Exhibit
10.1


 


 


REVOLVING CREDIT
AGREEMENT


dated as of
February 28, 2007


among


ERP OPERATING
LIMITED PARTNERSHIP,


THE BANKS LISTED
HEREIN,


BANK OF AMERICA, N.A.,


as Administrative
Agent,


JPMORGAN CHASE BANK,
N.A.,


as Syndication
Agent,


BANC OF AMERICA SECURITIES
LLC,


as Joint Lead
Arranger and Joint Book Runner,


J.P. MORGAN SECURITIES
INC.


as Joint Lead
Arranger and Joint Book Runner,


SUNTRUST BANK,


as Documentation
Agent,


WACHOVIA BANK, NATIONAL
ASSOCIATION,


as Documentation
Agent,


WELLS FARGO BANK, N.A.,


as Documentation
Agent,


LASALLE BANK
NATIONAL ASSOCIATION,

as Documentation Agent,


THE ROYAL BANK OF
SCOTLAND plc,


as Documentation Agent,


and

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent


 



   
 















REVOLVING CREDIT
AGREEMENT


THIS REVOLVING
CREDIT AGREEMENT, dated as of February 28, 2007, is among ERP OPERATING LIMITED
PARTNERSHIP (the “Borrower”), the BANKS party hereto, BANK OF AMERICA,
N.A., as Administrative Agent, JPMORGAN CHASE BANK, N.A., as Syndication Agent,
SUNTRUST BANK, as Documentation Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Documentation Agent, WELLS FARGO BANK, N.A., as Documentation Agent, LASALLE
BANK NATIONAL ASSOCIATION, as Documentation Agent, THE ROYAL BANK OF SCOTLAND
plc, as Documentation Agent, and U.S. BANK NATIONAL ASSOCIATION, 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.


“Acquisition
Property” means a property acquired by the Borrower or its Consolidated
Subsidiaries or Investment Affiliates (whether by purchase, merger or other
corporate transaction and including acquisitions from taxable REIT subsidiaries
owned by Borrower).


“Acquisition
Property Value” means the greater of (a) the EBITDA generated by an
Acquisition Property divided by the FMV Cap Rate (or Borrower’s Share thereof
with respect to any Acquisition Property owned by a Consolidated Subsidiary or
an Investment Affiliate), or (b) the undepreciated book value (cost basis plus
improvements) of an Acquisition Property (or Borrower’s Share thereof with
respect to any Acquisition Property owned by a Consolidated Subsidiary or an
Investment Affiliate).  An Acquisition
Property will be valued as a Stabilized













Property following
the sixth full fiscal quarter after the fiscal quarter in which such
Acquisition Property was first acquired.


“Additional
Cost Rate” has the meaning set forth in Schedule 1.1 attached hereto.


“Administrative
Agent” shall mean Bank of America, N.A., 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.


“Alternate
Currency” means the lawful currency of any of (i) the United Kingdom
(British Pounds Sterling) or (ii) the European Economic Union (Euros).  For all purposes of this Agreement, including
without limitation the calculation of the Dollar Equivalent Amount at any time
and from time to time, each Alternate Currency will be marked-to-market on the
last Business Day of each month and immediately prior to each Borrowing.


“Alternate
Currency Commitment” means with respect to each Bank, the amount set forth
under the name of such Bank on the signature pages hereof as its commitment for
Loans in Alternate Currencies (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 Alternate Currency Commitment) and  Dollars, 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, and as such amount may be increased in connection with an
assignment from an Assignor or pursuant to Section 2.1(b).  The initial aggregate Dollar Equivalent
Amount of the Banks’ Alternate Currency Commitments is $300,000,000.


“Alternate
Currency Letter of Credit” means a Letter of Credit denominated in
Alternate Currency.


“Alternate
Currency Sublimit” means, a Dollar Equivalent Amount of Loans denominated
in an Alternate Currency and Alternate Currency Letter(s) of 



 2
 









Credit (and, to the
extent expressly provided herein, Loans and Letters of Credit denominated in
Dollars), equal to the aggregate Dollar Equivalent Amount of the Banks’
Alternate Currency Commitments, as such amount may be increased in accordance
with Section 2.1(b) from time to time.


“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 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 the Borrower receives Credit Ratings that are not equivalent, the
Applicable Margin shall be based upon the higher of the Credit Ratings from
S&P or Moody’s.  In the event that
only one (1) Rating Agency has set the Borrower’s Credit Rating, then the
Applicable Margin shall be based on such single Credit Rating.



 3
 









 


	
  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-Investment
  Grade

  	
   

  	
  0.250

  	
   

  	
  1.000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.0

  	
   

  	
  0.750

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.0

  	
   

  	
  0.475

  
	
  BBB+/Baa1

  	
   

  	
  0.0

  	
   

  	
  0.375

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-/A3

  	
   

  	
  0.0

  	
   

  	
  0.325

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A/A2 or better

  	
   

  	
  0.0

  	
   

  	
  0.300

  



 


“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.


“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 IX) 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 fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate plus 1⁄2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by the Bank serving as the
Administrative Agent as its “prime rate.” 
The “prime rate” is a rate set by Bank of America, N.A. based upon
various factors including Bank of America, N.A.’s costs and 



 4
 









desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced
by the Bank serving as the Administrative Agent shall take effect at the
opening of business on the day specified in the public announcement of such
change.


“Base Rate Loan”
means a Committed Loan made or to be made by a Bank as a Base Rate Loan in
accordance with the applicable Notice of Borrowing or Notice of Interest Rate
Election 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 as
reasonably determined by Borrower based upon Borrower’s or EQR’s economic
interest in such Investment Affiliate or Consolidated Subsidiary, as the case
may be, as of the date of such determination.


“Borrowing”
has the meaning set forth in Section 1.3.


“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
are authorized or required by law to close (i) in Dallas, Texas and/or New York
City, and (ii) in the case of Euro-Dollar Loans, in London, England and/or
Dallas, Texas, and (iii) in the case of Letters of Credit transactions for a
particular Fronting Bank, in the place where its office for issuance or
administration of the pertinent Letter of Credit is located and/or Dallas,
Texas and/or New York City, and (iv) if such reference relates to the date on
which any amount is to be paid or made available in an Alternate Currency, the
principal financial center in the country of such Alternate Currency, as well
as the city in the country from which any Bank shall be funding such Alternate
Currency Loan.


“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


“Capital
Reserve” shall mean $200 per year.



 5
 









“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,
foreign deposits, domestic and foreign certificates of deposit, bankers
acceptances (foreign and domestic), commercial paper in Dollars or an Alternate
Currency rated at least A-1 by S&P and P-1 by Moody’s and/or guaranteed by
a Person with an Aa rating by Moody’s, an 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 a Person with an Aa rating by Moody’s, an 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 a Person with 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.



 6
 









“Committed Loan”
means a loan made or to be 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 upon; 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 sum of its Dollar Commitment and its
Alternate Currency Commitment.


“Condo Property”
means a Property owned by the Borrower or its Consolidated Subsidiaries or
Investment Affiliates, where such property is being positioned or held for sale
as condominium units.


“Condo Property
Value” means the undepreciated book value (cost basis plus improvements) of
the Condo Property.


“Consolidated
EBITDA” means, for any twelve (12) month period, net earnings (loss),
inclusive of the net incremental gains (losses) on sales of condominium units,
Raw Land and other non-depreciated Properties, and exclusive of net derivative
gains (losses) and gains (losses) on the dispositions of depreciable
Properties, as reflected in reports filed by Borrower pursuant to the
Securities Exchange Act of 1934, as amended, before deduction (including
amounts reported in discontinued operations), for (i) depreciation and
amortization expense and other non-cash items as determined in good faith by
Borrower for such period, (ii) Interest Expense for such period, (iii) Taxes
for such period, (iv) the gains (and plus the losses) from extraordinary
items, and (v) the gains (and plus the losses) from non-recurring items,
as determined in good faith by Borrower, for such period, all of the foregoing
without duplication. In each case, amounts shall be reasonably determined by
Borrower in accordance with GAAP, except to the extent that GAAP by its terms
shall not apply with respect to the determination of non-cash and non-recurring
items and except that such net earnings (loss) shall only include Borrower’s
Share of such net earnings (loss) attributable to Consolidated Subsidiaries and
shall include, without duplication, Borrower’s Share of the net earnings
(loss), inclusive of the net incremental gains (losses) on sales of condominium
units, Raw Land and other non-depreciated Properties, and exclusive of net
derivative gains (losses) and gains (losses) on the dispositions of depreciable
Properties, of any Investment Affiliate before deduction (including amounts
reported in discontinued operations) for (i) depreciation and amortization
expense and other non-cash items of such Investment Affiliate as determined in
good faith by Borrower for such period, (ii) Interest Expense of such 



 7
 









Investment Affiliate for
such period, (iii) Taxes of such Investment Affiliate for such period, (iv) the
gains (and plus the losses) from extraordinary items of such Investment
Affiliate, and (v) the gains (and plus the losses) from non-recurring items of
such Investment Affiliate as determined in good faith by Borrower for such
period.


“Consolidated
Subsidiary” means at any date any Person which is consolidated with
Borrower or EQR in accordance with GAAP.


“Construction
Property” means a property owned by the Borrower or its Consolidated
Subsidiaries or Investment Affiliates on which construction of improvements has
commenced or been completed (as such completion shall be evidenced by a
temporary or permanent certificate of occupancy permitting use of such property
by the general public).


“Construction
Property Value” means the greater of (a) the EBITDA generated by a Construction
Property divided by the FMV Cap Rate (or Borrower’s Share thereof with respect
to any Construction Property owned by a Consolidated Subsidiary or an
Investment Affiliate), or (b) the undepreciated book value (cost basis plus
improvements) of a Construction Property (or Borrower’s Share thereof with
respect to any Construction Property owned by a Consolidated Subsidiary or an
Investment Affiliate). A Construction Property will be valued as a Stabilized
Property following the sixth full fiscal quarter after the fiscal quarter in
which such Construction Property was first completed.


“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 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 



 8
 









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, (xx)
“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, and (yy) the aggregate amount of all Contingent Obligations of any
Consolidated Subsidiary or Investment Affiliate (except to the extent that any
such Contingent Obligation is recourse to the Borrower or EQR) which would
otherwise exceed the total capital contributions of the Borrower and EQR to
such entity, together with the amount of any unfunded obligations of the
Borrower or EQR to make such additional equity contributions to such entity that
could be legally enforced by a creditor of such entity shall be deemed to be
equal to the amount of such capital contributions and equity or loan
commitments.  All matters constituting
“Contingent Obligations” shall be calculated without duplication.


“Credit Rating”
means the rating assigned by the Rating Agencies to Borrower’s senior unsecured
long term indebtedness.


“Customary
Non-Recourse Carve-Outs” means 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.


 


 



 9















 


“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 Borrower or EQR (excluding
Indebtedness of any Consolidated Subsidiary or Investment Affiliate), on a
consolidated basis, plus Borrower’s Share of scheduled principal
amortization for such period on all Indebtedness of all Consolidated
Subsidiaries and 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 all Consolidated Subsidiaries and 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 or redevelopment and construction of
one or more apartment buildings by the Borrower or any of its 



 10
  
 









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 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 or EQR, or the Borrower’s Share of the cost of such
projects under development and construction in the case of assets owned by
Consolidated Subsidiaries or Investment Affiliates.


“Documentation
Agents” means SUNTRUST BANK, WACHOVIA BANK, NATIONAL ASSOCIATION, WELLS
FARGO BANK, N.A., LASALLE BANK NATIONAL ASSOCIATION, THE ROYAL BANK OF SCOTLAND
plc, and U.S. BANK NATIONAL ASSOCIATION, in their capacities as Documentation
Agents hereunder, and their permitted successors in such capacity in accordance
with the terms of this Agreement.


“Dollar
Commitment” means with respect to each Bank, the amount set forth under the
name of such Bank on the signature pages hereof as its commitment for Loans and
Letters of Credit in Dollars (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 Dollar 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, and as such amount may be increased in connection
with an assignment from an Assignor.  The
initial aggregate amount of the Banks’ Dollar Commitments is $1,200,000,000.


“Dollar
Equivalent Amount” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternate Currency, the equivalent amount thereof in Dollars
as determined by the Administrative Agent or the Fronting Bank, as the case may
be, at such time on the basis of the Spot Rate (determined in respect of the
most recent revaluation date pursuant to Section 2.20) for the purchase of
Dollars with such Alternate Currency.


“Dollar
Sublimit” means, an amount of Loans and Letters of Credit denominated in
Dollars equal to One Billion Two Hundred Million Dollars ($1,200,000,000), as
the same may be decreased in accordance with the provisions of this Agreement.


“Dollars”
and “$” mean the lawful money of the United States.



 11
  
 









 


“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.


“Down REIT”
means a limited liability company, corporation or limited partnership in which
the only interest in such limited liability company, corporation or partnership
not owned (directly or indirectly) by Borrower shall be preference interests or
preference units, respectively, and which limited liability company,
corporation or limited partnership, as the case may be (collectively, a “Down
REIT 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 H (a “Down REIT Guaranty”), (ii) all documents
reasonably requested by the Administrative Agent relating to the existence of
such Down REIT Guarantor, and the authority for and validity of such Down REIT
Guaranty, including, without limitation, the organizational documents of such
Down REIT Guarantor, modified or supplemented prior to the date of such Down
REIT Guaranty, each certified to be true, correct and complete by such Down
REIT Guarantor, not more than ten (10) days prior to the date of such Down REIT
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
Guarantor, to be dated not more than ten (10) days prior to the date of such
Down REIT Guaranty, as well as authorizing resolutions in respect of such Down
REIT Guaranty, and (iii) an opinion of counsel with respect to such Down REIT
Guarantor and Down REIT 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 such Down REIT
Guaranty.  In addition, for purposes of
this definition, a Down REIT Guaranty shall not be deemed to constitute
Unsecured Debt of the applicable Down REIT Guarantor.


“Down REIT
Guarantor” shall have the meaning set forth in the definition of Down REIT.


“Down REIT
Guaranty” shall have the meaning set forth in the definition of Down REIT.


“Down REIT
Guaranty Proceeds” shall have the meaning set forth in Section 9.18(a)
hereof.


“EBITDA”
means, for any twelve (12) month period, net earnings (loss), exclusive of net
derivative gains (losses) and gains (losses) on the dispositions of Properties,
before deduction (including amounts reported in discontinued operations) for 



 12
  
 









(i) depreciation
and amortization expense and other non-cash items as determined in good faith
by Borrower for such period, (ii) Interest Expense for such period, (iii) Taxes
for such period, (iv) the gains (and plus the losses) from extraordinary
items, and (v) the gains (and plus the losses) from non-recurring items, as
determined in good faith by Borrower, all of the foregoing without duplication.
In each case, amounts shall be reasonably determined by Borrower in accordance
with GAAP, except to the extent that GAAP by its terms shall not apply with
respect to the determination of non-cash and non-recurring items. EBITDA shall
not be deemed to include corporate level general and administrative expenses
and other corporate expenses, such as land holding costs, employee and trustee
stock and stock option expenses and pursuit costs write-offs, all as determined
in good faith by Borrower.


“Effective Date”
means the date this Agreement becomes effective in accordance with Section 9.9.


“Eligible
Liabilities” has the meaning set forth in Schedule 1.1 attached hereto.


“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 (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.


“Environmental
Laws” means any and all federal, state, and local statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, 



 13
  
 









injunctions,
permits, concessions, grants, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the environment on
human health or 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, 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 2005 Form
10-K” means EQR’s annual report on Form 10-K for 2005, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.


“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.


“Euro-Dollar
Business Day” means any 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 made or to be made by a Bank as a Euro-Dollar
Loan in accordance with the applicable Notice of Borrowing or Notice of
Interest Rate Election.



 14
  
 









 


“Euro-Dollar
Rate” means, for any applicable Interest Period for any Euro-Dollar Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, for Dollar or the applicable
Alternate Currency, as the case may be, deposits (for delivery on the first day
of such Interest Period) with a term equivalent such Interest Period.  If such rate is not available at such time
for any reason, the “Euro-Dollar Rate” for such Interest Period shall be the
rate per annum determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Euro-Dollar Loan being made,
continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.


“Euro-Dollar
Reserve Percentage” means, with respect to any applicable Interest Period,
for any day that percentage (expressed as a decimal) which is in effect on such
day as prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including
basic, supplemental, emergency, special and marginal reserves) generally
applicable to financial institutions regulated by the Federal Reserve Board
comparable in size and type to the Person serving as the Administrative Agent
under Regulation D of the Federal Reserve Board, in respect of “Eurocurrency
liabilities”, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding (or in respect of any other
category of liabilities which include deposits by reference to which the
interest rate on Euro-Dollar Loans is determined), whether or not the Person serving
as the Administrative Agent has any Euro-Currency liabilities or such
requirement otherwise in fact applies to the Person serving as the
Administrative Agent. The Euro-Dollar Rate shall be adjusted automatically as
of the effective date of each change in the Euro-Dollar Reserve Percentage.


“Event of
Default” has the meaning set forth in Section 6.1.


“Existing
Revolving Credit Agreement” has the meaning set forth in Section 3.1(e).


“Facility Fee”
has the meaning set forth in Section 2.8(a).



 15
  
 









 


“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 Business Day next succeeding such day, provided
that (i) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if no such rate is
so published on such next succeeding 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.


“Fees Rule”
has the meaning set forth in Schedule 1.1 attached hereto.


“Financing
Partnership” means any Subsidiary which is wholly-owned, directly or
indirectly, by Borrower or by Borrower and EQR.


“FIN46(R)”
has the meaning set forth in the definition of “GAAP”.


“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 twelve (12) month period means (without duplication) 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 during
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.



 16
  
 









 


“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 6.75%.


“Fronting Bank”
shall mean Bank of America, N.A., JPMorgan Chase Bank, N.A., or such other Bank
which has notified the Administrative Agent that it 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 profession, which are
applicable to the circumstances as of the date of determination; provided,
however, that with respect to the financial covenants, including the related
definitions, (i) GAAP shall be deemed modified to eliminate the effect of FASB
Interpretations No. 46(R), Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB) No. 51 (“FIN 46(R)”),
issued by the Financial Accounting Standards Board, on the operation of such
covenants, and (ii) only Borrower’s Share of any income, expense, assets and
liabilities of any Consolidated Subsidiary or Investment Affiliate shall be
taken into account.


“Gross Asset
Value” means, (i) the Stabilized Property Value, plus (ii) the
Non-Stabilized Property Value, plus (iii) the value of any Cash or Cash
Equivalents (including Cash or Cash Equivalents held in restricted Section 1031
accounts under the control of the Borrower or EQR) owned by Borrower, EQR or
any wholly-owned Subsidiary of either, plus (iv) the undepreciated book value,
determined in accordance with GAAP, of readily marketable Securities and
Investment Mortgages owned by the Borrower, EQR or their wholly-owned
Consolidated Subsidiaries, plus (v) Borrower’s Share of the value of any Cash
or Cash Equivalents (including Cash or Cash Equivalents held in restricted
Section 1031 accounts under the control of a non-wholly owned Consolidated
Subsidiary or by an Investment Affiliate) owned by any such Consolidated
Subsidiary or Investment Affiliate, plus (vi) Borrower’s Share of the
undepreciated book value, determined in accordance with GAAP, of readily
marketable Securities and Investment Mortgages owned by any non-wholly owned
Consolidated Subsidiary or Investment Affiliate.



 17
  
 









 


“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.


“Increase
Option” has the meaning set forth in Section 2.1(b).


“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 reimbursement obligations, contingent or
otherwise, of such Person with respect to letters of credit actually issued for
such Person’s account or upon such Person’s application, (d) all obligations of
such Person to pay the deferred and unpaid purchase price of Property except
(i) any such deferred and unpaid purchase price that constitutes an accrued
expense or trade payable, and (ii) any deferred and unpaid purchase price under
a contract which, in accordance with GAAP would not be included as a liability
on the liability side of the balance sheet of such Person, (e) all obligations
in respect of Capital Leases (including ground leases) of such Person, (f) 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, in the case of items of Indebtedness incurred under clauses (a), (b),
(c) and (d) to the extent that any such items (other than letters of credit),
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, tax
liabilities and dividends and distributions declared but not yet paid.
Indebtedness also includes, to the extent not otherwise included, any
obligation of Borrower or EQR, as well as Borrower’s Share of any obligation of
any Consolidated Subsidiary or Investment Affiliate, to be liable for, or to
pay as obligor, guarantor or otherwise (other than for purposes of collection
in the ordinary course of business), Indebtedness of another Person (other than
Borrower, EQR, a Consolidated Subsidiary or an Investment Affiliate).
Indebtedness shall not include any Intracompany Indebtedness. “Intracompany
Indebtedness” means indebtedness whose obligor is Borrower, EQR, any
Consolidated Subsidiary or any Investment Affiliate and whose obligee is
Borrower, EQR or any wholly-owned Consolidated Subsidiary.


“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 (excluding the interest component




 18
  
 









of Capital Leases,
as well as interest expense covered by an interest reserve established under a
loan facility, as well as any interest expense under any construction loan or
construction activity that under GAAP is required to be capitalized) of
Borrower or EQR (excluding nonrecurring prepayment premiums or penalties and
any such interest expense accrued or capitalized on Indebtedness of any
Consolidated Subsidiary or Investment Affiliate), including without limitation
all commissions, discounts 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 or paid interest with
respect to any Indebtedness of Consolidated Subsidiaries or 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 (excluding nonrecurring prepayment
premiums or penalties and the interest component of Capital Leases, as well as
excluding interest expense covered by an interest reserve established under a
loan facility, as well as any interest expense under any construction loan or
construction activity that under GAAP is required to be capitalized) with
respect to Indebtedness of Consolidated Subsidiaries or 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 period and, in the case of all Floating
Rate Indebtedness, the actual rate of interest in effect with respect to such
Floating Rate Indebtedness outstanding for the period during which no Interest
Rate Contract is in effect, and, during the period that an Interest Rate
Contract is in effect with respect to such Floating Rate Indebtedness, the
strike rate payable under such Interest Rate Contract if lower than the actual
rate of interest.


“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 1, 2, 3 or 6 months
thereafter (or such shorter period, but in no event less than 7 days, as
Borrower may request, subject to the approval of the Administrative Agent), as
the Borrower may elect in the applicable Notice of Borrowing or Notice of
Interest Rate Election; provided that:


                (a)  any such 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;


 



 19
  















 


(b)  any such 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 such Interest Period which would
otherwise end after the Maturity Date shall end on the Maturity Date.


(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 (or for
a period of less than one month but in no event less than seven (7) days) as
the Borrower may elect in accordance with Section ; provided that:


(a)  any such 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 such 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 such 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 seven (7) days, or more than 180 days) as the Borrower may
elect in accordance with Section ; provided that:


(a)  any such 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



 20
  
 









 


(b)  any such 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.


“Investment
Affiliate” means any Person in whom EQR or Borrower holds an equity
interest, directly or indirectly, other than Consolidated Subsidiaries,
excluding the effects of consolidation required by FIN46(R), Military Housing
Affiliates and Securities and other passive interests.


“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 or Fitch, or 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).


“Joint Lead
Arrangers” means Banc of America Securities LLC and J.P. Morgan Securities
Inc.


“Joint Venture
Parent” means Borrower , EQR or one or more Financing Partnerships of
Borrower which directly owns any interest in a Joint Venture Subsidiary.


“Joint Venture
Subsidiary” means any entity (other than a Financing Partnership) in which
(i) a Joint Venture Parent owns at least 20% of the economic interests and (ii)
the sale or financing of any Property owned by such Joint Venture Subsidiary is
substantially controlled by a Joint Venture Parent, subject to customary
provisions set forth in the organizational documents of such Joint Venture
Subsidiary with respect to refinancings or rights of first refusal granted to
other members of such Joint Venture Subsidiary. 
For purposes of the preceding sentence, the sale or financing of a
Property owned by a Joint Venture Subsidiary shall be deemed to be
substantially controlled by a Joint Venture Parent if such Joint Venture Parent
has the ability to 



 21
  
 









exercise a
buy-sell right in the event of a disagreement regarding the sale or financing
of such Property. In addition, the relationship of a Joint Venture Parent as a
tenant in common in any asset with other tenants in common in the same asset
shall be treated as if such relationship were a general partnership for
purposes of this definition. For purposes of the definition of Unencumbered
Asset Value, a Joint Venture Subsidiary shall be deemed to include any entity
(other than a Financing Partnership) in which a Qualified Joint Venture Partner
owns the balance of the interests.


“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 Euro-Dollar 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 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, each Qualified Borrower
Guaranty, the Letter(s) of Credit, the Letter of Credit Documents and any Down
REIT Guaranty.



 22
  
 









 


“Mandatory Cost”
has the meaning set forth in Schedule 1.1 attached hereto.


“Margin Stock”
shall have the meaning provided such term in Regulation U.


“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) impair the ability of the Borrower and/or EQR and their
Consolidated Subsidiaries, taken as a whole, to 
perform their respective obligations under the Loan Documents or (ii)
impair the ability of Administrative Agent or the Banks to enforce the Loan
Documents.


“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 February 28, 2012, unless accelerated pursuant to the
terms hereof or extended pursuant to Section 2.9(b) hereof.


“Military
Housing” shall mean projects, the primary purpose of which is the
acquisition, development, construction, maintenance and operation of military
family housing and military unaccompanied housing on or near military
installations of the United States of America in collaboration with the United
States of America.


“Military
Housing Affiliates” shall mean any Consolidated Subsidiary or Investment
Affiliate of the Borrower or EQR which only has an investment in Military
Housing.


“Money Market
Absolute Rate” has the meaning set forth in Section .


“Money Market
Absolute Rate Loan” means a loan made or to be made by a Bank pursuant to
an Absolute Rate Auction.


“Money Market
Borrowing” has the meaning set forth in Section 1.3.



 23
  
 









 


“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 Market Lending Office by notice to the Borrower and the
Administrative 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 made or 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.


“Money Market
Quote Request” shall have the meaning set forth in Section 2.3(b).


“Moody’s”
means Moody’s Investors Service, 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, or common or preferred stock, or membership, trust or other
equity interests issued by any Person engaged primarily in the business of
developing, owning, and managing multifamily residential property, but excluding
Securities.



 24
  
 









 


“Negative Pledge”
means, with respect to any Property, any covenant, condition, or other
restriction entered into by the owner of such Property or directly binding on
such Property which prohibits or limits the creation or assumption of any Lien
upon such Property to secure any or all of the Obligations; provided, however,
that such term shall not include (a) any covenant, condition or restriction
contained in any ground lease from a Governmental Authority, or (b) any
financial covenant (such as a limitation on secured indebtedness) given for the
benefit of any Person that may be violated by the granting of any Lien on any
Property to secure any or all of the Obligations.


“Net Income”
means, for any period, the net earnings (or loss) after Taxes of the Borrower,
on a consolidated basis, for such period calculated in conformity with GAAP.


“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 or
Raw Land, (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 Borrower or EQR as a
general partner of such partnership); provided, however, that personal recourse
of Borrower or EQR for any such Indebtedness for Customary Non-Recourse
Carve-Outs in non-recourse financing of real estate shall not, by itself, prevent
such Indebtedness from being characterized as Non-Recourse Indebtedness.


“Non-Stabilized
Property” means any Property owned or leased by Borrower, EQR, a
Consolidated Subsidiary or an Investment Affiliate that is not a Stabilized
Property.


“Non-Stabilized
Property Value” means, the sum of (i) the aggregate Acquisition Property
Value,  (ii)  the aggregate Construction Property Value,
(iii) the aggregate Redevelopment Property Value, (iv) the aggregate Condo
Property Value, (v)the aggregate value of any Acquisition Property that was
classified as a “Non-Stabilized Property” as of September 30, 2006 pursuant to
the Existing Revolving 



 25
  
 









Credit Agreement,
valued for a period of six fiscal quarters at the greater of (1) the  Property EBITDA divided by FMV Cap Rate (or
Borrower’s Share thereof with respect to any such Non-Stabilized Property owned
by a Consolidated Subsidiary or an Investment Affiliate), and (2) undepreciated
book value (cost basis plus improvements) (or Borrower’s Share thereof with
respect to any such Non-Stabilized Property owned by a Consolidated Subsidiary
or an Investment Affiliate) and thereafter shall be valued as a Stabilized
Property. All such Acquisition Properties described under clause (v) shall be
valued as a Stabilized Property following the sixth full fiscal quarter after
the date of this Agreement.


“Notes”
means promissory notes of the Borrower or any Qualified Borrower, substantially
in the form of Exhibits A-1, A-2 and A-3 hereto,
evidencing the obligation of the Borrower or any Qualified Borrower to repay
the Loans, and “Note” means any one of such promissory notes issued
hereunder.


“Notice of
Borrowing” means a notice substantially in the form of Exhibit C
attached hereto and made a part hereof.


“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).


“Participating
Member State” has the meaning set forth in Schedule 1.1 attached hereto.


“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).



 26
  
 









 


“Permitted
Holdings” means Development Activity, Raw Land, Securities, Non-Multifamily
Residential Property, Investment Mortgages, and Investment Affiliates.


“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;


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 in connection with worker’s compensation, unemployment
insurance and other social security legislation or to secure liabilities to
insurance carriers;


d.             utility deposits and other deposits
to secure the performance of bids,      trade
contracts (other than for borrowed money), leases, purchase contracts,
construction contracts, governmental contracts, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;


e.             Liens for purchase money
obligations for equipment (or Liens to secure Indebtedness incurred within 90
days after the purchase of any equipment to pay all or a portion of the
purchase price thereof or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such equipment, or extensions,
renewals, or replacements of any of the foregoing for the same or lesser
amount); 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;


f.              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 



 27
  
 









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;


g.             Liens and judgments (i) which have
been or will be bonded (and the Lien thereby removed other than on any cash or
securities serving as security for such bond) 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, or (ii) which are being contested in
good faith by appropriate proceedings for review and in respect of which there
shall have been secured a subsisting stay of execution pending such appeal or
proceedings;


h.             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


i.              Liens in favor of the Borrower, EQR
or a Consolidated Subsidiary against any asset of Borrower, any Consolidated
Subsidiary or any Investment Affiliate.


“Person”
means an individual, a corporation, a partnership, an association, a trust, a
limited liability company 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 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.


“principal
financial center” means, when used in reference to an Alternate Currency,
(a) in the case of British Pounds Sterling, London, England, and (b) in the
case of Euros, Frankfurt am Main, Germany.


“Pro Rata Share”
means, with respect to any Bank, as applicable, (a) a fraction (expressed as a
percentage), the numerator of which shall be the amount of such Bank’s Dollar
Commitment and the denominator of which shall be the aggregate amount of all of
the Banks’ Dollar Commitments, (b) a fraction (expressed as a percentage), the
numerator of which shall be the amount of such Bank’s Alternate Currency
Commitment and the denominator of which shall be the aggregate amount of all of
the applicable 



 28
  
 









Banks’ Alternate
Currency Commitments, or (c) a fraction (expressed as a percentage), the
numerator of which shall be such Bank’s Commitment and the denominator of which
shall be the aggregate amount of all of the Banks’ Commitments, in each case as
adjusted from time to time in accordance with the provisions of this Agreement.


“Property”
means, with respect to any Person, any real or personal property, building,
facility, structure, equipment or unit, or other asset owned or leased by such
Person.


“Public Debt”
shall have the meaning set forth in Section 9.18(a) hereof.


“Qualified Borrower”
means a foreign or domestic limited partnership,  limited liability company or other business
entity duly organized under the laws of its jurisdiction of formation of which
the Borrower (or a Person that is owned and controlled by the Borrower) is the
sole general partner or managing member, the Indebtedness of which, in all
cases, can be guaranteed by the Borrower pursuant to the provisions of the
Borrower’s organizational documents pursuant to the Qualified Borrower
Guaranty, and with respect to which a Qualified Borrower Guaranty has been
executed and delivered.


“Qualified
Borrower Guaranty” means a full and unconditional guaranty of payment in
the form of  Exhibit I
attached hereto, enforceable against Borrower for the payment of a Qualified
Borrower’s debt or obligation to the Banks.


“Qualified
Institution” shall have the meaning set forth in Section 9.6(c)
hereof.


“Qualified
Joint Venture Partner” means (a) pension funds, insurance companies, banks,
investment banks or similar institutional entities, each with significant
experience in making investments in commercial real estate, and (b) commercial
real estate companies of similar quality and experience.


“Qualifying
Unencumbered Property” means any Property (including Raw Land and Property
with Development Activity) from time to time which is owned directly or
indirectly in fee (or ground leasehold) by Borrower, EQR, a Financing
Partnership or a Joint Venture Subsidiary, which (i) is Raw Land, Construction
Property, Redevelopment Property, Condo Property or an operating multifamily
residential property, (ii) is not subject (nor are any equity interests in such
Property that are owned directly or indirectly by Borrower or EQR 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 that are owned
directly or indirectly by Borrower or EQR subject) to any Negative Pledge, and
(iv) in the case of any Property that is owned by a Subsidiary of the Borrower
or EQR, is 



 29
  
 









owned by a
Subsidiary that does not have any outstanding Unsecured Debt (other than those
items of Indebtedness set forth in clauses (d) or (e) of the definition of
Indebtedness, or any Contingent Obligation except for 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.  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 or a wholly-owned Subsidiary of
such Down REIT.


“Rating
Agencies” means, collectively, S&P, Moody’s and Fitch Ratings Inc.


“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.


“Redevelopment
Property” means a property (other than a Condo Property) owned by the
Borrower or its Consolidated Subsidiaries or Investment Affiliates where the
existing building or other improvements or a portion thereof are undergoing
renovation and redevelopment that will either (a) disrupt the occupancy of at
least thirty percent (30%) of the square footage of such property or (b)
temporarily reduce the Consolidated EBITDA attributable to such property by
more than thirty percent (30%) as compared to the immediately preceding
comparable prior period.


“Redevelopment
Property Value”  means the greater of
(a) the EBITDA generated by a Redevelopment Property for the quarter
immediately prior to the commencement of the redevelopment divided by the FMV
Cap Rate (or Borrower’s Share thereof with respect to any Redevelopment
Property owned by a Consolidated Subsidiary or an Investment Affiliate), and
(b) the undepreciated book value (cost basis plus improvements) of such
Redevelopment Property (or Borrower’s Share thereof with respect to any
Redevelopment Property owned by a Consolidated Subsidiary or an 



 30
  
 









Investment
Affiliate).  A  Redevelopment Property shall be valued as a
Stabilized Property following the sixth full fiscal quarter after the fiscal
quarter in which substantial completion of the redevelopment occurred.


“Regulation U”
means Regulation U of the Federal Reserve Board, 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 and Borrower (excluding Indebtedness of Consolidated
Subsidiaries or Investment Affiliates), and Borrower’s Share of any
Indebtedness of any Consolidated Subsidiary or Investment Affiliate, (i) the
payment of which is secured by a Lien on any Property owned or leased by EQR,
Borrower, or any Consolidated Subsidiary or Investment Affiliate of either or
both, or (ii) which is unsecured Indebtedness of any Consolidated Subsidiary or
Investment Affiliate of Borrower or EQR, which Consolidated Subsidiary or
Investment Affiliate is not a guarantor of the Obligations and which Indebtedness
is not recourse to the Borrower or EQR (other than for Customary Non-Recourse
Carve-Outs), or (iii) which is Unsecured Tax Exempt Indebtedness.


“Securities”
means any stock, 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 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, all of which shall be passive investments.


“Sharing Event”
means (i) the occurrence of an Event of Default with respect to the Borrower or
EQR under clauses (f) or (g) of Section 6.1,or (ii) the acceleration of the
Loans pursuant to Article VI.


 



 31
  















“Solvent” means,
with respect to any Person, that the fair saleable value of such Person’s
assets exceeds the Indebtedness of such Person.


“Special Deposits”
has the meaning set forth in Schedule 1.1 attached hereto.


“Spot Rate” means
the rate determined by the Administrative Agent or the Fronting Bank, as
applicable, to be the rate quoted by the Person acting in such capacity as the
spot rate for the purchase by such Person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange
computation is made; provided  that
the Administrative Agent or the Fronting Bank shall obtain such spot rate from Reuters (or other commercially
available source providing quotations of the spot rate as selected by
Administrative Agent from time to time); and provided  further
that the Fronting Bank may use such spot rate quoted on the date as of which
the foreign exchange computation is made in the case of any Letter of Credit
denominated in an Alternate Currency.


“Stabilized Property”
means all Properties except (i) any Acquisition Property, Construction Property
or Redevelopment Property until such Property has become a Stabilized Property
in accordance with the definitions of Acquisition Property Value, Construction
Property Value and Redevelopment Property Value, (ii) any Property described in
clause (v) of the definition of Non-Stabilized Property Value until such
Property has become a Stabilized Property in accordance with such definition,
and (iii) any Condo Property.


“Stabilized Property
Value” means the EBITDA generated by a Stabilized Property divided by the
FMV Cap Rate (or Borrower’s Share thereof with respect to any Stabilized Property
owned by a Consolidated Subsidiary or an Investment Affiliate).  Any Stabilized Property which generates
negative EBITDA will have a Stabilized Property Value of zero.


“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).



 32
  
 









“Swingline Lender”
means Bank of America, N.A., 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 or to be made by the Swingline Lender pursuant to
Section 2.18.


“Syndication Agent”
shall mean JPMorgan Chase Bank, N.A., 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 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.


“Unencumbered Asset
Value” means the sum of (i) Stabilized Property Value of all Qualifying
Unencumbered Properties which are Stabilized Properties, (ii) Non-Stabilized
Property Value of all Qualifying Unencumbered Properties which are
Non-Stabilized Properties, (iii) the value of any Cash or Cash Equivalent
(including Cash or Cash Equivalents held in restricted Section 1031 accounts
under the control of the Borrower) owned by Borrower, EQR or any wholly-owned
Subsidiary of either, and (iv) the undepreciated book value, determined in
accordance with GAAP, of readily marketable Securities and Investment Mortgages
owned by the Borrower, EQR or their



 33
  
 









wholly-owned Subsidiaries
not subject to any Lien, plus (v) Borrower’s Share of the value of any Cash or
Cash Equivalents (including Cash or Cash Equivalents held in restricted Section
1031 accounts under the control of a non-wholly owned Consolidated Subsidiary
or by an Investment Affiliate) owned by any such Consolidated Subsidiary or
Investment Affiliate, plus (vi) Borrower’s Share of the undepreciated book
value, determined in accordance with GAAP, of readily marketable Securities and
Investment Mortgages owned by any non-wholly owned Consolidated Subsidiary or
Investment Affiliate, provided, however, that the aggregate value of those
items set forth in clauses (iv) and (vi) shall not exceed thirty percent (30%)
of Unencumbered Asset Value.


“Unimproved Assets”
means Real Property Assets, other than Raw Land, upon which no material
improvements have been completed which completion is evidenced by a certificate
of occupancy or its equivalent and is less than 90% leased in the aggregate
(based upon number of units).


“United States”
means the United States of America, including the fifty states and the District
of Columbia.


“Unsecured Debt”
means Indebtedness of EQR, on a consolidated basis, which is not Secured Debt.


“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.



 34
  
 









SECTION 1.2         Accounting Terms 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 and, with respect to financial covenants
including the related definitions, except for eliminating the effects of FIN
46(R)) 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.


SECTION 1.3         Types of Borrowings.  The term “Borrowing” denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) 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 and an “Alternate Currency Borrowing” is a Borrowing
comprised of Euro-Dollar Loans denominated in an Alternate Currency) or by
reference to the provisions of Article II 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  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)).



 35
  
 









ARTICLE II





THE CREDITS


SECTION 2.1         Commitments to Lend.


(a)           Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, (a) to make Committed Loans
to the Borrower or to any Qualified Borrower and participate in Letters of
Credit issued by the Fronting Bank on behalf of the Borrower or the Qualified
Borrowers 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 Dollar Equivalent Amount of its Commitment, and (b)
in furtherance and clarification of the foregoing, as to Banks with an
Alternate Currency Commitment only, to participate in Alternate Currency
Letters of Credit issued by the Fronting Bank on behalf of Borrower or the
Qualified Borrowers pursuant to this Article and to make Euro-Dollar Loans to
Borrower and to the Qualified Borrowers denominated in any Alternate Currency
(provided (i) such Alternate Currency is readily available to such Banks and is
freely transferable and convertible to Dollars, and (ii) the Reuters Monitor
Money Rates Service (or any successor thereto) reports a London Interbank
Offered Rate for such Alternate Currency relating to the applicable Interest
Period, in an aggregate principal Dollar Equivalent Amount not to exceed such
Bank’s Alternate Currency Commitment. Each Borrowing outstanding under this
Section 2.1 shall be in an aggregate principal amount the Dollar Equivalent
Amount of which is $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 (i) the aggregate Dollar
Equivalent Amount of Loans outstanding at any time, plus outstanding Dollar
Equivalent Amount of the Letter of Credit Usage, exceed $1,500,000,000 (the “Facility
Amount”), or (ii) the aggregate Dollar Equivalent Amount of Loans
denominated in an Alternate Currency plus the outstanding aggregate Dollar
Equivalent Amount of the Letter of Credit Usage for Alternate Currency Letters
of Credit exceed the Alternate Currency Sublimit, with, in the case of both
clauses (i) and (ii), Loans denominated in Alternate Currencies and Letter of
Credit Usage for Alternate Currency Letters of Credit being marked to market
monthly on the last Business Day of each month and immediately prior to each
Borrowing.  Notwithstanding any other
provision of this Agreement to the contrary, each Borrowing denominated in
Dollars shall be deemed to use the Dollar Commitments to the extent the Dollar
Sublimit would not be exceeded thereby, and to use the Alternate Currency
Commitments if such Alternate Currency Commitments are available in the 



 36
  
 









event that the Dollar
Commitments would be so exceeded. Subject to the limitations set forth herein,
any amounts repaid may be reborrowed.


(b)           Optional Increase in Commitments.
At any time prior to the Maturity Date, provided no Event of Default shall have
occurred and then be continuing, the Borrower may, if it so elects, increase
the aggregate amount of the Dollar Commitments and/or Alternate Currency
Commitments (subject to proviso (ii) in the next sentence), either by
designating an Approved Bank not theretofore a Bank to become a Bank (such
designation to be effective only with the prior written consent of the
Administrative Agent, which consent will not be unreasonably withheld) and/or
by agreeing with an existing Bank or Banks that such Bank’s Commitment (or such
Banks’ Commitments) shall be increased.  Upon
execution and delivery by the Borrower and any such Bank or other financial
institution of an instrument in form reasonably satisfactory to the
Administrative Agent, such existing Bank shall have a Commitment as therein set
forth or such Approved Bank shall become a Bank with a Commitment as therein
set forth and all the rights and obligations of a Bank with such a Commitment
hereunder; provided that:


(i)            the Borrower shall provide prompt
notice of such increase to the Administrative Agent, who shall promptly notify
the Banks; and


(ii)           the amount of such increase does not
cause the aggregate Commitments to exceed $2,000,000,000, nor the Alternate
Currency Commitments to exceed $400,000,000.


Upon any increase
in the aggregate amount of the Commitments pursuant to this Section 2.1(b),
within five Business Days (in the case of any Base Rate Loans then outstanding)
or at the end of the then current Interest Period with respect thereto (in the
case of any Euro-Dollar Loans then outstanding), as applicable, each Bank’s Pro
Rata Share shall be recalculated to reflect such increase in the Commitments
and the outstanding principal balance of the Committed Loans shall be
reallocated among the Banks such that the outstanding principal amount of
Committed Loans owed to each Bank shall be equal to such Bank’s Pro Rata Share
(as recalculated).  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
each Bank’s recalculated Pro Rata Share.


SECTION 2.2         Notice of Borrowing.


(a)           The Borrower shall give
Administrative Agent notice not later than 10:00 a.m. (Dallas time) (x) one
Business Day before each Base Rate Borrowing, 
(y) three Euro-Dollar Business Days before each Euro-Dollar Borrowing,
or (z) four (4)



 37
  
 









Business Days before each
Euro-Dollar Borrowing denominated in an Alternate Currency, specifying:


(i)            the date of such Borrowing, which
shall be a 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 if Euro-Dollar
Loans are requested other than in Dollars, the type and amount of the Alternate
Currency being requested,


(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, and


(v)           if such Borrowing is to be made by a
Qualified Borrower, the identity of such Qualified Borrower.


(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 Consolidated
Subsidiary, Qualified Borrower or Investment Affiliate, hereunder no later than
10:00 a.m., Dallas time, at least four (4) Business Days prior to the date of
such issuance.  Each such notice shall
specify (i) if Alternate Currency is requested, the type of the Alternate
Currency being requested, (ii) the designated Fronting Bank, (iii) the
aggregate amount of the requested Letters of Credit, (iv) the individual amount
of each requested Letter of Credit and the number of Letters of Credit to be
issued, (v) the date of such issuance (which shall be a Business Day), (vi) the
name and address of the beneficiary, (vii) the expiration date of the Letter of
Credit (which in no event shall be later than twelve (12) months after the
Maturity Date), (viii) the purpose and circumstances for which such Letter of
Credit is being issued and (ix) the terms upon which each such Letter of Credit
may be drawn upon.  If Borrower shall
desire to have any Letter of Credit issued on behalf of an Investment
Affiliate, then, upon the reasonable request of any Bank or the Administrative
Agent, Borrower shall deliver to the Administrative Agent any information with
respect to such Investment Affiliate reasonably required to comply with the
provisions of Section 9.19.  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



 38
  
 









Administrative Agent
within one (1) 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) Business
Days prior to the issuance thereof. No later than 10:00 a.m., Dallas time, on
the date that is four (4) 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 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 prior to
the third Business Day following the date that such draft is presented if such
presentation is made later than 10:00 A.M. Dallas 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 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. Dallas 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 any 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. The Administrative Agent shall provide each of the
Banks, quarterly, a summary of all outstanding Letters 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
from both S&P and Moody’s, 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 in Dollars only to the Borrower, not to exceed, at such time, the lesser
of (i) fifty percent (50%) of the aggregate Commitments, 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 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 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.  It is hereby acknowledged and agreed by the



 39
  
 









Borrower, the
Administrative Agent and all the Banks party hereto that on the Closing Date,
the Money Market Loans previously made by JPMorgan Chase Bank and U.S. Bank
National Association under the Existing Revolving Credit Agreement, and more
particularly set forth on Schedule 2.3 hereto, shall be transferred to
this Agreement and shall be deemed to be Money Market Loans hereunder.


(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
Administrative Agent by facsimile transmission a request substantially in the
form of Exhibit B hereto (a “Money Market Quote Request”) so as
to be received not later than 10:30 A.M. (Dallas 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 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 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 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 7 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. Together with the delivery of
each Money Market Quote Request, Borrower shall pay to the Administrative
Agent, a fee equal to $2,500.


(c)           Invitation for Money Market Quotes.  Promptly upon receipt of a Money Market Quote
Request, the Administrative Agent shall send to the Banks by



 40
  
 









facsimile or electronic
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 (an “Invitation for Money Market Quotes”).


(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  not
later than (x) 2:00 P.M. (Dallas 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. (Dallas 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 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 Bank
serving as the Administrative Agent (or any affiliate of the Bank serving as
the Administrative Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Bank serving as 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 III and VI, 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



 41
  
 









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
Euro-Dollar 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 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(except for an aggregate limitation as provided in
subsection (d)(2) above); 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) Business Day after receipt thereof except with
respect to Money Market Absolute Rate Borrowings which shall be on the same day
as 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



 42
  
 









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. (Dallas 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 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 Administrative 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



 43
  
 









which such offers are
permitted to be 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) Business Day after such offers are accepted except
with respect to Money Market Absolute Rate Borrowings which shall be on the
same day as 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), 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
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)            Funding of Committed Loans Not
Affected. 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 of Borrowing
from Borrower in accordance with Section 2.2 hereof, 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



 44
  
 









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. (Dallas time
or, in the case of any Alternate Currency Borrowing, local time to the
principal financial center of the Alternate Currency in question) 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 or the applicable Alternate Currency
immediately available in Dallas (or, in the case of any Alternate Currency Borrowing,
the principal financial center of the Alternate Currency in question), 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 (Dallas 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 or to the applicable Qualified Borrower or, at
the instruction of the Borrower or the applicable Qualified Borrower, to the
beneficiary thereof, 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 with a Dollar Commitment or Alternate
Currency Commitment, as applicable, 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 Dollar Commitment or
Alternate Currency Commitment, as applicable, bears to the aggregate of all
Dollar Commitments or Alternate Currency Commitments, as applicable).  Upon any change in any of the Commitments in
accordance herewith, there shall be an automatic adjustment to such
participations to 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 or to the
applicable Qualified Borrower and the Fronting Bank shall make such Letter of
Credit available to the Borrower or to the applicable Qualified Borrower or, at
the instruction of the Borrower or the applicable Qualified Borrower, to the
beneficiary thereof, at the Borrower’s aforesaid address or at such address in
the United States as Borrower or the applicable Qualified Borrower shall
request on the date of the issuance thereof or, in the case of an Alternate
Currency Letter of Credit, at such address in Europe or the United Kingdom or
the United States as the Borrower or the applicable Qualified Borrower shall
request on the date of the issuance thereof.



 45
  















 


(c)           Not later than 3:00
p.m. (Dallas 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 Dallas, Texas, 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 (or to cause the applicable Qualified Borrower to repay) to the
Administrative Agent forthwith on demand, and in the case of the Borrower one
(1) 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 or such Qualified 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 as of
the date of such Borrowing for purposes of this Agreement.


(e)           Subject to the
provisions hereof, the Administrative Agent shall make available each Borrowing
to Borrower in Federal funds or to the Borrower or the applicable Qualified
Borrower in the applicable Alternate Currency immediately available in
accordance with, and on the date set forth in, the applicable Notice of
Borrowing.


SECTION 2.5         Notes.


(a)           The Loans of each
Bank shall be evidenced by a single Note made by the Borrower or any Qualified
Borrower 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 the 



 46
  
 









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-2 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 or the applicable
Qualified 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 or applicable Qualified Borrower
hereunder or under the Notes.  Each Bank
is hereby irrevocably authorized by the Borrower and each Qualified 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 fifteen (15) (twenty (20) in the event Borrower exercises its option
to increase the Commitments under Section 2.1(b)) Euro-Dollar Groups of Loans
and Money Market Loans outstanding at any one time, of which, no more than five
(5) Euro-Dollar Groups of Loans may be Alternate Currency Loans with Interest
Periods of less than one (1) month.



 47
  
 









 


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 or the applicable Qualified Borrower in the
applicable Notice of Borrowing. 
Thereafter, the Borrower or the applicable Qualified Borrower (or the
Borrower on behalf of the applicable Qualified 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:


(i)            if such Loans are
Base Rate Loans, the Borrower or the applicable Qualified 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, (a) denominated in Dollars, the Borrower or the applicable
Qualified Borrower (or the Borrower on behalf of the applicable Qualified
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, or (b)
denominated in an Alternate Currency, the Borrower or the applicable Qualified
Borrower (or the Borrower on behalf of the applicable Qualified Borrower) may
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 or the applicable Qualified
Borrower (or the Borrower on behalf of the applicable Qualified Borrower) in
the Notice of Interest Rate Election provided Borrower or the applicable
Qualified Borrower (or the Borrower on behalf of the applicable Qualified
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 of Loans, (ii) the portion to
which such Notice of Interest Rate Election applies, and the remaining portion
to which it does not apply, are each an amount, the Dollar Equivalent Amount of
which is $500,000 or any larger multiple of $100,000, (iii) there shall be no
more than fifteen (15) (twenty (20) in the event Borrower exercises its option to
increase the Commitments under Section 2.1(b)) Euro-Dollar Groups of Loans and
Money Market Loans outstanding at any one time, of which, no more than five (5)
Euro-Dollar Groups of Loans may be Alternate Currency Loans with Interest
Periods of less than 30 days, (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.



 48
  
 









 


(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 of Loans 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.


(c)           Upon receipt of a
Notice of Interest Rate Election from the Borrower or the applicable Qualified
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 or the applicable Qualified Borrower) and such notice shall not
thereafter be revocable by the Borrower or the applicable Qualified
Borrower.  If the Borrower or Qualified
Borrower fails to deliver a timely Notice of Interest Rate Election to the
Administrative Agent for any Group of Loans which are Euro-Dollar Loans, such
Loans shall be converted into Base Rate Loans or, in the case of Euro-Dollar
Loans denominated in an Alternate Currency, continued as a Euro-Dollar Loan
with an Interest Period of one (1) month, 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 (in the case of
a failure to pay interest) such failure shall become an Event of Default and
thereafter (or immediately in the case of a failure to pay principal) at a rate
per annum equal to the sum of 2% plus the Base Rate for such day.



 49
  
 









 


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 Business Day of each month.


(b)           Subject to Section
8.1, 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 Euro-Dollar Rate applicable to such Interest
Period.  Such interest shall be payable
on the  first Business Day of each month,
as well as on the date of any prepayment of any such Euro-Dollar Loan.


(c)           Subject to Section ,
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 Euro-Dollar 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 .  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
..  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 (in the case of a failure
to pay interest) such failure shall become an Event of Default and thereafter
(or immediately in the case of the failure to pay principal) at a rate per
annum equal to the sum of 2% 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 two percent (2%) (the “Default
Rate”).



 50
  
 









 


(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 the Banks of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of demonstrable error.


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,
and on the Maturity Date.




	
  Less than BBB-/ Baa3

  	
   

  	
  0.250%

  
	
  BBB-/Baa3

  	
   

  	
  0.200%

  
	
  BBB/Baa2

  	
   

  	
  0.150%

  
	
  BBB+/Baa1

  	
   

  	
  0.125%

  
	
  A-/A3

  	
   

  	
  0.100%

  
	
  >A/A2

  	
   

  	
  0.100%

  






 


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
Credit Ratings that are not equivalent, the applicable percentage per annum
shall be based upon the higher of the Credit Ratings from S&P or Moody’s.  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 Credit Rating.


(b)           Letter of Credit
Fee.  During the Term, the Borrower
shall pay, or shall cause the applicable Qualified Borrower to 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 the then
percentage per annum of the Applicable Margin with respect to Euro-Dollar Loans
less 0.075%, 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, and on the Maturity Date, and, if and to the extent
that the term of any Letter of Credit shall extend beyond the Maturity Date, on
each January 1, April 1, July 1 and 



 51
  
 









October 1 until all Letters of Credit shall have expired and/or been
returned and on the date such final Letter of Credit expires or is
returned.  From the occurrence, and
during the continuance, of an Event of Default, such fee shall be increased to
be equal to two percent (2%) per annum on the daily average of such issued and
undrawn Letters of Credit.


(c)           Fronting Bank Fee.  The Borrower or the applicable Qualified
Borrower shall pay any Fronting Bank, for its own account, a fee (a “Fronting
Bank Fee”) at a rate per annum equal to the greater of (x) .075% of the
issued and undrawn amount of the Letters of Credit issued by such Fronting Bank
and (y) $500 per 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, and on the Maturity Date, on each January 1,
April 1, July 1 and October 1 until all Letters of Credit shall have expired
and/or been returned and on the date such final Letter of Credit expires or is
returned. In addition, Borrower shall pay directly to the Fronting Bank for its
own account, the customary processing fees, charges and expenses of the
Fronting Bank in connection with the issuance, administration or extension of
letters of credit as from time to time in effect.


(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) shall terminate
and expire 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 other than with respect
to Letters of Credit) shall be due and payable on such date.


SECTION 2.10       Intentionally
Omitted.


SECTION 2.11       Optional
Prepayments and Optional Decreases and Termination.


(a)           The Borrower may,
upon at least one (1) Business Day’s notice to the Administrative Agent (which
shall promptly notify each of the Banks), prepay any Group of Loans which are
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 



 52
  
 









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 Business Day so long as prior notice is
given to the Administrative Agent and Swingline Lender no later than 1:00 p.m.
(Dallas 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 of all Swingline Loans then outstanding) by paying
the principal amount to be prepaid no later than 2:00 p.m. (Dallas 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 of Loans or Borrowing.


(b)           The Borrower may,
upon at least one (1) Euro-Dollar Business Day’s notice to the Administrative
Agent (which shall promptly notify each of the Banks), prepay any Euro-Dollar
Loan as of the last day of the Interest Period applicable thereto.  Except as provided in Article VIII 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 Loans which are
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) Business Day’s notice to the Administrative Agent (by
11:00 a.m Dallas time or local time to the principal financial center of the
Alternate Currency in question, as applicable, on such 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, or cause to be returned, 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 Dollar Commitments
or the Alternate Currency Commitments. If there are 



 53
  
 









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) Business Day’s notice to the Administrative Agent (which shall
promptly notify each of the Banks), 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 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(e) 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 or less than 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 or
Qualified Borrower shall make each payment of interest on the Loans and of fees
hereunder, not later than 12:00 Noon (Dallas time or local time to the
principal financial center of the Alternate Currency in question, as
applicable) on the date when due, in Federal or other funds immediately
available in Dallas, or, in the case of any Alternate Currency Loans, in the
applicable Alternate Currency immediately available in the principal financial
center of the Alternate Currency in question, 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 Business Day, if received after 12:00 noon on the immediately
following 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 (Dallas time or local time to the principal financial center of the
Alternate Currency in question, as applicable) 



 54
  
 









on any Business Day, and Administrative Agent shall not have
distributed to any Bank its applicable share of such payment on such 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 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 Business
Day, the date for payment thereof shall be extended to the next succeeding
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 or
Qualified Borrower, as the case may be, will not make such payment in full, the
Administrative Agent may assume that the Borrower or Qualified Borrower, as the
case may be, 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 or Qualified Borrower, as the case may be, 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.


 



 55
  















SECTION 2.13       Funding
Losses.  If the Borrower or a
Qualified Borrower, as the case may be, makes any payment of principal with
respect to any Euro-Dollar Loan or Money Market LIBOR Loan or Money Market
Absolute Rate 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 or a Qualified Borrower, as the case may be, fails to borrow, continue
or convert to any Euro-Dollar Loans or Money Market LIBOR Loans or Money Market
Absolute Rate Loans after notice has been given to any Bank in accordance with
Section 2.4(a) or 2.6, or if Borrower or a Qualified Borrower, as the case may
be, shall deliver a Notice of Interest Rate Election specifying that a
Euro-Dollar Loan or Money Market LIBOR Loan or Money Market Absolute Rate 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, continue or convert, 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. In addition, the Borrower shall pay to the Administrative
Agent, for the account of the applicable Bank, any Mandatory Cost.


SECTION 2.14       Computation
of Interest and Fees. All interest based on the Euro-Dollar Rate (other
than with respect to Loans denominated in Pounds Sterling) and all 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). All interest
based on the Base Rate and all interest on Loans denominated in Pounds Sterling
shall be computed on the basis of a year of 365 days (or, in the case of
interest based on the Base Rate only, 366 days in a leap year) and paid for the
actual number of days elapsed (including the first day but excluding the last
day).


SECTION 2.15       Use of
Proceeds.  The Borrower shall use, or
shall cause any Qualified Borrower to 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.



 56
 









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 or the Qualified
Borrower and the Fronting Bank (subject to the provisions of Section 2.2(b)) in
an amount or amounts equal to the amount or amounts requested by the Borrower;
provided that, in the case of (i) Alternate Currency Letter(s) of Credit, the
Fronting Bank shall issue the same in the Alternate Currency requested and (ii)
Dollar Letter(s) of Credit, the Fronting Bank shall issue the same in Dollars.
Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the Dollar Equivalent Amount of the stated amount of such
Letter of Credit in effect at such time.


(b)           It is hereby
acknowledged and agreed by the Borrower, the Administrative Agent and all the
Banks party hereto that on the Closing Date, the letters of credit previously
issued by Bank of America, N.A., and U.S. Bank National Association  as “Fronting Bank” under the Existing Revolving
Credit Agreement, as well as by Bank of America, N.A. under a separate letter
of credit facility, and more particularly set forth on Schedule 2.16
hereto, shall be transferred to this Agreement and shall be deemed to be
Letters of Credit hereunder.


(c)           The Letter of Credit
Usage shall be no more than Six Hundred Million Dollars ($600,000,000) at any
one time (and in the case of Alternate Currency Letters of Credit, no more than
the Dollar Equivalent Amount of the Alternate Currency Sublimit).


(d)           Intentionally
Omitted.


(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. (Dallas time)
on the 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 



 57
 









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 2.4(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.  Notwithstanding anything contained
herein to the contrary, however, in the case of Alternate Currency Letters of
Credit, Borrower or, if such Letter of Credit was issued on behalf of a
Qualified Borrower, such Qualified Borrower (which obligations of such Qualified
Borrower are guaranteed by Borrower pursuant to the Qualified Borrower
Guaranty) shall reimburse any drawing thereunder in the Alternate Currency in
which such Alternate Currency Letter(s) of Credit are denominated; provided,
however, that if (x) any such drawing is made at a time when there
exists an Event of Default or (y) Borrower shall not have notified the
Administrative Agent and Fronting Bank prior to 11 a.m. (Dallas time) at least
two (2) Business Days immediately prior to such drawing that Borrower intends
to reimburse Fronting Bank in the applicable Alternate Currency, then, in
either such case, such reimbursement shall instead be made by payment in
Dollars of the Dollar Equivalent Amount of such drawing and in immediately
available funds. In the event that any such Bank fails to make available to the
Fronting Bank the amount of 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
(excluding any costs already reflected in any Mandatory Cost), 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 



 58
 









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 harmless the Fronting Bank and the
Banks from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys’ fees and
disbursements) which the Fronting Bank or any 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, including by reason of court order
(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
and each 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 and the Banks 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 any Letter 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 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 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 



 59
 









any loss or delay in the transmission or otherwise of any documents
required in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any Letter
of Credit of the proceeds of such Letter of Credit; or (viii) for any
consequence arising from causes beyond the control of the Fronting Bank or any
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 or any 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 or any 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 draft and certificates strictly
in compliance with the terms and conditions of the Letter of Credit, except as
a result of any court order.


(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) 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 



 60
 









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;


(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 hereby or by
the Letter of Credit Documents or any unrelated transaction;


(e)           any draft or any other
document presented under or in connection with any Letter of Credit 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
Commitment.  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 in Dollars only to the
Borrower (each a “Swingline Loan” and, collectively, the “Swingline
Loans”) from time to time during the term hereof; provided, 



 61
 









however, that the aggregate amount of
Swingline Loans outstanding at any time shall not exceed the lesser of (i) ten
percent (10%) of the aggregate Commitments, and (ii) the aggregate Commitments
less the Dollar Equivalent Amount of all Loans (other than Swingline Loans)
then outstanding and the Dollar Equivalent Amount of the Letter of Credit Usage
(the “Swingline Commitment”). 
Subject to the limitations set forth herein, any amounts repaid in
respect of Swingline Loans may be reborrowed.


(b)           Swingline
Borrowings.


(i)            Notice of
Borrowing.  With respect to any
Swingline Borrowing, the Borrower shall give the Swingline Lender and the
Administrative Agent notice in writing in the form attached hereto as Exhibit
C, which is received by the Swingline Lender and Administrative Agent not
later than 1:00 p.m. (Dallas 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 Business Day,
and (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) 7 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) Business Days in any calendar month. If, and to the extent, any Swingline
Loans shall be outstanding on the date of any Committed Borrowing denominated
in Dollars, 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 7-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 



 62
 









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 Business Day if such
notice is received after 12:00 P.M. (Dallas 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 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 2.2,
(V) the date of such Mandatory Borrowing (provided that such date must be a
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 caused by any purchasing Bank 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, such 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 



 63
 









Funds Rate, for the two (2) 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 Rate.  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.


SECTION 2.19       Letters of
Credit Maturing after the Maturity Date.


(a)           Notwithstanding
anything contained herein to the contrary, if any Letters of Credit, by their
terms, shall mature after the Maturity Date (as the same may be extended),
then, on and after the Maturity Date, the provisions of this Agreement shall
remain in full force and effect with respect to such Letters of Credit, and the
Borrower shall comply with the provisions of Section 2.19(b). No Letter of
Credit shall mature on a date that is more than twelve (12) months after the
Maturity Date then in effect.


(b)           If, at any time and
from time to time, any Letter of Credit shall have been issued hereunder and
the same shall expire on a date after the Maturity Date, then, on the date that
is five (5) Business Days prior to the Maturity Date, 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 the
Letter of Credit Collateral Account, Letter of Credit Collateral in an amount
equal to the amount of the Letter of Credit Usage, in United States Dollars,
under the Letters of Credit. The Administrative Agent shall recalculate the
Dollar Equivalent Amount with respect to all Alternate Currency Letters of
Credit monthly, as of the last Business Day of each month.  Interest shall accrue on the Letter of Credit
Collateral Account in accordance with the provisions of Section 6.4.


SECTION 2.20       Special
Provisions Regarding Alternate Currency Loans.


(a)           Upon the occurrence
of a Sharing Event, automatically (and without the taking of any action) (x)
all then outstanding Euro-Dollar Loans denominated in an Alternate Currency
shall be automatically converted into Base Rate Loans denominated in Dollars
(in an amount equal to the Dollar Equivalent Amount of the aggregate principal
amount of the applicable Euro-Dollar Loans on the date such Sharing 



 64
 









Event first occurred, which Loans denominated in Dollars (i) shall
thereafter continue to be deemed to be Base Rate Loans and (ii) unless such
Sharing Event resulted solely from a termination of the Commitments, shall be
immediately due and payable on the date such Sharing Event has occurred) and
(y) unless such Sharing Event resulted solely from a termination of the
Commitments, all accrued and unpaid interest and other amounts owing with
respect to such Loans shall be immediately due and payable in Dollars, using
the Dollar Equivalent Amount of such accrued and unpaid interest and other
amounts.


(b)           Upon the occurrence
of a Sharing Event, and after giving effect to any automatic conversion
pursuant to Section 2.20(a), each Bank shall (and hereby unconditionally and
irrevocably agrees to) purchase and sell (in each case in Dollars) undivided
participating interests in all Committed Loans outstanding to, and any unpaid
Letter of Credit Usage owing by, the Borrower and the Qualified Borrowers in
such amounts so that each Bank shall have a share of such outstanding Loans and
unpaid Letter of Credit Usage then owing by the Borrower and the Qualified
Borrowers equal to its Pro Rata Share of the Commitments (although if because
of fluctuations in currency exchange rates any Bank would be required to
purchase such participations after giving effect to which such Bank’s allocated
share of all Committed Loans and Letter of Credit Usage (including
participations therein purchased pursuant to this Section 2.20) would exceed
the Dollar Equivalent Amount of such Bank’s Dollar Commitment and Alternate
Currency Commitment, then such participations shall be in an amount after
giving effect to which such Bank’s allocated share of all Committed Loans and
Letter of Credit Usage (including participations therein purchased pursuant to
this Section 2.20) would equal the Dollar Equivalent Amount of such Bank’s
Dollar Commitment and Alternate Currency Commitment).  Upon any such occurrence, the Administrative
Agent shall notify each Bank and shall specify the amount of dollars required
from such Bank in order to effect the purchases and sales by the various Banks
of participating interests in the amounts required above (together with accrued
interest with respect to the period for the last interest payment date through
the date of the Sharing Event plus any additional amounts payable by the
Borrower pursuant to this Section 2.20 in respect of such accrued but unpaid
interest); provided, in the event that a Sharing Event shall have occurred,
each Bank shall be deemed to have purchased, automatically and without request,
such participating interests. Promptly upon receipt of such request, each Bank
shall deliver to the Administrative Agent (in immediately available funds in
Dollars) the net amounts as specified by the Administrative Agent. The
Administrative Agent shall promptly deliver the amounts so received to the
various Banks in such amounts as are needed to effect the purchases and sales
of participations as provided above. Promptly following receipt thereof, each
Bank which has sold participations in any of its Loans (through the
Administrative Agent) will deliver to each Bank (through the Administrative
Agent) which has so purchased a participating interest a participation
certificate dated the date of receipt of such funds and in such amount. It is
understood that the amount of funds 



 65
 









delivered by each Bank shall be calculated on a net basis, giving
effect to both the sales and purchases of participations by the various Banks
as required above.


(c)           Upon the occurrence
of a Sharing Event (i) no further Loans shall be made, (ii) all amounts from
time to time accruing with respect to, and all amounts from time to time
payable on account of, any outstanding Euro-Dollar Loans initially denominated
in an Alternate Currency (including, without limitation, any interest and other
amounts which were accrued but unpaid on the date of such purchase) shall be
payable in Dollars as if such Euro-Dollar Loans had originally been made in
Dollars and shall be distributed by the relevant Banks (or their Affiliates) to
the Administrative Agent for the account of the Banks which made such Loans or
are participating therein and (iii) the Commitments of the Banks shall be
automatically terminated. Notwithstanding anything to the contrary contained
above, the failure of any Bank to purchase its participating interest in any
Committed Loans upon the occurrence of a Sharing Event shall not relieve any
other Bank of its obligation hereunder to purchase its participating interests
in a timely manner, but no Bank shall be responsible for the failure of any other
Bank to purchase the participating interest to be purchased by such other Bank
on any date.


(d)           If any amount
required to be paid by any Bank pursuant to Section 2.20(b) is not paid to the
Administrative Agent within one (1) Business Day following the date upon which
such Bank receives notice from the Administrative Agent of the amount of its
participations required to be purchased pursuant to said Section 2.20(b), such
Bank shall also pay to the Administrative Agent on demand an amount equal to
the product of (i) the amount so required to be paid by such Bank for the
purchase of its participations times (ii) the daily average Federal Funds Rate
during the period from and including the date of request for payment to the
date on which such payment is immediately available to the Administrative Agent
times (iii) a fraction the numerator of which is the number of days that
elapsed during such period and the denominator of which is 360. If any such
amount required to be paid by any Bank pursuant to Section 2.20(b) is not in
fact made available to the Administrative Agent within three (3) Business Days
following the date upon which such Bank receives notice from the Administrative
Agent as to the amount of participations required to be purchased by it, the Administrative
Agent shall be entitled to recover from such Bank on demand, such amount with
interest thereon calculated from such request date at the rate per annum
applicable to Base Rate Loans hereunder. A certificate of the Administrative
Agent submitted to any Bank with respect to any amounts payable by any Bank
pursuant to this Section 2.20 shall be paid to the Administrative Agent for the
account of the relevant Banks; provided that, if the Administrative Agent (in
its sole discretion) has elected to fund on behalf of such Bank the amounts
owing to such Banks, then the amounts shall be paid to the Administrative Agent
for its own account.



 66















(e)           Whenever, at any
time after the relevant Banks have received from any Banks purchases of
participations in any Committed Loans pursuant to this Section 2.20, the Banks
receive any payment on account thereof, such Banks will distribute to the
Administrative Agent, for the account of the various Banks participating
therein, such Banks’ participating interests in such amounts (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such participations were outstanding) in like funds as received;
provided, however, that in the event that such payment received by any Banks
are required to be returned, the Banks who received previous distributions in
respect of their participating interests therein will return to the respective
Banks any portion thereof previously so distributed to them in like funds as
such payment is required to be returned by the respective Banks.


(f)            Each Bank’s
obligation to purchase participating interests pursuant to this Section 2.20
shall be absolute and unconditional and shall not be affected by any
circumstance including, without limitation, (a) any setoff, counterclaim,
recoupment, defense or other right which such Bank may have against any other
Bank, the Borrower or any other Person for any reason whatsoever, (b) the
occurrence or continuance of an Event of Default, (c) any adverse change in the
condition (financial or otherwise) of the Borrower or any other Person, (d) any
breach of this Agreement by the Borrower, any of its Subsidiaries or any Bank
or any other Person, or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.


(g)           Notwithstanding
anything to the contrary contained elsewhere in this Agreement, upon any
purchase of participations as required above, each Bank which has purchased
such participations shall be entitled to receive from the Borrower any
increased costs and indemnities directly from the Borrower to the same extent
as if it were the direct Bank as opposed to a participant therein. The Borrower
acknowledges and agrees that, upon the occurrence of a Sharing Event and after
giving effect to the requirements of this Section 2.20, increased Taxes may be
owing by the Borrower pursuant to Section 8.4, which Taxes shall be paid (to
the extent provided in Section 8.4) by the Borrower, without any claim that the
increased Taxes are not payable because same resulted from the participations
effected as otherwise required by this Section 2.20.


SECTION 2.21       Qualified
Borrowers.


(a)           The Borrower may, at
any time or from time to time, upon not less than ten (10) Business Days’
notice in the case of a domestic Qualified Borrower or fifteen (15) Business
Day’s notice in the case of a foreign Qualified Borrower, designate one or more
Qualified Borrowers to be added to this Agreement by notifying the
Administrative Agent thereof, and the Administrative Agent shall promptly
notify each 



 67
 









Bank. Borrower shall, or shall cause such Qualified Borrower to,
deliver all documents required to be delivered pursuant to Section 3.1 with
respect to a Qualified Borrower, each of which shall be in form and substance
reasonably satisfactory to the Administrative Agent.  Following the giving of any notice pursuant
to this Section 2.21, if the designation of such Qualified Borrower obligates
the Administrative Agent or any Bank to comply with “know your customer” or
similar identification procedures in circumstances where the necessary
information is not already available to it, the Borrower shall, promptly upon
the request of the Administrative Agent or any Bank, supply such documentation
and other evidence as is reasonably requested by the Administrative Agent or
any Bank in order for the Administrative Agent or such Bank to carry out and be
satisfied it has complied with the results of all necessary “know your customer”
or other similar checks under all applicable laws and regulations.


(b)           If the Borrower
shall designate as a Qualified Borrower hereunder any entity not organized
under the laws of the United States or any State thereof, any Bank may, with
notice to the Administrative Agent and the Borrower, fulfill its Commitment by
causing an Affiliate of such Bank to act as the Bank in respect of such
Qualified Borrower (and such Bank shall, to the extent of Loans  made to, and participations in Letters of
Credit issued for the account of, such Qualified Borrower be deemed for all
purposes hereof to have pro tanto assigned such Loans and participations to
such Affiliate in compliance with the provisions of Section 9.6 (but only for
so long as such Loans or Letters of Credit shall be outstanding) except that
unless such an Affiliate is a Qualified Institution, nothing herein shall be
deemed to have relieved such Bank from its obligations under its Commitments).



 68
 









SECTION 2.22       Mandatory Prepayments.  The Administrative Agent shall calculate the
Dollar Equivalent Amount of all Loans denominated in an Alternate Currency and
Letter of Credit Usage of Alternate Currency Letters of Credit at the time of
each Borrowing thereof and on the last Business Day of each month during each
Interest Period.  If at any such time (y)
the Dollar Equivalent Amount of the sum of (i) all outstanding Loans
denominated in an Alternate Currency, (ii) all outstanding Loans denominated in
Dollars made against the Alternate Currency Commitments, (iii) the outstanding
Dollar Equivalent Amount of the Letter of Credit Usage for Alternate Currency
Letters of Credit, and (iv) the Letter of Credit Usage for Letters of Credit
denominated in Dollars issued against the Alternate Currency Commitments, so
determined by the Administrative Agent, in the aggregate, exceeds 105% of the
Alternate Currency Sublimit, Borrower shall repay  (and cause the applicable Qualified Borrowers
to repay) all or a portion of such Loans or post cash collateral with respect
to the Alternate Currency Letters of Credit, otherwise in accordance with the
applicable terms of this Agreement, in such amount so that, following the
making of such payment, the Dollar Equivalent Amount outstanding of such Loans
and non-cash collateralized Letter of Credit Usage does not exceed the
Alternate Currency Sublimit, or (z) the Dollar Equivalent Amount of the sum of
(i) all outstanding Loans and (ii) the outstanding Dollar Equivalent Amount of
the Letter of Credit Usage so determined by the Administrative Agent, in the
aggregate, exceeds the Commitments, Borrower shall, in each case, repay (or
cause the applicable Qualified Borrower to repay) all or a portion of the
Loans, otherwise in accordance with the applicable terms of this Agreement, in
such amount so that, following the making of such payment, the Dollar
Equivalent Amount outstanding of Loans and Letter of Credit Usage does not
exceed the Commitments.


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 and any
Qualified 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, EQR,
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;



 69
 









(c)           EQR shall have executed and delivered
to the Administrative Agent a duly executed original of the EQR Guaranty and
the Qualified Borrower Guaranty, if applicable, and each Down REIT Guarantor
shall have executed and delivered to the Administrative Agent a duly executed
original of a Down REIT Guaranty;


(d)           the Administrative
Agent shall have received an opinion of DLA Piper Rudnick US LLP, counsel for
the Borrower and any Qualified Borrower, acceptable to the Administrative
Agent, the Banks and their counsel;


(e)           the Borrower shall
have repaid in full, and terminated, the Revolving Credit Agreement, dated as
of April 1, 2005, among the Borrower, EQR, Bank of America N.A., as
administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and the
financial institutions party thereto (the “Existing Revolving Credit
Agreement”).


(f)            the Administrative
Agent shall have received all documents the Administrative Agent may reasonably
request relating to the existence of the Borrower and EQR and each Qualified
Borrower as of the Closing Date, if any, 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 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, and correlative
documentation for each Qualified Borrower as of 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;



 70
 









(h)           the Borrower, EQR and each Down REIT
Guarantor shall have taken all actions required to authorize the execution and
delivery of this Agreement and the other Loan Documents to be executed by
Borrower, EQR, each Down REIT Guarantor and each Qualified Borrower as of the
Closing Date, as the case may be, and the performance thereof by the Borrower,
EQR, each Down REIT Guarantor and each Qualified Borrower as of the Closing
Date;


(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, if required
by such firm and if such firm has delivered an invoice in reasonable detail of
such fees and expenses in sufficient time for the Borrower to approve and
process the same;


(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, each Qualified Borrower as of the Closing Date, 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  (or Borrower
shall have made publicly available) the audited financial statements of the
Borrower and its Consolidated Subsidiaries and of EQR for the fiscal year ended
December 31, 2005; and


(m)          no 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 Lender to make a Swingline Loan on the occasion of any
Borrowing or Letter of Credit issuance 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 



 71
 









2.3 or a request to cause a Fronting Bank to issue a Letter of Credit
pursuant to Section 2.16;


(b)           in the event that
such Loan is to be made to, or such Letter of Credit is to be issued for the
account of, a Qualified Borrower, receipt by the Administrative Agent of a Note
by such Qualified Borrower for the account of each Bank, if not previously
delivered, satisfying the requirements of Section 2.5, together with all other
items that would have been required to be delivered pursuant to Section 3.1
with respect to such Qualified Borrower;


(c)           immediately after
such Borrowing or issuance, the aggregate outstanding principal amount of the
Loans plus the Letter of Credit Usage will not exceed the aggregate amount of
the Commitments;


(d)           immediately before
and after such Borrowing or issuance of any Letter of Credit, no 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;


(e)           the representations
and warranties contained in this Agreement and the other Loan Documents (other
than representations and warranties which expressly speak as of a different
date and other than the representation and warranty set forth in Section
4.4(c)(i)) 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 or the issuance of such Letter of Credit;


(f)            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 the other
Loan Documents; and


(g)           with respect to the
initial Borrowing hereunder only, no event, act or condition shall have
occurred after the date of the most recent financial statements of Borrower
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), (f) and (g) (with respect to
the initial Borrowing hereunder only, and only to the extent that Borrower is
or should have been aware of any Material Adverse Effect) of this Section,
except as otherwise 



 72
 









disclosed in writing by Borrower to the Banks.  Notwithstanding anything to the contrary, no
Borrowing or issuance of a Letter of Credit shall be permitted if such
Borrowing or issuance 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.


ARTICLE IV





REPRESENTATIONS AND WARRANTIES


In
order to induce the Administrative Agent and each of the Banks which is or may
become a party to this Agreement to make the Loans and issue or participate in
Letters of Credit, 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 and the issuance of the Letters of Credit.


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. Each Qualified
Borrower is a duly formed and validly existing juridical entity under the laws
of its jurisdiction of formation 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.



 73
 









SECTION 4.2         Power and
Authority.  The Borrower and each
Qualified Borrower has the power and authority to execute, deliver and carry
out the terms and provisions of, and to consummate the transactions
contemplated by, each of the Loan Documents to which it is a party and has
taken all necessary action, if any, to authorize the execution and delivery on
behalf of the Borrower or such Qualified Borrower and the performance by the
Borrower or such Qualified Borrower of, and the consummation of the
transactions contemplated by, such Loan Documents.  The Borrower and each applicable Qualified
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
and each Qualified 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, and the consummation
of the transactions contemplated by, 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.


SECTION 4.3         No
Violation.


(a)           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 such 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).



 74
 









(b)           Neither the execution, delivery or
performance by or on behalf of any Qualified Borrower of the Loan Documents to
which it is a party, nor compliance by such Qualified 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 such Qualified 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 such Qualified Borrower (or of any
partnership of which such Qualified 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 such Qualified Borrower under any organizational document of any
Person in which such Qualified Borrower has an interest, or cause a material
default under such Qualified Borrower’s organizational documents, 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, 2005, 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, 2005, 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 2005 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 September 30,
2006, (i) except as may have been disclosed in writing to the Banks, nothing
has occurred prior to the Closing Date having a Material Adverse Effect, and
(ii) except as previously disclosed to the Banks, neither the Borrower 



 75
 









nor EQR has incurred any material indebtedness or guaranty on or before
the Closing Date.


SECTION 4.5         Litigation.  Except as previously disclosed by the
Borrower in writing to the Banks prior to the date hereof, there is no action,
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, nor, to the knowledge of the Borrower, any
investigation of, (i) the Borrower, any Qualified 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 or enforceability of this Agreement or the other Loan
Documents.


SECTION 4.6         Compliance
with ERISA.  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 for 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, Consolidated Subsidiaries of
either or both, and Qualified Borrowers 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.



 76















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, 2005.  The Borrower, each Qualified 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, any Qualified Borrower, 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, any
Qualified 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 or any Qualified Borrower to the Administrative Agent or any Bank for
purposes of or in connection with or pursuant to 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 existing on the Closing Date
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 and each Qualified Borrower will be Solvent.


SECTION 4.11       Use of Proceeds; Margin Regulations.  All proceeds of the Loans will be used by the
Borrower or the applicable Qualified Borrower only in accordance with the
provisions hereof.  No part of the
proceeds of any Loan, and no Letter of Credit, 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 nor the issuance of any Letter of Credit
will violate or be inconsistent with the provisions of Regulations T, U or X of
the Federal Reserve Board.



 77
 









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, any Qualified 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
“subsidiary company” within the meaning of the Public Utility Holding
Company Act of 2005, 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 or otherwise obtain extensions of credit.


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, 2005,
EQR qualified and EQR intends to continue to qualify as a real estate
investment trust under the Code.


SECTION 4.16       No Default.  No Event of Default or, to the best of the
Borrower’s knowledge, Default exists and neither the Borrower nor any Qualified
Borrower is 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 4.17       Compliance With Law.  To the Borrower’s knowledge, the Borrower,
each Qualified Borrower, and each of the Real Property Assets are in compliance
with all laws, rules, regulations, orders, 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.



 78
 









SECTION 4.18       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, each
Qualified Borrower as of the Closing Date and EQR.   The Borrower represents that it has
delivered to the Administrative Agent true, correct and complete copies, as of
the Closing Date, of each of the documents set forth in this Section 4.18,
except for exhibits to the Borrower’s partnership agreement identifying the
current list of partners which, with the permission of the Banks, have been
omitted therefrom.


SECTION 4.19       Qualifying Unencumbered Properties.  As of December 31, 2006, each Property listed
on Exhibit F as a Qualifying Unencumbered Property (i) is Raw Land, a
Property with Development Activity, a Condo Property or an operating multifamily
residential property owned or ground leased (directly or beneficially) by
Borrower, EQR, or a Consolidated Subsidiary or Investment Affiliate of either
or both, (ii) is not subject (nor are any equity interests in such Property
that are owned directly or indirectly by Borrower or EQR 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 that are owned
directly or indirectly by Borrower or EQR subject) to any Negative Pledges, 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 (d) or (e) 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.


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) Business Days after the same is 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 as of the end of and for the
previous fiscal year, all as reported on the form provided to the Securities
and Exchange 



 79
 









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;


(b)           as soon as available and in any event
within five (5) Business Days after the same is 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 as
reported on 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, the chief accounting officer or
treasurer 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 in all material
respects 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) 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.  Such
certificate shall set forth the calculations required to establish the matters
described in clauses (1) and (2) above;


(d)           (i) within five (5) Business Days
after any officer of the Borrower obtains knowledge of any Default or Event of
Default, if such Default or Event of Default 



 80
 









is then continuing, a
certificate of the chief financial officer, the chief accounting officer,
treasurer, 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)
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, and (y) any other event, act or condition which is likely to result in
a Material Adverse Effect;


(e)           promptly upon the mailing thereof to
the shareholders of EQR generally, and to the extent the same are not publicly
available, copies of all financial statements, reports and proxy statements so
mailed;


(f)            promptly upon the filing thereof and
to the extent that the same are not publicly available, 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 imposition of a Lien or the posting of a bond or other 



 81
 









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) 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.  Each of the Borrower, each Qualified
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.



 82
 









SECTION 5.3         Maintenance of Property; Insurance;
Leases.


(a)           The Borrower and/or EQR will keep,
and will cause each Consolidated Subsidiary and Qualified Borrower 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, each Qualified Borrower
and/or EQR shall maintain, or cause to be maintained, insurance with such
insurers, on such properties, in such amounts and against such risks (excluding
terrorist insurance and mold insurance and, to the extent the same are not
commercially available or available at commercially reasonable rates,
earthquake insurance or windstorm insurance) as is consistent with insurance
maintained by businesses of comparable type and size in the industry, and
furnish the Administrative Agent satisfactory evidence thereof promptly upon
Administrative Agent’s reasonable request.


SECTION 5.4         Conduct of Business and Maintenance
of Existence.  The Borrower, each
Qualified 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.



 83
 









SECTION 5.6         Inspection of Property, Books and Records.  Each of the Borrower and EQR will keep proper
books of record and account in which full, true and correct entries shall be
made of all material 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 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         Intentionally Omitted.


SECTION 5.8         Financial Covenants.


(a)           Indebtedness to Gross Asset Value.
 Borrower shall not permit the ratio of
Indebtedness of Borrower and EQR (excluding Indebtedness of Consolidated
Subsidiaries or Investment Affiliates), and Borrower’s Share of Indebtedness of
all Consolidated Subsidiaries and Investment Affiliates to Gross Asset Value of
Borrower and EQR to exceed 0.60:1 at any time; provided, however, that with
respect to any Fiscal Quarter in which Borrower acquired any Real Property
Assets (whether by purchase, merger or other corporate transaction), at
Borrower’s election, the ratio of Indebtedness of Borrower and EQR (excluding
Indebtedness of Consolidated Subsidiaries or Investment Affiliates), and
Borrower’s Share of Indebtedness of all Consolidated Subsidiaries and
Investment Affiliates to Gross Asset Value of Borrower and EQR for such Fiscal
Quarter and for the next three succeeding Fiscal Quarters may exceed 0.60:1,
provided that such ratio in no event shall exceed 0.65:1, and provided,
further, that thereafter such ratio shall not exceed 0.60:1.


(b)           Secured Debt to Gross Asset Value.  Borrower shall not permit the ratio of
Secured Debt of Borrower and EQR (excluding Indebtedness of Consolidated
Subsidiaries or Investment Affiliates), and Borrower’s Share of Secured Debt of
all  Consolidated Subsidiaries and
Investment Affiliates to Gross Asset Value of Borrower and EQR to exceed 0.40:1
at any time.


(c)           Consolidated EBITDA to Fixed
Charges Ratio.  Borrower shall not
permit the ratio of Consolidated EBITDA for the then most recently completed
twelve (12) month period to Fixed Charges for the then most recently completed
twelve (12) month period to be less than 1.50:1.



 84
 









(d)           Unencumbered Pool.  Borrower shall not permit the ratio of the
Unencumbered Asset Value to outstanding Unsecured Debt to be less than 1.50:1
at any time.


(e)           Permitted Holdings.  Borrower’s and EQR’s primary business will be
the ownership, operation and development of multifamily residential property
(including conversions to condominiums) 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
Permitted Holdings if and so long as the aggregate value of Permitted Holdings,
whether held directly or indirectly (but without duplication) by Borrower, EQR
and/or their Subsidiaries, does not exceed, at any time, thirty-five percent
(35%) of Gross Asset Value of Borrower and EQR as a whole.


(f)            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) either (x) the Borrower or
EQR is the surviving entity, or (y) the individuals constituting EQR’s Board of
Trustees immediately prior to such merger or consolidation represent a majority
of the surviving entity’s Board of Directors or Board of Trustees after such
merger or consolidation, and (ii) the entity which is merged with Borrower or
EQR is predominantly in the commercial real estate 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
Material Adverse Effect without the Administrative Agent’s consent, which shall
not be unreasonably withheld. No Qualified Borrower shall amend its
organizational documents in any manner that would have a Material Adverse
Effect without the Required Banks’ consent.


(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 simultaneously with the first delivery of financial statements
referred to in Sections 5.1(a) or (b) above following the effective date of any
such amendment.



 85
 









SECTION 5.10       Changes in Business.  Except for Permitted Holdings, neither the
Borrower, any Qualified 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 and
Investment Affiliates.


SECTION 5.11       Margin Stock.  None of the proceeds of any Loan, and no
Letter of Credit, 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       Intentionally Omitted.


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 or
another national stock exchange located in the United States 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.


(c)           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.



 86
 









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 or any Qualified
Borrower shall fail to pay when due any principal of any Loan, or the Borrower
or any Qualified 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, Section 5.11 or
Section 5.13;


(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 or deemed 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, any Qualified Borrower,
EQR, any Subsidiary or any Investment Affiliate shall default in the payment
when due (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 $50,000,000 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, any Qualified 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 



 87
 









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 admit in writing its inability to pay its debts as such debts
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 (or one or more judgments which is/are not stayed pending
appeal) in an aggregate amount of Fifty Million Dollars ($50,000,000) or more
shall be entered by a court or courts of competent jurisdiction against the
Borrower, any Qualified Borrower, EQR or, to the extent of any recourse to
Borrower, EQR or any Qualified Borrower, any of their respective 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 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 Directors or Board of Trustees of EQR during any
twelve (12) month period, excluding any change in directors or trustees
resulting from (w) the retirement of any director or trustee as a result of
compliance with any written policy of EQR requiring retirement from the Board
upon reaching the age specified in such policy, (x) the death or
disability of any director or trustee, 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 directors or 



 88
 









trustees or (z) the
replacement of any director or 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)           intentionally omitted;


(l)            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
have occurred and be continuing (or, in the case of a Multiemployer Plan with
respect to which a Termination Event described in clause (ii) of the definition
of Termination Event shall have occurred and be continuing, the liability of
the Borrower) is equal to or greater than $20,000,000 and which the
Administrative Agent reasonably determines will have a Material Adverse Effect;


(m)          any member of the ERISA Group shall
commit a failure described in Section 302(f)(1) of ERISA or Section 412(n)(1)
of the Code and the amount of the lien determined under Section 302(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 $20,000,000 and which the
Administrative Agent reasonably determines will have a Material Adverse Effect;


(n)           at any time, for any reason the
Borrower or any Qualified 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 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 



 89
 









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 for itself and on behalf of any
Qualified 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 for itself and on behalf of any Qualified Borrower.


(b)           Notwithstanding anything to the
contrary contained in this Agreement or in any other Loan Document, the
Administrative 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
within thirty (30) days of commencement of discussions, then, from and after an
Event of Default and the the end of such thirty (30) day period, the Administrative
Agent may pursue such rights and remedies as it may determine if it shall
reasonably determine that the same shall be in the best interests of the Banks,
taken as a whole.



 90















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 condition.  Should Administrative Agent receive notice of
the occurrence of a Default or Event of Default expressly stating that such
notice is a notice of a 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 (provided that upon the occurrence of any Event of Default it
described in Section 6.1(f) or 6.1(g) the Borrower shall automatically be
required to), 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
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



 91
  
 









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; provided that if
no Event of Default shall have occurred and be continuing, any interest,
dividends or other earnings received with respect to the Letter of Credit
Collateral shall be distributed to Borrower on a monthly basis; and


(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 Sections 6.4(b) and (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 and from time to time,
charge, set off or otherwise apply all or any part of the Letter of Credit
Collateral, 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



 92
  
 









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.


(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 and the Banks 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, and in the case of Letters of Credit maturing after the Maturity
Date, upon the return of any such Letters of Credit, any amount attributable to
such Letter of Credit shall be promptly returned to the Borrower.  Absent such cure or written waiver or return,
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.



 93
  
 









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 and discretion as
are reasonably incidental thereto. Except as set forth in Sections 7.8 and 7.9,
the provisions of this Article VII are solely for the benefit of Administrative
Agent and the Banks, and Borrower shall not have any right to rely on or
enforce any of the provisions of this Article VII.  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, N.A. 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, N.A. and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower, EQR or any Subsidiary
or affiliate of the Borrower as if it were not the Administrative Agent
hereunder, and the term “Bank” and “Banks” shall include Bank of America, N.A.
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.



 94
  
 









SECTION 7.5         Liability
of Administrative Agent, Syndication Agent, Documentation Agents.  As between Administrative Agent and the
Banks, none of the Administrative Agent, the Syndication Agent, or the
Documentation Agents, 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, or the Documentation Agents, 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 Agent, the Syndication Agent, and
the  Documentation Agents, and their
respective affiliates and directors, officers, agents and employees (to the
extent not reimbursed by the Borrower, but without affecting Borrower’s
reimbursement obligations), 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 and/or Documentation Agents 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, the
Documentation Agents 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, Syndication Agent, such
Documentation Agents 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, the Documentation Agents,
or the Administrative Agent, as the case may be, shall reimburse such Banks so
entitled to reimbursement within two (2) Business Days after its receipt of
such funds from the Borrower or such other party liable therefor.



 95
  
 









SECTION 7.7         Credit
Decision.  Each Bank acknowledges
that it has, independently and without reliance upon the Administrative Agent,
the Syndication Agent, or the Documentation Agents, 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, the Documentation Agents 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.



 96
  
 









SECTION 7.8         Successor
Administrative Agent or Syndication Agent. 
The Administrative Agent, the Syndication Agent, or the Documentation
Agents 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 the Commitment of the Bank serving as
the Administrative Agent or the Syndication Agent is reduced to less than
$10,000,000.  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, N.A.
as a successor Syndication Agent and JPMorgan Chase Bank, N.A. 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 (if required) approved by the Borrower, or,
if so appointed, shall not have accepted such 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 successor Administrative
Agent or Syndication Agent.  In any
event, the retiring Administrative Agent shall continue to act as Administrative
Agent until such time as a successor Administrative Agent shall have been so
appointed by the Required Banks, approved by Borrower (if required), and
assumed its duties hereunder. 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 the Required Banks (excluding for such
determination the Bank serving as Administrative Agent or Syndication Agent in
its capacity as a Bank, as applicable), the Administrative Agent or Syndication
Agent may be removed at any time by giving at least thirty (30) Business Days
prior written notice to the Administrative Agent, Syndication Agent and
Borrower.  Such resignation or removal
shall take effect upon the acceptance of appointment by a



 97
  
 









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, (iv) shall include Administrative Agent’s recommended course of
action or determination in respect thereof and (v) shall include, in boldface
type, a statement that if any Bank does not respond to such request within ten
(10) Business Days and provide a written explanation of the reasons behind any
objection, such Lender shall be deemed to have approved of or consented to, as
applicable, the recommendation or determination of the Administrative Agent
described in such request.  Each Bank
shall reply promptly, but in any event within ten (10) 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 that it objects to the recommendation or
determination of Administrative Agent 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 determines in good faith that deposits in dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest Period,
or



 98
  
 









(b)           Banks having 50% or
more of the aggregate amount of the applicable Commitments advise the
Administrative Agent that the Euro-Dollar Rate, as determined by the
Administrative Agent will not adequately and fairly reflect the cost to each
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.  In such event, (a) unless the Borrower
notifies the Administrative Agent at least two Business Days before the date of
(i) any Euro-Dollar Borrowing denominated in Dollars 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, and (b) any Notice of Borrowing for a Euro-Dollar Borrowing
denominated in an Alternate Currency shall be ineffective.  For purposes of Section 8.1(b), in
determining whether the Euro-Dollar 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 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.



 99
  















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 or the applicable Qualified Borrower, as the case may be,
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 or the applicable Qualified
Borrower, as the case may be, would otherwise be obligated to pay pursuant to
Section 2.13 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)
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 all amounts due such Bank hereunder (including, without limitation,
interest, Facility Fees, Letter of Credit Fees and all amounts payable pursuant
to Section 2.13), 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 is hereby required to accept, or (y) to
repay in full all Loans then outstanding of such Bank, together with interest
thereon, 



 100
  
 









Facility Fees, Letter of Credit Fees and all other amounts due such
Bank hereunder (including, without limitation, amounts payable pursuant to
Section 2.13), upon which event, such Bank’s Commitment shall be deemed to be
cancelled pursuant to Section 2.11(e). 
Any Bank subject to this paragraph shall retain the benefits of Sections
2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the period prior to such purchase or
cancellation.


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 after 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 Federal Reserve Board (but excluding with respect to any
Euro-Dollar Loan any such requirement to the extent 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
(excluding any amounts already reflected in any Mandatory Costs), 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 law, rule or regulation regarding capital adequacy, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or 



 101
  
 









comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank any request or directive regarding 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 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 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) 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 all amounts due such Bank hereunder (including,
without limitation, interest, Facility Fees, Letter of Credit Fees and all
amounts payable pursuant to Section 2.13 and this Section 8.3), 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 thereon, Facility Fees, Letter
of Credit Fees and all other amounts due such Bank hereunder (including,
without limitation, amounts payable pursuant to 



 102
  
 









Section 2.13 and this Section 8.3), upon which event, such Bank’s
Commitment shall be deemed to be cancelled pursuant to Section 2.11(e).  Any Bank subject to this Section 8.3(d) shall
retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.


SECTION 8.4   Taxes.


(a)           Any and all payments
by the Borrower or any Qualified 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 and 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 or any Qualified 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 in respect of any 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 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 or Qualified Borrower shall
make such deductions, (iii) the Borrower or Qualified Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower or Qualified 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 and each Qualified 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
in respect of any 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”).



 103
  
 









(c)           The Borrower and each Qualified
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 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
an Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, 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, 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 being under Sections 1442(c)(1)
and 1442(a) of the Code, 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.



 104
  
 









(f)            Upon reasonable demand by Borrower
or any Qualified Borrower to the Administrative Agent or any Bank, the
Administrative Agent or Bank, as the case may be, shall deliver to the Borrower
or such Qualified Borrower, or to such government or taxing authority as the
Borrower or such Qualified Borrower may reasonably direct, any form or document
that may be required or reasonably requested in writing in order to allow the
Borrower or such Qualified Borrower to make a payment to or for the account of
such Bank or the Administrative Agent hereunder or under any other Loan
Document without any deduction or withholding for or on account of any
Non-Excluded Taxes or with such deduction or withholding at a reduced rate (so
long as the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to the Borrower or such Qualified
Borrower making such demand and to be executed and to be delivered with any
reasonably required certification.


(g)           If the Borrower or
any Qualified 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.


(h)           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) 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 all amounts due such Bank hereunder (including,
without limitation, interest, Facility Fees, Letter of Credit Fees and all
amounts payable pursuant to Section 2.13 and this Section 8.4), 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 thereon, Facility Fees, Letter
of Credit Fees and all other amounts due such Bank hereunder (including,
without limitation, amounts payable pursuant to Section 2.13 and this Section
8.4), upon which event, such Bank’s Commitment shall be deemed to be cancelled
pursuant to Section 2.11(c).  Any Bank
subject to this Section 8.4(d) shall retain the benefits of Sections 2.16(f),
2.16(g), 8.3, 8.4 and 9.3 for the period prior to such purchase or
cancellation.



 105
  
 









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 no Borrowing from such
Bank shall take effect with respect to Loans denominated in an Alternate
Currency, 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.



 106
  
 









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 such party:  (x) in
the case of the Borrower, any Qualified 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, Two North Riverside Plaza, Suite 400, Chicago, Illinois
60606, Attn: General Counsel, and to DLA Piper US LLP, 203 North LaSalle
Street, Suite 1900, Chicago, Illinois 60601, 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 and, if such
party is the Borrower or the Administrative Agent, the Banks.  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. The Administrative Agent shall promptly notify the Banks of any
change in the address of the Borrower or the Administrative Agent.


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 Event of Default or alleged Default or Event
of Default, (ii) all reasonable fees and disbursements of special counsel
Skadden, Arps, 



 107
  
 









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 (the Administrative
Agent shall promptly submit any expenses of any of the Banks to Borrower for
reimbursement), including fees and disbursements of counsel for the
Administrative Agent and each of the Banks, in connection with the enforcement
of the Loan 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, including, without limitation, any Section
1031 exchange as contemplated by Section 9.21, (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 



 108
  
 









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 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.



 109
  
 









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 any Qualified 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 or any Qualified Borrower against and
on account of the Obligations of the Borrower or such Qualified 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 (except pursuant to Sections 8.2, 8.3, 8.4 or 9.6), 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
in respect of the Letters of Credit.  The
Borrower, for itself and on behalf of any Qualified 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 or such
Qualified Borrower in the amount of such participation. Notwithstanding
anything to the contrary contained herein, any Bank may, by separate agreement
with the Borrower or any Qualified Borrower, waive its right to set off
contained herein or granted by law and any such written waiver shall be
effective against such Bank under this Section 9.4.


 



 110
  















 


SECTION 9.5   Amendments and
Waivers.  Any provision of this
Agreement or the Notes, the Letter of Credit Documents 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 Letter of Credit Documents 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 or
extend the term of any Letter of Credit beyond twelve (12) months after the
Maturity Date, (iv) change the percentage of the Commitments (except pursuant
to the Increase Option) 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, except as provided below, any Down
REIT Guaranty or any Qualified Borrower Guaranty, (vi) modify the definition of
“Required Banks”, or (vii) modify the provisions of this Section 9.5. At such
time as the Borrower shall sell its interest in any Down REIT Guarantor to an
unaffiliated third party in an arms-length transaction, the Down REIT Guaranty
of such Down REIT Guarantor shall be deemed to have terminated and released,
and the Banks hereby authorize the Administrative Agent to enter into an agreement,
confirming the termination and release of such Down REIT Guaranty, at the
Borrower’s sole cost and expense.


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 or one or more banks, finance companies, insurance companies or other
financial institutions in minimum amounts of not less than $5,000,000 (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) (it being understood
that no 



 111
  
 









Bank may hold Commitments of which less than $10,000,000 in the
aggregate is for its own account, unless its Commitments shall have been
reduced to zero) 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, provided that no Event of Default shall have
occurred and be continuing, the Borrower (other than with respect to Money
Market Loans), which consent shall not be unreasonably withheld or
delayed.  The Administrative Agent shall
be notified by any such Bank of any such participation prior to the same
becoming effective. 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, (A) an
existing Bank, (B) one or more banks, finance companies, insurance or other
financial institutions which (1) 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 or a comparable rating by a rating agency
acceptable to Administrative Agent and (2) has total assets in excess of Ten
Billion Dollars ($10,000,000,000) (a “Qualified Institution”), or (C)
with the prior consent and approval of the Administrative Agent, each Fronting
Bank and Borrower, a wholly-owned affiliate of such transferor Bank if such
transferor Bank then meets the requirements of clause (i)(B) or, if such
transferor Bank’s parent then meets the requirements of clause (i)(B), a
wholly-owned affiliate of such parent, in each case 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) (it being understood that no Bank may hold Commitments
of less than $10,000,000 in the



 112
  
 









aggregate, unless its Commitments shall have been reduced to zero) 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 each Fronting Bank 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 which meets the requirements
of clause (i)(B) above or was a Bank immediately prior to such assignment, no
such consent shall be required; and provided further that such
assignment may, but need 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 provided that such fee shall be paid by the Assignee if
such assignment is required by Section 8.2, 8.3 or 8.4.  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 Sections 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 



 113
  
 









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 every obligation of the Designating Lender and its related
Designated Lender with respect to this Agreement, including, without
limitation, any indemnification obligations under Section 7.6 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 Sections 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 



 114
  
 









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 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 and each Qualified Borrower, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from
any thereof.  The Borrower irrevocably
consents, for itself and each Qualified Borrower, 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 or Qualified Borrower at its address set forth
below.  The Borrower, for itself and each
Qualified 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 or any Qualified Borrower in any other jurisdiction.


(c)           If for the purpose
of obtaining judgment in any court it is necessary to convert a sum due
hereunder in one currency into another currency, the parties hereto agree, to
the fullest extent that they may effectively do so under applicable law, that
the rate of exchange used shall be the spot rate at which in accordance with
normal banking procedures the first currency could be purchased in New York
City with 



 115
  
 









such other currency by the person obtaining such judgment on the
Business Day preceding that on which final judgment is given.


(d)           The parties agree,
to the fullest extent that they may effectively do so under applicable law,
that the obligations of the Borrower or any Qualified Borrower to make payments
in any currency of the principal of and interest on the Loans of the Borrower
and any Qualified Borrower and any other amounts due from the Borrower or any
Qualified Borrower hereunder to the Administrative Agent as provided herein (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with Section 9.8(c)), in any
currency other than the relevant currency, except to the extent that such
tender or recovery shall result in the actual receipt by the Administrative
Agent at its relevant office on behalf of the Banks of the full amount of the
relevant currency expressed to be payable in respect of the principal of and
interest on the Loans and all other amounts due hereunder (it being assumed for
purposes of this clause (i) that the Administrative Agent will convert any
amount tendered or recovered into the relevant currency on the date of such
tender or recovery), (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the relevant currency the
amount, if any, by which such actual receipt shall fall short of the full
amount of the relevant currency so expressed to be payable and (iii) shall not
be affected by an unrelated judgment being obtained for any other sum due under
this Agreement.


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, EACH
QUALIFIED 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.



 116
  
 









 


SECTION 9.11   Survival.  All indemnities set forth herein (including,
without limitation, Sections 2.16(g), 8.4 and 9.3) shall survive the execution
and delivery of this Agreement and the other Loan Documents and the making and
repayment of the Obligations.


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, for itself and each Qualified
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, each Qualified Borrower, and to EQR pursuant to the EQR
Guaranty and to any Down REIT Guarantor pursuant to any Down REIT Guaranty.
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 any officer, director,
shareholder or employee of EQR except in the event of fraud or misappropriation
of funds on the part of such officer, director, shareholder or employee.



 117
  
 









 


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 Investment 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, this Agreement, the
Loan Documents and the extension of credit hereunder, 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 or
self-regulatory body having jurisdiction over, or claiming jurisdiction or
authority to oversee or regulate, the Administrative Agent or any Bank or by
any applicable law, rule, regulation or judicial process.


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), 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).  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 as of the date of such Borrowing. 
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) shall not relieve any other Bank of its obligations
to fund its Commitment, in accordance with the provisions hereof.



 118
  
 









 


(b)           If a Bank does not
remit 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 remit to the Administrative
Agent such Bank’s Pro Rata Share of a Loan in accordance herewith for a period
of five (5) 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) 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 and payable by such Bank pursuant to the terms of the Loan
Documents for a period of five (5) 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 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, or any
of them, 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



 119
  
 









 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:


(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 or 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;


 



 120
  















(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 marshaling
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 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,1 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 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 



 121
  
 









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 other 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.


(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 



 122
  
 









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 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 



 123
  
 









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 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.


SECTION 9.18   Down REIT
Guaranties.


(a)           Notwithstanding any other provision
hereof or of 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 Down REIT Guaranty, net of the Administrative Agent’s and the Banks’
expenses of collection thereof (such net amount, “Down REIT Guaranty
Proceeds”), shall be made available for distribution equally and ratably
(in proportion to the aggregate amount of principal, interest and other amounts
then owed in respect of the Obligations or of an issuance of Public Debt, 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 Down REIT Guarantor by its execution and delivery of a Down REIT
Guaranty, to make such Down REIT Guaranty Proceeds so available.  No Bank or Designated Lender shall 



 124
  
 









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
9.18 shall apply solely to Down REIT 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 Down REIT Guarantor pursuant to a Down REIT
Guaranty.  Borrower is aware of the terms
of the Down REIT Guaranties, and specifically understands and agrees with the
Administrative Agent, the Banks and the Designated Lenders that, to the extent
Down REIT Guaranty Proceeds are distributed to holders of Public Debt or their
respective trustees, such Down REIT Guarantor has agreed that the Obligations
will not be deemed reduced by any such distributions and such Down REIT
Guarantor shall continue to make payments pursuant to its Down REIT 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 Down REIT Guaranty Proceeds in respect of
Indebtedness other than the Obligations.


(b)           Nothing contained herein shall be
deemed (1) to limit, modify, or alter the rights of the Administrative Agent,
the Banks and the Designated Lenders under any Down REIT Guaranty, (2) to
subordinate the Obligations to any Public Debt, or (3) to give any holder of
Public Debt (or any trustee for such holder) any rights of subrogation.


(c)           This Section 9.18 and all Down
REIT 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 Down REIT Guaranty shall be deemed for the benefit of any holder of Public
Debt, or any trustee for such holder; nor shall 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 Down REIT Guarantor for payment under its Down REIT
Guaranty).


SECTION 9.19   USA PATRIOT Act
Notice.  Each Bank that is subject to
the Act (as hereinafter defined) and the Administrative Agent (for itself and
not on behalf of any Bank) hereby notifies the Borrower and each Qualified
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower and each
Qualified Borrower, which information includes the name and address of the
Borrower and each Qualified Borrower and other information that will allow such
Bank or the Administrative Agent, as applicable, to identify the Borrower and
each Qualified Borrower in accordance with the Act.



 125
  
 









SECTION 9.20   Public/Private
Information.  The Borrower hereby
acknowledges that (a) the Administrative Agent and/or the Syndication Agent
will make available to the Banks and the Fronting Bank materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Banks may be “public-side”
lenders (i.e., Banks that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”).  The Borrower hereby agrees
that (w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to
have authorized the Administrative Agent, the Syndication Agent, the Fronting
Banks and the Banks to treat such Borrower Materials as not containing any
material non-public information with respect to the Borrower or its securities
for purposes of United States Federal and state securities laws (provided,
however, that to the extent such Borrower Materials constitute Information,
they shall be treated as set forth in Section 9.15); (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform marked “PUBLIC” or through a portion of the Platform designated “Public
Investor;” and (z) the Administrative Agent and the Syndication Agent shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.”



 126
  
 









SECTION 9.21   Section 1031 Exchanges. In order to
facilitate Borrower’s transactions pursuant to Section 1031 of the Code, the
Administrative Agent shall from time to time, on behalf of the Banks, accept a
pledge of membership interests in a limited liability company 100% owned
directly or indirectly by the Borrower as security for a specified amount of
the outstanding indebtedness (the “secured indebtedness”), which limited
liability company owns property which Borrower desires to sell in connection
with a like-kind exchange intended to qualify for treatment under Section 1031
of the Code.  Such pledge shall be
substantially in the form of the pledge agreement attached hereto as Exhibit
J.  Administrative Agent acknowledges
that the Borrower may assign said membership interests to a qualified
intermediary and that, upon such assignment, the qualified intermediary will
agree to accept responsibility for repayment of, and is expected to repay, the
secured indebtedness as part of such exchange. 
Each pledge shall be released automatically (i) upon the sale of such
membership interests or underlying property in the exchange (other than
transfer to a qualified intermediary) and repayment of the secured
indebtedness, or (ii) upon any prepayment of the Loans in an amount equal to or
greater than the secured indebtedness secured by such pledge and which Borrower
has designated as a prepayment of such indebtedness.  The Administrative Agent agrees to accept
repayment of the secured indebtedness from the proceeds of such sale.  The Borrower and EQR shall remain obligated
for all Obligations notwithstanding the pledge. 
Upon receipt from the Internal Revenue Service, the Borrower shall
deliver to Administrative Agent a copy of a private letter ruling from the
Internal Revenue Service to the Borrower with respect to a proposed Section
1031 exchange employing the proposed structure, it being understood that the
Administrative Agent shall not disclose the same (subject to Section 9.15)
unless and until the same shall be published or otherwise made generally
available by the Internal Revenue Service. 
Notwithstanding anything contained herein to the contrary, any party
hereto (and any of its employees, representatives and other agents) may disclose
to any and all Persons, without limitation of any kind, the tax treatment and
tax structure of this transaction.



 127
  
 









SECTION 9.22   No Advisory or
Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document), the
Borrower acknowledges and agrees that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Joint
Lead Arrangers are arm’s-length commercial transactions between the Borrower,
on the one hand, and the Administrative Agent and the Joint Lead Arrangers, on
the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C)
the Borrower is capable of evaluating, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents, (ii) (A) the Administrative Agent and each Joint Lead Arranger
each is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not
be acting as an advisor, agent or fiduciary, for the Borrower or any of its
Affiliates, and (B) neither the Administrative Agent nor any Joint Lead
Arranger has any obligation to the Borrower or any of its Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents and the commitment
letter; and (iii) the Administrative Agent and the Joint Lead Arrangers and
their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Borrower and its
Affiliates, and neither the Administrative Agent nor either Joint Lead Arranger
has any obligation to disclose any of such interests to the Borrower or its
Affiliates. To the fullest extent permitted by law, the Borrower hereby waives
and releases any claims that it may have against the Administrative Agent and
the Joint Lead Arrangers with respect to any breach or alleged breach of agency
or fiduciary duty arising on or before the date of this Agreement in connection
with any aspect of any transaction contemplated hereby.



 128
  















 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark J.
  Parrell

  
	
   

  	
   

  	
  Name: Mark J. Parrell

  
	
   

  	
   

  	
  Title: Senior Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
  Facsimile number: (312) 454-0039

  
	
   

  	
  Address:

  	
  Two North Riverside Plaza

  
	
   

  	
  Suite 400

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  For purposes of agreeing to be bound

  
	
  by the provisions of Section 5.13 only:

  
	
   

  
	
  EQUITY RESIDENTIAL

  
	
   

  
	
  By:

  	
   /s/ Mark J.
  Parrell

  	
   

  
	
   

  	
  Name: Mark J. Parrell

  
	
   

  	
  Title: Senior Vice President and Treasurer

  
							




 129
  
 









Commitments


	
  

  	
  BANK OF AMERICA,
  N.A., as Administrative

  Agent, as Swingline Lender and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mark A.
  Mokelke

  
	
   

  	
   

  	
  Name: Mark A. Mokelke

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
  Mail Code

  
	
   

  	
   

  	
  231 South LaSalle Street

  
	
   

  	
   

  	
  Chicago, Illinois 60697

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
  Telecopy:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $60,000,000

  
	
  Alternate Currency Commitment: $25,000,000

  
				



 



 130
  
 









 


	
  

  	
  JPMORGAN CHASE
  BANK, N.A., as Syndication

  Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Marc Costantino

  
	
   

  	
   

  	
  Name: Marc
  Costantino

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $60,000,000

  
	
  Alternate
  Currency Commitment: $25,000,000

  
				




 131
  
 









 


	
  

  	
  SUNTRUST BANK,
  as Documentation Agent

  and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Nancy B. Richards

  
	
   

  	
   

  	
  Name: Nancy B.
  Richards

  
	
   

  	
   

  	
  Title: Senior
  Vice President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 132
  
 









 


	
  

  	
  WACHOVIA BANK,
  NATIONAL

  ASSOCIATION, as Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Cynthia A. Bean

  
	
   

  	
   

  	
  Name: Cynthia A.
  Bean

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 133
  
 









 


	
  

  	
  WELLS FARGO
  BANK, N.A., as Documentation

  Agent and as a Bank

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   /s/ Scott S. Solis

  
	
   

  	
   

  	
  Name: Scott S.
  Solis

  
	
   

  	
   

  	
  Title: Senior
  Vice President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 134
  
 









 


	
  

  	
  EUROHYPO AG, NEW
  YORK BRANCH, as

  Managing Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Lippmann

  
	
   

  	
   

  	
  Name: John
  Lippmann

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Hayes

  
	
   

  	
   

  	
  Name: John Hayes

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar
  Commitment: $50,000,000

  
	
  Alternate
  Currency Commitment: $10,000,000

  




 135
  
 









 


	
  

  	
  U.S. BANK
  NATIONAL ASSOCIATION, as

  Documentation Agent and as a Bank

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Matthew
  Sadler

  
	
   

  	
   

  	
  Name: Matthew
  Sadler

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 136
  
 









 


	
  

  	
  LASALLE BANK
  NATIONAL ASSOCIATION,

  as Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kathryn Schad Reuther

  
	
   

  	
   

  	
  Name: Kathryn
  Schad Reuther

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 137
  
 









 


	
  

  	
  THE ROYAL BANK
  OF SCOTLAND plc, as

  Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Neil Crawford

  
	
   

  	
   

  	
  Name: Neil
  Crawford

  
	
   

  	
   

  	
  Title: Senior
  Vice President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  




 138
  
 









 


	
  

  	
  CITICORP NORTH
  AMERICA INC., as Senior

  Managing Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Malov Kakad

  
	
   

  	
   

  	
  Name: Malov
  Kakad

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  
	
   

  
	
  Dollar
  Commitment: $55,000,000

  
	
  Alternate
  Currency Commitment: $20,000,000

  



 



 139
  

















	
  

  	
   

  	
  

  
	
   

  	
   

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH,

  as Senior Managing Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
                                                         

  	
   

  	
  By:

  	
   /s/ Steven P.
  Lapham

  
	
   

  	
   

  	
  Name: Steven P. Lapham

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Joanna
  Soliman

  
	
   

  	
   

  	
  Name: Joanna Soliman

  
	
   

  	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $55,000,000

  
	
  Alternate Currency Commitment: $20,000,000

  
					






 



 140
  
 









 


	
  

  
	
   

  	
   

  	
  LEHMAN COMMERCIAL PAPER INC., as Senior Managing
  Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Janine M.
  Shugan

  
	
   

  	
   

  	
  Name: Janine M. Shugan

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $55,000,000

  
	
  Alternate Currency Commitment: $20,000,000

  



 



 141
  
 









 


	
  

  
	
   

  	
   

  	
  MERRILL LYNCH BANK USA, as Senior Managing Agent and
  as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Louis
  Alder

  
	
   

  	
   

  	
  Name: Louis Alder

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $55,000,000

  
	
  Alternate Currency Commitment: $20,000,000

  



 



 142
  
 









 


	
  

  
	
   

  	
   

  	
  MORGAN STANLEY BANK, as Senior Managing Agent and as
  a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Twenge

  
	
   

  	
   

  	
  Name: David Twenge

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   Morgan Stanley Bank

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $55,000,000

  
	
  Alternate Currency Commitment: $20,000,000

  



 



 143
  
 









 


	
  

  
	
   

  	
   

  	
  MIZUHO CORPORATE BANK LTD., as Managing Agent and as
  a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Yasuo
  Imaizumi

  
	
   

  	
   

  	
  Name: Yasuo Imaizumi

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $55,000,000

  
	
  Alternate Currency Commitment: $20,000,000

  



 



 144
  
 









 


	
  

  
	
   

  	
   

  	
  THE BANK OF TOKYO - MITSUBISHI UFJ,

  LTD., as Co-Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ James T.
  Taylor

  
	
   

  	
   

  	
  Name: James T. Taylor

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $50,000,000

  
	
  Alternate Currency Commitment: $0

  



 



 145
  
 









 


	
  

  
	
   

  	
   

  	
  THE BANK OF NEW YORK, as Co-Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Scott
  DeTraglia

  
	
   

  	
   

  	
  Name: Scott DeTraglia

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $50,000,000

  
	
  Alternate Currency Commitment: $0

  



 



 146
  
 









 


	
  

  
	
   

  	
   

  	
  COMERICA BANK, as Co-Agent and as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Leslie A.
  Vogel

  
	
   

  	
   

  	
  Name: Leslie A. Vogel

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $35,000,000

  
	
  Alternate Currency Commitment: $0

  



 



 147
  
 









 


	
  

  
	
   

  	
   

  	
  BANK HAPOALIM B.M., as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ James P.
  Surless

  
	
   

  	
   

  	
  Name: James P. Surless

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Charles
  McLaughlin

  
	
   

  	
   

  	
  Names: Charles McLaughlin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $30,000,000

  
	
  Alternate Currency Commitment: $0

  
					



 



 148
  
 









 


	
  

  
	
   

  	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Patrick Trowbridge

  
	
   

  	
   

  	
  Name: Patrick Trowbridge

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $30,000,000

  
	
  Alternate Currency Commitment: $0

  



 



 149
  
 









 


	
  

  
	
   

  	
   

  	
  MALAYAN BANKING BERHAD, NEW YORK BRANCH, as a Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Fauzi
  Zulkifli

  
	
   

  	
   

  	
  Name: Fauzi Zulkifli

  
	
   

  	
   

  	
  Title: General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dollar Commitment: $25,000,000

  
	
  Alternate Currency Commitment: $0

  



 



 150
  















 


	
  

  	
  MEGA INTERNATIONAL COMMERCIAL

  BANK CO., LTD., NEW YORK BRANCH, as

  a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nae-Yee Lung

  	
   

  
	
   

  	
  Name: Nae-Yee Lung

  
	
   

  	
  Title: SVP & General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $20,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 151
  
 









 


	
  

  	
  THE NORTHERN TRUST COMPANY, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kate Spadoni

  	
   

  
	
   

  	
  Name: Kate Spadoni

  
	
   

  	
  Title: Second Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $25,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 152
  
 









 


	
  

  	
  PEOPLE’S BANK, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anne Kuchinski

  	
   

  
	
   

  	
  Name: Anne Kuchinski

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $25,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 


 



 153
  
 









 


	
  

  	
  SUMITOMO MITSUI BANKING

  CORPORATION, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M. Ginn

  	
   

  
	
   

  	
  Name: William M. Ginn

  
	
   

  	
  Title: General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $25,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 


 



 154
  
 









 


	
  

  	
  FIRST HORIZON BANK, A DIVISION OF FIRST TENNESSEE
  BANK, NA, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth W. Rub

  	
   

  
	
   

  	
  Name: Kenneth W. Rub

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $15,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 155
  
 









 


	
  

  	
  BANK OF CHINA, NEW YORK BRANCH, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Smith

  	
   

  
	
   

  	
  Name: William Smith

  
	
   

  	
  Title: Deputy General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $15,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 156
  
 









 


	
  

  	
  BANK OF CHINA, LOS ANGELES BRANCH, as

  a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Xiao Wang

  	
   

  
	
   

  	
  Name: Xiao Wang

  
	
   

  	
  Title: Branch Manager and First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $15,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 157
  
 









 


 


	
  

  	
  UNITED OVERSEAS BANK LIMITED (LOS

  ANGELES AGENCY), as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hoong Chen

  	
   

  
	
   

  	
  Name: Hoong Chen

  
	
   

  	
  Title: FVP & General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dollar Commitment: $10,000,000

  	
   

  
	
  Alternate Currency Commitment: $0

  	
   

  
					



 



 158
  
 









Total Commitments


$1,500,000,000


 



 159