<PAGE>


                                                                  Exhibit 10.12

                           REVOLVING CREDIT AGREEMENT

                           dated as of August 12, 1999

                                      among

                       ERP OPERATING LIMITED PARTNERSHIP,

                            THE BANKS LISTED HEREIN,

                     BANK OF AMERICA, NATIONAL ASSOCIATION,
                            as Administrative Agent,

                            THE CHASE MANHATTAN BANK,
                              as Syndication Agent,

                   MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                             as Documentation Agent,

                         BANK OF AMERICA SECURITIES LLC,
                             as Joint Lead Arranger,

                                       and

                             CHASE SECURITIES INC.,
                             as Joint Lead Arranger


<PAGE>

                           REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT AGREEMENT (this "Agreement") dated as of August
12, 1999 among ERP OPERATING LIMITED PARTNERSHIP (the "Borrower"), the BANKS
listed on the signature pages hereof, BANK OF AMERICA, NATIONAL ASSOCIATION, as
Administrative Agent, THE CHASE MANHATTAN BANK, as Syndication Agent, and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent.

                               W I T N E S S E T H

         WHEREAS, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1 Definitions. The following terms, as used herein, have the
following meanings:

         "Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.3.

         "Adjusted Asset Value" means, with respect to any Person or Property,
(i) for any Property for which an acquisition or disposition has not occurred in
the Fiscal Quarter most recently ended by the Borrower, EQR and their
Consolidated Subsidiaries or Investment Affiliates, the product of four (4) and
a fraction, the numerator of which is EBITDA for such Fiscal Quarter
attributable to any such Property owned by the Borrower, EQR or any such
Consolidated Subsidiary, or in the case of any such Property owned by an
Investment Affiliate, the Borrower's Share of EBITDA, in a manner reasonably
acceptable to Administrative Agent for the Fiscal Quarter most recently ended,
and the denominator of which is the FMV Cap Rate, plus (ii) for any Property
which has been acquired by the Borrower, EQR and their Consolidated Subsidiaries
or Investment Affiliates in the Fiscal Quarter most recently ended, the Net
Price of the Property paid by Borrower, EQR or the Consolidated Subsidiary, or
the Borrower's or EQR's pro rata share of the Net Price of the Property paid by
the Investment Affiliate for such Property, plus (iii) the value of any
Unimproved Assets owned by the Borrower, EQR and their Consolidated
Subsidiaries, as measured on a GAAP basis, plus (iv) Borrower's Share of the
value of any Unimproved Assets owned by an Investment Affiliate, as measured on
a GAAP basis, plus (v) the value of any Raw Land owned by the Borrower, EQR and
their Consolidated Subsidiaries, as measured on a GAAP basis, plus (vi)
Borrower's Share of the value of any Raw Land



                                       1
<PAGE>

owned by an Investment Affiliate, as measured on a GAAP basis; provided,
however, the value attributable to any Unimproved Assets described in clauses
(iii) and (iv) above, in excess of ten percent (10%) of Gross Asset Value shall
be disregarded in calculating Adjusted Asset Value, and provided further, the
value attributable to any Raw Land described in clauses (v) and (vi) above,
shall be limited to five percent (5%) of Gross Asset Value.

         "Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.7(b).

         "Administrative Agent" shall mean Bank of America, National Association
in its capacity as Administrative Agent hereunder, and its permitted successors
in such capacity in accordance with the terms of this Agreement.

         "Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.

         "Agreement" shall mean this Revolving Credit Agreement as the same may
from time to time hereafter be modified, supplemented or amended.

         "Applicable Interest Rate" means (i) with respect to any Fixed Rate
Indebtedness, the fixed interest rate applicable to such Fixed Rate Indebtedness
at the time in question, and (ii) with respect to any Floating Rate
Indebtedness, either (x) the rate at which the interest rate applicable to such
Floating Rate Indebtedness is actually capped (or fixed pursuant to an interest
rate hedging device), at the time of calculation, if Borrower has entered into
an interest rate cap agreement or other interest rate hedging device with
respect thereto or (y) if Borrower has not entered into an interest rate cap
agreement or other interest rate hedging device with respect to such Floating
Rate Indebtedness, the greater of (A) the rate at which the interest rate
applicable to such Floating Rate Indebtedness could be fixed for the remaining
term of such Floating Rate Indebtedness, at the time of calculation, by
Borrower's entering into any unsecured interest rate hedging device either not
requiring an upfront payment or if requiring an upfront payment, such upfront
payment shall be amortized over the term of such device and included in the
calculation of the interest rate (or, if such rate is incapable of being fixed
by entering into an unsecured interest rate hedging device at the time of
calculation, a fixed rate equivalent reasonably determined by Administrative
Agent) or (B) the floating rate applicable to such Floating Rate Indebtedness at
the time in question.

         "Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans or Swingline Loans, its Domestic Lending Office,
(ii) in the case of its Euro-Dollar


                                       2
<PAGE>

Loans, its Euro-Dollar Lending Office, and (iii) in the case of its Money Market
Loans, its Money Market Lending Office.

         "Applicable Margin" means, with respect to each Loan, the respective
percentages per annum determined, at any time, based on the range into which
Borrower's Credit Rating then falls, in accordance with the table set forth
below. Any change in Borrower's Credit Rating causing it to move to a different
range on the table shall effect an immediate change in the Applicable Margin. In
the event that Borrower receives two (2) Credit Ratings that are not equivalent,
the Applicable Margin shall be determined by the lower of such two (2) Credit
Ratings. In the event that Borrower receives more than two (2) Credit Ratings,
and such ratings are not equivalent, the Applicable Margin shall be determined
by the lower of the two (2) highest ratings, provided that each of said two (2)
highest ratings shall be Investment Grade Ratings and at least one of which
shall be an Investment Grade Rating from S&P or Moody's. In the event that each
of said two (2) highest ratings shall not be Investment Grade Ratings or at
least one shall not be an Investment Grade Rating from S&P or Moody's, then the
Applicable Margin shall be determined by the lowest of the ratings. In the event
that only one of the Rating Agencies shall have set Borrower's Credit Rating,
then the Applicable Margin shall be based on such rating only.

<TABLE>
<CAPTION>

Range of          Applicable
Borrower's        Margin for                      Applicable
Credit Rating     Base Rate                       Margin for Euro
(S&P/Moody's      Loans                           Dollar Loans
Ratings)          (% per annum)                   (% per annum)

<S>                <C>                                  <C>
Non-Invest-
ment Grade         0.300                                1.450

BBB-/Baa3          0.0                                  1.100

BBB/Baa2           0.0                                  0.900

BBB+/Baa1          0.0                                  0.700

A-/A3              0.0                                  0.625

A/A2 or            0.0                                  0.550
better
</TABLE>

         "Approved Bank" shall mean banks which have (i)(a) a minimum net worth
of $500,000,000 and/or (b) total assets of $10,000,000,000, and (ii) a minimum
long term debt rating of (a) BBB+ or higher by S&P, and (b) Baa1 or higher by
Moody's.


                                       3
<PAGE>

         "Assignee" has the meaning set forth in Section 9.6(c).

         "Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.6(c), and their respective
successors and each Designated Lender; provided, however, that the term "Bank"
shall exclude each Designated Lender when used in reference to a Committed Loan,
the Commitments or terms relating to the Committed Loans and the Commitments and
shall further exclude each Designated Lender for all other purposes hereunder
except that any Designated Lender which funds a Money Market Loan shall, subject
to Section 9.6(d), have the rights (including the rights given to a Bank
contained in Section 9.3 and otherwise in Article 9) and obligations of a Bank
associated with holding such Money Market Loan.

         "Bankruptcy Code" shall mean Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.

         "Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 0.5% plus the Federal Funds
Rate for such day.

         "Base Rate Loan" means a Committed Loan to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to
Article VIII.

         "Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.

         "Borrower" means ERP Operating Limited Partnership, an Illinois limited
partnership.

         "Borrower's Share" means Borrower's or EQR's share of the liabilities
or assets, as the case may be, of an Investment Affiliate or Consolidated
Subsidiary based upon Borrower's or EQR's percentage ownership of such
Investment Affiliate or Consolidated Subsidiary, as the case may be.

         "Borrowing" has the meaning set forth in Section 1.3.

         "Capital Leases" as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.

         "Cap Rate" means the Treasury Rate plus 2.8%.


                                       4
<PAGE>

         "Capital Reserve" shall mean, for any period, $62.50 for each Fiscal
Quarter to occur during such period.

         "Cash and Cash Equivalents" shall mean unrestricted (notwithstanding
the foregoing, however, cash held in escrow in connection with the completion of
Code Section 1031 "like-kind" exchanges shall be deemed to be "unrestricted" for
purposes hereof) (i) cash, (ii) direct obligations of the United States
Government, including without limitation, treasury bills, notes and bonds, (iii)
interest bearing or discounted obligations of Federal agencies and Government
sponsored entities or pools of such instruments offered by Approved Banks and
dealers, including without limitation, Federal Home Loan Mortgage Corporation
participation sale certificates, Government National Mortgage Association
modified pass through certificates, Federal National Mortgage Association bonds
and notes, and Federal Farm Credit System securities, (iv) time deposits,
Domestic and Eurodollar certificates of deposit, bankers acceptances, commercial
paper rated at least A-1 by S&P and P-1 by Moody's and/or guaranteed by an Aa
rating by Moody's, a AA rating by S&P or better rated credit, floating rate
notes, other money market instruments and letters of credit each issued by
Approved Banks (provided that the same shall cease to be a "Cash or Cash
Equivalent" if at any time any such bank shall cease to be an Approved Bank),
(v) obligations of domestic corporations, including, without limitation,
commercial paper, bonds, debentures and loan participations, each of which is
rated at least AA by S&P and/or Aa2 by Moody's and/or guaranteed by an Aa rating
by Moody's, a AA rating by S&P or better rated credit, (vi) obligations issued
by states and local governments or their agencies, rated at least MIG-1 by
Moody's and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of credit
of an Approved Bank (provided that the same shall cease to be a "Cash or Cash
Equivalent" if at any time any such bank shall cease to be an Approved Bank),
(vii) repurchase agreements with major banks and primary government security
dealers fully secured by the U.S. Government or agency collateral equal to or
exceeding the principal amount on a daily basis and held in safekeeping, and
(viii) real estate loan pool participations, guaranteed by an AA rating given by
S&P or Aa2 rating given by Moody's or better rated credit.

         "Closing Date" means the date on or after the Effective Date on which
the conditions set forth in Section 3.1 shall have been satisfied to the
satisfaction of the Administrative Agent.

         "Code" shall mean the Internal Revenue Code of 1986, as amended, and as
it may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

         "Committed Borrowing" has the meaning set forth in Section 1.3.


                                       5
<PAGE>

         "Committed Loan" means a loan made by a Bank pursuant to Section 2.1,
as well as Loans required to be made by a Bank pursuant to Section 2.16 to
reimburse a Fronting Bank for a Letter of Credit that has been drawn down;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Committed
Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.

         "Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof (and, for each Bank
which is an Assignee, the amount set forth in the Transfer Supplement entered
into pursuant to Section 9.6(c) as the Assignee's Commitment), as such amount
may be reduced from time to time pursuant to Section 2.11(e) or in connection
with an assignment to an Assignee.

         "Consolidated Subsidiary" means at any date any Subsidiary or other
entity which is consolidated with Borrower or EQR in accordance with GAAP.

         "Consolidated Tangible Net Worth" means at any date the consolidated
partners' capital plus the value of preference units of the Borrower and its
Consolidated Subsidiaries (determined on a book basis), less their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition "Intangible Assets" means with respect to any such intangible assets,
the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups resulting from
foreign currency transactions and write-ups of assets of a going concern
business made within twelve months after the acquisition of such business)
subsequent to March 31, 1999 in the book value of any asset (other than Real
Property Assets) owned by the Borrower or a Consolidated Subsidiary and (ii)
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry forwards, copyrights, organization or developmental
expenses and other intangible assets.

         "Contingent Obligation" as to any Person means, without duplication,
(i) any contingent obligation of such Person required to be shown on such
Person's balance sheet in accordance with GAAP, and (ii) any obligation required
to be disclosed in the footnotes to such Person's financial statements,
guaranteeing partially or in whole any Non-Recourse Indebtedness, lease,
dividend or other obligation, exclusive of contractual indemnities (including,
without limitation, any indemnity or price-adjustment provision relating to the
purchase or sale of securities or other assets) and guarantees of non-monetary
obligations (other than guarantees of completion) which have not yet been called
on or quantified, of such Person or of any other Person. The amount of any
Contingent Obligation described in



                                       6
<PAGE>

clause (ii) shall be deemed to be (a) with respect to a guaranty of interest or
interest and principal, or operating income guaranty, the Net Present Value of
the sum of all payments required to be made thereunder (which in the case of an
operating income guaranty shall be deemed to be equal to the debt service for
the note secured thereby), calculated at the Applicable Interest Rate, through
(i) in the case of an interest or interest and principal guaranty, the stated
date of maturity of the obligation (and commencing on the date interest could
first be payable thereunder), or (ii) in the case of an operating income
guaranty, the date through which such guaranty will remain in effect, and (b)
with respect to all guarantees not covered by the preceding clause (a), an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of Borrower required to
be delivered pursuant to Section 4.4 hereof. Notwithstanding anything contained
herein to the contrary, guarantees of completion shall not be deemed to be
Contingent Obligations unless and until a claim for payment or performance has
been made thereunder, at which time any such guaranty of completion shall be
deemed to be a Contingent Obligation in an amount equal to any such claim.
Subject to the preceding sentence, (i) in the case of a joint and several
guaranty given by such Person and another Person (but only to the extent such
guaranty is recourse, directly or indirectly to Borrower), the amount of the
guaranty shall be deemed to be 100% thereof unless and only to the extent that
such other Person has delivered Cash or Cash Equivalents to secure all or any
part of such Person's guaranteed obligations and (ii) in the case of a guaranty
(whether or not joint and several) of an obligation otherwise constituting
Indebtedness of such Person, the amount of such guaranty shall be deemed to be
only that amount in excess of the amount of the obligation constituting
Indebtedness of such Person. Notwithstanding anything contained herein to the
contrary, "Contingent Obligations" shall be deemed not to include guarantees of
Unused Commitments or of construction loans to the extent the same have not been
drawn. All matters constituting "Contingent Obligations" shall be calculated
without duplication.

         "Convertible Securities" means evidences of shares of stock, limited or
general partnership interests or other ownership interests, warrants, options,
or other rights or securities which are convertible into or exchangeable for,
with or without payment of additional consideration, shares of common stock of
EQR or partnership interests of Borrower, as the case may be, either immediately
or upon the arrival of a specified date or the happening of a specified event.

         "Credit Rating" means the rating assigned by the Rating Agencies to
Borrower's senior unsecured long term indebtedness.


                                       7
<PAGE>

         "Debt Restructuring" means a restatement of, or material change in, the
amortization or other financial terms of any Indebtedness of EQR, the Borrower
or any Consolidated Subsidiary or Investment Affiliate.

         "Debt Service" means, for any period, Interest Expense for such period
plus scheduled principal amortization (excluding any individual scheduled
principal payment which exceeds 25% of the original principal amount of an
issuance of Indebtedness) for such period on all Indebtedness of EQR (calculated
as provided in Section 1.2), on a consolidated basis, plus Borrower's Share of
scheduled principal amortization for such period on all Indebtedness of
Investment Affiliates for which there is no recourse to EQR or Borrower (or any
Property thereof), plus, without duplication, EQR's and Borrower's actual or
potential liability for principal amortization (excluding any individual
scheduled principal payment which exceeds 25% of the original principal amount
of an issuance of Indebtedness) for such period on all Indebtedness of
Investment Affiliates that is recourse to EQR or Borrower (or any Property
thereof).

         "Default" means any condition or event which with the giving of notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.

         "Default Rate" has the meaning set forth in Section 2.6(d).

         "Designated Lender" means a special purpose corporation that (i) shall
have become a party to this Agreement pursuant to Section 9.6(d), and (ii) is
not otherwise a Bank.

         "Designated Lender Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to repay Money Market Loans made by Designated Lenders, and
"Designated Lender Note" means any one of such promissory notes issued under
Section 9.6(d) hereof.

         "Designating Lender" shall have the meaning set forth in Section 9.6(d)
hereof.

         "Designation Agreement" means a designation agreement in substantially
the form of Exhibit G attached hereto, entered into by a Bank and a Designated
Lender and accepted by the Administrative Agent.

         "Development Activity" means (a) the development and construction of
multiple apartment complexes by the Borrower or any of its Subsidiaries, (b) the
financing by the Borrower, EQR or any Subsidiaries or Investment Affiliates of
either or both of any such development or construction or (c) the incurrence by
the Borrower, EQR or any Subsidiaries or Investment Affiliates of



                                       8
<PAGE>

either or both of any Contingent Obligations in connection with such development
or construction (other than purchase contracts for Real Property Assets which
are not payable until completion of development or construction), valued at the
cost of such projects under development and construction in the case of assets
owned by the Borrower, EQR or any Subsidiaries, or the Borrower's Share of the
cost of such projects under development and construction in the case of assets
owned by Investment Affiliates.

         "Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Chicago, Illinois are authorized by law
to close.

         "Domestic Lending Office" means, as to each Bank, its office located at
its address in the United States set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.

         "EBITDA" means, for any period (i) Net Income for such period, plus
(ii) depreciation and amortization expense and other non-cash items deducted in
the calculation of Net Income for such period, plus (iii) Interest Expense
deducted in the calculation of Net Income for such period, plus, (iv) Taxes
deducted in the calculation of Net Income for such period, plus (v) Borrower's
Share of distributed earnings of Investment Affiliates for such period, minus
(vi) the gains (and plus the losses) from extraordinary items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of Net
Income, for such period, minus (vii) Borrower's Share of accrued income and
losses of Investment Affiliates for such period minus (viii) earnings of
Subsidiaries for such period distributed to third parties, all of the foregoing
without duplication.

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

         "Environmental Affiliate" means any partnership, joint venture, trust
or corporation in which an equity interest is owned by the Borrower and/or EQR,
either directly or indirectly, and, as a result of the ownership of such equity
interest, the Borrower and/or EQR may have recourse liability for Environmental
Claims against such partnership, joint venture or corporation (or the property
thereof).

         "Environmental Approvals" means any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.

         "Environmental Claim" means, with respect to any Person, any notice,
claim, demand or similar communication


                                       9
<PAGE>

(written or oral) by any other Person alleging potential liability of such
Person for investigatory costs, cleanup costs, governmental response costs,
natural resources damage, property damages, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the presence, or
release into the environment, of any Materials of Environmental Concern at any
location, whether or not owned by such Person or (ii) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law, in each
case (with respect to both (i) and (ii) above) as to which there is a reasonable
possibility of an adverse determination with respect thereto and which, if
adversely determined, would have a Material Adverse Effect on the Borrower.

         "Environmental Laws" means any and all federal, state, and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions, discharges or
releases of Materials of Environmental Concern into the environment including,
without limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern
or the clean up or other remediation thereof.

         "EQR" means Equity Residential Properties Trust, a Maryland real estate
investment trust, the sole general partner of the Borrower.

         "EQR Guaranty" means the Guaranty of Payment, dated as of the date
hereof, executed by EQR in favor of Administrative Agent and the Banks.

         "EQR 1998 Form 10-K" means EQR's annual report on Form 10-K for 1998,
as filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.

         "ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.

         "Euro-Dollar Borrowing" has the meaning set forth in Section 1.3.


                                       10
<PAGE>

         "Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.

         "Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.

         "Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a
Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.

         "Euro-Dollar Reference Bank" means the principal London offices of the
Administrative Agent.

         "Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.7(b).

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

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

         "Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System as constituted from time to time.

         "FFO" means "funds from operations," defined to mean, for any period,
Net Income before Borrower's Share of the Net Income or loss of any Investment
Affiliate, plus any and all cash distributions received by Borrower representing
Borrower's Share of the Net Income (plus Borrower's Share of depreciation and
amortization expenses of Investment Affiliates) of any Investment Affiliate,
plus depreciation and amortization expense for such



                                       11
<PAGE>

period and excluding gains (or losses) from Debt Restructurings and sales or
other dispositions of Property of the Borrower, EQR or any Consolidated
Subsidiary or any Investment Affiliate of either or both of them.

         "Fiscal Quarter" means a fiscal quarter of a Fiscal Year.

         "Fiscal Year" means the fiscal year of Borrower and EQR which shall be
the twelve (12) month period ending on the last day of December in each year.

         "Fixed Charges" for any Fiscal Quarter period means the sum of (i) Debt
Service for such period, (ii) the product of the average number of apartment
units owned (directly or beneficially) by Borrower, EQR, or any wholly-owned
Subsidiary of either or both during such period and the Capital Reserve for such
Period, (iii) Borrower's Share of the aggregate sum of the product of the
average number of apartment units owned (directly or beneficially) by each
Consolidated Subsidiary (other than wholly-owned Subsidiaries of Borrower and/or
EQR) and Investment Affiliate during such period and the Capital Reserve for
such period, (iv) dividends on preferred units payable by Borrower for such
period, and (v) distributions made by the Borrower during such period to EQR for
the purpose of paying dividends on preferred shares in EQR.

         "Fixed Rate Borrowing" has the meaning set forth in Section 1.3.

         "Fixed Rate Indebtedness" means all Indebtedness which accrues interest
at a fixed rate.

         "Floating Rate Indebtedness" means all Indebtedness which is not Fixed
Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.

         "FMV Cap Rate" means 9%.

         "Fronting Bank" shall mean Bank of America, National Association, The
Chase Manhattan Bank, Morgan Guaranty Trust Company of New York or such other
Bank which Borrower is notified by the Administrative Agent is willing to be a
Fronting Bank and which is designated by Borrower in its Notice of Borrowing as
the Bank which shall issue a Letter of Credit with respect to such Notice of
Borrowing.

         "GAAP" means generally accepted accounting principles recognized as
such in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting


                                       12
<PAGE>

profession, which are applicable to the circumstances as of the date of
determination.

         "GROSS ASSET VALUE" means, with respect to any Person or Property,
Adjusted Asset Value plus, in the case of any Person, the value of any Cash or
Cash Equivalent owned by such Person.

         "GROUP OF LOANS" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Base Rate Loans at such time, or (ii) all
Euro-Dollar Loans having the same Interest Period at such time; PROVIDED that,
if a Committed Loan of any particular Bank is converted to or made as a Base
Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been in if it
had not been so converted or made.

         "INDEBTEDNESS" as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities of such Person for
borrowed money, (b) all indebtedness, obligations or other liabilities of such
Person evidenced by Securities or other similar instruments, (c) all Contingent
Obligations of such Person, (d) all reimbursement obligations and other
liabilities of such Person with respect to letters of credit or banker's
acceptances issued for such Person's account or other similar instruments for
which a contingent liability exists, (e) all obligations of such Person to pay
the deferred purchase price of Property or services, (f) all obligations in
respect of Capital Leases (including ground leases) of such Person, (g) all
indebtedness obligations or other liabilities of such Person or others secured
by a Lien on any asset of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by, or are a personal liability of such
Person, (h) all indebtedness, obligations or other liabilities (other than
interest expense liability) in respect of Interest Rate Contracts and foreign
currency exchange agreements (other than Interest Rate Contracts purchased to
hedge Indebtedness), (i) ERISA obligations currently due and payable and (j) all
other items which, in accordance with GAAP, would be included as liabilities on
the liability side of the balance sheet of such Person, exclusive, however, of
all accounts payable, accrued interest and expenses, prepaid rents, security
deposits and dividends and distributions declared but not yet paid.

         "INDEMNITEE" has the meaning set forth in Section 9.3(b).

         "INTEREST EXPENSE" means, for any period and without duplication, total
interest expense, whether paid, accrued or capitalized (including the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility) of EQR, on a consolidated
basis, including without limitation all commissions, discounts



                                       13
<PAGE>

and other fees and charges owed with respect to drawn letters of credit,
amortized costs of Interest Rate Contracts incurred on or after the Closing Date
and the Facility Fees payable to the Banks in accordance with Section 2.8, PLUS
Borrower's Share of accrued, paid or capitalized interest with respect to any
Indebtedness of Investment Affiliates for which there is no recourse to EQR or
Borrower, PLUS, without duplication, EQR's and Borrower's actual or potential
liability for accrued, paid or capitalized interest (including the interest
component of Capital Leases but excluding interest expense covered by an
interest reserve established under a loan facility) with respect to Indebtedness
of Investment Affiliates that is recourse to EQR or Borrower calculated for all
Fixed Rate Indebtedness, at the actual interest rate in effect with respect to
all Indebtedness outstanding as of the last day of such Fiscal Quarter and in
the case of all Floating Rate Indebtedness, the greater of (i) (A) the Treasury
Rate plus 1.75% for taxable Indebtedness and (B) 7.0% for tax-exempt
Indebtedness, (ii) the actual rate of interest in effect with respect to such
Floating Rate Indebtedness outstanding for which no Interest Rate Contract is in
effect as of the last day of such quarter and (iii) if an Interest Rate Contract
is in effect with respect to such Floating Rate Indebtedness, the strike rate
payable under such Interest Rate Contract, all determined on an annualized
basis.

         "INTEREST PERIOD" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing specified in the
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending 30, 60, 90, or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Notice of Interest
Rate Election; PROVIDED that:

         (a) any Interest Period which would otherwise end on a day which is not
     a Euro-Dollar Business Day shall be extended to the next succeeding
     Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
     another calendar month, in which case such Interest Period shall end on the
     next preceding Euro-Dollar Business Day;

         (b) any Interest Period which begins on the last Euro-Dollar Business
     Day of a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall, subject to clause (c) below, end on the last Euro-Dollar Business
     Day of a calendar month; and

         (c) if any Interest Period includes a date on which a payment of
     principal of the Loans is required to be made under Section 2.10 but does
     not end on such date, then (i) the principal amount (if any) of each
     Euro-Dollar Loan required to be repaid on such date shall have an Interest
     Period ending on such date (it being understood that the foregoing shall
     not be deemed to relieve the Borrower of any



                                       14
<PAGE>

     obligation to pay any amounts otherwise required pursuant to Section 2.13
     in connection with such prepayment) and (ii) the remainder (if any) of each
     such Euro-Dollar Loan shall have an Interest Period determined as set forth
     above.

(2)  Intentionally Omitted.

(3)  with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Money Market Quote Request and
ending such number of months thereafter as the Borrower may elect in accordance
with Section 2.3; PROVIDED that:

          (a) any Interest Period which would otherwise end on a day which is
     not a Euro-Dollar Business Day shall be extended to the next succeeding
     Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
     another calendar month, in which case such Interest Period shall end on the
     next preceding Euro-Dollar Business Day;

          (b) any Interest Period which begins on the last Euro-Dollar Business
     Day of a calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall, subject to clause (c) below, end on the last Euro-Dollar Business
     Day of a calendar month; and

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

(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of borrowing specified in the applicable Money Market Quote Request
and ending such number of days thereafter (but not less than 14 days or more
than 180 days) as the Borrower may elect in accordance with Section 2.3;
PROVIDED that:

          (a) any Interest Period which would otherwise end on a day which is
     not a Euro-Dollar Business Day shall be extended to the next succeeding
     Euro-Dollar Business Day; and

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

         "INTEREST RATE CONTRACTS" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.


                                       15
<PAGE>

         "INTEREST RATE HEDGES" has the meaning set forth in Section 5.12.

         "INVESTMENT AFFILIATE" means any Person in whom EQR or Borrower holds
an equity interest, directly or indirectly, whose financial results are not
consolidated under GAAP with the financial results of EQR or Borrower on the
consolidated financial statements of EQR and Borrower.

         "INVESTMENT GRADE RATING" means a rating for a Person's senior
long-term unsecured debt, or if no such rating has been issued, a "shadow"
rating, of BBB- or better from S&P, and a rating or "shadow" rating of Baa3 or
better from Moody's. Any such "shadow" rating shall be evidenced by a letter
from the applicable Rating Agency or by such other evidence as may be reasonably
acceptable to the Administrative Agent (as to any such other evidence, the
Administrative Agent shall present the same to, and discuss the same with, the
Banks).

         "INVESTMENT MORTGAGES" means mortgages securing indebtedness directly
or indirectly owed to Borrower, EQR or Subsidiaries of either or both, including
certificates of interest in real estate mortgage investment conduits.

         "INVITATION FOR MONEY MARKET QUOTES" has the meaning set forth in
Section 2.3(c).

         "LETTER(S) OF CREDIT" has the meaning provided in Section 2.2(b).

         "LETTER OF CREDIT COLLATERAL" has the meaning provided in Section 6.4.

         "LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning provided in
Section 6.4.

         "LETTER OF CREDIT DOCUMENTS" has the meaning provided in Section 2.16.

         "LETTER OF CREDIT USAGE" means at any time the sum of (i) the
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower's unpaid obligations
under this Agreement in respect of the Letters of Credit.

         "LIBOR AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.3.

         "LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement, in each case that has the effect of creating a
security interest, in respect of such asset. For the purposes of this Agreement,
the Borrower, EQR or any Subsidiary of either or both shall be deemed to own
subject to a Lien any asset which it has acquired or holds


                                       16
<PAGE>

subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.

        "LOAN" means a Base Rate Loan, a Euro-Dollar Loan, a Money Market Loan
or a Swingline Loan and "LOANS" means Base Rate Loans, Euro-Dollar Loans, Money
Market Loans or Swingline Loans or any combination of the foregoing.

         "LOAN DOCUMENTS" means this Agreement, the Notes, the EQR Guaranty,
the Letter(s) of Credit, and the Letter of Credit Documents.

         "LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.7(b).

         "MARGIN STOCK" shall have the meaning provided such term in Regulation
U of the Federal Reserve Board.

         "MATERIAL ADVERSE EFFECT" means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely (i) effect the business, operations,
properties, assets or financial condition of the Borrower and its Consolidated
Subsidiaries taken as a whole, (ii) impair the ability of the Borrower and its
Consolidated Subsidiaries, taken as a whole, to perform their respective
obligations under the Loan Documents, or (iii) cause a Default under Sections
5.8, 5.9 or 5.13.

         "MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.

         "MATERIALS OF ENVIRONMENTAL CONCERN" means and includes pollutants,
contaminants, hazardous wastes, toxic and hazardous substances, asbestos, lead,
petroleum and petroleum by-products.

         "MATURITY DATE" shall mean the date when all of the Obligations
hereunder shall be due and payable which shall be August 11, 2002, unless
accelerated pursuant to the terms hereof.

         "MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.3(d).

         "MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.

         "MONEY MARKET BORROWING" has the meaning set forth in Section 1.3.

         "MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money



                                       17
<PAGE>

Market Lending Office by notice to the Borrower and the Agent; PROVIDED that any
Bank may from time to time by notice to the Borrower and the Administrative
Agent designate separate Money Market Lending Offices for its Money Market LIBOR
Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other
hand, in which case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such offices, as the
context may require.

         "MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant to
a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Article VIII.

         "MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.

         "MONEY MARKET MARGIN" has the meaning set forth in Section 2.3(d)(2).

         "MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.3.

         "MOODY'S" means Moody's Investors Services, Inc. or any successor
thereto.

         "MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.

         "MULTIFAMILY RESIDENTIAL PROPERTY MORTGAGES" means Investment Mortgages
issued by any Person engaged primarily in the business of developing, owning,
and managing multifamily residential property.

         "MULTIFAMILY RESIDENTIAL PROPERTY PARTNERSHIP INTERESTS" means
partnership or joint venture interests issued by any Person engaged primarily in
the business of developing, owning, and managing multifamily residential
property.

         "NET INCOME" means, for any period, the net earnings (or loss) after
Taxes of EQR, on a consolidated basis, for such period calculated in conformity
with GAAP.

         "NET OFFERING PROCEEDS" means all cash or other assets received by EQR
or Borrower as a result of the sale of common shares of beneficial interest,
preferred shares of beneficial interest, partnership interests, limited
liability company interests, Convertible Securities or other ownership or equity
interests in EQR or Borrower LESS customary costs and discounts of issuance paid
by EQR or Borrower, as the case may be.


                                       18
<PAGE>

         "NET OPERATING INCOME" means, for any period with respect to any
Property owned (directly or beneficially) by Borrower, EQR or their wholly-owned
Subsidiaries, the net operating income of such Property (attributed to such
Property in a manner reasonably acceptable to Administrative Agent) for such
period (i) determined in accordance with GAAP, (ii) determined in a manner which
is consistent with the past practices of EQR and Borrower, and (iii) inclusive
of an allocation of reasonable management fees and administrative costs to each
Property consistent with the past practices of EQR and Borrower, except that,
for purposes of determining Net Operating Income, income shall not (a) include
security or other deposits, lease termination or other similar charges,
delinquent rent recoveries, unless previously reflected in reserves, or any
other items deemed by Administrative Agent to be of a non-recurring nature or
(b) be reduced by depreciation or amortization.

         "NET PRICE" means, with respect to the purchase and sale of any
Property, without duplication, (i) Cash and Cash Equivalents paid as
consideration for such purchase or sale, PLUS (ii) the principal amount of any
note received or other deferred payment to be made in connection with such
purchase or sale (except as described in clause (iv) below), PLUS (iii) the
value of any other considerations delivered in connection with such purchase or
sale (including, without limitation, shares of beneficial interest in EQR and OP
Units or Preferred OP Units (as defined in Borrower's partnership agreement))
(as reasonably determined by Administrative Agent), MINUS (only in the case of a
sale) (iv) the value of any consideration deposited into escrow or subject to
disbursement or claim upon the occurrence of any event, MINUS (only in the case
of a sale) (v) the value of any consideration required to be paid to any Person
other than the Borrower and its Subsidiaries owning a beneficial interest in
such Property, MINUS (vi) reasonable costs of sale and taxes paid or payable in
connection with such purchase or sale.

         "NET PRESENT VALUE" shall mean, as to a specified or ascertainable
dollar amount, the present value, as of the date of calculation of any such
amount using a discount rate equal to the Base Rate in effect as of the date of
such calculation.

         "NON-MULTIFAMILY RESIDENTIAL PROPERTY" means Property which is not (i)
used for lease, operation or use as a multifamily residential property, (ii)
Unimproved Assets, (iii) Securities, (iv) Multifamily Residential Property
Mortgages, or (v) Multifamily Residential Property Partnership Interests.

         "NON-RECOURSE INDEBTEDNESS" means Indebtedness with respect to which
recourse for payment is limited to (i) specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness
or (ii) any Subsidiary or Investment Affiliate (provided that if a Subsidiary or
Investment Affiliate is a partnership, there is no recourse to



                                       19
<PAGE>

Borrower or EQR as a general partner of such partnership); provided, however,
that personal recourse of Borrower or EQR for any such Indebtedness for fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself,
prevent such Indebtedness from being characterized as Non-Recourse Indebtedness.

         "NOTES" means promissory notes of the Borrower, substantially in the
form of EXHIBITS A-1 AND A-2 hereto, evidencing the obligation of the Borrower
to repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.

         "NOTICE OF BORROWING" means a Notice of Borrowing (as defined in
Section 2.4).

         "NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.6.

         "OBLIGATIONS" means all obligations, liabilities, indemnity obligations
and Indebtedness of every nature of the Borrower, from time to time owing to
Administrative Agent or any Bank under or in connection with this Agreement or
any other Loan Document.

         "PARENT" means, with respect to any Bank, any Person controlling such
Bank.

         "PARTICIPANT" has the meaning set forth in Section 9.6(b).

         "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

         "PERIOD FRACTION" means with respect to any period of time, a fraction,
the numerator of which is the actual number of days in such period, and the
denominator of which is three hundred and sixty (360).

         "PERMITTED HOLDINGS" means Development Activity, Raw Land, Securities,
Non-Multifamily Residential Property and Investment Mortgages, but only to the
extent not prohibited in Section 5.8.

         "PERMITTED LIENS" means:

         a. Liens for Taxes, assessments or other governmental charges not yet
     due and payable or which are being contested in good faith by appropriate
     proceedings promptly instituted and diligently conducted in accordance with
     the terms hereof;


                                       20
<PAGE>

         b. statutory liens of carriers, warehousemen, mechanics, materialmen
     and other similar liens imposed by law, which are incurred in the ordinary
     course of business for sums not more than sixty (60) days delinquent or
     which are being contested in good faith in accordance with the terms
     hereof;

         c. deposits made in the ordinary course of business to secure
     liabilities to insurance carriers;

         d. Liens for purchase money obligations for equipment; PROVIDED that
     (i) the Indebtedness secured by any such Lien does not exceed the purchase
     price of such equipment, (ii) any such Lien encumbers only the asset so
     purchased and the proceeds upon sale, disposition, loss or destruction
     thereof, and (iii) such Lien, after giving effect to the Indebtedness
     secured thereby, does not give rise to an Event of Default;

         e. easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to the owner's
title insurance policies, except in connection with any Indebtedness, for any of
the Real Property Assets, so long as the foregoing do not interfere in any
material respect with the use or ordinary conduct of the business of the owner
and do not diminish in any material respect the value of the Property to which
it is attached or for which it is listed;

          f. Liens and judgments which have been or will be bonded or released
     of record within thirty (30) days after the date such Lien or judgment is
     entered or filed against EQR, Borrower, or any Subsidiary;

          g. Liens on Property of the Borrower, EQR or the Subsidiaries of
     either or both (other than Qualifying Unencumbered Property) securing
     Indebtedness which may be incurred or remain outstanding without resulting
     in an Event of Default hereunder; and

          h. Liens in favor of the Borrower against any asset of any
     wholly-owned Subsidiary of the Borrower and/or EQR.

         "PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

         "PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under


                                       21
<PAGE>

Section 412 of the Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the ERISA Group or (ii)
has at any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.

         "PRIME RATE" means the rate of interest publicly announced by the
Administrative Agent in Charlotte, North Carolina from time to time as its Prime
Rate for customers generally.

         "PROPERTY" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.

         "PROPERTY INCOME" means, when used with respect to any Real Property
Asset, annual contractual rents (other than prepaid rents and revenues and
security deposits except to the extent applied in satisfaction of tenants'
obligations for rent), in effect as of the last day of a quarter in accordance
with the applicable leases, but provided that if any tenant is more than 60 days
in arrears in the payment of base or fixed rent as of the last day of a quarter,
the annual contractual rents payable pursuant to such tenant's lease shall not
constitute "Property Income".

         "QUALIFYING UNENCUMBERED PROPERTY" means any Property from time to time
which (i) is an operating multifamily residential property wholly-owned
(directly or beneficially) by Borrower and/or EQR, (ii) is not subject (nor are
any equity interests in such Property subject) to a Lien which secures
Indebtedness of any Person other than Permitted Liens, (iii) is not subject (nor
are any equity interests in such Property subject) to any covenant, condition,
or other restriction which prohibits or limits the creation or assumption of any
Lien upon such Property (it being understood that covenants similar to those set
forth in Section 5.8 hereof shall not be deemed to constitute any such
prohibition or limitation), and (iv) if owned by a Subsidiary of the Borrower or
EQR (other than the Borrower), is owned by a Subsidiary that does not have any
outstanding Unsecured Debt (other than those items of Indebtedness set forth in
clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any
Contingent Obligation other than guarantees for borrowed money). In addition, in
the case of any Property that is owned by a Subsidiary of Borrower and/or EQR,
if such Subsidiary shall commence any proceeding under any bankruptcy,
insolvency or similar law, or any such involuntary case shall be commenced
against it and shall remain undismissed and unstayed for a period of 90 days,
then, simultaneously with the occurrence of such conditions, such Property shall
no longer constitute a Qualifying Unencumbered Property.


                                       22
<PAGE>

         "QRS CORPORATION" means those qualified EQR subsidiaries wholly owned
by EQR.

         "RATING AGENCIES" means, collectively, S&P, Moody's, Fitch Investors
Services, L.P. and Duff & Phelps Credit Rating Co.

         "RAW LAND" means Real Property Assets upon which no material
improvements have been commenced.

         "REAL PROPERTY ASSETS" means as of any time, the real property assets
(including interests in participating mortgages in which the Borrower's interest
therein is characterized as equity according to GAAP) owned directly or
indirectly by the Borrower, EQR and the Consolidated Subsidiaries of either or
both at such time.

         "RECOURSE DEBT" shall mean Indebtedness that is not Non-Recourse
Indebtedness.

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

         "REQUIRED BANKS" means at any time Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans (provided, that in the case of Swingline Loans,
the amount of each Bank's funded participation interest in such Swingline Loans
shall be considered for purposes hereof as if it were a direct loan and not a
participation interest, and the aggregate amount of Swingline Loans owing to the
Swingline Lender shall be considered for purposes hereof as reduced by the
amount of such funded participation interests).

         "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

         "SECURED DEBT" means Indebtedness of EQR, on a consolidated basis, and
without duplication, Borrower's Share of any Indebtedness of any Investment
Affiliate, the payment of which is secured by a Lien on any Property owned or
leased by EQR, Borrower, or any Subsidiary or Investment Affiliate of either or
both.

         "SECURITIES" means any stock, partnership interests (other than
Multifamily Residential Property Partnership Interests), shares, shares of
beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities," or
any certificates of interest, shares, or



                                       23
<PAGE>

participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the obligations.

         "SOLVENT" means, with respect to any Person, that the fair saleable
value of such Person's assets exceeds the Indebtedness of such Person.

         "SUBSIDIARY" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower and/or EQR.

         "SWINGLINE BORROWING" has the meaning set forth in Section 1.3.

         "SWINGLINE COMMITMENT" has the meaning set forth in Section 2.18(a).

         "SWINGLINE LENDER" means Bank of America, National Association, in its
capacity as Swingline Lender hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.

         "SWINGLINE LOAN" means a loan made by the Swingline Lender pursuant to
Section 2.18.

         "SYNDICATION AGENT" shall mean The Chase Manhattan Bank in its capacity
as Syndication Agent hereunder, and its permitted successors in such capacity in
accordance with the terms of this Agreement.

         "TAXES" means all federal, state, local and foreign income and gross
receipts taxes.

         "TERM" has the meaning set forth in Section 2.9.

         "TERMINATION EVENT" shall mean (i) a "reportable event", as such term
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC), or an event described
in Section 4062(e) of ERISA, (ii) the withdrawal by any member of the ERISA
Group from a Multiemployer Plan during a plan year in which it is a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), or the incurrence of
liability by any member of the ERISA Group under Section 4064 of ERISA upon the
termination of a Multiemployer Plan, (iii) the filing of a notice of intent to
terminate any Plan under Section 4041 of ERISA, other than in a standard
termination within the meaning of Section 4041 of ERISA, or the treatment of a
Plan amendment as a distress termination under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to terminate, impose liability (other
than for



                                       24
<PAGE>

premiums under Section 4007 of ERISA) in respect of, or cause a trustee to be
appointed to administer, any Plan or (v) any other event or condition that might
reasonably constitute grounds for the termination of, or the appointment of a
trustee to administer, any Plan or the imposition of any liability or
encumbrance or Lien on the Real Property Assets or any member of the ERISA Group
under ERISA.

         "TREASURY RATE" means, as of any date, a rate equal to the annual yield
to maturity on the U.S. Treasury Constant Maturity Series with a ten year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
-- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H.15,
if necessary. In the event Release H.15 is no longer published, the
Administrative Agent shall select, in its reasonable discretion, an alternate
basis for the determination of Treasury yield for U.S. Treasury Constant
Maturity Series with ten year maturities.

         "UNENCUMBERED ASSET VALUE" means (i) a fraction, the numerator of which
is the product of four (4) and the aggregate Unencumbered Net Operating Income
for the most recently ended Fiscal Quarter which is attributable (in a manner
reasonably acceptable to Administrative Agent) to Qualifying Unencumbered
Properties wholly-owned (directly or beneficially) by the Borrower and/or EQR
(exclusive of Unimproved Assets) for the entire Fiscal Quarter and the
denominator of which is the FMV Cap Rate PLUS (ii) for all Qualifying
Unencumbered Properties wholly-owned (directly or beneficially) by Borrower
and/or EQR which have been acquired (directly or indirectly) by the Borrower
and/or EQR the Fiscal Quarter most recently ended, the aggregate Net Price of
the Qualifying Unencumbered Properties paid by Borrower or its affiliates for
such Qualifying Unencumbered Properties; provided, however, the value
attributable to Unencumbered Net Operating Income from Qualifying Unencumbered
Properties located outside of the United States, in excess of ten percent (10%)
of Unencumbered Asset Value, shall be disregarded in calculating the
Unencumbered Asset Value.

         "UNENCUMBERED NET OPERATING INCOME" means for any period for all
Qualifying Unencumbered Properties owned (directly or beneficially) by the
Borrower and/or EQR and/or any wholly-owned Subsidiary of either or both during
the applicable period, Net Operating Income from each such Qualifying
Unencumbered Property minus an amount equal to the product of the average number
of apartment units in such Qualifying Unencumbered Property during such period
and the Capital Reserve for such period.

         "UNIMPROVED ASSETS" means Real Property Assets, other than Raw Land,
upon which no material improvements have been


                                       25
<PAGE>


completed which completion is evidenced by a certificate of occupancy or its
equivalent.

         "UNITED STATES" means the United States of America, including the fifty
states and the District of Columbia.

         "UNSECURED DEBT" means Indebtedness of Borrower and EQR and any
wholly-owned Subsidiary of either or both, which is not Secured Debt or
Unsecured Tax-Exempt Indebtedness.

         "UNSECURED INTEREST EXPENSE" means Interest Expense, other than
Interest Expense payable in respect of Secured Debt and Unsecured Tax-Exempt
Indebtedness and Interest Expense payable in respect of the Indebtedness of any
Person other than Borrower or EQR.

         "UNSECURED TAX-EXEMPT INDEBTEDNESS" means Indebtedness of any
wholly-owned Subsidiary of Borrower and/or EQR which is not Secured Debt, issued
in connection with a tax-exempt financing of a Real Property Asset and which is
guaranteed in whole by the Borrower and/or EQR.

         "UNUSED COMMITMENTS" shall mean an amount equal to all unadvanced funds
(other than unadvanced funds in connection with any construction loan) which any
third party is obligated to advance to Borrower or another Person or otherwise
pursuant to any loan document, written instrument or otherwise.

         SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONSTERMS AND
DETERMINATIONS. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Administrative Agent; PROVIDED that
for purposes of references to the financial results and information of "EQR, on
a consolidated basis," EQR shall be deemed to own one hundred percent (100%) of
the partnership interests in Borrower; and PROVIDED further that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
reasonably satisfactory to the Borrower and the Required Banks.


                                       26

<PAGE>


         SECTION 1.3 TYPES OF BORROWINGSOF BORROWINGS. The term "BORROWING"
denotes the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on the same date, all of which Loans are of the same type
(subject to Article 8) and, except in the case of Base Rate Loans and Swingline
Loans, have the same initial Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (E.G., a "FIXED RATE BORROWING" is a Euro-Dollar
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to
Article VIII), and a "EURO-DOLLAR BORROWING" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (I.E., a "COMMITTED BORROWING" is a
Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, while a "MONEY MARKET BORROWING" is a Borrowing under Section
2.3 in which a Bank's share is determined on the basis of its bid in accordance
therewith, and a "Swingline Borrowing" is a Borrowing under Section 2.18 in
which only the Swingline Lender participates (subject to the provisions of said
Section 2.18)).


                                   ARTICLE II
                                   THE CREDITS

         SECTION 2.1 COMMITMENTS TO LEND. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
and participate in Letters of Credit issued by the Fronting Bank on behalf of
the Borrower pursuant to this Article from time to time during the term hereof
in amounts such that the aggregate principal amount of Committed Loans plus such
Bank's Pro Rata Share of Swingline Loans by such Bank at any one time
outstanding together with such Bank's pro rata share of the Letter of Credit
Usage shall not exceed the amount of its Commitment. Each Borrowing outstanding
under this Section 2.1 shall be in an aggregate principal amount of $3,000,000,
or an integral multiple of $100,000 in excess thereof (except that any such
Borrowing may be in the aggregate amount available in accordance with Section
3.2(b), or in any amount required to reimburse the Fronting Bank for any drawing
under any Letter of Credit or to repay the Swingline Lender the amount of any
Swingline Loan) and, other than with respect to Money Market Loans and Swingline
Loans, shall be made from the several Banks ratably in proportion to their
respective Commitments. In no event shall the aggregate Loans outstanding at any
time, plus outstanding Letter of Credit Usage, exceed $700,000,000. Subject to
the limitations set forth herein, any amounts repaid may be reborrowed.

         SECTION 2.2 NOTICE OF BORROWING


                                       27

<PAGE>


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

         (i)   the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,

         (ii)  the aggregate amount of such Borrowing,

         (iii) whether the Loans comprising such Borrowing are to be Base
Rate Loans or Euro-Dollar Loans, and

         (iv)  in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.

         (b)   Borrower shall give the Administrative Agent, and the designated
Fronting Bank, written notice in the event that it desires to have Letters of
Credit (each, a "LETTER OF CREDIT") issued, or to have Letters of Credit issued
on behalf of a Subsidiary, hereunder no later than 10:00 a.m., Chicago time, at
least four (4) Domestic Business Days prior to the date of such issuance. Each
such notice shall specify (i) the designated Fronting Bank, (ii) the aggregate
amount of the requested Letters of Credit, (iii) the individual amount of each
requested Letter of Credit and the number of Letters of Credit to be issued,
(iv) the date of such issuance (which shall be a Domestic Business Day), (v) the
name and address of the beneficiary, (vi) the expiration date of the Letter of
Credit (which in no event shall be later than the Maturity Date or twelve (12)
months after the issuance of such Letter of Credit, whichever is earlier), (vii)
the purpose and circumstances for which such Letter of Credit is being issued
and (viii) the terms upon which each such Letter of Credit may be drawn down
(which terms shall not leave any discretion to Fronting Bank). Each such notice
may be revoked telephonically by the Borrower to the applicable Fronting Bank
and the Administrative Agent any time prior to the date of issuance of the
Letter of Credit by the applicable Fronting Bank, provided such revocation is
confirmed in writing by the Borrower to the Fronting Bank and the Administrative
Agent within one (1) Domestic Business Day by facsimile. Notwithstanding
anything contained herein to the contrary, the Borrower shall complete and
deliver to the Fronting Bank any required documentation in connection with any
requested Letter of Credit no later than two (2) Domestic Business Days prior to
the issuance thereof. No later than 10:00 a.m., Chicago time, on the date that
is four (4) Domestic Business Days prior to the date of issuance, the Borrower
shall specify a precise description of the documents and the verbatim text of
any certificate to be presented by the beneficiary of such Letter of Credit,
which if presented by such beneficiary prior to the expiration date of the
Letter of Credit


                                       28

<PAGE>


would require the Fronting Bank to make a payment under the Letter of Credit;
PROVIDED, that Fronting Bank may, in its reasonable judgment, require changes in
any such documents and certificates only in conformity with changes in customary
and commercially reasonable practice or law and, PROVIDED FURTHER, that no
Letter of Credit shall require payment against a conforming draft to be made
thereunder on the third Domestic Business Day following the date that such draft
is presented if such presentation is made later than 10:00 A.M. Chicago time
(except that if the beneficiary of any Letter of Credit requests at the time of
the issuance of its Letter of Credit that payment be made on the same Domestic
Business Day against a conforming draft, such beneficiary shall be entitled to
such a same day draw, provided such draft is presented to the applicable
Fronting Bank no later than 10:00 A.M. Chicago time and provided further the
Borrower shall have requested to the Fronting Bank and the Administrative Agent
that such beneficiary shall be entitled to a same day draw). In determining
whether to pay on such Letter of Credit, the Fronting Bank shall be responsible
only to determine that the documents and certificates required to be delivered
under the Letter of Credit have been delivered and that they comply on their
face with the requirements of that Letter of Credit.

         SECTION 2.3 MONEY MARKET BORROWINGS.

         (a)   THE MONEY MARKET OPTION. From time to time during the Term, and
provided that at such time the Borrower maintains an Investment Grade Rating,
the Borrower may, as set forth in this Section 2.3, request the Banks during the
Term to make offers to make Money Market Loans to the Borrower, not to exceed,
at such time, the lesser of (i) $250,000,000 in the aggregate outstanding, and
(ii) the aggregate Commitments less all Loans and Letter of Credit Usage then
outstanding. Subject to the provisions of this Agreement, the Borrower may repay
any outstanding Money Market Loan on any day which is both a Domestic Business
Day and a Euro-Dollar Business Day and any amounts so repaid may be reborrowed,
up to the amount available under this Section 2.3 at the time of such Borrowing,
until the Domestic Business Day next preceding the Maturity Date. The Banks may,
but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section 2.3.

         (b)   MONEY MARKET QUOTE REQUEST. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to the
Agent by facsimile transmission a Money Market Quote Request substantially in
the form of EXHIBIT B hereto so as to be received not later than 10:30 A.M.
(Chicago time) on (x) the fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the case
of an Absolute Rate Auction (or, in either case, such other time or date as the


                                       29

<PAGE>


Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:

         1.    the proposed date of Borrowing, which shall be a Euro-Dollar
    Business Day in the case of a LIBOR Auction or a Domestic Business Day in
    the case of an Absolute Rate Auction,

         2.    the aggregate amount of such Borrowing, which shall be $3,000,000
    or a larger multiple of $100,000,

         3.    the duration of the Interest Period applicable thereto (which
    shall not be less than 14 days or more than 180 days), subject to the
    provisions of the definition of Interest Period, and

         4.    whether the Money Market Quotes requested are to set forth a
    Money Market Margin or a Money Market Absolute Rate.

The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative Agent may agree) of any
other Money Market Quote Request.

         (c)   INVITATION FOR MONEY MARKET QUOTES. Promptly upon receipt of a
Money Market Quote Request, the Administrative Agent shall send to the Banks by
facsimile transmission a copy thereof, which shall constitute an invitation by
the Borrower to each Bank to submit Money Market Quotes offering to make the
Money Market Loans to which such Money Market Quote Request relates in
accordance with this Section.

         (d)   SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES.

               1.    Each Bank may submit a Money Market Quote containing an
    offer or offers to make Money Market Loans in response to any Invitation
    for Money Market Quotes. Each Money Market Quote must comply with the
    requirements of this subsection (d) and must be submitted to the
    Administrative Agent by facsimile transmission at its offices specified in
    or pursuant to Section 9.1 not later than (x) 2:00 P.M. (Chicago time) on
    the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing,
    in the case of a LIBOR Auction or (y) 9:30 A.M. (Chicago time) on the
    proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
    either case, such other time or date as the Borrower and the Administrative
    Agent shall have mutually agreed and shall have notified to the Banks not
    later than the date of


                                       30

<PAGE>


    the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
    Auction for which such change is to be effective); PROVIDED that Money
    Market Quotes submitted by the Administrative Agent (or any affiliate of the
    Administrative Agent) in the capacity of a Bank may be submitted, and may
    only be submitted, if the Administrative Agent or such affiliate notifies
    the Borrower of the terms of the offer or offers contained therein not later
    than (x) one hour prior to the deadline for the other Banks, in the case of
    a LIBOR Auction or (y) 15 minutes prior to the deadline for the other Banks,
    in the case of an Absolute Rate Auction. Subject to Articles 3 and 6, any
    Money Market Quote so made shall be irrevocable except with the written
    consent of the Administrative Agent given on the instructions of the
    Borrower. Such Money Market Loans may be funded by such Bank's Designated
    Lender (if any) as provided in Section 9.6(d), however such Bank shall not
    be required to specify in its Money Market Quote whether such Money Market
    Loans will be funded by such Designated Lender.

         2.   Each Money Market Quote shall be in substantially the form of
    EXHIBIT D hereto and shall in any case specify:

         (a)   the proposed date of Borrowing,

         (b)   the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be $3,000,000 or a larger multiple
of $100,000, (y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an aggregate limitation as
to the principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,

         (c)   in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "MONEY MARKET MARGIN") offered for
each such Money Market Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such base rate,

         (d)   in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/10,000th of 1%) (the "MONEY MARKET ABSOLUTE
RATE") offered for each such Money Market Loan, and

         (e)   the identity of the quoting Bank.

A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest


                                       31

<PAGE>


Period specified in the related Invitation for Money Market Quotes.

         3.    Any Money Market Quote shall be disregarded if it:

         (a)   is not substantially in conformity with EXHIBIT D hereto or does
not specify all of the information required by subsection (d)(2) above;

         (b)   contains qualifying, conditional or similar language (except for
an aggregate limitation as provided in subsection (d)(2)(b) above);

         (c)   proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or

         (d)   arrives after the time set forth in subsection (d)(1).

         (e)   NOTICE TO BORROWER. The Administrative Agent shall promptly (and
in any event within one (1) Domestic Business Day after receipt thereof) notify
the Borrower in writing of the terms (x) of any Money Market Quote submitted by
a Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote or modifies
the terms of such previous Money Market Quote to provide terms more favorable to
Borrower. The Administrative Agent's notice to the Borrower shall specify (A)
the aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or Money
Market Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.

         (f)   ACCEPTANCE AND NOTICE BY BORROWER. Not later than 10:30 A.M.
(Chicago time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or


                                       32

<PAGE>


Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case of acceptance,
such notice (a "NOTICE OF MONEY MARKET BORROWING") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; PROVIDED that:

         1.    the aggregate principal amount of each Money Market Borrowing
    may not exceed the applicable amount set forth in the related Money Market
    Quote Request;

         2.    the principal amount of each Money Market Borrowing must be
    $3,000,000 or a larger multiple of $100,000;

         3.    acceptance of offers may only be made on the basis of ascending
    Money Market Margins or Money Market Absolute Rates, as the case may be; and

         4.    the Borrower may not accept any offer that is described in
    subsection (d)(3) or that otherwise fails to comply with the requirements of
    this Agreement.

         (g)   ALLOCATION BY AGENT. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Banks as nearly as possible (in
multiples of $100,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. The Administrative
Agent shall promptly (and in any event within one (1) Domestic Business Day
after such offers are accepted) notify the Borrower and each such Bank in
writing of any such allocation of Money Market Loans. Determinations by the
Administrative Agent of the allocation of Money Market Loans shall be conclusive
in the absence of manifest error.

         (h)   NOTIFICATION BY ADMINISTRATIVE AGENT. Upon receipt of the
Borrower's Notice of Money Market Borrowing in accordance with Section 2.3(f)
hereof, the Administrative Agent shall, on the date such Notice of Money Market
Borrowing is received by the Administrative Agent, promptly notify each Bank
(and such Notice of Money Market Borrowing shall not thereafter be revocable by
the Borrower) (i) of the principal amount of the Money Market Borrowing accepted
by the Borrower, and (ii) of such Bank's share (if any) of such Money Market
Borrowing. A Bank who is notified that it has been selected to make a Money
Market Loan may designate its Designated Lender (if any) to fund such Money


                                       33

<PAGE>


Market Loan on its behalf, as described in Section 9.6(d). Any Designated Lender
which funds a Money Market Loan shall on and after the time of such funding
become the obligee under such Money Market Loan and be entitled to receive
payment thereof when due. No Bank shall be relieved of its obligation to fund a
Money Market Loan, and no Designated Lender shall assume such obligation, prior
to the time the applicable Money Market Loan is funded.

         (i)   Notwithstanding anything to the contrary contained herein, each
Bank shall be required to fund its pro rata share of Committed Loans in
accordance with Section 2.1 hereof despite the fact that any Bank's Commitment
may have been or may be exceeded as a result of such Bank's making of Money
Market Loans.

         SECTION 2.4 NOTICE TO BANKS; FUNDING OF LOANS

         (a)   Upon receipt of a notice from Borrower in accordance with Section
2.2 hereof (each such notice being a "NOTICE OF BORROWING"), the Administrative
Agent shall, on the date such Notice of Borrowing is received by the
Administrative Agent, promptly notify each Bank of the contents thereof and of
such Bank's share of such Borrowing, of the interest rate determined pursuant
thereto and the Interest Period(s) (if different from those requested by the
Borrower) and such Notice of Borrowing shall not thereafter be revocable by the
Borrower, unless Borrower shall pay any applicable expenses pursuant to Section
2.13.

         (b)   Not later than 1:00 p.m. (Chicago time) on the date of each
Borrowing as indicated in the Notice of Borrowing, each Bank shall (except as
provided in subsection (c) of this Section) make available its share of such
Borrowing in Federal funds immediately available in Chicago, to the
Administrative Agent at its address referred to in Section 9.1. If the Borrower
has requested the issuance of a Letter of Credit, no later than 12:00 Noon
(Chicago time) on the date of such issuance as indicated in the notice delivered
pursuant to Section 2.2(b), the Fronting Bank shall issue such Letter of Credit
in the amount so requested and deliver the same to the Borrower with a copy
thereof to the Administrative Agent. Immediately upon the issuance of each
Letter of Credit by the Fronting Bank, such Fronting Bank shall be deemed to
have sold and transferred to each other Bank, and each such other Bank shall be
deemed, and hereby agrees, to have irrevocably and unconditionally purchased and
received from the Fronting Bank, without recourse or warranty, an undivided
interest and a participation in such Letter of Credit, any drawing thereunder,
and the obligations of the Borrower hereunder with respect thereto, and any
security therefor or guaranty pertaining thereto, in an amount equal to such
Bank's ratable share thereof (based upon the ratio its Commitment bears to the
aggregate of all Commitments). Upon any change in any of the Commitments in
accordance herewith, there shall be an automatic adjustment to such
participations to


                                       34

<PAGE>


reflect such changed shares. The Fronting Bank shall have the primary obligation
to fund any and all draws made with respect to such Letter of Credit
notwithstanding any failure of a participating Bank to fund its ratable share of
any such draw. The Administrative Agent will instruct the Fronting Bank to make
such Letter of Credit available to the Borrower and the Fronting Bank shall make
such Letter of Credit available to the Borrower at the Borrower's aforesaid
address or at such address in the United States as Borrower shall request on the
date of the Borrowing.

         (c)   Not later than 3:00 p.m. (Chicago time) on the date of each
Swingline Borrowing as indicated in the applicable Notice of Borrowing, the
Swingline Lender shall make available such Swingline Borrowing in Federal funds
immediately available in Chicago, Illinois, to the Administrative Agent at its
address referred to herein.

         (d)   Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.4 and the Administrative Agent may, in reliance
upon such assumption, but shall not be obligated to, make available to the
Borrower on such date a corresponding amount on behalf of such Bank. If and to
the extent that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand, and in the case of the Borrower one
(1) Domestic Business Day after demand, such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, a rate per annum equal to the interest rate
applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement.

         SECTION 2.5 NOTES.

         (a)   The Loans of each Bank shall be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office.

         (b)   Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type (including Swingline Loans
and Money Market Loans) be evidenced by a separate Note in an amount equal to
the aggregate unpaid principal amount of such Loans. Any additional costs
incurred by


                                       35

<PAGE>


the Administrative Agent, the Borrower or the Banks in connection with preparing
such a Note shall be at the sole cost and expense of the Bank requesting such
Note. In the event any Loans evidenced by such a Note are paid in full prior to
the Maturity Date, any such Bank shall return such Note to Borrower. Each such
Note shall be in substantially the form of EXHIBIT A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Upon the execution and delivery of any such Note, any existing Note
payable to such Bank shall be replaced or modified accordingly. Each reference
in this Agreement to the "NOTE" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.

         (c)   Upon receipt of each Bank's Note pursuant to Section 3.1(a), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the appropriate schedule appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding; PROVIDED that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.

         (d)   The Committed Loans shall mature, and the principal amount
thereof shall be due and payable, on the Maturity Date. The Swingline Loans
shall mature, and the principal amount thereof shall be due and payable, in
accordance with Section 2.18(b)(iii).

         (e)   Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the earlier to occur of (i) last day
of the Interest Period applicable to such Borrowing or (ii) the Maturity Date.

         (f)   There shall be no more than ten (10) Euro-Dollar Groups of Loans
outstanding at any one time.

         SECTION 2.6 METHOD OF ELECTING INTEREST RATES.

         (a)   The Loans included in each Committed Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Borrowing. Thereafter, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article VIII), as follows:


                                       36

<PAGE>


         (i)   if such Loans are Base Rate Loans, the Borrower may elect to
convert all or any portion of such Loans to Euro-Dollar Loans as of any
Euro-Dollar Business Day;

         (ii)  if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert all or any portion of such Loans to Base Rate Loans and/or elect to
continue all or any portion of such Loans as Euro-Dollar Loans for an additional
Interest Period or additional Interest Periods, in each case effective on the
last day of the then current Interest Period applicable to such Loans, or on
such other date designated by Borrower in the Notice of Interest Rate Election
provided Borrower shall pay any losses pursuant to Section 2.13.

Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Administrative Agent at least three (3) Euro-Dollar
Business Days before the conversion or continuation selected in such notice is
to be effective. A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant Group
of Loans; PROVIDED that (i) such portion is allocated ratably among the Loans
comprising such Group, (ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each $500,000 or any larger
multiple of $100,000, (iii) there shall be no more than ten (10) Euro-Dollar
Groups of Loans outstanding at any time, (iv) no Committed Loan may be continued
as, or converted into, a Euro-Dollar Loan when any Event of Default has occurred
and is continuing, and (v) no Interest Period shall extend beyond the Maturity
Date.

         (b)   Each Notice of Interest Rate Election shall specify:

         (i)   the Group of Loans (or portion thereof) to which such notice
applies;

         (ii)  the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;

         (iii) if the Loans comprising such Group are to be converted, the new
type of Loans and, if such new Loans are Euro-Dollar Loans, the duration of the
initial Interest Period applicable thereto; and

         (iv)  if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.


                                       37

<PAGE>


         (c)   Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Administrative Agent shall notify
each Bank the same day as it receives such Notice of Interest Rate Election of
the contents thereof, the interest rates determined pursuant thereto and the
Interest Periods (if different from those requested by the Borrower) and such
notice shall not thereafter be revocable by the Borrower. If the Borrower fails
to deliver a timely Notice of Interest Rate Election to the Administrative Agent
for any Group of Euro-Dollar Loans, such Loans shall be converted into Base Rate
Loans on the last day of the then current Interest Period applicable thereto.

         (d)   If the Borrower shall fail to pay any principal of or interest on
any Money Market Loan when due, such Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the Base
Rate until such failure shall become an Event of Default and thereafter at a
rate per annum equal to the sum of 4% plus the Base Rate for such day.

         SECTION 2.7 INTEREST RATES.

         (a)   Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until the
date it is repaid or converted into a Euro-Dollar Loan pursuant to Section 2.6
or at the Maturity Date, at a rate per annum equal to the Base Rate plus the
Applicable Margin for Base Rate Loans for such day. Such interest shall be
payable on the first Domestic Business Day of each month.

         (b)   Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for
Euro-Dollar Loans for such day plus the Adjusted London Interbank Offered Rate
applicable to such Interest Period. Such interest shall be payable on the first
Domestic Business Day of each month.

         The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means the rate per annum, rounded upward, if necessary, to the nearest
1/100 of one percent, determined by the following formula:

                          LONDON INTERBANK OFFERED RATE
                     (1.00 - Euro-Dollar Reserve Percentage)

All figures used in this calculation shall be determined by the Administrative
Agent as of the first day of the applicable Interest Period, which must be a
Euro-Dollar Business Day.

         The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the per annum rate of interest, rounded upward, if necessary, to the
nearest 1/16th of one percent (0.0625%), at which the Euro-Dollar Reference
Bank's London


                                       38

<PAGE>


Branch, London, England, would offer U.S. dollar deposits for the applicable
Interest Period to other major banks in the London interbank market at
approximately 11:00 a.m. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Borrowing or Group Of Loans or portion
thereof to be converted into or continued as Euro-Dollar Loans to which such
Interest Period is to apply.

         "EURO-DOLLAR RESERVE PERCENTAGE" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency Liabilities, as defined in Regulation D,
as Regulation D may be amended, modified or supplemented. The Euro-Dollar
Reserve Percentage shall be expressed in decimal form and rounded upward, if
necessary, to the nearest 1/100th of one percent, and shall include marginal,
emergency, supplemental, special and other reserve percentages. The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.

         (c)   Subject to Section 8.1, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with Section
2.7(b) as if the related Money Market LIBOR Borrowing were a Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making
such Loan in accordance with Section 2.3. Each Money Market Absolute Rate Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the Money
Market Absolute Rate quoted by the Bank making such Loan in accordance with
Section 2.3. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than one month, at intervals
of one month after the first day thereof. Any overdue principal of or interest
on any Money Market Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the Base Rate until such failure shall
become an Event of Default and thereafter at a rate per annum equal to the sum
of 4% plus the Base Rate for such day.

         (d)   In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of the Loans,
and, to the extent permitted by applicable law, overdue interest in respect of
all Loans, shall bear interest at the annual rate equal to the sum of the Base
Rate and four percent (4%) (the "DEFAULT RATE").

         (e)   The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and


                                       39

<PAGE>


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

         (f)   The Euro-Dollar Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this Section.

         SECTION 2.8 FEES.

         (a)   FACILITY FEE. The Borrower shall pay to the Administrative Agent
for the account of the Banks ratably in proportion to their respective
Commitments a facility fee (the "FACILITY FEE") on the aggregate Commitments at
the respective percentages per annum based upon the range into which the
Borrower's Credit Rating then falls, in accordance with the following table. The
facility fee shall be payable in arrears on each January 1, April 1, July 1 and
October 1 during the Term.

<TABLE>
<CAPTION>
                  <S>                       <C>
                  Less than BBB-/
                           Baa3             0.300%
                  BBB-/Baa3                 0.250%
                  BBB/Baa2                  0.200%
                  BBB+/Baa1                 0.200%
                  A-/A3                     0.175%
                  A/A2 or better            0.150%

</TABLE>


Any change in the Borrower's Credit Rating causing it to move into a different
range on the table shall effect an immediate change in the applicable percentage
per annum. In the event that the Borrower receives two (2) Credit Ratings and
such ratings are split between a higher and a lower range on the table, the
applicable percentage per annum shall be based upon the lower of such two (2)
Credit Ratings. In the event that Borrower receives more than two (2) Credit
Ratings, and such ratings are not equivalent, the applicable percentage per
annum shall be determined by the lower of the two (2) highest ratings, provided
that each of said two (2) highest ratings shall be Investment Grade Ratings and
at least one of which shall be an Investment Grade Rating from S&P or Moody's.
In the event that each of said two (2) highest ratings shall not be Investment
Grade Ratings or at least one shall not be an Investment Grade Rating from S&P
or Moody's, then the applicable percentage per annum shall be determined by the
lowest of the ratings. In the event that only one (1) Rating Agency has set the
Borrower's Credit Rating, then the applicable percentage per annum shall be
based on such single rating.

         (b)   LETTER OF CREDIT FEE. During the Term, the Borrower shall pay to
the Administrative Agent, for the account of the Banks in proportion to their
interests in respect of issued and undrawn Letters of Credit, a fee (a "LETTER
OF CREDIT FEE") in an amount, provided that no Event of Default shall have
occurred and be continuing, equal to a rate per annum equal to


                                       40

<PAGE>


the then percentage per annum of the Applicable Margin with respect to
Euro-Dollar Loans, on the daily average of such issued and undrawn Letters of
Credit, which fee shall be payable, in arrears, on each January 1, April 1, July
1 and October 1 during the Term. From the occurrence, and during the
continuance, of an Event of Default, such fee shall be increased to be equal to
four percent (4%) per annum on the daily average of such issued and undrawn
Letters of Credit.

         (c)   FRONTING BANK FEE. The Borrower shall pay any Fronting Bank, for
its own account, a fee (a "FRONTING BANK FEE") at a rate per annum equal to .10%
of the issued and undrawn amount of such Letter of Credit, which fee shall be in
addition to and not in lieu of, the Letter of Credit Fee. The Fronting Bank Fee
shall be payable in arrears on each January 1, April 1, July 1 and October 1
during the Term.

         (d)   FEES NON-REFUNDABLE. All fees set forth in this Section 2.8 shall
be deemed to have been earned on the date payment is due in accordance with the
provisions hereof and shall be non-refundable. The obligation of the Borrower to
pay such fees in accordance with the provisions hereof shall be binding upon the
Borrower and shall inure to the benefit of the Administrative Agent and the
Banks regardless of whether any Loans are actually made.

         SECTION 2.9 MATURITY DATE.

         The term (the "TERM") of the Commitments (and each Bank's obligations
to make Loans and to participate in Letters of Credit hereunder) shall terminate
and expire, and the Borrower shall return or cause there to be returned all
Letters of Credit to the Fronting Bank, on the Maturity Date. Upon the date of
the termination of the Term, any Loans then outstanding (together with accrued
interest thereon and all other Obligations) shall be due and payable on such
date.

         SECTION 2.10 MANDATORY PREPAYMENTS.

         (a)   If at any time the Borrower, EQR or any Consolidated Subsidiary
of either or both sells, transfers, assigns or conveys any Real Property Asset
which shall cause the Borrower in any fiscal year period commencing after the
Closing Date, to have sold, transferred or conveyed property or assets which
constitute in the aggregate more than 30% of the Gross Asset Value of the
Borrower, EQR and any Consolidated Subsidiary of either or both on the date of
such transfer, then at the request of Administrative Agent, Borrower shall pay
to the Administrative Agent, for the account of the Banks, within thirty (30)
days after the date of such request, an amount equal to the Net Proceeds of such
transfer (but in no event more than the outstanding balance of the Loans).
Borrower shall make such prepayment together with interest accrued to the date
of the prepayment on the principal amount prepaid. In connection with


                                       41

<PAGE>


the prepayment of a Euro-Dollar Loan prior to the maturity thereof, the
Borrower shall also pay any applicable expenses pursuant to Section 2.13.
Each such prepayment shall be applied to prepay ratably the Loans of the
Banks. Amounts prepaid pursuant to this Section 2.10(a) may not be
reborrowed. As used in this Section 2.10, the term "NET PROCEEDS" shall mean
all amounts received by Borrower, EQR and the Consolidated Subsidiaries of
either or both in connection with such sale, transfer, assignment or
conveyance after payment of all expenses to be made by Borrower and any
Consolidated Subsidiaries in connection with such sale, transfer, assignment
or conveyance (including, without limitation, payment of then existing Liens
or encumbrances on such Real Property Asset, brokerage commissions, title and
survey costs or transfer taxes).

         (b)   If at any time the Borrower or EQR, directly or indirectly shall
purchase or hold any interest in any Investment Affiliates which, taken singly
or in the aggregate, exceeds fifteen percent (15%) of the Gross Asset Value of
the Borrower, EQR and the Consolidated Subsidiaries of either or both then, at
the request of Administrative Agent, Borrower shall pay to the Administrative
Agent, for the account of the Banks, within thirty (30) days after the date of
such request, an amount equal to the outstanding balance of all Borrowings
hereunder (except as to any Fixed Rate Borrowings for which such repayments
shall be made at the end of the Interest Period applicable to such Fixed Rate
Borrowing), and Borrower shall not be entitled to request any further Borrowings
under this Agreement until such time as the interest in any Investment
Affiliates of Borrower or EQR (directly or indirectly) shall not, taken singly
or in the aggregate, exceed fifteen percent (15%) of the Gross Asset Value of
the Borrower, EQR and the Consolidated Subsidiaries of either or both. Borrower
shall make such prepayment together with interest accrued to the date of the
prepayment on the principal amount prepaid. Amounts prepaid pursuant to this
Section 2.10(b) may be reborrowed in accordance with the provisions of this
Agreement.

         SECTION 2.11 OPTIONAL PREPAYMENTS.

         (a)   The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent, prepay any Group of Base Rate Loans (or any
Money Market Borrowing bearing interest at the Base Rate pursuant to Section
8.1), in whole at any time, or from time to time in part in amounts aggregating
One Million Dollars ($1,000,000) or any larger multiple of One Hundred Thousand
Dollars ($100,000), by paying the principal amount to be prepaid. The Borrower
may, from time to time on any Domestic Business Day so long as prior notice is
given to the Administrative Agent and Swingline Lender no later than 1:00 p.m.
(Chicago time) on the day on which Borrower intends to make such prepayment,
prepay any Swingline Loans in whole or in part in amounts aggregating $100,000
or a higher integral multiple of $100,000 (or, if less, the aggregate
outstanding principal amount


                                       42

<PAGE>


of all Swingline Loans then outstanding) by paying the principal amount to be
prepaid no later than 2:00 p.m. (Chicago time) on such day. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Group of Loans or Borrowing(or the Swingline Lender in the case
of Swingline Loans) included in such Group or Borrowing.

         (b)   The Borrower may, upon at least one (1) Euro-Dollar Business
Days' notice to the Administrative Agent, prepay any Euro-Dollar Loan as of the
last day of the Interest Period applicable thereto. Except as provided in
Article 8 and except with respect to any Euro-Dollar Loan which has been
converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4 hereof, the
Borrower may not prepay all or any portion of the principal amount of any
Euro-Dollar Loan prior to the end of the Interest Period applicable thereto
unless the Borrower shall also pay any applicable expenses pursuant to Section
2.13. Any such prepayment shall be upon at least three (3) Euro-Dollar Business
Days notice to the Administrative Agent. Each such optional prepayment shall be
in the amounts set forth in Section 2.11(a) above and shall be applied to prepay
ratably the Loans of the Banks included in any Group of Euro-Dollar Loans,
except that any Euro-Dollar Loan which has been converted to a Base Rate Loan
pursuant to Section 8.2, 8.3 or 8.4 hereof may be prepaid without ratable
payment of the other Loans in such Group of Loans which have not been so
converted.

         (c)   The Borrower may, upon at least one (1) Domestic Business Day's
notice to the Administrative Agent (by 11:00 a.m Chicago time on such Domestic
Business Day), reimburse the Administrative Agent for the benefit of the
Fronting Bank for the amount of any drawing under a Letter of Credit in whole or
in part in any amount.

         (d)   The Borrower may at any time return any undrawn Letter of Credit
to the Fronting Bank in whole, but not in part, and the Fronting Bank within a
reasonable period of time shall give the Administrative Agent and each of the
Banks notice of such return.

         (e)   The Borrower may at any time and from time to time cancel all or
any part of the Commitments by the delivery to the Administrative Agent of a
notice of cancellation within the applicable time periods set forth in Sections
2.11(a) and (b) if there are Loans then outstanding or, if there are no Loans
outstanding at such time as to which the Commitments with respect thereto are
being cancelled, upon at least one (1) Domestic Business Day's notice to the
Administrative Agent, whereupon, in either event, all or such portion of the
Commitments, as applicable, shall terminate as to the Banks, pro rata on the
date set forth in such notice of cancellation, and, if there are any Loans then
outstanding, Borrower shall prepay, as applicable, all or such portion of Loans
outstanding on such date in accordance with the requirements of Section 2.11(a)
and (b). In no event


                                       43

<PAGE>


shall the Borrower be permitted to cancel Commitments for which a Letter of
Credit has been issued and is outstanding unless the Borrower returns (or causes
to be returned) such Letter of Credit to the Fronting Bank. Borrower shall be
permitted to designate in its notice of cancellation which Loans, if any, are to
be prepaid. A reduction of the Commitments pursuant to this Section 2.11(c)
shall not effect a reduction in the Swingline Commitment (unless so elected by
the Borrower) until the aggregate Commitments have been reduced to an amount
equal to the Swingline Commitment.

         (f)   Any amounts so prepaid pursuant to Section 2.11 (a), (b), (c) or
(d) may be reborrowed. In the event Borrower elects to cancel all or any portion
of the Commitments and the Swingline Commitment pursuant to Section 2.11(e)
hereof, such amounts may not be reborrowed.

         (g)   The Borrower may not prepay any portion of a Money Market Loan
except with the prior consent of the Bank or Designated Lender holding such
Money Market Loan.

         SECTION 2.12 GENERAL PROVISIONS AS TO PAYMENTS.

         (a)   The Borrower shall make each payment of interest on the Loans and
of fees hereunder, not later than 12:00 Noon (Chicago time) on the date when
due, in Federal or other funds immediately available in Chicago, to the
Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly (and if received prior to 12:00 noon, on the
same Domestic Business Day, if received after 12:00 noon on the immediately
following Domestic Business Day) distribute to each Bank its ratable share (or
applicable share with respect to Money Market Loans) of each such payment
received by the Administrative Agent for the account of the Banks. If and to the
extent that the Administrative Agent shall receive any such payment for the
account of the Banks on or before 12:00 Noon (Chicago time) on any Domestic
Business Day, and Administrative Agent shall not have distributed to any Bank
its applicable share of such payment on such Domestic Business Day,
Administrative Agent shall distribute such amount to such Bank together with
interest thereon, for each day from the date such amount should have been
distributed to such Bank until the date Administrative Agent distributes such
amount to such Bank, at the Federal Funds Rate. Whenever any payment of


                                       44

<PAGE>


principal of, or interest on the Base Rate Loans or Swingline Loans or of fees
shall be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.

         (b)   Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.

         SECTION 2.13 FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or Money Market LIBOR Loan
(pursuant to Article II, VI or VIII or otherwise) on any day other than the last
day of the Interest Period applicable thereto, or if the Borrower fails to
borrow any Euro-Dollar Loans or Money Market LIBOR Loans after notice has been
given to any Bank in accordance with Section 2.4(a), or if Borrower shall
deliver a Notice of Interest Rate Election specifying that a Euro-Dollar Loan
shall be converted on a date other than the first (lst) day of the then current
Interest Period applicable thereto, the Borrower shall reimburse each Bank
within 15 days after certification of such Bank of such loss or expense (which
shall be delivered by each such Bank to Administrative Agent for delivery to
Borrower) for any resulting loss or expense incurred by it (or by an existing
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow, PROVIDED that such Bank shall have delivered to Administrative Agent and
Administrative Agent shall have delivered to the Borrower a certification as to
the amount of such loss or expense, which certification shall set forth in
reasonable detail the basis for and calculation of such loss or expense and
shall be conclusive in the absence of demonstrable error.

         SECTION 2.14 COMPUTATION OF INTEREST AND FEES. All interest and fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).


                                       45

<PAGE>


         SECTION 2.15 USE OF PROCEEDSOF PROCEEDS. The Borrower shall use the
proceeds of the Loans for general corporate purposes, including, without
limitation, the acquisition of real property to be used in the Borrower's
existing business and for general working capital needs of the Borrower;
provided, however, that no Swingline Loan shall be used more than once for the
purpose of refinancing another Swingline Loan, in whole or part.

         SECTION 2.16 LETTERS OF CREDIT.

         (a)   Subject to the terms contained in this Agreement and the other
Loan Documents, upon the receipt of a notice in accordance with Section 2.2(b)
requesting the issuance of a Letter of Credit, the Fronting Bank shall issue a
Letter of Credit or Letters of Credit in such form as is reasonably acceptable
to the Borrower (subject to the provisions of Section 2.2(b)) in an amount or
amounts equal to the amount or amounts requested by the Borrower.

         (b)   Each Letter of Credit shall be issued in the minimum amount of
One Million Dollars ($1,000,000).

         (c)   The Letter of Credit Usage shall be no more than Two Hundred
Million Dollars ($200,000,000) at any one time.

         (d)   There shall be no more than twenty (20) Letters of Credit
outstanding at any one time.

         (e)   In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereunder, the Fronting Bank shall notify the
Borrower and the Administrative Agent (and the Administrative Agent shall notify
each Bank thereof) on or before the date on which the Fronting Bank intends to
honor such drawing, and, except as provided in this subsection (e), the Borrower
shall reimburse the Fronting Bank, in immediately available funds, on the same
day on which such drawing is honored in an amount equal to the amount of such
drawing. Notwithstanding anything contained herein to the contrary, however,
unless the Borrower shall have notified the Administrative Agent, and the
Fronting Bank prior to 11:00 a.m. (Chicago time) on the Domestic Business Day
immediately prior to the date of such drawing that the Borrower intends to
reimburse the Fronting Bank for the amount of such drawing with funds other than
the proceeds of the Loans, the Borrower shall be deemed to have timely given a
Notice of Borrowing pursuant to Section 2.2 to the Administrative Agent,
requesting a Borrowing of Base Rate Loans on the date on which such drawing is
honored and in an amount equal to the amount of such drawing. Each Bank (other
than the Fronting Bank) shall, in accordance with Section 2.3(b), make available
its pro rata share of such Borrowing to the Administrative Agent, the proceeds
of which shall be applied directly by the Administrative Agent to reimburse the
Fronting Bank for the amount of such draw. In the event that any such Bank fails
to make available to the Fronting Bank the amount of


                                       46

<PAGE>


such Bank's participation on the date of a drawing, the Fronting Bank shall be
entitled to recover such amount on demand from such Bank together with interest
at the Federal Funds Rate commencing on the date such drawing is honored, and
the provisions of Section 9.16 shall otherwise apply to such failure.

         (f)   If, after the date hereof, any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof shall either (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, or participations in any letter of credit, upon any Bank
(including the Fronting Bank) or (ii) impose on any Bank any other condition
regarding this Agreement or such Bank (including the Fronting Bank) as it
pertains to the Letters of Credit or any participation therein and the result of
any event referred to in the preceding clause (i) or (ii) shall be to increase,
by an amount deemed by the Fronting Bank or such Bank to be material, the cost
to the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit
or participating therein, then the Borrower shall pay to the Fronting Bank or
such Bank, within 15 days after written demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, such
additional amounts as shall be required to compensate the Fronting Bank or such
Bank for such increased costs or reduction in amounts received or receivable
hereunder. Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section 2.16 and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
If such Bank shall fail to notify Borrower of any such event within 90 days
following the end of the month during which such event occurred, then Borrower's
liability for any amounts described in this Section incurred by such Bank as a
result of such event shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
such Bank actually notified Borrower of the occurrence of such event. A
certificate of any Bank claiming compensation under this Section 2.16 and
setting forth a reasonably detailed calculation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.

         (g)   The Borrower hereby agrees to protect, indemnify, pay and save
the Fronting Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and


                                       47

<PAGE>


disbursements) which the Fronting Bank may incur or be subject to as a result of
(i) the issuance of the Letters of Credit, other than to the extent of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank or (ii) the
failure of the Fronting Bank to honor a drawing under any Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future DE JURE or DE FACTO government or governmental authority (collectively,
"GOVERNMENTAL ACTS"), other than to the extent of the bad faith, gross
negligence or wilful misconduct of the Fronting Bank. As between the Borrower
and the Fronting Bank, the Borrower assumes all risks of the acts and omissions
of any beneficiary with respect to its use, or misuses of, the Letters of Credit
issued by the Fronting Bank. In furtherance and not in limitation of the
foregoing, the Fronting Bank shall not be responsible (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
such Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or insufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit, other than as a result of the bad faith,
gross negligence or wilful misconduct of the Fronting Bank; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any message,
by mail, cable, telegraph, facsimile transmission, or otherwise; (v) for errors
in interpretation of any technical terms; (vi) for any loss or delay in the
transmission or otherwise of any documents required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of such Letter of Credit; and (viii) for any consequence arising from causes
beyond the control of the Fronting Bank, including any Government Acts, in each
case other than to the extent of the bad faith, gross negligence or willful
misconduct of the Fronting Bank. None of the above shall affect, impair or
prevent the vesting of the Fronting Bank's rights and powers hereunder. In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Fronting Bank under or
in connection with the Letters of Credit issued by it or the related
certificates, if taken or omitted in good faith, shall not put the Fronting Bank
under any resulting liability to the Borrower; provided that, notwithstanding
anything in the foregoing to the contrary, the Fronting Bank will be liable to
the Borrower for any damages suffered by the Borrower or its Subsidiaries as a
result of the Fronting Bank's grossly negligent or wilful failure to pay under
any Letter of Credit after the presentation to it of a sight


                                       48

<PAGE>


draft and certificates strictly in compliance with the terms and conditions of
the Letter of Credit.

         (h)   If the Fronting Bank or the Administrative Agent is required at
any time, pursuant to any bankruptcy, insolvency, liquidation or reorganization
law or otherwise, to return to the Borrower any reimbursement by the Borrower of
any drawing under any Letter of Credit, each Bank shall pay to the Fronting Bank
or the Administrative Agent, as the case may be, its pro rata share of such
payment, but without interest thereon unless the Fronting Bank or the
Administrative Agent is required to pay interest on such amounts to the person
recovering such payment, in which case with interest thereon, computed at the
same rate, and on the same basis, as the interest that the Fronting Bank or the
Administrative Agent is required to pay.

         SECTION 2.17 LETTER OF CREDIT USAGE ABSOLUTE. The obligations of the
Borrower under this Agreement in respect of any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement (as the same may be amended from time to time) and any
Letter of Credit Documents (as hereinafter defined) under all circumstances,
including, without limitation, to the extent permitted by law, the following
circumstances:

         (a)   any lack of validity or enforceability of any Letter of Credit or
any other agreement or instrument relating thereto (collectively, the "LETTER OF
CREDIT DOCUMENTS") or any Loan Document;

         (b)   any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of the
Letters of Credit or any other amendment or waiver of or any consent by the
Borrower to departure from all or any of the Letter of Credit Documents or any
Loan Document; PROVIDED, that the Fronting Bank shall not consent to any such
change or amendment unless previously consented to in writing by the Borrower;

         (c)   any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Borrower in respect of the Letters of
Credit;

         (d)   the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Fronting Bank or any
Bank (other than a defense based on the bad faith, gross negligence or wilful
misconduct of the Administrative Agent, the Fronting Bank or such Bank) or any
other Person, whether in connection with the Loan Documents, the transactions
contemplated


                                       49

<PAGE>


hereby or by the Letters of Credit Documents or any unrelated transaction;

         (e)   any draft or any other document presented under or in connection
with any Letter of Credit or other Loan Document proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; PROVIDED, that payment by the
Fronting Bank under such Letter of Credit against presentation of such draft or
document shall not have been the result of the bad faith, gross negligence or
wilful misconduct of the Fronting Bank;

         (f)   payment by the Fronting Bank against presentation of a draft or
certificate that does not strictly comply with the terms of the Letter of
Credit; PROVIDED, that such payment shall not have been the result of the bad
faith, gross negligence or wilful misconduct of the Fronting Bank; and

         (g)   any other circumstance or happening whatsoever other than the
payment in full of all obligations hereunder in respect of any Letter of Credit
or any agreement or instrument relating to any Letter of Credit, whether or not
similar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrower; PROVIDED, that such other
circumstance or happening shall not have been the result of bad faith, gross
negligence or wilful misconduct of the Fronting Bank.

         SECTION 2.18 SWINGLINE LOAN SUBFACILITY.

         (a)   SWINGLINE COMMITMENTCOMMITMENT. Subject to the terms and
conditions of this Section 2.18, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower (each a
"SWINGLINE LOAN" and, collectively, the "SWINGLINE LOANS") from time to time
during the term hereof; provided, however, that the aggregate amount of
Swingline Loans outstanding at any time shall not exceed the lesser of (i) FIFTY
MILLION DOLLARS ($50,000,000), and (ii) the aggregate Commitments less all Loans
then outstanding (the "SWINGLINE COMMITMENT"). Subject to the limitations set
forth herein, any amounts repaid in respect of Swingline Loans may be
reborrowed.

         (b)   SWINGLINE BORROWINGSBORROWINGS.

         (i)   NOTICE OF BORROWING. With respect to any Swingline Borrowing, the
Borrower shall give the Swingline Lender and the Administrative Agent notice in
writing which is received by the Swingline Lender and Administrative Agent not
later than 1:00 p.m. (Chicago time) on the proposed date of such Swingline
Borrowing (and confirmed by telephone by such time), specifying (A) that a
Swingline Borrowing is being requested, (B) the amount of such Swingline
Borrowing, (C) the proposed date of such Swingline Borrowing, which shall be a
Domestic Business Day and


                                       50
<PAGE>


(D) stating that no Default or Event of Default has occurred and is continuing
both before and after giving effect to such Swingline Borrowing. Such notice
shall be irrevocable.

         (ii)  MINIMUM AMOUNTS. Each Swingline Borrowing shall be in a minimum
principal amount of $1,000,000, or an integral multiple of $100,000 in excess
thereof.

         (iii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan shall be due
and payable on the earliest of (A) 5 Domestic Business Days from the date of the
applicable Swingline Borrowing, (B) the date of the next Committed Borrowing or
(C) the Maturity Date. In addition, in no event shall Swingline Loans be
outstanding for more than ten (10) Domestic Business Days in any calendar month.
If, and to the extent, any Swingline Loans shall be outstanding on the date of
any Committed Borrowing, such Swingline Loans shall first be repaid from the
proceeds of such Committed Borrowing prior to the disbursement of the same to
the Borrower. If, and to the extent, a Committed Borrowing is not requested
prior to the Maturity Date or the end of the 5-Domestic Business Day period
after a Swingline Borrowing, the Borrower shall be deemed to have requested a
Committed Borrowing comprised entirely of Base Rate Loans in the amount of the
applicable Swingline Loan then outstanding, the proceeds of which shall be used
to repay such Swingline Loan to the Swingline Lender. In addition, the Swingline
Lender may, at any time, in its sole discretion, by written notice to the
Borrower and the Administrative Agent, demand repayment of its Swingline Loans
by way of a Committed Borrowing, in which case the Borrower shall be deemed to
have requested a Committed Borrowing comprised entirely of Base Rate Loans in
the amount of such Swingline Loans then outstanding, the proceeds of which shall
be used to repay such Swingline Loans to the Swingline Lender. Any Committed
Borrowing which is deemed requested by the Borrower in accordance with this
Section 2.18(b)(iii) is hereinafter referred to as a "Mandatory Borrowing". Each
Bank hereby irrevocably agrees to make Committed Loans promptly upon receipt of
notice from the Swingline Lender of any such deemed request for a Mandatory
Borrowing in the amount and in the manner specified in the preceding sentences
and on the date such notice is received by such Bank (or the next Domestic
Business Day if such notice is received after 12:00 P.M. (Chicago time))
notwithstanding (I) the amount of the Mandatory Borrowing may not comply with
the minimum amount of Committed Borrowings otherwise required hereunder, (II)
whether any conditions specified in Section 3.2 are then satisfied, (III)
whether a Default


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<PAGE>


or an Event of Default then exists, (IV) failure of any such deemed request for
a Committed Borrowing to be made by the time otherwise required in Section 2.1,
(V) the date of such Mandatory Borrowing (provided that such date must be a
Domestic Business Day), or (VI) any termination of the Commitments immediately
prior to such Mandatory Borrowing or contemporaneously therewith; provided,
however, that no Bank shall be obligated to make Committed Loans in respect of a
Mandatory Borrowing if a Default or an Event of Default then exists and the
applicable Swingline Loan was made by the Swingline Lender without receipt of a
written Notice of Borrowing in the form specified in subclause (i) above or
after Administrative Agent has delivered a notice of Default or Event of Default
which has not been rescinded.

         (iv)  PURCHASE OF PARTICIPATIONS. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation , as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each Bank hereby
agrees that it shall forthwith, upon demand, purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payment
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Bank to share in such Swingline Loans
ratably based upon its Pro Rata Share (determined before giving effect to any
termination of the Commitments pursuant hereto), provided that (A) all interest
payable on the Swingline Loans with respect to any participation shall be for
the account of the Swingline Lender until but excluding the day upon which the
Mandatory Borrowing would otherwise have occurred, and (B) in the event of a
delay between the day upon which the Mandatory Borrowing would otherwise have
occurred and the time any purchase of a participation pursuant to this sentence
is actually made, the purchasing Bank shall be required to pay to the Swingline
Lender interest on the principal amount of such participation for each day from
and including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
rate equal to the Federal Funds Rate, for the two (2) Domestic Business Days
after the date the Mandatory Borrowing would otherwise have occurred, and
thereafter at a rate equal to the Base Rate. Notwithstanding the foregoing, no
Bank shall be obligated to purchase a participation in any Swingline Loan if a
Default or an Event of Default then exists and such Swingline Loan was made by
the Swingline Lender without receipt of a written Notice of Borrowing in the
form specified in subclause (i) above or after Administrative Agent has
delivered a notice of Default or Event of Default which has not been rescinded.

         (c)   INTEREST RATERATE. Each Swingline Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Swingline
Loan is made until the date it is repaid, at a rate per annum equal to the
Federal Funds Rate for such day, plus the Applicable Margin for Euro-Dollar
Loans, plus .20%.


                                       52

<PAGE>


                                   ARTICLE III

                                   CONDITIONS

         SECTION 3.1 CLOSING. The closing hereunder shall occur on the date when
each of the following conditions is satisfied (or waived by the Administrative
Agent and the Banks), each document to be dated the Closing Date unless
otherwise indicated:

         (a)   the Borrower shall have executed and delivered to the
Administrative Agent a Note for the account of each Bank dated on or before the
Closing Date complying with the provisions of Section 2.5;

         (b)   the Borrower, the Administrative Agent and each of the Banks
shall have executed and delivered to the Borrower and the Administrative Agent a
duly executed original of this Agreement;

         (c)   EQR shall have executed and delivered to the Administrative Agent
a duly executed original of the EQR Guaranty;

         (d)   the Administrative Agent shall have received an opinion of
Rosenberg & Liebentritt, P.C., counsel for the Borrower, acceptable to the
Administrative Agent, the Banks and their counsel;

         (e)   the Borrower shall have repaid in full, and terminated, (i) the
Amended and Restated Credit Agreement, dated as of October 20, 1998, among the
Borrower, EQR, Bank of America National Trust and Savings Association, as
syndication agent, The Chase Manhattan Bank, as documentation agent, First Union
National Bank, as agent and arranger, and the financial institutions party
thereto, and (ii) the Second Amended and Restated Revolving Credit Agreement,
dated as of September 9, 1997, among the Borrower, Morgan Guaranty Trust Company
of New York, as Lead Agent, Bank of America National Trust and Savings
Association, as Co-lead Agent, and the other banks party thereto;

         (f)   the Administrative Agent shall have received all documents the
Administrative Agent may reasonably request relating to the existence of the
Borrower and EQR, the authority for and the validity of this Agreement and the
other Loan Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent. Such documentation shall
include, without limitation, the agreement of limited partnership of the
Borrower, as well as the certificate of limited partnership of the Borrower,
both as amended, modified or supplemented to the Closing Date, certified to be
true, correct and complete by a senior officer of the Borrower as of a date not
more than ten (10) days prior to the Closing Date, together with a certificate
of existence as to the Borrower from


                                       53

<PAGE>


the Secretary of State (or the equivalent thereof) of Illinois, to be dated not
more than thirty (30) days prior to the Closing Date, as well as the declaration
of trust of EQR, as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by a senior officer of EQR as of a
date not more than ten (10) days prior to the Closing Date, together with a good
standing certificate as to EQR from the Secretary of State (or the equivalent
thereof) of Maryland, to be dated not more than thirty (30) days prior to the
Closing Date;

         (g)   the Administrative Agent shall have received all certificates,
agreements and other documents and papers referred to in this Section 3.1 and
the Notice of Borrowing referred to in Section 3.2, if applicable, unless
otherwise specified, in sufficient counterparts, satisfactory in form and
substance to the Administrative Agent in its sole discretion;

         (h)   the Borrower shall have taken all actions required to authorize
the execution and delivery of this Agreement and the other Loan Documents and
the performance thereof by the Borrower;

         (i)   the Administrative Agent shall be satisfied that neither the
Borrower, EQR nor any Consolidated Subsidiary is subject to any present or
contingent environmental liability which could have a Material Adverse Effect;

         (j)   the Administrative Agent shall have received, for its and any
other Bank's account, all fees due and payable pursuant to Section 2.8 hereof on
or before the Closing Date, and the fees and expenses accrued through the
Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP shall have been paid
directly to such firm;

         (k)   the Administrative Agent shall have received copies of all
consents, licenses and approvals, if any, required in connection with the
execution, delivery and performance by the Borrower, EQR and the applicable
Consolidated Subsidiaries, and the validity and enforceability, of the Loan
Documents, or in connection with any of the transactions contemplated thereby,
and such consents, licenses and approvals shall be in full force and effect;

         (l)   the Administrative Agent shall have received the audited
financial statements of the Borrower and its Consolidated Subsidiaries and of
EQR for the fiscal year ending December 31, 1998; and

         (m)   no Default or Event of Default shall have occurred.

         SECTION 3.2 BORROWINGS. The obligation of any Bank to make a Loan or to
participate in any Letter of Credit issued by the Fronting Bank and the
obligation of the Fronting Bank to issue a Letter of Credit or the obligation of
the Swingline


                                       54

<PAGE>


Lender to make a Swingline Loan on the occasion of any Borrowing is subject to
the satisfaction of the following conditions:

         (a)   receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.2 or a Notice of Money Market Borrowing as required by
Section 2.3 or a request to cause a Fronting Bank to issue a Letter of Credit
pursuant to Section 2.16;

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

         (c)   immediately before and after such Borrowing or issuance of any
Letter of Credit, no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to the making of such Loans or
the issuance of such Letter of Credit;

         (d)   the representations and warranties of the Borrower contained in
this Agreement (other than representations and warranties which expressly speak
as of a different date) shall be true and correct in all material respects on
and as of the date of such Borrowing both before and after giving effect to the
making of such Loans;

         (e)   no law or regulation shall have been adopted, no order, judgment
or decree of any governmental authority shall have been issued, and no
litigation shall be pending, which does or seeks to enjoin, prohibit or
restrain, the making or repayment of the Loans, the issuance of any Letter of
Credit or the consummation of the transactions contemplated by this Agreement;
and

         (f)   no event, act or condition shall have occurred after the Closing
Date which, in the reasonable judgment of the Administrative Agent, or the
Required Banks, as the case may be, has had or is likely to have a Material
Adverse Effect;

Each Borrowing hereunder or acceptance of a Letter of Credit issued hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Borrowing as to the facts specified in clauses (b), (c), (d), (e), and
(f) (to the extent that Borrower is or should have been aware of any Material
Adverse Effect) of this Section, except as otherwise disclosed in writing by
Borrower to the Banks. Notwithstanding anything to the contrary, no Borrowing
shall be permitted if such Borrowing would cause Borrower to fail to be in
compliance with any of the covenants contained in this Agreement or in any of
the other Loan Documents.


                                       55

<PAGE>


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Administrative Agent and each of the other Banks
which is or may become a party to this Agreement to make the Loans, the Borrower
makes the following representations and warranties as of the Closing Date. Such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the other Loan Documents and the making
of the Loans.

         SECTION 4.1 EXISTENCE AND POWER. The Borrower is a limited partnership,
duly formed and validly existing as a limited partnership under the laws of the
State of Illinois and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect. EQR is a real estate investment trust,
duly formed, validly existing and in good standing as a real estate investment
trust under the laws of the State of Maryland and has all powers and all
material governmental licenses, authorizations, consents and approvals required
to own its property and assets and carry on its business as now conducted or as
it presently proposes to conduct and has been duly qualified and is in good
standing in every jurisdiction in which the failure to be so qualified and/or in
good standing is likely to have a Material Adverse Effect.

         SECTION 4.2 POWER AND AUTHORITY. The Borrower has the partnership power
and authority to execute, deliver and carry out the terms and provisions of each
of the Loan Documents to which it is a party and has taken all necessary
partnership action, if any, to authorize the execution and delivery on behalf of
the Borrower and the performance by the Borrower of such Loan Documents. The
Borrower has duly executed and delivered each Loan Document to which it is a
party in accordance with the terms of this Agreement, and each such Loan
Document constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law. EQR has the power and
authority to execute, deliver and carry out the terms and provisions of each of
the Loan Documents on behalf of the Borrower to which the Borrower is a party
and has taken all necessary action to authorize the execution and delivery on
behalf of the Borrower and the performance by the Borrower of such Loan
Documents.


                                       56

<PAGE>


         SECTION 4.3 NO VIOLATION. Neither the execution, delivery or
performance by or on behalf of the Borrower of the Loan Documents to which it is
a party, nor compliance by the Borrower with the terms and provisions thereof
nor the consummation of the transactions contemplated by the Loan Documents, (i)
will materially contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will materially conflict with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrower or
any of its Consolidated Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which the
Borrower (or of any partnership of which the Borrower is a partner) or any of
its Consolidated Subsidiaries is a party or by which it or any of its property
or assets is bound or to which it is subject, or (iii) will cause a material
default by the Borrower under any organizational document of any Person in which
the Borrower has an interest, or cause a material default under the Borrower's
agreement or certificate of limited partnership, the consequences of which
conflict, breach or default would have a Material Adverse Effect, or result in
or require the creation or imposition of any Lien whatsoever upon any Property
(except as contemplated herein).

         SECTION 4.4 FINANCIAL INFORMATION.

         (a)   The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, dated as of December 31, 1998, and the related
consolidated statements of Borrower's financial position for the fiscal year
then ended, reported on by Ernst & Young LLP, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with GAAP, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.

         (b)   The consolidated balance sheet of EQR, dated as of December 31,
1998, and the related consolidated statements of EQR's financial position for
the fiscal year then ended, reported on by Ernst & Young LLP and set forth in
the EQR 1998 Form 10-K, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with GAAP, the consolidated financial position of
EQR and its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.

         (c)   Since March 31, 1999, (i) except as may have been disclosed in
writing to the Banks, nothing has occurred having a Material Adverse Effect, and
(ii) except as previously disclosed to the Banks, neither the Borrower nor EQR
has incurred any material indebtedness or guaranty on or before the Closing
Date.


                                       57

<PAGE>


         SECTION 4.5 LITIGATION. Except as previously disclosed by the Borrower
in writing to the Banks, there is no action, suit or proceeding pending against,
or to the knowledge of the Borrower threatened against or affecting, (i) the
Borrower, EQR or any of their Consolidated Subsidiaries, (ii) the Loan Documents
or any of the transactions contemplated by the Loan Documents or (iii) any of
their assets, before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could, individually, or in the aggregate have a Material Adverse Effect or which
in any manner draws into question the validity of this Agreement or the other
Loan Documents.

         SECTION 4.6 COMPLIANCE WITH ERISA.

         (a)   Except as set forth on SCHEDULE 4.6 attached hereto, neither
Borrower nor EQR is a member of any Plan or Multiemployer Plan or any other
Benefit Arrangement.

         (b)   The transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject the
Administrative Agent or the Banks to any tax or penalty or prohibited
transactions imposed under Section 4975 of the Code or Section 502(i) of ERISA.

         SECTION 4.7 ENVIRONMENTAL MATTERS. The Borrower and EQR each conducts
reviews of the effect of Environmental Laws on the business, operations and
properties of the Borrower, EQR and Consolidated Subsidiaries of either or both
when necessary in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently owned, any
capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
and any actual or potential liabilities to third parties, including employees,
and any related costs and expenses). On the basis of this review, the Borrower
and EQR each has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect on the Borrower, EQR and their Consolidated
Subsidiaries.

         SECTION 4.8 TAXES. United States Federal income tax returns of the
Borrower, EQR and their Consolidated Subsidiaries have been prepared and filed
through the fiscal year ended December 31, 199 . The Borrower, EQR and their
Consolidated Subsidiaries have filed all United States Federal income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower,


                                       58

<PAGE>


EQR or any Consolidated Subsidiary, except such taxes, if any, as are reserved
against in accordance with GAAP, such taxes as are being contested in good faith
by appropriate proceedings or such taxes, the failure to make payment of which
when due and payable will not have, in the aggregate, a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower, EQR and their
Consolidated Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate.

         SECTION 4.9 FULL DISCLOSURE. All information heretofore furnished by
the Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby or thereby
is true and accurate in all material respects on the date as of which such
information is stated or certified. The Borrower has disclosed to the
Administrative Agent, in writing any and all facts which have or may have (to
the extent the Borrower can now reasonably foresee) a Material Adverse Effect.

         SECTION 4.10 SOLVENCY. On the Closing Date and after giving effect to
the transactions contemplated by the Loan Documents occurring on the Closing
Date, the Borrower will be Solvent.

         SECTION 4.11 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions
hereof. No part of the proceeds of any Loan will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock in any manner that might violate the
provisions of Regulations T, U or X of the Federal Reserve Board. Neither the
making of any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X of the Federal Reserve
Board.

         SECTION 4.12 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of any Loan Document or the consummation
of any of the transactions contemplated thereby other than those that have
already been duly made or obtained and remain in full force and effect or those
which, if not made or obtained, would not have a Material Adverse Effect;

         SECTION 4.13 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Neither the Borrower, EQR nor any Consolidated Subsidiary is (x) an
"INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY",
within the meaning of the Investment Company Act of 1940, as amended, (y) a
"HOLDING company" or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY" or an
"AFFILIATE" of either a "HOLDING COMPANY" or a


                                       59

<PAGE>


"SUBSIDIARY COMPANY" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (z) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money.

         SECTION 4.14 PRINCIPAL OFFICES. As of the Closing Date, the principal
office, chief executive office and principal place of business of the Borrower
is Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606.

         SECTION 4.15 REIT STATUS. For the fiscal year ended December 31, 1998,
EQR qualified and EQR intends to continue to qualify as a real estate investment
trust under the Code.

         SECTION 4.16 PATENTS, TRADEMARKS, ETC. The Borrower has obtained and
holds in full force and effect all patents, trademarks, servicemarks, trade
names, copyrights and other such rights, free from burdensome restrictions,
which are necessary for the operation of its business as presently conducted,
the impairment of which is likely to have a Material Adverse Effect.

         SECTION 4.17 OWNERSHIP OF PROPERTY. SCHEDULE 4.17 attached hereto and
made a part hereof sets forth all the real property owned or ground leased by
the Borrower, EQR and Persons in which the Borrower and/or EQR, directly or
indirectly, owns an interest as of the Closing Date. As of the Closing Date, the
Borrower, EQR and such Persons have good and insurable fee simple title (or
leasehold title if so designated on SCHEDULE 4.17) to all of such real property,
subject to Permitted Liens. As of the date of this Agreement, there are no
mortgages, deeds of trust, indentures, debt instruments or other agreements
creating a Lien against any of the Real Property Assets except as disclosed on
SCHEDULE 4.17.

         SECTION 4.18 NO DEFAULT. No Event of Default or, to the best of the
Borrower's knowledge, Default exists under or with respect to any Loan Document
and the Borrower is not in default in any material respect beyond any applicable
grace period under or with respect to any other material agreement, instrument
or undertaking to which it is a party or by which it or any of its property is
bound in any respect, the existence of which default is likely to result in a
Material Adverse Effect.

         SECTION 4.19 LICENSES, ETC. The Borrower has obtained and does hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditation, easements, rights of way and
other consents and approvals which are necessary for the operation of its
businesses as presently conducted, the absence of which is likely to have a
Material Adverse Effect.

         SECTION 4.20 COMPLIANCE WITH LAW. To the Borrower's knowledge, the
Borrower and each of the Real Property Assets are in compliance with all laws,
rules, regulations, orders,


                                       60

<PAGE>


judgments, writs and decrees, including, without limitation, all building and
zoning ordinances and codes, the failure to comply with which is likely to have
a Material Adverse Effect.

         SECTION 4.21 NO BURDENSOME RESTRICTIONS. Except as may have been
disclosed by the Borrower in writing to the Banks, Borrower is not a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is likely to have a Material Adverse Effect.

         SECTION 4.22 BROKERS' FEES. The Borrower has not dealt with any broker
or finder with respect to the transactions contemplated by this Agreement or
otherwise in connection with this Agreement, and the Borrower has not done any
act, had any negotiations or conversation, or made any agreements or promises
which will in any way create or give rise to any obligation or liability for the
payment by the Borrower of any brokerage fee, charge, commission or other
compensation to any party with respect to the transactions contemplated by the
Loan Documents, other than the fees payable to the Administrative Agent and the
Banks.

         SECTION 4.23 LABOR MATTERS. There are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Borrower and the
Borrower has not suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.

         SECTION 4.24 INSURANCE. The Borrower and/or EQR currently maintains
insurance at 100% replacement cost insurance coverage (subject to customary
deductibles) in respect of each of the Real Property Assets, as well as
commercial general liability insurance (including "builders' risk" where
applicable) against claims for personal, and bodily injury and/or death, to one
or more persons, or property damage, as well as workers' compensation insurance,
in each case with respect to liability and casualty insurance with insurers
having an A.M. Best policyholders' rating of not less than A-VII in amounts that
prudent owner of assets such as the Real Property Assets would maintain.

         SECTION 4.25 ORGANIZATIONAL DOCUMENTS. The documents delivered pursuant
to Section 3.1(f) constitute, as of the Closing Date, all of the organizational
documents (together with all amendments and modifications thereof) of the
Borrower and EQR. The Borrower represents that it has delivered to the
Administrative Agent true, correct and complete copies of each of the documents
set forth in this Section 4.25.

         SECTION 4.26 QUALIFYING UNENCUMBERED PROPERTIES. As of the date hereof,
each Property listed on EXHIBIT F as a Qualifying Unencumbered Property (i) is
an operating multifamily residential property wholly-owned (directly or
beneficially) by


                                       61

<PAGE>


Borrower and/or EQR or a wholly-owned Subsidiary of either or both, (ii) is not
subject (nor are any equity interests in such Property subject) to a Lien which
secures Indebtedness of any Person, other than Permitted Liens, (iii) is not
subject (nor are any equity interests in such Property subject) to any covenant,
condition, or other restriction which prohibits or limits the creation or
assumption of any Lien upon such Property (it being understood that covenants
similar to those set forth in Section 5.8 hereof shall not be deemed to
constitute any such prohibition or limitation), and (iv) is not owned by a
Subsidiary of the Borrower or EQR (other than the Borrower) that has any
outstanding Unsecured Debt (other than those items of Indebtedness set forth in
clauses (e), (f), (i) or (j) of the definition of Indebtedness, or any
Contingent Obligation other than guarantees for borrowed money). All of the
information set forth on EXHIBIT F is true and correct in all material respects.

         SECTION 4.27 YEAR 2000 COMPLIANCE. The Borrower and EQR have conducted
a review and assessment of the Borrower's and EQR's computer applications with
respect to the "year 2000 problem" (that is, the risk that computer applications
may not be able to properly perform date-sensitive functions after December 31,
1999) and, based on that review and inquiry, the Borrower does not believe that
the "year 2000 problem" will result in a Material Adverse Effect to the
Borrower's or EQR's financial condition or results of operations, or on its
ability to repay the Loans.

                                    ARTICLE V

                       AFFIRMATIVE AND NEGATIVE COVENANTS

         The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:

         SECTION 5.1 INFORMATION. The Borrower will deliver to each of the
Banks:

         (a)   as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than 125 days after the end of each
fiscal year of the Borrower) a consolidated balance sheet of the Borrower, EQR
and their Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of Borrower's and EQR's operations and
consolidated statements of Borrower's and EQR's cash flow for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on in a manner acceptable to the Securities and
Exchange Commission on Borrower's and EQR's Form 10K and reported on by Ernst &
Young LLP or other independent public accountants of nationally recognized
standing;


                                       62

<PAGE>


         (b)   as soon as available and in any event within five (5) Domestic
Business Days after the same is required to be filed with the Securities and
Exchange Commission (but in no event later than 80 days after the end of each of
the first three quarters of each fiscal year of the Borrower and EQR), (i) a
consolidated balance sheet of the Borrower, EQR and their Consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of Borrower's and EQR's operations and consolidated statements of
Borrower's and EQR's cash flow for such quarter and for the portion of the
Borrower's or EQR's fiscal year ended at the end of such quarter, all reported
on in the form provided to the Securities and Exchange Commission on Borrower's
and EQR's Form 10Q, and (ii) and such other information reasonably requested by
the Administrative Agent or any Bank;

         (c)   simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Section 5.8 on the date of
such financial statements; (ii) certifying (x) that such financial statements
fairly present the financial condition and the results of operations of the
Borrower on the dates and for the periods indicated, on the basis of GAAP, with
respect to the Borrower subject, in the case of interim financial statements, to
normally recurring year-end adjustments, and (y) that such officer has reviewed
the terms of the Loan Documents and has made, or caused to be made under his or
her supervision, a review in reasonable detail of the business and condition of
the Borrower during the period beginning on the date through which the last such
review was made pursuant to this Section 5.1(c) (or, in the case of the first
certification pursuant to this Section 5.1(c), the Closing Date) and ending on a
date not more than ten (10) Domestic Business Days prior to the date of such
delivery and that (1) on the basis of such financial statements and such review
of the Loan Documents, no Event of Default existed under Section 6.1(b) with
respect to Sections 5.8 and 5.9 at or as of the date of said financial
statements, and (2) on the basis of such review of the Loan Documents and the
business and condition of the Borrower, to the best knowledge of such officer,
as of the last day of the period covered by such certificate no Default or Event
of Default under any other provision of Section 6.1 occurred and is continuing
or, if any such Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof and, the action the Borrower proposes
to take in respect thereof and (3) no event has occurred and is continuing which
would give rise to a mandatory prepayment pursuant to Section 2.10 hereof. Such
certificate shall set forth the calculations required to establish the matters
described in clauses (1) and (3) above;


                                       63

<PAGE>


         (d)   (i) within five (5) Domestic Business Days after any officer of
the Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer, the chief accounting
officer, controller, or other executive officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto; and (ii) promptly and in any event within five (5)
Domestic Business Days after the Borrower obtains knowledge thereof, notice of
(x) any litigation or governmental proceeding pending or threatened against the
Borrower or the Real Property Assets as to which there is a reasonable
possibility of an adverse determination and which, if adversely determined, is
likely to individually or in the aggregate, result in a Material Adverse Effect,
(y) any other event, act or condition which is likely to result in a Material
Adverse Effect, and (z) any event giving rise to a mandatory prepayment pursuant
to Section 2.10;

         (e)   promptly upon the mailing thereof to the shareholders of EQR
generally, copies of all financial statements, reports and proxy statements so
mailed;

         (f)   promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) (other than the exhibits thereto, which exhibits will be provided
upon request therefor by any Bank) which EQR shall have filed with the
Securities and Exchange Commission;

         (g)   Promptly and in any event within thirty (30) days, if and when
any member of the ERISA Group (i) gives or is required to give notice to the
PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the


                                       64

<PAGE>


imposition of a Lien or the posting of a bond or other security, and in the case
of clauses (i) through (vii) above, which event could result in a Material
Adverse Effect, a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth details as to such occurrence
and action, if any, which the Borrower or applicable member of the ERISA Group
is required or proposes to take;

         (h)   promptly and in any event within ten (10) days after the Borrower
obtains actual knowledge of any of the following events, a certificate of the
Borrower, executed by an officer of the Borrower, specifying the nature of such
condition, and the Borrower's or, if the Borrower has actual knowledge thereof,
the Environmental Affiliate's proposed initial response thereto: (i) the receipt
by the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates of any communication (written or oral), whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
the Borrower, or, if the Borrower has actual knowledge thereof, any of the
Environmental Affiliates, is not in compliance with applicable Environmental
Laws, and such noncompliance is likely to have a Material Adverse Effect, (ii)
the Borrower shall obtain actual knowledge that there exists any Environmental
Claim pending against the Borrower or any Environmental Affiliate and such
Environmental Claim is likely to have a Material Adverse Effect or (iii) the
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Material of Environmental Concern that is likely to form the
basis of any Environmental Claim against the Borrower or any Environmental
Affiliate which in any such event is likely to have a Material Adverse Effect;

         (i)   promptly and in any event within five (5) Domestic Business Days
after receipt of any material notices or correspondence from any company or
agent for any company providing insurance coverage to the Borrower relating to
any loss which is likely to result in a Material Adverse Effect, copies of such
notices and correspondence; and

         (j)   from time to time such additional information regarding the
financial position or business of the Borrower, EQR and their Subsidiaries as
the Administrative Agent, at the request of any Bank, may reasonably request in
writing.

         SECTION 5.2 PAYMENT OF OBLIGATIONS. The Borrower, EQR and their
Consolidated Subsidiaries will pay and discharge, at or before maturity, all its
respective material obligations and liabilities including, without limitation,
any obligation pursuant to any agreement by which it or any of its properties is
bound, in each case where the failure to so pay or discharge such obligations or
liabilities is likely to result in a Material Adverse Effect, and will maintain
in accordance with GAAP, appropriate reserves for the accrual of any of the
same.


                                       65

<PAGE>


         SECTION 5.3 MAINTENANCE OF PROPERTY; INSURANCE; LEASES.

         (a)   The Borrower and/or EQR will keep, and will cause each
Consolidated Subsidiary to keep, all property useful and necessary in its
business, including without limitation the Real Property Assets (for so long as
it constitutes Real Property Assets), in good repair, working order and
condition, ordinary wear and tear excepted, in each case where the failure to so
maintain and repair will have a Material Adverse Effect.

         (b)   The Borrower and/or EQR shall maintain, or cause to be
maintained, insurance comparable to that described in Section 4.24 hereof with
insurers meeting the qualifications described therein, which insurance shall in
any event not provide for less coverage than insurance customarily carried by
owners of properties similar to, and in the same locations as, the Real Property
Assets. The Borrower and/or EQR will deliver to the Administrative Agent upon
the reasonable request of the Administrative Agent from time to time (i) full
information as to the insurance carried, (ii) within five (5) days of receipt of
notice from any insurer a copy of any notice of cancellation or material change
in coverage from that existing on the date of this Agreement and (iii)
forthwith, notice of any cancellation or nonrenewal of coverage by the Borrower
and/or EQR.

         SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Borrower and EQR will continue to engage in business of the same general type as
now conducted by the Borrower and EQR, and each will preserve, renew and keep in
full force and effect, its partnership and trust existence and its respective
rights, privileges and franchises necessary for the normal conduct of business
unless the failure to maintain such rights and franchises does not have a
Material Adverse Effect.

         SECTION 5.5 COMPLIANCE WITH LAWS. The Borrower and EQR will and will
cause their Subsidiaries to comply in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws, and all zoning
and building codes with respect to the Real Property Assets and ERISA and the
rules and regulations thereunder and all federal securities laws) except where
the necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to do so will not have a Material Adverse
Effect or expose Administrative Agent or the Banks to any material liability
therefor.

         SECTION 5.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Borrower and
EQR each will keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities in conformity with GAAP, modified as required by
this Agreement and applicable law; and will permit representatives of


                                       66

<PAGE>


any Bank at such Bank's expense to visit and inspect any of its properties,
including without limitation the Real Property Assets, to examine and make
abstracts from any of its books and records and to discuss its affairs, finances
and accounts with its officers and independent public accountants, all at such
reasonable times during normal business hours, upon reasonable prior notice and
as often as may reasonably be desired. Administrative Agent shall coordinate any
such visit or inspection to arrange for review by any Bank requesting any such
visit or inspection.

         SECTION 5.7 EXISTENCE. The Borrower shall do or cause to be done, all
things necessary to preserve and keep in full force and effect its, EQR's and
their Consolidated Subsidiaries' existence and its patents, trademarks,
servicemarks, tradenames, copyrights, franchises, licenses, permits,
certificates, authorizations, qualifications, accreditation, easements, rights
of way and other rights, consents and approvals the nonexistence of which is
likely to have a Material Adverse Effect.

         SECTION 5.8 FINANCIAL COVENANTS.

         (a)   INDEBTEDNESS TO GROSS ASSET VALUE. Borrower shall not permit the
ratio of Indebtedness of Borrower and EQR, on a consolidated basis, and
Borrower's Share of Indebtedness of Investment Affiliates to Gross Asset Value
of Borrower and EQR to exceed 0.50:1 at any time.

         (b)   SECURED DEBT TO GROSS ASSET VALUE. Borrower shall not permit the
ratio of Secured Debt to Gross Asset Value of Borrower and EQR to exceed 0.30:1
at any time.

         (c)   UNENCUMBERED POOL. Borrower shall not permit the ratio of the
Unencumbered Asset Value to outstanding Unsecured Debt to be less than 2.2:1 at
any time.

         (d)   EBITDA TO FIXED CHARGES RATIO. Borrower shall not permit the
ratio of EBITDA for the then most recently completed Fiscal Quarter to Fixed
Charges for the then most recently completed Fiscal Quarter to be less than
1.8:1.

         (e)   UNENCUMBERED NET OPERATING INCOME TO UNSECURED INTEREST EXPENSE.
Borrower shall not permit the ratio of Unencumbered Net Operating Income for the
then most recently completed Fiscal Quarter to Unsecured Interest Expense for
the then most recently completed Fiscal Quarter to be less than 2.25:1.

         (f)   DIVIDENDS. The Borrower will not, as determined on an aggregate
annual basis, pay any partnership distributions in excess of 90% of the
Borrower's FFO for such year. During the continuance of a monetary Event of
Default, Borrower shall only pay partnership distributions that are necessary to
enable EQR to


                                       67

<PAGE>


make those dividends necessary to maintain EQR's status as a real estate
investment trust.

         (g)   MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Consolidated
Tangible Net Worth of the Borrower and its Consolidated Subsidiaries will at no
time be less than $4,500,000,000 plus ninety percent (90%) of all Net Offering
Proceeds received by EQR or Borrower after the date hereof.

         (h)   RAW LAND. The Borrower and EQR shall not purchase or continue to
hold any Raw Land to the extent that the undepreciated book value of all such
Raw land, taken singly or in the aggregate, exceeds five percent (5%) of the
Gross Asset Value of Borrower and EQR.

         (i)   DEVELOPMENT ACTIVITY. The Borrower, EQR and their Subsidiaries
will not engage in any Development Activity other than Development Activity in
which the Borrower, EQR and their Subsidiaries do not have a total aggregate
investment at any time exceeding an amount equal to ten percent (10%) of the
Gross Asset Value of Borrower and EQR.

         (j)   PERMITTED HOLDINGS. Borrower's and EQR's primary business will be
the ownership, operation and development of multifamily residential property and
any other business activities of Borrower, EQR and Subsidiaries of either or
both will remain incidental thereto. Notwithstanding the foregoing, Borrower,
EQR and Subsidiaries of either or both may acquire or maintain the following
Permitted Holdings if and so long as (i) the aggregate value of Permitted
Holdings, together with the Permitted Holdings described in subsections (h) and
(i) above, whether held directly or indirectly (but without duplication) by
Borrower, EQR and/or their Subsidiaries, does not exceed, at any time, twenty
percent (20%) of Gross Asset Value of Borrower and EQR as a whole and (ii) the
value of each such Permitted Holding, whether held directly or indirectly by
Borrower, EQR or the Subsidiaries of either or both, does not exceed, at any
time, the following percentages of Gross Asset Value of Borrower and EQR:

<TABLE>
<CAPTION>

                                              Maximum Percentage
Permitted Holdings                           of Gross Asset Value
------------------                           --------------------
<S>                                                  <C>
Non-Multifamily Residential Property
(other than Cash or Cash Equivalents)                10%

Securities (other than Cash and Cash
 Equivalents)                                         5%

Multifamily Residential Property
Mortgages (other than Mortgages in
favor of the Borrower)                               10%

Multifamily Residential Property
Partnership Interests                                15%

</TABLE>


                                       68
<PAGE>

<TABLE>
<S>                                                  <C>
(other than interests in any Person wholly-owned
by EQR and/or Borrower, EQR's partnership
interest in the Borrower or Borrower's or EQR's
partnership interests in Evans Withycombe
Residential, L.P. a Delaware limited partnership
("Evans Withycombe"), or Borrower's or EQR's
indirect interest in any Person wholly-owned
directly or indirectly by
Evans Withycombe and/or EQR)

</TABLE>


For purposes of calculating the foregoing percentages the value of each category
shall be calculated in the manner that Gross Asset Value is determined;
PROVIDED, HOWEVER, that the Gross Asset Value for Securities shall be equal to
the lesser of (a) the acquisition cost thereof or (b) the current market value
thereof (such market value to be determined in a manner reasonably acceptable to
Administrative Agent).

         (k)   CALCULATION. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter.

         SECTION 5.9 RESTRICTION ON FUNDAMENTAL CHANGES.

         (a)   Neither the Borrower nor EQR shall enter into any merger or
consolidation, unless (i) the Borrower or EQR is the surviving entity, (ii) the
entity which is merged into Borrower or EQR is predominantly in the commercial
real estate business, (iii) the creditworthiness of the surviving entity's long
term unsecured debt or implied senior debt, as applicable, is not lower than
Borrower's or EQR's creditworthiness two months immediately preceding such
merger, and (iv) in the case of any merger where the then fair market value of
the assets of the entity which is merged into the Borrower or EQR is twenty-five
percent (25%) or more of the Borrower's or EQR's then Gross Asset Value
following such merger, the Administrative Agent's consent thereto in writing,
which consent shall not be unreasonably withheld, conditioned or delayed.
Neither the Borrower nor EQR shall liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), discontinue its business or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of its business or property, whether now or hereafter
acquired. Nothing in this Section shall be deemed to prohibit the sale or
leasing of portions of the Real Property Assets in the ordinary course of
business.

         (b)   The Borrower shall not amend its agreement of limited partnership
or other organizational documents in any manner that would have a Material
Adverse Effect without the Administrative Agent's consent, which shall not be
unreasonably withheld. EQR shall not amend its declaration of trust, by-laws, or
other organizational documents in any manner that would have a


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Material Adverse Effect without the Administrative Agent's consent, which shall
not be unreasonably withheld.

         (c)   The Borrower shall deliver to Administrative Agent copies of all
amendments to its agreement of limited partnership or to EQR's declaration of
trust, by-laws, or other organizational documents no less than ten (10) days
after the effective date of any such amendment.

         SECTION 5.10 CHANGES IN BUSINESS.

         (a)   Except for Permitted Holdings, neither the Borrower nor EQR shall
enter into any business which is substantially different from that conducted by
the Borrower or EQR on the Closing Date after giving effect to the transactions
contemplated by the Loan Documents. The Borrower shall carry on its business
operations through the Borrower and its Subsidiaries.

         (b)   Except for Permitted Holdings, Borrower shall not engage in any
line of business other than ownership, operation and development of multifamily
residential property and the provision of services incidental thereto, whether
directly or through its Subsidiaries and Investment Affiliates.

         SECTION 5.11 MARGIN STOCK. None of the proceeds of the Loan will be
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any Margin Stock in any manner that might
violate the provisions of Regulations T, U or X of the Federal Reserve Board.

         SECTION 5.12 HEDGING REQUIREMENTS. Within five (5) Domestic Business
Days after the last day of each calendar quarter, the Borrower shall have in
effect "Interest Rate Hedges" on Borrower's Indebtedness so that such
Indebtedness, together with all Fixed Rate Indebtedness of Borrower, shall
constitute at least fifty percent (50%) of the then aggregate Indebtedness of
the Borrower. "INTEREST RATE HEDGES" shall mean interest rate exchange, collar,
cap, swap, adjustable strike cap, adjustable strike corridor or similar
agreements, each of which (i) shall have a minimum term of two (2) years, or, in
the case of loans pursuant to which interest shall accrue at a rate other than a
fixed rate, a term equal to the term of such floating rate loan (to the extent
the term of such floating rate loan is less than two (2) years), (ii) shall have
the effect of capping the interest rates covered thereby at a rate equal to or
lower than the Cap Rate at the time of purchase or execution, and (iii) shall be
with an Approved Bank as the counterparty. It is acknowledged and agreed that
the Borrower shall have no obligation to replace any Interest Rate Hedge even if
the counterparty thereto shall cease to be an Approved Bank. The Borrower shall
submit evidence of its compliance with Interest Rate Hedges to the
Administrative Agent together with the


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certificate required to be delivered by the Borrower pursuant to Section 5.1(c).

         SECTION 5.13 EQR STATUS.

         (a)   STATUS. EQR shall at all times (i) remain a publicly traded
company listed on the New York Stock Exchange, and (ii) maintain its status as a
self-directed and self-administered real estate investment trust under the Code.

         (b)   INDEBTEDNESS. EQR shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

               (1)  the Obligations; and

               (2)  Indebtedness which, after giving effect thereto, may be
    incurred or may remain outstanding without giving rise to an Event of
    Default or Default under any provision of this Article V.

         (c)   RESTRICTION ON FUNDAMENTAL CHANGES.

               (1)  Except for Permitted Holdings, EQR shall not have an
    Investment in any Person other than Borrower, common stock of QRS
    Corporations, and the interests identified on SCHEDULE 5.13(C)(1) as being
    owned by EQR.

               (2)  Except for Permitted Holdings, EQR shall not acquire an
    interest in any Property other than Securities issued by Borrower, common
    stock of QRS Corporations, and the interests identified on SCHEDULE
    5.13(C)(2).

         (d)   ENVIRONMENTAL LIABILITIES. Neither EQR nor any of its
Subsidiaries shall become subject to any Environmental Claim which has a
Material Adverse Effect, including any arising out of or related to (i) the
release or threatened release of any Material of Environmental Concern into the
environment, or any remedial action in response thereto, or (ii) any violation
of any Environmental Laws. Notwithstanding the foregoing provision, EQR shall
have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) EQR shall have given
Administrative Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject EQR or such
Subsidiary to any criminal penalty or subject Administrative Agent or any Bank
to pay any civil penalty or to prosecution for a crime, and (iv) no portion of
any Property material to Borrower or its condition or prospects shall be in
substantial danger of being sold, forfeited or lost, by


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reason of such contest or the continued existence of the matter being contested.

         (e)   DISPOSAL OF PARTNERSHIP INTERESTS. EQR will not directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any of its partnership interests in Borrower, except for the
reduction of EQR's interest in the Borrower arising from Borrower's issuance of
partnership interests in the Borrower or the retirement of preference units by
Borrower.

                                   ARTICLE VI

                                    DEFAULTS

         SECTION 6.1 EVENTS OF DEFAULT. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:

         (a)   the Borrower shall fail to pay when due any principal of any
Loan, or the Borrower shall fail to pay when due interest on any Loan or any
fees or any other amount payable hereunder and the same shall continue for a
period of five (5) days after the same becomes due;

         (b)   the Borrower shall fail to observe or perform any covenant
contained in Section 5.8, Section 5.9(a) or (b), or Sections 5.10 to 5.13,
inclusive;

         (c)   the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a),
(b), (e), (f), (g), (h), (j), (n) or (o) of this Section 6.1) for 30 days after
written notice thereof has been given to the Borrower by the Administrative
Agent, or if such default is of such a nature that it cannot with reasonable
effort be completely remedied within said period of thirty (30) days such
additional period of time as may be reasonably necessary to cure same, provided
Borrower commences such cure within said thirty (30) day period and diligently
prosecutes same, until completion, but in no event shall such extended period
exceed ninety (90) days;

         (d)   any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and the defect
causing such representation or warranty to be incorrect when made (or deemed
made) is not removed within thirty (30) days after written notice thereof from
Administrative Agent to Borrower;

         (e)   the Borrower, EQR, any Subsidiary or any Investment Affiliate
shall default in the payment when due


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<PAGE>


(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) of any amount owing in respect of any Recourse Debt (other than the
Obligations) for which the aggregate outstanding principal amount exceeds
$10,000,000 and such default shall continue beyond the giving of any required
notice and the expiration of any applicable grace period and such default has
not been waived, in writing, by the holder of any such Debt; or the Borrower,
EQR, any Subsidiary or any Investment Affiliate shall default in the performance
or observance of any obligation or condition with respect to any such Recourse
Debt or any other event shall occur or condition exist beyond the giving of any
required notice and the expiration of any applicable grace period, if the effect
of such default, event or condition is to accelerate the maturity of any such
indebtedness or to permit (without any further requirement of notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such holders,
to accelerate the maturity of any such indebtedness;

         (f)   the Borrower or EQR shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action to authorize any of the foregoing;

         (g)   an involuntary case or other proceeding shall be commenced
against the Borrower or EQR seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or EQR under the federal bankruptcy
laws as now or hereafter in effect;

         (h)   one or more final, non-appealable judgments or decrees in an
aggregate amount of Twenty Million Dollars ($20,000,000) or more shall be
entered by a court or courts of competent jurisdiction against the Borrower, EQR
or its Consolidated Subsidiaries (other than any judgment as to which, and only
to the extent, a reputable insurance company has acknowledged coverage of such
claim in writing) and (i) any such judgments or decrees shall not be stayed,
discharged, paid, bonded or vacated within thirty (30) days or (ii) enforcement


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proceedings shall be commenced by any creditor on any such judgments or decrees;

         (i)   there shall be a change in the majority of the Board of Trustees
of EQR during any twelve (12) month period, excluding any change in directors
resulting from (x) the death or disability of any director, or (y) satisfaction
of any requirement for the majority of the members of the board of directors or
trustees of EQR to qualify under applicable law as independent trustees or (z)
the replacement of any trustee who is an officer or employee of EQR or an
affiliate of EQR with any other officer or employee of EQR or an affiliate of
EQR;

         (j)   any Person (including affiliates of such Person) or "group" (as
such term is defined in applicable federal securities laws and regulations)
shall acquire more than thirty percent (30%) of the common shares of EQR;

         (k)   EQR shall cease at any time to qualify as a real estate
investment trust under the Code;

         (l)   if any Termination Event with respect to a Plan shall occur as a
result of which Termination Event or Events any member of the ERISA Group has
incurred or may incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
insufficiency of such Plan and the insufficiency of any and all other Plans with
respect to which such a Termination Event shall occur and be continuing (or, in
the case of a Multiple Employer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall occur and
be continuing, the liability of the Borrower) is equal to or greater than
$10,000,000 and which the Administrative Agent reasonably determines will have a
Material Adverse Effect;

         (m)   if, any member of the ERISA Group shall commit a failure
described in Section 402(f)(1) of ERISA or Section 412(n)(1) of the Code and the
amount of the lien determined under Section 402(f)(3) of ERISA or Section
412(n)(3) of the Code that could reasonably be expected to be imposed on any
member of the ERISA Group or their assets in respect of such failure shall be
equal to or greater than $10,000,000 and which the Administrative Agent
reasonably determines will have a Material Adverse Effect;

         (n)   at any time, for any reason the Borrower or EQR seeks to
repudiate its obligations under any Loan Document; or

         (o)   a default beyond any applicable notice or grace period under any
of the other Loan Documents.

         SECTION 6.2 RIGHTS AND REMEDIES.

         (a)   Upon the occurrence of any Event of Default described in Sections
6.1(f) or (g), the Commitments and the


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Swingline Commitment shall immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Loans and any and all accrued fees
and other Obligations hereunder shall automatically become immediately due and
payable, with all additional interest from time to time accrued thereon and
without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower; and
upon the occurrence and during the continuance of any other Event of Default,
subject to the provisions of Section 6.2(b), the Administrative Agent may (and
upon the demand of the Required Banks shall), by written notice to the Borrower,
in addition to the exercise of all of the rights and remedies permitted the
Administrative Agent and the Banks at law or equity or under any of the other
Loan Documents, declare the Commitments terminated and the unpaid principal
amount of and any and all accrued and unpaid interest on the Loans and any and
all accrued fees and other Obligations hereunder to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and (except as otherwise as provided in the Loan
Documents) without presentation, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower.

         (b)   Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, the Lead Agent, and the Banks each
agree that any exercise or enforcement of the rights and remedies granted to the
Administrative Agent or the Banks under this Agreement or at law or in equity
with respect to this Agreement or any other Loan Documents shall be commenced
and maintained by the Administrative Agent on behalf of the Administrative Agent
and/or the Banks. The Administrative Agent shall act at the direction of the
Required Banks in connection with the exercise of any and all remedies at law,
in equity or under any of the Loan Documents (including, without limitation,
those set forth in Section 6.4 hereof) or, if the Required Banks are unable to
reach agreement, then, from and after an Event of Default, the Administrative
Agent may pursue such rights and remedies as it may determine.

         SECTION 6.3 NOTICE OF DEFAULT. The Administrative Agent shall give
notice to the Borrower under Section 6.1(c) promptly upon being requested to do
so by the Required Banks and shall thereupon notify all the Banks thereof. The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless Administrative Agent has received
notice in writing from a Bank or Borrower or any court or governmental agency
referring to this Agreement or the other Loan Documents, describing such event
or


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<PAGE>


condition. Should Administrative Agent receive notice of the occurrence of an
Default or Event of Default expressly stating that such notice is a notice of an
Default or Event of Default, or should Administrative Agent send Borrower a
notice of Default or Event of Default, Administrative Agent shall promptly give
notice thereof to each Bank.

         SECTION 6.4 ACTIONS IN RESPECT OF LETTERS OF CREDIT.

         (a)   If, at any time and from time to time, any Letter of Credit shall
have been issued hereunder and an Event of Default shall have occurred and be
continuing, then, upon the occurrence and during the continuation thereof, the
Administrative Agent may, and upon the demand of the Required Banks shall,
whether in addition to the taking by the Administrative Agent of any of the
actions described in this Article or otherwise, make a demand upon the Borrower
to, and forthwith upon such demand (but in any event within ten (10) days after
such demand) the Borrower shall, pay to the Administrative Agent, on behalf of
the Banks, in same day funds at the Administrative Agent's office designated in
such demand, for deposit in a special cash collateral account (the "LETTER OF
CREDIT COLLATERAL ACCOUNT") to be maintained in the name of the Administrative
Agent (on behalf of the Banks) and under its sole dominion and control at such
place as shall be designated by the Administrative Agent, an amount equal to the
amount of the Letter of Credit Usage under the Letters of Credit. Interest shall
accrue on the Letter of Credit Collateral Account at a rate equal to the rate on
overnight funds.

         (b)   The Borrower hereby pledges, assigns and grants to the
Administrative Agent, as administrative agent for its benefit and the ratable
benefit of the Banks a lien on and a security interest in, the following
collateral (the "LETTER OF CREDIT COLLATERAL"):

         (i)   the Letter of Credit Collateral Account, all cash deposited
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Letter of Credit Collateral Account;

         (ii)  all notes, certificates of deposit and other instruments from
time to time hereafter delivered to or otherwise possessed by the Administrative
Agent for or on behalf of the Borrower in substitution for or in respect of any
or all of the then existing Letter of Credit Collateral;

         (iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Letter of Credit Collateral; and


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         (iv)  to the extent not covered by the above clauses, all proceeds of
any or all of the foregoing Letter of Credit Collateral.

The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.

         (c)   The Borrower hereby authorizes the Administrative Agent for the
ratable benefit of the Banks to apply, from time to time after funds are
deposited in the Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any amounts, in such order
as the Administrative Agent may elect, as shall have become due and payable by
the Borrower to the Banks in respect of the Letters of Credit.

         (d)   Neither the Borrower nor any Person claiming or acting on behalf
of or through the Borrower shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account, except as provided in Section
6.4(h) hereof.

         (e)   The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Letter of Credit Collateral or (ii) create or
permit to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Letter of Credit Collateral, except for the
security interest created by this Section 6.4.

         (f)   If any Event of Default shall have occurred and be continuing:

         (i)   The Administrative Agent may, in its sole discretion, without
notice to the Borrower except as required by law and at any time from time to
time, charge, set off or otherwise apply all or any part of FIRST, (x) amounts
previously drawn on any Letter of Credit that have not been reimbursed by the
Borrower and (y) any Letter of Credit Usage described in clause (ii) of the
definition thereof that are then due and payable and SECOND, any other unpaid
Obligations then due and payable against the Letter of Credit Collateral Account
or any part thereof, in such order as the Administrative Agent shall elect. The
rights of the Administrative Agent under this Section 6.4 are in addition to any
rights and remedies which any Bank may have.

         (ii)  The Administrative Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral Account, in addition
to the other rights and remedies provided herein or otherwise available to it,
all the rights and remedies of a secured party upon default under the Uniform
Commercial Code in effect in the State of Illinois at that time.


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         (g)   The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that, assuming such treatment, the Administrative
Agent shall not have any responsibility or liability with respect thereto.

         (h)   At such time as all Events of Default have been cured or waived
in writing, all amounts remaining in the Letter of Credit Collateral Account
shall be promptly returned to the Borrower. Absent such cure or written waiver,
any surplus of the funds held in the Letter of Credit Collateral Account and
remaining after payment in full of all of the Obligations of the Borrower
hereunder and under any other Loan Document after the Maturity Date shall be
paid to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.

         SECTION 6.5 DISTRIBUTION OF PROCEEDS AFTER DEFAULT. Notwithstanding
anything contained herein to the contrary, from and after an Event of Default,
to the extent proceeds are received by Administrative Agent, such proceeds will
be distributed to the Banks pro rata in accordance with the unpaid principal
amount of the Loans.

                                   ARTICLE VII

                                   THE AGENTS

         SECTION 7.1 APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Except as set forth in Sections 7.8 and 7.9 hereof, the provisions of this
Article VII are solely for the benefit of Administrative Agent and the Banks,
and Borrower shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower.

         SECTION 7.2 AGENCY AND AFFILIATES. Bank of America, National
Association shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Administrative Agent, and Bank of America, National Association and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower, EQR or any


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<PAGE>


Subsidiary or affiliate of the Borrower as if it was not the Administrative
Agent hereunder, and the term "Bank" and "Banks" shall include Bank of America,
National Association in its individual capacity.

         SECTION 7.3 ACTION BY ADMINISTRATIVE AGENT. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default or Event of
Default, except as expressly provided in Article VI. The duties of
Administrative Agent shall be administrative in nature. Subject to the
provisions of Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer
the Loans in the same manner as it administers its own loans.

         SECTION 7.4 CONSULTATION WITH EXPERTS. As between Administrative Agent
and the Banks, the Administrative Agent may consult with legal counsel (who may
be counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

         SECTION 7.5 LIABILITY OF ADMINISTRATIVE AGENT AND SYNDICATION AGENT. As
between Administrative Agent and the Banks, none of the Administrative Agent,
the Syndication Agent nor any of their affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by any of them in connection herewith (i) with the consent or at the
request of the Required Banks or (ii) in the absence of its own gross negligence
or wilful misconduct. As between Administrative Agent and the Banks, none of the
Administrative Agent, the Syndication Agent nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower, except with respect to payment of principal and
interest; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Administrative Agent; or
(iv) the validity, effectiveness or genuineness of this Agreement, the other
Loan Documents or any other instrument or writing furnished in connection
herewith. As between Administrative Agent and the Banks, the Administrative
Agent shall not incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire, or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.

         SECTION 7.6 INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Administrative


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Agent and the Syndication Agent and their respective affiliates and directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitee's
gross negligence or wilful misconduct) that such indemnitee may suffer or incur
in connection with its duties as Administrative Agent and/or Syndication Agent
under this Agreement, the other Loan Documents or any action taken or omitted by
such indemnitee hereunder as Administrative Agent or as Syndication Agent. In
the event that the Syndication Agent or the Administrative Agent shall,
subsequent to its receipt of indemnification payment(s) from Banks in accordance
with this section, recoup any amount from the Borrower, or any other party
liable therefor in connection with such indemnification, such Syndication Agent
or the Administrative Agent shall reimburse the Banks which previously made the
payment(s) PRO RATA, based upon the actual amounts which were theretofore paid
by each Bank. The Syndication Agent or the Administrative Agent, as the case may
be, shall reimburse such Banks so entitled to reimbursement within two (2)
Domestic Business Days of its receipt of such funds from the Borrower or such
other party liable therefor.

         SECTION 7.7 CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the
Syndication Agent or any other Bank, and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent, Syndication Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under this Agreement.

         SECTION 7.8 SUCCESSOR ADMINISTRATIVE AGENT OR SYNDICATION AGENT. The
Administrative Agent or the Syndication Agent may resign at any time by giving
notice thereof to the Banks, the Borrower and each other and the Administrative
Agent or the Syndication Agent, as applicable, shall resign in the event its
Commitment is reduced to zero. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Administrative Agent or Syndication
Agent, as applicable, which successor Administrative Agent or successor
Syndication Agent (as applicable) shall, provided no Event of Default has
occurred and is then continuing, be subject to Borrower's approval, which
approval shall not be unreasonably withheld or delayed (except that Borrower
shall, in all events, be deemed to have approved Bank of America, National
Association as a successor Syndication Agent and The Chase Manhattan Bank as a
successor Administrative Agent). If no successor Administrative Agent or
Syndication Agent (as applicable) shall have been so appointed by the Required
Banks and approved by the Borrower, or, if so appointed, shall not have accepted
such


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<PAGE>


appointment within 30 days after the retiring Administrative Agent or
Syndication Agent (as applicable) gives notice of resignation, then the retiring
Administrative Agent or retiring Syndication Agent (as applicable) may, on
behalf of the Banks, appoint a successor Administrative Agent or Syndication
Agent (as applicable), which shall be the Syndication Agent or the
Administrative Agent, as the case may be, who shall act until the Required Banks
shall appoint a Administrative Agent or Syndication Agent. Upon the acceptance
of its appointment as the Administrative Agent or Syndication Agent hereunder by
a successor Administrative Agent or successor Syndication Agent, as applicable,
such successor Administrative Agent or successor Syndication Agent, as
applicable, shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent or retiring Syndication Agent, as
applicable, and the retiring Administrative Agent or the retiring Syndication
Agent, as applicable, shall be discharged from its duties and obligations
hereunder. The rights and duties of the Administrative Agent to be vested in any
successor Administrative Agent shall include, without limitation, the rights and
duties as Swingline Lender. After any retiring Administrative Agent's or
retiring Syndication Agent's resignation hereunder, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent or the Syndication Agent, as
applicable. For gross negligence or willful misconduct, as determined by all the
Banks (excluding for such determination Administrative Agent or Syndication
Agent in its capacity as a Bank, as applicable), Administrative Agent or
Syndication Agent may be removed at any time by giving at least thirty (30)
Domestic Business Days prior written notice to Administrative Agent, Syndication
Agent and Borrower. Such resignation or removal shall take effect upon the
acceptance of appointment by a successor Administrative Agent or Syndication
Agent, as applicable, in accordance with the provisions of this Section 7.8.

         SECTION 7.9 CONSENTS AND APPROVALS. All communications from
Administrative Agent to the Banks requesting the Banks' determination, consent,
approval or disapproval (i) shall be given in the form of a written notice to
each Bank, (ii) shall be accompanied by a description of the matter or item as
to which such determination, approval, consent or disapproval is requested, or
shall advise each Bank where such matter or item may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
reasonably requested by a Bank and to the extent not previously provided to such
Bank, written materials and a summary of all oral information provided to
Administrative Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Administrative Agent's recommended course of
action or determination in respect thereof. Each Bank shall reply promptly, but
in any event within ten (10) Domestic Business Days after receipt of the request
therefor from Administrative Agent (the "BANK REPLY PERIOD"). Unless a Bank
shall give written notice to Administrative Agent


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that it objects to the recommendation or determination of Administrative Agent
(together with a written explanation of the reasons behind such objection)
within the Bank Reply Period, such Bank shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions
requiring the approval of the Required Banks or all the Banks, Administrative
Agent shall submit its recommendation or determination for approval of or
consent to such recommendation or determination to all Banks and upon receiving
the required approval or consent shall follow the course of action or
determination of the Required Banks (and each non-responding Bank shall be
deemed to have concurred with such recommended course of action) or all the
Banks, as the case may be.


                                  ARTICLE VIII

                             CHANGE IN CIRCUMSTANCES

         SECTION 8.1 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing or Money Market LIBOR Loan:

         (a)   the Administrative Agent is advised by the Reference Bank that
the Euro-Dollar Reference Bank has determined in good faith that deposits in
dollars (in the applicable amounts) are not being offered to the Euro-Dollar
Reference Bank in the relevant market for such Interest Period, or

         (b)   Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the Adjusted London Interbank
Offered Rate, as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Bank of funding its Euro-Dollar Loans for such
Interest Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to make Euro-Dollar Loans shall be
suspended. Unless the Borrower notifies the Administrative Agent at least two
Domestic Business Days before the date of (i) any Euro-Dollar Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing, or (ii) any Money Market LIBOR Borrowing for which a Notice of Money
Market Borrowing has previously been given, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day. For purposes of this Section 8.1(b), in
determining whether the Adjusted London Interbank Offered Rate, as determined by
Administrative Agent, will not adequately and fairly reflect the cost to any
Bank of funding its Euro-Dollar Loans for such


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Interest Period, such determination will be based solely on the ability of such
Bank to obtain matching funds in the London interbank market at a reasonably
equivalent rate.

         SECTION 8.2 ILLEGALITY. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) made after the Closing Date of any such
authority, central bank or comparable agency shall make it unlawful for any Bank
(or its Euro-Dollar Lending Office) (x) to make, maintain or fund its
Euro-Dollar Loans, or (y) to participate in any Letter of Credit issued by the
Fronting Bank, or, with respect to the Fronting Bank, to issue any Letter of
Credit, the Administrative Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank in case of the event
described in clause (x) above to make Euro-Dollar Loans, or in the case of the
event described in clause (y) above, to participate in any Letter of Credit
issued by the Fronting Bank or, with respect to the Fronting Bank, to issue any
Letter of Credit, shall be suspended. With respect to Euro-Dollar Loans, before
giving any notice to the Administrative Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall be deemed to have delivered a Notice of Interest Rate Election and such
Euro-Dollar Loan shall be converted as of such date to a Base Rate Loan (without
payment of any amounts that Borrower would otherwise be obligated to pay
pursuant to Section 2.13 hereof with respect to Loans converted pursuant to this
Section 8.2) in an equal principal amount from such Bank (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base Rate Loan.

         If at any time, it shall be unlawful for any Bank to make, maintain or
fund its Euro-Dollar Loans, the Borrower shall have the right, upon five (5)
Domestic Business Day's notice to the Administrative Agent, to either (x) cause
a bank, reasonably acceptable to the Administrative Agent, to offer to purchase
the Commitments of such Bank for an amount equal to such Bank's outstanding
Loans, and to become a Bank hereunder, or obtain the agreement of one or more
existing Banks to offer to purchase the Commitments of such Bank for such
amount, which offer such Bank


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is hereby required to accept, or (y) to repay in full all Loans then outstanding
of such Bank, together with interest and all other amounts due thereon, upon
which event, such Bank's Commitments shall be deemed to be cancelled pursuant to
Section 2.11(c).

         SECTION 8.3 INCREASED COST AND REDUCED RETURN.

         (a)   If, on or after (x) the date hereof in the case of Committed
Loans made pursuant to Section 2.1, or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
made at the Closing Date of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System (but excluding with respect to any Euro-Dollar Loan any
such requirement reflected in an applicable Euro-Dollar Reserve Percentage)),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition materially
more burdensome in nature, extent or consequence than those in existence as of
the Closing Date affecting such Bank's Euro-Dollar Loans, its Note, or its
obligation to make Euro-Dollar Loans, and the result of any of the foregoing is
to increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect to such Euro-Dollar Loans, by an amount
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to such
Bank such additional amount or amounts (based upon a reasonable allocation
thereof by such Bank to the Euro-Dollar Loans made by such Bank hereunder) as
will compensate such Bank for such increased cost or reduction to the extent
such Bank generally imposes such additional amounts on other borrowers of such
Bank in similar circumstances.

         (b)   If any Bank shall have reasonably determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding


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capital adequacy (whether or not having the force of law) made after the Closing
Date of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within 15 days after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction to the extent such Bank generally imposes such additional amounts
on other borrowers of such Bank in similar circumstances.

         (c)   Each Bank will promptly notify the Borrower, the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If
such Bank shall fail to notify Borrower of any such event within 90 days
following the end of the month during which such event occurred, then Borrower's
liability for any amounts described in this Section incurred by such Bank as a
result of such event shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
such Bank actually notified Borrower of the occurrence of such event. A
certificate of any Bank claiming compensation under this Section and setting
forth a reasonably detailed calculation of the additional amount or amounts to
be paid to it hereunder shall be conclusive in the absence of demonstrable
error. In determining such amount, such Bank may use any reasonable averaging
and attribution methods.

         (d)   If at any time, any Bank shall be owed amounts pursuant to this
Section 8.3, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank's outstanding Loans, and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitments of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest and all other amounts due
thereon, upon which event, such Bank's Commitment shall be deemed to be
cancelled pursuant to Section 2.11(c).


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<PAGE>


         SECTION 8.4 TAXES.

         (a)   Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, EXCLUDING, in the case of each Bank, the
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise or similar taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof or by any other
jurisdiction (or any political subdivision thereof) as a result of a present or
former connection between such Bank or Administrative Agent and such other
jurisdiction or by the United States (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "NON-EXCLUDED TAXES"). If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note or Letter of Credit, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.4) such Bank, the Fronting Bank or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower shall
furnish to the Administrative Agent, at its address referred to in Section 9.1,
the original or a certified copy of a receipt evidencing payment thereof.

         (b)   In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made hereunder or under any Note or
the Letter of Credit or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Letter of Credit (hereinafter referred
to as "OTHER TAXES").

         (c)   The Borrower agrees to indemnify each Bank, the Fronting Bank and
the Administrative Agent for the full amount of Non-Excluded Taxes or Other
Taxes (including, without limitation, any Non-Excluded Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
8.4) paid by such Bank, the Fronting Bank or the Administrative Agent (as the
case may be) and, so long as such Bank or Administrative Agent has promptly paid
any such Non-Excluded Taxes or Other Taxes, any liability for penalties and
interest arising therefrom or with


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<PAGE>


respect thereto. This indemnification shall be made within 15 days from the date
such Bank, the Fronting Bank or the Administrative Agent (as the case may be)
makes demand therefor.

         (d)   Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
shall provide the Borrower with (A) two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (B) an Internal Revenue Service
Form W-8 or W-9, or any successor form prescribed by the Internal Revenue
Service, and shall provide Borrower with two further copies of any such form or
certification on or before the date that any such form or certification expires
or becomes obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to Borrower, certifying (i) in
the case of a Form 1001 or 4224, that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, and (ii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Non-Excluded Taxes" as defined in Section 8.4(a).

         (e)   For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.4(c) with respect to
Non-Excluded Taxes imposed by the United States; PROVIDED, HOWEVER, that should
a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Non-Excluded Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes so long
as Borrower shall incur no cost or liability as a result thereof.

         (f)   If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.4, then such Bank will change
the jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.


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         (g)   If at any time, any Bank shall be owed amounts pursuant to this
Section 8.4, the Borrower shall have the right, upon five (5) Domestic Business
Day's notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank's outstanding Loans, and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitments of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest and all other amounts due
thereon, upon which event, such Bank's Commitment shall be deemed to be
cancelled pursuant to Section 2.11(c).

         SECTION 8.5 BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3 or 8.4 with respect to its Euro-Dollar Loans and the Borrower shall, by at
least five Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer exist:

         (a)   Borrower shall be deemed to have delivered a Notice of Interest
Rate Election with respect to such affected Euro-Dollar Loans and thereafter all
Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be
made instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and

         (b)   after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead, and

         (c)   Borrower will not be required to make any payment which would
otherwise be required by Section 2.13 with respect to such Euro-Dollar Loans
converted to Base Rate Loans pursuant to clause (a) above.


                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile
transmission followed by telephonic confirmation or similar writing) and shall
be given to


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such party: (x) in the case of the Borrower or the Administrative Agent, at its
address, or facsimile number set forth on the signature pages hereof with a
duplicate copy thereof, in the case of the Borrower, to the Borrower, at Equity
Residential Properties Trust, Two North Riverside Plaza, Suite 400, Chicago,
Illinois 60606, Attn: General Counsel, and to Rosenberg & Liebentritt, P.C., Two
North Riverside Plaza, Suite 1515, Chicago, Illinois 60606, Attn: James M.
Phipps, Esq., (y) in the case of any Bank, at its address, or facsimile number
set forth in its Administrative Questionnaire or (z) in the case of any party,
such other address, or facsimile number as such party may hereafter specify for
the purpose by notice to the Administrative Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when such facsimile is transmitted to the facsimile
number specified in this Section and the appropriate answerback or facsimile
confirmation is received, (ii) if given by certified registered mail, return
receipt requested, with first class postage prepaid, addressed as aforesaid,
upon receipt or refusal to accept delivery, (iii) if given by a nationally
recognized overnight carrier, 24 hours after such communication is deposited
with such carrier with postage prepaid for next day delivery, or (iv) if given
by any other means, when delivered at the address specified in this Section;
PROVIDED that notices to the Administrative Agent under Article II or Article
VIII shall not be effective until received.

         SECTION 9.2 NO WAIVERS. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

         SECTION 9.3 EXPENSES; INDEMNIFICATION.

         (a)   The Borrower shall pay within thirty (30) days after written
notice from the Administrative Agent, (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Syndication Agent (including
reasonable fees and disbursements of special counsel Skadden, Arps, Slate,
Meagher & Flom LLP), in connection with the preparation of this Agreement, the
Loan Documents and the documents and instruments referred to therein, and any
waiver or consent hereunder or any amendment hereof or any Default or alleged
Default hereunder, (ii) all reasonable fees and disbursements of special counsel
Skadden, Arps, Slate, Meagher & Flom LLP in connection with the syndication of
the Loans and (iii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent and each Bank, including fees and
disbursements of counsel for the Administrative Agent and each of the Banks, in
connection with the enforcement of the Loan


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Documents and the instruments referred to therein and such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom; provided, however, that the attorneys' fees and disbursements for
which Borrower is obligated under this subsection (a)(iii) shall be limited to
the reasonable non-duplicative fees and disbursements of (A) counsel for
Administrative Agent, and (B) counsel for all of the Banks as a group; and
provided, further, that all other costs and expenses for which Borrower is
obligated under this subsection (a)(iii) shall be limited to the reasonable
non-duplicative costs and expenses of Administrative Agent. For purposes of this
Section 9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single
outside law firm representing Administrative Agent, and (2) counsel for all of
the Banks as a group shall mean a single outside law firm representing such
Banks as a group (which law firm may or may not be the same law firm
representing either or both of Administrative Agent and/or Syndication Agent).

         (b)   The Borrower agrees to indemnify the Syndication Agent, the
Administrative Agent and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the foregoing (each an
"INDEMNITEE") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding that may at any time (including, without limitation, at
any time following the payment of the Obligations) be asserted against any
Indemnitee, as a result of, or arising out of, or in any way related to or by
reason of, (i) any of the transactions contemplated by the Loan Documents or the
execution, delivery or performance of any Loan Document, (ii) any violation by
the Borrower, EQR or the Environmental Affiliates of any applicable
Environmental Law, (iii) any Environmental Claim arising out of the management,
use, control, ownership or operation of property or assets by the Borrower, EQR
or any of the Environmental Affiliates, including, without limitation, all
on-site and off-site activities of Borrower or any Environmental Affiliate
involving Materials of Environmental Concern, (iv) the breach of any
environmental representation or warranty set forth herein, but excluding those
liabilities, losses, damages, costs and expenses (a) for which such Indemnitee
has been compensated pursuant to the terms of this Agreement, (b) incurred
solely by reason of the gross negligence, wilful misconduct, bad faith or fraud
of any Indemnitee as finally determined by a court of competent jurisdiction,
(c) violations of Environmental Laws relating to a Property which are caused by
the act or omission of such Indemnitee after such Indemnitee takes possession of
such Property or (d) any liability of such Indemnitee to any third party based
upon contractual obligations of such Indemnitee owing to such third party which
are not expressly set forth in the Loan Documents. In addition, the
indemnification set forth in this Section 9.3(b) in favor of any director,
officer, agent or


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employee of Administrative Agent, Syndication Agent or any Bank shall be solely
in his or her respective capacity as such director, officer, agent or employee.
The Borrower's obligations under this Section shall survive the termination of
this Agreement and the payment of the Obligations.

         SECTION 9.4 SHARING OF SET-OFFS. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
but subject to the prior consent of the Administrative Agent, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final) and any other indebtedness at any time held or owing by
such Bank (including, without limitation, by branches and agencies of such Bank
wherever located) to or for the credit or the account of the Borrower against
and on account of the Obligations of the Borrower then due and payable to such
Bank under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations purchased by such Bank. Each
Bank agrees that if it shall by exercising any right of set-off or counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of
principal and interest due with respect to any Note held by it or Letter of
Credit participated in by it, or, in the case of the Fronting Bank, Letter of
Credit issued by it, which is greater than the proportion received by any other
Bank or Letter of Credit issued or participated in by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks or Letter of Credit issued
or participated in by such other Banks shall be shared by the Banks pro rata;
PROVIDED that nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have to any deposits not
received in connection with the Loans and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes or the Letters of Credit. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note or a Letter of Credit, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation. Notwithstanding anything to the contrary contained
herein, any Bank may, by separate agreement with the Borrower, waive its right
to set off contained herein or granted by law and any such


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written waiver shall be effective against such Bank under this Section 9.4.

         SECTION 9.5 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
the Notes, the Letters of Credit or other Loan Documents may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties of the
Administrative Agent or the Swingline Lender in its capacity as Administrative
Agent or Swingline Lender, as applicable, are affected thereby, by the
Administrative Agent or Swingline Lender, as applicable); PROVIDED that no such
amendment or waiver with respect to this Agreement, the Notes, the Letters of
Credit or any other Loan Documents shall, unless signed by all the Banks, (i)
increase or decrease the Commitment of any Bank (except for a ratable decrease
in the Commitments of all Banks) or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement, (v) release the EQR Guaranty
or (vi) modify the provisions of this Section 9.5.

         SECTION 9.6 SUCCESSORS AND ASSIGNS.

         (a)   The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement or the other Loan Documents without the prior
written consent of all Banks and the Administrative Agent and any Bank may not
assign or otherwise transfer any of its interest under this Agreement except as
permitted in subsection (b) and (c) of this Section 9.6.

         (b)   Any Bank may at any time grant (i) prior to the occurrence of an
Event of Default, to an existing Bank, one or more banks, finance companies,
insurance companies or other financial institutions in minimum amounts of not
less than $10,000,000 (or any lesser amount in the case of participations to an
existing Bank or in the case of participations with respect to Money Market
Loans only) and (ii) after the occurrence and during the continuance of an Event
of Default, to any Person in any amount (in each case, a "PARTICIPANT"),
participating interests in its Commitment or any or all of its Loans, with (and
subject to) the consent of the Administrative Agent (other than with respect to
Money Market Loans) and, provided that no Event of Default shall have occurred
and be continuing, the Borrower (other than with respect to Money Market Loans),
which consent


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shall not be unreasonably withheld or delayed. Any participation made during the
continuation of an Event of Default shall not be affected by the subsequent cure
of such Event of Default. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; PROVIDED that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii), (iii), (iv) or (v) of Section 9.5 without the
consent of the Participant. The Borrower agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled to the benefits
of Article VIII with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of, and subject
to the restrictions with respect to, a participating interest granted in
accordance with this subsection (b).

         (c)   Any Bank may at any time assign to (i) prior to the occurrence of
an Event of Default, an existing Bank or one or more banks, finance companies,
insurance or other financial institutions which (A) has (or, in the case of a
bank which is a subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by Moody's Investors Service or a comparable
rating by a rating agency acceptable to Administrative Agent and (B) has total
assets in excess of Ten Billion Dollars ($10,000,000,000), in minimum amounts of
not less than Ten Million Dollars ($10,000,000) and integral multiples of One
Million Dollars ($1,000,000) thereafter (or any lesser amount in the case of
assignments to an existing Bank) and (ii) after the occurrence and during the
continuance of an Event of Default, to any Person in any amount (in each case,
an "ASSIGNEE"), all or a proportionate part of all, of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and,
in either case, such Assignee shall assume such rights and obligations, pursuant
to a Transfer Supplement in substantially the form of EXHIBIT "E" hereto
executed by such Assignee and such transferor Bank, with (and subject to) the
consent of the Administrative Agent and, provided that no Event of Default shall
have occurred and be continuing, the Borrower, which consent shall not be
unreasonably withheld or delayed; PROVIDED that if an Assignee is an affiliate
of such transferor Bank or was a Bank immediately prior to such assignment, no
such consent shall be required; and PROVIDED FURTHER that such assignment may,
but need


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not, include rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and no further
consent or action by any party shall be required and the transferor Bank shall
be released from its obligations hereunder to a corresponding extent. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such assignment in the
amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.4. Any assignment made during the continuation of an Event of Default shall
not be affected by any subsequent cure of such Event of Default.

         (d)   Any Bank (each, a "DESIGNATING LENDER") may at any time designate
one Designated Lender to fund Money Market Loans on behalf of such Designating
Lender subject to the terms of this Section 9.6(d) and the provisions in Section
9.6(b) and (c) shall not apply to such designation. No Bank may designate more
than one (1) Designated Lender at any one time. The parties to each such
designation shall execute and deliver to the Administrative Agent for its
acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Administrative Agent will
accept such Designation Agreement and will give prompt notice thereof to the
Borrower, whereupon, (i) the Borrower shall execute and deliver to the
Designating Lender a Designated Lender Note payable to the order of the
Designated Lender, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Lender shall become a party to this
Agreement with a right (subject to the provisions of Section 2.3(b)) to make
Money Market Loans on behalf of its Designating Lender pursuant to Section 2.3
after the Borrower has accepted a Money Market Loan (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required to
make payments with respect to any obligations in this Agreement except to the
extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation and assumption
by the Designated Lender, the Designating Lender shall be and remain obligated
to the Borrower, the Administrative Agent and the Banks for each and


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every of the obligations of the Designating Lender and its related Designated
Lender with respect to this Agreement, including, without limitation, any
indemnification obligations under Section 7.6 hereof and any sums otherwise
payable to the Borrower by the Designated Lender. Each Designating Lender shall
serve as the administrative agent of the Designated Lender and shall on behalf
of, and to the exclusion of, the Designated Lender: (i) receive any and all
payments made for the benefit of the Designated Lender and (ii) give and receive
all communications and notices and take all actions hereunder, including,
without limitation, votes, approvals, waivers, consents and amendments under or
relating to this Agreement and the other Loan Documents. Any such notice,
communication, vote, approval, waiver, consent or amendment shall be signed by
the Designating Lender as administrative agent for the Designated Lender and
shall not be signed by the Designated Lender on its own behalf and shall be
binding upon the Designated Lender to the same extent as if signed by the
Designated Lender on its own behalf. The Borrower, the Administrative Agent and
the Banks may rely thereon without any requirement that the Designated Lender
sign or acknowledge the same. No Designated Lender may assign or transfer all or
any portion of its interest hereunder or under any other Loan Document, other
than assignments to the Designating Lender which originally designated such
Designated Lender or otherwise in accordance with the provisions of Section 9.6
(b) and (c).

         (e)   Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note and the Letter(s) of Credit participated in by
such Bank or, in the case of the Fronting Bank, issued by it, to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.

         (f)   No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3 or 8.4 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

         SECTION 9.7 COLLATERAL. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.

         SECTION 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION.

         (a)   THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND


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THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW).

         (b)   Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of Illinois or of the
United States of America for the Northern District of Illinois, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the hand delivery, or
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address set forth below. The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Administrative Agent to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Borrower in
any other jurisdiction.

         SECTION 9.9 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Administrative Agent and
the Borrower of counterparts hereof signed by each of the parties hereto (or, in
the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic or other written confirmation from such party of execution of a
counterpart hereof by such party).

         SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         SECTION 9.11 SURVIVAL. All indemnities set forth herein shall survive
the execution and delivery of this Agreement


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<PAGE>


and the other Loan Documents and the making and repayment of the Loans
hereunder.

         SECTION 9.12 DOMICILE OF LOANS. Each Bank may transfer and carry its
Loans at, to or for the account of any domestic or foreign branch office,
subsidiary or affiliate of such Bank.

         SECTION 9.13 LIMITATION OF LIABILITY. No claim may be made by the
Borrower or any other Person acting by or through Borrower against the
Administrative Agent or any Bank or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and the Borrower hereby waives, releases and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.

         SECTION 9.14 RECOURSE OBLIGATION. This Agreement and the Obligations
hereunder are fully recourse to the Borrower. Notwithstanding the foregoing, no
recourse under or upon any obligation, covenant, or agreement contained in this
Agreement shall be had against any officer, director, shareholder or employee of
the Borrower or EQR except in the event of fraud or misappropriation of funds on
the part of such officer, director, shareholder or employee.

         SECTION 9.15 CONFIDENTIALITY. The Administrative Agent and each Bank
shall use reasonable efforts to assure that information about Borrower, EQR and
its Subsidiaries and Investments Affiliates, and the Properties thereof and
their operations, affairs and financial condition, not generally disclosed to
the public, which is furnished to Administrative Agent or any Bank pursuant to
the provisions hereof or any other Loan Document is used only for the purposes
of this Agreement and shall not be divulged to any Person other than the
Administrative Agent, the Banks, and their affiliates and respective officers,
directors, employees and agents who are actively and directly participating in
the evaluation, administration or enforcement of the Loan, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
and exercise of any remedies of the Administrative Agent and the Banks hereunder
and under the other Loan Documents, (c) in connection with assignments and
participations and the solicitation of prospective assignees and participants
referred to in Section 9.6 hereof, who have agreed in writing to be bound by a
confidentiality agreement substantially equivalent to the terms of this Section
9.15, and (d) as may otherwise be required or requested by any regulatory
authority having jurisdiction over the Administrative Agent or any Bank or by
any applicable law, rule, regulation or judicial process.


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         SECTION 9.16 BANK'S FAILURE TO FUND.

         (a)   Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of Section 2.4 or Section 2.16(e) hereof, and the Administrative
Agent may, in reliance upon such assumption, make available to Borrower on such
date a corresponding amount. If and to the extent that such Bank shall not have
so made such share available to the Administrative Agent, such Bank and Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, in accordance with the
provisions of Section 2.4(c) or Section 2.16(e) hereof. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement. Nothing contained in this Section or Sections 2.4(c) or 2.16(e)
shall be deemed to reduce the Commitment of any Bank or in any way affect the
rights of Borrower with respect to any defaulting Bank or Administrative Agent.
The failure of any Bank to make available to the Administrative Agent such
Bank's share of any Borrowing in accordance with Sections 2.4(b) or 2.16(e)
hereof shall not relieve any other Bank of its obligations to fund its
Commitment, in accordance with the provisions hereof.

         (b)   If a Bank does not advance to Administrative Agent such Bank's
pro rata share of a Loan in accordance herewith, then neither Administrative
Agent nor the other Banks shall be required or obligated to fund such Bank's pro
rata share of such Loan.

         (c)   As used herein, the following terms shall have the meanings set
forth below:

         (i)   "DEFAULTING BANK" shall mean any Bank which (x) does not advance
to the Administrative Agent such Bank's pro rata share of a Loan in accordance
herewith for a period of five (5) Domestic Business Days after notice of such
failure from Administrative Agent, (y) shall otherwise fail to perform such
Bank's obligations under the Loan Documents for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, or (z)
shall fail to pay the Administrative Agent or any other Bank, as the case may
be, upon demand, such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of the Loan Documents for a period of five (5) Domestic Business Days after
notice of such failure from Administrative Agent, and in all cases, such failure
is not as a result of a good faith dispute as to whether such advance is
properly


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required to be made pursuant to the provisions of this Agreement, or as to
whether such other performance or payment is properly required pursuant to the
provisions of this Agreement.

         (ii)  "JUNIOR CREDITOR" means any Defaulting Bank which has not (x)
fully cured each and every default on its part under the Loan Documents and (y)
unconditionally tendered to the Administrative Agent such Defaulting Bank's pro
rata share of all costs, expenses and disbursements required to be paid or
reimbursed pursuant to the terms of the Loan Documents.

         (iii) "PAYMENT IN FULL" means, as of any date, the receipt by the Banks
who are not Junior Creditors of an amount of cash, in lawful currency of the
United States, sufficient to indefeasibly pay in full all Senior Debt.

         (iv)  "SENIOR DEBT" means (x) collectively, any and all indebtedness,
obligations and liabilities of the Borrower to the Banks who are not Junior
Creditors from time to time, whether fixed or contingent, direct or indirect,
joint or several, due or not due, liquidated or unliquidated, determined or
undetermined, arising by contract, operation of law or otherwise, whether on
open account or evidenced by one or more instruments, and whether for principal,
premium, interest (including, without limitation, interest accruing after the
filing of a petition initiating any proceeding referred to in Section 6.1(f) or
(g)), reimbursement for fees, indemnities, costs, expenses or otherwise, which
arise under, in connection with or in respect of the Loans or the Loan
Documents, and (y) any and all deferrals, renewals, extensions and refundings
of, or amendments, restatements, rearrangements, modifications or supplements
to, any such indebtedness, obligation or liability.

         (v)   "SUBORDINATED DEBT" means (x) any and all indebtedness,
obligations and liabilities of Borrower to one or more Junior Creditors from
time to time, whether fixed or contingent, direct or indirect, joint or several,
due or not due, liquidated or unliquidated, determined or undetermined, arising
by contract, operation of law or otherwise, whether on open account or evidenced
by one or more instruments, and whether for principal, premium, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement
for fees, indemnities, costs, expenses or otherwise, which arise under, in
connection with or in respect of the Loans or the Loan Documents, and (y) any
and all deferrals, renewals, extensions and refundings of, or amendments,
restatements, rearrangements, modifications or supplements to, any such
indebtedness, obligation or liability.

         (d)   Immediately upon a Bank's becoming a Junior Creditor, no Junior
Creditor shall, prior to Payment in Full of all Senior Debt:


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         (i)   accelerate, demand payment of, sue upon, collect, or receive any
payment upon, in any manner, or satisfy or otherwise discharge, any Subordinated
Debt, whether for principal, interest and otherwise;

         (ii)  take or enforce any Liens to secure Subordinated Debt or attach
or levy upon any assets of Borrower, to enforce any Subordinated Debt;

         (iii) enforce or apply any security for any Subordinated Debt; or

         (iv)  incur any debt or liability, or the like, to, or receive any
loan, return of capital, advance, gift or any other property, from, the
Borrower.

         (e)   In the event of:

         (i)   any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;

         (ii)  any liquidation, dissolution or other winding-up of the Borrower,
voluntary or involuntary, whether or not involving insolvency, reorganization or
bankruptcy proceedings;

         (iii) any assignment by the Borrower for the benefit of creditors;

         (iv)  any sale or other transfer of all or substantially all assets of
the Borrower; or

         (v)   any other marshalling of the assets of the Borrower;

each of the Banks shall first have received Payment in Full of all Senior Debt
before any payment or distribution, whether in cash, securities or other
property, shall be made in respect of or upon any Subordinated Debt. Any payment
or distribution, whether in cash, securities or other property that would
otherwise be payable or deliverable in respect of Subordinated Debt to any
Junior Creditor but for this Agreement shall be paid or delivered directly to
the Administrative Agent for distribution to the Banks in accordance with this
Agreement until Payment in Full of all Senior Debt. If any Junior Creditor
receives any such payment or distribution, it shall promptly pay over or deliver
the same to the Administrative Agent for application in accordance with the
preceding sentence.

         (f)   Each Junior Creditor shall file in any bankruptcy or other
proceeding of Borrower in which the filing of claims is required by law, all
claims relating to Subordinated Debt that such Junior Creditor may have against
Borrower and assign to the Banks who are not Junior Creditors all rights of such
Junior


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<PAGE>


Creditor thereunder. If such Junior Creditor does not file any such claim
prior to forty-five (45) days before the expiration of the time to file such
claim, Administrative Agent, as attorney-in-fact for such Junior Creditor, is
hereby irrevocably authorized to do so in the name of such Junior Creditor
or, in Administrative Agent's sole discretion, to assign the claim to a
nominee and to cause proof of claim to be filed in the name of such nominee.
The foregoing power of attorney is coupled with an interest and cannot be
revoked. The Administrative Agent shall, to the exclusion of each Junior
Creditor, have the sole right, subject to Section 9.5 hereof, to accept or
reject any plan proposed in any such proceeding and to take any other action
that a party filing a claim is entitled to take. In all such cases, whether
in administration, bankruptcy or otherwise, the Person or Persons authorized
to pay such claim shall pay to Administrative Agent the amount payable on
such claim and, to the full extent necessary for that purpose, each Junior
Creditor hereby transfers and assigns to the Administrative Agent all of the
Junior Creditor's rights to any such payments or distributions to which
Junior Creditor would otherwise be entitled.

         (g)   (i) If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
any Junior Creditor in contravention of any of the terms hereof, such payment or
distribution or security shall be received in trust for the benefit of, and
shall promptly be paid over or delivered and transferred to, Administrative
Agent for application to the payment of all Senior Debt, to the extent necessary
to achieve Payment in Full. In the event of the failure of any Junior Creditor
to endorse or assign any such payment, distribution or security, Administrative
Agent is hereby irrevocably authorized to endorse or assign the same as
attorney-in-fact for such Junior Creditor.

         (ii)  Each Junior Creditor shall take such action (including, without
limitation, the execution and filing of a financing statement with respect to
this Agreement and the execution, verification, delivery and filing of proofs of
claim, consents, assignments or other instructions that Administrative Agent may
require from time to time in order to prove or realize upon any rights or claims
pertaining to Subordinated Debt or to effectuate the full benefit of the
subordination contained herein) as may, in Administrative Agent's sole and
absolute discretion, be necessary or desirable to assure the effectiveness of
the subordination effected by this Agreement.

         (h)   (i) Each Bank that becomes a Junior Creditor understands and
acknowledges by its execution hereof that each other Bank is entering into this
Agreement and the Loan Documents in reliance upon the absolute subordination in
right of payment and in time of payment of Subordinated Debt to Senior Debt as
set forth herein.


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         (ii)  Only upon the Payment in Full of all Senior Debt shall any Junior
Creditor be subrogated to any remaining rights of the Banks which are not
Defaulting Banks to receive payments or distributions of assets of the Borrower
made on or applicable to any Senior Debt.

         (iii) Each Junior Creditor agrees that it will deliver all instruments
or other writings evidencing any Subordinated Debt held by it to Administrative
Agent, promptly after request therefor by the Administrative Agent.

         (iv)  No Junior Creditor may at any time sell, assign or otherwise
transfer any Subordinated Debt, or any portion thereof, including, without
limitation, the granting of any Lien thereon, unless and until satisfaction of
the requirements of Section 9.6 above and the proposed transferee shall have
assumed in writing the obligation of the Junior Creditor to the Banks under this
Agreement, in a form acceptable to the Administrative Agent.

         (v)   If any of the Senior Debt, should be invalidated, avoided or set
aside, the subordination provided for herein nevertheless shall continue in full
force and effect and, as between the Banks which are not Defaulting Banks and
all Junior Creditors, shall be and be deemed to remain in full force and effect.

         (vi)  Each Junior Creditor hereby irrevocably waives, in respect of
Subordinated Debt, all rights (x) under Sections 361 through 365, 502(e) and 509
of the Bankruptcy Code (or any similar sections hereafter in effect under any
other Federal or state laws or legal or equitable principles relating to
bankruptcy, insolvency, reorganizations, liquidations or otherwise for the
relief of debtors or protection of creditors), and (y) to seek or obtain
conversion to a different type of proceeding or to seek or obtain dismissal of a
proceeding, in each case in relation to a bankruptcy, reorganization, insolvency
or other proceeding under similar laws with respect to the Borrower. Without
limiting the generality of the foregoing, each Junior Creditor hereby
specifically waives (A) the right to seek to give credit (secured or otherwise)
to the Borrower in any way under Section 364 of the Bankruptcy Code unless the
same is subordinated in all respects to Senior Debt in a manner acceptable to
Administrative Agent in its sole and absolute discretion and (B) the right to
receive any collateral security (including any "super priority" or equal or
"priming" or replacement Lien) for any Subordinated Debt unless the Banks which
are not Defaulting Banks have received a senior position acceptable to the Banks
in their sole and absolute discretion to secure all Senior Debt (in the same
collateral to the extent collateral is involved).

         (i)   (i) In addition to and not in limitation of the subordination
effected by this Section 9.16, the


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<PAGE>


Administrative Agent and each of the Banks which are not Defaulting Banks may in
their respective sole and absolute discretion, also exercise any and all other
rights and remedies available at law or in equity in respect of a Defaulting
Bank; and

         (ii)  The Administrative Agent shall give each of the Banks notice of
the occurrence of a default under this Section 9.16 by a Defaulting Bank and if
the Administrative Agent and/or one or more of the other Banks shall, at their
option, fund any amounts required to be paid or advanced by a Defaulting Bank,
the other Banks who have elected not to fund any portion of such amounts shall
not be liable for any reimbursements to the Administrative Agent and/or to such
other funding Banks.

         (j)   Notwithstanding anything to the contrary contained or implied
herein, a Defaulting Bank shall not be entitled to vote on any matter as to
which a vote by the Banks is required hereunder, including, without limitation,
any actions or consents on the part of the Administrative Agent as to which the
approval or consent of all the Banks or the Required Banks is required under
Article VIII, Section 9.5 or elsewhere, so long as such Bank is a Defaulting
Bank; provided, however, that in the case of any vote requiring the unanimous
consent of the Banks, if all the Banks other than the Defaulting Bank shall have
voted in accordance with each other, then the Defaulting Bank shall be deemed to
have voted in accordance with such Banks.

         (k)   Each of the Administrative Agent and any one or more of the Banks
which are not Defaulting Banks may, at their respective option, (i) advance to
the Borrower such Bank's pro rata share of the Loans not advanced by a
Defaulting Bank in accordance with the Loan Documents, or (ii) pay to the
Administrative Agent such Bank's pro rata share of any costs, expenses or
disbursements incurred or made by the Administrative Agent pursuant to the terms
of this Agreement not theretofore paid by a Defaulting Bank. Immediately upon
the making of any such advance by the Administrative Agent or any one of the
Banks, such Bank's pro rata share and the pro rata share of the Defaulting Bank
shall be recalculated to reflect such advance. All payments, repayments and
other disbursements of funds by the Administrative Agent to Banks shall
thereupon and, at all times thereafter be made in accordance with such Bank's
recalculated pro rata share unless and until a Defaulting Bank shall fully cure
all defaults on the part of such Defaulting Bank under the Loan Documents or
otherwise existing in respect of the Loans or this Agreement, at which time the
pro rata share of the Bank(s) which advanced sums on behalf of the Defaulting
Bank and of the Defaulting Bank shall be restored to their original percentages.

         SECTION 9.17 NO BANKRUPTCY PROCEEDINGS. Each of the Borrower, the Banks
and the Administrative Agent hereby agrees that it will not institute against
any Designated Lender or join any other Person in instituting against any
Designated Lender any


                                      103

<PAGE>


bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding
under any federal or state bankruptcy or similar law, until the later to occur
of (i) one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Designated Lender and (ii) the Maturity
Date.


                                      104

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.


                                       ERP OPERATING LIMITED PARTNERSHIP

                                       By: Equity Residential
                                            Properties Trust

                                       By:  /s/ David J. Neithercut
                                          --------------------------
                                          Name:  David J. Neithercut
                                          Title: Executive Vice-
                                                 President, Chief
                                                 Financial Officer

                                       Facsimile number:
                                       Address:  Two North Riverside Plaza
                                                 Suite 400
                                                 Chicago, Illinois 60606
                                                 Attn: Chief Financial
                                                        Officer


                                      105

<PAGE>


COMMITMENTS

$80,000,000                            BANK OF AMERICA, NATIONAL
                                        ASSOCIATION, as Administrative
                                         Agent, as Swingline Lender and as
                                         Bank

                                       By:  /s/ Megan McBride
                                            ----------------------
                                            Name:   Megan McBride
                                            Title: Vice President

                                       Bank of America National
                                        Association
                                       Structured Debt Group
                                       Mail Code IL1-231-12-16
                                       231 South LaSalle Street
                                       Chicago, Illinois 60697
                                       Attention: Megan McBride
                                       Telecopy:  (312) 974-4970


                                      106

<PAGE>


$80,000,000                            THE CHASE MANHATTAN BANK, as
                                       Syndication Agent and as a Bank

                                       By: /s/ Charles E. Hoagland
                                           ------------------------
                                           Name:  Charles E. Hoagland
                                           Title: Vice President


                                      107

<PAGE>


$70,000,000                            MORGAN GUARANTY TRUST COMPANY
                                        OF NEW YORK, as Documentation Agent and
                                        as a Bank

                                       By: /s/ Robert Bottamedi
                                           -----------------------
                                           Name:  Robert Bottamedi
                                           Title: Vice President

                                       c/o J.P. Morgan Services Inc.
                                       500 Stanton Christiana Road
                                       Newark, DE 19713-2107
                                       Attention: William Lamb
                                       Telecopy: (302) 634-4222

                                       DOMESTIC AND EURO-CURRENCY
                                        LENDING OFFICE:

                                       c/o J.P. Morgan Services Inc.
                                       500 Stanton Christiana Road
                                       Newark, DE 19713-2107-
                                       Attention: Kevin M. McCann
                                       Telecopy: (302) 634-1852/1872


                                      108

<PAGE>


$55,000,000                            THE FIRST NATIONAL BANK OF CHICAGO, as a
                                        Co-Arranger and as a Bank

                                       By: /s/ Lynn Braun
                                           ---------------------
                                           Name:  Lynn Braun
                                           Title: Vice President


                                      109

<PAGE>


$55,000,000                            FIRST UNION NATIONAL BANK, as a
                                        Co-Arranger and as a Bank

                                       By: /s/ Rex E. Rudy
                                           ---------------------
                                           Name:  Rex E. Rudy
                                           Title: Vice President


                                      110

<PAGE>


$45,000,000                            BAYERISCHE LANDESBANK, CAYMAN ISLANDS
                                        BRANCH, as Managing Agent and as a Bank

                                       By: /s/ John A. Wain
                                           ---------------------------
                                           Name:  John A. Wain
                                           Title: First Vice President

                                       By: /s/ Alexander Kohnert
                                           ---------------------------
                                           Name:  Alexander Kohnert
                                           Title: First Vice President


                                      111

<PAGE>


$45,000,000                            COMMERZBANK AKTIENGESELLSCHAFT, as
                                        Managing Agent and as a Bank

                                       By: /s/ Douglas P. Traynor
                                           -------------------------
                                           Name:  Douglas P. Traynor
                                           Title: Vice President

                                       By: /s/ David Buettner
                                           -------------------------
                                           Name:  David Buettner
                                           Title: Assistant Treasurer


                                      112

<PAGE>

$45,000,000                            PNC BANK, NATIONAL ASSOCIATION, as
                                        Managing Agent and as a Bank

                                       By: /s/ Michael E. Smith
                                           -------------------------
                                           Name:  Michael E. Smith
                                           Title: Vice President


                                      113

<PAGE>


$35,000,000                            COMERICA BANK, as Co-Agent and as a Bank

                                       By: /s/ David J. Campbell
                                           --------------------------
                                           Name:  David J. Campbell
                                           Title: Vice President


                                      114

<PAGE>


$35,000,000                            THE INDUSTRIAL BANK OF JAPAN,
                                        LIMITED, as Co-Agent and as a Bank


                                       By: /s/ Takeshi Kubo
                                           -------------------------
                                           Name:  Takeshi Kubo
                                           Title: Vice President



                                      115

<PAGE>


$35,000,000                            KBC BANK N.V., as Co-Agent and
                                        as a Bank

                                       By: /s/ Declan Meagher/Michael V. Curran
                                           ------------------------------------
                                           Name:  Declan Meagher/Michael V.
                                                  Curran
                                           Title: First Vice President/Vice
                                                  President


                                      116

<PAGE>

$35,000,000                            U.S. BANK NATIONAL ASSOCIATION, as
                                        Co-Agent and as a Bank

                                       By: /s/ John M. Suhs
                                           ----------------------
                                           Name:  John M. Suhs
                                           Title: Vice President


                                      117

<PAGE>


$20,000,000                            SOUTHTRUST BANK, NATIONAL
                                        ASSOCIATION, as a Bank

                                       By: /s/ Lynn W. Feuerlein
                                           -----------------------
                                           Name:  Lynn W. Feuerlein
                                           Title: Group Vice President


                                      118

<PAGE>


$20,000,000                         ING (U.S.) CAPITAL LLC, as a Bank


                                       By: /s/ Thomas R. Hobbis
                                           -----------------------
                                           Name:  Thomas R. Hobbis
                                           Title: Vice President


                                      119

<PAGE>


$20,000,000                            LASALLE BANK, N.A., as a Bank


                                       By: /s/ Peter Margolin
                                           ------------------------------
                                           Name:  Peter Margolin
                                           Title: Assistant Vice President


                                      120

<PAGE>


$15,000,000                            CRESTAR BANK, as a Bank

                                       By: /s/ Nancy Richards
                                           ---------------------
                                           Name:  Nancy Richards
                                           Title: Vice President



                                      121

<PAGE>


$10,000,000                            CHANG HWA COMMERCIAL BANK, LTD.,
                                        NEW YORK BRANCH, as a Bank

                                       By: /s/ Wan-Tu Yeh
                                           -----------------------------
                                           Name:  Wan-Tu Yeh
                                           Title: Vice President & General
                                                   Manager


                                      122

<PAGE>


Total Commitments
-----------------

$700,000,000


                                      123

<PAGE>


                                  SCHEDULE 4.6

                          Borrower and EQR ERISA Plans

The employees of EQR and the Borrower may currently participate in a 401(k)
Plan.

Other benefits include:      Employee share purchase plan, stock option plan,
                             health care plan, dental care, life insurance and
                             accidental death and dismemberment plan,
                             travel/accident insurance, short-term disability,
                             long-term disability, sick time, vacation time,
                             personal days, holidays and direct paycheck
                             deposit.


                                      124

<PAGE>


                               SCHEDULE 5.13(C)(1)

                                      None


                                      125

<PAGE>


                               SCHEDULE 5.13(C)(2)

                                      None


                                      126

<PAGE>


                                                                     EXHIBIT A-1

                                      NOTE

                                                               Chicago, Illinois

                                                               ________ __, 1999

         For value received, ERP Operating Limited Partnership, an Illinois
limited partnership (the "BORROWER"), promises to pay to the order of
____________ (the "PAYEE"), for the account of its Applicable Lending Office,
the unpaid principal amount of each Loan made by the Payee to the Borrower
pursuant to the Credit Agreement referred to below on the Maturity Date (as such
term is defined in the Credit Agreement). The Borrower promises to pay interest
on the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Bank of America, National
Association,______________________, Chicago, Illinois _______________

         All Loans made by the Payee, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Payee and, if the Payee so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with respect
to each such Loan then outstanding may be endorsed by the Payee on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; PROVIDED that the failure of the Payee to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Credit Agreement.

         This note is one of the Designated Lender Notes referred to in, and is
delivered pursuant to and subject to all of the terms of, the Revolving Credit
Agreement, dated as of _____________, 1999 among the Borrower, the banks listed
on the signature pages thereof, Bank of America, National Association, as
Administrative Agent, The Chase Manhattan Bank, as Syndication Agent and Morgan
Guaranty Trust Company of New York, as Documentation Agent (as the same may be
amended from time to time, the "CREDIT AGREEMENT"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is


                                      A-1 1

<PAGE>


made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.

                                       ERP OPERATING LIMITED PARTNERSHIP

                                       By: Equity Residential Properties
                                            Trust

                                       By:
                                          ------------------------------
                                          Name:
                                          Title:


                                     A-1 2

<PAGE>


                                  Note (cont'd)

                         LOANS AND PAYMENTS OF PRINCIPAL

            ---------------------------------------------------------

<TABLE>
<CAPTION>

                                   Amount of
            Amount of    Type of   Principal    Maturity    Notation
Date          Loan         Loan     Repaid        Date       Made By
<S>         <C>          <C>       <C>          <C>         <C>

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

</TABLE>


                                      A-1 3

<PAGE>


                                                                     EXHIBIT A-2

                                      NOTE

                                                               Chicago, Illinois

                                                               ________ __, 1999

         For value received, ERP Operating Limited Partnership, an Illinois
partnership (the "BORROWER"), promises to pay to the order of _______________
(the "BANK"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below on the Maturity Date (as such term is
defined in the Credit Agreement). The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of Bank of America, National
Association,______________ , Chicago, Illinois _________________.

         All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; PROVIDED that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.

         This note is one of the Notes referred to in, and is delivered pursuant
to and subject to all of the terms of, the Revolving Credit Agreement dated as
of _______________, 1999 among the Borrower, the banks listed on the signature
pages thereof, Bank of America, National Association, as Administrative Agent,
The Chase Manhattan Bank, as Syndication Agent and Morgan Guaranty Trust Company
of New York, as Documentation Agent (as the same may be amended from time to
time, the "CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit


                                     A-2 1

<PAGE>


Agreement for provisions for the prepayment hereof and the acceleration of the
maturity hereof.


                                       ERP OPERATING LIMITED PARTNERSHIP

                                       By: Equity Residential Properties
                                            Trust

                                       By:
                                          ------------------------------
                                          Name:
                                          Title:


                                     A-2 2

<PAGE>


                                  Note (cont'd)

                         LOANS AND PAYMENTS OF PRINCIPAL

            ---------------------------------------------------------

<TABLE>
<CAPTION>

                                   Amount of
            Amount of    Type of   Principal    Maturity    Notation
Date          Loan         Loan     Repaid        Date       Made By
<S>         <C>          <C>       <C>          <C>         <C>

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

---------------------------------------------------------------------

</TABLE>


                                      A-2 3

<PAGE>


                                                                       EXHIBIT B

                       FORM OF MONEY MARKET QUOTE REQUEST

                                                                          [Date]

To:           Bank of America, National Association (the "Administrative Agent")

From:         ERP Operating Limited Partnership

Re:           Revolving Credit Agreement (the "Credit Agreement") dated as of
              ____________________________ , 1999 among ERP Operating Limited
              Partnership, the Banks parties thereto, the Administrative Agent,
              The Chase Manhattan Bank, as Syndication Agent, and Morgan
              Guaranty Trust Company of New York, as Documentation Agent

              We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):

Date of Borrowing:  __________________

<TABLE>
<CAPTION>

Principal Amount*                   Interest Period**
-----------------                   -----------------
<S>                                 <C>
$

</TABLE>

              Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]

              Terms used herein have the meanings assigned to them in the Credit
Agreement.


--------
*  Amount must be $3,000,000 or a larger multiple of $100,000.

** Not less than 14 days (LIBOR Auction) or not less than 14 days (Absolute Rate
Auction), subject to the provisions of the definition of Interest Period.


                                      B-1


<PAGE>


              Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] (Chicago time) on [date].


                                       ERP OPERATING LIMITED PARTNERSHIP

                                       By: Equity Residential Properties
                                           Trust

                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                      B-2

<PAGE>


                                                                       EXHIBIT C

                              INTENTIONALLY OMITTED


                                      C-1

<PAGE>


                                                                       EXHIBIT D

                           FORM OF MONEY MARKET QUOTE

To:           Bank of America, National Association, as Agent

Re:           Money Market Quote to ERP Operating Limited Partnership (the
              "Borrower")

              In response to your invitation on behalf of the Borrower dated
_________________, 19__ , we hereby make the following Money Market Quote on
the following terms:

1.            Quoting Bank:
                           ----------------------------------

2.            Person to contact at Quoting Bank:

               ----------------------------------------------

3.            Date of Borrowing:                             *
                                ------------------------------

4.            We hereby offer to make Money Market Loan(s) in the following
              principal amounts, for the following Interest Periods and at the
              following rates:

<TABLE>
<CAPTION>

Principal        Interest       Money Market
Amount**         Period***      [Margin****]        [Absolute Rate*****]
--------         ---------      ------------        --------------------
<S>              <C>            <C>                 <C>
$

$

</TABLE>


              [Provided, that the aggregate principal amount of Money Market
              Loans for which the above offers may be accepted shall not
              exceed $____________________ .]**

              We understand and agree that the offer(s) set forth above, subject
              to the satisfaction of the applicable conditions set forth in the
              Revolving Credit Agreement dated as of ____________________, 1999
              among ERP Operating Limited Partnership, the Banks parties
              thereto, The Chase Manhattan Bank, as Syndication Agent, and
              Morgan Guaranty Trust Company of New York, as Documentation Agent,
              and yourselves, as Administrative Agent, irrevocably obligates us
              to make the Money Market Loan(s) for which any offer(s) are
              accepted, in whole or in part.


                                      D-1

<PAGE>


                                       Very truly yours,

                                       [NAME OF BANK]

Dated:                                 By:
      -------------------                 -------------------
                                          Authorized Officer

----------
* As specified in the related Invitation.

** Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Bids must be made for $3,000,000
or a larger multiple of $100,000.

*** Not less than 14 days, as specified in the related Invitation. No more
than five bids are permitted for each Interest Period.

**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest 1/10,000
of 1%) and specify whether "PLUS" or "MINUS".

***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).


                                      D-2

<PAGE>


                                                                       EXHIBIT E

                               TRANSFER SUPPLEMENT

              TRANSFER SUPPLEMENT (this "TRANSFER SUPPLEMENT") dated as of
____________ , 199___ between _________________________________(the "ASSIGNOR")
and ___________________ having an address at _____________________________
(the "PURCHASING BANK").

                              W I T N E S S E T H:

              WHEREAS, the Assignor has made loans to ERP Operating Limited
Partnership, an Illinois limited partnership (the "BORROWER"), pursuant to
the Revolving Credit Agreement, dated as of _________________________, 1999
(as the same may be amended, supplemented or otherwise modified through the
date hereof, the "CREDIT AGREEMENT"), among the Borrower, the banks party
thereto, Bank of America, National Association, as Administrative Agent, The
Chase Manhattan Bank, as Syndication Agent, and Morgan Guaranty Trust Company
of New York, as Documentation Agent. All capitalized terms used and not
otherwise defined herein shall have the respective meanings set forth in the
Credit Agreement;

              WHEREAS, the Purchasing Bank desires to purchase and assume from
the Assignor, and the Assignor desires to sell and assign to the Purchasing
Bank, certain rights, title, interest and obligations under the Credit
Agreement;

              NOW, THEREFORE, IT IS AGREED:

              1. In consideration of the amount set forth in the receipt (the
"RECEIPT") given by Assignor to Purchasing Bank of even date herewith, and
transferred by wire to Assignor, the Assignor hereby assigns and sells,
without recourse, representation or warranty except as specifically set forth
herein, to the Purchasing Bank, and the Purchasing Bank hereby purchases and
assumes from the Assignor, a __% interest (the "PURCHASED INTEREST") of the
Loans constituting a portion of the Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below) including,
without limitation, such percentage interest of the Assignor in any Loans
owing to the Assignor, any Note held by the Assignor, any Loan Commitment of
the Assignor and any other interest of the Assignor under any of the Loan
Documents, including any participation in any Letter of Credit.

              2. The Assignor (i) represents and warrants that as of the date
hereof the aggregate outstanding principal amount of its share of the Loans
owing to it (without giving effect to assignments thereof which have not yet
become effective) is

                                      E-1


<PAGE>


$_____________________ ; (ii) represents and warrants that it is the legal and
beneficial owner of the interests being assigned by it hereunder and that such
interests are free and clear of any adverse claim; (iii) represents and warrants
that it has not received any notice of Default or Event of Default from the
Borrower; (iv) represents and warrants that it has full power and authority to
execute and deliver, and perform under, this Transfer Supplement, and all
necessary corporate and/or partnership action has been taken to authorize, and
all approvals and consents have been obtained for, the execution, delivery and
performance thereof; (v) represents and warrants that this Transfer Supplement
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms; (vi) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations (or
the truthfulness or accuracy thereof) made in or in connection with the Credit
Agreement, or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, or
the other Loan Documents or any other instrument or document furnished pursuant
thereto; and (vii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto. Except as specifically set forth in this Paragraph
2, this assignment shall be without recourse to Assignor.

              3. The Purchasing Bank (i) confirms that it has received a copy of
the Credit Agreement, and the other Loan Documents, together with such financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Transfer
Supplement and to become a party to the Credit Agreement, and has not relied on
any statements made by Assignor or Skadden, Arps, Slate, Meagher & Flom LLP;
(ii) agrees that it will, independently and without reliance upon any of the
Administrative Agent, the Assignor or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower
and will make its own credit analysis, appraisals and decisions in taking or not
taking action under the Credit Agreement, and the other Loan Documents; (iii)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement, and the other
Loan Documents as are delegated to the Agent by the terms thereof, together with
such powers as are incidental thereto; (iv) agrees that it will be bound by and
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; (v)
specifies as its address for notices and lending office, the office set forth
beneath its name on the signature page hereof; (vi) confirms that


                                      E-2

<PAGE>


it has full power and authority to execute and deliver, and perform under, this
Transfer Supplement, and that all necessary corporate and/or partnership action
has been taken to authorize, and all approvals and consents have been obtained
for, the execution, delivery and performance thereof; (vii) certifies that this
Transfer Supplement constitutes its legal, valid and binding obligation
enforceable in accordance with its terms; and (viii) confirms that the interest
being assigned hereunder is being acquired by it for its own account, for
investment purposes only and not with a view to the public distribution thereof
and without any present intention of its resale in either case that would be in
violation of applicable securities laws.

              4. This Transfer Supplement shall be effective on the date (the
"EFFECTIVE DATE") on which all of the following have occurred (i) it shall have
been executed and delivered by the parties hereto, (ii) copies hereof shall have
been delivered to the Administrative Agent and the Borrower, (iii) Purchasing
Bank shall have received an original Note and (iv) the Purchasing Bank shall
have paid to the Assignor the agreed purchase price as set forth in the Receipt.

              5. On and after the Effective Date, (i) the Purchasing Bank shall
be a party to the Credit Agreement and, to the extent provided in this Transfer
Supplement, have the rights and obligations of a Bank thereunder and be entitled
to the benefits and rights of the Banks thereunder and (ii) the Assignor shall,
to the extent provided in this Transfer Supplement as to the Purchased Interest,
relinquish its rights and be released from its obligations under the Credit
Agreement.

              6. From and after the Effective Date, the Assignor shall cause the
Administrative Agent to make all payments under the Credit Agreement, and the
Notes in respect of the Purchased Interest assigned hereby (including, without
limitation, all payments of principal, fees and interest with respect thereto
and any amounts accrued but not paid prior to such date) to the Purchasing Bank.

              7. This Transfer Supplement may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.

              8. Assignor hereby represents and warrants to Purchasing Bank that
it has made all payments demanded to date by Bank of America, National
Association ("BOFA") as Administrative Agent in connection with the Assignor's
pro rata share of the obligation to reimburse the Agent for its expenses and
made all Loans required. In the event BofA, as Administrative Agent, shall
demand reimbursement for fees and expenses from Purchasing Bank for any period
prior to the Effective Date, Assignor hereby agrees to promptly pay BofA, as
Administrative Agent, such sums directly, subject, however, to Paragraph 12
hereof.


                                      E-3

<PAGE>


              9. Assignor will, at the cost of Assignor, and without expense to
Purchasing Bank, do, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, assignments, notices of assignments, transfers and
assurances as Purchasing Bank shall, from time to time, reasonably require, for
the better assuring, conveying, assigning, transferring and confirming unto
Purchasing Bank the property and rights hereby given, granted, bargained, sold,
aliened, enfeoffed, conveyed, confirmed, assigned and/or intended now or
hereafter so to be, on which Assignor may be or may hereafter become bound to
convey or assign to Purchasing Bank, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing,
registering or recording this Agreement.

              10. The parties agree that no broker or finder was instrumental in
bringing about this transaction. Each party shall indemnify, defend the other
and hold the other free and harmless from and against any damages, costs or
expenses (including, but not limited to, reasonable attorneys' fees and
disbursements) suffered by such party arising from claims by any broker or
finder that such broker or finder has dealt with said party in connection with
this transaction.

              11. Subject to the provisions of Paragraph 12 hereof, if, with
respect to the Purchased Interest only, Assignor shall on or after the Effective
Date receive (a) any cash, note, securities, property, obligations or other
consideration in respect of or relating to the Loan or the Loan Documents or
issued in substitution or replacement of the Loan or the Loan Documents, (b) any
cash or non-cash consideration in any form whatsoever distributed, paid or
issued in any bankruptcy proceeding in connection with the Loan or the Loan
Documents or (c) any other distribution (whether by means of repayment,
redemption, realization of security or otherwise), Assignor shall accept the
same as Purchasing Bank's agent and hold the same in trust on behalf of and for
the benefit of Purchasing Bank, and shall deliver the same forthwith to
Purchasing Bank in the same form received, with the endorsement (without
recourse) of Assignor when necessary or appropriate. If the Assignor shall fail
to deliver any funds received by it within the same Domestic Business Day of
receipt, unless such funds are received by Assignor after 4:00 p.m., Eastern
Standard Time, then the following Domestic Business Day after receipt, said
funds shall accrue interest at the federal funds interest rate and in addition
to promptly remitting said amount, Assignor shall remit such interest from the
date received to the date such amount is remitted to the Purchasing Bank.

              12. Assignor and Purchasing Bank each hereby agree to indemnify
and hold harmless the other, each of its directors and each of its officers in
connection with any claim or cause of action based on any matter or claim based
on the acts of either while acting as a Bank under the Credit Agreement.
Promptly after receipt by the indemnified party under this Section of


                                      E-4

<PAGE>


notice of the commencement of any action, such indemnified party shall notify
the indemnifying party in writing of the commencement thereof. If any such
action is brought against any indemnified party and that party notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof. In no event
shall the indemnified party settle or consent to a settlement of such cause of
action or claim without the consent of the indemnifying party.

              13. THIS TRANSFER SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS.

Wire Transfer Instructions:
                                       ----------------------------------
                                       By:
                                          -------------------------------
                                          Name:
                                          Title:

                                       ----------------------------------
                                       By:
                                          -------------------------------
                                          Name:
                                          Title:


                                      E-5

<PAGE>


Receipt and Consent acknowledged this __________ day of ____________, 199__:

BANK OF AMERICA, NATIONAL ASSOCIATION,
 as Administrative Agent

By:
   -----------------------------------
   Name:
   Title:

[IF REQUIRED ADD THE FOLLOWING:]

ERP OPERATING LIMITED PARTNERSHIP

By: Equity Residential Properties Trust

By:
   ------------------------------------
Name:
Title:


                                      E-6

<PAGE>


                                                                       EXHIBIT G

                          FORM OF DESIGNATION AGREEMENT

                           Dated _____________, 199___

         Reference is made to that certain Revolving Credit Agreement, dated
as of ______________________, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among ERP OPERATING
LIMITED PARTNERSHIP, the banks parties thereto, and BANK OF AMERICA, NATIONAL
ASSOCIATION (the "ADMINISTRATIVE AGENT"), as Administrative Agent. Terms
defined in the Credit Agreement are used herein with the same meaning.

         [NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the
"Designee"), and the Administrative Agent agree as follows:

              1. The Designor hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Money Market Loans
pursuant to Article III of the Credit Agreement. Any assignment by Designor to
Designee of its rights to make a Money Market Loan pursuant to such Article III
shall be effective at the time of the funding of such Money Market Loan and not
before such time.

              2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.

              3. The Designee (a) confirms that it has received a copy of each
Loan Document, together with copies of the financial statements referred to in
Articles IV and V of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon the Administrative Agent, the Designor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under any Loan Document; (c) confirms that it is a Designated
Lender; (d) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to


                                      G-1

<PAGE>


the Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees to be bound by
each and every provision of each Loan Document and further agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of any Loan Document are required to be performed by it as a Bank.

              4. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Credit Agreement, to
deliver and receive all communications and notices under the Credit Agreement
and other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and make approvals, waivers, consents of amendments to or under the
Credit Agreement or other Loan Documents. Any document executed by the Designor
on the Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee. The Borrower, the Administrative
Agent and each of the Banks may rely on and are beneficiaries of the preceding
provisions.

              5. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on the
signature page thereto.

              6. The Administrative Agent hereby agrees that it will not
institute against any Designated Lender or join any other Person in instituting
against any Designated Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any federal or state bankruptcy or
similar law, until the later to occur of (i) one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Lender and (ii) the Maturity Date.

              7. The Designor unconditionally agrees to pay or reimburse the
Designee and save the Designee harmless against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed or asserted
by any of the parties to the Loan Documents against the Designee, in its
capacity as such, in any way relating to or arising out of this Agreement or any
other Loan Documents or any action taken or omitted by the Designee hereunder or
thereunder, PROVIDED that the Designor shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements if the same results from the Designee's
gross negligence or willful misconduct.


                                      G-2

<PAGE>


              8. Upon such acceptance and recording by the Administrative Agent,
as of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right (subject to the provisions of Section 2.3(b)) to make Money Market
Loans as a Bank pursuant to Section 2.3 of the Credit Agreement and the rights
and obligations of a Bank related thereto; PROVIDED, HOWEVER, that the Designee
shall not be required to make payments with respect to such obligations except
to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Designor, as administrative agent
for the Designee, shall be and remain obligated to the Borrower, the Co-Agents
and the Banks for each and every of the obligations of the Designee and its
Designor with respect to the Credit Agreement, including, without limitation,
any indemnification obligations under Section 7.6 of the Credit Agreement and
any sums otherwise payable to the Borrower by the Designee.

              9. This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois.

              10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.


                                      G-3

<PAGE>


              IN WITNESS WHEREOF, the Designor and the Designee, intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.

Effective Date:                        ________________________,199__

                                       [NAME OF DESIGNOR], as
                                       Designor

                                       By:
                                          ----------------------------
                                          Title:
                                                ----------------------

                                       [NAME OF DESIGNOR], as
                                       Designor

                                       By:
                                          ----------------------------
                                          Title:
                                                ----------------------

                                       Applicable Lending Office (and address
                                       for notices):

                                       [ADDRESS]

Accepted this _____ day
of ___________________, 19__

BANK OF AMERICA, NATIONAL ASSOCIATION,
as Administrative Agent

By:
   ---------------------------
Title:
      ------------------------


                                      G-4


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                Page
                                                                                ----
<S>                                                                            <C>
ARTICLE I.........................................................................1

SECTION 1.1  Definitions..........................................................1
SECTION 1.2  Accounting Terms and DeterminationsTerms and Determinations.........26
SECTION 1.3  Types of Borrowingsof Borrowings....................................27

ARTICLE II.......................................................................27
SECTION 2.1  Commitments to Lend.................................................27
SECTION 2.2  Notice of Borrowing.................................................27
SECTION 2.3  Money Market Borrowings.............................................29
SECTION 2.4  Notice to Banks; Funding of Loans...................................34
SECTION 2.5  Notes...............................................................35
SECTION 2.6  Method of Electing Interest Rates...................................36
SECTION 2.7  Interest Rates......................................................38
SECTION 2.8  Fees................................................................40
SECTION 2.9  Maturity Date.......................................................41
SECTION 2.10 Mandatory Prepayments...............................................41
SECTION 2.11  Optional Prepayments...............................................42
SECTION 2.12  General Provisions as to Payments..................................44
SECTION 2.13  Funding Losses.....................................................45
SECTION 2.14  Computation of Interest and Fees...................................45
SECTION 2.15  Use of Proceedsof Proceeds.........................................46
SECTION 1.19  Letters of Credit..................................................46
SECTION 2.17  Letter of Credit Usage Absolute....................................49
SECTION 2.18  Swingline Loan Subfacility.........................................50

ARTICLE III......................................................................53
SECTION 3.1  Closing.............................................................53
SECTION 3.2  Borrowings..........................................................54

ARTICLE IV.......................................................................56
SECTION 4.1  Existence and Power.................................................56
SECTION 4.2  Power and Authority.................................................56
SECTION 4.3  No Violation........................................................57
SECTION 4.4  Financial Information...............................................57
SECTION 4.5  Litigation..........................................................58
SECTION 4.6  Compliance with ERISA...............................................58
SECTION 4.7  Environmental Matters...............................................58
SECTION 4.8  Taxes...............................................................58
SECTION 4.9  Full Disclosure.....................................................59
SECTION 4.10  Solvency...........................................................59
SECTION 4.11  Use of Proceeds; Margin Regulations................................59
SECTION 4.12  Governmental Approvals.............................................59
SECTION 4.13  Investment Company Act; Public Utility Holding Company Act.........59
SECTION 4.14  Principal Offices..................................................60
SECTION 4.15  REIT Status........................................................60
SECTION 4.16  Patents, Trademarks, etc...........................................60
SECTION 4.17  Ownership of Property..............................................60

</TABLE>


                                       i

<PAGE>

<TABLE>
<S>                                                                              <C>
SECTION 4.18  No Default.........................................................60
SECTION 4.19  Licenses, etc......................................................60
SECTION 4.20  Compliance With Law................................................60
SECTION 4.21  No Burdensome Restrictions.........................................61
SECTION 4.22  Brokers' Fees......................................................61
SECTION 4.23  Labor Matters......................................................61
SECTION 4.24  Insurance..........................................................61
SECTION 4.25  Organizational Documents...........................................61
SECTION 4.26  Qualifying Unencumbered Properties.................................61
SECTION 4.27  Year 2000 Compliance...............................................62

ARTICLE V........................................................................62
SECTION 5.1  Information.........................................................62
SECTION 5.2  Payment of Obligations..............................................65
SECTION 5.3  Maintenance of Property; Insurance; Leases..........................66
SECTION 5.4  Conduct of Business and Maintenance of Existence....................66
SECTION 5.5  Compliance with Laws................................................66
SECTION 5.6  Inspection of Property, Books and Records...........................66
SECTION 5.7  Existence...........................................................67
SECTION 5.8  Financial Covenants.................................................67
SECTION 5.9  Restriction on Fundamental Changes..................................69
SECTION 5.10  Changes in Business................................................70
SECTION 5.11  Margin Stock.......................................................70
SECTION 5.12  Hedging Requirements...............................................70
SECTION 5.13  EQR Status.........................................................71

ARTICLE VI.......................................................................72
SECTION 6.1  Events of Default...................................................72
SECTION 6.2  Rights and Remedies.................................................74
SECTION 6.3  Notice of Default...................................................75
SECTION 6.4  Actions in Respect of Letters of Credit.............................76
SECTION 6.5  Distribution of Proceeds after Default..............................78

ARTICLE VII......................................................................78
SECTION 7.1  Appointment and Authorization.......................................78
SECTION 7.2  Agency and Affiliates...............................................78
SECTION 7.3  Action by Administrative Agent......................................79
SECTION 7.4  Consultation with Experts...........................................79
SECTION 7.5  Liability of Administrative Agent and Syndication Agent.............79
SECTION 7.6  Indemnification.....................................................79
SECTION 7.7  Credit Decision.....................................................80
SECTION 7.8  Successor Administrative Agent or Syndication Agent.................80
SECTION 7.9  Consents and Approvals..............................................81

ARTICLE VIII.....................................................................82
SECTION 8.1  Basis for Determining Interest Rate Inadequate or Unfair............82
SECTION 8.2  Illegality..........................................................83
SECTION 8.3  Increased Cost and Reduced Return...................................84
SECTION 8.4  Taxes...............................................................86
SECTION 8.5  Base Rate Loans Substituted for Affected Euro-Dollar Loans..........88

</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                             <C>
ARTICLE IX.......................................................................88
SECTION 9.1  Notices.............................................................88
SECTION 9.2  No Waivers..........................................................89
SECTION 9.3  Expenses; Indemnification...........................................89
SECTION 9.4  Sharing of Set-Offs.................................................91
SECTION 9.5  Amendments and Waivers..............................................92
SECTION 9.6  Successors and Assigns..............................................92
SECTION 9.7  Collateral..........................................................95
SECTION 9.8  Governing Law; Submission to Jurisdiction...........................95
SECTION 9.9  Counterparts; Integration; Effectiveness............................96
SECTION 9.10 WAIVER OF JURY TRIAL................................................96
SECTION 9.11 Survival............................................................96
SECTION 9.12 Domicile of Loans...................................................97
SECTION 9.13 Limitation of Liability.............................................97
SECTION 9.14 Recourse Obligation.................................................97
SECTION 9.15 Confidentiality.....................................................97
SECTION 9.16 Bank's Failure to Fund..............................................98
SECTION 9.17 No Bankruptcy Proceedings..........................................103

</TABLE>


                                      iii