<PAGE> 1
As filed with the Securities and Exchange Commission on February 3, 1998
Registration No. 333-_______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ERP OPERATING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Illinois 36-3894853
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Two North Riverside Plaza, Suite 400
Chicago, Illinois 60606
(312) 474-1300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Douglas Crocker II
President and Chief Executive Officer
Two North Riverside Plaza, Suite 400
Chicago, Illinois 60606
(312) 474-1300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Ruth Pinkham Haring, Esq.
William C. Hermann, Esq.
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as possible after the effective date of this Registration Statement and
from time to time as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to distribution or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Amount to be Aggregate Price Aggregate Offering Registration
Class of Securities(1) Registered(2)(3) Per Security Price(2)(4) Fee(5)
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<S> <C> <C> <C> <C>
Debt Securities . . . . . . . . . $1,000,000,000 (6) $1,000,000,000 $295,000
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</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
(Footnotes from previous page)
(1) This Registration Statement also covers delayed delivery contracts
which may be issued by the Registrant under which the counterparty may
be required to purchase Debt Securities covered hereby. Such contracts
may be issued together with the specific Debt Securities to which they
relate.
(2) In U.S. Dollars or the equivalent thereof denominated in one or more
foreign currencies or units of two or more foreign currencies or
composite currencies (such as European Currency Units).
(3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus included in this Registration Statement relates also to
$275,000,000 of Debt Securities registered on Form S-3 Registration
No. 333-12213.
(4) Estimated solely for purposes of calculating the registration fee.
(5) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended.
(6) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO BUY NOR SHALL THERE
BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION
OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 3, 1998
PROSPECTUS
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$1,275,000,000
ERP OPERATING LIMITED PARTNERSHIP
DEBT SECURITIES
----------------
ERP Operating Limited Partnership, an Illinois limited partnership (the
"Operating Partnership"), may from time to time offer in one or more series its
unsecured senior debt securities (the "Debt Securities"), in an aggregate
principal amount of up to $1,275,000,000, on terms to be determined at the time
of offering. The Debt Securities may be offered by the Operating Partnership in
separate series, in amounts, at prices and on terms to be set forth in a
supplement to this Prospectus (each a "Prospectus Supplement").
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include the specific title, aggregate principal amount,
currency, form (which may be registered or bearer, or certificated or global),
authorized denominations, maturity, rate (or manner of calculation thereof) and
time of payment of interest, terms for redemption at the option of the Operating
Partnership or repayment at the option of the holders of such Debt Securities,
terms for sinking fund payments, covenants and any initial public offering
price.
The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Debt Securities
covered by such Prospectus Supplement.
The Debt Securities may be offered directly, through agents designated
from time to time by the Operating Partnership, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Debt Securities, their names, and any applicable purchase price, fee, commission
or discount arrangement between or among them, will be set forth or will be
calculable from the information set forth in the applicable Prospectus
Supplement. See "Plan of Distribution." No Debt Securities may be sold without
delivery of the applicable Prospectus Supplement describing the method and terms
of the offering of such Debt Securities.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN
FACTORS RELATING TO AN INVESTMENT IN THE DEBT SECURITIES.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
----------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1998.
<PAGE> 4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and the documents incorporated by
reference herein and any accompanying Prospectus Supplement, including those set
forth in "Risk Factors" and "Use of Proceeds" herein, constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act"). Such forwarding-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company or industry
results to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions which will, among other things, affect demand for multifamily
properties, availability and credit worthiness of prospective tenants, lease
rents and the availability of financing, adverse changes in the real estate
markets including, among other things, competition with other companies, risks
of real estate acquisition, governmental actions and initiatives, and
environmental/safety requirements. See "Risk Factors."
AVAILABLE INFORMATION
The Operating Partnership is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The Registration
Statement (defined below), the exhibits and schedules forming a part thereof and
the reports, proxy statements and other information filed by the Operating
Partnership with the Commission in accordance with the Exchange Act can be
inspected and copied at the Commission's Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following regional offices of
the Commission: Seven World Trade Center, 13th Floor, New York, New York 10048
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements, and other information regarding registrants,
including the Operating Partnership, that file electronically with the
Commission.
The Operating Partnership has filed with the Commission a registration
statement on Form S-3 (the "Registration Statement"), of which this Prospectus
is a part, under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities offered hereby. For further information with
respect to the Operating Partnership and the Debt Securities offered hereby,
reference is made to the Registration Statement and exhibits thereto. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference and the exhibits and schedules
thereto. For further information regarding the Operating Partnership and the
Debt Securities, reference is hereby made to the Registration Statement and such
exhibits and schedules which may be obtained from the Commission at its
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission or from the Commission's Web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Operating Partnership
under the Exchange Act with the Commission and are incorporated herein by
reference:
a. The Operating Partnership's Annual Report on Form 10-K for the
year ended December 31, 1996.
b. The Operating Partnership's Quarterly Reports on Form 10-Q for
the periods ended March 31, 1997, June 30, 1997 and September
30, 1997, respectively.
c. The Operating Partnership's Current Reports on Form 8-K dated
May 23, 1996, November 15, 1996, May 20, 1997, May 30, 1997,
August 15, 1997, August 27, 1997, September 10, 1997, September
17, 1997, September 30, 1997, October 3, 1997, October 9, 1997,
November 20, 1997 and December 23, 1997, and the Operating
Partnership's Current Reports on Forms 8-K/A dated May 23, 1996
and October 9, 1997.
d. The Operating Partnership's Fourth Amended and Restated ERP
Operating Limited Partnership Agreement of Limited
Partnership, filed as Exhibit 10.1 to the Operating
Partnership's Quarterly Report on Form 10-Q for period ended
September 30, 1995, and the Operating Partnership's Amendment
to Fourth Amended and Restated Agreement of Limited
Partnership, filed as Exhibit 4.2 to the Operating
Partnership's Current Report on Form 8-K dated December 23,
1997.
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e. The Operating Partnership's Consent
Solicitation/Prospectus/Information Statement dated November
24, 1997.
All documents filed by the Operating Partnership pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated by reference in this Prospectus and to be
part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in the applicable Prospectus Supplement) or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus or any accompanying Prospectus
Supplement. Subject to the foregoing, all information appearing in this
Prospectus and each accompanying Prospectus Supplement is qualified in its
entirety by the information appearing in the documents incorporated by
reference.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered upon written or oral request. Requests should be
directed to ERP Operating Limited Partnership, c/o Equity Residential Properties
Trust, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attention:
Cynthia McHugh (telephone number: (312) 474-1300).
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As used herein, the term "Company" includes Equity Residential
Properties Trust as the survivor of the mergers between Equity Residential
Properties Trust (the "Company") and each of Wellsford Residential Property
Trust ("Wellsford") and Evans Withycombe Residential, Inc. ("EWR") and each of
the Company, Wellsford and EWR as predecessors to the Company, unless the
context indicates otherwise.
THE OPERATING PARTNERSHIP
GENERAL
The Debt Securities offered hereby are being issued by the Operating
Partnership which is managed by the Company, its general partner. The Company,
one of the largest publicly traded real estate investment trusts ("REITs")
(based on the aggregate market value of its outstanding equity capitalization),
is a self-administered and self-managed equity REIT. The Company was organized
as a Maryland real estate investment trust in March 1993 and commenced
operations as a publicly traded company on August 18, 1993 upon completion of
its initial public offering (the "IPO"). The Company 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 the Company. These entities had been engaged in the acquisition,
ownership and operation of multifamily properties since 1969. In May 1997, the
Company completed the acquisition of the multifamily property business of
Wellsford through the tax free merger of the Company and Wellsford. In December
1997, the Company completed the acquisition of the multifamily property business
of EWR through the tax free merger of EWR and the Company. The Company's senior
executives average over 24 years of experience in the multifamily property
business.
All of the Company's interests in its multifamily properties (the
"Properties") are held or controlled directly or indirectly by, and
substantially all of its operations relating to the Properties are conducted
through, the Operating Partnership.
The Operating Partnership currently has eight classes of limited
partnership interests outstanding: (i) partnership interests ("OP Units"), which
may be exchanged by the holders thereof for either common shares of beneficial
interest of the Company, $0.01 par value per share ("Common Shares"), on a
one-for-one basis or, at the Company's option, cash; (ii) 9 3/8% Series A
Cumulative Redeemable Preference Units ("9 3/8% Series A Preference Units");
(iii) 9 1/8% Series B Cumulative Redeemable Preference Units ("9 1/8% Series B
Preference Units"); (iv) 9 1/8% Series C Cumulative Redeemable Preference Units
("9 1/8% Series C Preference Units"); (v) 8.60% Series D Cumulative Redeemable
Preference Units ("8.60% Series D Preference Units"); (vi) Series E Cumulative
Convertible Preference Units ("Series E Preference Units"), (vii) 9.65% Series F
Cumulative Redeemable Preference Units ("9.65% Series F Preference Units") and
(viii) 7 1/4% Series G Convertible Cumulative Preference Units ("7 1/4% Series G
Preference Units"). The 9 3/8% Series A Preference Units, the 9 1/8% Series B
Preference Units, the 9 1/8% Series C Preference Units, the 8.60% Series D
Preference Units, the Series E Preference Units, the 9.65% Series F Preference
Units and the 7 1/4% Series G Preference Units are owned by the Company and
mirror the payments of distributions, including accrued and unpaid distributions
upon redemption, and of the liquidating preference amount of the Company's 9
3/8% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest,
$.01 par value per share (the "Series A Preferred Shares"), the Company's 9 1/8%
Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01 par
value per share (the "Series B Preferred Shares"), the Company's 9 1/8% Series C
Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01 per value
per share (the "Series C Preferred Shares"), the Company's 8.60% Series D
Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01 par value
per share (the "Series D Preferred Shares"), the Company's Series E Cumulative
Convertible Preferred Shares of Beneficial Interest, $.01 par value per share
(the "Series E Preferred Shares"), the Company's 9.65% Series F Preferred Shares
of Beneficial Interest, $.01 par value per share (the "Series F Preferred
Shares"), and the Company's 7 1/4% Series G Convertible Cumulative Preferred
Shares of Beneficial Interest, $.01 par value per share (the "Series G Preferred
Shares" and, collectively with the Series A Preferred Shares, the Series B
Preferred Shares, the Series C Preferred Shares, the Series D Preferred Shares,
the Series E Preferred Shares and the Series F Preferred Shares, the
"Outstanding Preferred Shares"), respectively. The Company controls the
Operating Partnership as the sole general partner and, as of January 29, 1998,
owned approximately 91% of all of the Operating Partnership's outstanding
partnership interests, excluding the 9 3/8% Series A Preference Units, the 9
1/8% Series B Preference Units, the 9 1/8% Series C Preference Units, the 8.60%
Series D Preference Units, the Series E Preference Units, the 9.65% Series F
Preference Units and the 7 1/4% Series G Preference Units. It is the Company's
policy that Equity Residential Properties Trust 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.
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The Operating Partnership's and the Company's corporate headquarters
and executive offices are located at Two North Riverside Plaza, Suite 400,
Chicago, Illinois 60606, and its telephone number is (312) 474-1300. In
addition, the Operating Partnership has 24 management offices in the following
cities: Chicago, Illinois; Denver, Colorado; Seattle, Washington; Bethesda,
Maryland; Atlanta, Georgia; Las Vegas, Nevada; Phoenix, Arizona; Portland,
Oregon; Dallas, Houston and San Antonio, Texas; Irvine and Stockton, California;
Ypsilanti, Michigan; Charlotte and Raleigh, North Carolina; Tampa and Ft.
Lauderdale, Florida; Kansas City; Kansas; Minneapolis, Minnesota; Louisville,
Kentucky; Tulsa, Oklahoma; Boston, Massachusetts; and Nashville, Tennessee.
THE OPERATING SUBSIDIARIES
Essentially all operations of the Company are conducted directly or
indirectly by the Operating Partnership and those entities owned or controlled
by the Operating Partnership (collectively, the "Subsidiaries"), so that, among
other things, the Company is able to comply with certain technical and complex
requirements under the federal tax law relating to the assets and income that a
REIT may hold or earn. In this regard, the Company has established: (i) the
Operating Partnership which benefited those entities that contributed certain of
the 69 Properties acquired by the Operating Partnership in connection with the
IPO in exchange for OP Units by allowing them to partially defer certain tax
consequences and which will allow the Operating Partnership to acquire
additional multifamily properties in transactions that may defer some or all of
the sellers' tax consequences, (ii) Equity Residential Properties Management
Corp., Equity Residential Properties Management Corp. II, Equity Residential
Properties Management Corp. III, Wellsford Holly Management, Inc. and Evans
Withycombe Management, Inc. (collectively, the "Management Corps") and
Equity Residential Properties Management Limited Partnership and Equity
Residential Properties Management Limited Partnership II (collectively, the
"Management Partnerships") provide management services because the income from
such operations might jeopardize the Company's REIT status if such services were
provided directly by the Company or the Operating Partnership to third parties,
and (iii) a series of limited partnerships and limited liability companies
which own the beneficial interest of certain of the Properties which are
encumbered by mortgage financing. The Operating Partnership and its
Subsidiaries perform substantially all ownership and management functions with
respect to the Properties.
RISK FACTORS
Prospective investors should carefully consider, among other factors,
the matters described below prior to making an investment decision regarding the
Debt Securities offered hereby.
ADVERSE CONSEQUENCES OF DEBT FINANCING AND PREFERRED SHARES
General Risks. As of December 31, 1997, the Properties were subject to
approximately $1.6 billion of mortgage indebtedness and the Operating
Partnership's total debt equaled approximately $2.9 billion, $912.8 million of
which was floating rate debt. In addition, from June 1995 through October 1997,
the Company issued the Outstanding Preferred Shares pursuant to preferred share
and depositary share offerings. The Operating Partnership used the proceeds from
debt offerings and the Preferred Share Offerings to repay indebtedness and to
acquire additional Properties. The Operating Partnership is subject to the risks
normally associated with debt or preferred equity financing, including the risk
that the Operating Partnership's cash flow will be insufficient to meet required
payments of principal and interest, the risk that existing indebtedness may not
be refinanced or that the terms of such refinancing will not be as favorable as
the terms of current indebtedness and the risk that necessary capital
expenditures for such purposes as renovations and other improvements may not be
financed on favorable terms or at all. If the Operating Partnership were unable
to refinance its indebtedness on acceptable terms, or at all, the Operating
Partnership might be forced to dispose of one or more of the Properties on
disadvantageous terms, which might result in losses to the Operating Partnership
and might adversely affect the cash available to meet required payments of
principal and interest and for distributions to unitholders. If interest rates
or other factors at the time of the refinancing result in higher interest rates
upon refinancing, the Operating Partnership's interest expense would increase,
which would affect the Operating Partnership's ability to meet required payments
of principal and interest and to make distributions to its unitholders.
Furthermore, if a Property is mortgaged to secure payment of indebtedness and
the Operating Partnership is unable to meet mortgage payments, the mortgagee
could foreclose upon the Property, appoint a receiver and receive an assignment
of rents and leases or pursue other remedies, all with a consequent loss of
income and asset value to the Operating Partnership. Foreclosures could also
create taxable income without accompanying cash proceeds, thereby hindering the
Company's ability to meet the REIT distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code").
Restrictions on the Company's Activities. A substantial portion of the
Operating Partnership's debt has been issued pursuant to two different
indentures (the "Indentures") which restrict the amount of indebtedness
(including acquisition financing) the Operating Partnership may incur.
Accordingly, if the Company or the Operating Partnership is unable to raise
additional equity or borrow money,
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respectively, because of the debt restrictions in the Indentures, the Operating
Partnership's ability to acquire additional properties may be limited. If the
Operating Partnership is unable to acquire additional properties, its ability to
increase funds from operations, and thereby cash available to meet required
payments of principal and interest, will be limited to increasing funds from
operations of the existing Properties in the Operating Partnership's portfolio
at such time.
Bond Compliance Requirements. Certain of the Operating Partnership's
Properties are subject to restrictive covenants or deed restrictions relating to
current or previous tax-exempt bond financing and owns the bonds collateralized
by several additional Properties. The Operating Partnership has retained an
independent outside consultant to monitor compliance with the restrictive
covenants and deed restrictions that affect these Properties. The bond
compliance requirements may have the effect of limiting the Operating
Partnership's income from these Properties if the Operating Partnership is
required to lower its rental rates to attract low or moderate income tenants, or
eligible/qualified tenants.
POTENTIAL ENVIRONMENTAL LIABILITY AFFECTING THE COMPANY
Under various Federal, state and local environmental laws, ordinances
and regulations, an owner of real estate may be liable for the costs of removal
or remediation of certain hazardous or toxic substances on such property. These
laws often impose environmental liability without regard to whether the owner
knew of, or was responsible for, the presence of such hazardous or toxic
substances. The presence of such substances, or the failure properly to
remediate such substances, may adversely affect the owner's ability to sell or
rent the property or to borrow using the property as collateral. Persons who
arrange for the disposal or treatment of hazardous or toxic substances may also
be liable for the costs of removal or remediation of such substances at a
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain laws impose liability for release of
asbestos-containing materials ("ACMs") into the air and third parties may seek
recovery from owners or operators of real properties for personal injury
associated with ACMs. In connection with the ownership (direct or indirect),
operation, management and development of real properties, the Operating
Partnership or the Subsidiaries, as the case may be, may be considered an owner
or operator of such properties or as having arranged for the disposal or
treatment of hazardous or toxic substances and, therefore, potentially liable
for removal or remediation costs, as well as certain other related costs,
including governmental fines and injuries to persons and property.
All of the Properties have been the subject of a Phase I, and in
certain cases a supplemental, environmental assessment (which involves general
inspections without soil sampling or ground water analysis and generally without
radon testing) completed by qualified independent environmental consultant
companies. All of the environmental assessments were conducted within the last
five years and were obtained prior to the acquisition by the Operating
Partnership of each of the Properties. These environmental assessments have not
revealed, nor is the Operating Partnership aware of, any environmental liability
that the Operating Partnership's management believes would have a material
adverse effect on the Operating Partnership's business, results of operations,
financial condition or liquidity.
No assurance can be given that existing environmental assessments with
respect to any of the Properties reveal all environmental liabilities, that any
prior owner of a Property did not create any material environmental condition
not known to the Operating Partnership, or that a material environmental
condition does not otherwise exist as to any one or more Properties.
REAL ESTATE INVESTMENT CONSIDERATIONS
General. Income from real property investments and the Operating
Partnership's resulting ability to make expected interest payments on Debt
Securities may be adversely affected by the general economic climate, local
conditions such as oversupply of apartment units or a reduction in demand for
apartment units in the area, the attractiveness of the Properties to tenants,
zoning or other regulatory restrictions, the ability of the Operating
Partnership to provide adequate maintenance and insurance, and increased
operating costs (including insurance premiums and real estate taxes). The
Operating Partnership's income would also be adversely affected if tenants were
unable to pay rent or the Operating Partnership were unable to rent apartment
units on favorable terms. If the Operating Partnership were unable to promptly
relet or renew the leases for a significant number of apartment units, or if the
rental rates upon such renewal or reletting were significantly lower than
expected rates, then the Operating Partnership's income and ability to meet
required payments of principal and interest and to make expected distributions
to unitholders may be adversely affected. In addition, certain expenditures
associated with each equity investment (such as real estate taxes and
maintenance costs) generally are not reduced when circumstances cause a
reduction in income from the investment. Furthermore, real estate investments
are relatively illiquid and, therefore, will tend to limit the ability of the
Operating Partnership to vary its portfolio promptly in response to changes in
economic or other conditions.
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USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement,
the Operating Partnership intends to use the proceeds from the sale of the Debt
Securities for general purposes including, without limitation, the acquisition
of multifamily properties and the repayment of debt.
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERENCE UNIT DISTRIBUTIONS
The following table sets forth the Operating Partnership's ratios of
earnings to combined fixed charges and preference unit distributions for the
periods shown.
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30, For the Years Ended December 31,
------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
1.69 1.58 1.59 1.54 2.18 1.25 .91
</TABLE>
Ratio of earnings to combined fixed charges and preference unit
distributions represents the ratio of income before gain on disposition of
properties, extraordinary items and allocation to minority interests plus fixed
charges (principally interest expense incurred) to fixed charges and preference
unit distributions.
The reorganization and recapitalization of the Company and the
Operating Partnership effected in connection with the IPO in 1993 permitted the
Company and the Operating Partnership to significantly deleverage the Properties
resulting in an improved ratio of earnings to combined fixed charges and
preference unit distributions for periods subsequent to the IPO.
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<PAGE> 10
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and
provisions of the Debt Securities to which any Prospectus Supplement may relate.
The particular terms of the Debt Securities being offered and the extent to
which such general provisions may apply will be described in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities will be issued under an Indenture dated as of
October 1, 1994, as amended or supplemented from time to time (the "Indenture"),
between the Operating Partnership and The First National Bank of Chicago, as
trustee (the "Trustee"). The Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part and is available for
inspection at the corporate trust office of the Trustee at 14 Wall Street,
Eighth Floor, New York, New York or as described above under "Available
Information." The Indenture is subject to, and governed by, the Trust Indenture
Act of 1939, as amended (the "TIA"). The statements made hereunder relating to
the Indenture and the Debt Securities to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indenture and such Debt Securities. All section references appearing herein are
to sections of the Indenture, and capitalized terms used but not defined herein
shall have the respective meanings set forth in the Indenture.
GENERAL
The Debt Securities will be direct, unsecured obligations of the
Operating Partnership and will rank equally with all other unsecured and
unsubordinated indebtedness of the Operating Partnership. Unless otherwise
specified in the applicable Prospectus Supplement, the Company has no obligation
for payment of principal of or interest on the Debt Securities. The Debt
Securities may be issued in one or more series, in each case as established from
time to time in or pursuant to authority granted by a resolution of the Board of
Trustees of the Company, as general partner of the Operating Partnership, or as
established in the Indenture or in one or more indentures supplemental to the
Indenture. All Debt Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders of the Debt Securities of such series, for issuances of additional
Debt Securities of such series (Section 301).
The Indenture provides that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indenture may resign or be removed with respect to one or more
series of Debt Securities, and a successor Trustee may be appointed to act with
respect to such series (Section 608). In the event that two or more persons are
acting as Trustee with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the applicable Indenture separate
and apart from the trust administered by any other Trustee (Section 609), and,
except as otherwise indicated herein, any action described herein to be taken by
the Trustee may be taken by each such Trustee with respect to, and only with
respect to, the one or more series of Debt Securities for which it is Trustee
under the Indenture.
Reference is made to the Prospectus Supplement relating to the series
of Debt Securities being offered for the specific terms thereof, including
without limitation:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity
thereof;
(4) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be
payable;
(5) the rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at
which such Debt Securities will bear interest, if any;
(6) the date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the Interest
Payment Dates on which any such interest will be payable, the
Regular Record Dates for such Interest Payment
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Dates, or the method by which such dates shall be determined,
the Person to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than
that of a 360-day year of twelve 30-day months;
(7) the place or places where (i) the principal of (and premium
and Make-Whole Amounts (as defined below), if any) and
interest, if any, on such Debt Securities will be payable,
(ii) such Debt Securities may be surrendered for conversion or
registration of transfer or exchange and (iii) notices or
demands to or upon the Operating Partnership in respect of
such Debt Securities and the Indenture may be served;
(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Debt
Securities may be redeemed, in whole or in part, at the option
of the Operating Partnership, if the Operating Partnership is
to have such an option;
(9) the obligation, if any, of the Operating Partnership to redeem,
repay or purchase such Debt Securities at the option of a
Holder thereof, and the period or periods within which, the
price or prices as to which and the terms and conditions upon
which such Debt Securities will be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
(10) if other than United States dollars, the currency or currencies
in which such Debt Securities are denominated and payable,
which may be a foreign currency or units of two or more foreign
currencies or a composite currency or currencies, and the terms
and conditions relating thereto;
(11) whether the amount of payments of principal (and premium, if
any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method
(which index, formula or other method may, but need not be,
based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such
amounts shall be determined;
(12) any additions to, modifications of or deletions from the terms
of such Debt Securities with respect to the Events of Default
or covenants, set forth in the Indenture;
(13) whether such Debt Securities will be issued in certificated or
book-entry form;
(14) whether such Debt Securities will be in registered or bearer
form and, if in registered form, the denominations thereof if
other than $1,000 and any integral multiple thereof and, if in
bearer form, the denominations thereof and the terms and
conditions relating thereto;
(15) the applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen of the Indenture;
(16) whether and under what circumstances the Operating Partnership
will pay Additional Amounts as contemplated in the Indenture in
respect of any tax, assessment or governmental charge and, if
so, whether the Operating Partnership will have the option to
redeem such Debt Securities in lieu of making such payment; and
(17) any other terms of such Debt Securities not inconsistent with
the provisions of the Indenture (Section 301).
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Securities"). Special United States federal
income tax, accounting and other considerations applicable to Original Issue
Discount Securities will be described in the applicable Prospectus Supplement.
Except as set forth below under "Certain Covenants - Limitations on
Incurrence of Debt," the Indenture does not contain any other provisions that
would limit the ability of the Operating Partnership to incur indebtedness or
that would afford Holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving the Operating Partnership or in the
event of a change of control. However, restrictions on ownership and transfers
of the Company's Common Shares and preferred shares of beneficial interest are
designed to preserve its status as a REIT and, therefore, may act to prevent or
hinder a change of control. Reference is made to the applicable Prospectus
Supplement for information with respect to any deletions from, modifications of
or additions to the Events of
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Default or covenants of the Operating Partnership that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Registered Securities of any series will be issuable in denominations of $1,000
and integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate trust office of the Trustee, initially located
at 14 Wall Street, Eighth Floor, New York, New York; provided that, at the
option of the Operating Partnership, payment of interest may be made by check
mailed to the address of the Person entitled thereto as it appears in the
Security Register or by wire transfer of funds to such Person at an account
maintained within the United States (Sections 301, 305, 306, 307 and 1002).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the Indenture
(Section 307).
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt Securities issued
in book- entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the Trustee. Every Debt Security surrendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Operating
Partnership may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (Section 305). If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Trustee) initially designated by the Operating Partnership with respect to
any series of Debt Securities, the Operating Partnership may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Operating
Partnership will be required to maintain a transfer agent in each Place of
Payment for such series. The Operating Partnership may at any time designate
additional transfer agents with respect to any series of Debt Securities
(Section 1002).
Neither the Operating Partnership nor the Trustee shall be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on the day of mailing of the relevant notice of redemption;
(ii) register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; or (iii) issue, register the transfer of or exchange any Debt
Security which has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
MERGER, CONSOLIDATION OR SALE
The Operating Partnership may consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into any
other entity, provided that (i) the Operating Partnership shall be the
continuing entity, or the successor entity shall be an entity organized and
existing under the laws of the United States or a state thereof and such
successor entity shall expressly assume payment of the principal of and premium
(if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 1012) on all of the Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the Indenture, (ii) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Operating
Partnership or any Subsidiary as a result thereof as having been incurred by the
Operating Partnership, or such Subsidiary at the time of such transaction, no
Event of Default under the Indenture, and no event which after notice or the
lapse of time, or both, would become such an Event of Default, shall have
occurred and be continuing; and (iii) an officer's certificate of the Company as
general partner of the Operating Partnership and legal opinion covering such
conditions shall be delivered to the Trustee (Sections 801 and 803).
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CERTAIN COVENANTS
Limitations on Incurrence of Debt. The Operating Partnership will not,
and will not permit any Subsidiary to incur any Debt (as defined below), other
than intercompany Debt (representing Debt to which the only parties are the
Company, the Operating Partnership and any of its Subsidiaries, (but only so
long as such Debt is held solely by any of the Company, the Operating
Partnership and any Subsidiary) that is subordinate in right of payment of the
Debt Securities, if, immediately after giving effect to the incurrence of such
additional Debt, the aggregate principal amount of all outstanding Debt of the
Operating Partnership and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles is greater than 60% of
the sum of (i) the Operating Partnership's Total Assets (as defined below) as of
the end of the calendar quarter covered in the Operating Partnership's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under
the Exchange Act, with the Trustee) prior to the incurrence of such additional
Debt and (ii) the increase in Total Assets from the end of such quarter
including, without limitation, any increase in Total Assets caused by the
incurrence of such additional Debt (such increase together with the Company's
Total Assets shall be referred to as the "Adjusted Total Assets") (Section
1004).
In addition to the foregoing limitation on the incurrence of Debt, the
Operating Partnership will not and will not permit any Subsidiary to incur any
Debt if the ratio of Consolidated Income Available for Debt Service to the
Maximum Annual Service Charge for the four consecutive fiscal quarters most
recently ended prior to the date on which such additional Debt is to be incurred
shall have been less than 1.5 to 1, on a pro forma basis after giving effect to
the incurrence of such Debt and to the application of the proceeds therefrom,
and calculated on the assumption that (i) such Debt and any other Debt incurred
by the Operating Partnership or its Subsidiaries since the first day of such
four- quarter period and the application of the proceeds therefrom, including to
refinance other Debt, had occurred at the beginning of such period, (ii) the
repayment or retirement of any other Debt by the Operating Partnership or its
Subsidiaries since the first day of such four-quarter period had been incurred,
repaid or retired at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility shall be
computed based upon the average daily balance of such Debt during such period),
(iii) the income earned on any increase in Adjusted Total Assets since the end
of such four-quarter period had been earned, on an annualized basis, during such
period; and (iv) in the case of any acquisition or disposition by the Operating
Partnership or any Subsidiary of any asset or group of assets since the first
day of such four-quarter period, including, without limitation, by merger, stock
purchase or sale, or asset purchase or sale, such acquisition or disposition or
any related repayment of Debt had occurred as of the first day of such period
with the appropriate adjustments with respect to such acquisition or disposition
being included in such pro forma calculation (Section 1004).
In addition to the foregoing limitations on the incurrence of Debt, the
Operating Partnership will not, and will not permit any Subsidiary to incur any
Debt secured by any mortgage, lien, charge, pledge, encumbrance or security
interest of any kind upon any of the property of the Operating Partnership or
any Subsidiary ("Secured Debt"), whether owned at the date of the Indenture or
thereafter acquired, if, immediately after giving effect to the incurrence of
such additional Secured Debt, the aggregate principal amount of all outstanding
Secured Debt of the Operating Partnership and its Subsidiaries on a consolidated
basis is greater than 40% of the Adjusted Total Assets (Section 1004).
Notwithstanding the limitation set forth in the preceding paragraph,
the Indenture provides that the Operating Partnership and its Subsidiaries may
incur Secured Debt, provided that such Secured Debt is incurred under the
Acquisition Lines of Credit, and provided further that after the increase of
such Secured Debt under the Acquisition Lines of Credit, the aggregate principal
amount of all outstanding Secured Debt, including debt under the Acquisition
Lines of Credit of the Operating Partnership or any Subsidiary does not exceed
45% of the Adjusted Total Assets; provided, however, that the aggregate
principal amount of all outstanding Secured Debt of the Operating Partnership
and its Subsidiaries on a consolidated basis may exceed 40% of the Adjusted
Total Assets for not more than 270 days of any consecutive 360 day period.
For purposes of the foregoing provisions regarding the limitation on
the incurrence of Debt, Debt shall be deemed to be "incurred" by the Operating
Partnership and its Subsidiaries on a consolidated basis whenever the Operating
Partnership and its Subsidiaries on a consolidated basis shall create, assume,
guarantee or otherwise become liable in respect thereof.
Restrictions on Distributions. The Operating Partnership will not make
any distribution, by reduction of capital or otherwise (other than distributions
payable in securities evidencing interests in the Operating Partnership's
capital for the purpose of acquiring interests in real property or otherwise)
if, immediately after such distribution the aggregate of all such distributions
made since March 31, 1993 shall exceed Funds from Operations of the Operating
Partnership and its Subsidiaries from March 31, 1993 until the end of the
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calendar quarter covered in the Operating Partnership's Annual Report on Form
10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed
with the Commission (or, if such filing is not permitted under the Exchange Act,
with the Trustee) prior to such distribution; provided, however, that the
foregoing limitation shall not apply to any distribution which is necessary to
maintain the Company's status as a REIT under the Code, if the aggregate
principal amount of all outstanding Debt of the Operating Partnership and its
Subsidiaries on a consolidated basis at such time is less than 60% of Adjusted
Total Assets (Section 1005).
Notwithstanding the foregoing, the Operating Partnership will not be
prohibited from making the payment of any distribution within 30 days of the
declaration thereof if at such date of declaration such payment would have
complied with the provisions of the immediately preceding paragraph (Section
1005).
Existence. Except as permitted under "Merger, Consolidation or Sale,"
the Operating Partnership will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Operating Partnership shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of the business of the Operating
Partnership, and that the loss thereof is not disadvantageous in any material
respect to the Holders of the Debt Securities.
Maintenance of Properties. The Operating Partnership will cause all of
its properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Operating Partnership may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that the Operating Partnership shall
not be prevented from selling or otherwise disposing for value its properties in
the ordinary course of business (Section 1007).
Insurance. The Operating Partnership will and will cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then fully insurable value with financially sound
and reputable insurance companies (Section 1008).
Payment of Taxes and Other Claims. The Operating Partnership will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Operating Partnership or any Subsidiary, and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Operating Partnership or any Subsidiary; provided, however, that
the Operating Partnership shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings (Section 1009).
Provision of Financial Information. The Holders of the Debt Securities
will be provided with copies of the annual reports and quarterly reports of the
Operating Partnership. Whether or not the Operating Partnership is subject to
Section 13 or 15(d) of the Exchange Act, the Operating Partnership will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents which the Operating Partnership
would have been required to file with the Commission pursuant to such Section 13
or 15(d) (the "Financial Statements") if the Operating Partnership were so
subject, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Operating
Partnership would have been required so to file such documents if the Operating
Partnership were so subject. The Operating Partnership will also in any event
(x) within 15 days of each Required Filing Date (i) transmit by mail to all
Holders of Debt Securities, as their names and addresses appear in the Security
Register, without cost to such Holders, copies of the annual reports and
quarterly reports which the Operating Partnership would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Operating Partnership were subject to such Sections and (ii) file with the
Trustee copies of the annual reports, quarterly reports and other documents
which the Operating Partnership would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Operating
Partnership were subject to such Sections and (y) if filing such documents by
the Operating Partnership with the Commission is not permitted under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any prospective
Holder (Section 1010).
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ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE
In addition to the covenants described in the section entitled "Certain
Covenants - Limitations on Incurrence of Debt" above, the Operating Partnership
is required to maintain Total Unencumbered Assets of not less than 150% of the
aggregate outstanding principal amount of the Unsecured Debt of the Operating
Partnership. As of September 30, 1997, the Operating Partnership's Total
Unencumbered Assets were equal to approximately 394% of the aggregate
outstanding amount of the Unsecured Debt of the Operating Partnership.
Any additional covenants and/or modifications to the covenants
described above with respect to any series of Debt Securities will be set forth
in the Prospectus Supplement relating thereto.
As used herein,
"Acquisition Lines of Credit" means, collectively, any secured lines of
credit of the Operating Partnership and its Subsidiaries, the proceeds of which
shall be used to, among other things, acquire interests, directly or indirectly,
in real estate.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Operating Partnership and its
Subsidiaries plus amounts which have been deducted for (a) interest on Debt of
the Operating Partnership and its Subsidiaries, (b) provision for taxes of the
Operating Partnership and its Subsidiaries based on income, (c) amortization of
debt discount, (d) provisions for gains and losses on properties, (e)
depreciation and amortization, (f) the effect of any non-cash charge resulting
from a change in accounting principles in determining Consolidated Net Income
for such period and (g) amortization of deferred charges.
"Consolidated Net Income" for any period means the amount of
consolidated net income (or loss) of the Operating Partnership and its
Subsidiaries for such period determined on a consolidated basis in accordance
with generally accepted accounting principles.
"Debt" of the Operating Partnership or any Subsidiary means any
indebtedness of the Operating Partnership and its Subsidiaries, whether or not
contingent, in respect of (i) borrowed money evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness secured by any mortgage,
pledge, lien, charge, encumbrance or any security interest existing on property
owned by the Operating Partnership and its Subsidiaries, (iii) the reimbursement
obligations, contingent or otherwise, in connection with any letters of credit
actually issued or amounts representing the balance deferred and unpaid of the
purchase price of any property except any such balance that constitutes an
accrued expense or trade payable or (iv) any lease of property by the Operating
Partnership and its Subsidiaries as lessee which is reflected on the Operating
Partnership's consolidated balance sheet as a capitalized lease in accordance
with generally accepted accounting principles, in the case of items of
indebtedness incurred under (i) through (iii) above to the extent that any such
items (other than letters of credit) would appear as a liability on the
Operating Partnership's consolidated balance sheet in accordance with generally
accepted accounting principles, and also includes, to the extent not otherwise
included, any obligation of the Operating Partnership or any Subsidiary to be
liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), indebtedness of
another person (other than the Operating Partnership or any Subsidiary) (it
being understood that Debt shall be deemed to be incurred by the Operating
Partnership and its Subsidiaries on a consolidated basis whenever the Operating
Partnership and its Subsidiaries on a consolidated basis shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Funds from Operations" for any period means the Consolidated Net
Income of the Operating Partnership and its Subsidiaries for such period without
giving effect to depreciation and amortization, gains or losses from
extraordinary items, gains or losses on sales of real estate, gains or losses on
investments in marketable securities and any provision/benefit for income taxes
for such period, plus funds from operations of unconsolidated joint ventures,
all determined on a consistent basis in accordance with generally accepted
accounting principles.
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest (exclusive
of interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had not been made, determined by discounting, on a semiannual basis,
such principal and interest at the Reinvestment Rate (determined on the third
Business Day preceding the date such notice of redemption is given or
declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had not been made, over (ii) the aggregate principal amount of the Notes
being redeemed or paid.
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"Maximum Annual Service Charge" as of any date means the maximum amount
which is payable in any 12 month period for interest on Debt.
"Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic means of the yields under the respective heading "Week Ending"
published in the most recent Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the most
recent Statistical Release published prior to the date of determination of the
Make-Whole Amount shall be used.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Significant Subsidiary" means any Subsidiary which is a "Significant
Subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Operating Partnership.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under the
Indenture, then such other reasonably comparable index which shall be designated
by the Operating Partnership.
"Subsidiary" means a corporation, a limited liability company or a
partnership a majority of the outstanding voting stock, limited liability
company or partnership interests, as the case may be, of which is owned,
directly or indirectly, by the Operating Partnership or by one or more other
Subsidiaries of the Operating Partnership. For the purposes of this definition,
"voting stock" means stock having voting power for the election of directors,
managing members or trustees, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) the Operating
Partnership's and its Subsidiaries' Undepreciated Real Estate Assets and (ii)
all other assets of the Operating Partnership and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted accounting
principles (but excluding intangibles and accounts receivable).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an encumbrance and (ii) all other assets of
the Operating Partnership and its Subsidiaries not subject to an encumbrance
determined in accordance with generally accepted accounting principles (but
excluding accounts receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Operating
Partnership and its Subsidiaries not subject to an encumbrance determined in
accordance with generally accepted accounting principles.
"Unsecured Debt" means Debt of the Operating Partnership or any
Subsidiary which is not secured by any mortgage, lien, charge, pledge or
security interest of any kind upon any of the Properties.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of
Default" with respect to the Debt Securities issued thereunder: (i) default for
30 days in the payment of any interest on any Debt Security of such series; (ii)
default in the payment of the principal of (or premium, if any,) on any Debt
Security of such series at its maturity; (iii) default in the performance, or
breach, of any other covenant or warranty of the Operating Partnership contained
in the Indenture (other than a covenant added to the Indenture solely for the
benefit of a series of Debt Securities issued thereunder other than such
series), continued for 60 days after written notice as provided in the
applicable Indenture; (iv) an event of default under any Debt, as defined in any
indenture or instrument evidencing such Debt, whether such indebtedness now
exists or shall hereinafter be created, the repayment of which the Operating
Partnership is directly responsible or liable
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as obligor or guarantor on a full recourse basis, for outstanding indebtedness
for borrowed money in, or a guarantee for, a principal amount in excess of
$10,000,000, shall happen and be continuing and such indebtedness shall have
been accelerated so that the same shall be or become due and payable prior to
the date on which the same would otherwise have become due and payable or the
Operating Partnership shall default in the payment at final maturity of
outstanding indebtedness for borrowed money in a principal amount in excess of
$10,000,000, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled; and (v) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Operating Partnership, any Significant Subsidiary
or any of their property and any other Event of Default (Section 501).
If an Event of Default under the Indenture with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% of the
principal amount of the Outstanding Debt Securities of that series will have the
right to declare the principal of (or, if the Debt Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal amount as may be specified in the terms thereof) and premium (if any)
on all of the Debt Securities of that series to be due and payable immediately
by written notice thereof to the Operating Partnership (and to the Trustee if
given by the Holders). However, at any time after such a declaration of
acceleration with respect to Debt Securities of such series (or of all Debt
Securities then Outstanding under the Indenture, as the case may be) has been
made, but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Holders of not less than a majority in principal
amount of Outstanding Debt Securities of such series (or of all Debt Securities
then Outstanding under the Indenture, as the case may be) may rescind and annul
such declaration and its consequences if (i) the Operating Partnership shall
have paid or deposited with the Trustee all required payments of the principal
of and premium (if any) and interest on the Outstanding Debt Securities of such
series (or of all Debt Securities then Outstanding under the Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
Trustee and (ii) all Events of Default, other than the non-payment of
accelerated principal or interest, with respect to the Debt Securities of such
series (or of all Debt Securities then Outstanding under the Indenture, as the
case may be) have been cured or waived as provided in the Indenture (Section
502). The Indenture also provides that the Holders of not less than a majority
in principal amount of the Outstanding Debt Securities of any series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be) may
waive any past default with respect to such series and its consequences, except
a default (x) in the payment of the principal of and premium (if any) or
interest on any Debt Security of such series or (y) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security affected thereby
(Section 513).
The Trustee will be required to give notice to the Holders of Debt
Securities within 90 days of a default under the Indenture, unless such default
shall have been cured or waived; provided, however, that the Trustee may
withhold notice to the Holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal of
and premium (if any) or interest on any Debt Security) if and so long as the
Responsible Officers of the Trustee consider such withholding to be in the
interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an Event of Default from the Holders of not
less than 25% in principal amount of the Outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it (Section
507). This provision will not prevent, however, any Holder of Debt Securities
from instituting suit for the enforcement of payment of the principal of and
premium (if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).
Subject to provisions in the Indenture relating to its duties in case
of default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 602). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon the
Trustee. However, the Trustee may refuse to follow any direction which is in
conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Operating
Partnership must deliver to the Trustee a certificate, signed by one of several
specified officers of the Company as to such officer's knowledge of the
Operating Partnership's compliance with all conditions and covenants under the
Indenture, and, in the event of any noncompliance, specifying each such
noncompliance and the nature and status thereof.
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MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities of each series issued under the Indenture which are
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each such
Debt Security affected thereby, (i) change the Stated Maturity of the principal
of, or any installment of principal of and premium (if any) or interest on, any
such Debt Security; (ii) reduce the principal amount of, or the rate or amount
of interest on, or premium payable upon the redemption of any such Debt
Security; (iii) change the Place of Payment, or the currency, for payment of
principal of any Debt Security or any premium or interest on any such Debt
Security; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (vi) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security or
(vii) adversely modify or affect (in any manner adverse to the Holders) the
terms and conditions of the obligations of the Operating Partnership in respect
of the due and punctual payment of the principal of and premium (if any), or
interest on the Debt Securities (Section 902).
The Holders of not less than a majority in principal amount of
Outstanding Debt Securities of each series affected thereby have the right to
waive compliance by the Operating Partnership with certain covenants in the
Indenture (Section 1013).
Modifications and amendments of the Indenture may be permitted to be
made by the Operating Partnership and the Trustee without the consent of any
Holders of Debt Securities for any of the following purposes: (i) to evidence
the succession of another Person to the Operating Partnership as obligor under
the Indenture; (ii) to add to the covenants of the Operating Partnership for the
benefit of the Holders of all or any series of Debt Securities or to surrender
any right or power conferred upon the Operating Partnership in Indenture; (iii)
to add Events of Default for the benefit of the Holders of all or any series of
Debt Securities; (iv) to change or eliminate any of the provisions of the
Indenture, provided that any such change or elimination shall become effective
only when there is no Debt Security Outstanding of any series created prior to
the modification or amendment which is entitled to the benefit of such
provision; (v) to secure the Debt Securities; (vi) to provide for the acceptance
of appointment by a successor Trustee or facilitate the administration of the
trusts under the Indenture by more than one Trustee; (vii) to cure any
ambiguity, defect or inconsistency in the Indenture, provided that such action
shall not adversely affect the interests of Holders of Debt Securities of any
series issued under the Indenture in any material respect; or (viii) to
supplement any of the provisions of the Indenture to the extent necessary to
permit or facilitate defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely affect the interests
of the Holders of the Debt Securities of any series in any material respect
(Section 901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, Debt Securities owned by the Operating Partnership, or any other
obligor upon the Debt Securities or any affiliate of the Operating Partnership,
Company or of such other obligor shall be disregarded.
The Indenture contains provisions for convening meetings of the Holders
of Debt Securities of a series (Section 1501). A meeting may be called at any
time by the Trustee, and also, upon request, by the Operating Partnership or by
the Holders of at least 10% in principal amount of the Outstanding Debt
Securities of such series, or in any such case, upon notice given as provided in
the Indenture (Section 1502). Except for any consent that must be given by the
Holder of each Debt Security affected by certain modifications and amendments of
the Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of Holders of Debt Securities of any series duly
held in accordance with the Indenture will be binding on all Holders of Debt
Securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be Persons holding or presenting
a majority in principal amount of the
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Outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Debt Securities of a series, the Persons holding or
representing such specified percentage in principal amount of the Outstanding
Debt Securities will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken
at a meeting of Holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage in principal amount of all Outstanding Debt
Securities affected thereby, or of the Holders of such series and one or more
additional series: (i) there shall be no minimum quorum requirement for such
meeting; and (ii) the principal amount of the Outstanding Debt Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Operating Partnership may discharge certain obligations to Holders
of any series of Debt Securities that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee, in trust, funds in an amount
sufficient to pay and discharge the entire indebtedness on such Debt Securities
in respect of principal and premium (if any) and interest to the date of such
deposit (if such Debt Securities have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be (Section 1401).
The Indenture provides that, if the provisions of Article Fourteen of
the Indenture are made applicable to the Debt Securities of or within any series
pursuant to Section 301 of the Indenture, the Operating Partnership may elect
either (i) to defease and be discharged from any and all obligations with
respect to such Debt Securities (except for the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402) or (ii) to be released from its obligations with
respect to such Debt Securities under Sections 1004 to 1010, inclusive, of the
Indenture (being the restrictions described under "Certain Covenants") and any
omission to comply with such obligations shall not constitute a default or an
Event of Default with respect to such Debt Securities ("covenant defeasance")
(Section 1403), in either case upon the irrevocable deposit by the Operating
Partnership with the Trustee, in trust, of an amount, in cash or Government
Obligations (as defined below), or both, which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient without reinvestment to pay the principal of and premium (if
any) and interest on such Debt Securities on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the
Operating Partnership has delivered to the applicable Trustee an Opinion of
Counsel (as specified in the Indenture) to the effect that the Holders of such
Debt Securities will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable United States federal income tax law occurring
after the date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct
obligations of the United States of America, for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which are not
callable or redeemable at the option or the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the Holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the Holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities, and such Debt Securities are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (iii) under "Events of Default, Notice and
Waiver" with respect to Sections 1004 to 1010, inclusive, of the Indenture
(which Sections would no
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longer be applicable to such Debt Securities), the amount of Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
such Debt Securities at the time of their Stated Maturity but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Operating
Partnership would remain liable to make payment of such amounts due at the time
of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
REDEMPTION OF SECURITIES
The Indenture provides that the Debt Securities may be redeemed at any
time at the option of the Operating Partnership, in whole or in part, at the
Redemption Price, except as may otherwise be provided in connection with any
Debt Securities or series thereof.
From and after notice has been given as provided in the Indenture, if
funds for the redemption of any Debt Securities called for redemption shall have
been made available on such redemption date, such Debt Securities will cease to
bear interest on the date fixed for such redemption specified in such notice and
the only right of the Holders of the Debt Securities will be to receive payment
of the Redemption Price.
Notice of any optional redemption of any Debt Securities will be given
to Holders at their addresses, as shown in the Security Register, not more than
60 nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Debt Securities held by such Holder to be redeemed.
If the Operating Partnership elects to redeem Debt Securities, it will
notify the Trustee at lease 45 days prior to the redemption date (or such
shorter period as satisfactory to the Trustee) of the aggregate principal amount
of Debt Securities to be redeemed and the redemption date. If less than all the
Debt Securities are to be redeemed, the Trustee shall select the Debt Securities
to be redeemed pro rata, by lot or in such manner as it shall deem fair and
appropriate.
BOOK ENTRY REGISTRATION
If the applicable Prospectus Supplement so indicates, the Debt
Securities will be represented by one or more certificates (the "Global Notes").
The Global Notes representing Debt Securities will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") or other successor depository
appointed by the Operating Partnership (DTC or such other depository is herein
referred to as the "Depository") and registered in the name of the Depository or
its nominee. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form under the limited circumstances described below,
the Global Note may not be transferred except as a whole (i) by DTC for the
Global Note to a nominee of DTC, (ii) by a nominee of DTC to DTC or another
nominee of DTC, or (iii) by DTC or any such nominee to a successor of DTC or a
nominee of such successor.
DTC currently limits the maximum denomination of any single Global Note
to $150,000,000. Therefore, for purposes hereof, "Global Note" refers to the
Global Note or Global Notes representing the entire issue of Debt Securities of
a particular series.
Ownership of beneficial interests in the Global Note will be limited to
persons that have accounts with DTC for the Global Note ("participants") or
persons that may hold interests through participants. Upon the issuance of the
Global Note, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with the respective principal amounts of the
Debt Securities represented by the Global Note beneficially owned by such
participants. Ownership of beneficial interests in the Global Note will be shown
on, and the transfer of such ownership interests will be effected only through,
records maintained by DTC (with respect to interests of participants) and on the
records of participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer, or pledge
beneficial interests in the Global Note.
So long as DTC or its nominee is the registered owner of the Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Debt Securities represented by the Global Note for all purposes
under the Indenture. Except as set forth below, owners of beneficial interests
in the Global Note will not be entitled to have the Debt Securities represented
by the Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the Debt Securities in definitive form, and will
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not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a beneficial interest in the Global Note must
rely on the procedures of DTC and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture. The Operating Partnership
understands that under existing industry practices, if the Operating Partnership
requests any action of holders or if an owner of a beneficial interest in the
Global Note desires to give or take any action that a holder is entitled to give
or take under the Indenture, DTC would authorize the participants holding the
relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instructions of beneficial
owners holding through them.
Principal and interest payments on Debt Securities represented by the
Global Note will be made to DTC or its nominee, as the case may be, as the
registered owner of the Global Note. None of the Operating Partnership, the
Trustee, or any other agent of the Operating Partnership or agent of the Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Note or for maintaining, supervising, or reviewing any records relating to such
beneficial ownership interests.
The Operating Partnership expects that DTC, upon receipt of any payment
of principal or interest in respect of the Global Note, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the Global Note as shown on the records of
DTC. The Operating Partnership also expects that payments by participants to
owners of beneficial interests in the Global Note held through such participants
will be governed by standing customer instructions and customary practices, as
is not the case with the securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of such
participants.
If DTC is at any time unwilling or unable to continue as depository for
the Debt Securities and the Operating Partnership fails to appoint a successor
Depository registered as a clearing agency under the Exchange Act within 90
days, the Operating Partnership will issue the Debt Securities in definitive
form in exchange for the Global Note. Any Debt Securities issued in definitive
form in exchange for the Global Note will be registered in such name or names,
and will be issued in denominations of $1,000 and such integral multiples
thereof, as DTC shall instruct the Trustee. It is expected that such
instructions will be based upon directions received by DTC from participants
with respect to ownership of beneficial interests in the Global Note.
DTC has advised the Operating Partnership of the following information
regarding DTC. DTC is a limited-purpose trust company organized under the
Banking Laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities of its participants
and to facilitate the clearance and settlement of transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations, some of which (and/or their representatives) own DTC. Access to
DTC book-entry system is also available to others, such as banks, brokers,
dealers, and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
SAME-DAY SETTLEMENT
Unless the applicable Prospectus Supplement so indicates, settlement
for the Debt Securities will be made by the underwriters, dealers or agents in
immediately available funds and all payments of principal and interest on the
Debt Securities will be made by the Operating Partnership in immediately
available funds.
Secondary trading in long-term notes and debentures of corporate
issuers is generally settled in clearinghouse or next-day funds. In contrast,
the Debt Securities subject to settlement in immediately available funds will
trade in DTC's Same-Day Funds Settlement System until maturity or until the Debt
Securities are issued in certificated form, and secondary market trading
activity in such Debt Securities will therefore be required by DTC to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Debt
Securities.
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PLAN OF DISTRIBUTION
The Operating Partnership may sell the Debt Securities to one or more
underwriters for public offering and sale by them or may sell the Debt
Securities to investors directly or through agents. Any such underwriter or
agent involved in the offer and sale of the Debt Securities will be named in the
applicable Prospectus Supplement.
Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Operating Partnership may, from
time to time, authorize underwriters acting as the Operating Partnership's
agents to offer and sell the Debt Securities upon the terms and conditions as
are set forth in the applicable Prospectus Supplement. In connection with the
sale of the Debt Securities, underwriters may be deemed to have received
compensation from the Operating Partnership in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of the
Debt Securities for whom they may act as agent. Underwriters may sell Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Operating Partnership to
underwriters or agents in connection with the offering of the Debt Securities,
and any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in the applicable Prospectus
Supplement. Underwriters, dealers and agents participating in the distribution
of the Debt Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Debt Securities may be deemed to be underwriting discounts and commissions,
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Operating Partnership, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Operating
Partnership will authorize underwriters or other persons acting as the Operating
Partnership's agents to solicit offers by certain institutions to purchase Debt
Securities from the Operating Partnership at the public offering price set forth
in such Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date or dates stated in
such Prospectus Supplement. Each Contract will be for an amount not less than,
and the aggregate principal amount of Debt Securities sold pursuant to Contracts
shall be not less nor more than, the respective amounts stated in the applicable
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of the Operating
Partnership. Contracts will not be subject to any conditions except (i) the
purchase by an institution of the Debt Securities covered by its Contracts shall
not at the time of delivery be prohibited under the laws of any jurisdiction in
the United States to which such institution is subject, and (ii) if the Debt
Securities are being sold to underwriters, the Operating Partnership shall have
sold to such underwriters, the total principal amount of the Debt Securities
less the principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with, and perform services for the Operating Partnership
and its Subsidiaries in the ordinary course of business.
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EXPERTS
The consolidated financial statements of the Operating Partnership
appearing in the Operating Partnership's 1996 Annual Report (Form 10-K) for the
year ended December 31, 1996; the consolidated financial statements of Evans
Withycombe Residential, L.P. appearing in the Operating Partnership's Current
Report on Form 8-K, dated September 10,1997; the consolidated financial
statements of Wellsford and its subsidiaries included in the Operating
Partnership's Current Report on Form 8-K, dated May 30, 1997; and the
Statements of Revenue and Certain Expenses of certain properties either
acquired or expected to be acquired in 1996 or 1997, appearing in the Operating
Partnership's Current Reports on Forms 8-K or 8-K/A dated May 23, 1996,
November 15, 1996, May 20, 1997, August 15, 1997, September 17, 1997 and
October 9, 1997; have all been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included or incorporated by
reference therein and are incorporated herein by reference in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of the Operating Partnership and
its subsidiaries appearing in the Operating Partnership's 1996 Annual Report
(Form 10-K) at December 31, 1995 and for the years ended December 31, 1995 and
1994 incorporated herein by reference have been audited by Grant Thornton LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated in this Registration Statement in reliance upon
the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The legality of the Debt Securities offered hereby will be passed upon
for the Operating Partnership by Rosenberg & Liebentritt, P.C., Chicago,
Illinois, and, with respect to any underwritten offering of Debt Securities,
certain legal matters will be passed upon for the underwriters by Hogan &
Hartson L.L.P., Washington, D.C. Hogan & Hartson L.L.P. from time to time
provides services to the Company and other entities controlled by Mr. Zell.
Sheli Z. Rosenberg, of counsel to Rosenberg & Liebentritt, P.C., is a
trustee of the Company. The Company incurred legal fees to Rosenberg &
Liebentritt, P.C. of approximately $1.4 million in 1997. Attorneys of Rosenberg
& Liebentritt, P.C. beneficially own less than 1% of the outstanding Common
Shares of the Company, either directly or upon the exercise of options.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE OPERATING PARTNERSHIP. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
DEBT SECURITIES, IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM,
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. THE DELIVERY OF
THIS PROSPECTUS OR ANY OFFER OR SALE MADE HEREUNDER SHALL NOT, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE OPERATING PARTNERSHIP SINCE THE DATE HEREOF.
----------------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<S> <C>
Special Note Regarding
Forward-Looking Statements . . . . . . . . . 2
Available Information . . . . . . . . . . . . . 2
Incorporation of Certain Documents
By Reference . . . . . . . . . . . . . . . . 2
The Operating Partnership . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . . 8
Ratios of Earnings to Combined Fixed Charges
And Preference Unit Distributions . . . . . . 8
Description of Debt Securities . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . 21
Experts . . . . . . . . . . . . . . . . . . . 22
Legal Matters . . . . . . . . . . . . . . . . . 22
</TABLE>
=============================================================================
=============================================================================
ERP OPERATING
LIMITED PARTNERSHIP
$1,275,000,000
DEBT SECURITIES
PROSPECTUS
FEBRUARY __, 1998
=============================================================================
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses for distribution to be
incurred in connection with the issuance and distribution of the securities
being registered.
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 295,000
Fees of Rating Agencies* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000
Printing and Duplicating Expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000
Legal Fees and Expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000
Accounting Fees and Expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000
Blue Sky Fees and Expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Fees of Trustee (including counsel fees)* . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,575,000
==========
</TABLE>
- - ----------------
*Estimated
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS
Under Maryland law, a real estate investment trust formed in Maryland
is permitted to eliminate, by provision in its Declaration of Trust, the
liability of trustees and officers to the trust and its shareholders for money
damages except for liability resulting from (a) actual receipt of an improper
benefit or profit in money, property or services or (b) acts or omissions
established by a final judgment as involving active and deliberate dishonesty
and being material to the matter giving rise to the proceeding. The Company's
Declaration of Trust includes such a provision eliminating such liability to the
maximum extent permitted by Maryland law.
The Maryland REIT law, effective October 1, 1994, permits a Maryland
real estate investment trust to indemnify and advance expenses to its trustees,
officers, employees and agents to the same extent as permitted by the MGCL for
directors and officers of Maryland corporations. In accordance with the MGCL,
the Company's bylaws require it to indemnify (a) any present or former trustee,
officer or shareholder or any individual who, while a trustee, officer or
shareholder, served or is serving as a trustee, officer, director, shareholder
or partner of another entity at the Company's express request who has been
successful, on the merits or otherwise, in the defense of a proceeding to which
he was made a party by reason of service in such capacity, against reasonable
expenses incurred by him in connection with the proceeding, (b) any present or
former trustee or officer or any individual who, while a trustee or officer
served or is serving as a trustee, officer, director, shareholder or partner of
another entity at the Company's express request against any claim or liability
to which he may become subject by reason of service in such capacity unless it
is established that (i) his act or omission was material to the matter giving
rise to the proceeding and was committed in bad faith or was the result of
active and deliberate dishonesty, (ii) he actually received an improper personal
benefit in money, property or services or (iii) in the case of a criminal
proceeding, he had reasonable cause to believe that his act or omission was
unlawful and (c) any present or former shareholder against any claim or
liability to which he may become subject by reason of such status. In addition,
the Company's bylaws require it to pay or reimburse, in advance of final
disposition of a proceeding, reasonable expenses incurred by a present or former
trustee, officer or shareholder or any individual who, while a trustee, officer
or shareholder, served or is serving as a trustee, officer, director,
shareholder or partner of another entity at the Company's express request made a
party to a proceeding by reason of such status, provided that, in the case of a
trustee or officer, the Company shall have received (1) a written affirmation by
such person of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company as authorized by the bylaws and (2)
a written undertaking by or on his behalf to repay the amount paid or reimbursed
by the Company if it shall ultimately be determined that the applicable standard
of conduct was not met. The Company's bylaws also (x) permit the Company to
provide indemnification and payment or reimbursement of expenses to a present or
former trustee, officer or shareholder who served a predecessor of the Company
or to any employee or agent of the Company or a predecessor of the Company, (y)
provide that any indemnification and payment or reimbursement of the expenses
permitted by the bylaws shall be furnished in accordance with the procedures
provided for indemnification and payment or reimbursement of expenses under
Section 2-418 of the MGCL for directors of Maryland corporations and (z) permit
the Company to provide to the trustees and officers such other and further
indemnification or payment or reimbursement of expenses to the fullest extent
permitted by Section 2-418 of the MGCL for directors of Maryland corporations.
The Company has entered into indemnification agreements with each of
its trustees and executive officers. The indemnification agreements require,
among other things, that the Company indemnify its trustees and executive
officers to the fullest
II-1
<PAGE> 26
extent permitted by law and advance to the trustees and executive officers all
related expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. Under these agreements, the Company must also
indemnify and advance all expenses incurred by trustees and executive officers
seeking to enforce their rights under the indemnification agreements and may
cover trustees and executive officers under the Company's trustees and officers'
liability insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by law, as a traditional form
of contract it may provide greater assurance to trustees and executive officers
that indemnification will be available.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to trustees and officers of the Company pursuant to the
foregoing provisions or otherwise, the Company has been advised that, although
the validity and scope of the governing statute have not been tested in court,
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In addition, indemnification may be limited by state securities
laws.
The partnership agreements of the Operating Partnership and the
Management Partnerships also provide for indemnification of the Company and its
officers and trustees to the same extent that indemnification is provided to
officers and trustees of the Company in its Declaration of Trust, and limit the
liability of the Company and its officers and trustees to the Operating
Partnership and the Management Partnerships and their respective partners to the
same extent that the liability of the officers and trustees of the Company to
the Company and its shareholders is limited under the Company's Declaration of
Trust.
ITEM 16. EXHIBITS
<TABLE>
<S> <C> <C>
1* -- Form of Underwriting Agreement
4.1** -- Form of Indenture, dated as of October 1, 1994
4.2*** -- Form of Fourth Amended and Restated ERP Operating Limited
Partnership Agreement of Limited Partnership, as amended
5 -- Opinion of Rosenberg & Liebentritt, P.C. regarding legality
12 -- Calculation of Ratios of Earnings to Combined Fixed Charges
and Preferred share Distributions
23.1 -- Consent of Grant Thornton LLP
23.2 -- Consent of Ernst & Young LLP
23.3 -- Consent of Rosenberg & Liebentritt, P.C. (included in
Exhibit 5)
24 -- Powers of Attorney (filed as part of the signature page to
the Registration Statement)
25 -- Statement of Eligibility of Trustee on Form T-1
</TABLE>
- - ------------------------------------------------------
* Filed previously as Exhibit 1 to the Operating Partnership's Amendment
No. 1 to Form S-3 (No. 33-84892) filed on November 28, 1994.
** Filed previously as Exhibit 4(a) to the Operating Partnership's Form
S-3 (No. 33-84892) filed on October 7, 1994, as amended.
*** Filed previously as Exhibit 10.1 to the Operating Partnership's
Quarterly Report on Form 10-Q for the period ended September 30, 1995;
and the Operating Partnership's Amendment to Fourth Amended and
Restated Agreement of Limited Partnership filed previously as Exhibit
4.2 to the Operating Partnership's Current Report on Form 8-K dated
December 23, 1997.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of Securities (if the total dollar value of Securities
would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range
II-2
<PAGE> 27
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in this
registration statement;
provided, however, that subparagraphs (i) and (ii) above do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in the periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a trustee, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on January 30, 1998.
EQUITY RESIDENTIAL PROPERTIES TRUST ERP OPERATING LIMITED PARTNERSHIP
By: /s/ Douglas Crocker II By: Equity Residential Properties
----------------------------- Trust, its general partner
Douglas Crocker II,
President, Chief Executive
Officer and Trustee
By: /s/ Douglas Crocker II
------------------------------
Douglas Crocker II, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, hereby constitutes and appoints Douglas Crocker II and Sheli Z.
Rosenberg, or either of them, his attorneys-in-fact and agents, with full power
of substitution and resubstitution for him in any and all capacities, to sign
any or all amendments or post-effective amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith or in connection with the registration of the Securities
under the Exchange Act, with the Securities and Exchange Commission, granting
unto each of such attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary in connection
with such matters as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that each of such attorneys-
in-fact and agents or his substitute or substitutes may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<S> <C> <C>
Name Title Date
---- ----- ----
/s/ Samuel Zell Chairman of the Board of Trustees January 30, 1998
----------------------------------
Samuel Zell
/s/ Douglas Crocker II President, Chief Executive Officer and January 30, 1998
----------------------------------
Douglas Crocker II Trustee
/s/ David J. Neithercut Executive Vice President and Chief Financial January 30, 1998
----------------------------------
David J. Neithercut Officer
/s/ Michael J. McHugh Executive Vice President, Chief Accounting January 30, 1998
----------------------------------
Michael J. McHugh Officer and Treasurer
/s/ Gerald A. Spector Trustee January 30, 1998
----------------------------------
Gerald A. Spector
/s/ Stephen O. Evans Executive Vice President of Strategic January 30, 1998
----------------------------------
Stephen O. Evans Investments and Trustee
/s/ Sheli Z. Rosenberg Trustee January 30, 1998
----------------------------------
Sheli Z. Rosenberg
/s/ James D. Harper, Jr. Trustee January 30, 1998
----------------------------------
James D. Harper, Jr.
/s/ Errol R. Halperin Trustee January 30, 1998
----------------------------------
Errol R. Halperin
/s/ John Alexander Trustee January 30, 1998
----------------------------------
John Alexander
/s/ Barry S. Sternlicht Trustee January 30, 1998
----------------------------------
Barry S. Sternlicht
/s/ B. Joseph White Trustee January 30, 1998
----------------------------------
B. Joseph White
/s/ Henry H. Goldberg Trustee January 30, 1998
----------------------------------
Henry H. Goldberg
/s/ Jeffrey H. Lynford Trustee January 30, 1998
----------------------------------
Jeffrey H. Lynford
Trustee January 30, 1998
----------------------------------
Edward Lowenthal
</TABLE>
<PAGE> 29
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Exhibit Sequentially Number
-------
Number Description Page
------ ----------- ----
<S> <C> <C>
1* -- Form of Underwriting Agreement
4.1** -- Form of Indenture, dated as of October 1, 1994
4.2*** -- Form of Fourth Amended and Restated ERP Operating Limited
Partnership Agreement of Limited Partnership, as amended
5 -- Opinion of Rosenberg & Liebentritt, P.C. regarding legality
12 -- Calculation of Ratios of Earnings to Combined Fixed Charges
and Preferred Share Distributions
23.1 -- Consent of Grant Thornton LLP
23.2 -- Consent of Ernst & Young LLP
23.3 -- Consent of Rosenberg & Liebentritt, P.C. (included in
Exhibit 5)
24 -- Powers of Attorney (filed as part of the signature page to the
Registration Statement)
25 -- Statement of Eligibility of Trustee on Form T-1
- - -------------------
</TABLE>
* Filed previously as Exhibit 1 to the Operating Partnership's Amendment
No. 1 to Form S-3 (No. 33-84892) filed on November 28, 1994.
** Filed previously as Exhibit 4(a) to the Operating Partnership's Form
S-3 (No. 33-84892) filed on October 7, 1994, as amended.
*** Filed previously as Exhibit 10.1 to the Operating Partnership's
Quarterly Report on Form 10-Q for the period ended September 30, 1995;
and the Operating Partnership's Amendment to Fourth Amended and
Restated Agreement of Limited Partnership filed previously as Exhibit
4.2 to the Operating Partnership's Current Report on Form 8-K dated
December 23, 1997.
<PAGE> 1
[Rosenberg & Liebentritt, P.C.]
February 3, 1998
ERP Operating Limited Partnership
c/o Board of Trustees
Equity Residential Properties Trust
Two North Riverside Plaza
Suite 400
Chicago, Illinois 60606
Ladies and Gentlemen:
We are acting as counsel to ERP Operating Limited Partnership, an Illinois
limited partnership ("ERP"), the general partner of which is Equity Residential
Properties Trust, a Maryland real estate investment trust (the "Company"), in
connection with the filing of ERP's registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission relating to
unsecured senior debt securities in a maximum aggregate offering price of
$1,000,000,000 (the "Securities") on February 2, 1998. This opinion letter is
furnished to you at your request to enable ERP to continue to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section
229.601(b)(5), in connection with the Registration Statement.
We assume that the classification, if any, terms and conditions, amount,
issuance and sale of the Securities to be offered from time to time will be
duly authorized and determined by proper action by the Company, acting as
general partner of ERP, consistent with the procedures and terms described in
the Registration Statement (each, a "General Partner Action") and in accordance
with ERP's Fourth Amended and Restated Agreement of Limited Partnership, as
amended (the "Partnership Agreement"), and with the applicable law of the State
of Illinois.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Second Amended and Restated Declaration of Trust, as amended, of
the Company (the "Declaration of Trust"), as certified by the
Secretary of the Company on the date hereof as then being complete,
accurate and in effect.
<PAGE> 2
ERP Operating Limited Partnership
February 3, 1998
Page 2
3. The Second Amended and Restated Bylaws of the Company, as
certified by the Secretary of the Company on the date hereof as then
being complete, accurate and in effect.
4. The Partnership Agreement, certified by the Secretary of the
Company, as the general partner of ERP, on the date hereof as then
being complete, accurate and in effect.
5. Resolutions of the Board of Trustees of the Company, as the
general partner of ERP, adopted on January 14, 1998 relating to the
filing of the Registration Statement and related matters, as
certified by the Secretary of the Company on the date hereof as then
being complete, accurate and in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents, and the conformity to authentic original documents of
all documents submitted to us as certified, telecopied, photostatic, or
reproduced copies. This opinion letter is given, and all statements herein are
made, in the context of the foregoing.
We call your attention to the fact that our firm only requires lawyers to
be qualified to practice law in the State of Illinois and, in rendering the
foregoing opinions, we express no opinion with respect to any laws relevant to
this opinion other than the laws and regulations identified herein.
Based upon, subject to and limited by the foregoing, we are of the opinion
that the Securities have been duly authorized by all necessary partnership
action of ERP and all necessary action of the Company, as general partner of
ERP, and when (a) the applicable provisions of the Securities Act and such
state "blue sky" or securities laws as may be applicable have been complied
with and (b) the Securities have been issued and delivered for value, the
Securities will be validly issued and legally binding obligations of ERP
enforceable against ERP in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, or
similar laws affecting creditors' rights generally from time to time in effect
and general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and except that a waiver of
rights under any usury law may be unenforceable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has
been prepared solely for your use in connection with the filing by ERP of the
Registration Statement on the date of this opinion letter
<PAGE> 3
ERP Operating Limited Partnership
February 3, 1998
Page 3
and will be incorporated by reference into the Registration Statement. This
opinion letter should not be quoted in whole or in part or otherwise be
referred to, nor filed with or furnished to any governmental agency or other
person or entity, without the prior written consent of this firm.
We hereby consent (i) to be named in the Registration Statement, and in
the Prospectus contained therein, as attorneys who will pass upon the legality
of the Securities to be sold thereunder and (ii) to the filing of this opinion
as an Exhibit to the Registration Statement. In giving this consent, we do not
thereby admit that we are an "expert" within the meaning of the Securities Act.
Very truly yours,
ROSENBERG & LIEBENTRITT, P.C.
By: _/s/ William C. Hermann_______
Vice President
<PAGE> 1
EXHIBIT 12
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED AND COMBINED HISTORICAL, INCLUDING PREDECESSOR BUSINESS
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS RATIO
<TABLE>
<CAPTION>
HISTORICAL
-------- -------- -------- -------- -------- -------- -------
09/30/97 09/30/96 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- -------- -------- -------- -------- -------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Rental income $482,980 $327,749 $454,412 $373,919 $220,727 $104,388 $ 86,597
Fee income - outside managed 4,364 4,982 6,749 7,030 4,739 4,651 4,215
Interest income - investment in mortgage 14,821 9,084 12,819 4,862 -- -- --
Interest and other income 7,513 2,232 4,405 4,573 5,568 3,031 2,161
-------- -------- -------- -------- -------- -------- -------
Total revenues 509,678 344,047 478,385 390,384 231,034 112,070 92,973
-------- -------- -------- -------- -------- -------- -------
EXPENSES
Property and maintenance 117,681 93,128 127,172 112,186 66,534 35,324 30,680
Real estate taxes and insurance 48,560 32,301 44,128 37,002 23,028 11,403 10,274
Property management 18,765 13,136 17,512 15,213 10,249 3,491 2,912
Property management - non-recurring -- -- -- -- 879 -- --
Fee and asset management 2,523 3,037 3,837 3,887 2,056 2,524 2,403
Depreciation 106,114 66,759 93,253 72,410 37,273 15,384 13,442
Interest
Expense incurred 82,775 58,632 81,351 78,375 37,044 26,042 31,926
Amortization of deferred financing costs 1,810 2,860 4,242 3,444 1,930 3,322 2,702
Refinancing costs -- -- -- -- -- 3,284 --
General and administrative 10,037 6,690 9,857 8,129 6,053 3,159 1,915
-------- -------- -------- -------- -------- -------- -------
Total expenses 388,265 276,543 381,352 330,646 185,046 103,933 96,254
-------- -------- -------- -------- -------- -------- -------
Income (loss) before extraordinary items $121,413 $ 67,504 $ 97,033 $ 59,738 $ 45,988 $ 8,137 $ (3,281)
======== ======== ======== ======== ======== ======== =======
Combined Fixed Charges and Preferred
Interest and other financing costs $ 82,775 $ 58,632 $ 81,351 $ 78,375 $ 37,044 $ 26,042 $ 31,926
Refinancing costs -- -- -- -- -- 3,284 --
Amortization of deferred financing costs 1,810 2,860 4,242 3,444 1,930 3,322 2,702
Preferred distributions 37,287 19,953 29,015 10,109 -- -- --
-------- -------- -------- -------- -------- -------- -------
TOTAL COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $121,872 $ 81,445 $114,608 $ 91,928 $ 38,974 $ 32,648 $ 34,628
======== ======== ======== ======== ======== ======== =======
EARNINGS BEFORE COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $205,998 $128,996 $182,626 $141,557 $ 84,962 $ 40,785 $ 31,347
======== ======== ======== ======== ======== ======== =======
FUNDS FROM OPERATIONS BEFORE COMBINED
CHARGES AND PREFERRED DISTRIBUTIONS $312,112 $195,755 $275,879 $213,967 $122,235 $ 56,169 $ 44,789
======== ======== ======== ======== ======== ======== =======
RATIO OF EARNINGS BEFORE COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS 1.69 1.58 1.59 1.54 2.18 1.25 0.91
======== ======== ======== ======== ======== ======== =======
RATIO OF FUNDS FROM OPERATIONS BEFORE
COMBINED FIXED CHARGES AND PREFERRED
DISTRIBUTIONS TO COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS 2.56 2.40 2.41 2.33 3.14 1.72 1.29
======== ======== ======== ======== ======== ======== =======
EARNINGS DEFICIENCY TO COVER FIXED CHARGES N/A N/A N/A N/A N/A N/A (3,281)
======== ======== ======== ======== ======== ======== =======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 14, 1996 accompanying the consolidated
financial statements of ERP Operating Limited Partnership as of December 31,
1995 and for each of the two years in the period then ended. We consent to
the incorporation by reference of the above report in the Registration
Statement of ERP Operating Limited Partnership Form S-3, and to the use of
our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Chicago, Illinois
January 30, 1998
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of ERP Operating
Limited Partnership for the registration of $1,000,000,000 of debt
securities and to the incorporation by reference therein of our reports
indicated below with respect to the financial statements indicated below
included or incorporated by reference in ERP Operating Limited Partnership's
filings as indicated below, filed with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Date of
-------
Financial Statements Auditor's Report Filing
- - -------------------- ---------------- ------
<S> <C> <C>
Consolidated February 12, 1997 Annual Report on
financial except for Note 19, Form 10-K
statements and as to which the
schedule of date is March 20,
ERP Operating Limited 1997
Partnership at
December 31, 1996
and for the year
then ended
Combined Statement November 12, 1997 Current Report on
of Revenue and Form 8-K, as
Certain Expenses of amended by
the CAPREIT Form 8-K/A
Acquired and dated October 9,
Probable Properties 1997
for the year ended
December 31, 1996
Combined Statement August 15, 1997 Current Report on
of Revenue and Form 8-K, dated
Certain Expenses of September 17, 1997
the Ameritech
Pension Trust
Probable Properties
for the year ended
December 31, 1996
Combined Statement September 5, 1997 Current Report on
of Revenue and Form 8-K, dated
Certain Expenses of September 17, 1997
Paces on the Green
and Paces Station
for the year ended
December 31, 1996
Statement of July 17, 1997 Current Report on
Revenue and Certain Form 8-K dated
Expenses of Cascade August 15, 1997
at Landmark for the
year ended December
31, 1996
Statement of July 2, 1997 Current Report on
Revenue and Certain Form 8-K dated
Expenses of Sabal August 15, 1997
Palm Club (formerly
known as Post
Crossing (Pompano))
for the year ended
December 31, 1996
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
Date of
-------
Financial Statements Auditor's Report Filing
- - -------------------- ---------------- ------
<S> <C> <C>
Statement of July 23, 1997 Current Report on
Revenue and Certain Form 8-K dated
Expenses of Wood August 15, 1997
Creek (Pleasant
Hill) for the year
ended December 31,
1996
Statement of July 25, 1997 Current Report on
Revenue and Certain Form 8-K dated
Expenses of August 15, 1997
LaMirage for the
year ended December
31, 1996
Statement of May 16, 1997 Current Report on
Revenue and Certain Form 8-K dated May
Expenses of 20, 1997
Harborview for the
year ended December
31, 1996
Statement of May 6, 1997 Current Report on
Revenue and Certain Form 8-K dated May
Expenses of Trails 20, 1997
at Dominion for the
year ended December
31, 1996
Statement of May 7, 1997 Current Report on
Revenue and Certain Form 8-K dated May
Expenses of Rincon 20, 1997
for the year ended
December 31, 1996
Statement of May 12, 1997 Current Report on
Revenue and Certain Form 8-K dated May
Expenses of 20, 1997
Waterford at the
Lakes for the year
ended December 31,
1996
Statement of May 16, 1997 Current Report on
Revenue and Certain Form 8-K dated May
Expenses of Lincoln 20, 1997
Harbour for the
year ended December
31, 1996
Combined Statement May 9, 1997 Current Report on
of Revenue and Form 8-K dated May
Certain Expenses of 20, 1997
Knights Castle and
Club at the Green
for the year ended
December 31, 1996
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Date of
-------
Financial Statements Auditor's Report Filing
- - -------------------- ---------------- ------
<S> <C> <C>
Combined Statements March 25, 1997 Current Report on
of Revenue and Form 8-K dated May
Certain Expenses of 20, 1997
the Zell/Merrill
Properties for each
of the three years
in the period ended
December 31, 1996
Combined Statement May 17, 1996 Current Report on
of Revenue and Form 8-K, as
Certain Expenses of amended by Form
the 1996 Acquired 8-K/A, dated May
Properties and 23, 1996
Probable Properties
for the year ended
December 31, 1995
Combined Statement November 7, 1996 Current Report on
of Revenue and Form 8-K dated
Certain Expenses November 15, 1996
for the 1996
Acquired Properties
for the year ended
December 31, 1995
Consolidated February 10, 1997 Current Report on
financial except for Note 13, Form 8-K, dated
statements and as to which the May 30, 1997
schedule of date is February
Wellsford 28, 1997
Residential
Property Trust at
December 31, 1996
and 1995 and for
each of the three
years in the period
ended December 31,
1996
Consolidated January 31, 1997 Current Report on
financial Form 8-K dated
statements and September 10, 1997
schedule of Evans
Withycombe
Residential, L.P.
and subsidiaries at
December 31, 1996
and 1995 and for
each of the three
years in the period
ended December 31,
1996
</TABLE>
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
January 30, 1998
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
ERP OPERATING LIMITED PARTNERSHIP
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-3894853
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
TWO NORTH RIVERSIDE PLAZE, SUITE 400
CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFLIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE> 3
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 29th day of January, 1998.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
------------------------------
Steven M. Wagner
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October
25, 1996 (Registration No. 333-14201).
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 29, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between ERP Operating
Limited Partnership and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
Steven M. Wagner
Vice President
<PAGE> 5
EXHIBIT 7
<TABLE>
<S><C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET
C400
DOLLAR AMOUNTS IN ------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,499,157 1.a.
b. Interest-bearing balances(2) 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D) 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases) 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M) 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding 2155 614,921 9.
10. Intangible assets (from Schedule RC-M) 2143 277,105 10.
11. Other assets (from Schedule RC-F) 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11) 2170 56,108,875 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 6
<TABLE>
<S><C>
Legal Title of Bank: The First National Bank of ChicagoCall Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN
Thousands BIL MIL THOU
- - ---------------------------------------------------------------------------------------------------------------------
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 21,496,468 13.a
(1) Noninterest-bearing(1) RCON 6631 8,918,843 13.a.1
(2) Interest-bearing RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and RCON 2200 14,164,129
IBF's (from Schedule RC-E, part 1)
(1) Noninterest bearing RCFN 6631 352,399 13.b.1
(2) Interest-bearing RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D).................................... RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less RCFD 2332 2,608,057 16.a
b. With a remaining maturity of than one year through three years A547 379,893 16.b
c. With a remaining maturity of more than three years ...................... A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 614,921 18
19. Subordinated notes and debentures (2) RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20) RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 023
24. Common stock RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,989,408 25
26. a. Undivided profits and capital reserves RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28) RCFD 3300 56,108,875 29
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank Number
by independent external Number auditors as of any date during 1996........... RCFD 6724.......... N/A M.1
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation
3 = Directors' examination of the bank conducted in work)
accordance with generally accepted auditing standards 8 = No external audit work
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
