield II Atlanta, GA 1,026,548 258,320 2,324,883
Via Ventura Phoenix, AZ (E) 1,476,500 13,382,006
Villa Encanto Phoenix, AZ - 2,884,447 22,197,363
Villa Madeira Phoenix, AZ - 1,580,000 14,240,297
Villa Serenas Tucson, AZ 9,141,446 2,424,900 14,615,923
Villa Solana Laguna Hills, CA - 1,663,500 14,985,678
Village at Bear Creek Denver, CO 21,113,845 4,519,700 40,676,390
Village at Lakewood Phoenix, AZ (P) 3,166,411 13,859,090
Village at Tanque Verde Tucson, AZ (P) 1,434,838 7,134,638
Village Oaks Austin, TX 4,987,945 1,184,400 10,663,736
Village of Newport Federal Way, WA - 414,900 3,747,606
Village of Sycamore Ridge Memphis, TN - 621,300 5,612,046
Villas at Josey Ranch Carrollton, TX 6,727,424 1,584,000 7,264,404
Villas of Oak Creste San Antonio, TX - 905,800 8,151,738
Viridian Lake Fort Myers, FL - 960,000 17,806,758
Vista Del Lago Mission Viejo, CA 30,971,241 4,524,400 40,736,293
Vista Grove Mesa, AZ - 1,341,796 12,157,045
Vista Pointe Irving, TX - 2,079,000 17,028,694
Walden Wood Southfield, MI 5,706,032 833,300 7,513,690
Walker Place Dallas, TX 1,145,471 125,274 1,127,466
Walker's Mark Dallas, TX - 984,000 6,029,822
Warwick Station Denver, CO 9,534,250 2,281,900 20,543,195
Waterbury (GA) Athens, GA 657,813 147,450 1,327,050
Waterbury (IN) Indianapolis, IN 824,264 105,245 947,206
Waterbury (MI) Detroit,MI 2,106,702 331,739 2,985,650
Waterbury (OH) Cincinnati, OH 1,130,576 193,167 1,738,500
Waterbury (TN) Clarksville, TN 942,471 116,968 1,052,708
Waterford (Jax) Jacksonville, FL - 3,024,000 23,662,293
Waterford at Deerwood Jacksonville, FL 10,566,370 1,736,000 10,659,702
Waterford at Orange Park Orange Park, FL 9,540,000 1,960,000 12,098,784
Waterford at Regency Jacksonville, FL 7,075,238 1,113,000 5,184,162
Waterford at the Lakes Kent, WA - 3,100,200 16,153,087
Waterford Place (TN) Nashville, TN - 900,000 12,003,189
Waterford Village (Broward) Delray Beach, FL - 1,888,000 15,358,635
Watermark Square Portland, OR 8,061,856 1,580,000 14,247,039
Waterstone Place Seattle, WA 2,950,900 26,674,599
Welleby Lake Club Sunrise, FL - 3,648,000 17,620,879
Wellington (WA) Silverdale, WA 8,062,026 1,097,300 9,883,303
Wellington Hill Manchester, NH (S) 1,872,500 17,120,662
Wellsford Oaks Tulsa, OK - 1,310,500 11,794,290
Wentworth Detroit,MI - 217,502 1,957,520
West Of Eastland Columbus, OH 2,022,939 234,544 2,110,894
Westbrook Village Manchester, MO - 2,310,000 10,621,218
Westcreek Jacksonville, FL 180,466 185,199 1,666,792
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Trowbridge 1,000 609,462 2,521,000 10,098,823 12,619,823
Turf Club 7,300 843,095 2,107,300 16,321,136 18,428,436
Turkscap I - 5,550 125,766 1,137,448 1,263,215
Turkscap III - 1,580 135,850 1,224,231 1,360,081
Tyrone Gardens 3,000 72,480 4,953,000 5,872,715 10,825,715
University Square I - 2,674 197,457 1,779,783 1,977,240
Valencia Plantation - 51,727 873,000 12,871,105 13,744,105
Valley Creek I 4,115 629,348 1,626,715 15,256,117 16,882,833
Valley Creek II 3,159 159,419 1,232,659 11,250,895 12,483,555
Valleybrook - 5,534 254,490 2,295,945 2,550,435
Valleyfield (KY) - 5,562 252,329 2,276,520 2,528,849
Valleyfield (PA) - 6,692 274,317 2,475,542 2,749,859
Valleyfield I - 2,510 252,413 2,274,228 2,526,641
Valleyfield II - 2,086 258,320 2,326,970 2,585,290
Via Ventura 10,100 4,815,861 1,486,600 18,197,867 19,684,467
Villa Encanto - 789,747 2,884,447 22,987,109 25,871,556
Villa Madeira 2,100 1,601,637 1,582,100 15,841,934 17,424,034
Villa Serenas 1,800 265,649 2,426,700 14,881,572 17,308,272
Villa Solana 1,600 1,372,378 1,665,100 16,358,056 18,023,156
Village at Bear Creek - 219,654 4,519,700 40,896,044 45,415,744
Village at Lakewood - 441,698 3,166,411 14,300,787 17,467,198
Village at Tanque Verde - 303,789 1,434,838 7,438,426 8,873,264
Village Oaks 1,600 507,844 1,186,000 11,171,580 12,357,580
Village of Newport 1,400 292,129 416,300 4,039,735 4,456,035
Village of Sycamore Ridge 2,600 262,988 623,900 5,875,035 6,498,935
Villas at Josey Ranch 3,700 269,222 1,587,700 7,533,626 9,121,326
Villas of Oak Creste - 493,841 905,800 8,645,579 9,551,379
Viridian Lake - 283,004 960,000 18,089,761 19,049,761
Vista Del Lago 1,400 2,495,423 4,525,800 43,231,717 47,757,517
Vista Grove - 146,856 1,341,796 12,303,901 13,645,697
Vista Pointe 1,800 151,120 2,080,800 17,179,814 19,260,614
Walden Wood 1,400 1,360,155 834,700 8,873,845 9,708,545
Walker Place - 2,241 125,274 1,129,707 1,254,981
Walker's Mark 800 196,019 984,800 6,225,841 7,210,641
Warwick Station 100 201,494 2,282,000 20,744,689 23,026,689
Waterbury (GA) - 2,444 147,450 1,329,495 1,476,945
Waterbury (IN) - 2,357 105,245 949,563 1,054,808
Waterbury (MI) - 24,135 331,739 3,009,785 3,341,524
Waterbury (OH) - 2,518 193,167 1,741,018 1,934,185
Waterbury (TN) - 2,319 116,968 1,055,027 1,171,995
Waterford (Jax) - 518,347 3,024,000 24,180,639 27,204,639
Waterford at Deerwood - 294,000 1,736,000 10,953,702 12,689,702
Waterford at Orange Park - 963,644 1,960,000 13,062,428 15,022,428
Waterford at Regency - 134,766 1,113,000 5,318,928 6,431,928
Waterford at the Lakes - 558,075 3,100,200 16,711,163 19,811,363
Waterford Place (TN) - 86,076 900,000 12,089,265 12,989,265
Waterford Village (Broward) - 1,397,696 1,888,000 16,756,331 18,644,331
Watermark Square 500 1,058,489 1,580,500 15,305,528 16,886,028
Waterstone Place 13,100 2,931,368 2,964,000 29,605,967 32,569,967
Welleby Lake Club - 214,745 3,648,000 17,835,624 21,483,624
Wellington (WA) 2,000 594,557 1,099,300 10,477,860 11,577,160
Wellington Hill 17,700 1,944,224 1,890,200 19,064,886 20,955,086
Wellsford Oaks - 188,148 1,310,500 11,982,438 13,292,938
Wentworth - 2,180 217,502 1,959,700 2,177,202
West Of Eastland - 12,197 234,544 2,123,090 2,357,634
Westbrook Village - 43,490 2,310,000 10,664,708 12,974,708
Westcreek - 12,032 185,199 1,678,824 1,864,023
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- -------------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trowbridge (550,816) 1980 30 Years
Turf Club (944,364) 1986 30 Years
Turkscap I (10,406) 1977 30 Years
Turkscap III (11,074) 1982 30 Years
Tyrone Gardens (341,434) 1961/1965 30 Years
University Square I (16,278) 1979 30 Years
Valencia Plantation (574,894) 1990 30 Years
Valley Creek I (1,152,417) 1989 30 Years
Valley Creek II (845,794) 1990 30 Years
Valleybrook (20,417) 1986 30 Years
Valleyfield (KY) (20,533) 1985 30 Years
Valleyfield (PA) (22,044) 1985 30 Years
Valleyfield I (20,095) 1984 30 Years
Valleyfield II (20,555) 1985 30 Years
Via Ventura (4,160,469) 1980 30 Years
Villa Encanto (1,754,746) 1983 30 Years
Villa Madeira (3,318,290) 1971 30 Years
Villa Serenas (1,297,882) 1973 30 Years
Villa Solana (3,537,814) 1984 30 Years
Village at Bear Creek (3,760,814) 1987 30 Years
Village at Lakewood (1,116,058) 1988 30 Years
Village at Tanque Verde (621,346) 1984-1994 30 Years
Village Oaks (1,399,883) 1984 30 Years
Village of Newport (871,926) 1987 30 Years
Village of Sycamore Ridge (513,509) 1977 30 Years
Villas at Josey Ranch (431,527) 1986 30 Years
Villas of Oak Creste (929,891) 1979 30 Years
Viridian Lake (820,681) 1991 30 Years
Vista Del Lago (9,277,982) 1986-88 30 Years
Vista Grove (774,793) 1997 - 1998 30 Years
Vista Pointe (1,073,208) 1996 30 Years
Walden Wood (2,174,376) 1972 30 Years
Walker Place (10,667) 1988 30 Years
Walker's Mark (365,841) 1982 30 Years
Warwick Station (1,959,615) 1986 30 Years
Waterbury (GA) (12,008) 1985 30 Years
Waterbury (IN) (8,723) 1984 30 Years
Waterbury (MI) (27,075) 1985 30 Years
Waterbury (OH) (15,721) 1985 30 Years
Waterbury (TN) (9,732) 1985 30 Years
Waterford (Jax) (1,132,510) 1988 30 Years
Waterford at Deerwood (524,459) 1985 30 Years
Waterford at Orange Park (687,174) 1986 30 Years
Waterford at Regency (265,356) 1985 30 Years
Waterford at the Lakes (1,723,697) 1990 30 Years
Waterford Place (TN) (542,453) 1994 30 Years
Waterford Village (Broward) (798,065) 1989 30 Years
Watermark Square (1,641,362) 1990 30 Years
Waterstone Place (7,165,406) 1990 30 Years
Welleby Lake Club (806,867) 1991 30 Years
Wellington (WA) (1,948,942) 1990 30 Years
Wellington Hill (4,193,508) 1987 30 Years
Wellsford Oaks (1,186,540) 1991 30 Years
Wentworth (17,646) 1985 30 Years
West Of Eastland (20,121) 1977 30 Years
Westbrook Village (269,544) 1984 30 Years
Westcreek (15,664) 1986 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westridge Tacoma, WA - 3,501,900 31,506,082
Westway Brunswick, GA 883,125 168,323 1,514,904
Westwood (IN) Elkhart, IN - 78,508 706,570
Westwood (OH) Columbus, OH 94,282 18,554 166,988
Westwood Pines Tamarac, FL - 1,526,200 13,739,616
Whispering Oaks Walnut Creek, CA 10,972,056 2,167,300 19,539,586
Whispering Pines II Fr. Pierce, FL - 105,172 946,544
Whisperwood Alabany, GA 550,950 84,240 758,163
White Bear Woods White Bear Lake, MN 14,184,170 1,621,300 14,609,576
Wilcrest Woods Savannah, GA 1,348,783 187,306 1,685,757
Wilde Lake Richmond, VA 4,440,000 934,600 8,524,744
Willow Brook (NC) Durham, NC - 1,408,000 7,118,834
Willow Creek I (GA) Atlanta, GA 832,502 145,769 1,326,411
Willow Lakes Spartanburg, SC 2,050,475 200,990 1,808,906
Willow Run (GA) Atlanta, GA 1,730,934 197,965 1,781,684
Willow Run (IN) New Albany, IN 1,130,811 183,873 1,654,854
Willow Run (KY) Owensboro, KY 1,128,383 141,016 1,269,141
Willow Run (OH) Mansfield, OH 833,658 103,396 930,565
Willow Trail Norcross, GA - 1,120,000 11,412,982
Willowick Aurora, CO - 500,000 4,157,878
Willowood (GA) Macon, GA 1,154,151 160,258 1,442,318
Willowood (KY) Owensboro, KY - 96,239 866,148
Willowood East II Indianapolis, IN 786,368 104,918 944,260
Willowood I (Gro) Columbus, OH 947,000 126,045 1,134,405
Willowood I (IN) Bloomington, IN 1,140,000 163,896 1,475,066
Willowood I (KY) Lexington, KY 1,016,267 138,822 1,249,401
Willowood I (Woo) Akron, OH 732,395 117,254 1,055,287
Willowood II (Gro) Columbus, OH 552,007 70,924 638,312
Willowood II (IN) Bloomington, IN 1,148,500 161,306 1,451,756
Willowood II (KY) Lexington, KY 851,423 120,375 1,083,379
Willowood II (Tro) Dayton, OH 914,537 142,623 1,283,610
Willowood II (Woo) Akron, OH 868,458 103,199 928,792
Willows I (OH), The Columbus, OH 560,734 76,283 686,551
Willows II (OH), The Columbus, OH 640,430 96,679 870,108
Willows III (OH), The Columbus, OH 863,348 129,221 1,162,993
Wimberly Dallas, TX - 2,232,000 27,685,923
Wimbledon Oaks Arlington, TX 7,422,826 1,488,000 8,850,195
Windemere Mesa, AZ 5,992,960 949,000 8,771,280
Windmill Colorado Springs, CO - 395,544 4,958,634
Windridge (CA) Laguna Niguel, CA (N) 2,660,800 23,966,595
Windridge (GA) Dunwoody, GA - 1,224,000 13,627,762
Windwood I (FL) Melbourne, FL - 113,913 1,025,215
Windwood II (FL) Melbourne, FL 360,000 118,915 1,070,236
Wingwood (Orl) Orlando, FL 1,498,204 236,884 2,131,959
Winter Woods I (FL) Orlando, FL 947,610 144,921 1,304,292
Winterwood Charlotte, NC 11,737,476 1,720,100 15,501,142
Winthrop Court (KY) Lexington, KY 1,488,803 184,709 1,662,384
Winthrop Court II (OH) Columbus, OH 742,316 102,381 921,430
Wood Creek (CA) Pleasant Hill, CA - 9,728,000 23,009,768
Wood Crest Villa Westland, MI - 925,900 8,492,103
Wood Forest Daytona Beach, FL 6,125,061 1,008,000 4,950,210
Wood Lane Place Woodbury, MN 14,014,000 2,003,300 18,081,691
Woodbine (Cuy) Akron, OH 1,035,420 185,868 1,672,813
Woodbine (Por) Hungtington, OH 636,931 78,098 702,881
Woodbridge (M) Cary, NC 4,688,514 1,981,900 17,838,219
Woodcliff I Atlanta, GA 1,172,930 276,659 2,489,931
Woodcliff II Atlanta, GA 1,681,499 266,449 2,398,044
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Westridge - 799,774 3,501,900 32,305,856 35,807,756
Westway - 8,381 168,323 1,523,286 1,691,608
Westwood (IN) - 9,098 78,508 715,668 794,176
Westwood (OH) - - 18,554 166,988 185,543
Westwood Pines 2,400 339,978 1,528,600 14,079,594 15,608,194
Whispering Oaks 3,500 1,060,849 2,170,800 20,600,436 22,771,236
Whispering Pines II - 4,776 105,172 951,319 1,056,491
Whisperwood - 3,140 84,240 761,303 845,543
White Bear Woods 3,441 236,302 1,624,741 14,845,878 16,470,619
Wilcrest Woods - 5,027 187,306 1,690,784 1,878,090
Wilde Lake 12,600 521,276 947,200 9,046,020 9,993,220
Willow Brook (NC) 1,500 184,159 1,409,500 7,302,993 8,712,493
Willow Creek I (GA) - 1,035 145,769 1,327,446 1,473,214
Willow Lakes - 7,841 200,990 1,816,747 2,017,737
Willow Run (GA) - 9,904 197,965 1,791,588 1,989,553
Willow Run (IN) - 9,003 183,873 1,663,857 1,847,730
Willow Run (KY) - 3,579 141,016 1,272,720 1,413,736
Willow Run (OH) - 2,591 103,396 933,156 1,036,552
Willow Trail - 84,286 1,120,000 11,497,268 12,617,268
Willowick 6,900 190,983 506,900 4,348,862 4,855,762
Willowood (GA) - 4,980 160,258 1,447,298 1,607,556
Willowood (KY) - 9,062 96,239 875,210 971,449
Willowood East II - 8,583 104,918 952,843 1,057,761
Willowood I (Gro) - 854 126,045 1,135,259 1,261,304
Willowood I (IN) - 7,636 163,896 1,482,702 1,646,598
Willowood I (KY) - 8,177 138,822 1,257,578 1,396,401
Willowood I (Woo) - 1,349 117,254 1,056,636 1,173,890
Willowood II (Gro) - 237 70,924 638,548 709,472
Willowood II (IN) - 1,841 161,306 1,453,597 1,614,903
Willowood II (KY) - 341 120,375 1,083,720 1,204,096
Willowood II (Tro) - 3,872 142,623 1,287,482 1,430,105
Willowood II (Woo) - 3,464 103,199 932,257 1,035,456
Willows I (OH), The - 2,744 76,283 689,295 765,578
Willows II (OH), The - 6,021 96,679 876,129 972,808
Willows III (OH), The - 1,867 129,221 1,164,860 1,294,081
Wimberly - 108,124 2,232,000 27,794,047 30,026,047
Wimbledon Oaks 3,700 350,075 1,491,700 9,200,270 10,691,970
Windemere 300 411,868 949,300 9,183,148 10,132,448
Windmill 100 797,354 395,644 5,755,988 6,151,632
Windridge (CA) 2,100 854,440 2,662,900 24,821,035 27,483,935
Windridge (GA) - 156,084 1,224,000 13,783,845 15,007,845
Windwood I (FL) - 4,573 113,913 1,029,787 1,143,700
Windwood II (FL) - 3,338 118,915 1,073,573 1,192,488
Wingwood (Orl) - 8,062 236,884 2,140,021 2,376,905
Winter Woods I (FL) - 5,310 144,921 1,309,603 1,454,524
Winterwood 1,900 1,667,447 1,722,000 17,168,589 18,890,589
Winthrop Court (KY) - 28,198 184,709 1,690,582 1,875,291
Winthrop Court II (OH) - 1,200 102,381 922,630 1,025,011
Wood Creek (CA) 1,900 302,901 9,729,900 23,312,669 33,042,569
Wood Crest Villa 7,922 824,243 933,822 9,316,346 10,250,168
Wood Forest - 29,316 1,008,000 4,979,526 5,987,526
Wood Lane Place 5,847 615,477 2,009,147 18,697,168 20,706,315
Woodbine (Cuy) - 471 185,868 1,673,284 1,859,152
Woodbine (Por) - 20,015 78,098 722,896 800,994
Woodbridge (M) 100 509,795 1,982,000 18,348,014 20,330,014
Woodcliff I - 4,654 276,659 2,494,585 2,771,244
Woodcliff II - 5,495 266,449 2,403,539 2,669,989
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- ----------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Westridge (3,146,814) 1987/1991 30 Years
Westway (14,064) 1984 30 Years
Westwood (IN) (6,752) 1984 30 Years
Westwood (OH) (1,625) 1980 30 Years
Westwood Pines (1,066,322) 1991 30 Years
Whispering Oaks (2,456,734) 1974 30 Years
Whispering Pines II (8,779) 1986 30 Years
Whisperwood (7,249) 1985 30 Years
White Bear Woods (1,126,466) 1989 30 Years
Wilcrest Woods (15,352) 1986 30 Years
Wilde Lake (1,042,447) 1989 30 Years
Willow Brook (NC) (742,988) 1986 30 Years
Willow Creek I (GA) (11,861) 1985 30 Years
Willow Lakes (16,905) 1986 30 Years
Willow Run (GA) (16,450) 1983 30 Years
Willow Run (IN) (15,085) 1984 30 Years
Willow Run (KY) (11,889) 1984 30 Years
Willow Run (OH) (8,901) 1983 30 Years
Willow Trail (530,427) 1985 30 Years
Willowick (252,644) 1980 30 Years
Willowood (GA) (13,089) 1984 30 Years
Willowood (KY) (8,405) 1984 30 Years
Willowood East II (9,133) 1985 30 Years
Willowood I (Gro) (10,255) 1984 30 Years
Willowood I (IN) (13,323) 1983 30 Years
Willowood I (KY) (11,535) 1984 30 Years
Willowood I (Woo) (9,683) 1984 30 Years
Willowood II (Gro) (5,761) 1985 30 Years
Willowood II (IN) (13,123) 1986 30 Years
Willowood II (KY) (9,929) 1985 30 Years
Willowood II (Tro) (11,897) 1987 30 Years
Willowood II (Woo) (8,784) 1986 30 Years
Willows I (OH), The (6,649) 1987 30 Years
Willows II (OH), The (8,139) 1981 30 Years
Willows III (OH), The (10,483) 1987 30 Years
Wimberly (1,229,499) 1996 30 Years
Wimbledon Oaks (518,830) 1985 30 Years
Windemere (888,408) 1986 30 Years
Windmill (1,702,527) 1985 30 Years
Windridge (CA) (4,652,693) 1989 30 Years
Windridge (GA) (643,036) 1982 30 Years
Windwood I (FL) (9,723) 1988 30 Years
Windwood II (FL) (10,097) 1987 30 Years
Wingwood (Orl) (19,329) 1980 30 Years
Winter Woods I (FL) (12,027) 1985 30 Years
Winterwood (3,973,146) 1986 30 Years
Winthrop Court (KY) (15,946) 1985 30 Years
Winthrop Court II (OH) (8,332) 1986 30 Years
Wood Creek (CA) (2,128,073) 1987 30 Years
Wood Crest Villa (896,381) 1970 30 Years
Wood Forest (238,822) 1985 30 Years
Wood Lane Place (1,390,578) 1989 30 Years
Woodbine (Cuy) (14,873) 1982 30 Years
Woodbine (Por) (7,100) 1981 30 Years
Woodbridge (M) (2,659,864) 1993-95 30 Years
Woodcliff I (22,045) 1984 30 Years
Woodcliff II (21,332) 1986 30 Years
</TABLE>
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INITIAL COST TO
DESCRIPTION COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Woodcreek Beaverton, OR 10,836,214 1,753,700 15,804,205
Woodcrest I Macon, GA 1,152,424 115,739 1,050,217
Woodlake (WA) Kirkland, WA 11,642,214 6,624,000 16,735,484
Woodlake at Killearn Tallahassee, FL - 1,404,300 13,024,748
Woodland Hills Decatur, GA - 1,223,900 11,021,239
Woodland I & II (FL) Orlando, FL 3,498,688 461,949 4,157,538
Woodland Meadows Ann Arbor, MI - 2,003,600 18,049,552
Woodland Oaks Tulsa, OK - 893,100 8,038,166
Woodlands (KY) Nashville, KY - 72,094 648,844
Woodlands I (Col) Columbus, OH 1,802,330 231,996 2,087,960
Woodlands I (PA) Pittsburgh, PA 1,040,321 163,192 1,468,725
Woodlands I (Str) Cleveland, OH 1,412,684 197,378 1,776,398
Woodlands II (Col) Columbus, OH 1,563,244 192,633 1,733,701
Woodlands II (PA) Pittsburgh, PA - 192,972 1,736,751
Woodlands II (Str) Cleveland, OH 1,588,582 183,996 1,655,964
Woodlands III (Col) Columbus, OH - 230,536 2,074,824
Woodlands of Brookfield Brookfield, WI (Q) 1,480,000 13,961,081
Woodlands of Minnetonka Minnetonka, MN - 2,392,500 13,543,076
Woodleaf Campbell, CA 11,543,551 8,544,000 16,988,183
Woodmoor Austin, TX - 649,300 5,875,968
Woodridge (CO) Aurora, CO - 2,774,000 20,845,971
Woodridge (MN) Eagan, MN 7,712,379 1,600,000 10,449,579
Woods of North Bend Raleigh, NC - 1,039,000 9,305,319
Woodscape Raleigh, NC - 956,000 8,607,940
Woodside Lorton, VA - 1,308,100 12,510,903
Woodtrail Atlanta, GA 998,738 250,895 2,258,054
Woodvalley Anniston, AL 1,416,346 190,188 1,711,693
Wycliffe Court Nashville, TN 1,143,552 166,545 1,498,902
Wynbrook Atlanta, GA - 2,544,000 11,017,078
Wyndridge 2 Memphis, TN 14,135,000 1,486,000 13,749,636
Wyndridge 3 Memphis, TN 10,855,000 1,500,000 13,531,741
Yarmouth Woods Yarmouth, ME - 690,000 6,096,155
Yorktowne at Olde Mill Millersville, MD - 216,000 4,224,762
Yuma Court Colorado Springs, CO - 113,163 840,859
Miscellaneous - - 6,732,080
Operating Partnership Chicago, IL - - 88,566
Management Business Chicago, IL - - 3,442,962
------------------ ------------------ -------------------
TOTAL INVESTMENT IN REAL ESTATE $ 2,309,147,938 $ 1,546,641,806 $ 10,262,221,652
================== ================== ===================
================== ================== ===================
REAL ESTATE HELD FOR DISPOSITION
Lakeridge at Moors Miami, FL $ - $ 2,100,000 $ 9,068,840
Sonnet Cove I Lexington, KY - 183,407 1,770,784
Sonnet Cove II Lexington, KY - 100,000 1,462,579
------------------ ------------------ -------------------
TOTAL REAL ESTATE HELD FOR DISPOSITION $ - $ 2,383,407 $ 12,302,203
================== ================== ===================
TOTAL REAL ESTATE $ 2,309,147,938 $ 1,549,025,213 $ 10,274,523,855
================== ================== ===================
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
COST CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT CARRIED
ACQUISITION AT CLOSE OF
DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99
- -----------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LAND FIXTURES LAND FIXTURES (A)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Woodcreek 2,100 2,119,075 1,755,800 17,923,280
Woodcrest I - 3,979 115,739 1,054,197
Woodlake (WA) 7,400 250,511 6,631,400 16,985,996
Woodlake at Killearn 3,855 738,290 1,408,155 13,763,038
Woodland Hills 700 575,900 1,224,600 11,597,140
Woodland I & II (FL) - 28,119 461,949 4,185,657
Woodland Meadows 2,400 312,397 2,006,000 18,361,948
Woodland Oaks - 407,656 893,100 8,445,823
Woodlands (KY) - 18,514 72,094 667,359
Woodlands I (Col) - 10,966 231,996 2,098,926
Woodlands I (PA) - 3,493 163,192 1,472,219
Woodlands I (Str) - 2,905 197,378 1,779,304
Woodlands II (Col) - 9,332 192,633 1,743,033
Woodlands II (PA) - 11,689 192,972 1,748,440
Woodlands II (Str) - 1,992 183,996 1,657,956
Woodlands III (Col) - 6,001 230,536 2,080,825
Woodlands of Brookfield 4,600 237,393 1,484,600 14,198,474
Woodlands of Minnetonka 2,000 466,954 2,394,500 14,010,030
Woodleaf 6,600 112,378 8,550,600 17,100,561
Woodmoor 4,500 1,242,377 653,800 7,118,345
Woodridge (CO) 6,700 474,382 2,780,700 21,320,353
Woodridge (MN) 2,300 247,486 1,602,300 10,697,066
Woods of North Bend 500 1,305,050 1,039,500 10,610,369
Woodscape 1,300 285,321 957,300 8,893,261
Woodside 17,900 505,533 1,326,000 13,016,436
Woodtrail - 13,149 250,895 2,271,203
Woodvalley - 6,319 190,188 1,718,013
Wycliffe Court - 6,778 166,545 1,505,680
Wynbrook 2,500 211,136 2,546,500 11,228,213
Wyndridge 2 2,000 556,066 1,488,000 14,305,702
Wyndridge 3 2,500 403,393 1,502,500 13,935,134
Yarmouth Woods 2,800 209,209 692,800 6,305,364
Yorktowne at Olde Mill - 2,019,215 216,000 6,243,977
Yuma Court 100 159,593 113,263 1,000,452
Miscellaneous - 4,569 - 6,736,649
Operating Partnership - 150 - 88,716
Management Business 101,000 32,920,524 101,000 36,363,486
-------------- ---------------- ------------------- --------------------
TOTAL INVESTMENT IN REAL ESTATE $3,735,914 $ 426,363,116 $ 1,550,377,719 $10,688,584,768
============== ================ =================== ====================
============== ================ =================== ====================
REAL ESTATE HELD FOR DISPOSITION
Lakeridge at Moors $ - $ 60,745 $ 2,100,000 $ 9,129,585
Sonnet Cove I - 2,835,689 183,407 4,606,473
Sonnet Cove II - 799,939 100,000 2,262,518
-------------- ---------------- ------------------- --------------------
TOTAL REAL ESTATE HELD FOR DISPOSITION $ - $ 3,696,373 $ 2,383,407 $ 15,998,576
============== ================ =================== ====================
TOTAL REAL ESTATE $3,735,914 $ 430,059,488 $ 1,552,761,126 $10,704,583,344
============== ================ =================== ====================
<CAPTION>
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
LIFE USED TO
COMPUTE
DESCRIPTION DEPRECIATION IN
- ----------------------------------------------------------------------------------------------------------------
ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Woodcreek 19,679,080 (3,965,455) 1982-84 30 Years
Woodcrest I 1,169,935 (9,867) 1984 30 Years
Woodlake (WA) 23,617,396 (939,644) 1984 30 Years
Woodlake at Killearn 15,171,193 (3,102,947) 1986 30 Years
Woodland Hills 12,821,740 (1,667,097) 1985 30 Years
Woodland I & II (FL) 4,647,605 (38,133) 1984/85 30 Years
Woodland Meadows 20,367,948 (1,509,989) 1987-1989 30 Years
Woodland Oaks 9,338,923 (861,147) 1983 30 Years
Woodlands (KY) 739,452 (6,855) 1983 30 Years
Woodlands I (Col) 2,330,922 (19,183) 1983 30 Years
Woodlands I (PA) 1,635,410 (13,177) 1983 30 Years
Woodlands I (Str) 1,976,681 (15,886) 1984 30 Years
Woodlands II (Col) 1,935,666 (15,871) 1984 30 Years
Woodlands II (PA) 1,941,412 (15,803) 1987 30 Years
Woodlands II (Str) 1,841,952 (14,857) 1985 30 Years
Woodlands III (Col) 2,311,361 (19,051) 1987 30 Years
Woodlands of Brookfield 15,683,074 (839,601) 1990 30 Years
Woodlands of Minnetonka 16,404,530 (1,073,483) 1988 30 Years
Woodleaf 25,651,161 (908,798) 1984 30 Years
Woodmoor 7,772,145 (1,731,345) 1981 30 Years
Woodridge (CO) 24,101,053 (1,240,035) 1980-82 30 Years
Woodridge (MN) 12,299,366 (640,231) 1986 30 Years
Woods of North Bend 11,649,869 (1,895,988) 1983 30 Years
Woodscape 9,850,561 (1,090,592) 1979 30 Years
Woodside 14,342,436 (2,515,124) 1987 30 Years
Woodtrail 2,522,098 (20,118) 1984 30 Years
Woodvalley 1,908,201 (15,624) 1986 30 Years
Wycliffe Court 1,672,224 (13,653) 1985 30 Years
Wynbrook 13,774,713 (671,616) 1972/1976 30 Years
Wyndridge 2 15,793,702 (1,431,485) 1988 30 Years
Wyndridge 3 15,437,634 (1,407,694) 1988 30 Years
Yarmouth Woods 6,998,164 (440,205) 1971/1978 30 Years
Yorktowne at Olde Mill 6,459,977 (4,584,812) 1974 30 Years
Yuma Court 1,113,715 (265,573) 1985 30 Years
Miscellaneous 6,736,649 (1,038)
Operating Partnership 88,716 (68,122) (H)
Management Business 36,464,486 (19,155,155) (G)
------------------ ------------------
TOTAL INVESTMENT IN REAL ESTATE $12,238,962,488 $ (1,070,486,957)
================== ==================
================== ==================
REAL ESTATE HELD FOR DISPOSITION
Lakeridge at Moors $ 11,229,585 $ (417,185) 1991 30 Years
Sonnet Cove I 4,789,880 (3,452,988) 1972 30 Years
Sonnet Cove II 2,362,518 (1,643,555) 1974 30 Years
------------------ ------------------
TOTAL REAL ESTATE HELD FOR DISPOSITION $ 18,381,983 $ (5,513,728)
================== ==================
TOTAL REAL ESTATE $12,257,344,470 $ (1,076,000,685)
================== ==================
</TABLE>
<PAGE>
SCHEDULE III
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
NOTES:
(A) The balance of furniture & fixtures included in the total investment in
real estate amount was $404,259,561 as of December 31,1999.
The balance of furniture & fixtures included in the total real estate
held for disposition amount was $1,403,187 as of December 31, 1999.
(B) The aggregate cost for Federal Income Tax purposes as of December 31,
1999 was approximately $8.5 billion.
(C) The life to compute depreciation for furniture & fixtures is 5 years.
(D) These two properties are encumbered by $14,438,632 in bonds.
(E) These 17 properties are encumbered by $136,000,000 in bonds.
(F) These four properties are encumbered by $15,500,000 in bonds.
(G) This asset consists of various acquisition dates and largely represents
furniture, fixtures and equipment owned by the Management Business.
(H) This asset consists of various acquisition dates and represents
furniture, fixtures and equipment owned by the Operating Partnership.
(I) Improvements are net of write-off of fully depreciated assets which are
no longer in service.
(J) Formerly known as Oxford & Sussex
(K) Formerly known as Post Place
(L) Formerly known as The Vinings at Coral Springs
(M) Formerly known as The Plantations (NC)
(N) These five properties are pledged as additional collateral in
connection with the tax-exempt bond refinancing of $177,570,000.
(O) These 21 properties are encumbered by $132,203,864 in bonds.
(P) These 5 properties are encumbered by a $48,722,302 note payable.
(Q) These 5 properties are encumbered by $50,000,000 of mortgage debt.
(R) These properties are currently under development and will be completed
subsequent to December 31, 1999.
(S) These ten properties are encumbered by $177,570,000 in bonds.
(T) Includes Port Royale I, Port Royale II and Port Royale III. Port Royale
III is encumbered by a third party mortgage.
(U) These five properties are pledged as additional collateral in
connection with a tax-exempt bond refinancing totaling $122,104,116.
* Four.Lakes was constructed in phases between 1968 & 1988.
(#) The Lodge-Texas was struck by a tornado that destroyed most of the
property. The property was reconstructed during 1989 & 1990.
(x) Pines of Springdale was constructed in phases between 1985 & 1987.
<PAGE>
SCHEDULE III
EQUITY RESIDENTIAL PROPERTIES TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
(AMOUNTS IN THOUSANDS)
The changes in total real estate for the years ended December 31, 1999, 1998,
and 1997 are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------- ------------------- ------------------
<S> <C> <C> <C>
Balance, beginning of year $ 10,986,261 $ 7,121,435 $ 2,983,510
Acquisitions 1,448,582 3,927,768 4,112,126
Improvements 141,935 102,020 60,043
Write-off of fully depreciated assets
which are no longer in service - (25) (930)
Dispositions and other (319,434) (164,937) (33,314)
------------------- ------------------- ------------------
Balance, end of year $ 12,257,344 $ 10,986,261 $ 7,121,435
=================== =================== ==================
The changes in accumulated depreciation for the years ended December 31, 1999,
1998, and 1997 are as follows:
<CAPTION>
1999 1998 1997
------------------- ------------------- ------------------
<S> <C> <C> <C>
Balance, beginning of year $ 732,803 $ 444,762 $ 301,512
Depreciation 406,906 301,869 156,644
Write-off of fully depreciated assets
which are no longer in service - (25) (930)
Dispositions and other (63,708) (13,803) (12,464)
------------------- ------------------- ------------------
Balance, end of year $ 1,076,001 $ 732,803 $ 444,762
=================== =================== ==================
</TABLE>
S-12
<PAGE>
Exhibit 10.12
REVOLVING CREDIT AGREEMENT
dated as of August 12, 1999
among
ERP OPERATING LIMITED PARTNERSHIP,
THE BANKS LISTED HEREIN,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent,
THE CHASE MANHATTAN BANK,
as Syndication Agent,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent,
BANK OF AMERICA SECURITIES LLC,
as Joint Lead Arranger,
and
CHASE SECURITIES INC.,
as Joint Lead Arranger
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") dated as of August
12, 1999 among ERP OPERATING LIMITED PARTNERSHIP (the "Borrower"), the BANKS
listed on the signature pages hereof, BANK OF AMERICA, NATIONAL ASSOCIATION, as
Administrative Agent, THE CHASE MANHATTAN BANK, as Syndication Agent, and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent.
W I T N E S S E T H
WHEREAS, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted Asset Value" means, with respect to any Person or Property,
(i) for any Property for which an acquisition or disposition has not occurred in
the Fiscal Quarter most recently ended by the Borrower, EQR and their
Consolidated Subsidiaries or Investment Affiliates, the product of four (4) and
a fraction, the numerator of which is EBITDA for such Fiscal Quarter
attributable to any such Property owned by the Borrower, EQR or any such
Consolidated Subsidiary, or in the case of any such Property owned by an
Investment Affiliate, the Borrower's Share of EBITDA, in a manner reasonably
acceptable to Administrative Agent for the Fiscal Quarter most recently ended,
and the denominator of which is the FMV Cap Rate, plus (ii) for any Property
which has been acquired by the Borrower, EQR and their Consolidated Subsidiaries
or Investment Affiliates in the Fiscal Quarter most recently ended, the Net
Price of the Property paid by Borrower, EQR or the Consolidated Subsidiary, or
the Borrower's or EQR's pro rata share of the Net Price of the Property paid by
the Investment Affiliate for such Property, plus (iii) the value of any
Unimproved Assets owned by the Borrower, EQR and their Consolidated
Subsidiaries, as measured on a GAAP basis, plus (iv) Borrower's Share of the
value of any Unimproved Assets owned by an Investment Affiliate, as measured on
a GAAP basis, plus (v) the value of any Raw Land owned by the Borrower, EQR and
their Consolidated Subsidiaries, as measured on a GAAP basis, plus (vi)
Borrower's Share of the value of any Raw Land
1
<PAGE>
owned by an Investment Affiliate, as measured on a GAAP basis; provided,
however, the value attributable to any Unimproved Assets described in clauses
(iii) and (iv) above, in excess of ten percent (10%) of Gross Asset Value shall
be disregarded in calculating Adjusted Asset Value, and provided further, the
value attributable to any Raw Land described in clauses (v) and (vi) above,
shall be limited to five percent (5%) of Gross Asset Value.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.7(b).
"Administrative Agent" shall mean Bank of America, National Association
in its capacity as Administrative Agent hereunder, and its permitted successors
in such capacity in accordance with the terms of this Agreement.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Agreement" shall mean this Revolving Credit Agreement as the same may
from time to time hereafter be modified, supplemented or amended.
"Applicable Interest Rate" means (i) with respect to any Fixed Rate
Indebtedness, the fixed interest rate applicable to such Fixed Rate Indebtedness
at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, either (x) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest
rate hedging device), at the time of calculation, if Borrower has entered into
an interest rate cap agreement or other interest rate hedging device with
respect thereto or (y) if Borrower has not entered into an interest rate cap
agreement or other interest rate hedging device with respect to such Floating
Rate Indebtedness, the greater of (A) the rate at which the interest rate
applicable to such Floating Rate Indebtedness could be fixed for the remaining
term of such Floating Rate Indebtedness, at the time of calculation, by
Borrower's entering into any unsecured interest rate hedging device either not
requiring an upfront payment or if requiring an upfront payment, such upfront
payment shall be amortized over the term of such device and included in the
calculation of the interest rate (or, if such rate is incapable of being fixed
by entering into an unsecured interest rate hedging device at the time of
calculation, a fixed rate equivalent reasonably determined by Administrative
Agent) or (B) the floating rate applicable to such Floating Rate Indebtedness at
the time in question.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans or Swingline Loans, its Domestic Lending Office,
(ii) in the case of its Euro-Dollar
2
<PAGE>
Loans, its Euro-Dollar Lending Office, and (iii) in the case of its Money Market
Loans, its Money Market Lending Office.
"Applicable Margin" means, with respect to each Loan, the respective
percentages per annum determined, at any time, based on the range into which
Borrower's Credit Rating then falls, in accordance with the table set forth
below. Any change in Borrower's Credit Rating causing it to move to a different
range on the table shall effect an immediate change in the Applicable Margin. In
the event that Borrower receives two (2) Credit Ratings that are not equivalent,
the Applicable Margin shall be determined by the lower of such two (2) Credit
Ratings. In the event that Borrower receives more than two (2) Credit Ratings,
and such ratings are not equivalent, the Applicable Margin shall be determined
by the lower of the two (2) highest ratings, provided that each of said two (2)
highest ratings shall be Investment Grade Ratings and at least one of which
shall be an Investment Grade Rating from S&P or Moody's. In the event that each
of said two (2) highest ratings shall not be Investment Grade Ratings or at
least one shall not be an Investment Grade Rating from S&P or Moody's, then the
Applicable Margin shall be determined by the lowest of the ratings. In the event
that only one of the Rating Agencies shall have set Borrower's Credit Rating,
then the Applicable Margin shall be based on such rating only.
<TABLE>
<CAPTION>
Range of Applicable
Borrower's Margin for Applicable
Credit Rating Base Rate Margin for Euro
(S&P/Moody's Loans Dollar Loans
Ratings) (% per annum) (% per annum)
<S> <C> <C>
Non-Invest-
ment Grade 0.300 1.450
BBB-/Baa3 0.0 1.100
BBB/Baa2 0.0 0.900
BBB+/Baa1 0.0 0.700
A-/A3 0.0 0.625
A/A2 or 0.0 0.550
better
</TABLE>
"Approved Bank" shall mean banks which have (i)(a) a minimum net worth
of $500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a minimum
long term debt rating of (a) BBB+ or higher by S&P, and (b) Baa1 or higher by
Moody's.
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"Assignee" has the meaning set forth in Section 9.6(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors and each Designated Lender; provided, however, that the term "Bank"
shall exclude each Designated Lender when used in reference to a Committed Loan,
the Commitments or terms relating to the Committed Loans and the Commitments and
shall further exclude each Designated Lender for all other purposes hereunder
except that any Designated Lender which funds a Money Market Loan shall, subject
to Section 9.6(d), have the rights (including the rights given to a Bank
contained in Section 9.3 and otherwise in Article 9) and obligations of a Bank
associated with holding such Money Market Loan.
"Bankruptcy Code" shall mean Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 0.5% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" means ERP Operating Limited Partnership, an Illinois limited
partnership.
"Borrower's Share" means Borrower's or EQR's share of the liabilities
or assets, as the case may be, of an Investment Affiliate or Consolidated
Subsidiary based upon Borrower's or EQR's percentage ownership of such
Investment Affiliate or Consolidated Subsidiary, as the case may be.
"Borrowing" has the meaning set forth in Section 1.3.
"Capital Leases" as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cap Rate" means the Treasury Rate plus 2.8%.
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"Capital Reserve" shall mean, for any period, $62.50 for each Fiscal
Quarter to occur during such period.
"Cash and Cash Equivalents" shall mean unrestricted (notwithstanding
the foregoing, however, cash held in escrow in connection with the completion of
Code Section 1031 "like-kind" exchanges shall be deemed to be "unrestricted" for
purposes hereof) (i) cash, (ii) direct obligations of the United States
Government, including without limitation, treasury bills, notes and bonds, (iii)
interest bearing or discounted obligations of Federal agencies and Government
sponsored entities or pools of such instruments offered by Approved Banks and
dealers, including without limitation, Federal Home Loan Mortgage Corporation
participation sale certificates, Government National Mortgage Association
modified pass through certificates, Federal National Mortgage Association bonds
and notes, and Federal Farm Credit System securities, (iv) time deposits,
Domestic and Eurodollar certificates of deposit, bankers acceptances, commercial
paper rated at least A-1 by S&P and P-1 by Moody's and/or guaranteed by an Aa
rating by Moody's, a AA rating by S&P or better rated credit, floating rate
notes, other money market instruments and letters of credit each issued by
Approved Banks (provided that the same shall cease to be a "Cash or Cash
Equivalent" if at any time any such bank shall cease to be an Approved Bank),
(v) obligations of domestic corporations, including, without limitation,
commercial paper, bonds, debentures and loan participations, each of which is
rated at least AA by S&P and/or Aa2 by Moody's and/or guaranteed by an Aa rating
by Moody's, a AA rating by S&P or better rated credit, (vi) obligations issued
by states and local governments or their agencies, rated at least MIG-1 by
Moody's and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of credit
of an Approved Bank (provided that the same shall cease to be a "Cash or Cash
Equivalent" if at any time any such bank shall cease to be an Approved Bank),
(vii) repurchase agreements with major banks and primary government security
dealers fully secured by the U.S. Government or agency collateral equal to or
exceeding the principal amount on a daily basis and held in safekeeping, and
(viii) real estate loan pool participations, guaranteed by an AA rating given by
S&P or Aa2 rating given by Moody's or better rated credit.
"Closing Date" means the date on or after the Effective Date on which
the conditions set forth in Section 3.1 shall have been satisfied to the
satisfaction of the Administrative Agent.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as
it may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Committed Borrowing" has the meaning set forth in Section 1.3.
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<PAGE>
"Committed Loan" means a loan made by a Bank pursuant to Section 2.1,
as well as Loans required to be made by a Bank pursuant to Section 2.16 to
reimburse a Fronting Bank for a Letter of Credit that has been drawn down;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Committed
Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof (and, for each Bank
which is an Assignee, the amount set forth in the Transfer Supplement entered
into pursuant to Section 9.6(c) as the Assignee's Commitment), as such amount
may be reduced from time to time pursuant to Section 2.11(e) or in connection
with an assignment to an Assignee.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity which is consolidated with Borrower or EQR in accordance with GAAP.
"Consolidated Tangible Net Worth" means at any date the consolidated
partners' capital plus the value of preference units of the Borrower and its
Consolidated Subsidiaries (determined on a book basis), less their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition "Intangible Assets" means with respect to any such intangible assets,
the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups resulting from
foreign currency transactions and write-ups of assets of a going concern
business made within twelve months after the acquisition of such business)
subsequent to March 31, 1999 in the book value of any asset (other than Real
Property Assets) owned by the Borrower or a Consolidated Subsidiary and (ii)
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry forwards, copyrights, organization or developmental
expenses and other intangible assets.
"Contingent Obligation" as to any Person means, without duplication,
(i) any contingent obligation of such Person required to be shown on such
Person's balance sheet in accordance with GAAP, and (ii) any obligation required
to be disclosed in the footnotes to such Person's financial statements,
guaranteeing partially or in whole any Non-Recourse Indebtedness, lease,
dividend or other obligation, exclusive of contractual indemnities (including,
without limitation, any indemnity or price-adjustment provision relating to the
purchase or sale of securities or other assets) and guarantees of non-monetary
obligations (other than guarantees of completion) which have not yet been called
on or quantified, of such Person or of any other Person. The amount of any
Contingent Obligation described in
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clause (ii) shall be deemed to be (a) with respect to a guaranty of interest or
interest and principal, or operating income guaranty, the Net Present Value of
the sum of all payments required to be made thereunder (which in the case of an
operating income guaranty shall be deemed to be equal to the debt service for
the note secured thereby), calculated at the Applicable Interest Rate, through
(i) in the case of an interest or interest and principal guaranty, the stated
date of maturity of the obligation (and commencing on the date interest could
first be payable thereunder), or (ii) in the case of an operating income
guaranty, the date through which such guaranty will remain in effect, and (b)
with respect to all guarantees not covered by the preceding clause (a), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of Borrower required to
be delivered pursuant to Section 4.4 hereof. Notwithstanding anything contained
herein to the contrary, guarantees of completion shall not be deemed to be
Contingent Obligations unless and until a claim for payment or performance has
been made thereunder, at which time any such guaranty of completion shall be
deemed to be a Contingent Obligation in an amount equal to any such claim.
Subject to the preceding sentence, (i) in the case of a joint and several
guaranty given by such Person and another Person (but only to the extent such
guaranty is recourse, directly or indirectly to Borrower), the amount of the
guaranty shall be deemed to be 100% thereof unless and only to the extent that
such other Person has delivered Cash or Cash Equivalents to secure all or any
part of such Person's guaranteed obligations and (ii) in the case of a guaranty
(whether or not joint and several) of an obligation otherwise constituting
Indebtedness of such Person, the amount of such guaranty shall be deemed to be
only that amount in excess of the amount of the obligation constituting
Indebtedness of such Person. Notwithstanding anything contained herein to the
contrary, "Contingent Obligations" shall be deemed not to include guarantees of
Unused Commitments or of construction loans to the extent the same have not been
drawn. All matters constituting "Contingent Obligations" shall be calculated
without duplication.
"Convertible Securities" means evidences of shares of stock, limited or
general partnership interests or other ownership interests, warrants, options,
or other rights or securities which are convertible into or exchangeable for,
with or without payment of additional consideration, shares of common stock of
EQR or partnership interests of Borrower, as the case may be, either immediately
or upon the arrival of a specified date or the happening of a specified event.
"Credit Rating" means the rating assigned by the Rating Agencies to
Borrower's senior unsecured long term indebtedness.
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<PAGE>
"Debt Restructuring" means a restatement of, or material change in, the
amortization or other financial terms of any Indebtedness of EQR, the Borrower
or any Consolidated Subsidiary or Investment Affiliate.
"Debt Service" means, for any period, Interest Expense for such period
plus scheduled principal amortization (excluding any individual scheduled
principal payment which exceeds 25% of the original principal amount of an
issuance of Indebtedness) for such period on all Indebtedness of EQR (calculated
as provided in Section 1.2), on a consolidated basis, plus Borrower's Share of
scheduled principal amortization for such period on all Indebtedness of
Investment Affiliates for which there is no recourse to EQR or Borrower (or any
Property thereof), plus, without duplication, EQR's and Borrower's actual or
potential liability for principal amortization (excluding any individual
scheduled principal payment which exceeds 25% of the original principal amount
of an issuance of Indebtedness) for such period on all Indebtedness of
Investment Affiliates that is recourse to EQR or Borrower (or any Property
thereof).
"Default" means any condition or event which with the giving of notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"Default Rate" has the meaning set forth in Section 2.6(d).
"Designated Lender" means a special purpose corporation that (i) shall
have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is
not otherwise a Bank.
"Designated Lender Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to repay Money Market Loans made by Designated Lenders, and
"Designated Lender Note" means any one of such promissory notes issued under
Section 9.6(d) hereof.
"Designating Lender" shall have the meaning set forth in Section 9.6(d)
hereof.
"Designation Agreement" means a designation agreement in substantially
the form of Exhibit G attached hereto, entered into by a Bank and a Designated
Lender and accepted by the Administrative Agent.
"Development Activity" means (a) the development and construction of
multiple apartment complexes by the Borrower or any of its Subsidiaries, (b) the
financing by the Borrower, EQR or any Subsidiaries or Investment Affiliates of
either or both of any such development or construction or (c) the incurrence by
the Borrower, EQR or any Subsidiaries or Investment Affiliates of
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<PAGE>
either or both of any Contingent Obligations in connection with such development
or construction (other than purchase contracts for Real Property Assets which
are not payable until completion of development or construction), valued at the
cost of such projects under development and construction in the case of assets
owned by the Borrower, EQR or any Subsidiaries, or the Borrower's Share of the
cost of such projects under development and construction in the case of assets
owned by Investment Affiliates.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Chicago, Illinois are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address in the United States set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"EBITDA" means, for any period (i) Net Income for such period, plus
(ii) depreciation and amortization expense and other non-cash items deducted in
the calculation of Net Income for such period, plus (iii) Interest Expense
deducted in the calculation of Net Income for such period, plus, (iv) Taxes
deducted in the calculation of Net Income for such period, plus (v) Borrower's
Share of distributed earnings of Investment Affiliates for such period, minus
(vi) the gains (and plus the losses) from extraordinary items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of Net
Income, for such period, minus (vii) Borrower's Share of accrued income and
losses of Investment Affiliates for such period minus (viii) earnings of
Subsidiaries for such period distributed to third parties, all of the foregoing
without duplication.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 9.9.
"Environmental Affiliate" means any partnership, joint venture, trust
or corporation in which an equity interest is owned by the Borrower and/or EQR,
either directly or indirectly, and, as a result of the ownership of such equity
interest, the Borrower and/or EQR may have recourse liability for Environmental
Claims against such partnership, joint venture or corporation (or the property
thereof).
"Environmental Approvals" means any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" means, with respect to any Person, any notice,
claim, demand or similar communication
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<PAGE>
(written or oral) by any other Person alleging potential liability of such
Person for investigatory costs, cleanup costs, governmental response costs,
natural resources damage, property damages, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the presence, or
release into the environment, of any Materials of Environmental Concern at any
location, whether or not owned by such Person or (ii) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law, in each
case (with respect to both (i) and (ii) above) as to which there is a reasonable
possibility of an adverse determination with respect thereto and which, if
adversely determined, would have a Material Adverse Effect on the Borrower.
"Environmental Laws" means any and all federal, state, and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions, discharges or
releases of Materials of Environmental Concern into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern
or the clean up or other remediation thereof.
"EQR" means Equity Residential Properties Trust, a Maryland real estate
investment trust, the sole general partner of the Borrower.
"EQR Guaranty" means the Guaranty of Payment, dated as of the date
hereof, executed by EQR in favor of Administrative Agent and the Banks.
"EQR 1998 Form 10-K" means EQR's annual report on Form 10-K for 1998,
as filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.
"Euro-Dollar Borrowing" has the meaning set forth in Section 1.3.
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"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.
"Euro-Dollar Reference Bank" means the principal London offices of the
Administrative Agent.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
"Facility Fee" has the meaning set forth in Section 2.8(a).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System as constituted from time to time.
"FFO" means "funds from operations," defined to mean, for any period,
Net Income before Borrower's Share of the Net Income or loss of any Investment
Affiliate, plus any and all cash distributions received by Borrower representing
Borrower's Share of the Net Income (plus Borrower's Share of depreciation and
amortization expenses of Investment Affiliates) of any Investment Affiliate,
plus depreciation and amortization expense for such
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<PAGE>
period and excluding gains (or losses) from Debt Restructurings and sales or
other dispositions of Property of the Borrower, EQR or any Consolidated
Subsidiary or any Investment Affiliate of either or both of them.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and EQR which shall be
the twelve (12) month period ending on the last day of December in each year.
"Fixed Charges" for any Fiscal Quarter period means the sum of (i) Debt
Service for such period, (ii) the product of the average number of apartment
units owned (directly or beneficially) by Borrower, EQR, or any wholly-owned
Subsidiary of either or both during such period and the Capital Reserve for such
Period, (iii) Borrower's Share of the aggregate sum of the product of the
average number of apartment units owned (directly or beneficially) by each
Consolidated Subsidiary (other than wholly-owned Subsidiaries of Borrower and/or
EQR) and Investment Affiliate during such period and the Capital Reserve for
such period, (iv) dividends on preferred units payable by Borrower for such
period, and (v) distributions made by the Borrower during such period to EQR for
the purpose of paying dividends on preferred shares in EQR.
"Fixed Rate Borrowing" has the meaning set forth in Section 1.3.
"Fixed Rate Indebtedness" means all Indebtedness which accrues interest
at a fixed rate.
"Floating Rate Indebtedness" means all Indebtedness which is not Fixed
Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.
"FMV Cap Rate" means 9%.
"Fronting Bank" shall mean Bank of America, National Association, The
Chase Manhattan Bank, Morgan Guaranty Trust Company of New York or such other
Bank which Borrower is notified by the Administrative Agent is willing to be a
Fronting Bank and which is designated by Borrower in its Notice of Borrowing as
the Bank which shall issue a Letter of Credit with respect to such Notice of
Borrowing.
"GAAP" means generally accepted accounting principles recognized as
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting
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<PAGE>
profession, which are applicable to the circumstances as of the date of
determination.
"GROSS ASSET VALUE" means, with respect to any Person or Property,
Adjusted Asset Value plus, in the case of any Person, the value of any Cash or
Cash Equivalent owned by such Person.
"GROUP OF LOANS" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Base Rate Loans at such time, or (ii) all
Euro-Dollar Loans having the same Interest Period at such time; PROVIDED that,
if a Committed Loan of any particular Bank is converted to or made as a Base
Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been in if it
had not been so converted or made.
"INDEBTEDNESS" as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities of such Person for
borrowed money, (b) all indebtedness, obligations or other liabilities of such
Person evidenced by Securities or other similar instruments, (c) all Contingent
Obligations of such Person, (d) all reimbursement obligations and other
liabilities of such Person with respect to letters of credit or banker's
acceptances issued for such Person's account or other similar instruments for
which a contingent liability exists, (e) all obligations of such Person to pay
the deferred purchase price of Property or services, (f) all obligations in
respect of Capital Leases (including ground leases) of such Person, (g) all
indebtedness obligations or other liabilities of such Person or others secured
by a Lien on any asset of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by, or are a personal liability of such
Person, (h) all indebtedness, obligations or other liabilities (other than
interest expense liability) in respect of Interest Rate Contracts and foreign
currency exchange agreements (other than Interest Rate Contracts purchased to
hedge Indebtedness), (i) ERISA obligations currently due and payable and (j) all
other items which, in accordance with GAAP, would be included as liabilities on
the liability side of the balance sheet of such Person, exclusive, however, of
all accounts payable, accrued interest and expenses, prepaid rents, security
deposits and dividends and distributions declared but not yet paid.
"INDEMNITEE" has the meaning set forth in Section 9.3(b).
"INTEREST EXPENSE" means, for any period and without duplication, total
interest expense, whether paid, accrued or capitalized (including the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility) of EQR, on a consolidated
basis, including without limitation all commissions, discounts
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and other fees and charges owed with respect to drawn letters of credit,
amortized costs of Interest Rate Contracts incurred on or after the Closing Date
and the Facility Fees payable to the Banks in accordance with Section 2.8, PLUS
Borrower's Share of accrued, paid or capitalized interest with respect to any
Indebtedness of Investment Affiliates for which there is no recourse to EQR or
Borrower, PLUS, without duplication, EQR's and Borrower's actual or potential
liability for accrued, paid or capitalized interest (including the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility) with respect to Indebtedness
of Investment Affiliates that is recourse to EQR or Borrower calculated for all
Fixed Rate Indebtedness, at the actual interest rate in effect with respect to
all Indebtedness outstanding as of the last day of such Fiscal Quarter and in
the case of all Floating Rate Indebtedness, the greater of (i) (A) the Treasury
Rate plus 1.75% for taxable Indebtedness and (B) 7.0% for tax-exempt
Indebtedness, (ii) the actual rate of interest in effect with respect to such
Floating Rate Indebtedness outstanding for which no Interest Rate Contract is in
effect as of the last day of such quarter and (iii) if an Interest Rate Contract
is in effect with respect to such Floating Rate Indebtedness, the strike rate
payable under such Interest Rate Contract, all determined on an annualized
basis.
"INTEREST PERIOD" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing specified in the
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending 30, 60, 90, or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Notice of Interest
Rate Election; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) if any Interest Period includes a date on which a payment of
principal of the Loans is required to be made under Section 2.10 but does
not end on such date, then (i) the principal amount (if any) of each
Euro-Dollar Loan required to be repaid on such date shall have an Interest
Period ending on such date (it being understood that the foregoing shall
not be deemed to relieve the Borrower of any
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<PAGE>
obligation to pay any amounts otherwise required pursuant to Section 2.13
in connection with such prepayment) and (ii) the remainder (if any) of each
such Euro-Dollar Loan shall have an Interest Period determined as set forth
above.
(2) Intentionally Omitted.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Money Market Quote Request and
ending such number of months thereafter as the Borrower may elect in accordance
with Section 2.3; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.
(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of borrowing specified in the applicable Money Market Quote Request
and ending such number of days thereafter (but not less than 14 days or more
than 180 days) as the Borrower may elect in accordance with Section 2.3;
PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.
"INTEREST RATE CONTRACTS" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
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"INTEREST RATE HEDGES" has the meaning set forth in Section 5.12.
"INVESTMENT AFFILIATE" means any Person in whom EQR or Borrower holds
an equity interest, directly or indirectly, whose financial results are not
consolidated under GAAP with the financial results of EQR or Borrower on the
consolidated financial statements of EQR and Borrower.
"INVESTMENT GRADE RATING" means a rating for a Person's senior
long-term unsecured debt, or if no such rating has been issued, a "shadow"
rating, of BBB- or better from S&P, and a rating or "shadow" rating of Baa3 or
better from Moody's. Any such "shadow" rating shall be evidenced by a letter
from the applicable Rating Agency or by such other evidence as may be reasonably
acceptable to the Administrative Agent (as to any such other evidence, the
Administrative Agent shall present the same to, and discuss the same with, the
Banks).
"INVESTMENT MORTGAGES" means mortgages securing indebtedness directly
or indirectly owed to Borrower, EQR or Subsidiaries of either or both, including
certificates of interest in real estate mortgage investment conduits.
"INVITATION FOR MONEY MARKET QUOTES" has the meaning set forth in
Section 2.3(c).
"LETTER(S) OF CREDIT" has the meaning provided in Section 2.2(b).
"LETTER OF CREDIT COLLATERAL" has the meaning provided in Section 6.4.
"LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning provided in
Section 6.4.
"LETTER OF CREDIT DOCUMENTS" has the meaning provided in Section 2.16.
"LETTER OF CREDIT USAGE" means at any time the sum of (i) the
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower's unpaid obligations
under this Agreement in respect of the Letters of Credit.
"LIBOR AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.3.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement, in each case that has the effect of creating a
security interest, in respect of such asset. For the purposes of this Agreement,
the Borrower, EQR or any Subsidiary of either or both shall be deemed to own
subject to a Lien any asset which it has acquired or holds
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subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"LOAN" means a Base Rate Loan, a Euro-Dollar Loan, a Money Market Loan
or a Swingline Loan and "LOANS" means Base Rate Loans, Euro-Dollar Loans, Money
Market Loans or Swingline Loans or any combination of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the EQR Guaranty,
the Letter(s) of Credit, and the Letter of Credit Documents.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.7(b).
"MARGIN STOCK" shall have the meaning provided such term in Regulation
U of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely (i) effect the business, operations,
properties, assets or financial condition of the Borrower and its Consolidated
Subsidiaries taken as a whole, (ii) impair the ability of the Borrower and its
Consolidated Subsidiaries, taken as a whole, to perform their respective
obligations under the Loan Documents, or (iii) cause a Default under Sections
5.8, 5.9 or 5.13.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
"MATERIALS OF ENVIRONMENTAL CONCERN" means and includes pollutants,
contaminants, hazardous wastes, toxic and hazardous substances, asbestos, lead,
petroleum and petroleum by-products.
"MATURITY DATE" shall mean the date when all of the Obligations
hereunder shall be due and payable which shall be August 11, 2002, unless
accelerated pursuant to the terms hereof.
"MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.3(d).
"MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"MONEY MARKET BORROWING" has the meaning set forth in Section 1.3.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money
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Market Lending Office by notice to the Borrower and the Agent; PROVIDED that any
Bank may from time to time by notice to the Borrower and the Administrative
Agent designate separate Money Market Lending Offices for its Money Market LIBOR
Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other
hand, in which case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such offices, as the
context may require.
"MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant to
a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Article VIII.
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section 2.3(d)(2).
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.3.
"MOODY'S" means Moody's Investors Services, Inc. or any successor
thereto.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"MULTIFAMILY RESIDENTIAL PROPERTY MORTGAGES" means Investment Mortgages
issued by any Person engaged primarily in the business of developing, owning,
and managing multifamily residential property.
"MULTIFAMILY RESIDENTIAL PROPERTY PARTNERSHIP INTERESTS" means
partnership or joint venture interests issued by any Person engaged primarily in
the business of developing, owning, and managing multifamily residential
property.
"NET INCOME" means, for any period, the net earnings (or loss) after
Taxes of EQR, on a consolidated basis, for such period calculated in conformity
with GAAP.
"NET OFFERING PROCEEDS" means all cash or other assets received by EQR
or Borrower as a result of the sale of common shares of beneficial interest,
preferred shares of beneficial interest, partnership interests, limited
liability company interests, Convertible Securities or other ownership or equity
interests in EQR or Borrower LESS customary costs and discounts of issuance paid
by EQR or Borrower, as the case may be.
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"NET OPERATING INCOME" means, for any period with respect to any
Property owned (directly or beneficially) by Borrower, EQR or their wholly-owned
Subsidiaries, the net operating income of such Property (attributed to such
Property in a manner reasonably acceptable to Administrative Agent) for such
period (i) determined in accordance with GAAP, (ii) determined in a manner which
is consistent with the past practices of EQR and Borrower, and (iii) inclusive
of an allocation of reasonable management fees and administrative costs to each
Property consistent with the past practices of EQR and Borrower, except that,
for purposes of determining Net Operating Income, income shall not (a) include
security or other deposits, lease termination or other similar charges,
delinquent rent recoveries, unless previously reflected in reserves, or any
other items deemed by Administrative Agent to be of a non-recurring nature or
(b) be reduced by depreciation or amortization.
"NET PRICE" means, with respect to the purchase and sale of any
Property, without duplication, (i) Cash and Cash Equivalents paid as
consideration for such purchase or sale, PLUS (ii) the principal amount of any
note received or other deferred payment to be made in connection with such
purchase or sale (except as described in clause (iv) below), PLUS (iii) the
value of any other considerations delivered in connection with such purchase or
sale (including, without limitation, shares of beneficial interest in EQR and OP
Units or Preferred OP Units (as defined in Borrower's partnership agreement))
(as reasonably determined by Administrative Agent), MINUS (only in the case of a
sale) (iv) the value of any consideration deposited into escrow or subject to
disbursement or claim upon the occurrence of any event, MINUS (only in the case
of a sale) (v) the value of any consideration required to be paid to any Person
other than the Borrower and its Subsidiaries owning a beneficial interest in
such Property, MINUS (vi) reasonable costs of sale and taxes paid or payable in
connection with such purchase or sale.
"NET PRESENT VALUE" shall mean, as to a specified or ascertainable
dollar amount, the present value, as of the date of calculation of any such
amount using a discount rate equal to the Base Rate in effect as of the date of
such calculation.
"NON-MULTIFAMILY RESIDENTIAL PROPERTY" means Property which is not (i)
used for lease, operation or use as a multifamily residential property, (ii)
Unimproved Assets, (iii) Securities, (iv) Multifamily Residential Property
Mortgages, or (v) Multifamily Residential Property Partnership Interests.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness with respect to which
recourse for payment is limited to (i) specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness
or (ii) any Subsidiary or Investment Affiliate (provided that if a Subsidiary or
Investment Affiliate is a partnership, there is no recourse to
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Borrower or EQR as a general partner of such partnership); provided, however,
that personal recourse of Borrower or EQR for any such Indebtedness for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself,
prevent such Indebtedness from being characterized as Non-Recourse Indebtedness.
"NOTES" means promissory notes of the Borrower, substantially in the
form of EXHIBITS A-1 AND A-2 hereto, evidencing the obligation of the Borrower
to repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"NOTICE OF BORROWING" means a Notice of Borrowing (as defined in
Section 2.4).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.6.
"OBLIGATIONS" means all obligations, liabilities, indemnity obligations
and Indebtedness of every nature of the Borrower, from time to time owing to
Administrative Agent or any Bank under or in connection with this Agreement or
any other Loan Document.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERIOD FRACTION" means with respect to any period of time, a fraction,
the numerator of which is the actual number of days in such period, and the
denominator of which is three hundred and sixty (360).
"PERMITTED HOLDINGS" means Development Activity, Raw Land, Securities,
Non-Multifamily Residential Property and Investment Mortgages, but only to the
extent not prohibited in Section 5.8.
"PERMITTED LIENS" means:
a. Liens for Taxes, assessments or other governmental charges not yet
due and payable or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted in accordance with
the terms hereof;
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b. statutory liens of carriers, warehousemen, mechanics, materialmen
and other similar liens imposed by law, which are incurred in the ordinary
course of business for sums not more than sixty (60) days delinquent or
which are being contested in good faith in accordance with the terms
hereof;
c. deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
d. Liens for purchase money obligations for equipment; PROVIDED that
(i) the Indebtedness secured by any such Lien does not exceed the purchase
price of such equipment, (ii) any such Lien encumbers only the asset so
purchased and the proceeds upon sale, disposition, loss or destruction
thereof, and (iii) such Lien, after giving effect to the Indebtedness
secured thereby, does not give rise to an Event of Default;
e. easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to the owner's
title insurance policies, except in connection with any Indebtedness, for any of
the Real Property Assets, so long as the foregoing do not interfere in any
material respect with the use or ordinary conduct of the business of the owner
and do not diminish in any material respect the value of the Property to which
it is attached or for which it is listed;
f. Liens and judgments which have been or will be bonded or released
of record within thirty (30) days after the date such Lien or judgment is
entered or filed against EQR, Borrower, or any Subsidiary;
g. Liens on Property of the Borrower, EQR or the Subsidiaries of
either or both (other than Qualifying Unencumbered Property) securing
Indebtedness which may be incurred or remain outstanding without resulting
in an Event of Default hereunder; and
h. Liens in favor of the Borrower against any asset of any
wholly-owned Subsidiary of the Borrower and/or EQR.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under
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Section 412 of the Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the ERISA Group or (ii)
has at any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"PRIME RATE" means the rate of interest publicly announced by the
Administrative Agent in Charlotte, North Carolina from time to time as its Prime
Rate for customers generally.
"PROPERTY" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"PROPERTY INCOME" means, when used with respect to any Real Property
Asset, annual contractual rents (other than prepaid rents and revenues and
security deposits except to the extent applied in satisfaction of tenants'
obligations for rent), in effect as of the last day of a quarter in accordance
with the applicable leases, but provided that if any tenant is more than 60 days
in arrears in the payment of base or fixed rent as of the last day of a quarter,
the annual contractual rents payable pursuant to such tenant's lease shall not
constitute "Property Income".
"QUALIFYING UNENCUMBERED PROPERTY" means any Property from time to time
which (i) is an operating multifamily residential property wholly-owned
(directly or beneficially) by Borrower and/or EQR, (ii) is not subject (nor are
any equity interests in such Property subject) to a Lien which secures
Indebtedness of any Person other than Permitted Liens, (iii) is not subject (nor
are any equity interests in such Property subject) to any covenant, condition,
or other restriction which prohibits or limits the creation or assumption of any
Lien upon such Property (it being understood that covenants similar to those set
forth in Section 5.8 hereof shall not be deemed to constitute any such
prohibition or limitation), and (iv) if owned by a Subsidiary of the Borrower or
EQR (other than the Borrower), is owned by a Subsidiary that does not have any
outstanding Unsecured Debt (other than those items of Indebtedness set forth in
clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any
Contingent Obligation other than guarantees for borrowed money). In addition, in
the case of any Property that is owned by a Subsidiary of Borrower and/or EQR,
if such Subsidiary shall commence any proceeding under any bankruptcy,
insolvency or similar law, or any such involuntary case shall be commenced
against it and shall remain undismissed and unstayed for a period of 90 days,
then, simultaneously with the occurrence of such conditions, such Property shall
no longer constitute a Qualifying Unencumbered Property.
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"QRS CORPORATION" means those qualified EQR subsidiaries wholly owned
by EQR.
"RATING AGENCIES" means, collectively, S&P, Moody's, Fitch Investors
Services, L.P. and Duff & Phelps Credit Rating Co.
"RAW LAND" means Real Property Assets upon which no material
improvements have been commenced.
"REAL PROPERTY ASSETS" means as of any time, the real property assets
(including interests in participating mortgages in which the Borrower's interest
therein is characterized as equity according to GAAP) owned directly or
indirectly by the Borrower, EQR and the Consolidated Subsidiaries of either or
both at such time.
"RECOURSE DEBT" shall mean Indebtedness that is not Non-Recourse
Indebtedness.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans (provided, that in the case of Swingline Loans,
the amount of each Bank's funded participation interest in such Swingline Loans
shall be considered for purposes hereof as if it were a direct loan and not a
participation interest, and the aggregate amount of Swingline Loans owing to the
Swingline Lender shall be considered for purposes hereof as reduced by the
amount of such funded participation interests).
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
"SECURED DEBT" means Indebtedness of EQR, on a consolidated basis, and
without duplication, Borrower's Share of any Indebtedness of any Investment
Affiliate, the payment of which is secured by a Lien on any Property owned or
leased by EQR, Borrower, or any Subsidiary or Investment Affiliate of either or
both.
"SECURITIES" means any stock, partnership interests (other than
Multifamily Residential Property Partnership Interests), shares, shares of
beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities," or
any certificates of interest, shares, or
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participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the obligations.
"SOLVENT" means, with respect to any Person, that the fair saleable
value of such Person's assets exceeds the Indebtedness of such Person.
"SUBSIDIARY" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower and/or EQR.
"SWINGLINE BORROWING" has the meaning set forth in Section 1.3.
"SWINGLINE COMMITMENT" has the meaning set forth in Section 2.18(a).
"SWINGLINE LENDER" means Bank of America, National Association, in its
capacity as Swingline Lender hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.
"SWINGLINE LOAN" means a loan made by the Swingline Lender pursuant to
Section 2.18.
"SYNDICATION AGENT" shall mean The Chase Manhattan Bank in its capacity
as Syndication Agent hereunder, and its permitted successors in such capacity in
accordance with the terms of this Agreement.
"TAXES" means all federal, state, local and foreign income and gross
receipts taxes.
"TERM" has the meaning set forth in Section 2.9.
"TERMINATION EVENT" shall mean (i) a "reportable event", as such term
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA
Group from a Multiemployer Plan during a plan year in which it is a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), or the incurrence of
liability by any member of the ERISA Group under Section 4064 of ERISA upon the
termination of a Multiemployer Plan, (iii) the filing of a notice of intent to
terminate any Plan under Section 4041 of ERISA, other than in a standard
termination within the meaning of Section 4041 of ERISA, or the treatment of a
Plan amendment as a distress termination under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to terminate, impose liability (other
than for
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premiums under Section 4007 of ERISA) in respect of, or cause a trustee to be
appointed to administer, any Plan or (v) any other event or condition that might
reasonably constitute grounds for the termination of, or the appointment of a
trustee to administer, any Plan or the imposition of any liability or
encumbrance or Lien on the Real Property Assets or any member of the ERISA Group
under ERISA.
"TREASURY RATE" means, as of any date, a rate equal to the annual yield
to maturity on the U.S. Treasury Constant Maturity Series with a ten year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
- -- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H.15,
if necessary. In the event Release H.15 is no longer published, the
Administrative Agent shall select, in its reasonable discretion, an alternate
basis for the determination of Treasury yield for U.S. Treasury Constant
Maturity Series with ten year maturities.
"UNENCUMBERED ASSET VALUE" means (i) a fraction, the numerator of which
is the product of four (4) and the aggregate Unencumbered Net Operating Income
for the most recently ended Fiscal Quarter which is attributable (in a manner
reasonably acceptable to Administrative Agent) to Qualifying Unencumbered
Properties wholly-owned (directly or beneficially) by the Borrower and/or EQR
(exclusive of Unimproved Assets) for the entire Fiscal Quarter and the
denominator of which is the FMV Cap Rate PLUS (ii) for all Qualifying
Unencumbered Properties wholly-owned (directly or beneficially) by Borrower
and/or EQR which have been acquired (directly or indirectly) by the Borrower
and/or EQR the Fiscal Quarter most recently ended, the aggregate Net Price of
the Qualifying Unencumbered Properties paid by Borrower or its affiliates for
such Qualifying Unencumbered Properties; provided, however, the value
attributable to Unencumbered Net Operating Income from Qualifying Unencumbered
Properties located outside of the United States, in excess of ten percent (10%)
of Unencumbered Asset Value, shall be disregarded in calculating the
Unencumbered Asset Value.
"UNENCUMBERED NET OPERATING INCOME" means for any period for all
Qualifying Unencumbered Properties owned (directly or beneficially) by the
Borrower and/or EQR and/or any wholly-owned Subsidiary of either or both during
the applicable period, Net Operating Income from each such Qualifying
Unencumbered Property minus an amount equal to the product of the average number
of apartment units in such Qualifying Unencumbered Property during such period
and the Capital Reserve for such period.
"UNIMPROVED ASSETS" means Real Property Assets, other than Raw Land,
upon which no material improvements have been
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completed which completion is evidenced by a certificate of occupancy or its
equivalent.
"UNITED STATES" means the United States of America, including the fifty
states and the District of Columbia.
"UNSECURED DEBT" means Indebtedness of Borrower and EQR and any
wholly-owned Subsidiary of either or both, which is not Secured Debt or
Unsecured Tax-Exempt Indebtedness.
"UNSECURED INTEREST EXPENSE" means Interest Expense, other than
Interest Expense payable in respect of Secured Debt and Unsecured Tax-Exempt
Indebtedness and Interest Expense payable in respect of the Indebtedness of any
Person other than Borrower or EQR.
"UNSECURED TAX-EXEMPT INDEBTEDNESS" means Indebtedness of any
wholly-owned Subsidiary of Borrower and/or EQR which is not Secured Debt, issued
in connection with a tax-exempt financing of a Real Property Asset and which is
guaranteed in whole by the Borrower and/or EQR.
"UNUSED COMMITMENTS" shall mean an amount equal to all unadvanced funds
(other than unadvanced funds in connection with any construction loan) which any
third party is obligated to advance to Borrower or another Person or otherwise
pursuant to any loan document, written instrument or otherwise.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONSTERMS AND
DETERMINATIONS. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Administrative Agent; PROVIDED that
for purposes of references to the financial results and information of "EQR, on
a consolidated basis," EQR shall be deemed to own one hundred percent (100%) of
the partnership interests in Borrower; and PROVIDED further that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
reasonably satisfactory to the Borrower and the Required Banks.
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SECTION 1.3 TYPES OF BORROWINGSOF BORROWINGS. The term "BORROWING"
denotes the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on the same date, all of which Loans are of the same type
(subject to Article 8) and, except in the case of Base Rate Loans and Swingline
Loans, have the same initial Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (E.G., a "FIXED RATE BORROWING" is a Euro-Dollar
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to
Article VIII), and a "EURO-DOLLAR BORROWING" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (I.E., a "COMMITTED BORROWING" is a
Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, while a "MONEY MARKET BORROWING" is a Borrowing under Section
2.3 in which a Bank's share is determined on the basis of its bid in accordance
therewith, and a "Swingline Borrowing" is a Borrowing under Section 2.18 in
which only the Swingline Lender participates (subject to the provisions of said
Section 2.18)).
ARTICLE II
THE CREDITS
SECTION 2.1 COMMITMENTS TO LEND. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
and participate in Letters of Credit issued by the Fronting Bank on behalf of
the Borrower pursuant to this Article from time to time during the term hereof
in amounts such that the aggregate principal amount of Committed Loans plus such
Bank's Pro Rata Share of Swingline Loans by such Bank at any one time
outstanding together with such Bank's pro rata share of the Letter of Credit
Usage shall not exceed the amount of its Commitment. Each Borrowing outstanding
under this Section 2.1 shall be in an aggregate principal amount of $3,000,000,
or an integral multiple of $100,000 in excess thereof (except that any such
Borrowing may be in the aggregate amount available in accordance with Section
3.2(b), or in any amount required to reimburse the Fronting Bank for any drawing
under any Letter of Credit or to repay the Swingline Lender the amount of any
Swingline Loan) and, other than with respect to Money Market Loans and Swingline
Loans, shall be made from the several Banks ratably in proportion to their
respective Commitments. In no event shall the aggregate Loans outstanding at any
time, plus outstanding Letter of Credit Usage, exceed $700,000,000. Subject to
the limitations set forth herein, any amounts repaid may be reborrowed.
SECTION 2.2 NOTICE OF BORROWING
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(a) The Borrower shall give Administrative Agent notice not later
than 10:00 a.m. (Chicago time) (x) one Domestic Business Day before each Base
Rate Borrowing, or (y) three Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be Base
Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
(b) Borrower shall give the Administrative Agent, and the designated
Fronting Bank, written notice in the event that it desires to have Letters of
Credit (each, a "LETTER OF CREDIT") issued, or to have Letters of Credit issued
on behalf of a Subsidiary, hereunder no later than 10:00 a.m., Chicago time, at
least four (4) Domestic Business Days prior to the date of such issuance. Each
such notice shall specify (i) the designated Fronting Bank, (ii) the aggregate
amount of the requested Letters of Credit, (iii) the individual amount of each
requested Letter of Credit and the number of Letters of Credit to be issued,
(iv) the date of such issuance (which shall be a Domestic Business Day), (v) the
name and address of the beneficiary, (vi) the expiration date of the Letter of
Credit (which in no event shall be later than the Maturity Date or twelve (12)
months after the issuance of such Letter of Credit, whichever is earlier), (vii)
the purpose and circumstances for which such Letter of Credit is being issued
and (viii) the terms upon which each such Letter of Credit may be drawn down
(which terms shall not leave any discretion to Fronting Bank). Each such notice
may be revoked telephonically by the Borrower to the applicable Fronting Bank
and the Administrative Agent any time prior to the date of issuance of the
Letter of Credit by the applicable Fronting Bank, provided such revocation is
confirmed in writing by the Borrower to the Fronting Bank and the Administrative
Agent within one (1) Domestic Business Day by facsimile. Notwithstanding
anything contained herein to the contrary, the Borrower shall complete and
deliver to the Fronting Bank any required documentation in connection with any
requested Letter of Credit no later than two (2) Domestic Business Days prior to
the issuance thereof. No later than 10:00 a.m., Chicago time, on the date that
is four (4) Domestic Business Days prior to the date of issuance, the Borrower
shall specify a precise description of the documents and the verbatim text of
any certificate to be presented by the beneficiary of such Letter of Credit,
which if presented by such beneficiary prior to the expiration date of the
Letter of Credit
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would require the Fronting Bank to make a payment under the Letter of Credit;
PROVIDED, that Fronting Bank may, in its reasonable judgment, require changes in
any such documents and certificates only in conformity with changes in customary
and commercially reasonable practice or law and, PROVIDED FURTHER, that no
Letter of Credit shall require payment against a conforming draft to be made
thereunder on the third Domestic Business Day following the date that such draft
is presented if such presentation is made later than 10:00 A.M. Chicago time
(except that if the beneficiary of any Letter of Credit requests at the time of
the issuance of its Letter of Credit that payment be made on the same Domestic
Business Day against a conforming draft, such beneficiary shall be entitled to
such a same day draw, provided such draft is presented to the applicable
Fronting Bank no later than 10:00 A.M. Chicago time and provided further the
Borrower shall have requested to the Fronting Bank and the Administrative Agent
that such beneficiary shall be entitled to a same day draw). In determining
whether to pay on such Letter of Credit, the Fronting Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under the Letter of Credit have been delivered and that they comply on their
face with the requirements of that Letter of Credit.
SECTION 2.3 MONEY MARKET BORROWINGS.
(a) THE MONEY MARKET OPTION. From time to time during the Term, and
provided that at such time the Borrower maintains an Investment Grade Rating,
the Borrower may, as set forth in this Section 2.3, request the Banks during the
Term to make offers to make Money Market Loans to the Borrower, not to exceed,
at such time, the lesser of (i) $250,000,000 in the aggregate outstanding, and
(ii) the aggregate Commitments less all Loans and Letter of Credit Usage then
outstanding. Subject to the provisions of this Agreement, the Borrower may repay
any outstanding Money Market Loan on any day which is both a Domestic Business
Day and a Euro-Dollar Business Day and any amounts so repaid may be reborrowed,
up to the amount available under this Section 2.3 at the time of such Borrowing,
until the Domestic Business Day next preceding the Maturity Date. The Banks may,
but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section 2.3.
(b) MONEY MARKET QUOTE REQUEST. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by facsimile transmission a Money Market Quote Request substantially in
the form of EXHIBIT B hereto so as to be received not later than 10:30 A.M.
(Chicago time) on (x) the fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the case
of an Absolute Rate Auction (or, in either case, such other time or date as the
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Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
1. the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
2. the aggregate amount of such Borrowing, which shall be $3,000,000
or a larger multiple of $100,000,
3. the duration of the Interest Period applicable thereto (which
shall not be less than 14 days or more than 180 days), subject to the
provisions of the definition of Interest Period, and
4. whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative Agent may agree) of any
other Money Market Quote Request.
(c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks by
facsimile transmission a copy thereof, which shall constitute an invitation by
the Borrower to each Bank to submit Money Market Quotes offering to make the
Money Market Loans to which such Money Market Quote Request relates in
accordance with this Section.
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.
1. Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any Invitation
for Money Market Quotes. Each Money Market Quote must comply with the
requirements of this subsection (d) and must be submitted to the
Administrative Agent by facsimile transmission at its offices specified in
or pursuant to Section 9.1 not later than (x) 2:00 P.M. (Chicago time) on
the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing,
in the case of a LIBOR Auction or (y) 9:30 A.M. (Chicago time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of
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the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); PROVIDED that Money
Market Quotes submitted by the Administrative Agent (or any affiliate of the
Administrative Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Administrative Agent or such affiliate notifies
the Borrower of the terms of the offer or offers contained therein not later
than (x) one hour prior to the deadline for the other Banks, in the case of
a LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks,
in the case of an Absolute Rate Auction. Subject to Articles 3 and 6, any
Money Market Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the
Borrower. Such Money Market Loans may be funded by such Bank's Designated
Lender (if any) as provided in Section 9.6(d), however such Bank shall not
be required to specify in its Money Market Quote whether such Money Market
Loans will be funded by such Designated Lender.
2. Each Money Market Quote shall be in substantially the form of
EXHIBIT D hereto and shall in any case specify:
(a) the proposed date of Borrowing,
(b) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be $3,000,000 or a larger multiple
of $100,000, (y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an aggregate limitation as
to the principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(c) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "MONEY MARKET MARGIN") offered for
each such Money Market Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such base rate,
(d) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/10,000th of 1%) (the "MONEY MARKET ABSOLUTE
RATE") offered for each such Money Market Loan, and
(e) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest
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Period specified in the related Invitation for Money Market Quotes.
3. Any Money Market Quote shall be disregarded if it:
(a) is not substantially in conformity with EXHIBIT D hereto or does
not specify all of the information required by subsection (d)(2) above;
(b) contains qualifying, conditional or similar language (except for
an aggregate limitation as provided in subsection (d)(2)(b) above);
(c) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
(d) arrives after the time set forth in subsection (d)(1).
(e) NOTICE TO BORROWER. The Administrative Agent shall promptly (and
in any event within one (1) Domestic Business Day after receipt thereof) notify
the Borrower in writing of the terms (x) of any Money Market Quote submitted by
a Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote or modifies
the terms of such previous Money Market Quote to provide terms more favorable to
Borrower. The Administrative Agent's notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:30 A.M.
(Chicago time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or
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Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case of acceptance,
such notice (a "NOTICE OF MONEY MARKET BORROWING") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; PROVIDED that:
1. the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request;
2. the principal amount of each Money Market Borrowing must be
$3,000,000 or a larger multiple of $100,000;
3. acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be; and
4. the Borrower may not accept any offer that is described in
subsection (d)(3) or that otherwise fails to comply with the requirements of
this Agreement.
(g) ALLOCATION BY AGENT. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Banks as nearly as possible (in
multiples of $100,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. The Administrative
Agent shall promptly (and in any event within one (1) Domestic Business Day
after such offers are accepted) notify the Borrower and each such Bank in
writing of any such allocation of Money Market Loans. Determinations by the
Administrative Agent of the allocation of Money Market Loans shall be conclusive
in the absence of manifest error.
(h) NOTIFICATION BY ADMINISTRATIVE AGENT. Upon receipt of the
Borrower's Notice of Money Market Borrowing in accordance with Section 2.3(f)
hereof, the Administrative Agent shall, on the date such Notice of Money Market
Borrowing is received by the Administrative Agent, promptly notify each Bank
(and such Notice of Money Market Borrowing shall not thereafter be revocable by
the Borrower) (i) of the principal amount of the Money Market Borrowing accepted
by the Borrower, and (ii) of such Bank's share (if any) of such Money Market
Borrowing. A Bank who is notified that it has been selected to make a Money
Market Loan may designate its Designated Lender (if any) to fund such Money
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Market Loan on its behalf, as described in Section 9.6(d). Any Designated Lender
which funds a Money Market Loan shall on and after the time of such funding
become the obligee under such Money Market Loan and be entitled to receive
payment thereof when due. No Bank shall be relieved of its obligation to fund a
Money Market Loan, and no Designated Lender shall assume such obligation, prior
to the time the applicable Money Market Loan is funded.
(i) Notwithstanding anything to the contrary contained herein, each
Bank shall be required to fund its pro rata share of Committed Loans in
accordance with Section 2.1 hereof despite the fact that any Bank's Commitment
may have been or may be exceeded as a result of such Bank's making of Money
Market Loans.
SECTION 2.4 NOTICE TO BANKS; FUNDING OF LOANS
(a) Upon receipt of a notice from Borrower in accordance with Section
2.2 hereof (each such notice being a "NOTICE OF BORROWING"), the Administrative
Agent shall, on the date such Notice of Borrowing is received by the
Administrative Agent, promptly notify each Bank of the contents thereof and of
such Bank's share of such Borrowing, of the interest rate determined pursuant
thereto and the Interest Period(s) (if different from those requested by the
Borrower) and such Notice of Borrowing shall not thereafter be revocable by the
Borrower, unless Borrower shall pay any applicable expenses pursuant to Section
2.13.
(b) Not later than 1:00 p.m. (Chicago time) on the date of each
Borrowing as indicated in the Notice of Borrowing, each Bank shall (except as
provided in subsection (c) of this Section) make available its share of such
Borrowing in Federal funds immediately available in Chicago, to the
Administrative Agent at its address referred to in Section 9.1. If the Borrower
has requested the issuance of a Letter of Credit, no later than 12:00 Noon
(Chicago time) on the date of such issuance as indicated in the notice delivered
pursuant to Section 2.2(b), the Fronting Bank shall issue such Letter of Credit
in the amount so requested and deliver the same to the Borrower with a copy
thereof to the Administrative Agent. Immediately upon the issuance of each
Letter of Credit by the Fronting Bank, such Fronting Bank shall be deemed to
have sold and transferred to each other Bank, and each such other Bank shall be
deemed, and hereby agrees, to have irrevocably and unconditionally purchased and
received from the Fronting Bank, without recourse or warranty, an undivided
interest and a participation in such Letter of Credit, any drawing thereunder,
and the obligations of the Borrower hereunder with respect thereto, and any
security therefor or guaranty pertaining thereto, in an amount equal to such
Bank's ratable share thereof (based upon the ratio its Commitment bears to the
aggregate of all Commitments). Upon any change in any of the Commitments in
accordance herewith, there shall be an automatic adjustment to such
participations to
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reflect such changed shares. The Fronting Bank shall have the primary obligation
to fund any and all draws made with respect to such Letter of Credit
notwithstanding any failure of a participating Bank to fund its ratable share of
any such draw. The Administrative Agent will instruct the Fronting Bank to make
such Letter of Credit available to the Borrower and the Fronting Bank shall make
such Letter of Credit available to the Borrower at the Borrower's aforesaid
address or at such address in the United States as Borrower shall request on the
date of the Borrowing.
(c) Not later than 3:00 p.m. (Chicago time) on the date of each
Swingline Borrowing as indicated in the applicable Notice of Borrowing, the
Swingline Lender shall make available such Swingline Borrowing in Federal funds
immediately available in Chicago, Illinois, to the Administrative Agent at its
address referred to herein.
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance
upon such assumption, but shall not be obligated to, make available to the
Borrower on such date a corresponding amount on behalf of such Bank. If and to
the extent that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand, and in the case of the Borrower one
(1) Domestic Business Day after demand, such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, a rate per annum equal to the interest rate
applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.5 NOTES.
(a) The Loans of each Bank shall be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type (including Swingline Loans
and Money Market Loans) be evidenced by a separate Note in an amount equal to
the aggregate unpaid principal amount of such Loans. Any additional costs
incurred by
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the Administrative Agent, the Borrower or the Banks in connection with preparing
such a Note shall be at the sole cost and expense of the Bank requesting such
Note. In the event any Loans evidenced by such a Note are paid in full prior to
the Maturity Date, any such Bank shall return such Note to Borrower. Each such
Note shall be in substantially the form of EXHIBIT A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Upon the execution and delivery of any such Note, any existing Note
payable to such Bank shall be replaced or modified accordingly. Each reference
in this Agreement to the "NOTE" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(a), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the appropriate schedule appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding; PROVIDED that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
(d) The Committed Loans shall mature, and the principal amount
thereof shall be due and payable, on the Maturity Date. The Swingline Loans
shall mature, and the principal amount thereof shall be due and payable, in
accordance with Section 2.18(b)(iii).
(e) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the earlier to occur of (i) last day
of the Interest Period applicable to such Borrowing or (ii) the Maturity Date.
(f) There shall be no more than ten (10) Euro-Dollar Groups of Loans
outstanding at any one time.
SECTION 2.6 METHOD OF ELECTING INTEREST RATES.
(a) The Loans included in each Committed Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Borrowing. Thereafter, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article VIII), as follows:
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(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert all or any portion of such Loans to Euro-Dollar Loans as of any
Euro-Dollar Business Day;
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert all or any portion of such Loans to Base Rate Loans and/or elect to
continue all or any portion of such Loans as Euro-Dollar Loans for an additional
Interest Period or additional Interest Periods, in each case effective on the
last day of the then current Interest Period applicable to such Loans, or on
such other date designated by Borrower in the Notice of Interest Rate Election
provided Borrower shall pay any losses pursuant to Section 2.13.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Administrative Agent at least three (3) Euro-Dollar
Business Days before the conversion or continuation selected in such notice is
to be effective. A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant Group
of Loans; PROVIDED that (i) such portion is allocated ratably among the Loans
comprising such Group, (ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each $500,000 or any larger
multiple of $100,000, (iii) there shall be no more than ten (10) Euro-Dollar
Groups of Loans outstanding at any time, (iv) no Committed Loan may be continued
as, or converted into, a Euro-Dollar Loan when any Event of Default has occurred
and is continuing, and (v) no Interest Period shall extend beyond the Maturity
Date.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
type of Loans and, if such new Loans are Euro-Dollar Loans, the duration of the
initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
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(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank the same day as it receives such Notice of Interest Rate Election of
the contents thereof, the interest rates determined pursuant thereto and the
Interest Periods (if different from those requested by the Borrower) and such
notice shall not thereafter be revocable by the Borrower. If the Borrower fails
to deliver a timely Notice of Interest Rate Election to the Administrative Agent
for any Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate
Loans on the last day of the then current Interest Period applicable thereto.
(d) If the Borrower shall fail to pay any principal of or interest on
any Money Market Loan when due, such Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the Base
Rate until such failure shall become an Event of Default and thereafter at a
rate per annum equal to the sum of 4% plus the Base Rate for such day.
SECTION 2.7 INTEREST RATES.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until the
date it is repaid or converted into a Euro-Dollar Loan pursuant to Section 2.6
or at the Maturity Date, at a rate per annum equal to the Base Rate plus the
Applicable Margin for Base Rate Loans for such day. Such interest shall be
payable on the first Domestic Business Day of each month.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for
Euro-Dollar Loans for such day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable on the first
Domestic Business Day of each month.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means the rate per annum, rounded upward, if necessary, to the nearest
1/100 of one percent, determined by the following formula:
LONDON INTERBANK OFFERED RATE
(1.00 - Euro-Dollar Reserve Percentage)
All figures used in this calculation shall be determined by the Administrative
Agent as of the first day of the applicable Interest Period, which must be a
Euro-Dollar Business Day.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the per annum rate of interest, rounded upward, if necessary, to the
nearest 1/16th of one percent (0.0625%), at which the Euro-Dollar Reference
Bank's London
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Branch, London, England, would offer U.S. dollar deposits for the applicable
Interest Period to other major banks in the London interbank market at
approximately 11:00 a.m. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Borrowing or Group Of Loans or portion
thereof to be converted into or continued as Euro-Dollar Loans to which such
Interest Period is to apply.
"EURO-DOLLAR RESERVE PERCENTAGE" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency Liabilities, as defined in Regulation D,
as Regulation D may be amended, modified or supplemented. The Euro-Dollar
Reserve Percentage shall be expressed in decimal form and rounded upward, if
necessary, to the nearest 1/100th of one percent, and shall include marginal,
emergency, supplemental, special and other reserve percentages. The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(c) Subject to Section 8.1, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with Section
2.7(b) as if the related Money Market LIBOR Borrowing were a Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making
such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than one month, at intervals
of one month after the first day thereof. Any overdue principal of or interest
on any Money Market Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the Base Rate until such failure shall
become an Event of Default and thereafter at a rate per annum equal to the sum
of 4% plus the Base Rate for such day.
(d) In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loans,
and, to the extent permitted by applicable law, overdue interest in respect of
all Loans, shall bear interest at the annual rate equal to the sum of the Base
Rate and four percent (4%) (the "DEFAULT RATE").
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and
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the Banks of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of demonstrable error.
(f) The Euro-Dollar Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this Section.
SECTION 2.8 FEES.
(a) FACILITY FEE. The Borrower shall pay to the Administrative Agent
for the account of the Banks ratably in proportion to their respective
Commitments a facility fee (the "FACILITY FEE") on the aggregate Commitments at
the respective percentages per annum based upon the range into which the
Borrower's Credit Rating then falls, in accordance with the following table. The
facility fee shall be payable in arrears on each January 1, April 1, July 1 and
October 1 during the Term.
<TABLE>
<CAPTION>
<S> <C>
Less than BBB-/
Baa3 0.300%
BBB-/Baa3 0.250%
BBB/Baa2 0.200%
BBB+/Baa1 0.200%
A-/A3 0.175%
A/A2 or better 0.150%
</TABLE>
Any change in the Borrower's Credit Rating causing it to move into a different
range on the table shall effect an immediate change in the applicable percentage
per annum. In the event that the Borrower receives two (2) Credit Ratings and
such ratings are split between a higher and a lower range on the table, the
applicable percentage per annum shall be based upon the lower of such two (2)
Credit Ratings. In the event that Borrower receives more than two (2) Credit
Ratings, and such ratings are not equivalent, the applicable percentage per
annum shall be determined by the lower of the two (2) highest ratings, provided
that each of said two (2) highest ratings shall be Investment Grade Ratings and
at least one of which shall be an Investment Grade Rating from S&P or Moody's.
In the event that each of said two (2) highest ratings shall not be Investment
Grade Ratings or at least one shall not be an Investment Grade Rating from S&P
or Moody's, then the applicable percentage per annum shall be determined by the
lowest of the ratings. In the event that only one (1) Rating Agency has set the
Borrower's Credit Rating, then the applicable percentage per annum shall be
based on such single rating.
(b) LETTER OF CREDIT FEE. During the Term, the Borrower shall pay to
the Administrative Agent, for the account of the Banks in proportion to their
interests in respect of issued and undrawn Letters of Credit, a fee (a "LETTER
OF CREDIT FEE") in an amount, provided that no Event of Default shall have
occurred and be continuing, equal to a rate per annum equal to
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the then percentage per annum of the Applicable Margin with respect to
Euro-Dollar Loans, on the daily average of such issued and undrawn Letters of
Credit, which fee shall be payable, in arrears, on each January 1, April 1, July
1 and October 1 during the Term. From the occurrence, and during the
continuance, of an Event of Default, such fee shall be increased to be equal to
four percent (4%) per annum on the daily average of such issued and undrawn
Letters of Credit.
(c) FRONTING BANK FEE. The Borrower shall pay any Fronting Bank, for
its own account, a fee (a "FRONTING BANK FEE") at a rate per annum equal to .10%
of the issued and undrawn amount of such Letter of Credit, which fee shall be in
addition to and not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee
shall be payable in arrears on each January 1, April 1, July 1 and October 1
during the Term.
(d) FEES NON-REFUNDABLE. All fees set forth in this Section 2.8 shall
be deemed to have been earned on the date payment is due in accordance with the
provisions hereof and shall be non-refundable. The obligation of the Borrower to
pay such fees in accordance with the provisions hereof shall be binding upon the
Borrower and shall inure to the benefit of the Administrative Agent and the
Banks regardless of whether any Loans are actually made.
SECTION 2.9 MATURITY DATE.
The term (the "TERM") of the Commitments (and each Bank's obligations
to make Loans and to participate in Letters of Credit hereunder) shall terminate
and expire, and the Borrower shall return or cause there to be returned all
Letters of Credit to the Fronting Bank, on the Maturity Date. Upon the date of
the termination of the Term, any Loans then outstanding (together with accrued
interest thereon and all other Obligations) shall be due and payable on such
date.
SECTION 2.10 MANDATORY PREPAYMENTS.
(a) If at any time the Borrower, EQR or any Consolidated Subsidiary
of either or both sells, transfers, assigns or conveys any Real Property Asset
which shall cause the Borrower in any fiscal year period commencing after the
Closing Date, to have sold, transferred or conveyed property or assets which
constitute in the aggregate more than 30% of the Gross Asset Value of the
Borrower, EQR and any Consolidated Subsidiary of either or both on the date of
such transfer, then at the request of Administrative Agent, Borrower shall pay
to the Administrative Agent, for the account of the Banks, within thirty (30)
days after the date of such request, an amount equal to the Net Proceeds of such
transfer (but in no event more than the outstanding balance of the Loans).
Borrower shall make such prepayment together with interest accrued to the date
of the prepayment on the principal amount prepaid. In connection with
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the prepayment of a Euro-Dollar Loan prior to the maturity thereof, the
Borrower shall also pay any applicable expenses pursuant to Section 2.13.
Each such prepayment shall be applied to prepay ratably the Loans of the
Banks. Amounts prepaid pursuant to this Section 2.10(a) may not be
reborrowed. As used in this Section 2.10, the term "NET PROCEEDS" shall mean
all amounts received by Borrower, EQR and the Consolidated Subsidiaries of
either or both in connection with such sale, transfer, assignment or
conveyance after payment of all expenses to be made by Borrower and any
Consolidated Subsidiaries in connection with such sale, transfer, assignment
or conveyance (including, without limitation, payment of then existing Liens
or encumbrances on such Real Property Asset, brokerage commissions, title and
survey costs or transfer taxes).
(b) If at any time the Borrower or EQR, directly or indirectly shall
purchase or hold any interest in any Investment Affiliates which, taken singly
or in the aggregate, exceeds fifteen percent (15%) of the Gross Asset Value of
the Borrower, EQR and the Consolidated Subsidiaries of either or both then, at
the request of Administrative Agent, Borrower shall pay to the Administrative
Agent, for the account of the Banks, within thirty (30) days after the date of
such request, an amount equal to the outstanding balance of all Borrowings
hereunder (except as to any Fixed Rate Borrowings for which such repayments
shall be made at the end of the Interest Period applicable to such Fixed Rate
Borrowing), and Borrower shall not be entitled to request any further Borrowings
under this Agreement until such time as the interest in any Investment
Affiliates of Borrower or EQR (directly or indirectly) shall not, taken singly
or in the aggregate, exceed fifteen percent (15%) of the Gross Asset Value of
the Borrower, EQR and the Consolidated Subsidiaries of either or both. Borrower
shall make such prepayment together with interest accrued to the date of the
prepayment on the principal amount prepaid. Amounts prepaid pursuant to this
Section 2.10(b) may be reborrowed in accordance with the provisions of this
Agreement.
SECTION 2.11 OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent, prepay any Group of Base Rate Loans (or any
Money Market Borrowing bearing interest at the Base Rate pursuant to Section
8.1), in whole at any time, or from time to time in part in amounts aggregating
One Million Dollars ($1,000,000) or any larger multiple of One Hundred Thousand
Dollars ($100,000), by paying the principal amount to be prepaid. The Borrower
may, from time to time on any Domestic Business Day so long as prior notice is
given to the Administrative Agent and Swingline Lender no later than 1:00 p.m.
(Chicago time) on the day on which Borrower intends to make such prepayment,
prepay any Swingline Loans in whole or in part in amounts aggregating $100,000
or a higher integral multiple of $100,000 (or, if less, the aggregate
outstanding principal amount
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<PAGE>
of all Swingline Loans then outstanding) by paying the principal amount to be
prepaid no later than 2:00 p.m. (Chicago time) on such day. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Group of Loans or Borrowing(or the Swingline Lender in the case
of Swingline Loans) included in such Group or Borrowing.
(b) The Borrower may, upon at least one (1) Euro-Dollar Business
Days' notice to the Administrative Agent, prepay any Euro-Dollar Loan as of the
last day of the Interest Period applicable thereto. Except as provided in
Article 8 and except with respect to any Euro-Dollar Loan which has been
converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4 hereof, the
Borrower may not prepay all or any portion of the principal amount of any
Euro-Dollar Loan prior to the end of the Interest Period applicable thereto
unless the Borrower shall also pay any applicable expenses pursuant to Section
2.13. Any such prepayment shall be upon at least three (3) Euro-Dollar Business
Days notice to the Administrative Agent. Each such optional prepayment shall be
in the amounts set forth in Section 2.11(a) above and shall be applied to prepay
ratably the Loans of the Banks included in any Group of Euro-Dollar Loans,
except that any Euro-Dollar Loan which has been converted to a Base Rate Loan
pursuant to Section 8.2, 8.3 or 8.4 hereof may be prepaid without ratable
payment of the other Loans in such Group of Loans which have not been so
converted.
(c) The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent (by 11:00 a.m Chicago time on such Domestic
Business Day), reimburse the Administrative Agent for the benefit of the
Fronting Bank for the amount of any drawing under a Letter of Credit in whole or
in part in any amount.
(d) The Borrower may at any time return any undrawn Letter of Credit
to the Fronting Bank in whole, but not in part, and the Fronting Bank within a
reasonable period of time shall give the Administrative Agent and each of the
Banks notice of such return.
(e) The Borrower may at any time and from time to time cancel all or
any part of the Commitments by the delivery to the Administrative Agent of a
notice of cancellation within the applicable time periods set forth in Sections
2.11(a) and (b) if there are Loans then outstanding or, if there are no Loans
outstanding at such time as to which the Commitments with respect thereto are
being cancelled, upon at least one (1) Domestic Business Day's notice to the
Administrative Agent, whereupon, in either event, all or such portion of the
Commitments, as applicable, shall terminate as to the Banks, pro rata on the
date set forth in such notice of cancellation, and, if there are any Loans then
outstanding, Borrower shall prepay, as applicable, all or such portion of Loans
outstanding on such date in accordance with the requirements of Section 2.11(a)
and (b). In no event
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<PAGE>
shall the Borrower be permitted to cancel Commitments for which a Letter of
Credit has been issued and is outstanding unless the Borrower returns (or causes
to be returned) such Letter of Credit to the Fronting Bank. Borrower shall be
permitted to designate in its notice of cancellation which Loans, if any, are to
be prepaid. A reduction of the Commitments pursuant to this Section 2.11(c)
shall not effect a reduction in the Swingline Commitment (unless so elected by
the Borrower) until the aggregate Commitments have been reduced to an amount
equal to the Swingline Commitment.
(f) Any amounts so prepaid pursuant to Section 2.11 (a), (b), (c) or
(d) may be reborrowed. In the event Borrower elects to cancel all or any portion
of the Commitments and the Swingline Commitment pursuant to Section 2.11(e)
hereof, such amounts may not be reborrowed.
(g) The Borrower may not prepay any portion of a Money Market Loan
except with the prior consent of the Bank or Designated Lender holding such
Money Market Loan.
SECTION 2.12 GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrower shall make each payment of interest on the Loans and
of fees hereunder, not later than 12:00 Noon (Chicago time) on the date when
due, in Federal or other funds immediately available in Chicago, to the
Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly (and if received prior to 12:00 noon, on the
same Domestic Business Day, if received after 12:00 noon on the immediately
following Domestic Business Day) distribute to each Bank its ratable share (or
applicable share with respect to Money Market Loans) of each such payment
received by the Administrative Agent for the account of the Banks. If and to the
extent that the Administrative Agent shall receive any such payment for the
account of the Banks on or before 12:00 Noon (Chicago time) on any Domestic
Business Day, and Administrative Agent shall not have distributed to any Bank
its applicable share of such payment on such Domestic Business Day,
Administrative Agent shall distribute such amount to such Bank together with
interest thereon, for each day from the date such amount should have been
distributed to such Bank until the date Administrative Agent distributes such
amount to such Bank, at the Federal Funds Rate. Whenever any payment of
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<PAGE>
principal of, or interest on the Base Rate Loans or Swingline Loans or of fees
shall be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.13 FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or Money Market LIBOR Loan
(pursuant to Article II, VI or VIII or otherwise) on any day other than the last
day of the Interest Period applicable thereto, or if the Borrower fails to
borrow any Euro-Dollar Loans or Money Market LIBOR Loans after notice has been
given to any Bank in accordance with Section 2.4(a), or if Borrower shall
deliver a Notice of Interest Rate Election specifying that a Euro-Dollar Loan
shall be converted on a date other than the first (lst) day of the then current
Interest Period applicable thereto, the Borrower shall reimburse each Bank
within 15 days after certification of such Bank of such loss or expense (which
shall be delivered by each such Bank to Administrative Agent for delivery to
Borrower) for any resulting loss or expense incurred by it (or by an existing
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow, PROVIDED that such Bank shall have delivered to Administrative Agent and
Administrative Agent shall have delivered to the Borrower a certification as to
the amount of such loss or expense, which certification shall set forth in
reasonable detail the basis for and calculation of such loss or expense and
shall be conclusive in the absence of demonstrable error.
SECTION 2.14 COMPUTATION OF INTEREST AND FEES. All interest and fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
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SECTION 2.15 USE OF PROCEEDSOF PROCEEDS. The Borrower shall use the
proceeds of the Loans for general corporate purposes, including, without
limitation, the acquisition of real property to be used in the Borrower's
existing business and for general working capital needs of the Borrower;
provided, however, that no Swingline Loan shall be used more than once for the
purpose of refinancing another Swingline Loan, in whole or part.
SECTION 2.16 LETTERS OF CREDIT.
(a) Subject to the terms contained in this Agreement and the other
Loan Documents, upon the receipt of a notice in accordance with Section 2.2(b)
requesting the issuance of a Letter of Credit, the Fronting Bank shall issue a
Letter of Credit or Letters of Credit in such form as is reasonably acceptable
to the Borrower (subject to the provisions of Section 2.2(b)) in an amount or
amounts equal to the amount or amounts requested by the Borrower.
(b) Each Letter of Credit shall be issued in the minimum amount of
One Million Dollars ($1,000,000).
(c) The Letter of Credit Usage shall be no more than Two Hundred
Million Dollars ($200,000,000) at any one time.
(d) There shall be no more than twenty (20) Letters of Credit
outstanding at any one time.
(e) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereunder, the Fronting Bank shall notify the
Borrower and the Administrative Agent (and the Administrative Agent shall notify
each Bank thereof) on or before the date on which the Fronting Bank intends to
honor such drawing, and, except as provided in this subsection (e), the Borrower
shall reimburse the Fronting Bank, in immediately available funds, on the same
day on which such drawing is honored in an amount equal to the amount of such
drawing. Notwithstanding anything contained herein to the contrary, however,
unless the Borrower shall have notified the Administrative Agent, and the
Fronting Bank prior to 11:00 a.m. (Chicago time) on the Domestic Business Day
immediately prior to the date of such drawing that the Borrower intends to
reimburse the Fronting Bank for the amount of such drawing with funds other than
the proceeds of the Loans, the Borrower shall be deemed to have timely given a
Notice of Borrowing pursuant to Section 2.2 to the Administrative Agent,
requesting a Borrowing of Base Rate Loans on the date on which such drawing is
honored and in an amount equal to the amount of such drawing. Each Bank (other
than the Fronting Bank) shall, in accordance with Section 2.3(b), make available
its pro rata share of such Borrowing to the Administrative Agent, the proceeds
of which shall be applied directly by the Administrative Agent to reimburse the
Fronting Bank for the amount of such draw. In the event that any such Bank fails
to make available to the Fronting Bank the amount of
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such Bank's participation on the date of a drawing, the Fronting Bank shall be
entitled to recover such amount on demand from such Bank together with interest
at the Federal Funds Rate commencing on the date such drawing is honored, and
the provisions of Section 9.16 shall otherwise apply to such failure.
(f) If, after the date hereof, any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Bank
(including the Fronting Bank) or (ii) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (i) or (ii) shall be to increase,
by an amount deemed by the Fronting Bank or such Bank to be material, the cost
to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit
or participating therein, then the Borrower shall pay to the Fronting Bank or
such Bank, within 15 days after written demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, such
additional amounts as shall be required to compensate the Fronting Bank or such
Bank for such increased costs or reduction in amounts received or receivable
hereunder. Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section 2.16 and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
If such Bank shall fail to notify Borrower of any such event within 90 days
following the end of the month during which such event occurred, then Borrower's
liability for any amounts described in this Section incurred by such Bank as a
result of such event shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
such Bank actually notified Borrower of the occurrence of such event. A
certificate of any Bank claiming compensation under this Section 2.16 and
setting forth a reasonably detailed calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(g) The Borrower hereby agrees to protect, indemnify, pay and save
the Fronting Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and
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disbursements) which the Fronting Bank may incur or be subject to as a result of
(i) the issuance of the Letters of Credit, other than to the extent of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank or (ii) the
failure of the Fronting Bank to honor a drawing under any Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future DE JURE or DE FACTO government or governmental authority (collectively,
"GOVERNMENTAL ACTS"), other than to the extent of the bad faith, gross
negligence or wilful misconduct of the Fronting Bank. As between the Borrower
and the Fronting Bank, the Borrower assumes all risks of the acts and omissions
of any beneficiary with respect to its use, or misuses of, the Letters of Credit
issued by the Fronting Bank. In furtherance and not in limitation of the
foregoing, the Fronting Bank shall not be responsible (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
such Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or insufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit, other than as a result of the bad faith,
gross negligence or wilful misconduct of the Fronting Bank; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any message,
by mail, cable, telegraph, facsimile transmission, or otherwise; (v) for errors
in interpretation of any technical terms; (vi) for any loss or delay in the
transmission or otherwise of any documents required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of such Letter of Credit; and (viii) for any consequence arising from causes
beyond the control of the Fronting Bank, including any Government Acts, in each
case other than to the extent of the bad faith, gross negligence or willful
misconduct of the Fronting Bank. None of the above shall affect, impair or
prevent the vesting of the Fronting Bank's rights and powers hereunder. In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Fronting Bank under or
in connection with the Letters of Credit issued by it or the related
certificates, if taken or omitted in good faith, shall not put the Fronting Bank
under any resulting liability to the Borrower; provided that, notwithstanding
anything in the foregoing to the contrary, the Fronting Bank will be liable to
the Borrower for any damages suffered by the Borrower or its Subsidiaries as a
result of the Fronting Bank's grossly negligent or wilful failure to pay under
any Letter of Credit after the presentation to it of a sight
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draft and certificates strictly in compliance with the terms and conditions of
the Letter of Credit.
(h) If the Fronting Bank or the Administrative Agent is required at
any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization
law or otherwise, to return to the Borrower any reimbursement by the Borrower of
any drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank
or the Administrative Agent, as the case may be, its pro rata share of such
payment, but without interest thereon unless the Fronting Bank or the
Administrative Agent is required to pay interest on such amounts to the person
recovering such payment, in which case with interest thereon, computed at the
same rate, and on the same basis, as the interest that the Fronting Bank or the
Administrative Agent is required to pay.
SECTION 2.17 LETTER OF CREDIT USAGE ABSOLUTE. The obligations of the
Borrower under this Agreement in respect of any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement (as the same may be amended from time to time) and any
Letter of Credit Documents (as hereinafter defined) under all circumstances,
including, without limitation, to the extent permitted by law, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or
any other agreement or instrument relating thereto (collectively, the "LETTER OF
CREDIT DOCUMENTS") or any Loan Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of the
Letters of Credit or any other amendment or waiver of or any consent by the
Borrower to departure from all or any of the Letter of Credit Documents or any
Loan Document; PROVIDED, that the Fronting Bank shall not consent to any such
change or amendment unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Borrower in respect of the Letters of
Credit;
(d) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Fronting Bank or any
Bank (other than a defense based on the bad faith, gross negligence or wilful
misconduct of the Administrative Agent, the Fronting Bank or such Bank) or any
other Person, whether in connection with the Loan Documents, the transactions
contemplated
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hereby or by the Letters of Credit Documents or any unrelated transaction;
(e) any draft or any other document presented under or in connection
with any Letter of Credit or other Loan Document proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; PROVIDED, that payment by the
Fronting Bank under such Letter of Credit against presentation of such draft or
document shall not have been the result of the bad faith, gross negligence or
wilful misconduct of the Fronting Bank;
(f) payment by the Fronting Bank against presentation of a draft or
certificate that does not strictly comply with the terms of the Letter of
Credit; PROVIDED, that such payment shall not have been the result of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank; and
(g) any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrower; PROVIDED, that such other
circumstance or happening shall not have been the result of bad faith, gross
negligence or wilful misconduct of the Fronting Bank.
SECTION 2.18 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENTCOMMITMENT. Subject to the terms and
conditions of this Section 2.18, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower (each a
"SWINGLINE LOAN" and, collectively, the "SWINGLINE LOANS") from time to time
during the term hereof; provided, however, that the aggregate amount of
Swingline Loans outstanding at any time shall not exceed the lesser of (i) FIFTY
MILLION DOLLARS ($50,000,000), and (ii) the aggregate Commitments less all Loans
then outstanding (the "SWINGLINE COMMITMENT"). Subject to the limitations set
forth herein, any amounts repaid in respect of Swingline Loans may be
reborrowed.
(b) SWINGLINE BORROWINGSBORROWINGS.
(i) NOTICE OF BORROWING. With respect to any Swingline Borrowing, the
Borrower shall give the Swingline Lender and the Administrative Agent notice in
writing which is received by the Swingline Lender and Administrative Agent not
later than 1:00 p.m. (Chicago time) on the proposed date of such Swingline
Borrowing (and confirmed by telephone by such time), specifying (A) that a
Swingline Borrowing is being requested, (B) the amount of such Swingline
Borrowing, (C) the proposed date of such Swingline Borrowing, which shall be a
Domestic Business Day and
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(D) stating that no Default or Event of Default has occurred and is continuing
both before and after giving effect to such Swingline Borrowing. Such notice
shall be irrevocable.
(ii) MINIMUM AMOUNTS. Each Swingline Borrowing shall be in a minimum
principal amount of $1,000,000, or an integral multiple of $100,000 in excess
thereof.
(iii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan shall be due
and payable on the earliest of (A) 5 Domestic Business Days from the date of the
applicable Swingline Borrowing, (B) the date of the next Committed Borrowing or
(C) the Maturity Date. In addition, in no event shall Swingline Loans be
outstanding for more than ten (10) Domestic Business Days in any calendar month.
If, and to the extent, any Swingline Loans shall be outstanding on the date of
any Committed Borrowing, such Swingline Loans shall first be repaid from the
proceeds of such Committed Borrowing prior to the disbursement of the same to
the Borrower. If, and to the extent, a Committed Borrowing is not requested
prior to the Maturity Date or the end of the 5-Domestic Business Day period
after a Swingline Borrowing, the Borrower shall be deemed to have requested a
Committed Borrowing comprised entirely of Base Rate Loans in the amount of the
applicable Swingline Loan then outstanding, the proceeds of which shall be used
to repay such Swingline Loan to the Swingline Lender. In addition, the Swingline
Lender may, at any time, in its sole discretion, by written notice to the
Borrower and the Administrative Agent, demand repayment of its Swingline Loans
by way of a Committed Borrowing, in which case the Borrower shall be deemed to
have requested a Committed Borrowing comprised entirely of Base Rate Loans in
the amount of such Swingline Loans then outstanding, the proceeds of which shall
be used to repay such Swingline Loans to the Swingline Lender. Any Committed
Borrowing which is deemed requested by the Borrower in accordance with this
Section 2.18(b)(iii) is hereinafter referred to as a "Mandatory Borrowing". Each
Bank hereby irrevocably agrees to make Committed Loans promptly upon receipt of
notice from the Swingline Lender of any such deemed request for a Mandatory
Borrowing in the amount and in the manner specified in the preceding sentences
and on the date such notice is received by such Bank (or the next Domestic
Business Day if such notice is received after 12:00 P.M. (Chicago time))
notwithstanding (I) the amount of the Mandatory Borrowing may not comply with
the minimum amount of Committed Borrowings otherwise required hereunder, (II)
whether any conditions specified in Section 3.2 are then satisfied, (III)
whether a Default
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or an Event of Default then exists, (IV) failure of any such deemed request for
a Committed Borrowing to be made by the time otherwise required in Section 2.1,
(V) the date of such Mandatory Borrowing (provided that such date must be a
Domestic Business Day), or (VI) any termination of the Commitments immediately
prior to such Mandatory Borrowing or contemporaneously therewith; provided,
however, that no Bank shall be obligated to make Committed Loans in respect of a
Mandatory Borrowing if a Default or an Event of Default then exists and the
applicable Swingline Loan was made by the Swingline Lender without receipt of a
written Notice of Borrowing in the form specified in subclause (i) above or
after Administrative Agent has delivered a notice of Default or Event of Default
which has not been rescinded.
(iv) PURCHASE OF PARTICIPATIONS. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation , as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each Bank hereby
agrees that it shall forthwith, upon demand, purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payment
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Bank to share in such Swingline Loans
ratably based upon its Pro Rata Share (determined before giving effect to any
termination of the Commitments pursuant hereto), provided that (A) all interest
payable on the Swingline Loans with respect to any participation shall be for
the account of the Swingline Lender until but excluding the day upon which the
Mandatory Borrowing would otherwise have occurred, and (B) in the event of a
delay between the day upon which the Mandatory Borrowing would otherwise have
occurred and the time any purchase of a participation pursuant to this sentence
is actually made, the purchasing Bank shall be required to pay to the Swingline
Lender interest on the principal amount of such participation for each day from
and including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
rate equal to the Federal Funds Rate, for the two (2) Domestic Business Days
after the date the Mandatory Borrowing would otherwise have occurred, and
thereafter at a rate equal to the Base Rate. Notwithstanding the foregoing, no
Bank shall be obligated to purchase a participation in any Swingline Loan if a
Default or an Event of Default then exists and such Swingline Loan was made by
the Swingline Lender without receipt of a written Notice of Borrowing in the
form specified in subclause (i) above or after Administrative Agent has
delivered a notice of Default or Event of Default which has not been rescinded.
(c) INTEREST RATERATE. Each Swingline Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Swingline
Loan is made until the date it is repaid, at a rate per annum equal to the
Federal Funds Rate for such day, plus the Applicable Margin for Euro-Dollar
Loans, plus .20%.
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ARTICLE III
CONDITIONS
SECTION 3.1 CLOSING. The closing hereunder shall occur on the date when
each of the following conditions is satisfied (or waived by the Administrative
Agent and the Banks), each document to be dated the Closing Date unless
otherwise indicated:
(a) the Borrower shall have executed and delivered to the
Administrative Agent a Note for the account of each Bank dated on or before the
Closing Date complying with the provisions of Section 2.5;
(b) the Borrower, the Administrative Agent and each of the Banks
shall have executed and delivered to the Borrower and the Administrative Agent a
duly executed original of this Agreement;
(c) EQR shall have executed and delivered to the Administrative Agent
a duly executed original of the EQR Guaranty;
(d) the Administrative Agent shall have received an opinion of
Rosenberg & Liebentritt, P.C., counsel for the Borrower, acceptable to the
Administrative Agent, the Banks and their counsel;
(e) the Borrower shall have repaid in full, and terminated, (i) the
Amended and Restated Credit Agreement, dated as of October 20, 1998, among the
Borrower, EQR, Bank of America National Trust and Savings Association, as
syndication agent, The Chase Manhattan Bank, as documentation agent, First Union
National Bank, as agent and arranger, and the financial institutions party
thereto, and (ii) the Second Amended and Restated Revolving Credit Agreement,
dated as of September 9, 1997, among the Borrower, Morgan Guaranty Trust Company
of New York, as Lead Agent, Bank of America National Trust and Savings
Association, as Co-lead Agent, and the other banks party thereto;
(f) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrower and EQR, the authority for and the validity of this Agreement and the
other Loan Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent. Such documentation shall
include, without limitation, the agreement of limited partnership of the
Borrower, as well as the certificate of limited partnership of the Borrower,
both as amended, modified or supplemented to the Closing Date, certified to be
true, correct and complete by a senior officer of the Borrower as of a date not
more than ten (10) days prior to the Closing Date, together with a certificate
of existence as to the Borrower from
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the Secretary of State (or the equivalent thereof) of Illinois, to be dated not
more than thirty (30) days prior to the Closing Date, as well as the declaration
of trust of EQR, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by a senior officer of EQR as of a
date not more than ten (10) days prior to the Closing Date, together with a good
standing certificate as to EQR from the Secretary of State (or the equivalent
thereof) of Maryland, to be dated not more than thirty (30) days prior to the
Closing Date;
(g) the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
the Notice of Borrowing referred to in Section 3.2, if applicable, unless
otherwise specified, in sufficient counterparts, satisfactory in form and
substance to the Administrative Agent in its sole discretion;
(h) the Borrower shall have taken all actions required to authorize
the execution and delivery of this Agreement and the other Loan Documents and
the performance thereof by the Borrower;
(i) the Administrative Agent shall be satisfied that neither the
Borrower, EQR nor any Consolidated Subsidiary is subject to any present or
contingent environmental liability which could have a Material Adverse Effect;
(j) the Administrative Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on
or before the Closing Date, and the fees and expenses accrued through the
Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP shall have been paid
directly to such firm;
(k) the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower, EQR and the applicable
Consolidated Subsidiaries, and the validity and enforceability, of the Loan
Documents, or in connection with any of the transactions contemplated thereby,
and such consents, licenses and approvals shall be in full force and effect;
(l) the Administrative Agent shall have received the audited
financial statements of the Borrower and its Consolidated Subsidiaries and of
EQR for the fiscal year ending December 31, 1998; and
(m) no Default or Event of Default shall have occurred.
SECTION 3.2 BORROWINGS. The obligation of any Bank to make a Loan or to
participate in any Letter of Credit issued by the Fronting Bank and the
obligation of the Fronting Bank to issue a Letter of Credit or the obligation of
the Swingline
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Lender to make a Swingline Loan on the occasion of any Borrowing is subject to
the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or a Notice of Money Market Borrowing as required by
Section 2.3 or a request to cause a Fronting Bank to issue a Letter of Credit
pursuant to Section 2.16;
(b) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans plus the Letter of Credit Usage will not exceed
the aggregate amount of the Commitments;
(c) immediately before and after such Borrowing or issuance of any
Letter of Credit, no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the making of such Loans or
the issuance of such Letter of Credit;
(d) the representations and warranties of the Borrower contained in
this Agreement (other than representations and warranties which expressly speak
as of a different date) shall be true and correct in all material respects on
and as of the date of such Borrowing both before and after giving effect to the
making of such Loans;
(e) no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans, the issuance of any Letter of
Credit or the consummation of the transactions contemplated by this Agreement;
and
(f) no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Administrative Agent, or the
Required Banks, as the case may be, has had or is likely to have a Material
Adverse Effect;
Each Borrowing hereunder or acceptance of a Letter of Credit issued hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Borrowing as to the facts specified in clauses (b), (c), (d), (e), and
(f) (to the extent that Borrower is or should have been aware of any Material
Adverse Effect) of this Section, except as otherwise disclosed in writing by
Borrower to the Banks. Notwithstanding anything to the contrary, no Borrowing
shall be permitted if such Borrowing would cause Borrower to fail to be in
compliance with any of the covenants contained in this Agreement or in any of
the other Loan Documents.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the other Banks
which is or may become a party to this Agreement to make the Loans, the Borrower
makes the following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.
SECTION 4.1 EXISTENCE AND POWER. The Borrower is a limited partnership,
duly formed and validly existing as a limited partnership under the laws of the
State of Illinois and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect. EQR is a real estate investment trust,
duly formed, validly existing and in good standing as a real estate investment
trust under the laws of the State of Maryland and has all powers and all
material governmental licenses, authorizations, consents and approvals required
to own its property and assets and carry on its business as now conducted or as
it presently proposes to conduct and has been duly qualified and is in good
standing in every jurisdiction in which the failure to be so qualified and/or in
good standing is likely to have a Material Adverse Effect.
SECTION 4.2 POWER AND AUTHORITY. The Borrower has the partnership power
and authority to execute, deliver and carry out the terms and provisions of each
of the Loan Documents to which it is a party and has taken all necessary
partnership action, if any, to authorize the execution and delivery on behalf of
the Borrower and the performance by the Borrower of such Loan Documents. The
Borrower has duly executed and delivered each Loan Document to which it is a
party in accordance with the terms of this Agreement, and each such Loan
Document constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law. EQR has the power and
authority to execute, deliver and carry out the terms and provisions of each of
the Loan Documents on behalf of the Borrower to which the Borrower is a party
and has taken all necessary action to authorize the execution and delivery on
behalf of the Borrower and the performance by the Borrower of such Loan
Documents.
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SECTION 4.3 NO VIOLATION. Neither the execution, delivery or
performance by or on behalf of the Borrower of the Loan Documents to which it is
a party, nor compliance by the Borrower with the terms and provisions thereof
nor the consummation of the transactions contemplated by the Loan Documents, (i)
will materially contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will materially conflict with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrower or
any of its Consolidated Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which the
Borrower (or of any partnership of which the Borrower is a partner) or any of
its Consolidated Subsidiaries is a party or by which it or any of its property
or assets is bound or to which it is subject, or (iii) will cause a material
default by the Borrower under any organizational document of any Person in which
the Borrower has an interest, or cause a material default under the Borrower's
agreement or certificate of limited partnership, the consequences of which
conflict, breach or default would have a Material Adverse Effect, or result in
or require the creation or imposition of any Lien whatsoever upon any Property
(except as contemplated herein).
SECTION 4.4 FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, dated as of December 31, 1998, and the related
consolidated statements of Borrower's financial position for the fiscal year
then ended, reported on by Ernst & Young LLP, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.
(b) The consolidated balance sheet of EQR, dated as of December 31,
1998, and the related consolidated statements of EQR's financial position for
the fiscal year then ended, reported on by Ernst & Young LLP and set forth in
the EQR 1998 Form 10-K, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with GAAP, the consolidated financial position of
EQR and its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.
(c) Since March 31, 1999, (i) except as may have been disclosed in
writing to the Banks, nothing has occurred having a Material Adverse Effect, and
(ii) except as previously disclosed to the Banks, neither the Borrower nor EQR
has incurred any material indebtedness or guaranty on or before the Closing
Date.
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SECTION 4.5 LITIGATION. Except as previously disclosed by the Borrower
in writing to the Banks, there is no action, suit or proceeding pending against,
or to the knowledge of the Borrower threatened against or affecting, (i) the
Borrower, EQR or any of their Consolidated Subsidiaries, (ii) the Loan Documents
or any of the transactions contemplated by the Loan Documents or (iii) any of
their assets, before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could, individually, or in the aggregate have a Material Adverse Effect or which
in any manner draws into question the validity of this Agreement or the other
Loan Documents.
SECTION 4.6 COMPLIANCE WITH ERISA.
(a) Except as set forth on SCHEDULE 4.6 attached hereto, neither
Borrower nor EQR is a member of any Plan or Multiemployer Plan or any other
Benefit Arrangement.
(b) The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the
Administrative Agent or the Banks to any tax or penalty or prohibited
transactions imposed under Section 4975 of the Code or Section 502(i) of ERISA.
SECTION 4.7 ENVIRONMENTAL MATTERS. The Borrower and EQR each conducts
reviews of the effect of Environmental Laws on the business, operations and
properties of the Borrower, EQR and Consolidated Subsidiaries of either or both
when necessary in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently owned, any
capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
and any actual or potential liabilities to third parties, including employees,
and any related costs and expenses). On the basis of this review, the Borrower
and EQR each has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect on the Borrower, EQR and their Consolidated
Subsidiaries.
SECTION 4.8 TAXES. United States Federal income tax returns of the
Borrower, EQR and their Consolidated Subsidiaries have been prepared and filed
through the fiscal year ended December 31, 199 . The Borrower, EQR and their
Consolidated Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower,
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EQR or any Consolidated Subsidiary, except such taxes, if any, as are reserved
against in accordance with GAAP, such taxes as are being contested in good faith
by appropriate proceedings or such taxes, the failure to make payment of which
when due and payable will not have, in the aggregate, a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower, EQR and their
Consolidated Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate.
SECTION 4.9 FULL DISCLOSURE. All information heretofore furnished by
the Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby or thereby
is true and accurate in all material respects on the date as of which such
information is stated or certified. The Borrower has disclosed to the
Administrative Agent, in writing any and all facts which have or may have (to
the extent the Borrower can now reasonably foresee) a Material Adverse Effect.
SECTION 4.10 SOLVENCY. On the Closing Date and after giving effect to
the transactions contemplated by the Loan Documents occurring on the Closing
Date, the Borrower will be Solvent.
SECTION 4.11 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions
hereof. No part of the proceeds of any Loan will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock in any manner that might violate the
provisions of Regulations T, U or X of the Federal Reserve Board. Neither the
making of any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X of the Federal Reserve
Board.
SECTION 4.12 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of any Loan Document or the consummation
of any of the transactions contemplated thereby other than those that have
already been duly made or obtained and remain in full force and effect or those
which, if not made or obtained, would not have a Material Adverse Effect;
SECTION 4.13 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower, EQR nor any Consolidated Subsidiary is (x) an
"INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY",
within the meaning of the Investment Company Act of 1940, as amended, (y) a
"HOLDING company" or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY" or an
"AFFILIATE" of either a "HOLDING COMPANY" or a
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"SUBSIDIARY COMPANY" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (z) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.
SECTION 4.14 PRINCIPAL OFFICES. As of the Closing Date, the principal
office, chief executive office and principal place of business of the Borrower
is Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606.
SECTION 4.15 REIT STATUS. For the fiscal year ended December 31, 1998,
EQR qualified and EQR intends to continue to qualify as a real estate investment
trust under the Code.
SECTION 4.16 PATENTS, TRADEMARKS, ETC. The Borrower has obtained and
holds in full force and effect all patents, trademarks, servicemarks, trade
names, copyrights and other such rights, free from burdensome restrictions,
which are necessary for the operation of its business as presently conducted,
the impairment of which is likely to have a Material Adverse Effect.
SECTION 4.17 OWNERSHIP OF PROPERTY. SCHEDULE 4.17 attached hereto and
made a part hereof sets forth all the real property owned or ground leased by
the Borrower, EQR and Persons in which the Borrower and/or EQR, directly or
indirectly, owns an interest as of the Closing Date. As of the Closing Date, the
Borrower, EQR and such Persons have good and insurable fee simple title (or
leasehold title if so designated on SCHEDULE 4.17) to all of such real property,
subject to Permitted Liens. As of the date of this Agreement, there are no
mortgages, deeds of trust, indentures, debt instruments or other agreements
creating a Lien against any of the Real Property Assets except as disclosed on
SCHEDULE 4.17.
SECTION 4.18 NO DEFAULT. No Event of Default or, to the best of the
Borrower's knowledge, Default exists under or with respect to any Loan Document
and the Borrower is not in default in any material respect beyond any applicable
grace period under or with respect to any other material agreement, instrument
or undertaking to which it is a party or by which it or any of its property is
bound in any respect, the existence of which default is likely to result in a
Material Adverse Effect.
SECTION 4.19 LICENSES, ETC. The Borrower has obtained and does hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is likely to have a
Material Adverse Effect.
SECTION 4.20 COMPLIANCE WITH LAW. To the Borrower's knowledge, the
Borrower and each of the Real Property Assets are in compliance with all laws,
rules, regulations, orders,
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judgments, writs and decrees, including, without limitation, all building and
zoning ordinances and codes, the failure to comply with which is likely to have
a Material Adverse Effect.
SECTION 4.21 NO BURDENSOME RESTRICTIONS. Except as may have been
disclosed by the Borrower in writing to the Banks, Borrower is not a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is likely to have a Material Adverse Effect.
SECTION 4.22 BROKERS' FEES. The Borrower has not dealt with any broker
or finder with respect to the transactions contemplated by this Agreement or
otherwise in connection with this Agreement, and the Borrower has not done any
act, had any negotiations or conversation, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by the Borrower of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents, other than the fees payable to the Administrative Agent and the
Banks.
SECTION 4.23 LABOR MATTERS. There are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Borrower and the
Borrower has not suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.
SECTION 4.24 INSURANCE. The Borrower and/or EQR currently maintains
insurance at 100% replacement cost insurance coverage (subject to customary
deductibles) in respect of each of the Real Property Assets, as well as
commercial general liability insurance (including "builders' risk" where
applicable) against claims for personal, and bodily injury and/or death, to one
or more persons, or property damage, as well as workers' compensation insurance,
in each case with respect to liability and casualty insurance with insurers
having an A.M. Best policyholders' rating of not less than A-VII in amounts that
prudent owner of assets such as the Real Property Assets would maintain.
SECTION 4.25 ORGANIZATIONAL DOCUMENTS. The documents delivered pursuant
to Section 3.1(f) constitute, as of the Closing Date, all of the organizational
documents (together with all amendments and modifications thereof) of the
Borrower and EQR. The Borrower represents that it has delivered to the
Administrative Agent true, correct and complete copies of each of the documents
set forth in this Section 4.25.
SECTION 4.26 QUALIFYING UNENCUMBERED PROPERTIES. As of the date hereof,
each Property listed on EXHIBIT F as a Qualifying Unencumbered Property (i) is
an operating multifamily residential property wholly-owned (directly or
beneficially) by
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Borrower and/or EQR or a wholly-owned Subsidiary of either or both, (ii) is not
subject (nor are any equity interests in such Property subject) to a Lien which
secures Indebtedness of any Person, other than Permitted Liens, (iii) is not
subject (nor are any equity interests in such Property subject) to any covenant,
condition, or other restriction which prohibits or limits the creation or
assumption of any Lien upon such Property (it being understood that covenants
similar to those set forth in Section 5.8 hereof shall not be deemed to
constitute any such prohibition or limitation), and (iv) is not owned by a
Subsidiary of the Borrower or EQR (other than the Borrower) that has any
outstanding Unsecured Debt (other than those items of Indebtedness set forth in
clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any
Contingent Obligation other than guarantees for borrowed money). All of the
information set forth on EXHIBIT F is true and correct in all material respects.
SECTION 4.27 YEAR 2000 COMPLIANCE. The Borrower and EQR have conducted
a review and assessment of the Borrower's and EQR's computer applications with
respect to the "year 2000 problem" (that is, the risk that computer applications
may not be able to properly perform date-sensitive functions after December 31,
1999) and, based on that review and inquiry, the Borrower does not believe that
the "year 2000 problem" will result in a Material Adverse Effect to the
Borrower's or EQR's financial condition or results of operations, or on its
ability to repay the Loans.
ARTICLE V
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:
SECTION 5.1 INFORMATION. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than 125 days after the end of each
fiscal year of the Borrower) a consolidated balance sheet of the Borrower, EQR
and their Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of Borrower's and EQR's operations and
consolidated statements of Borrower's and EQR's cash flow for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on in a manner acceptable to the Securities and
Exchange Commission on Borrower's and EQR's Form 10K and reported on by Ernst &
Young LLP or other independent public accountants of nationally recognized
standing;
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(b) as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than 80 days after the end of each of
the first three quarters of each fiscal year of the Borrower and EQR), (i) a
consolidated balance sheet of the Borrower, EQR and their Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of Borrower's and EQR's operations and consolidated statements of
Borrower's and EQR's cash flow for such quarter and for the portion of the
Borrower's or EQR's fiscal year ended at the end of such quarter, all reported
on in the form provided to the Securities and Exchange Commission on Borrower's
and EQR's Form 10Q, and (ii) and such other information reasonably requested by
the Administrative Agent or any Bank;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Section 5.8 on the date of
such financial statements; (ii) certifying (x) that such financial statements
fairly present the financial condition and the results of operations of the
Borrower on the dates and for the periods indicated, on the basis of GAAP, with
respect to the Borrower subject, in the case of interim financial statements, to
normally recurring year-end adjustments, and (y) that such officer has reviewed
the terms of the Loan Documents and has made, or caused to be made under his or
her supervision, a review in reasonable detail of the business and condition of
the Borrower during the period beginning on the date through which the last such
review was made pursuant to this Section 5.1(c) (or, in the case of the first
certification pursuant to this Section 5.1(c), the Closing Date) and ending on a
date not more than ten (10) Domestic Business Days prior to the date of such
delivery and that (1) on the basis of such financial statements and such review
of the Loan Documents, no Event of Default existed under Section 6.1(b) with
respect to Sections 5.8 and 5.9 at or as of the date of said financial
statements, and (2) on the basis of such review of the Loan Documents and the
business and condition of the Borrower, to the best knowledge of such officer,
as of the last day of the period covered by such certificate no Default or Event
of Default under any other provision of Section 6.1 occurred and is continuing
or, if any such Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof and, the action the Borrower proposes
to take in respect thereof and (3) no event has occurred and is continuing which
would give rise to a mandatory prepayment pursuant to Section 2.10 hereof. Such
certificate shall set forth the calculations required to establish the matters
described in clauses (1) and (3) above;
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(d) (i) within five (5) Domestic Business Days after any officer of
the Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer, the chief accounting
officer, controller, or other executive officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto; and (ii) promptly and in any event within five (5)
Domestic Business Days after the Borrower obtains knowledge thereof, notice of
(x) any litigation or governmental proceeding pending or threatened against the
Borrower or the Real Property Assets as to which there is a reasonable
possibility of an adverse determination and which, if adversely determined, is
likely to individually or in the aggregate, result in a Material Adverse Effect,
(y) any other event, act or condition which is likely to result in a Material
Adverse Effect, and (z) any event giving rise to a mandatory prepayment pursuant
to Section 2.10;
(e) promptly upon the mailing thereof to the shareholders of EQR
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) (other than the exhibits thereto, which exhibits will be provided
upon request therefor by any Bank) which EQR shall have filed with the
Securities and Exchange Commission;
(g) Promptly and in any event within thirty (30) days, if and when
any member of the ERISA Group (i) gives or is required to give notice to the
PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the
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imposition of a Lien or the posting of a bond or other security, and in the case
of clauses (i) through (vii) above, which event could result in a Material
Adverse Effect, a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth details as to such occurrence
and action, if any, which the Borrower or applicable member of the ERISA Group
is required or proposes to take;
(h) promptly and in any event within ten (10) days after the Borrower
obtains actual knowledge of any of the following events, a certificate of the
Borrower, executed by an officer of the Borrower, specifying the nature of such
condition, and the Borrower's or, if the Borrower has actual knowledge thereof,
the Environmental Affiliate's proposed initial response thereto: (i) the receipt
by the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates of any communication (written or oral), whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
the Borrower shall obtain actual knowledge that there exists any Environmental
Claim pending against the Borrower or any Environmental Affiliate and such
Environmental Claim is likely to have a Material Adverse Effect or (iii) the
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against the Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect;
(i) promptly and in any event within five (5) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any loss which is likely to result in a Material Adverse Effect, copies of such
notices and correspondence; and
(j) from time to time such additional information regarding the
financial position or business of the Borrower, EQR and their Subsidiaries as
the Administrative Agent, at the request of any Bank, may reasonably request in
writing.
SECTION 5.2 PAYMENT OF OBLIGATIONS. The Borrower, EQR and their
Consolidated Subsidiaries will pay and discharge, at or before maturity, all its
respective material obligations and liabilities including, without limitation,
any obligation pursuant to any agreement by which it or any of its properties is
bound, in each case where the failure to so pay or discharge such obligations or
liabilities is likely to result in a Material Adverse Effect, and will maintain
in accordance with GAAP, appropriate reserves for the accrual of any of the
same.
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SECTION 5.3 MAINTENANCE OF PROPERTY; INSURANCE; LEASES.
(a) The Borrower and/or EQR will keep, and will cause each
Consolidated Subsidiary to keep, all property useful and necessary in its
business, including without limitation the Real Property Assets (for so long as
it constitutes Real Property Assets), in good repair, working order and
condition, ordinary wear and tear excepted, in each case where the failure to so
maintain and repair will have a Material Adverse Effect.
(b) The Borrower and/or EQR shall maintain, or cause to be
maintained, insurance comparable to that described in Section 4.24 hereof with
insurers meeting the qualifications described therein, which insurance shall in
any event not provide for less coverage than insurance customarily carried by
owners of properties similar to, and in the same locations as, the Real Property
Assets. The Borrower and/or EQR will deliver to the Administrative Agent upon
the reasonable request of the Administrative Agent from time to time (i) full
information as to the insurance carried, (ii) within five (5) days of receipt of
notice from any insurer a copy of any notice of cancellation or material change
in coverage from that existing on the date of this Agreement and (iii)
forthwith, notice of any cancellation or nonrenewal of coverage by the Borrower
and/or EQR.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Borrower and EQR will continue to engage in business of the same general type as
now conducted by the Borrower and EQR, and each will preserve, renew and keep in
full force and effect, its partnership and trust existence and its respective
rights, privileges and franchises necessary for the normal conduct of business
unless the failure to maintain such rights and franchises does not have a
Material Adverse Effect.
SECTION 5.5 COMPLIANCE WITH LAWS. The Borrower and EQR will and will
cause their Subsidiaries to comply in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws, and all zoning
and building codes with respect to the Real Property Assets and ERISA and the
rules and regulations thereunder and all federal securities laws) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to do so will not have a Material Adverse
Effect or expose Administrative Agent or the Banks to any material liability
therefor.
SECTION 5.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Borrower and
EQR each will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities in conformity with GAAP, modified as required by
this Agreement and applicable law; and will permit representatives of
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any Bank at such Bank's expense to visit and inspect any of its properties,
including without limitation the Real Property Assets, to examine and make
abstracts from any of its books and records and to discuss its affairs, finances
and accounts with its officers and independent public accountants, all at such
reasonable times during normal business hours, upon reasonable prior notice and
as often as may reasonably be desired. Administrative Agent shall coordinate any
such visit or inspection to arrange for review by any Bank requesting any such
visit or inspection.
SECTION 5.7 EXISTENCE. The Borrower shall do or cause to be done, all
things necessary to preserve and keep in full force and effect its, EQR's and
their Consolidated Subsidiaries' existence and its patents, trademarks,
servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditation, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
likely to have a Material Adverse Effect.
SECTION 5.8 FINANCIAL COVENANTS.
(a) INDEBTEDNESS TO GROSS ASSET VALUE. Borrower shall not permit the
ratio of Indebtedness of Borrower and EQR, on a consolidated basis, and
Borrower's Share of Indebtedness of Investment Affiliates to Gross Asset Value
of Borrower and EQR to exceed 0.50:1 at any time.
(b) SECURED DEBT TO GROSS ASSET VALUE. Borrower shall not permit the
ratio of Secured Debt to Gross Asset Value of Borrower and EQR to exceed 0.30:1
at any time.
(c) UNENCUMBERED POOL. Borrower shall not permit the ratio of the
Unencumbered Asset Value to outstanding Unsecured Debt to be less than 2.2:1 at
any time.
(d) EBITDA TO FIXED CHARGES RATIO. Borrower shall not permit the
ratio of EBITDA for the then most recently completed Fiscal Quarter to Fixed
Charges for the then most recently completed Fiscal Quarter to be less than
1.8:1.
(e) UNENCUMBERED NET OPERATING INCOME TO UNSECURED INTEREST EXPENSE.
Borrower shall not permit the ratio of Unencumbered Net Operating Income for the
then most recently completed Fiscal Quarter to Unsecured Interest Expense for
the then most recently completed Fiscal Quarter to be less than 2.25:1.
(f) DIVIDENDS. The Borrower will not, as determined on an aggregate
annual basis, pay any partnership distributions in excess of 90% of the
Borrower's FFO for such year. During the continuance of a monetary Event of
Default, Borrower shall only pay partnership distributions that are necessary to
enable EQR to
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make those dividends necessary to maintain EQR's status as a real estate
investment trust.
(g) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Consolidated
Tangible Net Worth of the Borrower and its Consolidated Subsidiaries will at no
time be less than $4,500,000,000 plus ninety percent (90%) of all Net Offering
Proceeds received by EQR or Borrower after the date hereof.
(h) RAW LAND. The Borrower and EQR shall not purchase or continue to
hold any Raw Land to the extent that the undepreciated book value of all such
Raw land, taken singly or in the aggregate, exceeds five percent (5%) of the
Gross Asset Value of Borrower and EQR.
(i) DEVELOPMENT ACTIVITY. The Borrower, EQR and their Subsidiaries
will not engage in any Development Activity other than Development Activity in
which the Borrower, EQR and their Subsidiaries do not have a total aggregate
investment at any time exceeding an amount equal to ten percent (10%) of the
Gross Asset Value of Borrower and EQR.
(j) PERMITTED HOLDINGS. Borrower's and EQR's primary business will be
the ownership, operation and development of multifamily residential property and
any other business activities of Borrower, EQR and Subsidiaries of either or
both will remain incidental thereto. Notwithstanding the foregoing, Borrower,
EQR and Subsidiaries of either or both may acquire or maintain the following
Permitted Holdings if and so long as (i) the aggregate value of Permitted
Holdings, together with the Permitted Holdings described in subsections (h) and
(i) above, whether held directly or indirectly (but without duplication) by
Borrower, EQR and/or their Subsidiaries, does not exceed, at any time, twenty
percent (20%) of Gross Asset Value of Borrower and EQR as a whole and (ii) the
value of each such Permitted Holding, whether held directly or indirectly by
Borrower, EQR or the Subsidiaries of either or both, does not exceed, at any
time, the following percentages of Gross Asset Value of Borrower and EQR:
<TABLE>
<CAPTION>
Maximum Percentage
Permitted Holdings of Gross Asset Value
- ------------------ --------------------
<S> <C>
Non-Multifamily Residential Property
(other than Cash or Cash Equivalents) 10%
Securities (other than Cash and Cash
Equivalents) 5%
Multifamily Residential Property
Mortgages (other than Mortgages in
favor of the Borrower) 10%
Multifamily Residential Property
Partnership Interests 15%
</TABLE>
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<TABLE>
<S> <C>
(other than interests in any Person wholly-owned
by EQR and/or Borrower, EQR's partnership
interest in the Borrower or Borrower's or EQR's
partnership interests in Evans Withycombe
Residential, L.P. a Delaware limited partnership
("Evans Withycombe"), or Borrower's or EQR's
indirect interest in any Person wholly-owned
directly or indirectly by
Evans Withycombe and/or EQR)
</TABLE>
For purposes of calculating the foregoing percentages the value of each category
shall be calculated in the manner that Gross Asset Value is determined;
PROVIDED, HOWEVER, that the Gross Asset Value for Securities shall be equal to
the lesser of (a) the acquisition cost thereof or (b) the current market value
thereof (such market value to be determined in a manner reasonably acceptable to
Administrative Agent).
(k) CALCULATION. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter.
SECTION 5.9 RESTRICTION ON FUNDAMENTAL CHANGES.
(a) Neither the Borrower nor EQR shall enter into any merger or
consolidation, unless (i) the Borrower or EQR is the surviving entity, (ii) the
entity which is merged into Borrower or EQR is predominantly in the commercial
real estate business, (iii) the creditworthiness of the surviving entity's long
term unsecured debt or implied senior debt, as applicable, is not lower than
Borrower's or EQR's creditworthiness two months immediately preceding such
merger, and (iv) in the case of any merger where the then fair market value of
the assets of the entity which is merged into the Borrower or EQR is twenty-five
percent (25%) or more of the Borrower's or EQR's then Gross Asset Value
following such merger, the Administrative Agent's consent thereto in writing,
which consent shall not be unreasonably withheld, conditioned or delayed.
Neither the Borrower nor EQR shall liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), discontinue its business or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of its business or property, whether now or hereafter
acquired. Nothing in this Section shall be deemed to prohibit the sale or
leasing of portions of the Real Property Assets in the ordinary course of
business.
(b) The Borrower shall not amend its agreement of limited partnership
or other organizational documents in any manner that would have a Material
Adverse Effect without the Administrative Agent's consent, which shall not be
unreasonably withheld. EQR shall not amend its declaration of trust, by-laws, or
other organizational documents in any manner that would have a
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Material Adverse Effect without the Administrative Agent's consent, which shall
not be unreasonably withheld.
(c) The Borrower shall deliver to Administrative Agent copies of all
amendments to its agreement of limited partnership or to EQR's declaration of
trust, by-laws, or other organizational documents no less than ten (10) days
after the effective date of any such amendment.
SECTION 5.10 CHANGES IN BUSINESS.
(a) Except for Permitted Holdings, neither the Borrower nor EQR shall
enter into any business which is substantially different from that conducted by
the Borrower or EQR on the Closing Date after giving effect to the transactions
contemplated by the Loan Documents. The Borrower shall carry on its business
operations through the Borrower and its Subsidiaries.
(b) Except for Permitted Holdings, Borrower shall not engage in any
line of business other than ownership, operation and development of multifamily
residential property and the provision of services incidental thereto, whether
directly or through its Subsidiaries and Investment Affiliates.
SECTION 5.11 MARGIN STOCK. None of the proceeds of the Loan will be
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock in any manner that might
violate the provisions of Regulations T, U or X of the Federal Reserve Board.
SECTION 5.12 HEDGING REQUIREMENTS. Within five (5) Domestic Business
Days after the last day of each calendar quarter, the Borrower shall have in
effect "Interest Rate Hedges" on Borrower's Indebtedness so that such
Indebtedness, together with all Fixed Rate Indebtedness of Borrower, shall
constitute at least fifty percent (50%) of the then aggregate Indebtedness of
the Borrower. "INTEREST RATE HEDGES" shall mean interest rate exchange, collar,
cap, swap, adjustable strike cap, adjustable strike corridor or similar
agreements, each of which (i) shall have a minimum term of two (2) years, or, in
the case of loans pursuant to which interest shall accrue at a rate other than a
fixed rate, a term equal to the term of such floating rate loan (to the extent
the term of such floating rate loan is less than two (2) years), (ii) shall have
the effect of capping the interest rates covered thereby at a rate equal to or
lower than the Cap Rate at the time of purchase or execution, and (iii) shall be
with an Approved Bank as the counterparty. It is acknowledged and agreed that
the Borrower shall have no obligation to replace any Interest Rate Hedge even if
the counterparty thereto shall cease to be an Approved Bank. The Borrower shall
submit evidence of its compliance with Interest Rate Hedges to the
Administrative Agent together with the
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certificate required to be delivered by the Borrower pursuant to Section 5.1(c).
SECTION 5.13 EQR STATUS.
(a) STATUS. EQR shall at all times (i) remain a publicly traded
company listed on the New York Stock Exchange, and (ii) maintain its status as a
self-directed and self-administered real estate investment trust under the Code.
(b) INDEBTEDNESS. EQR shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(1) the Obligations; and
(2) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Default under any provision of this Article V.
(c) RESTRICTION ON FUNDAMENTAL CHANGES.
(1) Except for Permitted Holdings, EQR shall not have an
Investment in any Person other than Borrower, common stock of QRS
Corporations, and the interests identified on SCHEDULE 5.13(C)(1) as being
owned by EQR.
(2) Except for Permitted Holdings, EQR shall not acquire an
interest in any Property other than Securities issued by Borrower, common
stock of QRS Corporations, and the interests identified on SCHEDULE
5.13(C)(2).
(d) ENVIRONMENTAL LIABILITIES. Neither EQR nor any of its
Subsidiaries shall become subject to any Environmental Claim which has a
Material Adverse Effect, including any arising out of or related to (i) the
release or threatened release of any Material of Environmental Concern into the
environment, or any remedial action in response thereto, or (ii) any violation
of any Environmental Laws. Notwithstanding the foregoing provision, EQR shall
have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) EQR shall have given
Administrative Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject EQR or such
Subsidiary to any criminal penalty or subject Administrative Agent or any Bank
to pay any civil penalty or to prosecution for a crime, and (iv) no portion of
any Property material to Borrower or its condition or prospects shall be in
substantial danger of being sold, forfeited or lost, by
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reason of such contest or the continued existence of the matter being contested.
(e) DISPOSAL OF PARTNERSHIP INTERESTS. EQR will not directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any of its partnership interests in Borrower, except for the
reduction of EQR's interest in the Borrower arising from Borrower's issuance of
partnership interests in the Borrower or the retirement of preference units by
Borrower.
ARTICLE VI
DEFAULTS
SECTION 6.1 EVENTS OF DEFAULT. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or the Borrower shall fail to pay when due interest on any Loan or any
fees or any other amount payable hereunder and the same shall continue for a
period of five (5) days after the same becomes due;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.8, Section 5.9(a) or (b), or Sections 5.10 to 5.13,
inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b), (e), (f), (g), (h), (j), (n) or (o) of this Section 6.1) for 30 days after
written notice thereof has been given to the Borrower by the Administrative
Agent, or if such default is of such a nature that it cannot with reasonable
effort be completely remedied within said period of thirty (30) days such
additional period of time as may be reasonably necessary to cure same, provided
Borrower commences such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed ninety (90) days;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and the defect
causing such representation or warranty to be incorrect when made (or deemed
made) is not removed within thirty (30) days after written notice thereof from
Administrative Agent to Borrower;
(e) the Borrower, EQR, any Subsidiary or any Investment Affiliate
shall default in the payment when due
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(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) of any amount owing in respect of any Recourse Debt (other than the
Obligations) for which the aggregate outstanding principal amount exceeds
$10,000,000 and such default shall continue beyond the giving of any required
notice and the expiration of any applicable grace period and such default has
not been waived, in writing, by the holder of any such Debt; or the Borrower,
EQR, any Subsidiary or any Investment Affiliate shall default in the performance
or observance of any obligation or condition with respect to any such Recourse
Debt or any other event shall occur or condition exist beyond the giving of any
required notice and the expiration of any applicable grace period, if the effect
of such default, event or condition is to accelerate the maturity of any such
indebtedness or to permit (without any further requirement of notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity of any such indebtedness;
(f) the Borrower or EQR shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or EQR seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or EQR under the federal bankruptcy
laws as now or hereafter in effect;
(h) one or more final, non-appealable judgments or decrees in an
aggregate amount of Twenty Million Dollars ($20,000,000) or more shall be
entered by a court or courts of competent jurisdiction against the Borrower, EQR
or its Consolidated Subsidiaries (other than any judgment as to which, and only
to the extent, a reputable insurance company has acknowledged coverage of such
claim in writing) and (i) any such judgments or decrees shall not be stayed,
discharged, paid, bonded or vacated within thirty (30) days or (ii) enforcement
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proceedings shall be commenced by any creditor on any such judgments or decrees;
(i) there shall be a change in the majority of the Board of Trustees
of EQR during any twelve (12) month period, excluding any change in directors
resulting from (x) the death or disability of any director, or (y) satisfaction
of any requirement for the majority of the members of the board of directors or
trustees of EQR to qualify under applicable law as independent trustees or (z)
the replacement of any trustee who is an officer or employee of EQR or an
affiliate of EQR with any other officer or employee of EQR or an affiliate of
EQR;
(j) any Person (including affiliates of such Person) or "group" (as
such term is defined in applicable federal securities laws and regulations)
shall acquire more than thirty percent (30%) of the common shares of EQR;
(k) EQR shall cease at any time to qualify as a real estate
investment trust under the Code;
(l) if any Termination Event with respect to a Plan shall occur as a
result of which Termination Event or Events any member of the ERISA Group has
incurred or may incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans with
respect to which such a Termination Event shall occur and be continuing (or, in
the case of a Multiple Employer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall occur and
be continuing, the liability of the Borrower) is equal to or greater than
$10,000,000 and which the Administrative Agent reasonably determines will have a
Material Adverse Effect;
(m) if, any member of the ERISA Group shall commit a failure
described in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the
amount of the lien determined under Section 402(f)(3) of ERISA or Section
412(n)(3) of the Code that could reasonably be expected to be imposed on any
member of the ERISA Group or their assets in respect of such failure shall be
equal to or greater than $10,000,000 and which the Administrative Agent
reasonably determines will have a Material Adverse Effect;
(n) at any time, for any reason the Borrower or EQR seeks to
repudiate its obligations under any Loan Document; or
(o) a default beyond any applicable notice or grace period under any
of the other Loan Documents.
SECTION 6.2 RIGHTS AND REMEDIES.
(a) Upon the occurrence of any Event of Default described in Sections
6.1(f) or (g), the Commitments and the
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Swingline Commitment shall immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Loans and any and all accrued fees
and other Obligations hereunder shall automatically become immediately due and
payable, with all additional interest from time to time accrued thereon and
without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower; and
upon the occurrence and during the continuance of any other Event of Default,
subject to the provisions of Section 6.2(b), the Administrative Agent may (and
upon the demand of the Required Banks shall), by written notice to the Borrower,
in addition to the exercise of all of the rights and remedies permitted the
Administrative Agent and the Banks at law or equity or under any of the other
Loan Documents, declare the Commitments terminated and the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other Obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and (except as otherwise as provided in the Loan
Documents) without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Lead Agent, and the Banks each
agree that any exercise or enforcement of the rights and remedies granted to the
Administrative Agent or the Banks under this Agreement or at law or in equity
with respect to this Agreement or any other Loan Documents shall be commenced
and maintained by the Administrative Agent on behalf of the Administrative Agent
and/or the Banks. The Administrative Agent shall act at the direction of the
Required Banks in connection with the exercise of any and all remedies at law,
in equity or under any of the Loan Documents (including, without limitation,
those set forth in Section 6.4 hereof) or, if the Required Banks are unable to
reach agreement, then, from and after an Event of Default, the Administrative
Agent may pursue such rights and remedies as it may determine.
SECTION 6.3 NOTICE OF DEFAULT. The Administrative Agent shall give
notice to the Borrower under Section 6.1(c) promptly upon being requested to do
so by the Required Banks and shall thereupon notify all the Banks thereof. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless Administrative Agent has received
notice in writing from a Bank or Borrower or any court or governmental agency
referring to this Agreement or the other Loan Documents, describing such event
or
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condition. Should Administrative Agent receive notice of the occurrence of an
Default or Event of Default expressly stating that such notice is a notice of an
Default or Event of Default, or should Administrative Agent send Borrower a
notice of Default or Event of Default, Administrative Agent shall promptly give
notice thereof to each Bank.
SECTION 6.4 ACTIONS IN RESPECT OF LETTERS OF CREDIT.
(a) If, at any time and from time to time, any Letter of Credit shall
have been issued hereunder and an Event of Default shall have occurred and be
continuing, then, upon the occurrence and during the continuation thereof, the
Administrative Agent may, and upon the demand of the Required Banks shall,
whether in addition to the taking by the Administrative Agent of any of the
actions described in this Article or otherwise, make a demand upon the Borrower
to, and forthwith upon such demand (but in any event within ten (10) days after
such demand) the Borrower shall, pay to the Administrative Agent, on behalf of
the Banks, in same day funds at the Administrative Agent's office designated in
such demand, for deposit in a special cash collateral account (the "LETTER OF
CREDIT COLLATERAL ACCOUNT") to be maintained in the name of the Administrative
Agent (on behalf of the Banks) and under its sole dominion and control at such
place as shall be designated by the Administrative Agent, an amount equal to the
amount of the Letter of Credit Usage under the Letters of Credit. Interest shall
accrue on the Letter of Credit Collateral Account at a rate equal to the rate on
overnight funds.
(b) The Borrower hereby pledges, assigns and grants to the
Administrative Agent, as administrative agent for its benefit and the ratable
benefit of the Banks a lien on and a security interest in, the following
collateral (the "LETTER OF CREDIT COLLATERAL"):
(i) the Letter of Credit Collateral Account, all cash deposited
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Letter of Credit Collateral Account;
(ii) all notes, certificates of deposit and other instruments from
time to time hereafter delivered to or otherwise possessed by the Administrative
Agent for or on behalf of the Borrower in substitution for or in respect of any
or all of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Letter of Credit Collateral; and
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(iv) to the extent not covered by the above clauses, all proceeds of
any or all of the foregoing Letter of Credit Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.
(c) The Borrower hereby authorizes the Administrative Agent for the
ratable benefit of the Banks to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Administrative Agent may elect, as shall have become due and payable by
the Borrower to the Banks in respect of the Letters of Credit.
(d) Neither the Borrower nor any Person claiming or acting on behalf
of or through the Borrower shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account, except as provided in Section
6.4(h) hereof.
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Letter of Credit Collateral or (ii) create or
permit to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Letter of Credit Collateral, except for the
security interest created by this Section 6.4.
(f) If any Event of Default shall have occurred and be continuing:
(i) The Administrative Agent may, in its sole discretion, without
notice to the Borrower except as required by law and at any time from time to
time, charge, set off or otherwise apply all or any part of FIRST, (x) amounts
previously drawn on any Letter of Credit that have not been reimbursed by the
Borrower and (y) any Letter of Credit Usage described in clause (ii) of the
definition thereof that are then due and payable and SECOND, any other unpaid
Obligations then due and payable against the Letter of Credit Collateral Account
or any part thereof, in such order as the Administrative Agent shall elect. The
rights of the Administrative Agent under this Section 6.4 are in addition to any
rights and remedies which any Bank may have.
(ii) The Administrative Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral Account, in addition
to the other rights and remedies provided herein or otherwise available to it,
all the rights and remedies of a secured party upon default under the Uniform
Commercial Code in effect in the State of Illinois at that time.
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(g) The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that, assuming such treatment, the Administrative
Agent shall not have any responsibility or liability with respect thereto.
(h) At such time as all Events of Default have been cured or waived
in writing, all amounts remaining in the Letter of Credit Collateral Account
shall be promptly returned to the Borrower. Absent such cure or written waiver,
any surplus of the funds held in the Letter of Credit Collateral Account and
remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 6.5 DISTRIBUTION OF PROCEEDS AFTER DEFAULT. Notwithstanding
anything contained herein to the contrary, from and after an Event of Default,
to the extent proceeds are received by Administrative Agent, such proceeds will
be distributed to the Banks pro rata in accordance with the unpaid principal
amount of the Loans.
ARTICLE VII
THE AGENTS
SECTION 7.1 APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Except as set forth in Sections 7.8 and 7.9 hereof, the provisions of this
Article VII are solely for the benefit of Administrative Agent and the Banks,
and Borrower shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower.
SECTION 7.2 AGENCY AND AFFILIATES. Bank of America, National
Association shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Administrative Agent, and Bank of America, National Association and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower, EQR or any
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Subsidiary or affiliate of the Borrower as if it was not the Administrative
Agent hereunder, and the term "Bank" and "Banks" shall include Bank of America,
National Association in its individual capacity.
SECTION 7.3 ACTION BY ADMINISTRATIVE AGENT. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI. The duties of
Administrative Agent shall be administrative in nature. Subject to the
provisions of Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer
the Loans in the same manner as it administers its own loans.
SECTION 7.4 CONSULTATION WITH EXPERTS. As between Administrative Agent
and the Banks, the Administrative Agent may consult with legal counsel (who may
be counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.5 LIABILITY OF ADMINISTRATIVE AGENT AND SYNDICATION AGENT. As
between Administrative Agent and the Banks, none of the Administrative Agent,
the Syndication Agent nor any of their affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by any of them in connection herewith (i) with the consent or at the
request of the Required Banks or (ii) in the absence of its own gross negligence
or wilful misconduct. As between Administrative Agent and the Banks, none of the
Administrative Agent, the Syndication Agent nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower, except with respect to payment of principal and
interest; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Administrative Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the other
Loan Documents or any other instrument or writing furnished in connection
herewith. As between Administrative Agent and the Banks, the Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire, or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.6 INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Administrative
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Agent and the Syndication Agent and their respective affiliates and directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitee's
gross negligence or wilful misconduct) that such indemnitee may suffer or incur
in connection with its duties as Administrative Agent and/or Syndication Agent
under this Agreement, the other Loan Documents or any action taken or omitted by
such indemnitee hereunder as Administrative Agent or as Syndication Agent. In
the event that the Syndication Agent or the Administrative Agent shall,
subsequent to its receipt of indemnification payment(s) from Banks in accordance
with this section, recoup any amount from the Borrower, or any other party
liable therefor in connection with such indemnification, such Syndication Agent
or the Administrative Agent shall reimburse the Banks which previously made the
payment(s) PRO RATA, based upon the actual amounts which were theretofore paid
by each Bank. The Syndication Agent or the Administrative Agent, as the case may
be, shall reimburse such Banks so entitled to reimbursement within two (2)
Domestic Business Days of its receipt of such funds from the Borrower or such
other party liable therefor.
SECTION 7.7 CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the
Syndication Agent or any other Bank, and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent, Syndication Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under this Agreement.
SECTION 7.8 SUCCESSOR ADMINISTRATIVE AGENT OR SYNDICATION AGENT. The
Administrative Agent or the Syndication Agent may resign at any time by giving
notice thereof to the Banks, the Borrower and each other and the Administrative
Agent or the Syndication Agent, as applicable, shall resign in the event its
Commitment is reduced to zero. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Administrative Agent or Syndication
Agent, as applicable, which successor Administrative Agent or successor
Syndication Agent (as applicable) shall, provided no Event of Default has
occurred and is then continuing, be subject to Borrower's approval, which
approval shall not be unreasonably withheld or delayed (except that Borrower
shall, in all events, be deemed to have approved Bank of America, National
Association as a successor Syndication Agent and The Chase Manhattan Bank as a
successor Administrative Agent). If no successor Administrative Agent or
Syndication Agent (as applicable) shall have been so appointed by the Required
Banks and approved by the Borrower, or, if so appointed, shall not have accepted
such
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appointment within 30 days after the retiring Administrative Agent or
Syndication Agent (as applicable) gives notice of resignation, then the retiring
Administrative Agent or retiring Syndication Agent (as applicable) may, on
behalf of the Banks, appoint a successor Administrative Agent or Syndication
Agent (as applicable), which shall be the Syndication Agent or the
Administrative Agent, as the case may be, who shall act until the Required Banks
shall appoint a Administrative Agent or Syndication Agent. Upon the acceptance
of its appointment as the Administrative Agent or Syndication Agent hereunder by
a successor Administrative Agent or successor Syndication Agent, as applicable,
such successor Administrative Agent or successor Syndication Agent, as
applicable, shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent or retiring Syndication Agent, as
applicable, and the retiring Administrative Agent or the retiring Syndication
Agent, as applicable, shall be discharged from its duties and obligations
hereunder. The rights and duties of the Administrative Agent to be vested in any
successor Administrative Agent shall include, without limitation, the rights and
duties as Swingline Lender. After any retiring Administrative Agent's or
retiring Syndication Agent's resignation hereunder, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent or the Syndication Agent, as
applicable. For gross negligence or willful misconduct, as determined by all the
Banks (excluding for such determination Administrative Agent or Syndication
Agent in its capacity as a Bank, as applicable), Administrative Agent or
Syndication Agent may be removed at any time by giving at least thirty (30)
Domestic Business Days prior written notice to Administrative Agent, Syndication
Agent and Borrower. Such resignation or removal shall take effect upon the
acceptance of appointment by a successor Administrative Agent or Syndication
Agent, as applicable, in accordance with the provisions of this Section 7.8.
SECTION 7.9 CONSENTS AND APPROVALS. All communications from
Administrative Agent to the Banks requesting the Banks' determination, consent,
approval or disapproval (i) shall be given in the form of a written notice to
each Bank, (ii) shall be accompanied by a description of the matter or item as
to which such determination, approval, consent or disapproval is requested, or
shall advise each Bank where such matter or item may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
reasonably requested by a Bank and to the extent not previously provided to such
Bank, written materials and a summary of all oral information provided to
Administrative Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Bank shall reply promptly, but
in any event within ten (10) Domestic Business Days after receipt of the request
therefor from Administrative Agent (the "BANK REPLY PERIOD"). Unless a Bank
shall give written notice to Administrative Agent
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that it objects to the recommendation or determination of Administrative Agent
(together with a written explanation of the reasons behind such objection)
within the Bank Reply Period, such Bank shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions
requiring the approval of the Required Banks or all the Banks, Administrative
Agent shall submit its recommendation or determination for approval of or
consent to such recommendation or determination to all Banks and upon receiving
the required approval or consent shall follow the course of action or
determination of the Required Banks (and each non-responding Bank shall be
deemed to have concurred with such recommended course of action) or all the
Banks, as the case may be.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing or Money Market LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Bank that
the Euro-Dollar Reference Bank has determined in good faith that deposits in
dollars (in the applicable amounts) are not being offered to the Euro-Dollar
Reference Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the Adjusted London Interbank
Offered Rate, as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Bank of funding its Euro-Dollar Loans for such
Interest Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to make Euro-Dollar Loans shall be
suspended. Unless the Borrower notifies the Administrative Agent at least two
Domestic Business Days before the date of (i) any Euro-Dollar Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing, or (ii) any Money Market LIBOR Borrowing for which a Notice of Money
Market Borrowing has previously been given, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day. For purposes of this Section 8.1(b), in
determining whether the Adjusted London Interbank Offered Rate, as determined by
Administrative Agent, will not adequately and fairly reflect the cost to any
Bank of funding its Euro-Dollar Loans for such
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Interest Period, such determination will be based solely on the ability of such
Bank to obtain matching funds in the London interbank market at a reasonably
equivalent rate.
SECTION 8.2 ILLEGALITY. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) made after the Closing Date of any such
authority, central bank or comparable agency shall make it unlawful for any Bank
(or its Euro-Dollar Lending Office) (x) to make, maintain or fund its
Euro-Dollar Loans, or (y) to participate in any Letter of Credit issued by the
Fronting Bank, or, with respect to the Fronting Bank, to issue any Letter of
Credit, the Administrative Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank in case of the event
described in clause (x) above to make Euro-Dollar Loans, or in the case of the
event described in clause (y) above, to participate in any Letter of Credit
issued by the Fronting Bank or, with respect to the Fronting Bank, to issue any
Letter of Credit, shall be suspended. With respect to Euro-Dollar Loans, before
giving any notice to the Administrative Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall be deemed to have delivered a Notice of Interest Rate Election and such
Euro-Dollar Loan shall be converted as of such date to a Base Rate Loan (without
payment of any amounts that Borrower would otherwise be obligated to pay
pursuant to Section 2.13 hereof with respect to Loans converted pursuant to this
Section 8.2) in an equal principal amount from such Bank (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base Rate Loan.
If at any time, it shall be unlawful for any Bank to make, maintain or
fund its Euro-Dollar Loans, the Borrower shall have the right, upon five (5)
Domestic Business Day's notice to the Administrative Agent, to either (x) cause
a bank, reasonably acceptable to the Administrative Agent, to offer to purchase
the Commitments of such Bank for an amount equal to such Bank's outstanding
Loans, and to become a Bank hereunder, or obtain the agreement of one or more
existing Banks to offer to purchase the Commitments of such Bank for such
amount, which offer such Bank
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is hereby required to accept, or (y) to repay in full all Loans then outstanding
of such Bank, together with interest and all other amounts due thereon, upon
which event, such Bank's Commitments shall be deemed to be cancelled pursuant to
Section 2.11(c).
SECTION 8.3 INCREASED COST AND REDUCED RETURN.
(a) If, on or after (x) the date hereof in the case of Committed
Loans made pursuant to Section 2.1, or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
made at the Closing Date of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System (but excluding with respect to any Euro-Dollar Loan any
such requirement reflected in an applicable Euro-Dollar Reserve Percentage)),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition materially
more burdensome in nature, extent or consequence than those in existence as of
the Closing Date affecting such Bank's Euro-Dollar Loans, its Note, or its
obligation to make Euro-Dollar Loans, and the result of any of the foregoing is
to increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect to such Euro-Dollar Loans, by an amount
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to such
Bank such additional amount or amounts (based upon a reasonable allocation
thereof by such Bank to the Euro-Dollar Loans made by such Bank hereunder) as
will compensate such Bank for such increased cost or reduction to the extent
such Bank generally imposes such additional amounts on other borrowers of such
Bank in similar circumstances.
(b) If any Bank shall have reasonably determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding
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capital adequacy (whether or not having the force of law) made after the Closing
Date of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within 15 days after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction to the extent such Bank generally imposes such additional amounts
on other borrowers of such Bank in similar circumstances.
(c) Each Bank will promptly notify the Borrower, the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If
such Bank shall fail to notify Borrower of any such event within 90 days
following the end of the month during which such event occurred, then Borrower's
liability for any amounts described in this Section incurred by such Bank as a
result of such event shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
such Bank actually notified Borrower of the occurrence of such event. A
certificate of any Bank claiming compensation under this Section and setting
forth a reasonably detailed calculation of the additional amount or amounts to
be paid to it hereunder shall be conclusive in the absence of demonstrable
error. In determining such amount, such Bank may use any reasonable averaging
and attribution methods.
(d) If at any time, any Bank shall be owed amounts pursuant to this
Section 8.3, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank's outstanding Loans, and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitments of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest and all other amounts due
thereon, upon which event, such Bank's Commitment shall be deemed to be
cancelled pursuant to Section 2.11(c).
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SECTION 8.4 TAXES.
(a) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, EXCLUDING, in the case of each Bank, the
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof or by any other
jurisdiction (or any political subdivision thereof) as a result of a present or
former connection between such Bank or Administrative Agent and such other
jurisdiction or by the United States (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "NON-EXCLUDED TAXES"). If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note or Letter of Credit, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.4) such Bank, the Fronting Bank or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Administrative Agent, at its address referred to in Section 9.1,
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
the Letter of Credit or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Letter of Credit (hereinafter referred
to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Bank, the Fronting Bank and
the Administrative Agent for the full amount of Non-Excluded Taxes or Other
Taxes (including, without limitation, any Non-Excluded Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
8.4) paid by such Bank, the Fronting Bank or the Administrative Agent (as the
case may be) and, so long as such Bank or Administrative Agent has promptly paid
any such Non-Excluded Taxes or Other Taxes, any liability for penalties and
interest arising therefrom or with
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respect thereto. This indemnification shall be made within 15 days from the date
such Bank, the Fronting Bank or the Administrative Agent (as the case may be)
makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
shall provide the Borrower with (A) two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (B) an Internal Revenue Service
Form W-8 or W-9, or any successor form prescribed by the Internal Revenue
Service, and shall provide Borrower with two further copies of any such form or
certification on or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower, certifying (i) in
the case of a Form 1001 or 4224, that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, and (ii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Non-Excluded Taxes" as defined in Section 8.4(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(c) with respect to
Non-Excluded Taxes imposed by the United States; PROVIDED, HOWEVER, that should
a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Non-Excluded Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes so long
as Borrower shall incur no cost or liability as a result thereof.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.4, then such Bank will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
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(g) If at any time, any Bank shall be owed amounts pursuant to this
Section 8.4, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank's outstanding Loans, and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitments of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest and all other amounts due
thereon, upon which event, such Bank's Commitment shall be deemed to be
cancelled pursuant to Section 2.11(c).
SECTION 8.5 BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower shall, by at
least five Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist:
(a) Borrower shall be deemed to have delivered a Notice of Interest
Rate Election with respect to such affected Euro-Dollar Loans and thereafter all
Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be
made instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead, and
(c) Borrower will not be required to make any payment which would
otherwise be required by Section 2.13 with respect to such Euro-Dollar Loans
converted to Base Rate Loans pursuant to clause (a) above.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile
transmission followed by telephonic confirmation or similar writing) and shall
be given to
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such party: (x) in the case of the Borrower or the Administrative Agent, at its
address, or facsimile number set forth on the signature pages hereof with a
duplicate copy thereof, in the case of the Borrower, to the Borrower, at Equity
Residential Properties Trust, Two North Riverside Plaza, Suite 400, Chicago,
Illinois 60606, Attn: General Counsel, and to Rosenberg & Liebentritt, P.C., Two
North Riverside Plaza, Suite 1515, Chicago, Illinois 60606, Attn: James M.
Phipps, Esq., (y) in the case of any Bank, at its address, or facsimile number
set forth in its Administrative Questionnaire or (z) in the case of any party,
such other address, or facsimile number as such party may hereafter specify for
the purpose by notice to the Administrative Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when such facsimile is transmitted to the facsimile
number specified in this Section and the appropriate answerback or facsimile
confirmation is received, (ii) if given by certified registered mail, return
receipt requested, with first class postage prepaid, addressed as aforesaid,
upon receipt or refusal to accept delivery, (iii) if given by a nationally
recognized overnight carrier, 24 hours after such communication is deposited
with such carrier with postage prepaid for next day delivery, or (iv) if given
by any other means, when delivered at the address specified in this Section;
PROVIDED that notices to the Administrative Agent under Article II or Article
VIII shall not be effective until received.
SECTION 9.2 NO WAIVERS. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3 EXPENSES; INDEMNIFICATION.
(a) The Borrower shall pay within thirty (30) days after written
notice from the Administrative Agent, (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Syndication Agent (including
reasonable fees and disbursements of special counsel Skadden, Arps, Slate,
Meagher & Flom LLP), in connection with the preparation of this Agreement, the
Loan Documents and the documents and instruments referred to therein, and any
waiver or consent hereunder or any amendment hereof or any Default or alleged
Default hereunder, (ii) all reasonable fees and disbursements of special counsel
Skadden, Arps, Slate, Meagher & Flom LLP in connection with the syndication of
the Loans and (iii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent and each Bank, including fees and
disbursements of counsel for the Administrative Agent and each of the Banks, in
connection with the enforcement of the Loan
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Documents and the instruments referred to therein and such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom; provided, however, that the attorneys' fees and disbursements for
which Borrower is obligated under this subsection (a)(iii) shall be limited to
the reasonable non-duplicative fees and disbursements of (A) counsel for
Administrative Agent, and (B) counsel for all of the Banks as a group; and
provided, further, that all other costs and expenses for which Borrower is
obligated under this subsection (a)(iii) shall be limited to the reasonable
non-duplicative costs and expenses of Administrative Agent. For purposes of this
Section 9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single
outside law firm representing Administrative Agent, and (2) counsel for all of
the Banks as a group shall mean a single outside law firm representing such
Banks as a group (which law firm may or may not be the same law firm
representing either or both of Administrative Agent and/or Syndication Agent).
(b) The Borrower agrees to indemnify the Syndication Agent, the
Administrative Agent and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the foregoing (each an
"INDEMNITEE") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding that may at any time (including, without limitation, at
any time following the payment of the Obligations) be asserted against any
Indemnitee, as a result of, or arising out of, or in any way related to or by
reason of, (i) any of the transactions contemplated by the Loan Documents or the
execution, delivery or performance of any Loan Document, (ii) any violation by
the Borrower, EQR or the Environmental Affiliates of any applicable
Environmental Law, (iii) any Environmental Claim arising out of the management,
use, control, ownership or operation of property or assets by the Borrower, EQR
or any of the Environmental Affiliates, including, without limitation, all
on-site and off-site activities of Borrower or any Environmental Affiliate
involving Materials of Environmental Concern, (iv) the breach of any
environmental representation or warranty set forth herein, but excluding those
liabilities, losses, damages, costs and expenses (a) for which such Indemnitee
has been compensated pursuant to the terms of this Agreement, (b) incurred
solely by reason of the gross negligence, wilful misconduct, bad faith or fraud
of any Indemnitee as finally determined by a court of competent jurisdiction,
(c) violations of Environmental Laws relating to a Property which are caused by
the act or omission of such Indemnitee after such Indemnitee takes possession of
such Property or (d) any liability of such Indemnitee to any third party based
upon contractual obligations of such Indemnitee owing to such third party which
are not expressly set forth in the Loan Documents. In addition, the
indemnification set forth in this Section 9.3(b) in favor of any director,
officer, agent or
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employee of Administrative Agent, Syndication Agent or any Bank shall be solely
in his or her respective capacity as such director, officer, agent or employee.
The Borrower's obligations under this Section shall survive the termination of
this Agreement and the payment of the Obligations.
SECTION 9.4 SHARING OF SET-OFFS. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
but subject to the prior consent of the Administrative Agent, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final) and any other indebtedness at any time held or owing by
such Bank (including, without limitation, by branches and agencies of such Bank
wherever located) to or for the credit or the account of the Borrower against
and on account of the Obligations of the Borrower then due and payable to such
Bank under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations purchased by such Bank. Each
Bank agrees that if it shall by exercising any right of set-off or counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest due with respect to any Note held by it or Letter of
Credit participated in by it, or, in the case of the Fronting Bank, Letter of
Credit issued by it, which is greater than the proportion received by any other
Bank or Letter of Credit issued or participated in by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks or Letter of Credit issued
or participated in by such other Banks shall be shared by the Banks pro rata;
PROVIDED that nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have to any deposits not
received in connection with the Loans and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes or the Letters of Credit. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note or a Letter of Credit, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. Notwithstanding anything to the contrary contained
herein, any Bank may, by separate agreement with the Borrower, waive its right
to set off contained herein or granted by law and any such
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written waiver shall be effective against such Bank under this Section 9.4.
SECTION 9.5 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
the Notes, the Letters of Credit or other Loan Documents may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties of the
Administrative Agent or the Swingline Lender in its capacity as Administrative
Agent or Swingline Lender, as applicable, are affected thereby, by the
Administrative Agent or Swingline Lender, as applicable); PROVIDED that no such
amendment or waiver with respect to this Agreement, the Notes, the Letters of
Credit or any other Loan Documents shall, unless signed by all the Banks, (i)
increase or decrease the Commitment of any Bank (except for a ratable decrease
in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement, (v) release the EQR Guaranty
or (vi) modify the provisions of this Section 9.5.
SECTION 9.6 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks and the Administrative Agent and any Bank may not
assign or otherwise transfer any of its interest under this Agreement except as
permitted in subsection (b) and (c) of this Section 9.6.
(b) Any Bank may at any time grant (i) prior to the occurrence of an
Event of Default, to an existing Bank, one or more banks, finance companies,
insurance companies or other financial institutions in minimum amounts of not
less than $10,000,000 (or any lesser amount in the case of participations to an
existing Bank or in the case of participations with respect to Money Market
Loans only) and (ii) after the occurrence and during the continuance of an Event
of Default, to any Person in any amount (in each case, a "PARTICIPANT"),
participating interests in its Commitment or any or all of its Loans, with (and
subject to) the consent of the Administrative Agent (other than with respect to
Money Market Loans) and, provided that no Event of Default shall have occurred
and be continuing, the Borrower (other than with respect to Money Market Loans),
which consent
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shall not be unreasonably withheld or delayed. Any participation made during the
continuation of an Event of Default shall not be affected by the subsequent cure
of such Event of Default. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; PROVIDED that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii), (iii), (iv) or (v) of Section 9.5 without the
consent of the Participant. The Borrower agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled to the benefits
of Article VIII with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of, and subject
to the restrictions with respect to, a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to (i) prior to the occurrence of
an Event of Default, an existing Bank or one or more banks, finance companies,
insurance or other financial institutions which (A) has (or, in the case of a
bank which is a subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by Moody's Investors Service or a comparable
rating by a rating agency acceptable to Administrative Agent and (B) has total
assets in excess of Ten Billion Dollars ($10,000,000,000), in minimum amounts of
not less than Ten Million Dollars ($10,000,000) and integral multiples of One
Million Dollars ($1,000,000) thereafter (or any lesser amount in the case of
assignments to an existing Bank) and (ii) after the occurrence and during the
continuance of an Event of Default, to any Person in any amount (in each case,
an "ASSIGNEE"), all or a proportionate part of all, of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and,
in either case, such Assignee shall assume such rights and obligations, pursuant
to a Transfer Supplement in substantially the form of EXHIBIT "E" hereto
executed by such Assignee and such transferor Bank, with (and subject to) the
consent of the Administrative Agent and, provided that no Event of Default shall
have occurred and be continuing, the Borrower, which consent shall not be
unreasonably withheld or delayed; PROVIDED that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately prior to such assignment, no
such consent shall be required; and PROVIDED FURTHER that such assignment may,
but need
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not, include rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and no further
consent or action by any party shall be required and the transferor Bank shall
be released from its obligations hereunder to a corresponding extent. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such assignment in the
amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.4. Any assignment made during the continuation of an Event of Default shall
not be affected by any subsequent cure of such Event of Default.
(d) Any Bank (each, a "DESIGNATING LENDER") may at any time designate
one Designated Lender to fund Money Market Loans on behalf of such Designating
Lender subject to the terms of this Section 9.6(d) and the provisions in Section
9.6(b) and (c) shall not apply to such designation. No Bank may designate more
than one (1) Designated Lender at any one time. The parties to each such
designation shall execute and deliver to the Administrative Agent for its
acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Administrative Agent will
accept such Designation Agreement and will give prompt notice thereof to the
Borrower, whereupon, (i) the Borrower shall execute and deliver to the
Designating Lender a Designated Lender Note payable to the order of the
Designated Lender, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Lender shall become a party to this
Agreement with a right (subject to the provisions of Section 2.3(b)) to make
Money Market Loans on behalf of its Designating Lender pursuant to Section 2.3
after the Borrower has accepted a Money Market Loan (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required to
make payments with respect to any obligations in this Agreement except to the
extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation and assumption
by the Designated Lender, the Designating Lender shall be and remain obligated
to the Borrower, the Administrative Agent and the Banks for each and
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every of the obligations of the Designating Lender and its related Designated
Lender with respect to this Agreement, including, without limitation, any
indemnification obligations under Section 7.6 hereof and any sums otherwise
payable to the Borrower by the Designated Lender. Each Designating Lender shall
serve as the administrative agent of the Designated Lender and shall on behalf
of, and to the exclusion of, the Designated Lender: (i) receive any and all
payments made for the benefit of the Designated Lender and (ii) give and receive
all communications and notices and take all actions hereunder, including,
without limitation, votes, approvals, waivers, consents and amendments under or
relating to this Agreement and the other Loan Documents. Any such notice,
communication, vote, approval, waiver, consent or amendment shall be signed by
the Designating Lender as administrative agent for the Designated Lender and
shall not be signed by the Designated Lender on its own behalf and shall be
binding upon the Designated Lender to the same extent as if signed by the
Designated Lender on its own behalf. The Borrower, the Administrative Agent and
the Banks may rely thereon without any requirement that the Designated Lender
sign or acknowledge the same. No Designated Lender may assign or transfer all or
any portion of its interest hereunder or under any other Loan Document, other
than assignments to the Designating Lender which originally designated such
Designated Lender or otherwise in accordance with the provisions of Section 9.6
(b) and (c).
(e) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note and the Letter(s) of Credit participated in by
such Bank or, in the case of the Fronting Bank, issued by it, to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.
(f) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 9.7 COLLATERAL. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND
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THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW).
(b) Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of Illinois or of the
United States of America for the Northern District of Illinois, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the hand delivery, or
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address set forth below. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Administrative Agent to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Borrower in
any other jurisdiction.
SECTION 9.9 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent and
the Borrower of counterparts hereof signed by each of the parties hereto (or, in
the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11 SURVIVAL. All indemnities set forth herein shall survive
the execution and delivery of this Agreement
96
<PAGE>
and the other Loan Documents and the making and repayment of the Loans
hereunder.
SECTION 9.12 DOMICILE OF LOANS. Each Bank may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.
SECTION 9.13 LIMITATION OF LIABILITY. No claim may be made by the
Borrower or any other Person acting by or through Borrower against the
Administrative Agent or any Bank or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and the Borrower hereby waives, releases and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
SECTION 9.14 RECOURSE OBLIGATION. This Agreement and the Obligations
hereunder are fully recourse to the Borrower. Notwithstanding the foregoing, no
recourse under or upon any obligation, covenant, or agreement contained in this
Agreement shall be had against any officer, director, shareholder or employee of
the Borrower or EQR except in the event of fraud or misappropriation of funds on
the part of such officer, director, shareholder or employee.
SECTION 9.15 CONFIDENTIALITY. The Administrative Agent and each Bank
shall use reasonable efforts to assure that information about Borrower, EQR and
its Subsidiaries and Investments Affiliates, and the Properties thereof and
their operations, affairs and financial condition, not generally disclosed to
the public, which is furnished to Administrative Agent or any Bank pursuant to
the provisions hereof or any other Loan Document is used only for the purposes
of this Agreement and shall not be divulged to any Person other than the
Administrative Agent, the Banks, and their affiliates and respective officers,
directors, employees and agents who are actively and directly participating in
the evaluation, administration or enforcement of the Loan, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
and exercise of any remedies of the Administrative Agent and the Banks hereunder
and under the other Loan Documents, (c) in connection with assignments and
participations and the solicitation of prospective assignees and participants
referred to in Section 9.6 hereof, who have agreed in writing to be bound by a
confidentiality agreement substantially equivalent to the terms of this Section
9.15, and (d) as may otherwise be required or requested by any regulatory
authority having jurisdiction over the Administrative Agent or any Bank or by
any applicable law, rule, regulation or judicial process.
97
<PAGE>
SECTION 9.16 BANK'S FAILURE TO FUND.
(a) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of Section 2.4 or Section 2.16(e) hereof, and the Administrative
Agent may, in reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not have
so made such share available to the Administrative Agent, such Bank and Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, in accordance with the
provisions of Section 2.4(c) or Section 2.16(e) hereof. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement. Nothing contained in this Section or Sections 2.4(c) or 2.16(e)
shall be deemed to reduce the Commitment of any Bank or in any way affect the
rights of Borrower with respect to any defaulting Bank or Administrative Agent.
The failure of any Bank to make available to the Administrative Agent such
Bank's share of any Borrowing in accordance with Sections 2.4(b) or 2.16(e)
hereof shall not relieve any other Bank of its obligations to fund its
Commitment, in accordance with the provisions hereof.
(b) If a Bank does not advance to Administrative Agent such Bank's
pro rata share of a Loan in accordance herewith, then neither Administrative
Agent nor the other Banks shall be required or obligated to fund such Bank's pro
rata share of such Loan.
(c) As used herein, the following terms shall have the meanings set
forth below:
(i) "DEFAULTING BANK" shall mean any Bank which (x) does not advance
to the Administrative Agent such Bank's pro rata share of a Loan in accordance
herewith for a period of five (5) Domestic Business Days after notice of such
failure from Administrative Agent, (y) shall otherwise fail to perform such
Bank's obligations under the Loan Documents for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, or (z)
shall fail to pay the Administrative Agent or any other Bank, as the case may
be, upon demand, such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of the Loan Documents for a period of five (5) Domestic Business Days after
notice of such failure from Administrative Agent, and in all cases, such failure
is not as a result of a good faith dispute as to whether such advance is
properly
98
<PAGE>
required to be made pursuant to the provisions of this Agreement, or as to
whether such other performance or payment is properly required pursuant to the
provisions of this Agreement.
(ii) "JUNIOR CREDITOR" means any Defaulting Bank which has not (x)
fully cured each and every default on its part under the Loan Documents and (y)
unconditionally tendered to the Administrative Agent such Defaulting Bank's pro
rata share of all costs, expenses and disbursements required to be paid or
reimbursed pursuant to the terms of the Loan Documents.
(iii) "PAYMENT IN FULL" means, as of any date, the receipt by the Banks
who are not Junior Creditors of an amount of cash, in lawful currency of the
United States, sufficient to indefeasibly pay in full all Senior Debt.
(iv) "SENIOR DEBT" means (x) collectively, any and all indebtedness,
obligations and liabilities of the Borrower to the Banks who are not Junior
Creditors from time to time, whether fixed or contingent, direct or indirect,
joint or several, due or not due, liquidated or unliquidated, determined or
undetermined, arising by contract, operation of law or otherwise, whether on
open account or evidenced by one or more instruments, and whether for principal,
premium, interest (including, without limitation, interest accruing after the
filing of a petition initiating any proceeding referred to in Section 6.1(f) or
(g)), reimbursement for fees, indemnities, costs, expenses or otherwise, which
arise under, in connection with or in respect of the Loans or the Loan
Documents, and (y) any and all deferrals, renewals, extensions and refundings
of, or amendments, restatements, rearrangements, modifications or supplements
to, any such indebtedness, obligation or liability.
(v) "SUBORDINATED DEBT" means (x) any and all indebtedness,
obligations and liabilities of Borrower to one or more Junior Creditors from
time to time, whether fixed or contingent, direct or indirect, joint or several,
due or not due, liquidated or unliquidated, determined or undetermined, arising
by contract, operation of law or otherwise, whether on open account or evidenced
by one or more instruments, and whether for principal, premium, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement
for fees, indemnities, costs, expenses or otherwise, which arise under, in
connection with or in respect of the Loans or the Loan Documents, and (y) any
and all deferrals, renewals, extensions and refundings of, or amendments,
restatements, rearrangements, modifications or supplements to, any such
indebtedness, obligation or liability.
(d) Immediately upon a Bank's becoming a Junior Creditor, no Junior
Creditor shall, prior to Payment in Full of all Senior Debt:
99
<PAGE>
(i) accelerate, demand payment of, sue upon, collect, or receive any
payment upon, in any manner, or satisfy or otherwise discharge, any Subordinated
Debt, whether for principal, interest and otherwise;
(ii) take or enforce any Liens to secure Subordinated Debt or attach
or levy upon any assets of Borrower, to enforce any Subordinated Debt;
(iii) enforce or apply any security for any Subordinated Debt; or
(iv) incur any debt or liability, or the like, to, or receive any
loan, return of capital, advance, gift or any other property, from, the
Borrower.
(e) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;
(ii) any liquidation, dissolution or other winding-up of the Borrower,
voluntary or involuntary, whether or not involving insolvency, reorganization or
bankruptcy proceedings;
(iii) any assignment by the Borrower for the benefit of creditors;
(iv) any sale or other transfer of all or substantially all assets of
the Borrower; or
(v) any other marshalling of the assets of the Borrower;
each of the Banks shall first have received Payment in Full of all Senior Debt
before any payment or distribution, whether in cash, securities or other
property, shall be made in respect of or upon any Subordinated Debt. Any payment
or distribution, whether in cash, securities or other property that would
otherwise be payable or deliverable in respect of Subordinated Debt to any
Junior Creditor but for this Agreement shall be paid or delivered directly to
the Administrative Agent for distribution to the Banks in accordance with this
Agreement until Payment in Full of all Senior Debt. If any Junior Creditor
receives any such payment or distribution, it shall promptly pay over or deliver
the same to the Administrative Agent for application in accordance with the
preceding sentence.
(f) Each Junior Creditor shall file in any bankruptcy or other
proceeding of Borrower in which the filing of claims is required by law, all
claims relating to Subordinated Debt that such Junior Creditor may have against
Borrower and assign to the Banks who are not Junior Creditors all rights of such
Junior
100
<PAGE>
Creditor thereunder. If such Junior Creditor does not file any such claim
prior to forty-five (45) days before the expiration of the time to file such
claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is
hereby irrevocably authorized to do so in the name of such Junior Creditor
or, in Administrative Agent's sole discretion, to assign the claim to a
nominee and to cause proof of claim to be filed in the name of such nominee.
The foregoing power of attorney is coupled with an interest and cannot be
revoked. The Administrative Agent shall, to the exclusion of each Junior
Creditor, have the sole right, subject to Section 9.5 hereof, to accept or
reject any plan proposed in any such proceeding and to take any other action
that a party filing a claim is entitled to take. In all such cases, whether
in administration, bankruptcy or otherwise, the Person or Persons authorized
to pay such claim shall pay to Administrative Agent the amount payable on
such claim and, to the full extent necessary for that purpose, each Junior
Creditor hereby transfers and assigns to the Administrative Agent all of the
Junior Creditor's rights to any such payments or distributions to which
Junior Creditor would otherwise be entitled.
(g) (i) If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
any Junior Creditor in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall promptly be paid over or delivered and transferred to, Administrative
Agent for application to the payment of all Senior Debt, to the extent necessary
to achieve Payment in Full. In the event of the failure of any Junior Creditor
to endorse or assign any such payment, distribution or security, Administrative
Agent is hereby irrevocably authorized to endorse or assign the same as
attorney-in-fact for such Junior Creditor.
(ii) Each Junior Creditor shall take such action (including, without
limitation, the execution and filing of a financing statement with respect to
this Agreement and the execution, verification, delivery and filing of proofs of
claim, consents, assignments or other instructions that Administrative Agent may
require from time to time in order to prove or realize upon any rights or claims
pertaining to Subordinated Debt or to effectuate the full benefit of the
subordination contained herein) as may, in Administrative Agent's sole and
absolute discretion, be necessary or desirable to assure the effectiveness of
the subordination effected by this Agreement.
(h) (i) Each Bank that becomes a Junior Creditor understands and
acknowledges by its execution hereof that each other Bank is entering into this
Agreement and the Loan Documents in reliance upon the absolute subordination in
right of payment and in time of payment of Subordinated Debt to Senior Debt as
set forth herein.
101
<PAGE>
(ii) Only upon the Payment in Full of all Senior Debt shall any Junior
Creditor be subrogated to any remaining rights of the Banks which are not
Defaulting Banks to receive payments or distributions of assets of the Borrower
made on or applicable to any Senior Debt.
(iii) Each Junior Creditor agrees that it will deliver all instruments
or other writings evidencing any Subordinated Debt held by it to Administrative
Agent, promptly after request therefor by the Administrative Agent.
(iv) No Junior Creditor may at any time sell, assign or otherwise
transfer any Subordinated Debt, or any portion thereof, including, without
limitation, the granting of any Lien thereon, unless and until satisfaction of
the requirements of Section 9.6 above and the proposed transferee shall have
assumed in writing the obligation of the Junior Creditor to the Banks under this
Agreement, in a form acceptable to the Administrative Agent.
(v) If any of the Senior Debt, should be invalidated, avoided or set
aside, the subordination provided for herein nevertheless shall continue in full
force and effect and, as between the Banks which are not Defaulting Banks and
all Junior Creditors, shall be and be deemed to remain in full force and effect.
(vi) Each Junior Creditor hereby irrevocably waives, in respect of
Subordinated Debt, all rights (x) under Sections 361 through 365, 502(e) and 509
of the Bankruptcy Code (or any similar sections hereafter in effect under any
other Federal or state laws or legal or equitable principles relating to
bankruptcy, insolvency, reorganizations, liquidations or otherwise for the
relief of debtors or protection of creditors), and (y) to seek or obtain
conversion to a different type of proceeding or to seek or obtain dismissal of a
proceeding, in each case in relation to a bankruptcy, reorganization, insolvency
or other proceeding under similar laws with respect to the Borrower. Without
limiting the generality of the foregoing, each Junior Creditor hereby
specifically waives (A) the right to seek to give credit (secured or otherwise)
to the Borrower in any way under Section 364 of the Bankruptcy Code unless the
same is subordinated in all respects to Senior Debt in a manner acceptable to
Administrative Agent in its sole and absolute discretion and (B) the right to
receive any collateral security (including any "super priority" or equal or
"priming" or replacement Lien) for any Subordinated Debt unless the Banks which
are not Defaulting Banks have received a senior position acceptable to the Banks
in their sole and absolute discretion to secure all Senior Debt (in the same
collateral to the extent collateral is involved).
(i) (i) In addition to and not in limitation of the subordination
effected by this Section 9.16, the
102
<PAGE>
Administrative Agent and each of the Banks which are not Defaulting Banks may in
their respective sole and absolute discretion, also exercise any and all other
rights and remedies available at law or in equity in respect of a Defaulting
Bank; and
(ii) The Administrative Agent shall give each of the Banks notice of
the occurrence of a default under this Section 9.16 by a Defaulting Bank and if
the Administrative Agent and/or one or more of the other Banks shall, at their
option, fund any amounts required to be paid or advanced by a Defaulting Bank,
the other Banks who have elected not to fund any portion of such amounts shall
not be liable for any reimbursements to the Administrative Agent and/or to such
other funding Banks.
(j) Notwithstanding anything to the contrary contained or implied
herein, a Defaulting Bank shall not be entitled to vote on any matter as to
which a vote by the Banks is required hereunder, including, without limitation,
any actions or consents on the part of the Administrative Agent as to which the
approval or consent of all the Banks or the Required Banks is required under
Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting
Bank; provided, however, that in the case of any vote requiring the unanimous
consent of the Banks, if all the Banks other than the Defaulting Bank shall have
voted in accordance with each other, then the Defaulting Bank shall be deemed to
have voted in accordance with such Banks.
(k) Each of the Administrative Agent and any one or more of the Banks
which are not Defaulting Banks may, at their respective option, (i) advance to
the Borrower such Bank's pro rata share of the Loans not advanced by a
Defaulting Bank in accordance with the Loan Documents, or (ii) pay to the
Administrative Agent such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of this Agreement not theretofore paid by a Defaulting Bank. Immediately upon
the making of any such advance by the Administrative Agent or any one of the
Banks, such Bank's pro rata share and the pro rata share of the Defaulting Bank
shall be recalculated to reflect such advance. All payments, repayments and
other disbursements of funds by the Administrative Agent to Banks shall
thereupon and, at all times thereafter be made in accordance with such Bank's
recalculated pro rata share unless and until a Defaulting Bank shall fully cure
all defaults on the part of such Defaulting Bank under the Loan Documents or
otherwise existing in respect of the Loans or this Agreement, at which time the
pro rata share of the Bank(s) which advanced sums on behalf of the Defaulting
Bank and of the Defaulting Bank shall be restored to their original percentages.
SECTION 9.17 NO BANKRUPTCY PROCEEDINGS. Each of the Borrower, the Banks
and the Administrative Agent hereby agrees that it will not institute against
any Designated Lender or join any other Person in instituting against any
Designated Lender any
103
<PAGE>
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any federal or state bankruptcy or similar law, until the later to occur
of (i) one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Designated Lender and (ii) the Maturity
Date.
104
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential
Properties Trust
By: /s/ David J. Neithercut
--------------------------
Name: David J. Neithercut
Title: Executive Vice-
President, Chief
Financial Officer
Facsimile number:
Address: Two North Riverside Plaza
Suite 400
Chicago, Illinois 60606
Attn: Chief Financial
Officer
105
<PAGE>
COMMITMENTS
$80,000,000 BANK OF AMERICA, NATIONAL
ASSOCIATION, as Administrative
Agent, as Swingline Lender and as
Bank
By: /s/ Megan McBride
----------------------
Name: Megan McBride
Title: Vice President
Bank of America National
Association
Structured Debt Group
Mail Code IL1-231-12-16
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Megan McBride
Telecopy: (312) 974-4970
106
<PAGE>
$80,000,000 THE CHASE MANHATTAN BANK, as
Syndication Agent and as a Bank
By: /s/ Charles E. Hoagland
------------------------
Name: Charles E. Hoagland
Title: Vice President
107
<PAGE>
$70,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Documentation Agent and
as a Bank
By: /s/ Robert Bottamedi
-----------------------
Name: Robert Bottamedi
Title: Vice President
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107
Attention: William Lamb
Telecopy: (302) 634-4222
DOMESTIC AND EURO-CURRENCY
LENDING OFFICE:
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713-2107-
Attention: Kevin M. McCann
Telecopy: (302) 634-1852/1872
108
<PAGE>
$55,000,000 THE FIRST NATIONAL BANK OF CHICAGO, as a
Co-Arranger and as a Bank
By: /s/ Lynn Braun
---------------------
Name: Lynn Braun
Title: Vice President
109
<PAGE>
$55,000,000 FIRST UNION NATIONAL BANK, as a
Co-Arranger and as a Bank
By: /s/ Rex E. Rudy
---------------------
Name: Rex E. Rudy
Title: Vice President
110
<PAGE>
$45,000,000 BAYERISCHE LANDESBANK, CAYMAN ISLANDS
BRANCH, as Managing Agent and as a Bank
By: /s/ John A. Wain
---------------------------
Name: John A. Wain
Title: First Vice President
By: /s/ Alexander Kohnert
---------------------------
Name: Alexander Kohnert
Title: First Vice President
111
<PAGE>
$45,000,000 COMMERZBANK AKTIENGESELLSCHAFT, as
Managing Agent and as a Bank
By: /s/ Douglas P. Traynor
-------------------------
Name: Douglas P. Traynor
Title: Vice President
By: /s/ David Buettner
-------------------------
Name: David Buettner
Title: Assistant Treasurer
112
<PAGE>
$45,000,000 PNC BANK, NATIONAL ASSOCIATION, as
Managing Agent and as a Bank
By: /s/ Michael E. Smith
-------------------------
Name: Michael E. Smith
Title: Vice President
113
<PAGE>
$35,000,000 COMERICA BANK, as Co-Agent and as a Bank
By: /s/ David J. Campbell
--------------------------
Name: David J. Campbell
Title: Vice President
114
<PAGE>
$35,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as Co-Agent and as a Bank
By: /s/ Takeshi Kubo
-------------------------
Name: Takeshi Kubo
Title: Vice President
115
<PAGE>
$35,000,000 KBC BANK N.V., as Co-Agent and
as a Bank
By: /s/ Declan Meagher/Michael V. Curran
------------------------------------
Name: Declan Meagher/Michael V.
Curran
Title: First Vice President/Vice
President
116
<PAGE>
$35,000,000 U.S. BANK NATIONAL ASSOCIATION, as
Co-Agent and as a Bank
By: /s/ John M. Suhs
----------------------
Name: John M. Suhs
Title: Vice President
117
<PAGE>
$20,000,000 SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Bank
By: /s/ Lynn W. Feuerlein
-----------------------
Name: Lynn W. Feuerlein
Title: Group Vice President
118
<PAGE>
$20,000,000 ING (U.S.) CAPITAL LLC, as a Bank
By: /s/ Thomas R. Hobbis
-----------------------
Name: Thomas R. Hobbis
Title: Vice President
119
<PAGE>
$20,000,000 LASALLE BANK, N.A., as a Bank
By: /s/ Peter Margolin
------------------------------
Name: Peter Margolin
Title: Assistant Vice President
120
<PAGE>
$15,000,000 CRESTAR BANK, as a Bank
By: /s/ Nancy Richards
---------------------
Name: Nancy Richards
Title: Vice President
121
<PAGE>
$10,000,000 CHANG HWA COMMERCIAL BANK, LTD.,
NEW YORK BRANCH, as a Bank
By: /s/ Wan-Tu Yeh
-----------------------------
Name: Wan-Tu Yeh
Title: Vice President & General
Manager
122
<PAGE>
Total Commitments
- -----------------
$700,000,000
123
<PAGE>
SCHEDULE 4.6
Borrower and EQR ERISA Plans
The employees of EQR and the Borrower may currently participate in a 401(k)
Plan.
Other benefits include: Employee share purchase plan, stock option plan,
health care plan, dental care, life insurance and
accidental death and dismemberment plan,
travel/accident insurance, short-term disability,
long-term disability, sick time, vacation time,
personal days, holidays and direct paycheck
deposit.
124
<PAGE>
SCHEDULE 5.13(C)(1)
None
125
<PAGE>
SCHEDULE 5.13(C)(2)
None
126
<PAGE>
EXHIBIT A-1
NOTE
Chicago, Illinois
________ __, 1999
For value received, ERP Operating Limited Partnership, an Illinois
limited partnership (the "BORROWER"), promises to pay to the order of
____________ (the "PAYEE"), for the account of its Applicable Lending Office,
the unpaid principal amount of each Loan made by the Payee to the Borrower
pursuant to the Credit Agreement referred to below on the Maturity Date (as such
term is defined in the Credit Agreement). The Borrower promises to pay interest
on the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Bank of America, National
Association,______________________, Chicago, Illinois _______________
All Loans made by the Payee, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Payee and, if the Payee so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Payee on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED that the failure of the Payee to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.
This note is one of the Designated Lender Notes referred to in, and is
delivered pursuant to and subject to all of the terms of, the Revolving Credit
Agreement, dated as of _____________, 1999 among the Borrower, the banks listed
on the signature pages thereof, Bank of America, National Association, as
Administrative Agent, The Chase Manhattan Bank, as Syndication Agent and Morgan
Guaranty Trust Company of New York, as Documentation Agent (as the same may be
amended from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is
A-1 1
<PAGE>
made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties
Trust
By:
------------------------------
Name:
Title:
A-1 2
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
---------------------------------------------------------
<TABLE>
<CAPTION>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
A-1 3
<PAGE>
EXHIBIT A-2
NOTE
Chicago, Illinois
________ __, 1999
For value received, ERP Operating Limited Partnership, an Illinois
partnership (the "BORROWER"), promises to pay to the order of _______________
(the "BANK"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below on the Maturity Date (as such term is
defined in the Credit Agreement). The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of Bank of America, National
Association,______________ , Chicago, Illinois _________________.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; PROVIDED that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in, and is delivered pursuant
to and subject to all of the terms of, the Revolving Credit Agreement dated as
of _______________, 1999 among the Borrower, the banks listed on the signature
pages thereof, Bank of America, National Association, as Administrative Agent,
The Chase Manhattan Bank, as Syndication Agent and Morgan Guaranty Trust Company
of New York, as Documentation Agent (as the same may be amended from time to
time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit
A-2 1
<PAGE>
Agreement for provisions for the prepayment hereof and the acceleration of the
maturity hereof.
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties
Trust
By:
------------------------------
Name:
Title:
A-2 2
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
---------------------------------------------------------
<TABLE>
<CAPTION>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
</TABLE>
A-2 3
<PAGE>
EXHIBIT B
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: Bank of America, National Association (the "Administrative Agent")
From: ERP Operating Limited Partnership
Re: Revolving Credit Agreement (the "Credit Agreement") dated as of
____________________________ , 1999 among ERP Operating Limited
Partnership, the Banks parties thereto, the Administrative Agent,
The Chase Manhattan Bank, as Syndication Agent, and Morgan
Guaranty Trust Company of New York, as Documentation Agent
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
<TABLE>
<CAPTION>
Principal Amount* Interest Period**
- ----------------- -----------------
<S> <C>
$
</TABLE>
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
- --------
* Amount must be $3,000,000 or a larger multiple of $100,000.
** Not less than 14 days (LIBOR Auction) or not less than 14 days (Absolute Rate
Auction), subject to the provisions of the definition of Interest Period.
B-1
<PAGE>
Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] (Chicago time) on [date].
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties
Trust
By:
--------------------------------
Name:
Title:
B-2
<PAGE>
EXHIBIT C
INTENTIONALLY OMITTED
C-1
<PAGE>
EXHIBIT D
FORM OF MONEY MARKET QUOTE
To: Bank of America, National Association, as Agent
Re: Money Market Quote to ERP Operating Limited Partnership (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
_________________, 19__ , we hereby make the following Money Market Quote on
the following terms:
1. Quoting Bank:
----------------------------------
2. Person to contact at Quoting Bank:
----------------------------------------------
3. Date of Borrowing: *
------------------------------
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
<TABLE>
<CAPTION>
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- -------- --------- ------------ --------------------
<S> <C> <C> <C>
$
$
</TABLE>
[Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not
exceed $____________________ .]**
We understand and agree that the offer(s) set forth above, subject
to the satisfaction of the applicable conditions set forth in the
Revolving Credit Agreement dated as of ____________________, 1999
among ERP Operating Limited Partnership, the Banks parties
thereto, The Chase Manhattan Bank, as Syndication Agent, and
Morgan Guaranty Trust Company of New York, as Documentation Agent,
and yourselves, as Administrative Agent, irrevocably obligates us
to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
D-1
<PAGE>
Very truly yours,
[NAME OF BANK]
Dated: By:
------------------- -------------------
Authorized Officer
- ----------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Bids must be made for $3,000,000
or a larger multiple of $100,000.
*** Not less than 14 days, as specified in the related Invitation. No more
than five bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest 1/10,000
of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
D-2
<PAGE>
EXHIBIT E
TRANSFER SUPPLEMENT
TRANSFER SUPPLEMENT (this "TRANSFER SUPPLEMENT") dated as of
____________ , 199___ between _________________________________(the "ASSIGNOR")
and ___________________ having an address at _____________________________
(the "PURCHASING BANK").
W I T N E S S E T H:
WHEREAS, the Assignor has made loans to ERP Operating Limited
Partnership, an Illinois limited partnership (the "BORROWER"), pursuant to
the Revolving Credit Agreement, dated as of _________________________, 1999
(as the same may be amended, supplemented or otherwise modified through the
date hereof, the "CREDIT AGREEMENT"), among the Borrower, the banks party
thereto, Bank of America, National Association, as Administrative Agent, The
Chase Manhattan Bank, as Syndication Agent, and Morgan Guaranty Trust Company
of New York, as Documentation Agent. All capitalized terms used and not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement;
WHEREAS, the Purchasing Bank desires to purchase and assume from
the Assignor, and the Assignor desires to sell and assign to the Purchasing
Bank, certain rights, title, interest and obligations under the Credit
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. In consideration of the amount set forth in the receipt (the
"RECEIPT") given by Assignor to Purchasing Bank of even date herewith, and
transferred by wire to Assignor, the Assignor hereby assigns and sells,
without recourse, representation or warranty except as specifically set forth
herein, to the Purchasing Bank, and the Purchasing Bank hereby purchases and
assumes from the Assignor, a __% interest (the "PURCHASED INTEREST") of the
Loans constituting a portion of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below) including,
without limitation, such percentage interest of the Assignor in any Loans
owing to the Assignor, any Note held by the Assignor, any Loan Commitment of
the Assignor and any other interest of the Assignor under any of the Loan
Documents, including any participation in any Letter of Credit.
2. The Assignor (i) represents and warrants that as of the date
hereof the aggregate outstanding principal amount of its share of the Loans
owing to it (without giving effect to assignments thereof which have not yet
become effective) is
E-1
<PAGE>
$_____________________ ; (ii) represents and warrants that it is the legal and
beneficial owner of the interests being assigned by it hereunder and that such
interests are free and clear of any adverse claim; (iii) represents and warrants
that it has not received any notice of Default or Event of Default from the
Borrower; (iv) represents and warrants that it has full power and authority to
execute and deliver, and perform under, this Transfer Supplement, and all
necessary corporate and/or partnership action has been taken to authorize, and
all approvals and consents have been obtained for, the execution, delivery and
performance thereof; (v) represents and warrants that this Transfer Supplement
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms; (vi) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations (or
the truthfulness or accuracy thereof) made in or in connection with the Credit
Agreement, or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, or
the other Loan Documents or any other instrument or document furnished pursuant
thereto; and (vii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto. Except as specifically set forth in this Paragraph
2, this assignment shall be without recourse to Assignor.
3. The Purchasing Bank (i) confirms that it has received a copy of
the Credit Agreement, and the other Loan Documents, together with such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Transfer
Supplement and to become a party to the Credit Agreement, and has not relied on
any statements made by Assignor or Skadden, Arps, Slate, Meagher & Flom LLP;
(ii) agrees that it will, independently and without reliance upon any of the
Administrative Agent, the Assignor or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower
and will make its own credit analysis, appraisals and decisions in taking or not
taking action under the Credit Agreement, and the other Loan Documents; (iii)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement, and the other
Loan Documents as are delegated to the Agent by the terms thereof, together with
such powers as are incidental thereto; (iv) agrees that it will be bound by and
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; (v)
specifies as its address for notices and lending office, the office set forth
beneath its name on the signature page hereof; (vi) confirms that
E-2
<PAGE>
it has full power and authority to execute and deliver, and perform under, this
Transfer Supplement, and that all necessary corporate and/or partnership action
has been taken to authorize, and all approvals and consents have been obtained
for, the execution, delivery and performance thereof; (vii) certifies that this
Transfer Supplement constitutes its legal, valid and binding obligation
enforceable in accordance with its terms; and (viii) confirms that the interest
being assigned hereunder is being acquired by it for its own account, for
investment purposes only and not with a view to the public distribution thereof
and without any present intention of its resale in either case that would be in
violation of applicable securities laws.
4. This Transfer Supplement shall be effective on the date (the
"EFFECTIVE DATE") on which all of the following have occurred (i) it shall have
been executed and delivered by the parties hereto, (ii) copies hereof shall have
been delivered to the Administrative Agent and the Borrower, (iii) Purchasing
Bank shall have received an original Note and (iv) the Purchasing Bank shall
have paid to the Assignor the agreed purchase price as set forth in the Receipt.
5. On and after the Effective Date, (i) the Purchasing Bank shall
be a party to the Credit Agreement and, to the extent provided in this Transfer
Supplement, have the rights and obligations of a Bank thereunder and be entitled
to the benefits and rights of the Banks thereunder and (ii) the Assignor shall,
to the extent provided in this Transfer Supplement as to the Purchased Interest,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. From and after the Effective Date, the Assignor shall cause the
Administrative Agent to make all payments under the Credit Agreement, and the
Notes in respect of the Purchased Interest assigned hereby (including, without
limitation, all payments of principal, fees and interest with respect thereto
and any amounts accrued but not paid prior to such date) to the Purchasing Bank.
7. This Transfer Supplement may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.
8. Assignor hereby represents and warrants to Purchasing Bank that
it has made all payments demanded to date by Bank of America, National
Association ("BOFA") as Administrative Agent in connection with the Assignor's
pro rata share of the obligation to reimburse the Agent for its expenses and
made all Loans required. In the event BofA, as Administrative Agent, shall
demand reimbursement for fees and expenses from Purchasing Bank for any period
prior to the Effective Date, Assignor hereby agrees to promptly pay BofA, as
Administrative Agent, such sums directly, subject, however, to Paragraph 12
hereof.
E-3
<PAGE>
9. Assignor will, at the cost of Assignor, and without expense to
Purchasing Bank, do, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, assignments, notices of assignments, transfers and
assurances as Purchasing Bank shall, from time to time, reasonably require, for
the better assuring, conveying, assigning, transferring and confirming unto
Purchasing Bank the property and rights hereby given, granted, bargained, sold,
aliened, enfeoffed, conveyed, confirmed, assigned and/or intended now or
hereafter so to be, on which Assignor may be or may hereafter become bound to
convey or assign to Purchasing Bank, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing,
registering or recording this Agreement.
10. The parties agree that no broker or finder was instrumental in
bringing about this transaction. Each party shall indemnify, defend the other
and hold the other free and harmless from and against any damages, costs or
expenses (including, but not limited to, reasonable attorneys' fees and
disbursements) suffered by such party arising from claims by any broker or
finder that such broker or finder has dealt with said party in connection with
this transaction.
11. Subject to the provisions of Paragraph 12 hereof, if, with
respect to the Purchased Interest only, Assignor shall on or after the Effective
Date receive (a) any cash, note, securities, property, obligations or other
consideration in respect of or relating to the Loan or the Loan Documents or
issued in substitution or replacement of the Loan or the Loan Documents, (b) any
cash or non-cash consideration in any form whatsoever distributed, paid or
issued in any bankruptcy proceeding in connection with the Loan or the Loan
Documents or (c) any other distribution (whether by means of repayment,
redemption, realization of security or otherwise), Assignor shall accept the
same as Purchasing Bank's agent and hold the same in trust on behalf of and for
the benefit of Purchasing Bank, and shall deliver the same forthwith to
Purchasing Bank in the same form received, with the endorsement (without
recourse) of Assignor when necessary or appropriate. If the Assignor shall fail
to deliver any funds received by it within the same Domestic Business Day of
receipt, unless such funds are received by Assignor after 4:00 p.m., Eastern
Standard Time, then the following Domestic Business Day after receipt, said
funds shall accrue interest at the federal funds interest rate and in addition
to promptly remitting said amount, Assignor shall remit such interest from the
date received to the date such amount is remitted to the Purchasing Bank.
12. Assignor and Purchasing Bank each hereby agree to indemnify
and hold harmless the other, each of its directors and each of its officers in
connection with any claim or cause of action based on any matter or claim based
on the acts of either while acting as a Bank under the Credit Agreement.
Promptly after receipt by the indemnified party under this Section of
E-4
<PAGE>
notice of the commencement of any action, such indemnified party shall notify
the indemnifying party in writing of the commencement thereof. If any such
action is brought against any indemnified party and that party notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof. In no event
shall the indemnified party settle or consent to a settlement of such cause of
action or claim without the consent of the indemnifying party.
13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS.
Wire Transfer Instructions:
----------------------------------
By:
-------------------------------
Name:
Title:
----------------------------------
By:
-------------------------------
Name:
Title:
E-5
<PAGE>
Receipt and Consent acknowledged this __________ day of ____________, 199__:
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
[IF REQUIRED ADD THE FOLLOWING:]
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties Trust
By:
------------------------------------
Name:
Title:
E-6
<PAGE>
EXHIBIT G
FORM OF DESIGNATION AGREEMENT
Dated _____________, 199___
Reference is made to that certain Revolving Credit Agreement, dated
as of ______________________, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among ERP OPERATING
LIMITED PARTNERSHIP, the banks parties thereto, and BANK OF AMERICA, NATIONAL
ASSOCIATION (the "ADMINISTRATIVE AGENT"), as Administrative Agent. Terms
defined in the Credit Agreement are used herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the
"Designee"), and the Administrative Agent agree as follows:
1. The Designor hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Money Market Loans
pursuant to Article III of the Credit Agreement. Any assignment by Designor to
Designee of its rights to make a Money Market Loan pursuant to such Article III
shall be effective at the time of the funding of such Money Market Loan and not
before such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each
Loan Document, together with copies of the financial statements referred to in
Articles IV and V of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon the Administrative Agent, the Designor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under any Loan Document; (c) confirms that it is a Designated
Lender; (d) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to
G-1
<PAGE>
the Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees to be bound by
each and every provision of each Loan Document and further agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of any Loan Document are required to be performed by it as a Bank.
4. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Credit Agreement, to
deliver and receive all communications and notices under the Credit Agreement
and other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and make approvals, waivers, consents of amendments to or under the
Credit Agreement or other Loan Documents. Any document executed by the Designor
on the Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee. The Borrower, the Administrative
Agent and each of the Banks may rely on and are beneficiaries of the preceding
provisions.
5. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on the
signature page thereto.
6. The Administrative Agent hereby agrees that it will not
institute against any Designated Lender or join any other Person in instituting
against any Designated Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any federal or state bankruptcy or
similar law, until the later to occur of (i) one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Lender and (ii) the Maturity Date.
7. The Designor unconditionally agrees to pay or reimburse the
Designee and save the Designee harmless against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed or asserted
by any of the parties to the Loan Documents against the Designee, in its
capacity as such, in any way relating to or arising out of this Agreement or any
other Loan Documents or any action taken or omitted by the Designee hereunder or
thereunder, PROVIDED that the Designor shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements if the same results from the Designee's
gross negligence or willful misconduct.
G-2
<PAGE>
8. Upon such acceptance and recording by the Administrative Agent,
as of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right (subject to the provisions of Section 2.3(b)) to make Money Market
Loans as a Bank pursuant to Section 2.3 of the Credit Agreement and the rights
and obligations of a Bank related thereto; PROVIDED, HOWEVER, that the Designee
shall not be required to make payments with respect to such obligations except
to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Designor, as administrative agent
for the Designee, shall be and remain obligated to the Borrower, the Co-Agents
and the Banks for each and every of the obligations of the Designee and its
Designor with respect to the Credit Agreement, including, without limitation,
any indemnification obligations under Section 7.6 of the Credit Agreement and
any sums otherwise payable to the Borrower by the Designee.
9. This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois.
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.
G-3
<PAGE>
IN WITNESS WHEREOF, the Designor and the Designee, intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.
Effective Date: ________________________,199__
[NAME OF DESIGNOR], as
Designor
By:
----------------------------
Title:
----------------------
[NAME OF DESIGNOR], as
Designor
By:
----------------------------
Title:
----------------------
Applicable Lending Office (and address
for notices):
[ADDRESS]
Accepted this _____ day
of ___________________, 19__
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent
By:
---------------------------
Title:
------------------------
G-4
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I.........................................................................1
SECTION 1.1 Definitions..........................................................1
SECTION 1.2 Accounting Terms and DeterminationsTerms and Determinations.........26
SECTION 1.3 Types of Borrowingsof Borrowings....................................27
ARTICLE II.......................................................................27
SECTION 2.1 Commitments to Lend.................................................27
SECTION 2.2 Notice of Borrowing.................................................27
SECTION 2.3 Money Market Borrowings.............................................29
SECTION 2.4 Notice to Banks; Funding of Loans...................................34
SECTION 2.5 Notes...............................................................35
SECTION 2.6 Method of Electing Interest Rates...................................36
SECTION 2.7 Interest Rates......................................................38
SECTION 2.8 Fees................................................................40
SECTION 2.9 Maturity Date.......................................................41
SECTION 2.10 Mandatory Prepayments...............................................41
SECTION 2.11 Optional Prepayments...............................................42
SECTION 2.12 General Provisions as to Payments..................................44
SECTION 2.13 Funding Losses.....................................................45
SECTION 2.14 Computation of Interest and Fees...................................45
SECTION 2.15 Use of Proceedsof Proceeds.........................................46
SECTION 1.19 Letters of Credit..................................................46
SECTION 2.17 Letter of Credit Usage Absolute....................................49
SECTION 2.18 Swingline Loan Subfacility.........................................50
ARTICLE III......................................................................53
SECTION 3.1 Closing.............................................................53
SECTION 3.2 Borrowings..........................................................54
ARTICLE IV.......................................................................56
SECTION 4.1 Existence and Power.................................................56
SECTION 4.2 Power and Authority.................................................56
SECTION 4.3 No Violation........................................................57
SECTION 4.4 Financial Information...............................................57
SECTION 4.5 Litigation..........................................................58
SECTION 4.6 Compliance with ERISA...............................................58
SECTION 4.7 Environmental Matters...............................................58
SECTION 4.8 Taxes...............................................................58
SECTION 4.9 Full Disclosure.....................................................59
SECTION 4.10 Solvency...........................................................59
SECTION 4.11 Use of Proceeds; Margin Regulations................................59
SECTION 4.12 Governmental Approvals.............................................59
SECTION 4.13 Investment Company Act; Public Utility Holding Company Act.........59
SECTION 4.14 Principal Offices..................................................60
SECTION 4.15 REIT Status........................................................60
SECTION 4.16 Patents, Trademarks, etc...........................................60
SECTION 4.17 Ownership of Property..............................................60
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
SECTION 4.18 No Default.........................................................60
SECTION 4.19 Licenses, etc......................................................60
SECTION 4.20 Compliance With Law................................................60
SECTION 4.21 No Burdensome Restrictions.........................................61
SECTION 4.22 Brokers' Fees......................................................61
SECTION 4.23 Labor Matters......................................................61
SECTION 4.24 Insurance..........................................................61
SECTION 4.25 Organizational Documents...........................................61
SECTION 4.26 Qualifying Unencumbered Properties.................................61
SECTION 4.27 Year 2000 Compliance...............................................62
ARTICLE V........................................................................62
SECTION 5.1 Information.........................................................62
SECTION 5.2 Payment of Obligations..............................................65
SECTION 5.3 Maintenance of Property; Insurance; Leases..........................66
SECTION 5.4 Conduct of Business and Maintenance of Existence....................66
SECTION 5.5 Compliance with Laws................................................66
SECTION 5.6 Inspection of Property, Books and Records...........................66
SECTION 5.7 Existence...........................................................67
SECTION 5.8 Financial Covenants.................................................67
SECTION 5.9 Restriction on Fundamental Changes..................................69
SECTION 5.10 Changes in Business................................................70
SECTION 5.11 Margin Stock.......................................................70
SECTION 5.12 Hedging Requirements...............................................70
SECTION 5.13 EQR Status.........................................................71
ARTICLE VI.......................................................................72
SECTION 6.1 Events of Default...................................................72
SECTION 6.2 Rights and Remedies.................................................74
SECTION 6.3 Notice of Default...................................................75
SECTION 6.4 Actions in Respect of Letters of Credit.............................76
SECTION 6.5 Distribution of Proceeds after Default..............................78
ARTICLE VII......................................................................78
SECTION 7.1 Appointment and Authorization.......................................78
SECTION 7.2 Agency and Affiliates...............................................78
SECTION 7.3 Action by Administrative Agent......................................79
SECTION 7.4 Consultation with Experts...........................................79
SECTION 7.5 Liability of Administrative Agent and Syndication Agent.............79
SECTION 7.6 Indemnification.....................................................79
SECTION 7.7 Credit Decision.....................................................80
SECTION 7.8 Successor Administrative Agent or Syndication Agent.................80
SECTION 7.9 Consents and Approvals..............................................81
ARTICLE VIII.....................................................................82
SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair............82
SECTION 8.2 Illegality..........................................................83
SECTION 8.3 Increased Cost and Reduced Return...................................84
SECTION 8.4 Taxes...............................................................86
SECTION 8.5 Base Rate Loans Substituted for Affected Euro-Dollar Loans..........88
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX.......................................................................88
SECTION 9.1 Notices.............................................................88
SECTION 9.2 No Waivers..........................................................89
SECTION 9.3 Expenses; Indemnification...........................................89
SECTION 9.4 Sharing of Set-Offs.................................................91
SECTION 9.5 Amendments and Waivers..............................................92
SECTION 9.6 Successors and Assigns..............................................92
SECTION 9.7 Collateral..........................................................95
SECTION 9.8 Governing Law; Submission to Jurisdiction...........................95
SECTION 9.9 Counterparts; Integration; Effectiveness............................96
SECTION 9.10 WAIVER OF JURY TRIAL................................................96
SECTION 9.11 Survival............................................................96
SECTION 9.12 Domicile of Loans...................................................97
SECTION 9.13 Limitation of Liability.............................................97
SECTION 9.14 Recourse Obligation.................................................97
SECTION 9.15 Confidentiality.....................................................97
SECTION 9.16 Bank's Failure to Fund..............................................98
SECTION 9.17 No Bankruptcy Proceedings..........................................103
</TABLE>
iii
<PAGE>
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this
"AMENDMENT") is made as of November 10, 1999, by and among ERP OPERATING LIMITED
PARTNERSHIP (the "BORROWER"), BANK OF AMERICA, NATIONAL ASSOCIATION, as
Administrative Agent (the "ADMINISTRATIVE AGENT"), THE CHASE MANHATTAN BANK, as
Syndication Agent, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation
Agent, and the BANKS listed on the signature pages hereof.
W I T N E S S E T H:
WHEREAS, the Borrower and the Banks have entered into the
Revolving Credit Agreement, dated as of August 12, 1999 (the "CREDIT
AGREEMENT"); and
WHEREAS, the parties desire to modify the Credit Agreement upon
the terms and conditions set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Credit Agreement.
<PAGE>
2. LOAN DOCUMENTS. The definition "Loan Documents" is hereby
amended by adding the following after "and the Letter of Credit Documents": "and
any Guaranty".
3. QUALIFYING UNENCUMBERED PROPERTY. The definition "Qualifying
Unencumbered Property" is hereby amended by adding the following after the last
sentence thereof:
Notwithstanding the foregoing, for the purposes of this
definition, a Property shall be deemed to be wholly-owned by
Borrower if such Property shall be owned by a Down REIT (as
hereinafter defined) or a wholly-owned Subsidiary of such Down
REIT. The term "Down REIT" shall mean a limited liability
company or limited partnership in which the only interest in
such Down REIT not owned (directly or indirectly) by Borrower
shall be preference interests or preference units,
respectively, and which limited liability company or limited
partnership, as the case may be (collectively, a "GUARANTOR"),
has executed and delivered to the Administrative Agent, on
behalf of the Banks, (i) a Guaranty of Payment in the form
attached hereto as EXHIBIT A (a "GUARANTY"), (ii) all
documents reasonably requested by the Administrative Agent
relating to the existence of such Down REIT, and the authority
for and validity of the Guaranty, including, without
limitation, the organizational documents of such Down REIT,
modified or supplemented prior to the date of such Guaranty,
each certified to be true, correct and complete by such Down
REIT, not more than ten (10) days prior to the date of such
Guaranty, together with a good standing certificate from the
Secretary of State (or the equivalent thereof) of the State of
formation of such Down REIT, to be dated not more than ten
(10) days prior to the date
2
<PAGE>
of such Guaranty, as well as authorizing resolutions in
respect of the Guaranty, and (iii) an opinion of counsel with
respect to such Down REIT and Guaranty, in form and substance
reasonably acceptable to the Administrative Agent, with
respect to due organization, existence, good standing and
authority, and validity and enforceability of the Guaranty. In
addition, for purposes of this definition, a Guaranty shall
not be deemed to constitute Unsecured Debt of the applicable
Down REIT.
4. LETTERS OF CREDIT. Sections 2.16(b) and (d) of the Credit
Agreement are hereby deleted.
5. PERMITTED HOLDINGS. For purposes of calculating Multifamily
Residential Property Partnership Interests pursuant to Section 5.8(j) of the
Credit Agreement, a Down REIT (or a wholly-owned Subsidiary thereof) shall be
deemed to be wholly-owned by Borrower.
6. GUARANTY. (i) Notwithstanding any other provision of the Credit
Agreement or any other Loan Document to the contrary, the Administrative Agent,
the Banks and Designated Lenders agree with Borrower that any funds, claims, or
distributions actually received by the Administrative Agent for the account of
any Bank or Designated Lender as a result of the enforcement of, or pursuant to,
any Guaranty, net of the Administrative Agent's and the Banks' expenses of
collection thereof (such net amount, "GUARANTY PROCEEDS"), shall be made
available for distribution equally and ratably (in proportion to the aggregate
amount of principal, interest and other
3
<PAGE>
amounts then owed in respect of the Obligations or of an issuance of Public Debt
(as defined below), as the case may be) among the Administrative Agent, the
Banks and the Designated Lenders and the trustee or trustees of any Unsecured
Debt, not subordinated to the Obligations (or to the holders thereof), issued by
Borrower, before or after the Effective Date, in offerings registered under the
Securities Act of 1933, as amended, or in transactions exempt from registration
pursuant to rule 144A or Regulation 8 thereunder or listed on non-U.S.
securities exchanges ("PUBLIC DEBT"), and the Administrative Agent is hereby
authorized, by Borrower, by each Bank (on its own behalf and on behalf of its
Designated Lender, if any) and by each Guarantor by its execution and delivery
of a Guaranty, to make such Guaranty Proceeds so available. No Bank or
Designated Lender shall have any interest in any amount paid over by the
Administrative Agent to the trustee or trustees in respect of any Public Debt
(or to the holders thereof) pursuant to the foregoing authorization. This
Section 6 shall apply solely to Guaranty Proceeds, and not to any payments,
funds, claims or distributions received by the Administrative Agent, any Bank or
Designated Lender directly or indirectly from Borrower or any other Person other
than from a Guarantor pursuant to a Guaranty. Borrower is aware of the terms of
the
4
<PAGE>
Guaranties, and specifically understands and agrees with the Administrative
Agent, the Banks and the Designated Lenders that, to the extent Guaranty
Proceeds are distributed to holders of Public Debt or their respective trustees,
such Guarantor has agreed that the Obligations will not be deemed reduced by any
such distributions and such Guarantor shall continue to make payments pursuant
to its Guaranty until such time as the Obligations have been paid in full (and
the Commitments have been terminated and any Letter of Credit returned), after
taking into account any such distributions of Guaranty Proceeds in respect of
Indebtedness other than the Obligations.
(ii) Nothing contained herein shall be deemed (A) to limit,
modify, or alter the rights of the Administrative Agent, the Banks and the
Designated Lenders under any Guaranty, (b) to subordinate the Obligations to
any Public Debt, or (C) to give any holder of Public Debt (or any trustee
for such holder) any rights of subrogation.
(iii) This Amendment and all Guaranties, are for the sole benefit
of the Administrative Agent, the Banks and the Designated Lenders and their
respective successors and assigns. Nothing contained herein or in any
Guaranty shall be deemed for the benefit of any holder of Public Debt, or
any trustee for such holder; nor shall
5
<PAGE>
anything contained herein or therein be construed to impose on the
Administrative Agent, any Bank or any Designated Lender any fiduciary
duties, obligations or responsibilities to the holders of any Public Debt or
their trustees (including, but not limited to, any duty to pursue any
Guarantor for payment under its Guaranty).
7. EFFECTIVE DATE. This Amendment shall become effective when each
of the following conditions is satisfied (or waived by the Required Banks) (the
date such conditions are satisfied or waived being deemed the "EFFECTIVE DATE"):
(a) the Borrower shall have executed and delivered to the
Administrative Agent a duly executed original of this
Amendment;
(b) the Required Banks shall have executed and delivered to the
Administrative Agent a duly executed original of this
Amendment;
(c) the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the
existence of the Borrower, the authority for and the validity
of this Amendment, and the other documents executed in
6
<PAGE>
connection therewith, and any other matters relevant hereto,
all in form and substance reasonably satisfactory to the
Administrative Agent. Such documentation shall include, without
limitation, the organizational documents of the Borrower, as
amended, modified or supplemented prior to the Effective Date,
each certified to be true, correct and complete by an officer
of the Borrower, as of a date not more than twenty (20) days
prior to the Effective Date, together with a good standing
certificate from the Secretary of State (or the equivalent
thereof) of the State of Maryland, to be dated not more than
twenty (20) days prior to the Effective Date;
(d) the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this
Amendment, unless otherwise specified, in sufficient
counterparts, satisfactory in form and substance to the
Administrative Agent in its reasonable discretion;
(e) the Borrower shall have taken all actions required to authorize
the execution and delivery of this Amendment and the
performance hereof by the Borrower;
7
<PAGE>
(f) the Administrative Agent shall have received the reasonable
fees and expenses accrued through the Effective Date of
Skadden, Arps, Slate, Meagher & Flom LLP, together with any
other fees or expenses of the Administrative Agent;
(g) the representations and warranties of the Borrower contained in
the Credit Agreement, as amended hereby, shall be true and
correct in all material respects on and as of the Effective
Date; and
(h) receipt by the Administrative Agent and the Banks of a
certificate of an officer of the Borrower certifying that, on a
pro forma basis, the Borrower is in compliance with the
requirements of Section 5.8 of the Credit Agreement.
8. ENTIRE AGREEMENT. This Amendment constitutes the entire and
final agreement among the parties hereto with respect to the subject matter
hereof and there are no other agreements, understandings, undertakings,
representations or warranties among the parties hereto with respect to the
subject matter hereof except as set forth herein.
9. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the law of the State of Illinois.
8
<PAGE>
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart.
11. HEADINGS, ETC. Section or other headings contained in this
Amendment are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Amendment.
12. NO FURTHER MODIFICATIONS. Except as modified herein, all of
the terms and conditions of the Credit Agreement, as modified hereby shall
remain in full force and effect and, as modified hereby, the Borrower confirms
and ratifies all of the terms, covenants and conditions of the Credit Agreement
in all respects.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.
BORROWER: ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential
Properties Trust
By: /s/ David J. Neithercut
-------------------------------
Name: David J. Neithercut
Title: Executive Vice President
Chief Financial Officer
10
<PAGE>
BANK OF AMERICA, NATIONAL ASSOCIATION, as
Administrative Agent, as Swingline Lender
and as a Bank
By: /s/ Megan McBride
-------------------------
Name: Megan McBride
Title: Vice President
11
<PAGE>
THE CHASE MANHATTAN BANK, as Syndication
Agent and as a Bank
By: /s/ Marc E. Costantino
-------------------------
Name: Marc E. Costantino
Title: Vice President
12
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Documentation Agent and as a
Bank
By: /S/ R. DAVID STONE
---------------------------
Name: R. David Stone
Title: Associate
13
<PAGE>
BANK ONE, NA (f/k/a The First National
Bank of Chicago), as a Co-Arranger and as
a Bank
By: /s/ Lynn Braun
-------------------------------
Name: Lynn Braun
Title: Vice President
14
<PAGE>
FIRST UNION NATIONAL BANK, as a
Co-Arranger and as a Bank
By: /s/ Rex E. Rudy
----------------------
Name: Rex E. Rudy
Title: Vice President
15
<PAGE>
BAYERISCHE LANDESBANK, CAYMAN ISLANDS
BRANCH, as Managing Agent and as a Bank
By: /s/ John A. Wain
---------------------------
Name: John A. Wain
Title: First Vice President
By: /s/ Alexander Kohnert
-----------------------------
Name: Alexander Kohnert
Title: First Vice President
16
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT, as
Managing Agent and as a Bank
By: /s/ Ralph C. Marra
------------------------
Name: Ralph C. Marra
Title: Vice President
By: /s/ David Buettner
-------------------------
Name: David Buettner
Title: Assistant Treasurer
17
<PAGE>
PNC BANK, NATIONAL ASSOCIATION, as
Managing Agent and as a Bank
By: /s/ Michael E. Smith
---------------------------
Name: Michael E. Smith
Title: Vice President
18
<PAGE>
COMERICA BANK, as Co-Agent and as a Bank
By: /s/ David J. Campbell
-------------------------
Name: David J. Campbell
Title: Vice President
19
<PAGE>
SOUTHTRUST BANK, NATIONAL ASSOCIATION, as
a Bank
By: /s/ Lynn W. Feuerlein
--------------------------
Name: Lynn W. Feuerlein
Title: Group Vice President
20
<PAGE>
BANK HAPOALIM B.M., as a Bank
By: /s/ Laura Anne Raffa
------------------------------
Name: Laura Anne Raffa
Title: First Vice President &
Corporate Manager
By: /s/ Shaun Breidbart
------------------------------
Name: Shaun Breidbart
Title: Vice President
21
<PAGE>
ING (U.S.) CAPITAL LLC, as a Bank
By: /s/ Thomas R. Hobbis
------------------------
Name: Thomas R. Hobbis
Title: Vice President
22
<PAGE>
LASALLE BANK, National Association, as a
Bank
By: /s/ Peter Margolin
-------------------------------
Name: Peter Margolin
Title: Assistant Vice President
23
<PAGE>
CRESTAR BANK, as a Bank
By: /s/ Nancy Richards
---------------------
Name: Nancy Richards
Title: Vice President
24
<PAGE>
CHANG HWA COMMERCIAL BANK, LTD., NEW YORK
BRANCH, as a Bank
By: /s/ Wan-Tu Yeh
---------------------
Name: Wan Tu-Yeh
Title: Vice President & General
Manager
25
<PAGE>
EXHIBIT 10.16
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
LEXFORD PROPERTIES, L.P.,
AN OHIO LIMITED PARTNERSHIP
<PAGE>
TABLE OF CONTENTS
<TABLE>
ARTICLE PAGE
<S> <C>
I DEFINITIONS AND INTERPRETATION 2
1.1 Definitions 2
1.2 Interpretation 10
II ORGANIZATIONAL MATTERS 10
2.1 Continuation 10
2.2 Name 11
2.3 Principal Place of Business 11
2.4 Registered Office and Registered Agent 11
2.5 Term 11
2.6 Power of Attorney 11
III BUSINESS OF PARTNERSHIP 13
3.1 Purpose and Business 13
3.2 Powers 13
IV MANAGEMENT OF PARTNERSHIP; RIGHTS AND DUTIES OF GENERAL
PARTNER 14
4.1 Management 14
4.2 Liability for Certain Acts 14
4.3 General Partner and Limited Partners Have No
Exclusive Duty to Partnership 15
4.4 Indemnification 15
4.5 Other Matters Concerning the General Partner 17
4.6 Reliance by Third Parties 18
4.7 Affiliated Compensation 19
4.8 Title to Partnership Assets 19
V RIGHTS AND OBLIGATIONS OF PARTNERS 19
5.1 Admission of Partners 19
5.2 Limitation of Liability 19
5.3 List of Partners 19
5.4 Partnership Books 19
5.5 Representation by Partners 20
VI CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP;
CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS 22
6.1 Partners' Capital and Interests in the
Partnership 22
6.2 Capital Accounts 23
6.3 Timing and Amount of Allocations of Profits
and Losses 24
6.4 General Allocations of Profits and Losses 25
6.5 Additional Allocation Provisions 26
6.6 Tax Allocations 29
6.7 Distributions of Operating and Capital Cash Flow 29
6.8 Revisions to Reflect Issuance of Additional
Partnership Interests 30
VII BOOKS OF ACCOUNT, RECORDS AND REPORTS; TAX ITEMS 30
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
7.1 Records and Accounting 30
7.2 Fiscal Year 31
7.3 Reports 31
7.4 Tax Matters 31
VIII TRANSFERS AND WITHDRAWALS 34
8.1 Transfer 34
8.2 Transfer of Partnership Interests of the General
Partner and Holders of Common Partnership
Interests 34
8.3 Limited Partners' Rights to Transfer 35
8.4 Substituted Partner 36
8.5 Assignee 37
8.6 General Provisions 37
IX SUCCESSSOR GENERAL PARTNER AND ADMISSION OF ADDITIONAL
PARTNERS 40
9.1 Admission of Successor General Partner 40
9.2 Admission of Additional Partners 40
9.3 Amendment of Agreement and Certificate of
Formation 41
X DISSOLUTION AND TERMINATION 41
10.1 Dissolution 41
10.2 Effect of Filing of Dissolving Statement 42
10.3 Winding Up, Liquidation and Distribution of
Assets 42
10.4 Certificate of Dissolution 43
10.5 Effect of Dissolution 43
10.6 Return of Contribution Nonrecourse to Other
Partners 44
XI MISCELLANEOUS PROVISIONS 44
11.1 Notices 44
11.2 Books of Account and Records 44
11.3 Application of Ohio Law 44
11.4 Waiver of Action for Partition 44
11.5 Amendments 45
11.6 Execution of Additional Instruments 46
11.7 Headings 46
11.8 Waivers 46
11.9 Rights and Remedies Cumulative 46
11.10 Severability 46
11.11 Heirs, Successors and Assigns 46
11.12 Creditors 47
11.13 Counterparts 47
11.14 Integrated Agreement 47
</TABLE>
<PAGE>
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
LEXFORD PROPERTIES, L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (the
"Agreement") is made and entered into as of the 1st day of October, 1999, by and
between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership, as a
limited partner ("ERP"), and LEXFORD PARTNERS, L.L.C., an Ohio limited liability
company, as the general partner ("Lexford LLC" or the "General Partner").
R E C I T A L S:
WHEREAS, Lexford Properties, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the State of Ohio by a Certificate of
Limited Partnership filed with the Ohio Secretary of State on March 30, 1998
(the "Certificate");
WHEREAS, prior to the date hereof, the Partnership was governed by that
certain Agreement of Limited Partnership of the Partnership, dated as of April
29, 1999, as amended (the "Original Partnership Agreement"), by and between
Lexford LLC, as general partner, and Lexford Residential Trust, a Maryland real
estate investment trust, as limited partner ("Lexford");
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated
June 30, 1999 (the "Merger Agreement), on October 1, 1999, prior to the
execution hereof, Lexford merged with and into Equity Residential Properties
Trust, a Maryland real estate investment trust ("EQR") (the "Merger");
WHEREAS, pursuant to the Merger, EQR succeeded to all of Lexford's
rights and obligations as a limited partner in the Partnership;
WHEREAS, pursuant to that certain Assignment agreement, dated October
1, 1999, by and between EQR and ERP, subsequent to the Merger and immediately
prior to the execution hereof, EQR assigned and ERP accepted all of EQR's rights
and obligations as a limited partner in the Partnership; and
WHEREAS, ERP and Lexford LLC now desire to amend and restate the
Original Partnership Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS . Unless otherwise expressly provided herein,
the following terms used in this Limited Liability Partnership
Agreement shall have the following meanings:
(a) "ACT" shall mean the provisions of Title XVII, Chapter
1782 of the Ohio Revised Code, as it may be amended from time to time.
<PAGE>
(b) "ADDITIONAL PARTNER" shall mean any Person admitted to the
Partnership as a Partner pursuant to Section 9.2 hereof.
(c) "ADJUSTED CAPITAL ACCOUNT" means the Capital Account
maintained for each Partner as of the end of each Fiscal Year (i)
increased by any amounts which such Partner is obligated to restore
pursuant to any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury
Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased
by the items described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital
Account is intended to comply with the provisions of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(d) "ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean with respect
to any Partner, the deficit balance, if any, in such Partner's Capital
Account as of the end of the relevant Fiscal Year, after giving effect
to the following adjustments:
(i) decrease such deficit by any amounts which such
Partner is obligated to restore pursuant to this Agreement or
is deemed to be obligated to restore pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) or the penultimate
sentence of each of Treasury Regulation Sections 1.704-2(i)(5)
and 1.704-2(g)(1); and
(ii) increase such deficit by the items described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and
(6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(e) "AFFILIATE" means, with respect to any Person, (i) any
Person directly or indirectly controlling, controlled by, or under
common control with such Person, (ii) any Person owning or controlling
ten percent (10%) or more of the outstanding voting interests of such
Person, (iii) any officer, director, manager, partner, or general
partner of such Person, or (iv) any Person who is an officer, director,
manager, general partner, partner, trustee, or holder of ten percent
(10%) or more of the voting interests of any Person described in
clauses (i) through (iii) of this sentence. For purposes of this
definition, the term "controls", "is controlled by" or "is under common
control with" shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies
of a person or entity, whether through the ownership of voting
securities, by contract or otherwise.
(f) "ASSIGNEE" shall mean a Person to whom one or more
Partnership Interests have been transferred in a manner permitted under
this Agreement, but who has not become a Substituted Partner, and who
has the rights set forth in Section 8.5.
(g) "BANKRUPTCY" shall mean the definition ascribed to such
term in the definition of the term "Incapacity".
(h) "CAPITAL ACCOUNT" as of any given date shall mean the
Capital Account maintained for each Partner pursuant to Section 6.2
hereafter.
<PAGE>
(i) "CAPITAL CASH FLOW" shall mean, for purposes of this
Agreement and for a given period of time, the sum of the cash proceeds
plus the fair market value of any other consideration received by the
Partnership from a Major Capital Event, less the sum of (i) any portion
of such proceeds applied toward the repayment of any indebtedness being
refinanced or secured by or relating to the property being disposed of,
plus (ii) reasonable reserves required in the sole discretion of the
General Partner, plus (iii) any expenses incurred in connection with
such Major Capital Event.
(j) "CAPITAL CONTRIBUTION" shall mean the sum of any cash plus
the fair market value of any property, as determined by the General
Partner, contributed to the capital of the Partnership by a Partner.
(k) "CERTIFICATE" shall have the meaning as described in the
Recitals hereto.
(l) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding provisions of
succeeding law.
(m) "COMMON PARTNERSHIP INTERESTS" shall mean any Partnership
Interest other than a Preference Interest.
(n) "DEPRECIATION" shall mean, for each Fiscal Year or other
period, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or
other period, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the
beginning of such year or other period, Depreciation shall be an amount
which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery
deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such
year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the
General Partner.
(o) "DISTRIBUTABLE FUNDS FROM PARTNERSHIP OPERATIONS" shall
mean the sum of Operating Cash Flow and Capital Cash Flow.
(p) "ENTITY" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture,
trust, business trust, cooperative or association or any foreign trust
or foreign business organization.
(q) "EQR" shall mean Equity Residential Properties Trust, a
Maryland real estate investment trust.
(r) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
(s) "ERP" shall mean ERP Operating Limited Partnership, an
Illinois limited partnership.
(t) "FISCAL YEAR" shall mean the Partnership's fiscal year,
which shall be the calendar year.
<PAGE>
(u) "GENERAL PARTNER" shall mean ERP or such other Partner as
the Partners may designate in accordance with this Agreement.
(v) "GROSS ASSET VALUE" shall mean, with respect to any asset,
the asset's adjusted basis for federal income tax purposes, except as
follows:
(i) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross
fair market value of such asset, as determined by the General
Partner.
(ii) Immediately prior to the times listed below, the
Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as
determined by the General Partner using such reasonable method
of valuation as it may adopt:
(1) the acquisition of an additional
interest in the Partnership by a new or existing
Partner in exchange for more than a DE MINIMIS
Capital Contribution, if the General Partner
reasonably determines that such adjustment is
necessary or appropriate to reflect the relative
economic interests of the Partners in the
Partnership;
(2) the distribution by the Partnership to a
Partner of more than a DE MINIMIS amount of
Partnership property as consideration for an interest
in the Partnership if the General Partner reasonably
determines that such adjustment is necessary or
appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(3) the liquidation of the Partnership
within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(g); and
(4) at such other times as the General
Partner shall reasonably determine necessary or
advisable in order to comply with Treasury Regulation
Sections 1.704-1(b) and 1.704-2.
(iii) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be the gross fair market value
of such asset on the date of distribution, as determined by
the General Partner.
(iv) The Gross Asset Value of Partnership assets
shall be increased (or decreased) to reflect any adjustments
to the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that
such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset
Values shall not be adjusted pursuant to this subparagraph
(iv) to the extent that the General Partner reasonably
determines that an adjustment pursuant to subparagraph (ii) is
necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this
subparagraph (iv).
(v) If the Gross Asset Value of a Partnership asset
has been determined or adjusted pursuant to subparagraph (i),
(ii) or (iv), such Gross Asset Value shall thereafter
<PAGE>
be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing Profits and
Losses.
(w) "INCAPACITY" or "INCAPACITATED" means, (i) as to any
individual Partner, death, total physical disability or entry by a
court of competent jurisdiction adjudicating such Partner incompetent
to manage his or her Person or estate, (ii) as to any corporation which
is a Partner, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its charter, (iii)
as to any partnership or limited liability company which is a Partner,
the dissolution and commencement of winding up of the partnership or
limited liability company, (iv) as to any estate which is a Partner,
the distribution by the fiduciary of the estate's entire interest in
the Partnership, (v) as to any trustee of a trust which is a Partner,
the termination of the trust (but not the substitution of a new
trustee) or (vi) as to any Partner, the Bankruptcy of such Partner. For
purposes of this definition, Bankruptcy of a Partner shall be deemed to
have occurred when (a) the Partner commences a voluntary proceeding
seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect,
(b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the
Partner, (c) the Partner executes and delivers a general assignment for
the benefit of the Partner's creditors, (d) the Partner files an answer
or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding
of the nature described in clause (b) above, (e) the Partner seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed
within one hundred twenty (120) days after the commencement thereof,
(g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver of liquidator has not been vacated or stayed within
ninety (90) days of such appointment or (h) an appointment referred to
in clause (g) is not vacated within ninety (90) days after the
expiration of any such stay.
(x) "INDEMNITEE" (i) shall mean any Person subject to a claim
or demand made or threatened to be made a party to, or involved or
threatened to be involved in, an action, suit or proceeding by reason
of his or her status as (a) the General Partner or (b) a director,
officer, employee or agent of the Partnership or the General Partner,
and (ii) such other Persons (including Affiliates of the General
Partner or the Partnership) as the General Partner may designate from
time to time, in its sole and absolute discretion.
(y) "LIMITED PARTNER" shall mean and include any Partner that
is not a General Partner.
(z) "LOSSES" shall have the meaning given it in Section 6.3(c)
hereafter.
(aa) "MAJOR CAPITAL EVENT" The placement of new or additional
financing upon all or any portion of the Partnership's assets or any
interest therein; the refinancing of any existing or new financing upon
all or any portion of the Partnership's assets or any interest therein;
or the sale, exchange, condemnation, casualty loss or other disposition
(whether voluntary or involuntary) of substantially all of the
Partnership's assets (including any disposition in consideration for
securities in any real estate investment trust or other entity).
(bb) "MAJORITY-IN-INTEREST" shall mean Partner(s) who,
individually or collectively, own greater than fifty percent (50%) of
the Percentage Interests.
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(cc) "NONRECOURSE DEDUCTIONS" shall have the meaning set forth
in Treasury Regulation Section 1.704-2(b)(1), and the amount of
Nonrecourse Deductions for a Fiscal Year of the Partnership shall be
determined in accordance with the rules of Treasury Regulation Section
1.704-2(c).
(dd) "NONRECOURSE LIABILITY" shall have the meaning set forth
in Treasury Regulation Section 1.752-1(a)(2).
(ee) "OFFICIAL RECORDS" shall mean the Partnership's official
records which are to be maintained by the General Partner of the
Partnership at the Partnership's principal place of business.
(ff) "OPERATING CASH FLOW" shall mean, for purposes of this
Agreement and for a given period of time, all cash received by the
Partnership from any source (but excluding Capital Cash Flow), less the
sum of the following (to the extent not paid from Capital Cash Flow):
cash expended for all debts and expenses of the Partnership; principal
and interest payments on any indebtedness of the Partnership; capital
expenditures; and reasonable reserves required in the sole
determination of the General Partner.
(gg) "OTHER SECURITIES TERM SHEET" shall have the meaning
given it in Section 6.1(c) hereof.
(hh) "PARTNER" shall mean each of the Persons or Entities who
from time to time are admitted and continue as General Partners or
Limited Partners of the Partnership pursuant to the terms hereof.
(ii) "PARTNER MINIMUM GAIN" means an amount, with respect to
each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain
that would result if such Partner Nonrecourse Debt were treated as a
Nonrecourse Liability, determined in accordance with Treasury
Regulation Section 1.704-2(i)(3).
(jj) "PARTNER NONRECOURSE DEBT" shall mean "partner
nonrecourse debt" as defined in Treasury Regulation Section
1.704-2(b)(4).
(kk) "PARTNER NONRECOURSE DEDUCTIONS" shall mean "partner
nonrecourse deductions" as defined in Treasury Regulation Section
1.704-2(i)(2) and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Fiscal Year of the
Partnership shall be determined in accordance with the rules of
Treasury Regulation Section 1.704-2(i)(2).
(ll) "PARTNERSHIP" shall mean Lexford Properties, L.P., an
Ohio limited partnership.
(mm) "PARTNERSHIP INTEREST" shall mean a Partner's entire
interest in the Partnership, including such Partner's Percentage
Interest and such other rights and privileges that the Partner may
enjoy by being a Partner.
(nn) "PARTNERSHIP MINIMUM GAIN" shall mean "partnership
minimum gain" as defined in Treasury Regulation Section 1.704-2(b)(2),
and the amount of Partnership Minimum Gain, as well as any net increase
or decrease in Partnership Minimum Gain, for a Fiscal Year of the
Partnership shall be determined in accordance with the rules of
Treasury Regulation Section 1.704-2(d).
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(oo) "PERCENTAGE INTEREST" shall mean, for any Partner, the
percentage as set forth on Exhibit A hereto. Exhibit A shall be amended
from time to time to reflect any adjustments made to a Partner's
Percentage Interest.
(pp) "PERSON" shall mean any individual or entity, and the
heirs, executors, administrators, legal representatives, successors,
and assigns of such "Person" where the context so permits.
(qq) "PREFERENCE INTEREST" shall mean any class or series of
Partnership Interest designated as a Preference Interest pursuant to an
Other Securities Term Sheet adopted in accordance with Section 6.1(c)
hereof.
(rr) "PROFITS" shall have the meaning given it in Section
6.3(c) hereof.
(ss) "PROFITS" or "LOSSES" means for each Fiscal Year, an
amount equal to the Partnership's taxable income or loss for such
Fiscal Year, determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to this definition of
Profits or Losses shall be added to such taxable income or
loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section
705(a)(2)(B) expenditures pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits or Losses pursuant to this
definition of Profits or Losses shall be subtracted from such
taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subparagraph (ii) or
(iii) of the definition of Gross Asset Value, the amount of
such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing
Profits or Losses;
(iv) Gain or loss resulting from any disposition of
property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to
the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing
such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year;
(vi) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest
in the Partnership, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment
<PAGE>
decreases the basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provision of this
definition of Profits or Losses, any items of gross income or
deduction which are specially allocated pursuant to any Other
Securities Term Sheet and any items which are specially
allocated pursuant to Section 6.5 shall not be taken into
account in computing Profits or Losses. The amounts of items
of Partnership income, gain, loss, or deduction available to
be specially allocated pursuant to Section 6.5 shall be
determined by applying rules analogous to those set forth in
this definition of Profits or Losses.
(tt) "QUALIFIED TRANSFEREE" shall mean an "Accredited
Investor" as defined in Rule 501 promulgated under the Securities Act.
(uu) "REAL ESTATE INVESTMENT TRUST" shall mean a real estate
investment trust, as defined in Section 856 of the Code.
(vv) "REFERENCE RATE" shall mean the rate as announced, from
time to time, by Chemical Bank, a New York State banking corporation,
as its "base rate" or "reference rate".
(ww) "REGULATORY ALLOCATIONS" shall have the meaning set forth
in Section 6.5(a)(viii).
(xx) "REIT CHARTER" shall mean the Amended and Restated
Declaration of Trust of EQR.
(yy) "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
(zz) "SUBSIDIARY" shall mean with respect to any Person, any
corporation, limited liability company, trust, partnership or joint
venture, or other entity of which a majority of (i) the voting power of
the voting equity securities or (ii) the outstanding equity interests
is owned, directly or indirectly, by such Person.
(aaa) "SUBSTITUTED PARTNER" shall mean a Person admitted as a
Limited Partner under Section 8.4.
(bbb) "TAX ITEMS" shall have the meaning set forth in Section
6.6(a).
(ccc) "TREASURY REGULATIONS" shall include proposed, temporary
and final regulations promulgated under the Code in effect as of the
date of filing the Certificate and the corresponding sections of any
regulations subsequently issued that amend or supersede such
regulations.
(ddd) "UNITS" shall mean units of Common Partnership Interest
or Preference Interests, as the case may be.
1.2 INTERPRETATION . The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine and
neuter forms. As
<PAGE>
used in this Agreement, the words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." As
used in this Agreement, the terms "herein," "hereof" and "hereunder"
shall refer to this Agreement in its entirety. Any references in this
Agreement to "Sections" or "Articles" shall, unless otherwise
specified, refer to Sections or Articles, respectively, in this
Agreement.
ARTICLE II
ORGANIZATIONAL MATTERS
2.1 CONTINUATION . The Partners hereby agree to continue the
Partnership pursuant to the provisions of the Act and upon the terms
and conditions set forth in this Agreement.
2.2 NAME . The name of the Partnership is Lexford Properties,
L.P., provided that the General Partner may elect to transact business
in other names in those jurisdictions where they deem it necessary for
purposes of complying with the requirements of local law.
2.3 PRINCIPAL PLACE OF BUSINESS . The principal place of
business of the Partnership shall be Two N. Riverside Plaza, Suite 400,
Chicago, Illinois 60606. The Partnership may relocate its principal
place of business to any other place or places as the General Partner
may from time to time deem advisable. Additional offices may be
maintained and acts done at any other place appropriate for
accomplishing the purposes of the Partnership, all as determined by the
General Partner.
2.4 REGISTERED OFFICE AND REGISTERED AGENT . The Partnership's
initial registered office shall be at the office of its registered
agent at 50 W. Broad Street, Suite 1120, Columbus, Ohio 43215, and the
name of its initial registered agent at such address shall be Lexis
Document Services, Inc. The registered office and registered agent may
be changed from time to time by filing the address of the new
registered office and/or the name of the new registered agent with the
Ohio Secretary of State pursuant to the Act.
2.5 TERM . The term of the Partnership shall commence as of
the date hereof and shall be until October 1, 2049, unless sooner
terminated in accordance with either the provisions of this Agreement
or the Act.
2.6 POWER OF ATTORNEY .
(a) GENERAL. Each Partner and each Assignee who accepts a
Partnership Interest (or any rights, benefits or privileges associated
therewith) is deemed to irrevocably constitute and appoint the General
Partner, any liquidating trustee and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each
case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and
stead to:
(i) execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (a) all certificates,
documents and other instruments (including, without
limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner
or any liquidating trustee deems appropriate or necessary to
form, qualify or continue the existence or qualification of
the Partnership as a limited partnership in the State of Ohio
and in all other jurisdictions in which the Partnership may
conduct business or own property, (b) all instruments that the
<PAGE>
General Partner or any liquidating trustee deem appropriate or
necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms,
(c) all conveyances and other instruments or documents that
the General Partner or any liquidating trustee or deems
appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate of
cancellation, (d) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant
to, or other events described in, Article VIII or IX hereof or
the Capital Contribution of any Partner and (e) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of
Partnership Interests; and
(ii) execute, swear to, acknowledge and file all
ballots, consents, approvals, waivers, certificates and other
instruments appropriate or necessary, in the sole and absolute
discretion of the General Partner or any liquidating trustee,
to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action which is made or given by
the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole discretion
of the General Partner or any liquidating trustee, to
effectuate the terms or intent of this Agreement.
Nothing contained in this Section 2.6 shall be construed as authorizing
the General Partner or any liquidating trustee to amend this Agreement except in
accordance with Section 11.5 hereof or as may be otherwise expressly provided
for in this Agreement.
(b) IRREVOCABLE NATURE. The foregoing power of attorney is
hereby declared to be irrevocable and a power coupled with an interest,
in recognition of the fact that each of the Partners will be relying
upon the power of the General Partner or any liquidating trustee to act
as contemplated by this Agreement in any filing or other action by it
on behalf of the Partnership, and it shall survive and not be affected
by the subsequent Incapacity of any Partner or Assignee and the
transfer of all or any portion of such Partner's or Assignee's
Partnership Interests and shall extend to such Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such
Partner or Assignee hereby agrees to be bound by any representation
made by the General Partner or any liquidating trustee, acting in good
faith pursuant to such power of attorney; and each such Partner or
Assignee hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the General Partner or any
liquidating trustee, taken in good faith under such power of attorney.
Each Partner or Assignee shall execute and deliver to the General
Partner or the liquidating trustee, within fifteen (15) days after
receipt of the General Partner's or liquidating trustee's request
therefor, such further designation, powers of attorney and other
instruments as the General Partner or the liquidating trustee, as the
case may be, deems necessary to effectuate this Agreement and the
purposes of the Partnership.
ARTICLE III
BUSINESS OF PARTNERSHIP
3.1 PURPOSE AND BUSINESS . The purpose and nature of the
business to be conducted by the Partnership is (i) to conduct any
business that may be lawfully conducted by a limited partnership
organized pursuant to the Act; provided, however, that such business
shall be limited to and conducted in a manner as to permit EQR at all
times to be classified as a REIT, unless EQR ceases to qualify or is
not qualified as a REIT for any reason or reasons not related to the
<PAGE>
business conducted by the Partnership, (ii) to enter into any
corporation, partnership, joint venture, trust, limited liability
company or other similar arrangement to engage in any of the foregoing
or the ownership of interests in any entity engaged, directly or
indirectly, in any of the foregoing and (iii) to do anything necessary
or incidental to the foregoing. In connection with the foregoing, the
Partners acknowledge that the status of EQR as a REIT inures to the
benefit of all the Partners and not solely to EQR or its Affiliates.
3.2 POWERS . The Partnership is empowered to do any and all
acts and things necessary, appropriate, proper, advisable, incidental
to or convenient for the furtherance and accomplishment of the purposes
and business described herein and for the protection and benefit of the
Partnership, including, without limitation, full power and authority,
directly or through its ownership interest in other entities, to enter
into, perform and carry out contracts of any kind, borrow money and
issue evidences of indebtedness, whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and
develop real property, and lease, sell, transfer and dispose of real
property; provided, however, that the Partnership shall not take, or
refrain from taking, any action which, in the judgment of the General
Partner, in its sole and absolute discretion, (i) could adversely
affect the ability of EQR to continue to qualify as a REIT, (ii) could
subject EQR to any additional taxes under Section 857 or Section 4981
of the Code, (iii) could cause the Partnership to be classified as a
publicly traded partnership under Section 7704 of the Code, or (iv)
could violate any law or regulation of any governmental body or agency
having jurisdiction over any General Partner or its securities, unless
such action (or inaction) shall have been specifically consented to by
the General Partner in writing.
<PAGE>
ARTICLE IV
MANAGEMENT OF PARTNERSHIP;
RIGHTS AND DUTIES OF GENERAL PARTNER
4.1 MANAGEMENT .
(a) All management powers over the business and affairs of the
Partnership are and shall be vested exclusively in the General Partner,
and no other Partner or Person shall have any right or authority to act
for or by the Partnership except as permitted in this Agreement or as
required by law. No Partner is an agent of the Partnership solely by
virtue of being a Partner, and no Partner has authority to act for the
Partnership solely by virtue of being a Partner.
(b) Except as provided herein, each of the Partners agrees
that the General Partner is authorized to execute, deliver and perform
the above-mentioned agreements and transactions on behalf of the
Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement, the Act or any
applicable law, rule or regulation, to the full extent permitted under
the Act or other applicable law. The execution, delivery or performance
by the General Partner or the Partnership of any agreement authorized
or permitted under this Agreement shall not constitute a breach by the
General Partner of any duty that the General Partner may owe the
Partnership or the Partners or any other Persons under this Agreement
or of any duty stated or implied by law or equity.
(c) The General Partner shall not take any action (or fail to
take any action) if the consequence of such action (or inaction) would
be (i) to cause EQR to fail to qualify as a real estate investment
trust ("REIT") for federal or applicable state income tax purposes or
(ii) to cause ERP to fail to qualify as a partnership for federal or
applicable state income tax purposes, or (iii) to cause the
Partnership, ERP, or EQR to be classified as a publicly traded
partnership under Section 7704 of the Code or an "investment company"
as defined in, or otherwise be subject to regulation under, the
Investment Company Act of 1940, as amended.
4.2 LIABILITY FOR CERTAIN ACTS . The General Partner shall
perform its duties as General Partner in good faith, in a manner it or
its representatives reasonably believes to be in the best interests of
the Partnership, and with such care as an ordinarily prudent person in
a like position would use under similar circumstances. A General
Partner who so performs the duties as General Partner shall not have
any liability by reason of being or having been a General Partner of
the Partnership. The General Partner does not in any way guarantee the
return of the Partners' Capital Contributions or a profit for the
Partners from the operations of the Partnership. Notwithstanding any
other provision of this Agreement, the General Partner shall not be
liable to the Partnership or to any Partner for any loss or damage
sustained by the Partnership or any Partner, unless the loss or damage
shall have been the result of fraud, deceit, gross negligence, willful
misconduct, or a wrongful taking by the General Partner.
4.3 GENERAL PARTNER AND LIMITED PARTNERS HAVE NO EXCLUSIVE
DUTY TO PARTNERSHIP . The General Partner shall not be required to
manage the Partnership as its sole and exclusive function, and it (and
any Partner) may have other business interests and may engage in other
activities in addition to those relating to the Partnership. Neither
the Partnership nor any Partner shall have any right, by virtue of this
Agreement, to share or participate in such other investments or
activities of the General Partner and/or any other Partner or to the
income or proceeds derived therefrom, notwithstanding that such
investments or activities may be
<PAGE>
competitive with the business of the Partnership. Neither the General
Partner nor any other Partner shall incur any liability to the
Partnership or to any of the Partners as a result of engaging in any
other business or venture. The General Partner may, in its sole
discretion, on behalf of the Partnership, purchase, sell or lease real
or personal property from or to any Partner (including the General
Partner) or pay fees or compensation to any Partner (including the
General Partner) for any efforts or commitments in connection with the
business of the Partnership or otherwise deal with any Partner
(including the General Partner) or any firm in which any Partner
(including the General Partner) is directly or indirectly interested,
and neither the Partnership nor any of its Partners shall have any
rights in or to any income or profits received by such Partner or
General Partner in a transaction with the Partnership.
4.4 INDEMNIFICATION .
(a) GENERAL. The Partnership shall indemnify each Indemnitee
to the fullest extent provided by the Act from and against any and all
losses, claims, damages, liabilities, joint or several, expenses
(including, without limitation, reasonable attorneys fees and other
legal fees and expenses), judgments, fines, settlements and other
amounts arising from or in connection with any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or
investigative, incurred by the Indemnitee and relating to the
Partnership or the General Partner or the operation of, or the
ownership of property by, any of them as set forth in this Agreement in
which any such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or
omission of the Indemnitee was material to the matter giving rise to
the proceeding and either was committed in bad faith or was the result
of active and deliberate dishonesty, (ii) the Indemnitee actually
received an improper personal benefit in money, property or services or
(iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful.
Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligation for any indebtedness or other obligation or otherwise, for
any indebtedness of the Partnership or any Subsidiary of the
Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken
subject to), and the General Partner is hereby authorized and
empowered, on behalf of the Partnership, to enter into one or more
indemnity agreements consistent with the provisions of this Section 4.4
in favor of any Indemnitee having or potentially having liability for
any such indebtedness. The termination of any proceeding by judgment,
order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this
Section 4.4. The termination of any proceeding by conviction or upon a
plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the
Indemnitee acted in a manner contrary to that specified in this Section
4.4. With respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 4.4 shall be made only out of
the assets of the Partnership, and any insurance proceeds from the
liability policy covering the General Partner and any Indemnitee, and
neither a General Partner nor any Limited Partner shall have any
obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under
this Section 4.4.
(b) ADVANCEMENT OF EXPENSES. Reasonable expenses expected to
be incurred by an Indemnitee shall be paid or reimbursed by the
Partnership in advance of the final disposition of any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative
or investigative made or threatened against an Indemnitee upon receipt
by the Partnership of (i) a written affirmation by the Indemnitee of
the Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this
Section 4.4 has
<PAGE>
been met and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined
that the standard of conduct has not been met.
(c) NO LIMITATION OF RIGHTS. The indemnification provided by
this Section 4.4 shall be in addition to any other rights to which an
Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise,
and shall continue as to an Indemnitee who has ceased to serve in such
capacity unless otherwise provided in a written agreement pursuant to
which such Indemnitee is indemnified.
(d) INSURANCE. The Partnership may purchase and maintain
insurance on behalf of the Indemnitees and such other Persons as the
General Partner shall determine against any liability that may be
asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement.
(e) BENEFIT PLAN FIDUCIARY. For purposes of this Section 4.4,
(i) excise taxes assessed on an Indemnitee, or for which the Indemnitee
is otherwise found liable, with respect to an ERISA Plan pursuant to
applicable law shall constitute fines within the meaning of this
Section 4.4 and (iii) actions taken or omitted by the Indemnitee with
respect to an ERISA Plan in the performance of its duties for a purpose
reasonably believed by it to be in the interest of the participants and
beneficiaries of such ERISA Plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
(f) NO PERSONAL LIABILITY FOR PARTNERS. In no event may an
Indemnitee subject any of the Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.
(g) INTERESTED TRANSACTIONS. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 4.4 because the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by
the terms of this Agreement.
(h) BENEFIT. The provisions of this Section 4.4 are for the
benefit of the Indemnitees, their employees, officers, directors,
trustees, heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
Any amendment, modification or repeal of this Section 4.4, or any
provision hereof, shall be prospective only and shall not in any way
affect the limitation on the Partnership's liability to any Indemnitee
under this Section 4.4 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from
or related to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
(i) INDEMNIFICATION PAYMENTS NOT DISTRIBUTIONS. If and to the
extent any payments to the General Partner pursuant to this Section 4.4
constitute gross income to the General Partner (as opposed to the
repayment of advances made on behalf of the Partnership), such amounts
shall constitute guaranteed payments within the meaning of Section
707(c) of the Code, shall be treated consistently therewith by the
Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners' Capital Accounts.
(j) EXCEPTION TO INDEMNIFICATION. Notwithstanding anything to
the contrary in this Agreement, a General Partner shall not be entitled
to indemnification hereunder for any loss,
<PAGE>
claim, damage, liability or expense for which such General Partner is
obligated to indemnify the Partnership under any other agreement
between such General Partner and the Partnership.
4.5 OTHER MATTERS CONCERNING THE GENERAL PARTNER .
(a) RELIANCE ON DOCUMENTS. The General Partner may rely and
shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture or other paper or
document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.
(b) RELIANCE ON ADVISORS. The General Partner may consult with
legal counsel, accountants, appraisers, management consultants,
investment bankers and other consultants and advisers selected by them,
and any act taken or omitted to be taken in reliance upon the opinion
of such Persons as to matters which the General Partner reasonably
believes to be within such Person's professional or expert competence
shall be conclusively presumed to have been done or omitted in good
faith and in accordance with such opinion.
(c) ACTION THROUGH AGENTS. The General Partner shall have the
right, in respect of any of its powers or obligations hereunder, to act
through any of its duly authorized officers and a duly appointed
attorney or attorneys-in-fact. Each such attorney shall, to the extent
provided by the General Partner in the power of attorney, have full
power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
(d) ACTIONS TO MAINTAIN REIT STATUS. 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 a 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 allow EQR to avoid incurring any liability
for taxes under Section 857 or 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the
Partners.
4.6 RELIANCE BY THIRD PARTIES . Notwithstanding anything to
the contrary in this Agreement, any Person dealing with the Partnership
shall be entitled to assume that the General Partner has full power and
authority, without consent or approval of any other Partner or Person,
to encumber, sell or otherwise use in any manner any and all assets of
the Partnership, to enter into any contracts on behalf of the
Partnership and to take any and all actions on behalf of the
Partnership, and such Person shall be entitled to deal with the General
Partner as if the General Partner were the Partnership's sole party in
interest, both legally and beneficially. Each Partner hereby waives any
and all defenses or other remedies which may be available against such
Person to contest, negate or disaffirm any action of the General
Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been
complied with or to inquire into the necessity or expedience of any act
or action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery
of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such
certificate, document or instrument was duly authorized and empowered
to do so for and on behalf of the Partnership, and (iii) such
certificate, document or
<PAGE>
instrument was duly executed and delivered in accordance with the terms
and provisions of this Agreement and is binding upon the Partnership.
4.7 AFFILIATED COMPENSATION . The General Partner may retain
such Persons or Entities as it shall determine (including any Person or
Entity in which the General Partner shall have an interest or of which
it is an Affiliate) to provide services to or on behalf of the
Partnership for such reasonable compensation as the General Partner
deems to be appropriate.
4.8 TITLE TO PARTNERSHIP ASSETS . Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no
Partners, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets, including any bank accounts, may
be held in the name of the Partnership, the General Partner or one or
more nominees, as the General Partner may determine, including
Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is held
in the name of any General Partner or any nominee or Affiliate of the
General Partner shall be held by that General Partner for the use and
benefit of the Partnership in accordance with the provisions of this
Agreement. All Partnership assets shall be recorded as the property of
the Partnership in its books and records, irrespective of the name in
which legal title to such Partnership assets is held.
ARTICLE V
RIGHTS AND OBLIGATIONS OF PARTNERS
5.1 ADMISSION OF PARTNERS . Each of the Partners listed on
Exhibit A is hereby admitted and shall be recognized as a Partner of
the Partnership. No other Person shall be admitted or recognized as a
Partner of the Partnership, unless such Person is admitted in
accordance with this Agreement. The Partnership shall not at any time
have more than one hundred (100) Partners. For purposes of the
preceding sentence, a Partner shall include any Person indirectly
owning an interest in the Partnership through a partnership, limited
liability company, S corporation or grantor trust (such entity, a "flow
through entity"), but only if (i) substantially all of the value of
such Person's interest in the flow through entity is attributable to
the flow through entity's interest (direct or indirect) in the
Partnership, in each case within the meaning of Treasury Regulation
Section 1.7704-1(h) and (ii) a principal purpose of the use of the flow
through entity is to permit the Partnership to satisfy the 100 partner
limitation in Treasury Regulation Section 1.7704-1(h)(1)(ii).
5.2 LIMITATION OF LIABILITY . Each Partner's liability shall
be limited as set forth in this Agreement, the Act and other applicable
law.
5.3 LIST OF PARTNERS . Upon written request of any Partner,
the General Partner shall provide a list showing the names, addresses
and Percentage Interests of all Partners.
5.4 PARTNERSHIP BOOKS . The General Partner of the Partnership
shall maintain and preserve, during the term of the Partnership, and
for a time period thereafter consistent with reasonable record
retention policies, all accounts, books, Official Records and other
relevant Partnership documents. Upon reasonable request, each Partner
shall have the right, during ordinary business hours, to inspect and
copy such Partnership documents at the requesting Partner's expense.
<PAGE>
5.5 REPRESENTATION BY PARTNERS . Each Partner represents and
warrants to the other Partners and to the Partnership as follows:
(a) All transactions contemplated by this Agreement to be
performed by such Partner have been duly authorized by all necessary
action and do not require the consent or approval of any third party,
and such Partner has all necessary power with respect thereto.
(b) The consummation of the transactions contemplated by this
Agreement will not (and with the giving of notice or lapse of time or
both would not) result in a breach or violation of, or a default or
loss of contractual benefits under, any trust agreement or other
agreement by which such Partner or any of such Partner's properties is
bound, or any statute, regulation, order or other law to which such
Partner or any of such Partner's properties is subject, or give rise to
a lien or other encumbrance upon any of such Partner's properties or
assets.
(c) This Agreement is a valid and binding agreement on the
part of such Partner, enforceable in accordance with its terms.
(d) Such Partner's interest in the Partnership will be
acquired solely by and for the account of such Partner and is not being
purchased for subdivision, fractionalization, resale or distribution;
such Partner has no contract, undertaking, agreement or arrangement
with any person to sell or transfer to such person or anyone else such
Partner's interests in the Partnership (or any part thereof); and such
Partner has no present plans or intentions to enter into any such
contract, undertaking or arrangement.
(e) Such Partner's interests in the Partnership have not and
will not be registered under the federal Securities Act of 1933, as
amended, or the securities laws of any state, and cannot be sold or
transferred without compliance with the registration provisions of said
Act or state laws or compliance with exemptions, if any, available
thereunder. Such Partner understands that neither the Partnership nor
any Partner have any obligation or intention to register the interests
in the Partnership under any federal or state securities act or law, or
to file the reports to make public the information required by Rule 144
under the Securities Act of 1933, as amended.
(f) Such Partner: (i) has such knowledge and experience in
financial and business matters in general, and in investments of the
type made by the Partnership in particular, that such Partner is
capable of evaluating the merits and risks of an investment in the
Partnership; (ii) has a financial condition that is such that such
Partner has no need for liquidity with respect to such Partner's
investment in the Partnership to satisfy any existing or contemplated
undertaking or indebtedness; (iii) is able to bear the economic risk of
such Partner's investment in the Partnership for an indefinite period
of time, including the risk of losing all of such investment, and loss
of such investment would not materially adversely affect such Partner;
(iv) has either secured independent tax advice with respect to the
investment in the Partnership, upon which such Partner is solely
relying, or such Partner is sufficiently familiar with the income
taxation of entities similar to the Partnership that such Partner has
deemed such independent advice unnecessary; and (v) has sufficient
liquidity and net worth to satisfy, when required, its financial
commitments to the Partnership.
(g) Such Partner acknowledges that all documents pertaining to
the transaction have been made available to it and such Partner has
been allowed an opportunity to ask questions and receive answers
thereto and to verify and clarify any information contained in the
documents.
<PAGE>
(h) Such Partner has relied solely upon the documents
submitted to such Partner and independent investigations made by such
Partner in making the decision to become a Partner, and acknowledges
that no representations or agreements other than those set forth in
this Agreement have been made in respect thereto.
(i) Such Partner expressly acknowledges that: (i) such
Partner's interests in the Partnership are speculative investments that
involve a high degree of risk of loss of the entire investment of such
Partner in the Partnership; (ii) no federal or state agency has
reviewed or passed upon the adequacy or accuracy of the information set
forth in the documents submitted to such Partner or made any finding or
determination as to the fairness for investment, or any recommendation
or endorsement of an investment in the Partnership; (iii) there are
restrictions on the transferability of the interests in the
Partnership; there will be no public market for the interests in the
Partnership; and, accordingly, it may not be possible for such Partner
to liquidate such Partner's investment in the Partnership; and (iv) any
anticipated federal or state income tax benefits applicable to such
Partner's interests in the Partnership may be lost through changes in,
or adverse interpretations of, existing laws and regulations.
(j) Such Partner has not offered or sold to any Person
interests in such Partner that could or would have the effect of
subjecting the Partnership to the registration requirements of the
federal Securities Act of 1933, as amended, or any applicable state
securities law, or exposing the Partnership, the other Partners or any
Affiliates of the other Partners to any disclosure obligations or
liabilities under any applicable federal or state securities law.
(k) Such Partner is an "accredited investor", within the
meaning of Rule 501 promulgated under the Securities Act of 1933. A
Partner who receives the return in whole or in part of its contribution
is liable to the Partnership only to the extent, if any, provided by
the Act.
ARTICLE VI
CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP; CAPITAL ACCOUNTS;
DISTRIBUTIONS; ALLOCATIONS
6.1 PARTNERS' CAPITAL AND INTERESTS IN THE PARTNERSHIP .
(a) INITIAL CAPITAL CONTRIBUTIONS. The Partners shall own
Partnership Interests of the class and in the amounts set forth in
Exhibit A and shall have a Percentage Interest in the Partnership as
set forth in Exhibit A, which Percentage Interest shall be adjusted in
Exhibit A from time to time by the General Partner to the extent
necessary to accurately reflect exchanges, redemptions, Capital
Contributions, the issuance of additional Partnership Interests or
similar events having an effect on a Partner's Percentage Interest.
Except as required by law or as otherwise provided in subsection (b)
hereof and Section 7.4(e), no Partner shall be required or permitted to
make any additional Capital Contributions or loans to the Partnership.
(b) GENERAL. The General Partner may, at any time and from
time to time, determine that the Partnership requires additional funds
("Additional Funds") for the acquisition of additional properties or
for such other Partnership purposes as the General Partner may
determine. Additional Funds may be raised by the Partnership, at the
election of the General Partner, in any manner provided in, and in
accordance with, the terms of this subsection (b). No Person shall have
any preemptive, preferential or similar right or rights to subscribe
for or acquire any Partnership Interest.
<PAGE>
(c) ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS. The General
Partner may raise all or any portion of the Additional Funds by
accepting additional Capital Contributions of cash. The General Partner
may also accept additional Capital Contributions of real property or
other non-cash assets. In connection with any such additional Capital
Contributions (of cash or property), the General Partner is hereby
authorized to cause the Partnership from time to time to issue to
Partners (including the General Partner) or other Persons (including,
without limitation, in connection with the contribution of property to
the Partnership) additional Common Partnership Interests, or Preference
Interests, all as shall be determined by the General Partner in its
sole and absolute discretion subject to Ohio law, and as set forth by
an other securities term sheet to this Agreement (an "Other Securities
Term Sheet"), including without limitation: (i) the allocations of
items of Profit, Loss, income, gain, loss, deduction and credit to such
class or series of Preference Interests; (ii) the right of each such
class or series of Preference Interests to share in distribution of
Distributable Funds from Partnership Operations; (iii) the rights of
each such class or series of Preference Interests upon dissolution and
liquidation of the Partnership; and (iv) the right to vote. In the
event that the Partnership issues additional Preference Interests
pursuant to this subsection (c), the General Partner shall make such
revisions to this Agreement (including but not limited to an Other
Securities Term Sheet and the revisions described in Sections 9.3 and
6.8) as it determines are necessary to reflect the issuance of such
additional Preference Interests.
(d) PERCENTAGE INTEREST ADJUSTMENTS IN THE CASE OF CAPITAL
CONTRIBUTIONS FOR PARTNERSHIP INTERESTS. Upon the acceptance of
additional Capital Contributions in exchange for Partnership Interests,
the Percentage Interest related thereto, and the Percentage Interest of
each other Partner shall be equal to the amounts agreed to by the
Partnership and the contributors.
(e) NO PREEMPTIVE RIGHTS. Except to the extent expressly
granted by the Partnership, pursuant to another agreement, no Person
shall have any preemptive, preferential or other similar right with
respect to (i) making additional Capital Contributions to the
Partnership or (ii) issuance or sale of any Partnership Interests.
(f) LIMITED LIABILITY. Anything in this Agreement to the
contrary notwithstanding, the personal liability of any Partner arising
out of or in any manner relating to the Partnership shall be limited to
and shall not exceed that Partner's Capital Contribution made and
required to be made hereunder. No Partner shall have any personal
liability for liabilities or obligations of the Partnership, except to
the extent of its Capital Contributions as aforesaid, and, except as
aforesaid, no Partner shall be required to make any further or
additional contributions to the capital of the Partnership or to lend
or advance funds to the Partnership for any purpose.
(g) NO BENEFIT TO CREDITORS. The obligation, if any, of a
Partner to contribute to the capital of the Partnership is solely and
exclusively for the benefit of the Partnership and the Partners, and is
not intended to confer rights on any third party. Without limiting the
generality of the foregoing, no creditor of the Partnership shall be
deemed a third party beneficiary of any obligation of any Partner to
contribute capital or make advances to the Partnership.
6.2 CAPITAL ACCOUNTS .
(a) A separate Capital Account shall be maintained for each
Partner. Each Partner's Capital Account shall be (a) CREDITED WITH (i)
the amount of money contributed by such Partner, (ii) the Gross Asset
Value of property contributed by such Partner (net of liabilities
encumbering such contributed property that the Partnership is
considered to assume or take subject to under
<PAGE>
Section 752 of the Code), and (iii) allocations to such Partner of
Partnership income and gain (or items thereof) (including income and
gain exempt from tax and income and gain described in Treasury
Regulation Section 1.704-1(b)(2)(iv)(g), but excluding income and gain
described in Treasury Regulation Section 1.704-1(b)(4)(i)); and (b)
DEBITED WITH (i) the amount of money distributed to such Partner, (ii)
the Gross Asset Value of property distributed to such Partner (net of
liabilities encumbering such distributed property that such Partner is
considered to assume or take subject to under Section 752 of the Code),
(iii) allocations to such Partner of expenditures described in Section
705(a)(2)(B) of the Code (including expenditures deemed to be Section
705(a)(2)(B) expenditures under Treasury Regulation Section
1.704-1(b)(2)(iv)(i)), and (iv) allocations to such Partner of
Partnership loss and deduction (or item thereof) (including loss and
deduction described in Treasury Regulation Section
1.704-1(b)(2)(iv)(g), but excluding: (A) items described in (b)(iii)
above, and (B) loss or deduction described in Treasury Regulations
Sections 1.704-1(b)(4)(i) or (iii)).
(b) The Capital Accounts of the Partners may, in the sole
discretion of the General Partner, be adjusted to reflect a revaluation
of Partnership property (including intangible assets such as goodwill)
on the books of the Partnership if such adjustments are made
principally for a substantial non-tax business purpose (i) in
connection with a contribution of money or other property (other than a
DE MINIMIS amount) to the Partnership by a new or existing Partner as
consideration for an interest in the Partnership, or (ii) in connection
with the liquidation of the Partnership or a distribution of money or
other property (other than a DE MINIMIS amount) by the Partnership to a
retiring or continuing Partner as consideration for an interest in the
Partnership. Such Capital Account adjustments, if made under these
circumstances, shall (i) be based on the fair market value of
Partnership property (taking Section 7701(g) of the Code into account)
on the date of adjustment, (ii) reflect the manner in which the
unrealized income, gain, loss or deduction inherent in such property
(that has not been reflected in the Capital Accounts previously) would
be allocated among the Partners if there were a taxable disposition of
such property for such fair market value on that date and (iii) be made
in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g) for
allocations to the Partners of depreciation, depletion, amortization,
and gain or loss, as computed for book purposes, with respect to such
property.
(c) No Partner shall be entitled to a return of its Capital
Contributions except by way of the distribution to it of assets upon
the dissolution of the Partnership pursuant to the provisions of this
Agreement. No interest shall be allocated to any Partner on the amount
of its Capital Account.
(d) Except as provided in this Agreement or any Other
Securities Term Sheet, there shall be no priority of one or more of the
Partners over other Partners as to a return of Capital Contributions,
withdrawals or distributions of Distributable Funds from Partnership
Operations.
(e) A negative Capital Account of any Partner shall not be
considered an asset of the Partnership at any time, and no Partner
having a negative Capital Account shall be obliged to restore its
negative Capital Account.
6.3 TIMING AND AMOUNT OF ALLOCATIONS OF PROFITS AND LOSSES .
Profits and Losses of the Partnership shall be determined and allocated
with respect to each Fiscal Year of the Partnership as of the end of
each such year. Subject to the other provisions of this Article 6, an
allocation to a Partner of a share of Profits or Losses shall be
treated as an allocation of the same share of each item of income,
gain, loss or deduction that is taken into account in computing Profits
or Losses.
<PAGE>
6.4 GENERAL ALLOCATIONS OF PROFITS AND LOSSES .
(a) IN GENERAL. Except as otherwise provided in this Article
6, Profits and Losses allocable with respect to a class of Partnership
Interests, shall be allocated to each of the Partners holding such
class of Partnership Interests in accordance with their respective
Percentage Interest of such class.
(b) (i) PROFITS. Except as provided in Section 6.5, Profits
for any Fiscal Year shall be allocated in the following manner and
order of priority:
(1) First, 100% to the holders of Common
Partnership Interests in an amount equal to the
excess, if any, of the cumulative Losses allocated to
the holders of Common Partnership Interests pursuant
to Section 6.4(b)(ii)(3) for all prior Fiscal Years
minus the cumulative Profits allocated to such
holders pursuant to this Section 6.4(b)(i)(1) for all
prior Fiscal Years;
(2) Second, 100% to the holders of
Preference Partnership Interests in an amount equal
to the excess, if any, of the cumulative Losses
allocated to such holders pursuant to Section
6.4(b)(ii)(2) for all prior Fiscal Years minus the
cumulative Profits allocated to such holders pursuant
to this Section 6.4(b)(i)(2) for all prior Fiscal
Years;
(3) Third, 100% to the holders of Common
Partnership Interests in an amount equal to the
excess, if any, of the cumulative Losses allocated to
each such holder pursuant to Section 6.4(b)(ii)(1)
for all prior Fiscal Years minus the cumulative
Profits allocated to each holder pursuant to this
Section 6.2(b)(i)(3) for all prior Fiscal Years; and
(4) 100% to the holders of Common
Partnership Interests in accordance with their
respective Percentage Interests in the Common
Partnership Interests.
To the extent the allocations of Profits set forth above in any
paragraph of this Section 6.4(b)(i) are not sufficient to entirely
satisfy the allocation set forth in such paragraph, such allocation
shall be made in proration to the total amount that would have been
allocated pursuant to such paragraph without regard to such shortfall.
(ii) LOSSES. Except as provided in Section 6.5,
Losses for any Fiscal Year shall be allocated in the following
manner and order of priority:
(1) First, 100% to the holders of Common
Partnership Interests in accordance with their
respective Percentage Interests, until the Adjusted
Capital Account (ignoring for this purpose any
amounts a Partner is obligated to contribute to the
capital of the Partnership or is deemed obligated to
contribute to the capital of the Partnership pursuant
to Treasury Regulation Section
1.704-1(b)(2)(ii)(c)(2) and ignoring the Partner's
Preference Interest) of each such Partner is zero;
(2) Second, 100% to the holders of
Preference Interests, pro rata, in proportion to
their Adjusted Capital Account balances, until the
Adjusted Capital
<PAGE>
Account of each such Partner is zero; provided,
however that if there are multiple classes of
Preference Interests with different liquidation
preferences, then Losses allocated pursuant to this
Section 6.4(b)(ii)(2) shall be allocated among the
classes of such holders of Preference Interests in
reverse order to the order of liquidation preference
of such class (and within such class, pro rata, in
proportion to the Adjusted Capital Account balances
of such Partners). For purposes of this Section
6.4(b)(ii)(2), the Adjusted Capital Account shall be
determined by ignoring any amounts a holder is
obligated to contribute to the capital of the
Partnership or is deemed obligated to contribute
pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(c)(2)); and
(3) 100% to the holders of Common
Partnership Interests in accordance with their
respective Percentage Interests.
(c) ALLOCATIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP
INTERESTS. In the event that the Partnership issues additional
Partnership Interests to the General Partner, another existing Partner
or any Additional Partner, the General Partner shall make such
revisions to this Section 6.4 or to other provisions of this Agreement
as it determines are necessary to reflect the terms of the issuance of
such additional Partnership Interests, including making preferential
allocations to certain classes of Partnership Interests, subject to the
terms of any Other Securities Term Sheet.
6.5 ADDITIONAL ALLOCATION PROVISIONS . Notwithstanding the
foregoing provisions of this Article 6:
(a) REGULATORY ALLOCATIONS.
(i) MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Treasury Regulation Section 1.704-2(f),
notwithstanding the provisions of Section 6.4, or any other
provision of this Article 6, if there is a net decrease in
Partnership Minimum Gain during any Fiscal Year, each Partner
shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an
amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, as determined under Treasury
Regulation Section 1.704-2(g). Allocations pursuant to the
previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner
pursuant thereto. The items to be allocated shall be
determined in accordance with Treasury Regulation Section
1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.5(a)(i) is
intended to qualify as a "minimum gain chargeback" within the
meaning of Treasury Regulation Section 1.704-2(f) which shall
be controlling in the event of a conflict between such
Treasury Regulation and this Section 6.5(a)(i).
(ii) PARTNER MINIMUM GAIN CHARGEBACK. Except as
otherwise provided in Treasury Regulation Section
1.704-2(i)(4), and notwithstanding the provisions of Section
6.4, or any other provisions of this Article 6 (except Section
6.5(a)(i)), if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Fiscal
Year, each Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Treasury Regulation Section
<PAGE>
1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required
to be allocated to each Partner pursuant thereto. The items to
be so allocated shall be determined in accordance with
Treasury Regulation Section 1.704-2(i)(4) and 1.704-2(j)(2).
This Section 6.3A(ii) is intended to qualify as a "chargeback
of partner nonrecourse debt minimum gain" within the meaning
of Treasury Regulation Section 1.704-2(i) which shall be
controlling in the event of a conflict between such Treasury
Regulation and this Section 6.5(a)(ii).
(iii) NONRECOURSE DEDUCTIONS AND PARTNER NONRECOURSE
DEDUCTIONS. Any Nonrecourse Deductions for any Fiscal Year
shall be specially allocated to the Partners in accordance
with their respective Percentage Interest in Common
Partnership Interests. Any Partner Nonrecourse Deductions for
any Fiscal Year shall be specially allocated to the Partner(s)
who bears the economic risk of loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable, in accordance with Treasury
Regulation Section 1.704-2(b)(4) and 1.704-2(i).
(iv) QUALIFIED INCOME OFFSET. If any Partner
unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership
income and gain shall be allocated, in accordance with
Treasury Regulation Section 1.704-1(b)(2)(ii)(d), to the
Partner in an amount and manner sufficient to eliminate, to
the extent required by such Treasury Regulations, the Adjusted
Capital Account Deficit of the Partner as quickly as possible
provided that an allocation pursuant to this Section
6.5(a)(iv) shall be made if and only to the extent that such
Partner would have an Adjusted Capital Account Deficit after
all other allocations provided in this Article 6 have been
tentatively made as if this Section 6.5(a)(iv) were not in the
Agreement. It is intended that this Section 6.5(a)(iv) qualify
and be construed as a "qualified income offset" within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d),
which shall be controlling in the event of a conflict between
such Treasury Regulation and this Section 6.5(a)(iv).
(v) GROSS INCOME ALLOCATION. In the event any Partner
has a deficit Capital Account at the end of any Fiscal Year
which is in excess of the sum of (a) the amount (if any) such
Partner is obligated to restore to the Partnership and (b) the
amount such Partner is deemed to be obligated to restore
pursuant to Treasury Regulation Section 1.704-1(b)(ii)(c) or
the penultimate sentences of Treasury Regulation Section
1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
specially allocated items of Partnership income and gain in
the amount of such excess as quickly as possible; provided,
that an allocation pursuant to this Section 6.5(a)(v) shall be
made if and only to the extent that such Partner would have a
deficit Capital Account in excess of such sum after all other
allocations provided in this Article 6 have been tentatively
made as if this Section 6.5(a)(v) and Section 6.5(a)(iv) were
not in the Agreement.
(vi) LIMITATION ON ALLOCATION OF LOSSES. To the
extent any allocation of Losses would cause or increase an
Adjusted Capital Account Deficit as to any Partner, such
allocation of Losses shall be reallocated among the other
Partners in accordance with their respective Percentage
Interests in Common Partnership Interests, subject to the
limitations of this Section 6.5(a)(vi).
(vii) SECTION 754 ADJUSTMENT. To the extent an
adjustment to the adjusted tax basis of any Partnership asset
pursuant to Code Section 734(b) or Code Section 743(b) is
<PAGE>
required, pursuant to Treasury Regulation Sections
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be
taken into account in determining Capital Accounts as the
result of a distribution to a Partner in complete liquidation
of his interest in the Partnership, the amount of such
adjustment to the Capital Accounts shall be treated as an item
of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis) and such gain
or loss shall be specially allocated to the Partners in
accordance with their interests in the Partnership in the
event that Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Partners to whom such distribution was made
in the event that Treasury Regulation Section
1.704-1(b)(2)(iv)(m)(4) applies.
(viii) CURATIVE ALLOCATION. The allocations set forth
in Sections 6.5(a)(i), (ii), (iii), (iv), (v), (vi) and (vii)
(the "Regulatory Allocations") are intended to comply with
certain regulatory requirements, including the requirements of
Treasury Regulation Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Sections 6.3 and 6.4, the
Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss and deduction
among the Partners so that, to the extent possible, the net
amount of such allocations of other items and the Regulatory
Allocations to each Partner shall be equal to the net amount
that would have been allocated to each such Partner if the
Regulatory Allocations had not occurred.
(b) ALLOCATION OF NONRECOURSE LIABILITIES. For purposes of
determining a Partner's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Treasury
Regulation Section 1.752-3(a)(3), each Partner's interest in
Partnership profits shall be such Partner's Percentage Interest.
6.6 TAX ALLOCATIONS .
(a) IN GENERAL. Except as otherwise provided in this Section
6.6 for income tax purposes each item of income, gain, loss and
deduction (collectively, "Tax Items") shall be allocated among the
Partners in the same manner as its correlative item of "book" income,
gain, loss or deduction is allocated pursuant to Sections 6.4 and 6.5.
(b) ALLOCATIONS RESPECTING SECTION 704(C) REVALUATIONS.
Notwithstanding Section 6.6(a), Tax Items with respect to Partnership
property that is contributed to the Partnership by a Partner shall be
shared among the Partners for income tax purposes pursuant to Treasury
Regulations promulgated under Code Section 704(c), so as to take into
account the variation, if any, between the basis of the property to the
Partnership and its initial Gross Asset Value. The Partnership shall
account for such variation under any method approved under Code Section
704(c) and the applicable regulations as selected by the General
Partner. In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (ii) of the definition of Gross Asset
Value (provided in Article 1), subsequent allocations of Tax Items with
respect to such asset shall take account of the variation, if any,
between the adjusted basis of such asset and its Gross Asset Value in
the same manner as under Code Section 704(c) and the applicable
regulations consistent with the requirements of Treasury Regulation
Section 1.704-1(b)(iv)(g) using any method approved under Code Section
704(c) and the applicable regulations as selected by the General
Partner.
<PAGE>
6.7 DISTRIBUTIONS OF OPERATING AND CAPITAL CASH FLOW .
(a) Distributions of Operating Cash Flow shall be made at
least annually at such time or times as the General Partner shall
determine. The Operating Cash Flow of the Partnership shall be
distributed as follows:
(i) first, to the extent applicable, to the Partners
holding Preference Partnership Interests to the extent of the
respective priorities (if any) established by the applicable
Other Securities Term Sheet; and
(ii) thereafter, to the Partners in accordance with
their respective Percentage Interests.
(b) Distributions of Capital Cash Flow shall be made at such
time as the General Partner shall determine. Except as otherwise
provided in Section 10.3 hereafter with respect to liquidation of the
Partnership, the Capital Cash Flow of the Partnership shall be
distributed as follows:
(i) first, to pay such debts of the Partnership as
the General Partner shall determine;
(ii) second, to the extent applicable, to the
Partners holding Preference Partnership Interests to the
extent of the respective priorities (if any) established by
the applicable Other Securities Term Sheet; and
(iii) thereafter, to the Partners in accordance with
their respective Percentage Interests.
6.8 REVISIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP
INTERESTS . If the Partnership issues Partnership Interests to the
General Partner or any Additional Partner pursuant to this Article VI
hereof, the General Partner shall make the revisions to this Article VI
and Exhibit A as it deems necessary to reflect the issuance of such
additional Partnership Interests without the requirements for any other
consents or approvals.
ARTICLE VII
BOOKS OF ACCOUNT, RECORDS AND REPORTS; TAX ITEMS
7.1 RECORDS AND ACCOUNTING . The General Partner shall keep or
cause to be kept at the principal office of the Partnership appropriate
books and records with respect to the Partnership's business,
including, without limitation, all books and records necessary to
provide to the Partners any information, lists and copies of documents
required to be provided pursuant to Section 7.3. Any records maintained
by or on behalf of the Partnership in the regular course of its
business may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, micrographics or any other information storage
device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The
books of the Partnership shall be maintained, for financial and tax
reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles.
7.2 FISCAL YEAR . The fiscal year of the Partnership shall be
the calendar year.
<PAGE>
7.3 REPORTS .
(a) ANNUAL REPORTS. As soon as practicable, but in no event
later than the date on which EQR mails its annual report to its
shareholders, the General Partner shall cause to be mailed to each
Partner an annual report, as of the close of the most recently ended
Fiscal Year, containing financial statements of the Partnership, or of
EQR if such statements are prepared solely on a consolidated basis with
the Partnership, for such Fiscal Year, presented in accordance with
generally accepted accounting principles, such statements to be audited
by a nationally recognized firm of independent public accountants
selected by EQR
(b) QUARTERLY REPORTS. If and to the extent that the EQR mails
quarterly reports to its shareholders, as soon as practicable, but in
no event later than the date on such reports are mailed, EQR shall
cause to be mailed to each Partner a report containing unaudited
financial statements, as of the last day of such calendar quarter, of
the Partnership, or of EQR if such statements are prepared solely on a
consolidated basis with the Partnership, and such other information as
may be required by applicable law or regulation, or as the General
Partner determines to be appropriate.
7.4 TAX MATTERS .
(a) PREPARATION OF TAX RETURNS. The General Partner shall
arrange for the preparation and timely filing of all returns of
Partnership income, gains, deductions, losses and other items required
of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the
close of each taxable year, the tax information reasonably required by
Partners for federal and state income tax reporting purposes.
(b) TAX ELECTIONS. Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine
whether to make any available election pursuant to the Code, including,
without limitation, the election under Section 754 of the Code in
accordance with applicable regulations thereunder. The General Partner
shall have the right to seek to revoke any such election (including,
without limitation, the election under Section 754 of the Code) upon
the General Partner's determination in its sole and absolute discretion
that such revocation is in the best interests of the Partners.
(c) TAX MATTERS PARTNER.
(i) GENERAL. The General Partner shall be the "tax
matters partner" of the Partnership for federal income tax
purposes. Pursuant to Section 6223(c)(3) of the Code, upon
receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the
tax matters partner shall furnish the IRS with the name,
address, taxpayer identification number and profit interest of
each of the Partners and any Assignees; provided, however,
that such information is provided to the Partnership by the
Partners.
(ii) POWERS. The tax matters partner is authorized,
but not required:
(1) to enter into any settlement with the
IRS with respect to any administrative or judicial
proceedings for the adjustment of Partnership items
required to be taken into account by a Partner for
income tax purposes (such administrative proceedings
being referred to as a "tax audit" and such judicial
<PAGE>
proceedings being referred to as "judicial review"),
and in the settlement agreement the tax matters
partner may expressly state that such agreement shall
bind all Partners, except that such settlement
agreement shall not bind any Partner (i) who (within
the time prescribed pursuant to the Code and Treasury
Regulations) files a statement with the IRS providing
that the tax matters partner shall not have the
authority to enter into a settlement agreement on
behalf of such Partner or (ii) who is a "notice
partner" (as defined in Section 6231(a)(8) of the
Code) or a Partner of a "notice group" (as defined in
Section 6223(b)(2) of the Code);
(2) if a notice of a final administrative
adjustment at the Partnership level of any item
required to be taken into account by a Partner for
tax purposes (a "final adjustment") is mailed to the
tax matters partner, to seek judicial review of such
final adjustment, including the filing of a petition
for readjustment with the Tax Court or the filing of
a complaint for refund with the United States Claims
Court or the District Court of the United States for
the district in which the Partnership's principal
place of business is located;
(3) to intervene in any action brought by
any other Partner for judicial review of a final
adjustment;
(4) to file a request for an administrative
adjustment with the IRS at any time and, if any part
of such request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for
judicial review with respect to such request;
(5) to enter into an agreement with the IRS
to extend the period for assessing any tax which is
attributable to any item required to be taken into
account by a Partner for tax purposes, or an item
affected by such item; and
(6) to take any other action on behalf of
the Partners of the Partnership in connection with
any tax audit or judicial review proceeding to the
extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion
of the tax matters partner and the provisions relating to
indemnification of the General Partner set forth in Section 4.4 shall
be fully applicable to the tax matters partner in its capacity as such.
(iii) REIMBURSEMENT. The tax matters partner shall
receive no compensation for its services. All third party
costs and expenses incurred by the tax matters partner in
performing its duties as such (including legal and accounting
fees and expenses) shall be borne by the Partnership. Nothing
herein shall be construed to restrict the Partnership from
engaging an accounting firm and/or law firm to assist the tax
matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services
is reasonable.
(d) ORGANIZATIONAL EXPENSES. The Partnership shall deduct
expenses, if any, incurred by it in organizing the Partnership as
provided in Section 709 of the Code.
<PAGE>
(e) WITHHOLDING. Each Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to
such Partner any amount of federal, state, local, or foreign taxes that
the General Partner determines that the Partnership is required to
withhold or pay with respect to any amount distributable or allocable
to such Partner pursuant to this Agreement, including, without
limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code.
Any amount paid on behalf of or with respect to a Partner shall
constitute a loan by the Partnership to such Partner, which loan shall
be repaid by such Partner within fifteen (15) days after notice from
the General Partner that such payment must be made unless (i) the
Partnership withholds such payment from a distribution which would
otherwise be made to the Partner or (ii) the General Partner
determines, in its sole and absolute discretion, that such payment may
be satisfied out of the available funds of the Partnership which would,
but for such payment, be distributed to the Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed to such Partner. Each Partner hereby
unconditionally and irrevocably grants to the Partnership a security
interest in such Partner's Partnership Interest to secure such
Partner's obligation to pay to the Partnership any amounts required to
be paid pursuant to this Section 7.4(e). If a Partner fails to pay any
amounts owed to the Partnership pursuant to this Section 7.4(e) when
due, the General Partner may, in its sole and absolute discretion,
elect to make the payment to the Partnership on behalf of such
defaulting Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Partner and shall succeed to all rights
and remedies of the Partnership as against such defaulting Partner
(including, without limitation, the right to receive distributions).
Any amounts payable by a Partner hereunder shall bear interest at the
base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the Wall Street
Journal, plus four (4) percentage points (but not higher than the
maximum lawful rate under the laws of the State of Ohio) from the date
such amount is due (I.E., fifteen (15) days after demand) until such
amount is paid in full. Each Partner shall take such actions as the
Partnership or the General Partner shall request to perfect or enforce
the security interest created hereunder.
ARTICLE VIII
TRANSFERS AND WITHDRAWALS
8.1 TRANSFER .
(a) The term "transfer," when used in this Article VIII with
respect to a Partnership Interest, shall be deemed to refer to a
transaction by which a Partner purports to assign its Partnership
Interest to another Person, and includes a sale, assignment, gift
(outright or in trust), pledge, encumbrance, hypothecation, mortgage,
exchange or any other disposition by law or otherwise. No part of the
Partnership Interest of a Partner shall be subject to the claims of any
creditor, any spouse for alimony or support, or to legal process, and
may not be voluntarily or involuntarily alienated or encumbered, except
as may be specifically provided for in this Agreement.
(b) No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth
in this Article VIII. Any transfer or purported transfer of a
Partnership Interest of a Limited Partner not made in accordance with
this Article VIII shall be null and void AB INITIO unless otherwise
consented by the General Partner in its sole and absolute discretion.
<PAGE>
8.2 TRANSFER OF PARTNERSHIP INTERESTS OF THE GENERAL PARTNER
AND HOLDERS OF COMMON PARTNERSHIP INTERESTS .
(a) Except as provided below, the General Partner shall not
withdraw from the Partnership and shall not transfer all or any portion
of its interest in the Partnership (whether by sale, statutory merger,
consolidation, liquidation or otherwise) other than to one or more
Persons wholly-owned, directly or indirectly, by ERP and/or EQR. Any
prohibited transfer of the General Partner's Partnership Interest shall
be void AB INITIO. Notwithstanding the foregoing, the General Partner
shall be entitled to transfer its interest in the Partnership if such
transfer would not violate the terms of an Other Securities Term Sheet.
(b) Except as otherwise provided in this Article VIII, a
Limited Partner shall not withdraw from or transfer all or any portion
of its Partnership Interest in the Partnership (whether by sale,
statutory merger, consolidations, liquidation or otherwise) without the
prior written consent of the General Partner (which consent may be
given or withheld in the General Partner's sole and absolute
discretion). Any attempted transfer of a Partnership Interest of a
Limited Partner contrary to this Section 8.2(b) shall be void AB
INITIO. To the extent the prior sentence does not have the effect of
preventing any such proposed transfer, the transfer shall vest in the
General Partner the authority to dissolve the Partnership, in its
discretion.
8.3 LIMITED PARTNERS' RIGHTS TO TRANSFER .
(a) Any Limited Partner may, at any time without the consent
of the General Partner, subject to the provisions of Section 8.6, (a)
pledge (a "Pledge") all or any portion of its Partnership Interest to a
lending institution, which is not an Affiliate of such Limited Partner,
as collateral or security for a bona fide loss or other extension of
credit, or (b) transfer such pledged Partnership Interest to such
lending institution in connection with the exercise of remedies under
such loan or extension of credit. In addition, each Limited Partner or
Assignee (resulting from a transfer made pursuant to the preceding
sentence) shall have the right to transfer all or any portion of its
Partnership Interest, subject to the provisions of Section 8.6 PROVIDED
that any transfer of a Partnership Interest shall be made only to
Qualified Transferees. It is a condition to any transfer otherwise
permitted hereunder that the transferee assumes by operation of law or
express agreement all of the obligations of the transferor Limited
Partner under this Agreement with respect to such transferred
Partnership Interest and no such transfer (other than pursuant to a
statutory merger or consolidation wherein all obligations and
liabilities of the transferor Limited Partner are assumed by a
successor corporation by operation of law) shall relieve the transferor
Partner of its obligations under this Agreement without the approval of
the General Partner, in its reasonable discretion. Notwithstanding the
foregoing, any transferee of any transferred Partnership Interest shall
be subject to any and all ownership limitations contained in the REIT
Charter, which may limit or restrict such transferee's ability to
exercise any of its redemption rights or exchange rights set forth in
any applicable Other Securities Term Sheet. Any transferee, whether or
not admitted as a Substituted Partner, shall take their Partnership
Interest subject to the obligations of the transferor hereunder. Unless
admitted as a Substituted Partner, no transferee, whether by a
voluntary transfer, by operation of law or otherwise, shall have any
rights hereunder, other than the rights of an Assignee as provided in
Section 8.5.
(b) If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or
receiver of such Limited Partner's estate shall have all the rights of
a Limited Partner, but not more rights than those enjoyed by other
Limited Partners, for
<PAGE>
the purpose of setting or managing the estate, and such power as the
Incapacitated Limited Partner possessed to transfer all or any part of
his or its interest in the Partnership. The Incapacity of a Limited
Partner, in and of itself, shall not dissolve or terminate the
Partnership.
(c) The General Partner may prohibit any transfer otherwise
permitted under this Section 8.3 by a Limited Partner of his or her
Partnership Interest if, in the opinion of legal counsel to the
Partnership, such transfer would require the filing of a registration
statement under the Securities Act by the Partnership or would
otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interest.
(d) No transfer by a Limited Partner of his or her Partnership
Interest (including any redemption or exchange rights set forth in an
applicable Other Securities Term Sheet or any other acquisition of
Common Partnership Interest or Preference Interest by the General
Partner or the Partnership) may be made to any Person if (i) in the
opinion of legal counsel for the Partnership, it could result in the
Partnership being treated as an association taxable as a corporation or
(ii) absent the consent of the General Partner, which may be given or
withheld in its sole and absolute discretion, such transfer could be
treated as effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the
meaning on Section 7704 of the Code.
(e) No transfer of any Partnership Interest may be made to a
lender to the Partnership or any Person who is related (within the
meaning of Treasury Regulation Section 1.752-4(b)) to any lender to the
Partnership whose loss constitutes a Nonrecourse Liability, without the
consent of the General Partner, in its sole and absolute discretion;
PROVIDED, that as a condition to such consent, the lender will be
required to enter into an arrangement with the Partnership and the
General Partner to redeem or exchange the Partnership Interest pursuant
to the applicable Other Securities Term Sheet for any consideration in
which a security interest is held simultaneously with the time at which
such lender would be deemed to be a Partner in the Partnership for
purposes of allocating liabilities to such lender under Section 752 of
the Code.
(f) No Limited Partner may withdraw from the Partnership
except as a result of transfer, redemption or exchange of all of its
Partnership Interest pursuant hereto or pursuant to the applicable
Other Securities Term Sheet, as the case may be.
8.4 SUBSTITUTED PARTNER .
(a) Any Limited Partner shall have the right to substitute a
transferee permitted by this Agreement as a Partner in his or her
place. The General Partner shall have the right to consent to the
admission of a permitted transferee of the interest of any other
Partner, as a Substituted Partner pursuant to this Section 8.4, which
consent may be given or withheld by the General Partner in its sole and
absolute discretion. The General Partner's failure or refusal to permit
a transferee of any such Partnership Interests to become a Substituted
Partner shall not give rise to any cause of action against the
Partnership or any Partner.
(b) A transferee who has been admitted as a Substituted
Partner in accordance with this Article VIII shall have all the rights
and powers and be subject to all the restrictions and liabilities of a
Partner under this Agreement. The admission of any transferee as a
Substituted Partner shall be subject to the transferee executing and
delivering to the Partnership an acceptance of all of the terms and
conditions of this Agreement (including, without limitation, such other
documents or instruments as may be required to effect the admission,
each in form and substance
<PAGE>
satisfactory to the General Partner) and the acknowledgment by such
transferee that each of the representations and warranties set forth in
Section 5.5 are true and correct with respect to such transferee as of
the date of the transfer of the Partnership Interest to such transferee
and will continue to be true to the extent required by such
representations and warranties.
(c) Upon the admission of a Substituted Partner, the General
Partner shall amend Exhibit A to reflect the name, address and
Percentage Interest of such Substituted Partner and to eliminate or
adjust, if necessary, the name, address and interest of the predecessor
of such Substituted Partner.
8.5 ASSIGNEE . If the General Partner, with respect to a
transferee requiring the General Partner's consent, does not consent,
in its sole and absolute discretion, to the admission of any permitted
transferee under Section 8.3 as a Substituted Partner, as described in
Section 8.4, such transferee shall be considered an Assignee for
purposes of this Agreement. An Assignee shall be entitled to all the
rights of an assignee of a partnership interest under the Act,
including the right to reserve distributions from the Partnership and
the share of Profits, Losses, gain and loss attributable to the
Partnership Interest assigned to such transferee, the rights to
transfer the Partnership Interest provided in this Article VIII, the
right of exchange of such Partnership Interest for consideration as set
forth in any applicable Other Securities Term Sheet, but shall not be
deemed to be a Partner for any other purpose under this Agreement, and
shall not be entitled to effect a consent with respect to such
Partnership Interest on any matter presented to the Partners for
approval (such consent remaining with the transferor Partner). In the
event any such transferee desires to make a further assignment of any
such Partnership Interest, such transferee shall be subject to all the
provisions of this Article VIII to the same extent and in the same
manner as any Partner desiring to make an assignment of Partnership
Interest. Notwithstanding anything contained in this Agreement to the
contrary, as a condition to becoming an Assignee, any prospective
Assignee must first execute and deliver to the Partnership an
acknowledgment that each of the representation and warranties set forth
in Section 5.5 hereof are true and correct with respect to such
prospective Assignee as of the date of the prospective assignment of
the Partnership Interest to such prospective Assignee and will continue
to be true to the extent required by such representations or
warranties.
8.6 GENERAL PROVISIONS .
(a) No Partner may withdraw from the Partnership other than as
a result of (i) a transfer of all of such Partner's Partnership
Interest as permitted in accordance with this Article VIII and the
transferee(s) of such Partnership Interest being admitted to the
Partnership as a Substituted Partner, (ii) pursuant to the redemption
or exchange of all of such Partner's Partnership Interest pursuant to
the applicable Other Securities Term Sheet.
(b) Any Partner who shall transfer all of such Partner's
Partnership Interest in a transfer permitted pursuant to this Article
VIII where such transferee was admitted as a Substituted Partner or
pursuant to the exercise of its rights of redemption or exchange of all
of such Partner's Partnership Interest pursuant to the applicable Other
Securities Term Sheet shall cease to be a Partner.
(c) Transfers pursuant to this Article VIII may only be made
effective on the last day of the month set forth on the written
instrument of transfer, unless the General Partner otherwise agrees.
<PAGE>
(d) If any Partnership Interest is transferred, assigned or
redeemed during any quarterly segment of the Partnership's Fiscal Year
in compliance with the provisions of this Article VIII or transferred
or redeemed pursuant to the applicable Other Securities Term Sheet, on
any day other than the first day of a Fiscal Year, then Profits,
Losses, each item thereof and all other items attributable to such
Partnership Interest for such Fiscal Year shall be divided and
allocated between the transferor Partner and the transferee Partner by
taking into account their varying increases during the fiscal year in
accordance with Section 706(d) of the Code, using the interim closing
of the books method. Except as otherwise required by Section 706(d) of
the Code or as otherwise specified in this Agreement or as otherwise
determined by the General Partner (to the extent consistent with
Section 706(d) of the Code, solely for purposes of making such
allocations, each of such items for the calendar month in which the
transfer, assignment or redemption occurs shall be allocated among all
the Partners and Assignees in a manner determined by the General
Partner in its sole discretion.
(e) In addition to any other restrictions on transfer herein
contained, including without limitation the provisions of this Article
VIII, in no event may any transfer or assignment of a Partnership
Interest by any Partner (including by way of a Partnership Interest
redemption or exchange pursuant to an applicable Other Securities Term
Sheet, or any other acquisition of Common Partnership Interests or
Partnership Interests by the Partnership, or the General Partner) be
made (i) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest; (ii) in violation of applicable
law; (iii) except with the consent of the General Partner, which may be
given or withheld in its sole and absolute discretion, of any component
portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components
of a Partnership Interest; (iv) except with the consent of the General
Partner, which may be given or withheld in its sole and absolute
discretion, if in the opinion of legal counsel to the Partnership such
transfer would cause a termination of the Partnership for federal or
state income tax purposes (except as a result of the redemption or
exchange of Partnership Interests, respectively, of all Partnership
Interests held by all Limited Partners); (v) if such transfer would
cause the Partnership to be classified as a "publicly traded
partnership" within the meaning of Section 7704 of the Code, or as an
association taxable as a corporation for federal or state income tax
purposes; (vi) if such transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title 1 of ERISA,
a "party-in-interest" (as defined in Section 3(14) of ERISA) or a
"disqualified person" (as defined in Section 4975(c) of the Code);
(vii) if such transfer would, in the opinion of counsel to the
Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department
of Labor Regulations Section 2510.2101; (viii) if such transfer
requires the registration of such Partnership Interest or requires the
registration of the exchange of such Partnership Interests for any
capital stock pursuant to any applicable federal or state securities
laws; (ix) if such transfer is effectuated through an "established
securities market" or a "secondary market" (or the substantial
equivalent thereof) within the meaning of Section 7704 of the Code or
such transfer causes the Partnership to become a "publicly traded
partnership," as such term is defined in Sections 469(k)(2) or 7704 of
the Code; (x) if such transfer subjects the Partnership to be regulated
under the Investment Company Act of 1940, the Investment Advisors Act
of 1946 or the Employee Retirement Income Security Act of 1974, each as
amended; (xi) if the transferee or assignee of such Partnership
Interest is unable to make the representations set forth in Section 5.5
or such transfer could otherwise adversely affect the ability of EQR in
its capacity as the sole General Partner of ERP, to remain qualified as
a REIT; or (xii) if, except with the consent of the General Partner,
which may be given or withheld in its sole and absolute discretion,
such transfer would subject EQR to any additional taxes under Section
857 or Section 4981 of the Code.
<PAGE>
(f) The General Partner shall monitor the transfers of
interests in the Partnership (including any acquisition of Partnership
Interests by the Partnership, or the General Partner) to determine (i)
if such interests are being traded on an "established securities
market" or a "secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code and (ii) whether such
transfers of interests would result in the Partnership being unable to
qualify for at least one of the "safe harbors" set forth in Treasury
Regulation Section 1.7704-1 (or such other applicable guidance
subsequently published by the IRS setting forth safe harbors under
which interests will not be treated as "readily tradable on a secondary
market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code) (the "Safe Harbor"). The General Partner
shall have authority (but shall not be required to) to take any steps
it determines are necessary or appropriate in its sole and absolute
discretion to prevent any trading of interests which could cause the
Partnership to become a "publicly traded partnership," or any
recognition by the Partnership of such transfers, or to insure that at
least one of the Safe Harbors is met.
ARTICLE IX
SUCCESSSOR GENERAL PARTNER AND
ADMISSION OF ADDITIONAL PARTNERS
9.1 ADMISSION OF SUCCESSOR GENERAL PARTNER . A successor to
all of the General Partner's Partnership Interest pursuant to Section
9.2 who is proposed to be admitted as a successor General Partner shall
be admitted to the Partnership as the General Partner, effective upon
such transfer. Any such transferee shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of
this Agreement and such other documents or instruments as may be
required to effect the admission. In the case of such admission on any
day other than the first day of a Fiscal Year, all items attributable
to the General Partner's Partnership Interest for such Fiscal Year
shall be allocated between the transferring General Partner and such
successor as provided in Article VIII.
9.2 ADMISSION OF ADDITIONAL PARTNERS .
(a) A Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Partner only upon furnishing to the
General Partner (i) evidence of acceptance in form satisfactory to the
General Partner of all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in Section
2.6 and (ii) such other documents or instruments as may be required in
the discretion of the General Partner in order to effect such Person's
admission as an Additional Partner.
(b) Notwithstanding anything to the contrary in this Section
9.2, no Person shall be admitted as an Additional Partner without the
consent of the General Partner, which consent may be given or withheld
in the General Partner's sole and absolute discretion. The admission of
any Person as an Additional Partner shall become effective on the date
upon which the name of such Person is recorded on the books and records
of the Partnership, following the receipt of the Capital Contribution
in respect of such Partner, the documents set forth in this Section
9.2(a) and the consent of the General Partner to such admission. If any
Additional Partner is admitted to the Partnership on any day other than
the first day of a Fiscal Year, then Profits, Losses, each item thereof
and all other items allocable among Partners and Assignees for such
Fiscal Year shall be
<PAGE>
allocated among such Partner and all other Partners and Assignees by
taking into account their varying interests during the Fiscal Year in
accordance with Section 706(d) of the Code, using the interim closing
of the books method. Solely for purposes of making such allocations,
each of such items for the calendar month in which an admission of an
Additional Partner occurs shall be allocated among all the Partners and
Assignees, including such Additional Partner, in a manner determined by
the General Partner in its sole discretion.
9.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF FORMATION . For
the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of
Exhibit A) and, if required by law, shall prepare and file an amendment
to the Certificate and may for this purpose exercise the power of
attorney granted pursuant to Section 2.6.
ARTICLE X
DISSOLUTION AND TERMINATION
10.1 DISSOLUTION .
(a) The Partnership shall not be dissolved by the admission of
Substituted Partners or Additional Partners or by the admission of a
successor General Partner in accordance with the terms of this
Agreement. Upon the withdrawal of a General Partner, the remaining
General Partners and any successor General Partner shall continue the
business of the Partnership. The Partnership shall dissolve, and its
affairs shall be wound up, upon the first to occur of any of the
following ("Liquidating Events"):
(i) the expiration of its term as provided in
Section 2.5 hereof;
(ii) an event of withdrawal of a General Partner, as
defined in the Act (other than an event of bankruptcy), unless
(1) there is at least one other General Partner, in which case
the remaining General Partners shall continue the business of
the Partnership, or (2) within ninety (90) days after the
withdrawal a "majority in interest" (as defined below) of the
remaining Partners consent in writing to continue the business
of the Partnership and to the appointment, effective as of the
date of withdrawal, of a substitute General Partner;
(iii) an election to dissolve the Partnership made by
the General Partner, in its sole and absolute discretion;
(iv) entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act;
(v) the sale of all or substantially all of the
assets and properties of the Partnership for cash or for
marketable securities; or
(vi) a final and non-appealable judgment is entered
by a court of competent jurisdiction ruling that the remaining
General Partner(s) is bankrupt or insolvent, or a final and
non-appealable order for relief is entered by a court with
appropriate jurisdiction against the remaining General
Partner(s), in each case under any federal or
<PAGE>
state bankruptcy or insolvency laws as now or hereafter in
effect, unless prior to or at the time of the entry of such
order or judgment a "majority in interest" (as defined below)
of the remaining Partners consent in writing to continue the
business of the Partnership and to the appointment, effective
as of a date prior to the date of such order or judgment, of a
substitute General Partner.
As used herein, a "majority in interest" shall refer to Partners
(excluding the General Partners) who hold more than fifty percent (50%) of the
outstanding Percentage Interests not held by the General Partners.
10.2 EFFECT OF FILING OF DISSOLVING STATEMENT . Upon the
filing by the Ohio Secretary of State of a statement of intent to
dissolve, the Partnership shall cease to carry on its business, except
insofar as may be necessary for the winding up of its business, but its
separate existence shall continue until a certificate of dissolution
has been issued by the Ohio Secretary of State or until a decree
dissolving the Partnership has been entered by a court of competent
jurisdiction.
10.3 WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS .
(a) Upon dissolution, an accounting shall be made by the
Partnership's accountants of the accounts of the Partnership and of the
Partnership's assets, liabilities and operations from the date of the
last previous accounting until the date of dissolution. The General
Partner shall immediately proceed to wind up the affairs of the
Partnership.
(b) If the Partnership is dissolved and its affairs are to be
wound up, the General Partner (or if there be none, a liquidating
trustee selected by a Majority-in-Interest of the Partners) shall wind
up the affairs and liquidate the assets of the Partnership, and the
proceeds from the liquidation of the Partnership assets shall be
applied and distributed in the following order of priority:
(i) To the creditors of the Partnership (other than
Partners and creditors whose obligations will be assumed or
otherwise transferred on the sale or distribution of
Partnership assets) and to the payment of liquidation
expenses; when there is a contingent debt, obligation or
liability of the Partnership, a reserve (in such amount as the
General Partner or, if no General Partner, the liquidating
trustee, in its sole discretion, shall determine) shall be set
up to meet such contingency, and if and when such contingency
shall cease to exist, the moneys, if any, then contained in
the reserve shall be distributed as provided in this Section
10.3;
(ii) Then to the payment of any funds advanced to the
Partnership by any Partner or Partners and any other bona fide
loans made by any Partner or Partners to the Partnership and
evidenced by a note or notes duly executed by the Partnership;
and
(iii) Then to the Partners in accordance with their
respective Capital Account balances after giving effect to all
contributions, distributions and allocations for all periods.
In connection therewith, income, gain and loss of the
Partnership (and to the extent necessary to achieve the
purposes hereof, items of gross income and deduction) with
respect to the sale or other disposition of all or
substantially all of the Partnership's assets and/or the
Partnership's operations in connection therewith (whether or
not attributable to the taxable year in which the distribution
pursuant to this Section
<PAGE>
10.3(b)(iii) is to be made or a preceding taxable year) shall
be allocated among the Partners so that each Partner's Capital
Account shall equal, after taking into account the prior
balance (positive or negative) in such Partner's Capital
Account and the effect of such allocation, the amount that
such Partner would be entitled to receive if the Partnership
were to make a distribution to the Partners pursuant to the
provisions of Section 6.7(b) hereof in an amount equal to the
remaining liquidation proceeds to be distributed under this
Section 10.3(b)(iii).
(c) Notwithstanding anything to the contrary in this
Agreement, upon a liquidation within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any Partner has a
deficit Capital Account (after giving effect to all contributions,
distributions, allocations and other Capital Accounts adjustments for
all taxable years, including the year during which such liquidation
occurs), such Partner shall have no obligation to make any Capital
Contribution, and the negative balance of such Partner's Capital
Contribution, and the negative balance of such Partner's Capital
Account shall not be considered a debt owed by such Partner to the
Partnership or to any other Person for any purpose whatsoever.
(d) Upon completion of the winding up, liquidation and
distribution of the assets, the Partnership shall be deemed terminated.
(e) The General Partner shall comply with any applicable
requirements of applicable law pertaining to the winding up of the
affairs of the Partnership and the final distribution of its assets.
10.4 CERTIFICATE OF DISSOLUTION . When all debts, liabilities
and obligations have been paid and discharged or adequate provisions
have been made therefor and all of the remaining property and assets
have been distributed to the Partners, certificates of dissolution
shall be executed in duplicate and verified by the person signing the
articles, which articles shall set forth the information required by
the Act. Duplicate originals of such articles of dissolution shall be
delivered to the Ohio Secretary of State.
10.5 EFFECT OF DISSOLUTION . Upon the issuance of the
certificate of dissolution, the existence of the Partnership shall
cease, except for the purpose of suits, other proceedings and
appropriate action as provided in the Act. The General Partner shall
have authority to distribute any Partnership property discovered after
dissolution, convey real estate and take such other action as may be
necessary on behalf of and in the name of the Partnership.
10.6 RETURN OF CONTRIBUTION NONRECOURSE TO OTHER PARTNERS .
Except as provided by law or as expressly provided in this Agreement,
upon dissolution, each Partner shall look solely to the assets of the
Partnership for the return of its Capital Contribution. If the
Partnership property remaining after the payment or discharge of the
debts and liabilities of the Partnership is insufficient to return the
cash contribution of one or more Partners, such Partner or Partners
shall have no recourse against any other Partner.
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 NOTICES . Any notice, request, demand, consent, approval
and other communications under this Agreement shall be in writing, and
shall be deemed duly given or made at the time and on the date when
personally delivered as shown on a receipt therefor (which shall
include delivery by a nationally recognized overnight delivery
service), or when sent by facsimile, or three (3) business days after
being mailed by prepaid registered or certified mail, return receipt
requested, to the address for each party set forth at the conclusion of
this Agreement. Any Partner, by written notice to the other in the
manner herein provided, may designate an address different from that
set forth at the conclusion of this Agreement.
11.2 BOOKS OF ACCOUNT AND RECORDS . Proper and complete
records and books of account shall be kept or shall be caused to be
kept by the General Partner or such representatives as it may appoint
in which shall be entered fully and accurately all transactions and
other matters relating to the Partnership's business in such detail and
completeness as is customary and usual for businesses of the type
engaged in by the Partnership. The books and records shall at all times
be maintained at the principal executive office of the Partnership and
shall be open to the reasonable inspection and examination of the
Partners or their duly authorized representatives, at the sole cost and
expense of such Partner during reasonable business hours.
11.3 APPLICATION OF OHIO LAW . This Agreement, and the
application of interpretation hereof, shall be governed exclusively by
its terms and by the laws of the State of Ohio, and specifically the
Act.
11.4 WAIVER OF ACTION FOR PARTITION . Each Partner irrevocably
waives during the term of the Partnership any right that it may have to
maintain any action for partition with respect to the property of the
Partnership.
11.5 AMENDMENTS .
(a) GENERAL. Amendments to this Agreement may be proposed by
the General Partner or by any Partner holding twenty-five percent (25%)
or more of any class or series of Partnership Interests. Following such
proposal (except an amendment pursuant to Section 11.5(b)), the General
Partner shall submit any proposed amendment to the Partners. The
General Partner shall seek the written vote of the Partners on the
proposed amendment or shall call a meeting to vote thereon and to
transact any other business that the General Partner may deem
appropriate. For purposes of obtaining a written vote, the General
Partner may require a response within a reasonable specified time, but
not less than fifteen (15) days after notice is given, and failure to
respond in such time period shall constitute a vote which is consistent
with the General Partner's recommendation with respect to the proposal.
Except as provided in Section 11.5(b) or 11.5.(d), a proposed amendment
shall be adopted and be effective as an amendment hereto if (i) it is
approved by the General Partner and (ii) it receives the consent of
Partners holding a majority of the Common Partnership Interests and a
Majority of each class of Preference Interests (including Partnership
Interests held by the General Partner).
(b) AMENDMENTS NOT REQUIRING APPROVAL OF PARTNERS OTHER THAN
THE GENERAL PARTNER. Notwithstanding Section 11.5(a) or 11.5.(b), the
General Partner shall have the power, without the consent of the
Partners, to amend this Agreement as may be required to facilitate or
implement any of the following purposes:
<PAGE>
(i) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner
or any Affiliate of the General Partner for the benefit of the
Partners;
(ii) to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance with this
Agreement (which may be effected through the replacement of
Exhibit A with an amended Exhibit A);
(iii) to set forth the designations, rights, powers,
duties, and preferences of the holders of any additional
Partnership Interests issued pursuant to Article VI;
(iv) to reflect a change that does not adversely
affect the Partners in any material respect, or to cure any
ambiguity, correct or supplement any provision in this
Agreement not inconsistent with law or with other provisions
of this Agreement, or make other changes with respect to
matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this
Agreement; and
(v) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling
or regulation of a federal, state or local agency or contained
in federal, state or local law.
The General Partner shall notify the Limited Partners when any action
under this Section 11.5(b) is taken in the next regular communication to the
Partners.
(c) OTHER AMENDMENTS REQUIRING CERTAIN PARTNER'S APPROVAL.
Notwithstanding anything in this Section 11.5 to the contrary, this
Agreement shall not be amended with respect to any Partner adversely
affected without the consent of such Partner adversely affected if such
amendment would (i) modify the limited liability of a Limited Partner,
(ii) amend Article VI (except as permitted pursuant to Sections
11.5(b)(iii) and 6.8, (iii) amend the redemption or exchange rights
under an Other Securities Term Sheet, or (iv) amend this Section
11.5(c). This Section 11.5(c) does not require unanimous consent of all
classes of Partners adversely affected unless the amendment is to be
effective against all Partners of such classes adversely affected.
11.6 EXECUTION OF ADDITIONAL INSTRUMENTS . Each Partner hereby
agrees to execute such other and further statements of interest and
holdings, designations, powers of attorney and other instruments
necessary to comply with any laws, rules or regulations.
11.7 HEADINGS . The headings in this Agreement are inserted
for convenience only and are in no way intended to describe, interpret,
define, or limit the scope, extent or intent of this Agreement or any
provision hereof.
11.8 WAIVERS . The failure of any party to seek redress for
violation of or to insist upon the strict performance of any covenant
or condition of this Agreement shall not prevent a subsequent act,
which would have originally constituted a violation, from having the
effect of an original violation.
11.9 RIGHTS AND REMEDIES CUMULATIVE . The rights and remedies
provided by this Agreement are cumulative and the use of any one right
or remedy by any party shall not preclude or waive the right to use any
or all other remedies. Said rights and remedies are given in addition
to any other rights the parties may have by law, statute, ordinance or
otherwise.
<PAGE>
11.10 SEVERABILITY . If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid,
illegal or unenforceable to any extent, the remainder of this Agreement
and the application thereof shall not be affected and shall be
enforceable to the fullest extent permitted by law.
11.11 HEIRS, SUCCESSORS AND ASSIGNS . Each and all of the
covenants, terms, provisions and agreements herein contained shall be
binding upon and inure to the benefit of the parties hereto and, to the
extent permitted by this Agreement, their respective heirs, legal
representatives, successors and assigns.
11.12 CREDITORS . None of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditors of the
Partnership or of any Partner.
11.13 COUNTERPARTS . This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.
11.14 INTEGRATED AGREEMENT . This Agreement is intended to be
the sole "partnership agreement" (within the meaning of Section 1782.01
of the Act) of the Partnership. No document, instrument or writing
(other than an amendment to this Agreement that complies with Section
11.5 of this Agreement) is intended to be or shall be accorded the
status of a "partnership agreement" within the meaning of the Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
CERTIFICATE
The undersigned hereby agree, acknowledge and certify that the
foregoing Agreement constitutes the Amended and Restated Limited Partnership
Agreement of Lexford Properties, L.P. adopted by the Partners of the Partnership
in order to be effective as of October 1, 1999.
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment trust,
its general partner
By: /s/ Yasmina Rahal
------------------------------------------------
Name: Yasmina Rahal, Esq.
Its: Vice-President
Notice for Address Purposes: c/o Equity Residential Properties Trust
Two North Riverside Plaza, Suite 400
Chicago, Illinois 60606
Attention: General Counsel
LEXFORD PARTNERS, L.L.C.,
an Ohio limited liability company
By: ERP Operating Limited Partnership,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment trust,
its general partner
By: /s/ Yasmina Rahal
------------------------------------------------
Name: Yasmina Rahal, Esq.
Its: Vice-President
Notice for Address Purposes: c/o Equity Residential Properties Trust
Two North Riverside Plaza, Suite 400
Chicago, Illinois 60606
Attention: General Counsel
<PAGE>
EXHIBIT A
PARTNERS AND PERCENTAGE INTERESTS
<TABLE>
<CAPTION>
PARTNER PERCENTAGE INTEREST
------- -------------------
<S> <C>
ERP OPERATING LIMITED PARTNERSHIP, AN
ILLINOIS LIMITED PARTNERSHIP 99.0%
LEXFORD PARTNERS, L.L.C., AN OHIO LIMITED
LIABILITY COMPANY 1.0%
</TABLE>
<PAGE>
Exhibit 12
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED HISTORICAL
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS RATIO
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
----------------------------------------------------------------------------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 1,711,738 $ 1,293,560 $ 707,733 $ 454,412 $ 373,919
Fee income - outside managed 4,970 5,622 5,697 6,749 7,030
Interest income - investment in mortgage notes 12,559 18,564 20,366 12,819 4,862
Interest and other income 23,851 19,250 13,282 4,405 4,573
----------- ----------- ----------- ----------- -----------
Total revenues 1,753,118 1,336,996 747,078 478,385 390,384
----------- ----------- ----------- ----------- -----------
EXPENSES
Property and maintenance 414,026 326,733 176,075 127,172 112,186
Real estate taxes and insurance 171,289 126,009 69,520 44,128 37,002
Property management 61,626 53,101 26,793 17,512 15,213
Fee and asset management 3,587 4,279 3,364 3,837 3,887
Depreciation 408,688 301,869 156,644 93,253 72,410
Interest:
Expense incurred 337,189 246,585 121,324 81,351 78,375
Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444
General and administrative 22,296 20,631 14,821 9,857 8,129
----------- ----------- ----------- ----------- -----------
Total expenses 1,422,785 1,081,964 571,064 381,352 330,646
----------- ----------- ----------- ----------- -----------
Income before extraordinary items $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738
=========== =========== =========== =========== ===========
Combined Fixed Charges and Preferred Distributions:
Interest and other financing costs $ 337,189 $ 246,585 $ 121,324 $ 81,351 $ 78,375
Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444
Preferred distributions 113,196 92,917 59,012 29,015 10,109
----------- ----------- ----------- ----------- -----------
TOTAL COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $ 454,469 $ 342,259 $ 182,859 $ 114,608 $ 91,928
=========== =========== =========== =========== ===========
EARNINGS BEFORE COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $ 671,606 $ 504,374 $ 299,861 $ 182,626 $ 141,557
=========== =========== =========== =========== ===========
FUNDS FROM OPERATIONS BEFORE COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS * $ 1,074,072 $ 801,065 $ 453,387 $ 273,800 $ 212,138
=========== =========== =========== =========== ===========
RATIO OF EARNINGS BEFORE COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS 1.48 1.47 1.64 1.59 1.54
=========== =========== =========== =========== ===========
RATIO OF FUNDS FROM OPERATIONS BEFORE COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED
FIXED CHARGES AND PREFERRED DISTRIBUTIONS 2.36 2.34 2.48 2.39 2.31
=========== =========== =========== =========== ===========
* Includes unconsolidated depreciation from Joint
Ventures and limited partnerships $ 1,009 $ 183 $ -- $ -- $ --
=========== =========== =========== =========== ===========
* Excludes non-real estate depreciation $ (7,231) $ (5,361) $ (3,118) $ (2,079) $ (1,829)
=========== =========== =========== =========== ===========
</TABLE>
<PAGE>
Exhibit 21
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
1 EQUITY RESIDENTIAL PROPERTIES TRUST (PRE WRP MERGER)
2 EQUITY RESIDENTIAL PROPERTIES TRUST (POST WRP MERGER)
3 ERP OPERATING LIMITED PARTNERSHIP
4 EVANS WITHYCOMBE RESIDENTIAL LIMITED PARTNERSHIP
5 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP
6 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P.
7 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP II
8 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P. II
9 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP III
10 EVANS WITHYCOMBE MANAGEMENT INC.
11 ARTERY NORTHAMPTON LIMITED PARTNERSHIP
12 BUENA VISTA PLACE ASSOCIATES
13 Capital Realty Investors Tax Exempt Fund, L.P.
14 CAPREIT Arbor Glen L.P.
15 CAPREIT ATRIUM, L.P.
16 CAPREIT BOTANY ARMS, L.P.
17 CAPREIT BRECKENRIDGE
18 CAPREIT BURWICK FARMS, L.P.
19 CAPREIT Cedars L.P.
20 CAPREIT CHIMNEYS, L.P.
21 CAPREIT CLARION, L.P.
22 CAPREIT CONCORDE BRIDGE, L.P.
23 CAPREIT CREEKWOOD, L.P.
24 CAPREIT EASTLAND ON THE LAKE, L.P.
25 CAPREIT Farmington Gates L.P.
26 CAPREIT GARDEN LAKE, L.P.
27 CAPREIT GLENEAGLE, L.P.
28 CAPREIT GREYEAGLE, L.P.
29 CAPREIT HAMPTON ARMS, L.P.
30 CAPREIT HIDDEN OAKS, L.P.
31 CAPREIT HIGHLAND GROVE, L.P.
32 CAPREIT MARINER'S WHARF, L.P.
33 CAPREIT NORTHLAKE, L.P.
34 CAPREIT Ridgeway Commons L.P.
35 CAPREIT River Oak L.P.
36 CAPREIT SILVER SPRINGS, L.P.
37 CAPREIT SYCAMORE RIDGE, L.P.
38 CAPREIT TARMARIND AT STONEBRIDGE, L.P.
39 CAPREIT TIVOLI LAKES CLUB, L.P.
40 CAPREIT Westwood Pines L.P.
41 CAPREIT Woodcrest Villa L.P.
42 CAPREIT WOODLAND MEADOWS, L.P.
43 CARROLLWOOD LP
44 CEDAR CREST GENERAL PARTNERSHIP
45 COUNTRY CLUB ASSOCIATES LIMITED PARTNERSHIP
46 COUNTRY RIDGE GENERAL PARTNERSHIP
47 CRICO of Trailway Pond II, L.P.
48 CRICO of White Bear Woods I, L.P.
49 CRICO of Ethan's I, L.P.
50 CRICO of Ethan's II, L.P.
<PAGE>
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
51 CRICO of Fountain Place, L.P.
52 CRICO of James Street Crossing, L.P.
53 CRICO of Ocean Walk, L.P.
54 CRICO of Regency Woods, L.P.
55 CRICO of Trailway Pond I, L.P.
56 CRICO of Valley Creek I, L.P.
57 CRICO of Valley Creek II, L.P.
58 CRICO of Woodlane Place, L.P.
59 CRICO Royal Oaks, L.P.
60 E-G-ONE ASSOCIATES
61 E-G-TWO ASSOCIATES
62 E-LODGE ASSOCIATES LIMITED PARTNERSHIP
63 EQR-740 RIVER DRIVE, LLC
64 EQR-ALDERWOOD LP
65 EQR-ARBORETUM, LLC
66 EQR-ARBORS FINANCING LIMITED PARTNERSHIP
67 EQR-ARIZONA, L.L.C.
68 EQR-ARTBHOLDER, L.L.C.
69 EQR-ARTCAPLOAN, L.L.C.
70 EQR-BELLEVUE MEADOW GP LP
71 EQR-BELLEVUE MEADOW LP
72 EQR-BOND PARTNERSHIP
73 EQR-BRAMBLEWOOD GP LP
74 EQR-BRAMBLEWOOD LP
75 EQR-BRETON HAMMOCKS FINANCING LIMITED PARTNERSHIP
76 EQR-BRIARWOOD GP LP
77 EQR-BRIARWOOD LP
78 EQR-BROADWAY LP
79 EQR-BS FINANCING LIMITED PARTNERSHIP
80 EQR-CALIFORNIA, L.L.C
81 EQR-CAMELLERO FINANCING LIMITED PARTNERSHIP
82 EQR-CANTER CHASE GENERAL PARTNERSHIP
83 EQR-CEDAR POINTE GP LP
84 EQR-CEDAR POINTE LP
85 EQR-CEDAR RIDGE GP, LLC
86 EQR-CEDAR RIDGE LP
87 EQR-CHARDONNAY PARK, L.L.C.
88 EQR-CHELSEA SQUARE GP LP
89 EQR-CHELSEA SQUARE LP
90 EQR-COACHMAN TRIALS, LLC
91 EQR-CONNOR, LLC
92 EQR-CONTINENTAL VILLAS FINANCING LIMITED PARTNERSHIP
93 EQR-CREEKSIDE GP LP
94 EQR-CREEKSIDE LP
95 EQR-CREEKSIDE OAKS GENERAL PARTNERSHIP
96 EQR-DARTMOUTH WOODS GENERAL PARTNERSHIP
97 EQR-DORAL FINANCING LIMITED PARTNERSHIP
98 EQR-EMERALD PLACE FINANCING LIMITED PARTNERSHIP
99 EQR-EOI FINANCING LIMITED PARTNERSHIP
100 EQR-ESSEX PLACE FINANCING LIMITED PARTNERSHIP
<PAGE>
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
101 EQR-FAIRFIELD, LLC
102 EQR-FERNBROOK, LLC
103 EQR-FIELDERS CROSSING GP, LLC
104 EQR-FIELDERS CROSSING LP
105 EQR-FLATLANDS, LLC
106 EQR-GOVERNOR'S PLACE FINANCING LIMITED PARTNERSHIP
107 EQR-GRANDVIEW I GP LP
108 EQR-GRANDVIEW I LP
109 EQR-GRANDVIEW II GP LP
110 EQR-GRANDVIEW II LP
111 EQR-GREENHAVEN GP LP
112 EQR-GREENHAVEN LP
113 EQR-HIGHLINE OAKS, L.L.C.
114 EQR-IRONWOOD, L.L.C.
115 EQR-KEYSTONE FINANCING GENERAL PARTNERSHIP
116 EQR-LAKESHORE AT PRESTON LP
117 EQR-LAKEVILLE RESORT GENERAL PARTNERSHIP
118 EQR-LAKEWOOD GREENS GP, LLC
119 EQR-LAKEWOOD GREENS LP
120 EQR-LEXINGTON FARM, LLC
121 EQR-LINCOLN GREEN I AND II GP LIMITED PARTNERSHIP
122 EQR-LINCOLN VILLAGE (CA) I LP
123 EQR-LINCOLN VILLAGE (CA) II LP
124 EQR-LODGE (OK) GP LIMITED PARTNERSHIP
125 EQR-MARKS A, L.L.C.
126 EQR-MARKS B, L.L.C.
127 EQR-MARTINS LANDING, LLC
128 EQR-MET CA FINANCING LIMITED PARTNERSHIP
129 EQR-MET FINANCING LIMITED PARTNERSHIP
130 EQR-MISSOURI, L.L.C.
131 EQR-MOUNTAIN SHADOWS GP LP
132 EQR-MOUNTAIN SHADOWS LP
133 EQR-NORTH CREEK, LLC
134 EQR-NORTH HILL, L.L.C.
135 EQR-OLDE REDMOND GP LP
136 EQR-OLDE REDMOND LP
137 EQR-OLDE REDMOND LP LP
138 EQR-OREGON, L.L.C.
139 EQR-OVERLOOK MANOR II, LLC
140 EQR-PARK PLACE I GENERAL PARTNERSHIP
141 EQR-PARK PLACE II GENERAL PARTNERSHIP
142 EQR-PARKCREST, LLC
143 EQR-PARKSIDE LP
144 EQR-PINE MEADOWS GARDEN GENERAL PARTNERSHIP
145 EQR-PLANTATION FINANCING LIMITED PARTNERSHIP
146 EQR-PLANTATION, L.L.C.
147 EQR-PLEASANT RIDGE LP
148 EQR-PORTLAND CENTER, LLC
149 EQR-PRESTON BEND, G.P.
150 EQR-RESERVE SQUARE LIMITED PARTNERSHIP
<PAGE>
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
151 EQR-RIDGEMONT/MOUNTAIN BROOK, L.L.C.
152 EQR-RIVER PARK LP
153 EQR-SANDSTONE LP
154 EQR-SKYLARK, LLC
155 EQR-SMOKETREE, LLC
156 EQR-SONTERRA AT FOOTHILLS RANCH LP
157 EQR-SOUTHWOOD GP LP
158 EQR-SOUTHWOOD LP
159 EQR-SOUTHWOOD LP I LP
160 EQR-SOUTHWOOD LP II LP
161 EQR-SPINNAKER COVE, L.L.C.
162 EQR-SUMMER CREEK, LLC
163 EQR-SUMMERWOOD GP LP
164 EQR-SUMMERWOOD LP
165 EQR-SURREY DOWNS GP LP
166 EQR-SURREY DOWNS LP
167 EQR-SURREY DOWNS LP LP
168 EQR-SWN LINE FINANCING LIMITED PARTNERSHIP
169 EQR-TANASBOURNE TERRACE FINANCING LIMITED PARTNERSHIP
170 EQR-TENNESSEE LP
171 EQR-THE LAKES AT VININGS, LLC
172 EQR-TIMBERWOOD GP LP
173 EQR-TIMBERWOOD LP
174 EQR-TOWNHOMES OF MEADOWBROOK, LLC
175 EQR-TRAILS AT DOMINION GENERAL PARTNERSHIP
176 EQR-VALLEY PARK SOUTH FINANCING LIMITED PARTNERSHIP
177 EQR-VILLA SERENAS GENERAL PARTNERSHIP
178 EQR-VILLAGE OAKS GENERAL PARTNERSHIP
179 EQR-VILLAS OF JOSEY RANCH GP, LLC
180 EQR-VILLAS OF JOSEY RANCH LP
181 EQR-VININGS AT ASHLEY LAKE, L.L.C.
182 EQR-VIRGINIA, L.L.C.
183 EQR-WARWICK, L.L.C.
184 EQR-WASHINGTON, L.L.C.
185 EQR-WATERFALL, L.L.C.
186 EQR-WATSON G.P.
187 EQR-WELLINGTON, L.L.C.
188 EQR-WEST COAST PORTFOLIO GP, LLC
189 EQR-WIMBLEDON OAKS LP
190 EQR-WOODLAKE GP LP
191 EQR-WOODLAKE LP
192 EQR-WOODLEAF GP LP
193 EQR-WOODLEAF LP
194 EQR-WOODRIDGE I LP
195 EQR-WOODRIDGE II LP
196 EQR-WOODRIDGE III LP
197 EQR-WOODRIDGE, LLC
198 EQR-WYNDRIDGE II, L.L.C.
199 EQR-WYNDRIDGE III, L.L.C.
200 EQR-YORKTOWNE FINANCING LIMITED PARTNERSHIP
<PAGE>
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
201 EQUITY-GREEN I VENTURE LIMITED PARTNERSHIP
202 EQUITY-GREEN II VENTURE LIMITED PARTNERSHIP
203 EQUITY-LODGE VENTURE LTD.
204 EQUITY-STONEBROOK VENTURE LTD.
205 ERP-SOUTHEAST PROPERTIES, LLC
206 E-STONEBROOK ASSOCIATES
207 EVANS WITHYCOMBE FINANCE, L.P.
208 EW CHANDLER, L.P.
209 FOREST PLACE ASSOCIATES
210 FOURTH TOWNE CENTRE LIMITED PARTNERSHIP
211 FPAII, L.P.
212 Geary Courtyard Associates
213 GEORGIAN WOODS ANNEX ASSOCIATES
214 GLENLAKE CLUB L.P.
215 GREENWICH WOODS LIMITED PARTNERSHIP
216 HAMMOCKS AT LONG POINT, LLC
217 HORIZON PLACE ASSOCIATES
218 HUNTERS'S GLEN GENERAL PARTNERSHIP
219 HUNTINGTON, LLC
220 LANDON LEGACY PARTNERS LIMITED
221 LANDON PRAIRIE CREEK PARTNERS LIMITED
222 LENOX PLACE LP
223 MAGNOLIA VILLA, LLC
224 MCCASLIN HIDDEN LAKES, LTD.
225 MCCASLIN RIVERHILL, LTD.
226 MCKINLEY HILLS PARTNERS-85,
227 MERRY LAND DOWNREIT I LP
228 MERRY LAND, LLC
229 ML NORTH CAROLINA APARTMENTS LP
230 ML TENNESSEE APARTMENTS LP
231 ML TEXAS APARTMENTS LP
232 NORTHRIDGE LAKES LP
233 NRL ASSOCIATES LP
234 OAKS AT BAYMEADOWS ASSOCIATES
235 OAKS AT REGENCY ASSOCIATES
236 ROLIDO PARQUE GP
237 ROSEHILL POINTE GENERAL PARTNERSHIP
238 SARASOTA BENEVA PLACE ASSOICATES, LTD.
239 SEAGULL DRIVE JOINT VENTURE
240 SECOND COUNRTY CLUB ASSOCIATES LIMITED PARTNERSHIP
241 SECOND GEORGIAN WOODS LIMITED PARTNERSHIP
242 SONGBIRD GENERAL PARTNERSHIP
243 SUMMIT PLACE, LLC
244 SUNNY OAK VILLAGE GENERAL PARTNERSHIP
245 THE CROSSINGS ASSOCIATES
246 THE GATES OF REDMOND, L.L.C.
247 THE WIMBERLY APARTMENT HOMES, LTD.
248 THIRD TOWNE CENTRE LIMITED PARTNERSHIP
249 TOWERS AT PORTSIDE URBAN RENEWAL COMPANY, LLC
250 VININGS CLUB AT METROWEST LP
<PAGE>
-----------------------------------------------------------------
EQUITY RESIDENTIAL PROPERTIES TRUST
SUBSIDIARIES
-----------------------------------------------------------------
ENTITY
-----------------------------------------------------------------
251 WINDSOR PLACE, LLC
252 WOOD FOREST ASSOCIATES
253 WOODCREST (AUGUSTA), LLC
254 CRP SERVICE COMPANY, LLC
255 DUXFORD, LLC
256 EQR-BENEVA PLACE, LLC
257 EQR-BROOKDALE VILLAGE, LLC
258 EQR-CHICKASAW CROSSING, LLC
259 EQR-CODELLE, LLC
260 EQR-FOREST PLACE, LLC
261 EQR-GEORGIAN WOODS, LLC
262 EQR-HORIZON PLACE, LLC
263 EQR-LEXFORD LENDER, LLC
264 EQR-MOSAIC, LLC
265 EQR-NEW ENGLAND PROGRAM, LLC
266 EQR-PINETREE/WESTBROOKE, LLC
267 EQR-S & T, LLC
268 EQR-SABLE PALM AT LAKE BUENA VISTA, LLC
269 EQR-SCARBOROUGH SQUARE, LLC
270 EQR-TENNESSEE LOAN PORTFOLIO. LLC
271 EQR-THE WATERFORD AT DEERWOOD, LLC
272 EQR-THE WATERFORD AT ORANGE PARK, LLC
273 EQR-THE WATERFORD AT REGENCY, LLC
274 EQR-WOOD FOREST, LLC
275 GREENTREE APARTMENTS LP
276 LEXFORD GP II, LLC
277 LEXFORD PARTNERS, LLC
278 LEXFORD PROPERTIES MANAGEMENT, LLC
279 OLD REDWOODS, LLC
280 SCARBOROUGH ASSOCIATES
281 SECOND TOWNE CENTRE LP
282 THIRD GREENTREE ASSOCIATES LP
283 WOODBINE PROPERTIES
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
QUALIFIED REIT SUBSIDIARIES:
1 EQR-QRS HIGHLINE OAKS, INC
2 EQR-QRS RIDGEMONT/MOUNTAIN BROOK, INC
3 EQR-QRS SPINNAKER COVE, INC.
4 EQR-QRS WYNDRIDGE II, INC.
5 EQR-QRS WYNDRIDGE III, INC.
6 ERP-QRS ARBORS, INC.
7 ERP-QRS BRETON HAMMOCKS, INC.
8 ERP-QRS BS, INC.
9 ERP-QRS CAMELLERO, INC.
10 ERP-QRS CANTER CHASE, INC.
11 ERP-QRS CEDAR CREST, INC.
12 ERP-QRS CEDAR RIDGE, INC.
13 ERP-QRS CHAPARRAL CREEK, INC.
14 ERP-QRS CONTINENTAL VILLAS, INC.
15 ERP-QRS COUNTRY CLUB I, INC.
16 ERP-QRS COUNTRY CLUB II, INC.
17 ERP-QRS COUNTRY RIDGE, INC.
18 ERP-QRS CPRT II, INC.
19 ERP-QRS CPRT, INC.
20 ERP-QRS CREEKSIDE OAKS, INC.
21 ERP-QRS DARTMOUTH WOODS, INC.
22 ERP-QRS DORAL, INC.
23 ERP-QRS EMERALD PLACE, INC.
24 ERP-QRS EOI, INC.
25 ERP-QRS ESSEX PLACE, INC.
26 ERP-QRS FAIRFIELD, INC.
27 ERP-QRS FLATLANDS, INC.
28 ERP-QRS GEORGIAN WOODS ANNEX, INC.
29 ERP-QRS GLENLAKE CLUB, INC.
30 ERP-QRS GOVERNOR'S PLACE, INC.
31 ERP-QRS GREENWICH WOODS, INC.
32 ERP-QRS HARBOR POINTE, INC.
33 ERP-QRS HUNTER'S GLEN, INC.
34 ERP-QRS LAKEVILLE RESORT, INC.
35 ERP-QRS LAKEWOOD GREENS, INC.
36 ERP-QRS LINCOLN GREEN, INC.
37 ERP-QRS LODGE (OK), INC.
38 ERP-QRS MAGNUM, INC.
39 ERP-QRS MET CA, INC.
40 ERP-QRS MET, INC.
41 ERP-QRS NORTHAMPTON I, INC.
42 ERP-QRS PARK PLACE I, INC.
43 ERP-QRS PARK PLACE II, INC.
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
QUALIFIED REIT SUBSIDIARIES:
44 ERP-QRS PINE MEADOWS GARDEN, INC.
45 ERP-QRS PLANTATION, INC.
46 ERP-QRS PRESTON BEND, INC.
47 ERP-QRS RESERVE SQUARE, INC.
48 ERP-QRS ROLIDO PARQUE, INC.
49 ERP-QRS ROSEHILL POINTE, INC.
50 ERP-QRS SLEEPY HOLLOW, INC.
51 ERP-QRS SONGBIRD, INC.
52 ERP-QRS SONTERRA AT FOOTHILLS RANCH, INC.
53 ERP-QRS STONEBROOK, INC.
54 ERP-QRS SUNNY OAK VILLAGE, INC.
55 ERP-QRS SWN LINE, INC.
56 ERP-QRS TANASBOURNE TERRACE, INC.
57 ERP-QRS TOWNE CENTRE III, INC.
58 ERP-QRS TOWNE CENTRE IV, INC.
59 ERP-QRS TRAILS AT DOMINION, INC.
60 ERP-QRS VALLEY PARK SOUTH, INC.
61 ERP-QRS VILLA SERENAS, INC.
62 ERP-QRS VILLAGE OAKS, INC.
63 ERP-QRS WATSON, INC.
64 ERP-QRS WELLINGTON HILL, INC.
65 ERP-QRS YORKTOWNE, INC.
66 EVANS WITHYCOMBE FINANCE, INC
67 MERRY LAND & INVESTMENT COMPANY, INC.
68 MERRY LAND APARTMENT COMMUNITIES, INC.
69 QRS IRONWOOD, INC.
70 QRS MARKS A, INC.
71 QRS MARKS B, INC.
72 QRS MISSOURI, INC.
73 QRS WARWICK, INC.
74 QRS-740 RIVER DRIVE, INC.
75 QRS-ARBORETUM, INC.
76 QRS-ARTBHOLDER, INC.
77 QRS-ARTCAPLOAN, INC.
78 QRS-BOND, INC.
79 QRS-CHARDONNAY PARK, INC
80 QRS-CONNOR, INC.
81 QRS-FERNBROOK, INC.
82 QRS-GATES OF REDMOND, INC
83 QRS-GREENTREE I, INC.
84 QRS-GREENTREE III, INC.
85 QRS-LLC, INC.
86 QRS-NORTH HILL, INC
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
QUALIFIED REIT SUBSIDIARIES:
87 QRS-PORTLAND CENTER, INC.
88 QRS-SCARBOROUGH, INC.
89 QRS-SMOKETREE, INC.
90 QRS-TOWERS AT PORTSIDE, INC.
91 QRS-TOWNHOMES OF MEADOWBROOK, INC.
92 QRS-VININGS AT ASHLEY LAKE, INC.
93 QRS-WATERFALL, INC.
94 QRS-WOODRIDGE, INC.
95 WADLINGTON, INC.
96 EQR-BENEVA PLACE, INC.
97 EQR-CHICKASAW CROSSING, INC.
98 EQR-FOREST PLACE, INC.
99 EQR-HORIZON PLACE, INC.
100 EQR-SABLE PALM AT LAKE BUENA VISTA, INC.
101 EQR-THE WATERFORD AT DEERWOOD, INC.
102 EQR-THE WATERFORD AT ORANGE PARK, INC.
103 EQR-THE WATERFORD AT REGENCY, INC.
104 EQR-WOOD FOREST, INC.
105 ERP-QRS LONGFELLOW, INC.
106 ERP-QRS MANCHESTER HILL, INC.
107 ERP-QRS MARBRISA, INC.
108 ERP-QRS S&T, INC.
109 ERP-QRS TENNESSEE, INC.
110 QRS-CODELLE, INC.
111 QRS-TENNESSEE LOAN PORTFOLIO, INC.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Forms S-3 No. 333-80835, No. 333-72961, No. 333-45533, No. 333-39289, No.
333-12983, No. 333-06873, No. 33-97680, No. 33-84974 and Forms S-8 No.
333-88237, No. 333-83403, No. 333-66257 and No. 333-06869) of Equity Residential
Properties Trust and in the related Prospectuses, of our report dated February
16, 2000, except for Note 23, as to which the date is March 3, 2000, with
respect to the consolidated financial statements and schedule of Equity
Residential Properties Trust included in this Annual Report (Form 10-K) for the
year ended December 31, 1999.
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
March 13, 2000
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
STATE OF FLORIDA
COUNTY OF DADE
KNOW ALL MEN BY THESE PRESENTS that James D. Harper, Jr., having an
address at 11120 McCann Rd., Amity, OR 97101 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in and about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power and substitution and revocation, hereby ratifying and
confirming all that each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, James D. Harper, Jr., has hereunto set his hand this
29 day of February, 2000.
/s/ James D. Harper, Jr.
--------------------------
James D. Harper, Jr.
I, Marita B. Scholtz, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that James D. Harper, Jr., personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 29 day of February, 2000.
/s/ Marita B. Scholtz
-----------------------
(Notary Public)
My Commission Expires: 5/11/2003
------------------------------
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Errol R. Halperin, having an address
at 107 W. Delaware, Unit F, Chicago, IL 60610, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Reprot on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power of substitution and revocation, hereby ratifying and
confirming all tht each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Errol R. Halperin, has hereunto set his hand this
29th day of February, 2000.
/s/ Errol R. Halperin
-----------------------
Errol R. Halperin
I, Anna L. De La Garza, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Errol R. Halperin, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
use and purposes therein set forth.
Given under my hand and notarial seal this 29th day of February, 2000.
/s/ Anna L. De La Garza
-------------------------
(Notary Public)
My Commission Expires: March 24, 2000
-----------------------
<PAGE>
Exhibit 24.3
POWER OF ATTORNEY
-------------------
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
KNOW ALL MEN BY THESE PRESENTS that John W. Alexander, having an address
at 255 COLVILLE RD., NORTH CAROLINA, has made, constituted and appointed and
BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and
Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, John W. Alexander, has hereunto set his hand this 13
day of March, 2000.
/s/ John W. Alexander
----------------------------------------
John W. Alexander
I, Amy Alexander, a Notary Public in and for said County in the State of
aforesaid, do hereby certify that John W. Alexander, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 13 day of March, 2000.
/s/ Amy Alexander
-----------------------------------------
(Notary Public)
My Commission Expires: _________________________________
Amy Alexander, Notary Public
Cabarrus County, North Carolina
My Commission Expires 10/31/2004
<PAGE>
Exhibit 24.4
POWER OF ATTORNEY
STATE OF Michigan
COUNTY OF Washtenaw
KNOW ALL MEN BY THESE PRESENTS that B. Joseph White, having an address at
3000 Hunting Valley, Ann Arbor, MI 48104, has made, constituted and appointed
and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II
and Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, B. Joseph White, has hereunto set his hand this 9th
day of March, 2000.
/s/ B. Joseph White
-------------------------
B. Joseph White
I, Sheryl L. Brueger, a Notary Public in and for said County in the State
of aforesaid, do hereby certify that B. Joseph White, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 9th day of March, 2000.
/s/ Sheryl L. Brueger
-------------------------
(Notary Public)
Sheryl L. Brueger
Notary Public, Washtenaw County, MI
My Commission Expires Oct. 9, 2002
My Commission Expires:
---------------------------------------
<PAGE>
Exhibit 24.5
POWER OF ATTORNEY
-----------------
STATE OF MARYLAND
COUNTY OF MONTGOMERY
KNOW ALL MEN BY THESE PRESENTS that Henry H. Goldberg, having an address
at 7200 Wisconsin Ave., Suite 1000, Bethesda, MD 20814, has made, constituted
and appointed and BY THESE PRESENTS, does make, constitute and appoint
Douglas Crocker II and Michael J. McHugh, or either of them, having an address
at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Henry H. Goldberg, has hereunto set his hand this
1st day of March, 2000.
/s/ Henry H. Goldberg
-----------------------
Henry H. Goldberg
I, Priscilla Drevo, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Henry H. Goldberg, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
use and purposes therein set forth.
Given under my hand and notarial seal this 1st day of March, 2000.
/s/ Priscilla Drevo
---------------------
Priscilla Drevo
My Commission Expires: 12/1/2003
---------
<PAGE>
Exhibit 24.6
POWER OF ATTORNEY
-----------------
STATE OF NEW YORK
COUNTY OF NEW YORK
KNOW ALL MEN BY THESE PRESENTS that Jeffrey H. Lynford, having an address
at 10 Holly Branch Rd., Katonoh, NY 10536, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Jeffrey H. Lynford, has hereunto set his hand this
1st day of March, 2000.
/s/ Jeffrey H. Lynford
-----------------------
Jeffrey H. Lynford
I, Stasia M. Ananson, a Notary Public in and for State of New York,
County of New York, do hereby certify that Jeffrey H. Lynford, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
use and purposes therein set forth.
Given under my hand and notarial seal this 1st day of March, 2000.
/s/ Stasia M. Ananson
----------------------
(Notary Public)
My Commission Expires: 2001, July 19
<PAGE>
Exhibit 24.7
POWER OF ATTORNEY
STATE OF New Jersey
COUNTY OF Bergen
------
KNOW ALL MEN BY THESE PRESENTS that Edward Lowenthal, having an address
at 13 Ackerman Rd. Saddle River, NJ 07458, has made, constituted and appointed
and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II
and Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois, 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the
doing thereof, with full power of substitution and revocation, hereby
ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Edward Lowenthal, has hereunto set his hand this 2nd
day of March, 2000.
/s/ Edward Lowenthal
--------------------
Edward Lowenthal
I, Kim Beaulieu Ezzy, a Notary Public in and for the said County in the
State of aforesaid, do hereby certify that Edward Lowenthal, personally
known to me to be he same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 2nd day of March, 2000.
/s/ Kim Beaulieu Ezzy
---------------------
(Notary Public)
KIM BEAULIEU EZZY
Notary Public,
State of New York
No. 01EZ6031418
My Commission Expires: ________________________ Qualified in New York
County
Commission Expires on
October 4, 2001.
<PAGE>
Exhibit 24.8
POWER OF ATTORNEY
STATE OF ARIZONA
COUNTY OF MARICOPA
KNOW ALL MEN BY THESE PRESENTS that Stephen O. Evans, having an address
at 5825 E. Starlight Way, Paradise Valley, AZ 85253 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in and about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and
revocation, hereby ratifying and confirming all that each of such
Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by
virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, Stephen O. Evans, has hereunto set his hand this
2nd day of March, 2000.
/s/ Stephen O. Evans
-----------------------
Stephen O. Evans
I, Kristine M. Kovac, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Stephen O. Evans, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 2nd day of March, 2000.
/s/ Kristine M. Kovac
-----------------------
(Notary Public)
My Commission Expires: November 23, 2003
-------------------
<PAGE>
Exhibit 24.9
POWER OF ATTORNEY
STATE OF GEORGIA
COUNTY OF MCDUFFIE
KNOW ALL MEN BY THESE PRESENTS that Boone A. Knox, having an address
at 3133 Washington Rd. Thomson, GA 30824 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in and about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power and substitution and
revocation, hereby ratifying and confirming all that each of such
Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by
virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, Boone A. Knox, has hereunto set his hand this
29th day of February, 2000.
/s/ Boone A. Knox
-----------------------
Boone A. Knox
I, Barbara A. Crutchfield, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Boone A. Knox, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 29th day of February, 2000.
/s/ Barbara A. Crutchfield
---------------------------
(Notary Public)
My Commission Expires: Notary Public, Glascock County, Georgia
My Commission Expires June 22, 2003
---------------------------------------
<PAGE>
Exhibit 24.10
POWER OF ATTORNEY
STATE OF Georgia
COUNTY OF Columbia
KNOW ALL MEN BY THESE PRESENTS that Michael N. Thompson, having an
address at 5 Brigantine Court, Savannah, GA 31410, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Michael N. Thompson, has hereunto set his hand this
6th day of March, 2000.
/s/ Michael N. Thompson
-------------------------
Michael N. Thompson
I, Cindy W. Henry, a Notary Public in and for said County in the State
aforesaid, do hereby certify that Michael N. Thompson, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 6th day of March, 2000.
/s/ Cindy W. Henry
-------------------------
(Notary Public)
Notary Public, Columbia County, Georgia
My Commission Expires January 27, 2004
My Commission Expires:
---------------------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 29,117
<SECURITIES> 0
<RECEIVABLES> 1,731
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 388,098
<PP&E> 12,238,963
<DEPRECIATION> 1,070,487
<TOTAL-ASSETS> 11,715,689
<CURRENT-LIABILITIES> 279,908
<BONDS> 5,473,868
0
1,310,266
<COMMON> 1,275
<OTHER-SE> 4,195,543
<TOTAL-LIABILITY-AND-EQUITY> 11,715,689
<SALES> 1,729,267
<TOTAL-REVENUES> 1,753,118
<CGS> 0
<TOTAL-COSTS> 650,528
<OTHER-EXPENSES> 22,296
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 341,273
<INCOME-PRETAX> 330,333
<INCOME-TAX> 0
<INCOME-CONTINUING> 330,333
<DISCONTINUED> 93,535
<EXTRAORDINARY> (451)
<CHANGES> 0
<NET-INCOME> 310,221
<EPS-BASIC> 2.30
<EPS-DILUTED> 2.29
</TABLE>
