EXHIBIT 1
ERP OPERATING LIMITED PARTNERSHIP
(an Illinois limited partnership)
$150,000,000 6.55% Notes due November 15, 2001
$50,000,000 6.65% Notes due November 15, 2003
TERMS AGREEMENT
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Dated: November 20, 1997
To: ERP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
We understand that ERP Operating Limited Partnership, an Illinois limited
partnership ("ERP"), proposes to issue and sell $150,000,000 aggregate principal
amount of its 6.55% Notes due November 15, 2001 (the "2001 Notes") and
$50,000,000 aggregate principal amount of its 6.65% Notes due November 15, 2003
(the "2003 Notes" and together with the 2001 Notes, the "Notes") (such Notes
being hereinafter also referred to as the "Underwritten Securities"). Subject to
the terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the principal amount of the Underwritten Securities opposite our
names below at the purchase price set forth below, to the extent any are
purchased.
Principal Amount of Principal Amount of
Underwriter 2001 Notes 2003 Notes
----------- ---------- ----------
Merrill Lynch, Pierce, Fenner & Smith $ 50,000,000 $16,670,000
Incorporated
BancAmerica Robertson Stephens 50,000,000 16,665,000
J.P. Morgan Securities Inc. 50,000,000 16,665,000
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Total $150,000,000 $50,000,000
The Underwritten Securities shall have the following terms:
Title of Securities: 6.55% Notes due November 15, 2001 (the "2001 Notes") and
6.65% Notes due November 15, 2003 (the "2003 Notes")
Currency: U.S. Dollars.
Principal amount to be issued: $150,000,000 of 2001 Notes and $50,000,000 of
2003 Notes
Current ratings: Moody's Investors Service, Inc. A3; Standard & Poor's
Corporation BBB+; Duff & Phelps BBB+
Interest rate or formula: 6.55% for the 2001 Notes and 6.65% for the 2003 Notes.
Interest Payment Dates: May 15 and November 15 of each year, beginning on May
15, 1998.
Stated Maturity Date: November 15, 2001 for the 2001 Notes and November 15, 2003
for the 2003 Notes.
Redemption or repayment provisions: None.
Delayed Delivery Contracts: Not authorized.
Initial public offering price: 99.789% for the 2001 Notes and 99.833% for the
2003 Notes, plus accrued interest, if any, from November 25, 1997.
Purchase price: 99.239% for the 2001 Notes and 99.2205% for the 2003 Notes,
payable in same day funds.
Additional co-managers, if any: BancAmerica Robertson Stephens and J.P. Morgan
Securities Inc.
Other terms: ERP is required to maintain Total Unencumbered Assets of not less
than 150% of the aggregate outstanding principal amount of the Unsecured Debt of
ERP.
Closing date and location: November 25, 1997, Rosenberg & Liebentritt, P.C.,
Two North Riverside Plaza, Suite 1600, Chicago, Illinois 60606
All the provisions contained in the document attached as Annex A hereto
entitled "ERP Operating Limited Partnership--Debt Securities--Purchase
Agreement" (the "Purchase Agreement"), dated December 13, 1994 are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. In addition, the amendments to the Purchase Agreement
set forth in the Terms Agreement dated August 8, 1996, between ERP, Equity
Residential Properties Trust and the underwriters named therein, are
incorporated herein by reference to the same extent as if such provisions had
been set forth in full herein. Terms defined in the Purchase Agreement are used
herein as therein defined unless otherwise indicated.
Definitions
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As used herein, "Subsidiary" means a corporation, a limited liability
company or a partnership a majority of the outstanding voting stock, limited
liability company interests or partnership interests, as the case may be, of
which is owned, directly or indirectly, by ERP or by one or more other
Subsidiaries of ERP. For the purposes of this definition, "voting stock" means
stock having voting power for the election of directors, managing members or
trustees, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an encumbrance and (ii) all other assets of the
Operating Partnership and its Subsidiaries not subject to an encumbrance
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of ERP and its
Subsidiaries on such date, before depreciation and amortization determined on a
consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt of ERP or any Subsidiary which is not secured
by any mortgage, lien, charge, pledge or security interest of any kind upon any
of the Properties.
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Please accept this offer no later than 6:00 p.m. (New York City time) on
November 20, 1997 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
J.P. MORGAN SECURITIES INC.
By: Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By: /s/ Michael Berman
-----------------------------
Name: Michael Berman
Title: Director
Acting on behalf of itself and the other named
Underwriters
Accepted:
ERP OPERATING LIMITED PARTNERSHIP
By: EQUITY RESIDENTIAL PROPERTIES TRUST,
not individually but as General Partner
By: /s/ Bruce C. Strohm
--------------------------------
Name: Bruce C. Strohm
Title: Executive Vice President
and General Counsel
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