-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QbMkDsTyvqJiAz3OrK43ccfyR9ITRC9Gtb2obXpwBDro/3QnEbIYZAXHHXo44gP6 3qicL2Wvlg2GpP/t5E4nSQ== 0000912057-00-011416.txt : 20000315 0000912057-00-011416.hdr.sgml : 20000315 ACCESSION NUMBER: 0000912057-00-011416 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY RESIDENTIAL PROPERTIES TRUST CENTRAL INDEX KEY: 0000906107 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363877868 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-12252 FILM NUMBER: 568768 BUSINESS ADDRESS: STREET 1: TWO N RIVERSIDE PLZ STREET 2: STE 400 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124741300 MAIL ADDRESS: STREET 1: TWO N RIVERSIDE PLAZA STREET 2: SUITE 450 CITY: CHICAGO STATE: IL ZIP: 60606 10-K 1 FORM 10-K FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended DECEMBER 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-12252 EQUITY RESIDENTIAL PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) MARYLAND 13-3675988 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606 (Address of Principal Executive Offices) (Zip Code)
(312) 474-1300 (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: Common Shares of Beneficial Interest, $0.01 Par Value New York Stock Exchange (Title of Class) (Name of Each Exchange on Which Registered) Preferred Shares of Beneficial Interest, $0.01 Par Value New York Stock Exchange (Title of Class) (Name of Each Exchange on Which Registered)
Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of voting and non-voting shares held by non-affiliates of the Registrant was approximately $5.1 billion based upon the closing price on March 1, 2000 of $40 using beneficial ownership of shares rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting shares owned by Trustees and Officers, some of whom may not be held to be affiliates upon judicial determination. At March 1, 2000, 127,911,989 of the Registrant's Common Shares of Beneficial Interest were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates by reference information to be contained in the Company's definitive proxy statement, which the Company anticipates will be filed no later than March 31, 2000, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. 2
EQUITY RESIDENTIAL PROPERTIES TRUST TABLE OF CONTENTS PART I. PAGE ---- Item 1. Business 4 Item 2. The Properties 28 Item 3. Legal Proceedings 32 Item 4. Submission of Matters to a Vote of Security Holders 32 PART II. Item 5. Market for Registrant's Common Equity and Related 33 Shareholder Matters Item 6. Selected Financial Data 33 Item 7. Management's Discussion and Analysis of Financial Condition 36 and Results of Operations Item 7A. Quantitative and Qualitative Disclosure about Market Risk 47 Item 8. Financial Statements and Supplementary Data 48 Item 9. Changes in and Disagreements with Accountants on Accounting and 48 Financial Disclosure PART III. Item 10. Trustees and Executive Officers of the Registrant 49 Item 11. Executive Compensation 49 Item 12. Security Ownership of Certain Beneficial Owners and Management 49 Item 13. Certain Relationships and Related Transactions 49 PART IV. Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 50
3 PART I ITEM 1. BUSINESS GENERAL Equity Residential Properties Trust ("EQR") is a self-administered and self-managed equity real estate investment trust ("REIT"). EQR was organized in March 1993 and commenced operations on August 18, 1993 upon completion of its initial public offering (the "EQR IPO") of 13,225,000 common shares of beneficial interest, $0.01 par value per share ("Common Shares"). EQR was formed to continue the multifamily property business objectives and acquisition strategies of certain affiliated entities controlled by Mr. Samuel Zell, Chairman of the Board of Trustees of EQR. These entities had been engaged in the acquisition, ownership and operation of multifamily residential properties since 1969. As used herein, the term "Company" includes EQR and those entities owned or controlled by it, as the survivor of the mergers between EQR and each of Wellsford Residential Property Trust ("Wellsford") (the "Wellsford Merger"), Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land & Investment Company, Inc. ("MRY") (the "MRY Merger") and Lexford Residential Trust ("LFT") ("the LFT Merger") (collectively, the "Mergers"). The Company has formed a series of partnerships (the "Financing Partnerships") which beneficially own certain Properties (see definition below) that may be encumbered by mortgage indebtedness. In general, these are structured so that ERP Operating Limited Partnership (the "Operating Partnership"), a subsidiary of EQR, owns a 1% limited partner interest and a 98% general partner interest in each, with the remaining 1% general partner interest in each Financing Partnership owned by various qualified REIT subsidiaries wholly owned by the Company (each a "QRS Corporation"). Rental income from the Properties that are beneficially owned by a Financing Partnership is used first to service the applicable mortgage debt and pay other operating expenses and any excess is then distributed 1% to the applicable QRS Corporation, as the general partner of such Financing Partnership, and 99% to the Operating Partnership, as the sole 1% limited partner and as the 98% general partner. The Company has also formed a series of limited liability companies that own certain Properties (collectively, the "LLCs"). The Operating Partnership is a 99% managing member of each LLC and a QRS Corporation is a 1% member of each LLC. The Company's subsidiaries include the Operating Partnership, a series of management limited partnerships and companies (collectively, the "Management Partnerships" or the "Management Companies"), the Financing Partnerships, the LLC's and certain other entities. As of December 31, 1999, the Company owned or had interests in 1,062 multifamily properties containing 225,708 units, of which it wholly-owned a portfolio of 983 multifamily properties (individually, a "Property" and collectively, the "Properties") containing 214,060 units. The remaining 79 properties represent investments in partnership interests and/or subordinated mortgages containing 11,648 units. The Company's Properties are located in 35 states throughout the United States. The Company is one of the largest publicly traded REIT's (based on the aggregate market value of its outstanding Common Shares) and is the largest publicly traded REIT owner of multifamily properties (based on the number of apartment units wholly owned and total revenues earned). Since the EQR IPO and through December 31, 1999, the Company, through the Operating Partnership, has acquired direct interests in 988 properties containing 209,975 units in the aggregate for a total purchase price of approximately $12 billion, including the assumption of approximately $3.2 billion of mortgage indebtedness and $848.2 million of unsecured notes. Since the EQR IPO and through December 31, 1999, the Company has disposed of 74 properties, containing 17,640 units for a total sales price of approximately $654.2 million. 4 PART I The Company's corporate headquarters and executive offices are located in Chicago, Illinois. In addition, the Company has 31 management offices in the following cities: - Scottsdale and Tucson, Arizona; - Irvine, Sacramento and San Francisco, California; - Denver, Colorado; - Tampa, Jacksonville, Ft. Lauderdale and Orlando, Florida; - Atlanta and Augusta, Georgia; - Chicago, Illinois; - Kansas City, Kansas; - Louisville, Kentucky; - Bethesda, Maryland; - Ypsilanti, Michigan; - Minneapolis, Minnesota; - Las Vegas, Nevada; - Charlotte and Raleigh, North Carolina; - Reynoldsburg, Ohio - Tulsa, Oklahoma; - Portland, Oregon; - Nashville and Memphis, Tennessee. - Dallas, Houston and San Antonio, Texas; and - Seattle and Redmond, Washington The Company has approximately 6,700 employees. An on-site manager, who supervises the on-site employees and is responsible for the day-to-day operations of the Property, directs each of the Company's Properties. A leasing administrator and/or property administrator generally assists the manager. In addition, a maintenance director at each Property supervises a maintenance staff whose responsibilities include a variety of tasks, including responding to service requests, preparing vacant apartments for the next resident and performing preventive maintenance procedures year-round. BUSINESS OBJECTIVES AND OPERATING STRATEGIES The Company seeks to maximize both current income and long-term growth in income, thereby increasing: - the value of the Properties; - distributions on a per Common Share basis; and - shareholders' value. The Company's strategies for accomplishing these objectives are: - maintaining and increasing Property occupancy while increasing rental rates; - controlling expenses, providing regular preventive maintenance, making periodic renovations and enhancing amenities; - maintaining a ratio of consolidated debt-to-total market capitalization of less than 50%; - strategically acquiring and disposing of properties; and - purchasing newly developed, as well as co-investing in the development of, multifamily communities. The Company is committed to tenant satisfaction by striving to anticipate industry trends and implementing strategies and policies consistent with providing quality tenant services. In addition, the 5 PART I Company continuously surveys rental rates of competing properties and conducts satisfaction surveys of residents to determine the factors they consider most important in choosing a particular apartment unit. ACQUISITION STRATEGIES The Company anticipates that future property acquisitions will be located in the continental United States. Management will continue to use market information to evaluate acquisition opportunities. The Company's market database allows it to review the primary economic indicators of the markets where the Company currently manages Properties and where it expects to expand its operations. Acquisitions may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity securities, sales of Properties and collateralized and uncollateralized borrowings. In addition, the Company may acquire additional multifamily properties in transactions that include the issuance of limited partnership interests in the Operating Partnership ("OP Units") as consideration for the acquired properties. Such transactions may, in certain circumstances, partially defer the sellers' tax consequences. When evaluating potential acquisitions, the Company will consider: - the geographic area and type of community; - the location, construction quality, condition and design of the property; - the current and projected cash flow of the property and the ability to increase cash flow; - the potential for capital appreciation of the property; - the terms of resident leases, including the potential for rent increases; - the potential for economic growth and the tax and regulatory environment of the community in which the property is located; - the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket); - the prospects for liquidity through sale, financing or refinancing of the property; - the benefits of integration into existing operations; and - competition from existing multifamily properties and the potential for the construction of new multifamily properties in the area. The Company expects to purchase multifamily properties with physical and market characteristics similar to the Properties. DEVELOPMENT STRATEGIES The Company seeks to acquire newly constructed properties and make investments towards the development of properties in markets where it discerns strong demand, which the Company believes will enable it to achieve superior rates of return. The Company's current communities under development and future developments are in markets or will be in markets where certain market demographics justify the development of high quality multifamily communities. In evaluating whether to develop an apartment community in a particular location, the Company analyzes relevant demographic, economic and financial data. Specifically, the Company considers the following factors, among others, in determining the viability of a potential new apartment community: - income levels and employment growth trends in the relevant market; - uniqueness of location; - household growth and net migration of the relevant market's population; - supply/demand ratio, competitive housing alternatives, sub-market occupancy and rent levels; - barriers to entry that would limit competition; and - purchase prices and yields of available existing stabilized communities, if any. 6 PART I DISPOSITION STRATEGIES Management will use market information to evaluate dispositions. Factors the Company considers in deciding whether to dispose of its Properties include the following: - potential increases in new construction; - areas where the economy is expected to decline substantially; and - markets where the Company does not intend to establish long-term concentrations. The Company will reinvest the proceeds received from property dispositions primarily to fund property acquisitions as well as fund development activities. In addition, when feasible the Company may structure these transactions as tax deferred exchanges. FINANCING STRATEGIES The Company intends to maintain a ratio of consolidated debt-to-total market capitalization of 50% or less. At December 31, 1999, the Company had a ratio of approximately 42.75% based on the market value of equity equal to the closing price of the Company's Common Shares on the New York Stock Exchange and assuming conversion of all OP Units plus the liquidation preference of the Company's preferred shares of beneficial interest, $0.01 par value per share ("Preferred Shares") and the Operating Partnership's preference units and interests. It is the Company's policy that EQR shall not incur indebtedness other than short-term trade, employee compensation, dividends payable or similar indebtedness that will be paid in the ordinary course of business, and that indebtedness shall instead be incurred by the Operating Partnership to the extent necessary to fund the business activities conducted by the Operating Partnership and its subsidiaries. EQUITY OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999 During 1997, the Company issued 84,183 Common Shares pursuant to the Employee Share Purchase Plan at net prices which ranged from $35.63 per share to $42.08 per share and raised approximately $3.2 million in connection therewith. In March 1997, the Company completed three separate public offerings relating to an aggregate of 1,921,000 publicly registered Common Shares, which were sold to the public at a price of $46 per share. The Company received net proceeds of approximately $88.3 million therefrom. In May 1997, the Company sold 7,000,000 depositary shares (the "Series D Depositary Shares"). Each Series D Depositary Share represents a 1/10 fractional interest in a 8.60% Series D Cumulative Redeemable Preferred Share of Beneficial Interest, $0.01 par value per share (the "Series D Preferred Shares"). The liquidation preference of each of the Series D Preferred shares is $250.00 (equivalent to $25 per Series D Depositary Share). The Company received net proceeds of approximately $169.5 million from this offering (the "Series D Preferred Share Offering"). In June 1997, the Company completed five separate public offerings comprising an aggregate of 8,992,023 publicly registered Common Shares, which were sold to the public at prices ranging from $44.06 to $45.88 per share. The Company received net proceeds of approximately $398.9 million therefrom. In September 1997, the Company completed the sale of 498,000 publicly registered Common Shares, which were sold to the public at a price of $51.125 per share. The Company received net proceeds of approximately $24.2 million in connection with this offering. 7 PART I In September 1997, the Company sold 11,000,000 depositary shares (the "Series G Depositary Shares"). Each Series G Depositary Share represents a 1/10 fractional interest in a 7 1/4% Series G Convertible Cumulative Preferred Share of Beneficial Interest, $0.01 par value per share (the "Series G Preferred Shares"). Series G Depositary Shares representing Series G Preferred Shares are convertible at the option of the holder thereof at any time into Common Shares at a conversion price of $58.58 per Common Share (equivalent to a conversion rate of approximately .4268 Common Shares for each Series G Depositary Share). The liquidation preference of each of the Series G Preferred Shares is $250.00 per share (equivalent to $25 per Series G Depositary Share). The Company received net proceeds of approximately $264 million from this offering (the "Series G Preferred Share Offering"). In addition, in October 1997, the Company sold 1,650,000 additional Series G Depositary Shares pursuant to an over-allotment option granted to the underwriters and received net proceeds of approximately $39.6 million therefrom. In October 1997, in connection with the acquisition of a portfolio of Properties, the Company issued 3,315,500 publicly registered Common Shares, which were issued at a price of $45.25 per share with a value of approximately $150 million. On November 3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 7,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan. This registration statement was declared effective on November 25, 1997. The Distribution Reinvestment and Share Purchase Plan (the "DRIP Plan") of the Company provides holders of record and beneficial owners of Common Shares, Preferred Shares, and limited partnership interests in the Operating Partnership with a simple and convenient method of investing cash distributions in additional Common Shares (which is referred to herein as the "Dividend Reinvestment - DRIP Plan"). Common Shares may also be purchased on a monthly basis with optional cash payments made by participants in the Plan and interested new investors, not currently shareholders of the Company, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the "Share Purchase - DRIP Plan"). In December 1997, in connection with an acquisition of a Property, the Company issued 736,296 publicly registered Common Shares, which were issued at a price of $48.85 per share with a value of approximately $36 million. Also in December 1997, the Company completed the sale of 467,722 publicly registered Common Shares, which were sold at a price of $51.3125 per share. The Company received net proceeds of approximately $22.8 million in connection with this offering. During 1998, the Company issued 93,521 Common Shares pursuant to the Employee Share Purchase Plan and received net proceeds of approximately $3.7 million. During 1998, the Company issued 1,023,184 Common Shares pursuant to the Share Purchase - DRIP Plan and received net proceeds of approximately $50.7 million. During 1998, the Company issued 10,230 Common Shares pursuant to the Dividend Reinvestment - DRIP Plan and received net proceeds of approximately $0.4 million. On January 27, 1998, the Company completed an offering of 4,000,000 publicly registered Common Shares, which were sold to the public at a price of $50.4375 per share. The Company received net proceeds of approximately $195.3 million in connection therewith. On February 3, 1998, the Company filed with the SEC a Form S-3 Registration Statement to register $1 billion of equity securities. The SEC declared this registration statement effective on February 8 PART I 27, 1998. In addition, the Company carried over $272 million related to the registration statement effective on August 4, 1997. As of December 31, 1999, $1.1 billion remained outstanding under this registration statement. On February 18, 1998, the Company completed two offerings of 988,340 publicly registered Common Shares, which were sold to the public at a price of $50.625 per share. On February 23, 1998, the Company completed an offering of 1,000,000 publicly registered Common Shares, which were sold to the public at a price of $48 per share. The Company received net proceeds from these offerings of approximately $95 million. On March 30, 1998, the Company completed an offering of 495,663 publicly registered Common Shares, which were sold at a price of $47.9156 per share. The Company received net proceeds of approximately $23.7 million in connection therewith. On April 29, 1998, the Company completed an offering of 946,565 publicly registered Common Shares, which were sold at a price of $46.5459 per share. The Company received net proceeds of approximately $44.1 million in connection therewith. On September 20, 1998, the Company completed its repurchase of 2,367,400 of its Common Shares of beneficial interest, on the open market, for an average price of $40 per share. The purchases were made between August 5 and September 17, 1998. The Company paid approximately $94.7 million in connection therewith. These shares were subsequently retired. During 1999, the Company issued 147,885 Common Shares pursuant to the Employee Share Purchase Plan and received net proceeds of approximately $5.2 million. During 1999, the Company issued 22,534 Common Shares pursuant to the Share Purchase - DRIP Plan and received net proceeds of approximately $1.0 million. During 1999, the Company issued 36,132 Common Shares pursuant to the Dividend Reinvestment - DRIP Plan and received net proceeds of approximately $1.5 million. On October 12, 1999, the Company repurchased and retired 148,453 Common Shares previously issued in connection with the LFT Merger. These Common Shares were owned by various LFT employees and trustees. The Company paid approximately $6.3 million in connection therewith. DEBT OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999 In October 1997, the Operating Partnership issued $150 million of unsecured fixed rate notes (the "2017 Notes") in a public debt offering. The 2017 Notes are due on October 15, 2017 and bear interest at 7.125%, which is payable semiannually in arrears on April 15 and October 15, commencing April 15, 1998. The 2017 Notes are redeemable at any time by the Operating Partnership pursuant to the terms thereof. The Operating Partnership received net proceeds of approximately $147.4 million in connection with this issuance. In November 1997, the Operating Partnership issued $200 million of unsecured fixed rate notes in a public debt offering. Of the $200 million issued, $150 million of these notes are due November 15, 2001 (the "2001 Notes") and bear interest at a rate of 6.55%, which is payable semiannually in arrears on May 15 and November 15, commencing on May 15, 1998. The remaining $50 million of these notes are due November 15, 2003 (the "2003 Notes") and bear interest at a rate of 6.65%, which is payable semiannually 9 PART I in arrears on May 15 and November 15, commencing on May 15, 1998. The Operating Partnership received net proceeds of approximately $198.5 million in connection with the 2001 Notes and the 2003 Notes. On February 3, 1998, the Operating Partnership filed a Form S-3 Registration Statement to register $1 billion of debt securities. The SEC declared this registration statement effective on February 27, 1998. As of December 31, 1999, $430 million remained outstanding under this registration statement. In April 1998, the Operating Partnership issued $300 million of unsecured fixed rate notes (the "2015 Notes") in a public debt offering. The 2015 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The 2015 Notes are due April 13, 2015. The annual interest rate on the 2015 Notes to April 13, 2005 (the "Remarketing Date") is 6.63%, which is payable semi-annually in arrears on October 13 and April 13, commencing October 13, 1998. The 2015 Notes are subject to mandatory tender to the remarketing agent on the Remarketing Date, at the election of the remarketing dealer and subject to certain limitations. If the remarketing dealer, initially Salomon Brothers Inc., does not purchase all tendered 2015 Notes on the Remarketing Date, or in certain other limited circumstances, the Operating Partnership will be required to repurchase the 2015 Notes at 100% of their principal amount plus accrued interest. If the 2015 Notes are remarketed, the 2015 Notes will bear interest at the rate determined by the remarketing dealer on and after the Remarketing Date. The Operating Partnership received net proceeds of approximately $298.1 million in connection with this issuance. The Operating Partnership also received approximately $8.1 million from the sale of the option to remarket the 2015 Notes on the Remarketing Date, which is being amortized over the term of the 2015 Notes. Prior to the issuance of the 2015 Notes, the Operating Partnership entered into an interest rate protection agreement to effectively fix the interest rate cost of such issuance at the Remarketing Date. The Operating Partnership received a one-time settlement payment from this transaction, which was approximately $0.6 million and is being amortized over seven years. In August 1998, the Operating Partnership issued $100 million of Remarketed Reset Notes (the "August 2003 Notes") in a public debt offering. The August 2003 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The August 2003 Notes are due August 21, 2003. During the period from and including August 21, 1998 to but excluding August 23, 1999 (the "Initial Spread Period") the interest rate on the August 2003 Notes was LIBOR plus 0.45%. The current interest rate for the period from August 23, 1999 to August 22, 2000 is LIBOR plus 0.75%. Beginning August 23, 1999, the Operating Partnership is entitled to redeem the August 2003 Notes on certain dates and in certain circumstances. The Operating Partnership received net proceeds of approximately $99.7 million in connection with this issuance. In September 1998, the Operating Partnership issued $145 million of unsecured fixed rate notes (the "2000 Notes") in a public debt offering. The 2000 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The 2000 Notes are due September 15, 2000. The annual interest rate on the 2000 Notes is 6.15%, which is payable semi-annually in arrears on March 15 and September 15, commencing March 15, 1999. The Operating Partnership received net proceeds of approximately $144.5 million in connection with this issuance. In June 1999, the Operating Partnership issued $300 million of redeemable unsecured fixed rate notes (the "June 2004 Notes") in connection with the Debt Shelf Registration in a public debt offering. The June 2004 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The June 2004 Notes are due June 23, 2004. The annual interest rate on the June 2004 Notes is 7.10%, which is payable semiannually in arrears on December 23 and June 23, commencing December 23, 1999. The Operating Partnership received net proceeds of approximately $298.0 million in connection with this issuance. 10 PART I CREDIT FACILITY On August 12, 1999 the Company obtained a new three year $700 million unsecured revolving credit facility, with Bank of America Securities LLC and Chase Securities Inc. acting as joint lead arrangers. The new line of credit replaced the Company's $500 million unsecured revolving credit facility, as well as the $120 million unsecured revolving credit facility which the Company assumed in the MRY Merger. The prior existing revolving credit facilities were repaid in full and terminated upon the closing of the new facility. This new credit facility matures in August 2002 and will be used to fund property acquisitions, costs for certain properties under development and short term liquidity requirements. Advances under the credit facility bear interest at variable rates based upon LIBOR available at various interest periods, plus a certain spread dependent upon the Company's credit rating. As of March 7, 2000, $110 million was outstanding under this new facility bearing interest at a weighted average rate of 6.28%. BUSINESS COMBINATIONS On May 30, 1997, the Company completed the acquisition of the multifamily property business of Wellsford through the Wellsford Merger. The transaction was valued at approximately $1 billion and included 72 Properties of Wellsford containing 19,004 units. The purchase price consisted of: - 10.8 million Common Shares issued by the Company with a market value, at the date of closing, of $443.7 million; - liquidation value of $157.5 million for the following: a) Wellsford Series A Cumulative Convertible Preferred Shares of Beneficial Interest; b) Wellsford Series B Cumulative Redeemable Preferred Shares of Beneficial Interest; - assumption of mortgage indebtedness and unsecured notes in the amount of $345 million; - assumption of other liabilities of approximately $33.5 million; and - other merger related costs of approximately $23.4 million. In the Wellsford Merger, each outstanding common share of beneficial interest of Wellsford was converted into .625 of a Common Share. In addition, Wellsford Series A Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 3,999,800 Series E Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series E Preferred Shares") and Wellsford's Series B Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 2,300,000 9.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series F Preferred Shares"). On December 23, 1997, the Company completed the acquisition of the multifamily property business of EWR through the EWR Merger. The transaction was valued at approximately $1.2 billion and included 53 Properties of EWR containing 15,331 units and three Properties under construction or expansion containing 953 units. The purchase price consisted of: - 10.3 million Common Shares issued by the Company with a market value, at the date of closing, of approximately $501.6 million; - assumption of EWR's minority interest with a market value of approximately $107.3 million; - assumption of mortgage indebtedness and unsecured notes in the amount of $498 million; - assumption of other liabilities of approximately $28.2 million; and - other merger related costs of approximately $16.7 million. 11 PART I In the EWR Merger, each outstanding common share of beneficial interest of EWR was converted into .50 of a Common Share. On October 19, 1998, the Company completed the acquisition of the multifamily property business of MRY through the MRY Merger. The transaction was valued at approximately $2.2 billion and included 108 Properties containing 32,315 units, three Properties under construction and/or expansion anticipated to contain 872 units and six Additional Properties containing 1,297 units that were contributed to six joint ventures. The purchase price consisted of: - 21.8 million Common Shares issued by the Company with a market value, at the date of closing, of approximately $1 billion; - liquidation value of $369.1 million for the following: a) MRY Series A Cumulative Convertible Preferred Shares of Beneficial Interest; b) MRY Series B Cumulative Convertible Preferred Shares of Beneficial Interest; c) MRY Series C Cumulative Convertible Preferred Shares of Beneficial Interest; d) MRY Series D Cumulative Redeemable Preferred Shares of Beneficial Interest; e) MRY Series E Cumulative Redeemable Preferred Shares of Beneficial Interest; - assumption of MRY's minority interest with a market value of approximately $40.2 million. - assumption of mortgage indebtedness, unsecured notes and the outstanding balance under a line of credit in the amount of $723.5 million; - assumption of other liabilities of approximately $46.5 million; and - other merger related costs of approximately $51.9 million. In the MRY Merger, each outstanding common share of beneficial interest of MRY was converted into .53 of a Common Share. In addition, MRY spun-off certain assets and liabilities to Merry Land Properties, Inc. ("MRYP Spinco"). In connection with this spin-off, each holder of MRY common shares received one share of MRYP Spinco for each twenty shares of MRY common held. As partial consideration for the transfer, the Company extended a $25 million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement. As additional consideration, the Company extended an additional $20 million of indebtedness to MRYP Spinco under a 15-year Subordinated Debt Agreement, bearing interest payable quarterly. The Company also entered into the Preferred Stock Agreement and received 5,000 shares of MRYP Spinco Preferred Stock with a liquidation preference of $1,000 per share. In June 1999, MRYP Spinco repaid the entire outstanding Senior Note balance of $18.3 million and the Subordinated Debt Agreement balance of $20.0 million and repurchased all 5,000 shares of the preferred stock for $2.7 million. There is no further obligation by either party in connection with these agreements. In addition, MRY Series A Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 164,951 Series H Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series H Preferred Shares"), the MRY Series B Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 4,000,000 Series I Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series I Preferred Shares"), the MRY Series C Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 4,599,400 Series J Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series J Preferred Shares"), the MRY Series D Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 1,000,000 Series K Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series K Preferred Shares") and the MRY Series E Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 4,000,000 Series L Cumulative Redeemable Preferred Shares of 12 PART I Beneficial Interest, $0.01 par value per share (the "Series L Preferred Shares"). During 1999, all of the Series I Preferred Shares were converted into 2,566,797 Common Shares of the Company. On August 23, 1999, the Company sold its entire interest in the six joint venture properties to MRYP Spinco and received $54.1 million. There is no further obligation by either party in connection with the joint venture agreements. On October 1, 1999, the Company completed the acquisition of the multifamily property business of LFT through the LFT Merger. The transaction was valued at approximately $738 million and included 402 Properties of LFT containing 36,609 units. The purchase price consisted of: - 4.0 million Common Shares issued by the Company with a market value, at the date of closing, of approximately $181.1 million; - assumption of mortgage indebtedness and unsecured notes in the amount of $528.3 million; - acquisition of other assets of approximately $40.9 million and assumption of other liabilities of approximately $25.3 million; and - other merger related costs of approximately $24.5 million. In the LFT Merger, each outstanding common share of beneficial interest of LFT was converted into .463 of a Common Share. RECENT TRANSACTIONS On January 14, 2000, the Company entered into an agreement to acquire, in an all cash and debt transaction, Globe Business Resources, Inc. ("Globe"), one of the nation's largest providers of temporary corporate housing and furniture rental. The shareholders of Globe will receive $13.00 per share upon closing and up to an additional $0.50 per share post closing, upon final determination of costs, if any, relating to any potential breaches of certain representations and covenants. At full funding of $13.50 per share, the Company would pay approximately $64.8 million in cash for Globe. In addition, the Company will assume approximately $69.4 million in debt. The acquisition, which is expected to close during the second quarter of 2000, requires Globe shareholder approval. From January 1, 2000 through March 3, 2000, the Company acquired Windmont Apartments, a 178-unit property located in Atlanta, GA from an unaffiliated party for a total purchase price of approximately $10.3 million. From January 1, 2000 through March 3, 2000, the Company disposed of six Properties for a total sales price of $46.7 million. On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary of the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative Convertible Redeemable Preference Units with an equity value of $55.0 million. Lexford Properties, L.P. received $53.6 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 1.1 million units are exchangeable into 1.1 million shares of 8.50% Series M-1 Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company. The Series M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the Series B Preference Units or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25 per unit/share per year. The net proceeds received from this transaction will be used for scheduled mortgage and line of credit repayments. 13 PART I COMPETITION All of the Properties are located in developed areas that include other multifamily properties. The number of competitive multifamily properties in a particular area could have a material effect on the Company's ability to lease units at the Properties or at any newly acquired properties and on the rents charged. The Company may be competing with other entities that have greater resources than the Company and whose managers have more experience than the Company's officers and trustees. In addition, other forms of multifamily properties, including multifamily properties and manufactured housing controlled by Mr. Zell, and single-family housing, provide housing alternatives to potential residents of multifamily properties. RISK FACTORS THE FOLLOWING RISK FACTORS OMIT THE USE OF DEFINED TERMS USED ELSEWHERE HEREIN AND CONTAIN DEFINED TERMS THAT ARE DIFFERENT FROM THOSE USED IN THE OTHER SECTIONS OF THIS REPORT. UNLESS OTHERWISE INDICATED, WHEN USED IN THIS SECTION, THE TERMS "WE" AND "US" REFER TO EQUITY RESIDENTIAL PROPERTIES TRUST AND ITS SUBSIDIARIES, INCLUDING ERP OPERATING LIMITED PARTNERSHIP. Set forth below are the risks that we believe are important to investors who purchase or own our common shares of beneficial interest or preferred shares of beneficial interest (which we refer to collectively as "Shares") or units of limited partnership interest ("Units") of ERP Operating Limited Partnership, our operating partnership, which are redeemable on a one-for-one basis for common shares or their cash equivalent. In this section, we refer to the Shares and the Units together as our "securities," and the investors who own Shares and/or Units as our "security holders." DEBT FINANCING AND PREFERRED SHARES COULD ADVERSELY AFFECT OUR PERFORMANCE GENERAL As of December 31, 1999, certain of our multifamily properties were subject to approximately $2.9 billion of mortgage indebtedness and our total debt equaled approximately $5.5 billion. Of our total debt outstanding, $700.9 million (including the balance of $300 million outstanding on our $700 million unsecured line of credit) was floating rate debt, and $965.8 million was issued at tax exempt rates. In addition to debt, we have issued preferred shares of beneficial interest. Our use of debt and preferred equity financing creates certain risks, including the following. SCHEDULED DEBT PAYMENTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION In the future, our cash flow could be insufficient to meet required payments of principal and interest or to pay distributions on our securities at expected levels. We may not be able to refinance existing debt (which in virtually all cases requires substantial principal payments at maturity) and, if we can, the terms of such refinancing might not be as favorable as the terms of existing indebtedness. If principal payments due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow will not be sufficient in all years to repay all maturing debt. As a result, we may be forced to postpone capital expenditures necessary for the maintenance of our properties and may have to dispose of one or more properties on terms that would otherwise be unacceptable to us. FINANCIAL COVENANTS COULD ADVERSELY AFFECT THE COMPANY'S FINANCIAL CONDITION If a property we own is mortgaged to secure payment of indebtedness and we are unable to meet 14 PART I the mortgage payments, the holder of the mortgage could foreclose on the property, resulting in loss of income and asset value. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations. A foreclosure could also result in our recognition of taxable income without our actually receiving cash proceeds from the disposition of the property with which to pay the tax. This could adversely affect our cash flow and could make it more difficult for us to meet our distribution requirements as a real estate investment trust (a "REIT"). The mortgages on our properties contain customary negative covenants that, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property and to discontinue insurance coverage. In addition, our credit facilities contain certain customary restrictions, requirements and other limitations on our ability to incur indebtedness. The indentures under which a substantial portion of our debt was issued contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios, as well as limitations on our ability to incur secured and unsecured indebtedness (including acquisition financing), sell all or substantially all of our assets and engage in mergers, consolidations and certain acquisitions. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these restrictions, our ability to acquire additional properties may be limited. If we are unable to acquire additional properties, our ability to increase the distributions to security holders, as we have done in the past, will be limited to management's ability to increase funds from operations, and thereby cash available for distributions, from the existing properties in our portfolio at such time. Some of the properties were financed with tax-exempt bonds that contain certain restrictive covenants or deed restrictions. We have retained an independent outside consultant to monitor compliance with the restrictive covenants and deed restrictions that affect these properties. If these bond compliance requirements require us to lower our rental rates to attract low or moderate income tenants, or eligible/qualified tenants, then our income from these properties may be limited. OUR DEGREE OF LEVERAGE COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL FINANCING Our debt to market capitalization ratio (total debt as a percentage of total debt plus the market value of the outstanding common and preferred shares and units) was approximately 42.75% as of December 31, 1999. We have a policy of incurring indebtedness for borrowed money only through the Operating Partnership and its subsidiaries and only if upon such incurrence our debt to market capitalization ratio would be approximately 50% or less. Our degree of leverage could have important consequences to security holders. For example, the degree of leverage could affect our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, development or other general corporate purposes, making us more vulnerable to a downturn in business or the economy generally. RISING INTEREST RATES COULD ADVERSELY AFFECT CASH FLOW Advances under our credit facility bear interest at variable rates based upon LIBOR available at various interest periods, plus a certain spread dependent upon the Company's credit rating. Certain of our senior unsecured debt instruments also, from time to time, bear interest at floating rates. We may also borrow additional money with variable interest rates in the future. Increases in interest rates would increase our interest expenses under these debt instruments and would increase the costs of refinancing existing indebtedness and of issuing new debt. Accordingly, higher interest rates would adversely affect cash flow and our ability to service our debt and to make distributions to security holders. 15 PART I CONTROL AND INFLUENCE BY SIGNIFICANT SHAREHOLDERS COULD BE EXERCISED IN A MANNER ADVERSE TO OTHER SHAREHOLDERS GENERAL As of March 1, 2000, (1) Samuel Zell and certain of the current holders of Units issued to affiliates of Mr. Zell, who contributed 33 properties to us at the time of our initial public offering, owned in the aggregate approximately 2.85% of our common shares (Mr. Zell and these affiliates are described herein as the "Zell Original Owners"); (2) certain entities controlled by Starwood Capital Partners LP ("Starwood") and its affiliates, who contributed 23 properties to us at the time of our initial public offering, owned less than 1% of our common shares; and (3) our executive officers and trustees, excluding Mr. Zell (see disclosure above), owned approximately 4.37% of our common shares. These percentages assume all options are exercised for common shares and all Units are converted to common shares. In addition, the consent of certain affiliates of Mr. Zell and Starwood is required for certain amendments to the Fifth Amended and Restated ERP Operating Limited Partnership Agreement of Limited Partnership (the "Partnership Agreement"). As a result of their security ownership and rights concerning amendments to the Partnership Agreement, Mr. Zell and the Starwood owners may have substantial influence over the Company. Although these security holders have not agreed to act together on any matter, they would be in a position to exercise even more influence over the Company's affairs if they were to act together in the future. This influence might be exercised in a manner that is inconsistent with the interests of other security holders. MR. ZELL AND OTHERS ARE EXEMPT FROM THE 5% OWNERSHIP LIMIT GENERALLY APPLICABLE TO SECURITIES HOLDERS In order to maintain its qualification as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), not more than 50% of the value of the outstanding Shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities). To assure compliance with this test, our Declaration of Trust restricts the ownership of more than 5% of the lesser of the number or value of the outstanding Shares by any single security holder, subject to certain exceptions. These restrictions do not apply to the ownership of common shares that may be acquired by the holders of Units issued to the Zell Original Owners and the Starwood owners. Additionally, our Declaration of Trust exempts any transferees of such common shares from the 5% ownership limit, provided such transfers do not result in an increased concentration in the ownership. ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND CAN BE COSTLY Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at such property. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site. Environmental laws also govern the presence, maintenance and removal of asbestos. These laws require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, that they notify and train those who may come into contact with asbestos and that they 16 PART I undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building. These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. Substantially all of our properties have been the subject of environmental assessments completed by qualified independent environmental consultant companies. These environmental assessments have not revealed, nor are we aware of, any environmental liability that our management believes would have a material adverse effect on our business, results of operations, financial condition or liquidity. We cannot assure you that existing environmental assessments of our properties reveal all environmental liabilities, that any prior owner of any of our properties did not create a material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more of our properties. OUR PERFORMANCE AND SHARE VALUE ARE SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE INDUSTRY GENERAL Real property investments are subject to varying degrees of risk and are relatively illiquid. Several factors may adversely affect the economic performance and value of our properties. These factors include changes in the national, regional and local economic climate, local conditions such as an oversupply of multifamily properties or a reduction in demand for our multifamily properties, the attractiveness of our properties to tenants, competition from other available multifamily property owners and changes in market rental rates. Our performance also depends on our ability to collect rent from tenants and to pay for adequate maintenance, insurance and other operating costs, including real estate taxes, which could increase over time. Also, the expenses of owning and operating a property are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the property. WE MAY BE UNABLE TO RENEW LEASES OR RELET SPACE AS LEASES EXPIRE When our tenants decide not to renew their leases upon expiration, we may not be able to relet their space. Even if the tenants do renew or we can relet the space, the terms of renewal or reletting may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the space, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then our results of operations and financial condition will be adversely affected. Consequently, our cash flow and ability to service debt and make distributions to security holders would be reduced. NEW ACQUISITIONS OR DEVELOPMENTS MAY FAIL TO PERFORM AS EXPECTED AND COMPETITION FOR ACQUISITIONS MAY RESULT IN INCREASED PRICES FOR PROPERTIES We intend to continue to actively acquire or develop multifamily properties. Newly acquired or developed properties may fail to perform as expected. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to develop a property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities. This competition has increased prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. 17 PART I BECAUSE REAL ESTATE INVESTMENTS ARE ILLIQUID, WE MAY NOT BE ABLE TO SELL PROPERTIES WHEN APPROPRIATE Real estate investments generally cannot be sold quickly. We may not be able to vary our portfolio promptly in response to economic or other conditions. This inability to respond promptly to changes in the performance of our investments could adversely affect our financial condition and ability to make distributions to our security holders. CHANGES IN LAWS COULD AFFECT OUR BUSINESS We are generally not able to pass through to our tenants under existing leases increases in real estate taxes, income taxes and service or other taxes. Consequently, any such increases may adversely affect our financial condition and limit our ability to make distributions to our security holders. Similarly, changes that increase our potential liability under environmental laws or our expenditures on environmental compliance would adversely affect our cash flow and ability to make distributions on our securities. SHAREHOLDERS' ABILITY TO EFFECT CHANGES IN CONTROL OF THE COMPANY IS LIMITED PROVISIONS OF OUR DECLARATION OF TRUST AND BYLAWS COULD INHIBIT CHANGES IN CONTROL Certain provisions of our Declaration of Trust and Bylaws may delay or prevent a change in control of the Company or other transactions that could provide the security holders with a premium over the then-prevailing market price of their securities or which might otherwise be in the best interest of our security holders. These include a staggered Board of Trustees and the 5% Ownership Limit described below. See "--We Have a Share Ownership Limit for REIT Tax Purposes." Also, any future series of preferred shares of beneficial interest may have certain voting provisions that could delay or prevent a change of control or other transactions that might otherwise be in the interest of our security holders. WE HAVE A SHARE OWNERSHIP LIMIT FOR REIT TAX PURPOSES To remain qualified as a REIT for federal income tax purposes, not more than 50% in value of our outstanding Shares may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of any year. To facilitate maintenance of our REIT qualification, our Declaration of Trust, subject to certain exceptions, prohibits ownership by any single shareholder of more than 5% of the lesser of the number or value of the outstanding class of common or preferred shares. See "--Control and Influence by Significant Shareholders--Mr. Zell and Others are Exempt from the 5% Ownership Limit Generally Applicable to Securities Holders." We refer to this restriction as the "Ownership Limit." Absent any exemption or waiver, securities acquired or held in violation of the Ownership Limit will be transferred to a trust for the exclusive benefit of a designated charitable beneficiary, and the security holder's rights to distributions and to vote would terminate. A transfer of Shares may be void if it causes a person to violate the Ownership Limit. The Ownership Limit could delay or prevent a change in control and, therefore, could adversely affect our security holders' ability to realize a premium over the then-prevailing market price for their Shares. OUR PREFERRED SHARES OF BENEFICIAL INTEREST MAY AFFECT CHANGES IN CONTROL Our Declaration of Trust authorizes the Board of Trustees to issue up to 100 million preferred shares of beneficial interest, and to establish the preferences and rights (including the right to vote and the right to convert into common shares) of any preferred shares issued. The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company, even if a change in 18 PART I control were in the interest of security holders. As of December 31, 1999, 25,085,652 preferred shares were issued and outstanding. INAPPLICABILITY OF MARYLAND LAW LIMITING CERTAIN CHANGES IN CONTROL Certain provisions of Maryland law applicable to real estate investment trusts prohibit "business combinations" (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the trust's outstanding voting securities (an "Interested Shareholder"), or with an affiliate of an Interested Shareholder. These prohibitions last for five years after the most recent date on which the Interested Shareholder became an Interested Shareholder. After the five-year period, a business combination with an Interested Shareholder must be approved by two super-majority shareholder votes unless, among other conditions, the trust's holders of common shares receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Shareholder for its common shares. As permitted by Maryland law, however, the Board of Trustees of the Company has opted out of these restrictions with respect to any business combination involving the Zell Original Owners and persons acting in concert with any of the Zell Original Owners. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to a business combination involving us and any of them. Such business combinations may not be in the best interest of our security holders. OUR SUCCESS AS A REIT IS DEPENDENT ON COMPLIANCE WITH FEDERAL INCOME TAX REQUIREMENTS OUR FAILURE TO QUALIFY AS A REIT WOULD HAVE SERIOUS ADVERSE CONSEQUENCES TO OUR SECURITY HOLDERS We believe that we have qualified for taxation as a REIT for federal income tax purposes since our taxable year ended December 31, 1992. We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. We cannot, therefore, guarantee that we have qualified or will qualify in the future as a REIT. The determination that we are a REIT requires an analysis of various factual matters that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from sources that are itemized in the REIT tax laws. We are also required to distribute to security holders at least 95% of our REIT taxable income excluding capital gains. The fact that we hold our assets through ERP Operating Limited Partnership and its subsidiaries further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress and the IRS might make changes to the tax laws and regulations, and the courts might issue new rulings that make it more difficult, or impossible, for us to remain qualified as a REIT. We do not believe, however, that any pending or proposed tax law changes would jeopardize our REIT status. If we fail to qualify as a REIT, we would be subject to federal income tax at regular corporate rates. Also, unless the IRS granted us relief under certain statutory provisions, we would remain disqualified as a REIT for four years following the year we first failed to qualify. If we fail to qualify as a REIT, we would have to pay significant income taxes. We, therefore, would have less money available for investments or for distributions to security holders. This would likely have a significant adverse affect on the value of our securities. In addition, we would no longer be required to make any distributions to security holders. 19 PART I WE COULD BE DISQUALIFIED AS A REIT OR HAVE TO PAY TAXES IF OUR MERGER PARTNERS DID NOT QUALIFY AS REIT'S If any of our recent merger partners had failed to qualify as a REIT throughout the duration of their existence, then they might have had undistributed "C corporation earnings and profits" at the time of their merger with us. If that was the case and we did not distribute those earnings and profits prior to the end of the year in which the merger took place, we might not qualify as a REIT. We believe that each of our merger partners qualified as a REIT and that, in any event, none of them had any undistributed "C corporation earnings and profits" at the time of their merger with us. If any of our merger partners failed to qualify as a REIT, an additional concern would be that they would have recognized taxable gain at the time they were merged with us. We would be liable for the tax on such gain. In this event, we would have to pay corporate income tax on any gain existing at the time of the applicable merger on assets acquired in the merger if the assets are sold within ten years of the merger. Finally, we could be precluded from electing REIT status for up to four years after the year in which the predecessor entity failed to qualify for REIT status. OTHER TAX LIABILITIES Even if we qualify as a REIT, we will be subject to certain federal, state and local taxes on our income and property. In addition, our third-party management operations, which are conducted through subsidiaries, generally will be subject to federal income tax at regular corporate rates. WE DEPEND ON OUR KEY PERSONNEL We depend on the efforts of the Chairman of our Board of Trustees, Samuel Zell, and our executive officers, particularly Douglas Crocker II and Gerald A. Spector. If they resign, our operations could be temporarily adversely effected. Mr. Crocker and Mr. Spector have entered into Deferred Compensation Agreements with the Company which provide both with a salary benefit after their respective termination of employment with the Company. In addition, Mr. Zell, Mr. Crocker and Mr. Spector have entered into Noncompetition Agreements with the Company. COMPLIANCE WITH REIT DISTRIBUTION REQUIREMENTS MAY AFFECT OUR FINANCIAL CONDITION DISTRIBUTION REQUIREMENTS MAY INCREASE THE INDEBTEDNESS OF THE COMPANY We may be required from time to time, under certain circumstances, to accrue as income for tax purposes interest and rent earned but not yet received. In such event, or upon our repayment of principal on debt, we could have taxable income without sufficient cash to enable us to meet the distribution requirements of a REIT. Accordingly, we could be required to borrow funds or liquidate investments on adverse terms in order to meet these distribution requirements. WE ARE DEPENDENT ON EXTERNAL SOURCES OF CAPITAL Because of our annual REIT distribution requirements, we may not be able to fund all future capital needs, including for acquisitions and developments, from income generated by operations and the disposition of certain assets. We therefore may have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. Moreover, additional equity offerings, if pursued, may result in dilution of security holders' interests, and additional debt financing may increase our leverage. 20 PART I FEDERAL INCOME TAX CONSIDERATIONS GENERAL The following discussion summarizes all of the federal income tax considerations material to a holder of common shares. It is not exhaustive of all possible tax considerations. For example, it does not give a detailed discussion of any state, local or foreign tax considerations. The following discussion also does not address all tax matters that may be relevant to prospective shareholders in light of their particular circumstances. Moreover, it does not address all tax matters that may be relevant to shareholders who are subject to special treatment under the tax laws, such as insurance companies, tax-exempt entities, financial institutions or broker-dealers, foreign corporations and persons who are not citizens or residents of the United States. The specific tax attributes of a particular shareholder could have a material impact on the tax considerations associated with the purchase, ownership and disposition of common shares. Therefore, it is essential that each prospective shareholder consult with his or her own tax advisors with regard to the application of the federal income tax laws to the shareholder's personal tax situation, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. OUR TAXATION We elected REIT status beginning with the year that ended December 31, 1992. In any year in which we qualify as a REIT, we generally will not be subject to federal income tax on the portion of our REIT taxable income or capital gain that we distribute to our shareholders. This treatment substantially eliminates the double taxation that applies to most corporations, which pay a tax on their income and then distribute dividends to shareholders who are in turn taxed on the amount they receive. However, we will be subject to federal income tax at regular corporate rates upon our REIT taxable income or capital gain that we do not distribute to our shareholders. We also may be subject to the corporate "alternate minimum tax" on items of preference under this alternative tax regime. In addition, we will be subject to a 4% excise tax if we do not satisfy specific REIT distribution requirements. Moreover, we may be subject to taxes in certain situations and on certain transactions that we do not presently contemplate. If we fail to qualify for taxation as a REIT in any taxable year, we will be subject to tax on our taxable income at regular corporate rates. We also may be subject to the corporate "alternate minimum tax." As a result, our failure to qualify as a REIT would significantly reduce the cash we have available to distribute to our shareholders. Unless entitled to statutory relief, we would be disqualified from qualification as a REIT for the four taxable years following the year during which qualification was lost. It is not possible to state whether we would be entitled to statutory relief. Our qualification and taxation as a REIT depend on our ability to satisfy various requirements under the Internal Revenue Code. We are required to satisfy these requirements on a continuing basis through actual annual operating and other results. These requirements relate to the sources of our gross income, the composition of our assets, the amount of dividends we pay to shareholders, the diversity of our share ownership, and other aspects of our operations. The purpose of these requirements is to allow the tax benefit of REIT status only to companies that: (a) primarily own, and primarily derive income from, real estate-related assets and certain other assets which are passive in nature, and (b) distribute 95% of the taxable income, computed without regard to net capital gain, to shareholders. 21 PART I On December 17, 1999, as part of a larger bill, the President signed into law the REIT Modernization Act ("RMA"). Effective beginning January 1, 2001, the RMA will amend the tax rules relating to the composition of a REIT's assets. Under current law, a REIT is precluded from owning more than 10% of the outstanding voting securities of any one issuer, other than a wholly owned subsidiary or another REIT. Beginning in 2001, a REIT will remain subject to the current restriction and be precluded from owning more than 10% of the value of all classes of any one issuer. There is an exception to this prohibition. A REIT will be allowed to own up to 100% of the securities of a taxable REIT subsidiary ("TRS") that can provide services to REIT tenants and others without disqualifying the rents that a REIT receives from its tenants. However, no more than 20% of the value of a REIT's total assets can be represented by securities of one or more TRS. The amount of debt and rental payments from a TRS to a REIT will be limited to ensure that a TRS is subject to an appropriate level of corporate tax. The new 10% asset test will not apply to certain arrangements (including third party subsidiaries) in place on July 12, 1999, provided that a subsidiary does not engage in a "substantial" new line of business, its existing business does not increase, and a REIT does not acquire any new securities in the subsidiary. Under the RMA, a third party subsidiary will be able to convert tax free into a TRS. In addition to the above legislative changes, effective January 1, 2001, the distribution of taxable income requirement of a REIT will be reduced from 95% to 90%. Further, effective January 1, 2001, the 15% personal property test (which generally requires that the adjusted basis of a REIT's personal property not exceed 15% of its real and personal property in order for income to be considered rents from real property) will be based on fair market values instead of adjusted tax basis. We believe that we have qualified as a REIT for all of our taxable years beginning with 1992. We also believe that our current structure and method of operation is such that we will continue to qualify as a REIT. However, we cannot guarantee that the actual results of our operations have satisfied or will satisfy the requirements under the Internal Revenue Code. Piper, Marbury, Rudnick & Wolfe, our special tax counsel, will provide an opinion to the effect that we were organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code for each of our taxable years beginning in 1992. The opinion will also provide that our current organization and method of operation should enable us to continue to meet the requirements for qualification and taxation as a REIT. It must be emphasized that the opinion will be based on various assumptions and factual representations relating to our organization and our prior and expected operations. In each case, these representations include representations about our predecessors. Piper, Marbury, Rudnick & Wolfe will not review our compliance with these requirements on a continuing basis. TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS General. If we qualify as a REIT, distributions made to our taxable domestic shareholders with respect to their common shares, other than capital gain distributions, will be treated as ordinary income to the extent that the distributions come out of earnings and profits. These distributions will not be eligible for the dividends received deduction for shareholders that are corporations. In determining whether distributions are out of earnings and profits, we will allocate our earnings and profits first to preferred shares and second to the common shares. We cannot guarantee that we will have sufficient earnings and profits to cover distributions on the preferred shares. To the extent we make distributions to our taxable domestic shareholders in excess of our earnings and profits, such distributions will be considered a return of capital. Such distributions will be 22 PART I treated as a tax free distribution and will reduce the tax basis of a shareholder's common shares by the amount of the distribution so treated. To the extent that such distributions cumulatively exceed a taxable domestic shareholder's tax basis, such distributions are taxable as a gain from the sale of his shares. Shareholders may not include in their individual income tax returns any of our net operating losses or capital losses. Distributions made by us that we properly designate as capital gain dividends will be taxable to taxable domestic shareholders as gain from the sale or exchange of a capital asset held for more than one year. This treatment applies only to the extent that the designated distributions do not exceed our actual net capital gain for the taxable year. It applies regardless of the period for which a domestic shareholder has held his or her common shares. Despite this general rule, corporate shareholders may be required to treat up to 20% of certain capital gain dividends as ordinary income. Generally, we will classify a portion of our designated capital gains dividend as a 20% rate gain distribution and the remaining portion as an unrecaptured Section 1250 gain distribution. As the names suggest, a 20% rate gain distribution would be taxable to taxable domestic shareholders that are individuals, estates or trusts at a maximum rate of 20%. An unrecaptured Section 1250 gain distribution would be taxable to taxable domestic shareholders that are individuals, estates or trusts at a maximum rate of 25%. If, for any taxable year, we elect to designate as capital gain dividends any portion of the dividends paid or made available for the year to holders of all classes of shares of beneficial interest, then the portion of the capital gains dividends that will be allocable to the holders of common shares will be the total capital gain dividends multiplied by a fraction. The numerator of the fraction will be the total dividends paid or made available to the holders of the common shares for the year. The denominator of the fraction will be the total dividends paid or made available to holders of all classes of shares of beneficial interest. In general, a shareholder will recognize gain or loss for federal income tax purposes on the sale or other disposition of common shares in an amount equal to the difference between: (a) the amount of cash and the fair market value of any property received in the sale or other disposition, and (b) the shareholder's adjusted tax basis in the common shares. The gain or loss will be capital gain or loss if the common shares were held as a capital asset. Generally, the capital gain or loss will be long-term capital gain or loss if the common shares were held for more than one year. The Taxpayer Relief Act of 1997 allows the IRS to issue regulations relating to the manner in which capital gain rates will apply to sales of capital assets by REIT's and to sales of interests in REIT's. The IRS has not issued these regulations. However, if the IRS does issue these regulations, they could affect the taxation of gain and loss realized on the disposition of common shares. Shareholders are urged to consult with their own tax advisors with respect to the rules contained in the Taxpayer Relief Act. In general, a loss recognized by a shareholder upon the sale of common shares that were held for six months or less, determined after applying certain holding period rules, will be treated as long-term capital loss to the extent that the shareholder received distributions that were treated as long-term capital gains. For shareholders who are individuals, trusts and estates, the long-term capital loss will be apportioned among the applicable long-term capital gain rates to the extent that distributions received by the shareholder were previously so treated. 23 PART I We may elect to retain (rather than distribute as is generally required) net capital gain for a taxable year and pay the income tax on that gain. If we make this election, shareholders must include in income, as long-term capital gain, their proportionate share of the undistributed net capital gain. Shareholders will be treated as having paid their proportionate share of the tax paid by us on these gains. Accordingly, they will receive a credit or refund for the amount. Shareholders will increase the basis in their common shares by the difference between the amount of capital gain included in their income and the amount of the tax they are treated as having paid. Our earnings and profits will be adjusted appropriately. TAXATION OF TAX-EXEMPT SHAREHOLDERS Most tax-exempt organizations are not subject to federal income tax except to the extent of their unrelated business taxable income, which is often referred to as UBIT. Unless a tax-exempt shareholder holds its common shares as debt financed property or uses the common shares in an unrelated trade or business, distributions to the shareholder should not constitute UBIT. Similarly, if a tax-exempt shareholder sells common shares, the income from the sale should not constitute UBIT unless the shareholder held the shares as debt financed property or used the shares in a trade or business. However, for tax-exempt shareholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans, income from owning or selling common shares will constitute UBIT unless the organization is able to properly deduct amounts set aside or placed in reserve so as to offset the income generated by its investment in common shares. These shareholders should consult their own tax advisors concerning these set aside and reserve requirements which are set forth in the Internal Revenue Code. In addition, certain pension trusts that own more than 10% of a pension-held REIT must report a portion of the distributions that they receive from the REIT as UBIT. We have not been and do not expect to be treated as a pension-held REIT for purposes of this rule. TAXATION OF FOREIGN SHAREHOLDERS The following is a discussion of certain anticipated United States federal income tax consequences of the ownership and disposition of common shares applicable to a foreign shareholder. It is based on current law and is for general information only. A "foreign shareholder" is any person other than: (a) a citizen or resident of the United States, (b) a corporation or partnership created or organized in the United States or under the laws of the United States or of any state thereof, or (c) an estate or trust whose income is includable in gross income for United States federal income tax purposes regardless of its source. Distributions by Us. Distributions by us to a foreign shareholder that are neither attributable to gain from sales or exchanges by us of United States real property interests nor designated by us as capital gains dividends will be treated as dividends of ordinary income to the extent that they are made out of our earnings and profits. These distributions ordinarily will be subject to withholding of United States federal income tax on a gross basis at a 30% rate, or a lower treaty rate, unless the dividends are treated as effectively connected with the conduct by the foreign shareholder of a United States trade or business. Please note that under certain treaties lower withholding rates generally applicable to dividends do not apply to dividends from REIT's. Dividends that are effectively connected with a United States trade or business will be subject to tax on a net basis at graduated rates, and are generally not subject to 24 PART I withholding. Certification and disclosure requirements must be satisfied before a dividend is exempt from withholding under this exemption. A foreign shareholder that is a corporation also may be subject to an additional branch profits tax at a 30% rate or a lower treaty rate. We expect to withhold United States income tax at the rate of 30% on any distributions made to a foreign shareholder unless: (a) a lower treaty rate applies and any required form or certification evidencing eligibility for that reduced rate is filed with us, or (b) the foreign shareholder files an IRS Form 4224 with us claiming that the distribution is effectively connected income. A distribution in excess of our current or accumulated earnings and profits will not be taxable to a foreign shareholder to the extent that the distribution does not exceed the adjusted basis of the shareholder's common shares. Instead, the distribution will reduce the adjusted basis of the common shares. To the extent that the distribution exceeds the adjusted basis of the common shares, it will give rise to gain from the sale or exchange of the shareholder's common shares. The tax treatment of this gain is described below. As a result of a legislative change made by the Small Business Job Protection Act of 1996, it appears that we will be required to withhold 10% of any distribution in excess of our earnings and profits. Consequently, although we intend to withhold at a rate of 30%, or a lower applicable treaty rate, on the entire amount of any distribution, to the extent that we do not do so, distributions will be subject to withholding at a rate of 10%. However, a foreign shareholder may seek a refund of the withheld amount from the IRS if it subsequently determined that the distribution was, in fact, in excess of our earnings and profits, and the amount withheld exceeded the foreign shareholder's United States tax liability with respect to the distribution. Distributions to a foreign shareholder that we designate at the time of the distributions as capital gain dividends, other than those arising from the disposition of a United States real property interest, generally will not be subject to United States federal income taxation unless: (a) the investment in the common shares is effectively connected with the foreign shareholder's United States trade or business, in which case the foreign shareholder will be subject to the same treatment as domestic shareholders, except that a shareholder that is a foreign corporation may also be subject to the branch profits tax, as discussed above, or (b) the foreign shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and has a "tax home" in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual's capital gains. Under the Foreign Investment in Real Property Tax Act, which is known as FIRPTA, distributions to a foreign shareholder that are attributable to gain from sales or exchanges of United States real property interests will cause the foreign shareholder to be treated as recognizing the gain as income effectively connected with a United States trade or business. This rule applies whether or not a distribution is designated as a capital gain dividend. Accordingly, foreign shareholders generally would be taxed on these distributions at the same rates applicable to U.S. shareholders, subject to a special alternative minimum tax in the case of nonresident alien individuals. In addition, a foreign corporate shareholder might be subject to the branch profits tax discussed above. We are required to withhold 35% of these distributions. The withheld amount can be credited against the foreign shareholder's United States federal income tax liability. 25 PART I Although the law is not entirely clear on the matter, it appears that amounts we designate as undistributed capital gains in respect of the common shares held by U.S. shareholders would be treated with respect to foreign shareholders in the same manner as actual distributions of capital gain dividends. Under that approach, foreign shareholders would be able to offset as a credit against the United States federal income tax liability their proportionate share of the tax paid by us on these undistributed capital gains. In addition, foreign shareholders would be able to receive from the IRS a refund to the extent their proportionate share of the tax paid by us were to exceed their actual United States federal income tax liability. SALES OF COMMON SHARES. Gain recognized by a foreign shareholder upon the sale or exchange of common shares generally will not be subject to United States taxation unless the shares constitute a "United States real property interest" within the meaning of FIRPTA. The common shares will not constitute a United States real property interest so long as we are a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its stock is held directly or indirectly by foreign shareholders. We believe that we are a domestically controlled REIT. Therefore, we believe that the sale of common shares will not be subject to taxation under FIRPTA. However, because common shares and preferred shares are publicly traded, we cannot guarantee that we will continue to be a domestically controlled REIT. In any event, gain from the sale or exchange of common shares not otherwise subject to FIRPTA will be taxable to a foreign shareholder if either: (a) the investment in the common shares is effectively connected with the foreign shareholder's United States trade or business, in which case the foreign shareholder will be subject to the same treatment as domestic shareholders with respect to the gain, or (b) the foreign shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and has a tax home in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual's capital gains. Even if we do not qualify as or cease to be a domestically controlled REIT, gain arising from the sale or exchange by a foreign shareholder of common shares still would not be subject to United States taxation under FIRPTA as a sale of a United States real property interest if: (a) the class or series of shares being sold is "regularly traded," as defined by applicable IRS regulations, on an established securities market such as the New York Stock Exchange, and (b) the selling foreign shareholder owned 5% or less of the value of the outstanding class or series of shares being sold throughout the five-year period ending on the date of the sale or exchange. If gain on the sale or exchange of common shares were subject to taxation under FIRPTA, the foreign shareholder would be subject to regular United States income tax with respect to the gain in the same manner as a taxable U.S. shareholder, subject to any applicable alternative minimum tax, a special alternative minimum tax in the case of nonresident alien individuals and the possible application of the branch profits tax in the case of foreign corporations. The purchaser of the common shares would be required to withhold and remit to the IRS 10% of the purchase price. OTHER TAX CONSIDERATIONS CLINTON ADMINISTRATION PROPOSAL. The Clinton Administration's fiscal year 2001 budget proposal was announced on February 1, 2000. One part of the proposed budget would amend the tax rules relating to the distribution of a REIT's income. Under current law, a REIT is required to distribute 26 PART I at least 85% of its ordinary income and 95% of its capital gains during a taxable year in order to avoid a 4% excise tax on the undistributed amount. Under the Clinton Administration proposal, a REIT would be required to distribute 98% of both ordinary income and capital gain net income to avoid the excise tax. If this proposal were enacted, it would be effective for calendar years beginning after December 31, 2000. As in previous Clinton Administration proposals, the administration proposes a "closely held REIT" ownership test, under which no "person" (i.e., a corporation, partnership or trust, including a pension or profit sharing trust) could own stock of a REIT possessing 50% or more of the total combined voting power of all classes of voting stock or 50% or more of the total value of shares of all classes of stock. This 2001 proposal contains an exception for REIT's owning more than 50% of another REIT. Further, there is a newly proposed "limited look-through rule" for partnerships that own REIT's. There is no exception for publicly traded REIT's. This proposal, if enacted, would be effective for entities electing REIT status for taxable years beginning on or after the date of first committee action (an entity that has elected REIT status prior to this date will avoid these restrictions so long as it has sufficient business assets or activities as of such date). It is presently uncertain whether these REIT proposals, or any other proposals regarding REIT's, will be enacted. OUR MANAGEMENT COMPANY AND OTHER SUBSIDIARIES. A small portion of the cash to be used by the Operating Partnership to fund distributions to us is expected to come from payments of dividends on non-voting stock of management companies and other companies held by the Operating Partnership. These companies pay federal and state income tax at the full applicable corporate rates. They will attempt to minimize the amount of these taxes, but we cannot guarantee whether or the extent to, which measures taken to minimize these taxes, will be successful. To the extent that these companies are required to pay taxes, the cash available for distribution from these management companies by us to shareholders will be reduced accordingly. STATE AND LOCAL TAXES. We and our shareholders may be subject to state or local taxation in various jurisdictions, including those in which it or they transact business or reside. The state and local tax treatment of us and our shareholders may not conform to the federal income tax consequence discussed above. Consequently, prospective shareholders should consult their own tax advisors regarding the effect of state and local tax laws on an investment in common shares. 27 PART I ITEM 2. THE PROPERTIES As of December 31, 1999, the Company owned or had interests in a portfolio of 1,062 multifamily Properties located in 35 states containing 225,708 apartment units. The Company has:
AVERAGE AVERAGE AVERAGE NUMBER OF NUMBER OCCUPANCY MONTHLY RENT TYPE PROPERTIES OF UNITS PERCENTAGE ------------------------- ---------------- ------------ -------------- -------------- GARDEN 652 282 94.9% $ 764 MID/HIGH-RISE 24 360 95.4% $ 1,239 RANCH 386 85 93.3% $ 463 ---------------- TOTAL 1,062 ================
Tenant leases are generally year-to-year and require security deposits. The garden-style properties are generally defined as properties with two and/or three floors while the mid-rise/high-rise properties are defined as properties greater than three floors. These two property types typically provide residents with amenities, which may include a clubhouse, swimming pool, laundry facilities and cable television access. Certain of these properties offer additional amenities such as saunas, whirlpools, spas, sports courts and exercise rooms. The ranch-style properties, which are defined as single story properties, generally do not provide additional amenities for its residents. It is management's role to monitor compliance with Property policies and to provide preventive maintenance of the Properties including common areas, facilities and amenities. The Company holds periodic meetings of its Property management personnel for training and implementation of the Company's strategies. The Company believes that, due in part to this strategy, the Properties historically have had high occupancy rates. The distribution of the Properties throughout the United States reflects the Company's belief that geographic diversification helps insulate the portfolio from regional and economic influences. At the same time, the Company has sought to create clusters of Properties within each of its primary markets in order to achieve economies of scale in management and operation; however, the Company may acquire additional multifamily properties located anywhere in the United States. The Company beneficially owns fee simple title to 976 of the 983 controlled properties and holds a 99-year leasehold interest with respect to one Property (Mallgate). In addition, with respect to two Properties, the Company owns the debt collateralized by such Properties and with respect to four Properties, the Company owns an interest in the debt collateralized by the Properties. The remaining 79 properties represent investments in partnership interests and/or subordinated mortgages containing 11,648 units. Direct fee simple title for certain of the Properties is owned by single-purpose nominee corporations, LLC's or land trusts that engage in no business other than holding title to the Property for the benefit of the Company. Holding title in such a manner is expected to make it less costly to transfer such Property in the future in the event of a sale and should facilitate financing, since lenders often require title to a Property to be held in a single purpose entity in order to isolate that Property from potential liabilities of other Properties. Direct fee simple title for certain other Properties is owned by a single LLC. The Company also leases (under operating leases) various management, regional and corporate offices throughout the United States. See Item 1 for the locations of these offices. The following table sets forth certain information by type and by state relating to the Properties owned by the Company or in which the Company had a direct equity or mortgage interest at December 31, 1999. 28 PART I
GARDEN-STYLE PROPERTIES AVERAGE DECEMBER 31, 1999 OCCUPANCY AVERAGE MONTHLY NUMBER OF NUMBER PERCENTAGE OF PERCENTAGE AS OF RENTAL RATE PER STATE PROPERTIES OF UNITS TOTAL UNITS DECEMBER 31, 1999 UNIT - ---------------------------------------------------------------------------------------------------------------------- Alabama 12 2,483 1.10 % 87.4 % $507 Arizona 65 19,513 8.65 94.9 734 California 70 18,215 8.07 96.5 1,061 Colorado 31 8,102 3.59 95.0 733 Connecticut 1 156 0.07 93.6 814 Florida 85 24,448 10.83 94.5 717 Georgia 40 13,112 5.81 94.7 769 Illinois 6 2,154 0.95 96.1 978 Indiana 1 320 0.14 94.7 627 Iowa 1 200 0.09 93.0 596 Kansas 6 2,392 1.06 96.5 721 Kentucky 7 1,941 0.86 94.0 583 Maine 5 672 0.30 97.1 770 Maryland 27 6,587 2.92 95.9 786 Massachusetts 6 1,214 0.54 96.4 1,141 Michigan 11 4,084 1.81 94.4 821 Minnesota 17 3,641 1.61 95.4 907 Missouri 8 1,590 0.70 95.7 654 Nevada 11 3,595 1.59 93.8 677 New Hampshire 1 390 0.17 96.2 842 New Jersey 1 704 0.31 97.9 959 New Mexico 4 1,073 0.48 93.5 667 North Carolina 38 10,358 4.59 94.8 652 Ohio 1 827 0.37 92.7 836 Oklahoma 9 2,324 1.03 95.8 559 Oregon 11 3,448 1.53 94.1 694 South Carolina 8 1,473 0.65 94.4 543 Tennessee 18 5,081 2.25 94.6 662 Texas 84 26,158 11.59 94.3 704 Utah 4 1,426 0.63 93.5 612 Virginia 16 4,837 2.14 95.4 769 Washington 43 10,367 4.59 95.5 788 Wisconsin 4 1,281 0.57 95.6 897 ------------ ------------ ------------ TOTAL GARDEN-STYLE 652 184,166 81.59 % ------------ ------------ ------------ ------------ ------------- ----------- AVERAGE GARDEN-STYLE 282 94.9 % $764 ------------ ------------- -----------
29 PART I
MID-RISE/HIGH-RISE PROPERTIES AVERAGE DECEMBER 31, 1999 OCCUPANCY AVERAGE MONTHLY NUMBER OF NUMBER PERCENTAGE OF PERCENTAGE AS OF RENTAL RATE PER STATE PROPERTIES OF UNITS TOTAL UNITS DECEMBER 31, 1999 UNIT - ---------------------------------------------------------------------------------------------------------------------- Arizona 1 611 0.27 % 91.2 % $581 California 1 164 0.07 94.0 1,670 Connecticut 2 407 0.18 95.3 1,939 Florida 2 457 0.20 97.0 973 Illinois 1 1,420 0.63 95.4 838 Iowa 1 186 0.08 95.1 799 Massachusetts 4 2,181 0.97 98.2 1,467 Minnesota 1 162 0.07 98.8 1,246 New Jersey 2 684 0.30 96.0 1,954 Ohio 1 765 0.34 79.3 987 Oregon 1 525 0.23 93.9 915 Texas 2 333 0.15 97.3 1,061 Virginia 1 277 0.12 97.8 1,031 Washington 4 472 0.21 95.0 985 ------------ ------------ ------------ TOTAL MID-RISE/HIGH-RISE 24 8,644 3.83 % ------------ ------------ ------------ ------------ ------------- ------------- AVERAGE MID-RISE/HIGH-RISE 360 95.4 % $1,239 ------------ ------------- -------------
RANCH-STYLE PROPERTIES Alabama 2 159 0.07 % 94.0 % $388 Florida 97 8,922 3.95 94.4 468 Georgia 60 4,964 2.20 93.6 494 Illinois 4 281 0.12 91.9 444 Indiana 51 4,415 1.96 90.6 450 Kentucky 27 2,026 0.90 95.2 428 Maryland 4 413 0.18 92.7 537 Michigan 21 1,720 0.76 97.3 539 Ohio 100 8,337 3.69 92.3 439 Pennsylvania 7 580 0.26 93.2 534 South Carolina 3 269 0.12 93.9 444 Tennessee 5 348 0.15 96.5 453 Texas 1 67 0.03 93.0 467 West Virginia 4 397 0.18 91.1 423 ------------ ------------ ------------ TOTAL RANCH-STYLE 386 32,898 14.58 % ------------ ------------ ------------ ------------ ------------- ------------- AVERAGE RANCH-STYLE 85 93.3 % $463 ------------ ------------- ------------- TOTAL EQR RESIDENTIAL PORTFOLIO ------------ ------------ ------------ 1,062 225,708 100.00 % ============ ============ ============
30 PART I The properties currently under development (see discussion in Item 7) are included in the following table.
DEVELOPMENT ESTIMATED EQR TOTAL EQR ESTIMATED COST FUNDED FUTURE FUNDING FUNDING DEVELOPMENT COST AT 12/31/1999 OBLIGATION OBLIGATION ESTIMATED DEVELOPMENT NUMBER OF NUMBER (IN (IN (IN (IN COMPLETION PROJECT NAME LOCATION PROPERTIES OF UNITS MILLIONS) MILLIONS)(1) MILLIONS)(1) MILLIONS)(1) DATE - ----------------------------------------------------------------------------------------------------------------------------------- La Mirage IV (3) San Diego, CA 1 340 $ 54.4 $ 1.6 $ 52.8 $ 54.4 Q1 2001 Town Center II (2) Houston, TX 1 260 15.2 15.2 0.0 15.2 Completed Prospect Towers II (3) Hackensack, NJ 1 203 33.8 0.6 33.2 33.8 Q2 2001 --- ----- ---------- -------- -------- -------- EXPANSION PROJECTS 3 803 $ 103.4 $ 17.4 $ 86.0 $ 103.4 --- ----- ---------- -------- -------- -------- Peachtree Atlanta, GA 1 355 $ 35.3 $ 8.8 $ 0.0 $ 8.8 Completed Lincoln Park Lawrence, MA 1 174 17.8 4.5 0.0 4.5 Q2 2000 Mount Laurel Crossing Mt. Laurel, NJ 1 296 25.2 6.3 0.0 6.3 Q2 2000 Fairfax Corners Fairfax, VA 1 652 63.9 16.0 0.0 16.0 Q3 2001 Lakeside Park Tampa, FL 1 264 17.7 4.4 0.0 4.4 Q4 2000 Eden Village Loudon County, VA 1 298 28.7 0.0 7.2 7.2 Q4 2001 Landings, The Lake Zurich, IL 1 206 20.9 5.2 0.0 5.2 Q3 2000 Regents Court San Diego, CA 1 251 37.1 9.3 0.0 9.3 Q1 2001 Potomac Yard Alexandria, VA 1 588 65.7 0.0 16.4 16.4 Q3 2001 Waltham Terrace Waltham, MA 1 192 27.0 0.0 6.7 6.7 Q4 2001 Braintree Woods Braintree, MA 1 202 27.4 6.8 0.0 6.8 Q4 2000 Savannah at Park Place Atlanta, GA 1 416 43.9 9.9 1.1 11.0 Q4 2000 --- ----- ---------- -------- -------- -------- LINCOLN PROPERTY COMPANY JOINT VENTURE PROJECTS 12 3,894 $ 410.6 $ 71.2 $ 31.4 $ 102.6 ----- ----- -------- ------ ------ ------ Hampden Town Center Aurora, CO 1 444 $ 44.8 $ 9.5 $ 1.7 $ 11.2 Q1 2001 Warner Ridge Woodland Hills, CA 1 579 111.2 27.8 0.0 27.8 Q4 2001 ----- ----- -------- ------ ------ ------ LEGACY PARTNERS JOINT VENTURE PROJECTS 2 1,023 $ 156.0 $ 37.3 $ 1.7 $ 39.0 ----- ----- -------- ------ ------ ------ Parkfield Denver, CO 1 476 $ 37.9 $ 0.0 $ 37.9 $ 37.9 Q4 2000 ----- ----- -------- ------ ------ ------ EARNOUT PROJECTS 1 476 $ 37.9 $ 0.0 $ 37.9 $ 37.9 ----- ----- -------- ------ ------ ------ ----- ----- -------- ------ ------ ------ TOTAL PROJECTS 18 6,196 $ 707.9 $ 125.9 $ 157.0 $ 282.9 ===== ====== ====== ====== ====== =========
(1) The Company's funding of Lincoln Property Company Joint Venture and Legacy Partners Joint Venture Projects is limited to 25% of the total development cost. (2) Town Center II was substantially completed and acquired on December 22, 1999 and is included in the outstanding property and unit counts as of that date. (3) Estimated development cost does not include the cost of land previously acquired by the Company. 31 PART I ITEM 3. LEGAL PROCEEDINGS Only ordinary routine litigation incidental to the business, which is not deemed material, was initiated during the year ended December 31, 1999. As of December 31, 1999, the Company does not believe there is any other litigation threatened against the Company other than routine litigation arising out of the ordinary course of business, some of which is expected to be covered by liability insurance, none of which is expected to have a material adverse effect on the consolidated financial statements of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 32 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS The following table sets forth, for the periods indicated, the high and low sales prices for and the distributions paid on the Company's Common Shares which trade on the New York Stock Exchange under the trading symbol EQR.
SALES PRICE HIGH LOW DISTRIBUTIONS FISCAL YEAR 1999 Fourth Quarter Ended December 31, 1999 $43 1/4 $38 1/4 $0.76 Third Quarter Ended September 30, 1999 $45 1/4 $40 11/16 $0.76 Second Quarter Ended June 30, 1999 $48 3/8 $40 1/4 $0.71 First Quarter Ended March 31, 1999 $41 15/16 $39 7/8 $0.71
SALES PRICE HIGH LOW DISTRIBUTIONS FISCAL YEAR 1998 Fourth Quarter Ended December 31, 1998 $43 1/4 $38 7/8 $0.71 Third Quarter Ended September 30, 1998 $47 1/2 $34 11/16 $0.67 Second Quarter Ended June 30, 1998 $52 9/16 $44 1/2 $0.67 First Quarter Ended March 31, 1998 $52 7/16 $47 $0.67
In addition, on February 17, 2000, the Company declared a $0.76 distribution per Common Share payable on April 14, 2000 to shareholders of record on March 20, 2000. The number of beneficial holders of Common Shares at March 1, 2000, was approximately 61,000. The number of outstanding Common Shares as of March 1, 2000 was 127,911,989. ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial and operating information on a historical basis for the Company. The following information should be read in conjunction with all of the financial statements and notes thereto included elsewhere in this Form 10-K. The historical operating and balance sheet data for the year ended December 31, 1995 have been derived from the historical Financial Statements of the Company. The historical operating and balance sheet data for the years ended December 31, 1999, 1998, 1997 and 1996 have been derived from the historical Financial Statements of the Company audited by Ernst & Young LLP, independent auditors. Certain capitalized terms as used herein, are defined in the Notes to the Consolidated Financial Statements. 33 PART II
EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED HISTORICAL FINANCIAL INFORMATION (FINANCIAL INFORMATION IN THOUSANDS EXCEPT FOR PER SHARE AND PROPERTY DATA) YEAR ENDED DECEMBER 31, --------------------------------------------------------------------------------------- 1999 1998 1997 1996 1995 -------------- ------------- ------------ ----------- ------------ OPERATING DATA: Total revenues $ 1,753,118 $ 1,336,996 $ 747,078 $ 478,385 $390,384 =============== ============== ============= ============ ======== Income before gain on disposition of properties, net, extraordinary items and allocation to Minority Interests $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738 =============== ============== ============= ============ ======== Net income $ 393,881 $ 258,206 $ 176,592 $ 101,624 $ 67,719 =============== ============== ============= ============ ======== Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580 $ 72,609 $ 57,610 =============== ============== ============= ============ ======== Net income per share - basic $ 2.30 $ 1.65 $ 1.79 $ 1.70 $ 1.68 =============== ============== ============= ============ ======== Net income per share - diluted $ 2.29 $ 1.63 $ 1.76 $ 1.69 $ 1.67 =============== ============== ============= ============ ======== Weighted average Common Shares outstanding 122,175 100,370 65,729 42,586 34,358 - basic =============== ============== ============= ============ ======== Weighted average Common Shares outstanding 135,655 112,578 74,281 51,102 43,983 - diluted =============== ============== ============= ============ ======== Distributions declared per Common Share $ 2.94 $ 2.72 $ 2.55 $ 2.40 $ 2.18 outstanding =============== ============== ============= ============ ========
BALANCE SHEET DATA (at end of period): Real estate, before accumulated $ 12,238,963 $ 10,942,063 $ 7,121,435 $ 2,983,510 $ 2,188,939 depreciation(1) Real estate, after accumulated $ 11,168,476 $ 10,223,572 $ 6,676,673 $ 2,681,998 $ 1,970,600 depreciation(1) Total assets $ 11,715,689 $ 10,700,260 $ 7,094,631 $ 2,986,127 $ 2,141,260 Total debt $ 5,473,868 $ 4,680,527 $ 2,948,323 $ 1,254,274 $ 1,002,219 Minority Interests $ 456,979 $ 431,374 $ 273,404 $ 150,637 $ 168,963 Shareholders' equity $ 5,504,934 $ 5,330,447 $ 3,689,991 $ 1,458,830 $ 884,517 OTHER DATA: Total properties (at end of period) (2) 983 653 463 218 174 Total apartment units (at end of 214,060 186,496 135,200 67,705 53,294 period)(2) Funds from operations available to Common Shares and OP Units (3) $ 619,603 $ 458,841 $ 270,763 $ 160,267 $ 120,965 Cash flow provided by (used for): Operating activities $ 785,219 $ 543,213 $ 348,997 $ 210,930 $ 141,534 Investing activities $ (523,551) $ (1,047,374) $ (1,552,390) $ (635,655) $ (324,018) Financing activities $ (236,516) $ 474,831 $ 1,089,417 $ 558,568 $ 175,874
34 PART II ITEM 6. SELECTED FINANCIAL DATA (CONSOLIDATED HISTORICAL (CONTINUED)) (1) Includes approximately $18.0 million and $96.3 million of construction in progress as of December 31, 1999 and 1998, respectively. (2) Totals exclude properties which the Company had investments in partnership interests and/or subordinated mortgages. As of December 31, 1999, this represented 79 properties containing 11,648 units. As of December 31, 1998, this represented 27 properties containing 5,193 units. As of December 31, 1997, this represented 26 properties containing 5,267 units. (3) The Company generally considers funds from operations ("FFO") to be one measure of the performance of real estate companies, including an equity REIT. The definition of FFO adopted in March 1995 by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with generally accepted accounting principles ("GAAP")), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company believes that FFO is helpful to investors as a measure of the performance of an equity REIT because, along with cash flows from operating activities, financing activities and investing activities, it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO, in and of itself, does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indication of the Company's performance or to net cash flows from operating activities as determined by GAAP as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. The Company's calculation of FFO represents net income available to Common Shares, excluding gains on dispositions of properties, gains on early extinguishment of debt, and write-off of unamortized costs on refinanced debt, plus depreciation on real estate assets, income allocated to Minority Interests and amortization of deferred financing costs related to the Predecessor Business. The Company's calculation of FFO may differ from the methodology for calculating FFO utilized by other REIT's and, accordingly, may not be comparable to such other REIT's. The Company's calculation of FFO for 1995 has been restated to reflect the effects of the definition as mentioned above. The Company will adopt, effective January 1, 2000, NAREIT's updated recommended definition of FFO as approved in the fourth quarter of 1999. 35 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7. OVERVIEW The following discussion and analysis of the results of operations and financial condition of the Company should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company's ability to control the Operating Partnership, the Management Partnerships and Management Companies, the Financing Partnerships, the LLC's and certain other entities, each entity has been consolidated with the Company for financial reporting purposes. Capitalized terms used herein and not defined are as defined elsewhere in this Annual Report on Form 10-K for the year ended December 31, 1999. Forward-looking statements in this Item 7 as well as Item 1 of this Annual Report on Form 10-K are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believes", "expects" and "anticipates" and other similar expressions which are predictions of or indicate future events and trends and which do not relate solely to historical matters identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties which could cause actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such differences include, but are not limited to, the following: - alternative sources of capital to the Company are higher than anticipated; - occupancy levels and market rents may be adversely affected by local economic and market conditions, which are beyond the Company's control; and - additional factors as discussed in Part I of the Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. RESULTS OF OPERATIONS The acquired properties are presented in the Consolidated Financial Statements of the Company from the date of each acquisition or the closing dates of the Mergers. The following table summarizes the number of Acquired and Disposed Properties and related units for the prior three years:
ACQUISITIONS DISPOSITIONS ---------------------------------- ------------------------------- Number of Number of Units Number of Number of YEAR Properties Properties Units --------------------------- ---------------- ----------------- --------------- --------------- 1997 252 68,830 7 1,336 1998 210 56,015 20 4,719 1999 366 35,450 36 7,886
36 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED) In addition, during the year ended December 31, 1999, the Company also sold its entire interest in six MRY joint venture properties (to MRYP Spinco) containing 1,297 units for approximately $54.1 million. The Company's overall results of operations for the year ended December 31, 1999 and 1998 have been significantly impacted by the Company's acquisition and disposition activity. The significant changes in rental revenues, property and maintenance expenses, real estate taxes and insurance, depreciation expense, property management and interest expense can all primarily be attributed to the acquisition of the 1998 Acquired Properties and the 1999 Acquired Properties, partially offset by the disposition of the 1998 Disposed Properties and the 1999 Disposed Properties. The impact of the 1998 Acquired Properties, the 1999 Acquired Properties, the 1998 Disposed Properties and the 1999 Disposed Properties is discussed in greater detail in the following paragraphs. Properties that the Company owned for all of both 1999 and 1998 (the "1999 Same Store Properties"), which represented 121,490 units, impacted the Company's results of operations. Properties that the Company owned for all of both 1998 and 1997 (the "1998 Same Store Properties"), which represented 63,243 units, also impacted the Company's results of operations. Both the 1999 Same Store Properties and 1998 Same Store Properties are discussed in the following paragraphs. COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31, 1998 For the year ended December 31, 1999, income before gain on disposition of properties, net, extraordinary item and allocation to Minority Interests increased by $75.3 million when compared to the year ended December 31, 1998. This increase was primarily due to the acquisition of the 1998 Acquired Properties and the 1999 Acquired Properties as well as increases in rental revenues net of increases in property and maintenance expenses, real estate taxes and insurance, property management expenses, depreciation expense, interest expense and general and administrative expenses. In regard to the 1999 Same Store Properties, total revenues increased by approximately $35.8 million to $1.1 billion or 3.48% primarily as a result of higher rental rates charged to new tenants and tenant renewals and an increase in income from billing tenants for their share of utility costs as well as other ancillary services provided to tenants. Overall, property operating expenses, which include property and maintenance, real estate taxes and insurance and an allocation of property management expenses, increased approximately $0.1 million or 0.03%. This increase was primarily the result of higher expenses for on-site compensation costs and an increase in real estate taxes on certain properties, but was partially offset by lower leasing and advertising, administrative, maintenance and property management costs. Property management represents expenses associated with the self-management of the Company's Properties. These expenses increased by approximately $8.5 million primarily due to the continued expansion of the Company's property management business. During 1999, the Company assumed a management office in Reynoldsburg, Ohio related to the LFT Merger. Fee and asset management revenues and fee and asset management expenses are associated with the management of properties not owned by the Company that are managed for affiliates. These revenues and expenses decreased due to the Company acquiring certain of these properties that were formerly fee-managed. 37 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED) Interest expense, including amortization of deferred financing costs, increased by approximately $91.9 million. This increase was primarily the result of an increase in the Company's average indebtedness outstanding which increased by $1.3 billion. However, the Company's effective interest costs decreased from 7.10% for the year ended December 31, 1998 to 7.05% for the year ended December 31, 1999. General and administrative expenses, which include corporate operating expenses, increased approximately $1.7 million between the periods under comparison. This increase was primarily due to the addition of corporate personnel. However, by gaining certain economies of scale with a much larger operation these expenses as a percentage of total revenues were 1.27% for the year ended December 31, 1999 compared to 1.54% of total revenues for the year ended December 31, 1998. COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER 31, 1997 For the year ended December 31, 1998, income before gain on disposition of properties, net, extraordinary item and allocation to Minority Interests increased by $79 million when compared to the year ended December 31, 1997. This increase was primarily due to increases in rental revenues net of increases in property and maintenance expenses, real estate taxes and insurance, property management expenses, depreciation expense, interest expense and general and administrative expenses. In regard to the 1998 Same Store Properties rental income increased by approximately $23.1 million to $527.3 million or 4.59% primarily as a result of higher rental rates charged to new tenants and tenant renewals, a 1.01% increase in average economic occupancy levels and an increase in income from billing tenants for their share of utility costs. Overall, property operating expenses, which include property and maintenance, real estate taxes and insurance and an allocation of property management expenses, increased approximately $5.3 million or 2.65%. This increase was primarily the result of higher compensation costs, leasing and advertising costs, utilities, and maintenance charges. Property management represents expenses associated with the self-management of the Company's Properties. These expenses increased by approximately $26.3 million primarily due to the continued expansion of the Company's property management business. The 1998 amounts include a full year effect of the various offices the Company opened in 1997, including the Scottsdale Office, which had a significant expansion resulting from the EWR Merger. During 1998, the Company opened new management offices in Jacksonville and Orlando, Florida and the Company assumed a management office in Augusta, Georgia related to the MRY Merger. Fee and asset management revenues and fee and asset management expenses are associated with the management of properties not owned by the Company that are managed for affiliates. These net revenues decreased due to the disposition of certain of these properties, resulting in the Company no longer providing fee and asset management services to such properties. Interest expense, including amortization of deferred financing costs, increased by approximately $125.5 million. This increase was primarily the result of an increase in the Company's average indebtedness outstanding which increased by $1.9 billion. However, the Company's effective interest costs decreased from 7.50% for the year ended December 31, 1997 to 7.10% for the year ended December 31, 1998. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED) General and administrative expenses, which include corporate operating expenses, increased approximately $5.8 million between the periods under comparison. This increase was primarily due to the addition of corporate personnel in the Company's Human Resources, Accounting, Legal and Management Information Systems groups, as well as higher compensation costs, shareholder reporting costs and professional fees. However, by gaining certain economies of scale with a much larger operation these expenses as a percentage of total revenues were 1.54% for the year ended December 31, 1998 compared to 1.98% of total revenues for the year ended December 31, 1997. LIQUIDITY AND CAPITAL RESOURCES FOR THE YEAR ENDED DECEMBER 31, 1999 As of January 1, 1999, the Company had approximately $4 million of cash and cash equivalents and $330 million available on its lines of credit, of which $12 million was restricted. After taking into effect the various transactions discussed in the following paragraphs, the Company's cash and cash equivalents balance at December 31, 1999 was approximately $29.1 million and the amount available on the Company's line of credit was $400 million, of which $65.8 million was restricted. The following discussion also explains the changes in net cash provided by operating activities, net cash used for investing activities and net cash provided by (used for) financing activities, all of which are presented in the Company's Statements of Cash Flows. Part of the Company's strategy in funding the purchase of multifamily properties, funding its Properties in the development stage and the funding of the Company's investment in two joint ventures with multifamily real estate developers is to utilize its line of credit and to subsequently repay the line of credit from the issuance of additional equity or debt securities or the disposition of Properties. Utilizing this strategy during 1999, the Company: - issued the June 2004 Notes and received net proceeds of $298.0 million; - refinanced seven Properties and received additional proceeds of $78.5 million; - obtained new mortgage financing on eleven previously unencumbered properties and received net proceeds of $126.5 million; - disposed of forty-two properties (including the sale of the Company's interest in six MRY joint venture properties) and received net proceeds of $383 million; - issued approximately 1.2 million Common Shares and received net proceeds of $38.5 million; and - issued 800,000 8.00% Series A Cumulative Convertible Redeemable Preference Interests of EQR-Mosaic, L.L.C. and received net proceeds of $39 million. All of these proceeds were utilized to either: - purchase additional properties; - provide funding for properties in the development stage; and/or - repay the line of credit and mortgage indebtedness on certain Properties. With respect to the 1999 Acquired Properties, the Company assumed and/or entered into new mortgage indebtedness of approximately $69.9 million, issued OP Units with a value of $25.2 million and issued Junior Convertible Preference Units with a value of $3.0 million. The total purchase price of the 1999 Acquired Properties was approximately $1.4 billion. 39 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) Subsequent to December 31, 1999 and through March 3, 2000, the Company acquired one additional property containing 178 units for a total purchase price of approximately $10.3 million. Subsequent to December 31, 1999 and through March 3, 2000, the Company disposed of six properties for a total sales price of $46.7 million. These proceeds will be utilized to purchase additional properties. The Company anticipates that it will continue to sell certain Properties in the portfolio. On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary of the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative Convertible Redeemable Preference Units with an equity value of $55.0 million. Lexford Properties, L.P. received $53.6 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 1.1 million units are exchangeable into 1.1 million shares of 8.50% Series M-1 Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company. The Series M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the Series B Preference Units or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25 per unit/share per year. The net proceeds received from this transaction will be used for scheduled mortgage and line of credit repayments. In regard to the joint venture agreements with two multifamily residential real estate developers during the year ended December 31, 1999, the Company funded a total of $88.6 million and during 2000 the Company expects to fund approximately $32.7 million in connection with these agreements. In connection with the first agreement, the Company has an obligation to fund up to an additional $20 million to guarantee third party construction financing. In regard to certain other properties that were under development and/or expansion during the year ended December 31, 1999, the Company funded $47.5 million. During 2000, the Company expects to fund $44.9 million related to the continued development and/or expansion of as many as three Properties. In regard to certain properties that were under earnout/development agreements, during the year ended December 31, 1999, the Company funded the following: - $17.2 million relating to the acquisition of Copper Canyon Apartments, which included a $1.0 million earnout payment to the developer; - $24.9 million relating to the acquisition of Skyview Apartments, which included a $3.1 million earnout payment to the developer; and - $18.3 million relating to the acquisition of Rosecliff Apartments. Subsequent to December 31, 1999, the Company funded $2.3 million for an initial earnout payment to the developer of Rosecliff Apartments. During 2000, the Company expects to fund $33.4 million related to the continued earnout/development of one Property. In May 1999, the Company repaid its 1999 Notes that matured on May 15, 1999. The $125 million repayment was initially funded from borrowings under the Company's lines of credit. In November 1999, the Company repaid the 1999-A Notes that matured on November 24, 1999. The $25 million repayment was initially funded from borrowings under the Company's line of credit. 40 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) During 1999, the Company repaid approximately $60.8 million of mortgage indebtedness on 31 Properties. These repayments were funded from the Company's line of credit and/or certain proceeds from dispositions. In addition, the Company refinanced the debt on six existing properties totaling $45.0 million with new mortgage indebtedness totaling $65.7 million. As of December 31, 1999, the Company had total indebtedness of approximately $5.5 billion, which included mortgage indebtedness of $2.9 billion (including premiums of $2.1 million), of which $838 million represented tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (including net discounts and premiums in the amount of $2.5 million), of which $127.8 million represented tax-exempt bond indebtedness. Subsequent to December 31, 1999, the Company settled on a $100 million interest rate protection agreement and received approximately $7.0 million in connection therewith. In the second quarter of 2000, the Company anticipates repaying mortgage indebtedness of approximately $85 million assumed in connection with the LFT Merger. These repayments will also be primarily funded from additional borrowings under the line of credit and/or additional mortgage borrowings. The Company has, from time to time, entered into interest rate protection agreements (financial instruments) to reduce the potential impact of increases in interest rates but believes it has limited exposure to the extent of non-performance by the counterparties of each protection agreement since each counterparty is a major U.S. financial institution, and the Company does not anticipate their non-performance. No such financial instrument has been used for trading purposes. In August 1996, the Company entered into an interest rate protection agreement to effectively fix the interest rate cost of the Company's 2026 Notes. The agreement was for a notional amount of $150 million with a locked in treasury rate of 7.57%. In July 1997, the Company entered into two interest rate protection agreements to effectively fix the interest rate cost of the Company's 2001 Notes and 2003 Notes. One agreement was for a notional amount of $100 million with a locked in treasury rate of 6.134%. The second agreement was for a notional amount of $75 million with a locked in treasury rate of 6.287%. In April 1998, the Company entered into an interest rate protection agreement to effectively fix the interest rate cost of the Company's 2015 Notes. The agreement was for a notional amount of $300 million with a locked in treasury rate of 6.63%. In May 1998, the Company entered into an interest rate protection agreement to effectively fix the interest rate cost of the Evans Withycombe Financing Limited Partnership indebtedness to within a range of 5.6% to 6.0% upon its refinancing. The agreement was for a notional amount of $131 million with a settlement date of August 2001. There was no initial cost to the Company for entering into this agreement. In August 1998, the Company entered into an interest rate protection agreement to effectively fix the interest rate cost of the Company's planned financing in the fourth quarter of 1998. This agreement was 41 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) canceled in November at a cost of approximately $3.7 million. This cost is being amortized over the life of the financing for the 15 previously unencumbered Properties that occurred in November 1998. In August 1998, the Company entered into an interest rate swap agreement that fixed the Company's interest rate risk on a portion of the Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of 3.65125%. This agreement was for a notional amount of $150 million with a termination date of August 2003. In August 1998, the Company entered into an interest rate swap agreement that fixed the Company's interest rate risk on a portion of the Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of 3.683%. This agreement was for a notional amount of $150 million with a termination date of August 2005. The fair value of these instruments, discussed above, as of December 31, 1999 approximates their carrying or contract values. The Company has a policy of capitalizing expenditures made for new assets, including newly acquired properties and the costs associated with placing these assets into service. Expenditures for improvements and renovations that significantly enhance the value of existing assets or substantially extend the useful life of an asset are also capitalized. Expenditures for in-the-unit replacement-type items such as appliances, draperies, carpeting and floor coverings, mechanical equipment and certain furniture and fixtures is also capitalized. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred. With respect to acquired properties, the Company has determined that it generally spends $1,000 per unit during its first three years of ownership to fully improve and enhance these properties to meet the Company's standards. In regard to replacement-type items described above, the Company generally expects to spend $250 per unit on an annual recurring basis. During the year ended December 31, 1999, total capital expenditures for the Company approximated $141.9 million. Of this amount, approximately $34.5 million, or $427 per unit, related to capital improvements and major repairs for the 1997, 1998 and 1999 Acquired Properties. Capital improvements and major repairs for all of the Company's pre-EQR IPO properties and 1993, 1994, 1995 and 1996 Acquired Properties approximated $40.8 million, or $362 per unit. Capital spent for replacement-type items approximated $53.5 million, or $277 per unit. In addition, approximately $5.9 million was spent on four specific assets related to major renovations and repositioning of these assets. Also included in total capital expenditures was approximately $7.2 million expended for non-real estate additions such as computer software, computer equipment, and furniture and fixtures and leasehold improvements for the Company's property management offices and its corporate headquarters. Such capital expenditures were primarily funded from working capital reserves and from net cash provided by operating activities. Total capital expenditures for 2000 are budgeted to be approximately $110.0 million for all Properties. Minority Interests as of December 31, 1999 increased by $25.6 million when compared to December 31, 1998. The primary factors that impacted this account during the year were: - distributions declared to Minority Interests, which amounted to $37.4 million for 1999 (excluding preference unit/interest distributions); - the allocation of income from operations in the amount of $29.5 million; - the conversion of OP Units into Common Shares; and - the issuance of Common Shares, OP Units, Preference Units and Preference Interests during 1999. 42 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) Total distributions paid in 1999 amounted to $514.9 million, which included certain distributions declared in the fourth quarters of 1998 and 1999. The Company paid a $0.76 per Common Share distribution on December 31, 1999 for the quarter ended December 31, 1999 to Common Shareholders and Minority Interest holders of record as of December 20, 1999. The Company expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing Properties and certain scheduled unsecured note and mortgage note repayments, generally through its working capital, net cash provided by operating activities and borrowings under its line of credit. The Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions. The Company also expects to meet its long-term liquidity requirements, such as scheduled unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of unsecured notes and equity securities including additional OP Units as well as from undistributed FFO and proceeds received from the disposition of certain Properties. In addition, the Company has certain uncollateralized Properties available for additional mortgage borrowings in the event that the public capital markets are unavailable to the Company or the cost of alternative sources of capital to the Company is too high. On August 12, 1999 the Company obtained a new three year $700 million unsecured revolving credit facility, with Bank of America Securities LLC and Chase Securities Inc. acting as joint lead arrangers. The new line of credit replaced the Company's $500 million unsecured revolving credit facility, as well as the $120 million unsecured revolving credit facility which the Company assumed in the MRY Merger. The prior existing revolving credit facilities were repaid in full and terminated upon the closing of the new facility. This new credit facility matures in August 2002 and will be used to fund property acquisitions, costs for certain properties under development and short term liquidity requirements. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods, plus a certain spread dependent upon the Company's credit rating. As of March 7, 2000, $110 million was outstanding under this new facility bearing interest at a weighted average rate of 6.28%. Pursuant to the LFT Merger, the Company assumed a line of credit that had an outstanding balance of approximately $26.4 million. On October 1, 1999, the Company repaid the outstanding balance and terminated this facility. In connection with the Wellsford Merger, the Company has provided a $14.8 million credit enhancement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project. Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real Properties, Inc. ("WRP Newco"), the Company has agreed to purchase up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a standby basis over a three-year period ending on May 30, 2000. These preferred shares would be convertible to WRP Newco common shares under certain circumstances. As of December 31, 1999, no shares of WRP Newco Series A Preferred had been acquired by the Company. The Company expects to fund this $25 million investment in April 2000. In connection with the MRY Merger, the Company extended a $25 million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement. On June 24, 1999, MRYP Spinco repaid the entire outstanding Senior Note balance of $18.3 million and there is no further obligation by either party in connection with this agreement. Also, in connection with the MRY Merger, the Company entered into six joint venture 43 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) agreements with MRYP Spinco. The Company contributed six properties with an initial value of $52.7 million in return for an ownership interest in each joint venture. On August 23, 1999, the Company sold its entire interest in these six properties to MRYP Spinco and received $54.1 million. There is no further obligation by either party in connection with these agreements. FOR THE YEAR ENDED DECEMBER 31, 1998 As of January 1, 1998, the Company had approximately $33.3 million of cash and cash equivalents and $265 million available on its line of credit of which $24.7 million was restricted. After taking into effect the various transactions discussed in the following paragraphs, cash and cash equivalents at December 31, 1998 were approximately $4 million and the amounts available on the Company's lines of credit were $330 million of which $12 million was restricted. The following discussion also explains the changes in net cash provided by operating activities, net cash (used for) investing activities and net cash provided by financing activities, all of which are presented in the Company's Consolidated Statements of Cash Flows. Part of the Company's strategy in funding the purchase of multifamily properties, funding its Properties in the development stage and the funding of the Company's investment in a joint venture with a multifamily real estate developer, excluding those Properties acquired through the Mergers, is to utilize its line of credit and to subsequently repay the line of credit from the issuance of additional equity or debt securities or the disposition of Properties. Utilizing this strategy during 1998 the Company: - issued a total of approximately 8.5 million Common Shares through various offerings and received total net proceeds of $412.5 million; - issued the 2015 Notes, the August 2003 Notes and the 2000 Notes and received net proceeds of $542.3 million; - mortgaged fifteen previously unencumbered Properties and received net proceeds of $223.5 million; and - disposed of twenty properties, which generated net proceeds of approximately $177 million. All of these proceeds were utilized to either: - purchase additional properties; - provide funding for properties in the development stage; and/or - repay the lines of credit and mortgage indebtedness on certain Properties. With respect to the 1998 Acquired Properties, the Company issued 21.8 million Common Shares having a value of $1.0 billion and issued the following preferred shares having a combined liquidation value of $369.1 million: - Series H Preferred Shares; - Series I Preferred Shares; - Series J Preferred Shares; - Series K Preferred Shares; and - Series L Preferred Shares. The Company also assumed mortgage indebtedness, unsecured notes and a line of credit of approximately $1.2 billion, issued OP Units having a value of approximately $205.2 million and issued 44 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) Junior Convertible Preference Units having a value of approximately $4.8 million. The cash portion of these acquisitions were primarily funded from amounts drawn on the Company's lines of credit and proceeds received in connection with the transactions mentioned in the previous paragraphs. In December 1997, the Company entered into a joint venture agreement with a multifamily residential real estate developer whereby the Company will make investments in a limited partnership to fund its portion of the project cost. During 1998, the Company funded a total of $23.9 million in connection with this agreement. In regards to certain other properties that were under development and/or expansion in 1998, the Company funded $31.6 million. In regards to certain properties that were under earnout/development agreements in 1998, no amounts were funded. As of December 31, 1998, the Company had total indebtedness of approximately $4.7 billion, which included mortgage indebtedness of $2.3 billion (including premiums of $4.5 million), of which $878.3 million represented tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (net of a $5.3 million discount), of which $35.6 million represented tax-exempt bond indebtedness. During the year, the Company repaid an aggregate of $63.8 million of mortgage indebtedness on nine of its Properties. These repayments were funded from the Company's line of credit or from proceeds received from the various capital transactions mentioned in the previous paragraphs. YEAR 2000 ISSUE In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company expensed approximately $184,000 and $700,000 during 1999 and 1998, respectively, in connection with remediating its systems. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly. FUNDS FROM OPERATIONS Commencing in 1996, the Company implemented the definition of FFO adopted by the Board of Governors of NAREIT in March 1995. The definition primarily eliminates the amortization of deferring financing costs and depreciation of non-real estate assets as items added back to net income when calculating FFO. 45 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FUNDS FROM OPERATIONS (CONTINUED) The Company generally considers FFO to be one measure of the performance of real estate companies. The resolution adopted by the Board of Governors of NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. The Company believes that FFO is helpful to investors as a measure of the performance of a real estate company because, along with cash flows from operating activities, financing activities and investing activities, it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO in and of itself does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indication of the Company's performance or to net cash flows from operating activities as determined by GAAP as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. The Company's calculation of FFO represents net income available to Common Shares, excluding gains on dispositions of properties and gains/losses on early extinguishment of debt, plus depreciation on real estate assets, income allocated to Minority Interests and amortization of deferred financing costs related to the Predecessor Business. The Company's calculation of FFO may differ from the methodology for calculating FFO utilized by other real estate companies and, accordingly, may not be comparable to such other real estate companies. The Company will adopt, effective January 1, 2000, NAREIT's updated recommended definition of FFO as approved in the fourth quarter of 1999. For the year ended December 31, 1999, FFO increased $160.8 million representing a 35% increase when compared to the year ended December 31, 1998. For the year ended December 31, 1998, FFO increased by $188.1 million representing a 69.5% increase when compared to the year ended December 31, 1997. The following is a reconciliation of net income available to Common Shares to FFO available to Common Shares and OP Units for the years ended December 31, 1999, 1998 and 1997 (amounts are in thousands):
--------------------------------------------------------- --- -------------- -- -------------- -- -------------- Year Ended Year Ended Year Ended 12/31/99 12/31/98 12/31/97 --------------------------------------------------------- --- -------------- -- -------------- -- -------------- Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580 Adjustments: Income allocated to Minority Interests 29,536 18,529 13,260 Depreciation on real estate assets* 402,466 296,691 153,526 Amortization of deferred financing costs related to predecessor business -- 35 235 Loss on early extinguishment of debt 451 -- -- Gain on disposition of properties (93,535) (21,703) (13,838) --------------------------------------------------------- --- -------------- -- -------------- -- -------------- FFO available to Common Shares and OP Units $ 619,603 $ 458,841 $ 270,763 --------------------------------------------------------- --- -------------- -- -------------- -- --------------
* Includes $1,009,000 and $183,000 related to the Company's share of depreciation from unconsolidated joint ventures and limited partnerships for the years ended December 31, 1999 and 1998, respectively. 46 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company's future earnings, cash flows and fair values relevant to financial instruments are dependent upon prevalent market rates. Market risk is the risk of loss from adverse changes in market prices and interest rates. The Company manages its market risk by matching projected cash inflows from operating properties, financing activities and investing activities with projected cash outflows to fund debt payments, acquisitions, capital expenditures, distributions and other cash requirements. The Company also utilizes certain derivative financial instruments to limit market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis. Derivatives are used for hedging purposes rather than speculation. The Company does not enter into financial instruments for trading purposes. The Company has total outstanding debt of approximately $5.5 billion at December 31, 1999, of which approximately $700.9 million, or 12.8% is floating rate debt, including the effects of any interest rate protection agreements. If market rates of interest on the Company's floating rate debt increase by 55 basis points (a 10% increase), the increase in interest expense on the Company's floating rate debt would decrease future earnings and cash flows by approximately $3.9 million. If market rates of interest on the Company's floating rate debt decrease by 55 basis points (a 10% decrease), the decrease in interest expense on the Company's floating rate debt would increase future earnings and cash flows by approximately $3.9 million. These amounts were determined by considering the impact of hypothetical interest rates and equity prices on the Company's financial instruments. These analyses do not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management would likely take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Company's financial structure. 47 PART II ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Index to Consolidated Financial Statements on page F-1 of this Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 48 PART III ITEMS 10, 11, 12 AND 13. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS. The information required by Item 10, Item 11, Item 12 and Item 13 are incorporated by reference to, and will be contained in, the Company's definitive proxy statement, which the Company anticipates will be filed no later than March 31, 2000, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. 49 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K (a) (1 & 2) See Index to Financial Statements and Schedules on page F-1 of this Form 10-K. (3) Exhibits: 2.1# Agreement and Plan of Merger by and between Equity Residential Properties Trust and Wellsford Residential Property Trust dated as of January 16, 1997. 2.2## Articles of Merger by and between Equity Residential Properties Trust and Wellsford Residential Property Trust. 2.3### Agreement and Plan of Merger by and between Equity Residential Properties Trust and Evans Withycombe Residential, Inc. dated as of August 27, 1997. 2.4#### Articles of Merger by and between Equity Residential Properties Trust and Evans Withycombe Residential, Inc. 2.5^ Agreement and Plan of Merger and First Amendment Thereto by and between Equity Residential Properties Trust and Merry Land & Investment Company, Inc. dated as of July 8, 1998 and September 4, 1998, respectively. 2.6^^ Articles of Merger by and between Equity Residential Properties Trust and Merry Land & Investment Company, Inc. 2.7^^^ Agreement and Plan of Merger between Equity Residential Properties Trust and Lexford Residential Trust dated as of June 30, 1999. 2.8^^^^ Articles of Merger by and between Equity Residential Properties Trust and Lexford Residential Trust. 3.1+ Second Amended and Restated Declaration of Trust of Equity Residential Properties Trust dated May 30, 1997. 3.2++ Third Amended and Restated Bylaws of Equity Residential Properties Trust. 4.1* Indenture, dated as of May 16, 1994, by and among the Operating Partnership, as obligor, the Company, as guarantor and The First National Bank of Chicago, as trustee in connection with 8 1/2% senior notes due May 15, 1999. 4.2* Indenture, dated October 1, 1994, between the Operating Partnership, as obligor and The First National Bank of Chicago, as trustee. 10.1** Fifth Amended and Restated Agreement of Limited Partnership of ERP Operating Limited Partnership. 10.2*** Agreement of Limited Partnership of Equity Residential Properties Management Limited Partnership. 10.3**** Agreement of Limited Partnership of Equity Residential Properties Management Limited Partnership II. 10.4*** Noncompetition Agreement (Zell). 10.5*** Noncompetition Agreement (Crocker). 10.6*** Noncompetition Agreement (Spector). 10.7*** Form of Noncompetition Agreement (other officers). 10.8*** Services Agreement between Equity Residential Properties Trust and Equity Group Investments, Inc. 10.9*** Form of Property Management Agreement (REIT properties). 10.10* Form of Property Management Agreement (Non-REIT properties). 10.11+++ Amended and Restated Master Reimbursement Agreement, dated as of November 1, 1996 by and between Federal National Mortgage Association and EQR-Bond Partnership. 10.12 Revolving Credit Agreement dated as of August 12, 1999 among the Operating Partnership, the Banks listed therein, Bank of America, National Association, as administrative agent, The Chase Manhattan Bank, as syndication agent, Morgan Guaranty Trust Company of New York, as documentation agent, Bank of America Securities LLC, as joint lead arranger, and Chase Securities Inc., as joint lead arranger. 50 PART IV 10.13 First Amendment to Revolving Credit Agreement dated November 10, 1999 between the Operating Partnership, Bank of America, National Association, as administrative agent, The Chase Manhattan Bank, as syndication agent, Morgan Guaranty Trust Company of New York, as documentation agent and the Banks listed as signatories thereto. 10.14#### Employment Agreement dated August 27, 1997 between Equity Residential Properties Management Limited Partnership and Richard G. Berry. 10.15++++ Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Evans Withycombe Residential, LP. 10.16 Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P. 12 Computation of Ratio of Earnings to Fixed Charges 21 List of Subsidiaries of Equity Residential Properties Trust 23.1 Consent of Ernst & Young LLP 24.1 Power of Attorney for James D. Harper, Jr. dated February 29, 2000 24.2 Power of Attorney for Errol R. Halperin dated February 29, 2000 24.3 Power of Attorney for John W. Alexander dated March 13, 2000 24.4 Power of Attorney for B. Joseph White dated March 9, 2000 24.5 Power of Attorney for Henry H. Goldberg dated March 1, 2000 24.6 Power of Attorney for Jeffrey H. Lynford dated March 1, 2000 24.7 Power of Attorney for Edward Lowenthal dated March 2, 2000 24.8 Power of Attorney for Stephen O. Evans dated March 2, 2000 24.9 Power of Attorney for Boone A. Knox dated February 29, 2000 24.10 Power of Attorney for Michael N. Thompson dated March 6, 2000 ________________________________ # Included as an exhibit to the Company's Form 8-K dated January 16, 1997, filed on January 17, 1997. ## Included as Appendix B in the Company's Form S-4 filed on April 29, 1997. ### Included as an exhibit to the Company's Form 8-K dated August 27, 1997, filed on August 29, 1997. #### Included as Appendix B in the Company's Form S-4 filed on September 18, 1997. ^ Included as Appendix A in the Company's Form S-4 filed on September 14, 1998. ^^ Included as Appendix B in the Company's Form S-4 filed on September 14, 1998. ^^^ Included as Appendix A in the Company's Form S-4 filed on July 23, 1999. ^^^^ Included as an exhibit to the Company's Form 8-K dated October 1, 1999, filed on October 5, 1999. + Included as an exhibit to the Company's Form 8-K dated May 30, 1997, filed on June 5, 1997. ++ Included as an exhibit to the Company's Form 10-Q for the quarterly period ended June 30, 1999. +++ Included as an exhibit to the Company's Form 10-K for the year ended December 31, 1996. ++++ Included as an exhibit to the Company's Form 10-K for the year ended December 31, 1997. * Included as an exhibit to the Operating Partnership's Form 10/A, dated December 12, 1994, File No. 0-24920, and incorporated herein by reference. ** Included as an exhibit to the Operating Partnership's Form 8-K/A dated July 23, 1998, filed on August 18, 1998. *** Included as an exhibit to the Company's Form S-11 Registration Statement, File No. 33-63158, and incorporated herein by reference. **** Included as an exhibit to the Company's Form 10-K for the year ended December 31, 1994. 51 PART IV (b) Reports on Form 8-K: A Report on Form 8-K dated October 5, 1999, reporting the closing of the merger between Equity Residential Properties Trust and Lexford Residential Trust. A Report on Form 8-K dated December 3, 1999, disclosing additional financial information of Lexford Residential Trust as of September 30, 1999. (c) Exhibits: See Item 14(a)(3) above. (d) Financial Statement Schedules: See Index to Financial Statements attached hereto on page F-1 of this Form 10-K. 52 PART IV SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned thereunto duly authorized. EQUITY RESIDENTIAL PROPERTIES TRUST Date: MARCH 13, 2000 By: /S/ DOUGLAS CROCKER II -------------- -------------------------------------- Douglas Crocker II President, Chief Executive Officer, Trustee and *Attorney-in-Fact Date: MARCH 13, 2000 By: /S/ DAVID J. NEITHERCUT -------------- -------------------------------------- David J. Neithercut Executive Vice President and Chief Financial Officer Date: MARCH 13, 2000 By: /S/ MICHAEL J. MCHUGH -------------- -------------------------------------- Michael J. McHugh Executive Vice President, Chief Accounting Officer, Treasurer and *Attorney-in-fact Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: MARCH 13, 2000 By: /S/ SAMUEL ZELL --------------- --------------------------------------- Samuel Zell Chairman of the Board of Trustees Date: MARCH 13, 2000 By: /S/ GERALD A. SPECTOR -------------- --------------------------------------- Gerald A. Spector Executive Vice President, Chief Operating Officer and Trustee Date: MARCH 13, 2000 By: /S/ SHELI Z. ROSENBERG -------------- --------------------------------------- Sheli Z. Rosenberg Trustee 53 PART IV SIGNATURES-CONTINUED Date: MARCH 13, 2000 By: /S/ JAMES D. HARPER* -------------- -------------------------------------- James D. Harper Trustee Date: MARCH 13, 2000 By: /S/ ERROL R. HALPERIN* -------------- -------------------------------------- Errol R. Halperin Trustee Date: MARCH 13, 2000 By: /S/ JOHN W. ALEXANDER* -------------- -------------------------------------- John W. Alexander Trustee Date: MARCH 13, 2000 By: /S/ B. JOSEPH WHITE* -------------- --------------------------------------- B. Joseph White Trustee Date: MARCH 13, 2000 By: /S/ HENRY H. GOLDBERG* -------------- --------------------------------------- Henry H. Goldberg Trustee Date: MARCH 13, 2000 By: /S/ JEFFREY H. LYNFORD* -------------- --------------------------------------- Jeffrey H. Lynford Trustee Date: MARCH 13, 2000 By: /S/ EDWARD LOWENTHAL* -------------- --------------------------------------- Edward Lowenthal Trustee Date: MARCH 13, 2000 By: /S/ STEPHEN O. EVANS* -------------- --------------------------------------- Stephen O. Evans Trustee Date: MARCH 13, 2000 By: /S/ BOONE A. KNOX* -------------- --------------------------------------- Boone A. Knox Trustee Date: MARCH 13, 2000 By: /S/ MICHAEL N. THOMPSON* -------------- ---------------------------------------- Michael N. Thompson Trustee * By: /S/ MICHAEL J. MCHUGH OR DOUGLAS CROCKER II ---------------------------------------------------- Michael J. McHugh or Douglas Crocker II, as Attorney-in-fact 54 INDEX TO FINANCIAL STATEMENTS AND SCHEDULE EQUITY RESIDENTIAL PROPERTIES TRUST
PAGE ---- FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT Report of Independent Auditors........................................................ F-2 Consolidated Balance Sheets as of December 31, 1999 and 1998........................................................ F-3 Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997.................................. F-4 Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997.................................. F-5 to F-7 Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 1999, 1998 and 1997.............................. F-8 to F-9 Notes to Consolidated Financial Statements............................................ F-10 to F-44 SCHEDULE FILED AS PART OF THIS REPORT Schedule III - Real Estate and Accumulated Depreciation............................... S-1 to S-21
REPORT OF INDEPENDENT AUDITORS To the Board of Trustees and Shareholders Equity Residential Properties Trust We have audited the accompanying consolidated balance sheets of Equity Residential Properties Trust (the "Company") as of December 31, 1999 and 1998 and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 1999. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Equity Residential Properties Trust at December 31, 1999 and 1998, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. ERNST & YOUNG LLP Chicago, Illinois February 16, 2000 except for Note 23, as to which the date is March 3, 2000 F-2 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS (Amounts in thousands except for share amounts)
DECEMBER 31, DECEMBER 31, 1999 1998 ----------------- ---------------- ASSETS Investment in real estate Land $ 1,550,378 $ 1,326,148 Depreciable property 10,670,550 9,519,579 Construction in progress 18,035 96,336 ----------------- ---------------- 12,238,963 10,942,063 Accumulated depreciation (1,070,487) (718,491) ----------------- ---------------- Investment in real estate, net of accumulated depreciation 11,168,476 10,223,572 Real estate held for disposition 12,868 29,886 Cash and cash equivalents 29,117 3,965 Investment in mortgage notes, net 84,977 88,041 Rents receivable 1,731 4,758 Deposits - restricted 111,270 69,339 Escrow deposits - mortgage 75,328 68,725 Deferred financing costs, net 33,968 27,569 Other assets 197,954 184,405 ----------------- ---------------- TOTAL ASSETS $ 11,715,689 $ 10,700,260 ================= ================ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $ 2,883,583 $ 2,341,011 Notes, net 2,290,285 2,049,516 Lines of credit 300,000 290,000 Accounts payable and accrued expenses 102,955 100,926 Accrued interest payable 44,257 46,176 Rents received in advance and other liabilities 74,196 54,616 Security deposits 39,687 37,439 Distributions payable 18,813 18,755 ----------------- ---------------- TOTAL LIABILITIES 5,753,776 4,938,439 ----------------- ---------------- COMMITMENTS AND CONTINGENCIES Minority Interests 456,979 431,374 ----------------- ---------------- ----------------- ---------------- Shareholders' equity: Preferred Shares of beneficial interest, $.01 par value; 100,000,000 shares authorized; 25,085,652 shares issued and outstanding as of December 31, 1999 and 29,097,951 shares issued and outstanding as of December 31, 1998 1,310,266 1,410,574 Common Shares of beneficial interest, $.01 par value; 350,000,000 shares authorized; 127,450,798 shares issued and outstanding as of December 31, 1999 and 118,230,009 shares issued and outstanding as of December 31, 1998 1,275 1,182 Paid in capital 4,523,919 4,169,102 Employee notes (4,670) (4,873) Distributions in excess of accumulated earnings (325,856) (245,538) ----------------- ---------------- Total shareholders' equity 5,504,934 5,330,447 ----------------- ---------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,715,689 $ 10,700,260 ================= ================
SEE ACOMPANYING NOTES F-3 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, --------------------------------------------- 1999 1998 1997 --------------------------------------------- REVENUES Rental income $ 1,711,738 $ 1,293,560 $ 707,733 Fee and asset management 4,970 5,622 5,697 Interest income - investment in mortgage notes 12,559 18,564 20,366 Interest and other income 23,851 19,250 13,282 ------------ ------------ ------------- Total revenues 1,753,118 1,336,996 747,078 EXPENSES Property and maintenance 414,026 326,733 176,075 Real estate taxes and insurance 171,289 126,009 69,520 Property management 61,626 53,101 26,793 Fee and asset management 3,587 4,279 3,364 Depreciation 408,688 301,869 156,644 Interest: Expense incurred 337,189 246,585 121,324 Amortization of deferred financing costs 4,084 2,757 2,523 General and administrative 22,296 20,631 14,821 ------------ ------------ ------------- Total expenses 1,422,785 1,081,964 571,064 Income before gain on disposition of properties, net, extraordinary item and allocation to Minority Interests 330,333 255,032 176,014 Gain on disposition of properties, net 93,535 21,703 13,838 ------------ ------------ ------------- Income before extraordinary item and allocation to Minority Interests 423,868 276,735 189,852 Loss on early extinguishment of debt (451) - - ------------ ------------ ------------- Income before allocation to Minority Interests 423,417 276,735 189,852 Income allocated to Minority Interests (29,536) (18,529) (13,260) ------------ ------------ ------------- Net income 393,881 258,206 176,592 Preferred distributions (113,196) (92,917) (59,012) ------------ ------------ ------------- Net income available to Common Shares $ 280,685 $ 165,289 $ 117,580 ============ ============ ============= Weighted average Common Shares outstanding - basic 122,175 100,370 65,729 ============ ============ ============= Distributions declared per Common Share outstanding $ 2.94 $ 2.72 $ 2.55 ============ ============ ============= Tax treatment of distributions (unaudited) Ordinary income $ 2.56 $ 2.14 $ 2.24 ============ ============ ============= Return of capital $ 0.26 $ 0.52 $ 0.26 ============ ============ ============= Long-term capital gain $ 0.09 $ 0.01 $ 0.05 ============ ============ ============= Unrecaptured section 1250 gain $ 0.03 $ 0.05 $ - ============ ============ ============= Net income per share - basic $ 2.30 $ 1.65 $ 1.79 ============ ============ ============= Net income per share - diluted $ 2.29 $ 1.63 $ 1.76 ============ ============ =============
SEE ACCOMPANYING NOTES F-4 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (AMOUNTS IN THOUSANDS)
YEAR ENDED DECEMBER 31, ---------------------------------------------- 1999 1998 1997 ---------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 393,881 $ 258,206 $ 176,592 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Income allocated to Minority Interests 29,536 18,529 13,260 Depreciation 408,688 301,869 156,644 Amortization of deferred financing costs 4,084 2,757 2,523 Amortization of discounts and premiums on debt (2,322) (1,958) (353) Amortization of treasury locks and options on debt 987 1,649 818 Amortization of discount on investment in mortgage notes (1,165) (3,015) (3,100) Gain on disposition of properties, net (93,535) (21,703) (13,838) Compensation paid with Company Common Shares 9,625 803 2,325 CHANGES IN ASSETS AND LIABILITIES: Decrease (increase) in rents receivable 3,559 (1,456) (1,373) (Increase) in deposits - restricted (9,953) (13,147) (23,183) Decrease (increase) in other assets 47,670 (8,787) (13,708) (Decrease) increase in accounts payable and accrued expenses (5,610) (3,601) 20,235 (Decrease) increase in accrued interest payable (6,387) 7,546 12,224 Increase (decrease) in rents received in advance and other liabilities 7,963 (2,077) 12,112 (Decrease) increase in security deposits (1,802) 7,598 7,819 ------------ --------------- -------------- Net cash provided by operating activities 785,219 543,213 348,997 ------------ --------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in real estate, net (632,474) (990,728) (1,190,933) Improvements to real estate (134,716) (90,608) (50,246) Additions to non-real estate property (7,219) (11,412) (9,754) Interest capitalized for real estate under construction (1,493) (1,620) - Proceeds from disposition of real estate, net 329,342 174,796 35,758 Decrease (increase) in investment in mortgage notes 4,229 2,853 (86,367) (Increase) decrease in deposits on real estate acquisitions, net (25,563) (18,451) 7,946 Decrease (increase) in mortgage deposits 11,117 (20,499) (25,521) Investment in limited partnerships (40,480) (23,946) (6,900) Decrease in mortgage receivables 7,150 - - Purchase of management contract rights (285) (119) (5,000) Costs related to Mergers (18,274) (50,139) (176,908) Other investing activities (14,885) (17,501) (44,465) ------------ --------------- -------------- Net cash (used for) investing activities (523,551) (1,047,374) (1,552,390) ------------ --------------- --------------
SEE ACCOMPANYING NOTES F-5 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (AMOUNTS IN THOUSANDS)
YEAR ENDED DECEMBER 31, ------------------------------------------------- 1999 1998 1997 ------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Loan and bond acquisition costs $ (9,522) $ (9,021) $ (11,617) MORTGAGE NOTES PAYABLE: Proceeds 204,986 223,491 16,460 Lump sum payoffs (105,846) (63,785) (113,389) Monthly principal payments (21,147) (12,624) (7,157) NOTES, NET: Proceeds 298,014 542,227 348,303 Payoffs (152,266) (120,000) (100,000) LINES OF CREDIT: Proceeds 1,372,000 859,000 442,500 Repayments (1,388,383) (881,000) (207,500) Proceeds from treasury locks and options on debt 1,380 8,130 - Proceeds from sale of Common Shares 7,717 425,253 540,010 Proceeds from sale of Preferred Shares/Units, net 39,000 - 491,250 Proceeds from exercise of options 30,750 14,482 4,999 Common Shares repurchased and retired (6,252) (94,705) - Payment of offering costs (625) (12,370) (22,470) DISTRIBUTIONS: Common Shares (364,183) (277,815) (217,229) Preferred Shares/Units (113,153) (95,952) (50,024) Minority Interests (37,580) (30,752) (24,829) Principal receipts on employee notes, net 203 272 110 Principal receipts on other notes receivable, net 8,391 - - -------------- -------------- -------------- Net cash (used for) provided by financing activities (236,516) 474,831 1,089,417 -------------- -------------- -------------- Net increase (decrease) in cash and cash equivalents 25,152 (29,330) (113,976) Cash and cash equivalents, beginning of year 3,965 33,295 147,271 -------------- -------------- -------------- Cash and cash equivalents, end of year $ 29,117 $ 3,965 $ 33,295 ============== ============== ============== SUPPLEMENTAL INFORMATION: Cash paid during the year for interest $ 341,936 $ 234,318 $ 109,100 ============== ============== ============== Mortgage loans assumed and/or entered into through acquisitions of real estate $ 69,885 $ 459,820 $ 597,245 ============== ============== ============== Net real estate contributed in exchange for Common Shares $ - $ - $ 185,994 ============== ============== ============== Net real estate contributed in exchange for OP Units or Preference Units $ 28,232 $ 169,834 $ 5,335 ============== ============== ============== Mortgage loans assumed by purchaser in real estate dispositions $ (12,500) $ - $ - ============== ============== ============== Transfers to real estate held for disposition $ 12,868 $ 29,886 $ - ============== ============== ==============
SEE ACCOMPANYING NOTES F-6 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (AMOUNTS IN THOUSANDS)
YEAR ENDED DECEMBER 31, ------------------------------------------------- 1999 1998 1997 ------------------------------------------------- SUPPLEMENTAL INFORMATION (CONTINUED): Investment in mortgage notes converted to investment in real estate $ - $ 88,184 $ - ============== ============== ============== Refinancing of mortgage notes payable in favor of notes, net $ 92,180 $ 35,600 $ - ============== ============== ============== Net (assets acquired) liabilities assumed through Mergers $ (15,604) $ 42,955 $ 33,237 ============== ============== ============== Mortgage loans assumed through Mergers $ 499,654 $ 184,587 $ 333,966 ============== ============== ============== Unsecured notes assumed through Mergers $ 2,266 $ 461,956 $ 383,954 ============== ============== ============== Line of credit assumed through Mergers $ 26,383 $ 77,000 $ - ============== ============== ============== Valuation of Common Shares issued through Mergers $ 181,124 $ 1,010,723 $ 945,312 ============== ============== ============== Valuation of OP Units issued through Mergers $ - $ 40,155 $ 107,270 ============== ============== ============== Liquidation value of Preferred Shares redesignated through Mergers $ - $ 369,109 $ 157,495 ============== ============== ==============
SEE ACCOMPANYING NOTES F-7 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (AMOUNTS IN THOUSANDS)
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1999 1998 1997 ------------------------------------------------ PREFERRED SHARES Balance, beginning of year $ 1,410,574 $ 1,041,713 $ 393,000 Issuance of 8.60% Series D Cumulative Redeemable - - 175,000 Issuance of Series E Cumulative Convertible - - 99,995 Issuance of 9.65% Series F Cumulative Redeemable - - 57,500 Issuance of 7 1/4% Series G Convertible Cumulative - - 316,250 Issuance of 7.00% Series H Cumulative Convertible - 4,124 - Issuance of 8.82% Series I Cumulative Convertible - 100,000 - Issuance of 8.60% Series J Cumulative Convertible - 114,985 - Issuance of 8.29% Series K Cumulative Redeemable - 50,000 - Issuance of 7.625% Series L Cumulative Redeemable - 100,000 - Conversion of Series E Cumulative Convertible (75) (38) (32) Conversion of 7.00% Series H Cumulative Convertible (228) (210) - Conversion of 8.82% Series I Cumulative Convertible (100,000) - - Conversion of 8.60% Series J Cumulative Convertible (5) - - -------------- -------------- ------------- Balance, end of year $ 1,310,266 $ 1,410,574 $1,041,713 ============== ============== ============= COMMON SHARES, $.01 PAR VALUE Balance, beginning of year $ 1,182 $ 891 $ 512 Issuance through proceeds from offerings - 74 119 Issuance in connection with Mergers and acquisitions 40 218 252 Issuance through conversion of OP Units into Common Shares 12 7 5 Issuance through exercise of options 10 5 1 Issuance through restricted share grants 3 - 1 Issuance through Share Purchase - DRIP Plan and Dividend Reinvestment - DRIP Plan 1 10 - Issuance through Employee Share Purchase Plan 2 1 1 Issuance through conversion of Preferred Shares into Common 26 - - Common Shares repurchased and retired (1) (24) - -------------- -------------- ------------- Balance, end of year $ 1,275 $ 1,182 $ 891 ============== ============== =============
SEE ACCOMPANYING NOTES F-8 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED) (AMOUNTS IN THOUSANDS)
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1999 1998 1997 ------------------------------------------------ PAID IN CAPITAL Balance, beginning of year $ 4,169,102 $ 2,785,661 $ 1,147,214 Issuance of Common Shares through proceeds from offerings - 370,385 536,645 Issuance of Common Shares in connection with Mergers and acquisitions 181,084 1,010,505 1,131,054 Issuance of Common Shares through conversion of OP Units into Common Shares 39,683 19,806 11,267 Issuance of Common Shares through exercise of options 30,740 14,477 4,998 Issuance of Common Shares through restricted share grants 8,374 - 1,741 Issuance of Common Shares through Share Purchase - DRIP Plan 954 50,674 - Issuance of Common Shares through Dividend Reinvestment - DRIP Plan 1,525 419 - Issuance of Common Shares through Employee Share Purchase Plan 5,235 3,690 3,245 Issuance of Common Shares through 401(k) Plan 1,248 803 583 Issuance of Common Shares through conversion of Preferred Shares into Common Shares 100,282 248 32 Common Shares repurchased and retired (6,251) (94,681) - Offering costs (1,625) (12,370) (22,470) Principal (advances) on other notes receivable, net (4,045) - - Adjustment for Minority Interests ownership in Operating Partnership (2,387) 19,485 (28,648) -------------- -------------- ------------- Balance, end of year $ 4,523,919 $ 4,169,102 $ 2,785,661 ============== ============== ============= EMPLOYEE NOTES Balance, beginning of year $ (4,873) $ (5,145) $ (5,255) Principal receipts, net 203 272 110 -------------- -------------- ------------- Balance, end of year $ (4,670) $ (4,873) $ (5,145) ============== ============== ============= DISTRIBUTIONS IN EXCESS OF ACCUMULATED EARNINGS Balance, beginning of year $ (245,538) $ (133,129) $ (76,641) Net income 393,881 258,206 176,592 Preference Unit distributions (1,185) - - Preferred distributions (112,011) (92,917) (59,012) Distributions on Common Shares (361,003) (277,698) (174,068) -------------- -------------- ------------- Balance, end of year $ (325,856) $ (245,538) $ (133,129) ============== ============== =============
SEE ACCOMPANYING NOTES F-9 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND FORMATION OF THE COMPANY Equity Residential Properties Trust, formed in March 1993, ("EQR"), is a self-administered and self-managed equity real estate investment trust ("REIT"). As used herein, the term "Company" means EQR, and its subsidiaries, as the survivor of the mergers between EQR and each of Wellsford Residential Property Trust ("Wellsford") (the "Wellsford Merger"), Evans Withycombe Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land & Investment Company, Inc. ("MRY") (the "MRY Merger") and Lexford Residential Trust ("LFT") ("the LFT Merger") (see Note 4). The Company has elected to be taxed as a REIT under Section 856(c) of the Internal Revenue Code 1986, as amended (the "Code"). The Company is engaged in the acquisition, disposition, ownership, management and operation of multifamily properties. As of December 31, 1999, the Company owned or had interests in a portfolio of 1,062 multifamily properties containing 225,708 apartment units of which it controlled a portfolio of 983 multifamily properties containing 214,060 apartment units (individually a "Property" and collectively the "Properties"). The Company had an investment in partnership interests (equity investments) and/or an investment in subordinated mortgages collateralized by the remaining 79 Properties containing 11,648 units. These properties are located in 35 states throughout the United States. The Company has formed a series of partnerships (the "Financing Partnerships") which beneficially own certain Properties that may be encumbered by mortgage indebtedness. In general, these are structured so that ERP Operating Limited Partnership (the "Operating Partnership"), a subsidiary of EQR, owns a 1% limited partner interest and a 98% general partner interest in each, with the remaining 1% general partner interest in each Financing Partnership owned by various qualified REIT subsidiaries wholly owned by the Company (each a "QRS Corporation"). Rental income from the Properties that are beneficially owned by a Financing Partnership is used first to service the applicable mortgage debt and pay other operating expenses and any excess is then distributed 1% to the applicable QRS Corporation, as the general partner of such Financing Partnership, and 99% to the Operating Partnership, as the sole 1% limited partner and as the 98% general partner. The Company has also formed a series of limited liability companies that own certain Properties (collectively, the "LLCs"). The Operating Partnership is a 99% managing member of each LLC and a QRS Corporation is a 1% member of each LLC. 2. BASIS OF PRESENTATION The Wellsford Merger, the EWR Merger, the MRY Merger and the LFT Merger (collectively, the "Mergers") were treated as purchases in accordance with Accounting Principles Board Opinion No. 16. The fair value of the consideration given by the Company in the Mergers was used as the valuation basis for each of the combinations. The assets acquired and the liabilities assumed of Wellsford were recorded at their relative fair values as of May 30, 1997 (the "Wellsford Closing Date"). The assets acquired and the liabilities assumed of EWR were recorded at their relative fair values as of December 23, 1997 (the "EWR Closing Date"). The assets acquired and the liabilities assumed of MRY were recorded at their relative fair values as of October 19, 1998 (the "MRY Closing Date"). The assets acquired and the liabilities assumed of LFT were recorded at their relative fair values as of October 1, 1999 (the "LFT Closing Date"). The accompanying consolidated statements of operations and cash flows include the results of the Properties purchased through the Mergers from their respective closing dates. Due to the Company's ability as general partner to control either through ownership or by contract the Operating Partnership, a series of management limited partnerships and companies (collectively, the "Management Partnerships" or the "Management Companies"), the Financing Partnerships, the LLCs, and certain other entities, each such entity has been consolidated with the Company for financial reporting F-10 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) purposes. In regard to the Management Companies, the Company does not have legal control; however, these entities are consolidated for financial reporting purposes, the effects of which are immaterial. Certain reclassifications have been made to the prior year's financial statements in order to conform to the current year presentation. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) REAL ESTATE ASSETS AND DEPRECIATION Real estate is recorded at cost less accumulated depreciation less an adjustment, if any, for impairment. A land value is assigned based on the purchase price if acquired separately or based on market research if acquired in a merger or in a single or portfolio acquisition. For real estate properties to be disposed of, an impairment loss is recognized when the fair value of the real estate, less the estimated cost to sell, is less than the carrying amount of the real estate measured at the time it is certain that the Company will sell the property. Real estate held for disposition is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. The Company uses a 30-year estimated life for buildings and a five-year estimated life for initial furniture, fixtures and equipment. Replacements inside a unit such as appliances and carpeting, are depreciated over a five-year estimated life. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to ten years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms. Property sales or dispositions are recorded when title transfers and sufficient consideration has been received by the Company. Upon disposition, the related costs and accumulated depreciation are removed from the respective accounts. Any gain or loss on sale of disposition is recognized in accordance with accounting principles generally accepted in the United States. The Company classifies Properties under development and/or expansion and properties in the lease up phase as construction in progress until construction on the apartment community has been completed and all certificates of occupancy permits have been obtained. The Company also classifies land relating to construction in progress as land on its balance sheet. Land associated with construction in progress was $18.5 million and $19.4 million as of December 31, 1999 and 1998, respectively. (b) CASH AND CASH EQUIVALENTS The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at each institution periodically exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate their non-performance. (c) DEFERRED FINANCING COSTS Deferred financing costs include fees and costs incurred to obtain the Company's line of credit, F-11 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) long-term financing and costs for certain interest rate protection agreements. These costs are amortized over the terms of the related debt. Unamortized financing costs are written-off when debt is retired before the maturity date. The accumulated amortization of such deferred financing costs was $11.1 million and $8.2 million at December 31, 1999 and 1998, respectively. (d) INTEREST RATE PROTECTION AGREEMENTS The Company from time to time enters into interest rate protection agreements to effectively convert floating rate debt to a fixed rate basis, as well as to hedge anticipated financing transactions. Net amounts paid or received under these agreements are recognized as an adjustment to interest expense when such amounts are incurred or earned. Settlement amounts paid or received in connection with terminated interest rate protection agreements are deferred and amortized over the remaining term of the related financing transaction on the straight-line method. The Company believes it has limited exposure to the extent of non-performance by the counterparties of each protection agreement since each counterparty is a major U.S. financial institution, and the Company does not anticipate their non-performance. (e) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("Statement No. 133"). Statement No. 133 requires recording all derivative instruments as assets or liabilities, measured at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. The standard's effective date was deferred by FASB Statement No. 137 to all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company is planning to adopt the standard once it is effective and does not anticipate that the adoption will have a material impact on the Company's financial condition and results of operations. (f) FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of the Company's financial instruments, including cash and cash equivalents, mortgage notes payable, other notes payable, lines of credit and other financial instruments, approximate their carrying or contract values. With respect to the Company's investment in mortgage notes, the fair value as of December 31, 1999 and 1998 was estimated to be approximately $87.0 million and $91.8 million, respectively, compared to the Company's carrying value of $85 million and $88 million, respectively. The estimated fair value of the Company's investment in mortgage notes represents the estimated net present value based on the expected future property level cash flows and an estimated current market discount rate. (g) REVENUE RECOGNITION Rental income attributable to leases is recorded when due from tenants and is recognized monthly as it is earned, which is not materially different than on a straight-line basis. Interest income is recorded on an accrual basis. F-12 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (h) LEASE AGREEMENTS The majority of the leases entered into between a tenant and a Property for the rental of an apartment unit are year-to-year, renewable upon consent of both parties on a year-to-year or month-to-month basis. (i) INCOME TAXES Due to the structure of the Company as a REIT and the nature of the operations of the Properties and Management Business, the results of operations contain no provision for Federal income taxes. However, the Company is subject to certain state and local income, excise or franchise taxes. The aggregate cost of land and depreciable property for Federal income tax purposes as of December 31, 1999 and 1998 was approximately $8.6 billion and $8.5 billion, respectively. (j) MINORITY INTERESTS Net income is allocated to the Minority Interests (as defined in Note 5) based on their respective ownership percentage of the Operating Partnership. Ownership percentage is represented by dividing the number of OP Units held by the Minority Interests by the total OP Units held by Minority Interests and EQR. Issuance of additional Common Shares or OP Units changes the ownership interests of both the Minority Interests and EQR. Such transactions and the proceeds therefrom are treated as capital transactions and result in an allocation between shareholders' equity and Minority Interests to account for the change in the respective percentage ownership of the underlying equity of the Operating Partnership. (k) USE OF ESTIMATES In preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. (l) REPORTABLE SEGMENTS During the fourth quarter of 1998, the Company adopted Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION ("Statement No. 131"). Statement No. 131 superseded FASB Statement of Financial Accounting Standards No. 14, FINANCIAL REPORTING FOR SEGMENTS OF A BUSINESS ENTERPRISE ("Statement No. 14"). Statement No. 131 establishes standards for the way that public business enterprises report information regarding reportable operating segments. The adoption of Statement No. 131 did not affect the Company's results of operations or financial position. The Company has one primary reportable business segment, which consists of investment in rental real estate. The Company's primary business is owning, managing and operating multifamily residential properties which includes the generation of rental and other related income through the leasing of apartment units to tenants. The Company also has a segment for corporate level activity including such items as interest income earned on short-term investments, interest income earned on investment in mortgage notes, general and administrative expenses, and interest expense on mortgage notes payable and unsecured note issuances. In addition, the Company has a segment for third party management activity that is immaterial F-13 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) and does not meet the threshold requirements of Statement No. 131 as a reportable segment. The Company evaluates performance and allocates resources primarily based on the rental and other income generated from each property less property and maintenance expenses, real estate taxes and insurance, and property management expenses, which is considered net operating income ("NOI"). However, all other segment measurements are disclosed in the Company's consolidated financial statements, and accordingly the accounting policies of the reportable segments are the same as those described elsewhere in the Summary of Significant Accounting Policies. The Company also considers funds from operations ("FFO") to be a primary measure of the performance of real estate companies including an equity REIT. The Company believes that FFO is helpful to investors as a measure of the performance of an equity REIT because, along with cash flows from operating activities, financing activities and investing activities, it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO in and of itself does not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States ("GAAP") and therefore should not be considered an alternative to net income as an indication of the Company's performance or to net cash flows from operating activities as determined by GAAP as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. The Company's calculation of FFO represents net income available to Common Shares, excluding gains on dispositions of properties, gains on early extinguishment of debt, and write-off of unamortized costs on refinanced debt, plus depreciation on real estate assets, income allocated to Minority Interests and amortization of deferred financing costs related to the predecessor business. The Company's calculation of FFO may differ from the methodology for calculating FFO utilized by other REIT's and, accordingly, may not be comparable to such other REIT's. The Company will adopt, effective January 1, 2000, the National Association of Real Estate Investment Trust's ("NAREIT") updated recommended definition of FFO as approved in the fourth quarter of 1999. All revenues are from external customers and no revenues are generated from transactions with other segments. There are no tenants who contributed 10% or more of the Company's total revenues during 1999, 1998 or 1997. Interest expense on debt is not allocated to individual Properties, even if the Properties secure such debt. Further, minority interest in consolidated subsidiaries is not allocated to the Properties. There is no provision for income taxes as the Company is organized as a REIT under the Internal Revenue Code. 4. BUSINESS COMBINATIONS In connection with the Wellsford Merger each outstanding common share of beneficial interest of Wellsford was converted into .625 of a Common Share of the Company. In addition, Wellsford's Series A Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 3,999,800 Series E Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series E Preferred Shares") and Wellsford's Series B Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 2,300,000 9.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series F Preferred Shares"). On the Wellsford Closing Date, 72 Properties containing 19,004 units and other related assets were acquired for a total purchase price of approximately $1 billion. The purchase price consisted of 10.8 million common shares of beneficial interest, $.01 par value per share ("Common Shares") issued by the Company with a market value of $443.7 million, the liquidation value of $157.5 million for the Series E Preferred F-14 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Shares and the Series F Preferred Shares, the assumption of mortgage indebtedness and unsecured notes in the amount of $345 million, the assumption of other liabilities of approximately $33.5 million and other merger related costs of approximately $23.4 million. On the EWR Closing Date, 53 Properties containing 15,331 units and three Properties under construction or expansion containing 953 units and other related assets were acquired for a total purchase price of approximately $1.2 billion. In connection with the EWR Merger, as of the EWR Closing Date, each outstanding common share of beneficial interest of EWR was converted into .50 of a Common Share of the Company. The purchase price consisted of 10.3 million Common Shares issued by the Company with a total market value of approximately $501.6 million, the assumption of EWR's minority interest with a market value of approximately $107.3 million, the assumption of mortgage indebtedness and unsecured notes in the amount of $498 million, the assumption of other liabilities of approximately $28.2 million and other EWR Merger related costs of approximately $16.7 million. In connection with the MRY Merger, each outstanding common share of beneficial interest of MRY was converted into 0.53 of a Common Share of the Company. In addition, MRY spun-off certain assets and liabilities to Merry Land Properties, Inc. ("MRYP Spinco"). As partial consideration for the transfer, the Company extended a $25 million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement. As of December 31, 1999, the debt agreement was no longer outstanding. In addition, MRY Series A Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 164,951 Series H Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series H Preferred Shares"), the MRY Series B Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 4,000,000 Series I Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series I Preferred Shares"), the MRY Series C Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated as the Company's 4,599,400 Series J Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series J Preferred Shares"), the MRY Series D Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 1,000,000 Series K Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series K Preferred Shares") and the MRY Series E Cumulative Redeemable Preferred Shares of Beneficial Interest were redesignated as the Company's 4,000,000 Series L Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series L Preferred Shares"). On the MRY Closing Date, 108 Properties containing 32,315 units, three Properties under construction or expansion expected to contain 872 units, six Additional Properties that represent an investment in six joint ventures containing 1,297 units and other related assets were acquired for a total purchase price of approximately $2.2 billion. The purchase price consisted of 21.8 million Common Shares issued by the Company with a market value of $1 billion, the assumption of MRY's minority interest with a market value of approximately $40.2 million, the liquidation value of $369.1 million for the Series H Preferred Shares, the Series I Preferred Shares, the Series J Preferred Shares, the Series K Preferred Shares and the Series L Preferred Shares, the assumption of mortgage indebtedness, unsecured notes and a line of credit in the amount of $723.5 million, the assumption of other liabilities of approximately $46.5 million and other merger related costs of approximately $51.9 million. On the LFT Closing Date, 402 Properties containing 36,609 units and other related assets were acquired for a total purchase price of approximately $738 million. In connection with the LFT Merger, each outstanding common share of beneficial interest of LFT was converted into 0.463 of a Common Share of the Company. The purchase price consisted of 4.0 million Common Shares issued by the Company with F-15 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) a market value of $181.1 million, the assumption of mortgage indebtedness, a term loan and a line of credit in the amount of $528.3 million, the acquisition of other assets of approximately $40.9 million, the assumption of other liabilities of approximately $25.3 million and other merger related costs of approximately $24.5 million. All of the amounts stated in the previous paragraph are based on management's current best estimates, which are subject to adjustment within one year of the respective closing dates. 5. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS The following table presents the changes in the Company's issued and outstanding Common Shares for the years ended December 31, 1999, 1998 and 1997:
---------------------------------------------------- -------------- -------------- -------------- 1999 1998 1997 ---------------------------------------------------- -------------- -------------- -------------- Common Shares outstanding at January 1, 118,230,009 89,085,265 51,154,836 COMMON SHARES ISSUED: Conversion of LFT common shares 4,018,717 -- -- January 1998 Common Share Offering -- 4,000,000 -- February 1998 Common Share Offerings -- 1,988,340 -- March 1998 Common Share Offering -- 495,663 -- April 1998 Common Share Offering -- 946,565 -- Conversion of MRY common shares -- 21,801,612 -- March 1997 Common Share Offerings -- -- 1,921,000 June 1997 Common Share Offerings -- -- 8,992,023 September 1997 Common Share Offering -- -- 498,000 October 1997 Common Share Offering -- -- 3,315,500 December 1997 Common Share Offerings -- -- 1,204,018 Conversion of Wellsford common shares -- -- 10,823,016 Conversion of EWR common shares -- -- 10,288,583 Conversion of Series E Preferred Shares 1,669 834 723 Conversion of Series H Preferred Shares 6,580 6,078 -- Conversion of all Series I Preferred Shares 2,566,797 -- -- Conversion of Series J Preferred Shares 122 -- -- Employee Share Purchase Plan 147,885 93,521 84,183 Dividend Reinvestment - DRIP Plan 36,132 10,230 -- Share Purchase - DRIP Plan 22,534 1,023,184 -- Exercise of options 1,013,192 431,174 180,138 Restricted share grants, net 306,500 59,060 28,246 Conversion of OP Units 1,217,821 640,337 582,185 Profit-sharing/401(k) Plan contribution 30,260 15,980 13,140 COMMON SHARES OTHER: Common Shares repurchased and retired (148,453) (2,367,400) -- Common Shares other 1,033 (434) (326) ---------------------------------------------------- -------------- -------------- -------------- COMMON SHARES OUTSTANDING AT DECEMBER 31, 127,450,798 118,230,009 89,085,265 ---------------------------------------------------- -------------- -------------- --------------
On February 3, 1998, the Company filed with the SEC a Form S-3 Registration Statement to register $1 billion of equity securities. The SEC declared this registration statement effective on February 27, 1998. In addition, the Company carried over $272 million related to the registration statement effective on August 4, 1997. As of December 31, 1999, $1.1 billion remained outstanding under this registration statement. F-16 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for a partnership interest are collectively referred to as the "Minority Interests". As of December 31, 1999 and 1998, the Minority Interests held 12,483,742 and 13,187,929 OP Units, respectively. As a result, the Minority Interests had an 8.92% and 10.04% interest in the Operating Partnership at December 31, 1999 and 1998, respectively. Assuming conversion of all OP Units into Common Shares, total Common Shares outstanding at December 31, 1999 and 1998 would have been 139,934,540 and 131,417,938, respectively. Net proceeds from the Company's Common Share and Preferred Share offerings are contributed by the Company to the Operating Partnership in return for an increased ownership percentage and are treated as capital transactions in the Company's Consolidated Financial Statements. As a result, the net offering proceeds from Common Shares are allocated between shareholders' equity and Minority Interests to account for the change in their respective percentage ownership of the underlying equity of the Operating Partnership. On October 12, 1999, the Company repurchased and retired 148,453 Common Shares previously issued in connection with the LFT Merger. Various LFT employees and trustees owned these Common Shares. The Company paid approximately $6.3 million in connection therewith. In connection with certain acquisitions during the year ended December 31, 1999, the Operating Partnership issued 28,795 Series A Junior Convertible Preference Units and 7,367 Series B Junior Convertible Preference Units having a combined value of approximately $3.0 million. These units ultimately will convert to OP Units in accordance with the respective term sheet agreements. The value of these preference units is included in Minority Interests in the Consolidated Balance Sheets and the distributions incurred are included in preferred distributions in the Consolidated Statements of Operations. On September 27, 1999, EQR-Mosaic, L.L.C., a wholly-owned subsidiary of the Operating Partnership, issued 800,000 units of 8.00% Series A Cumulative Convertible Redeemable Preference Interests with an equity value of $40 million. EQR-Mosaic LLC received $39 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 800,000 units are exchangeable into 800,000 shares of 8.00% Series M Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company. The Series M Preferred Shares are not convertible to EQR Common Shares. Dividends for the Series A Preference Interests or the Series M Preferred Shares are payable quarterly at the rate of $4.00 per unit/share per year. The value of these preference interests is included in Minority Interests in the Consolidated Balance Sheets and the distributions incurred are included in preferred distributions in the Consolidated Statements of Operations. The declaration of trust of the Company provides that the Company may issue up to 100,000,000 Preferred Shares with specific rights, preferences and other attributes as the Board of Trustees may determine, which may include preferences, powers and rights that are senior to the rights of holders of the Company's Common Shares. The following table presents the Company's issued and outstanding Preferred Shares as of December 31, 1999 and 1998: F-17 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
- ------------------------------------------------------------------- ------------- ----------- ----------- ANNUAL DIVIDEND REDEMPTION CONVERSION RATE PER DATE (1) (2) RATE (2) SHARE (3) - ------------------------------------------------------------------- ------------- ----------- ----------- Preferred Shares of beneficial interest, $.01 par value; 100,000,000 shares authorized: 9 3/8% Series A Cumulative Redeemable Preferred; liquidation 6/1/00 N/A $2.34375 value $25 per share; 6,120,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 9 1/8% Series B Cumulative Redeemable Preferred; liquidation 10/15/05 N/A $22.81252 value $250 per share; 500,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 9 1/8% Series C Cumulative Redeemable Preferred; liquidation 9/9/06 N/A $22.81252 value $250 per share; 460,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 8.60% Series D Cumulative Redeemable Preferred; liquidation 7/15/07 N/A $21.50000 value $250 per share; 700,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 Series E Cumulative Convertible Preferred; liquidation value 11/1/98 0.5564 $1.75000 $25 per share; 3,994,000 and 3,997,000 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 9.65% Series F Cumulative Redeemable Preferred; liquidation 8/24/00 N/A $2.41250 value $25 per share; 2,300,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7 1/4% Series G Convertible Cumulative Preferred; liquidation 9/15/02 4.2680 $18.12500 value $250 per share; 1,265,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7.00% Series H Cumulative Convertible Preferred; liquidation 6/30/98 0.7240 $1.75000 value $25 per share; 147,452 and 156,551 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 8.82% Series I Cumulative Convertible Preferred; liquidation 10/31/99 0.6417 $2.20500 value $25 per share; 0 and 4,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively (4) 8.60% Series J Cumulative Convertible Preferred; liquidation 3/31/00 0.6136 $2.15000 value $25 per share; 4,599,200 and 4,599,400 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 8.29% Series K Cumulative Redeemable Preferred; liquidation 12/10/26 N/A $4.14500 value $50 per share; 1,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7.625% Series L Cumulative Redeemable Preferred; liquidation 2/13/03 N/A $1.90625 value $25 per share; 4,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 - ------------------------------------------------------------------- ------------- ----------- ----------- - ------------------------------------------------------------------- ------------- ----------- -----------
- --------------------------------------------------------------------- ------------ --- ------------ DECEMBER DECEMBER 31, 31, 1999 1998 - --------------------------------------------------------------------- ------------ --- ------------ Preferred Shares of beneficial interest, $.01 par value; 100,000,000 shares authorized: 9 3/8% Series A Cumulative Redeemable Preferred; liquidation $ 153,000 $ 153,000 value $25 per share; 6,120,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 9 1/8% Series B Cumulative Redeemable Preferred; liquidation 125,000 125,000 value $250 per share; 500,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 9 1/8% Series C Cumulative Redeemable Preferred; liquidation 115,000 115,000 value $250 per share; 460,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 8.60% Series D Cumulative Redeemable Preferred; liquidation 175,000 175,000 value $250 per share; 700,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 Series E Cumulative Convertible Preferred; liquidation value 99,850 99,925 $25 per share; 3,994,000 and 3,997,000 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 9.65% Series F Cumulative Redeemable Preferred; liquidation 57,500 57,500 value $25 per share; 2,300,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7 1/4% Series G Convertible Cumulative Preferred; liquidation 316,250 316,250 value $250 per share; 1,265,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7.00% Series H Cumulative Convertible Preferred; liquidation 3,686 3,914 value $25 per share; 147,452 and 156,551 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 8.82% Series I Cumulative Convertible Preferred; liquidation - 100,000 value $25 per share; 0 and 4,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively (4) 8.60% Series J Cumulative Convertible Preferred; liquidation 114,980 114,985 value $25 per share; 4,599,200 and 4,599,400 shares issued and outstanding at December 31, 1999 and December 31, 1998, respectively 8.29% Series K Cumulative Redeemable Preferred; liquidation 50,000 50,000 value $50 per share; 1,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 7.625% Series L Cumulative Redeemable Preferred; liquidation 100,000 100,000 value $25 per share; 4,000,000 shares issued and outstanding at December 31, 1999 and December 31, 1998 - --------------------------------------------------------------------- ------------ --- ------------ $ 1,310,266 $ 1,410,574 - --------------------------------------------------------------------- ------------ --- ------------
F-18 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (1) On or after the redemption date, redeemable preferred shares (Series A, B, C, D, F, K and L) may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any. (2) On or after the redemption date, convertible preferred shares (Series E, G, H, I & J) may be redeemed under certain circumstances for cash or Common Shares at the option of the Company, in whole or in part, at various redemption prices per share based upon the contractual conversion rate, plus accrued and unpaid distributions, if any. The conversion rate listed for Series G is the Preferred Share rate and the equivalent Depositary Share rate is 0.4268. (3) Dividends on all series of Preferred Shares are payable quarterly at various pay dates. Dividend rates listed for Series B, C, D and G are Preferred Share rates. The equivalent Depositary Share annual dividend rates are $2.281252, $2.281252, $2.15 and $1.8125 per Series B, C, D and G Depositary Share, respectively. (4) During 1999, all of the Series I Preferred Shares were converted into 2,566,797 Common Shares of the Company. 6. REAL ESTATE The following table summarizes the carrying amounts for investment in real estate as of December 31, 1999 and 1998 (AMOUNTS ARE IN THOUSANDS):
-------------------------------------- ----------------- -------------- 1999 1998 -------------------------------------- ----------------- -------------- Land $ 1,550,378 $ 1,326,148 Buildings and Improvements 10,266,290 9,186,220 Furniture, Fixtures and Equipment 404,260 333,359 Construction in Progress 18,035 96,336 -------------------------------------- ----------------- -------------- Real Estate 12,238,963 10,942,063 Accumulated Depreciation (1,070,487) (718,491) -------------------------------------- ----------------- -------------- Real Estate, net $11,168,476 $ 10,223,572 -------------------------------------- ----------------- --------------
The following table summarizes the carrying amounts for the real estate held for disposition as of December 31, 1999 and 1998 (AMOUNTS ARE IN THOUSANDS):
------------------------------------- -------------- -------------- 1999 1998 ------------------------------------- -------------- -------------- Land $ 2,383 $ 4,189 Buildings and Improvements 14,596 35,620 Furniture, Fixtures and Equipment 1,403 4,389 Construction in Progress -- -- ------------------------------------- -------------- -------------- Real Estate 18,382 44,198 Accumulated Depreciation (5,514) (14,312) ------------------------------------- -------------- -------------- Real Estate Held for Disposition $ 12,868 $ 29,886 ------------------------------------- -------------- --------------
In addition to the LFT Merger, during the year ended December 31, 1999, the Company acquired the twenty-two Properties listed below, of which fourteen were acquired from unaffiliated third parties and eight were acquired from an affiliated party. In connection with certain of the acquisitions listed below, the Company assumed and/or entered into new mortgage indebtedness of approximately $69.9 million, issued OP Units having a value of approximately $25.2 million and issued Junior Convertible Preference Units F-19 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) having a value of approximately $3.0 million. The cash portion of these transactions was funded primarily from proceeds received from the disposition of certain properties, working capital and the Company's line of credit.
- --------------- ----------------------------------- --------------------------------- ------------ -------------- PURCHASE PRICE DATE NUMBER (IN ACQUIRED PROPERTY LOCATION OF UNITS THOUSANDS) - --------------- ----------------------------------- --------------------------------- ------------ -------------- 01/22/99 Fireside Park Rockville, MD 236 $14,279 01/22/99 Mill Pond Glen Burnie, MD 240 11,745 01/28/99 Aspen Crossing Wheaton, MD 192 11,386 02/24/99 Copper Canyon Highlands Ranch, CO 222 16,200 03/04/99 Siena Terrace Lake Forest, CA 356 33,000 03/23/99 Greenbriar Kirkwood, MO 218 12,033 03/24/99 Fairland Gardens Silver Spring, MD 400 25,897 04/28/99 Pine Tree Club Wildwood, MO 150 7,988 04/28/99 Westbrooke Village I & II Manchester, MO 252 12,642 04/29/99 Brookside Frederick, MD 228 10,809 04/30/99 Skyview Rancho Santa Margarita, CA 260 21,800 05/20/99 Lincoln at Defoors Atlanta, GA 300 25,500 05/25/99 Rosecliff Quincy, MA 156 18,263 05/25/99 Canyon Crest Santa Clarita, CA 158 12,500 06/29/99 Greentree I Glen Burnie, MD 350 15,625 06/29/99 Greentree III Glen Burnie, MD 207 9,598 07/14/99 Brookdale Village Naperville, IL 252 19,600 07/29/99 Longfellow Place* Boston, MA 710 237,000 07/30/99 Greentree II Glen Burnie, MD 239 10,907 10/28/99 Granada Highlands Malden, MA 919 128,000 12/16/99 Bridgewater at Wells Crossing Orange Park, FL 288 15,500 12/22/99 Town Center Phase II Houston, TX 260 14,423 - --------------- ----------------------------------- --------------------------------- ------------ -------------- 6,593 $684,695 - --------------- ----------------------------------- --------------------------------- ------------ --------------
* This acquisition also included approximately 264,000 square feet of office and retail space and two parking garages. In addition to the MRY Merger, during the year ended December 31, 1998, the Company acquired 99 Properties, of which 96 were acquired from unaffiliated third parties and 3 were acquired from an affiliated party. In connection with certain of these acquisitions, the Company assumed and/or entered into mortgage indebtedness of approximately $459.8 million, issued OP Units having a value of approximately $165 million and issued Junior Convertible Preference Units having a value of approximately $4.8 million. The cash portion of these transactions was funded primarily from proceeds raised from the various capital transactions as disclosed in Note 5 of the Notes to Consolidated Financial Statements, the various debt offerings as disclosed in Note 12 of the Notes to Consolidated Financial Statements, the Company's line of credit, proceeds received from the disposition of certain Properties and working capital. 7. REAL ESTATE DISPOSITIONS During the year ended December 31, 1999, the Company disposed of the thirty-six Properties listed below to unaffiliated third parties. The Company recognized a net gain for financial reporting purposes of F-20 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) approximately $93.5 million. In connection with one of these dispositions, the purchaser assumed the Company's mortgage indebtedness of approximately $12.5 million.
--------------- --------------------------------------- ------------------------- -------------- ----------------- DISPOSITION DATE NUMBER PRICE DISPOSED PROPERTY LOCATION OF UNITS (IN THOUSANDS) --------------- --------------------------------------- ------------------------- -------------- ----------------- 01/06/99 Fox Run Little Rock, AR 337 $10,623 01/06/99 Greenwood Forest Little Rock, AR 239 7,533 01/06/99 Walnut Ridge Little Rock, AR 252 7,943 01/06/99 Williamsburg Little Rock, AR 211 6,651 01/27/99 The Hawthorne Phoenix, AZ 276 20,500 03/02/99 The Atrium Durham, NC 208 10,750 03/24/99 Greenbriar Kirkwood, MO 218 12,525 05/06/99 Sandstone at Bear Creek Euless, TX 40 2,075 05/12/99 La Costa Brava/Cedar Cove Jacksonville, FL 464 17,650 05/18/99 Lands End Pacifica , CA 260 30,100 07/01/99 The Willows Knoxville, TN 250 11,950 07/26/99 Tivoli Lakes Club Deerfield Beach, FL 278 17,000 07/29/99 The Seasons Boise, ID 120 6,026 08/19/99 Kingswood Manor San Antonio, TX 129 3,800 08/19/99 Hampton Green San Antonio, TX 293 8,000 08/19/99 Trails End San Antonio, TX 308 9,100 08/19/99 Waterford San Antonio, TX 133 4,500 09/23/99 Southbank Mesa, AZ 113 4,550 09/30/99 Governor's Place Augusta, GA 190 5,500 09/30/99 Maxwell House Augusta, GA 216 3,500 10/14/99 Burn Brae Irving, TX 282 10,800 10/15/99 Casa Cordoba Tallahassee, FL 168 5,672 10/15/99 Casa Cortez Tallahassee, FL 66 2,228 11/18/99 Orchards of Landen Maineville, OH 312 19,100 11/23/99 Flying Sun Phoenix, AZ 108 5,100 12/15/99 Sleepy Hollow Kansas City, MO 388 18,050 12/15/99 Harbour Landing Corpus Christi, TX 284 9,500 12/15/99 Doral Louisville, KY 228 9,750 12/20/99 Villa Manana Phoenix, AZ 260 11,350 12/20/99 University Park Toledo, OH 99 2,050 12/20/99 Village of Hampshire Heights Toledo, OH 304 7,000 12/22/99 Superstition Vistas/Heritage Point Mesa, AZ 464 25,000 12/22/99 The Meadows Mesa, AZ 306 14,500 12/28/99 Metropolitan Park Seattle, WA 82 7,000 --------------- --------------------------------------- ------------------------- -------------- ----------------- 7,886 $347,376 --------------- --------------------------------------- ------------------------- -------------- -----------------
In addition, during the year ended December 31, 1999, the Company also sold its entire interest in six MRY joint venture properties (to MRYP Spinco) containing 1,297 units for approximately $54.1 million. F-21 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8. COMMITMENTS TO ACQUIRE/DISPOSE OF REAL ESTATE As of December 31, 1999, in addition to the Property that was subsequently acquired as discussed in Note 23 of the Notes to Consolidated Financial Statements, the Company entered into separate agreements to acquire three multifamily properties containing 886 units from unaffiliated parties. The Company expects a combined purchase price of approximately $126 million. As of December 31, 1999, in addition to the Properties that were subsequently disposed of as discussed in Note 23 of the Notes to Consolidated Financial Statements, the Company entered into separate agreements to dispose of fourteen multifamily properties containing 3,056 units to unaffiliated parties. The Company expects a combined disposition price of approximately $138.9 million. The closings of these pending transactions are subject to certain contingencies and conditions; therefore, there can be no assurance that these transactions will be consummated or that the final terms thereof will not differ in material respects from those summarized in the preceding paragraphs. 9. INVESTMENT IN MORTGAGE NOTES, NET In 1995, the Company made an $89 million investment in partnership interests and subordinated mortgages collateralized by 21 of the Properties. These 21 Properties consist of 3,896 units, located in California, Colorado, New Mexico and Oklahoma. This included an $87.1 million investment in second and third mortgages (net of an original discount of approximately $12.7 million to their face amount), $1.6 million represented a one time payment for an interest rate protection agreement and $0.3 million represented an investment for primarily a 49.5% limited partnership interest in the title-holding entities. As the Company does not control the general partners of the title-holding entities and substantially all of the Company's investment is in second and third mortgages (which are subordinate to first mortgages owned by third party unaffiliated entities), the $87.1 million investment is accounted for as an investment in mortgage notes. The $1.6 million payment made for the interest rate protection agreement is included in deferred financing costs and is being amortized over the term of the related debt. As of December 31, 1999 and 1998, the second mortgage notes had a combined principal balance of approximately $17.5 million and $21.7 million, respectively, and currently accrue interest at a rate of 9.45% per annum, receive principal amortization from excess cash flow and have a stated maturity date of December 31, 2019. As of December 31, 1999 and 1998, the third mortgage notes had a combined principal balance of approximately $71.1 million and $71.1 million, respectively, and currently accrue interest at a rate of 6.15% per annum, plus up to an additional 3% per annum to the extent of available cash flow. Contingent interest on the third mortgage notes is recognized to the extent it is received. The third mortgage notes have a stated maturity of December 31, 2024. Receipt of principal and interest on the second and third mortgage notes is subordinated to the receipt of all interest on the first mortgage notes. With respect to the discount on these notes, the unamortized balance at December 31, 1999 and 1998 was $4.8 million and $6 million, respectively. During 1999, 1998 and 1997, the Company amortized $1.2 million, $3.0 million and $3.1 million, respectively, which is included in interest income-investment in mortgage notes in the consolidated statements of operations. This discount is being amortized utilizing the effective yield method based on the expected life of the investment. 10. DEPOSITS-RESTRICTED Deposits-restricted as of December 31, 1999 primarily included the following: F-22 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) - a deposit in the amount of $25 million held in a third party escrow account to provide collateral for third party construction financing in connection with two separate joint venture agreements; - approximately $48.9 million was held in third party escrow accounts, representing proceeds received in connection with the Company's disposition of three properties and earnest money deposits made for one additional acquisition; - approximately $29.9 million was for tenant security, utility deposits, and other deposits for certain of the Company's Properties; and - approximately $7.5 million of other deposits. Deposits-restricted as of December 31, 1998 primarily included the following: - a deposit in the amount of $20 million held in a third party escrow account to provide collateral for third party construction financing in connection with the Joint Venture Agreement; - approximately $22.2 million held in third party escrow accounts representing proceeds received in connection with the Company's disposition of four properties; - approximately $15.3 million for tenant security and utility deposits for certain of the Company's Properties; and - approximately $11.8 million of other deposits. 11. MORTGAGE NOTES PAYABLE As of December 31, 1999, the Company had outstanding mortgage indebtedness of approximately $2.9 billion encumbering 545 of the Properties. The carrying value of such Properties (net of accumulated depreciation of $416 million) was approximately $4.7 billion. The mortgage notes payables are generally due in monthly installments of principal and interest. During the year ended December 31, 1999 the Company: - as part of the LFT Merger, assumed the outstanding mortgage balances on 342 Properties in the aggregate amount of $499.7 million; - assumed the outstanding mortgage balances on eight additional properties acquired during 1999 in the aggregate amount of $69.9 million; - repaid the outstanding mortgage balances on 31 Properties in the aggregate amount of $60.8 million. In connection with the above transactions, the Company incurred prepayment penalties of $0.5 million, which have been classified as losses on early extinguishment of debt; - refinanced the debt on four existing properties totaling $44.9 million with new mortgage indebtedness totaling $62.9 million; - obtained new mortgage financing on eleven previously unencumbered properties in the amount of $126.5 million; - refinanced the debt totaling $120.8 million on ten existing properties. In addition, five previously unencumbered properties cross-collateralize each of the new mortgage notes; - refinanced the debt on two existing properties and consequently sold its lender position to a third party, thus receiving additional net cash proceeds of approximately $2.6 million. The bond indebtedness on these two properties is now unsecured and is classified as notes, net at December 31, 1999; - refinanced the debt on one existing property and consequently sold its lender position to F-23 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) a third party, thus receiving additional cash proceeds of approximately $13.7 million; and - sold the debt on one property totaling $12.5 million in conjunction with a real estate disposition. As of December 31, 1999, scheduled maturities for the Company's outstanding mortgage indebtedness are at various dates through October 1, 2033. The interest rate range on the Company's mortgage debt was 4.00% to 10.13% at December 31, 1999. During the year ended December 31, 1999, the effective interest cost on all of the Company's debt was 7.05%. Aggregate payments of principal on mortgage notes payable for each of the next five years and thereafter are as follows (amounts in thousands):
--------------------------------------------------- YEAR TOTAL --------------------------------------------------- 2000 $ 49,588 2001 349,223 2002 249,458 2003 97,351 2004 171,597 Thereafter 1,962,966 Net Unamortized Premiums 3,400 --------------------------------------------------- Total $2,883,583 ---------------------------------------------------
During the year ended December 31, 1998, the Company repaid the outstanding mortgage balances on nine Properties in the aggregate amount of $63.8 million. As of December 31, 1998, the Company had outstanding mortgage indebtedness of approximately $2.3 billion encumbering 216 of the Properties. The carrying value of such Properties (net of accumulated depreciation of $250 million) was approximately $3.8 billion. The mortgage notes payables are generally due in monthly installments of principal and interest. In connection with the Properties acquired during the year ended December 31, 1998, including the effects of the MRY Merger, the Company assumed the outstanding mortgage balances on 58 Properties in the aggregate amount of $608.9 million, which includes a premium of approximately $1.5 million recorded in connection with the MRY Merger. As of December 31, 1998, scheduled maturities for the Company's outstanding mortgage indebtedness are at various dates through October 1, 2033. The interest rate range on the Company's mortgage debt was 3.00% to 10.00% at December 31, 1998. During the year ended December 31, 1998, the effective interest cost on all of the Company's debt was 7.10%. The Company has, from time to time, entered into interest rate protection agreements (financial instruments) to reduce the potential impact of increases in interest rates but believes it has limited exposure to the extent of non-performance by the counterparties of each protection agreement since each counterparty is a major U.S. financial institution, and the Company does not anticipate their non-performance. No such financial instrument has been used for trading purposes. Concurrent with the refinancing of certain tax-exempt bonds and as a requirement of the credit provider of the bonds, the Financing Partnership, which owns certain of the Properties, entered into interest rate protection agreements, which were assigned to the credit provider as additional security. The Financing Partnership pays interest based on a fixed interest rate and the counterparty of the agreement pays interest to F-24 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) the Company at a floating rate that is calculated based on the Public Securities Association Index for municipal bonds ("PSA Municipal Index"). As of December 31, 1999, the aggregate notional amounts of these agreements were approximately $133.4 million, $27.7 million, $9.1 million. As of December 31, 1998, the aggregate notional amounts of these agreements were approximately $135.1 million, $28.0 million and $9.2 million. The fixed interest rates for these agreements were 4.81%, 4.528% and 4.90%. The termination dates are October 1, 2003, January 1, 2004 and April 1, 2004. The Company simultaneously entered into substantially identical reverse interest rate protection agreements. Under these agreements the Company pays interest monthly at a floating rate based on the PSA Municipal Index and the counterparty pays interest to the Company based on a fixed interest rate. As of December 31, 1999, the aggregate notional amounts of these agreements were approximately $133.4 million, $27.7 million, $9.1 million. As of December 31, 1998, the aggregate notional amounts of these agreements were approximately $135.1 million, $28.0 million and $9.2 million. The fixed interest rates received by the Company in exchange for paying interest based on the PSA Municipal Index for these agreements were 4.74%, 4.458% and 4.83%. The termination dates are October 1, 2003, January 1, 2004 and April 1, 2004. Collectively, these agreements effectively cost the Company 0.07% per annum on the current outstanding aggregate notional amount. The Company also has an interest rate swap agreement for a notional amount of $228 million, for which it will receive payments if the PSA index exceeds 8.00%, that terminates on December 1, 2000. Any payments by the counterparty under this agreement have been collaterally assigned to the provider of certain sureties related to the tax-exempt bonds secured by certain of its Properties. The Company has no payment obligations to the counterparty with respect to this agreement. In May 1998, the Company entered into an interest rate protection agreement to effectively fix the interest rate upon its refinancing of the Evans Withycombe Financing Limited Partnership indebtedness to within a range of 5.6% to 6.0%. The agreement was for a notional amount of $131 million with a settlement date of August 2001. There was no initial cost to the Company for entering into this agreement. In August 1998, the Company entered into an interest rate protection agreement to effectively fix the interest rate cost of the Company's planned financing in the fourth quarter of 1998. This agreement was canceled in November 1998 at a cost of approximately $3.7 million. This cost is being amortized over the life of the financing for the fifteen previously unencumbered Properties that occurred in November 1998. In August 1998, the Company entered into an interest rate swap agreement that fixed the Company's interest rate risk on a portion of the Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of 3.65125%. This agreement was for a notional amount of $150 million with a termination date of August 2003. In August 1998, the Company entered into an interest rate swap agreement that fixed the Company's interest rate risk on a portion of the Operating Partnership's variable rate tax-exempt bond indebtedness at a rate of 3.683%. This agreement was for a notional amount of $150 million with a termination date of August 2005. In October 1999, the Company settled on a $50 million treasury lock and received $1.38 million. This settlement is being amortized over the life of the financing for the eleven previously unencumbered Properties that occurred in July 1999. The Company believes that it has limited exposure to the extent of non-performance by the F-25 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) counterparties of the agreements, mentioned in the previous paragraphs, since each counterparty is a major U.S. financial institution, and the Company does not anticipate their non-performance. The fair value of these instruments, discussed above, as of December 31, 1999 approximates their carrying or contract values. 12. NOTES The following tables summarize the Company's unsecured note balances and certain interest rate and maturity date information as of and for the years ended December 31, 1999 and 1998, respectively:
Weighted December 31, 1999 Net Principal Interest Rate Average Maturity (AMOUNTS ARE IN THOUSANDS) Balance Ranges Interest Rate Date Ranges - ------------------------------------------------------------------------------------------------------------------ Fixed Rate Public Notes $ 2,062,759 6.150% - 9.375% 6.98% 2000 - 2026 Floating Rate Public Notes 99,746 (1) 5.81% 2003 Fixed Rate Tax-Exempt Bonds 127,780 4.750% - 5.200% 4.99% 2024 - 2029 ------------------- Totals $ 2,290,285 ===================
(1) As of December 31, 1999, floating rate public notes consisted of one note. The interest rate on this note was LIBOR (reset quarterly) plus a spread equal to 0.75% at December 31, 1999 (reset annually in August).
Weighted December 31, 1999 Net Principal Interest Rate Average Maturity (AMOUNTS ARE IN THOUSANDS) Balance Ranges Interest Rate Date Ranges - ------------------------------------------------------------------------------------------------------------------ Fixed Rate Public Notes $ 1,889,241 6.150% - 9.375% 7.36% 1999 - 2026 Floating Rate Public Notes 124,675 (2) 6.14% 1999 - 2003 Fixed Rate Tax-Exempt Bonds 35,600 4.750% 4.750% 2024 ------------------- Totals $ 2,049,516 ===================
(2) As of December 31, 1998, floating rate public notes consisted of two separate notes. The interest rate on the first note was LIBOR (reset quarterly) plus a spread equal to 0.45% at December 31, 1998 (reset annually in August). The interest rate on the second note was LIBOR (reset quarterly) plus a spread equal to 0.32% at December 31, 1998. As of December 31, 1999, the Company had outstanding unsecured notes of approximately $2.3 billion net of a $4.6 million discount and including a $7.1 million premium. As of December 31, 1998, the Company had outstanding unsecured notes of approximately $2.0 billion net of a $5.3 million discount and including a $9.2 million premium. On February 3, 1998, the Operating Partnership filed a Form S-3 Registration Statement to register $1 billion of debt securities. The SEC declared this registration statement effective on February 27, 1998. As of December 31, 1999, $430 million remained outstanding under this registration statement. F-26 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) During the year ended December 31, 1999, the Company: - issued $300 million of redeemable unsecured fixed rate notes (the "June 2004 Notes") in connection with the Debt Shelf Registration in a public debt offering (the "Ninth Public Debt Offering"). The June 2004 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. As of December 31, 1999, the unamortized discount balance was approximately $0.2 million. The June 2004 Notes are due June 23, 2004. The annual interest rate on the June 2004 Notes is 7.10%, which is payable semiannually in arrears on December 23 and June 23, commencing December 23, 1999. The Operating Partnership received net proceeds of approximately $298.0 million in connection with this issuance; - repaid its $125 million fixed rate notes that matured on May 15, 1999 and its $25 million floating rate notes that matured on November 24, 1999; - refinanced the bond indebtedness collateralized by four existing properties. The bond indebtedness on all four properties totaling $75.8 million is now unsecured; - pursuant to the LFT Merger, assumed an unsecured term note in the approximate amount of $2.3 million and paid it off the same day; and - refinanced the bond indebtedness collateralized by two existing properties. The bond indebtedness on both properties totaling $16.4 million is now unsecured. Aggregate payments of principal on unsecured notes payable for each of the next five years and thereafter are as follows (amounts in thousands):
----------------------------------------------------- YEAR TOTAL ----------------------------------------------------- 2000 $ 200,000 2001 150,000 2002 265,000 2003 190,000 2004 415,000 Thereafter 1,067,780 Net Unamortized Premiums 7,056 Net Unamortized Discounts (4,551) ----------------------------------------------------- Total $2,290,285 =====================================================
As of December 31, 1999 and 1998, the remaining unamortized balance of deferred settlement receipts from treasury locks and interest rate protection agreements was $9.5 million and $8.8 million, respectively. As of December 31, 1999 and 1998, the remaining unamortized balance of deferred settlement payments on treasury locks and interest rate protection agreements was $3.7 million and $5.4 million, respectively. In regard to the interest rate protection agreements mentioned, the Company believes that it has limited exposure to the extent of non-performance by the counterparties of each agreement since each counterparty is a major U.S. financial institution, and the Company does not anticipate their non-performance. F-27 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. LINES OF CREDIT On August 12, 1999 the Company obtained a new three year $700 million unsecured revolving credit facility, with Bank of America Securities LLC and Chase Securities Inc. acting as joint lead arrangers, maturing August 11, 2002. The new line of credit replaced the Company's $500 million unsecured revolving credit facility, as well as the $120 million unsecured revolving credit facility which the Company assumed in the MRY Merger. The prior existing revolving credit facilities were repaid in full and terminated upon the closing of the new facility. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods, plus a certain spread dependent upon the Company's credit rating. As of December 31, 1999 and 1998, $300 million and $290 million, respectively, was outstanding and $65.8 million and $12 million, respectively, was restricted on the lines of credit. During the years ended December 31, 1999 and 1998, the weighted average interest rate was 6.42% and 6.47%, respectively. Pursuant to the LFT Merger, the Company assumed a line of credit that had an outstanding balance of approximately $26.4 million. On October 1, 1999, the Company repaid the outstanding balance and terminated this facility. 14. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE COMMON SHARE The following tables set forth the computation of net income per share - - basic and net income per share - diluted. F-28 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1999 1998 1997 ------------------------------------------------ (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) NUMERATOR: Income before gain on disposition of properties, net, extraordinary item, allocation of income to Minority Interests and preferred distributions $ 330,333 $ 255,032 $ 176,014 Allocation of income to Minority Interests (29,536) (18,529) (13,260) Distributions to preferred shareholders (113,196) (92,917) (59,012) -------------- --------------- ------------- Income before gain on disposition of properties, net and extraordinary item 187,601 143,586 103,742 Gain on disposition of properties, net 93,535 21,703 13,838 Loss on early extinguishment of debt (451) -- -- -------------- --------------- ------------- Numerator for net income per share - basic 280,685 165,289 117,580 Effect of dilutive securities: Allocation of income to Minority Interests 29,536 18,529 13,260 -------------- --------------- ------------- Numerator for net income per share - diluted $ 310,221 $ 183,818 $130,840 ============== =============== ============= DENOMINATOR: Denominator for net income per share - basic 122,175 100,370 65,729 Effect of dilutive securities: Contingent incremental employee share options 654 865 1,099 OP Units 12,826 11,343 7,453 -------------- --------------- ------------- Denominator for net income per share - diluted 135,655 112,578 74,281 ============== =============== ============= Net income per share - basic $ 2.30 $ 1.65 $ 1.79 ============== =============== ============= Net income per share - diluted $ 2.29 $ 1.63 $ 1.76 ============== =============== =============
F-29 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED DECEMBER 31, ----------------------------------------------- 1999 1998 1997 ----------------------------------------------- (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) NET INCOME PER SHARE - BASIC: Income before gain on disposition of properties, net and extraordinary item per share - basic $ 1.61 $ 1.45 $ 1.60 Gain on disposition of properties, net 0.69 0.20 0.19 Loss on early extinguishment of debt - - - ------------- -------------- -------------- Net income per share - basic $ 2.30 $ 1.65 $ 1.79 ============= ============== ============== NET INCOME PER SHARE - DILUTED: Income before gain on disposition of properties, net and extraordinary item per share - diluted $ 1.60 $ 1.44 $ 1.58 Gain on disposition of properties, net 0.69 0.19 0.18 Loss on early extinguishment of debt - - - ------------- -------------- -------------- Net income per share - diluted $ 2.29 $ 1.63 $ 1.76 ============= ============== ==============
FOR ADDITIONAL DISCLOSURES REGARDING THE EMPLOYEE SHARE OPTIONS, SEE NOTE 16. CONVERTIBLE PREFERRED SHARES AND JUNIOR CONVERTIBLE PREFERENCE UNITS THAT COULD BE CONVERTED INTO 12,023,051, 8,739,688 AND 2,763,898 WEIGHTED COMMON SHARES FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997, RESPECTIVELY, WERE OUTSTANDING BUT WERE NOT INCLUDED IN THE COMPUTATION OF DILUTED EARNINGS PER SHARE BECAUSE THE EFFECTS WOULD BE ANTI-DILUTIVE. 15. SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS The following Summarized Pro Forma Condensed Statement of Operations has been prepared as if the following had occurred on January 1, 1999 (as described in Note 4, Note 5, Note 6, Note 7, Note 11 and Note 12 of Notes to Consolidated Financial Statements): - the acquisition of the 402 LFT properties containing 36,609 units and other related assets for a total purchase price of approximately $738 million; - the acquisition of an additional 22 Properties, including the related assumption of $69.9 million of mortgage indebtedness, the issuance of Junior Convertible Preference Units with a value of $3.0 million and the issuance of OP Units with a value of $25.2 million; - the disposition of 36 properties; - the $300 million public debt offering in June 1999; - the repayment of the 1999 Notes totaling $125 million; - the repayment of the 1999-A Medium Term Notes totaling $25 million; - the repayment of LFT's unsecured term note and line of credit totaling $28.6 million; - the repayment of the outstanding mortgage balances on 31 properties totaling $60.8 million; - the mortgage financing of eleven previously unencumbered Properties for $126.5 million; - the mortgage refinancing of eight properties increasing mortgage indebtedness by $21.8 million (net); F-30 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) - the issuance of the 800,000 units of 8.00% Series A Cumulative Convertible Redeemable Preference Interests; and - the conversion of all of the Series I Preferred Shares to 2,566,797 Common Shares during 1999. This would result in 126,417,761 Common Shares outstanding on January 1, 1999. In management's opinion, the Summarized Pro Forma Condensed Statement of Operations does not purport to present what actual results would have been had the above transactions occurred on January 1, 1999, or to project results for any future period. The amounts presented in the following statement are in thousands except for per share amounts:
SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 ------------------------------------------------------------------ ----------------------------------- Total revenues $ 1,883,294 --------- Total expenses 1,547,363 --------- Income before allocation to Minority Interests 335,931 --------- Net income 315,016 Preferred distributions 112,313 --------- Net income available for Common Shares $ 202,703 ========= Net income per Common Share $ 1.60 =========
16. SHARE OPTION AND SHARE AWARD PLAN Pursuant to the Company's Fifth Amended and Restated 1993 Share Option and Share Award Plan (the "Fifth Amended Option and Award Plan"), officers, directors, key employees and consultants of the Company may be offered the opportunity to acquire Common Shares through the grant of share options ("Options") including non-qualified share options ("NQSOs"), incentive share options ("ISOs") and share appreciation rights ("SARs") or may be granted restricted or non-restricted shares. Additionally, under the Fifth Amended Option and Award Plan, officers and key employees of the Company may be awarded Common Shares, subject to conditions and restrictions as described in the Fifth Amended Option and Award Plan. Options and SARs are sometimes referred to herein as "Awards". As to the Options that have been granted through December 31, 1999, generally, one-third are exercisable one year after the initial grant, one-third are exercisable two years following the date such Options were granted and the remaining one-third are exercisable three years following the date such Options were granted. As to the restricted shares that have been awarded through December 31, 1999, these shares fully vest three years from the award date. During the three year period of restriction, the employee receives quarterly dividend payments on their shares. If employment is terminated prior to the lapsing of the restriction, the shares are canceled. The Company has reserved 12,500,000 Common Shares for issuance under the Fifth Amended Option and Award Plan. The Options generally are granted at the fair market value of the Company's F-31 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Common Shares at the date of grant, vest over a three year period, are exercisable upon vesting and expire ten years from the date of grant. The exercise price for all Options under the Fifth Amended Option and Award Plan shall not be less than the fair market value of the underlying Common Shares at the time the Option is granted. The Fifth Amended Option and Award Plan will terminate at such time as no further Common Shares are available for issuance upon the exercise of Options and all outstanding Options have expired or been exercised. The Board of Trustees may at any time amend or terminate the Fifth Amended Option and Award Plan, but termination will not affect Awards previously granted. Any Options, which had vested prior to such a termination, would remain exercisable by the holder thereof. Pursuant to the MRY Merger, the Company assumed MRY's Stock Option and Incentive Plan, which included existing options granted by MRY prior to the MRY Merger. As to the Options that have been granted through October 18, 1998, generally, one-fifth are exercisable one year after the initial grant, one-fifth are exercisable two years following the date such Options were granted, one-fifth are exercisable three years following the date such Options were granted, one-fifth are exercisable four years following the date such Options were granted and the remaining one-fifth are exercisable five years following the date such Options were granted. The Company will not issue common shares under the MRY Stock Option and Incentive Plan. The Options already granted under the plan were assumed with the original grant dates. The number of original MRY Options and the original MRY grant prices were converted to the Company's equivalent using a conversion ratio of 0.54. They will vest over a five-year period, are exercisable upon vesting and expire ten years from the date of grant. The MRY Stock Option and Incentive Plan will terminate at such time all outstanding Options have expired or been exercised. Any Options, which had vested prior to such assumption, would remain exercisable by the holder thereof. Pursuant to the LFT Merger, the Company assumed LFT's Incentive Equity Plan, which included existing options granted by LFT prior to the LFT Merger. As to the Options that were granted by LFT from January 1, 1999 through September 30, 1999, generally, one-third are exercisable one year after the initial grant, one-third are exercisable two years following the date such Options were granted and the remaining one-third are exercisable three years following the date such Options were granted. The Company will not issue common shares under the LFT Incentive Equity Plan. The Options already granted under the plan were assumed with the original grant dates. The number of original LFT Options and the original LFT grant prices were converted to the Company's equivalent using a conversion ratio of 0.463. The Options granted through December 31, 1998 vested immediately upon closing of the LFT Merger and are exercisable and expire ten years from the date of grant. The LFT Incentive Equity Plan will terminate at such time all outstanding Options have expired or been exercised. Any Options, which had vested prior to such assumption, would remain exercisable by the holder thereof. The Company has elected to apply the provisions of Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB No. 25"), in the computation of compensation expense. Under APB No. 25's intrinsic value method, compensation expense is determined by computing the excess of the market price of the shares over the exercise price on the measurement date. For the Company's share options, the intrinsic value on the measurement date (or grant date) is zero, and no compensation expense is recognized. FASB Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("Statement No. 123"), requires the Company to disclose pro forma net income and income per share as if a fair value based accounting method had been used in the computation of compensation expense. The fair value of the options computed under Statement No. 123 would be recognized over the vesting period of the options. The fair value for the Company's options was estimated at the time the F-32 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) options were granted using the Black Scholes option pricing model with the following weighted-average assumptions for 1997, 1998 and 1999, respectively: risk-free interest rates of 6.33%, 5.37% and 5.84%; dividend yields of 5.32%, 5.98% and 6.89%; volatility factors of the expected market price of the Company's Common Shares of 0.218, 0.212 and 0.209; and a weighted-average expected life of the option of seven years. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's Options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its Options. For purposes of pro forma disclosures, the estimated fair value of the Options is amortized to expense over the Options' vesting period. The following is the pro forma information for the three years ended December 31, 1999, 1998 and 1997 (unaudited):
--------------------------------------------------------------- ----------------- -------------- -------------- 1999 1998 1997 --------------------------------------------------------------- ----------------- -------------- -------------- Pro forma net income available to Common Shares $ 270,947 $ 155,318 $ 112,156 Pro forma income per weighted Average Common Share Outstanding $ 2.22 $ 1.55 $ 1.71 --------------------------------------------------------------- ----------------- -------------- --------------
The table below summarizes the Option activity of the Fifth Amended Option and Award Plan, the MRY Stock Option and Incentive Plan and the LFT Stock Option Plan for the three years ended December 31, 1999, 1998 and 1997: F-33 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
COMMON WEIGHTED AVERAGE EXERCISE SHARES SUBJECT TO OPTIONS PRICE OR AWARDS PER COMMON SHARE - ------------------------------------------ --------------------------- --------------------------- Balance at December 31, 1996 2,330,263 $28.75 Options granted 2,035,211 $44.03 Options exercised (180,138) $27.78 Options cancelled (95,013) $36.88 - ------------------------------------------ --------------------------- --------------------------- Balance at December 31, 1997 4,090,323 $36.21 Options granted 1,964,550 $50.31 MRY Options granted (assumed) 925,830 $38.53 Options exercised (194,021) $29.20 MRY Options exercised (237,153) $37.22 Options cancelled (327,069) $47.21 - ------------------------------------------ --------------------------- --------------------------- Balance at December 31, 1998 6,222,460 $40.61 Options granted 1,485,903 $40.68 LFT Options granted (assumed) 82,466 $31.43 Options exercised (575,865) $28.87 MRY Options exercised (435,429) $38.21 LFT Options exercised (1,898) $36.90 Options cancelled (268,762) $45.93 MRY Options cancelled (140,010) $41.78 LFT Options cancelled (2,819) $23.31 - ------------------------------------------ --------------------------- --------------------------- Balance at December 31, 1999 6,366,046 $41.48
As of December 31, 1999, 1998 and 1997, 3,266,759 shares, 2,841,111 shares and 1,330,150 shares were exercisable, respectively. Exercise prices for Options outstanding as of December 31, 1999 ranged from $26 to $54.8125 for the Fifth Amended Option and Award Plan, $15.28 to $41.85 for the MRY Stock Option and Incentive Plan and $2.83 to $48.60 for the LFT Stock Option Plan. Expiration dates ranged from August 11, 2003 to November 8, 2009. The remaining weighted-average contractual life of those Options was 7.3 years. The weighted-average grant date fair value of Options granted during 1999, 1998 and 1997 was $4.43, $6.28 and $7.37, respectively. 17. EMPLOYEE SHARE PURCHASE PLAN Under the Company's Employee Share Purchase Plan certain eligible officers, trustees and employees of the Company may annually acquire up to $100,000 of Common Shares of the Company. The aggregate number of Common Shares available under the Employee Share Purchase Plan shall not exceed 1,000,000, subject to adjustment by the Board of Trustees. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter. During 1997, the Company issued 84,183 Common Shares at net prices that ranged from $35.63 per share to $42.08 per share and raised approximately $3.2 million in connection therewith. During 1998, the Company issued 93,521 Common Shares at net prices that ranged from $35.70 per share to $42.71 per share and raised approximately $3.7 million in connection therewith. During 1999, the Company issued 147,885 Common Shares at net prices that ranged from $34.37 per share to $36.71 per share and raised approximately $5.2 million in connection therewith. F-34 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18. DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN On November 3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 7,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the "DRIP Plan"). The registration statement was declared effective on November 25, 1997. The DRIP Plan of the Company provides holders of record and beneficial owners of Common Shares, Preferred Shares, and limited partnership interests in the Operating Partnership with a simple and convenient method of investing cash distributions in additional Common Shares (which is referred to herein as the "Dividend Reinvestment - DRIP Plan"). Common Shares may also be purchased on a monthly basis with optional cash payments made by participants in the DRIP Plan and interested new investors, not currently shareholders of the Company, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the "Share Purchase - DRIP Plan"). 19. EMPLOYEE TRANSACTIONS Douglas Crocker II, President and Chief Executive Officer of the Company, and three other officers had purchased an aggregate of 190,000 Common Shares at prices which range from $26 to $31.625 per Common Share. These purchases were financed by loans made by the Company in the aggregate amount of approximately $5.3 million. The employee notes accrue interest, payable in arrears, at rates that range from 6.15% per annum to 7.93% per annum. Scheduled maturities are at various dates through March 2005. The outstanding balance on these loans in the aggregate was $4.7 million and $4.9 million for the years ended December 31, 1999 and 1998, respectively. The employee notes are recourse to Mr. Crocker and the three other officers and are collateralized by pledges of the 190,000 Common Shares purchased. In addition, as of December 31, 1999, the outstanding principal balance on additional notes issued to Mr. Crocker and three other officers was approximately $1.2 million. These notes accrue interest, payable in arrears, at one month LIBOR plus 2% per annum. Scheduled maturities are at various dates through March 2003. Subsequent to December 31, 1999, Mr. Crocker paid a principal installment on one of his notes in the amount of $80,570 and repaid another note in full in the amount of $100,000. The notes are recourse to Mr. Crocker and the three other officers and are collateralized by pledges of options and share awards. Mr. Crocker and Gerald A. Spector, Executive Vice President and Chief Operating Officer of the Company, have entered into Deferred Compensation Agreements with the Company which provide both with a salary benefit after their respective termination of employment with the Company, under certain circumstances. In addition, Mr. Crocker also has entered into a Share Distributions Agreement with the Company whereby he was issued options to purchase 100,000 Common Shares under the terms of the Fifth Amended Option and Award Plan. Upon exercise of these options, Mr. Crocker will be entitled to receive dividends on these shares as if they had been outstanding from the grant date through the exercise date. The Company has recognized $1.1 million, $0.8 million and $0.7 million of compensation expense for the years ended December 31, 1999, 1998 and 1997, respectively, related to these agreements. The Company has established a defined contribution plan (the "401(k) Plan") that provides retirement benefits for employees that meet minimum employment criteria. The Company contributes 100% of the first 4% of eligible compensation that a participant contributes to the 401(k) Plan. Participants are vested in the Company's contributions over five years. The Company made contributions in the amount of $1.4 million and $1.4 million for the years ended December 31, 1997 and 1998, respectively, and expects F-35 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) to make contributions in the amount of approximately $3.1 million for the year ended December 31, 1999. 20. TRANSACTIONS WITH RELATED PARTIES In connection with the Wellsford Merger, Jeffrey H. Lynford and Edward Lowenthal (trustees of the Company) each executed a consulting agreement with the Company. Each consulting agreement has a term of five years from May 30, 1997, the closing date of the Wellsford Merger. Pursuant to the consulting agreements, each of Messrs. Lynford and Lowenthal will serve as a senior management consultant to the Company and will receive compensation at the rate of $200,000 per year plus reimbursement for reasonable out-of-pocket expenses. In connection with the EWR Merger, in December 1997, Stephen O. Evans (a trustee of the Company) executed a consulting agreement with an affiliate of the Company. The consulting agreement had a term of two years and expired on December 31, 1999. Pursuant to the consulting agreement, Mr. Evans served as a senior management consultant to the Company and received compensation at the rate of $225,000 per year. Mr. Evans also received an option to purchase 115,500 Common Shares that will vest in three equal annual installments and will have an exercise price equal to $50.125 per Common Share. Mr. Evans was also eligible to participate in all of the Company's employee benefit plans in which persons in comparable positions participate, treating Mr. Evans as an employee. In connection with the affiliated lease agreements for various offices as defined in Note 21, the Company paid Equity Office Holdings, L.L.C. ("EOH") $126,272, $114,539 and $145,511 in connection with the Chicago Office, $261,040, $194,506 and $177,793 in connection with the Tampa Office, $131,079, $83,485 and $55,149 in connection with the Southern California area office and $770,317, $772,320 and $632,693 in connection with the space occupied by the corporate headquarters for the years ended December 31, 1999, 1998 and 1997, respectively. Also, the Company paid EOH $166,328 and $55,117 in connection with the Atlanta Office for the year ended December 31, 1999 and 1998, respectively. Amounts due to EOH were $311,345, $136,000 and $59,675 as of December 31, 1999, 1998 and 1997, respectively. Equity Group Investments, Inc. and certain of its subsidiaries, including, Equity Properties & Development, L.P. and Equity Properties Management Corp. (collectively, "EGI"), have provided certain services to the Company which include, but are not limited to, investor relations, corporate secretarial, real estate tax evaluation services and market consulting and research services. Fees paid to EGI for these services amounted to approximately $708,582, $1.1 million and $1.1 million for the years ended December 31, 1999, 1998 and 1997, respectively. Amounts due to EGI were $175,662, $57,408 and $74,578 as of December 31, 1999, 1998 and 1997, respectively. Artery Property Management, Inc., a real estate property management company ("APMI") in which Mr. Goldberg, a trustee of the Company, is a two-thirds owner and chairman of the board of directors, provided the Company consulting services with regard to property acquisitions and additional business opportunities. In connection with the acquisition of certain Properties from Mr. Goldberg and his affiliates during 1995, the Company made a loan to Mr. Goldberg and APMI of $15,212,000 evidenced by two notes and secured by 465,545 OP Units. At December 31, 1999, approximately $6.2 million was outstanding and 64,948 OP Units and 123,792 Common Shares secured this loan. In connection with the acquisition of certain Properties from Mr. Goldberg and his affiliates during 1998, the Company made a $12,000,000 revolving loan to Mr. Goldberg and his wife in September 1998. On October 1, 1999, this note was fully repaid. F-36 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) During 1999, the Company acquired eight Properties and the related management agreements from affiliates of Mr. Goldberg for an aggregate purchase price of approximately $110.2 million, including the assumption of approximately $44.3 million of mortgage indebtedness. The purchase price also included the issuance of 28,795 Series A Junior Convertible Preference Units in the Operating Partnership which have a liquidation value of $100 per unit and are exchangeable for OP Units under certain circumstances. On June 29, 1999, Mr. Goldberg received 8,462 of these units with a liquidation value of approximately $0.8 million. Certain related entities provided services to the Company. These included, but were not limited to, Rosenberg & Liebentritt, P.C., which provided legal services, and Arthur A. Greenberg, which provided tax advisory services. Fees paid to these related entities in the aggregate amounted to $1.3 million for the year ended December 31, 1997. In addition, The Riverside Agency, Inc., which provided insurance brokerage services, was paid fees and reimbursed premiums and loss claims in the amount of $0.3 million for the year ended December 31, 1997. Piper, Marbury, Rudnick & Wolfe, a law firm in which Mr. Errol Halperin, a trustee of the Company, is a partner, provided legal services to the Company. Fees paid to this firm amounted to approximately $1.6 million, $2.2 million and $2.3 million for the years ended December 31, 1999, 1998 and 1997, respectively. Seyfarth, Shaw, Fairweather & Geraldson, a law firm in which Ms. Sheli Rosenberg's (a trustee of the Company) husband is a partner, provided legal services to the Company. Fees paid to this firm amounted to $34,357 and $29,146, for the years ended December 31, 1999 and 1998, respectively. In addition, the Company has provided acquisitions, asset and property management services to certain related entities for properties not owned by the Company. Fees received for providing such services were approximately $2.4 million, $3.5 million and $4.6 million for the years ended December 31, 1999, 1998 and 1997, respectively. 21. COMMITMENTS AND CONTINGENCIES The Company, as an owner of real estate, is subject to various environmental laws of Federal and local governments. Compliance by the Company with existing laws has not had a material adverse effect on the Company's financial condition and results of operations. However, the Company cannot predict the impact of new or changed laws or regulations on its current Properties or on properties that it may acquire in the future. The Company does not believe there is any litigation threatened against the Company other than routine litigation arising out of the ordinary course of business, some of which is expected to be covered by liability insurance, none of which is expected to have a material adverse effect on the consolidated financial statements of the Company. In regard to the joint venture agreements with two multifamily residential real estate developers during the year ended December 31, 1999, the Company funded a total of $88.6 million and during 2000 the Company expects to fund approximately $32.7 million in connection with these agreements. In connection with the first agreement, the Company has an obligation to fund up to an additional $20 million to guarantee third party construction financing. F-37 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) In regard to certain other properties that were under development and/or expansion during the year ended December 31, 1999, the Company funded $47.5 million. During 2000, the Company expects to fund $44.9 million related to the continued development and/or expansion of as many as three Properties. In regard to certain properties that were under earnout/development agreements, during the year ended December 31, 1999, the Company funded the following: - $17.2 million relating to the acquisition of Copper Canyon Apartments, which included a $1.0 million earnout payment to the developer; - $24.9 million relating to the acquisition of Skyview Apartments, which included a $3.1 million earnout payment to the developer; and - $18.3 million relating to the acquisition of Rosecliff Apartments. During 2000, the Company expects to fund $33.4 million related to the continued earnout/development of one Property. In connection with the Wellsford Merger, the Company has provided a $14.8 million credit enhancement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project. Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real Properties, Inc. ("WRP Newco"), the Company has agreed to purchase up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a standby basis over a three-year period ending on May 30, 2000. These preferred shares would be convertible to WRP Newco common shares under certain circumstances. As of December 31, 1999, no shares of WRP Newco Series A Preferred had been acquired by the Company. In connection with the MRY Merger, the Company extended a $25 million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt Agreement. On June 24, 1999, MRYP Spinco repaid the entire outstanding Senior Note balance of $18.3 million and there is no further obligation by either party in connection with this agreement. Also, in connection with the MRY Merger, the Company entered into six joint venture agreements with MRYP Spinco, the entity spun-off in the MRY Merger. The Company contributed six properties with an initial value of $52.7 million in return for an ownership interest in each joint venture. On August 23, 1999, the Company sold its entire interest in these six properties to MRYP Spinco and there is no further obligation by either party in connection with these agreements. The Company has lease agreements with an affiliated party covering office space occupied by the management offices located in Tampa, Florida (the "Tampa Office"), Atlanta, Georgia (the "Atlanta Office"); and Chicago, Illinois (the "Chicago Office"). The Company also has a lease agreement with an affiliated party covering office space occupied by an area office located in Southern California. The Tampa Office agreement expires on October 31, 2001, the Atlanta Office agreement expires on June 20, 2001, the Chicago Office agreement expires on July 11, 2000 and the Southern California agreement expires on July 31, 2000. The Company also has seven additional lease agreements with unaffiliated parties covering space occupied by the management offices located in Dallas, Texas (the "Dallas Office"); Bethesda, Maryland (the "Bethesda Office"); Denver, Colorado (the "Denver Office"); Seattle, Washington (the "Seattle Office"); Scottsdale, Arizona (the "Scottsdale Office"), Charlotte, North Carolina (the "Charlotte Office") and Reynoldsburg, Ohio (the "Lexford Office"). The lease agreement for the Dallas Office expires on F-38 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) September 30, 2005, the lease agreement for the Bethesda Office expires on February 1, 2004, the lease agreement for the Denver Office expires on December 31, 2002, the lease agreement for the Seattle Office expires on June 30, 2003, the lease agreement for the Scottsdale Office expires on July 31, 2004, the lease agreement for the Charlotte Office expires on May 31, 2004 and the lease agreement for the Lexford Office expires on December 31, 2004. The Company also has a lease agreement with an affiliated party covering office space occupied by the corporate headquarters located in Chicago, Illinois. This agreement, as amended, expires on July 31, 2001. In addition, commencing June 15, 1998, the Company increased the office space occupied by its corporate personnel. The lease agreement covering the additional space expires on December 31, 2004. During the years ended December 31, 1999, 1998 and 1997, total lease payments incurred, including a portion of real estate taxes, insurance, repairs and utilities, aggregated $3,271,513, $2,528,150 and $1,491,766, respectively. The minimum basic aggregate rental commitment under the above described leases in years succeeding December 31, 1999 is as follows:
--------------- ---------------- Year Amount --------------- ---------------- 2000 $3,197,959 2001 2,754,510 2002 2,220,692 2003 2,005,051 2004 1,619,293 Thereafter 481,179 --------------- ---------------- Total $12,278,684 --------------- ----------------
22. REPORTABLE SEGMENTS The following tables set forth the reconciliation of net income and total assets for the Company's reportable segments for the years ended December 31, 1999, 1998 and 1997 (see also Note 3 for further discussion). F-39 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
RENTAL REAL CORPORATE/ 1999 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED ----------------------------------------------------------------------------------------------------------------- Rental income $ 1,711,738 $ - $ 1,711,738 Property and maintenance expense (414,026) - (414,026) Real estate tax and insurance expense (171,289) - (171,289) Property management expense (61,626) - (61,626) ----------------------------------------------------- Net operating income 1,064,797 - 1,064,797 Fee and asset management income - 4,970 4,970 Interest income - investment in mortgage notes - 12,559 12,559 Interest and other income - 23,851 23,851 Fee and asset management expense - (3,587) (3,587) Depreciation expense on non-real estate assets - (7,231) (7,231) Interest expense: Expense incurred - (337,189) (337,189) Amortization of deferred financing costs - (4,084) (4,084) General and administrative expense - (22,296) (22,296) Preferred distributions - (113,196) (113,196) Adjustment for depreciation expense related to equity in unconsolidated joint ventures - 1,009 1,009 ------------------------------------------------------ Funds from operations available to Common Shares and OP Units (unaudited) 1,064,797 (445,194) 619,603 Depreciation expense on real estate assets (401,457) - (401,457) Gain on disposition of properties, net 93,535 - 93,535 Loss on early extinguishment of debt - (451) (451) Income allocated to Minority Interests - (29,536) (29,536) Adjustment for depreciation expense related to equity in unconsolidated joint ventures - (1,009) (1,009) ----------------------------------------------------- Net income available to Common Shares $ 756,875 $ (476,190) $ 280,685 ===================================================== Investment in real estate, net of accumulated depreciation $11,151,167 $ 17,309 $11,168,476 ===================================================== Total assets $11,164,035 $ 551,654 $11,715,689 =====================================================
F-40 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
RENTAL REAL CORPORATE/ 1998 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED ---------------------------------------------------------------------------------------------------------------- Rental income $ 1,293,560 $ - $ 1,293,560 Property and maintenance expense (326,733) - (326,733) Real estate tax and insurance expense (126,009) - (126,009) Property management expense (53,101) - (53,101) ----------------------------------------------------- Net operating income 787,717 - 787,717 Fee and asset management income - 5,622 5,622 Interest income - investment in mortgage notes - 18,564 18,564 Interest and other income - 19,250 19,250 Fee and asset management expense - (4,279) (4,279) Depreciation expense on non-real estate assets - (5,361) (5,361) Interest expense: Expense incurred - (246,585) (246,585) Amortization of deferred financing costs - (2,757) (2,757) General and administrative expense - (20,631) (20,631) Preferred distributions - (92,917) (92,917) Adjustment for amortization of deferred financing costs related to predecessor business - 35 35 Adjustment for depreciation expense related to equity in unconsolidated joint ventures - 183 183 ----------------------------------------------------- Funds from operations available to Common Shares and OP Units (unaudited) 787,717 (328,876) 458,841 Depreciation expense on real estate assets (296,508) - (296,508) Gain on disposition of properties, net 21,703 - 21,703 Income allocated to Minority Interests - (18,529) (18,529) Adjustment for amortization of deferred financing costs related to predecessor business - (35) (35) Adjustment for depreciation expense related to equity in unconsolidated joint ventures - (183) (183) ----------------------------------------------------- Net income available to Common Shares $ 512,912 $ (347,623) $ 165,289 ===================================================== Investment in real estate, net of accumulated depreciation $10,208,113 $ 15,459 $ 10,223,572 ===================================================== Total assets $10,237,999 $ 462,261 $ 10,700,260 =====================================================
F-41 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
RENTAL REAL CORPORATE/ 1997 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED ---------------------------------------------------------------------------------------------------------------- Rental income $ 707,733 $ - $ 707,733 Property and maintenance expense (176,075) - (176,075) Real estate tax and insurance expense (69,520) - (69,520) Property management expense (26,793) - (26,793) ----------------------------------------------------- Net operating income 435,345 - 435,345 Fee and asset management income - 5,697 5,697 Interest income - investment in mortgage notes - 20,366 20,366 Interest and other income - 13,282 13,282 Fee and asset management expense - (3,364) (3,364) Depreciation expense on non-real estate assets - (3,118) (3,118) Interest expense: Expense incurred - (121,324) (121,324) Amortization of deferred financing costs - (2,523) (2,523) General and administrative expense - (14,821) (14,821) Preferred distributions - (59,012) (59,012) Adjustment for amortization of deferred financing costs - 235 235 related to predecessor business ----------------------------------------------------- Funds from operations available to Common Shares and OP Units (unaudited) 435,345 ( 164,582) 270,763 Depreciation expense on real estate assets (153,526) - (153,526) Gain on disposition of properties, net 13,838 - 13,838 Income allocated to Minority Interests - (13,260) - Adjustment for amortization of deferred financing costs related to predecessor business - (235) (235) ----------------------------------------------------- Net income available to Common Shares $ 295,657 $ (178,077) $ 117,580 =====================================================
(1) The Company has one primary reportable business segment, which consists of investment in rental real estate. The Company's primary business is owning, managing, and operating multifamily residential properties which includes the generation of rental and other related income through the leasing of apartment units to tenants. (2) The Company has a segment for corporate level activity including such items as interest income earned on short-term investments, interest income earned on investment in mortgage notes, general and administrative expenses, and interest expense on mortgage notes payable and unsecured note issuances. In addition, the Company has a segment for third party management activity that is immaterial and does not meet the threshold requirements of a reportable segment as provided for in Statement No. 131. Interest expense on debt is not allocated to individual Properties, even if the Properties secure such debt. Further, income allocated to Minority Interests is not allocated to the Properties. F-42 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 23. SUBSEQUENT EVENTS On January 14, 2000, the Company announced it has entered into an agreement to acquire, in an all cash and debt transaction, Globe Business Resources, Inc. ("Globe"), one of the nation's largest providers of temporary corporate housing and furniture rental. Shareholders of Globe will receive $13.00 per share upon closing and up to an additional $0.50 per share post closing, upon final determination of costs, if any, relating to any potential breaches of certain representations and covenants. At full funding of $13.50 per share, the Company would pay approximately $64.8 million in cash (based on the 4.8 million Globe shares currently outstanding). In addition, the Company will assume approximately $69.4 million in debt. The acquisition, which is expected to close during the second quarter of 2000, does not require approval of the Company's shareholders but does require Globe shareholder approval. On January 19, 2000, the Company acquired Windmont Apartments, a 178-unit multifamily property located in Atlanta, GA, from an unaffiliated third party for a purchase price of approximately $10.3 million. On January 24, 2000, the Company funded $2.3 million for an initial earnout payment to the developer of Rosecliff Apartments. On January 25, 2000, the Company settled on a $100 million forward starting swap and received $7.1 million in connection therewith. The amount received is expected to be amortized over the life of a future financing transaction that the Company expects to close in March 2000. From January 1, 2000 through March 3, 2000, the Company repaid the outstanding mortgage balances on three properties in the aggregate amount of $12.8 million. On February 4, 2000, the Company disposed of Lakeridge at the Moors Apartments, a 175-unit multifamily property located in Miami, FL, to an unaffiliated party for a total sales price of $10 million. On February 9, 2000, the Company disposed of Sonnet Cove I&II Apartments, a 331-unit multifamily property located in Lexington, KY, to an unaffiliated party for a total sales price of $12.3 million. On February 25, 2000, the Company disposed of Yuma Court Apartments, a 40-unit multifamily property located in Colorado Springs, CO, to an unaffiliated party for a total sales price of $2.4 million. On February 25, 2000, the Company disposed of Oaks of Lakebridge Apartments, a 170-unit multifamily property located in Ormond Beach, FL, to an unaffiliated party for a total sales price of $7.8 million. On February 25, 2000, the Company disposed of Indigo Plantation Apartments, a 304-unit multifamily property located in Daytona Beach, FL, to an unaffiliated party for a total sales price of $14.2 million. On March 3, 2000, Lexford Properties, L.P., a wholly-owned subsidiary of the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative Convertible Redeemable Preference Units with an equity value of $55.0 million. Lexford Properties, L.P. received $53.6 million in net proceeds from this transaction. The liquidation value of these units is $50 per unit. The 1.1 million units are exchangeable into 1.1 million shares of 8.50% Series M-1 Cumulative Redeemable Preferred Shares of F-43 EQUITY RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Beneficial Interest of the Company. The Series M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the Series B Preference Units or the Series M-1 Preferred Shares are payable quarterly at the rate of $4.25 per unit/share per year. 24. QUARTERLY FINANCIAL DATA (UNAUDITED) The following unaudited quarterly data has been prepared on the basis of a December 31 year-end. The 1999 and 1998 net income per weighted average Common Share amounts have been presented and, where appropriate, restated to comply with Statement of Financial Accounting Standards No. 128, Earnings Per Share. For further discussion of net income per share and the impact of Statement No. 128, see Note 14 of Notes to Consolidated Financial Statements. Amounts are in thousands, except for per share amounts.
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER 1999 3/31 6/30 9/30 12/31 - ---------------------------------------------------------------------------------------------------------------- Total revenues $416,137 $422,222 $435,188 $479,571 ========= ========= ========= ======== Income before allocation to Minority Interests $100,680 $104,050 $102,931 $115,756 ======== ========= ========= ======== Net income $93,554 $96,662 $95,891 $107,774 ======== ======== ======== ======== Net income available to Common Shares $64,177 $68,928 $67,884 $79,696 ======= ======= ======= ======= Weighted average Common Shares outstanding 118,956 120,558 122,312 126,788 ======= ======= ======= ======= Net income per share - basic $0.54 $0.57 $0.56 $0.63 ===== ===== ===== ===== Net income per share - diluted $0.54 $0.57 $0.55 $0.63 ===== ===== ===== =====
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER 1998 3/31 6/30 9/30 12/31 - ---------------------------------------------------------------------------------------------------------------- Total revenues $286,291 $306,959 $339,249 $404,497 ========= ========= ========= ======== Income before allocation to Minority Interests $61,275 $72,357 $61,102 $82,001 ======= ======== ======== ======= Net income $57,587 $67,735 $56,572 $76,312 ======== ======== ======== ======= Net income available to Common Shares $35,895 $46,043 $34,881 $48,470 ======= ======= ======= ======= Weighted average Common Shares outstanding 93,361 97,405 97,089 113,440 ====== ====== ====== ======= Net income per share - basic $0.38 $0.47 $0.36 $0.43 ===== ===== ===== ===== Net income per share - diluted $0.38 $0.47 $0.36 $0.42 ===== ===== ===== =====
F-44 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ 2300 Elliott Seattle, WA $ - $ 796,700 $ 7,173,725 2900 on First Combined Seattle, WA - 1,176,400 10,600,360 3000 Grand Des Moines, IA - 858,305 7,736,013 740 River Drive St. Paul, MN 6,648,364 1,620,000 11,232,943 7979 Westheimer Houston, TX - 1,388,400 12,497,975 Acacia Creek Scottsdale, AZ 20,790,723 6,121,856 35,380,172 Acadia Court Bloomington, IN 2,092,837 257,484 2,317,353 Acadia Court II Bloomington, IN 1,806,908 253,636 2,282,721 Adams Farm Greensboro, NC - 2,350,000 30,073,197 Alderwood Park Lynnwood, WA 4,030,879 3,760,000 8,110,530 Altamonte San Antonio, TX (S) 1,663,100 14,986,474 Amberidge Detroit, MI 919,875 130,844 1,177,598 Amberton Manassas, VA 10,597,067 888,800 8,474,461 Amberwood (OH) Canton, OH 887,691 126,227 1,136,042 Amberwood I (FL) Jacksonville, FL 397,879 101,744 915,696 Amesbury I Columbus, OH 1,228,447 143,039 1,287,355 Amesbury II Columbus, OH 1,275,358 180,588 1,625,293 Amhurst (Tol) Toledo, OH 804,321 161,854 1,456,683 Amhurst I (OH) Dayton, OH 902,927 152,574 1,373,165 Amhurst II (OH) Dayton, OH 934,952 159,416 1,434,748 Andover Court Columbus, OH 719,453 123,875 1,114,873 Annhurst (IN) Indianpolis, IN 1,275,000 189,235 1,703,117 Annhurst (PA) Pittsburgh, PA 1,951,830 307,952 2,771,572 Annhurst II (OH) Columbus, OH 1,064,340 116,739 1,050,648 Annhurst III (OH) Columbus, OH 866,157 134,788 1,213,092 Ansley Oaks St. Louis, IL - 134,522 1,210,697 Apple Ridge I Columbus, OH 1,036,653 139,300 1,253,697 Apple Ridge III Columbus, OH 577,684 72,585 653,268 Apple Run (MI) Jackson, MI 497,314 87,459 787,133 Apple Run II (Col) Columbus, OH - 93,810 844,292 Applegate (Chi) Columbus, OH 529,497 7,738 69,640 Applegate (Col) Bloomington, IN 940,163 171,829 1,546,462 Applegate (Lor) Youngstown, OH 512,809 66,488 598,393 Applegate I (IN) Muncie, IN 924,977 138,506 1,246,551 Applegate II (IN) Muncie, IN 1,236,009 180,017 1,620,150 Applerun (War) Youngstown, OH 670,142 113,303 1,019,729 Applewood I & II Daytona Beach, FL 2,193,626 235,230 2,117,074 Aragon Woods Indianpolis, IN 1,104,739 157,791 1,420,119 Arbor Glen Pittsfield Twp, MI - 1,092,300 9,887,635 Arboretum (AZ) Tucson, AZ (P) 3,453,446 19,020,019 Arboretum (GA) Atlanta, GA - 4,679,400 15,937,649 Arboretum (MA) Canton, MA (S) 4,680,000 10,995,641 Arbors at Century Center Memphis, TN - 2,520,000 15,236,996 Arbors of Brentwood Nashville, TN (D) 404,570 13,536,367 Arbors of Hickory Hollow Nashville, TN (D) 202,285 6,937,209 Arbors of Las Colinas Irving, TX - 1,662,300 15,385,713 Ashford Hill Columbus, OH 1,400,000 184,985 1,664,868 Ashgrove (IN) Indianpolis, IN 866,676 172,924 1,556,316 Ashgrove (KY) Louisville, KY 1,050,088 171,816 1,546,342 Ashgrove (Mar) Battle Creek, MI 839,002 119,823 1,078,405 Ashgrove (OH) Cincinnati, OH 1,261,088 157,535 1,417,811 Ashgrove I (MI) Detroit, MI 3,284,510 403,580 3,632,218 Ashgrove II (MI) Detroit, MI 2,301,646 311,912 2,807,210 Ashton, The Corona Hills, CA - 2,594,264 33,042,398 Aspen Crossing Silver Spring, MD - 2,880,000 8,561,456 Audubon Village Tampa, FL - 3,576,000 26,121,909
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ 2300 Elliott $ 100 $ 2,935,619 $ 796,800 $ 10,109,344 $ 10,906,144 2900 on First Combined 1,300 1,221,640 1,177,700 11,822,000 12,999,700 3000 Grand - 1,479,910 858,305 9,215,923 10,074,228 740 River Drive 6,700 667,316 1,626,700 11,900,258 13,526,958 7979 Westheimer 1,700 1,403,830 1,390,100 13,901,805 15,291,905 Acacia Creek - 826,219 6,121,856 36,206,391 42,328,247 Acadia Court - 4,007 257,484 2,321,360 2,578,844 Acadia Court II - 3,287 253,636 2,286,008 2,539,643 Adams Farm - 192,947 2,350,000 30,266,144 32,616,144 Alderwood Park 7,400 251,284 3,767,400 8,361,813 12,129,213 Altamonte 1,970 1,079,239 1,665,070 16,065,713 17,730,783 Amberidge - 2,644 130,844 1,180,241 1,311,085 Amberton 11,800 953,021 900,600 9,427,482 10,328,082 Amberwood (OH) - 3,281 126,227 1,139,323 1,265,550 Amberwood I (FL) - 1,612 101,744 917,309 1,019,053 Amesbury I - 6,063 143,039 1,293,418 1,436,458 Amesbury II - 2,489 180,588 1,627,782 1,808,370 Amhurst (Tol) - 3,345 161,854 1,460,028 1,621,882 Amhurst I (OH) - 5,899 152,574 1,379,064 1,531,638 Amhurst II (OH) - 3,173 159,416 1,437,921 1,597,337 Andover Court - 750 123,875 1,115,623 1,239,498 Annhurst (IN) - 25,662 189,235 1,728,780 1,918,015 Annhurst (PA) - 7,495 307,952 2,779,067 3,087,019 Annhurst II (OH) - 964 116,739 1,051,612 1,168,351 Annhurst III (OH) - 4,691 134,788 1,217,784 1,352,572 Ansley Oaks - 6,779 134,522 1,217,476 1,351,998 Apple Ridge I - 2,067 139,300 1,255,765 1,395,064 Apple Ridge III - 2,113 72,585 655,381 727,967 Apple Run (MI) - 3,227 87,459 790,361 877,820 Apple Run II (Col) - 2,107 93,810 846,399 940,210 Applegate (Chi) - 2,236 7,738 71,876 79,613 Applegate (Col) - 2,971 171,829 1,549,433 1,721,262 Applegate (Lor) - 2,843 66,488 601,236 667,724 Applegate I (IN) - 17,867 138,506 1,264,418 1,402,923 Applegate II (IN) - 10,066 180,017 1,630,216 1,810,233 Applerun (War) - 1,083 113,303 1,020,812 1,134,115 Applewood I & II - 46,153 235,230 2,163,227 2,398,457 Aragon Woods - 8,996 157,791 1,429,115 1,586,906 Arbor Glen 3,764 329,195 1,096,064 10,216,830 11,312,895 Arboretum (AZ) - 602,827 3,453,446 19,622,846 23,076,292 Arboretum (GA) 2,900 505,371 4,682,300 16,443,020 21,125,320 Arboretum (MA) 5,900 110,930 4,685,900 11,106,571 15,792,471 Arbors at Century Center 1,700 326,386 2,521,700 15,563,382 18,085,082 Arbors of Brentwood 100 958,708 404,670 14,495,074 14,899,744 Arbors of Hickory Hollow 700 1,613,360 202,985 8,550,569 8,753,554 Arbors of Las Colinas 1,600 1,163,452 1,663,900 16,549,165 18,213,065 Ashford Hill - 5,143 184,985 1,670,011 1,854,996 Ashgrove (IN) - 4,337 172,924 1,560,653 1,733,577 Ashgrove (KY) - 4,136 171,816 1,550,478 1,722,293 Ashgrove (Mar) - 2,800 119,823 1,081,204 1,201,027 Ashgrove (OH) - 3,088 157,535 1,420,900 1,578,434 Ashgrove I (MI) - 7,742 403,580 3,639,960 4,043,540 Ashgrove II (MI) - 5,130 311,912 2,812,340 3,124,253 Ashton, The - 381,532 2,594,264 33,423,929 36,018,193 Aspen Crossing - 207,627 2,880,000 8,769,083 11,649,083 Audubon Village - 407,722 3,576,000 26,529,631 30,105,631
LIFE USED TO COMPUTE - ------------------------------------------------------------------------- DEPRECIATION IN ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - -------------------------------------------------------------------------------------------- 2300 Elliott $ (922,189) 1992 30 Years 2900 on First Combined (1,560,994) 1989-91 30 Years 3000 Grand (5,333,188) 1970 30 Years 740 River Drive (904,264) 1962 30 Years 7979 Westheimer (2,580,432) 1973 30 Years Acacia Creek (2,731,863) 1988-1994 30 Years Acadia Court (20,996) 1985 30 Years Acadia Court II (20,862) 1986 30 Years Adams Farm (1,381,592) 1987 30 Years Alderwood Park (448,619) 1982 30 Years Altamonte (3,306,194) 1985 30 Years Amberidge (10,682) 1985 30 Years Amberton (1,758,943) 1986 30 Years Amberwood (OH) (10,627) 1987 30 Years Amberwood I (FL) (8,521) 1981 30 Years Amesbury I (12,005) 1986 30 Years Amesbury II (14,957) 1987 30 Years Amhurst (Tol) (13,191) 1983 30 Years Amhurst I (OH) (12,854) 1979 30 Years Amhurst II (OH) (13,293) 1981 30 Years Andover Court (10,163) 1982 30 Years Annhurst (IN) (16,379) 1985 30 Years Annhurst (PA) (24,948) 1984 30 Years Annhurst II (OH) (9,682) 1986 30 Years Annhurst III (OH) (11,136) 1988 30 Years Ansley Oaks (11,446) 1986 30 Years Apple Ridge I (11,513) 1987 30 Years Apple Ridge III (6,005) 1982 30 Years Apple Run (MI) (7,314) 1982 30 Years Apple Run II (Col) (7,951) 1980 30 Years Applegate (Chi) (1,330) 1981 30 Years Applegate (Col) (13,939) 1982 30 Years Applegate (Lor) (5,698) 1982 30 Years Applegate I (IN) (11,476) 1984 30 Years Applegate II (IN) (15,034) 1987 30 Years Applerun (War) (9,329) 1983 30 Years Applewood I & II (22,519) 1982 30 Years Aragon Woods (13,287) 1986 30 Years Arbor Glen (814,768) 1990 30 Years Arboretum (AZ) (1,571,619) 1987 30 Years Arboretum (GA) (1,264,590) 1970 30 Years Arboretum (MA) (644,133) 1989 30 Years Arbors at Century Center (859,174) 1988/1990 30 Years Arbors of Brentwood (3,465,757) 1986 30 Years Arbors of Hickory Hollow (2,474,364) 1986 30 Years Arbors of Las Colinas (3,681,305) 1984/85 30 Years Ashford Hill (15,312) 1986 30 Years Ashgrove (IN) (14,028) 1983 30 Years Ashgrove (KY) (14,040) 1984 30 Years Ashgrove (Mar) (9,912) 1983 30 Years Ashgrove (OH) (12,950) 1983 30 Years Ashgrove I (MI) (32,433) 1985 30 Years Ashgrove II (MI) (25,053) 1987 30 Years Ashton, The (2,464,027) 1986 30 Years Aspen Crossing (307,059) 1979 30 Years Audubon Village (1,214,035) 1990 30 Years
S-1
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Augustine Club Tallahassee, FL - 1,110,000 8,906,841 Autumn Cove Atlanta, GA 741,297 187,220 1,684,983 Autumn Creek Cordova, TN (E) 1,680,000 9,345,282 Auvers Village Orlando, FL - 3,840,000 29,322,243 Bainbridge Durham, NC - 1,042,900 9,688,677 Balcones Club Austin, TX - 2,184,000 10,128,165 Banyan Lake Boynton Beach, FL - 2,736,000 11,227,892 Barrington Atlanta, GA 1,018,645 144,459 1,300,132 Bay Club Phoenix, AZ - 828,100 6,221,786 Bay Ridge San Pedro, CA - 2,385,399 2,176,963 Bayside Lakeland, FL - 73,463 661,165 Bayside at the Islands Gilbert, AZ (O) 3,306,484 15,573,006 Beach Club Fort Myers, FL - 2,080,000 14,800,928 Bear Canyon Tucson, AZ 8,482,946 1,660,608 11,228,524 Beckford Place (IN) Indianpolis, IN 715,911 99,046 891,413 Beckford Place (Pla) Parkersburg, OH 1,013,959 161,161 1,450,447 Beckford Place (Wap) Lima, OH 620,607 76,491 688,419 Beckford Place I (OH) Canton, OH 1,161,993 168,426 1,515,830 Beckford Place II (OH) Canton, OH 1,229,833 172,134 1,549,209 Bel Aire I Miami, FL - 188,343 1,695,084 Bel Aire II Miami, FL - 136,416 1,227,745 Bell Road I & II Nashville, TN - 3,100,000 846,693 Bellevue Meadows Bellevue, WA - 4,500,000 12,574,814 Belmont Crossing Riverdale, GA - 1,580,000 18,449,045 Belmont Landing Riverdale, GA - 2,120,000 21,651,256 Beneva Place Sarasota, FL 8,700,000 1,344,000 9,665,447 Berkshire Place Charlotte, NC - 805,550 12,540,032 Bermuda Cove Jacksonville, FL - 1,503,000 19,561,896 Berry Pines Pensacola, FL 989,344 154,086 1,386,772 Birches, The Lima, OH 973,805 94,798 853,180 Bishop Park Winter Park, FL - 2,592,000 17,982,357 Blue Swan San Antonio, TX (E) 1,424,800 7,596,023 Blueberry Hill I Orlando, FL 738,919 140,370 1,263,328 Boulder Creek Wilsonville, OR - 3,552,000 11,485,309 Bourbon Square Combined Palatine, IL 26,950,227 3,982,600 35,870,194 Bradford Place St. Louis, IL 1,098,789 140,356 1,263,208 Bramblewood San Jose, CA - 5,184,000 9,658,072 Branchwood Orlando, FL - 324,069 2,916,617 Brandon Court Bloomington, IN 1,428,498 170,636 1,535,722 Brandywine E. Lakeland, FL 595,521 88,126 793,138 Breckenridge Lexington, KY 9,162,971 1,645,800 14,845,715 Brentwood Vancouver, WA - 1,318,200 12,202,521 Breton Mill Houston, TX (F) 212,720 8,547,263 Briarwood (CA) Sunnyvale, CA 14,103,692 9,984,000 22,265,278 Bridford Lakes Greensboro, NC - 2,265,314 25,823,941 Bridge Creek Wilsonville, OR - 1,294,600 11,690,114 Bridgeport Raleigh, NC - 1,296,200 11,942,278 Bridgewater at Wells Crossing Orange Park, FL - 2,160,000 13,347,474 Brierwood Jacksonville, FL - 546,100 4,965,856 Brittany Square Tulsa, OK - 625,000 4,236,498 Brixworth Nashville, TN - 1,172,100 10,564,856 Broadway Garland, TX 6,106,827 1,440,000 7,803,082 Brookdale Village Naperville, IL 11,490,000 3,276,000 16,360,060 Brookfield Salt Lake City, UT - 1,152,000 5,682,453 Brookridge Centreville, VA (E) 2,520,000 16,007,356 Brookside (CO) Boulder, CO - 3,600,000 10,212,594 Brookside (MD) Frederick, MD 8,203,145 2,736,000 8,156,453
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ----------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) - ----------------------------------------------------------------------------------------------------------------------------- Augustine Club - 51,948 1,110,000 8,958,789 Autumn Cove - 1,536 187,220 1,686,519 Autumn Creek 1,900 170,212 1,681,900 9,515,494 Auvers Village - 317,058 3,840,000 29,639,301 Bainbridge 33,400 1,169,267 1,076,300 10,857,944 Balcones Club 1,500 442,458 2,185,500 10,570,623 Banyan Lake 2,600 553,268 2,738,600 11,781,160 Barrington - 8,774 144,459 1,308,906 Bay Club 100 1,595,448 828,200 7,817,234 Bay Ridge 15,901 42,715 2,401,300 2,219,678 Bayside - 6,044 73,463 667,210 Bayside at the Islands - 248,089 3,306,484 15,821,095 Beach Club - 374,079 2,080,000 15,175,007 Bear Canyon - 84,261 1,660,608 11,312,784 Beckford Place (IN) - 15,144 99,046 906,558 Beckford Place (Pla) - 14,180 161,161 1,464,627 Beckford Place (Wap) - 2,224 76,491 690,643 Beckford Place I (OH) - 2,538 168,426 1,518,368 Beckford Place II (OH) - 2,446 172,134 1,551,655 Bel Aire I - 8,251 188,343 1,703,335 Bel Aire II - 6,957 136,416 1,234,702 Bell Road I & II - - 3,100,000 846,693 Bellevue Meadows 7,100 84,737 4,507,100 12,659,552 Belmont Crossing - 122,063 1,580,000 18,571,108 Belmont Landing - 220,121 2,120,000 21,871,377 Beneva Place - 98,710 1,344,000 9,764,156 Berkshire Place - 93,866 805,550 12,633,898 Bermuda Cove - 196,306 1,503,000 19,758,202 Berry Pines - 11,378 154,086 1,398,150 Birches, The - 1,869 94,798 855,048 Bishop Park - 1,217,731 2,592,000 19,200,088 Blue Swan 700 400,660 1,425,500 7,996,683 Blueberry Hill I - 4,073 140,370 1,267,401 Boulder Creek 2,400 544,576 3,554,400 12,029,885 Bourbon Square Combined 2,700 5,323,864 3,985,300 41,194,058 Bradford Place - 8,912 140,356 1,272,120 Bramblewood 6,700 143,451 5,190,700 9,801,522 Branchwood - 3,175 324,069 2,919,791 Brandon Court - 6,044 170,636 1,541,765 Brandywine E. - 2,152 88,126 795,290 Breckenridge 2,500 484,825 1,648,300 15,330,540 Brentwood 39,021 849,109 1,357,221 13,051,631 Breton Mill 100 742,697 212,820 9,289,960 Briarwood (CA) 7,500 63,517 9,991,500 22,328,795 Bridford Lakes - 342,755 2,265,314 26,166,696 Bridge Creek 5,290 1,524,030 1,299,890 13,214,144 Bridgeport 500 297,325 1,296,700 12,239,604 Bridgewater at Wells Crossing - (20,800) 2,160,000 13,326,674 Brierwood 5,800 717,682 551,900 5,683,537 Brittany Square - 650,495 625,000 4,886,993 Brixworth 1,700 356,644 1,173,800 10,921,500 Broadway 3,700 315,030 1,443,700 8,118,112 Brookdale Village - 76,870 3,276,000 16,436,929 Brookfield 1,000 120,039 1,153,000 5,802,492 Brookridge 1,500 238,305 2,521,500 16,245,660 Brookside (CO) 400 36,220 3,600,400 10,248,814 Brookside (MD) - 50,702 2,736,000 8,207,155
LIFE USED TO COMPUTE - ------------------------------------------------------------------------------------------------ DEPRECIATION IN ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C) - ------------------------------------------------------------------------------------------------------------------- Augustine Club 10,068,789 (419,933) 1988 30 Years Autumn Cove 1,873,739 (14,911) 1985 30 Years Autumn Creek 11,197,394 (803,105) 1991 30 Years Auvers Village 33,479,301 (1,343,424) 1991 30 Years Bainbridge 11,934,244 (2,345,416) 1984 30 Years Balcones Club 12,756,123 (777,309) 1984 30 Years Banyan Lake 14,519,760 (1,231,543) 1986 30 Years Barrington 1,453,365 (11,919) 1984 30 Years Bay Club 8,645,434 (2,061,881) 1976 30 Years Bay Ridge 4,620,978 (228,161) 1987 30 Years Bayside 740,672 (6,597) 1982 30 Years Bayside at the Islands 19,127,579 (1,188,034) 1989 30 Years Beach Club 17,255,007 (719,580) 1990 30 Years Bear Canyon 12,973,392 (850,529) 1996 30 Years Beckford Place (IN) 1,005,603 (8,496) 1984 30 Years Beckford Place (Pla) 1,625,788 (13,460) 1982 30 Years Beckford Place (Wap) 767,134 (6,449) 1981 30 Years Beckford Place I (OH) 1,686,794 (13,733) 1983 30 Years Beckford Place II (OH) 1,723,789 (13,975) 1985 30 Years Bel Aire I 1,891,678 (15,413) 1985 30 Years Bel Aire II 1,371,118 (11,173) 1986 30 Years Bell Road I & II 3,946,693 - (R) 30 Years Bellevue Meadows 17,166,652 (686,762) 1983 30 Years Belmont Crossing 20,151,108 (845,370) 1988 30 Years Belmont Landing 23,991,377 (1,001,635) 1988 30 Years Beneva Place 11,108,156 (449,277) 1986 30 Years Berkshire Place 13,439,448 (581,657) 1982 30 Years Bermuda Cove 21,261,202 (896,951) 1989 30 Years Berry Pines 1,552,236 (13,025) 1985 30 Years Birches, The 949,846 (8,117) 1977 30 Years Bishop Park 21,792,088 (865,075) 1991 30 Years Blue Swan 9,422,183 (708,614) 1985-1994 30 Years Blueberry Hill I 1,407,771 (11,808) 1986 30 Years Boulder Creek 15,584,285 (1,265,906) 1991 30 Years Bourbon Square Combined 45,179,358 (9,308,546) 1984-87 30 Years Bradford Place 1,412,477 (11,769) 1986 30 Years Bramblewood 14,992,222 (522,533) 1986 30 Years Branchwood 3,243,860 (26,379) 1981 30 Years Brandon Court 1,712,401 (14,224) 1984 30 Years Brandywine E. 883,416 (7,316) 1981 30 Years Breckenridge 16,978,840 (1,235,360) 1986-1987 30 Years Brentwood 14,408,852 (2,423,484) 1990 30 Years Breton Mill 9,502,780 (2,138,545) 1986 30 Years Briarwood (CA) 32,320,295 (1,102,269) 1985 30 Years Bridford Lakes 28,432,010 (1,228,501) 1999 30 Years Bridge Creek 14,514,034 (3,026,340) 1987 30 Years Bridgeport 13,536,304 (2,691,810) 1990 30 Years Bridgewater at Wells Crossing 15,486,674 (21,021) 1986 30 Years Brierwood 6,235,437 (830,482) 1974 30 Years Brittany Square 5,511,993 (2,683,742) 1982 30 Years Brixworth 12,095,300 (1,401,742) 1985 30 Years Broadway 9,561,812 (495,896) 1983 30 Years Brookdale Village 19,712,929 (276,898) 1986 30 Years Brookfield 6,955,492 (502,518) 1985 30 Years Brookridge 18,767,160 (1,310,622) 1989 30 Years Brookside (CO) 13,849,214 (580,483) 1993 30 Years Brookside (MD) 10,943,155 (211,691) 1993 30 Years
S-2 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Brookside II (MD) Frederick, MD - 2,448,000 6,929,404 Brunswick (IL) Champaign, IL 1,392,689 199,520 1,795,683 Brunswick I (WV) Pittsburgh, PA 1,693,948 241,739 2,175,654 Brunswick II (WV) Pittsburgh, WV 1,284,805 202,928 1,826,354 Burwick Farms Howell, MI 9,176,084 1,102,200 9,932,207 Calais Dallas, TX - 1,118,900 10,070,076 California Gardens Jacksonville, FL - 105,528 949,754 Cambridge at Hickory Hollow Nashville, TN (U) 3,240,000 17,903,507 Cambridge Commons I Indianapolis, IN - 179,139 1,612,253 Cambridge Commons II Indianapolis, IN 889,905 141,845 1,276,607 Cambridge Commons III Indianapolis, IN - 98,125 883,124 Cambridge Village Lewisville, TX - 800,000 8,762,606 Camden Way I Jacksonville, GA 923,892 109,240 983,156 Camden Way II Jacksonville, GA 745,698 105,552 949,969 Camellero Scottsdale, AZ 11,597,077 1,923,600 17,324,593 Camellia Court (KY) Louisville, KY 593,319 115,620 1,040,578 Camellia Court (OH) Columbus, OH 565,693 68,584 617,254 Camellia Court I (Col) Columbus, OH 1,007,909 133,059 1,197,529 Camellia Court I (Day) Dayton, OH 1,096,022 131,858 1,186,725 Camellia Court II (Col) Columbus, OH 945,285 118,421 1,065,788 Camellia Court II (Day) Dayton, OH 780,269 131,571 1,184,138 Candlelight I Tampa, FL 606,065 105,000 945,002 Candlelight II Tampa, FL 600,666 95,061 855,551 Canterbury Germantown, MD 31,363,911 2,781,300 26,711,251 Canterbury Crossings Orlando, FL - 273,671 2,463,037 Canterchase Nashville, TN 5,627,420 862,200 7,765,192 Canyon Creek (AZ) Tucson, AZ - 834,313 6,083,047 Canyon Crest Santa Clarita, CA - 2,370,000 10,147,286 Canyon Crest Views Riverside, CA - 1,744,640 17,397,194 Canyon Ridge San Diego, CA - 4,869,448 11,955,064 Canyon Sands Phoenix, AZ - 1,475,900 13,436,146 Cardinal, The Greensboro, NC 7,324,402 1,280,000 11,850,557 Carleton Court (PA) Erie, PA - 128,528 1,156,756 Carleton Court (WV) Charleston, WV 1,341,720 196,222 1,766,001 Carmel Terrace San Diego, CA - 2,288,300 20,596,281 Carolina Crossing Greenville, SC - 547,800 4,949,619 Carriage Hill Macon, GA 688,124 131,911 1,187,196 Carriage Homes at Wyndham Glen Allen, VA - 1,736,000 27,448,696 Casa Capricorn San Diego, CA - 1,260,100 11,365,093 Casa Ruiz San Diego, CA - 3,920,000 9,389,153 Cascade at Landmark Alexandria, VA - 3,601,000 19,672,036 Catalina Shores Las Vegas, NV - 1,222,200 11,042,867 Catalina Shores (WRP) Las Vegas, NV - 1,427,200 12,844,277 Cedar Crest Overland Park, KS 14,108,784 2,159,800 19,425,812 Cedar Hill Knoxville, TN 1,452,748 204,792 1,843,131 Cedar Ridge (TX) Arlington, TX 3,537,028 605,000 4,238,427 Cedargate (GA) Atlanta, GA 860,724 205,043 1,845,391 Cedargate (MI) Southbend, IN 798,043 120,378 1,083,403 Cedargate (She) Louisville, KY 1,205,960 158,685 1,428,168 Cedargate I (Cla) Dayton, OH 1,237,463 159,599 1,436,393 Cedargate I (IN) Bloomington, IN 1,115,965 191,650 1,724,853 Cedargate I (KY) Louisville, KY 847,702 165,397 1,488,569 Cedargate I (OH) Columbus, OH 2,249,899 240,587 2,165,281 Cedargate II (IN) Bloomington, IN 1,106,850 165,041 1,485,367 Cedargate II (KY) Louisville, KY 1,160,000 140,895 1,268,055 Cedargate II (OH) Columbus, OH 703,354 87,618 788,563 Cedars, The Charlotte, NC - 2,025,300 18,225,424 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Brookside II (MD) 2,800 346,930 2,450,800 7,276,335 9,727,135 Brunswick (IL) - 4,831 199,520 1,800,513 2,000,034 Brunswick I (WV) - 17,670 241,739 2,193,325 2,435,064 Brunswick II (WV) - 9,842 202,928 1,836,196 2,039,125 Burwick Farms 2,400 250,695 1,104,600 10,182,902 11,287,502 Calais - 424,486 1,118,900 10,494,562 11,613,462 California Gardens - 8,619 105,528 958,372 1,063,900 Cambridge at Hickory Hollow 800 211,835 3,240,800 18,115,343 21,356,143 Cambridge Commons I - 23,097 179,139 1,635,349 1,814,488 Cambridge Commons II - 27,778 141,845 1,304,386 1,446,231 Cambridge Commons III - 13,875 98,125 896,999 995,124 Cambridge Village 1,300 410,179 801,300 9,172,786 9,974,086 Camden Way I - 11,408 109,240 994,564 1,103,803 Camden Way II - 1,024 105,552 950,993 1,056,545 Camellero 1,300 2,791,342 1,924,900 20,115,935 22,040,835 Camellia Court (KY) - 1,492 115,620 1,042,070 1,157,690 Camellia Court (OH) - 2,642 68,584 619,896 688,480 Camellia Court I (Col) - 4,245 133,059 1,201,774 1,334,833 Camellia Court I (Day) - 4,285 131,858 1,191,010 1,322,868 Camellia Court II (Col) - 1,315 118,421 1,067,103 1,185,524 Camellia Court II (Day) - 2,417 131,571 1,186,555 1,318,125 Candlelight I - 5,210 105,000 950,213 1,055,213 Candlelight II - 6,404 95,061 861,955 957,016 Canterbury - 2,941,680 2,781,300 29,652,931 32,434,231 Canterbury Crossings - 4,393 273,671 2,467,430 2,741,100 Canterchase 1,400 552,637 863,600 8,317,829 9,181,429 Canyon Creek (AZ) 100 381,397 834,413 6,464,444 7,298,857 Canyon Crest - 180,685 2,370,000 10,327,972 12,697,972 Canyon Crest Views - 239,927 1,744,640 17,637,121 19,381,761 Canyon Ridge - 191,180 4,869,448 12,146,244 17,015,692 Canyon Sands 16,850 510,150 1,492,750 13,946,296 15,439,046 Cardinal, The 1,200 194,770 1,281,200 12,045,327 13,326,527 Carleton Court (PA) - 3,325 128,528 1,160,081 1,288,609 Carleton Court (WV) - 2,820 196,222 1,768,822 1,965,044 Carmel Terrace - 504,482 2,288,300 21,100,763 23,389,063 Carolina Crossing 2,400 219,279 550,200 5,168,898 5,719,098 Carriage Hill - 583 131,911 1,187,779 1,319,690 Carriage Homes at Wyndham - 35,987 1,736,000 27,484,683 29,220,683 Casa Capricorn 2,600 415,546 1,262,700 11,780,639 13,043,339 Casa Ruiz 2,400 173,918 3,922,400 9,563,071 13,485,471 Cascade at Landmark 2,400 386,827 3,603,400 20,058,863 23,662,263 Catalina Shores 4,800 616,049 1,227,000 11,658,916 12,885,916 Catalina Shores (WRP) - 136,297 1,427,200 12,980,574 14,407,774 Cedar Crest 900 1,689,519 2,160,700 21,115,331 23,276,031 Cedar Hill - 6,112 204,792 1,849,243 2,054,036 Cedar Ridge (TX) 3,600 58,401 608,600 4,296,829 4,905,429 Cedargate (GA) - 1,873 205,043 1,847,264 2,052,308 Cedargate (MI) - 2,139 120,378 1,085,542 1,205,920 Cedargate (She) - 4,208 158,685 1,432,376 1,591,061 Cedargate I (Cla) - 3,128 159,599 1,439,521 1,599,120 Cedargate I (IN) - 932 191,650 1,725,785 1,917,435 Cedargate I (KY) - 9,136 165,397 1,497,705 1,663,101 Cedargate I (OH) - 7,465 240,587 2,172,746 2,413,333 Cedargate II (IN) - 501 165,041 1,485,868 1,650,909 Cedargate II (KY) - 2,459 140,895 1,270,514 1,411,409 Cedargate II (OH) - 5,656 87,618 794,219 881,837 Cedars, The 2,879 454,674 2,028,179 18,680,098 20,708,277 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ----------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ------------------------------------------------------------------------------------------- Brookside II (MD) (425,804) 1979 30 Years Brunswick (IL) (16,411) 1986 30 Years Brunswick I (WV) (20,211) 1986 30 Years Brunswick II (WV) (16,777) 1987 30 Years Burwick Farms (876,755) 1991 30 Years Calais (1,052,951) 1986 30 Years California Gardens (9,393) 1987 30 Years Cambridge at Hickory Hollow (1,520,957) 1997 30 Years Cambridge Commons I (15,364) 1986 30 Years Cambridge Commons II (12,550) 1987 30 Years Cambridge Commons III (8,971) 1988 30 Years Cambridge Village (856,706) 1987 30 Years Camden Way I (9,527) 1985 30 Years Camden Way II (8,908) 1986 30 Years Camellero (3,362,648) 1979 30 Years Camellia Court (KY) (9,638) 1982 30 Years Camellia Court (OH) (5,902) 1981 30 Years Camellia Court I (Col) (11,185) 1981 30 Years Camellia Court I (Day) (10,946) 1981 30 Years Camellia Court II (Col) (9,591) 1984 30 Years Camellia Court II (Day) (10,820) 1982 30 Years Candlelight I (8,874) 1982 30 Years Candlelight II (8,365) 1985 30 Years Canterbury (5,545,041) 1986 30 Years Canterbury Crossings (21,854) 1983 30 Years Canterchase (1,166,563) 1985 30 Years Canyon Creek (AZ) (1,596,443) 1986 30 Years Canyon Crest (226,931) 1993 30 Years Canyon Crest Views (1,274,377) 1982-1983 30 Years Canyon Ridge (892,881) 1989 30 Years Canyon Sands (2,061,724) 1983 30 Years Cardinal, The (1,247,214) 1994 30 Years Carleton Court (PA) (10,774) 1985 30 Years Carleton Court (WV) (16,028) 1985 30 Years Carmel Terrace (3,931,878) 1988-89 30 Years Carolina Crossing (460,588) 1988-89 30 Years Carriage Hill (10,920) 1985 30 Years Carriage Homes at Wyndham (1,206,396) 1999 30 Years Casa Capricorn (1,417,659) 1981 30 Years Casa Ruiz (837,630) 1976-1986 30 Years Cascade at Landmark (1,895,299) 1990 30 Years Catalina Shores (2,439,001) 1989 30 Years Catalina Shores (WRP) (1,246,328) 1989 30 Years Cedar Crest (2,848,098) 1986 30 Years Cedar Hill (16,777) 1986 30 Years Cedar Ridge (TX) (247,895) 1980 30 Years Cedargate (GA) (16,359) 1983 30 Years Cedargate (MI) (9,961) 1983 30 Years Cedargate (She) (13,045) 1984 30 Years Cedargate I (Cla) (13,087) 1984 30 Years Cedargate I (IN) (15,546) 1983 30 Years Cedargate I (KY) (13,653) 1983 30 Years Cedargate I (OH) (20,157) 1982 30 Years Cedargate II (IN) (13,370) 1985 30 Years Cedargate II (KY) (11,597) 1986 30 Years Cedargate II (OH) (7,599) 1983 30 Years Cedars, The (1,264,053) 1983 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Cedarwood (OH) Parkersburg, OH 429,100 23,916 215,243 Cedarwood I (Bel) Parkersburg, OH - 82,082 738,735 Cedarwood I (FL) Ocala, FL 742,098 119,470 1,075,226 Cedarwood I and II (IN) Elkhart, IN 1,935,444 251,745 2,265,704 Cedarwood I (KY) Lexington, KY 725,701 106,681 960,127 Cedarwood II (FL) Ocala, FL 565,693 98,372 885,352 Cedarwood II (KY) Lexington, KY 996,680 106,724 960,518 Cedarwood III (KY) Lexington, KY 851,423 102,491 922,420 Celebration Westchase Houston, TX - 2,204,590 6,667,960 Centre Lake III Miami, FL 4,746,131 685,601 6,170,412 Champion Oaks Houston, TX 6,594,689 931,900 8,389,394 Champions Club Glen Allen, VA - 954,000 12,417,167 Champion's Park Norcross, GA - 1,134,000 14,570,304 Chandler Court Chandler, AZ - 1,352,600 12,175,173 Chandler's Bay Kent, WA - 1,503,400 13,640,021 Chantecleer Lakes Naperville, IL (E) 6,688,000 16,341,986 Chaparral Largo, FL - 303,100 6,261,338 Chardonnay Park Redmond, WA 3,426,890 1,297,500 6,725,737 Charing Cross Toledo, OH 804,122 154,584 1,391,260 Charter Club Everett, WA - 998,700 9,012,305 Chartwell Court Houston, TX - 1,215,000 12,827,843 Chatelaine Park Duluth, GA - 1,818,000 24,489,671 Chatham Wood High Point, NC - 700,000 8,311,884 Chelsea Court Cleveland, OH 684,336 145,835 1,312,517 Chelsea Square Redmond, WA - 3,390,000 9,289,074 Cherry Creek I,II,&III (TN) Hermitage, TN - 2,942,345 45,483,592 Cherry Glen I & II Indianapolis, IN 3,176,114 335,596 3,020,362 Cherry Hill Seattle, WA - 700,100 6,300,112 Cherry Tree Baltimore, MD 2,009,159 352,003 3,168,025 Chestnut Hills Tacoma, WA - 756,300 6,806,635 Cheyenne Crest Colorado Springs, CO - 73,950 4,131,145 Chicksaw Crossing Orlando, FL 11,707,137 2,044,000 12,366,832 Chimneys Charlotte, NC - 904,700 8,154,674 Cierra Crest Denver, CO 21,409,834 4,800,000 34,894,898 Cimarron Ridge Denver, CO - 1,591,100 14,320,031 Cityscape South Louis Park, MN (U) 1,560,000 10,794,604 Claire Point Jacksonville, FL - 2,048,000 14,649,393 Clarion Decatur, GA - 1,501,900 13,537,919 Clarys Crossing Columbia, MD - 891,000 15,489,721 Classic, The Stamford, CT - 2,880,000 19,918,680 Clearlake Pines II Melbourne, FL 893,282 119,280 1,073,518 Clearview I Indianapolis, IN 1,091,745 182,206 1,639,850 Clearview II Indianapolis, IN - 226,963 2,042,667 Clearwater Cleveland, OH 1,036,652 128,303 1,154,728 Cloisters on the Green Lexington, KY - 187,074 1,746,721 Club at Tanasbourne Hillsboro, OR 10,981,261 3,520,000 16,271,439 Club at the Green Beaverton, OR - 2,030,150 12,622,687 Coach Lantern Scarborough, ME - 450,000 4,405,723 Coachman Trails Plymouth, MN 6,491,117 1,224,000 9,532,005 Coconut Palm Club Coconut Creek, GA - 3,000,000 17,689,319 Colinas Pointe Denver, CO (E) 1,587,400 14,285,902 Colony Place Fort Myers, FL - 1,500,000 20,920,274 Colony Woods Birmingham, AL 12,628,842 1,656,000 21,787,686 Concord Square Cincinnati, OH - 121,509 1,093,577 Concord Square (IN) Kokomo, IN 749,854 123,247 1,109,220 Concord Square I & II (OH) Mansfiled, OH 1,240,279 164,124 1,477,118 Concorde Bridge Overland Park, KS - 1,972,400 17,776,438 OST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME AND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Cedarwood (OH) - 7,433 23,916 222,676 246,592 Cedarwood I (Bel) - 2,249 82,082 740,983 823,065 Cedarwood I (FL) - 5,118 119,470 1,080,344 1,199,814 Cedarwood I and II (IN) - 5,809 251,745 2,271,513 2,523,258 Cedarwood I (KY) - 6,114 106,681 966,241 1,072,922 Cedarwood II (FL) - 824 98,372 886,177 984,549 Cedarwood II (KY) - 10,626 106,724 971,144 1,077,868 Cedarwood III (KY) - 8,760 102,491 931,180 1,033,671 Celebration Westchase 100 959,088 2,204,690 7,627,048 9,831,738 Centre Lake III - 21,744 685,601 6,192,157 6,877,758 Champion Oaks - 698,062 931,900 9,087,455 10,019,355 Champions Club - 224,038 954,000 12,641,205 13,595,205 Champion's Park - 149,012 1,134,000 14,719,315 15,853,315 Chandler Court 500 1,328,359 1,353,100 13,503,532 14,856,632 Chandler's Bay 3,500 1,114,241 1,506,900 14,754,262 16,261,162 Chantecleer Lakes 1,400 421,596 6,689,400 16,763,582 23,452,982 Chaparral - 3,178,219 303,100 9,439,557 9,742,656 Chardonnay Park - 63,719 1,297,500 6,789,456 8,086,956 Charing Cross - 1,200 154,584 1,392,460 1,547,044 Charter Club 2,400 330,203 1,001,100 9,342,507 10,343,607 Chartwell Court 700 137,139 1,215,700 12,964,982 14,180,682 Chatelaine Park - 126,922 1,818,000 24,616,593 26,434,593 Chatham Wood - 158,743 700,000 8,470,627 9,170,627 Chelsea Court - 2,496 145,835 1,315,014 1,460,849 Chelsea Square 7,100 75,975 3,397,100 9,365,049 12,762,149 Cherry Creek I,II,&III (TN) - 38,332 2,942,345 45,521,924 48,464,269 Cherry Glen I & II - 15,041 335,596 3,035,402 3,370,998 Cherry Hill - 93,802 700,100 6,393,914 7,094,014 Cherry Tree - 8,880 352,003 3,176,905 3,528,908 Chestnut Hills - 166,132 756,300 6,972,767 7,729,067 Cheyenne Crest 100 749,398 74,050 4,880,543 4,954,593 Chicksaw Crossing - 146,530 2,044,000 12,513,362 14,557,362 Chimneys 2,400 434,384 907,100 8,589,058 9,496,158 Cierra Crest 3,100 180,735 4,803,100 35,075,632 39,878,732 Cimarron Ridge - 951,302 1,591,100 15,271,333 16,862,433 Cityscape 3,200 184,970 1,563,200 10,979,573 12,542,773 Claire Point - 214,007 2,048,000 14,863,400 16,911,400 Clarion 2,400 107,696 1,504,300 13,645,616 15,149,916 Clarys Crossing - 98,932 891,000 15,588,653 16,479,653 Classic, The 3,500 313,369 2,883,500 20,232,050 23,115,550 Clearlake Pines II - 1,967 119,280 1,075,484 1,194,764 Clearview I - 4,333 182,206 1,644,183 1,826,388 Clearview II - 5,337 226,963 2,048,005 2,274,968 Clearwater - 2,234 128,303 1,156,962 1,285,265 Cloisters on the Green - 2,315,324 187,074 4,062,045 4,249,119 Club at Tanasbourne 1,300 712,875 3,521,300 16,984,314 20,505,614 Club at the Green 800 610,142 2,030,950 13,232,829 15,263,779 Coach Lantern 2,900 109,901 452,900 4,515,624 4,968,524 Coachman Trails 3,000 163,946 1,227,000 9,695,951 10,922,951 Coconut Palm Club 1,700 322,508 3,001,700 18,011,827 21,013,527 Colinas Pointe - 286,023 1,587,400 14,571,925 16,159,325 Colony Place - 194,577 1,500,000 21,114,851 22,614,851 Colony Woods 1,300 101,463 1,657,300 21,889,148 23,546,448 Concord Square - 1,138 121,509 1,094,715 1,216,223 Concord Square (IN) - 4,837 123,247 1,114,057 1,237,303 Concord Square I & II (OH) - 4,349 164,124 1,481,466 1,645,590 Concorde Bridge 2,400 535,564 1,974,800 18,312,002 20,286,802 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ------------------------------------------------------------------------------------- Cedarwood (OH) (2,513) 1982 30 Years Cedarwood I (Bel) (6,987) 1980 30 Years Cedarwood I (FL) (10,037) 1978 30 Years Cedarwood I and II (IN) (20,481) 1983/84 30 Years Cedarwood I (KY) (9,053) 1984 30 Years Cedarwood II (FL) (8,056) 1980 30 Years Cedarwood II (KY) (9,205) 1986 30 Years Cedarwood III (KY) (8,704) 1986 30 Years Celebration Westchase (2,157,668) 1979 30 Years Centre Lake III (55,787) 1986 30 Years Champion Oaks (1,876,080) 1984 30 Years Champions Club (574,482) 1988 30 Years Champion's Park (672,437) 1987 30 Years Chandler Court (1,968,600) 1987 30 Years Chandler's Bay (2,950,212) 1989 30 Years Chantecleer Lakes (1,399,079) 1986 30 Years Chaparral (6,636,364) 1976 30 Years Chardonnay Park (597,014) 1982-1989 30 Years Charing Cross (12,732) 1978 30 Years Charter Club (2,031,374) 1991 30 Years Chartwell Court (960,130) 1995 30 Years Chatelaine Park (1,092,990) 1995 30 Years Chatham Wood (408,826) 1986 30 Years Chelsea Court (12,049) 1981 30 Years Chelsea Square (502,839) 1991 30 Years Cherry Creek I,II,&III (TN) (1,315,473) 1986/96 30 Years Cherry Glen I & II (27,894) 1986/87 30 Years Cherry Hill (608,893) 1991 30 Years Cherry Tree (28,275) 1986 30 Years Chestnut Hills (701,302) 1991 30 Years Cheyenne Crest (1,332,855) 1984 30 Years Chicksaw Crossing (587,728) 1986 30 Years Chimneys (757,432) 1974 30 Years Cierra Crest (2,574,457) 1996 30 Years Cimarron Ridge (1,569,561) 1984 30 Years Cityscape (798,782) 1990 30 Years Claire Point (679,020) 1986 30 Years Clarion (1,107,543) 1990 30 Years Clarys Crossing (698,024) 1984 30 Years Classic, The (1,599,059) 1990 30 Years Clearlake Pines II (9,861) 1985 30 Years Clearview I (14,950) 1986 30 Years Clearview II (18,479) 1987 30 Years Clearwater (10,381) 1986 30 Years Cloisters on the Green (2,989,242) 1974 30 Years Club at Tanasbourne (1,720,349) 1990 30 Years Club at the Green (1,388,047) 1991 30 Years Coach Lantern (314,592) 1971/1981 30 Years Coachman Trails (520,267) 1987 30 Years Coconut Palm Club (1,038,093) 1992 30 Years Colinas Pointe (1,396,068) 1986 30 Years Colony Place (950,675) 1991 30 Years Colony Woods (1,164,356) 1991/1994 30 Years Concord Square (9,967) 1982 30 Years Concord Square (IN) (10,217) 1983 30 Years Concord Square I & II (OH) (13,691) 1981/83 30 Years Concorde Bridge (1,507,828) 1973 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Conway Station Orlando, FL - 1,936,000 10,852,858 Copper Canyon Denver, CO - 1,443,000 16,064,368 Copper Creek Phoenix, AZ - 1,017,400 9,148,068 Copper Hill Bedford, TX - 1,020,000 6,001,680 Copper Terrace Orlando, FL - 1,200,000 17,887,868 Copperfield San Antonio, TX - 791,200 7,121,171 Country Brook Chandler, AZ (O) 1,505,219 29,542,535 Country Club Place (FL) Pembroke Pines, FL - 912,000 10,016,543 Country Club Village Seattle, WA - 1,150,500 10,352,179 Country Gables Beaverton, OR 8,204,727 1,580,500 14,248,239 Country Ridge Farmington Hills, MI (U) 1,605,800 14,599,936 Countryside San Antonio, TX - 667,500 6,008,259 Countryside I Daytona Beach, FL - 136,665 1,229,981 Countryside II Daytona Beach, FL - 234,633 2,111,700 Countryside Manor Atlanta, GA 1,163,328 298,186 2,683,678 Coventry at Cityview Fort Worth, TX - 2,160,000 23,072,847 Creekside (San Mateo) San Mateo, CA 14,503,372 9,600,000 21,193,232 Creekside Homes at Legacy Plano. TX - 4,560,000 32,275,748 Creekside Village Mountlake Terrace, WA 14,826,887 2,802,900 25,270,594 Creekwood Charlotte, NC - 1,859,300 16,740,569 Crescent at Cherry Creek Denver, CO (E) 2,592,000 15,149,470 Cross Creek Charlotte, NC 12,628,842 3,150,000 20,299,439 Crossing at Green Valley Las Vegas, NV 10,214,792 2,408,500 21,673,209 Crosswinds St. Petersburg, FL - 1,561,200 5,777,205 Crown Court Phoenix, AZ - 3,156,600 28,414,599 Crystal Creek Phoenix, AZ - 952,900 8,581,704 Crystal Village Attleboro, MA - 1,365,000 4,992,817 Cypress Panama City, FL 1,421,807 171,882 1,546,941 Cypress Cove Melbourne, FL - 1,630,000 19,020,939 Cypress Point Las Vegas, NV - 953,800 8,636,551 Daniel Court Cincinnati, OH 2,339,616 334,101 3,006,906 Dartmouth Place I Akron, OH - 151,771 1,365,939 Dartmouth Place II Akron, OH 835,726 130,102 1,170,914 Dartmouth Woods Denver, CO 4,283,469 1,608,000 10,832,754 Dawntree Carrollton, TX - 1,204,600 10,851,833 Deerbrook Jacksonville, FL - 1,008,000 8,845,716 Deerwood (Corona) Corona, CA - 4,740,000 20,313,008 Deerwood (FL) Orlando, FL 874,672 114,948 1,034,533 Deerwood (SD) San Diego, CA - 2,075,700 18,740,815 Deerwood Meadows Greensboro, NC - 986,643 7,204,362 Defoor Village Atlanta, GA - 2,964,000 10,573,374 Del Coronado Mesa, AZ (N) 1,963,200 17,680,640 Desert Park Las Vegas, NV - 1,085,400 9,759,958 Desert Sands Phoenix, AZ - 1,464,200 13,331,581 Dogwood Glen I Indianpolis, IN 1,750,348 240,855 2,167,693 Dogwood Glen II Indianpolis, IN 1,364,537 202,397 1,821,571 Dos Caminos Phoenix, AZ - 1,727,900 15,567,778 Dover Place I Cleveland, OH 1,126,709 244,294 2,198,644 Dover Place II Cleveland, OH 1,623,551 230,895 2,078,058 Dover Place III Cleveland, OH 769,313 119,835 1,078,516 Dover Place IV Cleveland, OH 1,868,332 261,912 2,357,208 Driftwood Jacksonville, FL 346,206 126,357 1,137,216 Duraleigh Woods Raleigh, NC - 1,629,000 19,917,750 Eagle Canyon Chino Hills, CA - 1,806,800 16,279,860 Eagle Rim Redmond, WA - 976,200 8,801,849 East Pointe Charlotte, NC 9,324,851 1,364,100 12,295,246 Edgewood Woodinville, WA 5,765,994 1,068,200 9,632,980 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Conway Station - 119,516 1,936,000 10,972,375 12,908,375 Copper Canyon - 10,517 1,443,000 16,074,885 17,517,885 Copper Creek - 304,674 1,017,400 9,452,742 10,470,142 Copper Hill 1,800 370,936 1,021,800 6,372,616 7,394,416 Copper Terrace - 387,322 1,200,000 18,275,190 19,475,190 Copperfield - 437,383 791,200 7,558,554 8,349,754 Country Brook - 273,686 1,505,219 29,816,221 31,321,440 Country Club Place (FL) - 318,621 912,000 10,335,164 11,247,164 Country Club Village - 526,284 1,150,500 10,878,463 12,028,963 Country Gables 1,200,000 481,350 2,780,500 14,729,589 17,510,089 Country Ridge 16,150 550,397 1,621,950 15,150,333 16,772,283 Countryside 100 412,423 667,600 6,420,682 7,088,282 Countryside I - 16,073 136,665 1,246,054 1,382,719 Countryside II - 8,391 234,633 2,120,091 2,354,724 Countryside Manor - 52,218 298,186 2,735,896 3,034,083 Coventry at Cityview - 98,094 2,160,000 23,170,941 25,330,941 Creekside (San Mateo) 6,600 135,586 9,606,600 21,328,817 30,935,417 Creekside Homes at Legacy - 105,379 4,560,000 32,381,127 36,941,127 Creekside Village 4,700 1,380,117 2,807,600 26,650,711 29,458,311 Creekwood 2,400 291,533 1,861,700 17,032,101 18,893,801 Crescent at Cherry Creek 2,000 203,737 2,594,000 15,353,207 17,947,207 Cross Creek 1,600 226,589 3,151,600 20,526,028 23,677,628 Crossing at Green Valley - 559,613 2,408,500 22,232,822 24,641,322 Crosswinds - 528,718 1,561,200 6,305,923 7,867,123 Crown Court - 822,085 3,156,600 29,236,684 32,393,284 Crystal Creek 600 689,464 953,500 9,271,168 10,224,668 Crystal Village 4,000 222,939 1,369,000 5,215,756 6,584,756 Cypress - 5,514 171,882 1,552,455 1,724,337 Cypress Cove - 121,373 1,630,000 19,142,312 20,772,312 Cypress Point 5,890 660,432 959,690 9,296,983 10,256,673 Daniel Court - 48,439 334,101 3,055,345 3,389,446 Dartmouth Place I - 673 151,771 1,366,612 1,518,383 Dartmouth Place II - 1,258 130,102 1,172,172 1,302,273 Dartmouth Woods 1,800 170,582 1,609,800 11,003,336 12,613,136 Dawntree 900 1,957,423 1,205,500 12,809,256 14,014,756 Deerbrook - 268,237 1,008,000 9,113,953 10,121,953 Deerwood (Corona) 2,200 443,272 4,742,200 20,756,280 25,498,480 Deerwood (FL) - 2,643 114,948 1,037,176 1,152,124 Deerwood (SD) 6,395 3,100,942 2,082,095 21,841,758 23,923,853 Deerwood Meadows 100 673,335 986,743 7,877,697 8,864,440 Defoor Village 2,400 73,350 2,966,400 10,646,725 13,613,125 Del Coronado 1,200 970,090 1,964,400 18,650,730 20,615,130 Desert Park - 670,709 1,085,400 10,430,667 11,516,067 Desert Sands 16,850 1,139,193 1,481,050 14,470,774 15,951,824 Dogwood Glen I - 8,496 240,855 2,176,189 2,417,043 Dogwood Glen II - 6,718 202,397 1,828,289 2,030,685 Dos Caminos - 644,151 1,727,900 16,211,929 17,939,829 Dover Place I - 4,301 244,294 2,202,945 2,447,239 Dover Place II - 644 230,895 2,078,702 2,309,597 Dover Place III - 51 119,835 1,078,567 1,198,402 Dover Place IV - 117 261,912 2,357,325 2,619,236 Driftwood - 3,381 126,357 1,140,597 1,266,955 Duraleigh Woods - 816,697 1,629,000 20,734,447 22,363,447 Eagle Canyon 2,100 374,756 1,808,900 16,654,615 18,463,515 Eagle Rim 1,600 586,880 977,800 9,388,729 10,366,529 East Pointe 1,800 1,204,794 1,365,900 13,500,040 14,865,940 Edgewood 1,900 482,907 1,070,100 10,115,887 11,185,987 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - -------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - -------------------------------------------------------------------------------------- Conway Station (512,582) 1987 30 Years Copper Canyon (464,397) 1999 30 Years Copper Creek (898,503) 1984 30 Years Copper Hill (387,204) 1983 30 Years Copper Terrace (827,643) 1989 30 Years Copperfield (843,648) 1984 30 Years Country Brook (2,166,522) 1986-1996 30 Years Country Club Place (FL) (480,928) 1987 30 Years Country Club Village (1,016,737) 1991 30 Years Country Gables (1,571,653) 1991 30 Years Country Ridge (2,092,845) 1986 30 Years Countryside (698,035) 1980 30 Years Countryside I (11,733) 1982 30 Years Countryside II (19,424) 1982 30 Years Countryside Manor (24,672) 1985 30 Years Coventry at Cityview (1,032,613) 1996 30 Years Creekside (San Mateo) (1,126,487) 1985 30 Years Creekside Homes at Legacy (1,420,194) 1998 30 Years Creekside Village (5,117,588) 1987 30 Years Creekwood (1,441,955) 1987-1990 30 Years Crescent at Cherry Creek (1,201,679) 1994 30 Years Cross Creek (1,165,524) 1989 30 Years Crossing at Green Valley (2,105,455) 1986 30 Years Crosswinds (637,241) 1986 30 Years Crown Court (2,810,106) 1987 30 Years Crystal Creek (1,723,802) 1985 30 Years Crystal Village (386,720) 1974 30 Years Cypress (14,243) 1985 30 Years Cypress Cove (867,992) 1990 30 Years Cypress Point (1,999,455) 1989 30 Years Daniel Court (28,239) 1985 30 Years Dartmouth Place I (12,284) 1982 30 Years Dartmouth Place II (10,597) 1986 30 Years Dartmouth Woods (1,104,796) 1990 30 Years Dawntree (2,696,547) 1982 30 Years Deerbrook (428,249) 1983 30 Years Deerwood (Corona) (1,709,155) 1992 30 Years Deerwood (FL) (9,520) 1982 30 Years Deerwood (SD) (4,942,798) 1990 30 Years Deerwood Meadows (2,048,569) 1986 30 Years Defoor Village (589,285) 1997 30 Years Del Coronado (3,191,774) 1985 30 Years Desert Park (1,742,920) 1987 30 Years Desert Sands (2,077,285) 1982 30 Years Dogwood Glen I (19,715) 1986 30 Years Dogwood Glen II (16,643) 1987 30 Years Dos Caminos (1,563,082) 1983 30 Years Dover Place I (19,485) 1982 30 Years Dover Place II (18,414) 1983 30 Years Dover Place III (9,489) 1983 30 Years Dover Place IV (20,848) 1986 30 Years Driftwood (10,643) 1985 30 Years Duraleigh Woods (948,536) 1987 30 Years Eagle Canyon (2,016,417) 1985 30 Years Eagle Rim (1,880,558) 1986-88 30 Years East Pointe (3,183,576) 1987 30 Years Edgewood (2,038,593) 1986 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Elmtree Park I Indianpolis, IN 1,488,803 157,687 1,419,184 Elmtree Park II Indianpolis, IN 935,749 114,114 1,027,027 Elmwood (GA) Atlanta, GA 828,235 183,756 1,653,808 Elmwood I (FL) W. Palm Beach, FL 1,338,661 163,389 1,470,498 Elmwood II (FL) W. Palm Beach, FL 1,339,923 179,743 1,617,691 Emerald Bay Winter Park, FL - 2,160,000 13,549,968 Emerald Place Bermuda Dunes, CA - 954,400 8,609,599 Emerson Place Combined Boston, MA - 14,850,000 57,582,798 Enclave, The Tempe, AZ (P) 1,500,192 19,281,399 English Hills Charlotte, NC - 1,260,000 12,554,291 Esprit Del Sol Solana Beach, CA - 5,110,000 11,913,045 Essex Place Overland Park, KS - 1,831,900 16,513,586 Essex Place (FL) Tampa, FL - 1,188,000 7,106,384 Estate at Quarry Lake Austin, TX 12,454,239 1,963,000 18,972,537 Ethans Glen III Kansas City, MO 2,366,364 244,100 2,221,562 Ethans Ridge I Kansas City, MO 16,232,216 1,945,900 17,563,769 Ethans Ridge II Kansas City, MO 10,991,981 1,465,500 13,176,233 Fairfield Combined Stamford, CT - 6,500,000 39,425,167 Fairland Gardens Silver Spring, MD - 6,000,000 19,978,402 Falls Tampa, FL - 1,440,000 8,445,778 Farmington Gates Germantown, TN - 969,700 8,786,180 Farnham Park Houston, TX 11,356,588 1,512,000 14,234,419 Fernbrook Townhomes Plymouth, MN 5,196,328 576,000 6,683,693 Fielder Crossing Arlington, TX 3,373,279 714,000 3,935,453 Firdale Village Seattle, WA - 2,279,400 20,496,049 Fireside Park Rockville, MD 8,749,542 4,248,000 10,099,286 Forest Glen Pensacola, FL 1,078,228 161,548 1,453,936 Forest Place Tampa, FL 10,594,977 1,708,000 8,612,029 Forest Ridge I & II Arlington, TX - 2,339,300 21,266,573 Forest Valley San Antonio, TX - 590,000 5,310,328 Forest Village Macon, GA 1,231,993 224,022 2,016,196 Forsythia Court (KY) Louisville, KY 1,926,833 279,450 2,515,053 Forsythia Court (MD) Baltimore, MD 2,085,646 251,955 2,267,597 Forsythia Court II (MD) Baltimore, MD 2,320,497 239,834 2,158,502 Fountain Creek Phoenix, AZ - 686,000 6,177,920 Fountain Place I Eden Prairie, MN 24,676,652 2,399,900 21,678,609 Fountain Place II Eden Prairie, MN 12,612,600 1,226,500 11,087,407 Fountainhead Combined San Antonio, TX (S) 3,617,449 14,131,386 Fountains at Flamingo Las Vegas, NV - 3,180,900 28,650,076 Four Lakes Lisle, IL 10,344,569 2,465,000 13,091,599 Four Lakes 5 Lisle, IL (S) 600,000 18,717,933 Fox Run (WA) Federal Way, WA - 638,500 5,760,413 Foxchase Grand Prairie, TX - 781,500 7,621,196 Foxcroft Scarborough, ME - 520,000 4,527,409 Foxhaven Canton, OH 1,816,369 256,821 2,311,388 Foxton (MI) Detriot, MI 897,474 156,363 1,407,262 Foxton II (OH) Dayton, OH 1,381,197 165,806 1,492,250 Garden Court Detriot, MI 2,123,809 351,532 3,163,785 Garden Lake Riverdale, GA - 1,464,500 13,186,716 Garden Terrace I Tampa, FL 593,409 93,144 838,295 Garden Terrace II Tampa, FL 678,182 97,120 874,077 Gatehouse at Pine Lake Plantation , FL - 1,886,200 17,070,795 Gatehouse on the Green Pembroke Pines, FL - 2,216,800 20,056,270 Gates at Carlson Center Minnetonka, MN (Q) 4,350,000 23,802,817 Gates of Redmond Redmond, WA 6,222,662 2,305,600 12,122,006 Gateway Villas Scottsdale, AZ - 1,431,048 14,926,833 Geary Court Yard San Francisco, CA 17,709,692 1,719,400 15,606,269 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Elmtree Park I - 4,451 157,687 1,423,636 1,581,323 Elmtree Park II - 7,967 114,114 1,034,995 1,149,109 Elmwood (GA) - 5,018 183,756 1,658,826 1,842,583 Elmwood I (FL) - 5,064 163,389 1,475,562 1,638,951 Elmwood II (FL) - 1,787 179,743 1,619,478 1,799,221 Emerald Bay 1,600 766,134 2,161,600 14,316,102 16,477,702 Emerald Place 2,100 658,459 956,500 9,268,058 10,224,558 Emerson Place Combined 5,000 936,486 14,855,000 58,519,284 73,374,284 Enclave, The - 124,309 1,500,192 19,405,708 20,905,900 English Hills - 241,048 1,260,000 12,795,339 14,055,339 Esprit Del Sol 1,200 153,817 5,111,200 12,066,862 17,178,062 Essex Place 3,500 2,347,676 1,835,400 18,861,261 20,696,661 Essex Place (FL) - 122,091 1,188,000 7,228,476 8,416,476 Estate at Quarry Lake - 179,131 1,963,000 19,151,668 21,114,668 Ethans Glen III 2,400 94,857 246,500 2,316,420 2,562,920 Ethans Ridge I 2,400 706,019 1,948,300 18,269,788 20,218,088 Ethans Ridge II 2,635 231,760 1,468,135 13,407,993 14,876,128 Fairfield Combined 10,200 187,599 6,510,200 39,612,765 46,122,965 Fairland Gardens - 370,801 6,000,000 20,349,202 26,349,202 Falls - 170,773 1,440,000 8,616,551 10,056,551 Farmington Gates 4,098 478,095 973,798 9,264,274 10,238,072 Farnham Park 600 158,866 1,512,600 14,393,284 15,905,884 Fernbrook Townhomes 4,100 - 580,100 6,683,693 7,263,793 Fielder Crossing 4,100 39,730 718,100 3,975,183 4,693,283 Firdale Village - 499,849 2,279,400 20,995,897 23,275,297 Fireside Park - 82,030 4,248,000 10,181,316 14,429,316 Forest Glen - 12,777 161,548 1,466,713 1,628,262 Forest Place - 235,685 1,708,000 8,847,714 10,555,714 Forest Ridge I & II 23,400 1,254,610 2,362,700 22,521,183 24,883,883 Forest Valley - 197,987 590,000 5,508,315 6,098,315 Forest Village - 3,762 224,022 2,019,958 2,243,980 Forsythia Court (KY) - 4,253 279,450 2,519,306 2,798,756 Forsythia Court (MD) - 2,310 251,955 2,269,907 2,521,862 Forsythia Court II (MD) - 4,356 239,834 2,162,858 2,402,691 Fountain Creek 500 423,043 686,500 6,600,963 7,287,463 Fountain Place I 5,168 503,200 2,405,068 22,181,809 24,586,877 Fountain Place II 4,850 205,532 1,231,350 11,292,939 12,524,289 Fountainhead Combined - 1,344,210 3,617,449 15,475,596 19,093,045 Fountains at Flamingo 2,200 782,801 3,183,100 29,432,877 32,615,977 Four Lakes - 8,785,388 2,465,000 21,876,987 24,341,987 Four Lakes 5 - 1,397,362 600,000 20,115,295 20,715,295 Fox Run (WA) 1,200 569,763 639,700 6,330,175 6,969,875 Foxchase 200 549,368 781,700 8,170,564 8,952,264 Foxcroft 3,400 180,361 523,400 4,707,770 5,231,170 Foxhaven - 3,619 256,821 2,315,007 2,571,828 Foxton (MI) - 3,896 156,363 1,411,159 1,567,521 Foxton II (OH) - 5,268 165,806 1,497,518 1,663,324 Garden Court - 4,343 351,532 3,168,128 3,519,660 Garden Lake 2,400 319,603 1,466,900 13,506,319 14,973,219 Garden Terrace I - 4,504 93,144 842,799 935,943 Garden Terrace II - 9,394 97,120 883,471 980,591 Gatehouse at Pine Lake 10,400 514,172 1,896,600 17,584,967 19,481,567 Gatehouse on the Green 11,400 637,607 2,228,200 20,693,877 22,922,077 Gates at Carlson Center 5,200 638,657 4,355,200 24,441,474 28,796,674 Gates of Redmond 500 266,081 2,306,100 12,388,087 14,694,187 Gateway Villas - 88,014 1,431,048 15,014,847 16,445,895 Geary Court Yard 3,000 219,655 1,722,400 15,825,925 17,548,325 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ---------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ---------------------------------------------------------------------------------- Elmtree Park I (13,162) 1986 30 Years Elmtree Park II (9,742) 1987 30 Years Elmwood (GA) (14,713) 1984 30 Years Elmwood I (FL) (13,308) 1984 30 Years Elmwood II (FL) (14,376) 1984 30 Years Emerald Bay (1,107,336) 1972 30 Years Emerald Place (2,146,222) 1988 30 Years Emerson Place Combined (3,413,919) 1962 30 Years Enclave, The (1,389,414) 1994 30 Years English Hills (602,187) 1984 30 Years Esprit Del Sol (595,282) 1986 30 Years Essex Place (4,115,387) 1970-84 30 Years Essex Place (FL) (334,076) 1989 30 Years Estate at Quarry Lake (865,054) 1995 30 Years Ethans Glen III (183,034) 1990 30 Years Ethans Ridge I (1,431,763) 1988 30 Years Ethans Ridge II (1,024,418) 1990 30 Years Fairfield Combined (2,423,749) 1996 30 Years Fairland Gardens (582,927) 1981 30 Years Falls (414,270) 1985 30 Years Farmington Gates (723,242) 1976 30 Years Farnham Park (989,376) 1996 30 Years Fernbrook Townhomes (328,876) 1993 30 Years Fielder Crossing (230,318) 1980 30 Years Firdale Village (2,040,106) 1986 30 Years Fireside Park (362,944) 1961 30 Years Forest Glen (13,625) 1986 30 Years Forest Place (439,668) 1985 30 Years Forest Ridge I & II (3,355,354) 1984/85 30 Years Forest Valley (581,196) 1983 30 Years Forest Village (18,298) 1983 30 Years Forsythia Court (KY) (22,721) 1985 30 Years Forsythia Court (MD) (20,235) 1986 30 Years Forsythia Court II (MD) (19,421) 1987 30 Years Fountain Creek (1,204,197) 1984 30 Years Fountain Place I (1,673,205) 1989 30 Years Fountain Place II (840,451) 1989 30 Years Fountainhead Combined (6,874,617) 1985/1987 30 Years Fountains at Flamingo (5,583,649) 1989-91 30 Years Four Lakes (11,901,961) 1968/1988* 30 Years Four Lakes 5 (7,936,713) 1968/1988* 30 Years Fox Run (WA) (1,374,796) 1988 30 Years Foxchase (851,504) 1983 30 Years Foxcroft (324,960) 1977/1979 30 Years Foxhaven (21,160) 1986 30 Years Foxton (MI) (12,682) 1983 30 Years Foxton II (OH) (13,965) 1983 30 Years Garden Court (28,179) 1988 30 Years Garden Lake (1,136,899) 1991 30 Years Garden Terrace I (8,090) 1981 30 Years Garden Terrace II (8,688) 1982 30 Years Gatehouse at Pine Lake (2,031,874) 1990 30 Years Gatehouse on the Green (2,382,963) 1990 30 Years Gates at Carlson Center (1,573,137) 1989 30 Years Gates of Redmond (1,083,369) 1979 30 Years Gateway Villas (1,081,046) 1995 30 Years Geary Court Yard (1,148,571) 1990 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Gentian Oaks Columbus, GA 1,203,778 169,268 1,523,416 Georgian Woods Combined (REIT) Wheaton, MD 18,590,806 5,034,000 28,817,818 Glen Arm Manor Albany, GA 1,167,058 166,498 1,498,486 Glen Eagle Greenville, SC - 833,500 7,523,244 GlenGarry Club Bloomingdale, IL (Q) 3,125,000 15,807,889 Glenlake Glendale Heights. IL 14,845,000 5,040,000 16,671,970 Glenridge Colorado Springs, CO (F) 884,688 4,650,939 Glenview Huntsville, AL 1,647,376 184,451 1,660,061 Glenwood Village Macon, GA 1,096,813 167,779 1,510,009 Governor's Pointe Roswell, GA (E) 3,744,000 24,520,965 Granada Highlands Malden, MA - 28,210,000 99,956,182 Grandview I & II Las Vegas, NV - 2,325,600 15,527,187 Greenbriar Glen Altlanta, GA 1,538,287 227,701 2,049,311 Greengate Marietta, GA - 132,979 1,526,005 Greenglen (Day) Dayton, OH 1,141,512 204,289 1,838,604 Greenglen II (Lim) Lima, OH 891,704 87,335 786,015 Greenglen II (Tol) Toledo, OH 814,863 162,264 1,460,373 Greenhaven Union City, CA 10,857,291 7,500,000 15,210,399 Greenhouse - Frey Road Atlanta, GA (S) 2,464,900 22,187,443 Greenhouse - Holcomb Bridge Atlanta, GA (S) 2,142,400 19,291,427 Greenhouse - Roswell Atlanta, GA (S) 1,217,500 10,974,727 Greentree 1 Glen Burnie, MD 11,761,074 3,912,968 11,799,657 Greentree 2 Glen Burnie, MD - 2,700,000 8,261,634 Greentree 3 Glen Burnie, MD 7,245,399 2,380,443 7,294,085 Greenwich Woods Silver Spring, MD 18,426,770 3,095,700 29,226,035 Greenwood Village Tempe, AZ (O) 2,118,781 17,274,216 Grey Eagle Greenville, SC - 725,200 6,547,650 Greystone Atlanta, GA - 2,250,000 5,207,079 Gwinnett Crossing Duluth, GA - 2,632,000 32,016,496 Hall Place Quincy, MA - 3,150,000 5,121,950 Hammock's Place Miami, FL (F) 319,080 12,513,467 Hampshire Court Ft. Wayne, IN - 101,297 911,672 Hampshire II Cleveland, OH 860,000.00 126,231 1,136,082 Hamptons Tacoma, WA 5,857,832 1,119,200 10,075,844 Harbinwood Atlanta, GA 1,627,164 236,761 2,130,849 Harbor Pointe Milwaukee, WI 12,000,000 2,975,000 22,096,546 Harborview San Pedro, CA 12,104,725 6,400,000 12,633,175 Harrison Park Tucson, AZ (O) 1,265,094 16,342,322 Hartwick Anderson, IN 727,948 123,791 1,114,115 Harvest Grove Conyers, GA - 752,000 18,717,899 Harvest Grove I Columbus, OH 1,637,684 170,334 1,533,007 Harvest Grove II Columbus, OH 1,076,969 148,792 1,339,124 Hatcherway Jacksonville, GA 745,042 96,885 871,969 Hathaway Long Beach, CA - 2,512,200 22,611,912 Hayfield Park Cincinnati, KY 1,577,277 261,457 2,353,111 Haywood Pointe Greenville, SC - 480,000 9,163,271 Hearthstone San Antonio, TX - 1,035,700 3,525,388 Heathmoore (Eva) Evansville, IN 1,155,071 162,375 1,461,371 Heathmoore (KY) Louisville, KY 927,105 156,840 1,411,559 Heathmoore (MI) Detriot, MI 1,725,257 227,105 2,043,945 Heathmoore I (IN) Indianapolis, IN 1,229,295 144,557 1,301,010 Heathmoore I (MI) Detriot, MI 1,564,304 232,064 2,088,575 Heathmoore II (MI) Detriot, MI 918,553 170,433 1,533,893 Heritage, The Phoenix, AZ (O) 1,211,205 13,136,903 Heron Cove Coral Springs, FL - 823,000 8,114,762 Heron Landing (J) Lauderhill, FL - 707,100 6,406,776 Heron Pointe Boynton Beach, FL - 1,546,700 7,804,414 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Gentian Oaks - 2,617 169,268 1,526,034 1,695,302 Georgian Woods Combined (REIT) 4,400 1,956,090 5,038,400 30,773,909 35,812,309 Glen Arm Manor - 5,299 166,498 1,503,786 1,670,284 Glen Eagle 2,400 138,654 835,900 7,661,897 8,497,797 GlenGarry Club 4,700 750,843 3,129,700 16,558,731 19,688,431 Glenlake 1,700 572,258 5,041,700 17,244,228 22,285,928 Glenridge 100 607,958 884,788 5,258,897 6,143,685 Glenview - 22,546 184,451 1,682,607 1,867,058 Glenwood Village - 8,499 167,779 1,518,508 1,686,287 Governor's Pointe 2,600 813,249 3,746,600 25,334,214 29,080,814 Granada Highlands - (138,357) 28,210,000 99,817,825 128,027,825 Grandview I & II 7,700 233,024 2,333,300 15,760,211 18,093,511 Greenbriar Glen - 5,965 227,701 2,055,276 2,282,977 Greengate - 1,349,931 132,979 2,875,936 3,008,915 Greenglen (Day) - 5,377 204,289 1,843,980 2,048,270 Greenglen II (Lim) - 1,024 87,335 787,039 874,374 Greenglen II (Tol) - 2,255 162,264 1,462,628 1,624,891 Greenhaven 7,000 147,711 7,507,000 15,358,110 22,865,110 Greenhouse - Frey Road 2,300 1,629,230 2,467,200 23,816,673 26,283,873 Greenhouse - Holcomb Bridge 900 1,429,246 2,143,300 20,720,674 22,863,974 Greenhouse - Roswell 2,500 1,023,254 1,220,000 11,997,982 13,217,982 Greentree 1 - 195,706 3,912,968 11,995,363 15,908,331 Greentree 2 - 72,591 2,700,000 8,334,225 11,034,225 Greentree 3 - 62,104 2,380,443 7,356,189 9,736,632 Greenwich Woods 5,300 2,496,472 3,101,000 31,722,507 34,823,507 Greenwood Village - 468,585 2,118,781 17,742,801 19,861,582 Grey Eagle 2,400 126,075 727,600 6,673,725 7,401,325 Greystone 2,000 345,842 2,252,000 5,552,921 7,804,921 Gwinnett Crossing - 331,101 2,632,000 32,347,597 34,979,597 Hall Place 800 30,725 3,150,800 5,152,674 8,303,474 Hammock's Place 100 684,686 319,180 13,198,153 13,517,333 Hampshire Court - 1,812 101,297 913,484 1,014,780 Hampshire II - 2,529 126,231 1,138,612 1,264,843 Hamptons - 250,024 1,119,200 10,325,869 11,445,069 Harbinwood - 5,012 236,761 2,135,861 2,372,622 Harbor Pointe 4,800 937,057 2,979,800 23,033,603 26,013,403 Harborview 2,500 260,840 6,402,500 12,894,015 19,296,515 Harrison Park - 219,481 1,265,094 16,561,803 17,826,897 Hartwick - 8,316 123,791 1,122,431 1,246,222 Harvest Grove - 155,391 752,000 18,873,290 19,625,290 Harvest Grove I - 2,826 170,334 1,535,832 1,706,166 Harvest Grove II - 4,038 148,792 1,343,162 1,491,953 Hatcherway - 4,129 96,885 876,098 972,984 Hathaway 300 747,836 2,512,500 23,359,748 25,872,248 Hayfield Park - 2,958 261,457 2,356,069 2,617,526 Haywood Pointe - 95,060 480,000 9,258,331 9,738,331 Hearthstone 200 674,597 1,035,900 4,199,985 5,235,885 Heathmoore (Eva) - 3,232 162,375 1,464,603 1,626,977 Heathmoore (KY) - 3,290 156,840 1,414,848 1,571,688 Heathmoore (MI) - 2,156 227,105 2,046,102 2,273,207 Heathmoore I (IN) - 5,939 144,557 1,306,950 1,451,506 Heathmoore I (MI) - 3,353 232,064 2,091,928 2,323,992 Heathmoore II (MI) - 3,534 170,433 1,537,427 1,707,860 Heritage, The - 91,266 1,211,205 13,228,170 14,439,375 Heron Cove - 578,453 823,000 8,693,215 9,516,215 Heron Landing (J) 4,700 469,761 711,800 6,876,537 7,588,337 Heron Pointe - 538,442 1,546,700 8,342,856 9,889,556 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - -------------------------------------------------------------------------------------- LATEST INCOME ACCUMULATED DATE OF STATEMENT (C) APARTMENT NAME DEPRECIATION CONSTRUCTION - -------------------------------------------------------------------------------------- Gentian Oaks (13,817) 1985 30 Years Georgian Woods Combined (REIT) (4,708,939) 1967 30 Years Glen Arm Manor (13,819) 1986 30 Years Glen Eagle (657,971) 1990 30 Years GlenGarry Club (1,077,078) 1989 30 Years Glenlake (1,341,810) 1988 30 Years Glenridge (1,393,882) 1985 30 Years Glenview (15,893) 1986 30 Years Glenwood Village (14,184) 1986 30 Years Governor's Pointe (2,071,813) 1982-1986 30 Years Granada Highlands (616,003) 1972 30 Years Grandview I & II (919,023) 1980 30 Years Greenbriar Glen (18,554) 1988 30 Years Greengate (1,780,427) 1971 30 Years Greenglen (Day) (16,738) 1983 30 Years Greenglen II (Lim) (7,469) 1981 30 Years Greenglen II (Tol) (13,234) 1982 30 Years Greenhaven (791,410) 1983 30 Years Greenhouse - Frey Road (4,903,879) 1985 30 Years Greenhouse - Holcomb Bridge (4,363,006) 1985 30 Years Greenhouse - Roswell (2,525,185) 1985 30 Years Greentree 1 (240,618) 1973 30 Years Greentree 2 (136,124) 1973 30 Years Greentree 3 (143,473) 1973 30 Years Greenwich Woods (6,410,863) 1967 30 Years Greenwood Village (1,349,731) 1984 30 Years Grey Eagle (567,982) 1991 30 Years Greystone (334,766) 1960 30 Years Gwinnett Crossing (1,483,650) 1989/90 30 Years Hall Place (198,701) 1998 30 Years Hammock's Place (3,089,391) 1986 30 Years Hampshire Court (8,413) 1982 30 Years Hampshire II (10,487) 1981 30 Years Hamptons (1,031,315) 1991 30 Years Harbinwood (19,145) 1985 30 Years Harbor Pointe (1,608,231) 1970/1990 30 Years Harborview (1,337,178) 1985 30 Years Harrison Park (1,256,808) 1985 30 Years Hartwick (10,246) 1982 30 Years Harvest Grove (872,861) 1986 30 Years Harvest Grove I (14,069) 1986 30 Years Harvest Grove II (12,252) 1987 30 Years Hatcherway (8,439) 1986 30 Years Hathaway (3,763,231) 1987 30 Years Hayfield Park (21,110) 1986 30 Years Haywood Pointe (435,792) 1985 30 Years Hearthstone (1,101,530) 1982 30 Years Heathmoore (Eva) (13,526) 1984 30 Years Heathmoore (KY) (12,914) 1983 30 Years Heathmoore (MI) (18,315) 1983 30 Years Heathmoore I (IN) (11,949) 1983 30 Years Heathmoore I (MI) (18,517) 1986 30 Years Heathmoore II (MI) (13,772) 1986 30 Years Heritage, The (968,755) 1995 30 Years Heron Cove (1,838,946) 1987 30 Years Heron Landing (J) (1,099,485) 1988 30 Years Heron Pointe (849,081) 1989 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Heron Pointe (Atl) Jacksonville, Fl 1,610,460 214,332 1,928,989 Heron Run Plantation, FL - 917,800 9,006,476 Hickory Creek Richmond, VA - 1,323,000 18,520,609 Hickory Mill Columbus, OH 1,055,961 161,714 1,455,430 Hickory Mill I Charleston, WV 934,166 129,187 1,162,681 Hickory Place Gainesville, GL 1,338,750 192,453 1,732,080 Hickory Ridge Greenville, SC - 285,800 2,591,930 Hidden Acres Sarasota, FL 1,646,801 253,139 2,278,249 Hidden Lakes Haltom City, TX - 1,872,000 20,242,109 Hidden Oaks Cary, NC - 1,176,200 10,614,135 Hidden Palms Tampa, FL (E) 2,048,000 6,380,289 Hidden Pines Orlando, FL 19,562 176,308 1,586,772 Hidden Valley Club Ann Arbor, MI - 915,000 7,342,020 High Points St. Petersburg, FL 1,056,641 222,308 2,000,769 Highland Creste Seattle, WA - 935,200 8,415,391 Highland Grove Stone Mt., GA - 1,665,700 15,010,714 Highland Point Denver, CO 9,886,746 1,631,900 14,684,439 Highline Oaks Denver, CO 7,100,000 1,055,000 9,748,823 Hillcrest Villas Ft. Walton Bch., FL 978,813 141,603 1,274,427 Hillside Manor Albany, GA 611,803 102,632 923,690 Hillside Trace Tampa, FL 1,058,133 138,888 1,249,992 Hollows Columbia, SC - 450,000 8,835,008 Holly Park Columbus, GA 790,970 138,418 1,245,760 Holly Ridge Miami, FL - 295,596 2,660,361 Holly Sands I Ft. Walton Bch.,FL 1,373,631 190,942 1,718,481 Holly Sands II Ft. Walton Bch., FL 1,037,680 124,578 1,121,198 Hollyview Silver Springs, MD - 189,000 1,506,539 Horizon Place Tampa, FL 12,475,333 2,128,000 12,086,937 Hunt Club Charlotte, NC - 1,090,000 17,992,887 Hunter Glen (IL) Springfield, IL 956,507 158,197 1,423,776 Hunter's Glen Chesterfield, MO - 913,500 8,230,595 Hunter's Green Fort Worth, TX (F) 524,200 3,653,481 Hunters Ridge/South Pointe St. Louis, MO 18,630,250 1,950,000 17,570,346 Huntington Hollow Tulsa, OK - 668,600 6,018,259 Huntington Park Everett, WA - 1,594,500 14,748,864 Idlewood Indianapolis, IN - 2,560,000 11,473,589 Independence Village Columbus, OH - 226,988 2,042,891 Indian Bend Phoenix, AZ - 1,072,500 9,675,133 Indian Lake I Atlanta, GA 4,207,504 839,669 7,557,017 Indian Tree Arvada, CO - 881,125 4,552,815 Indigo Plantation Daytona Beach, FL - 1,520,000 14,650,246 Indigo Springs Kent, WA 7,740,381 1,270,000 11,446,902 Ingleside, The Phoenix, AZ - 1,203,600 10,685,212 Iris Glen Atlanta, GA 1,785,000 270,458 2,434,122 Ironwood at the Ranch Wesminster, CO 5,808,479 1,493,300 13,439,305 Isle at Arrowhead Ranch Glendale, AZ - 1,650,237 19,533,715 Ivy Place (K) Atlanta, GA - 793,200 7,228,257 James Street Crossing Kent, WA 16,395,379 2,078,600 18,738,034 Jefferson at Walnut Creek Austin, TX (E) 2,736,000 14,598,337 Jefferson Way I Jacksonville, Fl 1,028,679 147,799 1,330,189 Junipers at Yarmouth Yarmouth, ME - 1,350,000 7,861,966 Jupiter Cove I W. Palm Beach, FL 1,637,684 233,932 2,105,392 Jupiter Cove III W. Palm Beach, FL 1,723,290 242,010 2,178,090 Kempton Downs Gresham, OR - 1,182,200 10,943,372 Ketwood Dayton, OH 1,605,298 266,443 2,397,989 Keystone Austin, TX 2,789,477 498,000 4,487,295 Kimmerly Glen Charlotte, NC - 1,040,000 12,406,969 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ----------------------------------------------------------------------------------------------------------------------------------- Heron Pointe (Atl) - 6,523 214,332 1,935,511 2,149,844 Heron Run - 806,918 917,800 9,813,395 10,731,195 Hickory Creek - 235,832 1,323,000 18,756,441 20,079,441 Hickory Mill - 13,342 161,714 1,468,772 1,630,486 Hickory Mill I - 931 129,187 1,163,612 1,292,799 Hickory Place - 439 192,453 1,732,519 1,924,973 Hickory Ridge 2,400 125,220 288,200 2,717,150 3,005,350 Hidden Acres - 10,113 253,139 2,288,362 2,541,501 Hidden Lakes - 87,354 1,872,000 20,329,463 22,201,463 Hidden Oaks 2,400 965,785 1,178,600 11,579,921 12,758,521 Hidden Palms 1,600 407,995 2,049,600 6,788,284 8,837,884 Hidden Pines - 2,970 176,308 1,589,741 1,766,049 Hidden Valley Club - 1,395,871 915,000 8,737,891 9,652,891 High Points - 6,383 222,308 2,007,152 2,229,460 Highland Creste - 385,329 935,200 8,800,720 9,735,920 Highland Grove 2,400 213,174 1,668,100 15,223,889 16,891,989 Highland Point - 342,409 1,631,900 15,026,848 16,658,748 Highline Oaks 2,400 337,844 1,057,400 10,086,666 11,144,066 Hillcrest Villas - 13,721 141,603 1,288,148 1,429,751 Hillside Manor - 5,484 102,632 929,173 1,031,806 Hillside Trace - 8,214 138,888 1,258,206 1,397,094 Hollows - 67,279 450,000 8,902,286 9,352,286 Holly Park - 9,271 138,418 1,255,031 1,393,449 Holly Ridge - 4,627 295,596 2,664,988 2,960,583 Holly Sands I - 13,513 190,942 1,731,994 1,922,936 Holly Sands II - 2,297 124,578 1,123,495 1,248,072 Hollyview 2,400 33,512 191,400 1,540,051 1,731,451 Horizon Place - 254,270 2,128,000 12,341,207 14,469,207 Hunt Club - 196,881 1,090,000 18,189,769 19,279,769 Hunter Glen (IL) - 2,428 158,197 1,426,204 1,584,402 Hunter's Glen 1,700 545,410 915,200 8,776,005 9,691,205 Hunter's Green 100 698,698 524,300 4,352,179 4,876,479 Hunters Ridge/South Pointe 5,600 1,115,090 1,955,600 18,685,436 20,641,036 Huntington Hollow - 186,853 668,600 6,205,112 6,873,712 Huntington Park 3,000 292,087 1,597,500 15,040,951 16,638,451 Idlewood 1,800 528,947 2,561,800 12,002,536 14,564,336 Independence Village - 9,506 226,988 2,052,397 2,279,385 Indian Bend 3,200 1,397,968 1,075,700 11,073,101 12,148,801 Indian Lake I - 25,941 839,669 7,582,957 8,422,626 Indian Tree 100 871,891 881,225 5,424,706 6,305,931 Indigo Plantation - 98,980 1,520,000 14,749,225 16,269,225 Indigo Springs 500 648,933 1,270,500 12,095,835 13,366,335 Ingleside, The - 72,304 1,203,600 10,757,516 11,961,116 Iris Glen - 6,212 270,458 2,440,334 2,710,792 Ironwood at the Ranch - 226,423 1,493,300 13,665,728 15,159,028 Isle at Arrowhead Ranch - 120,568 1,650,237 19,654,283 21,304,520 Ivy Place (K) 9,750 323,819 802,950 7,552,076 8,355,026 James Street Crossing 2,654 324,912 2,081,254 19,062,945 21,144,199 Jefferson at Walnut Creek 1,600 203,494 2,737,600 14,801,831 17,539,431 Jefferson Way I - 4,695 147,799 1,334,883 1,482,682 Junipers at Yarmouth 5,700 417,354 1,355,700 8,279,320 9,635,020 Jupiter Cove I - 12,397 233,932 2,117,789 2,351,722 Jupiter Cove III - 3,615 242,010 2,181,705 2,423,715 Kempton Downs 35,149 1,012,310 1,217,349 11,955,682 13,173,031 Ketwood - 11,007 266,443 2,408,996 2,675,439 Keystone 500 695,837 498,500 5,183,133 5,681,633 Kimmerly Glen - 93,533 1,040,000 12,500,502 13,540,502 LIFE USED TO DESCRIPTION COMPUTE - ----------------------------------------------------------------------------------- DEPRECIATION IN ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - --------------------------------------------------------------------------------------------------- Heron Pointe (Atl) (17,926) 1986 30 Years Heron Run (2,059,502) 1987 30 Years Hickory Creek (865,310) 1984 30 Years Hickory Mill (13,515) 1980 30 Years Hickory Mill I (10,517) 1983 30 Years Hickory Place (15,620) 1983 30 Years Hickory Ridge (244,413) 1968 30 Years Hidden Acres (21,345) 1987 30 Years Hidden Lakes (909,260) 1996 30 Years Hidden Oaks (987,908) 1988 30 Years Hidden Palms (621,560) 1986 30 Years Hidden Pines (14,253) 1981 30 Years Hidden Valley Club (5,271,915) 1973 30 Years High Points (18,484) 1986 30 Years Highland Creste (931,911) 1989 30 Years Highland Grove (1,255,285) 1988 30 Years Highland Point (1,455,251) 1984 30 Years Highline Oaks (952,996) 1986 30 Years Hillcrest Villas (12,065) 1985 30 Years Hillside Manor (8,871) 1985 30 Years Hillside Trace (11,706) 1987 30 Years Hollows (419,929) 1987 30 Years Holly Park (11,912) 1985 30 Years Holly Ridge (23,909) 1986 30 Years Holly Sands I (15,944) 1985 30 Years Holly Sands II (10,289) 1986 30 Years Hollyview (125,799) 1965 30 Years Horizon Place (586,978) 1985 30 Years Hunt Club (829,308) 1990 30 Years Hunter Glen (IL) (13,004) 1987 30 Years Hunter's Glen (1,163,664) 1985 30 Years Hunter's Green (1,229,116) 1981 30 Years Hunters Ridge/South Pointe (1,866,301) 1986-1987 30 Years Huntington Hollow (682,525) 1981 30 Years Huntington Park (3,240,823) 1991 30 Years Idlewood (1,036,708) 1991 30 Years Independence Village (19,419) 1978 30 Years Indian Bend (2,382,653) 1973 30 Years Indian Lake I (67,778) 1987 30 Years Indian Tree (1,553,220) 1983 30 Years Indigo Plantation (681,686) 1989 30 Years Indigo Springs (1,354,595) 1991 30 Years Ingleside, The (770,952) 1995 30 Years Iris Glen (21,884) 1984 30 Years Ironwood at the Ranch (1,318,351) 1986 30 Years Isle at Arrowhead Ranch (1,429,829) 1996 30 Years Ivy Place (K) (1,041,136) 1978 30 Years James Street Crossing (1,434,987) 1989 30 Years Jefferson at Walnut Creek (1,220,695) 1994 30 Years Jefferson Way I (12,134) 1987 30 Years Junipers at Yarmouth (870,172) 1970 30 Years Jupiter Cove I (18,963) 1987 30 Years Jupiter Cove III (19,306) 1987 30 Years Kempton Downs (2,233,649) 1990 30 Years Ketwood (21,828) 1979 30 Years Keystone (1,100,519) 1981 30 Years Kimmerly Glen (579,229) 1986 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ---------------------------------------------------------------------------------------------------------------------------------- BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ---------------------------------------------------------------------------------------------------------------------------------- Kings Colony Savannah, GA 2,084,325 230,149 2,071,343 Kingsport Alexandria, VA - 1,262,250 12,479,294 Kirby Place Houston, TX (E) 3,620,000 25,914,555 Knox Landing Knoxville, TN 1,551,481 158,589 1,427,298 La Costa Brava (ORL) Orlando, FL - 206,626 4,610,502 La Mariposa Mesa, AZ (O) 2,047,539 12,466,128 La Mirage San Diego, CA - 34,895,200 93,909,311 La Reserve Oro Valley, AZ (O) 3,264,562 4,936,546 La Tour Fontaine Houston, TX 9,610,482 2,916,000 15,917,178 La Valencia Mesa, AZ - 3,553,350 20,542,396 Ladera Mesa, AZ 10,906,931 2,978,879 20,640,453 Lake in the Woods (MI) Ypsilanti, MI - 1,859,625 18,283,831 Lake Point Charlotte, NC - 1,058,975 13,587,338 Lakes at Vinings Atlanta, GA 22,200,684 6,496,000 21,857,927 Lakeshore at Preston Plano, TX 12,933,907 3,322,000 15,211,713 Lakeshore I (GA) Chattanooga, TN 1,236,015 169,375 1,524,375 Lakeville Resort Petaluma, CA 20,367,547 2,734,100 24,610,651 Lakewood Greens Dallas, TX 8,293,081 2,016,000 9,032,159 Lakewood Oaks Dallas, TX - 1,630,200 14,686,192 Lamplight Court Columbus, OH - 70,517 634,654 Landera San Antonio, TX - 766,300 6,896,811 Landings (FL), The Winterhaven, FL 716,235 130,953 1,178,580 Landings (TN) Memphis, TN - 1,314,000 14,090,109 Larkspur I (Hil) Columbus, OH 993,689 179,628 1,616,653 Larkspur I (Mor) Dayton, OH 452,555 55,416 498,745 Larkspur II Dayton, OH - 29,908 269,168 Larkspur Woods Sacramento, CA (E) 5,800,000 14,539,036 Laurel Bay Detroit, MI 859,412 186,004 1,674,035 Laurel Court Toledo, OH 1,116,603 135,736 1,221,621 Laurel Gardens Coral Springs, FL - 4,800,000 25,942,631 Laurel Glen Atlanta, GA 1,701,792 289,509 2,605,582 Laurel Ridge Chapel Hill, NC - 160,000 3,594,635 Legends Tucson, AZ - 2,729,788 17,911,434 Lexington Farm Alpharetta, GA 18,455,654 3,520,000 21,063,101 Lexington Glen Atlanta, GA - 5,760,000 40,190,507 Lexington Park Orlando, FL - 2,016,000 12,346,726 Lincoln at Defoors Atlanta, GA - 5,100,000 20,425,822 Lincoln Green I San Antonio, TX - 947,366 5,833,661 Lincoln Green I & II (CA) Sunnyvale, CA 12,727,505 9,048,000 18,483,642 Lincoln Green II San Antonio, TX - 1,052,340 5,212,696 Lincoln Green III San Antonio, TX - 536,010 1,828,661 Lincoln Heights Quincy, MA 21,409,834 5,925,000 33,595,262 Lincoln Village I & II (CA) Larkspur, CA - 17,100,000 31,399,237 Lindendale Columbus, OH 1,382,143 209,159 1,882,427 Link Terrace Savannah, GA 898,724 121,839 1,096,547 Little Cottonwoods Tempe, AZ (O) 3,050,133 26,991,689 Lodge (OK), The Tulsa, OK - 313,571 3,023,363 Lodge (TX), The San Antonio, TX - 1,363,636 8,737,564 Lofton Place Tampa, FL - 2,240,000 16,679,214 Longfellow Place - Combined Boston, MA - 53,164,160 184,021,737 Longwood Decatur, GA - 1,452,000 13,087,837 Longwood (KY) Lexington,KY 943,932 146,309 1,316,781 Madison at Cedar Springs Dallas, TX - 2,470,000 33,194,620 Madison at Chase Oaks Plano, TX - 3,055,000 28,932,885 Madison at River Sound Lawrenceville, GA - 3,666,999 47,387,106 Madison at Round Grove Austin, TX - 2,626,000 25,682,373 Madison at Stone Creek Lewisville, TX - 2,535,000 22,611,700
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ----------------------------------------------------------------------------------------------------------------------------------- Kings Colony - 8,117 230,149 2,079,460 2,309,609 Kingsport - 982,079 1,262,250 13,461,373 14,723,623 Kirby Place 1,600 258,979 3,621,600 26,173,534 29,795,134 Knox Landing - 6,373 158,589 1,433,671 1,592,259 La Costa Brava (ORL) - 2,638,716 206,626 7,249,218 7,455,844 La Mariposa - 318,757 2,047,539 12,784,885 14,832,424 La Mirage - 2,665,264 34,895,200 96,574,575 131,469,775 La Reserve - 218,849 3,264,562 5,155,395 8,419,957 La Tour Fontaine - 107,312 2,916,000 16,024,490 18,940,490 La Valencia - 678,386 3,553,350 21,220,782 24,774,132 Ladera - 82,888 2,978,879 20,723,341 23,702,220 Lake in the Woods (MI) - 5,889,551 1,859,625 24,173,382 26,033,007 Lake Point - 114,443 1,058,975 13,701,781 14,760,756 Lakes at Vinings 2,000 209,564 6,498,000 22,067,492 28,565,492 Lakeshore at Preston 3,800 117,521 3,325,800 15,329,235 18,655,035 Lakeshore I (GA) - 34,990 169,375 1,559,365 1,728,740 Lakeville Resort 2,400 855,402 2,736,500 25,466,053 28,202,553 Lakewood Greens 3,600 254,494 2,019,600 9,286,654 11,306,254 Lakewood Oaks 1,400 870,899 1,631,600 15,557,091 17,188,691 Lamplight Court - 15,753 70,517 650,407 720,924 Landera - 294,058 766,300 7,190,869 7,957,169 Landings (FL), The - 15,445 130,953 1,194,025 1,324,978 Landings (TN) - 249,510 1,314,000 14,339,619 15,653,619 Larkspur I (Hil) - 3,697 179,628 1,620,350 1,799,978 Larkspur I (Mor) - 2,813 55,416 501,558 556,974 Larkspur II - 718 29,908 269,886 299,794 Larkspur Woods 2,900 366,134 5,802,900 14,905,170 20,708,070 Laurel Bay - 2,119 186,004 1,676,154 1,862,158 Laurel Court - 3,331 135,736 1,224,951 1,360,687 Laurel Gardens - 258,894 4,800,000 26,201,525 31,001,525 Laurel Glen - 5,312 289,509 2,610,894 2,900,403 Laurel Ridge 22,551 1,467,459 182,551 5,062,094 5,244,644 Legends - 205,304 2,729,788 18,116,738 20,846,526 Lexington Farm 1,900 146,849 3,521,900 21,209,949 24,731,849 Lexington Glen - 180,007 5,760,000 40,370,514 46,130,514 Lexington Park - 314,673 2,016,000 12,661,398 14,677,398 Lincoln at Defoors - 154,794 5,100,000 20,580,616 25,680,616 Lincoln Green I - 255,937 947,366 6,089,598 7,036,964 Lincoln Green I & II (CA) 9,300 106,511 9,057,300 18,590,153 27,647,453 Lincoln Green II - 705,958 1,052,340 5,918,654 6,970,994 Lincoln Green III - 273,656 536,010 2,102,317 2,638,327 Lincoln Heights 3,400 229,981 5,928,400 33,825,243 39,753,643 Lincoln Village I & II (CA) 7,300 2,054,383 17,107,300 33,453,620 50,560,920 Lindendale - 5,305 209,159 1,887,732 2,096,890 Link Terrace - 3,896 121,839 1,100,443 1,222,282 Little Cottonwoods - 308,845 3,050,133 27,300,534 30,350,667 Lodge (OK), The (200) 930,879 313,371 3,954,242 4,267,613 Lodge (TX), The - 630,444 1,363,636 9,368,009 10,731,645 Lofton Place - 609,388 2,240,000 17,288,602 19,528,602 Longfellow Place - Combined - 424,740 53,164,160 184,446,477 237,610,637 Longwood 2,048 518,830 1,454,048 13,606,667 15,060,715 Longwood (KY) - 4,531 146,309 1,321,312 1,467,621 Madison at Cedar Springs - 69,228 2,470,000 33,263,848 35,733,848 Madison at Chase Oaks - 140,773 3,055,000 29,073,658 32,128,658 Madison at River Sound - 68,178 3,666,999 47,455,284 51,122,283 Madison at Round Grove - 145,729 2,626,000 25,828,103 28,454,103 Madison at Stone Creek - 150,265 2,535,000 22,761,964 25,296,964
LIFE USED TO DESCRIPTION COMPUTE - -------------------------------------------------------------------------------- DEPRECIATION IN ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ------------------------------------------------------------------------------------------------ Kings Colony (19,070) 1987 30 Years Kingsport (2,811,542) 1986 30 Years Kirby Place (2,033,124) 1994 30 Years Knox Landing (13,477) 1986 30 Years La Costa Brava (ORL) (4,129,893) 1967 30 Years La Mariposa (981,457) 1986 30 Years La Mirage (8,319,235) 1988/1992 30 Years La Reserve (455,305) 1988 30 Years La Tour Fontaine (696,631) 1994 30 Years La Valencia (1,610,709) 1998 30 Years Ladera (1,488,588) 1995 30 Years Lake in the Woods (MI) (13,445,220) 1969 30 Years Lake Point (640,515) 1984 30 Years Lakes at Vinings (1,211,285) 1972/1975 30 Years Lakeshore at Preston (841,484) 1992 30 Years Lakeshore I (GA) (14,995) 1986 30 Years Lakeville Resort (3,060,894) 1984 30 Years Lakewood Greens (531,387) 1986 30 Years Lakewood Oaks (3,233,391) 1987 30 Years Lamplight Court (6,401) 1972 30 Years Landera (740,084) 1983 30 Years Landings (FL), The (11,203) 1984 30 Years Landings (TN) (653,435) 1986 30 Years Larkspur I (Hil) (14,581) 1983 30 Years Larkspur I (Mor) (4,721) 1982 30 Years Larkspur II (2,535) 1984 30 Years Larkspur Woods (1,218,608) 1989/1993 30 Years Laurel Bay (15,167) 1989 30 Years Laurel Court (11,448) 1978 30 Years Laurel Gardens (1,169,799) 1989 30 Years Laurel Glen (23,262) 1986 30 Years Laurel Ridge (2,749,488) 1975 30 Years Legends (1,353,986) 1995 30 Years Lexington Farm (1,129,048) 1995 30 Years Lexington Glen (1,792,637) 1990 30 Years Lexington Park (582,892) 1988 30 Years Lincoln at Defoors (459,955) 1980 30 Years Lincoln Green I (3,203,644) 1984/1986 30 Years Lincoln Green I & II (CA) (980,932) 1979 30 Years Lincoln Green II (2,703,798) 1984/1986 30 Years Lincoln Green III (991,219) 1984/1986 30 Years Lincoln Heights (2,415,021) 1991 30 Years Lincoln Village I & II (CA) (1,816,235) 1980 30 Years Lindendale (17,177) 1987 30 Years Link Terrace (10,110) 1984 30 Years Little Cottonwoods (1,989,161) 1984 30 Years Lodge (OK), The (2,419,623) 1979 30 Years Lodge (TX), The (3,827,792) 1979(#) 30 Years Lofton Place (780,117) 1988 30 Years Longfellow Place - Combined (2,668,333) 1975 30 Years Longwood (2,905,506) 1992 30 Years Longwood (KY) (12,100) 1985 30 Years Madison at Cedar Springs (1,451,112) 1995 30 Years Madison at Chase Oaks (1,299,365) 1995 30 Years Madison at River Sound (2,096,164) 1996 30 Years Madison at Round Grove (1,158,009) 1995 30 Years Madison at Stone Creek (1,026,234) 1995 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ----------------------------------------------------------------------------------------------------------------------------------- Madison at the Arboretum Austin, TX - 1,046,500 9,638,269 Madison on Melrose Richardson, TX - 1,300,000 15,067,256 Madison on the Parkway Dallas, TX - 2,444,000 22,482,051 Mallard Cove Greenville, SC - 803,700 7,322,311 Mallard Cove at Conway Orlando, FL - 600,000 2,555,069 Mallgate Louisville, KY - - 6,702,515 Marabou Mills I Indianpolis, IN 1,412,119 224,178 2,017,602 Marabou Mills II Indianpolis, IN 959,880 192,186 1,729,676 Marabou Mills III Indianpolis, IN 1,176,908 171,557 1,544,010 Marbrisa Tampa, FL - 811,500 7,313,488 Mariner Club (FL) Pembroke Pines, FL 9,501,055 1,824,000 20,771,566 Mariners Wharf Orange Park, FL - 1,858,800 16,744,951 Mark Landing I Miami, FL 1,307,433 191,986 1,727,872 Marks Englewood, CO 20,560,000 4,928,500 44,418,180 Marquessa Corona Hills, CA (U) 6,888,500 21,604,584 Marsh Landing I Brunswick, GA 776,149 133,193 1,198,735 Marshlanding II Brunswick, GA 952,036 111,187 1,000,684 Martha Lake Seattle, WA - 823,200 7,405,070 Martins Landing Roswell, GA 12,745,735 4,800,000 12,949,891 Marymont (MD) Laurel, MD - 1,901,800 17,135,393 McAlpine Ridge Charlotte, NC - 1,283,400 11,557,252 McDowell Place Naperville, IL 15,786,052 2,578,900 23,211,919 Meadow Creek Tigard, OR 8,209,235 1,298,100 11,692,425 Meadowland Athens, GA 983,511 152,395 1,371,552 Meadowood (Cin) Cincinnati, OH 1,776,638 330,734 2,976,610 Meadowood (Cra) Indianpolis, IN 1,098,209 132,471 1,192,235 Meadowood (Cuy) Akron, OH 1,286,594 201,407 1,812,659 Meadowood (FL) Huntington, KY 862,397 96,350 867,146 Meadowood (Fra) Franklin, IN 1,021,963 129,252 1,163,264 Meadowood (Log) Southbend, IN - 93,338 840,044 Meadowood (New) Evansville, IN 981,203 131,546 1,183,914 Meadowood (Nic) Lexington,KY 1,401,249 173,223 1,559,007 Meadowood (Tem) Toledo, MI 1,340,000 173,675 1,563,071 Meadowood (Wel) Youngstown, OH - 58,570 527,133 Meadowood Apts. (Man) Mansfield, OH 937,100 118,504 1,066,538 Meadowood I (GA) Atlanta, GA 986,986 205,468 1,849,208 Meadowood I (MI) Jackson, MI 944,458 146,208 1,315,871 Meadowood I (OH) Columbus, OH 1,016,762 146,912 1,322,211 Meadowood II (FL) Orlando, FL 823,042 160,367 1,443,300 Meadowood II (GA) Atlanta, GA 883,550 176,968 1,592,713 Meadowood II (IN) Indianpolis, IN 708,179 122,626 1,103,630 Meadowood II (OH) Columbus, OH 484,068 57,802 520,217 Meadows I (OH), The Columbus, OH 785,201 150,800 1,357,203 Meadows II (OH), The Columbus, OH 1,158,433 186,636 1,679,728 Meadows in the Park Birmingham, AL - 1,000,000 8,533,099 Meadows on the Lake Birmingham, AL - 1,000,000 8,529,726 Meldon Place Toledo, OH 2,400,695 288,434 2,595,904 Merrifield Hagerstown, MD 2,045,897 268,712 2,418,407 Merrill Creek Tacoma, WA - 814,200 7,330,606 Merrimac Woods Costa Mesa, CA - 673,300 6,081,677 Merritt at Satellite Place Duluth, GA - 3,400,000 29,919,407 Miguel Place St. Petersburg, FL 1,469,356 199,349 1,794,141 Mill Pond Millersville, MD 7,912,334 2,880,000 8,931,260 Mill Run Savannah, GA 1,519,728 198,212 1,783,904 Mill Village Randolph, MA - 6,200,000 13,221,679 Millburn Akron, OH 1,205,695 192,062 1,728,558 Millburn Court II Dayton, OH 908,789 122,870 1,105,834
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ----------------------------------------------------------------------------------------------------------------------------------- Madison at the Arboretum - 166,261 1,046,500 9,804,530 10,851,030 Madison on Melrose - 47,134 1,300,000 15,114,390 16,414,390 Madison on the Parkway - 105,958 2,444,000 22,588,009 25,032,009 Mallard Cove 9,650 664,534 813,350 7,986,845 8,800,195 Mallard Cove at Conway - 4,872,430 600,000 7,427,499 8,027,499 Mallgate - 4,537,936 - 11,240,451 11,240,451 Marabou Mills I - 5,162 224,178 2,022,764 2,246,942 Marabou Mills II - 14,463 192,186 1,744,139 1,936,326 Marabou Mills III - 3,234 171,557 1,547,244 1,718,801 Marbrisa 2,000 2,147,386 813,500 9,460,873 10,274,373 Mariner Club (FL) 500 188,748 1,824,500 20,960,314 22,784,814 Mariners Wharf 2,400 239,255 1,861,200 16,984,206 18,845,406 Mark Landing I - 1,963 191,986 1,729,835 1,921,821 Marks - 882,561 4,928,500 45,300,740 50,229,240 Marquessa - 591,208 6,888,500 22,195,792 29,084,292 Marsh Landing I - 5,347 133,193 1,204,082 1,337,275 Marshlanding II - 8,237 111,187 1,008,920 1,120,108 Martha Lake (2,000) 130,462 821,200 7,535,532 8,356,732 Martins Landing 2,000 247,544 4,802,000 13,197,435 17,999,435 Marymont (MD) 2,000 657,214 1,903,800 17,792,607 19,696,407 McAlpine Ridge 600 838,514 1,284,000 12,395,765 13,679,765 McDowell Place 1,500 930,783 2,580,400 24,142,702 26,723,102 Meadow Creek 1,000 1,198,268 1,299,100 12,890,692 14,189,792 Meadowland - 3,056 152,395 1,374,608 1,527,003 Meadowood (Cin) - 6,878 330,734 2,983,488 3,314,223 Meadowood (Cra) - 17,543 132,471 1,209,778 1,342,248 Meadowood (Cuy) - 2,097 201,407 1,814,756 2,016,162 Meadowood (FL) - 17,574 96,350 884,720 981,069 Meadowood (Fra) - 6,951 129,252 1,170,215 1,299,467 Meadowood (Log) - 8,342 93,338 848,386 941,724 Meadowood (New) - 7,844 131,546 1,191,758 1,323,304 Meadowood (Nic) - 30,448 173,223 1,589,455 1,762,678 Meadowood (Tem) - 2,064 173,675 1,565,136 1,738,810 Meadowood (Wel) - 796 58,570 527,929 586,499 Meadowood Apts. (Man) - 2,403 118,504 1,068,942 1,187,446 Meadowood I (GA) - 3,322 205,468 1,852,530 2,057,997 Meadowood I (MI) - 2,165 146,208 1,318,035 1,464,243 Meadowood I (OH) - 7,343 146,912 1,329,554 1,476,467 Meadowood II (FL) - 1,943 160,367 1,445,243 1,605,609 Meadowood II (GA) - 5,264 176,968 1,597,977 1,774,945 Meadowood II (IN) - 3,501 122,626 1,107,131 1,229,756 Meadowood II (OH) - 471 57,802 520,688 578,490 Meadows I (OH), The - 8,655 150,800 1,365,858 1,516,658 Meadows II (OH), The - 4,861 186,636 1,684,589 1,871,226 Meadows in the Park 900 525,288 1,000,900 9,058,388 10,059,288 Meadows on the Lake 900 24,124 1,000,900 8,553,850 9,554,750 Meldon Place - 7,891 288,434 2,603,794 2,892,228 Merrifield - 5,194 268,712 2,423,601 2,692,313 Merrill Creek - 96,201 814,200 7,426,806 8,241,006 Merrimac Woods 2,400 500,505 675,700 6,582,182 7,257,882 Merritt at Satellite Place - 3,102 3,400,000 29,922,509 33,322,509 Miguel Place - 6,348 199,349 1,800,489 1,999,838 Mill Pond - 289,776 2,880,000 9,221,037 12,101,037 Mill Run - 3,278 198,212 1,787,182 1,985,393 Mill Village (14,700) 302,028 6,185,300 13,523,707 19,709,007 Millburn - 2,457 192,062 1,731,015 1,923,077 Millburn Court II - 6,623 122,870 1,112,457 1,235,327
LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - -------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ---------------------------------------------------------------------------------------------- Madison at the Arboretum (445,081) 1995 30 Years Madison on Melrose (666,001) 1995 30 Years Madison on the Parkway (1,010,063) 1995 30 Years Mallard Cove (1,164,556) 1983 30 Years Mallard Cove at Conway (4,733,928) 1974 30 Years Mallgate (7,354,306) 1969 30 Years Marabou Mills I (18,412) 1986 30 Years Marabou Mills II (15,857) 1987 30 Years Marabou Mills III (14,005) 1987 30 Years Marbrisa (1,289,391) 1984 30 Years Mariner Club (FL) (938,007) 1988 30 Years Mariners Wharf (1,382,369) 1989 30 Years Mark Landing I (15,636) 1987 30 Years Marks (4,281,090) 1987 30 Years Marquessa (1,673,748) 1992 30 Years Marsh Landing I (11,068) 1984 30 Years Marshlanding II (9,409) 1986 30 Years Martha Lake (731,255) 1991 30 Years Martins Landing (739,426) 1972 30 Years Marymont (MD) (3,476,900) 1987-88 30 Years McAlpine Ridge (2,492,628) 1989-90 30 Years McDowell Place (2,820,106) 1988 30 Years Meadow Creek (2,731,776) 1985 30 Years Meadowland (12,492) 1984 30 Years Meadowood (Cin) (26,751) 1985 30 Years Meadowood (Cra) (11,341) 1983 30 Years Meadowood (Cuy) (16,221) 1985 30 Years Meadowood (FL) (8,532) 1983 30 Years Meadowood (Fra) (10,820) 1983 30 Years Meadowood (Log) (7,854) 1984 30 Years Meadowood (New) (11,187) 1984 30 Years Meadowood (Nic) (14,491) 1983 30 Years Meadowood (Tem) (14,019) 1984 30 Years Meadowood (Wel) (5,088) 1986 30 Years Meadowood Apts. (Man) (9,775) 1983 30 Years Meadowood I (GA) (16,546) 1982 30 Years Meadowood I (MI) (11,846) 1983 30 Years Meadowood I (OH) (12,120) 1984 30 Years Meadowood II (FL) (13,009) 1980 30 Years Meadowood II (GA) (14,319) 1984 30 Years Meadowood II (IN) (10,529) 1986 30 Years Meadowood II (OH) (4,727) 1985 30 Years Meadows I (OH), The (12,593) 1985 30 Years Meadows II (OH), The (15,199) 1987 30 Years Meadows in the Park (718,147) 1986 30 Years Meadows on the Lake (652,281) 1987 30 Years Meldon Place (24,002) 1978 30 Years Merrifield (21,850) 1988 30 Years Merrill Creek (712,427) 1994 30 Years Merrimac Woods (834,633) 1970 30 Years Merritt at Satellite Place (256,094) 1999 30 Years Miguel Place (16,667) 1987 30 Years Mill Pond (335,570) 1984 30 Years Mill Run (16,459) 1986 30 Years Mill Village (1,045,059) 1971/1977 30 Years Millburn (15,339) 1984 30 Years Millburn Court II (10,292) 1981 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ----------------------------------------------------------------------------------------------------------------------------------- Millston I Cincinnati, OH 443,126 73,599 662,395 Millston II Cincinnati, OH 329,988 59,830 538,472 Mirador Phoenix, AZ - 2,597,518 23,402,200 Mission Bay Orlando, FL - 2,432,000 21,623,560 Mission Palms Tucson, AZ - 2,023,400 18,209,315 Misty Woods Cary, NC - 720,790 18,063,934 Montgomery Court I (MI) Lansing, MI 1,213,411 156,298 1,406,680 Montgomery Court I (OH) Columbus, OH 1,280,843 163,755 1,473,796 Montgomery Court II (OH) Columbus, OH 795,450 149,734 1,347,604 Montierra Scottsdale, AZ - 3,455,000 17,269,841 Montrose Square Columbus, OH 1,699,852 193,266 1,739,394 Morgan Trace Atlanta, GA 1,437,958 239,102 2,151,922 Morningside Scottsdale, AZ (O) 670,470 12,607,976 Morningside (FL) Titusville, FL - 197,890 1,781,006 Mosswood I Orlando, FL 785,201 163,294 1,469,644 Mosswood II Orlando, FL 1,534,000 275,330 2,477,969 Mountain Park Ranch Phoenix, AZ (P) 1,662,332 18,260,276 Mountain Run Albuquerque, NM - 2,023,400 20,734,818 Mountain Terrace Stevenson Ranch, CA - 3,977,200 35,826,520 Newberry I Lansing, MI 1,144,691 183,509 1,651,580 Newberry II Lansing, MI 1,235,839 142,292 1,280,632 Newport Heights Seattle, WA - 390,700 3,522,780 North Creek (Everett) Evertt, WA 8,157,506 3,960,000 12,411,015 North Creek Heights Seattle, WA - 753,800 6,786,778 North Hill Atlanta, GA 16,060,957 2,520,000 18,550,989 Northampton 1 Largo, MD 20,380,296 1,843,200 17,397,514 Northampton 2 Largo, MD - 1,494,100 14,464,432 Northgate Village San Antonio, TX - 660,000 5,974,145 Northlake (FL) Jacksonville, FL - 1,166,000 10,514,526 Northridge Pleasant Hill, CA - 5,525,000 14,695,328 Northridge (GA) Atlanta, GA 968,755 238,811 2,149,295 Northrup Court I Pittsburgh, PA 1,375,701 189,246 1,703,213 Northrup Court II Pittsburgh, PA 886,769 157,190 1,414,713 Northwoods Village Cary, NC (E) 1,368,000 11,460,337 Nova Glen I Daytona Beach, FL - 142,086 1,278,771 Nova Glen II Daytona Beach, FL 1,284,043 175,168 1,576,511 Novawood I Daytona Beach, FL 310,000 122,311 1,100,803 Novawood II Daytona Beach, FL 720,993 144,401 1,299,613 Oak Gardens Miami, FL - 329,968 2,969,711 Oak Mill 2 Germantown, MD 9,507,486 854,000 8,230,187 Oak Park North Agoura Hills, CA (N) 1,706,500 15,362,666 Oak Park South Agoura Hills, CA (N) 1,683,400 15,154,608 Oak Ridge Orlando, FL 1,217,944 173,617 1,562,552 Oak Shade Daytona Beach, FL 1,467,867 229,403 2,064,627 Oakley Woods Atlanta, GA 1,131,397 165,449 1,489,040 Oaks (NC) Charlotte, NC - 2,196,744 23,601,540 Oaks of Lakebridge Ormond Beach, FL - 413,700 3,912,636 Oakwood Manor Miami, FL - 173,247 1,559,222 Oakwood Village (FL) St. Petersburg, FL 721,523 145,547 1,309,922 Oakwood Village (GA) Augusta, GA 1,054,585 161,174 1,450,567 Ocean Walk Key West, FL 21,099,078 2,834,900 25,531,749 Old Archer Court Gainesville, FL 993,263 170,323 1,532,911 Olde Redmond Place Redmond, WA 9,274,306 4,800,000 14,126,038 Olentangy Commons (OH) Columbus, OH - 3,032,336 22,821,061 Olivewood (MI) Detriot, MI 3,339,425 519,167 4,672,501 Olivewood I Indianapolis, IN 932,086 184,701 1,662,312 Olivewood II Indianapolis, IN 1,292,000 186,235 1,676,111
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Millston I - 4,213 73,599 666,609 740,208 Millston II - (963) 59,830 537,508 597,338 Mirador - 168,298 2,597,518 23,570,498 26,168,016 Mission Bay - 195,874 2,432,000 21,819,435 24,251,435 Mission Palms - 422,331 2,023,400 18,631,646 20,655,046 Misty Woods - 1,111,837 720,790 19,175,771 19,896,561 Montgomery Court I (MI) - 7,186 156,298 1,413,866 1,570,164 Montgomery Court I (OH) - 42,777 163,755 1,516,573 1,680,328 Montgomery Court II (OH) - 3,890 149,734 1,351,494 1,501,228 Montierra - 21,931 3,455,000 17,291,772 20,746,772 Montrose Square - 10,725 193,266 1,750,119 1,943,385 Morgan Trace - 3,035 239,102 2,154,957 2,394,059 Morningside - 155,496 670,470 12,763,472 13,433,942 Morningside (FL) - 18,926 197,890 1,799,932 1,997,821 Mosswood I - 9,206 163,294 1,478,849 1,642,143 Mosswood II - 8,596 275,330 2,486,565 2,761,895 Mountain Park Ranch - 327,404 1,662,332 18,587,680 20,250,012 Mountain Run 280,600 719,179 2,304,000 21,453,997 23,757,997 Mountain Terrace (10,700) 478,785 3,966,500 36,305,304 40,271,804 Newberry I - 8,340 183,509 1,659,920 1,843,429 Newberry II - 6,463 142,292 1,287,095 1,429,387 Newport Heights 500 304,974 391,200 3,827,754 4,218,954 North Creek (Everett) 7,500 172,724 3,967,500 12,583,739 16,551,239 North Creek Heights - 129,466 753,800 6,916,244 7,670,044 North Hill 5,300 3,450,464 2,525,300 22,001,453 24,526,753 Northampton 1 - 2,356,521 1,843,200 19,754,035 21,597,235 Northampton 2 19,400 449,175 1,513,500 14,913,607 16,427,107 Northgate Village 100 698,354 660,100 6,672,499 7,332,599 Northlake (FL) 2,400 218,250 1,168,400 10,732,777 11,901,177 Northridge 2,800 582,926 5,527,800 15,278,254 20,806,054 Northridge (GA) - 4,854 238,811 2,154,149 2,392,960 Northrup Court I - 973 189,246 1,704,186 1,893,432 Northrup Court II - 2,427 157,190 1,417,140 1,574,330 Northwoods Village 1,700 529,690 1,369,700 11,990,027 13,359,727 Nova Glen I - 7,932 142,086 1,286,703 1,428,789 Nova Glen II - 7,642 175,168 1,584,152 1,759,320 Novawood I - 4,051 122,311 1,104,854 1,227,165 Novawood II - 4,217 144,401 1,303,830 1,448,232 Oak Gardens - 5,526 329,968 2,975,237 3,305,205 Oak Mill 2 133 1,192,091 854,133 9,422,277 10,276,410 Oak Park North 400 131,674 1,706,900 15,494,340 17,201,240 Oak Park South 400 266,763 1,683,800 15,421,370 17,105,170 Oak Ridge - 5,442 173,617 1,567,994 1,741,611 Oak Shade - 4,303 229,403 2,068,930 2,298,333 Oakley Woods - 27,803 165,449 1,516,842 1,682,291 Oaks (NC) - 91,742 2,196,744 23,693,282 25,890,026 Oaks of Lakebridge 2,100 460,951 415,800 4,373,586 4,789,386 Oakwood Manor - 5,410 173,247 1,564,633 1,737,880 Oakwood Village (FL) - 6,046 145,547 1,315,967 1,461,514 Oakwood Village (GA) - 3,466 161,174 1,454,033 1,615,207 Ocean Walk 3,849 284,742 2,838,749 25,816,491 28,655,239 Old Archer Court - 5,323 170,323 1,538,234 1,708,558 Olde Redmond Place 7,100 129,092 4,807,100 14,255,130 19,062,230 Olentangy Commons (OH) - 7,556,896 3,032,336 30,377,957 33,410,293 Olivewood (MI) - 27,383 519,167 4,699,883 5,219,050 Olivewood I - 7,258 184,701 1,669,571 1,854,272 Olivewood II - 7,750 186,235 1,683,861 1,870,096
LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - --------------------------------------------------------------------------------------------- Millston I (6,563) 1981 30 Years Millston II (5,088) 1982 30 Years Mirador (1,709,124) 1995 30 Years Mission Bay (972,490) 1991 30 Years Mission Palms (1,832,997) 1980 30 Years Misty Woods (890,158) 1984 30 Years Montgomery Court I (MI) (12,993) 1984 30 Years Montgomery Court I (OH) (14,001) 1985 30 Years Montgomery Court II (OH) (12,301) 1986 30 Years Montierra (457,154) 1999 30 Years Montrose Square (17,088) 1987 30 Years Morgan Trace (19,367) 1986 30 Years Morningside (933,893) 1989 30 Years Morningside (FL) (18,468) 1984 30 Years Mosswood I (13,463) 1981 30 Years Mosswood II (22,392) 1982 30 Years Mountain Park Ranch (1,382,379) 1994 30 Years Mountain Run (2,141,282) 1985 30 Years Mountain Terrace (3,982,884) 1992 30 Years Newberry I (15,010) 1985 30 Years Newberry II (11,642) 1986 30 Years Newport Heights (822,936) 1985 30 Years North Creek (Everett) (647,951) 1986 30 Years North Creek Heights (661,310) 1990 30 Years North Hill (2,343,974) 1984 30 Years Northampton 1 (4,473,537) 1977 30 Years Northampton 2 (2,884,167) 1988 30 Years Northgate Village (1,794,088) 1984 30 Years Northlake (FL) (899,665) 1989 30 Years Northridge (918,027) 1974 30 Years Northridge (GA) (19,311) 1985 30 Years Northrup Court I (15,234) 1985 30 Years Northrup Court II (12,671) 1985 30 Years Northwoods Village (1,019,828) 1986 30 Years Nova Glen I (11,918) 1984 30 Years Nova Glen II (14,746) 1986 30 Years Novawood I (10,198) 1980 30 Years Novawood II (11,956) 1980 30 Years Oak Gardens (26,651) 1988 30 Years Oak Mill 2 (1,667,080) 1985 30 Years Oak Park North (2,252,250) 1990 30 Years Oak Park South (2,424,736) 1989 30 Years Oak Ridge (14,326) 1985 30 Years Oak Shade (18,744) 1985 30 Years Oakley Woods (13,965) 1984 30 Years Oaks (NC) (1,056,167) 1996 30 Years Oaks of Lakebridge (1,117,621) 1984 30 Years Oakwood Manor (14,203) 1986 30 Years Oakwood Village (FL) (12,299) 1986 30 Years Oakwood Village (GA) (13,370) 1985 30 Years Ocean Walk (1,899,755) 1990 30 Years Old Archer Court (14,160) 1977 30 Years Olde Redmond Place (769,558) 1986 30 Years Olentangy Commons (OH) (19,008,907) 1972 30 Years Olivewood (MI) (42,683) 1986 30 Years Olivewood I (15,038) 1985 30 Years Olivewood II (15,261) 1986 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ----------------------------------------------------------------------------------------------------------------------------------- One Eton Square Tulsa, OK -- 1,570,100 14,130,937 Orange Grove Village Tucson, AZ (O) 1,813,154 14,893,347 Orchard Ridge Seattle, WA -- 482,600 4,372,033 Overlook San Antonio, TX -- 1,100,000 9,901,517 Overlook Manor Frederick, MD -- 1,296,000 3,932,513 Overlook Manor II Frederick, MD 5,860,000 2,184,000 6,284,130 Overlook Manor III Frederick, MD -- 1,024,000 3,029,673 Paces Station Atlanta, GA -- 4,801,500 32,547,553 Palatka Oaks I Gainesville, FL 188,564 49,535 445,818 Palatka Oaks II Gainesville, FL 207,421 42,767 384,899 Palm Place Sarasota, FL 1,353,618 248,315 2,234,833 Palms at South Shore League City, TX -- 1,200,000 16,522,433 Palms, The Phoenix, AZ (O) 3,285,226 11,270,203 Panther Ridge Seattle, WA -- 1,055,800 9,506,117 Paradise Pointe Dania, FL - 1,493,800 17,344,218 Parc Royale Houston, TX 8,766,487 2,223,000 11,936,833 Park Knoll Atlanta, GA -- 2,904,500 26,175,911 Park Meadow Gilbert, AZ (O) 835,217 15,120,769 Park Place I and II (MN) Plymouth, MN 17,525,591 2,428,200 21,918,197 Park Place (TX) Houston, TX 9,976,425 1,603,000 11,961,284 Park West (CA) Los Angeles, CA -- 3,033,300 27,302,383 Park West (TX) Austin, TX -- 648,605 4,738,542 Park West End (VA) Richmond, VA 7,168,169 1,560,000 11,871,449 Parkcrest Southfield, MI 7,110,922 1,260,000 10,404,807 Parkridge Place Las Colinas, TX -- 6,430,800 17,091,674 Parkside Union City, CA -- 6,240,000 11,827,453 Parkview Terrace Redlands, CA -- 4,969,200 35,653,777 Parkville (Col) Columbus, OH 1,745,875 150,433 1,353,897 Parkville (IN) Muncie, IN 745,459 103,434 930,908 Parkville (Par) Dayton, OH 588,286 127,863 1,150,767 Parkville (WV) Parkersburg, WV -- 105,460 949,139 Parkwood East Fort Collins, CO -- 1,644,000 14,790,698 Patchen Oaks Lexington, KY -- 1,344,000 8,129,210 Pelican Pointe I Jacksonville, FL 1,297,844 213,515 1,921,634 Pelican Pointe II Jacksonville, FL 989,685 184,852 1,663,670 Pine Barrens Jacksonville, FL 1,489,659 268,303 2,414,726 Pine Harbour Orlando, FL -- 1,661,000 14,970,915 Pine Knoll Atlanta, GA 1,220,819 138,052 1,242,470 Pine Lake Tampa, FL 655,073 79,877 718,891 Pine Meadow Greensboro, NC 4,696,390 719,300 6,487,043 Pine Meadows I (FL) Ft. Meyers, FL 1,062,399 152,019 1,368,175 Pine Terrace I & II Panama City, FL 2,166,946 288,992 2,600,927 Pine Tree Club Wildwood, MO -- 1,125,000 7,046,441 Pinellas Pines St. Petersburg, FL 1,552,906 174,999 1,574,993 Pines of Cloverlane Pittsfield Township, MI -- 1,906,600 16,880,313 Pines of Springdale West Palm Beach, FL -- 471,200 4,416,174 Plantation (TX) Houston, TX -- 2,320,000 7,718,422 Plantation Ridge Marietta, GA -- 4,086,000 19,206,247 Plantations at Killearn Tallahassee, FL 4,960,829 828,000 7,617,890 Pleasant Ridge Arlington, TX 1,640,061 441,000 1,999,502 Plum Tree Corner, WI (Q) 1,992,000 20,246,205 Plum Tree Park Seattle, WA -- 1,133,400 10,201,652 Plumwood (Che) Anderson, IN 448,333 84,923 764,303 Plumwood (For) Ft. Wayne, IN 604,317 131,351 1,182,157 Plumwood I Columbus, OH 1,711,169 289,814 2,608,329 Plumwood II Columbus, OH 444,366 107,583 968,248 Point (NC) Charlotte, NC -- 1,700,000 25,417,267
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ---------------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ---------------------------------------------------------------------------------------------------------------------------------- One Eton Square -- 718,912 1,570,100 14,849,849 16,419,949 Orange Grove Village -- 301,882 1,813,154 15,195,228 17,008,382 Orchard Ridge 3,000 254,386 485,600 4,626,418 5,112,018 Overlook 200 631,826 1,100,200 10,533,342 11,633,542 Overlook Manor 3,100 159,057 1,299,100 4,091,571 5,390,671 Overlook Manor II 2,300 49,984 2,186,300 6,334,114 8,520,414 Overlook Manor III 2,300 32,968 1,026,300 3,062,642 4,088,942 Paces Station -- 1,646,648 4,801,500 34,194,201 38,995,701 Palatka Oaks I -- 6,560 49,535 452,378 501,913 Palatka Oaks II -- 5,522 42,767 390,421 433,187 Palm Place -- 10,223 248,315 2,245,056 2,493,371 Palms at South Shore -- 416,281 1,200,000 16,938,714 18,138,714 Palms, The -- 256,071 3,285,226 11,526,273 14,811,499 Panther Ridge -- 453,522 1,055,800 9,959,639 11,015,439 Paradise Pointe 419,614 1,799,747 1,913,414 19,143,965 21,057,379 Parc Royale -- 86,783 2,223,000 12,023,616 14,246,616 Park Knoll 4,300 1,915,780 2,908,800 28,091,691 31,000,491 Park Meadow -- 265,939 835,217 15,386,708 16,221,925 Park Place I and II (MN) 7,800 1,135,866 2,436,000 23,054,063 25,490,063 Park Place (TX) -- 167,908 1,603,000 12,129,192 13,732,192 Park West (CA) 200 944,675 3,033,500 28,247,058 31,280,558 Park West (TX) 100 486,853 648,705 5,225,394 5,874,099 Park West End (VA) 2,500 97,312 1,562,500 11,968,761 13,531,261 Parkcrest 5,000 383,797 1,265,000 10,788,604 12,053,604 Parkridge Place 2,100 558,596 6,432,900 17,650,270 24,083,170 Parkside 6,700 418,035 6,246,700 12,245,488 18,492,188 Parkview Terrace -- 331,371 4,969,200 35,985,148 40,954,348 Parkville (Col) -- 20,995 150,433 1,374,892 1,525,325 Parkville (IN) -- 3,407 103,434 934,316 1,037,750 Parkville (Par) -- 3,144 127,863 1,153,911 1,281,774 Parkville (WV) -- 1,999 105,460 951,138 1,056,598 Parkwood East -- 225,821 1,644,000 15,016,519 16,660,519 Patchen Oaks 1,300 339,237 1,345,300 8,468,447 9,813,747 Pelican Pointe I -- 5,780 213,515 1,927,414 2,140,929 Pelican Pointe II -- 4,000 184,852 1,667,670 1,852,522 Pine Barrens -- 15,659 268,303 2,430,385 2,698,688 Pine Harbour 3,300 1,066,706 1,664,300 16,037,621 17,701,921 Pine Knoll -- 6,355 138,052 1,248,825 1,386,877 Pine Lake -- 1,697 79,877 720,588 800,464 Pine Meadow 1,350 815,015 720,650 7,302,059 8,022,709 Pine Meadows I (FL) -- 12,276 152,019 1,380,450 1,532,470 Pine Terrace I & II -- 76,057 288,992 2,676,983 2,965,975 Pine Tree Club -- 64,569 1,125,000 7,111,010 8,236,010 Pinellas Pines -- (6,430) 174,999 1,568,563 1,743,562 Pines of Cloverlane 1,200 3,957,201 1,907,800 20,837,514 22,745,314 Pines of Springdale 2,667 450,125 473,867 4,866,299 5,340,166 Plantation (TX) 2,900 380,548 2,322,900 8,098,970 10,421,870 Plantation Ridge 2,900 1,087,595 4,088,900 20,293,842 24,382,742 Plantations at Killearn -- 122,109 828,000 7,739,999 8,567,999 Pleasant Ridge 4,100 28,405 445,100 2,027,907 2,473,007 Plum Tree 4,700 436,480 1,996,700 20,682,685 22,679,385 Plum Tree Park -- 195,938 1,133,400 10,397,590 11,530,990 Plumwood (Che) -- 1,854 84,923 766,158 851,080 Plumwood (For) -- 5,105 131,351 1,187,262 1,318,613 Plumwood I -- 20,625 289,814 2,628,954 2,918,768 Plumwood II -- 968 107,583 969,216 1,076,799 Point (NC) -- 55,211 1,700,000 25,472,478 27,172,478
LIFE USED TO DESCRIPTION COMPUTE - ----------------------------------------------------------------------- DEPRECIATION IN ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - --------------------------------------------------------------------------------------------- One Eton Square (1,553,505) 1985 30 Years Orange Grove Village (1,181,558) 1986/1995 30 Years Orchard Ridge (989,493) 1988 30 Years Overlook (1,126,151) 1985 30 Years Overlook Manor (223,567) 1980/1985 30 Years Overlook Manor II (356,121) 1980/1985 30 Years Overlook Manor III (165,917) 1980/1985 30 Years Paces Station (3,030,942) 1984-1988/1989 30 Years Palatka Oaks I (4,530) 1977 30 Years Palatka Oaks II (3,804) 1980 30 Years Palm Place (20,245) 1984 30 Years Palms at South Shore (751,887) 1990 30 Years Palms, The (856,248) 1990 30 Years Panther Ridge (1,041,171) 1980 30 Years Paradise Pointe (3,798,899) 1987-90 30 Years Parc Royale (531,529) 1994 30 Years Park Knoll (6,365,689) 1983 30 Years Park Meadow (1,127,461) 1986 30 Years Park Place I and II (MN) (3,094,798) 1986 30 Years Park Place (TX) (874,889) 1996 30 Years Park West (CA) (4,573,054) 1987/90 30 Years Park West (TX) (1,300,192) 1985 30 Years Park West End (VA) (894,429) 1985 30 Years Parkcrest (595,297) 1987 30 Years Parkridge Place (1,480,035) 1985 30 Years Parkside (713,305) 1979 30 Years Parkview Terrace (2,637,623) 1986 30 Years Parkville (Col) (13,505) 1978 30 Years Parkville (IN) (8,682) 1982 30 Years Parkville (Par) (10,468) 1982 30 Years Parkville (WV) (8,796) 1982 30 Years Parkwood East (1,435,827) 1986 30 Years Patchen Oaks (485,193) 1990 30 Years Pelican Pointe I (17,639) 1987 30 Years Pelican Pointe II (15,161) 1987 30 Years Pine Barrens (22,241) 1986 30 Years Pine Harbour (3,633,109) 1991 30 Years Pine Knoll (11,312) 1985 30 Years Pine Lake (6,710) 1982 30 Years Pine Meadow (1,098,597) 1974 30 Years Pine Meadows I (FL) (12,688) 1985 30 Years Pine Terrace I & II (25,306) 1983 30 Years Pine Tree Club (178,421) 1986 30 Years Pinellas Pines (14,057) 1983 30 Years Pines of Cloverlane (3,781,260) 1975-79 30 Years Pines of Springdale (1,092,682) 1985/87(X) 30 Years Plantation (TX) (625,820) 1969 30 Years Plantation Ridge (1,232,194) 1975 30 Years Plantations at Killearn (364,497) 1990 30 Years Pleasant Ridge (117,006) 1982 30 Years Plum Tree (1,349,403) 1989 30 Years Plum Tree Park (999,214) 1991 30 Years Plumwood (Che) (7,080) 1980 30 Years Plumwood (For) (10,918) 1981 30 Years Plumwood I (23,897) 1978 30 Years Plumwood II (8,669) 1983 30 Years Point (NC) (1,134,122) 1996 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------ Pointe at South Mountain Phoenix, AZ 11,600,069 2,228,800 20,059,311 Pointe East Redmond, WA - 601,800 5,425,763 Polos Fort Myers, FL - 1,640,000 18,444,966 Polos East Orlando, FL - 1,386,000 19,058,620 Combined Ft. Lauderdale Properties (T) Ft. Lauderdale, FL 10,000,000 10,222,700 39,715,328 Portland Center Combined Portland, OR 21,929,538 6,028,000 43,554,399 Portofino Chino Hills, CA - 3,572,400 14,660,994 Portside Towers Combined Jersey City, NJ 57,560,162 22,440,000 96,842,913 Prairie Creek I & II Richardson, TX - 4,067,292 39,494,373 Preakness Antioch, TN (E) 1,560,000 7,671,710 Preserve at Squaw Peak Phoenix, AZ (O) 517,788 8,533,992 Preston at Willowbend Plano, TX - 872,500 8,107,915 Preston Bend Dallas, TX 8,719,000 1,083,000 10,024,505 Preston Lake Atlanta, GA - 1,430,900 12,918,697 Princeton Court Evansville, IN 906,106 116,696 1,050,264 Princeton Square Jacksonville, FL - 864,000 11,910,478 Promenade (FL) St. Petersburg, FL - 2,124,193 25,804,037 Promenade Terrace Corona Hills, CA 15,661,286 2,281,000 20,546,289 Promontory Pointe I & II Phoenix, AZ (O) 2,355,509 30,421,840 Prospect Towers Hackensack, NJ 14,624,305 8,425,000 27,989,853 Pueblo Villas Albuquerque, NM - 854,300 7,694,320 Quail Call Albany, GA 716,387 104,723 942,511 Quail Cove Salt Lake City, UT - 2,271,800 20,444,381 Ramblewood I (Val) Valdosta, GA 975,751 132,084 1,188,753 Ramblewood II (Aug) Augusta, GA - 169,269 1,523,424 Ramblewood II (Val) Valdosta, GA 483,139 61,672 555,049 Rancho Murietta Tempe, AZ - 1,766,282 17,585,449 Ranchside St. Petersburg, FL 686,474 144,692 1,302,232 Ranchstone Houston, TX - 770,000 15,371,431 Ravens Crest Plainsboro, NJ (N) 4,673,000 42,080,642 Ravenwood Greenville, SC 1,565,791 197,284 1,775,552 Ravinia Greenfield, WI (Q) 1,236,000 12,055,713 Red Deer I Dayton, OH 1,281,868 204,317 1,838,851 Red Deer II Dayton, OH 1,174,345 193,852 1,744,665 Redan Village I Atlanta, GA 1,204,316 274,294 2,468,650 Redan Village II Atlanta, GA 1,080,708 240,605 2,165,449 Redlands Lawn and Tennis Redlands, CA - 4,822,320 26,359,328 Reflections at the Lakes Las Vegas, NV - 1,896,000 17,058,626 Regatta San Antonio, TX - 818,500 7,366,677 Regency Charlotte, NC - 890,000 11,783,920 Regency Palms Huntington Beach, CA - 1,856,500 16,718,292 Regency Woods Des Moines, IA 6,351,345 745,100 7,027,086 Registry Denver, CO - 1,303,100 11,726,478 Reserve at Ashley Lake Boynton Beach, FL 24,150,000 3,519,900 23,345,118 Reserve Square Combined Cleveland, OH - 2,618,352 23,582,869 Retreat, The Phoenix, AZ - 3,475,114 27,268,765 Richmond Townhomes Houston, TX 9,191,494 940,000 13,906,905 Ridgegate Seattle, WA - 805,800 7,323,524 Ridgetop Tacoma, WA - 811,500 7,299,490 Ridgetree Dallas, TX - 2,094,600 19,037,864 Ridgeway Commons Memphis, TN - 568,400 5,396,306 Ridgewood (Lou) Louisville, KY 864,095 163,686 1,473,173 Ridgewood (MI) Detriot, MI 1,200,000 176,969 1,592,721 Ridgewood (Rus) Nashville, KY 763,342 69,156 622,405 Ridgewood I (Bed) Bedford, IN 850,377 107,120 964,079 Ridgewood I (Elk) Elkhart, IN 1,171,440 159,371 1,434,341 Ridgewood I (GA) Atlanta, GA 1,413,648 230,574 2,075,168
COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Pointe at South Mountain - 621,583 2,228,800 20,680,894 22,909,694 Pointe East 800 235,997 602,600 5,661,760 6,264,360 Polos - 301,494 1,640,000 18,746,460 20,386,460 Polos East - 138,739 1,386,000 19,197,359 20,583,359 Combined Ft. Lauderdale Properties (T) 8,600 2,069,004 10,231,300 41,784,332 52,015,632 Portland Center Combined 4,900 722,041 6,032,900 44,276,439 50,309,339 Portofino - 171,655 3,572,400 14,832,649 18,405,049 Portside Towers Combined 15,700 313,184 22,455,700 97,156,097 119,611,797 Prairie Creek I & II - 56,494 4,067,292 39,550,867 43,618,158 Preakness 1,900 1,138,963 1,561,900 8,810,673 10,372,573 Preserve at Squaw Peak - 152,605 517,788 8,686,597 9,204,385 Preston at Willowbend - 1,678,188 872,500 9,786,103 10,658,603 Preston Bend 2,200 189,245 1,085,200 10,213,750 11,298,950 Preston Lake 34,993 1,281,902 1,465,893 14,200,599 15,666,492 Princeton Court - 12,807 116,696 1,063,071 1,179,767 Princeton Square - 113,638 864,000 12,024,115 12,888,115 Promenade (FL) - 140,252 2,124,193 25,944,289 28,068,482 Promenade Terrace 1,800 458,387 2,282,800 21,004,676 23,287,476 Promontory Pointe I & II - 330,742 2,355,509 30,752,581 33,108,090 Prospect Towers 1,600 883,784 8,426,600 28,873,636 37,300,236 Pueblo Villas 1,300 977,991 855,600 8,672,311 9,527,911 Quail Call - 3,483 104,723 945,994 1,050,717 Quail Cove - 551,603 2,271,800 20,995,984 23,267,784 Ramblewood I (Val) - 4,187 132,084 1,192,940 1,325,024 Ramblewood II (Aug) - 19,542 169,269 1,542,967 1,712,236 Ramblewood II (Val) - 1,789 61,672 556,839 618,511 Rancho Murietta - 308,644 1,766,282 17,894,093 19,660,375 Ranchside - 5,878 144,692 1,308,110 1,452,802 Ranchstone - 81,134 770,000 15,452,565 16,222,565 Ravens Crest 2,850 2,252,693 4,675,850 44,333,335 49,009,185 Ravenwood - 3,227 197,284 1,778,779 1,976,062 Ravinia 4,100 264,043 1,240,100 12,319,756 13,559,856 Red Deer I - 2,347 204,317 1,841,198 2,045,515 Red Deer II - 3,194 193,852 1,747,859 1,941,711 Redan Village I - 7,780 274,294 2,476,430 2,750,724 Redan Village II - 1,919 240,605 2,167,368 2,407,974 Redlands Lawn and Tennis - 506,607 4,822,320 26,865,935 31,688,255 Reflections at the Lakes - 384,427 1,896,000 17,443,054 19,339,054 Regatta - 255,057 818,500 7,621,734 8,440,234 Regency - 78,512 890,000 11,862,432 12,752,432 Regency Palms 900 823,622 1,857,400 17,541,914 19,399,314 Regency Woods 8,380 219,695 753,480 7,246,781 8,000,261 Registry - 219,650 1,303,100 11,946,129 13,249,229 Reserve at Ashley Lake 500 452,827 3,520,400 23,797,945 27,318,345 Reserve Square Combined 500 12,070,829 2,618,852 35,653,698 38,272,550 Retreat, The - 38,552 3,475,114 27,307,317 30,782,431 Richmond Townhomes - 94,029 940,000 14,000,934 14,940,934 Ridgegate - 151,483 805,800 7,475,008 8,280,808 Ridgetop - 128,373 811,500 7,427,863 8,239,363 Ridgetree 20,600 1,426,528 2,115,200 20,464,391 22,579,591 Ridgeway Commons 14,840 200,136 583,240 5,596,442 6,179,682 Ridgewood (Lou) - 430 163,686 1,473,603 1,637,289 Ridgewood (MI) - 4,776 176,969 1,597,496 1,774,465 Ridgewood (Rus) - 12,074 69,156 634,478 703,635 Ridgewood I (Bed) - 6,672 107,120 970,751 1,077,871 Ridgewood I (Elk) - 14,808 159,371 1,449,149 1,608,520 Ridgewood I (GA) - 5,968 230,574 2,081,136 2,311,710
LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - --------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ----------------------------------------------------------------------------------------------- Pointe at South Mountain (2,018,761) 1988 30 Years Pointe East (1,079,919) 1988 30 Years Polos (867,299) 1991 30 Years Polos East (865,308) 1991 30 Years Combined Ft. Lauderdale Properties (T) (6,224,657) 1988 30 Years Portland Center Combined (1,717,412) 1965 30 Years Portofino (1,075,995) 1989 30 Years Portside Towers Combined (5,181,331) 1992/1997 30 Years Prairie Creek I & II (1,128,902) 1998/99 30 Years Preakness (803,978) 1986 30 Years Preserve at Squaw Peak (649,077) 1990 30 Years Preston at Willowbend (2,263,021) 1985 30 Years Preston Bend (980,172) 1986 30 Years Preston Lake (3,335,031) 1984-86 30 Years Princeton Court (9,916) 1985 30 Years Princeton Square (563,868) 1984 30 Years Promenade (FL) (1,145,473) 1994 30 Years Promenade Terrace (2,677,571) 1990 30 Years Promontory Pointe I & II (2,246,711) 1984/1996 30 Years Prospect Towers (1,907,947) 1995 30 Years Pueblo Villas (1,210,863) 1975 30 Years Quail Call (8,893) 1984 30 Years Quail Cove (2,069,366) 1987 30 Years Ramblewood I (Val) (10,896) 1983 30 Years Ramblewood II (Aug) (14,924) 1986 30 Years Ramblewood II (Val) (5,149) 1983 30 Years Rancho Murietta (1,329,081) 1983 30 Years Ranchside (12,306) 1985 30 Years Ranchstone (684,806) 1996 30 Years Ravens Crest (9,058,639) 1984 30 Years Ravenwood (16,278) 1987 30 Years Ravinia (805,342) 1991 30 Years Red Deer I (16,553) 1986 30 Years Red Deer II (15,699) 1987 30 Years Redan Village I (22,143) 1984 30 Years Redan Village II (19,377) 1986 30 Years Redlands Lawn and Tennis (2,012,103) 1986 30 Years Reflections at the Lakes (1,673,007) 1989 30 Years Regatta (776,707) 1983 30 Years Regency (537,602) 1986 30 Years Regency Palms (2,550,877) 1969 30 Years Regency Woods (569,679) 1986 30 Years Registry (1,150,094) 1987 30 Years Reserve at Ashley Lake (1,814,527) 1990 30 Years Reserve Square Combined (8,338,981) 1973 30 Years Retreat, The (489,190) 1999 30 Years Richmond Townhomes (622,577) 1995 30 Years Ridgegate (730,185) 1990 30 Years Ridgetop (747,671) 1988 30 Years Ridgetree (3,018,446) 1983 30 Years Ridgeway Commons (435,462) 1970 30 Years Ridgewood (Lou) (13,306) 1984 30 Years Ridgewood (MI) (14,383) 1983 30 Years Ridgewood (Rus) (6,392) 1984 30 Years Ridgewood I (Bed) (9,041) 1984 30 Years Ridgewood I (Elk) (13,455) 1984 30 Years Ridgewood I (GA) (18,548) 1984 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Ridgewood I (Lex) Lexington, KY 1,040,373 203,720 1,833,477 Ridgewood I (OH) Columbus, OH 1,191,565 174,066 1,566,593 Ridgewood II (Bed) Bedford, IN 883,318 99,559 896,029 Ridgewood II (Elk) Elkhart, IN 1,297,758 215,335 1,938,012 Ridgewood II (GA) Atlanta, GA 1,008,359 164,999 1,484,991 Ridgewood II (OH) Columbus, OH 1,151,846 162,914 1,466,226 Ridgewood Village San Diego, CA (U) 5,760,000 14,032,511 Rincon Houston, TX - 4,400,000 16,734,746 River Bend Tampa, FL - 602,945 2,916,839 River Glen I Columbus, OH 985,686 171,272 1,541,447 River Glen II Columbus, OH 1,156,468 158,684 1,428,152 River Hill Grand Prairie, TX - 2,004,000 19,272,944 River Oak Louisville, KY - 1,253,900 11,300,386 River Park Fort Worth, TX 7,632,622 2,240,000 8,818,888 Rivers Edge Waterbury, CT - 780,000 6,561,802 Rivers End I Jacksonville, FL 1,406,919 171,745 1,545,703 Rivers End II Jacksonville, FL 1,127,324 190,688 1,716,189 Riverside Park Tulsa, OK (E) 1,440,000 12,389,121 Riverview Estates Toledo, OH 1,057,319 141,210 1,270,890 Roanoke Detriot, MI 40,500 369,911 3,329,200 Rock Creek Corrboro, NC - 895,100 8,062,948 Rolido Parque Houston, TX 7,111,022 2,950,000 7,935,130 Rosecliff Quincy, MA - 5,460,000 12,989,873 Rosehill Pointe Lenexa, KS 12,924,830 2,073,400 18,864,909 Rosewood (KY) Louisville, KY 1,608,243 253,453 2,281,076 Rosewood (OH) Columbus, OH 1,279,827 212,378 1,911,405 Rosewood Commons I Indianapolis, IN 1,864,582 228,644 2,057,800 Rosewood Commons II Indianapolis, IN 1,194,320 220,463 1,984,167 Royal Oak Eagan, MN 13,148,135 1,598,200 14,415,400 Royal Oaks (FL) Jacksonville, FL - 1,988,000 13,645,117 Sabal Palm Pompano Beach, FL - 3,536,000 20,190,650 Sabal Palm at Boot Ranch Palm Harbor, FL 16,631,058 3,888,000 28,923,692 Sabal Palm at Carrollwood Place Tampa, FL - 3,888,000 26,911,542 Sabal Palm at Lake Buena Vista Orlando, Fl 21,170,000 2,800,000 23,687,893 Sabal Palm at Metrowest Orlando, Fl - 4,560,000 38,394,865 Sabal Palm at Metrowest II Orlando, Fl - 4,110,000 33,907,283 Sabal Pointe (L) Coral Springs, FL - 1,941,900 17,570,508 Saddle Creek Carrollton, TX - 703,300 6,375,449 Saddle Ridge Loudoun County, VA - 1,351,800 12,283,616 Sailboat Bay Raleigh, NC - 960,000 8,797,580 San Tropez Phoenix, AZ - 2,738,000 24,650,003 Sandalwood Toledo, OH 1,103,983 151,926 1,367,336 Sandpiper II Fort Pierce, FL 1,033,653 155,496 1,399,461 Sanford Court Orlando, Fl 1,760,829 238,814 2,149,327 Sawgrass Cove Bradenton, FL - 1,671,200 15,060,378 Scarborough Square Rockville, MD 5,119,928 1,815,000 7,540,062 Scottsdale Courtyards Scottsdale, AZ (O) 2,979,269 25,073,538 Scottsdale Meadows Scottsdale, AZ - 1,512,000 11,407,699 Sedona Ridge Ahwatukee, AZ - 5,508,000 9,703,496 Sedona Springs Austin, TX - 2,574,000 23,477,043 Seeley Lake Tacoma, WA - 2,760,400 24,845,286 Settler's Point Salt Lake City, UT - 1,715,100 15,437,046 Seventh & James Seattle, WA - 663,800 5,974,803 Shadow Bay I Jacksonville, FL - 123,319 1,109,867 Shadow Bay II Jacksonville, FL 990,062 139,709 1,257,379 Shadow Brook Phoenix, AZ (O) 3,065,496 18,367,686 Shadow Lake Doraville, GA - 1,140,000 13,117,277 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Ridgewood I (Lex) - 1,814 203,720 1,835,291 2,039,010 Ridgewood I (OH) - 6,169 174,066 1,572,762 1,746,828 Ridgewood II (Bed) - 8,806 99,559 904,834 1,004,393 Ridgewood II (Elk) - 19,093 215,335 1,957,105 2,172,440 Ridgewood II (GA) - 794 164,999 1,485,785 1,650,784 Ridgewood II (OH) - 3,176 162,914 1,469,402 1,632,316 Ridgewood Village 1,500 17,709 5,761,500 14,050,220 19,811,720 Rincon 1,900 122,065 4,401,900 16,856,811 21,258,711 River Bend - 1,765,660 602,945 4,682,499 5,285,444 River Glen I - 2,855 171,272 1,544,302 1,715,574 River Glen II - 1,186 158,684 1,429,338 1,588,022 River Hill - 220,879 2,004,000 19,493,823 21,497,823 River Oak 2,700 492,123 1,256,600 11,792,509 13,049,109 River Park 5,400 1,089,629 2,245,400 9,908,517 12,153,917 Rivers Edge 1,900 44,071 781,900 6,605,874 7,387,774 Rivers End I - 3,361 171,745 1,549,064 1,720,809 Rivers End II - 3,186 190,688 1,719,375 1,910,062 Riverside Park 1,400 342,244 1,441,400 12,731,365 14,172,765 Riverview Estates - 3,158 141,210 1,274,048 1,415,258 Roanoke - 6,827 369,911 3,336,028 3,705,939 Rock Creek 600 343,612 895,700 8,406,560 9,302,260 Rolido Parque 5,900 750,516 2,955,900 8,685,646 11,641,546 Rosecliff - 2,717 5,460,000 12,992,590 18,452,590 Rosehill Pointe 22,600 1,690,797 2,096,000 20,555,705 22,651,705 Rosewood (KY) - 16,594 253,453 2,297,670 2,551,123 Rosewood (OH) - 8,425 212,378 1,919,830 2,132,209 Rosewood Commons I - 11,881 228,644 2,069,680 2,298,325 Rosewood Commons II - 16,118 220,463 2,000,285 2,220,749 Royal Oak 4,704 337,982 1,602,904 14,753,382 16,356,285 Royal Oaks (FL) - 138,372 1,988,000 13,783,489 15,771,489 Sabal Palm 2,600 737,738 3,538,600 20,928,388 24,466,988 Sabal Palm at Boot Ranch - 168,353 3,888,000 29,092,045 32,980,045 Sabal Palm at Carrollwood Place - 169,009 3,888,000 27,080,552 30,968,552 Sabal Palm at Lake Buena Vista - 201,215 2,800,000 23,889,108 26,689,108 Sabal Palm at Metrowest (450,000) 205,634 4,110,000 38,600,499 42,710,499 Sabal Palm at Metrowest II 450,000 78,683 4,560,000 33,985,966 38,545,966 Sabal Pointe (L) 9,700 344,893 1,951,600 17,915,401 19,867,001 Saddle Creek 4,800 3,237,209 708,100 9,612,658 10,320,758 Saddle Ridge 13,000 451,702 1,364,800 12,735,318 14,100,118 Sailboat Bay - 183,887 960,000 8,981,467 9,941,467 San Tropez - 310,770 2,738,000 24,960,773 27,698,773 Sandalwood - 1,490 151,926 1,368,826 1,520,752 Sandpiper II - 9,964 155,496 1,409,425 1,564,920 Sanford Court - 8,519 238,814 2,157,846 2,396,660 Sawgrass Cove 2,950 1,420,386 1,674,150 16,480,765 18,154,915 Scarborough Square - 99,143 1,815,000 7,639,205 9,454,205 Scottsdale Courtyards - 293,614 2,979,269 25,367,152 28,346,421 Scottsdale Meadows - 197,072 1,512,000 11,604,771 13,116,771 Sedona Ridge - 311,028 5,508,000 10,014,524 15,522,524 Sedona Springs - 130,113 2,574,000 23,607,156 26,181,156 Seeley Lake - 380,827 2,760,400 25,226,114 27,986,514 Settler's Point - 613,357 1,715,100 16,050,403 17,765,503 Seventh & James - 133,631 663,800 6,108,434 6,772,234 Shadow Bay I - 4,003 123,319 1,113,869 1,237,188 Shadow Bay II - 4,570 139,709 1,261,948 1,401,657 Shadow Brook - 292,506 3,065,496 18,660,192 21,725,688 Shadow Lake - 81,614 1,140,000 13,198,891 14,338,891 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - -------------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - -------------------------------------------------------------------------------------------- Ridgewood I (Lex) (16,373) 1984 30 Years Ridgewood I (OH) (14,247) 1984 30 Years Ridgewood II (Bed) (8,571) 1986 30 Years Ridgewood II (Elk) (18,206) 1986 30 Years Ridgewood II (GA) (13,269) 1986 30 Years Ridgewood II (OH) (13,274) 1985 30 Years Ridgewood Village (1,021,636) 1997 30 Years Rincon (1,660,510) 1996 30 Years River Bend (3,638,171) 1971 30 Years River Glen I (13,938) 1987 30 Years River Glen II (12,809) 1987 30 Years River Hill (878,180) 1996 30 Years River Oak (945,076) 1989 30 Years River Park (564,762) 1984 30 Years Rivers Edge (374,911) 1974 30 Years Rivers End I (14,079) 1986 30 Years Rivers End II (15,542) 1986 30 Years Riverside Park (1,052,333) 1994 30 Years Riverview Estates (12,199) 1987 30 Years Roanoke (29,499) 1985 30 Years Rock Creek (990,522) 1986 30 Years Rolido Parque (663,254) 1978 30 Years Rosecliff (276,066) 1990 30 Years Rosehill Pointe (3,200,631) 1984 30 Years Rosewood (KY) (20,784) 1984 30 Years Rosewood (OH) (17,670) 1985 30 Years Rosewood Commons I (19,123) 1986 30 Years Rosewood Commons II (18,268) 1987 30 Years Royal Oak (1,116,654) 1989 30 Years Royal Oaks (FL) (636,826) 1991 30 Years Sabal Palm (2,123,534) 1989 30 Years Sabal Palm at Boot Ranch (1,299,988) 1996 30 Years Sabal Palm at Carrollwood Place (1,214,963) 1995 30 Years Sabal Palm at Lake Buena Vista (1,087,252) 1988 30 Years Sabal Palm at Metrowest (1,685,822) 1998 30 Years Sabal Palm at Metrowest II (1,513,049) 1997 30 Years Sabal Pointe (L) (2,540,052) 1995 30 Years Saddle Creek (3,488,055) 1980 30 Years Saddle Ridge (1,949,000) 1989 30 Years Sailboat Bay (419,027) 1986 30 Years San Tropez (2,325,211) 1989 30 Years Sandalwood (12,278) 1984 30 Years Sandpiper II (13,069) 1982 30 Years Sanford Court (19,922) 1976 30 Years Sawgrass Cove (3,610,334) 1991 30 Years Scarborough Square (286,105) 1967 30 Years Scottsdale Courtyards (1,842,672) 1993 30 Years Scottsdale Meadows (854,318) 1984 30 Years Sedona Ridge (1,016,060) 1988 30 Years Sedona Springs (1,060,492) 1995 30 Years Seeley Lake (2,429,867) 1990 30 Years Settler's Point (1,555,999) 1986 30 Years Seventh & James (577,713) 1992 30 Years Shadow Bay I (10,279) 1984 30 Years Shadow Bay II (11,561) 1985 30 Years Shadow Brook (1,366,383) 1984 30 Years Shadow Lake (599,606) 1989 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ----------------------------------------------------------------------------------------------------------------------------------- BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ----------------------------------------------------------------------------------------------------------------------------------- Shadow Ridge Tallahassee, FL 1,018,858 150,327 1,352,939 Shadow Trace Atlanta, GA - 244,320 2,198,884 Shadowood I Sarasota, FL 1,420,269 157,661 1,418,945 Shadowood II Sarasota, FL 1,920,328 152,031 1,368,278 Sheffield Court Arlington, VA - 3,349,350 31,960,800 Sherbrook (IN) Indianapolis, IN 1,673,663 171,920 1,547,284 Sherbrook (OH) Columbus, OH 1,092,268 163,493 1,471,440 Sherbrook (PA) Pittsburgh, WV 1,278,955 279,665 2,516,985 Shoal Run Birmingham, AL - 1,380,000 12,218,577 Shores at Andersen Springs Chandler, AZ (O) 2,743,816 22,774,646 Siena Terrace Lake Forest, CA - 8,900,000 24,123,024 Sierra Canyon Canyon Cnty, CA - 3,480,000 12,546,066 Silver Creek Phoenix, AZ (O) 712,102 6,707,496 Silver Forest Ocala, FL 859,440 126,536 1,138,821 Silver Shadow Las Vegas, NV - 952,100 8,799,511 Silver Springs (FL) Jacksonville, FL - 1,828,700 16,474,735 Silver Springs (OK) Tulsa, OK - 672,500 6,052,669 Silverwood Mission, KS (S) 1,230,000 11,070,904 Sky Pines I & II Orlando, Fl 2,307,645 349,029 3,141,259 Sky Ridge Atlanta, GA 1,879,443 437,373 3,936,361 Skylark Union City, CA - 1,775,000 16,713,916 Skyline Gateway Tucson, AZ - 1,128,400 10,155,747 Skyview Rancho Santa Margarita, CA - 3,380,000 21,708,875 Slate Run (Bt) Louisville, KY 766,280 96,556 869,006 Slate Run (Hop) Hopkinsville, KY 908,184 91,304 821,734 Slate Run (Ind) Indianapolis, IN 2,028,467 295,593 2,660,337 Slate Run (Leb) Indianapolis, IN 1,232,500 154,061 1,386,549 Slate Run (Mia) Dayton, OH 862,241 136,065 1,224,583 Slate Run I (Lou) Louisville, KY 870,163 179,766 1,617,890 Slate Run II (Lou) Louisville, KY 1,168,080 167,723 1,509,506 Smoketree Polo Club Indio, CA 9,050,000 864,000 6,950,033 Sommerset Place Raleigh, NC - 360,000 7,800,206 Songbird San Antonio, TX 6,554,066 1,080,500 9,734,435 Sonoran Phoenix, AZ (O) 2,361,922 31,841,724 Sonterra at Foothill Ranch Orange Cnty, CA 16,378,029 7,500,000 24,048,507 South Creek Mesa, AZ 15,600,333 2,669,300 24,042,042 Southwood Palo Alto, CA - 6,930,000 14,324,069 Spicewood Indianapolis, IN 1,012,173 128,355 1,155,191 Spicewood Springs Jacksonville, FL - 1,536,000 21,138,009 Spinnaker Cove Hermitage, TN 14,205,000 1,420,500 12,770,421 Spring Gate Panama City, FL 971,750 132,951 1,196,563 Spring Oak Richmond, VA - 3,803,700 7,854,648 Springbrook Anderson, SC 1,702,253 168,959 1,520,630 Springs Colony Orlando, FL (S) 631,900 5,860,157 Springs of Country Woods Salt Lake City, UT - 3,547,400 31,906,637 Springwood (Col) Columbus, OH 1,082,979 189,948 1,709,529 Springwood (IN) Ft. Wayne, IN 773,114 119,199 1,072,791 Springwood (KY) Cincinnati, KY 801,399 117,442 1,056,980 Springwood II (Aus) Youngstown, OH 473 78,057 702,513 Steeplechase Charlotte, NC - 1,111,500 10,180,750 Sterling Point Denver, CO - 935,500 8,419,200 Stewart Way I & II Savannah, GA 2,198,566 290,773 2,616,953 Stillwater Savannah, GA 941,996 151,198 1,360,780 Stonehenge (Day) Dayton, OH 1,180,692 202,294 1,820,645 Stonehenge (Ind) Indianapolis, IN 1,198,930 146,810 1,321,293 Stonehenge (Jas) Jasper, IN 438,289 78,335 705,013 Stonehenge (KY) Nashville, KY 790,000 111,632 1,004,684 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Shadow Ridge - 4,518 150,327 1,357,457 1,507,783 Shadow Trace - 21,522 244,320 2,220,406 2,464,726 Shadowood I - 13,534 157,661 1,432,479 1,590,139 Shadowood II - 6,871 152,031 1,375,149 1,527,180 Sheffield Court - 622,255 3,349,350 32,583,055 35,932,405 Sherbrook (IN) - 9,547 171,920 1,556,832 1,728,752 Sherbrook (OH) - 3,084 163,493 1,474,524 1,638,018 Sherbrook (PA) - 2,476 279,665 2,519,462 2,799,127 Shoal Run - 49,790 1,380,000 12,268,367 13,648,367 Shores at Andersen Springs - 288,461 2,743,816 23,063,106 25,806,922 Siena Terrace - 308,655 8,900,000 24,431,678 33,331,678 Sierra Canyon 4,200 678,896 3,484,200 13,224,962 16,709,162 Silver Creek - 102,761 712,102 6,810,256 7,522,358 Silver Forest - 2,222 126,536 1,141,043 1,267,579 Silver Shadow 1,340 216,655 953,440 9,016,166 9,969,606 Silver Springs (FL) 2,400 589,385 1,831,100 17,064,120 18,895,220 Silver Springs (OK) - 116,197 672,500 6,168,867 6,841,367 Silverwood - 979,523 1,230,000 12,050,427 13,280,427 Sky Pines I & II - 19,577 349,029 3,160,836 3,509,864 Sky Ridge - 10,391 437,373 3,946,753 4,384,126 Skylark 6,600 250,652 1,781,600 16,964,567 18,746,167 Skyline Gateway - 287,983 1,128,400 10,443,730 11,572,130 Skyview - 21,933 3,380,000 21,730,807 25,110,807 Slate Run (Bt) - 5,434 96,556 874,441 970,997 Slate Run (Hop) - 19,319 91,304 841,053 932,357 Slate Run (Ind) - 9,937 295,593 2,670,274 2,965,867 Slate Run (Leb) - 17,957 154,061 1,404,505 1,558,566 Slate Run (Mia) - 3,260 136,065 1,227,844 1,363,908 Slate Run I (Lou) - 1,832 179,766 1,619,723 1,799,488 Slate Run II (Lou) - 3,212 167,723 1,512,718 1,680,441 Smoketree Polo Club 3,200 232,119 867,200 7,182,152 8,049,352 Sommerset Place - 71,740 360,000 7,871,945 8,231,945 Songbird 2,000 930,874 1,082,500 10,665,309 11,747,809 Sonoran - 370,955 2,361,922 32,212,679 34,574,601 Sonterra at Foothill Ranch 3,400 38,798 7,503,400 24,087,305 31,590,705 South Creek 2,000 1,002,105 2,671,300 25,044,147 27,715,447 Southwood 6,600 624,987 6,936,600 14,949,056 21,885,656 Spicewood - 37 128,355 1,155,228 1,283,583 Spicewood Springs - 979,925 1,536,000 22,117,934 23,653,934 Spinnaker Cove 41,231 501,696 1,461,731 13,272,117 14,733,849 Spring Gate - 8,708 132,951 1,205,271 1,338,222 Spring Oak - - 3,803,700 7,854,648 11,658,348 Springbrook - 18,100 168,959 1,538,730 1,707,689 Springs Colony 8,500 914,970 640,400 6,775,127 7,415,527 Springs of Country Woods - 1,112,515 3,547,400 33,019,153 36,566,553 Springwood (Col) - 7,351 189,948 1,716,880 1,906,828 Springwood (IN) - 2,848 119,199 1,075,639 1,194,838 Springwood (KY) - 2,215 117,442 1,059,195 1,176,637 Springwood II (Aus) - 731 78,057 703,244 781,301 Steeplechase - 97,056 1,111,500 10,277,806 11,389,306 Sterling Point - 168,200 935,500 8,587,400 9,522,900 Stewart Way I & II - 11,104 290,773 2,628,057 2,918,829 Stillwater - 4,254 151,198 1,365,034 1,516,232 Stonehenge (Day) - 1,857 202,294 1,822,502 2,024,796 Stonehenge (Ind) - 18,388 146,810 1,339,681 1,486,491 Stonehenge (Jas) - 2,403 78,335 707,416 785,751 Stonehenge (KY) - 4,406 111,632 1,009,090 1,120,722 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - -------------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - -------------------------------------------------------------------------------------------- Shadow Ridge (12,473) 1983 30 Years Shadow Trace (20,114) 1984 30 Years Shadowood I (13,296) 1982 30 Years Shadowood II (12,753) 1983 30 Years Sheffield Court (5,878,396) 1986 30 Years Sherbrook (IN) (14,579) 1986 30 Years Sherbrook (OH) (13,348) 1985 30 Years Sherbrook (PA) (22,240) 1986 30 Years Shoal Run (575,058) 1986 30 Years Shores at Andersen Springs (1,695,090) 1989 30 Years Siena Terrace (731,866) 1988 30 Years Sierra Canyon (854,087) 1987 30 Years Silver Creek (529,648) 1986 30 Years Silver Forest (10,405) 1985 30 Years Silver Shadow (1,936,532) 1992 30 Years Silver Springs (FL) (1,484,647) 1985 30 Years Silver Springs (OK) (637,471) 1984 30 Years Silverwood (2,512,138) 1986 30 Years Sky Pines I & II (29,036) 1986 30 Years Sky Ridge (35,177) 1987 30 Years Skylark (821,077) 1986 30 Years Skyline Gateway (1,041,992) 1985 30 Years Skyview (469,341) 1999 30 Years Slate Run (Bt) (8,247) 1984 30 Years Slate Run (Hop) (8,305) 1984 30 Years Slate Run (Ind) (23,947) 1984 30 Years Slate Run (Leb) (13,015) 1984 30 Years Slate Run (Mia) (11,097) 1985 30 Years Slate Run I (Lou) (14,642) 1984 30 Years Slate Run II (Lou) (13,772) 1985 30 Years Smoketree Polo Club (380,571) 1987-89 30 Years Sommerset Place (361,991) 1983 30 Years Songbird (1,393,324) 1981 30 Years Sonoran (2,360,245) 1995 30 Years Sonterra at Foothill Ranch (1,495,623) 1997 30 Years South Creek (3,328,589) 1986-89 30 Years Southwood (808,666) 1985 30 Years Spicewood (10,462) 1986 30 Years Spicewood Springs (1,035,439) 1986 30 Years Spinnaker Cove (1,371,884) 1986 30 Years Spring Gate (11,289) 1983 30 Years Spring Oak - (R) 30 Years Springbrook (14,782) 1986 30 Years Springs Colony (1,573,779) 1986 30 Years Springs of Country Woods (3,167,620) 1982 30 Years Springwood (Col) (15,468) 1983 30 Years Springwood (IN) (9,845) 1981 30 Years Springwood (KY) (9,746) 1986 30 Years Springwood II (Aus) (6,588) 1982 30 Years Steeplechase (487,273) 1986 30 Years Sterling Point (823,591) 1979 30 Years Stewart Way I & II (24,309) 1986 30 Years Stillwater (12,351) 1983 30 Years Stonehenge (Day) (16,375) 1985 30 Years Stonehenge (Ind) (12,647) 1984 30 Years Stonehenge (Jas) (6,651) 1985 30 Years Stonehenge (KY) (9,416) 1983 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Stonehenge (Mas) Canton, OH 624,377 145,386 1,308,477 Stonehenge (MI) Jackson, MI 1,068,963 146,554 1,318,985 Stonehenge (Ott) Lima, OH 558,155 97,654 878,884 Stonehenge I (Ric) Dayton, OH 1,122,698 156,343 1,407,087 Stoney Creek Tacoma, WA - 1,215,200 10,938,134 Stratford Lane I Columbus, OH 893,247 206,637 1,867,258 Strawberry Place Tampa, FL 770,474 78,445 706,003 Suffolk Grove I Columbus, OH - 214,107 1,926,961 Suffolk Grove II Columbus, OH 1,050,088 167,683 1,509,147 Sugartree I Daytona Beach, FL 983,117 164,985 1,484,863 Summer Chase Denver, CO 11,830,115 1,708,000 15,382,234 Summer Creek Plymouth, MN 2,303,767 576,000 3,815,800 Summer Ridge Riverside, CA - 600,500 5,422,807 Summerset Village Chatsworth, CA - 2,628,500 23,675,871 Summerwood Hayward, CA - 4,860,000 6,942,421 Summit at Lake Union Seattle, WA - 1,424,600 12,852,461 Summit Chase Coral Springs, FL - 1,120,000 4,433,084 Sun Creek Glendale, AZ (O) 896,929 7,066,940 Sunny Oak Village Overland Park, KS 14,898,087 2,222,600 20,230,536 Sunnyside Albany, GA 1,332,479 166,887 1,501,984 Sunrise Springs Las Vegas, NV - 972,600 8,775,662 Sunset Way I Miami, FL 1,619,086 258,568 2,327,111 Sunset Way II Miami, FL 2,636,031 274,903 2,474,128 Suntree Village Oro Valley, AZ (O) 1,571,745 13,095,941 Surprise Lake Village Tacoma, WA - 1,830,200 16,470,508 Surrey Downs Bellevue, WA - 3,050,000 7,848,618 Sutton Place Dallas, TX - 1,316,500 12,227,725 Sutton Place (FL) Lakeland, FL 855,842 120,887 1,087,987 Sweetwater Glen Lawrenceville, GA - 500,000 10,469,749 Sycamore Creek Scottsdale, AZ (E) 3,150,000 19,087,302 Tabor Ridge Cleveland, OH 1,687,748 235,940 2,123,463 Tamarind at Stoneridge Columbia, SC - 1,053,800 9,489,319 Tamarlane Portland, ME - 690,000 5,153,633 Tanasbourne Terrace Hillsboro, OR 11,982,492 1,873,000 16,891,205 Tanglewood (OR) Portland, OR - 760,000 6,863,649 Tanglewood (VA) Manassas, VA 24,855,587 2,103,400 19,674,833 Terrace Trace Tampa, FL 1,637,684 193,916 1,745,248 Thymewood II Miami, FL (552) 219,661 1,976,949 Timber Hollow Chapel Hill, NC - 800,000 11,219,537 Timbercreek Toledo, OH 1,542,455 203,420 1,830,778 Timberwalk Jacksonville, FL - 1,988,000 13,204,219 Timberwood Aurora, CO - 1,512,000 14,587,786 Timberwood (OH) Macon, GA 555,480 144,299 1,298,695 Town Center (TX) Kingwood, TX - 1,290,000 11,530,216 Town Center II (TX) Kingwood, TX - 1,375,000 13,837,474 Town Centre III & IV Laurel, MD 15,238,742 2,546,500 24,230,152 Towne Square Chandler, AZ - 1,924,710 36,211,417 Townhomes of Meadowbrook Auburn Hills, MI 10,071,742 1,380,000 12,367,314 Trails (CO), The Aurora, CO 10,074,269 1,217,800 8,877,205 Trails (NV), The Las Vegas, NV - 3,076,200 27,712,940 Trails (TX), The Arlington, TX - 616,700 5,745,125 Trails at Briar Forest Houston, TX 14,160,486 2,380,000 24,911,561 Trails at Dominion Park Houston, TX 25,013,613 2,529,000 35,699,589 Trails of Valley Ranch Irving, TX - 2,808,000 7,923,064 Trailway Pond I Burnsville, MN 4,913,909 476,800 4,309,055 Trailway Pond II Burnsville, MN 11,365,354 1,104,700 9,954,266 Trinity Lakes Cordova, TN (E) 1,980,000 14,955,732 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF (IMPROVEMENTS, NET)(I) PERIOD 12/31/99 - --------------------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES(A) TOTAL(B) - --------------------------------------------------------------------------------------------------------------------------------- Stonehenge (Mas) - 7,424 145,386 1,315,901 1,461,287 Stonehenge (MI) - 330 146,554 1,319,315 1,465,869 Stonehenge (Ott) - 4,432 97,654 883,316 980,970 Stonehenge I (Ric) - 10,760 156,343 1,417,847 1,574,190 Stoney Creek - 182,572 1,215,200 11,120,706 12,335,906 Stratford Lane I - 1,983 206,637 1,869,241 2,075,878 Strawberry Place - 14,281 78,445 720,283 798,728 Suffolk Grove I - 3,288 214,107 1,930,249 2,144,356 Suffolk Grove II - 2,222 167,683 1,511,369 1,679,051 Sugartree I - 10,917 164,985 1,495,781 1,660,766 Summer Chase 1,200 1,179,229 1,709,200 16,561,462 18,270,662 Summer Creek 3,600 242,638 579,600 4,058,438 4,638,038 Summer Ridge 1,900 223,894 602,400 5,646,701 6,249,101 Summerset Village 262,846 376,991 2,891,346 24,052,863 26,944,208 Summerwood 6,600 224,843 4,866,600 7,167,264 12,033,864 Summit at Lake Union 100 759,034 1,424,700 13,611,495 15,036,195 Summit Chase 2,100 348,037 1,122,100 4,781,121 5,903,221 Sun Creek - 130,685 896,929 7,197,625 8,094,554 Sunny Oak Village 25,150 2,151,058 2,247,750 22,381,595 24,629,345 Sunnyside - 603 166,887 1,502,587 1,669,474 Sunrise Springs 2,700 379,434 975,300 9,155,096 10,130,396 Sunset Way I - 11,739 258,568 2,338,851 2,597,418 Sunset Way II - 4,764 274,903 2,478,892 2,753,795 Suntree Village - 374,645 1,571,745 13,470,586 15,042,331 Surprise Lake Village - 455,216 1,830,200 16,925,724 18,755,924 Surrey Downs 7,100 76,023 3,057,100 7,924,641 10,981,741 Sutton Place 41,900 2,827,457 1,358,400 15,055,182 16,413,582 Sutton Place (FL) - 7,479 120,887 1,095,466 1,216,353 Sweetwater Glen - 76,429 500,000 10,546,178 11,046,178 Sycamore Creek 2,000 429,964 3,152,000 19,517,266 22,669,266 Tabor Ridge - 560 235,940 2,124,022 2,359,962 Tamarind at Stoneridge 2,400 172,709 1,056,200 9,662,028 10,718,228 Tamarlane 900 147,937 690,900 5,301,569 5,992,469 Tanasbourne Terrace 3,700 1,264,592 1,876,700 18,155,797 20,032,497 Tanglewood (OR) 3,000 1,615,686 763,000 8,479,335 9,242,335 Tanglewood (VA) 4,895 2,251,142 2,108,295 21,925,975 24,034,270 Terrace Trace - 3,812 193,916 1,749,060 1,942,976 Thymewood II - 3,459 219,661 1,980,407 2,200,068 Timber Hollow - 130,316 800,000 11,349,853 12,149,853 Timbercreek - 1,371 203,420 1,832,149 2,035,569 Timberwalk - 142,033 1,988,000 13,346,252 15,334,252 Timberwood 6,600 388,286 1,518,600 14,976,073 16,494,673 Timberwood (OH) - 6,087 144,299 1,304,781 1,449,081 Town Center (TX) 1,300 193,375 1,291,300 11,723,592 13,014,892 Town Center II (TX) - 1,590 1,375,000 13,839,065 15,214,065 Town Centre III & IV 4,700 2,034,631 2,551,200 26,264,783 28,815,983 Towne Square - 319,701 1,924,710 36,531,118 38,455,828 Townhomes of Meadowbrook 2,600 469,826 1,382,600 12,837,140 14,219,740 Trails (CO), The 100 1,710,373 1,217,900 10,587,578 11,805,478 Trails (NV), The 3,000 1,146,722 3,079,200 28,859,662 31,938,862 Trails (TX), The 21,300 579,446 638,000 6,324,570 6,962,570 Trails at Briar Forest - 243,736 2,380,000 25,155,297 27,535,297 Trails at Dominion Park 2,800 1,092,971 2,531,800 36,792,560 39,324,360 Trails of Valley Ranch 1,400 205,855 2,809,400 8,128,919 10,938,319 Trailway Pond I 2,484 232,699 479,284 4,541,754 5,021,039 Trailway Pond II 2,588 249,320 1,107,288 10,203,586 11,310,874 Trinity Lakes 2,000 469,324 1,982,000 15,425,056 17,407,056 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ---------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ---------------------------------------------------------------------------------- Stonehenge (Mas) (12,102) 1984 30 Years Stonehenge (MI) (11,807) 1984 30 Years Stonehenge (Ott) (7,992) 1983 30 Years Stonehenge I (Ric) (12,848) 1984 30 Years Stoney Creek (1,071,035) 1990 30 Years Stratford Lane I (16,695) 1984 30 Years Strawberry Place (7,096) 1982 30 Years Suffolk Grove I (17,358) 1985 30 Years Suffolk Grove II (13,449) 1987 30 Years Sugartree I (13,702) 1984 30 Years Summer Chase (2,269,958) 1983 30 Years Summer Creek (230,197) 1985 30 Years Summer Ridge (742,851) 1985 30 Years Summerset Village (2,824,900) 1985 30 Years Summerwood (400,314) 1982 30 Years Summit at Lake Union (1,240,993) 1995 - 1997 30 Years Summit Chase (548,513) 1985 30 Years Sun Creek (556,216) 1985 30 Years Sunny Oak Village (3,379,027) 1984 30 Years Sunnyside (13,731) 1984 30 Years Sunrise Springs (1,827,290) 1989 30 Years Sunset Way I (21,465) 1987 30 Years Sunset Way II (22,424) 1988 30 Years Suntree Village (1,087,909) 1986 30 Years Surprise Lake Village (1,666,072) 1986 30 Years Surrey Downs (432,578) 1986 30 Years Sutton Place (3,867,574) 1985 30 Years Sutton Place (FL) (10,198) 1984 30 Years Sweetwater Glen (486,070) 1986 30 Years Sycamore Creek (1,589,335) 1984 30 Years Tabor Ridge (19,335) 1986 30 Years Tamarind at Stoneridge (832,338) 1985 30 Years Tamarlane (503,791) 1986 30 Years Tanasbourne Terrace (3,783,624) 1986-89 30 Years Tanglewood (OR) (2,101,837) 1976 30 Years Tanglewood (VA) (4,128,721) 1987 30 Years Terrace Trace (16,100) 1985 30 Years Thymewood II (17,760) 1986 30 Years Timber Hollow (521,951) 1986 30 Years Timbercreek (16,581) 1987 30 Years Timberwalk (620,991) 1987 30 Years Timberwood (874,206) 1983 30 Years Timberwood (OH) (12,035) 1985 30 Years Town Center (TX) (1,247,668) 1994 30 Years Town Center II (TX) (13,563) 1994 30 Years Town Centre III & IV (5,338,532) 1968, 1969 30 Years Towne Square (2,700,797) 1987-1996 30 Years Townhomes of Meadowbrook (756,374) 1988 30 Years Trails (CO), The (2,767,017) 1986 30 Years Trails (NV), The (5,629,075) 1988 30 Years Trails (TX), The (1,466,440) 1984 30 Years Trails at Briar Forest (1,152,474) 1990 30 Years Trails at Dominion Park (3,882,199) 1992 30 Years Trails of Valley Ranch (570,724) 1986 30 Years Trailway Pond I (345,153) 1988 30 Years Trailway Pond II (768,364) 1988 30 Years Trinity Lakes (1,298,278) 1985 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Trowbridge Atlanta, GA - 2,520,000 9,489,361 Turf Club Littleton, CO - 2,100,000 15,478,040 Turkscap I Tampa, FL 558,781 125,766 1,131,898 Turkscap III Tampa, FL 768,804 135,850 1,222,651 Tyrone Gardens Randolph, MA - 4,950,000 5,800,235 University Square I Tampa, FL 917,645 197,457 1,777,109 Valencia Plantation Orlando, FL - 873,000 12,819,377 Valley Creek I Woodbury, MN 12,827,815 1,622,600 14,626,770 Valley Creek II Woodbury, MN 10,110,100 1,229,500 11,091,476 Valleybrook Atlanta, GA 1,525,843 254,490 2,290,411 Valleyfield (KY) Lexington, KY 1,835,776 252,329 2,270,959 Valleyfield (PA) Pittsburg, PA - 274,317 2,468,850 Valleyfield I Atlanta, GA 1,629,018 252,413 2,271,717 Valleyfield II Atlanta, GA 1,026,548 258,320 2,324,883 Via Ventura Phoenix, AZ (E) 1,476,500 13,382,006 Villa Encanto Phoenix, AZ - 2,884,447 22,197,363 Villa Madeira Phoenix, AZ - 1,580,000 14,240,297 Villa Serenas Tucson, AZ 9,141,446 2,424,900 14,615,923 Villa Solana Laguna Hills, CA - 1,663,500 14,985,678 Village at Bear Creek Denver, CO 21,113,845 4,519,700 40,676,390 Village at Lakewood Phoenix, AZ (P) 3,166,411 13,859,090 Village at Tanque Verde Tucson, AZ (P) 1,434,838 7,134,638 Village Oaks Austin, TX 4,987,945 1,184,400 10,663,736 Village of Newport Federal Way, WA - 414,900 3,747,606 Village of Sycamore Ridge Memphis, TN - 621,300 5,612,046 Villas at Josey Ranch Carrollton, TX 6,727,424 1,584,000 7,264,404 Villas of Oak Creste San Antonio, TX - 905,800 8,151,738 Viridian Lake Fort Myers, FL - 960,000 17,806,758 Vista Del Lago Mission Viejo, CA 30,971,241 4,524,400 40,736,293 Vista Grove Mesa, AZ - 1,341,796 12,157,045 Vista Pointe Irving, TX - 2,079,000 17,028,694 Walden Wood Southfield, MI 5,706,032 833,300 7,513,690 Walker Place Dallas, TX 1,145,471 125,274 1,127,466 Walker's Mark Dallas, TX - 984,000 6,029,822 Warwick Station Denver, CO 9,534,250 2,281,900 20,543,195 Waterbury (GA) Athens, GA 657,813 147,450 1,327,050 Waterbury (IN) Indianapolis, IN 824,264 105,245 947,206 Waterbury (MI) Detroit,MI 2,106,702 331,739 2,985,650 Waterbury (OH) Cincinnati, OH 1,130,576 193,167 1,738,500 Waterbury (TN) Clarksville, TN 942,471 116,968 1,052,708 Waterford (Jax) Jacksonville, FL - 3,024,000 23,662,293 Waterford at Deerwood Jacksonville, FL 10,566,370 1,736,000 10,659,702 Waterford at Orange Park Orange Park, FL 9,540,000 1,960,000 12,098,784 Waterford at Regency Jacksonville, FL 7,075,238 1,113,000 5,184,162 Waterford at the Lakes Kent, WA - 3,100,200 16,153,087 Waterford Place (TN) Nashville, TN - 900,000 12,003,189 Waterford Village (Broward) Delray Beach, FL - 1,888,000 15,358,635 Watermark Square Portland, OR 8,061,856 1,580,000 14,247,039 Waterstone Place Seattle, WA 2,950,900 26,674,599 Welleby Lake Club Sunrise, FL - 3,648,000 17,620,879 Wellington (WA) Silverdale, WA 8,062,026 1,097,300 9,883,303 Wellington Hill Manchester, NH (S) 1,872,500 17,120,662 Wellsford Oaks Tulsa, OK - 1,310,500 11,794,290 Wentworth Detroit,MI - 217,502 1,957,520 West Of Eastland Columbus, OH 2,022,939 234,544 2,110,894 Westbrook Village Manchester, MO - 2,310,000 10,621,218 Westcreek Jacksonville, FL 180,466 185,199 1,666,792 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Trowbridge 1,000 609,462 2,521,000 10,098,823 12,619,823 Turf Club 7,300 843,095 2,107,300 16,321,136 18,428,436 Turkscap I - 5,550 125,766 1,137,448 1,263,215 Turkscap III - 1,580 135,850 1,224,231 1,360,081 Tyrone Gardens 3,000 72,480 4,953,000 5,872,715 10,825,715 University Square I - 2,674 197,457 1,779,783 1,977,240 Valencia Plantation - 51,727 873,000 12,871,105 13,744,105 Valley Creek I 4,115 629,348 1,626,715 15,256,117 16,882,833 Valley Creek II 3,159 159,419 1,232,659 11,250,895 12,483,555 Valleybrook - 5,534 254,490 2,295,945 2,550,435 Valleyfield (KY) - 5,562 252,329 2,276,520 2,528,849 Valleyfield (PA) - 6,692 274,317 2,475,542 2,749,859 Valleyfield I - 2,510 252,413 2,274,228 2,526,641 Valleyfield II - 2,086 258,320 2,326,970 2,585,290 Via Ventura 10,100 4,815,861 1,486,600 18,197,867 19,684,467 Villa Encanto - 789,747 2,884,447 22,987,109 25,871,556 Villa Madeira 2,100 1,601,637 1,582,100 15,841,934 17,424,034 Villa Serenas 1,800 265,649 2,426,700 14,881,572 17,308,272 Villa Solana 1,600 1,372,378 1,665,100 16,358,056 18,023,156 Village at Bear Creek - 219,654 4,519,700 40,896,044 45,415,744 Village at Lakewood - 441,698 3,166,411 14,300,787 17,467,198 Village at Tanque Verde - 303,789 1,434,838 7,438,426 8,873,264 Village Oaks 1,600 507,844 1,186,000 11,171,580 12,357,580 Village of Newport 1,400 292,129 416,300 4,039,735 4,456,035 Village of Sycamore Ridge 2,600 262,988 623,900 5,875,035 6,498,935 Villas at Josey Ranch 3,700 269,222 1,587,700 7,533,626 9,121,326 Villas of Oak Creste - 493,841 905,800 8,645,579 9,551,379 Viridian Lake - 283,004 960,000 18,089,761 19,049,761 Vista Del Lago 1,400 2,495,423 4,525,800 43,231,717 47,757,517 Vista Grove - 146,856 1,341,796 12,303,901 13,645,697 Vista Pointe 1,800 151,120 2,080,800 17,179,814 19,260,614 Walden Wood 1,400 1,360,155 834,700 8,873,845 9,708,545 Walker Place - 2,241 125,274 1,129,707 1,254,981 Walker's Mark 800 196,019 984,800 6,225,841 7,210,641 Warwick Station 100 201,494 2,282,000 20,744,689 23,026,689 Waterbury (GA) - 2,444 147,450 1,329,495 1,476,945 Waterbury (IN) - 2,357 105,245 949,563 1,054,808 Waterbury (MI) - 24,135 331,739 3,009,785 3,341,524 Waterbury (OH) - 2,518 193,167 1,741,018 1,934,185 Waterbury (TN) - 2,319 116,968 1,055,027 1,171,995 Waterford (Jax) - 518,347 3,024,000 24,180,639 27,204,639 Waterford at Deerwood - 294,000 1,736,000 10,953,702 12,689,702 Waterford at Orange Park - 963,644 1,960,000 13,062,428 15,022,428 Waterford at Regency - 134,766 1,113,000 5,318,928 6,431,928 Waterford at the Lakes - 558,075 3,100,200 16,711,163 19,811,363 Waterford Place (TN) - 86,076 900,000 12,089,265 12,989,265 Waterford Village (Broward) - 1,397,696 1,888,000 16,756,331 18,644,331 Watermark Square 500 1,058,489 1,580,500 15,305,528 16,886,028 Waterstone Place 13,100 2,931,368 2,964,000 29,605,967 32,569,967 Welleby Lake Club - 214,745 3,648,000 17,835,624 21,483,624 Wellington (WA) 2,000 594,557 1,099,300 10,477,860 11,577,160 Wellington Hill 17,700 1,944,224 1,890,200 19,064,886 20,955,086 Wellsford Oaks - 188,148 1,310,500 11,982,438 13,292,938 Wentworth - 2,180 217,502 1,959,700 2,177,202 West Of Eastland - 12,197 234,544 2,123,090 2,357,634 Westbrook Village - 43,490 2,310,000 10,664,708 12,974,708 Westcreek - 12,032 185,199 1,678,824 1,864,023 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ------------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ------------------------------------------------------------------------------------------- Trowbridge (550,816) 1980 30 Years Turf Club (944,364) 1986 30 Years Turkscap I (10,406) 1977 30 Years Turkscap III (11,074) 1982 30 Years Tyrone Gardens (341,434) 1961/1965 30 Years University Square I (16,278) 1979 30 Years Valencia Plantation (574,894) 1990 30 Years Valley Creek I (1,152,417) 1989 30 Years Valley Creek II (845,794) 1990 30 Years Valleybrook (20,417) 1986 30 Years Valleyfield (KY) (20,533) 1985 30 Years Valleyfield (PA) (22,044) 1985 30 Years Valleyfield I (20,095) 1984 30 Years Valleyfield II (20,555) 1985 30 Years Via Ventura (4,160,469) 1980 30 Years Villa Encanto (1,754,746) 1983 30 Years Villa Madeira (3,318,290) 1971 30 Years Villa Serenas (1,297,882) 1973 30 Years Villa Solana (3,537,814) 1984 30 Years Village at Bear Creek (3,760,814) 1987 30 Years Village at Lakewood (1,116,058) 1988 30 Years Village at Tanque Verde (621,346) 1984-1994 30 Years Village Oaks (1,399,883) 1984 30 Years Village of Newport (871,926) 1987 30 Years Village of Sycamore Ridge (513,509) 1977 30 Years Villas at Josey Ranch (431,527) 1986 30 Years Villas of Oak Creste (929,891) 1979 30 Years Viridian Lake (820,681) 1991 30 Years Vista Del Lago (9,277,982) 1986-88 30 Years Vista Grove (774,793) 1997 - 1998 30 Years Vista Pointe (1,073,208) 1996 30 Years Walden Wood (2,174,376) 1972 30 Years Walker Place (10,667) 1988 30 Years Walker's Mark (365,841) 1982 30 Years Warwick Station (1,959,615) 1986 30 Years Waterbury (GA) (12,008) 1985 30 Years Waterbury (IN) (8,723) 1984 30 Years Waterbury (MI) (27,075) 1985 30 Years Waterbury (OH) (15,721) 1985 30 Years Waterbury (TN) (9,732) 1985 30 Years Waterford (Jax) (1,132,510) 1988 30 Years Waterford at Deerwood (524,459) 1985 30 Years Waterford at Orange Park (687,174) 1986 30 Years Waterford at Regency (265,356) 1985 30 Years Waterford at the Lakes (1,723,697) 1990 30 Years Waterford Place (TN) (542,453) 1994 30 Years Waterford Village (Broward) (798,065) 1989 30 Years Watermark Square (1,641,362) 1990 30 Years Waterstone Place (7,165,406) 1990 30 Years Welleby Lake Club (806,867) 1991 30 Years Wellington (WA) (1,948,942) 1990 30 Years Wellington Hill (4,193,508) 1987 30 Years Wellsford Oaks (1,186,540) 1991 30 Years Wentworth (17,646) 1985 30 Years West Of Eastland (20,121) 1977 30 Years Westbrook Village (269,544) 1984 30 Years Westcreek (15,664) 1986 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Westridge Tacoma, WA - 3,501,900 31,506,082 Westway Brunswick, GA 883,125 168,323 1,514,904 Westwood (IN) Elkhart, IN - 78,508 706,570 Westwood (OH) Columbus, OH 94,282 18,554 166,988 Westwood Pines Tamarac, FL - 1,526,200 13,739,616 Whispering Oaks Walnut Creek, CA 10,972,056 2,167,300 19,539,586 Whispering Pines II Fr. Pierce, FL - 105,172 946,544 Whisperwood Alabany, GA 550,950 84,240 758,163 White Bear Woods White Bear Lake, MN 14,184,170 1,621,300 14,609,576 Wilcrest Woods Savannah, GA 1,348,783 187,306 1,685,757 Wilde Lake Richmond, VA 4,440,000 934,600 8,524,744 Willow Brook (NC) Durham, NC - 1,408,000 7,118,834 Willow Creek I (GA) Atlanta, GA 832,502 145,769 1,326,411 Willow Lakes Spartanburg, SC 2,050,475 200,990 1,808,906 Willow Run (GA) Atlanta, GA 1,730,934 197,965 1,781,684 Willow Run (IN) New Albany, IN 1,130,811 183,873 1,654,854 Willow Run (KY) Owensboro, KY 1,128,383 141,016 1,269,141 Willow Run (OH) Mansfield, OH 833,658 103,396 930,565 Willow Trail Norcross, GA - 1,120,000 11,412,982 Willowick Aurora, CO - 500,000 4,157,878 Willowood (GA) Macon, GA 1,154,151 160,258 1,442,318 Willowood (KY) Owensboro, KY - 96,239 866,148 Willowood East II Indianapolis, IN 786,368 104,918 944,260 Willowood I (Gro) Columbus, OH 947,000 126,045 1,134,405 Willowood I (IN) Bloomington, IN 1,140,000 163,896 1,475,066 Willowood I (KY) Lexington, KY 1,016,267 138,822 1,249,401 Willowood I (Woo) Akron, OH 732,395 117,254 1,055,287 Willowood II (Gro) Columbus, OH 552,007 70,924 638,312 Willowood II (IN) Bloomington, IN 1,148,500 161,306 1,451,756 Willowood II (KY) Lexington, KY 851,423 120,375 1,083,379 Willowood II (Tro) Dayton, OH 914,537 142,623 1,283,610 Willowood II (Woo) Akron, OH 868,458 103,199 928,792 Willows I (OH), The Columbus, OH 560,734 76,283 686,551 Willows II (OH), The Columbus, OH 640,430 96,679 870,108 Willows III (OH), The Columbus, OH 863,348 129,221 1,162,993 Wimberly Dallas, TX - 2,232,000 27,685,923 Wimbledon Oaks Arlington, TX 7,422,826 1,488,000 8,850,195 Windemere Mesa, AZ 5,992,960 949,000 8,771,280 Windmill Colorado Springs, CO - 395,544 4,958,634 Windridge (CA) Laguna Niguel, CA (N) 2,660,800 23,966,595 Windridge (GA) Dunwoody, GA - 1,224,000 13,627,762 Windwood I (FL) Melbourne, FL - 113,913 1,025,215 Windwood II (FL) Melbourne, FL 360,000 118,915 1,070,236 Wingwood (Orl) Orlando, FL 1,498,204 236,884 2,131,959 Winter Woods I (FL) Orlando, FL 947,610 144,921 1,304,292 Winterwood Charlotte, NC 11,737,476 1,720,100 15,501,142 Winthrop Court (KY) Lexington, KY 1,488,803 184,709 1,662,384 Winthrop Court II (OH) Columbus, OH 742,316 102,381 921,430 Wood Creek (CA) Pleasant Hill, CA - 9,728,000 23,009,768 Wood Crest Villa Westland, MI - 925,900 8,492,103 Wood Forest Daytona Beach, FL 6,125,061 1,008,000 4,950,210 Wood Lane Place Woodbury, MN 14,014,000 2,003,300 18,081,691 Woodbine (Cuy) Akron, OH 1,035,420 185,868 1,672,813 Woodbine (Por) Hungtington, OH 636,931 78,098 702,881 Woodbridge (M) Cary, NC 4,688,514 1,981,900 17,838,219 Woodcliff I Atlanta, GA 1,172,930 276,659 2,489,931 Woodcliff II Atlanta, GA 1,681,499 266,449 2,398,044 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) TOTAL (B) - ------------------------------------------------------------------------------------------------------------------------------------ Westridge - 799,774 3,501,900 32,305,856 35,807,756 Westway - 8,381 168,323 1,523,286 1,691,608 Westwood (IN) - 9,098 78,508 715,668 794,176 Westwood (OH) - - 18,554 166,988 185,543 Westwood Pines 2,400 339,978 1,528,600 14,079,594 15,608,194 Whispering Oaks 3,500 1,060,849 2,170,800 20,600,436 22,771,236 Whispering Pines II - 4,776 105,172 951,319 1,056,491 Whisperwood - 3,140 84,240 761,303 845,543 White Bear Woods 3,441 236,302 1,624,741 14,845,878 16,470,619 Wilcrest Woods - 5,027 187,306 1,690,784 1,878,090 Wilde Lake 12,600 521,276 947,200 9,046,020 9,993,220 Willow Brook (NC) 1,500 184,159 1,409,500 7,302,993 8,712,493 Willow Creek I (GA) - 1,035 145,769 1,327,446 1,473,214 Willow Lakes - 7,841 200,990 1,816,747 2,017,737 Willow Run (GA) - 9,904 197,965 1,791,588 1,989,553 Willow Run (IN) - 9,003 183,873 1,663,857 1,847,730 Willow Run (KY) - 3,579 141,016 1,272,720 1,413,736 Willow Run (OH) - 2,591 103,396 933,156 1,036,552 Willow Trail - 84,286 1,120,000 11,497,268 12,617,268 Willowick 6,900 190,983 506,900 4,348,862 4,855,762 Willowood (GA) - 4,980 160,258 1,447,298 1,607,556 Willowood (KY) - 9,062 96,239 875,210 971,449 Willowood East II - 8,583 104,918 952,843 1,057,761 Willowood I (Gro) - 854 126,045 1,135,259 1,261,304 Willowood I (IN) - 7,636 163,896 1,482,702 1,646,598 Willowood I (KY) - 8,177 138,822 1,257,578 1,396,401 Willowood I (Woo) - 1,349 117,254 1,056,636 1,173,890 Willowood II (Gro) - 237 70,924 638,548 709,472 Willowood II (IN) - 1,841 161,306 1,453,597 1,614,903 Willowood II (KY) - 341 120,375 1,083,720 1,204,096 Willowood II (Tro) - 3,872 142,623 1,287,482 1,430,105 Willowood II (Woo) - 3,464 103,199 932,257 1,035,456 Willows I (OH), The - 2,744 76,283 689,295 765,578 Willows II (OH), The - 6,021 96,679 876,129 972,808 Willows III (OH), The - 1,867 129,221 1,164,860 1,294,081 Wimberly - 108,124 2,232,000 27,794,047 30,026,047 Wimbledon Oaks 3,700 350,075 1,491,700 9,200,270 10,691,970 Windemere 300 411,868 949,300 9,183,148 10,132,448 Windmill 100 797,354 395,644 5,755,988 6,151,632 Windridge (CA) 2,100 854,440 2,662,900 24,821,035 27,483,935 Windridge (GA) - 156,084 1,224,000 13,783,845 15,007,845 Windwood I (FL) - 4,573 113,913 1,029,787 1,143,700 Windwood II (FL) - 3,338 118,915 1,073,573 1,192,488 Wingwood (Orl) - 8,062 236,884 2,140,021 2,376,905 Winter Woods I (FL) - 5,310 144,921 1,309,603 1,454,524 Winterwood 1,900 1,667,447 1,722,000 17,168,589 18,890,589 Winthrop Court (KY) - 28,198 184,709 1,690,582 1,875,291 Winthrop Court II (OH) - 1,200 102,381 922,630 1,025,011 Wood Creek (CA) 1,900 302,901 9,729,900 23,312,669 33,042,569 Wood Crest Villa 7,922 824,243 933,822 9,316,346 10,250,168 Wood Forest - 29,316 1,008,000 4,979,526 5,987,526 Wood Lane Place 5,847 615,477 2,009,147 18,697,168 20,706,315 Woodbine (Cuy) - 471 185,868 1,673,284 1,859,152 Woodbine (Por) - 20,015 78,098 722,896 800,994 Woodbridge (M) 100 509,795 1,982,000 18,348,014 20,330,014 Woodcliff I - 4,654 276,659 2,494,585 2,771,244 Woodcliff II - 5,495 266,449 2,403,539 2,669,989 EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ---------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME DEPRECIATION CONSTRUCTION STATEMENT (C) - ---------------------------------------------------------------------------------------- Westridge (3,146,814) 1987/1991 30 Years Westway (14,064) 1984 30 Years Westwood (IN) (6,752) 1984 30 Years Westwood (OH) (1,625) 1980 30 Years Westwood Pines (1,066,322) 1991 30 Years Whispering Oaks (2,456,734) 1974 30 Years Whispering Pines II (8,779) 1986 30 Years Whisperwood (7,249) 1985 30 Years White Bear Woods (1,126,466) 1989 30 Years Wilcrest Woods (15,352) 1986 30 Years Wilde Lake (1,042,447) 1989 30 Years Willow Brook (NC) (742,988) 1986 30 Years Willow Creek I (GA) (11,861) 1985 30 Years Willow Lakes (16,905) 1986 30 Years Willow Run (GA) (16,450) 1983 30 Years Willow Run (IN) (15,085) 1984 30 Years Willow Run (KY) (11,889) 1984 30 Years Willow Run (OH) (8,901) 1983 30 Years Willow Trail (530,427) 1985 30 Years Willowick (252,644) 1980 30 Years Willowood (GA) (13,089) 1984 30 Years Willowood (KY) (8,405) 1984 30 Years Willowood East II (9,133) 1985 30 Years Willowood I (Gro) (10,255) 1984 30 Years Willowood I (IN) (13,323) 1983 30 Years Willowood I (KY) (11,535) 1984 30 Years Willowood I (Woo) (9,683) 1984 30 Years Willowood II (Gro) (5,761) 1985 30 Years Willowood II (IN) (13,123) 1986 30 Years Willowood II (KY) (9,929) 1985 30 Years Willowood II (Tro) (11,897) 1987 30 Years Willowood II (Woo) (8,784) 1986 30 Years Willows I (OH), The (6,649) 1987 30 Years Willows II (OH), The (8,139) 1981 30 Years Willows III (OH), The (10,483) 1987 30 Years Wimberly (1,229,499) 1996 30 Years Wimbledon Oaks (518,830) 1985 30 Years Windemere (888,408) 1986 30 Years Windmill (1,702,527) 1985 30 Years Windridge (CA) (4,652,693) 1989 30 Years Windridge (GA) (643,036) 1982 30 Years Windwood I (FL) (9,723) 1988 30 Years Windwood II (FL) (10,097) 1987 30 Years Wingwood (Orl) (19,329) 1980 30 Years Winter Woods I (FL) (12,027) 1985 30 Years Winterwood (3,973,146) 1986 30 Years Winthrop Court (KY) (15,946) 1985 30 Years Winthrop Court II (OH) (8,332) 1986 30 Years Wood Creek (CA) (2,128,073) 1987 30 Years Wood Crest Villa (896,381) 1970 30 Years Wood Forest (238,822) 1985 30 Years Wood Lane Place (1,390,578) 1989 30 Years Woodbine (Cuy) (14,873) 1982 30 Years Woodbine (Por) (7,100) 1981 30 Years Woodbridge (M) (2,659,864) 1993-95 30 Years Woodcliff I (22,045) 1984 30 Years Woodcliff II (21,332) 1986 30 Years
EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999
INITIAL COST TO DESCRIPTION COMPANY - ------------------------------------------------------------------------------------------------------------------------------------ BUILDING & APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES - ------------------------------------------------------------------------------------------------------------------------------------ Woodcreek Beaverton, OR 10,836,214 1,753,700 15,804,205 Woodcrest I Macon, GA 1,152,424 115,739 1,050,217 Woodlake (WA) Kirkland, WA 11,642,214 6,624,000 16,735,484 Woodlake at Killearn Tallahassee, FL - 1,404,300 13,024,748 Woodland Hills Decatur, GA - 1,223,900 11,021,239 Woodland I & II (FL) Orlando, FL 3,498,688 461,949 4,157,538 Woodland Meadows Ann Arbor, MI - 2,003,600 18,049,552 Woodland Oaks Tulsa, OK - 893,100 8,038,166 Woodlands (KY) Nashville, KY - 72,094 648,844 Woodlands I (Col) Columbus, OH 1,802,330 231,996 2,087,960 Woodlands I (PA) Pittsburgh, PA 1,040,321 163,192 1,468,725 Woodlands I (Str) Cleveland, OH 1,412,684 197,378 1,776,398 Woodlands II (Col) Columbus, OH 1,563,244 192,633 1,733,701 Woodlands II (PA) Pittsburgh, PA - 192,972 1,736,751 Woodlands II (Str) Cleveland, OH 1,588,582 183,996 1,655,964 Woodlands III (Col) Columbus, OH - 230,536 2,074,824 Woodlands of Brookfield Brookfield, WI (Q) 1,480,000 13,961,081 Woodlands of Minnetonka Minnetonka, MN - 2,392,500 13,543,076 Woodleaf Campbell, CA 11,543,551 8,544,000 16,988,183 Woodmoor Austin, TX - 649,300 5,875,968 Woodridge (CO) Aurora, CO - 2,774,000 20,845,971 Woodridge (MN) Eagan, MN 7,712,379 1,600,000 10,449,579 Woods of North Bend Raleigh, NC - 1,039,000 9,305,319 Woodscape Raleigh, NC - 956,000 8,607,940 Woodside Lorton, VA - 1,308,100 12,510,903 Woodtrail Atlanta, GA 998,738 250,895 2,258,054 Woodvalley Anniston, AL 1,416,346 190,188 1,711,693 Wycliffe Court Nashville, TN 1,143,552 166,545 1,498,902 Wynbrook Atlanta, GA - 2,544,000 11,017,078 Wyndridge 2 Memphis, TN 14,135,000 1,486,000 13,749,636 Wyndridge 3 Memphis, TN 10,855,000 1,500,000 13,531,741 Yarmouth Woods Yarmouth, ME - 690,000 6,096,155 Yorktowne at Olde Mill Millersville, MD - 216,000 4,224,762 Yuma Court Colorado Springs, CO - 113,163 840,859 Miscellaneous - - 6,732,080 Operating Partnership Chicago, IL - - 88,566 Management Business Chicago, IL - - 3,442,962 ------------------ ------------------ ------------------- TOTAL INVESTMENT IN REAL ESTATE $ 2,309,147,938 $ 1,546,641,806 $ 10,262,221,652 ================== ================== =================== ================== ================== =================== REAL ESTATE HELD FOR DISPOSITION Lakeridge at Moors Miami, FL $ - $ 2,100,000 $ 9,068,840 Sonnet Cove I Lexington, KY - 183,407 1,770,784 Sonnet Cove II Lexington, KY - 100,000 1,462,579 ------------------ ------------------ ------------------- TOTAL REAL ESTATE HELD FOR DISPOSITION $ - $ 2,383,407 $ 12,302,203 ================== ================== =================== TOTAL REAL ESTATE $ 2,309,147,938 $ 1,549,025,213 $ 10,274,523,855 ================== ================== =================== EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 COST CAPITALIZED SUBSEQUENT TO GROSS AMOUNT CARRIED ACQUISITION AT CLOSE OF DESCRIPTION (IMPROVEMENTS, NET) (I) PERIOD 12/31/99 - ----------------------------------------------------------------------------------------------------------------------- BUILDING & BUILDING & APARTMENT NAME LAND FIXTURES LAND FIXTURES (A) - ----------------------------------------------------------------------------------------------------------------------- Woodcreek 2,100 2,119,075 1,755,800 17,923,280 Woodcrest I - 3,979 115,739 1,054,197 Woodlake (WA) 7,400 250,511 6,631,400 16,985,996 Woodlake at Killearn 3,855 738,290 1,408,155 13,763,038 Woodland Hills 700 575,900 1,224,600 11,597,140 Woodland I & II (FL) - 28,119 461,949 4,185,657 Woodland Meadows 2,400 312,397 2,006,000 18,361,948 Woodland Oaks - 407,656 893,100 8,445,823 Woodlands (KY) - 18,514 72,094 667,359 Woodlands I (Col) - 10,966 231,996 2,098,926 Woodlands I (PA) - 3,493 163,192 1,472,219 Woodlands I (Str) - 2,905 197,378 1,779,304 Woodlands II (Col) - 9,332 192,633 1,743,033 Woodlands II (PA) - 11,689 192,972 1,748,440 Woodlands II (Str) - 1,992 183,996 1,657,956 Woodlands III (Col) - 6,001 230,536 2,080,825 Woodlands of Brookfield 4,600 237,393 1,484,600 14,198,474 Woodlands of Minnetonka 2,000 466,954 2,394,500 14,010,030 Woodleaf 6,600 112,378 8,550,600 17,100,561 Woodmoor 4,500 1,242,377 653,800 7,118,345 Woodridge (CO) 6,700 474,382 2,780,700 21,320,353 Woodridge (MN) 2,300 247,486 1,602,300 10,697,066 Woods of North Bend 500 1,305,050 1,039,500 10,610,369 Woodscape 1,300 285,321 957,300 8,893,261 Woodside 17,900 505,533 1,326,000 13,016,436 Woodtrail - 13,149 250,895 2,271,203 Woodvalley - 6,319 190,188 1,718,013 Wycliffe Court - 6,778 166,545 1,505,680 Wynbrook 2,500 211,136 2,546,500 11,228,213 Wyndridge 2 2,000 556,066 1,488,000 14,305,702 Wyndridge 3 2,500 403,393 1,502,500 13,935,134 Yarmouth Woods 2,800 209,209 692,800 6,305,364 Yorktowne at Olde Mill - 2,019,215 216,000 6,243,977 Yuma Court 100 159,593 113,263 1,000,452 Miscellaneous - 4,569 - 6,736,649 Operating Partnership - 150 - 88,716 Management Business 101,000 32,920,524 101,000 36,363,486 -------------- ---------------- ------------------- -------------------- TOTAL INVESTMENT IN REAL ESTATE $3,735,914 $ 426,363,116 $ 1,550,377,719 $10,688,584,768 ============== ================ =================== ==================== ============== ================ =================== ==================== REAL ESTATE HELD FOR DISPOSITION Lakeridge at Moors $ - $ 60,745 $ 2,100,000 $ 9,129,585 Sonnet Cove I - 2,835,689 183,407 4,606,473 Sonnet Cove II - 799,939 100,000 2,262,518 -------------- ---------------- ------------------- -------------------- TOTAL REAL ESTATE HELD FOR DISPOSITION $ - $ 3,696,373 $ 2,383,407 $ 15,998,576 ============== ================ =================== ==================== TOTAL REAL ESTATE $3,735,914 $ 430,059,488 $ 1,552,761,126 $10,704,583,344 ============== ================ =================== ==================== EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 LIFE USED TO COMPUTE DESCRIPTION DEPRECIATION IN - ---------------------------------------------------------------------------------------------------------------- ACCUMULATED DATE OF LATEST INCOME APARTMENT NAME TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C) - ---------------------------------------------------------------------------------------------------------------- Woodcreek 19,679,080 (3,965,455) 1982-84 30 Years Woodcrest I 1,169,935 (9,867) 1984 30 Years Woodlake (WA) 23,617,396 (939,644) 1984 30 Years Woodlake at Killearn 15,171,193 (3,102,947) 1986 30 Years Woodland Hills 12,821,740 (1,667,097) 1985 30 Years Woodland I & II (FL) 4,647,605 (38,133) 1984/85 30 Years Woodland Meadows 20,367,948 (1,509,989) 1987-1989 30 Years Woodland Oaks 9,338,923 (861,147) 1983 30 Years Woodlands (KY) 739,452 (6,855) 1983 30 Years Woodlands I (Col) 2,330,922 (19,183) 1983 30 Years Woodlands I (PA) 1,635,410 (13,177) 1983 30 Years Woodlands I (Str) 1,976,681 (15,886) 1984 30 Years Woodlands II (Col) 1,935,666 (15,871) 1984 30 Years Woodlands II (PA) 1,941,412 (15,803) 1987 30 Years Woodlands II (Str) 1,841,952 (14,857) 1985 30 Years Woodlands III (Col) 2,311,361 (19,051) 1987 30 Years Woodlands of Brookfield 15,683,074 (839,601) 1990 30 Years Woodlands of Minnetonka 16,404,530 (1,073,483) 1988 30 Years Woodleaf 25,651,161 (908,798) 1984 30 Years Woodmoor 7,772,145 (1,731,345) 1981 30 Years Woodridge (CO) 24,101,053 (1,240,035) 1980-82 30 Years Woodridge (MN) 12,299,366 (640,231) 1986 30 Years Woods of North Bend 11,649,869 (1,895,988) 1983 30 Years Woodscape 9,850,561 (1,090,592) 1979 30 Years Woodside 14,342,436 (2,515,124) 1987 30 Years Woodtrail 2,522,098 (20,118) 1984 30 Years Woodvalley 1,908,201 (15,624) 1986 30 Years Wycliffe Court 1,672,224 (13,653) 1985 30 Years Wynbrook 13,774,713 (671,616) 1972/1976 30 Years Wyndridge 2 15,793,702 (1,431,485) 1988 30 Years Wyndridge 3 15,437,634 (1,407,694) 1988 30 Years Yarmouth Woods 6,998,164 (440,205) 1971/1978 30 Years Yorktowne at Olde Mill 6,459,977 (4,584,812) 1974 30 Years Yuma Court 1,113,715 (265,573) 1985 30 Years Miscellaneous 6,736,649 (1,038) Operating Partnership 88,716 (68,122) (H) Management Business 36,464,486 (19,155,155) (G) ------------------ ------------------ TOTAL INVESTMENT IN REAL ESTATE $12,238,962,488 $ (1,070,486,957) ================== ================== ================== ================== REAL ESTATE HELD FOR DISPOSITION Lakeridge at Moors $ 11,229,585 $ (417,185) 1991 30 Years Sonnet Cove I 4,789,880 (3,452,988) 1972 30 Years Sonnet Cove II 2,362,518 (1,643,555) 1974 30 Years ------------------ ------------------ TOTAL REAL ESTATE HELD FOR DISPOSITION $ 18,381,983 $ (5,513,728) ================== ================== TOTAL REAL ESTATE $12,257,344,470 $ (1,076,000,685) ================== ==================
SCHEDULE III EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 NOTES: (A) The balance of furniture & fixtures included in the total investment in real estate amount was $404,259,561 as of December 31,1999. The balance of furniture & fixtures included in the total real estate held for disposition amount was $1,403,187 as of December 31, 1999. (B) The aggregate cost for Federal Income Tax purposes as of December 31, 1999 was approximately $8.5 billion. (C) The life to compute depreciation for furniture & fixtures is 5 years. (D) These two properties are encumbered by $14,438,632 in bonds. (E) These 17 properties are encumbered by $136,000,000 in bonds. (F) These four properties are encumbered by $15,500,000 in bonds. (G) This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment owned by the Management Business. (H) This asset consists of various acquisition dates and represents furniture, fixtures and equipment owned by the Operating Partnership. (I) Improvements are net of write-off of fully depreciated assets which are no longer in service. (J) Formerly known as Oxford & Sussex (K) Formerly known as Post Place (L) Formerly known as The Vinings at Coral Springs (M) Formerly known as The Plantations (NC) (N) These five properties are pledged as additional collateral in connection with the tax-exempt bond refinancing of $177,570,000. (O) These 21 properties are encumbered by $132,203,864 in bonds. (P) These 5 properties are encumbered by a $48,722,302 note payable. (Q) These 5 properties are encumbered by $50,000,000 of mortgage debt. (R) These properties are currently under development and will be completed subsequent to December 31, 1999. (S) These ten properties are encumbered by $177,570,000 in bonds. (T) Includes Port Royale I, Port Royale II and Port Royale III. Port Royale III is encumbered by a third party mortgage. (U) These five properties are pledged as additional collateral in connection with a tax-exempt bond refinancing totaling $122,104,116. * Four.Lakes was constructed in phases between 1968 & 1988. (#) The Lodge-Texas was struck by a tornado that destroyed most of the property. The property was reconstructed during 1989 & 1990. (x) Pines of Springdale was constructed in phases between 1985 & 1987. SCHEDULE III EQUITY RESIDENTIAL PROPERTIES TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED) (AMOUNTS IN THOUSANDS) The changes in total real estate for the years ended December 31, 1999, 1998, and 1997 are as follows:
1999 1998 1997 ------------------- ------------------- ------------------ Balance, beginning of year $ 10,986,261 $ 7,121,435 $ 2,983,510 Acquisitions 1,448,582 3,927,768 4,112,126 Improvements 141,935 102,020 60,043 Write-off of fully depreciated assets which are no longer in service - (25) (930) Dispositions and other (319,434) (164,937) (33,314) ------------------- ------------------- ------------------ Balance, end of year $ 12,257,344 $ 10,986,261 $ 7,121,435 =================== =================== ================== The changes in accumulated depreciation for the years ended December 31, 1999, 1998, and 1997 are as follows: 1999 1998 1997 ------------------- ------------------- ------------------ Balance, beginning of year $ 732,803 $ 444,762 $ 301,512 Depreciation 406,906 301,869 156,644 Write-off of fully depreciated assets which are no longer in service - (25) (930) Dispositions and other (63,708) (13,803) (12,464) ------------------- ------------------- ------------------ Balance, end of year $ 1,076,001 $ 732,803 $ 444,762 =================== =================== ==================
S-12 EX-10.12 2 EXHIBIT 10.12 Exhibit 10.12 REVOLVING CREDIT AGREEMENT dated as of August 12, 1999 among ERP OPERATING LIMITED PARTNERSHIP, THE BANKS LISTED HEREIN, BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent, THE CHASE MANHATTAN BANK, as Syndication Agent, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent, BANK OF AMERICA SECURITIES LLC, as Joint Lead Arranger, and CHASE SECURITIES INC., as Joint Lead Arranger REVOLVING CREDIT AGREEMENT THIS REVOLVING CREDIT AGREEMENT (this "Agreement") dated as of August 12, 1999 among ERP OPERATING LIMITED PARTNERSHIP (the "Borrower"), the BANKS listed on the signature pages hereof, BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent, THE CHASE MANHATTAN BANK, as Syndication Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent. W I T N E S S E T H WHEREAS, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Definitions. The following terms, as used herein, have the following meanings: "Absolute Rate Auction" means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3. "Adjusted Asset Value" means, with respect to any Person or Property, (i) for any Property for which an acquisition or disposition has not occurred in the Fiscal Quarter most recently ended by the Borrower, EQR and their Consolidated Subsidiaries or Investment Affiliates, the product of four (4) and a fraction, the numerator of which is EBITDA for such Fiscal Quarter attributable to any such Property owned by the Borrower, EQR or any such Consolidated Subsidiary, or in the case of any such Property owned by an Investment Affiliate, the Borrower's Share of EBITDA, in a manner reasonably acceptable to Administrative Agent for the Fiscal Quarter most recently ended, and the denominator of which is the FMV Cap Rate, plus (ii) for any Property which has been acquired by the Borrower, EQR and their Consolidated Subsidiaries or Investment Affiliates in the Fiscal Quarter most recently ended, the Net Price of the Property paid by Borrower, EQR or the Consolidated Subsidiary, or the Borrower's or EQR's pro rata share of the Net Price of the Property paid by the Investment Affiliate for such Property, plus (iii) the value of any Unimproved Assets owned by the Borrower, EQR and their Consolidated Subsidiaries, as measured on a GAAP basis, plus (iv) Borrower's Share of the value of any Unimproved Assets owned by an Investment Affiliate, as measured on a GAAP basis, plus (v) the value of any Raw Land owned by the Borrower, EQR and their Consolidated Subsidiaries, as measured on a GAAP basis, plus (vi) Borrower's Share of the value of any Raw Land 1 owned by an Investment Affiliate, as measured on a GAAP basis; provided, however, the value attributable to any Unimproved Assets described in clauses (iii) and (iv) above, in excess of ten percent (10%) of Gross Asset Value shall be disregarded in calculating Adjusted Asset Value, and provided further, the value attributable to any Raw Land described in clauses (v) and (vi) above, shall be limited to five percent (5%) of Gross Asset Value. "Adjusted London Interbank Offered Rate" has the meaning set forth in Section 2.7(b). "Administrative Agent" shall mean Bank of America, National Association in its capacity as Administrative Agent hereunder, and its permitted successors in such capacity in accordance with the terms of this Agreement. "Administrative Questionnaire" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Bank. "Agreement" shall mean this Revolving Credit Agreement as the same may from time to time hereafter be modified, supplemented or amended. "Applicable Interest Rate" means (i) with respect to any Fixed Rate Indebtedness, the fixed interest rate applicable to such Fixed Rate Indebtedness at the time in question, and (ii) with respect to any Floating Rate Indebtedness, either (x) the rate at which the interest rate applicable to such Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest rate hedging device), at the time of calculation, if Borrower has entered into an interest rate cap agreement or other interest rate hedging device with respect thereto or (y) if Borrower has not entered into an interest rate cap agreement or other interest rate hedging device with respect to such Floating Rate Indebtedness, the greater of (A) the rate at which the interest rate applicable to such Floating Rate Indebtedness could be fixed for the remaining term of such Floating Rate Indebtedness, at the time of calculation, by Borrower's entering into any unsecured interest rate hedging device either not requiring an upfront payment or if requiring an upfront payment, such upfront payment shall be amortized over the term of such device and included in the calculation of the interest rate (or, if such rate is incapable of being fixed by entering into an unsecured interest rate hedging device at the time of calculation, a fixed rate equivalent reasonably determined by Administrative Agent) or (B) the floating rate applicable to such Floating Rate Indebtedness at the time in question. "Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Base Rate Loans or Swingline Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar 2 Loans, its Euro-Dollar Lending Office, and (iii) in the case of its Money Market Loans, its Money Market Lending Office. "Applicable Margin" means, with respect to each Loan, the respective percentages per annum determined, at any time, based on the range into which Borrower's Credit Rating then falls, in accordance with the table set forth below. Any change in Borrower's Credit Rating causing it to move to a different range on the table shall effect an immediate change in the Applicable Margin. In the event that Borrower receives two (2) Credit Ratings that are not equivalent, the Applicable Margin shall be determined by the lower of such two (2) Credit Ratings. In the event that Borrower receives more than two (2) Credit Ratings, and such ratings are not equivalent, the Applicable Margin shall be determined by the lower of the two (2) highest ratings, provided that each of said two (2) highest ratings shall be Investment Grade Ratings and at least one of which shall be an Investment Grade Rating from S&P or Moody's. In the event that each of said two (2) highest ratings shall not be Investment Grade Ratings or at least one shall not be an Investment Grade Rating from S&P or Moody's, then the Applicable Margin shall be determined by the lowest of the ratings. In the event that only one of the Rating Agencies shall have set Borrower's Credit Rating, then the Applicable Margin shall be based on such rating only.
Range of Applicable Borrower's Margin for Applicable Credit Rating Base Rate Margin for Euro (S&P/Moody's Loans Dollar Loans Ratings) (% per annum) (% per annum) Non-Invest- ment Grade 0.300 1.450 BBB-/Baa3 0.0 1.100 BBB/Baa2 0.0 0.900 BBB+/Baa1 0.0 0.700 A-/A3 0.0 0.625 A/A2 or 0.0 0.550 better
"Approved Bank" shall mean banks which have (i)(a) a minimum net worth of $500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a minimum long term debt rating of (a) BBB+ or higher by S&P, and (b) Baa1 or higher by Moody's. 3 "Assignee" has the meaning set forth in Section 9.6(c). "Bank" means each bank listed on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective successors and each Designated Lender; provided, however, that the term "Bank" shall exclude each Designated Lender when used in reference to a Committed Loan, the Commitments or terms relating to the Committed Loans and the Commitments and shall further exclude each Designated Lender for all other purposes hereunder except that any Designated Lender which funds a Money Market Loan shall, subject to Section 9.6(d), have the rights (including the rights given to a Bank contained in Section 9.3 and otherwise in Article 9) and obligations of a Bank associated with holding such Money Market Loan. "Bankruptcy Code" shall mean Title 11 of the United States Code, entitled "Bankruptcy", as amended from time to time, and any successor statute or statutes. "Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 0.5% plus the Federal Funds Rate for such day. "Base Rate Loan" means a Committed Loan to be made by a Bank as a Base Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to Article VIII. "Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group. "Borrower" means ERP Operating Limited Partnership, an Illinois limited partnership. "Borrower's Share" means Borrower's or EQR's share of the liabilities or assets, as the case may be, of an Investment Affiliate or Consolidated Subsidiary based upon Borrower's or EQR's percentage ownership of such Investment Affiliate or Consolidated Subsidiary, as the case may be. "Borrowing" has the meaning set forth in Section 1.3. "Capital Leases" as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. "Cap Rate" means the Treasury Rate plus 2.8%. 4 "Capital Reserve" shall mean, for any period, $62.50 for each Fiscal Quarter to occur during such period. "Cash and Cash Equivalents" shall mean unrestricted (notwithstanding the foregoing, however, cash held in escrow in connection with the completion of Code Section 1031 "like-kind" exchanges shall be deemed to be "unrestricted" for purposes hereof) (i) cash, (ii) direct obligations of the United States Government, including without limitation, treasury bills, notes and bonds, (iii) interest bearing or discounted obligations of Federal agencies and Government sponsored entities or pools of such instruments offered by Approved Banks and dealers, including without limitation, Federal Home Loan Mortgage Corporation participation sale certificates, Government National Mortgage Association modified pass through certificates, Federal National Mortgage Association bonds and notes, and Federal Farm Credit System securities, (iv) time deposits, Domestic and Eurodollar certificates of deposit, bankers acceptances, commercial paper rated at least A-1 by S&P and P-1 by Moody's and/or guaranteed by an Aa rating by Moody's, a AA rating by S&P or better rated credit, floating rate notes, other money market instruments and letters of credit each issued by Approved Banks (provided that the same shall cease to be a "Cash or Cash Equivalent" if at any time any such bank shall cease to be an Approved Bank), (v) obligations of domestic corporations, including, without limitation, commercial paper, bonds, debentures and loan participations, each of which is rated at least AA by S&P and/or Aa2 by Moody's and/or guaranteed by an Aa rating by Moody's, a AA rating by S&P or better rated credit, (vi) obligations issued by states and local governments or their agencies, rated at least MIG-1 by Moody's and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of credit of an Approved Bank (provided that the same shall cease to be a "Cash or Cash Equivalent" if at any time any such bank shall cease to be an Approved Bank), (vii) repurchase agreements with major banks and primary government security dealers fully secured by the U.S. Government or agency collateral equal to or exceeding the principal amount on a daily basis and held in safekeeping, and (viii) real estate loan pool participations, guaranteed by an AA rating given by S&P or Aa2 rating given by Moody's or better rated credit. "Closing Date" means the date on or after the Effective Date on which the conditions set forth in Section 3.1 shall have been satisfied to the satisfaction of the Administrative Agent. "Code" shall mean the Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form. "Committed Borrowing" has the meaning set forth in Section 1.3. 5 "Committed Loan" means a loan made by a Bank pursuant to Section 2.1, as well as Loans required to be made by a Bank pursuant to Section 2.16 to reimburse a Fronting Bank for a Letter of Credit that has been drawn down; provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term "Committed Loan" shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be. "Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof (and, for each Bank which is an Assignee, the amount set forth in the Transfer Supplement entered into pursuant to Section 9.6(c) as the Assignee's Commitment), as such amount may be reduced from time to time pursuant to Section 2.11(e) or in connection with an assignment to an Assignee. "Consolidated Subsidiary" means at any date any Subsidiary or other entity which is consolidated with Borrower or EQR in accordance with GAAP. "Consolidated Tangible Net Worth" means at any date the consolidated partners' capital plus the value of preference units of the Borrower and its Consolidated Subsidiaries (determined on a book basis), less their consolidated Intangible Assets, all determined as of such date. For purposes of this definition "Intangible Assets" means with respect to any such intangible assets, the amount (to the extent reflected in determining such consolidated stockholders' equity) of (i) all write-ups (other than write-ups resulting from foreign currency transactions and write-ups of assets of a going concern business made within twelve months after the acquisition of such business) subsequent to March 31, 1999 in the book value of any asset (other than Real Property Assets) owned by the Borrower or a Consolidated Subsidiary and (ii) goodwill, patents, trademarks, service marks, trade names, anticipated future benefit of tax loss carry forwards, copyrights, organization or developmental expenses and other intangible assets. "Contingent Obligation" as to any Person means, without duplication, (i) any contingent obligation of such Person required to be shown on such Person's balance sheet in accordance with GAAP, and (ii) any obligation required to be disclosed in the footnotes to such Person's financial statements, guaranteeing partially or in whole any Non-Recourse Indebtedness, lease, dividend or other obligation, exclusive of contractual indemnities (including, without limitation, any indemnity or price-adjustment provision relating to the purchase or sale of securities or other assets) and guarantees of non-monetary obligations (other than guarantees of completion) which have not yet been called on or quantified, of such Person or of any other Person. The amount of any Contingent Obligation described in 6 clause (ii) shall be deemed to be (a) with respect to a guaranty of interest or interest and principal, or operating income guaranty, the Net Present Value of the sum of all payments required to be made thereunder (which in the case of an operating income guaranty shall be deemed to be equal to the debt service for the note secured thereby), calculated at the Applicable Interest Rate, through (i) in the case of an interest or interest and principal guaranty, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (ii) in the case of an operating income guaranty, the date through which such guaranty will remain in effect, and (b) with respect to all guarantees not covered by the preceding clause (a), an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and on the footnotes to the most recent financial statements of Borrower required to be delivered pursuant to Section 4.4 hereof. Notwithstanding anything contained herein to the contrary, guarantees of completion shall not be deemed to be Contingent Obligations unless and until a claim for payment or performance has been made thereunder, at which time any such guaranty of completion shall be deemed to be a Contingent Obligation in an amount equal to any such claim. Subject to the preceding sentence, (i) in the case of a joint and several guaranty given by such Person and another Person (but only to the extent such guaranty is recourse, directly or indirectly to Borrower), the amount of the guaranty shall be deemed to be 100% thereof unless and only to the extent that such other Person has delivered Cash or Cash Equivalents to secure all or any part of such Person's guaranteed obligations and (ii) in the case of a guaranty (whether or not joint and several) of an obligation otherwise constituting Indebtedness of such Person, the amount of such guaranty shall be deemed to be only that amount in excess of the amount of the obligation constituting Indebtedness of such Person. Notwithstanding anything contained herein to the contrary, "Contingent Obligations" shall be deemed not to include guarantees of Unused Commitments or of construction loans to the extent the same have not been drawn. All matters constituting "Contingent Obligations" shall be calculated without duplication. "Convertible Securities" means evidences of shares of stock, limited or general partnership interests or other ownership interests, warrants, options, or other rights or securities which are convertible into or exchangeable for, with or without payment of additional consideration, shares of common stock of EQR or partnership interests of Borrower, as the case may be, either immediately or upon the arrival of a specified date or the happening of a specified event. "Credit Rating" means the rating assigned by the Rating Agencies to Borrower's senior unsecured long term indebtedness. 7 "Debt Restructuring" means a restatement of, or material change in, the amortization or other financial terms of any Indebtedness of EQR, the Borrower or any Consolidated Subsidiary or Investment Affiliate. "Debt Service" means, for any period, Interest Expense for such period plus scheduled principal amortization (excluding any individual scheduled principal payment which exceeds 25% of the original principal amount of an issuance of Indebtedness) for such period on all Indebtedness of EQR (calculated as provided in Section 1.2), on a consolidated basis, plus Borrower's Share of scheduled principal amortization for such period on all Indebtedness of Investment Affiliates for which there is no recourse to EQR or Borrower (or any Property thereof), plus, without duplication, EQR's and Borrower's actual or potential liability for principal amortization (excluding any individual scheduled principal payment which exceeds 25% of the original principal amount of an issuance of Indebtedness) for such period on all Indebtedness of Investment Affiliates that is recourse to EQR or Borrower (or any Property thereof). "Default" means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate" has the meaning set forth in Section 2.6(d). "Designated Lender" means a special purpose corporation that (i) shall have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is not otherwise a Bank. "Designated Lender Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A-1 hereto, evidencing the obligation of the Borrower to repay Money Market Loans made by Designated Lenders, and "Designated Lender Note" means any one of such promissory notes issued under Section 9.6(d) hereof. "Designating Lender" shall have the meaning set forth in Section 9.6(d) hereof. "Designation Agreement" means a designation agreement in substantially the form of Exhibit G attached hereto, entered into by a Bank and a Designated Lender and accepted by the Administrative Agent. "Development Activity" means (a) the development and construction of multiple apartment complexes by the Borrower or any of its Subsidiaries, (b) the financing by the Borrower, EQR or any Subsidiaries or Investment Affiliates of either or both of any such development or construction or (c) the incurrence by the Borrower, EQR or any Subsidiaries or Investment Affiliates of 8 either or both of any Contingent Obligations in connection with such development or construction (other than purchase contracts for Real Property Assets which are not payable until completion of development or construction), valued at the cost of such projects under development and construction in the case of assets owned by the Borrower, EQR or any Subsidiaries, or the Borrower's Share of the cost of such projects under development and construction in the case of assets owned by Investment Affiliates. "Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in Chicago, Illinois are authorized by law to close. "Domestic Lending Office" means, as to each Bank, its office located at its address in the United States set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent. "EBITDA" means, for any period (i) Net Income for such period, plus (ii) depreciation and amortization expense and other non-cash items deducted in the calculation of Net Income for such period, plus (iii) Interest Expense deducted in the calculation of Net Income for such period, plus, (iv) Taxes deducted in the calculation of Net Income for such period, plus (v) Borrower's Share of distributed earnings of Investment Affiliates for such period, minus (vi) the gains (and plus the losses) from extraordinary items or asset sales or write-ups or forgiveness of indebtedness included in the calculation of Net Income, for such period, minus (vii) Borrower's Share of accrued income and losses of Investment Affiliates for such period minus (viii) earnings of Subsidiaries for such period distributed to third parties, all of the foregoing without duplication. "Effective Date" means the date this Agreement becomes effective in accordance with Section 9.9. "Environmental Affiliate" means any partnership, joint venture, trust or corporation in which an equity interest is owned by the Borrower and/or EQR, either directly or indirectly, and, as a result of the ownership of such equity interest, the Borrower and/or EQR may have recourse liability for Environmental Claims against such partnership, joint venture or corporation (or the property thereof). "Environmental Approvals" means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws. "Environmental Claim" means, with respect to any Person, any notice, claim, demand or similar communication 9 (written or oral) by any other Person alleging potential liability of such Person for investigatory costs, cleanup costs, governmental response costs, natural resources damage, property damages, personal injuries, fines or penalties arising out of, based on or resulting from (i) the presence, or release into the environment, of any Materials of Environmental Concern at any location, whether or not owned by such Person or (ii) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law, in each case (with respect to both (i) and (ii) above) as to which there is a reasonable possibility of an adverse determination with respect thereto and which, if adversely determined, would have a Material Adverse Effect on the Borrower. "Environmental Laws" means any and all federal, state, and local statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, licenses, agreements and other governmental restrictions relating to the environment, the effect of the environment on human health or to emissions, discharges or releases of Materials of Environmental Concern into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern or the clean up or other remediation thereof. "EQR" means Equity Residential Properties Trust, a Maryland real estate investment trust, the sole general partner of the Borrower. "EQR Guaranty" means the Guaranty of Payment, dated as of the date hereof, executed by EQR in favor of Administrative Agent and the Banks. "EQR 1998 Form 10-K" means EQR's annual report on Form 10-K for 1998, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. "ERISA Group" means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Code. "Euro-Dollar Borrowing" has the meaning set forth in Section 1.3. 10 "Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London. "Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent. "Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a Euro-Dollar Loan in accordance with the applicable Notice of Borrowing. "Euro-Dollar Reference Bank" means the principal London offices of the Administrative Agent. "Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.7(b). "Event of Default" has the meaning set forth in Section 6.1. "Facility Fee" has the meaning set forth in Section 2.8(a). "Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System as constituted from time to time. "FFO" means "funds from operations," defined to mean, for any period, Net Income before Borrower's Share of the Net Income or loss of any Investment Affiliate, plus any and all cash distributions received by Borrower representing Borrower's Share of the Net Income (plus Borrower's Share of depreciation and amortization expenses of Investment Affiliates) of any Investment Affiliate, plus depreciation and amortization expense for such 11 period and excluding gains (or losses) from Debt Restructurings and sales or other dispositions of Property of the Borrower, EQR or any Consolidated Subsidiary or any Investment Affiliate of either or both of them. "Fiscal Quarter" means a fiscal quarter of a Fiscal Year. "Fiscal Year" means the fiscal year of Borrower and EQR which shall be the twelve (12) month period ending on the last day of December in each year. "Fixed Charges" for any Fiscal Quarter period means the sum of (i) Debt Service for such period, (ii) the product of the average number of apartment units owned (directly or beneficially) by Borrower, EQR, or any wholly-owned Subsidiary of either or both during such period and the Capital Reserve for such Period, (iii) Borrower's Share of the aggregate sum of the product of the average number of apartment units owned (directly or beneficially) by each Consolidated Subsidiary (other than wholly-owned Subsidiaries of Borrower and/or EQR) and Investment Affiliate during such period and the Capital Reserve for such period, (iv) dividends on preferred units payable by Borrower for such period, and (v) distributions made by the Borrower during such period to EQR for the purpose of paying dividends on preferred shares in EQR. "Fixed Rate Borrowing" has the meaning set forth in Section 1.3. "Fixed Rate Indebtedness" means all Indebtedness which accrues interest at a fixed rate. "Floating Rate Indebtedness" means all Indebtedness which is not Fixed Rate Indebtedness and which is not a Contingent Obligation or an Unused Commitment. "FMV Cap Rate" means 9%. "Fronting Bank" shall mean Bank of America, National Association, The Chase Manhattan Bank, Morgan Guaranty Trust Company of New York or such other Bank which Borrower is notified by the Administrative Agent is willing to be a Fronting Bank and which is designated by Borrower in its Notice of Borrowing as the Bank which shall issue a Letter of Credit with respect to such Notice of Borrowing. "GAAP" means generally accepted accounting principles recognized as such in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting 12 profession, which are applicable to the circumstances as of the date of determination. "GROSS ASSET VALUE" means, with respect to any Person or Property, Adjusted Asset Value plus, in the case of any Person, the value of any Cash or Cash Equivalent owned by such Person. "GROUP OF LOANS" means, at any time, a group of Loans consisting of (i) all Committed Loans which are Base Rate Loans at such time, or (ii) all Euro-Dollar Loans having the same Interest Period at such time; PROVIDED that, if a Committed Loan of any particular Bank is converted to or made as a Base Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made. "INDEBTEDNESS" as applied to any Person (and without duplication), means (a) all indebtedness, obligations or other liabilities of such Person for borrowed money, (b) all indebtedness, obligations or other liabilities of such Person evidenced by Securities or other similar instruments, (c) all Contingent Obligations of such Person, (d) all reimbursement obligations and other liabilities of such Person with respect to letters of credit or banker's acceptances issued for such Person's account or other similar instruments for which a contingent liability exists, (e) all obligations of such Person to pay the deferred purchase price of Property or services, (f) all obligations in respect of Capital Leases (including ground leases) of such Person, (g) all indebtedness obligations or other liabilities of such Person or others secured by a Lien on any asset of such Person, whether or not such indebtedness, obligations or liabilities are assumed by, or are a personal liability of such Person, (h) all indebtedness, obligations or other liabilities (other than interest expense liability) in respect of Interest Rate Contracts and foreign currency exchange agreements (other than Interest Rate Contracts purchased to hedge Indebtedness), (i) ERISA obligations currently due and payable and (j) all other items which, in accordance with GAAP, would be included as liabilities on the liability side of the balance sheet of such Person, exclusive, however, of all accounts payable, accrued interest and expenses, prepaid rents, security deposits and dividends and distributions declared but not yet paid. "INDEMNITEE" has the meaning set forth in Section 9.3(b). "INTEREST EXPENSE" means, for any period and without duplication, total interest expense, whether paid, accrued or capitalized (including the interest component of Capital Leases but excluding interest expense covered by an interest reserve established under a loan facility) of EQR, on a consolidated basis, including without limitation all commissions, discounts 13 and other fees and charges owed with respect to drawn letters of credit, amortized costs of Interest Rate Contracts incurred on or after the Closing Date and the Facility Fees payable to the Banks in accordance with Section 2.8, PLUS Borrower's Share of accrued, paid or capitalized interest with respect to any Indebtedness of Investment Affiliates for which there is no recourse to EQR or Borrower, PLUS, without duplication, EQR's and Borrower's actual or potential liability for accrued, paid or capitalized interest (including the interest component of Capital Leases but excluding interest expense covered by an interest reserve established under a loan facility) with respect to Indebtedness of Investment Affiliates that is recourse to EQR or Borrower calculated for all Fixed Rate Indebtedness, at the actual interest rate in effect with respect to all Indebtedness outstanding as of the last day of such Fiscal Quarter and in the case of all Floating Rate Indebtedness, the greater of (i) (A) the Treasury Rate plus 1.75% for taxable Indebtedness and (B) 7.0% for tax-exempt Indebtedness, (ii) the actual rate of interest in effect with respect to such Floating Rate Indebtedness outstanding for which no Interest Rate Contract is in effect as of the last day of such quarter and (iii) if an Interest Rate Contract is in effect with respect to such Floating Rate Indebtedness, the strike rate payable under such Interest Rate Contract, all determined on an annualized basis. "INTEREST PERIOD" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing specified in the Notice of Borrowing or on the date specified in the applicable Notice of Interest Rate Election and ending 30, 60, 90, or 180 days thereafter, as the Borrower may elect in the applicable Notice of Borrowing or Notice of Interest Rate Election; PROVIDED that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) if any Interest Period includes a date on which a payment of principal of the Loans is required to be made under Section 2.10 but does not end on such date, then (i) the principal amount (if any) of each Euro-Dollar Loan required to be repaid on such date shall have an Interest Period ending on such date (it being understood that the foregoing shall not be deemed to relieve the Borrower of any 14 obligation to pay any amounts otherwise required pursuant to Section 2.13 in connection with such prepayment) and (ii) the remainder (if any) of each such Euro-Dollar Loan shall have an Interest Period determined as set forth above. (2) Intentionally Omitted. (3) with respect to each Money Market LIBOR Loan, the period commencing on the date of borrowing specified in the applicable Money Market Quote Request and ending such number of months thereafter as the Borrower may elect in accordance with Section 2.3; PROVIDED that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day; (b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and (c) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date. (4) with respect to each Money Market Absolute Rate Loan, the period commencing on the date of borrowing specified in the applicable Money Market Quote Request and ending such number of days thereafter (but not less than 14 days or more than 180 days) as the Borrower may elect in accordance with Section 2.3; PROVIDED that: (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and (b) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date. "INTEREST RATE CONTRACTS" means, collectively, interest rate swap, collar, cap or similar agreements providing interest rate protection. 15 "INTEREST RATE HEDGES" has the meaning set forth in Section 5.12. "INVESTMENT AFFILIATE" means any Person in whom EQR or Borrower holds an equity interest, directly or indirectly, whose financial results are not consolidated under GAAP with the financial results of EQR or Borrower on the consolidated financial statements of EQR and Borrower. "INVESTMENT GRADE RATING" means a rating for a Person's senior long-term unsecured debt, or if no such rating has been issued, a "shadow" rating, of BBB- or better from S&P, and a rating or "shadow" rating of Baa3 or better from Moody's. Any such "shadow" rating shall be evidenced by a letter from the applicable Rating Agency or by such other evidence as may be reasonably acceptable to the Administrative Agent (as to any such other evidence, the Administrative Agent shall present the same to, and discuss the same with, the Banks). "INVESTMENT MORTGAGES" means mortgages securing indebtedness directly or indirectly owed to Borrower, EQR or Subsidiaries of either or both, including certificates of interest in real estate mortgage investment conduits. "INVITATION FOR MONEY MARKET QUOTES" has the meaning set forth in Section 2.3(c). "LETTER(S) OF CREDIT" has the meaning provided in Section 2.2(b). "LETTER OF CREDIT COLLATERAL" has the meaning provided in Section 6.4. "LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning provided in Section 6.4. "LETTER OF CREDIT DOCUMENTS" has the meaning provided in Section 2.16. "LETTER OF CREDIT USAGE" means at any time the sum of (i) the aggregate maximum amount available to be drawn under the Letters of Credit then outstanding, assuming compliance with all requirements for drawing referred to therein, and (ii) the aggregate amount of the Borrower's unpaid obligations under this Agreement in respect of the Letters of Credit. "LIBOR AUCTION" means a solicitation of Money Market Quotes setting forth Money Market Margins based on the London Interbank Offered Rate pursuant to Section 2.3. "LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement, in each case that has the effect of creating a security interest, in respect of such asset. For the purposes of this Agreement, the Borrower, EQR or any Subsidiary of either or both shall be deemed to own subject to a Lien any asset which it has acquired or holds 16 subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "LOAN" means a Base Rate Loan, a Euro-Dollar Loan, a Money Market Loan or a Swingline Loan and "LOANS" means Base Rate Loans, Euro-Dollar Loans, Money Market Loans or Swingline Loans or any combination of the foregoing. "LOAN DOCUMENTS" means this Agreement, the Notes, the EQR Guaranty, the Letter(s) of Credit, and the Letter of Credit Documents. "LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section 2.7(b). "MARGIN STOCK" shall have the meaning provided such term in Regulation U of the Federal Reserve Board. "MATERIAL ADVERSE EFFECT" means an effect resulting from any circumstance or event or series of circumstances or events, of whatever nature (but excluding general economic conditions), which does or could reasonably be expected to, materially and adversely (i) effect the business, operations, properties, assets or financial condition of the Borrower and its Consolidated Subsidiaries taken as a whole, (ii) impair the ability of the Borrower and its Consolidated Subsidiaries, taken as a whole, to perform their respective obligations under the Loan Documents, or (iii) cause a Default under Sections 5.8, 5.9 or 5.13. "MATERIAL PLAN" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $5,000,000. "MATERIALS OF ENVIRONMENTAL CONCERN" means and includes pollutants, contaminants, hazardous wastes, toxic and hazardous substances, asbestos, lead, petroleum and petroleum by-products. "MATURITY DATE" shall mean the date when all of the Obligations hereunder shall be due and payable which shall be August 11, 2002, unless accelerated pursuant to the terms hereof. "MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section 2.3(d). "MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank pursuant to an Absolute Rate Auction. "MONEY MARKET BORROWING" has the meaning set forth in Section 1.3. "MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic Lending Office or such other office, branch or affiliate of such Bank as it may hereafter designate as its Money 17 Market Lending Office by notice to the Borrower and the Agent; PROVIDED that any Bank may from time to time by notice to the Borrower and the Administrative Agent designate separate Money Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other hand, in which case all references herein to the Money Market Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require. "MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Article VIII. "MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan. "MONEY MARKET MARGIN" has the meaning set forth in Section 2.3(d)(2). "MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market Loan in accordance with Section 2.3. "MOODY'S" means Moody's Investors Services, Inc. or any successor thereto. "MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period. "MULTIFAMILY RESIDENTIAL PROPERTY MORTGAGES" means Investment Mortgages issued by any Person engaged primarily in the business of developing, owning, and managing multifamily residential property. "MULTIFAMILY RESIDENTIAL PROPERTY PARTNERSHIP INTERESTS" means partnership or joint venture interests issued by any Person engaged primarily in the business of developing, owning, and managing multifamily residential property. "NET INCOME" means, for any period, the net earnings (or loss) after Taxes of EQR, on a consolidated basis, for such period calculated in conformity with GAAP. "NET OFFERING PROCEEDS" means all cash or other assets received by EQR or Borrower as a result of the sale of common shares of beneficial interest, preferred shares of beneficial interest, partnership interests, limited liability company interests, Convertible Securities or other ownership or equity interests in EQR or Borrower LESS customary costs and discounts of issuance paid by EQR or Borrower, as the case may be. 18 "NET OPERATING INCOME" means, for any period with respect to any Property owned (directly or beneficially) by Borrower, EQR or their wholly-owned Subsidiaries, the net operating income of such Property (attributed to such Property in a manner reasonably acceptable to Administrative Agent) for such period (i) determined in accordance with GAAP, (ii) determined in a manner which is consistent with the past practices of EQR and Borrower, and (iii) inclusive of an allocation of reasonable management fees and administrative costs to each Property consistent with the past practices of EQR and Borrower, except that, for purposes of determining Net Operating Income, income shall not (a) include security or other deposits, lease termination or other similar charges, delinquent rent recoveries, unless previously reflected in reserves, or any other items deemed by Administrative Agent to be of a non-recurring nature or (b) be reduced by depreciation or amortization. "NET PRICE" means, with respect to the purchase and sale of any Property, without duplication, (i) Cash and Cash Equivalents paid as consideration for such purchase or sale, PLUS (ii) the principal amount of any note received or other deferred payment to be made in connection with such purchase or sale (except as described in clause (iv) below), PLUS (iii) the value of any other considerations delivered in connection with such purchase or sale (including, without limitation, shares of beneficial interest in EQR and OP Units or Preferred OP Units (as defined in Borrower's partnership agreement)) (as reasonably determined by Administrative Agent), MINUS (only in the case of a sale) (iv) the value of any consideration deposited into escrow or subject to disbursement or claim upon the occurrence of any event, MINUS (only in the case of a sale) (v) the value of any consideration required to be paid to any Person other than the Borrower and its Subsidiaries owning a beneficial interest in such Property, MINUS (vi) reasonable costs of sale and taxes paid or payable in connection with such purchase or sale. "NET PRESENT VALUE" shall mean, as to a specified or ascertainable dollar amount, the present value, as of the date of calculation of any such amount using a discount rate equal to the Base Rate in effect as of the date of such calculation. "NON-MULTIFAMILY RESIDENTIAL PROPERTY" means Property which is not (i) used for lease, operation or use as a multifamily residential property, (ii) Unimproved Assets, (iii) Securities, (iv) Multifamily Residential Property Mortgages, or (v) Multifamily Residential Property Partnership Interests. "NON-RECOURSE INDEBTEDNESS" means Indebtedness with respect to which recourse for payment is limited to (i) specific assets related to a particular Property or group of Properties encumbered by a Lien securing such Indebtedness or (ii) any Subsidiary or Investment Affiliate (provided that if a Subsidiary or Investment Affiliate is a partnership, there is no recourse to 19 Borrower or EQR as a general partner of such partnership); provided, however, that personal recourse of Borrower or EQR for any such Indebtedness for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate indemnification agreements in non-recourse financing of real estate shall not, by itself, prevent such Indebtedness from being characterized as Non-Recourse Indebtedness. "NOTES" means promissory notes of the Borrower, substantially in the form of EXHIBITS A-1 AND A-2 hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder. "NOTICE OF BORROWING" means a Notice of Borrowing (as defined in Section 2.4). "NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section 2.6. "OBLIGATIONS" means all obligations, liabilities, indemnity obligations and Indebtedness of every nature of the Borrower, from time to time owing to Administrative Agent or any Bank under or in connection with this Agreement or any other Loan Document. "PARENT" means, with respect to any Bank, any Person controlling such Bank. "PARTICIPANT" has the meaning set forth in Section 9.6(b). "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "PERIOD FRACTION" means with respect to any period of time, a fraction, the numerator of which is the actual number of days in such period, and the denominator of which is three hundred and sixty (360). "PERMITTED HOLDINGS" means Development Activity, Raw Land, Securities, Non-Multifamily Residential Property and Investment Mortgages, but only to the extent not prohibited in Section 5.8. "PERMITTED LIENS" means: a. Liens for Taxes, assessments or other governmental charges not yet due and payable or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted in accordance with the terms hereof; 20 b. statutory liens of carriers, warehousemen, mechanics, materialmen and other similar liens imposed by law, which are incurred in the ordinary course of business for sums not more than sixty (60) days delinquent or which are being contested in good faith in accordance with the terms hereof; c. deposits made in the ordinary course of business to secure liabilities to insurance carriers; d. Liens for purchase money obligations for equipment; PROVIDED that (i) the Indebtedness secured by any such Lien does not exceed the purchase price of such equipment, (ii) any such Lien encumbers only the asset so purchased and the proceeds upon sale, disposition, loss or destruction thereof, and (iii) such Lien, after giving effect to the Indebtedness secured thereby, does not give rise to an Event of Default; e. easements, rights-of-way, zoning restrictions, other similar charges or encumbrances and all other items listed on Schedule B to the owner's title insurance policies, except in connection with any Indebtedness, for any of the Real Property Assets, so long as the foregoing do not interfere in any material respect with the use or ordinary conduct of the business of the owner and do not diminish in any material respect the value of the Property to which it is attached or for which it is listed; f. Liens and judgments which have been or will be bonded or released of record within thirty (30) days after the date such Lien or judgment is entered or filed against EQR, Borrower, or any Subsidiary; g. Liens on Property of the Borrower, EQR or the Subsidiaries of either or both (other than Qualifying Unencumbered Property) securing Indebtedness which may be incurred or remain outstanding without resulting in an Event of Default hereunder; and h. Liens in favor of the Borrower against any asset of any wholly-owned Subsidiary of the Borrower and/or EQR. "PERSON" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "PLAN" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under 21 Section 412 of the Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. "PRIME RATE" means the rate of interest publicly announced by the Administrative Agent in Charlotte, North Carolina from time to time as its Prime Rate for customers generally. "PROPERTY" means, with respect to any Person, any real or personal property, building, facility, structure, equipment or unit, or other asset owned by such Person. "PROPERTY INCOME" means, when used with respect to any Real Property Asset, annual contractual rents (other than prepaid rents and revenues and security deposits except to the extent applied in satisfaction of tenants' obligations for rent), in effect as of the last day of a quarter in accordance with the applicable leases, but provided that if any tenant is more than 60 days in arrears in the payment of base or fixed rent as of the last day of a quarter, the annual contractual rents payable pursuant to such tenant's lease shall not constitute "Property Income". "QUALIFYING UNENCUMBERED PROPERTY" means any Property from time to time which (i) is an operating multifamily residential property wholly-owned (directly or beneficially) by Borrower and/or EQR, (ii) is not subject (nor are any equity interests in such Property subject) to a Lien which secures Indebtedness of any Person other than Permitted Liens, (iii) is not subject (nor are any equity interests in such Property subject) to any covenant, condition, or other restriction which prohibits or limits the creation or assumption of any Lien upon such Property (it being understood that covenants similar to those set forth in Section 5.8 hereof shall not be deemed to constitute any such prohibition or limitation), and (iv) if owned by a Subsidiary of the Borrower or EQR (other than the Borrower), is owned by a Subsidiary that does not have any outstanding Unsecured Debt (other than those items of Indebtedness set forth in clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any Contingent Obligation other than guarantees for borrowed money). In addition, in the case of any Property that is owned by a Subsidiary of Borrower and/or EQR, if such Subsidiary shall commence any proceeding under any bankruptcy, insolvency or similar law, or any such involuntary case shall be commenced against it and shall remain undismissed and unstayed for a period of 90 days, then, simultaneously with the occurrence of such conditions, such Property shall no longer constitute a Qualifying Unencumbered Property. 22 "QRS CORPORATION" means those qualified EQR subsidiaries wholly owned by EQR. "RATING AGENCIES" means, collectively, S&P, Moody's, Fitch Investors Services, L.P. and Duff & Phelps Credit Rating Co. "RAW LAND" means Real Property Assets upon which no material improvements have been commenced. "REAL PROPERTY ASSETS" means as of any time, the real property assets (including interests in participating mortgages in which the Borrower's interest therein is characterized as equity according to GAAP) owned directly or indirectly by the Borrower, EQR and the Consolidated Subsidiaries of either or both at such time. "RECOURSE DEBT" shall mean Indebtedness that is not Non-Recourse Indebtedness. "REGULATION U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. "REQUIRED BANKS" means at any time Banks having at least 51% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing at least 51% of the aggregate unpaid principal amount of the Loans (provided, that in the case of Swingline Loans, the amount of each Bank's funded participation interest in such Swingline Loans shall be considered for purposes hereof as if it were a direct loan and not a participation interest, and the aggregate amount of Swingline Loans owing to the Swingline Lender shall be considered for purposes hereof as reduced by the amount of such funded participation interests). "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto. "SECURED DEBT" means Indebtedness of EQR, on a consolidated basis, and without duplication, Borrower's Share of any Indebtedness of any Investment Affiliate, the payment of which is secured by a Lien on any Property owned or leased by EQR, Borrower, or any Subsidiary or Investment Affiliate of either or both. "SECURITIES" means any stock, partnership interests (other than Multifamily Residential Property Partnership Interests), shares, shares of beneficial interest, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as "securities," or any certificates of interest, shares, or 23 participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire any of the foregoing, but shall not include any evidence of the obligations. "SOLVENT" means, with respect to any Person, that the fair saleable value of such Person's assets exceeds the Indebtedness of such Person. "SUBSIDIARY" means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Borrower and/or EQR. "SWINGLINE BORROWING" has the meaning set forth in Section 1.3. "SWINGLINE COMMITMENT" has the meaning set forth in Section 2.18(a). "SWINGLINE LENDER" means Bank of America, National Association, in its capacity as Swingline Lender hereunder, and its permitted successors in such capacity in accordance with the terms of this Agreement. "SWINGLINE LOAN" means a loan made by the Swingline Lender pursuant to Section 2.18. "SYNDICATION AGENT" shall mean The Chase Manhattan Bank in its capacity as Syndication Agent hereunder, and its permitted successors in such capacity in accordance with the terms of this Agreement. "TAXES" means all federal, state, local and foreign income and gross receipts taxes. "TERM" has the meaning set forth in Section 2.9. "TERMINATION EVENT" shall mean (i) a "reportable event", as such term is described in Section 4043 of ERISA (other than a "reportable event" not subject to the provision for 30-day notice to the PBGC), or an event described in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA Group from a Multiemployer Plan during a plan year in which it is a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), or the incurrence of liability by any member of the ERISA Group under Section 4064 of ERISA upon the termination of a Multiemployer Plan, (iii) the filing of a notice of intent to terminate any Plan under Section 4041 of ERISA, other than in a standard termination within the meaning of Section 4041 of ERISA, or the treatment of a Plan amendment as a distress termination under Section 4041 of ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose liability (other than for 24 premiums under Section 4007 of ERISA) in respect of, or cause a trustee to be appointed to administer, any Plan or (v) any other event or condition that might reasonably constitute grounds for the termination of, or the appointment of a trustee to administer, any Plan or the imposition of any liability or encumbrance or Lien on the Real Property Assets or any member of the ERISA Group under ERISA. "TREASURY RATE" means, as of any date, a rate equal to the annual yield to maturity on the U.S. Treasury Constant Maturity Series with a ten year maturity, as such yield is reported in Federal Reserve Statistical Release H.15 - -- Selected Interest Rates, published most recently prior to the date the applicable Treasury Rate is being determined. Such yield shall be determined by straight line linear interpolation between the yields reported in Release H.15, if necessary. In the event Release H.15 is no longer published, the Administrative Agent shall select, in its reasonable discretion, an alternate basis for the determination of Treasury yield for U.S. Treasury Constant Maturity Series with ten year maturities. "UNENCUMBERED ASSET VALUE" means (i) a fraction, the numerator of which is the product of four (4) and the aggregate Unencumbered Net Operating Income for the most recently ended Fiscal Quarter which is attributable (in a manner reasonably acceptable to Administrative Agent) to Qualifying Unencumbered Properties wholly-owned (directly or beneficially) by the Borrower and/or EQR (exclusive of Unimproved Assets) for the entire Fiscal Quarter and the denominator of which is the FMV Cap Rate PLUS (ii) for all Qualifying Unencumbered Properties wholly-owned (directly or beneficially) by Borrower and/or EQR which have been acquired (directly or indirectly) by the Borrower and/or EQR the Fiscal Quarter most recently ended, the aggregate Net Price of the Qualifying Unencumbered Properties paid by Borrower or its affiliates for such Qualifying Unencumbered Properties; provided, however, the value attributable to Unencumbered Net Operating Income from Qualifying Unencumbered Properties located outside of the United States, in excess of ten percent (10%) of Unencumbered Asset Value, shall be disregarded in calculating the Unencumbered Asset Value. "UNENCUMBERED NET OPERATING INCOME" means for any period for all Qualifying Unencumbered Properties owned (directly or beneficially) by the Borrower and/or EQR and/or any wholly-owned Subsidiary of either or both during the applicable period, Net Operating Income from each such Qualifying Unencumbered Property minus an amount equal to the product of the average number of apartment units in such Qualifying Unencumbered Property during such period and the Capital Reserve for such period. "UNIMPROVED ASSETS" means Real Property Assets, other than Raw Land, upon which no material improvements have been 25 completed which completion is evidenced by a certificate of occupancy or its equivalent. "UNITED STATES" means the United States of America, including the fifty states and the District of Columbia. "UNSECURED DEBT" means Indebtedness of Borrower and EQR and any wholly-owned Subsidiary of either or both, which is not Secured Debt or Unsecured Tax-Exempt Indebtedness. "UNSECURED INTEREST EXPENSE" means Interest Expense, other than Interest Expense payable in respect of Secured Debt and Unsecured Tax-Exempt Indebtedness and Interest Expense payable in respect of the Indebtedness of any Person other than Borrower or EQR. "UNSECURED TAX-EXEMPT INDEBTEDNESS" means Indebtedness of any wholly-owned Subsidiary of Borrower and/or EQR which is not Secured Debt, issued in connection with a tax-exempt financing of a Real Property Asset and which is guaranteed in whole by the Borrower and/or EQR. "UNUSED COMMITMENTS" shall mean an amount equal to all unadvanced funds (other than unadvanced funds in connection with any construction loan) which any third party is obligated to advance to Borrower or another Person or otherwise pursuant to any loan document, written instrument or otherwise. SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONSTERMS AND DETERMINATIONS. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent (except for changes concurred in by the Borrower's independent public accountants) with the most recent audited consolidated financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Administrative Agent; PROVIDED that for purposes of references to the financial results and information of "EQR, on a consolidated basis," EQR shall be deemed to own one hundred percent (100%) of the partnership interests in Borrower; and PROVIDED further that, if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article V to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Banks wish to amend Article V for such purpose), then the Borrower's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner reasonably satisfactory to the Borrower and the Required Banks. 26 SECTION 1.3 TYPES OF BORROWINGSOF BORROWINGS. The term "BORROWING" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article 2 on the same date, all of which Loans are of the same type (subject to Article 8) and, except in the case of Base Rate Loans and Swingline Loans, have the same initial Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (E.G., a "FIXED RATE BORROWING" is a Euro-Dollar Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Article VIII), and a "EURO-DOLLAR BORROWING" is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2 under which participation therein is determined (I.E., a "COMMITTED BORROWING" is a Borrowing under Section 2.1 in which all Banks participate in proportion to their Commitments, while a "MONEY MARKET BORROWING" is a Borrowing under Section 2.3 in which a Bank's share is determined on the basis of its bid in accordance therewith, and a "Swingline Borrowing" is a Borrowing under Section 2.18 in which only the Swingline Lender participates (subject to the provisions of said Section 2.18)). ARTICLE II THE CREDITS SECTION 2.1 COMMITMENTS TO LEND. Each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make Loans to the Borrower and participate in Letters of Credit issued by the Fronting Bank on behalf of the Borrower pursuant to this Article from time to time during the term hereof in amounts such that the aggregate principal amount of Committed Loans plus such Bank's Pro Rata Share of Swingline Loans by such Bank at any one time outstanding together with such Bank's pro rata share of the Letter of Credit Usage shall not exceed the amount of its Commitment. Each Borrowing outstanding under this Section 2.1 shall be in an aggregate principal amount of $3,000,000, or an integral multiple of $100,000 in excess thereof (except that any such Borrowing may be in the aggregate amount available in accordance with Section 3.2(b), or in any amount required to reimburse the Fronting Bank for any drawing under any Letter of Credit or to repay the Swingline Lender the amount of any Swingline Loan) and, other than with respect to Money Market Loans and Swingline Loans, shall be made from the several Banks ratably in proportion to their respective Commitments. In no event shall the aggregate Loans outstanding at any time, plus outstanding Letter of Credit Usage, exceed $700,000,000. Subject to the limitations set forth herein, any amounts repaid may be reborrowed. SECTION 2.2 NOTICE OF BORROWING 27 (a) The Borrower shall give Administrative Agent notice not later than 10:00 a.m. (Chicago time) (x) one Domestic Business Day before each Base Rate Borrowing, or (y) three Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying: (i) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, (ii) the aggregate amount of such Borrowing, (iii) whether the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar Loans, and (iv) in the case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period. (b) Borrower shall give the Administrative Agent, and the designated Fronting Bank, written notice in the event that it desires to have Letters of Credit (each, a "LETTER OF CREDIT") issued, or to have Letters of Credit issued on behalf of a Subsidiary, hereunder no later than 10:00 a.m., Chicago time, at least four (4) Domestic Business Days prior to the date of such issuance. Each such notice shall specify (i) the designated Fronting Bank, (ii) the aggregate amount of the requested Letters of Credit, (iii) the individual amount of each requested Letter of Credit and the number of Letters of Credit to be issued, (iv) the date of such issuance (which shall be a Domestic Business Day), (v) the name and address of the beneficiary, (vi) the expiration date of the Letter of Credit (which in no event shall be later than the Maturity Date or twelve (12) months after the issuance of such Letter of Credit, whichever is earlier), (vii) the purpose and circumstances for which such Letter of Credit is being issued and (viii) the terms upon which each such Letter of Credit may be drawn down (which terms shall not leave any discretion to Fronting Bank). Each such notice may be revoked telephonically by the Borrower to the applicable Fronting Bank and the Administrative Agent any time prior to the date of issuance of the Letter of Credit by the applicable Fronting Bank, provided such revocation is confirmed in writing by the Borrower to the Fronting Bank and the Administrative Agent within one (1) Domestic Business Day by facsimile. Notwithstanding anything contained herein to the contrary, the Borrower shall complete and deliver to the Fronting Bank any required documentation in connection with any requested Letter of Credit no later than two (2) Domestic Business Days prior to the issuance thereof. No later than 10:00 a.m., Chicago time, on the date that is four (4) Domestic Business Days prior to the date of issuance, the Borrower shall specify a precise description of the documents and the verbatim text of any certificate to be presented by the beneficiary of such Letter of Credit, which if presented by such beneficiary prior to the expiration date of the Letter of Credit 28 would require the Fronting Bank to make a payment under the Letter of Credit; PROVIDED, that Fronting Bank may, in its reasonable judgment, require changes in any such documents and certificates only in conformity with changes in customary and commercially reasonable practice or law and, PROVIDED FURTHER, that no Letter of Credit shall require payment against a conforming draft to be made thereunder on the third Domestic Business Day following the date that such draft is presented if such presentation is made later than 10:00 A.M. Chicago time (except that if the beneficiary of any Letter of Credit requests at the time of the issuance of its Letter of Credit that payment be made on the same Domestic Business Day against a conforming draft, such beneficiary shall be entitled to such a same day draw, provided such draft is presented to the applicable Fronting Bank no later than 10:00 A.M. Chicago time and provided further the Borrower shall have requested to the Fronting Bank and the Administrative Agent that such beneficiary shall be entitled to a same day draw). In determining whether to pay on such Letter of Credit, the Fronting Bank shall be responsible only to determine that the documents and certificates required to be delivered under the Letter of Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit. SECTION 2.3 MONEY MARKET BORROWINGS. (a) THE MONEY MARKET OPTION. From time to time during the Term, and provided that at such time the Borrower maintains an Investment Grade Rating, the Borrower may, as set forth in this Section 2.3, request the Banks during the Term to make offers to make Money Market Loans to the Borrower, not to exceed, at such time, the lesser of (i) $250,000,000 in the aggregate outstanding, and (ii) the aggregate Commitments less all Loans and Letter of Credit Usage then outstanding. Subject to the provisions of this Agreement, the Borrower may repay any outstanding Money Market Loan on any day which is both a Domestic Business Day and a Euro-Dollar Business Day and any amounts so repaid may be reborrowed, up to the amount available under this Section 2.3 at the time of such Borrowing, until the Domestic Business Day next preceding the Maturity Date. The Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section 2.3. (b) MONEY MARKET QUOTE REQUEST. When the Borrower wishes to request offers to make Money Market Loans under this Section, it shall transmit to the Agent by facsimile transmission a Money Market Quote Request substantially in the form of EXHIBIT B hereto so as to be received not later than 10:30 A.M. (Chicago time) on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the 29 Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying: 1. the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction, 2. the aggregate amount of such Borrowing, which shall be $3,000,000 or a larger multiple of $100,000, 3. the duration of the Interest Period applicable thereto (which shall not be less than 14 days or more than 180 days), subject to the provisions of the definition of Interest Period, and 4. whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate. The Borrower may request offers to make Money Market Loans for more than one Interest Period in a single Money Market Quote Request. No Money Market Quote Request shall be given within five Euro-Dollar Business Days (or such other number of days as the Borrower and the Administrative Agent may agree) of any other Money Market Quote Request. (c) INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of a Money Market Quote Request, the Administrative Agent shall send to the Banks by facsimile transmission a copy thereof, which shall constitute an invitation by the Borrower to each Bank to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section. (d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES. 1. Each Bank may submit a Money Market Quote containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Administrative Agent by facsimile transmission at its offices specified in or pursuant to Section 9.1 not later than (x) 2:00 P.M. (Chicago time) on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (Chicago time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Banks not later than the date of 30 the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); PROVIDED that Money Market Quotes submitted by the Administrative Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank may be submitted, and may only be submitted, if the Administrative Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) one hour prior to the deadline for the other Banks, in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote so made shall be irrevocable except with the written consent of the Administrative Agent given on the instructions of the Borrower. Such Money Market Loans may be funded by such Bank's Designated Lender (if any) as provided in Section 9.6(d), however such Bank shall not be required to specify in its Money Market Quote whether such Money Market Loans will be funded by such Designated Lender. 2. Each Money Market Quote shall be in substantially the form of EXHIBIT D hereto and shall in any case specify: (a) the proposed date of Borrowing, (b) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Bank, (x) must be $3,000,000 or a larger multiple of $100,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Bank may be accepted, (c) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the "MONEY MARKET MARGIN") offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate, (d) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the "MONEY MARKET ABSOLUTE RATE") offered for each such Money Market Loan, and (e) the identity of the quoting Bank. A Money Market Quote may set forth up to five separate offers by the quoting Bank with respect to each Interest 31 Period specified in the related Invitation for Money Market Quotes. 3. Any Money Market Quote shall be disregarded if it: (a) is not substantially in conformity with EXHIBIT D hereto or does not specify all of the information required by subsection (d)(2) above; (b) contains qualifying, conditional or similar language (except for an aggregate limitation as provided in subsection (d)(2)(b) above); (c) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or (d) arrives after the time set forth in subsection (d)(1). (e) NOTICE TO BORROWER. The Administrative Agent shall promptly (and in any event within one (1) Domestic Business Day after receipt thereof) notify the Borrower in writing of the terms (x) of any Money Market Quote submitted by a Bank that is in accordance with subsection (d) and (y) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Administrative Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote or modifies the terms of such previous Money Market Quote to provide terms more favorable to Borrower. The Administrative Agent's notice to the Borrower shall specify (A) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (B) the respective principal amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted. (f) ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:30 A.M. (Chicago time) on (x) the third Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or 32 Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a "NOTICE OF MONEY MARKET BORROWING") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; PROVIDED that: 1. the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request; 2. the principal amount of each Money Market Borrowing must be $3,000,000 or a larger multiple of $100,000; 3. acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be; and 4. the Borrower may not accept any offer that is described in subsection (d)(3) or that otherwise fails to comply with the requirements of this Agreement. (g) ALLOCATION BY AGENT. If offers are made by two or more Banks with the same Money Market Margins or Money Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Administrative Agent among such Banks as nearly as possible (in multiples of $100,000, as the Administrative Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. The Administrative Agent shall promptly (and in any event within one (1) Domestic Business Day after such offers are accepted) notify the Borrower and each such Bank in writing of any such allocation of Money Market Loans. Determinations by the Administrative Agent of the allocation of Money Market Loans shall be conclusive in the absence of manifest error. (h) NOTIFICATION BY ADMINISTRATIVE AGENT. Upon receipt of the Borrower's Notice of Money Market Borrowing in accordance with Section 2.3(f) hereof, the Administrative Agent shall, on the date such Notice of Money Market Borrowing is received by the Administrative Agent, promptly notify each Bank (and such Notice of Money Market Borrowing shall not thereafter be revocable by the Borrower) (i) of the principal amount of the Money Market Borrowing accepted by the Borrower, and (ii) of such Bank's share (if any) of such Money Market Borrowing. A Bank who is notified that it has been selected to make a Money Market Loan may designate its Designated Lender (if any) to fund such Money 33 Market Loan on its behalf, as described in Section 9.6(d). Any Designated Lender which funds a Money Market Loan shall on and after the time of such funding become the obligee under such Money Market Loan and be entitled to receive payment thereof when due. No Bank shall be relieved of its obligation to fund a Money Market Loan, and no Designated Lender shall assume such obligation, prior to the time the applicable Money Market Loan is funded. (i) Notwithstanding anything to the contrary contained herein, each Bank shall be required to fund its pro rata share of Committed Loans in accordance with Section 2.1 hereof despite the fact that any Bank's Commitment may have been or may be exceeded as a result of such Bank's making of Money Market Loans. SECTION 2.4 NOTICE TO BANKS; FUNDING OF LOANS (a) Upon receipt of a notice from Borrower in accordance with Section 2.2 hereof (each such notice being a "NOTICE OF BORROWING"), the Administrative Agent shall, on the date such Notice of Borrowing is received by the Administrative Agent, promptly notify each Bank of the contents thereof and of such Bank's share of such Borrowing, of the interest rate determined pursuant thereto and the Interest Period(s) (if different from those requested by the Borrower) and such Notice of Borrowing shall not thereafter be revocable by the Borrower, unless Borrower shall pay any applicable expenses pursuant to Section 2.13. (b) Not later than 1:00 p.m. (Chicago time) on the date of each Borrowing as indicated in the Notice of Borrowing, each Bank shall (except as provided in subsection (c) of this Section) make available its share of such Borrowing in Federal funds immediately available in Chicago, to the Administrative Agent at its address referred to in Section 9.1. If the Borrower has requested the issuance of a Letter of Credit, no later than 12:00 Noon (Chicago time) on the date of such issuance as indicated in the notice delivered pursuant to Section 2.2(b), the Fronting Bank shall issue such Letter of Credit in the amount so requested and deliver the same to the Borrower with a copy thereof to the Administrative Agent. Immediately upon the issuance of each Letter of Credit by the Fronting Bank, such Fronting Bank shall be deemed to have sold and transferred to each other Bank, and each such other Bank shall be deemed, and hereby agrees, to have irrevocably and unconditionally purchased and received from the Fronting Bank, without recourse or warranty, an undivided interest and a participation in such Letter of Credit, any drawing thereunder, and the obligations of the Borrower hereunder with respect thereto, and any security therefor or guaranty pertaining thereto, in an amount equal to such Bank's ratable share thereof (based upon the ratio its Commitment bears to the aggregate of all Commitments). Upon any change in any of the Commitments in accordance herewith, there shall be an automatic adjustment to such participations to 34 reflect such changed shares. The Fronting Bank shall have the primary obligation to fund any and all draws made with respect to such Letter of Credit notwithstanding any failure of a participating Bank to fund its ratable share of any such draw. The Administrative Agent will instruct the Fronting Bank to make such Letter of Credit available to the Borrower and the Fronting Bank shall make such Letter of Credit available to the Borrower at the Borrower's aforesaid address or at such address in the United States as Borrower shall request on the date of the Borrowing. (c) Not later than 3:00 p.m. (Chicago time) on the date of each Swingline Borrowing as indicated in the applicable Notice of Borrowing, the Swingline Lender shall make available such Swingline Borrowing in Federal funds immediately available in Chicago, Illinois, to the Administrative Agent at its address referred to herein. (d) Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank's share of such Borrowing, the Administrative Agent may assume that such Bank has made such share available to the Administrative Agent on the date of such Borrowing in accordance with subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance upon such assumption, but shall not be obligated to, make available to the Borrower on such date a corresponding amount on behalf of such Bank. If and to the extent that such Bank shall not have so made such share available to the Administrative Agent, such Bank and the Borrower severally agree to repay to the Administrative Agent forthwith on demand, and in the case of the Borrower one (1) Domestic Business Day after demand, such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. SECTION 2.5 NOTES. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office. (b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that its Loans of a particular type (including Swingline Loans and Money Market Loans) be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Any additional costs incurred by 35 the Administrative Agent, the Borrower or the Banks in connection with preparing such a Note shall be at the sole cost and expense of the Bank requesting such Note. In the event any Loans evidenced by such a Note are paid in full prior to the Maturity Date, any such Bank shall return such Note to Borrower. Each such Note shall be in substantially the form of EXHIBIT A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Upon the execution and delivery of any such Note, any existing Note payable to such Bank shall be replaced or modified accordingly. Each reference in this Agreement to the "NOTE" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require. (c) Upon receipt of each Bank's Note pursuant to Section 3.1(a), the Administrative Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the appropriate schedule appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; PROVIDED that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required. (d) The Committed Loans shall mature, and the principal amount thereof shall be due and payable, on the Maturity Date. The Swingline Loans shall mature, and the principal amount thereof shall be due and payable, in accordance with Section 2.18(b)(iii). (e) Each Money Market Loan included in any Money Market Borrowing shall mature, and the principal amount thereof shall be due and payable, together with accrued interest thereon, on the earlier to occur of (i) last day of the Interest Period applicable to such Borrowing or (ii) the Maturity Date. (f) There shall be no more than ten (10) Euro-Dollar Groups of Loans outstanding at any one time. SECTION 2.6 METHOD OF ELECTING INTEREST RATES. (a) The Loans included in each Committed Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject in each case to the provisions of Article VIII), as follows: 36 (i) if such Loans are Base Rate Loans, the Borrower may elect to convert all or any portion of such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day; (ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert all or any portion of such Loans to Base Rate Loans and/or elect to continue all or any portion of such Loans as Euro-Dollar Loans for an additional Interest Period or additional Interest Periods, in each case effective on the last day of the then current Interest Period applicable to such Loans, or on such other date designated by Borrower in the Notice of Interest Rate Election provided Borrower shall pay any losses pursuant to Section 2.13. Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST RATE ELECTION") to the Administrative Agent at least three (3) Euro-Dollar Business Days before the conversion or continuation selected in such notice is to be effective. A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans; PROVIDED that (i) such portion is allocated ratably among the Loans comprising such Group, (ii) the portion to which such Notice applies, and the remaining portion to which it does not apply, are each $500,000 or any larger multiple of $100,000, (iii) there shall be no more than ten (10) Euro-Dollar Groups of Loans outstanding at any time, (iv) no Committed Loan may be continued as, or converted into, a Euro-Dollar Loan when any Event of Default has occurred and is continuing, and (v) no Interest Period shall extend beyond the Maturity Date. (b) Each Notice of Interest Rate Election shall specify: (i) the Group of Loans (or portion thereof) to which such notice applies; (ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of subsection (a) above; (iii) if the Loans comprising such Group are to be converted, the new type of Loans and, if such new Loans are Euro-Dollar Loans, the duration of the initial Interest Period applicable thereto; and (iv) if such Loans are to be continued as Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period. Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period. 37 (c) Upon receipt of a Notice of Interest Rate Election from the Borrower pursuant to subsection (a) above, the Administrative Agent shall notify each Bank the same day as it receives such Notice of Interest Rate Election of the contents thereof, the interest rates determined pursuant thereto and the Interest Periods (if different from those requested by the Borrower) and such notice shall not thereafter be revocable by the Borrower. If the Borrower fails to deliver a timely Notice of Interest Rate Election to the Administrative Agent for any Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period applicable thereto. (d) If the Borrower shall fail to pay any principal of or interest on any Money Market Loan when due, such Money Market Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Base Rate until such failure shall become an Event of Default and thereafter at a rate per annum equal to the sum of 4% plus the Base Rate for such day. SECTION 2.7 INTEREST RATES. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until the date it is repaid or converted into a Euro-Dollar Loan pursuant to Section 2.6 or at the Maturity Date, at a rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate Loans for such day. Such interest shall be payable on the first Domestic Business Day of each month. (b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per annum equal to the sum of the Applicable Margin for Euro-Dollar Loans for such day plus the Adjusted London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable on the first Domestic Business Day of each month. The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means the rate per annum, rounded upward, if necessary, to the nearest 1/100 of one percent, determined by the following formula: LONDON INTERBANK OFFERED RATE (1.00 - Euro-Dollar Reserve Percentage) All figures used in this calculation shall be determined by the Administrative Agent as of the first day of the applicable Interest Period, which must be a Euro-Dollar Business Day. The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means the per annum rate of interest, rounded upward, if necessary, to the nearest 1/16th of one percent (0.0625%), at which the Euro-Dollar Reference Bank's London 38 Branch, London, England, would offer U.S. dollar deposits for the applicable Interest Period to other major banks in the London interbank market at approximately 11:00 a.m. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Borrowing or Group Of Loans or portion thereof to be converted into or continued as Euro-Dollar Loans to which such Interest Period is to apply. "EURO-DOLLAR RESERVE PERCENTAGE" means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency Liabilities, as defined in Regulation D, as Regulation D may be amended, modified or supplemented. The Euro-Dollar Reserve Percentage shall be expressed in decimal form and rounded upward, if necessary, to the nearest 1/100th of one percent, and shall include marginal, emergency, supplemental, special and other reserve percentages. The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage. (c) Subject to Section 8.1, each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.7(b) as if the related Money Market LIBOR Borrowing were a Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the Bank making such Loan in accordance with Section 2.3. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than one month, at intervals of one month after the first day thereof. Any overdue principal of or interest on any Money Market Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the Base Rate until such failure shall become an Event of Default and thereafter at a rate per annum equal to the sum of 4% plus the Base Rate for such day. (d) In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding principal amount of the Loans, and, to the extent permitted by applicable law, overdue interest in respect of all Loans, shall bear interest at the annual rate equal to the sum of the Base Rate and four percent (4%) (the "DEFAULT RATE"). (e) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall give prompt notice to the Borrower and 39 the Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of demonstrable error. (f) The Euro-Dollar Reference Bank agrees to use its best efforts to furnish quotations to the Administrative Agent as contemplated by this Section. SECTION 2.8 FEES. (a) FACILITY FEE. The Borrower shall pay to the Administrative Agent for the account of the Banks ratably in proportion to their respective Commitments a facility fee (the "FACILITY FEE") on the aggregate Commitments at the respective percentages per annum based upon the range into which the Borrower's Credit Rating then falls, in accordance with the following table. The facility fee shall be payable in arrears on each January 1, April 1, July 1 and October 1 during the Term.
Less than BBB-/ Baa3 0.300% BBB-/Baa3 0.250% BBB/Baa2 0.200% BBB+/Baa1 0.200% A-/A3 0.175% A/A2 or better 0.150%
Any change in the Borrower's Credit Rating causing it to move into a different range on the table shall effect an immediate change in the applicable percentage per annum. In the event that the Borrower receives two (2) Credit Ratings and such ratings are split between a higher and a lower range on the table, the applicable percentage per annum shall be based upon the lower of such two (2) Credit Ratings. In the event that Borrower receives more than two (2) Credit Ratings, and such ratings are not equivalent, the applicable percentage per annum shall be determined by the lower of the two (2) highest ratings, provided that each of said two (2) highest ratings shall be Investment Grade Ratings and at least one of which shall be an Investment Grade Rating from S&P or Moody's. In the event that each of said two (2) highest ratings shall not be Investment Grade Ratings or at least one shall not be an Investment Grade Rating from S&P or Moody's, then the applicable percentage per annum shall be determined by the lowest of the ratings. In the event that only one (1) Rating Agency has set the Borrower's Credit Rating, then the applicable percentage per annum shall be based on such single rating. (b) LETTER OF CREDIT FEE. During the Term, the Borrower shall pay to the Administrative Agent, for the account of the Banks in proportion to their interests in respect of issued and undrawn Letters of Credit, a fee (a "LETTER OF CREDIT FEE") in an amount, provided that no Event of Default shall have occurred and be continuing, equal to a rate per annum equal to 40 the then percentage per annum of the Applicable Margin with respect to Euro-Dollar Loans, on the daily average of such issued and undrawn Letters of Credit, which fee shall be payable, in arrears, on each January 1, April 1, July 1 and October 1 during the Term. From the occurrence, and during the continuance, of an Event of Default, such fee shall be increased to be equal to four percent (4%) per annum on the daily average of such issued and undrawn Letters of Credit. (c) FRONTING BANK FEE. The Borrower shall pay any Fronting Bank, for its own account, a fee (a "FRONTING BANK FEE") at a rate per annum equal to .10% of the issued and undrawn amount of such Letter of Credit, which fee shall be in addition to and not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee shall be payable in arrears on each January 1, April 1, July 1 and October 1 during the Term. (d) FEES NON-REFUNDABLE. All fees set forth in this Section 2.8 shall be deemed to have been earned on the date payment is due in accordance with the provisions hereof and shall be non-refundable. The obligation of the Borrower to pay such fees in accordance with the provisions hereof shall be binding upon the Borrower and shall inure to the benefit of the Administrative Agent and the Banks regardless of whether any Loans are actually made. SECTION 2.9 MATURITY DATE. The term (the "TERM") of the Commitments (and each Bank's obligations to make Loans and to participate in Letters of Credit hereunder) shall terminate and expire, and the Borrower shall return or cause there to be returned all Letters of Credit to the Fronting Bank, on the Maturity Date. Upon the date of the termination of the Term, any Loans then outstanding (together with accrued interest thereon and all other Obligations) shall be due and payable on such date. SECTION 2.10 MANDATORY PREPAYMENTS. (a) If at any time the Borrower, EQR or any Consolidated Subsidiary of either or both sells, transfers, assigns or conveys any Real Property Asset which shall cause the Borrower in any fiscal year period commencing after the Closing Date, to have sold, transferred or conveyed property or assets which constitute in the aggregate more than 30% of the Gross Asset Value of the Borrower, EQR and any Consolidated Subsidiary of either or both on the date of such transfer, then at the request of Administrative Agent, Borrower shall pay to the Administrative Agent, for the account of the Banks, within thirty (30) days after the date of such request, an amount equal to the Net Proceeds of such transfer (but in no event more than the outstanding balance of the Loans). Borrower shall make such prepayment together with interest accrued to the date of the prepayment on the principal amount prepaid. In connection with 41 the prepayment of a Euro-Dollar Loan prior to the maturity thereof, the Borrower shall also pay any applicable expenses pursuant to Section 2.13. Each such prepayment shall be applied to prepay ratably the Loans of the Banks. Amounts prepaid pursuant to this Section 2.10(a) may not be reborrowed. As used in this Section 2.10, the term "NET PROCEEDS" shall mean all amounts received by Borrower, EQR and the Consolidated Subsidiaries of either or both in connection with such sale, transfer, assignment or conveyance after payment of all expenses to be made by Borrower and any Consolidated Subsidiaries in connection with such sale, transfer, assignment or conveyance (including, without limitation, payment of then existing Liens or encumbrances on such Real Property Asset, brokerage commissions, title and survey costs or transfer taxes). (b) If at any time the Borrower or EQR, directly or indirectly shall purchase or hold any interest in any Investment Affiliates which, taken singly or in the aggregate, exceeds fifteen percent (15%) of the Gross Asset Value of the Borrower, EQR and the Consolidated Subsidiaries of either or both then, at the request of Administrative Agent, Borrower shall pay to the Administrative Agent, for the account of the Banks, within thirty (30) days after the date of such request, an amount equal to the outstanding balance of all Borrowings hereunder (except as to any Fixed Rate Borrowings for which such repayments shall be made at the end of the Interest Period applicable to such Fixed Rate Borrowing), and Borrower shall not be entitled to request any further Borrowings under this Agreement until such time as the interest in any Investment Affiliates of Borrower or EQR (directly or indirectly) shall not, taken singly or in the aggregate, exceed fifteen percent (15%) of the Gross Asset Value of the Borrower, EQR and the Consolidated Subsidiaries of either or both. Borrower shall make such prepayment together with interest accrued to the date of the prepayment on the principal amount prepaid. Amounts prepaid pursuant to this Section 2.10(b) may be reborrowed in accordance with the provisions of this Agreement. SECTION 2.11 OPTIONAL PREPAYMENTS. (a) The Borrower may, upon at least one (1) Domestic Business Day's notice to the Administrative Agent, prepay any Group of Base Rate Loans (or any Money Market Borrowing bearing interest at the Base Rate pursuant to Section 8.1), in whole at any time, or from time to time in part in amounts aggregating One Million Dollars ($1,000,000) or any larger multiple of One Hundred Thousand Dollars ($100,000), by paying the principal amount to be prepaid. The Borrower may, from time to time on any Domestic Business Day so long as prior notice is given to the Administrative Agent and Swingline Lender no later than 1:00 p.m. (Chicago time) on the day on which Borrower intends to make such prepayment, prepay any Swingline Loans in whole or in part in amounts aggregating $100,000 or a higher integral multiple of $100,000 (or, if less, the aggregate outstanding principal amount 42 of all Swingline Loans then outstanding) by paying the principal amount to be prepaid no later than 2:00 p.m. (Chicago time) on such day. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Group of Loans or Borrowing(or the Swingline Lender in the case of Swingline Loans) included in such Group or Borrowing. (b) The Borrower may, upon at least one (1) Euro-Dollar Business Days' notice to the Administrative Agent, prepay any Euro-Dollar Loan as of the last day of the Interest Period applicable thereto. Except as provided in Article 8 and except with respect to any Euro-Dollar Loan which has been converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4 hereof, the Borrower may not prepay all or any portion of the principal amount of any Euro-Dollar Loan prior to the end of the Interest Period applicable thereto unless the Borrower shall also pay any applicable expenses pursuant to Section 2.13. Any such prepayment shall be upon at least three (3) Euro-Dollar Business Days notice to the Administrative Agent. Each such optional prepayment shall be in the amounts set forth in Section 2.11(a) above and shall be applied to prepay ratably the Loans of the Banks included in any Group of Euro-Dollar Loans, except that any Euro-Dollar Loan which has been converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4 hereof may be prepaid without ratable payment of the other Loans in such Group of Loans which have not been so converted. (c) The Borrower may, upon at least one (1) Domestic Business Day's notice to the Administrative Agent (by 11:00 a.m Chicago time on such Domestic Business Day), reimburse the Administrative Agent for the benefit of the Fronting Bank for the amount of any drawing under a Letter of Credit in whole or in part in any amount. (d) The Borrower may at any time return any undrawn Letter of Credit to the Fronting Bank in whole, but not in part, and the Fronting Bank within a reasonable period of time shall give the Administrative Agent and each of the Banks notice of such return. (e) The Borrower may at any time and from time to time cancel all or any part of the Commitments by the delivery to the Administrative Agent of a notice of cancellation within the applicable time periods set forth in Sections 2.11(a) and (b) if there are Loans then outstanding or, if there are no Loans outstanding at such time as to which the Commitments with respect thereto are being cancelled, upon at least one (1) Domestic Business Day's notice to the Administrative Agent, whereupon, in either event, all or such portion of the Commitments, as applicable, shall terminate as to the Banks, pro rata on the date set forth in such notice of cancellation, and, if there are any Loans then outstanding, Borrower shall prepay, as applicable, all or such portion of Loans outstanding on such date in accordance with the requirements of Section 2.11(a) and (b). In no event 43 shall the Borrower be permitted to cancel Commitments for which a Letter of Credit has been issued and is outstanding unless the Borrower returns (or causes to be returned) such Letter of Credit to the Fronting Bank. Borrower shall be permitted to designate in its notice of cancellation which Loans, if any, are to be prepaid. A reduction of the Commitments pursuant to this Section 2.11(c) shall not effect a reduction in the Swingline Commitment (unless so elected by the Borrower) until the aggregate Commitments have been reduced to an amount equal to the Swingline Commitment. (f) Any amounts so prepaid pursuant to Section 2.11 (a), (b), (c) or (d) may be reborrowed. In the event Borrower elects to cancel all or any portion of the Commitments and the Swingline Commitment pursuant to Section 2.11(e) hereof, such amounts may not be reborrowed. (g) The Borrower may not prepay any portion of a Money Market Loan except with the prior consent of the Bank or Designated Lender holding such Money Market Loan. SECTION 2.12 GENERAL PROVISIONS AS TO PAYMENTS. (a) The Borrower shall make each payment of interest on the Loans and of fees hereunder, not later than 12:00 Noon (Chicago time) on the date when due, in Federal or other funds immediately available in Chicago, to the Administrative Agent at its address referred to in Section 9.1. The Administrative Agent will promptly (and if received prior to 12:00 noon, on the same Domestic Business Day, if received after 12:00 noon on the immediately following Domestic Business Day) distribute to each Bank its ratable share (or applicable share with respect to Money Market Loans) of each such payment received by the Administrative Agent for the account of the Banks. If and to the extent that the Administrative Agent shall receive any such payment for the account of the Banks on or before 12:00 Noon (Chicago time) on any Domestic Business Day, and Administrative Agent shall not have distributed to any Bank its applicable share of such payment on such Domestic Business Day, Administrative Agent shall distribute such amount to such Bank together with interest thereon, for each day from the date such amount should have been distributed to such Bank until the date Administrative Agent distributes such amount to such Bank, at the Federal Funds Rate. Whenever any payment of 44 principal of, or interest on the Base Rate Loans or Swingline Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Money Market Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (b) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate. SECTION 2.13 FUNDING LOSSES. If the Borrower makes any payment of principal with respect to any Euro-Dollar Loan or Money Market LIBOR Loan (pursuant to Article II, VI or VIII or otherwise) on any day other than the last day of the Interest Period applicable thereto, or if the Borrower fails to borrow any Euro-Dollar Loans or Money Market LIBOR Loans after notice has been given to any Bank in accordance with Section 2.4(a), or if Borrower shall deliver a Notice of Interest Rate Election specifying that a Euro-Dollar Loan shall be converted on a date other than the first (lst) day of the then current Interest Period applicable thereto, the Borrower shall reimburse each Bank within 15 days after certification of such Bank of such loss or expense (which shall be delivered by each such Bank to Administrative Agent for delivery to Borrower) for any resulting loss or expense incurred by it (or by an existing Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow, PROVIDED that such Bank shall have delivered to Administrative Agent and Administrative Agent shall have delivered to the Borrower a certification as to the amount of such loss or expense, which certification shall set forth in reasonable detail the basis for and calculation of such loss or expense and shall be conclusive in the absence of demonstrable error. SECTION 2.14 COMPUTATION OF INTEREST AND FEES. All interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). 45 SECTION 2.15 USE OF PROCEEDSOF PROCEEDS. The Borrower shall use the proceeds of the Loans for general corporate purposes, including, without limitation, the acquisition of real property to be used in the Borrower's existing business and for general working capital needs of the Borrower; provided, however, that no Swingline Loan shall be used more than once for the purpose of refinancing another Swingline Loan, in whole or part. SECTION 2.16 LETTERS OF CREDIT. (a) Subject to the terms contained in this Agreement and the other Loan Documents, upon the receipt of a notice in accordance with Section 2.2(b) requesting the issuance of a Letter of Credit, the Fronting Bank shall issue a Letter of Credit or Letters of Credit in such form as is reasonably acceptable to the Borrower (subject to the provisions of Section 2.2(b)) in an amount or amounts equal to the amount or amounts requested by the Borrower. (b) Each Letter of Credit shall be issued in the minimum amount of One Million Dollars ($1,000,000). (c) The Letter of Credit Usage shall be no more than Two Hundred Million Dollars ($200,000,000) at any one time. (d) There shall be no more than twenty (20) Letters of Credit outstanding at any one time. (e) In the event of any request for a drawing under any Letter of Credit by the beneficiary thereunder, the Fronting Bank shall notify the Borrower and the Administrative Agent (and the Administrative Agent shall notify each Bank thereof) on or before the date on which the Fronting Bank intends to honor such drawing, and, except as provided in this subsection (e), the Borrower shall reimburse the Fronting Bank, in immediately available funds, on the same day on which such drawing is honored in an amount equal to the amount of such drawing. Notwithstanding anything contained herein to the contrary, however, unless the Borrower shall have notified the Administrative Agent, and the Fronting Bank prior to 11:00 a.m. (Chicago time) on the Domestic Business Day immediately prior to the date of such drawing that the Borrower intends to reimburse the Fronting Bank for the amount of such drawing with funds other than the proceeds of the Loans, the Borrower shall be deemed to have timely given a Notice of Borrowing pursuant to Section 2.2 to the Administrative Agent, requesting a Borrowing of Base Rate Loans on the date on which such drawing is honored and in an amount equal to the amount of such drawing. Each Bank (other than the Fronting Bank) shall, in accordance with Section 2.3(b), make available its pro rata share of such Borrowing to the Administrative Agent, the proceeds of which shall be applied directly by the Administrative Agent to reimburse the Fronting Bank for the amount of such draw. In the event that any such Bank fails to make available to the Fronting Bank the amount of 46 such Bank's participation on the date of a drawing, the Fronting Bank shall be entitled to recover such amount on demand from such Bank together with interest at the Federal Funds Rate commencing on the date such drawing is honored, and the provisions of Section 9.16 shall otherwise apply to such failure. (f) If, after the date hereof, any change in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof shall either (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against letters of credit issued by, or assets held by, or deposits in or for the account of, or participations in any letter of credit, upon any Bank (including the Fronting Bank) or (ii) impose on any Bank any other condition regarding this Agreement or such Bank (including the Fronting Bank) as it pertains to the Letters of Credit or any participation therein and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase, by an amount deemed by the Fronting Bank or such Bank to be material, the cost to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit or participating therein, then the Borrower shall pay to the Fronting Bank or such Bank, within 15 days after written demand by such Bank (with a copy to the Administrative Agent), which demand shall be accompanied by a certificate showing, in reasonable detail, the calculation of such amount or amounts, such additional amounts as shall be required to compensate the Fronting Bank or such Bank for such increased costs or reduction in amounts received or receivable hereunder. Each Bank will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section 2.16 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall fail to notify Borrower of any such event within 90 days following the end of the month during which such event occurred, then Borrower's liability for any amounts described in this Section incurred by such Bank as a result of such event shall be limited to those attributable to the period occurring subsequent to the ninetieth (90th) day prior to the date upon which such Bank actually notified Borrower of the occurrence of such event. A certificate of any Bank claiming compensation under this Section 2.16 and setting forth a reasonably detailed calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of demonstrable error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. (g) The Borrower hereby agrees to protect, indemnify, pay and save the Fronting Bank harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees and 47 disbursements) which the Fronting Bank may incur or be subject to as a result of (i) the issuance of the Letters of Credit, other than to the extent of the bad faith, gross negligence or wilful misconduct of the Fronting Bank or (ii) the failure of the Fronting Bank to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future DE JURE or DE FACTO government or governmental authority (collectively, "GOVERNMENTAL ACTS"), other than to the extent of the bad faith, gross negligence or wilful misconduct of the Fronting Bank. As between the Borrower and the Fronting Bank, the Borrower assumes all risks of the acts and omissions of any beneficiary with respect to its use, or misuses of, the Letters of Credit issued by the Fronting Bank. In furtherance and not in limitation of the foregoing, the Fronting Bank shall not be responsible (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of such Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or insufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of any such Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit, other than as a result of the bad faith, gross negligence or wilful misconduct of the Fronting Bank; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any message, by mail, cable, telegraph, facsimile transmission, or otherwise; (v) for errors in interpretation of any technical terms; (vi) for any loss or delay in the transmission or otherwise of any documents required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any such Letter of Credit of the proceeds of such Letter of Credit; and (viii) for any consequence arising from causes beyond the control of the Fronting Bank, including any Government Acts, in each case other than to the extent of the bad faith, gross negligence or willful misconduct of the Fronting Bank. None of the above shall affect, impair or prevent the vesting of the Fronting Bank's rights and powers hereunder. In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Fronting Bank under or in connection with the Letters of Credit issued by it or the related certificates, if taken or omitted in good faith, shall not put the Fronting Bank under any resulting liability to the Borrower; provided that, notwithstanding anything in the foregoing to the contrary, the Fronting Bank will be liable to the Borrower for any damages suffered by the Borrower or its Subsidiaries as a result of the Fronting Bank's grossly negligent or wilful failure to pay under any Letter of Credit after the presentation to it of a sight 48 draft and certificates strictly in compliance with the terms and conditions of the Letter of Credit. (h) If the Fronting Bank or the Administrative Agent is required at any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization law or otherwise, to return to the Borrower any reimbursement by the Borrower of any drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank or the Administrative Agent, as the case may be, its pro rata share of such payment, but without interest thereon unless the Fronting Bank or the Administrative Agent is required to pay interest on such amounts to the person recovering such payment, in which case with interest thereon, computed at the same rate, and on the same basis, as the interest that the Fronting Bank or the Administrative Agent is required to pay. SECTION 2.17 LETTER OF CREDIT USAGE ABSOLUTE. The obligations of the Borrower under this Agreement in respect of any Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement (as the same may be amended from time to time) and any Letter of Credit Documents (as hereinafter defined) under all circumstances, including, without limitation, to the extent permitted by law, the following circumstances: (a) any lack of validity or enforceability of any Letter of Credit or any other agreement or instrument relating thereto (collectively, the "LETTER OF CREDIT DOCUMENTS") or any Loan Document; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Borrower in respect of the Letters of Credit or any other amendment or waiver of or any consent by the Borrower to departure from all or any of the Letter of Credit Documents or any Loan Document; PROVIDED, that the Fronting Bank shall not consent to any such change or amendment unless previously consented to in writing by the Borrower; (c) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the obligations of the Borrower in respect of the Letters of Credit; (d) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Administrative Agent, the Fronting Bank or any Bank (other than a defense based on the bad faith, gross negligence or wilful misconduct of the Administrative Agent, the Fronting Bank or such Bank) or any other Person, whether in connection with the Loan Documents, the transactions contemplated 49 hereby or by the Letters of Credit Documents or any unrelated transaction; (e) any draft or any other document presented under or in connection with any Letter of Credit or other Loan Document proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; PROVIDED, that payment by the Fronting Bank under such Letter of Credit against presentation of such draft or document shall not have been the result of the bad faith, gross negligence or wilful misconduct of the Fronting Bank; (f) payment by the Fronting Bank against presentation of a draft or certificate that does not strictly comply with the terms of the Letter of Credit; PROVIDED, that such payment shall not have been the result of the bad faith, gross negligence or wilful misconduct of the Fronting Bank; and (g) any other circumstance or happening whatsoever other than the payment in full of all obligations hereunder in respect of any Letter of Credit or any agreement or instrument relating to any Letter of Credit, whether or not similar to any of the foregoing, that might otherwise constitute a defense available to, or a discharge of, the Borrower; PROVIDED, that such other circumstance or happening shall not have been the result of bad faith, gross negligence or wilful misconduct of the Fronting Bank. SECTION 2.18 SWINGLINE LOAN SUBFACILITY. (a) SWINGLINE COMMITMENTCOMMITMENT. Subject to the terms and conditions of this Section 2.18, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrower (each a "SWINGLINE LOAN" and, collectively, the "SWINGLINE LOANS") from time to time during the term hereof; provided, however, that the aggregate amount of Swingline Loans outstanding at any time shall not exceed the lesser of (i) FIFTY MILLION DOLLARS ($50,000,000), and (ii) the aggregate Commitments less all Loans then outstanding (the "SWINGLINE COMMITMENT"). Subject to the limitations set forth herein, any amounts repaid in respect of Swingline Loans may be reborrowed. (b) SWINGLINE BORROWINGSBORROWINGS. (i) NOTICE OF BORROWING. With respect to any Swingline Borrowing, the Borrower shall give the Swingline Lender and the Administrative Agent notice in writing which is received by the Swingline Lender and Administrative Agent not later than 1:00 p.m. (Chicago time) on the proposed date of such Swingline Borrowing (and confirmed by telephone by such time), specifying (A) that a Swingline Borrowing is being requested, (B) the amount of such Swingline Borrowing, (C) the proposed date of such Swingline Borrowing, which shall be a Domestic Business Day and 50 (D) stating that no Default or Event of Default has occurred and is continuing both before and after giving effect to such Swingline Borrowing. Such notice shall be irrevocable. (ii) MINIMUM AMOUNTS. Each Swingline Borrowing shall be in a minimum principal amount of $1,000,000, or an integral multiple of $100,000 in excess thereof. (iii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan shall be due and payable on the earliest of (A) 5 Domestic Business Days from the date of the applicable Swingline Borrowing, (B) the date of the next Committed Borrowing or (C) the Maturity Date. In addition, in no event shall Swingline Loans be outstanding for more than ten (10) Domestic Business Days in any calendar month. If, and to the extent, any Swingline Loans shall be outstanding on the date of any Committed Borrowing, such Swingline Loans shall first be repaid from the proceeds of such Committed Borrowing prior to the disbursement of the same to the Borrower. If, and to the extent, a Committed Borrowing is not requested prior to the Maturity Date or the end of the 5-Domestic Business Day period after a Swingline Borrowing, the Borrower shall be deemed to have requested a Committed Borrowing comprised entirely of Base Rate Loans in the amount of the applicable Swingline Loan then outstanding, the proceeds of which shall be used to repay such Swingline Loan to the Swingline Lender. In addition, the Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Committed Borrowing, in which case the Borrower shall be deemed to have requested a Committed Borrowing comprised entirely of Base Rate Loans in the amount of such Swingline Loans then outstanding, the proceeds of which shall be used to repay such Swingline Loans to the Swingline Lender. Any Committed Borrowing which is deemed requested by the Borrower in accordance with this Section 2.18(b)(iii) is hereinafter referred to as a "Mandatory Borrowing". Each Bank hereby irrevocably agrees to make Committed Loans promptly upon receipt of notice from the Swingline Lender of any such deemed request for a Mandatory Borrowing in the amount and in the manner specified in the preceding sentences and on the date such notice is received by such Bank (or the next Domestic Business Day if such notice is received after 12:00 P.M. (Chicago time)) notwithstanding (I) the amount of the Mandatory Borrowing may not comply with the minimum amount of Committed Borrowings otherwise required hereunder, (II) whether any conditions specified in Section 3.2 are then satisfied, (III) whether a Default 51 or an Event of Default then exists, (IV) failure of any such deemed request for a Committed Borrowing to be made by the time otherwise required in Section 2.1, (V) the date of such Mandatory Borrowing (provided that such date must be a Domestic Business Day), or (VI) any termination of the Commitments immediately prior to such Mandatory Borrowing or contemporaneously therewith; provided, however, that no Bank shall be obligated to make Committed Loans in respect of a Mandatory Borrowing if a Default or an Event of Default then exists and the applicable Swingline Loan was made by the Swingline Lender without receipt of a written Notice of Borrowing in the form specified in subclause (i) above or after Administrative Agent has delivered a notice of Default or Event of Default which has not been rescinded. (iv) PURCHASE OF PARTICIPATIONS. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation , as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower), then each Bank hereby agrees that it shall forthwith, upon demand, purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payment received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause each such Bank to share in such Swingline Loans ratably based upon its Pro Rata Share (determined before giving effect to any termination of the Commitments pursuant hereto), provided that (A) all interest payable on the Swingline Loans with respect to any participation shall be for the account of the Swingline Lender until but excluding the day upon which the Mandatory Borrowing would otherwise have occurred, and (B) in the event of a delay between the day upon which the Mandatory Borrowing would otherwise have occurred and the time any purchase of a participation pursuant to this sentence is actually made, the purchasing Bank shall be required to pay to the Swingline Lender interest on the principal amount of such participation for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate equal to the Federal Funds Rate, for the two (2) Domestic Business Days after the date the Mandatory Borrowing would otherwise have occurred, and thereafter at a rate equal to the Base Rate. Notwithstanding the foregoing, no Bank shall be obligated to purchase a participation in any Swingline Loan if a Default or an Event of Default then exists and such Swingline Loan was made by the Swingline Lender without receipt of a written Notice of Borrowing in the form specified in subclause (i) above or after Administrative Agent has delivered a notice of Default or Event of Default which has not been rescinded. (c) INTEREST RATERATE. Each Swingline Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Swingline Loan is made until the date it is repaid, at a rate per annum equal to the Federal Funds Rate for such day, plus the Applicable Margin for Euro-Dollar Loans, plus .20%. 52 ARTICLE III CONDITIONS SECTION 3.1 CLOSING. The closing hereunder shall occur on the date when each of the following conditions is satisfied (or waived by the Administrative Agent and the Banks), each document to be dated the Closing Date unless otherwise indicated: (a) the Borrower shall have executed and delivered to the Administrative Agent a Note for the account of each Bank dated on or before the Closing Date complying with the provisions of Section 2.5; (b) the Borrower, the Administrative Agent and each of the Banks shall have executed and delivered to the Borrower and the Administrative Agent a duly executed original of this Agreement; (c) EQR shall have executed and delivered to the Administrative Agent a duly executed original of the EQR Guaranty; (d) the Administrative Agent shall have received an opinion of Rosenberg & Liebentritt, P.C., counsel for the Borrower, acceptable to the Administrative Agent, the Banks and their counsel; (e) the Borrower shall have repaid in full, and terminated, (i) the Amended and Restated Credit Agreement, dated as of October 20, 1998, among the Borrower, EQR, Bank of America National Trust and Savings Association, as syndication agent, The Chase Manhattan Bank, as documentation agent, First Union National Bank, as agent and arranger, and the financial institutions party thereto, and (ii) the Second Amended and Restated Revolving Credit Agreement, dated as of September 9, 1997, among the Borrower, Morgan Guaranty Trust Company of New York, as Lead Agent, Bank of America National Trust and Savings Association, as Co-lead Agent, and the other banks party thereto; (f) the Administrative Agent shall have received all documents the Administrative Agent may reasonably request relating to the existence of the Borrower and EQR, the authority for and the validity of this Agreement and the other Loan Documents, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent. Such documentation shall include, without limitation, the agreement of limited partnership of the Borrower, as well as the certificate of limited partnership of the Borrower, both as amended, modified or supplemented to the Closing Date, certified to be true, correct and complete by a senior officer of the Borrower as of a date not more than ten (10) days prior to the Closing Date, together with a certificate of existence as to the Borrower from 53 the Secretary of State (or the equivalent thereof) of Illinois, to be dated not more than thirty (30) days prior to the Closing Date, as well as the declaration of trust of EQR, as amended, modified or supplemented to the Closing Date, certified to be true, correct and complete by a senior officer of EQR as of a date not more than ten (10) days prior to the Closing Date, together with a good standing certificate as to EQR from the Secretary of State (or the equivalent thereof) of Maryland, to be dated not more than thirty (30) days prior to the Closing Date; (g) the Administrative Agent shall have received all certificates, agreements and other documents and papers referred to in this Section 3.1 and the Notice of Borrowing referred to in Section 3.2, if applicable, unless otherwise specified, in sufficient counterparts, satisfactory in form and substance to the Administrative Agent in its sole discretion; (h) the Borrower shall have taken all actions required to authorize the execution and delivery of this Agreement and the other Loan Documents and the performance thereof by the Borrower; (i) the Administrative Agent shall be satisfied that neither the Borrower, EQR nor any Consolidated Subsidiary is subject to any present or contingent environmental liability which could have a Material Adverse Effect; (j) the Administrative Agent shall have received, for its and any other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on or before the Closing Date, and the fees and expenses accrued through the Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP shall have been paid directly to such firm; (k) the Administrative Agent shall have received copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by the Borrower, EQR and the applicable Consolidated Subsidiaries, and the validity and enforceability, of the Loan Documents, or in connection with any of the transactions contemplated thereby, and such consents, licenses and approvals shall be in full force and effect; (l) the Administrative Agent shall have received the audited financial statements of the Borrower and its Consolidated Subsidiaries and of EQR for the fiscal year ending December 31, 1998; and (m) no Default or Event of Default shall have occurred. SECTION 3.2 BORROWINGS. The obligation of any Bank to make a Loan or to participate in any Letter of Credit issued by the Fronting Bank and the obligation of the Fronting Bank to issue a Letter of Credit or the obligation of the Swingline 54 Lender to make a Swingline Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions: (a) receipt by the Administrative Agent of a Notice of Borrowing as required by Section 2.2 or a Notice of Money Market Borrowing as required by Section 2.3 or a request to cause a Fronting Bank to issue a Letter of Credit pursuant to Section 2.16; (b) immediately after such Borrowing, the aggregate outstanding principal amount of the Loans plus the Letter of Credit Usage will not exceed the aggregate amount of the Commitments; (c) immediately before and after such Borrowing or issuance of any Letter of Credit, no Default or Event of Default shall have occurred and be continuing both before and after giving effect to the making of such Loans or the issuance of such Letter of Credit; (d) the representations and warranties of the Borrower contained in this Agreement (other than representations and warranties which expressly speak as of a different date) shall be true and correct in all material respects on and as of the date of such Borrowing both before and after giving effect to the making of such Loans; (e) no law or regulation shall have been adopted, no order, judgment or decree of any governmental authority shall have been issued, and no litigation shall be pending, which does or seeks to enjoin, prohibit or restrain, the making or repayment of the Loans, the issuance of any Letter of Credit or the consummation of the transactions contemplated by this Agreement; and (f) no event, act or condition shall have occurred after the Closing Date which, in the reasonable judgment of the Administrative Agent, or the Required Banks, as the case may be, has had or is likely to have a Material Adverse Effect; Each Borrowing hereunder or acceptance of a Letter of Credit issued hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c), (d), (e), and (f) (to the extent that Borrower is or should have been aware of any Material Adverse Effect) of this Section, except as otherwise disclosed in writing by Borrower to the Banks. Notwithstanding anything to the contrary, no Borrowing shall be permitted if such Borrowing would cause Borrower to fail to be in compliance with any of the covenants contained in this Agreement or in any of the other Loan Documents. 55 ARTICLE IV REPRESENTATIONS AND WARRANTIES In order to induce the Administrative Agent and each of the other Banks which is or may become a party to this Agreement to make the Loans, the Borrower makes the following representations and warranties as of the Closing Date. Such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the other Loan Documents and the making of the Loans. SECTION 4.1 EXISTENCE AND POWER. The Borrower is a limited partnership, duly formed and validly existing as a limited partnership under the laws of the State of Illinois and has all powers and all material governmental licenses, authorizations, consents and approvals required to own its property and assets and carry on its business as now conducted or as it presently proposes to conduct and has been duly qualified and is in good standing in every jurisdiction in which the failure to be so qualified and/or in good standing is likely to have a Material Adverse Effect. EQR is a real estate investment trust, duly formed, validly existing and in good standing as a real estate investment trust under the laws of the State of Maryland and has all powers and all material governmental licenses, authorizations, consents and approvals required to own its property and assets and carry on its business as now conducted or as it presently proposes to conduct and has been duly qualified and is in good standing in every jurisdiction in which the failure to be so qualified and/or in good standing is likely to have a Material Adverse Effect. SECTION 4.2 POWER AND AUTHORITY. The Borrower has the partnership power and authority to execute, deliver and carry out the terms and provisions of each of the Loan Documents to which it is a party and has taken all necessary partnership action, if any, to authorize the execution and delivery on behalf of the Borrower and the performance by the Borrower of such Loan Documents. The Borrower has duly executed and delivered each Loan Document to which it is a party in accordance with the terms of this Agreement, and each such Loan Document constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, except as enforceability may be limited by applicable insolvency, bankruptcy or other laws affecting creditors rights generally, or general principles of equity, whether such enforceability is considered in a proceeding in equity or at law. EQR has the power and authority to execute, deliver and carry out the terms and provisions of each of the Loan Documents on behalf of the Borrower to which the Borrower is a party and has taken all necessary action to authorize the execution and delivery on behalf of the Borrower and the performance by the Borrower of such Loan Documents. 56 SECTION 4.3 NO VIOLATION. Neither the execution, delivery or performance by or on behalf of the Borrower of the Loan Documents to which it is a party, nor compliance by the Borrower with the terms and provisions thereof nor the consummation of the transactions contemplated by the Loan Documents, (i) will materially contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, (ii) will materially conflict with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Borrower or any of its Consolidated Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, or other agreement or other instrument to which the Borrower (or of any partnership of which the Borrower is a partner) or any of its Consolidated Subsidiaries is a party or by which it or any of its property or assets is bound or to which it is subject, or (iii) will cause a material default by the Borrower under any organizational document of any Person in which the Borrower has an interest, or cause a material default under the Borrower's agreement or certificate of limited partnership, the consequences of which conflict, breach or default would have a Material Adverse Effect, or result in or require the creation or imposition of any Lien whatsoever upon any Property (except as contemplated herein). SECTION 4.4 FINANCIAL INFORMATION. (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries, dated as of December 31, 1998, and the related consolidated statements of Borrower's financial position for the fiscal year then ended, reported on by Ernst & Young LLP, a copy of which has been delivered to each of the Banks, fairly present, in conformity with GAAP, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (b) The consolidated balance sheet of EQR, dated as of December 31, 1998, and the related consolidated statements of EQR's financial position for the fiscal year then ended, reported on by Ernst & Young LLP and set forth in the EQR 1998 Form 10-K, a copy of which has been delivered to each of the Banks, fairly present, in conformity with GAAP, the consolidated financial position of EQR and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year. (c) Since March 31, 1999, (i) except as may have been disclosed in writing to the Banks, nothing has occurred having a Material Adverse Effect, and (ii) except as previously disclosed to the Banks, neither the Borrower nor EQR has incurred any material indebtedness or guaranty on or before the Closing Date. 57 SECTION 4.5 LITIGATION. Except as previously disclosed by the Borrower in writing to the Banks, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting, (i) the Borrower, EQR or any of their Consolidated Subsidiaries, (ii) the Loan Documents or any of the transactions contemplated by the Loan Documents or (iii) any of their assets, before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could, individually, or in the aggregate have a Material Adverse Effect or which in any manner draws into question the validity of this Agreement or the other Loan Documents. SECTION 4.6 COMPLIANCE WITH ERISA. (a) Except as set forth on SCHEDULE 4.6 attached hereto, neither Borrower nor EQR is a member of any Plan or Multiemployer Plan or any other Benefit Arrangement. (b) The transactions contemplated by the Loan Documents will not constitute a nonexempt prohibited transaction (as such term is defined in Section 4975 of the Code or Section 406 of ERISA) that could subject the Administrative Agent or the Banks to any tax or penalty or prohibited transactions imposed under Section 4975 of the Code or Section 502(i) of ERISA. SECTION 4.7 ENVIRONMENTAL MATTERS. The Borrower and EQR each conducts reviews of the effect of Environmental Laws on the business, operations and properties of the Borrower, EQR and Consolidated Subsidiaries of either or both when necessary in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for clean-up or closure of properties presently owned, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Borrower and EQR each has reasonably concluded that such associated liabilities and costs, including the costs of compliance with Environmental Laws, are unlikely to have a Material Adverse Effect on the Borrower, EQR and their Consolidated Subsidiaries. SECTION 4.8 TAXES. United States Federal income tax returns of the Borrower, EQR and their Consolidated Subsidiaries have been prepared and filed through the fiscal year ended December 31, 199 . The Borrower, EQR and their Consolidated Subsidiaries have filed all United States Federal income tax returns and all other material tax returns which are required to be filed by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower, 58 EQR or any Consolidated Subsidiary, except such taxes, if any, as are reserved against in accordance with GAAP, such taxes as are being contested in good faith by appropriate proceedings or such taxes, the failure to make payment of which when due and payable will not have, in the aggregate, a Material Adverse Effect. The charges, accruals and reserves on the books of the Borrower, EQR and their Consolidated Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate. SECTION 4.9 FULL DISCLOSURE. All information heretofore furnished by the Borrower to the Administrative Agent or any Bank for purposes of or in connection with this Agreement or any transaction contemplated hereby or thereby is true and accurate in all material respects on the date as of which such information is stated or certified. The Borrower has disclosed to the Administrative Agent, in writing any and all facts which have or may have (to the extent the Borrower can now reasonably foresee) a Material Adverse Effect. SECTION 4.10 SOLVENCY. On the Closing Date and after giving effect to the transactions contemplated by the Loan Documents occurring on the Closing Date, the Borrower will be Solvent. SECTION 4.11 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the Loans will be used by the Borrower only in accordance with the provisions hereof. No part of the proceeds of any Loan will be used by the Borrower to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in any manner that might violate the provisions of Regulations T, U or X of the Federal Reserve Board. Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulations T, U or X of the Federal Reserve Board. SECTION 4.12 GOVERNMENTAL APPROVALS. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of any Loan Document or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those which, if not made or obtained, would not have a Material Adverse Effect; SECTION 4.13 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower, EQR nor any Consolidated Subsidiary is (x) an "INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY", within the meaning of the Investment Company Act of 1940, as amended, (y) a "HOLDING company" or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY" or an "AFFILIATE" of either a "HOLDING COMPANY" or a 59 "SUBSIDIARY COMPANY" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (z) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money. SECTION 4.14 PRINCIPAL OFFICES. As of the Closing Date, the principal office, chief executive office and principal place of business of the Borrower is Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606. SECTION 4.15 REIT STATUS. For the fiscal year ended December 31, 1998, EQR qualified and EQR intends to continue to qualify as a real estate investment trust under the Code. SECTION 4.16 PATENTS, TRADEMARKS, ETC. The Borrower has obtained and holds in full force and effect all patents, trademarks, servicemarks, trade names, copyrights and other such rights, free from burdensome restrictions, which are necessary for the operation of its business as presently conducted, the impairment of which is likely to have a Material Adverse Effect. SECTION 4.17 OWNERSHIP OF PROPERTY. SCHEDULE 4.17 attached hereto and made a part hereof sets forth all the real property owned or ground leased by the Borrower, EQR and Persons in which the Borrower and/or EQR, directly or indirectly, owns an interest as of the Closing Date. As of the Closing Date, the Borrower, EQR and such Persons have good and insurable fee simple title (or leasehold title if so designated on SCHEDULE 4.17) to all of such real property, subject to Permitted Liens. As of the date of this Agreement, there are no mortgages, deeds of trust, indentures, debt instruments or other agreements creating a Lien against any of the Real Property Assets except as disclosed on SCHEDULE 4.17. SECTION 4.18 NO DEFAULT. No Event of Default or, to the best of the Borrower's knowledge, Default exists under or with respect to any Loan Document and the Borrower is not in default in any material respect beyond any applicable grace period under or with respect to any other material agreement, instrument or undertaking to which it is a party or by which it or any of its property is bound in any respect, the existence of which default is likely to result in a Material Adverse Effect. SECTION 4.19 LICENSES, ETC. The Borrower has obtained and does hold in full force and effect, all franchises, licenses, permits, certificates, authorizations, qualifications, accreditation, easements, rights of way and other consents and approvals which are necessary for the operation of its businesses as presently conducted, the absence of which is likely to have a Material Adverse Effect. SECTION 4.20 COMPLIANCE WITH LAW. To the Borrower's knowledge, the Borrower and each of the Real Property Assets are in compliance with all laws, rules, regulations, orders, 60 judgments, writs and decrees, including, without limitation, all building and zoning ordinances and codes, the failure to comply with which is likely to have a Material Adverse Effect. SECTION 4.21 NO BURDENSOME RESTRICTIONS. Except as may have been disclosed by the Borrower in writing to the Banks, Borrower is not a party to any agreement or instrument or subject to any other obligation or any charter or corporate or partnership restriction, as the case may be, which, individually or in the aggregate, is likely to have a Material Adverse Effect. SECTION 4.22 BROKERS' FEES. The Borrower has not dealt with any broker or finder with respect to the transactions contemplated by this Agreement or otherwise in connection with this Agreement, and the Borrower has not done any act, had any negotiations or conversation, or made any agreements or promises which will in any way create or give rise to any obligation or liability for the payment by the Borrower of any brokerage fee, charge, commission or other compensation to any party with respect to the transactions contemplated by the Loan Documents, other than the fees payable to the Administrative Agent and the Banks. SECTION 4.23 LABOR MATTERS. There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower and the Borrower has not suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years. SECTION 4.24 INSURANCE. The Borrower and/or EQR currently maintains insurance at 100% replacement cost insurance coverage (subject to customary deductibles) in respect of each of the Real Property Assets, as well as commercial general liability insurance (including "builders' risk" where applicable) against claims for personal, and bodily injury and/or death, to one or more persons, or property damage, as well as workers' compensation insurance, in each case with respect to liability and casualty insurance with insurers having an A.M. Best policyholders' rating of not less than A-VII in amounts that prudent owner of assets such as the Real Property Assets would maintain. SECTION 4.25 ORGANIZATIONAL DOCUMENTS. The documents delivered pursuant to Section 3.1(f) constitute, as of the Closing Date, all of the organizational documents (together with all amendments and modifications thereof) of the Borrower and EQR. The Borrower represents that it has delivered to the Administrative Agent true, correct and complete copies of each of the documents set forth in this Section 4.25. SECTION 4.26 QUALIFYING UNENCUMBERED PROPERTIES. As of the date hereof, each Property listed on EXHIBIT F as a Qualifying Unencumbered Property (i) is an operating multifamily residential property wholly-owned (directly or beneficially) by 61 Borrower and/or EQR or a wholly-owned Subsidiary of either or both, (ii) is not subject (nor are any equity interests in such Property subject) to a Lien which secures Indebtedness of any Person, other than Permitted Liens, (iii) is not subject (nor are any equity interests in such Property subject) to any covenant, condition, or other restriction which prohibits or limits the creation or assumption of any Lien upon such Property (it being understood that covenants similar to those set forth in Section 5.8 hereof shall not be deemed to constitute any such prohibition or limitation), and (iv) is not owned by a Subsidiary of the Borrower or EQR (other than the Borrower) that has any outstanding Unsecured Debt (other than those items of Indebtedness set forth in clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any Contingent Obligation other than guarantees for borrowed money). All of the information set forth on EXHIBIT F is true and correct in all material respects. SECTION 4.27 YEAR 2000 COMPLIANCE. The Borrower and EQR have conducted a review and assessment of the Borrower's and EQR's computer applications with respect to the "year 2000 problem" (that is, the risk that computer applications may not be able to properly perform date-sensitive functions after December 31, 1999) and, based on that review and inquiry, the Borrower does not believe that the "year 2000 problem" will result in a Material Adverse Effect to the Borrower's or EQR's financial condition or results of operations, or on its ability to repay the Loans. ARTICLE V AFFIRMATIVE AND NEGATIVE COVENANTS The Borrower covenants and agrees that, so long as any Bank has any Commitment hereunder or any Obligations remain unpaid: SECTION 5.1 INFORMATION. The Borrower will deliver to each of the Banks: (a) as soon as available and in any event within five (5) Domestic Business Days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 125 days after the end of each fiscal year of the Borrower) a consolidated balance sheet of the Borrower, EQR and their Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of Borrower's and EQR's operations and consolidated statements of Borrower's and EQR's cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on in a manner acceptable to the Securities and Exchange Commission on Borrower's and EQR's Form 10K and reported on by Ernst & Young LLP or other independent public accountants of nationally recognized standing; 62 (b) as soon as available and in any event within five (5) Domestic Business Days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 80 days after the end of each of the first three quarters of each fiscal year of the Borrower and EQR), (i) a consolidated balance sheet of the Borrower, EQR and their Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of Borrower's and EQR's operations and consolidated statements of Borrower's and EQR's cash flow for such quarter and for the portion of the Borrower's or EQR's fiscal year ended at the end of such quarter, all reported on in the form provided to the Securities and Exchange Commission on Borrower's and EQR's Form 10Q, and (ii) and such other information reasonably requested by the Administrative Agent or any Bank; (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Section 5.8 on the date of such financial statements; (ii) certifying (x) that such financial statements fairly present the financial condition and the results of operations of the Borrower on the dates and for the periods indicated, on the basis of GAAP, with respect to the Borrower subject, in the case of interim financial statements, to normally recurring year-end adjustments, and (y) that such officer has reviewed the terms of the Loan Documents and has made, or caused to be made under his or her supervision, a review in reasonable detail of the business and condition of the Borrower during the period beginning on the date through which the last such review was made pursuant to this Section 5.1(c) (or, in the case of the first certification pursuant to this Section 5.1(c), the Closing Date) and ending on a date not more than ten (10) Domestic Business Days prior to the date of such delivery and that (1) on the basis of such financial statements and such review of the Loan Documents, no Event of Default existed under Section 6.1(b) with respect to Sections 5.8 and 5.9 at or as of the date of said financial statements, and (2) on the basis of such review of the Loan Documents and the business and condition of the Borrower, to the best knowledge of such officer, as of the last day of the period covered by such certificate no Default or Event of Default under any other provision of Section 6.1 occurred and is continuing or, if any such Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof and, the action the Borrower proposes to take in respect thereof and (3) no event has occurred and is continuing which would give rise to a mandatory prepayment pursuant to Section 2.10 hereof. Such certificate shall set forth the calculations required to establish the matters described in clauses (1) and (3) above; 63 (d) (i) within five (5) Domestic Business Days after any officer of the Borrower obtains knowledge of any Default, if such Default is then continuing, a certificate of the chief financial officer, the chief accounting officer, controller, or other executive officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and (ii) promptly and in any event within five (5) Domestic Business Days after the Borrower obtains knowledge thereof, notice of (x) any litigation or governmental proceeding pending or threatened against the Borrower or the Real Property Assets as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, is likely to individually or in the aggregate, result in a Material Adverse Effect, (y) any other event, act or condition which is likely to result in a Material Adverse Effect, and (z) any event giving rise to a mandatory prepayment pursuant to Section 2.10; (e) promptly upon the mailing thereof to the shareholders of EQR generally, copies of all financial statements, reports and proxy statements so mailed; (f) promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) (other than the exhibits thereto, which exhibits will be provided upon request therefor by any Bank) which EQR shall have filed with the Securities and Exchange Commission; (g) Promptly and in any event within thirty (30) days, if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the 64 imposition of a Lien or the posting of a bond or other security, and in the case of clauses (i) through (vii) above, which event could result in a Material Adverse Effect, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take; (h) promptly and in any event within ten (10) days after the Borrower obtains actual knowledge of any of the following events, a certificate of the Borrower, executed by an officer of the Borrower, specifying the nature of such condition, and the Borrower's or, if the Borrower has actual knowledge thereof, the Environmental Affiliate's proposed initial response thereto: (i) the receipt by the Borrower, or, if the Borrower has actual knowledge thereof, any of the Environmental Affiliates of any communication (written or oral), whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Borrower, or, if the Borrower has actual knowledge thereof, any of the Environmental Affiliates, is not in compliance with applicable Environmental Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii) the Borrower shall obtain actual knowledge that there exists any Environmental Claim pending against the Borrower or any Environmental Affiliate and such Environmental Claim is likely to have a Material Adverse Effect or (iii) the Borrower obtains actual knowledge of any release, emission, discharge or disposal of any Material of Environmental Concern that is likely to form the basis of any Environmental Claim against the Borrower or any Environmental Affiliate which in any such event is likely to have a Material Adverse Effect; (i) promptly and in any event within five (5) Domestic Business Days after receipt of any material notices or correspondence from any company or agent for any company providing insurance coverage to the Borrower relating to any loss which is likely to result in a Material Adverse Effect, copies of such notices and correspondence; and (j) from time to time such additional information regarding the financial position or business of the Borrower, EQR and their Subsidiaries as the Administrative Agent, at the request of any Bank, may reasonably request in writing. SECTION 5.2 PAYMENT OF OBLIGATIONS. The Borrower, EQR and their Consolidated Subsidiaries will pay and discharge, at or before maturity, all its respective material obligations and liabilities including, without limitation, any obligation pursuant to any agreement by which it or any of its properties is bound, in each case where the failure to so pay or discharge such obligations or liabilities is likely to result in a Material Adverse Effect, and will maintain in accordance with GAAP, appropriate reserves for the accrual of any of the same. 65 SECTION 5.3 MAINTENANCE OF PROPERTY; INSURANCE; LEASES. (a) The Borrower and/or EQR will keep, and will cause each Consolidated Subsidiary to keep, all property useful and necessary in its business, including without limitation the Real Property Assets (for so long as it constitutes Real Property Assets), in good repair, working order and condition, ordinary wear and tear excepted, in each case where the failure to so maintain and repair will have a Material Adverse Effect. (b) The Borrower and/or EQR shall maintain, or cause to be maintained, insurance comparable to that described in Section 4.24 hereof with insurers meeting the qualifications described therein, which insurance shall in any event not provide for less coverage than insurance customarily carried by owners of properties similar to, and in the same locations as, the Real Property Assets. The Borrower and/or EQR will deliver to the Administrative Agent upon the reasonable request of the Administrative Agent from time to time (i) full information as to the insurance carried, (ii) within five (5) days of receipt of notice from any insurer a copy of any notice of cancellation or material change in coverage from that existing on the date of this Agreement and (iii) forthwith, notice of any cancellation or nonrenewal of coverage by the Borrower and/or EQR. SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The Borrower and EQR will continue to engage in business of the same general type as now conducted by the Borrower and EQR, and each will preserve, renew and keep in full force and effect, its partnership and trust existence and its respective rights, privileges and franchises necessary for the normal conduct of business unless the failure to maintain such rights and franchises does not have a Material Adverse Effect. SECTION 5.5 COMPLIANCE WITH LAWS. The Borrower and EQR will and will cause their Subsidiaries to comply in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, Environmental Laws, and all zoning and building codes with respect to the Real Property Assets and ERISA and the rules and regulations thereunder and all federal securities laws) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings or where the failure to do so will not have a Material Adverse Effect or expose Administrative Agent or the Banks to any material liability therefor. SECTION 5.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Borrower and EQR each will keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities in conformity with GAAP, modified as required by this Agreement and applicable law; and will permit representatives of 66 any Bank at such Bank's expense to visit and inspect any of its properties, including without limitation the Real Property Assets, to examine and make abstracts from any of its books and records and to discuss its affairs, finances and accounts with its officers and independent public accountants, all at such reasonable times during normal business hours, upon reasonable prior notice and as often as may reasonably be desired. Administrative Agent shall coordinate any such visit or inspection to arrange for review by any Bank requesting any such visit or inspection. SECTION 5.7 EXISTENCE. The Borrower shall do or cause to be done, all things necessary to preserve and keep in full force and effect its, EQR's and their Consolidated Subsidiaries' existence and its patents, trademarks, servicemarks, tradenames, copyrights, franchises, licenses, permits, certificates, authorizations, qualifications, accreditation, easements, rights of way and other rights, consents and approvals the nonexistence of which is likely to have a Material Adverse Effect. SECTION 5.8 FINANCIAL COVENANTS. (a) INDEBTEDNESS TO GROSS ASSET VALUE. Borrower shall not permit the ratio of Indebtedness of Borrower and EQR, on a consolidated basis, and Borrower's Share of Indebtedness of Investment Affiliates to Gross Asset Value of Borrower and EQR to exceed 0.50:1 at any time. (b) SECURED DEBT TO GROSS ASSET VALUE. Borrower shall not permit the ratio of Secured Debt to Gross Asset Value of Borrower and EQR to exceed 0.30:1 at any time. (c) UNENCUMBERED POOL. Borrower shall not permit the ratio of the Unencumbered Asset Value to outstanding Unsecured Debt to be less than 2.2:1 at any time. (d) EBITDA TO FIXED CHARGES RATIO. Borrower shall not permit the ratio of EBITDA for the then most recently completed Fiscal Quarter to Fixed Charges for the then most recently completed Fiscal Quarter to be less than 1.8:1. (e) UNENCUMBERED NET OPERATING INCOME TO UNSECURED INTEREST EXPENSE. Borrower shall not permit the ratio of Unencumbered Net Operating Income for the then most recently completed Fiscal Quarter to Unsecured Interest Expense for the then most recently completed Fiscal Quarter to be less than 2.25:1. (f) DIVIDENDS. The Borrower will not, as determined on an aggregate annual basis, pay any partnership distributions in excess of 90% of the Borrower's FFO for such year. During the continuance of a monetary Event of Default, Borrower shall only pay partnership distributions that are necessary to enable EQR to 67 make those dividends necessary to maintain EQR's status as a real estate investment trust. (g) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Consolidated Tangible Net Worth of the Borrower and its Consolidated Subsidiaries will at no time be less than $4,500,000,000 plus ninety percent (90%) of all Net Offering Proceeds received by EQR or Borrower after the date hereof. (h) RAW LAND. The Borrower and EQR shall not purchase or continue to hold any Raw Land to the extent that the undepreciated book value of all such Raw land, taken singly or in the aggregate, exceeds five percent (5%) of the Gross Asset Value of Borrower and EQR. (i) DEVELOPMENT ACTIVITY. The Borrower, EQR and their Subsidiaries will not engage in any Development Activity other than Development Activity in which the Borrower, EQR and their Subsidiaries do not have a total aggregate investment at any time exceeding an amount equal to ten percent (10%) of the Gross Asset Value of Borrower and EQR. (j) PERMITTED HOLDINGS. Borrower's and EQR's primary business will be the ownership, operation and development of multifamily residential property and any other business activities of Borrower, EQR and Subsidiaries of either or both will remain incidental thereto. Notwithstanding the foregoing, Borrower, EQR and Subsidiaries of either or both may acquire or maintain the following Permitted Holdings if and so long as (i) the aggregate value of Permitted Holdings, together with the Permitted Holdings described in subsections (h) and (i) above, whether held directly or indirectly (but without duplication) by Borrower, EQR and/or their Subsidiaries, does not exceed, at any time, twenty percent (20%) of Gross Asset Value of Borrower and EQR as a whole and (ii) the value of each such Permitted Holding, whether held directly or indirectly by Borrower, EQR or the Subsidiaries of either or both, does not exceed, at any time, the following percentages of Gross Asset Value of Borrower and EQR:
Maximum Percentage Permitted Holdings of Gross Asset Value - ------------------ -------------------- Non-Multifamily Residential Property (other than Cash or Cash Equivalents) 10% Securities (other than Cash and Cash Equivalents) 5% Multifamily Residential Property Mortgages (other than Mortgages in favor of the Borrower) 10% Multifamily Residential Property Partnership Interests 15%
68 (other than interests in any Person wholly-owned by EQR and/or Borrower, EQR's partnership interest in the Borrower or Borrower's or EQR's partnership interests in Evans Withycombe Residential, L.P. a Delaware limited partnership ("Evans Withycombe"), or Borrower's or EQR's indirect interest in any Person wholly-owned directly or indirectly by Evans Withycombe and/or EQR)
For purposes of calculating the foregoing percentages the value of each category shall be calculated in the manner that Gross Asset Value is determined; PROVIDED, HOWEVER, that the Gross Asset Value for Securities shall be equal to the lesser of (a) the acquisition cost thereof or (b) the current market value thereof (such market value to be determined in a manner reasonably acceptable to Administrative Agent). (k) CALCULATION. Each of the foregoing ratios and financial requirements shall be calculated as of the last day of each Fiscal Quarter. SECTION 5.9 RESTRICTION ON FUNDAMENTAL CHANGES. (a) Neither the Borrower nor EQR shall enter into any merger or consolidation, unless (i) the Borrower or EQR is the surviving entity, (ii) the entity which is merged into Borrower or EQR is predominantly in the commercial real estate business, (iii) the creditworthiness of the surviving entity's long term unsecured debt or implied senior debt, as applicable, is not lower than Borrower's or EQR's creditworthiness two months immediately preceding such merger, and (iv) in the case of any merger where the then fair market value of the assets of the entity which is merged into the Borrower or EQR is twenty-five percent (25%) or more of the Borrower's or EQR's then Gross Asset Value following such merger, the Administrative Agent's consent thereto in writing, which consent shall not be unreasonably withheld, conditioned or delayed. Neither the Borrower nor EQR shall liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), discontinue its business or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series of transactions, all or substantially all of its business or property, whether now or hereafter acquired. Nothing in this Section shall be deemed to prohibit the sale or leasing of portions of the Real Property Assets in the ordinary course of business. (b) The Borrower shall not amend its agreement of limited partnership or other organizational documents in any manner that would have a Material Adverse Effect without the Administrative Agent's consent, which shall not be unreasonably withheld. EQR shall not amend its declaration of trust, by-laws, or other organizational documents in any manner that would have a 69 Material Adverse Effect without the Administrative Agent's consent, which shall not be unreasonably withheld. (c) The Borrower shall deliver to Administrative Agent copies of all amendments to its agreement of limited partnership or to EQR's declaration of trust, by-laws, or other organizational documents no less than ten (10) days after the effective date of any such amendment. SECTION 5.10 CHANGES IN BUSINESS. (a) Except for Permitted Holdings, neither the Borrower nor EQR shall enter into any business which is substantially different from that conducted by the Borrower or EQR on the Closing Date after giving effect to the transactions contemplated by the Loan Documents. The Borrower shall carry on its business operations through the Borrower and its Subsidiaries. (b) Except for Permitted Holdings, Borrower shall not engage in any line of business other than ownership, operation and development of multifamily residential property and the provision of services incidental thereto, whether directly or through its Subsidiaries and Investment Affiliates. SECTION 5.11 MARGIN STOCK. None of the proceeds of the Loan will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any Margin Stock in any manner that might violate the provisions of Regulations T, U or X of the Federal Reserve Board. SECTION 5.12 HEDGING REQUIREMENTS. Within five (5) Domestic Business Days after the last day of each calendar quarter, the Borrower shall have in effect "Interest Rate Hedges" on Borrower's Indebtedness so that such Indebtedness, together with all Fixed Rate Indebtedness of Borrower, shall constitute at least fifty percent (50%) of the then aggregate Indebtedness of the Borrower. "INTEREST RATE HEDGES" shall mean interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements, each of which (i) shall have a minimum term of two (2) years, or, in the case of loans pursuant to which interest shall accrue at a rate other than a fixed rate, a term equal to the term of such floating rate loan (to the extent the term of such floating rate loan is less than two (2) years), (ii) shall have the effect of capping the interest rates covered thereby at a rate equal to or lower than the Cap Rate at the time of purchase or execution, and (iii) shall be with an Approved Bank as the counterparty. It is acknowledged and agreed that the Borrower shall have no obligation to replace any Interest Rate Hedge even if the counterparty thereto shall cease to be an Approved Bank. The Borrower shall submit evidence of its compliance with Interest Rate Hedges to the Administrative Agent together with the 70 certificate required to be delivered by the Borrower pursuant to Section 5.1(c). SECTION 5.13 EQR STATUS. (a) STATUS. EQR shall at all times (i) remain a publicly traded company listed on the New York Stock Exchange, and (ii) maintain its status as a self-directed and self-administered real estate investment trust under the Code. (b) INDEBTEDNESS. EQR shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except: (1) the Obligations; and (2) Indebtedness which, after giving effect thereto, may be incurred or may remain outstanding without giving rise to an Event of Default or Default under any provision of this Article V. (c) RESTRICTION ON FUNDAMENTAL CHANGES. (1) Except for Permitted Holdings, EQR shall not have an Investment in any Person other than Borrower, common stock of QRS Corporations, and the interests identified on SCHEDULE 5.13(C)(1) as being owned by EQR. (2) Except for Permitted Holdings, EQR shall not acquire an interest in any Property other than Securities issued by Borrower, common stock of QRS Corporations, and the interests identified on SCHEDULE 5.13(C)(2). (d) ENVIRONMENTAL LIABILITIES. Neither EQR nor any of its Subsidiaries shall become subject to any Environmental Claim which has a Material Adverse Effect, including any arising out of or related to (i) the release or threatened release of any Material of Environmental Concern into the environment, or any remedial action in response thereto, or (ii) any violation of any Environmental Laws. Notwithstanding the foregoing provision, EQR shall have the right to contest in good faith any claim of violation of an Environmental Law by appropriate legal proceedings and shall be entitled to postpone compliance with the obligation being contested as long as (i) no Event of Default shall have occurred and be continuing, (ii) EQR shall have given Administrative Agent prior written notice of the commencement of such contest, (iii) noncompliance with such Environmental Law shall not subject EQR or such Subsidiary to any criminal penalty or subject Administrative Agent or any Bank to pay any civil penalty or to prosecution for a crime, and (iv) no portion of any Property material to Borrower or its condition or prospects shall be in substantial danger of being sold, forfeited or lost, by 71 reason of such contest or the continued existence of the matter being contested. (e) DISPOSAL OF PARTNERSHIP INTERESTS. EQR will not directly or indirectly convey, sell, transfer, assign, pledge or otherwise encumber or dispose of any of its partnership interests in Borrower, except for the reduction of EQR's interest in the Borrower arising from Borrower's issuance of partnership interests in the Borrower or the retirement of preference units by Borrower. ARTICLE VI DEFAULTS SECTION 6.1 EVENTS OF DEFAULT. If one or more of the following events ("EVENTS OF DEFAULT") shall have occurred and be continuing: (a) the Borrower shall fail to pay when due any principal of any Loan, or the Borrower shall fail to pay when due interest on any Loan or any fees or any other amount payable hereunder and the same shall continue for a period of five (5) days after the same becomes due; (b) the Borrower shall fail to observe or perform any covenant contained in Section 5.8, Section 5.9(a) or (b), or Sections 5.10 to 5.13, inclusive; (c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a), (b), (e), (f), (g), (h), (j), (n) or (o) of this Section 6.1) for 30 days after written notice thereof has been given to the Borrower by the Administrative Agent, or if such default is of such a nature that it cannot with reasonable effort be completely remedied within said period of thirty (30) days such additional period of time as may be reasonably necessary to cure same, provided Borrower commences such cure within said thirty (30) day period and diligently prosecutes same, until completion, but in no event shall such extended period exceed ninety (90) days; (d) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made (or deemed made) and the defect causing such representation or warranty to be incorrect when made (or deemed made) is not removed within thirty (30) days after written notice thereof from Administrative Agent to Borrower; (e) the Borrower, EQR, any Subsidiary or any Investment Affiliate shall default in the payment when due 72 (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) of any amount owing in respect of any Recourse Debt (other than the Obligations) for which the aggregate outstanding principal amount exceeds $10,000,000 and such default shall continue beyond the giving of any required notice and the expiration of any applicable grace period and such default has not been waived, in writing, by the holder of any such Debt; or the Borrower, EQR, any Subsidiary or any Investment Affiliate shall default in the performance or observance of any obligation or condition with respect to any such Recourse Debt or any other event shall occur or condition exist beyond the giving of any required notice and the expiration of any applicable grace period, if the effect of such default, event or condition is to accelerate the maturity of any such indebtedness or to permit (without any further requirement of notice or lapse of time) the holder or holders thereof, or any trustee or agent for such holders, to accelerate the maturity of any such indebtedness; (f) the Borrower or EQR shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action to authorize any of the foregoing; (g) an involuntary case or other proceeding shall be commenced against the Borrower or EQR seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 days; or an order for relief shall be entered against the Borrower or EQR under the federal bankruptcy laws as now or hereafter in effect; (h) one or more final, non-appealable judgments or decrees in an aggregate amount of Twenty Million Dollars ($20,000,000) or more shall be entered by a court or courts of competent jurisdiction against the Borrower, EQR or its Consolidated Subsidiaries (other than any judgment as to which, and only to the extent, a reputable insurance company has acknowledged coverage of such claim in writing) and (i) any such judgments or decrees shall not be stayed, discharged, paid, bonded or vacated within thirty (30) days or (ii) enforcement 73 proceedings shall be commenced by any creditor on any such judgments or decrees; (i) there shall be a change in the majority of the Board of Trustees of EQR during any twelve (12) month period, excluding any change in directors resulting from (x) the death or disability of any director, or (y) satisfaction of any requirement for the majority of the members of the board of directors or trustees of EQR to qualify under applicable law as independent trustees or (z) the replacement of any trustee who is an officer or employee of EQR or an affiliate of EQR with any other officer or employee of EQR or an affiliate of EQR; (j) any Person (including affiliates of such Person) or "group" (as such term is defined in applicable federal securities laws and regulations) shall acquire more than thirty percent (30%) of the common shares of EQR; (k) EQR shall cease at any time to qualify as a real estate investment trust under the Code; (l) if any Termination Event with respect to a Plan shall occur as a result of which Termination Event or Events any member of the ERISA Group has incurred or may incur any liability to the PBGC or any other Person and the sum (determined as of the date of occurrence of such Termination Event) of the insufficiency of such Plan and the insufficiency of any and all other Plans with respect to which such a Termination Event shall occur and be continuing (or, in the case of a Multiple Employer Plan with respect to which a Termination Event described in clause (ii) of the definition of Termination Event shall occur and be continuing, the liability of the Borrower) is equal to or greater than $10,000,000 and which the Administrative Agent reasonably determines will have a Material Adverse Effect; (m) if, any member of the ERISA Group shall commit a failure described in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the amount of the lien determined under Section 402(f)(3) of ERISA or Section 412(n)(3) of the Code that could reasonably be expected to be imposed on any member of the ERISA Group or their assets in respect of such failure shall be equal to or greater than $10,000,000 and which the Administrative Agent reasonably determines will have a Material Adverse Effect; (n) at any time, for any reason the Borrower or EQR seeks to repudiate its obligations under any Loan Document; or (o) a default beyond any applicable notice or grace period under any of the other Loan Documents. SECTION 6.2 RIGHTS AND REMEDIES. (a) Upon the occurrence of any Event of Default described in Sections 6.1(f) or (g), the Commitments and the 74 Swingline Commitment shall immediately terminate and the unpaid principal amount of, and any and all accrued interest on, the Loans and any and all accrued fees and other Obligations hereunder shall automatically become immediately due and payable, with all additional interest from time to time accrued thereon and without presentation, demand, or protest or other requirements of any kind (including, without limitation, valuation and appraisement, diligence, presentment, notice of intent to demand or accelerate and notice of acceleration), all of which are hereby expressly waived by the Borrower; and upon the occurrence and during the continuance of any other Event of Default, subject to the provisions of Section 6.2(b), the Administrative Agent may (and upon the demand of the Required Banks shall), by written notice to the Borrower, in addition to the exercise of all of the rights and remedies permitted the Administrative Agent and the Banks at law or equity or under any of the other Loan Documents, declare the Commitments terminated and the unpaid principal amount of and any and all accrued and unpaid interest on the Loans and any and all accrued fees and other Obligations hereunder to be, and the same shall thereupon be, immediately due and payable with all additional interest from time to time accrued thereon and (except as otherwise as provided in the Loan Documents) without presentation, demand, or protest or other requirements of any kind (including, without limitation, valuation and appraisement, diligence, presentment, notice of intent to demand or accelerate and notice of acceleration), all of which are hereby expressly waived by the Borrower. (b) Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, the Lead Agent, and the Banks each agree that any exercise or enforcement of the rights and remedies granted to the Administrative Agent or the Banks under this Agreement or at law or in equity with respect to this Agreement or any other Loan Documents shall be commenced and maintained by the Administrative Agent on behalf of the Administrative Agent and/or the Banks. The Administrative Agent shall act at the direction of the Required Banks in connection with the exercise of any and all remedies at law, in equity or under any of the Loan Documents (including, without limitation, those set forth in Section 6.4 hereof) or, if the Required Banks are unable to reach agreement, then, from and after an Event of Default, the Administrative Agent may pursue such rights and remedies as it may determine. SECTION 6.3 NOTICE OF DEFAULT. The Administrative Agent shall give notice to the Borrower under Section 6.1(c) promptly upon being requested to do so by the Required Banks and shall thereupon notify all the Banks thereof. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default (other than nonpayment of principal of or interest on the Loans) unless Administrative Agent has received notice in writing from a Bank or Borrower or any court or governmental agency referring to this Agreement or the other Loan Documents, describing such event or 75 condition. Should Administrative Agent receive notice of the occurrence of an Default or Event of Default expressly stating that such notice is a notice of an Default or Event of Default, or should Administrative Agent send Borrower a notice of Default or Event of Default, Administrative Agent shall promptly give notice thereof to each Bank. SECTION 6.4 ACTIONS IN RESPECT OF LETTERS OF CREDIT. (a) If, at any time and from time to time, any Letter of Credit shall have been issued hereunder and an Event of Default shall have occurred and be continuing, then, upon the occurrence and during the continuation thereof, the Administrative Agent may, and upon the demand of the Required Banks shall, whether in addition to the taking by the Administrative Agent of any of the actions described in this Article or otherwise, make a demand upon the Borrower to, and forthwith upon such demand (but in any event within ten (10) days after such demand) the Borrower shall, pay to the Administrative Agent, on behalf of the Banks, in same day funds at the Administrative Agent's office designated in such demand, for deposit in a special cash collateral account (the "LETTER OF CREDIT COLLATERAL ACCOUNT") to be maintained in the name of the Administrative Agent (on behalf of the Banks) and under its sole dominion and control at such place as shall be designated by the Administrative Agent, an amount equal to the amount of the Letter of Credit Usage under the Letters of Credit. Interest shall accrue on the Letter of Credit Collateral Account at a rate equal to the rate on overnight funds. (b) The Borrower hereby pledges, assigns and grants to the Administrative Agent, as administrative agent for its benefit and the ratable benefit of the Banks a lien on and a security interest in, the following collateral (the "LETTER OF CREDIT COLLATERAL"): (i) the Letter of Credit Collateral Account, all cash deposited therein and all certificates and instruments, if any, from time to time representing or evidencing the Letter of Credit Collateral Account; (ii) all notes, certificates of deposit and other instruments from time to time hereafter delivered to or otherwise possessed by the Administrative Agent for or on behalf of the Borrower in substitution for or in respect of any or all of the then existing Letter of Credit Collateral; (iii) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Letter of Credit Collateral; and 76 (iv) to the extent not covered by the above clauses, all proceeds of any or all of the foregoing Letter of Credit Collateral. The lien and security interest granted hereby secures the payment of all obligations of the Borrower now or hereafter existing hereunder and under any other Loan Document. (c) The Borrower hereby authorizes the Administrative Agent for the ratable benefit of the Banks to apply, from time to time after funds are deposited in the Letter of Credit Collateral Account, funds then held in the Letter of Credit Collateral Account to the payment of any amounts, in such order as the Administrative Agent may elect, as shall have become due and payable by the Borrower to the Banks in respect of the Letters of Credit. (d) Neither the Borrower nor any Person claiming or acting on behalf of or through the Borrower shall have any right to withdraw any of the funds held in the Letter of Credit Collateral Account, except as provided in Section 6.4(h) hereof. (e) The Borrower agrees that it will not (i) sell or otherwise dispose of any interest in the Letter of Credit Collateral or (ii) create or permit to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Letter of Credit Collateral, except for the security interest created by this Section 6.4. (f) If any Event of Default shall have occurred and be continuing: (i) The Administrative Agent may, in its sole discretion, without notice to the Borrower except as required by law and at any time from time to time, charge, set off or otherwise apply all or any part of FIRST, (x) amounts previously drawn on any Letter of Credit that have not been reimbursed by the Borrower and (y) any Letter of Credit Usage described in clause (ii) of the definition thereof that are then due and payable and SECOND, any other unpaid Obligations then due and payable against the Letter of Credit Collateral Account or any part thereof, in such order as the Administrative Agent shall elect. The rights of the Administrative Agent under this Section 6.4 are in addition to any rights and remedies which any Bank may have. (ii) The Administrative Agent may also exercise, in its sole discretion, in respect of the Letter of Credit Collateral Account, in addition to the other rights and remedies provided herein or otherwise available to it, all the rights and remedies of a secured party upon default under the Uniform Commercial Code in effect in the State of Illinois at that time. 77 (g) The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Letter of Credit Collateral if the Letter of Credit Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, it being understood that, assuming such treatment, the Administrative Agent shall not have any responsibility or liability with respect thereto. (h) At such time as all Events of Default have been cured or waived in writing, all amounts remaining in the Letter of Credit Collateral Account shall be promptly returned to the Borrower. Absent such cure or written waiver, any surplus of the funds held in the Letter of Credit Collateral Account and remaining after payment in full of all of the Obligations of the Borrower hereunder and under any other Loan Document after the Maturity Date shall be paid to the Borrower or to whomsoever may be lawfully entitled to receive such surplus. SECTION 6.5 DISTRIBUTION OF PROCEEDS AFTER DEFAULT. Notwithstanding anything contained herein to the contrary, from and after an Event of Default, to the extent proceeds are received by Administrative Agent, such proceeds will be distributed to the Banks pro rata in accordance with the unpaid principal amount of the Loans. ARTICLE VII THE AGENTS SECTION 7.1 APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. Except as set forth in Sections 7.8 and 7.9 hereof, the provisions of this Article VII are solely for the benefit of Administrative Agent and the Banks, and Borrower shall not have any rights to rely on or enforce any of the provisions hereof. In performing its functions and duties under this Agreement, Administrative Agent shall act solely as an agent of the Banks and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Borrower. SECTION 7.2 AGENCY AND AFFILIATES. Bank of America, National Association shall have the same rights and powers under this Agreement as any other Bank and may exercise or refrain from exercising the same as though it were not the Administrative Agent, and Bank of America, National Association and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower, EQR or any 78 Subsidiary or affiliate of the Borrower as if it was not the Administrative Agent hereunder, and the term "Bank" and "Banks" shall include Bank of America, National Association in its individual capacity. SECTION 7.3 ACTION BY ADMINISTRATIVE AGENT. The obligations of the Administrative Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Administrative Agent shall not be required to take any action with respect to any Default or Event of Default, except as expressly provided in Article VI. The duties of Administrative Agent shall be administrative in nature. Subject to the provisions of Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer the Loans in the same manner as it administers its own loans. SECTION 7.4 CONSULTATION WITH EXPERTS. As between Administrative Agent and the Banks, the Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 7.5 LIABILITY OF ADMINISTRATIVE AGENT AND SYNDICATION AGENT. As between Administrative Agent and the Banks, none of the Administrative Agent, the Syndication Agent nor any of their affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by any of them in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or wilful misconduct. As between Administrative Agent and the Banks, none of the Administrative Agent, the Syndication Agent nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower, except with respect to payment of principal and interest; (iii) the satisfaction of any condition specified in Article III, except receipt of items required to be delivered to the Administrative Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the other Loan Documents or any other instrument or writing furnished in connection herewith. As between Administrative Agent and the Banks, the Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, or similar writing) believed by it to be genuine or to be signed by the proper party or parties. SECTION 7.6 INDEMNIFICATION. Each Bank shall, ratably in accordance with its Commitment, indemnify the Administrative 79 Agent and the Syndication Agent and their respective affiliates and directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitee's gross negligence or wilful misconduct) that such indemnitee may suffer or incur in connection with its duties as Administrative Agent and/or Syndication Agent under this Agreement, the other Loan Documents or any action taken or omitted by such indemnitee hereunder as Administrative Agent or as Syndication Agent. In the event that the Syndication Agent or the Administrative Agent shall, subsequent to its receipt of indemnification payment(s) from Banks in accordance with this section, recoup any amount from the Borrower, or any other party liable therefor in connection with such indemnification, such Syndication Agent or the Administrative Agent shall reimburse the Banks which previously made the payment(s) PRO RATA, based upon the actual amounts which were theretofore paid by each Bank. The Syndication Agent or the Administrative Agent, as the case may be, shall reimburse such Banks so entitled to reimbursement within two (2) Domestic Business Days of its receipt of such funds from the Borrower or such other party liable therefor. SECTION 7.7 CREDIT DECISION. Each Bank acknowledges that it has, independently and without reliance upon the Administrative Agent, the Syndication Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, Syndication Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement. SECTION 7.8 SUCCESSOR ADMINISTRATIVE AGENT OR SYNDICATION AGENT. The Administrative Agent or the Syndication Agent may resign at any time by giving notice thereof to the Banks, the Borrower and each other and the Administrative Agent or the Syndication Agent, as applicable, shall resign in the event its Commitment is reduced to zero. Upon any such resignation, the Required Banks shall have the right to appoint a successor Administrative Agent or Syndication Agent, as applicable, which successor Administrative Agent or successor Syndication Agent (as applicable) shall, provided no Event of Default has occurred and is then continuing, be subject to Borrower's approval, which approval shall not be unreasonably withheld or delayed (except that Borrower shall, in all events, be deemed to have approved Bank of America, National Association as a successor Syndication Agent and The Chase Manhattan Bank as a successor Administrative Agent). If no successor Administrative Agent or Syndication Agent (as applicable) shall have been so appointed by the Required Banks and approved by the Borrower, or, if so appointed, shall not have accepted such 80 appointment within 30 days after the retiring Administrative Agent or Syndication Agent (as applicable) gives notice of resignation, then the retiring Administrative Agent or retiring Syndication Agent (as applicable) may, on behalf of the Banks, appoint a successor Administrative Agent or Syndication Agent (as applicable), which shall be the Syndication Agent or the Administrative Agent, as the case may be, who shall act until the Required Banks shall appoint a Administrative Agent or Syndication Agent. Upon the acceptance of its appointment as the Administrative Agent or Syndication Agent hereunder by a successor Administrative Agent or successor Syndication Agent, as applicable, such successor Administrative Agent or successor Syndication Agent, as applicable, shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent or retiring Syndication Agent, as applicable, and the retiring Administrative Agent or the retiring Syndication Agent, as applicable, shall be discharged from its duties and obligations hereunder. The rights and duties of the Administrative Agent to be vested in any successor Administrative Agent shall include, without limitation, the rights and duties as Swingline Lender. After any retiring Administrative Agent's or retiring Syndication Agent's resignation hereunder, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent or the Syndication Agent, as applicable. For gross negligence or willful misconduct, as determined by all the Banks (excluding for such determination Administrative Agent or Syndication Agent in its capacity as a Bank, as applicable), Administrative Agent or Syndication Agent may be removed at any time by giving at least thirty (30) Domestic Business Days prior written notice to Administrative Agent, Syndication Agent and Borrower. Such resignation or removal shall take effect upon the acceptance of appointment by a successor Administrative Agent or Syndication Agent, as applicable, in accordance with the provisions of this Section 7.8. SECTION 7.9 CONSENTS AND APPROVALS. All communications from Administrative Agent to the Banks requesting the Banks' determination, consent, approval or disapproval (i) shall be given in the form of a written notice to each Bank, (ii) shall be accompanied by a description of the matter or item as to which such determination, approval, consent or disapproval is requested, or shall advise each Bank where such matter or item may be inspected, or shall otherwise describe the matter or issue to be resolved, (iii) shall include, if reasonably requested by a Bank and to the extent not previously provided to such Bank, written materials and a summary of all oral information provided to Administrative Agent by Borrower in respect of the matter or issue to be resolved, and (iv) shall include Administrative Agent's recommended course of action or determination in respect thereof. Each Bank shall reply promptly, but in any event within ten (10) Domestic Business Days after receipt of the request therefor from Administrative Agent (the "BANK REPLY PERIOD"). Unless a Bank shall give written notice to Administrative Agent 81 that it objects to the recommendation or determination of Administrative Agent (together with a written explanation of the reasons behind such objection) within the Bank Reply Period, such Bank shall be deemed to have approved of or consented to such recommendation or determination. With respect to decisions requiring the approval of the Required Banks or all the Banks, Administrative Agent shall submit its recommendation or determination for approval of or consent to such recommendation or determination to all Banks and upon receiving the required approval or consent shall follow the course of action or determination of the Required Banks (and each non-responding Bank shall be deemed to have concurred with such recommended course of action) or all the Banks, as the case may be. ARTICLE VIII CHANGE IN CIRCUMSTANCES SECTION 8.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If on or prior to the first day of any Interest Period for any Euro-Dollar Borrowing or Money Market LIBOR Loan: (a) the Administrative Agent is advised by the Reference Bank that the Euro-Dollar Reference Bank has determined in good faith that deposits in dollars (in the applicable amounts) are not being offered to the Euro-Dollar Reference Bank in the relevant market for such Interest Period, or (b) Banks having 50% or more of the aggregate amount of the Commitments advise the Administrative Agent that the Adjusted London Interbank Offered Rate, as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Bank of funding its Euro-Dollar Loans for such Interest Period, the Administrative Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of (i) any Euro-Dollar Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Borrowing shall instead be made as a Base Rate Borrowing, or (ii) any Money Market LIBOR Borrowing for which a Notice of Money Market Borrowing has previously been given, the Money Market LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but excluding the last day of the Interest Period applicable thereto at the Base Rate for such day. For purposes of this Section 8.1(b), in determining whether the Adjusted London Interbank Offered Rate, as determined by Administrative Agent, will not adequately and fairly reflect the cost to any Bank of funding its Euro-Dollar Loans for such 82 Interest Period, such determination will be based solely on the ability of such Bank to obtain matching funds in the London interbank market at a reasonably equivalent rate. SECTION 8.2 ILLEGALITY. If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) made after the Closing Date of any such authority, central bank or comparable agency shall make it unlawful for any Bank (or its Euro-Dollar Lending Office) (x) to make, maintain or fund its Euro-Dollar Loans, or (y) to participate in any Letter of Credit issued by the Fronting Bank, or, with respect to the Fronting Bank, to issue any Letter of Credit, the Administrative Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank in case of the event described in clause (x) above to make Euro-Dollar Loans, or in the case of the event described in clause (y) above, to participate in any Letter of Credit issued by the Fronting Bank or, with respect to the Fronting Bank, to issue any Letter of Credit, shall be suspended. With respect to Euro-Dollar Loans, before giving any notice to the Administrative Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall be deemed to have delivered a Notice of Interest Rate Election and such Euro-Dollar Loan shall be converted as of such date to a Base Rate Loan (without payment of any amounts that Borrower would otherwise be obligated to pay pursuant to Section 2.13 hereof with respect to Loans converted pursuant to this Section 8.2) in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan. If at any time, it shall be unlawful for any Bank to make, maintain or fund its Euro-Dollar Loans, the Borrower shall have the right, upon five (5) Domestic Business Day's notice to the Administrative Agent, to either (x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to purchase the Commitments of such Bank for an amount equal to such Bank's outstanding Loans, and to become a Bank hereunder, or obtain the agreement of one or more existing Banks to offer to purchase the Commitments of such Bank for such amount, which offer such Bank 83 is hereby required to accept, or (y) to repay in full all Loans then outstanding of such Bank, together with interest and all other amounts due thereon, upon which event, such Bank's Commitments shall be deemed to be cancelled pursuant to Section 2.11(c). SECTION 8.3 INCREASED COST AND REDUCED RETURN. (a) If, on or after (x) the date hereof in the case of Committed Loans made pursuant to Section 2.1, or (y) the date of the related Money Market Quote, in the case of any Money Market Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) made at the Closing Date of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System (but excluding with respect to any Euro-Dollar Loan any such requirement reflected in an applicable Euro-Dollar Reserve Percentage)), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the London interbank market any other condition materially more burdensome in nature, extent or consequence than those in existence as of the Closing Date affecting such Bank's Euro-Dollar Loans, its Note, or its obligation to make Euro-Dollar Loans, and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect to such Euro-Dollar Loans, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts (based upon a reasonable allocation thereof by such Bank to the Euro-Dollar Loans made by such Bank hereunder) as will compensate such Bank for such increased cost or reduction to the extent such Bank generally imposes such additional amounts on other borrowers of such Bank in similar circumstances. (b) If any Bank shall have reasonably determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding 84 capital adequacy (whether or not having the force of law) made after the Closing Date of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount reasonably deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction to the extent such Bank generally imposes such additional amounts on other borrowers of such Bank in similar circumstances. (c) Each Bank will promptly notify the Borrower, the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall fail to notify Borrower of any such event within 90 days following the end of the month during which such event occurred, then Borrower's liability for any amounts described in this Section incurred by such Bank as a result of such event shall be limited to those attributable to the period occurring subsequent to the ninetieth (90th) day prior to the date upon which such Bank actually notified Borrower of the occurrence of such event. A certificate of any Bank claiming compensation under this Section and setting forth a reasonably detailed calculation of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of demonstrable error. In determining such amount, such Bank may use any reasonable averaging and attribution methods. (d) If at any time, any Bank shall be owed amounts pursuant to this Section 8.3, the Borrower shall have the right, upon five (5) Domestic Business Day's notice to the Administrative Agent to either (x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to purchase the Commitments of such Bank for an amount equal to such Bank's outstanding Loans, and to become a Bank hereunder, or to obtain the agreement of one or more existing Banks to offer to purchase the Commitments of such Bank for such amount, which offer such Bank is hereby required to accept, or (y) to repay in full all Loans then outstanding of such Bank, together with interest and all other amounts due thereon, upon which event, such Bank's Commitment shall be deemed to be cancelled pursuant to Section 2.11(c). 85 SECTION 8.4 TAXES. (a) Any and all payments by the Borrower to or for the account of any Bank or the Administrative Agent hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, EXCLUDING, in the case of each Bank, the Administrative Agent, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank or the Administrative Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Bank, taxes imposed on its income, and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's Applicable Lending Office or any political subdivision thereof or by any other jurisdiction (or any political subdivision thereof) as a result of a present or former connection between such Bank or Administrative Agent and such other jurisdiction or by the United States (all such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "NON-EXCLUDED TAXES"). If the Borrower shall be required by law to deduct any Non-Excluded Taxes from or in respect of any sum payable hereunder or under any Note or Letter of Credit, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.4) such Bank, the Fronting Bank or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower shall furnish to the Administrative Agent, at its address referred to in Section 9.1, the original or a certified copy of a receipt evidencing payment thereof. (b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, or charges or similar levies which arise from any payment made hereunder or under any Note or the Letter of Credit or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Letter of Credit (hereinafter referred to as "OTHER TAXES"). (c) The Borrower agrees to indemnify each Bank, the Fronting Bank and the Administrative Agent for the full amount of Non-Excluded Taxes or Other Taxes (including, without limitation, any Non-Excluded Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 8.4) paid by such Bank, the Fronting Bank or the Administrative Agent (as the case may be) and, so long as such Bank or Administrative Agent has promptly paid any such Non-Excluded Taxes or Other Taxes, any liability for penalties and interest arising therefrom or with 86 respect thereto. This indemnification shall be made within 15 days from the date such Bank, the Fronting Bank or the Administrative Agent (as the case may be) makes demand therefor. (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Bank listed on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of each other Bank, shall provide the Borrower with (A) two duly completed copies of Internal Revenue Service form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (B) an Internal Revenue Service Form W-8 or W-9, or any successor form prescribed by the Internal Revenue Service, and shall provide Borrower with two further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to Borrower, certifying (i) in the case of a Form 1001 or 4224, that such Bank is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, and (ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from United States backup withholding tax. If the form provided by a Bank at the time such Bank first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from "Non-Excluded Taxes" as defined in Section 8.4(a). (e) For any period with respect to which a Bank has failed to provide the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such failure is due to a change in treaty, law or regulation occurring subsequent to the date on which a form originally was required to be provided), such Bank shall not be entitled to indemnification under Section 8.4(c) with respect to Non-Excluded Taxes imposed by the United States; PROVIDED, HOWEVER, that should a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Non-Excluded Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Bank shall reasonably request to assist such Bank to recover such Taxes so long as Borrower shall incur no cost or liability as a result thereof. (f) If the Borrower is required to pay additional amounts to or for the account of any Bank pursuant to this Section 8.4, then such Bank will change the jurisdiction of its Applicable Lending Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Bank, is not otherwise disadvantageous to such Bank. 87 (g) If at any time, any Bank shall be owed amounts pursuant to this Section 8.4, the Borrower shall have the right, upon five (5) Domestic Business Day's notice to the Administrative Agent to either (x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to purchase the Commitments of such Bank for an amount equal to such Bank's outstanding Loans, and to become a Bank hereunder, or to obtain the agreement of one or more existing Banks to offer to purchase the Commitments of such Bank for such amount, which offer such Bank is hereby required to accept, or (y) to repay in full all Loans then outstanding of such Bank, together with interest and all other amounts due thereon, upon which event, such Bank's Commitment shall be deemed to be cancelled pursuant to Section 2.11(c). SECTION 8.5 BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS. If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section 8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice to such Bank through the Administrative Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist: (a) Borrower shall be deemed to have delivered a Notice of Interest Rate Election with respect to such affected Euro-Dollar Loans and thereafter all Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and (b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead, and (c) Borrower will not be required to make any payment which would otherwise be required by Section 2.13 with respect to such Euro-Dollar Loans converted to Base Rate Loans pursuant to clause (a) above. ARTICLE IX MISCELLANEOUS SECTION 9.1 NOTICES. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, facsimile transmission followed by telephonic confirmation or similar writing) and shall be given to 88 such party: (x) in the case of the Borrower or the Administrative Agent, at its address, or facsimile number set forth on the signature pages hereof with a duplicate copy thereof, in the case of the Borrower, to the Borrower, at Equity Residential Properties Trust, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: General Counsel, and to Rosenberg & Liebentritt, P.C., Two North Riverside Plaza, Suite 1515, Chicago, Illinois 60606, Attn: James M. Phipps, Esq., (y) in the case of any Bank, at its address, or facsimile number set forth in its Administrative Questionnaire or (z) in the case of any party, such other address, or facsimile number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when such facsimile is transmitted to the facsimile number specified in this Section and the appropriate answerback or facsimile confirmation is received, (ii) if given by certified registered mail, return receipt requested, with first class postage prepaid, addressed as aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a nationally recognized overnight carrier, 24 hours after such communication is deposited with such carrier with postage prepaid for next day delivery, or (iv) if given by any other means, when delivered at the address specified in this Section; PROVIDED that notices to the Administrative Agent under Article II or Article VIII shall not be effective until received. SECTION 9.2 NO WAIVERS. No failure or delay by the Administrative Agent or any Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 9.3 EXPENSES; INDEMNIFICATION. (a) The Borrower shall pay within thirty (30) days after written notice from the Administrative Agent, (i) all reasonable out-of-pocket costs and expenses of the Administrative Agent and the Syndication Agent (including reasonable fees and disbursements of special counsel Skadden, Arps, Slate, Meagher & Flom LLP), in connection with the preparation of this Agreement, the Loan Documents and the documents and instruments referred to therein, and any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder, (ii) all reasonable fees and disbursements of special counsel Skadden, Arps, Slate, Meagher & Flom LLP in connection with the syndication of the Loans and (iii) if an Event of Default occurs, all reasonable out-of-pocket expenses incurred by the Administrative Agent and each Bank, including fees and disbursements of counsel for the Administrative Agent and each of the Banks, in connection with the enforcement of the Loan 89 Documents and the instruments referred to therein and such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom; provided, however, that the attorneys' fees and disbursements for which Borrower is obligated under this subsection (a)(iii) shall be limited to the reasonable non-duplicative fees and disbursements of (A) counsel for Administrative Agent, and (B) counsel for all of the Banks as a group; and provided, further, that all other costs and expenses for which Borrower is obligated under this subsection (a)(iii) shall be limited to the reasonable non-duplicative costs and expenses of Administrative Agent. For purposes of this Section 9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single outside law firm representing Administrative Agent, and (2) counsel for all of the Banks as a group shall mean a single outside law firm representing such Banks as a group (which law firm may or may not be the same law firm representing either or both of Administrative Agent and/or Syndication Agent). (b) The Borrower agrees to indemnify the Syndication Agent, the Administrative Agent and each Bank, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding that may at any time (including, without limitation, at any time following the payment of the Obligations) be asserted against any Indemnitee, as a result of, or arising out of, or in any way related to or by reason of, (i) any of the transactions contemplated by the Loan Documents or the execution, delivery or performance of any Loan Document, (ii) any violation by the Borrower, EQR or the Environmental Affiliates of any applicable Environmental Law, (iii) any Environmental Claim arising out of the management, use, control, ownership or operation of property or assets by the Borrower, EQR or any of the Environmental Affiliates, including, without limitation, all on-site and off-site activities of Borrower or any Environmental Affiliate involving Materials of Environmental Concern, (iv) the breach of any environmental representation or warranty set forth herein, but excluding those liabilities, losses, damages, costs and expenses (a) for which such Indemnitee has been compensated pursuant to the terms of this Agreement, (b) incurred solely by reason of the gross negligence, wilful misconduct, bad faith or fraud of any Indemnitee as finally determined by a court of competent jurisdiction, (c) violations of Environmental Laws relating to a Property which are caused by the act or omission of such Indemnitee after such Indemnitee takes possession of such Property or (d) any liability of such Indemnitee to any third party based upon contractual obligations of such Indemnitee owing to such third party which are not expressly set forth in the Loan Documents. In addition, the indemnification set forth in this Section 9.3(b) in favor of any director, officer, agent or 90 employee of Administrative Agent, Syndication Agent or any Bank shall be solely in his or her respective capacity as such director, officer, agent or employee. The Borrower's obligations under this Section shall survive the termination of this Agreement and the payment of the Obligations. SECTION 9.4 SHARING OF SET-OFFS. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default, each Bank is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, but subject to the prior consent of the Administrative Agent, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final) and any other indebtedness at any time held or owing by such Bank (including, without limitation, by branches and agencies of such Bank wherever located) to or for the credit or the account of the Borrower against and on account of the Obligations of the Borrower then due and payable to such Bank under this Agreement or under any of the other Loan Documents, including, without limitation, all interests in Obligations purchased by such Bank. Each Bank agrees that if it shall by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it or Letter of Credit participated in by it, or, in the case of the Fronting Bank, Letter of Credit issued by it, which is greater than the proportion received by any other Bank or Letter of Credit issued or participated in by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks or Letter of Credit issued or participated in by such other Banks shall be shared by the Banks pro rata; PROVIDED that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have to any deposits not received in connection with the Loans and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes or the Letters of Credit. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note or a Letter of Credit, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as fully as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation. Notwithstanding anything to the contrary contained herein, any Bank may, by separate agreement with the Borrower, waive its right to set off contained herein or granted by law and any such 91 written waiver shall be effective against such Bank under this Section 9.4. SECTION 9.5 AMENDMENTS AND WAIVERS. Any provision of this Agreement or the Notes, the Letters of Credit or other Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of the Administrative Agent or the Swingline Lender in its capacity as Administrative Agent or Swingline Lender, as applicable, are affected thereby, by the Administrative Agent or Swingline Lender, as applicable); PROVIDED that no such amendment or waiver with respect to this Agreement, the Notes, the Letters of Credit or any other Loan Documents shall, unless signed by all the Banks, (i) increase or decrease the Commitment of any Bank (except for a ratable decrease in the Commitments of all Banks) or subject any Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder, (iii) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder or for any reduction or termination of any Commitment, (iv) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement, (v) release the EQR Guaranty or (vi) modify the provisions of this Section 9.5. SECTION 9.6 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights under this Agreement or the other Loan Documents without the prior written consent of all Banks and the Administrative Agent and any Bank may not assign or otherwise transfer any of its interest under this Agreement except as permitted in subsection (b) and (c) of this Section 9.6. (b) Any Bank may at any time grant (i) prior to the occurrence of an Event of Default, to an existing Bank, one or more banks, finance companies, insurance companies or other financial institutions in minimum amounts of not less than $10,000,000 (or any lesser amount in the case of participations to an existing Bank or in the case of participations with respect to Money Market Loans only) and (ii) after the occurrence and during the continuance of an Event of Default, to any Person in any amount (in each case, a "PARTICIPANT"), participating interests in its Commitment or any or all of its Loans, with (and subject to) the consent of the Administrative Agent (other than with respect to Money Market Loans) and, provided that no Event of Default shall have occurred and be continuing, the Borrower (other than with respect to Money Market Loans), which consent 92 shall not be unreasonably withheld or delayed. Any participation made during the continuation of an Event of Default shall not be affected by the subsequent cure of such Event of Default. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, such Bank shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; PROVIDED that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii), (iii), (iv) or (v) of Section 9.5 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article VIII with respect to its participating interest. An assignment or other transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes of this Agreement only to the extent of, and subject to the restrictions with respect to, a participating interest granted in accordance with this subsection (b). (c) Any Bank may at any time assign to (i) prior to the occurrence of an Event of Default, an existing Bank or one or more banks, finance companies, insurance or other financial institutions which (A) has (or, in the case of a bank which is a subsidiary, such bank's parent has) a rating of its senior debt obligations of not less than Baa-1 by Moody's Investors Service or a comparable rating by a rating agency acceptable to Administrative Agent and (B) has total assets in excess of Ten Billion Dollars ($10,000,000,000), in minimum amounts of not less than Ten Million Dollars ($10,000,000) and integral multiples of One Million Dollars ($1,000,000) thereafter (or any lesser amount in the case of assignments to an existing Bank) and (ii) after the occurrence and during the continuance of an Event of Default, to any Person in any amount (in each case, an "ASSIGNEE"), all or a proportionate part of all, of its rights and obligations under this Agreement, the Notes and the other Loan Documents, and, in either case, such Assignee shall assume such rights and obligations, pursuant to a Transfer Supplement in substantially the form of EXHIBIT "E" hereto executed by such Assignee and such transferor Bank, with (and subject to) the consent of the Administrative Agent and, provided that no Event of Default shall have occurred and be continuing, the Borrower, which consent shall not be unreasonably withheld or delayed; PROVIDED that if an Assignee is an affiliate of such transferor Bank or was a Bank immediately prior to such assignment, no such consent shall be required; and PROVIDED FURTHER that such assignment may, but need 93 not, include rights of the transferor Bank in respect of outstanding Money Market Loans. Upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set forth in such instrument of assumption, and no further consent or action by any party shall be required and the transferor Bank shall be released from its obligations hereunder to a corresponding extent. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if required, a new Note is issued to the Assignee. In connection with any such assignment, the transferor Bank shall pay to the Administrative Agent an administrative fee for processing such assignment in the amount of $2,500. If the Assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to the Borrower and the Administrative Agent certification as to exemption from deduction or withholding of any United States federal income taxes in accordance with Section 8.4. Any assignment made during the continuation of an Event of Default shall not be affected by any subsequent cure of such Event of Default. (d) Any Bank (each, a "DESIGNATING LENDER") may at any time designate one Designated Lender to fund Money Market Loans on behalf of such Designating Lender subject to the terms of this Section 9.6(d) and the provisions in Section 9.6(b) and (c) shall not apply to such designation. No Bank may designate more than one (1) Designated Lender at any one time. The parties to each such designation shall execute and deliver to the Administrative Agent for its acceptance a Designation Agreement. Upon such receipt of an appropriately completed Designation Agreement executed by a Designating Lender and a designee representing that it is a Designated Lender, the Administrative Agent will accept such Designation Agreement and will give prompt notice thereof to the Borrower, whereupon, (i) the Borrower shall execute and deliver to the Designating Lender a Designated Lender Note payable to the order of the Designated Lender, (ii) from and after the effective date specified in the Designation Agreement, the Designated Lender shall become a party to this Agreement with a right (subject to the provisions of Section 2.3(b)) to make Money Market Loans on behalf of its Designating Lender pursuant to Section 2.3 after the Borrower has accepted a Money Market Loan (or portion thereof) of the Designating Lender, and (iii) the Designated Lender shall not be required to make payments with respect to any obligations in this Agreement except to the extent of excess cash flow of such Designated Lender which is not otherwise required to repay obligations of such Designated Lender which are then due and payable; provided, however, that regardless of such designation and assumption by the Designated Lender, the Designating Lender shall be and remain obligated to the Borrower, the Administrative Agent and the Banks for each and 94 every of the obligations of the Designating Lender and its related Designated Lender with respect to this Agreement, including, without limitation, any indemnification obligations under Section 7.6 hereof and any sums otherwise payable to the Borrower by the Designated Lender. Each Designating Lender shall serve as the administrative agent of the Designated Lender and shall on behalf of, and to the exclusion of, the Designated Lender: (i) receive any and all payments made for the benefit of the Designated Lender and (ii) give and receive all communications and notices and take all actions hereunder, including, without limitation, votes, approvals, waivers, consents and amendments under or relating to this Agreement and the other Loan Documents. Any such notice, communication, vote, approval, waiver, consent or amendment shall be signed by the Designating Lender as administrative agent for the Designated Lender and shall not be signed by the Designated Lender on its own behalf and shall be binding upon the Designated Lender to the same extent as if signed by the Designated Lender on its own behalf. The Borrower, the Administrative Agent and the Banks may rely thereon without any requirement that the Designated Lender sign or acknowledge the same. No Designated Lender may assign or transfer all or any portion of its interest hereunder or under any other Loan Document, other than assignments to the Designating Lender which originally designated such Designated Lender or otherwise in accordance with the provisions of Section 9.6 (b) and (c). (e) Any Bank may at any time assign all or any portion of its rights under this Agreement and its Note and the Letter(s) of Credit participated in by such Bank or, in the case of the Fronting Bank, issued by it, to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder. (f) No Assignee, Participant or other transferee of any Bank's rights shall be entitled to receive any greater payment under Section 8.3 or 8.4 than such Bank would have been entitled to receive with respect to the rights transferred, unless such transfer is made with the Borrower's prior written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to designate a different Applicable Lending Office under certain circumstances or at a time when the circumstances giving rise to such greater payment did not exist. SECTION 9.7 COLLATERAL. Each of the Banks represents to the Administrative Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement. SECTION 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND 95 THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW). (b) Any legal action or proceeding with respect to this Agreement or any other Loan Document and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of Illinois or of the United States of America for the Northern District of Illinois, and, by execution and delivery of this Agreement, the Borrower hereby accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any thereof. The Borrower irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the hand delivery, or mailing of copies thereof by registered or certified mail, postage prepaid, to the Borrower at its address set forth below. The Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right of the Administrative Agent to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction. SECTION 9.9 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective upon receipt by the Administrative Agent and the Borrower of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Administrative Agent in form satisfactory to it of telegraphic or other written confirmation from such party of execution of a counterpart hereof by such party). SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 9.11 SURVIVAL. All indemnities set forth herein shall survive the execution and delivery of this Agreement 96 and the other Loan Documents and the making and repayment of the Loans hereunder. SECTION 9.12 DOMICILE OF LOANS. Each Bank may transfer and carry its Loans at, to or for the account of any domestic or foreign branch office, subsidiary or affiliate of such Bank. SECTION 9.13 LIMITATION OF LIABILITY. No claim may be made by the Borrower or any other Person acting by or through Borrower against the Administrative Agent or any Bank or the affiliates, directors, officers, employees, attorneys or agent of any of them for any consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or by the other Loan Documents, or any act, omission or event occurring in connection therewith; and the Borrower hereby waives, releases and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. SECTION 9.14 RECOURSE OBLIGATION. This Agreement and the Obligations hereunder are fully recourse to the Borrower. Notwithstanding the foregoing, no recourse under or upon any obligation, covenant, or agreement contained in this Agreement shall be had against any officer, director, shareholder or employee of the Borrower or EQR except in the event of fraud or misappropriation of funds on the part of such officer, director, shareholder or employee. SECTION 9.15 CONFIDENTIALITY. The Administrative Agent and each Bank shall use reasonable efforts to assure that information about Borrower, EQR and its Subsidiaries and Investments Affiliates, and the Properties thereof and their operations, affairs and financial condition, not generally disclosed to the public, which is furnished to Administrative Agent or any Bank pursuant to the provisions hereof or any other Loan Document is used only for the purposes of this Agreement and shall not be divulged to any Person other than the Administrative Agent, the Banks, and their affiliates and respective officers, directors, employees and agents who are actively and directly participating in the evaluation, administration or enforcement of the Loan, except: (a) to their attorneys and accountants, (b) in connection with the enforcement of the rights and exercise of any remedies of the Administrative Agent and the Banks hereunder and under the other Loan Documents, (c) in connection with assignments and participations and the solicitation of prospective assignees and participants referred to in Section 9.6 hereof, who have agreed in writing to be bound by a confidentiality agreement substantially equivalent to the terms of this Section 9.15, and (d) as may otherwise be required or requested by any regulatory authority having jurisdiction over the Administrative Agent or any Bank or by any applicable law, rule, regulation or judicial process. 97 SECTION 9.16 BANK'S FAILURE TO FUND. (a) Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank's share of such Borrowing, the Administrative Agent may assume that such Bank has made such share available to the Administrative Agent on the date of such Borrowing in accordance with subsection (b) of Section 2.4 or Section 2.16(e) hereof, and the Administrative Agent may, in reliance upon such assumption, make available to Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Administrative Agent, such Bank and Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, in accordance with the provisions of Section 2.4(c) or Section 2.16(e) hereof. If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. Nothing contained in this Section or Sections 2.4(c) or 2.16(e) shall be deemed to reduce the Commitment of any Bank or in any way affect the rights of Borrower with respect to any defaulting Bank or Administrative Agent. The failure of any Bank to make available to the Administrative Agent such Bank's share of any Borrowing in accordance with Sections 2.4(b) or 2.16(e) hereof shall not relieve any other Bank of its obligations to fund its Commitment, in accordance with the provisions hereof. (b) If a Bank does not advance to Administrative Agent such Bank's pro rata share of a Loan in accordance herewith, then neither Administrative Agent nor the other Banks shall be required or obligated to fund such Bank's pro rata share of such Loan. (c) As used herein, the following terms shall have the meanings set forth below: (i) "DEFAULTING BANK" shall mean any Bank which (x) does not advance to the Administrative Agent such Bank's pro rata share of a Loan in accordance herewith for a period of five (5) Domestic Business Days after notice of such failure from Administrative Agent, (y) shall otherwise fail to perform such Bank's obligations under the Loan Documents for a period of five (5) Domestic Business Days after notice of such failure from Administrative Agent, or (z) shall fail to pay the Administrative Agent or any other Bank, as the case may be, upon demand, such Bank's pro rata share of any costs, expenses or disbursements incurred or made by the Administrative Agent pursuant to the terms of the Loan Documents for a period of five (5) Domestic Business Days after notice of such failure from Administrative Agent, and in all cases, such failure is not as a result of a good faith dispute as to whether such advance is properly 98 required to be made pursuant to the provisions of this Agreement, or as to whether such other performance or payment is properly required pursuant to the provisions of this Agreement. (ii) "JUNIOR CREDITOR" means any Defaulting Bank which has not (x) fully cured each and every default on its part under the Loan Documents and (y) unconditionally tendered to the Administrative Agent such Defaulting Bank's pro rata share of all costs, expenses and disbursements required to be paid or reimbursed pursuant to the terms of the Loan Documents. (iii) "PAYMENT IN FULL" means, as of any date, the receipt by the Banks who are not Junior Creditors of an amount of cash, in lawful currency of the United States, sufficient to indefeasibly pay in full all Senior Debt. (iv) "SENIOR DEBT" means (x) collectively, any and all indebtedness, obligations and liabilities of the Borrower to the Banks who are not Junior Creditors from time to time, whether fixed or contingent, direct or indirect, joint or several, due or not due, liquidated or unliquidated, determined or undetermined, arising by contract, operation of law or otherwise, whether on open account or evidenced by one or more instruments, and whether for principal, premium, interest (including, without limitation, interest accruing after the filing of a petition initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement for fees, indemnities, costs, expenses or otherwise, which arise under, in connection with or in respect of the Loans or the Loan Documents, and (y) any and all deferrals, renewals, extensions and refundings of, or amendments, restatements, rearrangements, modifications or supplements to, any such indebtedness, obligation or liability. (v) "SUBORDINATED DEBT" means (x) any and all indebtedness, obligations and liabilities of Borrower to one or more Junior Creditors from time to time, whether fixed or contingent, direct or indirect, joint or several, due or not due, liquidated or unliquidated, determined or undetermined, arising by contract, operation of law or otherwise, whether on open account or evidenced by one or more instruments, and whether for principal, premium, interest (including, without limitation, interest accruing after the filing of a petition initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement for fees, indemnities, costs, expenses or otherwise, which arise under, in connection with or in respect of the Loans or the Loan Documents, and (y) any and all deferrals, renewals, extensions and refundings of, or amendments, restatements, rearrangements, modifications or supplements to, any such indebtedness, obligation or liability. (d) Immediately upon a Bank's becoming a Junior Creditor, no Junior Creditor shall, prior to Payment in Full of all Senior Debt: 99 (i) accelerate, demand payment of, sue upon, collect, or receive any payment upon, in any manner, or satisfy or otherwise discharge, any Subordinated Debt, whether for principal, interest and otherwise; (ii) take or enforce any Liens to secure Subordinated Debt or attach or levy upon any assets of Borrower, to enforce any Subordinated Debt; (iii) enforce or apply any security for any Subordinated Debt; or (iv) incur any debt or liability, or the like, to, or receive any loan, return of capital, advance, gift or any other property, from, the Borrower. (e) In the event of: (i) any insolvency, bankruptcy, receivership, liquidation, dissolution, reorganization, readjustment, composition or other similar proceeding relating to Borrower; (ii) any liquidation, dissolution or other winding-up of the Borrower, voluntary or involuntary, whether or not involving insolvency, reorganization or bankruptcy proceedings; (iii) any assignment by the Borrower for the benefit of creditors; (iv) any sale or other transfer of all or substantially all assets of the Borrower; or (v) any other marshalling of the assets of the Borrower; each of the Banks shall first have received Payment in Full of all Senior Debt before any payment or distribution, whether in cash, securities or other property, shall be made in respect of or upon any Subordinated Debt. Any payment or distribution, whether in cash, securities or other property that would otherwise be payable or deliverable in respect of Subordinated Debt to any Junior Creditor but for this Agreement shall be paid or delivered directly to the Administrative Agent for distribution to the Banks in accordance with this Agreement until Payment in Full of all Senior Debt. If any Junior Creditor receives any such payment or distribution, it shall promptly pay over or deliver the same to the Administrative Agent for application in accordance with the preceding sentence. (f) Each Junior Creditor shall file in any bankruptcy or other proceeding of Borrower in which the filing of claims is required by law, all claims relating to Subordinated Debt that such Junior Creditor may have against Borrower and assign to the Banks who are not Junior Creditors all rights of such Junior 100 Creditor thereunder. If such Junior Creditor does not file any such claim prior to forty-five (45) days before the expiration of the time to file such claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is hereby irrevocably authorized to do so in the name of such Junior Creditor or, in Administrative Agent's sole discretion, to assign the claim to a nominee and to cause proof of claim to be filed in the name of such nominee. The foregoing power of attorney is coupled with an interest and cannot be revoked. The Administrative Agent shall, to the exclusion of each Junior Creditor, have the sole right, subject to Section 9.5 hereof, to accept or reject any plan proposed in any such proceeding and to take any other action that a party filing a claim is entitled to take. In all such cases, whether in administration, bankruptcy or otherwise, the Person or Persons authorized to pay such claim shall pay to Administrative Agent the amount payable on such claim and, to the full extent necessary for that purpose, each Junior Creditor hereby transfers and assigns to the Administrative Agent all of the Junior Creditor's rights to any such payments or distributions to which Junior Creditor would otherwise be entitled. (g) (i) If any payment or distribution of any character or any security, whether in cash, securities or other property, shall be received by any Junior Creditor in contravention of any of the terms hereof, such payment or distribution or security shall be received in trust for the benefit of, and shall promptly be paid over or delivered and transferred to, Administrative Agent for application to the payment of all Senior Debt, to the extent necessary to achieve Payment in Full. In the event of the failure of any Junior Creditor to endorse or assign any such payment, distribution or security, Administrative Agent is hereby irrevocably authorized to endorse or assign the same as attorney-in-fact for such Junior Creditor. (ii) Each Junior Creditor shall take such action (including, without limitation, the execution and filing of a financing statement with respect to this Agreement and the execution, verification, delivery and filing of proofs of claim, consents, assignments or other instructions that Administrative Agent may require from time to time in order to prove or realize upon any rights or claims pertaining to Subordinated Debt or to effectuate the full benefit of the subordination contained herein) as may, in Administrative Agent's sole and absolute discretion, be necessary or desirable to assure the effectiveness of the subordination effected by this Agreement. (h) (i) Each Bank that becomes a Junior Creditor understands and acknowledges by its execution hereof that each other Bank is entering into this Agreement and the Loan Documents in reliance upon the absolute subordination in right of payment and in time of payment of Subordinated Debt to Senior Debt as set forth herein. 101 (ii) Only upon the Payment in Full of all Senior Debt shall any Junior Creditor be subrogated to any remaining rights of the Banks which are not Defaulting Banks to receive payments or distributions of assets of the Borrower made on or applicable to any Senior Debt. (iii) Each Junior Creditor agrees that it will deliver all instruments or other writings evidencing any Subordinated Debt held by it to Administrative Agent, promptly after request therefor by the Administrative Agent. (iv) No Junior Creditor may at any time sell, assign or otherwise transfer any Subordinated Debt, or any portion thereof, including, without limitation, the granting of any Lien thereon, unless and until satisfaction of the requirements of Section 9.6 above and the proposed transferee shall have assumed in writing the obligation of the Junior Creditor to the Banks under this Agreement, in a form acceptable to the Administrative Agent. (v) If any of the Senior Debt, should be invalidated, avoided or set aside, the subordination provided for herein nevertheless shall continue in full force and effect and, as between the Banks which are not Defaulting Banks and all Junior Creditors, shall be and be deemed to remain in full force and effect. (vi) Each Junior Creditor hereby irrevocably waives, in respect of Subordinated Debt, all rights (x) under Sections 361 through 365, 502(e) and 509 of the Bankruptcy Code (or any similar sections hereafter in effect under any other Federal or state laws or legal or equitable principles relating to bankruptcy, insolvency, reorganizations, liquidations or otherwise for the relief of debtors or protection of creditors), and (y) to seek or obtain conversion to a different type of proceeding or to seek or obtain dismissal of a proceeding, in each case in relation to a bankruptcy, reorganization, insolvency or other proceeding under similar laws with respect to the Borrower. Without limiting the generality of the foregoing, each Junior Creditor hereby specifically waives (A) the right to seek to give credit (secured or otherwise) to the Borrower in any way under Section 364 of the Bankruptcy Code unless the same is subordinated in all respects to Senior Debt in a manner acceptable to Administrative Agent in its sole and absolute discretion and (B) the right to receive any collateral security (including any "super priority" or equal or "priming" or replacement Lien) for any Subordinated Debt unless the Banks which are not Defaulting Banks have received a senior position acceptable to the Banks in their sole and absolute discretion to secure all Senior Debt (in the same collateral to the extent collateral is involved). (i) (i) In addition to and not in limitation of the subordination effected by this Section 9.16, the 102 Administrative Agent and each of the Banks which are not Defaulting Banks may in their respective sole and absolute discretion, also exercise any and all other rights and remedies available at law or in equity in respect of a Defaulting Bank; and (ii) The Administrative Agent shall give each of the Banks notice of the occurrence of a default under this Section 9.16 by a Defaulting Bank and if the Administrative Agent and/or one or more of the other Banks shall, at their option, fund any amounts required to be paid or advanced by a Defaulting Bank, the other Banks who have elected not to fund any portion of such amounts shall not be liable for any reimbursements to the Administrative Agent and/or to such other funding Banks. (j) Notwithstanding anything to the contrary contained or implied herein, a Defaulting Bank shall not be entitled to vote on any matter as to which a vote by the Banks is required hereunder, including, without limitation, any actions or consents on the part of the Administrative Agent as to which the approval or consent of all the Banks or the Required Banks is required under Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting Bank; provided, however, that in the case of any vote requiring the unanimous consent of the Banks, if all the Banks other than the Defaulting Bank shall have voted in accordance with each other, then the Defaulting Bank shall be deemed to have voted in accordance with such Banks. (k) Each of the Administrative Agent and any one or more of the Banks which are not Defaulting Banks may, at their respective option, (i) advance to the Borrower such Bank's pro rata share of the Loans not advanced by a Defaulting Bank in accordance with the Loan Documents, or (ii) pay to the Administrative Agent such Bank's pro rata share of any costs, expenses or disbursements incurred or made by the Administrative Agent pursuant to the terms of this Agreement not theretofore paid by a Defaulting Bank. Immediately upon the making of any such advance by the Administrative Agent or any one of the Banks, such Bank's pro rata share and the pro rata share of the Defaulting Bank shall be recalculated to reflect such advance. All payments, repayments and other disbursements of funds by the Administrative Agent to Banks shall thereupon and, at all times thereafter be made in accordance with such Bank's recalculated pro rata share unless and until a Defaulting Bank shall fully cure all defaults on the part of such Defaulting Bank under the Loan Documents or otherwise existing in respect of the Loans or this Agreement, at which time the pro rata share of the Bank(s) which advanced sums on behalf of the Defaulting Bank and of the Defaulting Bank shall be restored to their original percentages. SECTION 9.17 NO BANKRUPTCY PROCEEDINGS. Each of the Borrower, the Banks and the Administrative Agent hereby agrees that it will not institute against any Designated Lender or join any other Person in instituting against any Designated Lender any 103 bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal or state bankruptcy or similar law, until the later to occur of (i) one year and one day after the payment in full of the latest maturing commercial paper note issued by such Designated Lender and (ii) the Maturity Date. 104 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: /s/ David J. Neithercut -------------------------- Name: David J. Neithercut Title: Executive Vice- President, Chief Financial Officer Facsimile number: Address: Two North Riverside Plaza Suite 400 Chicago, Illinois 60606 Attn: Chief Financial Officer 105 COMMITMENTS $80,000,000 BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent, as Swingline Lender and as Bank By: /s/ Megan McBride ---------------------- Name: Megan McBride Title: Vice President Bank of America National Association Structured Debt Group Mail Code IL1-231-12-16 231 South LaSalle Street Chicago, Illinois 60697 Attention: Megan McBride Telecopy: (312) 974-4970 106 $80,000,000 THE CHASE MANHATTAN BANK, as Syndication Agent and as a Bank By: /s/ Charles E. Hoagland ------------------------ Name: Charles E. Hoagland Title: Vice President 107 $70,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent and as a Bank By: /s/ Robert Bottamedi ----------------------- Name: Robert Bottamedi Title: Vice President c/o J.P. Morgan Services Inc. 500 Stanton Christiana Road Newark, DE 19713-2107 Attention: William Lamb Telecopy: (302) 634-4222 DOMESTIC AND EURO-CURRENCY LENDING OFFICE: c/o J.P. Morgan Services Inc. 500 Stanton Christiana Road Newark, DE 19713-2107- Attention: Kevin M. McCann Telecopy: (302) 634-1852/1872 108 $55,000,000 THE FIRST NATIONAL BANK OF CHICAGO, as a Co-Arranger and as a Bank By: /s/ Lynn Braun --------------------- Name: Lynn Braun Title: Vice President 109 $55,000,000 FIRST UNION NATIONAL BANK, as a Co-Arranger and as a Bank By: /s/ Rex E. Rudy --------------------- Name: Rex E. Rudy Title: Vice President 110 $45,000,000 BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH, as Managing Agent and as a Bank By: /s/ John A. Wain --------------------------- Name: John A. Wain Title: First Vice President By: /s/ Alexander Kohnert --------------------------- Name: Alexander Kohnert Title: First Vice President 111 $45,000,000 COMMERZBANK AKTIENGESELLSCHAFT, as Managing Agent and as a Bank By: /s/ Douglas P. Traynor ------------------------- Name: Douglas P. Traynor Title: Vice President By: /s/ David Buettner ------------------------- Name: David Buettner Title: Assistant Treasurer 112 $45,000,000 PNC BANK, NATIONAL ASSOCIATION, as Managing Agent and as a Bank By: /s/ Michael E. Smith ------------------------- Name: Michael E. Smith Title: Vice President 113 $35,000,000 COMERICA BANK, as Co-Agent and as a Bank By: /s/ David J. Campbell -------------------------- Name: David J. Campbell Title: Vice President 114 $35,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED, as Co-Agent and as a Bank By: /s/ Takeshi Kubo ------------------------- Name: Takeshi Kubo Title: Vice President 115 $35,000,000 KBC BANK N.V., as Co-Agent and as a Bank By: /s/ Declan Meagher/Michael V. Curran ------------------------------------ Name: Declan Meagher/Michael V. Curran Title: First Vice President/Vice President 116 $35,000,000 U.S. BANK NATIONAL ASSOCIATION, as Co-Agent and as a Bank By: /s/ John M. Suhs ---------------------- Name: John M. Suhs Title: Vice President 117 $20,000,000 SOUTHTRUST BANK, NATIONAL ASSOCIATION, as a Bank By: /s/ Lynn W. Feuerlein ----------------------- Name: Lynn W. Feuerlein Title: Group Vice President 118 $20,000,000 ING (U.S.) CAPITAL LLC, as a Bank By: /s/ Thomas R. Hobbis ----------------------- Name: Thomas R. Hobbis Title: Vice President 119 $20,000,000 LASALLE BANK, N.A., as a Bank By: /s/ Peter Margolin ------------------------------ Name: Peter Margolin Title: Assistant Vice President 120 $15,000,000 CRESTAR BANK, as a Bank By: /s/ Nancy Richards --------------------- Name: Nancy Richards Title: Vice President 121 $10,000,000 CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH, as a Bank By: /s/ Wan-Tu Yeh ----------------------------- Name: Wan-Tu Yeh Title: Vice President & General Manager 122 Total Commitments - ----------------- $700,000,000 123 SCHEDULE 4.6 Borrower and EQR ERISA Plans The employees of EQR and the Borrower may currently participate in a 401(k) Plan. Other benefits include: Employee share purchase plan, stock option plan, health care plan, dental care, life insurance and accidental death and dismemberment plan, travel/accident insurance, short-term disability, long-term disability, sick time, vacation time, personal days, holidays and direct paycheck deposit. 124 SCHEDULE 5.13(C)(1) None 125 SCHEDULE 5.13(C)(2) None 126 EXHIBIT A-1 NOTE Chicago, Illinois ________ __, 1999 For value received, ERP Operating Limited Partnership, an Illinois limited partnership (the "BORROWER"), promises to pay to the order of ____________ (the "PAYEE"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Payee to the Borrower pursuant to the Credit Agreement referred to below on the Maturity Date (as such term is defined in the Credit Agreement). The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Bank of America, National Association,______________________, Chicago, Illinois _______________ All Loans made by the Payee, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Payee and, if the Payee so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Payee on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; PROVIDED that the failure of the Payee to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Designated Lender Notes referred to in, and is delivered pursuant to and subject to all of the terms of, the Revolving Credit Agreement, dated as of _____________, 1999 among the Borrower, the banks listed on the signature pages thereof, Bank of America, National Association, as Administrative Agent, The Chase Manhattan Bank, as Syndication Agent and Morgan Guaranty Trust Company of New York, as Documentation Agent (as the same may be amended from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is A-1 1 made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: ------------------------------ Name: Title: A-1 2 Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL ---------------------------------------------------------
Amount of Amount of Type of Principal Maturity Notation Date Loan Loan Repaid Date Made By - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - ---------------------------------------------------------------------
A-1 3 EXHIBIT A-2 NOTE Chicago, Illinois ________ __, 1999 For value received, ERP Operating Limited Partnership, an Illinois partnership (the "BORROWER"), promises to pay to the order of _______________ (the "BANK"), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred to below on the Maturity Date (as such term is defined in the Credit Agreement). The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of Bank of America, National Association,______________ , Chicago, Illinois _________________. All Loans made by the Bank, the respective types and maturities thereof and all repayments of the principal thereof shall be recorded by the Bank and, if the Bank so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Bank on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; PROVIDED that the failure of the Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This note is one of the Notes referred to in, and is delivered pursuant to and subject to all of the terms of, the Revolving Credit Agreement dated as of _______________, 1999 among the Borrower, the banks listed on the signature pages thereof, Bank of America, National Association, as Administrative Agent, The Chase Manhattan Bank, as Syndication Agent and Morgan Guaranty Trust Company of New York, as Documentation Agent (as the same may be amended from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit A-2 1 Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof. ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: ------------------------------ Name: Title: A-2 2 Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL ---------------------------------------------------------
Amount of Amount of Type of Principal Maturity Notation Date Loan Loan Repaid Date Made By - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - --------------------------------------------------------------------- - ---------------------------------------------------------------------
A-2 3 EXHIBIT B FORM OF MONEY MARKET QUOTE REQUEST [Date] To: Bank of America, National Association (the "Administrative Agent") From: ERP Operating Limited Partnership Re: Revolving Credit Agreement (the "Credit Agreement") dated as of ____________________________ , 1999 among ERP Operating Limited Partnership, the Banks parties thereto, the Administrative Agent, The Chase Manhattan Bank, as Syndication Agent, and Morgan Guaranty Trust Company of New York, as Documentation Agent We hereby give notice pursuant to Section 2.3 of the Credit Agreement that we request Money Market Quotes for the following proposed Money Market Borrowing(s): Date of Borrowing: __________________
Principal Amount* Interest Period** - ----------------- ----------------- $
Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.] Terms used herein have the meanings assigned to them in the Credit Agreement. - -------- * Amount must be $3,000,000 or a larger multiple of $100,000. ** Not less than 14 days (LIBOR Auction) or not less than 14 days (Absolute Rate Auction), subject to the provisions of the definition of Interest Period. B-1 Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.] (Chicago time) on [date]. ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: -------------------------------- Name: Title: B-2 EXHIBIT C INTENTIONALLY OMITTED C-1 EXHIBIT D FORM OF MONEY MARKET QUOTE To: Bank of America, National Association, as Agent Re: Money Market Quote to ERP Operating Limited Partnership (the "Borrower") In response to your invitation on behalf of the Borrower dated _________________, 19__ , we hereby make the following Money Market Quote on the following terms: 1. Quoting Bank: ---------------------------------- 2. Person to contact at Quoting Bank: ---------------------------------------------- 3. Date of Borrowing: * ------------------------------ 4. We hereby offer to make Money Market Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market Amount** Period*** [Margin****] [Absolute Rate*****] - -------- --------- ------------ -------------------- $ $
[Provided, that the aggregate principal amount of Money Market Loans for which the above offers may be accepted shall not exceed $____________________ .]** We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Revolving Credit Agreement dated as of ____________________, 1999 among ERP Operating Limited Partnership, the Banks parties thereto, The Chase Manhattan Bank, as Syndication Agent, and Morgan Guaranty Trust Company of New York, as Documentation Agent, and yourselves, as Administrative Agent, irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are accepted, in whole or in part. D-1 Very truly yours, [NAME OF BANK] Dated: By: ------------------- ------------------- Authorized Officer - ---------- * As specified in the related Invitation. ** Principal amount bid for each Interest Period may not exceed principal amount requested. Specify aggregate limitation if the sum of the individual offers exceeds the amount the Bank is willing to lend. Bids must be made for $3,000,000 or a larger multiple of $100,000. *** Not less than 14 days, as specified in the related Invitation. No more than five bids are permitted for each Interest Period. **** Margin over or under the London Interbank Offered Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and specify whether "PLUS" or "MINUS". ***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%). D-2 EXHIBIT E TRANSFER SUPPLEMENT TRANSFER SUPPLEMENT (this "TRANSFER SUPPLEMENT") dated as of ____________ , 199___ between _________________________________(the "ASSIGNOR") and ___________________ having an address at _____________________________ (the "PURCHASING BANK"). W I T N E S S E T H: WHEREAS, the Assignor has made loans to ERP Operating Limited Partnership, an Illinois limited partnership (the "BORROWER"), pursuant to the Revolving Credit Agreement, dated as of _________________________, 1999 (as the same may be amended, supplemented or otherwise modified through the date hereof, the "CREDIT AGREEMENT"), among the Borrower, the banks party thereto, Bank of America, National Association, as Administrative Agent, The Chase Manhattan Bank, as Syndication Agent, and Morgan Guaranty Trust Company of New York, as Documentation Agent. All capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement; WHEREAS, the Purchasing Bank desires to purchase and assume from the Assignor, and the Assignor desires to sell and assign to the Purchasing Bank, certain rights, title, interest and obligations under the Credit Agreement; NOW, THEREFORE, IT IS AGREED: 1. In consideration of the amount set forth in the receipt (the "RECEIPT") given by Assignor to Purchasing Bank of even date herewith, and transferred by wire to Assignor, the Assignor hereby assigns and sells, without recourse, representation or warranty except as specifically set forth herein, to the Purchasing Bank, and the Purchasing Bank hereby purchases and assumes from the Assignor, a __% interest (the "PURCHASED INTEREST") of the Loans constituting a portion of the Assignor's rights and obligations under the Credit Agreement as of the Effective Date (as defined below) including, without limitation, such percentage interest of the Assignor in any Loans owing to the Assignor, any Note held by the Assignor, any Loan Commitment of the Assignor and any other interest of the Assignor under any of the Loan Documents, including any participation in any Letter of Credit. 2. The Assignor (i) represents and warrants that as of the date hereof the aggregate outstanding principal amount of its share of the Loans owing to it (without giving effect to assignments thereof which have not yet become effective) is E-1 $_____________________ ; (ii) represents and warrants that it is the legal and beneficial owner of the interests being assigned by it hereunder and that such interests are free and clear of any adverse claim; (iii) represents and warrants that it has not received any notice of Default or Event of Default from the Borrower; (iv) represents and warrants that it has full power and authority to execute and deliver, and perform under, this Transfer Supplement, and all necessary corporate and/or partnership action has been taken to authorize, and all approvals and consents have been obtained for, the execution, delivery and performance thereof; (v) represents and warrants that this Transfer Supplement constitutes its legal, valid and binding obligation enforceable in accordance with its terms; (vi) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations (or the truthfulness or accuracy thereof) made in or in connection with the Credit Agreement, or the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, or the other Loan Documents or any other instrument or document furnished pursuant thereto; and (vii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or the other Loan Documents or any other instrument or document furnished pursuant thereto. Except as specifically set forth in this Paragraph 2, this assignment shall be without recourse to Assignor. 3. The Purchasing Bank (i) confirms that it has received a copy of the Credit Agreement, and the other Loan Documents, together with such financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Transfer Supplement and to become a party to the Credit Agreement, and has not relied on any statements made by Assignor or Skadden, Arps, Slate, Meagher & Flom LLP; (ii) agrees that it will, independently and without reliance upon any of the Administrative Agent, the Assignor or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Borrower and will make its own credit analysis, appraisals and decisions in taking or not taking action under the Credit Agreement, and the other Loan Documents; (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement, and the other Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are incidental thereto; (iv) agrees that it will be bound by and perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Bank; (v) specifies as its address for notices and lending office, the office set forth beneath its name on the signature page hereof; (vi) confirms that E-2 it has full power and authority to execute and deliver, and perform under, this Transfer Supplement, and that all necessary corporate and/or partnership action has been taken to authorize, and all approvals and consents have been obtained for, the execution, delivery and performance thereof; (vii) certifies that this Transfer Supplement constitutes its legal, valid and binding obligation enforceable in accordance with its terms; and (viii) confirms that the interest being assigned hereunder is being acquired by it for its own account, for investment purposes only and not with a view to the public distribution thereof and without any present intention of its resale in either case that would be in violation of applicable securities laws. 4. This Transfer Supplement shall be effective on the date (the "EFFECTIVE DATE") on which all of the following have occurred (i) it shall have been executed and delivered by the parties hereto, (ii) copies hereof shall have been delivered to the Administrative Agent and the Borrower, (iii) Purchasing Bank shall have received an original Note and (iv) the Purchasing Bank shall have paid to the Assignor the agreed purchase price as set forth in the Receipt. 5. On and after the Effective Date, (i) the Purchasing Bank shall be a party to the Credit Agreement and, to the extent provided in this Transfer Supplement, have the rights and obligations of a Bank thereunder and be entitled to the benefits and rights of the Banks thereunder and (ii) the Assignor shall, to the extent provided in this Transfer Supplement as to the Purchased Interest, relinquish its rights and be released from its obligations under the Credit Agreement. 6. From and after the Effective Date, the Assignor shall cause the Administrative Agent to make all payments under the Credit Agreement, and the Notes in respect of the Purchased Interest assigned hereby (including, without limitation, all payments of principal, fees and interest with respect thereto and any amounts accrued but not paid prior to such date) to the Purchasing Bank. 7. This Transfer Supplement may be executed in any number of counterparts which, when taken together, shall be deemed to constitute one and the same instrument. 8. Assignor hereby represents and warrants to Purchasing Bank that it has made all payments demanded to date by Bank of America, National Association ("BOFA") as Administrative Agent in connection with the Assignor's pro rata share of the obligation to reimburse the Agent for its expenses and made all Loans required. In the event BofA, as Administrative Agent, shall demand reimbursement for fees and expenses from Purchasing Bank for any period prior to the Effective Date, Assignor hereby agrees to promptly pay BofA, as Administrative Agent, such sums directly, subject, however, to Paragraph 12 hereof. E-3 9. Assignor will, at the cost of Assignor, and without expense to Purchasing Bank, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, assignments, notices of assignments, transfers and assurances as Purchasing Bank shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring and confirming unto Purchasing Bank the property and rights hereby given, granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, assigned and/or intended now or hereafter so to be, on which Assignor may be or may hereafter become bound to convey or assign to Purchasing Bank, or for carrying out the intention or facilitating the performance of the terms of this Agreement or for filing, registering or recording this Agreement. 10. The parties agree that no broker or finder was instrumental in bringing about this transaction. Each party shall indemnify, defend the other and hold the other free and harmless from and against any damages, costs or expenses (including, but not limited to, reasonable attorneys' fees and disbursements) suffered by such party arising from claims by any broker or finder that such broker or finder has dealt with said party in connection with this transaction. 11. Subject to the provisions of Paragraph 12 hereof, if, with respect to the Purchased Interest only, Assignor shall on or after the Effective Date receive (a) any cash, note, securities, property, obligations or other consideration in respect of or relating to the Loan or the Loan Documents or issued in substitution or replacement of the Loan or the Loan Documents, (b) any cash or non-cash consideration in any form whatsoever distributed, paid or issued in any bankruptcy proceeding in connection with the Loan or the Loan Documents or (c) any other distribution (whether by means of repayment, redemption, realization of security or otherwise), Assignor shall accept the same as Purchasing Bank's agent and hold the same in trust on behalf of and for the benefit of Purchasing Bank, and shall deliver the same forthwith to Purchasing Bank in the same form received, with the endorsement (without recourse) of Assignor when necessary or appropriate. If the Assignor shall fail to deliver any funds received by it within the same Domestic Business Day of receipt, unless such funds are received by Assignor after 4:00 p.m., Eastern Standard Time, then the following Domestic Business Day after receipt, said funds shall accrue interest at the federal funds interest rate and in addition to promptly remitting said amount, Assignor shall remit such interest from the date received to the date such amount is remitted to the Purchasing Bank. 12. Assignor and Purchasing Bank each hereby agree to indemnify and hold harmless the other, each of its directors and each of its officers in connection with any claim or cause of action based on any matter or claim based on the acts of either while acting as a Bank under the Credit Agreement. Promptly after receipt by the indemnified party under this Section of E-4 notice of the commencement of any action, such indemnified party shall notify the indemnifying party in writing of the commencement thereof. If any such action is brought against any indemnified party and that party notifies the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein, and to the extent that it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof. In no event shall the indemnified party settle or consent to a settlement of such cause of action or claim without the consent of the indemnifying party. 13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS. Wire Transfer Instructions: ---------------------------------- By: ------------------------------- Name: Title: ---------------------------------- By: ------------------------------- Name: Title: E-5 Receipt and Consent acknowledged this __________ day of ____________, 199__: BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent By: ----------------------------------- Name: Title: [IF REQUIRED ADD THE FOLLOWING:] ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: ------------------------------------ Name: Title: E-6 EXHIBIT G FORM OF DESIGNATION AGREEMENT Dated _____________, 199___ Reference is made to that certain Revolving Credit Agreement, dated as of ______________________, 1999 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement") among ERP OPERATING LIMITED PARTNERSHIP, the banks parties thereto, and BANK OF AMERICA, NATIONAL ASSOCIATION (the "ADMINISTRATIVE AGENT"), as Administrative Agent. Terms defined in the Credit Agreement are used herein with the same meaning. [NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"), and the Administrative Agent agree as follows: 1. The Designor hereby designates the Designee, and the Designee hereby accepts such designation, to have a right to make Money Market Loans pursuant to Article III of the Credit Agreement. Any assignment by Designor to Designee of its rights to make a Money Market Loan pursuant to such Article III shall be effective at the time of the funding of such Money Market Loan and not before such time. 2. Except as set forth in Section 7 below, the Designor makes no representation or warranty and assumes no responsibility pursuant to this Designation Agreement with respect to (a) any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or any other instrument and document furnished pursuant thereto and (b) the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto. 3. The Designee (a) confirms that it has received a copy of each Loan Document, together with copies of the financial statements referred to in Articles IV and V of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Designation Agreement; (b) agrees that it will independently and without reliance upon the Administrative Agent, the Designor or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under any Loan Document; (c) confirms that it is a Designated Lender; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under any Loan Document as are delegated to G-1 the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; and (e) agrees to be bound by each and every provision of each Loan Document and further agrees that it will perform in accordance with their terms all of the obligations which by the terms of any Loan Document are required to be performed by it as a Bank. 4. The Designee hereby appoints Designor as Designee's agent and attorney in fact, and grants to Designor an irrevocable power of attorney, to receive payments made for the benefit of Designee under the Credit Agreement, to deliver and receive all communications and notices under the Credit Agreement and other Loan Documents and to exercise on Designee's behalf all rights to vote and to grant and make approvals, waivers, consents of amendments to or under the Credit Agreement or other Loan Documents. Any document executed by the Designor on the Designee's behalf in connection with the Credit Agreement or other Loan Documents shall be binding on the Designee. The Borrower, the Administrative Agent and each of the Banks may rely on and are beneficiaries of the preceding provisions. 5. Following the execution of this Designation Agreement by the Designor and its Designee, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent. The effective date for this Designation Agreement (the "Effective Date") shall be the date of acceptance hereof by the Administrative Agent, unless otherwise specified on the signature page thereto. 6. The Administrative Agent hereby agrees that it will not institute against any Designated Lender or join any other Person in instituting against any Designated Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal or state bankruptcy or similar law, until the later to occur of (i) one year and one day after the payment in full of the latest maturing commercial paper note issued by such Designated Lender and (ii) the Maturity Date. 7. The Designor unconditionally agrees to pay or reimburse the Designee and save the Designee harmless against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed or asserted by any of the parties to the Loan Documents against the Designee, in its capacity as such, in any way relating to or arising out of this Agreement or any other Loan Documents or any action taken or omitted by the Designee hereunder or thereunder, PROVIDED that the Designor shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements if the same results from the Designee's gross negligence or willful misconduct. G-2 8. Upon such acceptance and recording by the Administrative Agent, as of the Effective Date, the Designee shall be a party to the Credit Agreement with a right (subject to the provisions of Section 2.3(b)) to make Money Market Loans as a Bank pursuant to Section 2.3 of the Credit Agreement and the rights and obligations of a Bank related thereto; PROVIDED, HOWEVER, that the Designee shall not be required to make payments with respect to such obligations except to the extent of excess cash flow of such Designee which is not otherwise required to repay obligations of such Designated Lender which are then due and payable. Notwithstanding the foregoing, the Designor, as administrative agent for the Designee, shall be and remain obligated to the Borrower, the Co-Agents and the Banks for each and every of the obligations of the Designee and its Designor with respect to the Credit Agreement, including, without limitation, any indemnification obligations under Section 7.6 of the Credit Agreement and any sums otherwise payable to the Borrower by the Designee. 9. This Designation Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois. 10. This Designation Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Designation Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Designation Agreement. G-3 IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally bound, have caused this Designation Agreement to be executed by their officers thereunto duly authorized as of the date first above written. Effective Date: ________________________,199__ [NAME OF DESIGNOR], as Designor By: ---------------------------- Title: ---------------------- [NAME OF DESIGNOR], as Designor By: ---------------------------- Title: ---------------------- Applicable Lending Office (and address for notices): [ADDRESS] Accepted this _____ day of ___________________, 19__ BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent By: --------------------------- Title: ------------------------ G-4 TABLE OF CONTENTS
Page ---- ARTICLE I.........................................................................1 SECTION 1.1 Definitions..........................................................1 SECTION 1.2 Accounting Terms and DeterminationsTerms and Determinations.........26 SECTION 1.3 Types of Borrowingsof Borrowings....................................27 ARTICLE II.......................................................................27 SECTION 2.1 Commitments to Lend.................................................27 SECTION 2.2 Notice of Borrowing.................................................27 SECTION 2.3 Money Market Borrowings.............................................29 SECTION 2.4 Notice to Banks; Funding of Loans...................................34 SECTION 2.5 Notes...............................................................35 SECTION 2.6 Method of Electing Interest Rates...................................36 SECTION 2.7 Interest Rates......................................................38 SECTION 2.8 Fees................................................................40 SECTION 2.9 Maturity Date.......................................................41 SECTION 2.10 Mandatory Prepayments...............................................41 SECTION 2.11 Optional Prepayments...............................................42 SECTION 2.12 General Provisions as to Payments..................................44 SECTION 2.13 Funding Losses.....................................................45 SECTION 2.14 Computation of Interest and Fees...................................45 SECTION 2.15 Use of Proceedsof Proceeds.........................................46 SECTION 1.19 Letters of Credit..................................................46 SECTION 2.17 Letter of Credit Usage Absolute....................................49 SECTION 2.18 Swingline Loan Subfacility.........................................50 ARTICLE III......................................................................53 SECTION 3.1 Closing.............................................................53 SECTION 3.2 Borrowings..........................................................54 ARTICLE IV.......................................................................56 SECTION 4.1 Existence and Power.................................................56 SECTION 4.2 Power and Authority.................................................56 SECTION 4.3 No Violation........................................................57 SECTION 4.4 Financial Information...............................................57 SECTION 4.5 Litigation..........................................................58 SECTION 4.6 Compliance with ERISA...............................................58 SECTION 4.7 Environmental Matters...............................................58 SECTION 4.8 Taxes...............................................................58 SECTION 4.9 Full Disclosure.....................................................59 SECTION 4.10 Solvency...........................................................59 SECTION 4.11 Use of Proceeds; Margin Regulations................................59 SECTION 4.12 Governmental Approvals.............................................59 SECTION 4.13 Investment Company Act; Public Utility Holding Company Act.........59 SECTION 4.14 Principal Offices..................................................60 SECTION 4.15 REIT Status........................................................60 SECTION 4.16 Patents, Trademarks, etc...........................................60 SECTION 4.17 Ownership of Property..............................................60
i SECTION 4.18 No Default.........................................................60 SECTION 4.19 Licenses, etc......................................................60 SECTION 4.20 Compliance With Law................................................60 SECTION 4.21 No Burdensome Restrictions.........................................61 SECTION 4.22 Brokers' Fees......................................................61 SECTION 4.23 Labor Matters......................................................61 SECTION 4.24 Insurance..........................................................61 SECTION 4.25 Organizational Documents...........................................61 SECTION 4.26 Qualifying Unencumbered Properties.................................61 SECTION 4.27 Year 2000 Compliance...............................................62 ARTICLE V........................................................................62 SECTION 5.1 Information.........................................................62 SECTION 5.2 Payment of Obligations..............................................65 SECTION 5.3 Maintenance of Property; Insurance; Leases..........................66 SECTION 5.4 Conduct of Business and Maintenance of Existence....................66 SECTION 5.5 Compliance with Laws................................................66 SECTION 5.6 Inspection of Property, Books and Records...........................66 SECTION 5.7 Existence...........................................................67 SECTION 5.8 Financial Covenants.................................................67 SECTION 5.9 Restriction on Fundamental Changes..................................69 SECTION 5.10 Changes in Business................................................70 SECTION 5.11 Margin Stock.......................................................70 SECTION 5.12 Hedging Requirements...............................................70 SECTION 5.13 EQR Status.........................................................71 ARTICLE VI.......................................................................72 SECTION 6.1 Events of Default...................................................72 SECTION 6.2 Rights and Remedies.................................................74 SECTION 6.3 Notice of Default...................................................75 SECTION 6.4 Actions in Respect of Letters of Credit.............................76 SECTION 6.5 Distribution of Proceeds after Default..............................78 ARTICLE VII......................................................................78 SECTION 7.1 Appointment and Authorization.......................................78 SECTION 7.2 Agency and Affiliates...............................................78 SECTION 7.3 Action by Administrative Agent......................................79 SECTION 7.4 Consultation with Experts...........................................79 SECTION 7.5 Liability of Administrative Agent and Syndication Agent.............79 SECTION 7.6 Indemnification.....................................................79 SECTION 7.7 Credit Decision.....................................................80 SECTION 7.8 Successor Administrative Agent or Syndication Agent.................80 SECTION 7.9 Consents and Approvals..............................................81 ARTICLE VIII.....................................................................82 SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair............82 SECTION 8.2 Illegality..........................................................83 SECTION 8.3 Increased Cost and Reduced Return...................................84 SECTION 8.4 Taxes...............................................................86 SECTION 8.5 Base Rate Loans Substituted for Affected Euro-Dollar Loans..........88
ii ARTICLE IX.......................................................................88 SECTION 9.1 Notices.............................................................88 SECTION 9.2 No Waivers..........................................................89 SECTION 9.3 Expenses; Indemnification...........................................89 SECTION 9.4 Sharing of Set-Offs.................................................91 SECTION 9.5 Amendments and Waivers..............................................92 SECTION 9.6 Successors and Assigns..............................................92 SECTION 9.7 Collateral..........................................................95 SECTION 9.8 Governing Law; Submission to Jurisdiction...........................95 SECTION 9.9 Counterparts; Integration; Effectiveness............................96 SECTION 9.10 WAIVER OF JURY TRIAL................................................96 SECTION 9.11 Survival............................................................96 SECTION 9.12 Domicile of Loans...................................................97 SECTION 9.13 Limitation of Liability.............................................97 SECTION 9.14 Recourse Obligation.................................................97 SECTION 9.15 Confidentiality.....................................................97 SECTION 9.16 Bank's Failure to Fund..............................................98 SECTION 9.17 No Bankruptcy Proceedings..........................................103
iii EX-10.13 3 EXHIBIT 10.13 FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "AMENDMENT") is made as of November 10, 1999, by and among ERP OPERATING LIMITED PARTNERSHIP (the "BORROWER"), BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent (the "ADMINISTRATIVE AGENT"), THE CHASE MANHATTAN BANK, as Syndication Agent, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent, and the BANKS listed on the signature pages hereof. W I T N E S S E T H: WHEREAS, the Borrower and the Banks have entered into the Revolving Credit Agreement, dated as of August 12, 1999 (the "CREDIT AGREEMENT"); and WHEREAS, the parties desire to modify the Credit Agreement upon the terms and conditions set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. DEFINITIONS. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement. 2. LOAN DOCUMENTS. The definition "Loan Documents" is hereby amended by adding the following after "and the Letter of Credit Documents": "and any Guaranty". 3. QUALIFYING UNENCUMBERED PROPERTY. The definition "Qualifying Unencumbered Property" is hereby amended by adding the following after the last sentence thereof: Notwithstanding the foregoing, for the purposes of this definition, a Property shall be deemed to be wholly-owned by Borrower if such Property shall be owned by a Down REIT (as hereinafter defined) or a wholly-owned Subsidiary of such Down REIT. The term "Down REIT" shall mean a limited liability company or limited partnership in which the only interest in such Down REIT not owned (directly or indirectly) by Borrower shall be preference interests or preference units, respectively, and which limited liability company or limited partnership, as the case may be (collectively, a "GUARANTOR"), has executed and delivered to the Administrative Agent, on behalf of the Banks, (i) a Guaranty of Payment in the form attached hereto as EXHIBIT A (a "GUARANTY"), (ii) all documents reasonably requested by the Administrative Agent relating to the existence of such Down REIT, and the authority for and validity of the Guaranty, including, without limitation, the organizational documents of such Down REIT, modified or supplemented prior to the date of such Guaranty, each certified to be true, correct and complete by such Down REIT, not more than ten (10) days prior to the date of such Guaranty, together with a good standing certificate from the Secretary of State (or the equivalent thereof) of the State of formation of such Down REIT, to be dated not more than ten (10) days prior to the date 2 of such Guaranty, as well as authorizing resolutions in respect of the Guaranty, and (iii) an opinion of counsel with respect to such Down REIT and Guaranty, in form and substance reasonably acceptable to the Administrative Agent, with respect to due organization, existence, good standing and authority, and validity and enforceability of the Guaranty. In addition, for purposes of this definition, a Guaranty shall not be deemed to constitute Unsecured Debt of the applicable Down REIT. 4. LETTERS OF CREDIT. Sections 2.16(b) and (d) of the Credit Agreement are hereby deleted. 5. PERMITTED HOLDINGS. For purposes of calculating Multifamily Residential Property Partnership Interests pursuant to Section 5.8(j) of the Credit Agreement, a Down REIT (or a wholly-owned Subsidiary thereof) shall be deemed to be wholly-owned by Borrower. 6. GUARANTY. (i) Notwithstanding any other provision of the Credit Agreement or any other Loan Document to the contrary, the Administrative Agent, the Banks and Designated Lenders agree with Borrower that any funds, claims, or distributions actually received by the Administrative Agent for the account of any Bank or Designated Lender as a result of the enforcement of, or pursuant to, any Guaranty, net of the Administrative Agent's and the Banks' expenses of collection thereof (such net amount, "GUARANTY PROCEEDS"), shall be made available for distribution equally and ratably (in proportion to the aggregate amount of principal, interest and other 3 amounts then owed in respect of the Obligations or of an issuance of Public Debt (as defined below), as the case may be) among the Administrative Agent, the Banks and the Designated Lenders and the trustee or trustees of any Unsecured Debt, not subordinated to the Obligations (or to the holders thereof), issued by Borrower, before or after the Effective Date, in offerings registered under the Securities Act of 1933, as amended, or in transactions exempt from registration pursuant to rule 144A or Regulation 8 thereunder or listed on non-U.S. securities exchanges ("PUBLIC DEBT"), and the Administrative Agent is hereby authorized, by Borrower, by each Bank (on its own behalf and on behalf of its Designated Lender, if any) and by each Guarantor by its execution and delivery of a Guaranty, to make such Guaranty Proceeds so available. No Bank or Designated Lender shall have any interest in any amount paid over by the Administrative Agent to the trustee or trustees in respect of any Public Debt (or to the holders thereof) pursuant to the foregoing authorization. This Section 6 shall apply solely to Guaranty Proceeds, and not to any payments, funds, claims or distributions received by the Administrative Agent, any Bank or Designated Lender directly or indirectly from Borrower or any other Person other than from a Guarantor pursuant to a Guaranty. Borrower is aware of the terms of the 4 Guaranties, and specifically understands and agrees with the Administrative Agent, the Banks and the Designated Lenders that, to the extent Guaranty Proceeds are distributed to holders of Public Debt or their respective trustees, such Guarantor has agreed that the Obligations will not be deemed reduced by any such distributions and such Guarantor shall continue to make payments pursuant to its Guaranty until such time as the Obligations have been paid in full (and the Commitments have been terminated and any Letter of Credit returned), after taking into account any such distributions of Guaranty Proceeds in respect of Indebtedness other than the Obligations. (ii) Nothing contained herein shall be deemed (A) to limit, modify, or alter the rights of the Administrative Agent, the Banks and the Designated Lenders under any Guaranty, (b) to subordinate the Obligations to any Public Debt, or (C) to give any holder of Public Debt (or any trustee for such holder) any rights of subrogation. (iii) This Amendment and all Guaranties, are for the sole benefit of the Administrative Agent, the Banks and the Designated Lenders and their respective successors and assigns. Nothing contained herein or in any Guaranty shall be deemed for the benefit of any holder of Public Debt, or any trustee for such holder; nor shall 5 anything contained herein or therein be construed to impose on the Administrative Agent, any Bank or any Designated Lender any fiduciary duties, obligations or responsibilities to the holders of any Public Debt or their trustees (including, but not limited to, any duty to pursue any Guarantor for payment under its Guaranty). 7. EFFECTIVE DATE. This Amendment shall become effective when each of the following conditions is satisfied (or waived by the Required Banks) (the date such conditions are satisfied or waived being deemed the "EFFECTIVE DATE"): (a) the Borrower shall have executed and delivered to the Administrative Agent a duly executed original of this Amendment; (b) the Required Banks shall have executed and delivered to the Administrative Agent a duly executed original of this Amendment; (c) the Administrative Agent shall have received all documents the Administrative Agent may reasonably request relating to the existence of the Borrower, the authority for and the validity of this Amendment, and the other documents executed in 6 connection therewith, and any other matters relevant hereto, all in form and substance reasonably satisfactory to the Administrative Agent. Such documentation shall include, without limitation, the organizational documents of the Borrower, as amended, modified or supplemented prior to the Effective Date, each certified to be true, correct and complete by an officer of the Borrower, as of a date not more than twenty (20) days prior to the Effective Date, together with a good standing certificate from the Secretary of State (or the equivalent thereof) of the State of Maryland, to be dated not more than twenty (20) days prior to the Effective Date; (d) the Administrative Agent shall have received all certificates, agreements and other documents and papers referred to in this Amendment, unless otherwise specified, in sufficient counterparts, satisfactory in form and substance to the Administrative Agent in its reasonable discretion; (e) the Borrower shall have taken all actions required to authorize the execution and delivery of this Amendment and the performance hereof by the Borrower; 7 (f) the Administrative Agent shall have received the reasonable fees and expenses accrued through the Effective Date of Skadden, Arps, Slate, Meagher & Flom LLP, together with any other fees or expenses of the Administrative Agent; (g) the representations and warranties of the Borrower contained in the Credit Agreement, as amended hereby, shall be true and correct in all material respects on and as of the Effective Date; and (h) receipt by the Administrative Agent and the Banks of a certificate of an officer of the Borrower certifying that, on a pro forma basis, the Borrower is in compliance with the requirements of Section 5.8 of the Credit Agreement. 8. ENTIRE AGREEMENT. This Amendment constitutes the entire and final agreement among the parties hereto with respect to the subject matter hereof and there are no other agreements, understandings, undertakings, representations or warranties among the parties hereto with respect to the subject matter hereof except as set forth herein. 9. GOVERNING LAW. This Amendment shall be governed by, and construed in accordance with, the law of the State of Illinois. 8 10. COUNTERPARTS. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. 11. HEADINGS, ETC. Section or other headings contained in this Amendment are for reference purposes only and shall not in any way affect the meaning or interpretation of this Amendment. 12. NO FURTHER MODIFICATIONS. Except as modified herein, all of the terms and conditions of the Credit Agreement, as modified hereby shall remain in full force and effect and, as modified hereby, the Borrower confirms and ratifies all of the terms, covenants and conditions of the Credit Agreement in all respects. 9 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written. BORROWER: ERP OPERATING LIMITED PARTNERSHIP By: Equity Residential Properties Trust By: /s/ David J. Neithercut ------------------------------- Name: David J. Neithercut Title: Executive Vice President Chief Financial Officer 10 BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent, as Swingline Lender and as a Bank By: /s/ Megan McBride ------------------------- Name: Megan McBride Title: Vice President 11 THE CHASE MANHATTAN BANK, as Syndication Agent and as a Bank By: /s/ Marc E. Costantino ------------------------- Name: Marc E. Costantino Title: Vice President 12 MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent and as a Bank By: /S/ R. DAVID STONE --------------------------- Name: R. David Stone Title: Associate 13 BANK ONE, NA (f/k/a The First National Bank of Chicago), as a Co-Arranger and as a Bank By: /s/ Lynn Braun ------------------------------- Name: Lynn Braun Title: Vice President 14 FIRST UNION NATIONAL BANK, as a Co-Arranger and as a Bank By: /s/ Rex E. Rudy ---------------------- Name: Rex E. Rudy Title: Vice President 15 BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH, as Managing Agent and as a Bank By: /s/ John A. Wain --------------------------- Name: John A. Wain Title: First Vice President By: /s/ Alexander Kohnert ----------------------------- Name: Alexander Kohnert Title: First Vice President 16 COMMERZBANK AKTIENGESELLSCHAFT, as Managing Agent and as a Bank By: /s/ Ralph C. Marra ------------------------ Name: Ralph C. Marra Title: Vice President By: /s/ David Buettner ------------------------- Name: David Buettner Title: Assistant Treasurer 17 PNC BANK, NATIONAL ASSOCIATION, as Managing Agent and as a Bank By: /s/ Michael E. Smith --------------------------- Name: Michael E. Smith Title: Vice President 18 COMERICA BANK, as Co-Agent and as a Bank By: /s/ David J. Campbell ------------------------- Name: David J. Campbell Title: Vice President 19 SOUTHTRUST BANK, NATIONAL ASSOCIATION, as a Bank By: /s/ Lynn W. Feuerlein -------------------------- Name: Lynn W. Feuerlein Title: Group Vice President 20 BANK HAPOALIM B.M., as a Bank By: /s/ Laura Anne Raffa ------------------------------ Name: Laura Anne Raffa Title: First Vice President & Corporate Manager By: /s/ Shaun Breidbart ------------------------------ Name: Shaun Breidbart Title: Vice President 21 ING (U.S.) CAPITAL LLC, as a Bank By: /s/ Thomas R. Hobbis ------------------------ Name: Thomas R. Hobbis Title: Vice President 22 LASALLE BANK, National Association, as a Bank By: /s/ Peter Margolin ------------------------------- Name: Peter Margolin Title: Assistant Vice President 23 CRESTAR BANK, as a Bank By: /s/ Nancy Richards --------------------- Name: Nancy Richards Title: Vice President 24 CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH, as a Bank By: /s/ Wan-Tu Yeh --------------------- Name: Wan Tu-Yeh Title: Vice President & General Manager 25 EX-10.16 4 EXHIBIT 10.16 EXHIBIT 10.16 AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF LEXFORD PROPERTIES, L.P., AN OHIO LIMITED PARTNERSHIP TABLE OF CONTENTS ARTICLE PAGE I DEFINITIONS AND INTERPRETATION 2 1.1 Definitions 2 1.2 Interpretation 10 II ORGANIZATIONAL MATTERS 10 2.1 Continuation 10 2.2 Name 11 2.3 Principal Place of Business 11 2.4 Registered Office and Registered Agent 11 2.5 Term 11 2.6 Power of Attorney 11 III BUSINESS OF PARTNERSHIP 13 3.1 Purpose and Business 13 3.2 Powers 13 IV MANAGEMENT OF PARTNERSHIP; RIGHTS AND DUTIES OF GENERAL PARTNER 14 4.1 Management 14 4.2 Liability for Certain Acts 14 4.3 General Partner and Limited Partners Have No Exclusive Duty to Partnership 15 4.4 Indemnification 15 4.5 Other Matters Concerning the General Partner 17 4.6 Reliance by Third Parties 18 4.7 Affiliated Compensation 19 4.8 Title to Partnership Assets 19 V RIGHTS AND OBLIGATIONS OF PARTNERS 19 5.1 Admission of Partners 19 5.2 Limitation of Liability 19 5.3 List of Partners 19 5.4 Partnership Books 19 5.5 Representation by Partners 20 VI CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS 22 6.1 Partners' Capital and Interests in the Partnership 22 6.2 Capital Accounts 23 6.3 Timing and Amount of Allocations of Profits and Losses 24 6.4 General Allocations of Profits and Losses 25 6.5 Additional Allocation Provisions 26 6.6 Tax Allocations 29 6.7 Distributions of Operating and Capital Cash Flow 29 6.8 Revisions to Reflect Issuance of Additional Partnership Interests 30 VII BOOKS OF ACCOUNT, RECORDS AND REPORTS; TAX ITEMS 30
7.1 Records and Accounting 30 7.2 Fiscal Year 31 7.3 Reports 31 7.4 Tax Matters 31 VIII TRANSFERS AND WITHDRAWALS 34 8.1 Transfer 34 8.2 Transfer of Partnership Interests of the General Partner and Holders of Common Partnership Interests 34 8.3 Limited Partners' Rights to Transfer 35 8.4 Substituted Partner 36 8.5 Assignee 37 8.6 General Provisions 37 IX SUCCESSSOR GENERAL PARTNER AND ADMISSION OF ADDITIONAL PARTNERS 40 9.1 Admission of Successor General Partner 40 9.2 Admission of Additional Partners 40 9.3 Amendment of Agreement and Certificate of Formation 41 X DISSOLUTION AND TERMINATION 41 10.1 Dissolution 41 10.2 Effect of Filing of Dissolving Statement 42 10.3 Winding Up, Liquidation and Distribution of Assets 42 10.4 Certificate of Dissolution 43 10.5 Effect of Dissolution 43 10.6 Return of Contribution Nonrecourse to Other Partners 44 XI MISCELLANEOUS PROVISIONS 44 11.1 Notices 44 11.2 Books of Account and Records 44 11.3 Application of Ohio Law 44 11.4 Waiver of Action for Partition 44 11.5 Amendments 45 11.6 Execution of Additional Instruments 46 11.7 Headings 46 11.8 Waivers 46 11.9 Rights and Remedies Cumulative 46 11.10 Severability 46 11.11 Heirs, Successors and Assigns 46 11.12 Creditors 47 11.13 Counterparts 47 11.14 Integrated Agreement 47
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF LEXFORD PROPERTIES, L.P. This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (the "Agreement") is made and entered into as of the 1st day of October, 1999, by and between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership, as a limited partner ("ERP"), and LEXFORD PARTNERS, L.L.C., an Ohio limited liability company, as the general partner ("Lexford LLC" or the "General Partner"). R E C I T A L S: WHEREAS, Lexford Properties, L.P. (the "Partnership") was formed as a limited partnership under the laws of the State of Ohio by a Certificate of Limited Partnership filed with the Ohio Secretary of State on March 30, 1998 (the "Certificate"); WHEREAS, prior to the date hereof, the Partnership was governed by that certain Agreement of Limited Partnership of the Partnership, dated as of April 29, 1999, as amended (the "Original Partnership Agreement"), by and between Lexford LLC, as general partner, and Lexford Residential Trust, a Maryland real estate investment trust, as limited partner ("Lexford"); WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated June 30, 1999 (the "Merger Agreement), on October 1, 1999, prior to the execution hereof, Lexford merged with and into Equity Residential Properties Trust, a Maryland real estate investment trust ("EQR") (the "Merger"); WHEREAS, pursuant to the Merger, EQR succeeded to all of Lexford's rights and obligations as a limited partner in the Partnership; WHEREAS, pursuant to that certain Assignment agreement, dated October 1, 1999, by and between EQR and ERP, subsequent to the Merger and immediately prior to the execution hereof, EQR assigned and ERP accepted all of EQR's rights and obligations as a limited partner in the Partnership; and WHEREAS, ERP and Lexford LLC now desire to amend and restate the Original Partnership Agreement on the terms set forth herein. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS . Unless otherwise expressly provided herein, the following terms used in this Limited Liability Partnership Agreement shall have the following meanings: (a) "ACT" shall mean the provisions of Title XVII, Chapter 1782 of the Ohio Revised Code, as it may be amended from time to time. (b) "ADDITIONAL PARTNER" shall mean any Person admitted to the Partnership as a Partner pursuant to Section 9.2 hereof. (c) "ADJUSTED CAPITAL ACCOUNT" means the Capital Account maintained for each Partner as of the end of each Fiscal Year (i) increased by any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) "ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean with respect to any Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (i) decrease such deficit by any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Treasury Regulation Sections 1.704-2(i)(5) and 1.704-2(g)(1); and (ii) increase such deficit by the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (e) "AFFILIATE" means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by, or under common control with such Person, (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any officer, director, manager, partner, or general partner of such Person, or (iv) any Person who is an officer, director, manager, general partner, partner, trustee, or holder of ten percent (10%) or more of the voting interests of any Person described in clauses (i) through (iii) of this sentence. For purposes of this definition, the term "controls", "is controlled by" or "is under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise. (f) "ASSIGNEE" shall mean a Person to whom one or more Partnership Interests have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Partner, and who has the rights set forth in Section 8.5. (g) "BANKRUPTCY" shall mean the definition ascribed to such term in the definition of the term "Incapacity". (h) "CAPITAL ACCOUNT" as of any given date shall mean the Capital Account maintained for each Partner pursuant to Section 6.2 hereafter. (i) "CAPITAL CASH FLOW" shall mean, for purposes of this Agreement and for a given period of time, the sum of the cash proceeds plus the fair market value of any other consideration received by the Partnership from a Major Capital Event, less the sum of (i) any portion of such proceeds applied toward the repayment of any indebtedness being refinanced or secured by or relating to the property being disposed of, plus (ii) reasonable reserves required in the sole discretion of the General Partner, plus (iii) any expenses incurred in connection with such Major Capital Event. (j) "CAPITAL CONTRIBUTION" shall mean the sum of any cash plus the fair market value of any property, as determined by the General Partner, contributed to the capital of the Partnership by a Partner. (k) "CERTIFICATE" shall have the meaning as described in the Recitals hereto. (l) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provisions of succeeding law. (m) "COMMON PARTNERSHIP INTERESTS" shall mean any Partnership Interest other than a Preference Interest. (n) "DEPRECIATION" shall mean, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner. (o) "DISTRIBUTABLE FUNDS FROM PARTNERSHIP OPERATIONS" shall mean the sum of Operating Cash Flow and Capital Cash Flow. (p) "ENTITY" shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative or association or any foreign trust or foreign business organization. (q) "EQR" shall mean Equity Residential Properties Trust, a Maryland real estate investment trust. (r) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. (s) "ERP" shall mean ERP Operating Limited Partnership, an Illinois limited partnership. (t) "FISCAL YEAR" shall mean the Partnership's fiscal year, which shall be the calendar year. (u) "GENERAL PARTNER" shall mean ERP or such other Partner as the Partners may designate in accordance with this Agreement. (v) "GROSS ASSET VALUE" shall mean, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the General Partner. (ii) Immediately prior to the times listed below, the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt: (1) the acquisition of an additional interest in the Partnership by a new or existing Partner in exchange for more than a DE MINIMIS Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; (2) the distribution by the Partnership to a Partner of more than a DE MINIMIS amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; (3) the liquidation of the Partnership within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (4) at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Treasury Regulation Sections 1.704-1(b) and 1.704-2. (iii) the Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution, as determined by the General Partner. (iv) The Gross Asset Value of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that the General Partner reasonably determines that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). (v) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses. (w) "INCAPACITY" or "INCAPACITATED" means, (i) as to any individual Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to manage his or her Person or estate, (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter, (iii) as to any partnership or limited liability company which is a Partner, the dissolution and commencement of winding up of the partnership or limited liability company, (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate's entire interest in the Partnership, (v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee) or (vi) as to any Partner, the Bankruptcy of such Partner. For purposes of this definition, Bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner's creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner's properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof, (g) the appointment without the Partner's consent or acquiescence of a trustee, receiver of liquidator has not been vacated or stayed within ninety (90) days of such appointment or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days after the expiration of any such stay. (x) "INDEMNITEE" (i) shall mean any Person subject to a claim or demand made or threatened to be made a party to, or involved or threatened to be involved in, an action, suit or proceeding by reason of his or her status as (a) the General Partner or (b) a director, officer, employee or agent of the Partnership or the General Partner, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time, in its sole and absolute discretion. (y) "LIMITED PARTNER" shall mean and include any Partner that is not a General Partner. (z) "LOSSES" shall have the meaning given it in Section 6.3(c) hereafter. (aa) "MAJOR CAPITAL EVENT" The placement of new or additional financing upon all or any portion of the Partnership's assets or any interest therein; the refinancing of any existing or new financing upon all or any portion of the Partnership's assets or any interest therein; or the sale, exchange, condemnation, casualty loss or other disposition (whether voluntary or involuntary) of substantially all of the Partnership's assets (including any disposition in consideration for securities in any real estate investment trust or other entity). (bb) "MAJORITY-IN-INTEREST" shall mean Partner(s) who, individually or collectively, own greater than fifty percent (50%) of the Percentage Interests. (cc) "NONRECOURSE DEDUCTIONS" shall have the meaning set forth in Treasury Regulation Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year of the Partnership shall be determined in accordance with the rules of Treasury Regulation Section 1.704-2(c). (dd) "NONRECOURSE LIABILITY" shall have the meaning set forth in Treasury Regulation Section 1.752-1(a)(2). (ee) "OFFICIAL RECORDS" shall mean the Partnership's official records which are to be maintained by the General Partner of the Partnership at the Partnership's principal place of business. (ff) "OPERATING CASH FLOW" shall mean, for purposes of this Agreement and for a given period of time, all cash received by the Partnership from any source (but excluding Capital Cash Flow), less the sum of the following (to the extent not paid from Capital Cash Flow): cash expended for all debts and expenses of the Partnership; principal and interest payments on any indebtedness of the Partnership; capital expenditures; and reasonable reserves required in the sole determination of the General Partner. (gg) "OTHER SECURITIES TERM SHEET" shall have the meaning given it in Section 6.1(c) hereof. (hh) "PARTNER" shall mean each of the Persons or Entities who from time to time are admitted and continue as General Partners or Limited Partners of the Partnership pursuant to the terms hereof. (ii) "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3). (jj) "PARTNER NONRECOURSE DEBT" shall mean "partner nonrecourse debt" as defined in Treasury Regulation Section 1.704-2(b)(4). (kk) "PARTNER NONRECOURSE DEDUCTIONS" shall mean "partner nonrecourse deductions" as defined in Treasury Regulation Section 1.704-2(i)(2) and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year of the Partnership shall be determined in accordance with the rules of Treasury Regulation Section 1.704-2(i)(2). (ll) "PARTNERSHIP" shall mean Lexford Properties, L.P., an Ohio limited partnership. (mm) "PARTNERSHIP INTEREST" shall mean a Partner's entire interest in the Partnership, including such Partner's Percentage Interest and such other rights and privileges that the Partner may enjoy by being a Partner. (nn) "PARTNERSHIP MINIMUM GAIN" shall mean "partnership minimum gain" as defined in Treasury Regulation Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year of the Partnership shall be determined in accordance with the rules of Treasury Regulation Section 1.704-2(d). (oo) "PERCENTAGE INTEREST" shall mean, for any Partner, the percentage as set forth on Exhibit A hereto. Exhibit A shall be amended from time to time to reflect any adjustments made to a Partner's Percentage Interest. (pp) "PERSON" shall mean any individual or entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such "Person" where the context so permits. (qq) "PREFERENCE INTEREST" shall mean any class or series of Partnership Interest designated as a Preference Interest pursuant to an Other Securities Term Sheet adopted in accordance with Section 6.1(c) hereof. (rr) "PROFITS" shall have the meaning given it in Section 6.3(c) hereof. (ss) "PROFITS" or "LOSSES" means for each Fiscal Year, an amount equal to the Partnership's taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: (i) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits or Losses shall be added to such taxable income or loss; (ii) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of Profits or Losses shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year; (vi) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition of Profits or Losses, any items of gross income or deduction which are specially allocated pursuant to any Other Securities Term Sheet and any items which are specially allocated pursuant to Section 6.5 shall not be taken into account in computing Profits or Losses. The amounts of items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 6.5 shall be determined by applying rules analogous to those set forth in this definition of Profits or Losses. (tt) "QUALIFIED TRANSFEREE" shall mean an "Accredited Investor" as defined in Rule 501 promulgated under the Securities Act. (uu) "REAL ESTATE INVESTMENT TRUST" shall mean a real estate investment trust, as defined in Section 856 of the Code. (vv) "REFERENCE RATE" shall mean the rate as announced, from time to time, by Chemical Bank, a New York State banking corporation, as its "base rate" or "reference rate". (ww) "REGULATORY ALLOCATIONS" shall have the meaning set forth in Section 6.5(a)(viii). (xx) "REIT CHARTER" shall mean the Amended and Restated Declaration of Trust of EQR. (yy) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder. (zz) "SUBSIDIARY" shall mean with respect to any Person, any corporation, limited liability company, trust, partnership or joint venture, or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person. (aaa) "SUBSTITUTED PARTNER" shall mean a Person admitted as a Limited Partner under Section 8.4. (bbb) "TAX ITEMS" shall have the meaning set forth in Section 6.6(a). (ccc) "TREASURY REGULATIONS" shall include proposed, temporary and final regulations promulgated under the Code in effect as of the date of filing the Certificate and the corresponding sections of any regulations subsequently issued that amend or supersede such regulations. (ddd) "UNITS" shall mean units of Common Partnership Interest or Preference Interests, as the case may be. 1.2 INTERPRETATION . The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine and neuter forms. As used in this Agreement, the words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." As used in this Agreement, the terms "herein," "hereof" and "hereunder" shall refer to this Agreement in its entirety. Any references in this Agreement to "Sections" or "Articles" shall, unless otherwise specified, refer to Sections or Articles, respectively, in this Agreement. ARTICLE II ORGANIZATIONAL MATTERS 2.1 CONTINUATION . The Partners hereby agree to continue the Partnership pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. 2.2 NAME . The name of the Partnership is Lexford Properties, L.P., provided that the General Partner may elect to transact business in other names in those jurisdictions where they deem it necessary for purposes of complying with the requirements of local law. 2.3 PRINCIPAL PLACE OF BUSINESS . The principal place of business of the Partnership shall be Two N. Riverside Plaza, Suite 400, Chicago, Illinois 60606. The Partnership may relocate its principal place of business to any other place or places as the General Partner may from time to time deem advisable. Additional offices may be maintained and acts done at any other place appropriate for accomplishing the purposes of the Partnership, all as determined by the General Partner. 2.4 REGISTERED OFFICE AND REGISTERED AGENT . The Partnership's initial registered office shall be at the office of its registered agent at 50 W. Broad Street, Suite 1120, Columbus, Ohio 43215, and the name of its initial registered agent at such address shall be Lexis Document Services, Inc. The registered office and registered agent may be changed from time to time by filing the address of the new registered office and/or the name of the new registered agent with the Ohio Secretary of State pursuant to the Act. 2.5 TERM . The term of the Partnership shall commence as of the date hereof and shall be until October 1, 2049, unless sooner terminated in accordance with either the provisions of this Agreement or the Act. 2.6 POWER OF ATTORNEY . (a) GENERAL. Each Partner and each Assignee who accepts a Partnership Interest (or any rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and appoint the General Partner, any liquidating trustee and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to: (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or any liquidating trustee deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership in the State of Ohio and in all other jurisdictions in which the Partnership may conduct business or own property, (b) all instruments that the General Partner or any liquidating trustee deem appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms, (c) all conveyances and other instruments or documents that the General Partner or any liquidating trustee or deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation, (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article VIII or IX hereof or the Capital Contribution of any Partner and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and (ii) execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any liquidating trustee, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any liquidating trustee, to effectuate the terms or intent of this Agreement. Nothing contained in this Section 2.6 shall be construed as authorizing the General Partner or any liquidating trustee to amend this Agreement except in accordance with Section 11.5 hereof or as may be otherwise expressly provided for in this Agreement. (b) IRREVOCABLE NATURE. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner or any liquidating trustee to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Partner or Assignee and the transfer of all or any portion of such Partner's or Assignee's Partnership Interests and shall extend to such Partner's or Assignee's heirs, successors, assigns and personal representatives. Each such Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any liquidating trustee, acting in good faith pursuant to such power of attorney; and each such Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any liquidating trustee, taken in good faith under such power of attorney. Each Partner or Assignee shall execute and deliver to the General Partner or the liquidating trustee, within fifteen (15) days after receipt of the General Partner's or liquidating trustee's request therefor, such further designation, powers of attorney and other instruments as the General Partner or the liquidating trustee, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership. ARTICLE III BUSINESS OF PARTNERSHIP 3.1 PURPOSE AND BUSINESS . The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act; provided, however, that such business shall be limited to and conducted in a manner as to permit EQR at all times to be classified as a REIT, unless EQR ceases to qualify or is not qualified as a REIT for any reason or reasons not related to the business conducted by the Partnership, (ii) to enter into any corporation, partnership, joint venture, trust, limited liability company or other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged, directly or indirectly, in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, the Partners acknowledge that the status of EQR as a REIT inures to the benefit of all the Partners and not solely to EQR or its Affiliates. 3.2 POWERS . The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided, however, that the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (i) could adversely affect the ability of EQR to continue to qualify as a REIT, (ii) could subject EQR to any additional taxes under Section 857 or Section 4981 of the Code, (iii) could cause the Partnership to be classified as a publicly traded partnership under Section 7704 of the Code, or (iv) could violate any law or regulation of any governmental body or agency having jurisdiction over any General Partner or its securities, unless such action (or inaction) shall have been specifically consented to by the General Partner in writing. ARTICLE IV MANAGEMENT OF PARTNERSHIP; RIGHTS AND DUTIES OF GENERAL PARTNER 4.1 MANAGEMENT . (a) All management powers over the business and affairs of the Partnership are and shall be vested exclusively in the General Partner, and no other Partner or Person shall have any right or authority to act for or by the Partnership except as permitted in this Agreement or as required by law. No Partner is an agent of the Partnership solely by virtue of being a Partner, and no Partner has authority to act for the Partnership solely by virtue of being a Partner. (b) Except as provided herein, each of the Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, notwithstanding any other provision of this Agreement, the Act or any applicable law, rule or regulation, to the full extent permitted under the Act or other applicable law. The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity. (c) The General Partner shall not take any action (or fail to take any action) if the consequence of such action (or inaction) would be (i) to cause EQR to fail to qualify as a real estate investment trust ("REIT") for federal or applicable state income tax purposes or (ii) to cause ERP to fail to qualify as a partnership for federal or applicable state income tax purposes, or (iii) to cause the Partnership, ERP, or EQR to be classified as a publicly traded partnership under Section 7704 of the Code or an "investment company" as defined in, or otherwise be subject to regulation under, the Investment Company Act of 1940, as amended. 4.2 LIABILITY FOR CERTAIN ACTS . The General Partner shall perform its duties as General Partner in good faith, in a manner it or its representatives reasonably believes to be in the best interests of the Partnership, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. A General Partner who so performs the duties as General Partner shall not have any liability by reason of being or having been a General Partner of the Partnership. The General Partner does not in any way guarantee the return of the Partners' Capital Contributions or a profit for the Partners from the operations of the Partnership. Notwithstanding any other provision of this Agreement, the General Partner shall not be liable to the Partnership or to any Partner for any loss or damage sustained by the Partnership or any Partner, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, willful misconduct, or a wrongful taking by the General Partner. 4.3 GENERAL PARTNER AND LIMITED PARTNERS HAVE NO EXCLUSIVE DUTY TO PARTNERSHIP . The General Partner shall not be required to manage the Partnership as its sole and exclusive function, and it (and any Partner) may have other business interests and may engage in other activities in addition to those relating to the Partnership. Neither the Partnership nor any Partner shall have any right, by virtue of this Agreement, to share or participate in such other investments or activities of the General Partner and/or any other Partner or to the income or proceeds derived therefrom, notwithstanding that such investments or activities may be competitive with the business of the Partnership. Neither the General Partner nor any other Partner shall incur any liability to the Partnership or to any of the Partners as a result of engaging in any other business or venture. The General Partner may, in its sole discretion, on behalf of the Partnership, purchase, sell or lease real or personal property from or to any Partner (including the General Partner) or pay fees or compensation to any Partner (including the General Partner) for any efforts or commitments in connection with the business of the Partnership or otherwise deal with any Partner (including the General Partner) or any firm in which any Partner (including the General Partner) is directly or indirectly interested, and neither the Partnership nor any of its Partners shall have any rights in or to any income or profits received by such Partner or General Partner in a transaction with the Partnership. 4.4 INDEMNIFICATION . (a) GENERAL. The Partnership shall indemnify each Indemnitee to the fullest extent provided by the Act from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, reasonable attorneys fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from or in connection with any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, incurred by the Indemnitee and relating to the Partnership or the General Partner or the operation of, or the ownership of property by, any of them as set forth in this Agreement in which any such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established by a final determination of a court of competent jurisdiction that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty, (ii) the Indemnitee actually received an improper personal benefit in money, property or services or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guarantee, contractual obligation for any indebtedness or other obligation or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 4.4 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 4.4. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 4.4. With respect to the subject matter of such proceeding. Any indemnification pursuant to this Section 4.4 shall be made only out of the assets of the Partnership, and any insurance proceeds from the liability policy covering the General Partner and any Indemnitee, and neither a General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the Partnership to fund its obligations under this Section 4.4. (b) ADVANCEMENT OF EXPENSES. Reasonable expenses expected to be incurred by an Indemnitee shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative made or threatened against an Indemnitee upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 4.4 has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. (c) NO LIMITATION OF RIGHTS. The indemnification provided by this Section 4.4 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified. (d) INSURANCE. The Partnership may purchase and maintain insurance on behalf of the Indemnitees and such other Persons as the General Partner shall determine against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership's activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement. (e) BENEFIT PLAN FIDUCIARY. For purposes of this Section 4.4, (i) excise taxes assessed on an Indemnitee, or for which the Indemnitee is otherwise found liable, with respect to an ERISA Plan pursuant to applicable law shall constitute fines within the meaning of this Section 4.4 and (iii) actions taken or omitted by the Indemnitee with respect to an ERISA Plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of such ERISA Plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership. (f) NO PERSONAL LIABILITY FOR PARTNERS. In no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth in this Agreement. (g) INTERESTED TRANSACTIONS. An Indemnitee shall not be denied indemnification in whole or in part under this Section 4.4 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement. (h) BENEFIT. The provisions of this Section 4.4 are for the benefit of the Indemnitees, their employees, officers, directors, trustees, heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 4.4, or any provision hereof, shall be prospective only and shall not in any way affect the limitation on the Partnership's liability to any Indemnitee under this Section 4.4 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or related to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. (i) INDEMNIFICATION PAYMENTS NOT DISTRIBUTIONS. If and to the extent any payments to the General Partner pursuant to this Section 4.4 constitute gross income to the General Partner (as opposed to the repayment of advances made on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners' Capital Accounts. (j) EXCEPTION TO INDEMNIFICATION. Notwithstanding anything to the contrary in this Agreement, a General Partner shall not be entitled to indemnification hereunder for any loss, claim, damage, liability or expense for which such General Partner is obligated to indemnify the Partnership under any other agreement between such General Partner and the Partnership. 4.5 OTHER MATTERS CONCERNING THE GENERAL PARTNER . (a) RELIANCE ON DOCUMENTS. The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. (b) RELIANCE ON ADVISORS. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by them, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which the General Partner reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion. (c) ACTION THROUGH AGENTS. The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder. (d) ACTIONS TO MAINTAIN REIT STATUS. Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of a General Partner to refrain from acting on behalf of the Partnership undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of EQR to continue to qualify as a REIT or (ii) to allow EQR to avoid incurring any liability for taxes under Section 857 or 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Partners. 4.6 RELIANCE BY THIRD PARTIES . Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority, without consent or approval of any other Partner or Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership, to enter into any contracts on behalf of the Partnership and to take any and all actions on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if the General Partner were the Partnership's sole party in interest, both legally and beneficially. Each Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership, and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership. 4.7 AFFILIATED COMPENSATION . The General Partner may retain such Persons or Entities as it shall determine (including any Person or Entity in which the General Partner shall have an interest or of which it is an Affiliate) to provide services to or on behalf of the Partnership for such reasonable compensation as the General Partner deems to be appropriate. 4.8 TITLE TO PARTNERSHIP ASSETS . Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets, including any bank accounts, may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of any General Partner or any nominee or Affiliate of the General Partner shall be held by that General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held. ARTICLE V RIGHTS AND OBLIGATIONS OF PARTNERS 5.1 ADMISSION OF PARTNERS . Each of the Partners listed on Exhibit A is hereby admitted and shall be recognized as a Partner of the Partnership. No other Person shall be admitted or recognized as a Partner of the Partnership, unless such Person is admitted in accordance with this Agreement. The Partnership shall not at any time have more than one hundred (100) Partners. For purposes of the preceding sentence, a Partner shall include any Person indirectly owning an interest in the Partnership through a partnership, limited liability company, S corporation or grantor trust (such entity, a "flow through entity"), but only if (i) substantially all of the value of such Person's interest in the flow through entity is attributable to the flow through entity's interest (direct or indirect) in the Partnership, in each case within the meaning of Treasury Regulation Section 1.7704-1(h) and (ii) a principal purpose of the use of the flow through entity is to permit the Partnership to satisfy the 100 partner limitation in Treasury Regulation Section 1.7704-1(h)(1)(ii). 5.2 LIMITATION OF LIABILITY . Each Partner's liability shall be limited as set forth in this Agreement, the Act and other applicable law. 5.3 LIST OF PARTNERS . Upon written request of any Partner, the General Partner shall provide a list showing the names, addresses and Percentage Interests of all Partners. 5.4 PARTNERSHIP BOOKS . The General Partner of the Partnership shall maintain and preserve, during the term of the Partnership, and for a time period thereafter consistent with reasonable record retention policies, all accounts, books, Official Records and other relevant Partnership documents. Upon reasonable request, each Partner shall have the right, during ordinary business hours, to inspect and copy such Partnership documents at the requesting Partner's expense. 5.5 REPRESENTATION BY PARTNERS . Each Partner represents and warrants to the other Partners and to the Partnership as follows: (a) All transactions contemplated by this Agreement to be performed by such Partner have been duly authorized by all necessary action and do not require the consent or approval of any third party, and such Partner has all necessary power with respect thereto. (b) The consummation of the transactions contemplated by this Agreement will not (and with the giving of notice or lapse of time or both would not) result in a breach or violation of, or a default or loss of contractual benefits under, any trust agreement or other agreement by which such Partner or any of such Partner's properties is bound, or any statute, regulation, order or other law to which such Partner or any of such Partner's properties is subject, or give rise to a lien or other encumbrance upon any of such Partner's properties or assets. (c) This Agreement is a valid and binding agreement on the part of such Partner, enforceable in accordance with its terms. (d) Such Partner's interest in the Partnership will be acquired solely by and for the account of such Partner and is not being purchased for subdivision, fractionalization, resale or distribution; such Partner has no contract, undertaking, agreement or arrangement with any person to sell or transfer to such person or anyone else such Partner's interests in the Partnership (or any part thereof); and such Partner has no present plans or intentions to enter into any such contract, undertaking or arrangement. (e) Such Partner's interests in the Partnership have not and will not be registered under the federal Securities Act of 1933, as amended, or the securities laws of any state, and cannot be sold or transferred without compliance with the registration provisions of said Act or state laws or compliance with exemptions, if any, available thereunder. Such Partner understands that neither the Partnership nor any Partner have any obligation or intention to register the interests in the Partnership under any federal or state securities act or law, or to file the reports to make public the information required by Rule 144 under the Securities Act of 1933, as amended. (f) Such Partner: (i) has such knowledge and experience in financial and business matters in general, and in investments of the type made by the Partnership in particular, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership; (ii) has a financial condition that is such that such Partner has no need for liquidity with respect to such Partner's investment in the Partnership to satisfy any existing or contemplated undertaking or indebtedness; (iii) is able to bear the economic risk of such Partner's investment in the Partnership for an indefinite period of time, including the risk of losing all of such investment, and loss of such investment would not materially adversely affect such Partner; (iv) has either secured independent tax advice with respect to the investment in the Partnership, upon which such Partner is solely relying, or such Partner is sufficiently familiar with the income taxation of entities similar to the Partnership that such Partner has deemed such independent advice unnecessary; and (v) has sufficient liquidity and net worth to satisfy, when required, its financial commitments to the Partnership. (g) Such Partner acknowledges that all documents pertaining to the transaction have been made available to it and such Partner has been allowed an opportunity to ask questions and receive answers thereto and to verify and clarify any information contained in the documents. (h) Such Partner has relied solely upon the documents submitted to such Partner and independent investigations made by such Partner in making the decision to become a Partner, and acknowledges that no representations or agreements other than those set forth in this Agreement have been made in respect thereto. (i) Such Partner expressly acknowledges that: (i) such Partner's interests in the Partnership are speculative investments that involve a high degree of risk of loss of the entire investment of such Partner in the Partnership; (ii) no federal or state agency has reviewed or passed upon the adequacy or accuracy of the information set forth in the documents submitted to such Partner or made any finding or determination as to the fairness for investment, or any recommendation or endorsement of an investment in the Partnership; (iii) there are restrictions on the transferability of the interests in the Partnership; there will be no public market for the interests in the Partnership; and, accordingly, it may not be possible for such Partner to liquidate such Partner's investment in the Partnership; and (iv) any anticipated federal or state income tax benefits applicable to such Partner's interests in the Partnership may be lost through changes in, or adverse interpretations of, existing laws and regulations. (j) Such Partner has not offered or sold to any Person interests in such Partner that could or would have the effect of subjecting the Partnership to the registration requirements of the federal Securities Act of 1933, as amended, or any applicable state securities law, or exposing the Partnership, the other Partners or any Affiliates of the other Partners to any disclosure obligations or liabilities under any applicable federal or state securities law. (k) Such Partner is an "accredited investor", within the meaning of Rule 501 promulgated under the Securities Act of 1933. A Partner who receives the return in whole or in part of its contribution is liable to the Partnership only to the extent, if any, provided by the Act. ARTICLE VI CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP; CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS 6.1 PARTNERS' CAPITAL AND INTERESTS IN THE PARTNERSHIP . (a) INITIAL CAPITAL CONTRIBUTIONS. The Partners shall own Partnership Interests of the class and in the amounts set forth in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to accurately reflect exchanges, redemptions, Capital Contributions, the issuance of additional Partnership Interests or similar events having an effect on a Partner's Percentage Interest. Except as required by law or as otherwise provided in subsection (b) hereof and Section 7.4(e), no Partner shall be required or permitted to make any additional Capital Contributions or loans to the Partnership. (b) GENERAL. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds ("Additional Funds") for the acquisition of additional properties or for such other Partnership purposes as the General Partner may determine. Additional Funds may be raised by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this subsection (b). No Person shall have any preemptive, preferential or similar right or rights to subscribe for or acquire any Partnership Interest. (c) ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS. The General Partner may raise all or any portion of the Additional Funds by accepting additional Capital Contributions of cash. The General Partner may also accept additional Capital Contributions of real property or other non-cash assets. In connection with any such additional Capital Contributions (of cash or property), the General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership) additional Common Partnership Interests, or Preference Interests, all as shall be determined by the General Partner in its sole and absolute discretion subject to Ohio law, and as set forth by an other securities term sheet to this Agreement (an "Other Securities Term Sheet"), including without limitation: (i) the allocations of items of Profit, Loss, income, gain, loss, deduction and credit to such class or series of Preference Interests; (ii) the right of each such class or series of Preference Interests to share in distribution of Distributable Funds from Partnership Operations; (iii) the rights of each such class or series of Preference Interests upon dissolution and liquidation of the Partnership; and (iv) the right to vote. In the event that the Partnership issues additional Preference Interests pursuant to this subsection (c), the General Partner shall make such revisions to this Agreement (including but not limited to an Other Securities Term Sheet and the revisions described in Sections 9.3 and 6.8) as it determines are necessary to reflect the issuance of such additional Preference Interests. (d) PERCENTAGE INTEREST ADJUSTMENTS IN THE CASE OF CAPITAL CONTRIBUTIONS FOR PARTNERSHIP INTERESTS. Upon the acceptance of additional Capital Contributions in exchange for Partnership Interests, the Percentage Interest related thereto, and the Percentage Interest of each other Partner shall be equal to the amounts agreed to by the Partnership and the contributors. (e) NO PREEMPTIVE RIGHTS. Except to the extent expressly granted by the Partnership, pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) making additional Capital Contributions to the Partnership or (ii) issuance or sale of any Partnership Interests. (f) LIMITED LIABILITY. Anything in this Agreement to the contrary notwithstanding, the personal liability of any Partner arising out of or in any manner relating to the Partnership shall be limited to and shall not exceed that Partner's Capital Contribution made and required to be made hereunder. No Partner shall have any personal liability for liabilities or obligations of the Partnership, except to the extent of its Capital Contributions as aforesaid, and, except as aforesaid, no Partner shall be required to make any further or additional contributions to the capital of the Partnership or to lend or advance funds to the Partnership for any purpose. (g) NO BENEFIT TO CREDITORS. The obligation, if any, of a Partner to contribute to the capital of the Partnership is solely and exclusively for the benefit of the Partnership and the Partners, and is not intended to confer rights on any third party. Without limiting the generality of the foregoing, no creditor of the Partnership shall be deemed a third party beneficiary of any obligation of any Partner to contribute capital or make advances to the Partnership. 6.2 CAPITAL ACCOUNTS . (a) A separate Capital Account shall be maintained for each Partner. Each Partner's Capital Account shall be (a) CREDITED WITH (i) the amount of money contributed by such Partner, (ii) the Gross Asset Value of property contributed by such Partner (net of liabilities encumbering such contributed property that the Partnership is considered to assume or take subject to under Section 752 of the Code), and (iii) allocations to such Partner of Partnership income and gain (or items thereof) (including income and gain exempt from tax and income and gain described in Treasury Regulation Section 1.704-1(b)(2)(iv)(g), but excluding income and gain described in Treasury Regulation Section 1.704-1(b)(4)(i)); and (b) DEBITED WITH (i) the amount of money distributed to such Partner, (ii) the Gross Asset Value of property distributed to such Partner (net of liabilities encumbering such distributed property that such Partner is considered to assume or take subject to under Section 752 of the Code), (iii) allocations to such Partner of expenditures described in Section 705(a)(2)(B) of the Code (including expenditures deemed to be Section 705(a)(2)(B) expenditures under Treasury Regulation Section 1.704-1(b)(2)(iv)(i)), and (iv) allocations to such Partner of Partnership loss and deduction (or item thereof) (including loss and deduction described in Treasury Regulation Section 1.704-1(b)(2)(iv)(g), but excluding: (A) items described in (b)(iii) above, and (B) loss or deduction described in Treasury Regulations Sections 1.704-1(b)(4)(i) or (iii)). (b) The Capital Accounts of the Partners may, in the sole discretion of the General Partner, be adjusted to reflect a revaluation of Partnership property (including intangible assets such as goodwill) on the books of the Partnership if such adjustments are made principally for a substantial non-tax business purpose (i) in connection with a contribution of money or other property (other than a DE MINIMIS amount) to the Partnership by a new or existing Partner as consideration for an interest in the Partnership, or (ii) in connection with the liquidation of the Partnership or a distribution of money or other property (other than a DE MINIMIS amount) by the Partnership to a retiring or continuing Partner as consideration for an interest in the Partnership. Such Capital Account adjustments, if made under these circumstances, shall (i) be based on the fair market value of Partnership property (taking Section 7701(g) of the Code into account) on the date of adjustment, (ii) reflect the manner in which the unrealized income, gain, loss or deduction inherent in such property (that has not been reflected in the Capital Accounts previously) would be allocated among the Partners if there were a taxable disposition of such property for such fair market value on that date and (iii) be made in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g) for allocations to the Partners of depreciation, depletion, amortization, and gain or loss, as computed for book purposes, with respect to such property. (c) No Partner shall be entitled to a return of its Capital Contributions except by way of the distribution to it of assets upon the dissolution of the Partnership pursuant to the provisions of this Agreement. No interest shall be allocated to any Partner on the amount of its Capital Account. (d) Except as provided in this Agreement or any Other Securities Term Sheet, there shall be no priority of one or more of the Partners over other Partners as to a return of Capital Contributions, withdrawals or distributions of Distributable Funds from Partnership Operations. (e) A negative Capital Account of any Partner shall not be considered an asset of the Partnership at any time, and no Partner having a negative Capital Account shall be obliged to restore its negative Capital Account. 6.3 TIMING AND AMOUNT OF ALLOCATIONS OF PROFITS AND LOSSES . Profits and Losses of the Partnership shall be determined and allocated with respect to each Fiscal Year of the Partnership as of the end of each such year. Subject to the other provisions of this Article 6, an allocation to a Partner of a share of Profits or Losses shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Profits or Losses. 6.4 GENERAL ALLOCATIONS OF PROFITS AND LOSSES . (a) IN GENERAL. Except as otherwise provided in this Article 6, Profits and Losses allocable with respect to a class of Partnership Interests, shall be allocated to each of the Partners holding such class of Partnership Interests in accordance with their respective Percentage Interest of such class. (b) (i) PROFITS. Except as provided in Section 6.5, Profits for any Fiscal Year shall be allocated in the following manner and order of priority: (1) First, 100% to the holders of Common Partnership Interests in an amount equal to the excess, if any, of the cumulative Losses allocated to the holders of Common Partnership Interests pursuant to Section 6.4(b)(ii)(3) for all prior Fiscal Years minus the cumulative Profits allocated to such holders pursuant to this Section 6.4(b)(i)(1) for all prior Fiscal Years; (2) Second, 100% to the holders of Preference Partnership Interests in an amount equal to the excess, if any, of the cumulative Losses allocated to such holders pursuant to Section 6.4(b)(ii)(2) for all prior Fiscal Years minus the cumulative Profits allocated to such holders pursuant to this Section 6.4(b)(i)(2) for all prior Fiscal Years; (3) Third, 100% to the holders of Common Partnership Interests in an amount equal to the excess, if any, of the cumulative Losses allocated to each such holder pursuant to Section 6.4(b)(ii)(1) for all prior Fiscal Years minus the cumulative Profits allocated to each holder pursuant to this Section 6.2(b)(i)(3) for all prior Fiscal Years; and (4) 100% to the holders of Common Partnership Interests in accordance with their respective Percentage Interests in the Common Partnership Interests. To the extent the allocations of Profits set forth above in any paragraph of this Section 6.4(b)(i) are not sufficient to entirely satisfy the allocation set forth in such paragraph, such allocation shall be made in proration to the total amount that would have been allocated pursuant to such paragraph without regard to such shortfall. (ii) LOSSES. Except as provided in Section 6.5, Losses for any Fiscal Year shall be allocated in the following manner and order of priority: (1) First, 100% to the holders of Common Partnership Interests in accordance with their respective Percentage Interests, until the Adjusted Capital Account (ignoring for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute to the capital of the Partnership pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c)(2) and ignoring the Partner's Preference Interest) of each such Partner is zero; (2) Second, 100% to the holders of Preference Interests, pro rata, in proportion to their Adjusted Capital Account balances, until the Adjusted Capital Account of each such Partner is zero; provided, however that if there are multiple classes of Preference Interests with different liquidation preferences, then Losses allocated pursuant to this Section 6.4(b)(ii)(2) shall be allocated among the classes of such holders of Preference Interests in reverse order to the order of liquidation preference of such class (and within such class, pro rata, in proportion to the Adjusted Capital Account balances of such Partners). For purposes of this Section 6.4(b)(ii)(2), the Adjusted Capital Account shall be determined by ignoring any amounts a holder is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c)(2)); and (3) 100% to the holders of Common Partnership Interests in accordance with their respective Percentage Interests. (c) ALLOCATIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS. In the event that the Partnership issues additional Partnership Interests to the General Partner, another existing Partner or any Additional Partner, the General Partner shall make such revisions to this Section 6.4 or to other provisions of this Agreement as it determines are necessary to reflect the terms of the issuance of such additional Partnership Interests, including making preferential allocations to certain classes of Partnership Interests, subject to the terms of any Other Securities Term Sheet. 6.5 ADDITIONAL ALLOCATION PROVISIONS . Notwithstanding the foregoing provisions of this Article 6: (a) REGULATORY ALLOCATIONS. (i) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in Treasury Regulation Section 1.704-2(f), notwithstanding the provisions of Section 6.4, or any other provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain, as determined under Treasury Regulation Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be allocated shall be determined in accordance with Treasury Regulation Section 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.5(a)(i) is intended to qualify as a "minimum gain chargeback" within the meaning of Treasury Regulation Section 1.704-2(f) which shall be controlling in the event of a conflict between such Treasury Regulation and this Section 6.5(a)(i). (ii) PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4), and notwithstanding the provisions of Section 6.4, or any other provisions of this Article 6 (except Section 6.5(a)(i)), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3A(ii) is intended to qualify as a "chargeback of partner nonrecourse debt minimum gain" within the meaning of Treasury Regulation Section 1.704-2(i) which shall be controlling in the event of a conflict between such Treasury Regulation and this Section 6.5(a)(ii). (iii) NONRECOURSE DEDUCTIONS AND PARTNER NONRECOURSE DEDUCTIONS. Any Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Partners in accordance with their respective Percentage Interest in Common Partnership Interests. Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Partner(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Treasury Regulation Section 1.704-2(b)(4) and 1.704-2(i). (iv) QUALIFIED INCOME OFFSET. If any Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Treasury Regulation Section 1.704-1(b)(2)(ii)(d), to the Partner in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulations, the Adjusted Capital Account Deficit of the Partner as quickly as possible provided that an allocation pursuant to this Section 6.5(a)(iv) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.5(a)(iv) were not in the Agreement. It is intended that this Section 6.5(a)(iv) qualify and be construed as a "qualified income offset" within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Treasury Regulation and this Section 6.5(a)(iv). (v) GROSS INCOME ALLOCATION. In the event any Partner has a deficit Capital Account at the end of any Fiscal Year which is in excess of the sum of (a) the amount (if any) such Partner is obligated to restore to the Partnership and (b) the amount such Partner is deemed to be obligated to restore pursuant to Treasury Regulation Section 1.704-1(b)(ii)(c) or the penultimate sentences of Treasury Regulation Section 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 6.5(a)(v) shall be made if and only to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.5(a)(v) and Section 6.5(a)(iv) were not in the Agreement. (vi) LIMITATION ON ALLOCATION OF LOSSES. To the extent any allocation of Losses would cause or increase an Adjusted Capital Account Deficit as to any Partner, such allocation of Losses shall be reallocated among the other Partners in accordance with their respective Percentage Interests in Common Partnership Interests, subject to the limitations of this Section 6.5(a)(vi). (vii) SECTION 754 ADJUSTMENT. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of his interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in accordance with their interests in the Partnership in the event that Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution was made in the event that Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4) applies. (viii) CURATIVE ALLOCATION. The allocations set forth in Sections 6.5(a)(i), (ii), (iii), (iv), (v), (vi) and (vii) (the "Regulatory Allocations") are intended to comply with certain regulatory requirements, including the requirements of Treasury Regulation Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Sections 6.3 and 6.4, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Partner shall be equal to the net amount that would have been allocated to each such Partner if the Regulatory Allocations had not occurred. (b) ALLOCATION OF NONRECOURSE LIABILITIES. For purposes of determining a Partner's proportional share of the "excess nonrecourse liabilities" of the Partnership within the meaning of Treasury Regulation Section 1.752-3(a)(3), each Partner's interest in Partnership profits shall be such Partner's Percentage Interest. 6.6 TAX ALLOCATIONS . (a) IN GENERAL. Except as otherwise provided in this Section 6.6 for income tax purposes each item of income, gain, loss and deduction (collectively, "Tax Items") shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Sections 6.4 and 6.5. (b) ALLOCATIONS RESPECTING SECTION 704(C) REVALUATIONS. Notwithstanding Section 6.6(a), Tax Items with respect to Partnership property that is contributed to the Partnership by a Partner shall be shared among the Partners for income tax purposes pursuant to Treasury Regulations promulgated under Code Section 704(c), so as to take into account the variation, if any, between the basis of the property to the Partnership and its initial Gross Asset Value. The Partnership shall account for such variation under any method approved under Code Section 704(c) and the applicable regulations as selected by the General Partner. In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value (provided in Article 1), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Code Section 704(c) and the applicable regulations consistent with the requirements of Treasury Regulation Section 1.704-1(b)(iv)(g) using any method approved under Code Section 704(c) and the applicable regulations as selected by the General Partner. 6.7 DISTRIBUTIONS OF OPERATING AND CAPITAL CASH FLOW . (a) Distributions of Operating Cash Flow shall be made at least annually at such time or times as the General Partner shall determine. The Operating Cash Flow of the Partnership shall be distributed as follows: (i) first, to the extent applicable, to the Partners holding Preference Partnership Interests to the extent of the respective priorities (if any) established by the applicable Other Securities Term Sheet; and (ii) thereafter, to the Partners in accordance with their respective Percentage Interests. (b) Distributions of Capital Cash Flow shall be made at such time as the General Partner shall determine. Except as otherwise provided in Section 10.3 hereafter with respect to liquidation of the Partnership, the Capital Cash Flow of the Partnership shall be distributed as follows: (i) first, to pay such debts of the Partnership as the General Partner shall determine; (ii) second, to the extent applicable, to the Partners holding Preference Partnership Interests to the extent of the respective priorities (if any) established by the applicable Other Securities Term Sheet; and (iii) thereafter, to the Partners in accordance with their respective Percentage Interests. 6.8 REVISIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS . If the Partnership issues Partnership Interests to the General Partner or any Additional Partner pursuant to this Article VI hereof, the General Partner shall make the revisions to this Article VI and Exhibit A as it deems necessary to reflect the issuance of such additional Partnership Interests without the requirements for any other consents or approvals. ARTICLE VII BOOKS OF ACCOUNT, RECORDS AND REPORTS; TAX ITEMS 7.1 RECORDS AND ACCOUNTING . The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership's business, including, without limitation, all books and records necessary to provide to the Partners any information, lists and copies of documents required to be provided pursuant to Section 7.3. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device, provided that the records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles. 7.2 FISCAL YEAR . The fiscal year of the Partnership shall be the calendar year. 7.3 REPORTS . (a) ANNUAL REPORTS. As soon as practicable, but in no event later than the date on which EQR mails its annual report to its shareholders, the General Partner shall cause to be mailed to each Partner an annual report, as of the close of the most recently ended Fiscal Year, containing financial statements of the Partnership, or of EQR if such statements are prepared solely on a consolidated basis with the Partnership, for such Fiscal Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by EQR (b) QUARTERLY REPORTS. If and to the extent that the EQR mails quarterly reports to its shareholders, as soon as practicable, but in no event later than the date on such reports are mailed, EQR shall cause to be mailed to each Partner a report containing unaudited financial statements, as of the last day of such calendar quarter, of the Partnership, or of EQR if such statements are prepared solely on a consolidated basis with the Partnership, and such other information as may be required by applicable law or regulation, or as the General Partner determines to be appropriate. 7.4 TAX MATTERS . (a) PREPARATION OF TAX RETURNS. The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by Partners for federal and state income tax reporting purposes. (b) TAX ELECTIONS. Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code, including, without limitation, the election under Section 754 of the Code in accordance with applicable regulations thereunder. The General Partner shall have the right to seek to revoke any such election (including, without limitation, the election under Section 754 of the Code) upon the General Partner's determination in its sole and absolute discretion that such revocation is in the best interests of the Partners. (c) TAX MATTERS PARTNER. (i) GENERAL. The General Partner shall be the "tax matters partner" of the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address, taxpayer identification number and profit interest of each of the Partners and any Assignees; provided, however, that such information is provided to the Partnership by the Partners. (ii) POWERS. The tax matters partner is authorized, but not required: (1) to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a "tax audit" and such judicial proceedings being referred to as "judicial review"), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (i) who (within the time prescribed pursuant to the Code and Treasury Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a "notice partner" (as defined in Section 6231(a)(8) of the Code) or a Partner of a "notice group" (as defined in Section 6223(b)(2) of the Code); (2) if a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a "final adjustment") is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Partnership's principal place of business is located; (3) to intervene in any action brought by any other Partner for judicial review of a final adjustment; (4) to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request; (5) to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and (6) to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations. The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 4.4 shall be fully applicable to the tax matters partner in its capacity as such. (iii) REIMBURSEMENT. The tax matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees and expenses) shall be borne by the Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm and/or law firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable. (d) ORGANIZATIONAL EXPENSES. The Partnership shall deduct expenses, if any, incurred by it in organizing the Partnership as provided in Section 709 of the Code. (e) WITHHOLDING. Each Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Partner any amount of federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any amount paid on behalf of or with respect to a Partner shall constitute a loan by the Partnership to such Partner, which loan shall be repaid by such Partner within fifteen (15) days after notice from the General Partner that such payment must be made unless (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed to such Partner. Each Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Partner's Partnership Interest to secure such Partner's obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 7.4(e). If a Partner fails to pay any amounts owed to the Partnership pursuant to this Section 7.4(e) when due, the General Partner may, in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such defaulting Partner, and in such event shall be deemed to have loaned such amount to such defaulting Partner and shall succeed to all rights and remedies of the Partnership as against such defaulting Partner (including, without limitation, the right to receive distributions). Any amounts payable by a Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the Wall Street Journal, plus four (4) percentage points (but not higher than the maximum lawful rate under the laws of the State of Ohio) from the date such amount is due (I.E., fifteen (15) days after demand) until such amount is paid in full. Each Partner shall take such actions as the Partnership or the General Partner shall request to perfect or enforce the security interest created hereunder. ARTICLE VIII TRANSFERS AND WITHDRAWALS 8.1 TRANSFER . (a) The term "transfer," when used in this Article VIII with respect to a Partnership Interest, shall be deemed to refer to a transaction by which a Partner purports to assign its Partnership Interest to another Person, and includes a sale, assignment, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise. No part of the Partnership Interest of a Partner shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered, except as may be specifically provided for in this Agreement. (b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article VIII. Any transfer or purported transfer of a Partnership Interest of a Limited Partner not made in accordance with this Article VIII shall be null and void AB INITIO unless otherwise consented by the General Partner in its sole and absolute discretion. 8.2 TRANSFER OF PARTNERSHIP INTERESTS OF THE GENERAL PARTNER AND HOLDERS OF COMMON PARTNERSHIP INTERESTS . (a) Except as provided below, the General Partner shall not withdraw from the Partnership and shall not transfer all or any portion of its interest in the Partnership (whether by sale, statutory merger, consolidation, liquidation or otherwise) other than to one or more Persons wholly-owned, directly or indirectly, by ERP and/or EQR. Any prohibited transfer of the General Partner's Partnership Interest shall be void AB INITIO. Notwithstanding the foregoing, the General Partner shall be entitled to transfer its interest in the Partnership if such transfer would not violate the terms of an Other Securities Term Sheet. (b) Except as otherwise provided in this Article VIII, a Limited Partner shall not withdraw from or transfer all or any portion of its Partnership Interest in the Partnership (whether by sale, statutory merger, consolidations, liquidation or otherwise) without the prior written consent of the General Partner (which consent may be given or withheld in the General Partner's sole and absolute discretion). Any attempted transfer of a Partnership Interest of a Limited Partner contrary to this Section 8.2(b) shall be void AB INITIO. To the extent the prior sentence does not have the effect of preventing any such proposed transfer, the transfer shall vest in the General Partner the authority to dissolve the Partnership, in its discretion. 8.3 LIMITED PARTNERS' RIGHTS TO TRANSFER . (a) Any Limited Partner may, at any time without the consent of the General Partner, subject to the provisions of Section 8.6, (a) pledge (a "Pledge") all or any portion of its Partnership Interest to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or security for a bona fide loss or other extension of credit, or (b) transfer such pledged Partnership Interest to such lending institution in connection with the exercise of remedies under such loan or extension of credit. In addition, each Limited Partner or Assignee (resulting from a transfer made pursuant to the preceding sentence) shall have the right to transfer all or any portion of its Partnership Interest, subject to the provisions of Section 8.6 PROVIDED that any transfer of a Partnership Interest shall be made only to Qualified Transferees. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Partnership Interest and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Limited Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion. Notwithstanding the foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all ownership limitations contained in the REIT Charter, which may limit or restrict such transferee's ability to exercise any of its redemption rights or exchange rights set forth in any applicable Other Securities Term Sheet. Any transferee, whether or not admitted as a Substituted Partner, shall take their Partnership Interest subject to the obligations of the transferor hereunder. Unless admitted as a Substituted Partner, no transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have any rights hereunder, other than the rights of an Assignee as provided in Section 8.5. (b) If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner's estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of setting or managing the estate, and such power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership. (c) The General Partner may prohibit any transfer otherwise permitted under this Section 8.3 by a Limited Partner of his or her Partnership Interest if, in the opinion of legal counsel to the Partnership, such transfer would require the filing of a registration statement under the Securities Act by the Partnership or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or the Partnership Interest. (d) No transfer by a Limited Partner of his or her Partnership Interest (including any redemption or exchange rights set forth in an applicable Other Securities Term Sheet or any other acquisition of Common Partnership Interest or Preference Interest by the General Partner or the Partnership) may be made to any Person if (i) in the opinion of legal counsel for the Partnership, it could result in the Partnership being treated as an association taxable as a corporation or (ii) absent the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, such transfer could be treated as effectuated through an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning on Section 7704 of the Code. (e) No transfer of any Partnership Interest may be made to a lender to the Partnership or any Person who is related (within the meaning of Treasury Regulation Section 1.752-4(b)) to any lender to the Partnership whose loss constitutes a Nonrecourse Liability, without the consent of the General Partner, in its sole and absolute discretion; PROVIDED, that as a condition to such consent, the lender will be required to enter into an arrangement with the Partnership and the General Partner to redeem or exchange the Partnership Interest pursuant to the applicable Other Securities Term Sheet for any consideration in which a security interest is held simultaneously with the time at which such lender would be deemed to be a Partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code. (f) No Limited Partner may withdraw from the Partnership except as a result of transfer, redemption or exchange of all of its Partnership Interest pursuant hereto or pursuant to the applicable Other Securities Term Sheet, as the case may be. 8.4 SUBSTITUTED PARTNER . (a) Any Limited Partner shall have the right to substitute a transferee permitted by this Agreement as a Partner in his or her place. The General Partner shall have the right to consent to the admission of a permitted transferee of the interest of any other Partner, as a Substituted Partner pursuant to this Section 8.4, which consent may be given or withheld by the General Partner in its sole and absolute discretion. The General Partner's failure or refusal to permit a transferee of any such Partnership Interests to become a Substituted Partner shall not give rise to any cause of action against the Partnership or any Partner. (b) A transferee who has been admitted as a Substituted Partner in accordance with this Article VIII shall have all the rights and powers and be subject to all the restrictions and liabilities of a Partner under this Agreement. The admission of any transferee as a Substituted Partner shall be subject to the transferee executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement (including, without limitation, such other documents or instruments as may be required to effect the admission, each in form and substance satisfactory to the General Partner) and the acknowledgment by such transferee that each of the representations and warranties set forth in Section 5.5 are true and correct with respect to such transferee as of the date of the transfer of the Partnership Interest to such transferee and will continue to be true to the extent required by such representations and warranties. (c) Upon the admission of a Substituted Partner, the General Partner shall amend Exhibit A to reflect the name, address and Percentage Interest of such Substituted Partner and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Partner. 8.5 ASSIGNEE . If the General Partner, with respect to a transferee requiring the General Partner's consent, does not consent, in its sole and absolute discretion, to the admission of any permitted transferee under Section 8.3 as a Substituted Partner, as described in Section 8.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a partnership interest under the Act, including the right to reserve distributions from the Partnership and the share of Profits, Losses, gain and loss attributable to the Partnership Interest assigned to such transferee, the rights to transfer the Partnership Interest provided in this Article VIII, the right of exchange of such Partnership Interest for consideration as set forth in any applicable Other Securities Term Sheet, but shall not be deemed to be a Partner for any other purpose under this Agreement, and shall not be entitled to effect a consent with respect to such Partnership Interest on any matter presented to the Partners for approval (such consent remaining with the transferor Partner). In the event any such transferee desires to make a further assignment of any such Partnership Interest, such transferee shall be subject to all the provisions of this Article VIII to the same extent and in the same manner as any Partner desiring to make an assignment of Partnership Interest. Notwithstanding anything contained in this Agreement to the contrary, as a condition to becoming an Assignee, any prospective Assignee must first execute and deliver to the Partnership an acknowledgment that each of the representation and warranties set forth in Section 5.5 hereof are true and correct with respect to such prospective Assignee as of the date of the prospective assignment of the Partnership Interest to such prospective Assignee and will continue to be true to the extent required by such representations or warranties. 8.6 GENERAL PROVISIONS . (a) No Partner may withdraw from the Partnership other than as a result of (i) a transfer of all of such Partner's Partnership Interest as permitted in accordance with this Article VIII and the transferee(s) of such Partnership Interest being admitted to the Partnership as a Substituted Partner, (ii) pursuant to the redemption or exchange of all of such Partner's Partnership Interest pursuant to the applicable Other Securities Term Sheet. (b) Any Partner who shall transfer all of such Partner's Partnership Interest in a transfer permitted pursuant to this Article VIII where such transferee was admitted as a Substituted Partner or pursuant to the exercise of its rights of redemption or exchange of all of such Partner's Partnership Interest pursuant to the applicable Other Securities Term Sheet shall cease to be a Partner. (c) Transfers pursuant to this Article VIII may only be made effective on the last day of the month set forth on the written instrument of transfer, unless the General Partner otherwise agrees. (d) If any Partnership Interest is transferred, assigned or redeemed during any quarterly segment of the Partnership's Fiscal Year in compliance with the provisions of this Article VIII or transferred or redeemed pursuant to the applicable Other Securities Term Sheet, on any day other than the first day of a Fiscal Year, then Profits, Losses, each item thereof and all other items attributable to such Partnership Interest for such Fiscal Year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying increases during the fiscal year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Except as otherwise required by Section 706(d) of the Code or as otherwise specified in this Agreement or as otherwise determined by the General Partner (to the extent consistent with Section 706(d) of the Code, solely for purposes of making such allocations, each of such items for the calendar month in which the transfer, assignment or redemption occurs shall be allocated among all the Partners and Assignees in a manner determined by the General Partner in its sole discretion. (e) In addition to any other restrictions on transfer herein contained, including without limitation the provisions of this Article VIII, in no event may any transfer or assignment of a Partnership Interest by any Partner (including by way of a Partnership Interest redemption or exchange pursuant to an applicable Other Securities Term Sheet, or any other acquisition of Common Partnership Interests or Partnership Interests by the Partnership, or the General Partner) be made (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if in the opinion of legal counsel to the Partnership such transfer would cause a termination of the Partnership for federal or state income tax purposes (except as a result of the redemption or exchange of Partnership Interests, respectively, of all Partnership Interests held by all Limited Partners); (v) if such transfer would cause the Partnership to be classified as a "publicly traded partnership" within the meaning of Section 7704 of the Code, or as an association taxable as a corporation for federal or state income tax purposes; (vi) if such transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title 1 of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified person" (as defined in Section 4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2101; (viii) if such transfer requires the registration of such Partnership Interest or requires the registration of the exchange of such Partnership Interests for any capital stock pursuant to any applicable federal or state securities laws; (ix) if such transfer is effectuated through an "established securities market" or a "secondary market" (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code or such transfer causes the Partnership to become a "publicly traded partnership," as such term is defined in Sections 469(k)(2) or 7704 of the Code; (x) if such transfer subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment Advisors Act of 1946 or the Employee Retirement Income Security Act of 1974, each as amended; (xi) if the transferee or assignee of such Partnership Interest is unable to make the representations set forth in Section 5.5 or such transfer could otherwise adversely affect the ability of EQR in its capacity as the sole General Partner of ERP, to remain qualified as a REIT; or (xii) if, except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, such transfer would subject EQR to any additional taxes under Section 857 or Section 4981 of the Code. (f) The General Partner shall monitor the transfers of interests in the Partnership (including any acquisition of Partnership Interests by the Partnership, or the General Partner) to determine (i) if such interests are being traded on an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code and (ii) whether such transfers of interests would result in the Partnership being unable to qualify for at least one of the "safe harbors" set forth in Treasury Regulation Section 1.7704-1 (or such other applicable guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as "readily tradable on a secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code) (the "Safe Harbor"). The General Partner shall have authority (but shall not be required to) to take any steps it determines are necessary or appropriate in its sole and absolute discretion to prevent any trading of interests which could cause the Partnership to become a "publicly traded partnership," or any recognition by the Partnership of such transfers, or to insure that at least one of the Safe Harbors is met. ARTICLE IX SUCCESSSOR GENERAL PARTNER AND ADMISSION OF ADDITIONAL PARTNERS 9.1 ADMISSION OF SUCCESSOR GENERAL PARTNER . A successor to all of the General Partner's Partnership Interest pursuant to Section 9.2 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer. Any such transferee shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the case of such admission on any day other than the first day of a Fiscal Year, all items attributable to the General Partner's Partnership Interest for such Fiscal Year shall be allocated between the transferring General Partner and such successor as provided in Article VIII. 9.2 ADMISSION OF ADDITIONAL PARTNERS . (a) A Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.6 and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person's admission as an Additional Partner. (b) Notwithstanding anything to the contrary in this Section 9.2, no Person shall be admitted as an Additional Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner's sole and absolute discretion. The admission of any Person as an Additional Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the receipt of the Capital Contribution in respect of such Partner, the documents set forth in this Section 9.2(a) and the consent of the General Partner to such admission. If any Additional Partner is admitted to the Partnership on any day other than the first day of a Fiscal Year, then Profits, Losses, each item thereof and all other items allocable among Partners and Assignees for such Fiscal Year shall be allocated among such Partner and all other Partners and Assignees by taking into account their varying interests during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of an Additional Partner occurs shall be allocated among all the Partners and Assignees, including such Additional Partner, in a manner determined by the General Partner in its sole discretion. 9.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF FORMATION . For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.6. ARTICLE X DISSOLUTION AND TERMINATION 10.1 DISSOLUTION . (a) The Partnership shall not be dissolved by the admission of Substituted Partners or Additional Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of a General Partner, the remaining General Partners and any successor General Partner shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following ("Liquidating Events"): (i) the expiration of its term as provided in Section 2.5 hereof; (ii) an event of withdrawal of a General Partner, as defined in the Act (other than an event of bankruptcy), unless (1) there is at least one other General Partner, in which case the remaining General Partners shall continue the business of the Partnership, or (2) within ninety (90) days after the withdrawal a "majority in interest" (as defined below) of the remaining Partners consent in writing to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner; (iii) an election to dissolve the Partnership made by the General Partner, in its sole and absolute discretion; (iv) entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act; (v) the sale of all or substantially all of the assets and properties of the Partnership for cash or for marketable securities; or (vi) a final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the remaining General Partner(s) is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the remaining General Partner(s), in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to or at the time of the entry of such order or judgment a "majority in interest" (as defined below) of the remaining Partners consent in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner. As used herein, a "majority in interest" shall refer to Partners (excluding the General Partners) who hold more than fifty percent (50%) of the outstanding Percentage Interests not held by the General Partners. 10.2 EFFECT OF FILING OF DISSOLVING STATEMENT . Upon the filing by the Ohio Secretary of State of a statement of intent to dissolve, the Partnership shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until a certificate of dissolution has been issued by the Ohio Secretary of State or until a decree dissolving the Partnership has been entered by a court of competent jurisdiction. 10.3 WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS . (a) Upon dissolution, an accounting shall be made by the Partnership's accountants of the accounts of the Partnership and of the Partnership's assets, liabilities and operations from the date of the last previous accounting until the date of dissolution. The General Partner shall immediately proceed to wind up the affairs of the Partnership. (b) If the Partnership is dissolved and its affairs are to be wound up, the General Partner (or if there be none, a liquidating trustee selected by a Majority-in-Interest of the Partners) shall wind up the affairs and liquidate the assets of the Partnership, and the proceeds from the liquidation of the Partnership assets shall be applied and distributed in the following order of priority: (i) To the creditors of the Partnership (other than Partners and creditors whose obligations will be assumed or otherwise transferred on the sale or distribution of Partnership assets) and to the payment of liquidation expenses; when there is a contingent debt, obligation or liability of the Partnership, a reserve (in such amount as the General Partner or, if no General Partner, the liquidating trustee, in its sole discretion, shall determine) shall be set up to meet such contingency, and if and when such contingency shall cease to exist, the moneys, if any, then contained in the reserve shall be distributed as provided in this Section 10.3; (ii) Then to the payment of any funds advanced to the Partnership by any Partner or Partners and any other bona fide loans made by any Partner or Partners to the Partnership and evidenced by a note or notes duly executed by the Partnership; and (iii) Then to the Partners in accordance with their respective Capital Account balances after giving effect to all contributions, distributions and allocations for all periods. In connection therewith, income, gain and loss of the Partnership (and to the extent necessary to achieve the purposes hereof, items of gross income and deduction) with respect to the sale or other disposition of all or substantially all of the Partnership's assets and/or the Partnership's operations in connection therewith (whether or not attributable to the taxable year in which the distribution pursuant to this Section 10.3(b)(iii) is to be made or a preceding taxable year) shall be allocated among the Partners so that each Partner's Capital Account shall equal, after taking into account the prior balance (positive or negative) in such Partner's Capital Account and the effect of such allocation, the amount that such Partner would be entitled to receive if the Partnership were to make a distribution to the Partners pursuant to the provisions of Section 6.7(b) hereof in an amount equal to the remaining liquidation proceeds to be distributed under this Section 10.3(b)(iii). (c) Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any Partner has a deficit Capital Account (after giving effect to all contributions, distributions, allocations and other Capital Accounts adjustments for all taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any Capital Contribution, and the negative balance of such Partner's Capital Contribution, and the negative balance of such Partner's Capital Account shall not be considered a debt owed by such Partner to the Partnership or to any other Person for any purpose whatsoever. (d) Upon completion of the winding up, liquidation and distribution of the assets, the Partnership shall be deemed terminated. (e) The General Partner shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Partnership and the final distribution of its assets. 10.4 CERTIFICATE OF DISSOLUTION . When all debts, liabilities and obligations have been paid and discharged or adequate provisions have been made therefor and all of the remaining property and assets have been distributed to the Partners, certificates of dissolution shall be executed in duplicate and verified by the person signing the articles, which articles shall set forth the information required by the Act. Duplicate originals of such articles of dissolution shall be delivered to the Ohio Secretary of State. 10.5 EFFECT OF DISSOLUTION . Upon the issuance of the certificate of dissolution, the existence of the Partnership shall cease, except for the purpose of suits, other proceedings and appropriate action as provided in the Act. The General Partner shall have authority to distribute any Partnership property discovered after dissolution, convey real estate and take such other action as may be necessary on behalf of and in the name of the Partnership. 10.6 RETURN OF CONTRIBUTION NONRECOURSE TO OTHER PARTNERS . Except as provided by law or as expressly provided in this Agreement, upon dissolution, each Partner shall look solely to the assets of the Partnership for the return of its Capital Contribution. If the Partnership property remaining after the payment or discharge of the debts and liabilities of the Partnership is insufficient to return the cash contribution of one or more Partners, such Partner or Partners shall have no recourse against any other Partner. ARTICLE XI MISCELLANEOUS PROVISIONS 11.1 NOTICES . Any notice, request, demand, consent, approval and other communications under this Agreement shall be in writing, and shall be deemed duly given or made at the time and on the date when personally delivered as shown on a receipt therefor (which shall include delivery by a nationally recognized overnight delivery service), or when sent by facsimile, or three (3) business days after being mailed by prepaid registered or certified mail, return receipt requested, to the address for each party set forth at the conclusion of this Agreement. Any Partner, by written notice to the other in the manner herein provided, may designate an address different from that set forth at the conclusion of this Agreement. 11.2 BOOKS OF ACCOUNT AND RECORDS . Proper and complete records and books of account shall be kept or shall be caused to be kept by the General Partner or such representatives as it may appoint in which shall be entered fully and accurately all transactions and other matters relating to the Partnership's business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Partnership. The books and records shall at all times be maintained at the principal executive office of the Partnership and shall be open to the reasonable inspection and examination of the Partners or their duly authorized representatives, at the sole cost and expense of such Partner during reasonable business hours. 11.3 APPLICATION OF OHIO LAW . This Agreement, and the application of interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Ohio, and specifically the Act. 11.4 WAIVER OF ACTION FOR PARTITION . Each Partner irrevocably waives during the term of the Partnership any right that it may have to maintain any action for partition with respect to the property of the Partnership. 11.5 AMENDMENTS . (a) GENERAL. Amendments to this Agreement may be proposed by the General Partner or by any Partner holding twenty-five percent (25%) or more of any class or series of Partnership Interests. Following such proposal (except an amendment pursuant to Section 11.5(b)), the General Partner shall submit any proposed amendment to the Partners. The General Partner shall seek the written vote of the Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that the General Partner may deem appropriate. For purposes of obtaining a written vote, the General Partner may require a response within a reasonable specified time, but not less than fifteen (15) days after notice is given, and failure to respond in such time period shall constitute a vote which is consistent with the General Partner's recommendation with respect to the proposal. Except as provided in Section 11.5(b) or 11.5.(d), a proposed amendment shall be adopted and be effective as an amendment hereto if (i) it is approved by the General Partner and (ii) it receives the consent of Partners holding a majority of the Common Partnership Interests and a Majority of each class of Preference Interests (including Partnership Interests held by the General Partner). (b) AMENDMENTS NOT REQUIRING APPROVAL OF PARTNERS OTHER THAN THE GENERAL PARTNER. Notwithstanding Section 11.5(a) or 11.5.(b), the General Partner shall have the power, without the consent of the Partners, to amend this Agreement as may be required to facilitate or implement any of the following purposes: (i) to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Partners; (ii) to reflect the admission, substitution, termination, or withdrawal of Partners in accordance with this Agreement (which may be effected through the replacement of Exhibit A with an amended Exhibit A); (iii) to set forth the designations, rights, powers, duties, and preferences of the holders of any additional Partnership Interests issued pursuant to Article VI; (iv) to reflect a change that does not adversely affect the Partners in any material respect, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with law or with other provisions of this Agreement, or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the provisions of this Agreement; and (v) to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a federal, state or local agency or contained in federal, state or local law. The General Partner shall notify the Limited Partners when any action under this Section 11.5(b) is taken in the next regular communication to the Partners. (c) OTHER AMENDMENTS REQUIRING CERTAIN PARTNER'S APPROVAL. Notwithstanding anything in this Section 11.5 to the contrary, this Agreement shall not be amended with respect to any Partner adversely affected without the consent of such Partner adversely affected if such amendment would (i) modify the limited liability of a Limited Partner, (ii) amend Article VI (except as permitted pursuant to Sections 11.5(b)(iii) and 6.8, (iii) amend the redemption or exchange rights under an Other Securities Term Sheet, or (iv) amend this Section 11.5(c). This Section 11.5(c) does not require unanimous consent of all classes of Partners adversely affected unless the amendment is to be effective against all Partners of such classes adversely affected. 11.6 EXECUTION OF ADDITIONAL INSTRUMENTS . Each Partner hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney and other instruments necessary to comply with any laws, rules or regulations. 11.7 HEADINGS . The headings in this Agreement are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision hereof. 11.8 WAIVERS . The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation. 11.9 RIGHTS AND REMEDIES CUMULATIVE . The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. 11.10 SEVERABILITY . If any provision of this Agreement or the application thereof to any Person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law. 11.11 HEIRS, SUCCESSORS AND ASSIGNS . Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal representatives, successors and assigns. 11.12 CREDITORS . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Partnership or of any Partner. 11.13 COUNTERPARTS . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 11.14 INTEGRATED AGREEMENT . This Agreement is intended to be the sole "partnership agreement" (within the meaning of Section 1782.01 of the Act) of the Partnership. No document, instrument or writing (other than an amendment to this Agreement that complies with Section 11.5 of this Agreement) is intended to be or shall be accorded the status of a "partnership agreement" within the meaning of the Act. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] CERTIFICATE The undersigned hereby agree, acknowledge and certify that the foregoing Agreement constitutes the Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P. adopted by the Partners of the Partnership in order to be effective as of October 1, 1999. ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership By: Equity Residential Properties Trust, a Maryland real estate investment trust, its general partner By: /s/ Yasmina Rahal ------------------------------------------------ Name: Yasmina Rahal, Esq. Its: Vice-President Notice for Address Purposes: c/o Equity Residential Properties Trust Two North Riverside Plaza, Suite 400 Chicago, Illinois 60606 Attention: General Counsel LEXFORD PARTNERS, L.L.C., an Ohio limited liability company By: ERP Operating Limited Partnership, an Illinois limited partnership By: Equity Residential Properties Trust, a Maryland real estate investment trust, its general partner By: /s/ Yasmina Rahal ------------------------------------------------ Name: Yasmina Rahal, Esq. Its: Vice-President Notice for Address Purposes: c/o Equity Residential Properties Trust Two North Riverside Plaza, Suite 400 Chicago, Illinois 60606 Attention: General Counsel EXHIBIT A PARTNERS AND PERCENTAGE INTERESTS
PARTNER PERCENTAGE INTEREST ------- ------------------- ERP OPERATING LIMITED PARTNERSHIP, AN ILLINOIS LIMITED PARTNERSHIP 99.0% LEXFORD PARTNERS, L.L.C., AN OHIO LIMITED LIABILITY COMPANY 1.0%
EX-12 5 EXHIBIT 12 Exhibit 12 EQUITY RESIDENTIAL PROPERTIES TRUST CONSOLIDATED HISTORICAL EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS RATIO
HISTORICAL ---------------------------------------------------------------------------- 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 ---------------------------------------------------------------------------- (Amounts in thousands) REVENUES Rental income $ 1,711,738 $ 1,293,560 $ 707,733 $ 454,412 $ 373,919 Fee income - outside managed 4,970 5,622 5,697 6,749 7,030 Interest income - investment in mortgage notes 12,559 18,564 20,366 12,819 4,862 Interest and other income 23,851 19,250 13,282 4,405 4,573 ----------- ----------- ----------- ----------- ----------- Total revenues 1,753,118 1,336,996 747,078 478,385 390,384 ----------- ----------- ----------- ----------- ----------- EXPENSES Property and maintenance 414,026 326,733 176,075 127,172 112,186 Real estate taxes and insurance 171,289 126,009 69,520 44,128 37,002 Property management 61,626 53,101 26,793 17,512 15,213 Fee and asset management 3,587 4,279 3,364 3,837 3,887 Depreciation 408,688 301,869 156,644 93,253 72,410 Interest: Expense incurred 337,189 246,585 121,324 81,351 78,375 Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444 General and administrative 22,296 20,631 14,821 9,857 8,129 ----------- ----------- ----------- ----------- ----------- Total expenses 1,422,785 1,081,964 571,064 381,352 330,646 ----------- ----------- ----------- ----------- ----------- Income before extraordinary items $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738 =========== =========== =========== =========== =========== Combined Fixed Charges and Preferred Distributions: Interest and other financing costs $ 337,189 $ 246,585 $ 121,324 $ 81,351 $ 78,375 Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444 Preferred distributions 113,196 92,917 59,012 29,015 10,109 ----------- ----------- ----------- ----------- ----------- TOTAL COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 454,469 $ 342,259 $ 182,859 $ 114,608 $ 91,928 =========== =========== =========== =========== =========== EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS $ 671,606 $ 504,374 $ 299,861 $ 182,626 $ 141,557 =========== =========== =========== =========== =========== FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS * $ 1,074,072 $ 801,065 $ 453,387 $ 273,800 $ 212,138 =========== =========== =========== =========== =========== RATIO OF EARNINGS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 1.48 1.47 1.64 1.59 1.54 =========== =========== =========== =========== =========== RATIO OF FUNDS FROM OPERATIONS BEFORE COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS 2.36 2.34 2.48 2.39 2.31 =========== =========== =========== =========== =========== * Includes unconsolidated depreciation from Joint Ventures and limited partnerships $ 1,009 $ 183 $ -- $ -- $ -- =========== =========== =========== =========== =========== * Excludes non-real estate depreciation $ (7,231) $ (5,361) $ (3,118) $ (2,079) $ (1,829) =========== =========== =========== =========== ===========
EX-21 6 EXHIBIT 21 Exhibit 21 ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 1 EQUITY RESIDENTIAL PROPERTIES TRUST (PRE WRP MERGER) 2 EQUITY RESIDENTIAL PROPERTIES TRUST (POST WRP MERGER) 3 ERP OPERATING LIMITED PARTNERSHIP 4 EVANS WITHYCOMBE RESIDENTIAL LIMITED PARTNERSHIP 5 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP 6 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P. 7 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP II 8 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P. II 9 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP III 10 EVANS WITHYCOMBE MANAGEMENT INC. 11 ARTERY NORTHAMPTON LIMITED PARTNERSHIP 12 BUENA VISTA PLACE ASSOCIATES 13 Capital Realty Investors Tax Exempt Fund, L.P. 14 CAPREIT Arbor Glen L.P. 15 CAPREIT ATRIUM, L.P. 16 CAPREIT BOTANY ARMS, L.P. 17 CAPREIT BRECKENRIDGE 18 CAPREIT BURWICK FARMS, L.P. 19 CAPREIT Cedars L.P. 20 CAPREIT CHIMNEYS, L.P. 21 CAPREIT CLARION, L.P. 22 CAPREIT CONCORDE BRIDGE, L.P. 23 CAPREIT CREEKWOOD, L.P. 24 CAPREIT EASTLAND ON THE LAKE, L.P. 25 CAPREIT Farmington Gates L.P. 26 CAPREIT GARDEN LAKE, L.P. 27 CAPREIT GLENEAGLE, L.P. 28 CAPREIT GREYEAGLE, L.P. 29 CAPREIT HAMPTON ARMS, L.P. 30 CAPREIT HIDDEN OAKS, L.P. 31 CAPREIT HIGHLAND GROVE, L.P. 32 CAPREIT MARINER'S WHARF, L.P. 33 CAPREIT NORTHLAKE, L.P. 34 CAPREIT Ridgeway Commons L.P. 35 CAPREIT River Oak L.P. 36 CAPREIT SILVER SPRINGS, L.P. 37 CAPREIT SYCAMORE RIDGE, L.P. 38 CAPREIT TARMARIND AT STONEBRIDGE, L.P. 39 CAPREIT TIVOLI LAKES CLUB, L.P. 40 CAPREIT Westwood Pines L.P. 41 CAPREIT Woodcrest Villa L.P. 42 CAPREIT WOODLAND MEADOWS, L.P. 43 CARROLLWOOD LP 44 CEDAR CREST GENERAL PARTNERSHIP 45 COUNTRY CLUB ASSOCIATES LIMITED PARTNERSHIP 46 COUNTRY RIDGE GENERAL PARTNERSHIP 47 CRICO of Trailway Pond II, L.P. 48 CRICO of White Bear Woods I, L.P. 49 CRICO of Ethan's I, L.P. 50 CRICO of Ethan's II, L.P. ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 51 CRICO of Fountain Place, L.P. 52 CRICO of James Street Crossing, L.P. 53 CRICO of Ocean Walk, L.P. 54 CRICO of Regency Woods, L.P. 55 CRICO of Trailway Pond I, L.P. 56 CRICO of Valley Creek I, L.P. 57 CRICO of Valley Creek II, L.P. 58 CRICO of Woodlane Place, L.P. 59 CRICO Royal Oaks, L.P. 60 E-G-ONE ASSOCIATES 61 E-G-TWO ASSOCIATES 62 E-LODGE ASSOCIATES LIMITED PARTNERSHIP 63 EQR-740 RIVER DRIVE, LLC 64 EQR-ALDERWOOD LP 65 EQR-ARBORETUM, LLC 66 EQR-ARBORS FINANCING LIMITED PARTNERSHIP 67 EQR-ARIZONA, L.L.C. 68 EQR-ARTBHOLDER, L.L.C. 69 EQR-ARTCAPLOAN, L.L.C. 70 EQR-BELLEVUE MEADOW GP LP 71 EQR-BELLEVUE MEADOW LP 72 EQR-BOND PARTNERSHIP 73 EQR-BRAMBLEWOOD GP LP 74 EQR-BRAMBLEWOOD LP 75 EQR-BRETON HAMMOCKS FINANCING LIMITED PARTNERSHIP 76 EQR-BRIARWOOD GP LP 77 EQR-BRIARWOOD LP 78 EQR-BROADWAY LP 79 EQR-BS FINANCING LIMITED PARTNERSHIP 80 EQR-CALIFORNIA, L.L.C 81 EQR-CAMELLERO FINANCING LIMITED PARTNERSHIP 82 EQR-CANTER CHASE GENERAL PARTNERSHIP 83 EQR-CEDAR POINTE GP LP 84 EQR-CEDAR POINTE LP 85 EQR-CEDAR RIDGE GP, LLC 86 EQR-CEDAR RIDGE LP 87 EQR-CHARDONNAY PARK, L.L.C. 88 EQR-CHELSEA SQUARE GP LP 89 EQR-CHELSEA SQUARE LP 90 EQR-COACHMAN TRIALS, LLC 91 EQR-CONNOR, LLC 92 EQR-CONTINENTAL VILLAS FINANCING LIMITED PARTNERSHIP 93 EQR-CREEKSIDE GP LP 94 EQR-CREEKSIDE LP 95 EQR-CREEKSIDE OAKS GENERAL PARTNERSHIP 96 EQR-DARTMOUTH WOODS GENERAL PARTNERSHIP 97 EQR-DORAL FINANCING LIMITED PARTNERSHIP 98 EQR-EMERALD PLACE FINANCING LIMITED PARTNERSHIP 99 EQR-EOI FINANCING LIMITED PARTNERSHIP 100 EQR-ESSEX PLACE FINANCING LIMITED PARTNERSHIP ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 101 EQR-FAIRFIELD, LLC 102 EQR-FERNBROOK, LLC 103 EQR-FIELDERS CROSSING GP, LLC 104 EQR-FIELDERS CROSSING LP 105 EQR-FLATLANDS, LLC 106 EQR-GOVERNOR'S PLACE FINANCING LIMITED PARTNERSHIP 107 EQR-GRANDVIEW I GP LP 108 EQR-GRANDVIEW I LP 109 EQR-GRANDVIEW II GP LP 110 EQR-GRANDVIEW II LP 111 EQR-GREENHAVEN GP LP 112 EQR-GREENHAVEN LP 113 EQR-HIGHLINE OAKS, L.L.C. 114 EQR-IRONWOOD, L.L.C. 115 EQR-KEYSTONE FINANCING GENERAL PARTNERSHIP 116 EQR-LAKESHORE AT PRESTON LP 117 EQR-LAKEVILLE RESORT GENERAL PARTNERSHIP 118 EQR-LAKEWOOD GREENS GP, LLC 119 EQR-LAKEWOOD GREENS LP 120 EQR-LEXINGTON FARM, LLC 121 EQR-LINCOLN GREEN I AND II GP LIMITED PARTNERSHIP 122 EQR-LINCOLN VILLAGE (CA) I LP 123 EQR-LINCOLN VILLAGE (CA) II LP 124 EQR-LODGE (OK) GP LIMITED PARTNERSHIP 125 EQR-MARKS A, L.L.C. 126 EQR-MARKS B, L.L.C. 127 EQR-MARTINS LANDING, LLC 128 EQR-MET CA FINANCING LIMITED PARTNERSHIP 129 EQR-MET FINANCING LIMITED PARTNERSHIP 130 EQR-MISSOURI, L.L.C. 131 EQR-MOUNTAIN SHADOWS GP LP 132 EQR-MOUNTAIN SHADOWS LP 133 EQR-NORTH CREEK, LLC 134 EQR-NORTH HILL, L.L.C. 135 EQR-OLDE REDMOND GP LP 136 EQR-OLDE REDMOND LP 137 EQR-OLDE REDMOND LP LP 138 EQR-OREGON, L.L.C. 139 EQR-OVERLOOK MANOR II, LLC 140 EQR-PARK PLACE I GENERAL PARTNERSHIP 141 EQR-PARK PLACE II GENERAL PARTNERSHIP 142 EQR-PARKCREST, LLC 143 EQR-PARKSIDE LP 144 EQR-PINE MEADOWS GARDEN GENERAL PARTNERSHIP 145 EQR-PLANTATION FINANCING LIMITED PARTNERSHIP 146 EQR-PLANTATION, L.L.C. 147 EQR-PLEASANT RIDGE LP 148 EQR-PORTLAND CENTER, LLC 149 EQR-PRESTON BEND, G.P. 150 EQR-RESERVE SQUARE LIMITED PARTNERSHIP ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 151 EQR-RIDGEMONT/MOUNTAIN BROOK, L.L.C. 152 EQR-RIVER PARK LP 153 EQR-SANDSTONE LP 154 EQR-SKYLARK, LLC 155 EQR-SMOKETREE, LLC 156 EQR-SONTERRA AT FOOTHILLS RANCH LP 157 EQR-SOUTHWOOD GP LP 158 EQR-SOUTHWOOD LP 159 EQR-SOUTHWOOD LP I LP 160 EQR-SOUTHWOOD LP II LP 161 EQR-SPINNAKER COVE, L.L.C. 162 EQR-SUMMER CREEK, LLC 163 EQR-SUMMERWOOD GP LP 164 EQR-SUMMERWOOD LP 165 EQR-SURREY DOWNS GP LP 166 EQR-SURREY DOWNS LP 167 EQR-SURREY DOWNS LP LP 168 EQR-SWN LINE FINANCING LIMITED PARTNERSHIP 169 EQR-TANASBOURNE TERRACE FINANCING LIMITED PARTNERSHIP 170 EQR-TENNESSEE LP 171 EQR-THE LAKES AT VININGS, LLC 172 EQR-TIMBERWOOD GP LP 173 EQR-TIMBERWOOD LP 174 EQR-TOWNHOMES OF MEADOWBROOK, LLC 175 EQR-TRAILS AT DOMINION GENERAL PARTNERSHIP 176 EQR-VALLEY PARK SOUTH FINANCING LIMITED PARTNERSHIP 177 EQR-VILLA SERENAS GENERAL PARTNERSHIP 178 EQR-VILLAGE OAKS GENERAL PARTNERSHIP 179 EQR-VILLAS OF JOSEY RANCH GP, LLC 180 EQR-VILLAS OF JOSEY RANCH LP 181 EQR-VININGS AT ASHLEY LAKE, L.L.C. 182 EQR-VIRGINIA, L.L.C. 183 EQR-WARWICK, L.L.C. 184 EQR-WASHINGTON, L.L.C. 185 EQR-WATERFALL, L.L.C. 186 EQR-WATSON G.P. 187 EQR-WELLINGTON, L.L.C. 188 EQR-WEST COAST PORTFOLIO GP, LLC 189 EQR-WIMBLEDON OAKS LP 190 EQR-WOODLAKE GP LP 191 EQR-WOODLAKE LP 192 EQR-WOODLEAF GP LP 193 EQR-WOODLEAF LP 194 EQR-WOODRIDGE I LP 195 EQR-WOODRIDGE II LP 196 EQR-WOODRIDGE III LP 197 EQR-WOODRIDGE, LLC 198 EQR-WYNDRIDGE II, L.L.C. 199 EQR-WYNDRIDGE III, L.L.C. 200 EQR-YORKTOWNE FINANCING LIMITED PARTNERSHIP ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 201 EQUITY-GREEN I VENTURE LIMITED PARTNERSHIP 202 EQUITY-GREEN II VENTURE LIMITED PARTNERSHIP 203 EQUITY-LODGE VENTURE LTD. 204 EQUITY-STONEBROOK VENTURE LTD. 205 ERP-SOUTHEAST PROPERTIES, LLC 206 E-STONEBROOK ASSOCIATES 207 EVANS WITHYCOMBE FINANCE, L.P. 208 EW CHANDLER, L.P. 209 FOREST PLACE ASSOCIATES 210 FOURTH TOWNE CENTRE LIMITED PARTNERSHIP 211 FPAII, L.P. 212 Geary Courtyard Associates 213 GEORGIAN WOODS ANNEX ASSOCIATES 214 GLENLAKE CLUB L.P. 215 GREENWICH WOODS LIMITED PARTNERSHIP 216 HAMMOCKS AT LONG POINT, LLC 217 HORIZON PLACE ASSOCIATES 218 HUNTERS'S GLEN GENERAL PARTNERSHIP 219 HUNTINGTON, LLC 220 LANDON LEGACY PARTNERS LIMITED 221 LANDON PRAIRIE CREEK PARTNERS LIMITED 222 LENOX PLACE LP 223 MAGNOLIA VILLA, LLC 224 MCCASLIN HIDDEN LAKES, LTD. 225 MCCASLIN RIVERHILL, LTD. 226 MCKINLEY HILLS PARTNERS-85, 227 MERRY LAND DOWNREIT I LP 228 MERRY LAND, LLC 229 ML NORTH CAROLINA APARTMENTS LP 230 ML TENNESSEE APARTMENTS LP 231 ML TEXAS APARTMENTS LP 232 NORTHRIDGE LAKES LP 233 NRL ASSOCIATES LP 234 OAKS AT BAYMEADOWS ASSOCIATES 235 OAKS AT REGENCY ASSOCIATES 236 ROLIDO PARQUE GP 237 ROSEHILL POINTE GENERAL PARTNERSHIP 238 SARASOTA BENEVA PLACE ASSOICATES, LTD. 239 SEAGULL DRIVE JOINT VENTURE 240 SECOND COUNRTY CLUB ASSOCIATES LIMITED PARTNERSHIP 241 SECOND GEORGIAN WOODS LIMITED PARTNERSHIP 242 SONGBIRD GENERAL PARTNERSHIP 243 SUMMIT PLACE, LLC 244 SUNNY OAK VILLAGE GENERAL PARTNERSHIP 245 THE CROSSINGS ASSOCIATES 246 THE GATES OF REDMOND, L.L.C. 247 THE WIMBERLY APARTMENT HOMES, LTD. 248 THIRD TOWNE CENTRE LIMITED PARTNERSHIP 249 TOWERS AT PORTSIDE URBAN RENEWAL COMPANY, LLC 250 VININGS CLUB AT METROWEST LP ----------------------------------------------------------------- EQUITY RESIDENTIAL PROPERTIES TRUST SUBSIDIARIES ----------------------------------------------------------------- ENTITY ----------------------------------------------------------------- 251 WINDSOR PLACE, LLC 252 WOOD FOREST ASSOCIATES 253 WOODCREST (AUGUSTA), LLC 254 CRP SERVICE COMPANY, LLC 255 DUXFORD, LLC 256 EQR-BENEVA PLACE, LLC 257 EQR-BROOKDALE VILLAGE, LLC 258 EQR-CHICKASAW CROSSING, LLC 259 EQR-CODELLE, LLC 260 EQR-FOREST PLACE, LLC 261 EQR-GEORGIAN WOODS, LLC 262 EQR-HORIZON PLACE, LLC 263 EQR-LEXFORD LENDER, LLC 264 EQR-MOSAIC, LLC 265 EQR-NEW ENGLAND PROGRAM, LLC 266 EQR-PINETREE/WESTBROOKE, LLC 267 EQR-S & T, LLC 268 EQR-SABLE PALM AT LAKE BUENA VISTA, LLC 269 EQR-SCARBOROUGH SQUARE, LLC 270 EQR-TENNESSEE LOAN PORTFOLIO. LLC 271 EQR-THE WATERFORD AT DEERWOOD, LLC 272 EQR-THE WATERFORD AT ORANGE PARK, LLC 273 EQR-THE WATERFORD AT REGENCY, LLC 274 EQR-WOOD FOREST, LLC 275 GREENTREE APARTMENTS LP 276 LEXFORD GP II, LLC 277 LEXFORD PARTNERS, LLC 278 LEXFORD PROPERTIES MANAGEMENT, LLC 279 OLD REDWOODS, LLC 280 SCARBOROUGH ASSOCIATES 281 SECOND TOWNE CENTRE LP 282 THIRD GREENTREE ASSOCIATES LP 283 WOODBINE PROPERTIES EQUITY RESIDENTIAL PROPERTIES TRUST QUALIFIED REIT SUBSIDIARIES: 1 EQR-QRS HIGHLINE OAKS, INC 2 EQR-QRS RIDGEMONT/MOUNTAIN BROOK, INC 3 EQR-QRS SPINNAKER COVE, INC. 4 EQR-QRS WYNDRIDGE II, INC. 5 EQR-QRS WYNDRIDGE III, INC. 6 ERP-QRS ARBORS, INC. 7 ERP-QRS BRETON HAMMOCKS, INC. 8 ERP-QRS BS, INC. 9 ERP-QRS CAMELLERO, INC. 10 ERP-QRS CANTER CHASE, INC. 11 ERP-QRS CEDAR CREST, INC. 12 ERP-QRS CEDAR RIDGE, INC. 13 ERP-QRS CHAPARRAL CREEK, INC. 14 ERP-QRS CONTINENTAL VILLAS, INC. 15 ERP-QRS COUNTRY CLUB I, INC. 16 ERP-QRS COUNTRY CLUB II, INC. 17 ERP-QRS COUNTRY RIDGE, INC. 18 ERP-QRS CPRT II, INC. 19 ERP-QRS CPRT, INC. 20 ERP-QRS CREEKSIDE OAKS, INC. 21 ERP-QRS DARTMOUTH WOODS, INC. 22 ERP-QRS DORAL, INC. 23 ERP-QRS EMERALD PLACE, INC. 24 ERP-QRS EOI, INC. 25 ERP-QRS ESSEX PLACE, INC. 26 ERP-QRS FAIRFIELD, INC. 27 ERP-QRS FLATLANDS, INC. 28 ERP-QRS GEORGIAN WOODS ANNEX, INC. 29 ERP-QRS GLENLAKE CLUB, INC. 30 ERP-QRS GOVERNOR'S PLACE, INC. 31 ERP-QRS GREENWICH WOODS, INC. 32 ERP-QRS HARBOR POINTE, INC. 33 ERP-QRS HUNTER'S GLEN, INC. 34 ERP-QRS LAKEVILLE RESORT, INC. 35 ERP-QRS LAKEWOOD GREENS, INC. 36 ERP-QRS LINCOLN GREEN, INC. 37 ERP-QRS LODGE (OK), INC. 38 ERP-QRS MAGNUM, INC. 39 ERP-QRS MET CA, INC. 40 ERP-QRS MET, INC. 41 ERP-QRS NORTHAMPTON I, INC. 42 ERP-QRS PARK PLACE I, INC. 43 ERP-QRS PARK PLACE II, INC. EQUITY RESIDENTIAL PROPERTIES TRUST QUALIFIED REIT SUBSIDIARIES: 44 ERP-QRS PINE MEADOWS GARDEN, INC. 45 ERP-QRS PLANTATION, INC. 46 ERP-QRS PRESTON BEND, INC. 47 ERP-QRS RESERVE SQUARE, INC. 48 ERP-QRS ROLIDO PARQUE, INC. 49 ERP-QRS ROSEHILL POINTE, INC. 50 ERP-QRS SLEEPY HOLLOW, INC. 51 ERP-QRS SONGBIRD, INC. 52 ERP-QRS SONTERRA AT FOOTHILLS RANCH, INC. 53 ERP-QRS STONEBROOK, INC. 54 ERP-QRS SUNNY OAK VILLAGE, INC. 55 ERP-QRS SWN LINE, INC. 56 ERP-QRS TANASBOURNE TERRACE, INC. 57 ERP-QRS TOWNE CENTRE III, INC. 58 ERP-QRS TOWNE CENTRE IV, INC. 59 ERP-QRS TRAILS AT DOMINION, INC. 60 ERP-QRS VALLEY PARK SOUTH, INC. 61 ERP-QRS VILLA SERENAS, INC. 62 ERP-QRS VILLAGE OAKS, INC. 63 ERP-QRS WATSON, INC. 64 ERP-QRS WELLINGTON HILL, INC. 65 ERP-QRS YORKTOWNE, INC. 66 EVANS WITHYCOMBE FINANCE, INC 67 MERRY LAND & INVESTMENT COMPANY, INC. 68 MERRY LAND APARTMENT COMMUNITIES, INC. 69 QRS IRONWOOD, INC. 70 QRS MARKS A, INC. 71 QRS MARKS B, INC. 72 QRS MISSOURI, INC. 73 QRS WARWICK, INC. 74 QRS-740 RIVER DRIVE, INC. 75 QRS-ARBORETUM, INC. 76 QRS-ARTBHOLDER, INC. 77 QRS-ARTCAPLOAN, INC. 78 QRS-BOND, INC. 79 QRS-CHARDONNAY PARK, INC 80 QRS-CONNOR, INC. 81 QRS-FERNBROOK, INC. 82 QRS-GATES OF REDMOND, INC 83 QRS-GREENTREE I, INC. 84 QRS-GREENTREE III, INC. 85 QRS-LLC, INC. 86 QRS-NORTH HILL, INC EQUITY RESIDENTIAL PROPERTIES TRUST QUALIFIED REIT SUBSIDIARIES: 87 QRS-PORTLAND CENTER, INC. 88 QRS-SCARBOROUGH, INC. 89 QRS-SMOKETREE, INC. 90 QRS-TOWERS AT PORTSIDE, INC. 91 QRS-TOWNHOMES OF MEADOWBROOK, INC. 92 QRS-VININGS AT ASHLEY LAKE, INC. 93 QRS-WATERFALL, INC. 94 QRS-WOODRIDGE, INC. 95 WADLINGTON, INC. 96 EQR-BENEVA PLACE, INC. 97 EQR-CHICKASAW CROSSING, INC. 98 EQR-FOREST PLACE, INC. 99 EQR-HORIZON PLACE, INC. 100 EQR-SABLE PALM AT LAKE BUENA VISTA, INC. 101 EQR-THE WATERFORD AT DEERWOOD, INC. 102 EQR-THE WATERFORD AT ORANGE PARK, INC. 103 EQR-THE WATERFORD AT REGENCY, INC. 104 EQR-WOOD FOREST, INC. 105 ERP-QRS LONGFELLOW, INC. 106 ERP-QRS MANCHESTER HILL, INC. 107 ERP-QRS MARBRISA, INC. 108 ERP-QRS S&T, INC. 109 ERP-QRS TENNESSEE, INC. 110 QRS-CODELLE, INC. 111 QRS-TENNESSEE LOAN PORTFOLIO, INC. EX-23.1 7 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Forms S-3 No. 333-80835, No. 333-72961, No. 333-45533, No. 333-39289, No. 333-12983, No. 333-06873, No. 33-97680, No. 33-84974 and Forms S-8 No. 333-88237, No. 333-83403, No. 333-66257 and No. 333-06869) of Equity Residential Properties Trust and in the related Prospectuses, of our report dated February 16, 2000, except for Note 23, as to which the date is March 3, 2000, with respect to the consolidated financial statements and schedule of Equity Residential Properties Trust included in this Annual Report (Form 10-K) for the year ended December 31, 1999. /s/ Ernst & Young LLP Ernst & Young LLP Chicago, Illinois March 13, 2000 EX-24.1 8 EXHIBIT 24.1 Exhibit 24.1 POWER OF ATTORNEY STATE OF FLORIDA COUNTY OF DADE KNOW ALL MEN BY THESE PRESENTS that James D. Harper, Jr., having an address at 11120 McCann Rd., Amity, OR 97101 has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in and about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power and substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virture hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, James D. Harper, Jr., has hereunto set his hand this 29 day of February, 2000. /s/ James D. Harper, Jr. -------------------------- James D. Harper, Jr. I, Marita B. Scholtz, a Notary Public in and for said County in the State of aforesaid, do hereby certify that James D. Harper, Jr., personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 29 day of February, 2000. /s/ Marita B. Scholtz ----------------------- (Notary Public) My Commission Expires: 5/11/2003 ------------------------------ EX-24.2 9 EXHIBIT 24.2 Exhibit 24.2 POWER OF ATTORNEY ----------------- STATE OF ILLINOIS COUNTY OF COOK KNOW ALL MEN BY THESE PRESENTS that Errol R. Halperin, having an address at 107 W. Delaware, Unit F, Chicago, IL 60610, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Reprot on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all tht each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virture hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Errol R. Halperin, has hereunto set his hand this 29th day of February, 2000. /s/ Errol R. Halperin ----------------------- Errol R. Halperin I, Anna L. De La Garza, a Notary Public in and for said County in the State of aforesaid, do hereby certify that Errol R. Halperin, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the use and purposes therein set forth. Given under my hand and notarial seal this 29th day of February, 2000. /s/ Anna L. De La Garza ------------------------- (Notary Public) My Commission Expires: March 24, 2000 ----------------------- EX-24.3 10 EXHIBIT 24.3 Exhibit 24.3 POWER OF ATTORNEY ------------------- STATE OF NORTH CAROLINA COUNTY OF MECKLENBURG KNOW ALL MEN BY THESE PRESENTS that John W. Alexander, having an address at 255 COLVILLE RD., NORTH CAROLINA, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, John W. Alexander, has hereunto set his hand this 13 day of March, 2000. /s/ John W. Alexander ---------------------------------------- John W. Alexander I, Amy Alexander, a Notary Public in and for said County in the State of aforesaid, do hereby certify that John W. Alexander, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 13 day of March, 2000. /s/ Amy Alexander ----------------------------------------- (Notary Public) My Commission Expires: _________________________________ Amy Alexander, Notary Public Cabarrus County, North Carolina My Commission Expires 10/31/2004 EX-24.4 11 EXHIBIT 24.4 Exhibit 24.4 POWER OF ATTORNEY STATE OF Michigan COUNTY OF Washtenaw KNOW ALL MEN BY THESE PRESENTS that B. Joseph White, having an address at 3000 Hunting Valley, Ann Arbor, MI 48104, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, B. Joseph White, has hereunto set his hand this 9th day of March, 2000. /s/ B. Joseph White ------------------------- B. Joseph White I, Sheryl L. Brueger, a Notary Public in and for said County in the State of aforesaid, do hereby certify that B. Joseph White, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 9th day of March, 2000. /s/ Sheryl L. Brueger ------------------------- (Notary Public) Sheryl L. Brueger Notary Public, Washtenaw County, MI My Commission Expires Oct. 9, 2002 My Commission Expires: --------------------------------------- EX-24.5 12 EXHIBIT 24.5 Exhibit 24.5 POWER OF ATTORNEY ----------------- STATE OF MARYLAND COUNTY OF MONTGOMERY KNOW ALL MEN BY THESE PRESENTS that Henry H. Goldberg, having an address at 7200 Wisconsin Ave., Suite 1000, Bethesda, MD 20814, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Henry H. Goldberg, has hereunto set his hand this 1st day of March, 2000. /s/ Henry H. Goldberg ----------------------- Henry H. Goldberg I, Priscilla Drevo, a Notary Public in and for said County in the State of aforesaid, do hereby certify that Henry H. Goldberg, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the use and purposes therein set forth. Given under my hand and notarial seal this 1st day of March, 2000. /s/ Priscilla Drevo --------------------- Priscilla Drevo My Commission Expires: 12/1/2003 --------- EX-24.6 13 EXHIBIT 24.6 Exhibit 24.6 POWER OF ATTORNEY ----------------- STATE OF NEW YORK COUNTY OF NEW YORK KNOW ALL MEN BY THESE PRESENTS that Jeffrey H. Lynford, having an address at 10 Holly Branch Rd., Katonoh, NY 10536, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Jeffrey H. Lynford, has hereunto set his hand this 1st day of March, 2000. /s/ Jeffrey H. Lynford ----------------------- Jeffrey H. Lynford I, Stasia M. Ananson, a Notary Public in and for State of New York, County of New York, do hereby certify that Jeffrey H. Lynford, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the use and purposes therein set forth. Given under my hand and notarial seal this 1st day of March, 2000. /s/ Stasia M. Ananson ---------------------- (Notary Public) My Commission Expires: 2001, July 19 EX-24.7 14 EXHIBIT 24.7 Exhibit 24.7 POWER OF ATTORNEY STATE OF New Jersey COUNTY OF Bergen ------ KNOW ALL MEN BY THESE PRESENTS that Edward Lowenthal, having an address at 13 Ackerman Rd. Saddle River, NJ 07458, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois, 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Edward Lowenthal, has hereunto set his hand this 2nd day of March, 2000. /s/ Edward Lowenthal -------------------- Edward Lowenthal I, Kim Beaulieu Ezzy, a Notary Public in and for the said County in the State of aforesaid, do hereby certify that Edward Lowenthal, personally known to me to be he same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 2nd day of March, 2000. /s/ Kim Beaulieu Ezzy --------------------- (Notary Public) KIM BEAULIEU EZZY Notary Public, State of New York No. 01EZ6031418 My Commission Expires: ________________________ Qualified in New York County Commission Expires on October 4, 2001. EX-24.8 15 EXHIBIT 24.8 Exhibit 24.8 POWER OF ATTORNEY STATE OF ARIZONA COUNTY OF MARICOPA KNOW ALL MEN BY THESE PRESENTS that Stephen O. Evans, having an address at 5825 E. Starlight Way, Paradise Valley, AZ 85253 has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in and about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virture hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Stephen O. Evans, has hereunto set his hand this 2nd day of March, 2000. /s/ Stephen O. Evans ----------------------- Stephen O. Evans I, Kristine M. Kovac, a Notary Public in and for said County in the State of aforesaid, do hereby certify that Stephen O. Evans, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 2nd day of March, 2000. /s/ Kristine M. Kovac ----------------------- (Notary Public) My Commission Expires: November 23, 2003 ------------------- EX-24.9 16 EXHIBIT 24.9 Exhibit 24.9 POWER OF ATTORNEY STATE OF GEORGIA COUNTY OF MCDUFFIE KNOW ALL MEN BY THESE PRESENTS that Boone A. Knox, having an address at 3133 Washington Rd. Thomson, GA 30824 has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in and about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power and substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virture hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Boone A. Knox, has hereunto set his hand this 29th day of February, 2000. /s/ Boone A. Knox ----------------------- Boone A. Knox I, Barbara A. Crutchfield, a Notary Public in and for said County in the State of aforesaid, do hereby certify that Boone A. Knox, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 29th day of February, 2000. /s/ Barbara A. Crutchfield --------------------------- (Notary Public) My Commission Expires: Notary Public, Glascock County, Georgia My Commission Expires June 22, 2003 --------------------------------------- EX-24.10 17 EXHIBIT 24.10 Exhibit 24.10 POWER OF ATTORNEY STATE OF Georgia COUNTY OF Columbia KNOW ALL MEN BY THESE PRESENTS that Michael N. Thompson, having an address at 5 Brigantine Court, Savannah, GA 31410, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and Michael J. McHugh, or either of them, having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-in-Fact for him and his name, place and stead to sign and execute in any and all capacities this Annual Report on Form 10-K and any or all amendments to this Annual Report granting unto each of such, Attorney-in-Fact, full power and authority to do and perform each and every act and thing, requisite and necessary to be done in an about the premises, as fully, to all intents and purposes as he might or could do if personally present at the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that each of such Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Michael N. Thompson, has hereunto set his hand this 6th day of March, 2000. /s/ Michael N. Thompson ------------------------- Michael N. Thompson I, Cindy W. Henry, a Notary Public in and for said County in the State aforesaid, do hereby certify that Michael N. Thompson, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 6th day of March, 2000. /s/ Cindy W. Henry ------------------------- (Notary Public) Notary Public, Columbia County, Georgia My Commission Expires January 27, 2004 My Commission Expires: --------------------------------------- EX-27 18 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 29,117 0 1,731 0 0 388,098 12,238,963 1,070,487 11,715,689 279,908 5,473,868 0 1,310,266 1,275 4,195,543 11,715,689 1,729,267 1,753,118 0 650,528 22,296 0 341,273 330,333 0 330,333 93,535 (451) 0 310,221 2.30 2.29
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