exv10w8






Exhibit 10.8




Execution copy




 

 








CREDIT AGREEMENT

dated as of October 5, 2007




among



ERP OPERATING LIMITED PARTNERSHIP,



THE BANKS LISTED HEREIN,



BANK OF AMERICA, N.A.,

as Administrative Agent,



JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,



BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arranger and Joint Book Runner,



J.P. MORGAN SECURITIES INC.,

as Joint Lead Arranger and Joint Book Runner,



and



CITICORP NORTH AMERICA INC.,

as Documentation Agent,



DEUTSCHE BANK SECURITIES INC.,

as Documentation Agent,



REGIONS BANK,

as Documentation Agent,



THE ROYAL BANK OF SCOTLAND PLC,

as Documentation Agent, and



U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent



 

 








 









 














CREDIT AGREEMENT




          THIS CREDIT AGREEMENT, dated as of October 5, 2007, is among ERP OPERATING LIMITED PARTNERSHIP
(the “Borrower”), the BANKS party hereto, BANK OF AMERICA, N.A., as Administrative Agent,
JPMORGAN CHASE BANK, N.A., as Syndication Agent, and CITICORP NORTH AMERICA INC., DEUTSCHE BANK AG,
NEW YORK BRANCH, REGIONS BANK, THE ROYAL BANK OF SCOTLAND PLC, and U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agents.



WITNESSETH




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



ARTICLE I




DEFINITIONS



          I.1 Definitions. The following terms, as used herein, have the following meanings:



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



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



          “Administrative Agent” shall mean Bank of America, N.A., in its capacity as
Administrative Agent hereunder, and its permitted successors in such capacity in accordance with
the terms of this Agreement.



 









 





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



          “Agreement” shall mean this 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, its Domestic Lending Office, and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.



          “Applicable Margin” means, with respect to each Loan, the respective
percentages per annum determined, at any time, based on the range into which Borrower’s Credit
Rating then falls, in accordance with the table set forth below. Any change in Borrower’s Credit
Rating causing it to move to a different range on the table shall effect an immediate change in the
Applicable Margin. In the event that the Borrower receives Credit Ratings that are not equivalent,
the Applicable
Margin shall be based upon the higher of the Credit Ratings from S&P or Moody’s. In the event
that only one (1) Rating Agency has set the Borrower’s Credit Rating, then the Applicable Margin
shall be based on such single Credit Rating.



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	Range of	 	Applicable	 	 
	Borrower’s	 	Margin for	 	Applicable
	Credit Rating	 	Base Rate	 	Margin for Euro
	(S&P/Moody’s	 	Loans	 	Dollar Loans
	Ratings)	 	(% per annum)	 	(% per annum)
	Non-Investment Grade
	 	 	0.250	 	 	 	1.250	 
	BBB-/Baa3
	 	 	0.0	 	 	 	0.950	 
	BBB/Baa2
	 	 	0.0	 	 	 	0.625	 
	BBB+/Baa1
	 	 	0.0	 	 	 	0.500	 
	A-/A3
	 	 	0.0	 	 	 	0.425	 
	A/A2 or
better
	 	 	0.0	 	 	 	0.400	 






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



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



          “Bank” means each bank listed on the signature pages hereof, each Assignee which
becomes a Bank pursuant to Section 9.6(c), and their respective successors.



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



          “Base Rate” means, for any day, a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by the Bank serving as the Administrative Agent as its
“prime rate.” The “prime rate” is a rate set by Bank of America, N.A. based upon various factors
including Bank of America, N.A.’s costs and
desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such announced rate. Any
change in such rate announced by the Bank serving as the Administrative Agent shall take effect at
the opening of business on the day specified in the public announcement of such change.



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



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



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



          “Borrower’s Share” means Borrower’s or EQR’s share of the liabilities or assets, as
the case may be, of an Investment Affiliate or Consolidated Subsidiary as reasonably determined by
Borrower based upon Borrower’s or EQR’s economic interest in such Investment Affiliate or
Consolidated Subsidiary, as the case may be, as of the date of such determination.



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



          “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks are authorized or required by law to close (i) in Dallas, Texas and/or New York
City, and (ii) in the case of Euro-Dollar Loans, in London, England and/or Dallas, Texas.



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



          “Capital Reserve” shall mean $200 per year.



          “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)



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time deposits, foreign deposits, domestic and foreign certificates of deposit,
bankers acceptances (foreign and domestic), commercial paper in Dollars or an alternate currency
rated at least A-1 by S&P and P-1 by Moody’s and/or guaranteed by a Person with an Aa rating by
Moody’s, an AA rating by S&P or better rated credit, floating rate notes, other money market
instruments and letters of credit each issued by Approved Banks (provided that the same shall cease
to be a “Cash or Cash Equivalent” if at any time any such bank shall cease to be an Approved Bank),
(v) obligations of domestic corporations, including, without limitation, commercial paper, bonds,
debentures and loan participations, each of which is rated at least AA by S&P and/or Aa2 by Moody’s
and/or guaranteed by a Person with an Aa rating by Moody’s, an AA rating by S&P or better rated
credit, (vi) obligations issued by states and local governments or their agencies, rated at least
MIG-1 by Moody’s and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of credit of an
Approved Bank (provided that the same shall cease to be a “Cash or Cash Equivalent” if at any time
any such bank shall cease to be an Approved Bank), (vii) repurchase agreements with major banks and
primary government security dealers fully secured by the U.S. Government or agency collateral equal
to or exceeding the principal amount on a daily basis and held in safekeeping, and (viii) real
estate loan pool participations, guaranteed by a Person with an AA rating given by S&P or Aa2
rating given by Moody’s or better rated credit.



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



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



          “Commitment” means with respect to each Bank, the amount set forth under the
name of such Bank on the signature pages hereof as its commitment (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, and as such amount may be increased in
connection with
Section 2.1(b) or with an assignment from an assignor. The initial aggregate amount of the
Banks’ Commitments is $500,000,000.



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



5









 





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



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



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



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



          “Construction Property Value” means the greater of (a) the EBITDA generated by a
Construction Property divided by the FMV Cap Rate (or Borrower’s Share thereof with respect to any
Construction Property owned by a Consolidated Subsidiary or



6









 







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



          “Contingent Obligation” as to any Person means, without duplication, (i) any
contingent obligation of such Person required to be shown on such Person’s balance sheet in
accordance with GAAP, and (ii) any obligation required to be disclosed in the footnotes to such
Person’s financial statements, guaranteeing partially or in whole any Non-Recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities (including, without
limitation, any indemnity or price-adjustment provision relating to the purchase or sale of
securities or other assets) and guarantees of non-monetary obligations (other than guarantees of
completion) which have not yet been called on or quantified, of such Person or of any other Person.
The amount of any Contingent Obligation described in clause (ii) shall be deemed to be (a) with
respect to a guaranty of interest or interest and principal, or operating income guaranty, the Net
Present Value of the sum of all payments required to be made thereunder (which in the case of an
operating income guaranty shall be deemed to be equal to the debt service for the note secured
thereby), calculated at the Applicable Interest Rate, through (I) in the case of an interest or
interest and principal guaranty, the stated date of maturity of the obligation (and commencing on
the date interest could first be payable thereunder), or (II) in the case of an operating income
guaranty, the date through which such guaranty will 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.
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



7









 







obligation
constituting Indebtedness of such Person. Notwithstanding anything contained herein to the
contrary, (xx) “Contingent Obligations” shall be deemed not to include guarantees of Unused
Commitments or of construction loans to the extent the same have not been drawn, and (yy) the
aggregate amount of all Contingent Obligations of any Consolidated Subsidiary or Investment
Affiliate (except to the extent that any such Contingent Obligation is recourse to the Borrower or
EQR) which would otherwise exceed the total capital contributions of the Borrower and EQR to such
entity, together with the amount of any unfunded obligations of the Borrower or EQR to make such
additional equity contributions to such entity that could be legally enforced by a creditor of such
entity shall be deemed to be equal to the amount of such capital contributions and equity or loan
commitments. All matters constituting “Contingent Obligations” shall be calculated without
duplication.



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



          “Customary Non-Recourse Carve-Outs” means fraud, misrepresentation, misapplication of
cash, waste, environmental claims and liabilities and other circumstances customarily excluded by
institutional lenders from exculpation provisions and/or included in separate indemnification
agreements.



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



          “Debt Service” means, for any period, Interest Expense for such period
plus scheduled principal amortization (excluding any individual scheduled principal payment
which exceeds 25% of the original principal amount of an issuance of Indebtedness) for such period
on all Indebtedness of Borrower or EQR (excluding Indebtedness of any Consolidated Subsidiary or
Investment Affiliate), on a consolidated basis, plus Borrower’s Share of scheduled
principal amortization for such period on all
Indebtedness of all Consolidated Subsidiaries and Investment Affiliates for which there is no
recourse to EQR or Borrower (or any Property thereof), plus, without duplication, EQR’s and
Borrower’s actual or potential liability for principal amortization (excluding any individual
scheduled principal payment which exceeds 25% of the original principal amount of an issuance of
Indebtedness) for such period on all Indebtedness of all Consolidated Subsidiaries and Investment
Affiliates that is recourse to EQR or Borrower (or any Property thereof).



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



8









 





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



          “Development Activity” means (a) the development or redevelopment and construction of
one or more apartment buildings 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 either or both of any Contingent Obligations in connection with such
development or construction (other than purchase contracts for Real Property Assets which are not
payable until completion of development or construction), valued at the cost of such projects under
development and construction in the case of assets owned by the Borrower or EQR, or the Borrower’s
Share of the cost of such projects under development and construction in the case of assets owned
by Consolidated Subsidiaries or Investment Affiliates.



          “Documentation Agents” means CITICORP NORTH AMERICA INC., DEUTSCHE BANK SECURITIES
INC., REGIONS BANK, THE ROYAL BANK OF SCOTLAND PLC, and U.S. BANK NATIONAL ASSOCIATION, in their
capacity as Documentation Agent hereunder, and their permitted successors in such capacity in
accordance with the terms of this Agreement.



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



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



          “Down REIT” means a limited liability company, corporation or limited
partnership in which the only interest in such limited liability company, corporation or
partnership not owned (directly or indirectly) by Borrower shall be preference interests or
preference units, respectively, and which limited liability company, corporation or limited
partnership, as the case may be (collectively, a “Down REIT Guarantor”), has executed and
delivered to the Administrative Agent, on behalf of the Banks, (i) a Guaranty of Payment in the
form attached hereto as Exhibit G (a “Down REIT Guaranty”), (ii) all documents
reasonably requested by the Administrative Agent relating to the existence of such Down REIT
Guarantor, and the authority for and validity of such Down REIT Guaranty, including, without
limitation, the organizational documents of such Down REIT Guarantor, modified or supplemented
prior to the date of such Down REIT Guaranty, each certified to be true, correct and complete by
such Down REIT Guarantor, not more than ten (10) days prior to the date of such Down REIT Guaranty,
together with a good standing certificate from the Secretary of State (or the equivalent



9









 







thereof)
of the State of formation of such Down REIT Guarantor, to be dated not more than ten (10) days
prior to the date of such Down REIT Guaranty, as well as authorizing resolutions in respect of such
Down REIT Guaranty, and (iii) an opinion of counsel with respect to such Down REIT Guarantor and
Down REIT Guaranty, in form and substance reasonably acceptable to the Administrative Agent, with
respect to due organization, existence, good standing and authority, and validity and
enforceability of such Down REIT Guaranty. In addition, for purposes of this definition, a Down
REIT Guaranty shall not be deemed to constitute Unsecured Debt of the applicable Down REIT
Guarantor.



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



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



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



          “EBITDA” means, for any twelve (12) month period, net earnings (loss),
exclusive of net derivative gains (losses) and gains (losses) on the dispositions of Properties,
before deduction (including amounts reported in discontinued operations) for (i) depreciation and
amortization expense and other non-cash items as determined in good faith by Borrower for such
period, (ii) Interest Expense for such period, (iii) Taxes for such period, (iv) the gains (and
plus the losses) from extraordinary items, and (v) the gains (and plus the losses) from
non-recurring items, as determined in good faith by Borrower, all of the foregoing without
duplication. In each case, amounts shall be reasonably determined by Borrower in accordance with
GAAP, except to the extent that GAAP by its terms shall not apply with respect to the determination
of non-cash and non-recurring items. EBITDA shall not be deemed to include corporate level general
and
administrative expenses and other corporate expenses, such as land holding costs, employee and
trustee stock and stock option expenses and pursuit costs write-offs, all as determined in good
faith by Borrower.



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



          “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).



10









 





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



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



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



          “EQR” means Equity Residential, a Maryland real estate investment trust, the sole
general partner of the Borrower.



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



          “EQR 2006 Form 10-K” means EQR’s annual report on Form 10-K for 2006, as filed with
the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.



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



          “ERISA Group” means the Borrower, any Subsidiary and all members of a controlled group
of corporations and all trades or businesses (whether or not



11









 







incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single employer under Section
414 of the Code.



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



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



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



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



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



          “Euro-Dollar Reserve Percentage” means, with respect to any applicable Interest
Period, for any day that percentage (expressed as a decimal) which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including basic, supplemental, emergency, special and
marginal reserves) generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to the Person serving as the Administrative Agent under
Regulation D of the Federal



12









 







Reserve Board, in respect of “Eurocurrency liabilities”, or under any
similar or successor regulation with respect to Eurocurrency liabilities or Eurocurrency funding
(or in respect of any other category of liabilities which include deposits by reference to which
the interest rate on Euro-Dollar Loans is determined), whether or not the Person serving as the
Administrative Agent has any Euro-Currency liabilities or such requirement otherwise in fact
applies to the Person serving as the Administrative Agent. The Euro-Dollar Rate shall be adjusted
automatically as of the effective date of each change in the Euro-Dollar Reserve Percentage.



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



          “Existing Credit Agreement” has the meaning set forth in the definition of
“Non-Stabilized Property Value” in this Section 1.1.



          “Extension Date” has the meaning set forth in Section 2.9(b).



          “Extension Fee” shall mean a fee in an amount equal to five basis points (0.05%) due
and payable on the aggregate amount of the continuing Commitments on the first Extension Date, and
an amount equal to seven and one-half basis points (0.075%) due and payable on the aggregate amount
of the continuing Commitments on the second Extension Date, pursuant to the terms of Section
2.9(b).



          “Extension Notice” has the meaning set forth in Section 2.9(b).



          “Extension Option” has the meaning set forth in Section 2.9(b).



          “Facility Amount” has the meaning set forth in Section 2.1(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 Business Day next
succeeding such day, provided that (i) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted
to the Administrative Agent on such day on such transactions as determined by the Administrative
Agent.



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



13









 





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



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



          “Fiscal Quarter” means a fiscal quarter of a Fiscal Year.



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



          “Fixed Charges” for any twelve (12) month period means (without duplication) the sum
of (i) Debt Service for such period, (ii) the product of the average number of apartment units
owned (directly or beneficially) by Borrower, EQR, or any wholly-owned Subsidiary of either or both
during such period and the Capital Reserve for such period, (iii) Borrower’s Share of the aggregate
sum of the product of the average number of apartment units owned (directly or beneficially) by
each Consolidated Subsidiary (other than wholly-owned Subsidiaries of Borrower and/or EQR) and
Investment Affiliate during such period and the Capital Reserve for such period, (iv) dividends on
preferred units payable by Borrower during such period, and (v) distributions made by the Borrower
during such period to EQR for the purpose of paying dividends on preferred shares in EQR.



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



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



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



          “FMV Cap Rate” means 6.75%.



          “Former Revolving Credit Agreement” means the Revolving Credit Agreement, dated as of
April 1, 2005, among the Borrower, EQR, Bank of America N.A., as administrative agent, JPMorgan
Chase Bank, N.A., as syndication agent, and the financial institutions party thereto.



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



14









 







circumstances as of the date of determination; provided,
however, that with respect to the financial covenants, including the related definitions, (i) GAAP
shall be deemed modified to eliminate the effect of FASB Interpretations No. 46(R), Consolidation
of Variable Interest Entities, an Interpretation of Accounting Research Bulletin (ARB) No. 51
(“FIN 46(R)”) and to eliminate the effect of FASB Staff Position APB 14-a, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement) (“FAS APB 14-a”), issued by the Financial Accounting Standards Board, on the
operation of such covenants, and (ii) only Borrower’s Share of any income, expense, assets and
liabilities of any Consolidated Subsidiary or Investment Affiliate shall be taken into account.



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



          “Group of Loans” means, at any time, a group of Loans consisting of (i) all 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 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 reimbursement obligations, contingent or otherwise, of such Person
with respect to letters of credit actually issued for such Person’s account or upon such Person’s
application, (d) all obligations of such Person to pay the deferred and unpaid purchase price of
Property except (i) any such deferred and unpaid purchase price that constitutes an accrued expense
or trade payable, and (ii) any deferred and unpaid purchase price under a contract which, in
accordance with GAAP would not



15









 







be included as a liability on the liability side of the balance
sheet of such Person, (e) all obligations in respect of Capital Leases (including ground leases) of
such Person, (f) all indebtedness, obligations or other liabilities of such Person or others
secured by a Lien on any asset of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by, or are a personal liability of such Person, in the case of items of
Indebtedness incurred under clauses (a), (b), (c) and (d) to the extent that any such items (other
than letters of credit), in accordance with GAAP, would be included as liabilities on the liability
side of the balance sheet of such Person, exclusive, however, of all accounts payable, accrued
interest and expenses, prepaid rents, security deposits, tax liabilities and dividends and
distributions declared but not yet paid. Indebtedness also includes, to the extent not otherwise
included, any obligation of Borrower or EQR, as well as Borrower’s Share of any obligation of any
Consolidated Subsidiary or Investment Affiliate, to be liable for, or to pay as obligor, guarantor
or otherwise (other than for purposes of collection in the ordinary course of business),
Indebtedness of another Person (other than Borrower, EQR, a Consolidated Subsidiary or an
Investment Affiliate). Indebtedness shall not include any Intracompany Indebtedness. “Intracompany
Indebtedness” means indebtedness whose obligor is Borrower, EQR, any Consolidated Subsidiary or any
Investment Affiliate and whose obligee is Borrower, EQR or any wholly-owned Consolidated
Subsidiary.



          “Indemnitee” has the meaning set forth in Section 9.3(b).



          “Interest Expense” means, for any period and without duplication, total
interest expense, whether paid, accrued or capitalized (excluding the interest component of Capital
Leases, as well as interest expense covered by an interest reserve established under a loan
facility, as well as any interest expense under any construction loan or
construction activity that under GAAP is required to be capitalized) of Borrower or EQR
(excluding nonrecurring prepayment premiums or penalties and any such interest expense accrued or
capitalized on Indebtedness of any Consolidated Subsidiary or Investment Affiliate), including
without limitation all commissions, discounts and other fees and charges owed with respect to drawn
letters of credit, amortized costs of Interest Rate Contracts incurred on or after the Closing Date
and the “Facility Fees” paid pursuant to the Existing Credit Agreement, plus Borrower’s
Share of accrued or paid interest with respect to any Indebtedness of Consolidated Subsidiaries or
Investment Affiliates for which there is no recourse to EQR or Borrower, plus, without
duplication, EQR’s and Borrower’s actual or potential liability for accrued, paid or capitalized
interest (excluding nonrecurring prepayment premiums or penalties and the interest component of
Capital Leases, as well as excluding interest expense covered by an interest reserve established
under a loan facility, as well as any interest expense under any construction loan or construction
activity that under GAAP is required to be capitalized) with respect to Indebtedness of
Consolidated Subsidiaries or Investment Affiliates that is recourse to EQR or Borrower, calculated
for all Fixed Rate Indebtedness at the actual interest rate in



16









 







effect with respect to all
Indebtedness outstanding as of the last day of such period and, in the case of all Floating Rate
Indebtedness, the actual rate of interest in effect with respect to such Floating Rate Indebtedness
outstanding for the period during which no Interest Rate Contract is in effect, and, during the
period that an Interest Rate Contract is in effect with respect to such Floating Rate Indebtedness,
the strike rate payable under such Interest Rate Contract if lower than the actual rate of
interest.



          “Interest Period” means with respect to each Euro-Dollar Borrowing, the period
commencing on the date of such Borrowing specified in the Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending 1, 2, 3 or 6 months
thereafter (or such shorter period, but in no event less than 7 days, as Borrower may request,
subject to the approval of the Administrative Agent), as the Borrower may elect in the applicable
Notice of Borrowing or Notice of Interest Rate Election; provided that:




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




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




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



          “Interest Rate Contracts” means, collectively, interest rate swap, collar, cap or
similar agreements providing interest rate protection.



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



          “Investment Grade Rating” means a rating for a Person’s senior long-term unsecured
debt, or if no such rating has been issued, a “shadow” rating, of BBB- or better from S&P or Fitch,
or a rating or “shadow” rating of Baa3 or better from Moody’s. Any such “shadow” rating shall be
evidenced by a letter from the applicable Rating Agency or



17









 







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.



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



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



          “Joint Venture Subsidiary” means any entity (other than a Financing
Partnership) in which (i) a Joint Venture Parent owns at least 20% of the economic interests and
(ii) the sale or financing of any Property owned by such Joint Venture Subsidiary is substantially
controlled by a Joint Venture Parent, subject to customary provisions set forth in the
organizational documents of such Joint Venture Subsidiary with respect to refinancings or rights of
first refusal granted to other members of such Joint Venture Subsidiary. For purposes of the
preceding sentence, the sale or financing of a Property owned by a Joint Venture Subsidiary shall
be deemed to be substantially controlled by a Joint Venture Parent if such Joint Venture Parent has
the ability to
exercise a buy-sell right in the event of a disagreement regarding the sale or financing of
such Property. In addition, the relationship of a Joint Venture Parent as a tenant in common in any
asset with other tenants in common in the same asset shall be treated as if such relationship were
a general partnership for purposes of this definition. For purposes of the definition of
Unencumbered Asset Value, a Joint Venture Subsidiary shall be deemed to include any entity (other
than a Financing Partnership) in which a Qualified Joint Venture Partner owns the balance of the
interests.



          “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, or any other type of preferential arrangement, in each case
that has the effect of creating a security interest in respect of such asset. For the purposes of
this Agreement, the Borrower, EQR or any Subsidiary of either or both shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title retention agreement
relating to such asset.



          “Loan” means a Base Rate Loan or a Euro-Dollar Loan and “Loans” means Base
Rate Loans or Euro-Dollar Loans or any combination of the foregoing.



18









 





          “Loan Documents” means this Agreement, the Notes, the EQR Guaranty and any Down REIT
Guaranty.



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



          “Material Adverse Effect” means an effect resulting from any circumstance or event or
series of circumstances or events, of whatever nature (but excluding general economic conditions),
which does or could reasonably be expected to, materially and adversely, (i) impair the ability of
the Borrower and/or EQR and their Consolidated Subsidiaries, taken as a whole, to perform their
respective obligations under the Loan Documents or (ii) impair the ability of Administrative Agent
or the Banks to enforce the Loan Documents.



          “Material Plan” means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $5,000,000.



          “Materials of Environmental Concern” means and includes pollutants, contaminants,
hazardous wastes, toxic and hazardous substances, asbestos, lead, petroleum and petroleum
by-products.



          “Maturity Date” shall mean the date when all of the Obligations hereunder shall be due
and payable which shall be October 5, 2010, unless accelerated pursuant to the terms hereof or
extended pursuant to Section 2.9(b).



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



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



          “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.



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



19









 





          “Multifamily Residential Property Mortgages” means Investment Mortgages issued by any
Person engaged primarily in the business of developing, owning, and managing multifamily
residential property.



          “Multifamily Residential Property Partnership Interests” means partnership or joint
venture interests, or common or preferred stock, or membership, trust or other equity interests
issued by any Person engaged primarily in the business of developing, owning, and managing
multifamily residential property, but excluding Securities.



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



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



          “Net Present Value” shall mean, as to a specified or ascertainable dollar amount, the
present value, as of the date of calculation of any such amount, using a discount rate equal to the
Base Rate in effect as of the date of such calculation.



          “Non-Multifamily Residential Property” means Property which is not (i) used for lease,
operation or use as a multifamily residential property, (ii) Unimproved Assets or Raw Land, (iii)
Securities, (iv) Multifamily Residential Property Mortgages, or (v) Multifamily Residential
Property Partnership Interests.



          “Non-Recourse Indebtedness” means Indebtedness with respect to which recourse for
payment is limited to (i) specific assets related to a particular Property or group of Properties
encumbered by a Lien securing such Indebtedness or (ii) any Subsidiary or Investment Affiliate
(provided that if a Subsidiary or Investment Affiliate is a partnership, there is no recourse to
Borrower or EQR as a general partner of such partnership); provided, however, that personal
recourse of Borrower or EQR for any such Indebtedness for Customary Non-Recourse Carve-Outs in
non-recourse financing of real estate shall not, by itself, prevent such Indebtedness from being
characterized as Non-Recourse Indebtedness.



20









 





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



          “Non-Stabilized Property Value” means, the sum of (i) the aggregate Acquisition
Property Value, (ii) the aggregate Construction Property Value, (iii) the aggregate Redevelopment
Property Value, (iv) the aggregate Condo Property Value, (v) the aggregate value of any Acquisition
Property that was classified as a “Non-Stabilized Property” as of September 30, 2006 pursuant to
the Former Revolving Credit Agreement, valued for a period of six fiscal quarters at the greater of
(1) the Property EBITDA divided by FMV Cap Rate (or Borrower’s Share thereof with respect to any
such Non-Stabilized Property owned by a Consolidated Subsidiary or an Investment Affiliate), and
(2) undepreciated book value (cost basis plus improvements) (or Borrower’s Share thereof with
respect to any such Non-Stabilized Property owned by a Consolidated Subsidiary or an Investment
Affiliate) and thereafter shall be valued as a Stabilized Property, and (vi) with respect to Raw
Land or any other Non-Stabilized Property (other than the Non-Stabilized Properties described under
clauses (i) through (v)), the aggregate undepreciated book value (cost basis plus improvements),
determined in accordance with
GAAP of such Non-Stabilized Property (or Borrower’s Share thereof with respect to any
Non-Stabilized Property owned by a Consolidated Subsidiary or an Investment Affiliate). All such
Acquisition Properties described under clause (v) shall be valued as a Stabilized Property
following the sixth full fiscal quarter after the date of the Revolving Credit Agreement, dated as
of February 28, 2007, among the Borrower, the Administrative Agent and the banks party thereto, as
amended by Amendment to Revolving Credit Agreement, dated as of March 30, 2007 (as the same may be
amended, restated, supplemented or replaced from time to time, the “Existing Credit
Agreement”).



          “Notes” means promissory notes of the Borrower, substantially in the form of
Exhibit A 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 substantially in the form of Exhibit C
attached hereto and made a part hereof.



          “Notice of Interest Rate Election” has the meaning set forth in Section 2.6.



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



21









 





          “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, Investment Mortgages, and Investment Affiliates.



          “Permitted Liens” means:




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




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




     c. deposits made in the ordinary course of business in connection with
worker’s compensation, unemployment insurance and other social security
legislation or to secure liabilities to insurance carriers;




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




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



22









 






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




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




     g. Liens and judgments (i) which have been or will be bonded (and the
Lien thereby removed other than on any cash or securities serving as security for
such bond) or released of record within thirty (30) days after
the date such Lien or judgment is entered or filed against EQR, Borrower, or
any Subsidiary, or (ii) which are being contested in good faith by appropriate
proceedings for review and in respect of which there shall have been secured a
subsisting stay of execution pending such appeal or proceedings;




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




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



          “Person” means an individual, a corporation, a partnership, an association, a trust, a
limited liability company or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.



          “Plan” means at any time an employee pension benefit plan (other than a Multiemployer
Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person which was at such time a member of the
ERISA Group for employees of any Person which was at such time a member of the ERISA Group.



23









 





          “Pro Rata Share” means, with respect to any Bank, a fraction (expressed as a
percentage), the numerator of which shall be such Bank’s Commitment and the denominator of which
shall be the aggregate amount of all of the Banks’ Commitments, in each case as adjusted from time
to time in accordance with the provisions of this Agreement.



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



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



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



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



          “Qualifying Unencumbered Property” means any Property (including Raw Land and Property
with Development Activity) from time to time which is owned directly or indirectly in fee (or
ground leasehold) by Borrower, EQR, a Financing Partnership or a Joint Venture Subsidiary, which
(i) is Raw Land, Construction Property, Redevelopment Property, Condo Property or an operating
multifamily residential property, (ii) is not subject (nor are any equity interests in such
Property that are owned directly or indirectly by Borrower or EQR subject) to a Lien which secures
Indebtedness of any Person other than Permitted Liens, (iii) is not subject (nor are any equity
interests in such Property that are owned directly or indirectly by Borrower or EQR subject) to any
Negative Pledge, and (iv) in the case of any Property that is owned by a Subsidiary of the Borrower
or EQR, is owned by a Subsidiary that does not have any outstanding Unsecured Debt (other than
those items of Indebtedness set forth in clauses (d) or (e) of the definition of Indebtedness, or
any Contingent Obligation except for guarantees for borrowed money). In addition, in the case of
any Property that is owned by a Subsidiary of Borrower and/or EQR, if such Subsidiary shall
commence any proceeding under any bankruptcy, insolvency or similar law, or any such involuntary
case shall be commenced against it and shall remain undismissed and unstayed for a period of 90
days, then, simultaneously with the occurrence of such conditions, such Property shall no longer
constitute a Qualifying Unencumbered Property. Notwithstanding the foregoing, for the purposes of
this definition, a Property shall be deemed to be wholly-owned by Borrower



24









 







if such Property shall
be owned by a Down REIT or a wholly-owned Subsidiary of such Down REIT.



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



          “Raw Land” means Real Property Assets upon which no material improvements have been
commenced.



          “Real Property Assets” means, as of any time, the real property assets (including
interests in participating mortgages in which the Borrower’s interest therein is characterized as
equity according to GAAP) owned directly or indirectly by the Borrower, EQR and the Consolidated
Subsidiaries of either or both at such time.



          “Recourse Debt” shall mean Indebtedness that is not Non-Recourse Indebtedness.



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



          “Redevelopment Property Value” means the greater of (a) the EBITDA generated by a
Redevelopment Property for the quarter immediately prior to the commencement of the redevelopment
divided by the FMV Cap Rate (or Borrower’s Share thereof with respect to any Redevelopment Property
owned by a Consolidated Subsidiary or an Investment Affiliate), and (b) the undepreciated book
value (cost basis plus improvements) of such Redevelopment Property (or Borrower’s Share thereof
with respect to any Redevelopment Property owned by a Consolidated Subsidiary or an Investment
Affiliate). A Redevelopment Property shall be valued as a Stabilized Property following the sixth
full fiscal quarter after the fiscal quarter in which substantial completion of the redevelopment
occurred.



          “Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time
to time.



          “Required Banks” means at any time Banks having at least 51% of the aggregate amount
of the Commitments or, if the Commitments shall have been



25









 







terminated, holding Notes evidencing at
least 51% of the aggregate unpaid principal amount of the Loans.



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



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



          “Securities” means any stock, partnership interests, shares, shares of beneficial
interest, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as “securities,” or any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, all of which shall be passive investments.



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



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



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



26









 





          “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.



          “Syndication Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as
Syndication Agent hereunder, and its permitted successors in such capacity in accordance with the
terms of this Agreement.



          “Taxes” means all federal, state, local and foreign income and gross receipts taxes.



          “Term” has the meaning set forth in Section 2.9.



          “Termination Event” shall mean (i) a “reportable event”, as such term is
described in Section 4043 of ERISA (other than a “reportable event” not subject to the provision
for 30-day notice to the PBGC), or an event described in Section 4062(e) of
ERISA, (ii) the withdrawal by any member of the ERISA Group from a Multiemployer Plan during a
plan year in which it is a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), or
the incurrence of liability by any member of the ERISA Group under Section 4064 of ERISA upon the
termination of a Multiemployer Plan, (iii) the filing of a notice of intent to terminate any Plan
under Section 4041 of ERISA, other than in a standard termination within the meaning of Section
4041 of ERISA, or the treatment of a Plan amendment as a distress termination under Section 4041 of
ERISA, (iv) the institution by the PBGC of proceedings to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or cause a trustee to be appointed to
administer, any Plan or (v) any other event or condition that might reasonably constitute grounds
for the termination of, or the appointment of a trustee to administer, any Plan or the imposition
of any liability or encumbrance or Lien on the Real Property Assets or any member of the ERISA
Group under ERISA.



          “Unencumbered Asset Value” means the sum of (i) Stabilized Property Value of all
Qualifying Unencumbered Properties which are Stabilized Properties, (ii) Non-Stabilized Property
Value of all Qualifying Unencumbered Properties which are Non-Stabilized Properties, (iii) the
value of any Cash or Cash Equivalent (including Cash or Cash Equivalents held in restricted Section
1031 accounts under the control of the Borrower) owned by Borrower, EQR or any wholly-owned
Subsidiary of either, and (iv) the undepreciated book value, determined in accordance with GAAP, of
readily marketable Securities and Investment Mortgages owned by the Borrower, EQR or their
wholly-owned Subsidiaries not subject to any Lien, plus (v) Borrower’s Share of the value of any
Cash or Cash Equivalents (including Cash or Cash Equivalents held in restricted Section 1031
accounts under the control of a non-wholly owned Consolidated Subsidiary or by an Investment
Affiliate) owned by any such Consolidated Subsidiary or



27









 







Investment Affiliate, plus (vi) Borrower’s
Share of the undepreciated book value, determined in accordance with GAAP, of readily marketable
Securities and Investment Mortgages owned by any non-wholly owned Consolidated Subsidiary or
Investment Affiliate, provided, however, that the aggregate value of those items set forth in
clauses (iv) and (vi) shall not exceed thirty percent (30%) of Unencumbered Asset Value.



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



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



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



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



          I.2 Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants and, with respect to financial covenants including the
related definitions, except for eliminating the effects of FIN 46(R) and FAS APB 14-a) 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.



28









 





          I.3 Types of Borrowings. The term “Borrowing” denotes the aggregation of
Loans of one or more Banks to be made to the Borrower pursuant to Article II on the same date, all
of which Loans are of the same type (subject to Article VIII) and, except in the case of Base Rate
Loans, 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, and a “Euro-Dollar Borrowing” is
a Borrowing comprised of Euro-Dollar Loans).



ARTICLE II




THE CREDITS



          II.1 Commitments to Lend.



          (a) Loans. Each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make Loans to the Borrower pursuant to this Article from time to time during the term
hereof in amounts such that the aggregate principal amount of such Loans shall not exceed its
Commitment. The Commitments shall be fully funded, in a single Borrowing, no later than five (5)
Business Days after the Closing Date, except that in connection with any increase in the Facility
Amount pursuant to Section 2.1(b), such increased amount shall be fully funded at the closing of
such increase. In no event shall the aggregate Loans outstanding at any time exceed $500,000,000,
as the same may be increased pursuant to Section 2.1(b) hereof (the “Facility Amount”). Any
amounts repaid may not be reborrowed.



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




29











 





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




          (ii) the amount of such increase does not cause the aggregate Commitments to exceed
$750,000,000.




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




          II.2 Notice of Borrowing. The Borrower shall give Administrative Agent notice not
later than 10:00 a.m. (Dallas time) (x) one Business Day before the Closing Date or the closing of
any increase in the Facility Amount pursuant to Section 2.1(b), in the case of a Base Rate
Borrowing, or (y) three Euro-Dollar Business Days before the Closing Date or the closing of any
increase in the Facility Amount pursuant to Section 2.1(b), in the case of a Euro-Dollar Borrowing,
specifying:




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




          (ii) the aggregate amount of such Borrowing,




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




          (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.




          II.3 Intentionally Omitted.




          II.4 Notice to Banks; Funding of Loans.




          (a) Upon receipt of a Notice of Borrowing from Borrower in accordance with Section 2.2, the
Administrative Agent shall, on the date such Notice of




30









 







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. (Dallas 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 Dallas, to the
Administrative Agent at its address referred to in Section 9.1.




          (c) Intentionally Omitted.




          (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) 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 as of the date of
such Borrowing for purposes of this Agreement.




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




          II.5 Notes.




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




31









 








          (b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that
its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate
unpaid principal amount of such Loans. Any additional costs incurred by the 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 Loans shall mature, and the principal amount thereof shall be due and payable, on the
Maturity Date.




          (e) Intentionally Omitted.




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




          II.6 Method of Electing Interest Rates.




          (a) The Loans included in each 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:




32









 








          (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, 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 of Loans, (ii) the portion to which such Notice of Interest Rate
Election applies, and the remaining portion to which it does not apply, are each in an amount equal
to $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 one time, (iv) no 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 of Loans are to be converted, the new type of Loans
and, if such new Loans are Euro-Dollar Loans, the duration of the initial Interest Period
applicable thereto; and




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



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




33









 








          (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 Loans which
are Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans on the last day of the
then current Interest Period applicable thereto.




          II.7 Interest Rates.




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




          (b) Subject to Section 8.1, each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Applicable Margin for Euro-Dollar Loans for such day plus the
Euro-Dollar Rate applicable to such Interest Period. Such interest shall be payable on the first
Business Day of each month, as well as on the date of any prepayment of any such Euro-Dollar Loan.




          (c) Intentionally Omitted.




          (d) In the event that, and for so long as, any Event of Default shall have occurred and be
continuing, the outstanding principal amount of the Loans, and, to the extent permitted by
applicable law, overdue interest in respect of all Loans, shall bear interest at the annual rate
equal to the sum of the Base Rate and two percent (2%) (the “Default Rate”).




          (e) The Administrative Agent shall determine each interest rate applicable to the Loans
hereunder. The Administrative Agent shall give prompt notice to
the Borrower and the Banks of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of demonstrable error.




34









 








          II.8 Fees. All fees set forth in this Agreement 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.




          II.9 Maturity Date.




          (a) The term (the “Term”) of the Commitments (and each Bank’s obligations to make
Loans) shall terminate and expire on the Maturity Date. Upon the date of the termination of the
Term, any Loans then outstanding (together with accrued interest thereon and all other Obligations)
shall be due and payable on such date.




          (b) Borrower shall have two options (each, an “Extension Option”) to extend the
Maturity Date, for an additional twelve (12) month period, upon the following terms and conditions:
(i) delivery by Borrower of written notice thereof to the Administrative Agent (the “Extension
Notice”) on or before the date which is thirty (30) days prior to the current Maturity Date but
in no event more than one hundred eighty (180) days prior to the current Maturity Date (which
Extension Notice the Administrative Agent shall promptly deliver to the Banks); (ii) no Event of
Default shall have occurred and be continuing both on the date Borrower delivers the Extension
Notice to the Administrative Agent and on the first day of the extension period (the “Extension
Date”); (iii) each of the representations and warranties contained in this Agreement and the
other Loan Documents (other than representations and warranties which expressly speak of a
different date and other than the representation and warranty set forth in Section 4.4(c)(i)) shall
be true and correct in all material respects on and as of the Extension Date; and (iv) Borrower
shall pay to the Administrative Agent, for the account of the Banks, ratably in proportion to their
respective Commitments, on the Extension Date, the Extension Fee. Borrower’s delivery of the
Extension Notice shall be irrevocable.




          II.10 Intentionally Omitted.




          II.11 Optional Prepayments.




          (a) The Borrower may, upon at least one (1) Business Day’s notice to the Administrative Agent
(which shall promptly notify each of the Banks), prepay any Group of Loans which are Base Rate
Loans, 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. Each
such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included
in such Group of Loans or Borrowing.




35









 








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




          (c) Any amounts so prepaid pursuant to Section 2.11 (a) or (b) may not be reborrowed.




          II.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 (Dallas time) on the date when due, in Federal or other funds
immediately available in Dallas, to the Administrative Agent at its address referred to in Section
9.1. The Administrative Agent will promptly (and if received prior to 12:00 noon, on the same
Business Day, if received after 12:00 noon on the immediately following Business Day) distribute to
each Bank its ratable share of each such payment received by the Administrative Agent for the
account of the Banks. If and to the extent that the Administrative Agent shall receive any such
payment for the account of the Banks on or before 12:00 Noon (Dallas time) on any Business Day, and
Administrative Agent shall not have distributed to any Bank its applicable share of such payment on
such Business Day, Administrative Agent shall distribute such amount to such Bank together with
interest thereon, for each day from the date such amount should have been distributed to such Bank
until the date Administrative Agent distributes such amount to such Bank, at the Federal Funds
Rate. Whenever any payment of principal of, or interest on the Base Rate Loans or of fees shall be
due on a day which is not a Business Day, the date for payment thereof shall be extended to the
next succeeding Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the




36









 







date for payment thereof shall be the next
preceding 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.




          II.13 Funding Losses. If the Borrower makes any payment of principal with respect to
any Euro-Dollar 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, continue or
convert to any Euro-Dollar Loans after notice has been given to any Bank in accordance with Section
2.4(a) or 2.6, 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, continue or convert, provided
that such Bank shall have delivered to Administrative Agent and Administrative Agent shall have
delivered to the Borrower a certification as to the amount of such loss or expense, which
certification shall set forth in reasonable detail the basis for and calculation of such loss or
expense and shall be conclusive in the absence of demonstrable error.




          II.14 Computation of Interest and Fees. All interest based on the Euro-Dollar Rate and
all fees shall be computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day). All interest based on the Base
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for
the actual number of days elapsed (including the first day but excluding the last day).




37









 








          II.15 Use of 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.




ARTICLE III




CONDITIONS



          III.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, EQR, the Administrative Agent and each of the Banks shall have executed and
delivered to the Borrower and the Administrative Agent a duly executed original of this Agreement;




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




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




          (e) intentionally omitted;




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




38









 







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




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




          (j) the Administrative Agent shall have received, for its and any other Bank’s account, all
fees due and payable pursuant to Section 2.8 hereof on or before the Closing Date, and the fees and
expenses accrued through the Closing Date of Skadden, Arps, Slate, Meagher & Flom LLP shall have
been paid directly to such firm, if required by such firm and if such firm has delivered an invoice
in reasonable detail of such fees and expenses in sufficient time for the Borrower to approve and
process the same;




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




          (l) the Administrative Agent shall have received (or Borrower shall have made publicly
available) the audited financial statements of the Borrower and its Consolidated Subsidiaries and
of EQR for the fiscal year ended December 31, 2006; and




39









 








          (m) no Event of Default shall have occurred.




          III.2 Borrowings. The obligation of any Bank to make a 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;




          (b) intentionally omitted;




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




          (d) immediately before and after such Borrowing, no Event of Default shall have occurred and
be continuing both before and after giving effect to the making of such Loans;




          (e) the representations and warranties contained in this Agreement and the other Loan
Documents (other than representations and warranties which expressly speak as of a different date
and other than the representation and warranty set forth in Section 4.4(c)(i)) shall be true and
correct in all material respects on and as of the date of such Borrowing both before and after
giving effect to the making of such Loans;




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




          (g) with respect to the initial Borrowing hereunder only, no event, act or condition shall
have occurred after the date of the most recent financial statements of
Borrower which, in the reasonable judgment of the Administrative Agent, or the Required Banks,
as the case may be, has had or is likely to have a Material Adverse Effect.



Each Borrowing hereunder shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c), (d), (e), (f)
and (g) (with respect to the initial Borrowing hereunder only, and only to the extent that Borrower
is or should have been aware of any Material Adverse Effect) of this Section, except as otherwise
disclosed in writing by Borrower to the Banks. Notwithstanding anything to the contrary, no
Borrowing shall be permitted if such




40









 







Borrowing or issuance would cause Borrower to fail to be in
compliance with any of the covenants contained in this Agreement or in any of the other Loan
Documents.




ARTICLE IV




REPRESENTATIONS AND WARRANTIES



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




          IV.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.









41









 








          IV.2 Power and Authority. The Borrower has the power and authority to execute,
deliver and carry out the terms and provisions of, and to consummate the transactions contemplated
by, each of the Loan Documents to which it is a party and has taken all necessary action, if any,
to authorize the execution and delivery on behalf of the Borrower and the performance by the
Borrower of, and the consummation of the transactions contemplated by, 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, and the consummation of the transactions
contemplated by, each of the Loan Documents on behalf of the Borrower to which the Borrower is a
party and has taken all necessary action to authorize the execution and delivery on behalf of the
Borrower and the performance by the Borrower of such Loan Documents.




          IV.3 No Violation.




          (a) Neither the execution, delivery or performance by or on behalf of the Borrower of the Loan
Documents to which it is a party, nor compliance by the Borrower with the terms and provisions
thereof nor the consummation of the transactions contemplated by the Loan Documents, (i) will
materially contravene any applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will materially conflict
with or result in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Borrower or any of its Consolidated
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, or other agreement
or other instrument to which the Borrower (or of any partnership of which the Borrower is a
partner) or any of its Consolidated Subsidiaries is a party or by which it or any of its property
or assets is bound or to which it is subject, or (iii) will cause a material default by the
Borrower under any organizational document of any Person in which such Borrower has an interest, or
cause a material default under the Borrower’s agreement or certificate of limited partnership, the
consequences of which conflict, breach or default would have a Material Adverse Effect, or result
in or require the creation or imposition of any Lien whatsoever upon any Property (except as
contemplated herein).




          IV.4 Financial Information.







42









 








          (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries, dated as
of December 31, 2006, 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, 2006, 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 2006 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 June 30, 2007, (i) except as may have been disclosed in writing to the Banks,
nothing has occurred prior to the Closing Date having a Material Adverse Effect, and (ii) except as
previously disclosed to the Banks, neither the Borrower nor EQR has incurred any material
indebtedness or guaranty on or before the Closing Date.




          IV.5 Litigation. Except as previously disclosed by the Borrower in writing to the
Banks prior to the date hereof, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, nor, to the knowledge of the Borrower,
any investigation of, (i) the Borrower, EQR or any of their Consolidated Subsidiaries, (ii) the
Loan Documents or any of the transactions contemplated by the Loan Documents or (iii) any of their
assets, before any court or arbitrator or any governmental body, agency or official in which there
is a reasonable possibility of an adverse decision which could, individually or in the aggregate,
have a Material Adverse Effect or which in any manner draws into question the validity or
enforceability of this Agreement or the other Loan Documents.




          IV.6 Compliance with ERISA. The transactions contemplated by the Loan Documents will
not constitute a nonexempt prohibited transaction (as such term is defined in Section 4975 of the
Code or Section 406 of ERISA) that could subject the Administrative Agent or the Banks to any tax
or penalty for prohibited transactions imposed under Section 4975 of the Code or Section 502(i) of
ERISA.







43









 








          IV.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.




          IV.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, 2006. 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, 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.




          IV.9 Full Disclosure. All information heretofore furnished by the Borrower to the
Administrative Agent or any Bank for purposes of or in connection with or pursuant to this
Agreement or any transaction contemplated hereby or thereby is true and accurate in all material
respects on the date as of which such information is stated or certified. The Borrower has
disclosed to the Administrative Agent, in writing any and all facts existing on the Closing Date
which have or may have (to the extent the Borrower can now reasonably foresee) a Material Adverse
Effect.




          IV.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.







44









 








          IV.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.




          IV.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.




          IV.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
“subsidiary company” within the meaning of the Public Utility Holding Company Act of 2005,
as amended, or (z) subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money or otherwise obtain extensions of credit.




          IV.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.




          IV.15 REIT Status. For the fiscal year ended December 31, 2006, EQR qualified and EQR
intends to continue to qualify as a real estate investment trust under the Code.




          IV.16 No Default. No Event of Default or, to the best of the Borrower’s knowledge,
Default exists 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.




45









 








          IV.17 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, 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.




          IV.18 Organizational Documents. The documents delivered pursuant to Section
3.1(f) constitute, as of the Closing Date, all of the organizational documents (together with all
amendments and modifications thereof) of the Borrower and EQR. The Borrower represents that it
has delivered to the Administrative Agent true, correct and complete copies, as of the Closing
Date, of each of the documents set forth in this Section 4.18, except for exhibits to the
Borrower’s partnership agreement identifying the current list of partners which, with the
permission of the Banks, have been omitted therefrom.




          IV.19 Qualifying Unencumbered Properties. As of December 31, 2006, each Property
listed on Exhibit F as a Qualifying Unencumbered Property (i) is Raw Land, a Property with
Development Activity, a Condo Property or an operating multifamily residential property owned or
ground leased (directly or beneficially) by Borrower, EQR, or a Consolidated Subsidiary or
Investment Affiliate of either or both, (ii) is not subject (nor are any equity interests in such
Property that are owned directly or indirectly by Borrower or EQR subject) to a Lien which secures
Indebtedness of any Person, other than Permitted Liens, (iii) is not subject (nor are any equity
interests in such Property that are owned directly or indirectly by Borrower or EQR subject) to any
Negative Pledges, and (iv) is not owned by a Subsidiary of the Borrower or EQR (other than the
Borrower) that has any outstanding Unsecured Debt (other than those items of Indebtedness set forth
in clauses (d) or (e) of the definition of Indebtedness, or any Contingent Obligation other than
guarantees for borrowed money). As of December 31, 2006, all of the information set forth on
Exhibit F is true and correct in all material respects.




ARTICLE V




AFFIRMATIVE AND NEGATIVE COVENANTS



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




          V.1 Information. The Borrower will deliver to each of the Banks:




46









 








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




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




          (c) simultaneously with the delivery of each set of financial statements referred to in
clauses (a) and (b) above, a certificate of the chief financial officer, the chief accounting
officer or treasurer of the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the requirements of Section 5.8
on the date of such financial statements; (ii) certifying (x) that such financial statements fairly
present in all material respects the financial condition and the results of operations of the
Borrower on the dates and for the periods indicated, on the basis of GAAP, with respect to the
Borrower subject, in the case of interim financial statements, to normally recurring year-end
adjustments, and (y) that such officer has reviewed the terms of the Loan Documents and has made,
or caused to be made under his or her supervision, a review in reasonable detail of the business
and condition of the Borrower during the period beginning on the date through which the last such
review was made pursuant to this Section 5.1(c) (or, in the case of the first certification
pursuant to this Section 5.1(c), the Closing Date) and ending on a date not more than ten (10)
Business Days prior to the date of such delivery and that (1) on the basis of such financial
statements and such review of the Loan Documents, no Event of Default existed under Section 6.1(b)
with respect to Sections 5.8 and 5.9 at or as of the date of said financial statements, and (2) on
the basis of such review of the Loan Documents and the business and condition of the Borrower, to
the best knowledge of such officer, as of the




47









 







last day of the period covered by such certificate no
Default or Event of Default under any other provision of Section 6.1 occurred and is continuing or,
if any such Default or Event of Default has occurred and is continuing, specifying the nature and
extent thereof and the action the Borrower proposes to take in respect thereof. Such certificate
shall set forth the calculations required to establish the matters described in clauses (1) and (2)
above;




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




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




          (f) promptly upon the filing thereof and to the extent that the same are not publicly
available, copies of all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) (other than the exhibits thereto, which exhibits will be provided upon request
therefor by any Bank) which EQR shall have filed with the Securities and Exchange Commission;




          (g) Promptly and in any event within thirty (30) days, if and when any member of the
ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as
defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given or required to be given
to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer,




48









 







any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, and in the case of clauses (i)
through (vii) above, which event could result in a Material Adverse Effect, a certificate of the
chief financial officer or the chief accounting officer of the Borrower setting forth details as to
such occurrence and action, if any, which the Borrower or applicable member of the ERISA Group is
required or proposes to take;




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




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




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




49









 








          V.2 Payment of Obligations. Each of 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.




          V.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 with such
insurers, on such properties, in such amounts and against such risks (excluding terrorist insurance
and mold insurance and, to the extent the same are not commercially available or available at
commercially reasonable rates, earthquake insurance or windstorm insurance) as is consistent with
insurance maintained by businesses of comparable type and size in the industry, and furnish the
Administrative Agent satisfactory evidence thereof promptly upon Administrative Agent’s reasonable
request.




          V.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.




          V.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.




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          V.6 Inspection of Property, Books and Records. Each of the Borrower and EQR
will keep proper books of record and account in which full, true and correct entries shall be made
of all material dealings and transactions in relation to its business and activities in conformity
with GAAP, modified as required by this Agreement and applicable law; and will permit
representatives of any Bank at such Bank’s expense to visit and inspect any of its properties,
including without limitation the Real Property Assets, to examine and make abstracts from any of
its books and records and to discuss its affairs, finances and accounts with its officers and
independent public accountants, all at such reasonable times during normal business hours, upon
reasonable prior notice and as often as may reasonably be desired. Administrative Agent shall
coordinate any such visit or inspection to arrange for review by any Bank requesting any such visit
or inspection.




          V.7 Intentionally Omitted.




          V.8 Financial Covenants.




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




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




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




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




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




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




          V.9 Restriction on Fundamental Changes.




          (a) Neither the Borrower nor EQR shall enter into any merger or consolidation, unless (i)
either (x) the Borrower or EQR is the surviving entity, or (y) the individuals constituting EQR’s
Board of Trustees immediately prior to such merger or consolidation represent a majority of the
surviving entity’s Board of Directors or Board of Trustees after such merger or consolidation, and
(ii) the entity which is merged with Borrower or EQR is predominantly in the commercial real estate
business.




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




          (c) The Borrower shall deliver to Administrative Agent copies of all amendments to its
agreement of limited partnership or to EQR’s declaration of trust, by-laws, or other organizational
documents simultaneously with the first delivery of financial statements referred to in Sections
5.1(a) or (b) above following the effective date of any such amendment.




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          V.10 Changes in Business. 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 and Investment Affiliates.




          V.11 Margin Stock. None of the proceeds of any 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.




          V.12 Intentionally Omitted.




          V.13 EQR Status.




          (a) Status. EQR shall at all times (i) remain a publicly traded company listed on the
New York Stock Exchange or another national stock exchange located in the United States and (ii)
maintain its status as a self-directed and self-administered real estate investment trust under the
Code.




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




               (1) the Obligations; and



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



          (c) Disposal of Partnership Interests. EQR will not directly or indirectly convey,
sell, transfer, assign, pledge or otherwise encumber or dispose of any of its partnership interests in Borrower, except for the reduction of EQR’s interest in the
Borrower arising from Borrower’s issuance of partnership interests in the Borrower or the
retirement of preference units by Borrower.




ARTICLE VI




DEFAULTS



          VI.1 Events of Default. If one or more of the following events (“Events of
Default”) shall have occurred and be continuing:





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          (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, Section 5.11 or Section 5.13;




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




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




          (e) the Borrower, EQR, any Subsidiary or any Investment Affiliate shall default in the payment
when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) of
any amount owing in respect of any Recourse Debt (other than the Obligations) for which the
aggregate outstanding principal amount exceeds $50,000,000 and such default shall continue beyond the giving of any required
notice and the expiration of any applicable grace period and such default has not been waived, in
writing, by the holder of any such Debt; or the Borrower, 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;




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




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




          (h) one or more final, non-appealable judgments or decrees (or one or more judgments which
is/are not stayed pending appeal) in an aggregate amount of Fifty Million Dollars ($50,000,000) or
more shall be entered by a court or courts of competent jurisdiction against the Borrower, EQR or,
to the extent of any recourse to Borrower, EQR, or any of their respective Consolidated
Subsidiaries (other than any judgment as to which, and only to the extent, a reputable insurance
company has acknowledged coverage of such claim in writing) and (i) any such judgments or decrees
shall not be stayed, discharged, paid, bonded or vacated within thirty (30) days or (ii)
enforcement proceedings shall be commenced by any creditor on any such judgments or decrees;




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




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




          (k) intentionally omitted;




          (l) any Termination Event with respect to a Plan shall occur as a result of which Termination
Event or Events any member of the ERISA Group has incurred or may incur any liability to the PBGC
or any other Person and the sum (determined as of the date of occurrence of such Termination Event)
of the insufficiency of such Plan and the insufficiency of any and all other Plans with respect to
which such a Termination Event shall have occurred and be continuing (or, in the case of a
Multiemployer Plan with respect to which a Termination Event described in clause (ii) of the
definition of Termination Event shall have occurred and be continuing, the liability of the
Borrower) is equal to or greater than $20,000,000 and which the Administrative Agent reasonably
determines will have a Material Adverse Effect;




          (m) any member of the ERISA Group shall commit a failure described in Section 302(f)(1) of
ERISA or Section 412(n)(1) of the Code and the amount of the lien determined under Section
302(f)(3) of ERISA or Section 412(n)(3) of the Code that could reasonably be expected to be imposed
on any member of the ERISA Group or their assets in respect of such failure shall be equal to or
greater than $20,000,000 and which the Administrative Agent reasonably determines will have a
Material Adverse Effect;




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




          VI.2 Rights and Remedies.




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




56









 







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 Administrative Agent and the Banks each agree that any exercise or enforcement of the
rights and remedies granted to the Administrative Agent or the Banks under this Agreement or at law
or in equity with respect to this Agreement or any other Loan Documents shall be commenced and
maintained by the Administrative Agent on behalf of the Administrative Agent and/or the Banks. The
Administrative Agent shall act at the direction of the Required Banks in connection with the
exercise of any and all remedies at law, in equity or under any of the Loan Documents (including,
without limitation, those set forth in Section 6.4 hereof) or, if the Required Banks are unable to
reach agreement within thirty (30) days of commencement of discussions, then, from and after an
Event of Default and the the end of such thirty (30) day period, the Administrative Agent may
pursue such rights and remedies as it may determine if it shall reasonably determine that the same
shall be in the best interests of the Banks, taken as a whole.




          VI.3 Notice of Default. The Administrative Agent shall give notice to the Borrower
under Section 6.1(c) promptly upon being requested to do so by the Required Banks and shall
thereupon notify all the Banks thereof. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless Administrative Agent has received notice in writing
from a Bank or Borrower or any court or governmental agency referring to this Agreement or the
other Loan Documents, describing such event or condition. Should Administrative Agent receive
notice of the occurrence of a Default or Event of Default expressly stating that such notice is a
notice of a Default or Event of Default, or should Administrative Agent send Borrower a notice of
Default or Event of Default, Administrative Agent shall promptly give notice thereof to each Bank.




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          VI.4 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



          VII.1 Appointment and Authorization. Each Bank irrevocably appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the Administrative Agent by
the terms hereof or thereof, together with all such powers and discretion as are reasonably
incidental thereto. Except as set forth in Sections 7.8 and 7.9, the provisions of this Article VII
are solely for the benefit of Administrative Agent and the Banks, and Borrower shall not have any
right to rely on or enforce any of the provisions of this Article VII. In performing its functions
and duties under this Agreement, Administrative Agent shall act solely as an agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Borrower.




          VII.2 Agency and Affiliates. Bank of America, N.A. shall have the same rights and
powers under this Agreement as any other Bank and may exercise or refrain from exercising the same
as though it were not the Administrative Agent, and Bank of America, N.A. and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of business with the
Borrower, EQR or any Subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent hereunder, and the term “Bank” and “Banks” shall include Bank of America, N.A. in its
individual capacity.




          VII.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.




          VII.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.









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          VII.5 Liability of Administrative Agent, Syndication Agent, Documentation Agents. As
between Administrative Agent and the Banks, none of the Administrative Agent, the Syndication
Agent, or the Documentation Agents, nor any of their affiliates nor any of their respective
directors, officers, agents or employees, shall be liable for any action taken or not taken by any
of them in connection herewith (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or wilful misconduct. As between Administrative Agent
and the Banks, none of the Administrative Agent, the Syndication Agent, or the Documentation
Agents, nor any of their respective directors, officers, agents or employees, shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the Borrower, except with
respect to payment of principal and interest; (iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be delivered to the Administrative Agent; or (iv)
the validity, effectiveness or genuineness of this Agreement, the other Loan Documents or any other
instrument or writing furnished in connection herewith. As between Administrative Agent and the
Banks, the Administrative Agent shall not incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank wire, or similar
writing) believed by it to be genuine or to be signed by the proper party or parties.




          VII.6 Indemnification. Each Bank shall, ratably in accordance with its Commitment,
indemnify the Administrative Agent, the Syndication Agent, and the Documentation Agents, and their
respective affiliates and directors, officers, agents and employees (to the extent not reimbursed
by the Borrower, but without affecting Borrower’s reimbursement obligations), against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitee’s gross negligence or wilful misconduct) that such
indemnitee may suffer or incur in connection with its duties as Administrative Agent and/or
Syndication Agent and/or Documentation Agents under this Agreement, the other Loan Documents or any
action taken or omitted by such indemnitee hereunder as Administrative Agent or as Syndication
Agent. In the event that the Syndication Agent, the Documentation Agents or the Administrative
Agent shall, subsequent to its receipt of indemnification payment(s) from Banks in accordance with
this Section, recoup any amount from the Borrower, or any other party liable therefor in connection
with such indemnification, Syndication Agent, such Documentation Agents or the Administrative Agent
shall reimburse the Banks which previously made the payment(s) pro rata, based upon the
actual amounts which were theretofore paid by each Bank. The Syndication Agent, the Documentation
Agents, or the Administrative Agent, as the case may be, shall reimburse such Banks so entitled to
reimbursement within two (2) Business Days after its receipt of such funds from the Borrower or
such other party liable therefor.





59












 





          VII.7 Credit Decision. Each Bank acknowledges that it has, independently
and without reliance upon the Administrative Agent, the Syndication Agent, or the Documentation
Agents, or any other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the Administrative Agent,
Syndication Agent, the Documentation Agents or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement. The Banks or other entities identified in
this Agreement as the Syndication Agent and the Documentation Agents shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement or any other Loan
Document other than those applicable to all Banks. Without limiting the foregoing, neither the
Syndication Agent nor the Documentation Agents shall have or be deemed to have a fiduciary
relationship with any Bank.







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          VII.8 Successor Administrative Agent or Syndication Agent. The Administrative Agent,
the Syndication Agent, or the Documentation Agents may resign at any time by giving notice thereof
to the Banks, the Borrower and each other and the Administrative Agent or the Syndication Agent, as
applicable, shall resign in the event the Commitment of the Bank serving as the Administrative
Agent or the Syndication Agent is reduced to less than $10,000,000. Upon any such resignation, the
Required Banks shall have the right to appoint a successor Administrative Agent or Syndication
Agent, as applicable, which successor Administrative Agent or successor Syndication Agent (as
applicable) shall, provided no Event of Default has occurred and is then continuing, be subject to
Borrower’s approval, which approval shall not be unreasonably withheld or delayed (except that
Borrower shall, in all events, be deemed to have approved Bank of America, N.A. as a successor
Syndication Agent and JPMorgan Chase Bank, N.A. as a successor Administrative Agent). If no
successor Administrative Agent or Syndication Agent (as applicable) shall have been so appointed by
the Required Banks and (if required) approved by the Borrower, or, if so appointed, shall not have
accepted such appointment within 30 days after the retiring Administrative Agent or Syndication
Agent (as applicable) gives notice of resignation, then the retiring Administrative Agent or
retiring Syndication Agent (as applicable) may, on behalf of the Banks, appoint a successor
Administrative Agent or Syndication Agent (as applicable), which shall be the Syndication Agent or
the Administrative Agent, as the case may be, who shall act until the Required Banks shall appoint
a successor Administrative Agent or Syndication Agent. In any event, the retiring Administrative
Agent shall continue to act as Administrative Agent until such time as a successor Administrative
Agent shall have been so appointed by the Required Banks, approved by Borrower (if required), and
assumed its duties hereunder. Upon the acceptance of its appointment as the Administrative Agent or
Syndication Agent hereunder by a successor Administrative Agent or successor Syndication Agent, as
applicable, such successor Administrative Agent or successor Syndication Agent, as applicable,
shall thereupon succeed to and become vested with all the rights and duties of the retiring
Administrative Agent or retiring Syndication Agent, as applicable, and the retiring Administrative
Agent or the retiring Syndication Agent, as applicable, shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent’s or retiring Syndication Agent’s
resignation hereunder, the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent or the Syndication Agent,
as applicable. For gross negligence or willful misconduct, as determined by the Required Banks
(excluding for such determination the Bank serving as Administrative Agent or Syndication Agent in
its capacity as a Bank, as applicable), the Administrative Agent or Syndication Agent may be
removed at any time by giving at least thirty (30) Business Days prior written notice to the
Administrative Agent, Syndication Agent and Borrower. Such resignation or removal shall take
effect upon the
acceptance of appointment by a successor Administrative Agent or Syndication Agent, as
applicable, in accordance with the provisions of this Section 7.8.



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          VII.9 Consents and Approvals. All communications from Administrative Agent to the
Banks requesting the Banks’ determination, consent, approval or disapproval (i) shall be given in
the form of a written notice to each Bank, (ii) shall be accompanied by a description of the matter
or item as to which such determination, approval, consent or disapproval is requested, or shall
advise each Bank where such matter or item may be inspected, or shall otherwise describe the matter
or issue to be resolved, (iii) shall include, if reasonably requested by a Bank and to the extent
not previously provided to such Bank, written materials and a summary of all oral information
provided to Administrative Agent by Borrower in respect of the matter or issue to be resolved, (iv)
shall include Administrative Agent’s recommended course of action or determination in respect
thereof and (v) shall include, in boldface type, a statement that if any Bank does not respond to
such request within ten (10) Business Days and provide a written explanation of the reasons behind
any objection, such Lender shall be deemed to have approved of or consented to, as applicable, the
recommendation or determination of the Administrative Agent described in such request. Each Bank
shall reply promptly, but in any event within ten (10) Business Days after receipt of the request
therefor from Administrative Agent (the “Bank Reply Period”). Unless a Bank shall give
written notice to Administrative Agent that it objects to the recommendation or determination of
Administrative Agent within the Bank Reply Period, such Bank shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions requiring the
approval of the Required Banks or all the Banks, Administrative Agent shall submit its
recommendation or determination for approval of or consent to such recommendation or determination
to all Banks and upon receiving the required approval or consent shall follow the course of action
or determination of the Required Banks (and each non-responding Bank shall be deemed to have
concurred with such recommended course of action) or all the Banks, as the case may be.



ARTICLE VIII




CHANGE IN CIRCUMSTANCES



          VIII.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:



          (a) the Administrative Agent determines in good faith that deposits in dollars (in the
applicable amounts) are not being offered in the relevant market for such Interest Period, or



          (b) Banks having 50% or more of the aggregate amount of the Commitments advise the
Administrative Agent that the Euro-Dollar Rate, as determined by the Administrative Agent will not
adequately and fairly reflect the cost to each such



62









 







Bank of funding its Euro-Dollar Loans for such
Interest Period, the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to make Euro-Dollar
Loans shall be suspended. In such event, unless the Borrower notifies the Administrative Agent at
least two Business Days before the date of 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. For purposes of Section 8.1(b), in determining whether
the Euro-Dollar Rate, as determined by Administrative Agent, will not adequately and fairly reflect
the cost to any Bank of funding its Euro-Dollar Loans for such Interest Period, such determination
will be based solely on the ability of such Bank to obtain matching funds in the London interbank
market at a reasonably equivalent rate.



          VIII.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) to make, maintain or
fund its Euro-Dollar Loans, 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 above to make Euro-Dollar Loans, 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
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.



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          If, at any time, it shall be unlawful for any Bank to make, maintain or fund its Euro-Dollar
Loans, the Borrower shall have the right, upon five (5) Business Day’s notice to the Administrative
Agent, to either (x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to
purchase the Commitment of such Bank for an amount equal to such Bank’s outstanding Loans and all
amounts due such Bank hereunder (including, without limitation, interest and all amounts payable
pursuant to Section 2.13), and to become a Bank hereunder, or obtain the agreement of one or more
existing Banks to offer to purchase the Commitment of such Bank for such amount, which offer such
Bank is hereby required to accept, or (y) to repay in full all Loans then outstanding of such Bank,
together with interest thereon and all other amounts due such Bank hereunder (including, without
limitation, amounts payable pursuant to Section 2.13), upon which event, such Bank’s Commitment
shall be deemed to be cancelled pursuant to Section 2.11(e). Any Bank subject to this paragraph
shall retain the benefits of Sections 8.3, 8.4 and 9.3 for the period prior to such purchase or
cancellation.



          VIII.3 Increased Cost and Reduced Return.



          (a) If, on or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having the force of law)
made after the Closing Date of any such authority, central bank or comparable agency, shall impose,
modify or deem applicable any reserve (including, without limitation, any such requirement imposed
by the Federal Reserve Board (but excluding with respect to any Euro-Dollar Loan any such
requirement to the extent reflected in an applicable Euro-Dollar Reserve Percentage)), special
deposit, insurance assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on
any Bank (or its Applicable Lending Office) or on the London interbank market any other condition
materially more burdensome in nature, extent or consequence than those in existence as of the
Closing Date affecting such Bank’s Euro-Dollar Loans, its Note, or its obligation to make
Euro-Dollar Loans, and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce the
amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect to such Euro-Dollar Loans, by an amount deemed by such
Bank to be material, 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



64









 







for such increased cost or reduction to the extent such
Bank generally imposes such additional amounts on other borrowers of such Bank in similar
circumstances.



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



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



          (d) If at any time, any Bank shall be owed amounts pursuant to this Section 8.3, the Borrower
shall have the right, upon five (5) Business Day’s notice to the Administrative Agent to either (x)
cause a bank, reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitment of such Bank for an amount equal to such Bank’s outstanding Loans and all amounts due
such Bank hereunder



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(including, without limitation, interest and all amounts payable pursuant to
Section 2.13 and this Section 8.3), and to become a Bank hereunder, or to obtain the agreement of
one or more existing Banks to offer to purchase the Commitment of such Bank for such amount, which
offer such Bank is hereby required to accept, or (y) to repay in full all Loans then outstanding of
such Bank, together with interest thereon and all other amounts due such Bank hereunder (including,
without limitation, amounts payable pursuant to Section 2.13 and this Section 8.3), upon which
event, such Bank’s Commitment shall be deemed to be cancelled pursuant to Section 2.11(e). Any
Bank subject to this Section 8.3(d) shall retain the benefits of Sections 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.



          VIII.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 and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank or
the Administrative Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its income, and franchise or similar taxes imposed
on it, by the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision
thereof or by any other jurisdiction (or any political subdivision thereof) as a result of a
present or former connection between such Bank or Administrative Agent and such other jurisdiction
or by the United States (all such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Non-Excluded Taxes”). If
the Borrower shall be required by law to deduct any Non-Excluded Taxes from or in respect of any
sum payable hereunder or under any Note, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to additional sums
payable under this Section 8.4) such Bank or the Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been made, (ii) the
Borrower 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 from the execution



66









 







or delivery of, or otherwise with respect
to, this Agreement or any Note (hereinafter referred to as “Other Taxes”).



          (c) The Borrower agrees to indemnify each 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 or the Administrative Agent (as the case may be) and, so long as such Bank or
Administrative Agent has promptly paid any such Non-Excluded Taxes or Other Taxes, any liability
for penalties and interest arising therefrom or with respect thereto. This indemnification shall
be made within 15 days from the date such Bank or the Administrative Agent (as the case may be)
makes demand therefor.



          (d) Each Bank organized under the laws of a jurisdiction outside the United States, on
or prior to the date of its execution and delivery of this Agreement in the case of each Bank
listed on the signature pages hereof and on or prior to the date on
which it becomes a Bank in the case of each other Bank, shall provide the Borrower with an
Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and shall provide Borrower with two further copies of any such form
or certification on or before the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in the most recent form
previously delivered by it to Borrower, certifying (i) in the case of a Form 1001, that such Bank
is entitled to benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct of a trade or
business in the United States, and (ii) in the case of being under Sections 1442(c)(1) and 1442(a)
of the Code, that it is entitled to an exemption from United States backup withholding tax. If the
form provided by a Bank at the time such Bank first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax at such rate shall
be considered excluded from “Non-Excluded Taxes” as defined in Section 8.4(a).



          (e) For any period with respect to which a Bank has failed to provide the Borrower with the
appropriate form pursuant to Section 8.4(d) (unless such failure is due to a change in treaty, law
or regulation occurring subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section 8.4(c) with respect to
Non-Excluded Taxes imposed by the United States; provided, however, that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Non-Excluded Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such



67









 







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



          (g) 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.



          (h) If, at any time, any Bank shall be owed amounts pursuant to this Section 8.4, the
Borrower shall have the right, upon five (5) Business Day’s notice to the Administrative Agent to
either (x) cause a bank, reasonably acceptable to the Administrative Agent, to offer to purchase
the Commitment of such Bank for an amount equal to such Bank’s outstanding Loans and all amounts
due such Bank hereunder (including, without limitation, interest and all amounts payable pursuant
to Section 2.13 and this Section 8.4), and to become a Bank hereunder, or to obtain the agreement
of one or more existing Banks to offer to purchase the Commitment of such Bank for such amount,
which offer such Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest thereon and all other amounts due such Bank
hereunder (including, without limitation, amounts payable pursuant to Section 2.13 and this Section
8.4), upon which event, such Bank’s Commitment shall be deemed to be cancelled pursuant to Section
2.11(c). Any Bank subject to this Section 8.4(d) shall retain the benefits of Sections 8.3, 8.4
and 9.3 for the period prior to such purchase or cancellation.



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          VIII.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



69









 





          IX.1 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, facsimile transmission followed by telephonic
confirmation or similar writing) and shall be given to such party: (x) in the case of the Borrower
or the Administrative Agent, at its address, or facsimile number set forth on the signature pages
hereof with a duplicate copy thereof, in the case of the Borrower, to the Borrower, at Equity
Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: General Counsel,
facsimile number (312) 454-0039, and to DLA Piper US LLP, 203 North LaSalle Street, Suite 1900,
Chicago, Illinois 60601, Attn: James M. Phipps, Esq., facsimile number (312) 251-5735, (y) in the
case of any Bank, at its address, or facsimile number set forth in its Administrative Questionnaire
or (z) in the case of any party, such other address, or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the Borrower and, if
such party is the Borrower or the Administrative Agent, the Banks. Each such notice, request or
other communication shall be effective (i) if given by facsimile transmission, when such facsimile
is transmitted to the facsimile number specified in this Section and the appropriate answerback or
facsimile confirmation is received, (ii) if given by certified registered mail, return receipt
requested, with first class postage prepaid, addressed as aforesaid, upon receipt or refusal to
accept delivery, (iii) if given by a nationally recognized overnight carrier, 24 hours after such
communication is deposited with such carrier with postage prepaid for next day delivery, or (iv) if
given by any other means, when delivered at the address specified in this Section; provided
that notices to the Administrative Agent under Article II or Article VIII shall not be effective
until received. The Administrative Agent shall promptly notify the Banks of any change in the
address of the Borrower or the Administrative Agent.



          IX.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.



          IX.3 Expenses; Indemnification.



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



70









 







Slate,
Meagher & Flom LLP in connection with the syndication of the Loans and (iii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by the Administrative Agent and each Bank
(the Administrative Agent shall promptly submit any expenses of any of the Banks to Borrower for
reimbursement), including fees and disbursements of counsel for the Administrative Agent and each
of the Banks, in connection with the enforcement of the Loan Documents and the instruments referred
to therein and such Event of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom; provided, however, that the attorneys’ fees and
disbursements for which Borrower is obligated under this subsection (a)(iii) shall be limited to
the reasonable non-duplicative fees and disbursements of (A) counsel for Administrative Agent, and
(B) counsel for all of the Banks as a group; and provided, further, that all other
costs and expenses for which Borrower is obligated under this subsection (a)(iii) shall be limited
to the reasonable non-duplicative costs and expenses of Administrative Agent. For purposes of this
Section 9.3(a)(iii), (1) counsel for Administrative Agent shall mean a single outside law firm
representing Administrative Agent, and (2) counsel for all of the Banks as a group shall mean a
single outside law firm representing such Banks as a group (which law firm may or may not be the
same law firm representing either or both of Administrative Agent and/or Syndication Agent).



          (b) The Borrower agrees to indemnify the Syndication Agent, the Administrative Agent
and each Bank, their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial proceeding that may at
any time (including, without limitation, at any time following the payment of the Obligations) be
asserted against any Indemnitee, as a result of, or arising out of, or in any way related to or by
reason of, (i) any of the transactions contemplated by the Loan Documents or the execution,
delivery or performance of any Loan Document, including, without limitation, any Section 1031
exchange as contemplated by Section 9.21, (ii) any violation by the
Borrower, EQR or the Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or operation of property
or assets by the Borrower, EQR or any of the Environmental Affiliates, including, without
limitation, all on-site and off-site activities of Borrower or any Environmental Affiliate
involving Materials of Environmental Concern, (iv) the breach of any environmental representation
or warranty set forth herein, but excluding those liabilities, losses, damages, costs and expenses
(a) for which such Indemnitee has been compensated pursuant to the terms of this Agreement, (b)
incurred solely by reason of the gross negligence, wilful misconduct, bad faith or fraud of any
Indemnitee as finally determined by a court of competent jurisdiction, (c) violations of
Environmental Laws relating to a Property which are caused by the act or omission of such
Indemnitee after



71









 







such Indemnitee takes possession of such Property or (d) any liability of such
Indemnitee to any third party based upon contractual obligations of such Indemnitee owing to such
third party which are not expressly set forth in the Loan Documents. In addition, the
indemnification set forth in this Section 9.3(b) in favor of any director, officer, agent or
employee of Administrative Agent, Syndication Agent or any Bank shall be solely in his or her
respective capacity as such director, officer, agent or employee. The Borrower’s obligations under
this Section shall survive the termination of this Agreement and the payment of the Obligations.



          IX.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 (except pursuant to Sections 8.2, 8.3, 8.4 or 9.6), receive payment of a proportion of
the aggregate amount of principal and interest due with respect to any Note held by it, which is
greater than the proportion received by any 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 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 The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a participation in a Note, 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 written
waiver shall be effective against such Bank under this Section 9.4.



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          IX.5 Amendments and Waivers. Any provision of this Agreement or the Notes 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 are affected thereby, by the Administrative Agent); provided that no
such amendment or waiver with respect to this Agreement, the Notes 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) except as may result by
operation of Section 2.1(b), 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, except as provided below, any Down REIT Guaranty, (vi) modify the definition
of “Required Banks”, or (vii) modify the provisions of this Section 9.5. At such time as (I) the
Borrower shall sell its interest in any Down REIT Guarantor to an unaffiliated third party in an
arms-length transaction, or (II) any Down REIT Guarantor is no longer a guarantor under the
Existing Credit Agreement, the Down REIT Guaranty of such Down REIT Guarantor shall be deemed to
have terminated and released, and the Banks hereby authorize the Administrative Agent to enter into
an agreement, confirming the termination and release of such Down REIT Guaranty, at the Borrower’s
sole cost and expense.



          IX.6 Successors and Assigns.



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



          (b) Any Bank may at any time grant (i) prior to the occurrence of an Event of Default,
to an existing Bank or one or more banks, finance companies, insurance companies or other financial
institutions in minimum amounts of not less than $5,000,000 (or any lesser amount in the case of
participations to an existing Bank) (it being understood that no Bank may hold a Commitment of
which less than $10,000,000 in the aggregate is for its own account, unless its Commitment shall
have been reduced to zero) and (ii) after the occurrence and during the continuance of an Event of
Default, to
any Person in any amount (in each case, a “Participant”), participating interests in
its



73









 







Commitment or any or all of its Loans, with (and subject to) the consent of, provided that no
Event of Default shall have occurred and be continuing, the Borrower, which consent shall not be
unreasonably withheld or delayed. The Administrative Agent shall be notified by any such Bank of
any such participation prior to the same becoming effective. Any participation made during the
continuation of an Event of Default shall not be affected by the subsequent cure of such Event of
Default. In the event of any such grant by a Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Administrative Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank in connection with
such Bank’s rights and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in clause (i), (ii),
(iii), (iv) or (v) of Section 9.5 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement, be entitled to the
benefits of Article VIII with respect to its participating interest. An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of, and subject to the restrictions with respect to, a
participating interest granted in accordance with this subsection (b).



          (c) Any Bank may at any time assign to (i) prior to the occurrence of an Event of
Default, (A) an existing Bank, (B) one or more banks, finance companies, insurance or other
financial institutions which (1) has (or, in the case of a bank which is a subsidiary, such bank’s
parent has) a rating of its senior debt obligations of not less than Baa-1 by Moody’s or a
comparable rating by a rating agency acceptable to Administrative Agent and (2) has total assets in
excess of Ten Billion Dollars ($10,000,000,000) (a “Qualified Institution”), or (C) with
the prior consent and approval of the Administrative Agent and Borrower, a wholly-owned affiliate
of such transferor Bank if such transferor Bank then meets the requirements of clause (i)(B) or, if
such transferor Bank’s parent then meets the requirements of clause (i)(B), a wholly-owned
affiliate of such parent, in each case in minimum amounts of not less than Ten Million Dollars
($10,000,000) and integral multiples of One Million Dollars ($1,000,000) thereafter (or any lesser
amount in the case of assignments to an existing Bank) (it being understood that no Bank may hold a
Commitment of less than $10,000,000 in the aggregate, unless its Commitment shall have been reduced
to zero) and (ii) after the occurrence and during the continuance of an Event of Default, to any
Person in any amount (in each case, an “Assignee”), all or a proportionate part of all, of
its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and, in



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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 which meets the requirements of clause (i)(B) above or was a Bank immediately prior
to such assignment, no such consent shall be required. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and no further consent or action by any party shall be
required and the transferor Bank shall be released from its obligations hereunder to a
corresponding extent. Upon the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to the Assignee. In connection with any such assignment,
the transferor Bank shall pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500 provided that such fee shall be paid by the Assignee if such
assignment is required by Section 8.2, 8.3 or 8.4. If the Assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.4. Any assignment made during the
continuation of an Event of Default shall not be affected by any subsequent cure of such Event of
Default.



          (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and
its Note, to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its
obligations hereunder.



          (e) 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.



          IX.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.



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          IX.8 Governing Law; Submission to Jurisdiction.



          (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE
STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).



          (b) Any legal action or proceeding with respect to this Agreement or any other Loan Document
and any action for enforcement of any judgment in respect thereof may be brought in the courts of
the State of Illinois or of the United States of America for the Northern District of Illinois,
and, by execution and delivery of this Agreement, the Borrower hereby accepts for itself and in
respect of its property, 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.



          IX.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).



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          IX.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.



          IX.11 Survival. All indemnities set forth herein (including, without limitation,
Sections 8.4 and 9.3) shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Obligations.



          IX.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.



          IX.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.



          IX.14 Recourse Obligation. This Agreement and the Obligations hereunder are fully
recourse to the Borrower, and to EQR pursuant to the EQR Guaranty and to any Down REIT Guarantor
pursuant to any Down REIT Guaranty. Notwithstanding the foregoing, no recourse under or upon any
obligation, covenant, or agreement contained in this Agreement shall be had against any officer,
director, shareholder, limited partner or employee of the Borrower or any officer, director,
shareholder or employee of EQR except in the event of fraud or misappropriation of funds on the
part of such officer, director, shareholder or employee.



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          IX.15 Confidentiality. The Administrative Agent and each Bank shall use
reasonable efforts to assure that information about Borrower, EQR and its Subsidiaries and
Investment Affiliates, and the Properties thereof and their operations, affairs and financial
condition, not generally disclosed to the public, which is furnished to Administrative Agent or any
Bank pursuant to the provisions hereof or any other Loan Document is used only for the purposes of
this Agreement and shall not be divulged to any Person other than the Administrative Agent, the
Banks, and their affiliates and respective officers, directors, employees and agents who are
actively and directly participating in the evaluation, administration or enforcement of the Loan,
this Agreement, the Loan Documents, the extension of credit hereunder or other banking services
business with the Borrower and its Affiliates, except: (a) to their attorneys and accountants, (b)
in connection with the enforcement of the rights and exercise of any remedies of the Administrative
Agent and the Banks hereunder and under the other Loan Documents, (c) in connection with
assignments and participations and the solicitation of prospective assignees and participants
referred to in Section 9.6 hereof, who have agreed in writing to be bound by a confidentiality
agreement substantially equivalent to the terms of this Section 9.15, and (d) as may otherwise be
required or requested by any regulatory authority or self-regulatory body having jurisdiction over,
or claiming jurisdiction or authority to oversee or regulate, the Administrative Agent or any Bank
or by any applicable law, rule, regulation or judicial process.



          IX.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, 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). If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank’s Loan included in such Borrowing for
purposes of this Agreement as of the date of such Borrowing. Nothing contained in this Section or
Section 2.4(c) 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
Section 2.4(b) shall not relieve any other Bank of its obligations to fund its Commitment, in
accordance with the provisions hereof.



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          (b) If a Bank does not remit to Administrative Agent such Bank’s Pro Rata Share of a
Loan in accordance herewith, then neither Administrative Agent nor the other Banks shall be
required or obligated to fund such Bank’s Pro Rata Share of such Loan.



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



          (i) “Defaulting Bank” shall mean any Bank which (x) does not remit to the
Administrative Agent such Bank’s Pro Rata Share of a Loan in accordance herewith for a period of
five (5) Business Days after notice of such failure from Administrative Agent, (y) shall otherwise
fail to perform such Bank’s obligations under the Loan Documents for a period of five (5) Business
Days after notice of such failure from Administrative Agent, or (z) shall fail to pay the
Administrative Agent or any other Bank, as the case may be, upon demand, such Bank’s Pro Rata Share
of any costs, expenses or disbursements incurred or made by the Administrative Agent and payable by
such Bank pursuant to the terms of the Loan Documents for a period of five (5) Business Days after
notice of such failure from Administrative Agent, and in all cases, such failure is not as a result
of a good faith dispute as to whether such advance is properly required to be made pursuant to the
provisions of this Agreement, or as to whether such other performance or payment is properly
required pursuant to the provisions of this Agreement.



          (ii) “Junior Creditor” means any Defaulting Bank which has not (x) fully cured each
and every default on its part under the Loan Documents and (y) unconditionally tendered to the
Administrative Agent such Defaulting Bank’s Pro Rata Share of all costs, expenses and disbursements
required to be paid or reimbursed pursuant to the terms of the Loan Documents.



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



          (iv) “Senior Debt” means (x) collectively, any and all indebtedness,
obligations and liabilities of the Borrower to the Banks who are not Junior Creditors, or any of
them, from time to time, whether fixed or contingent, direct or indirect, joint or several, due or
not due, liquidated or unliquidated, determined or undetermined, arising by contract, operation of
law or otherwise, whether on open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing after the filing of
a petition initiating any proceeding referred to in Section 6.1(f) or (g)), reimbursement for fees,
indemnities, costs, expenses or



79









 







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:



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



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



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



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



          (e) In the event of:



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



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



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



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



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



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



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



          (g) (i) If any payment or distribution of any character or any security, whether in
cash, securities or other property, shall be received by any Junior Creditor in contravention of
any of the terms hereof, such payment or distribution or security shall be received for the benefit
of, and shall promptly be paid over or delivered and transferred to, Administrative Agent for
application to the payment of all Senior Debt, to the extent



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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 other Loan Documents
in reliance upon the absolute subordination in right of payment and in time of payment of
Subordinated Debt to Senior Debt as set forth herein.



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



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



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



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



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          (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 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.



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          (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.



          IX.17 Intentionally Omitted.



          IX.18 Down REIT Guaranties.



          (a) Notwithstanding any other provision hereof or of any other Loan Document to the
contrary, the Administrative Agent and the Banks agree with Borrower that any funds, claims, or
distributions actually received by the Administrative Agent for the account of any Bank as a result
of the enforcement of, or pursuant to, any Down REIT Guaranty, net of the Administrative Agent’s
and the Banks’ expenses of collection thereof (such net amount, “Down REIT Guaranty
Proceeds”), shall be made available for distribution equally and ratably (in proportion to the
aggregate amount of principal, interest and other amounts then owed in respect of the Obligations
or of an issuance of Public Debt, as the case may be) among the Administrative Agent and the Banks
and the trustee or trustees of any Unsecured Debt, not subordinated to the Obligations (or to the
holders thereof), issued by Borrower, before or after the Effective Date, in offerings registered
under the Securities Act of 1933, as amended, or in transactions exempt from registration pursuant
to rule 144A or Regulation 8 thereunder or listed on non-U.S. securities exchanges (“Public
Debt”), and the Administrative Agent is hereby authorized
by Borrower, by each Bank and by each Down REIT Guarantor by its execution and delivery of a
Down REIT Guaranty, to make such Down REIT Guaranty Proceeds so available. No Bank shall have any
interest in any amount paid over by the Administrative Agent to the trustee or trustees in respect
of any Public Debt (or to the holders thereof) pursuant to the foregoing authorization. This
Section 9.18 shall apply solely to Down REIT Guaranty Proceeds, and not to any payments,
funds, claims or distributions received by the Administrative Agent or any Bank directly or
indirectly



84









 







from Borrower or any other Person other than from a Down REIT Guarantor pursuant to a
Down REIT Guaranty. Borrower is aware of the terms of the Down REIT Guaranties, and specifically
understands and agrees with the Administrative Agent and the Banks that, to the extent Down REIT
Guaranty Proceeds are distributed to holders of Public Debt or their respective trustees, such Down
REIT Guarantor has agreed that the Obligations will not be deemed reduced by any such distributions
and such Down REIT Guarantor shall continue to make payments pursuant to its Down REIT Guaranty
until such time as the Obligations have been paid in full (and the Commitments have been
terminated), after taking into account any such distributions of Down REIT Guaranty Proceeds in
respect of Indebtedness other than the Obligations.



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



          (c) This Section 9.18 and all Down REIT Guaranties, are for the sole benefit of the
Administrative Agent and the Banks and their respective successors and assigns. Nothing contained
herein or in any Down REIT Guaranty shall be deemed for the benefit of any holder of Public Debt,
or any trustee for such holder; nor shall anything contained herein or therein be construed to
impose on the Administrative Agent or any Bank any fiduciary duties, obligations or
responsibilities to the holders of any Public Debt or their trustees (including, but not limited
to, any duty to pursue any Down REIT Guarantor for payment under its Down REIT Guaranty).



          IX.19 USA PATRIOT Act Notice. Each Bank that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any Bank) hereby notifies
the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Bank or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.



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          IX.20 Public/Private Information. The Borrower hereby acknowledges that (a) the
Administrative Agent and/or the Syndication Agent will make available to the Banks materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”)
by posting the Borrower Materials on IntraLinks or another similar electronic system (the
“Platform”) and (b) certain of the Banks may be “public-side” lenders (i.e., Banks that do not wish
to receive material non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the
Administrative Agent, the Syndication Agent and the Banks to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however, that to the extent
such Borrower Materials constitute Information, they shall be treated as set forth in Section
9.15); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform marked “PUBLIC” or through a portion of the Platform designated “Public
Investor;” and (z) the Administrative Agent and the Syndication Agent shall be entitled to treat
any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion
of the Platform not designated “Public Investor.”



 









 





          IX.21 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i)
(A) the arranging and other services regarding this Agreement provided by the Administrative Agent
and the Joint Lead Arrangers are arm’s-length commercial transactions between the Borrower, on the
one hand, and the Administrative Agent and the Joint Lead Arrangers, on the other hand, (B) the
Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the other Loan
Documents, (ii) (A) the Administrative Agent and each Joint Lead Arranger each is and has been
acting solely as a principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Borrower or
any of its Affiliates, and (B) neither the Administrative Agent nor any Joint Lead Arranger has any
obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan Documents and the
commitment letter; and (iii) the Administrative Agent and the Joint Lead Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that involve interests that
differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor
either Joint Lead Arranger has any obligation to disclose any of such interests to the Borrower or
its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any
claims that it may have against the Administrative Agent and the Joint Lead Arrangers with respect
to any breach or alleged breach of agency or fiduciary duty arising on or before the date of this
Agreement in connection with any aspect of any transaction contemplated hereby.




 











 





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



	 	 	 	 	 
	 	ERP OPERATING LIMITED PARTNERSHIP

 	 
	 	By:  	                                         Equity Residential
 	 
	 	 	 	 
	 	 	 
	 	By:  	                                                   /s/ Mark J. Parrell
 	 
	 	 	Name:  	Mark J. Parrell 	 
	 	 	Title:  	Senior Vice President and Treasurer

	 	

Facsimile number: (312) 454-0039

Address:              Two North Riverside Plaza

                  Suite 400

                  Chicago, Illinois 60606

                  Attn: Chief Financial Officer 	 
	 



For purposes of agreeing to be bound

by the provisions of Section 5.13 only:




	 	 	 	 	 
	EQUITY RESIDENTIAL

 	 	 
	By:  	/s/ Mark J. Parrell
 	 	 
	 	Name:  	Mark J. Parrell 	 	 
	 	Title:  	Senior Vice President and Treasurer 	 	 



88









 






	 	 	 	 	 


Commitments




	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Administrative 

Agent and as a Bank

 	 
	 	By:  	/s/ Mark A. Mokelke
 	 
	 	 	Name:  	Mark A. Mokelke 	 
	 	 	Title:  	Vice President

	 
	 	 	

Bank of America, N.A.

Mail Code

231 South LaSalle Street

Chicago, Illinois 60697

Attention:

Telecopy: 	 
	 


Commitment: $45,000,000





89









 








	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Syndication 

Agent and as a Bank

 	 
	 	By:  	/s/ Marc Costantino
 	 
	 	 	Name:  	Marc Costantino 	 
	 	 	Title:  	Executive Director 	 
	 


Commitment: $45,000,000





90









 








	 	 	 	 	 
	 	CITICORP NORTH AMERICA INC., as 

Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Ricardo James
 	 
	 	 	Name:  	Ricardo James 	 
	 	 	Title:  	 	 
	 


Commitment: $30,000,000





91









 








	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY 

AMERICAS, as a Bank

 	 
	 	By:  	/s/ Brenda Casey
 	 
	 	 	Name:  	Brenda Casey 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                                         /s/ J.T. Coe
 	 
	 	 	Name:  	J.T. Coe 	 
	 	 	Title:  	Managing Director 	 
	 


Commitment: $30,000,000




	 	 	 	 	 
	 	DEUTSCHE BANK SECURITIES INC., 

as Documentation Agent

 	 
	 	By:  	/s/ James Rolison
 	 
	 	 	Name:  	James Rolison 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                                         /s/ George Reynolds
 	 
	 	 	Name:  	George Reynolds 	 
	 	 	Title:  	Director 	 



92









 






	 	 	 	 	 



	 	 	 	 	 
	 	REGIONS BANK, as Documentation Agent and as a 

Bank

 	 
	 	By:  	/s/ Lori Chambers
 	 
	 	 	Name:  	Lori Chambers 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $30,000,000





93









 








	 	 	 	 	 
	 	ROYAL BANK OF SCOTLAND PLC, as 

Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Brett Thompson
 	 
	 	 	Name:  	Brett Thompson 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $30,000,000





94









 








	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as 

Documentation Agent and as a Bank

 	 
	 	By:  	/s/ Renee Lewis
 	 
	 	 	Name:  	Renee Lewis 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $30,000,000





95









 








	 	 	 	 	 
	 	NATIONAL CITY BANK, as Managing Agent and 

as a Bank

 	 
	 	By:  	/s/ Michael Mitro
 	 
	 	 	Name:  	Michael Mitro 	 
	 	 	Title:  	Senior Vice President 	 
	 


Commitment: $30,000,000





96









 








	 	 	 	 	 
	 	LEHMAN COMMERCIAL PAPER INC., as 

Managing Agent and as a Bank

 	 
	 	By:  	/s/ Brian McNany
 	 
	 	 	Name:  	Brian McNany 	 
	 	 	Title:  	Authorized Signatory 	 
	 


Commitment: $25,000,000





97









 








	 	 	 	 	 
	 	MERRILL LYNCH BANK USA, as Managing 

Agent and as a Bank

 	 
	 	By:  	/s/ David Millett
 	 
	 	 	Name:  	David Millett 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $25,000,000





98









 








	 	 	 	 	 
	 	MORGAN STANLEY BANK, as Managing Agent 

and as a Bank

 	 
	 	By:  	/s/ Daniel Twenge
 	 
	 	 	Name:  	Daniel Twenge 	 
	 	 	Title:  	Authorized Signatory 	 
	 


Commitment: $25,000,000






99









 








	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL 

ASSOCIATION, as Managing Agent and as a Bank

 	 
	 	By:  	

/s/ Cynthia A. Bean
 	 
	 	 	Name:  	Cynthia A. Bean 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $25,000,000





100









 








	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Managing Agent 

and as a Bank

 	 
	 	By:  	/s/ Winita Lau
 	 
	 	 	Name:  	Winita Lau 	 
	 	 	Title:  	Assistant Vice President 	 
	 


Commitment: $25,000,000





101









 








	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION, as a 

Bank

 	 
	 	By:  	/s/ Dennis Owen Gallagher
 	 
	 	 	Name:  	Dennis Owen Gallagher 	 
	 	 	Title:  	Senior Vice President 	 
	 


Commitment: $25,000,000





102









 








	 	 	 	 	 
	 	SUNTRUST BANK, as a Bank

 	 
	 	By:  	/s/ Nancy B. Richards
 	 
	 	 	Name:  	Nancy B. Richards 	 
	 	 	Title:  	Senior Vice President 	 
	 


Commitment: $20,000,000






103









 








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

 	 
	 	By:  	/s/ Kevin Jordan
 	 
	 	 	Name:  	Kevin Jordan 	 
	 	 	Title:  	Senior Vice President 	 
	 


Commitment: $20,000,000






104









 








	 	 	 	 	 
	 	COMERICA BANK, as a Bank

 	 
	 	By:  	/s/ Leslie A. Vogel
 	 
	 	 	Name:  	Leslie A. Vogel 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $15,000,000






105









 








	 	 	 	 	 
	 	THE BANK OF NEW YORK, as a Bank

 	 
	 	By:  	/s/ Kenneth R. McDonnell
 	 
	 	 	Name:  	Kenneth R. McDonnell 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $10,000,000





106









 








	 	 	 	 	 
	 	BANK OF TOKYO — MITSUBISHI UFJ, LTD., as 

a Bank

 	 
	 	By:  	/s/ James T. Taylor
 	 
	 	 	Name:  	James T. Taylor 	 
	 	 	Title:  	Vice President 	 
	 


Commitment: $10,000,000






107









 








	 	 	 	 	 
	 	THE NORTHERN TRUST COMPANY, as a Bank

 	 
	 	By:  	/s/ Kate Spadoni
 	 
	 	 	Name:  	Kate Spadoni 	 
	 	 	Title:  	Second Vice President 	 
	 


Commitment: $5,000,000





108









 







Total Commitments


$500,000,000

















 





EXHIBIT A




NOTE




			
	 	 	 
	$_______________
	 	Chicago, Illinois
	 
	 	_______  ___,2007






          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 Agreement referred to below on the Maturity Date (as such term is
defined in the 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 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, N.A., 901 Main Street,
Dallas, TX 75202.




          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 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 Credit Agreement dated as of October 5, 2007 among the Borrower, the banks
party thereto, BANK OF AMERICA, N.A., as Administrative Agent, JPMORGAN CHASE BANK, N.A., as
Syndication Agent, and CITICORP NORTH AMERICA INC., DEUTSCHE BANK SECURITIES INC., REGIONS BANK,
THE ROYAL BANK OF SCOTLAND PLC, and U.S. BANK NATIONAL ASSOCIATION, as Documentation Agents (as the
same may be amended from time to time, the “Agreement”). Terms defined in the Agreement
are used herein with the same meanings. Reference is made to the Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.





A-1







 









 








	 	 	 	 	 
	 	ERP OPERATING LIMITED PARTNERSHIP

 	 
	 	By:  	Equity Residential
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




A-2








 









 








Note (cont’d)




LOANS AND PAYMENTS OF PRINCIPAL



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of	 	 	 	 
	 	 	Amount of	 	Type of	 	Principal	 	 	 	Maturity	 	 
	Date	 	Loan	 	Loan	 	Repaid	 	Date	 	Made By	 	Notation
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 






A-3






 









 








EXHIBIT B

Intentionally Omitted




B-1








 









 








EXHIBIT C




FORM OF NOTICE OF BORROWING



______________________, _____



Bank of America, N.A., as Administrative Agent for the Banks party to the Credit Agreement referred
to below




______________________




______________________




Attention:



Ladies and Gentlemen:




          Reference is hereby made to that certain Credit Agreement dated as of October 5, 2007 among
ERP Operating Limited Partnership (the “Borrower”), the banks party thereto, BANK OF AMERICA, N.A.,
as Administrative Agent, JPMORGAN CHASE BANK, N.A., as Syndication Agent, and CITICORP NORTH
AMERICA INC., DEUTSCHE BANK SECURITIES INC., REGIONS BANK, THE ROYAL BANK OF SCOTLAND PLC, and U.S.
BANK NATIONAL ASSOCIATION, as Documentation Agents.




          The Borrower hereby gives you notice, irrevocably, pursuant to Section 2.1 of the
Credit Agreement that the Borrower hereby requests a Borrowing under the Credit Agreement and, in
that connection, sets forth below the information relating to such Borrowing or issuance (the
“Proposed Borrowing”) as required pursuant to the terms of the Credit Agreement:





	 	1.	 	Amount of Loans: _____________
	 
	 	2.	 	Date of Proposed Borrowing: ___________
	 
	 	4.	 	Type of Loan(check one only):






	 	o 	 	 Base Rate Loan
	 
	 	o 	 	 Euro-Dollar Loan with Euro-Dollar Interest
Period of:






	 	o 	 	 [1, 2, 3 or 6 months (or shorter but not less than 7 days)] ending _____





X-1






 









 








     Proceeds of such Loans are to be credited to Bank of America Account # (or wired to
such other bank and account as instructed) (or used to pay down Base Rate Loan in the amount of
_______).



     The Borrower hereby certifies that the conditions precedent contained in
Section [3.1] [3.2] are satisfied on the date hereof and will be satisfied on
the date of the Proposed Borrowing.



	 	 	 	 	 
	 	ERP OPERATING LIMITED PARTNERSHIP

 	 
	 	By:  	Equity Residential
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



X-2






 









 








EXHIBIT D




Intentionally Omitted




D-1






 









 








EXHIBIT E




TRANSFER SUPPLEMENT



          TRANSFER SUPPLEMENT (this “Transfer Supplement”)
 dated as of ___,
200_ between ________(the “Assignor”) and
_____  having an address at _____ (the “Purchasing Bank”).




WITNESSETH:




          WHEREAS, the Assignor has made loans to ERP Operating Limited Partnership, an Illinois limited
partnership (the “Borrower”), pursuant to the Credit Agreement dated as of October 5, 2007
among the Borrower, the banks party thereto, BANK OF AMERICA, N.A., as Administrative Agent,
JPMORGAN CHASE BANK, N.A., as Syndication Agent, and CITICORP NORTH AMERICA INC., DEUTSCHE BANK
SECURITIES INC., REGIONS BANK, THE ROYAL BANK OF SCOTLAND PLC, and U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agents. All capitalized terms used and not otherwise defined herein shall have
the respective meanings set forth in the Agreement; and




          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 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
Assignor’s rights and obligations under the 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 Loan held by the Assignor, the Commitment of the Assignor and any other interest of
the Assignor under any of the Loan Documents.




          2. The Assignor (i) represents and warrants that as of the date hereof the amount of
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 $ ___; (ii) represents and warrants that it is the legal and




E-1





 









 







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 Agreement or the other Loan
Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of the 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, EQR or any Down REIT Guarantor or the
performance or observance by the Borrower, EQR or any Down REIT Guarantor of any of its obligations
under the Agreement or the other Loan Documents or any other instrument or document furnished
pursuant thereto. Except as a result of a material misrepresentation of those representations
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 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 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 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 Agreement, and the other Loan Documents
as are delegated to the Administrative 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 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 it has full power and authority
to execute and deliver, and perform under, this




E-2




 









 







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 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 (except any rights of the Assignor under Sections 8.3, 8.4 and 9.3 for the period prior
to the Effective Date) and be released from its obligations under the Agreement.




          6. From and after the Effective Date, the Assignor shall cause the Administrative Agent to
make all payments under the 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, N.A. (“BofA”) as Administrative Agent in connection
with the Assignor’s Pro Rata Share of the obligation to reimburse the Agent for its expenses and
made all Loans required. In the event BofA, as Administrative Agent, shall demand reimbursement for
fees and expenses from Purchasing Bank for any period prior to the Effective Date, Assignor hereby
agrees to promptly pay BofA, as Administrative Agent, such sums directly, subject, however, to
Paragraph 12 hereof.




E-3













 









 








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




          10. The parties agree that no broker or finder was instrumental in bringing about this
transaction. Each party shall indemnify and 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 Loans or
the Loan Documents or issued in substitution or replacement of the Loans 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 Loans 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 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 on the same
Business Day of receipt, or such funds are received by Assignor after 4:00 p.m., Eastern
Standard Time, then the following 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
Agreement. Promptly after receipt by the indemnified party under this Paragraph of notice of the
commencement of any action,




E-4





 









 







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
Paragraph 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.




E-5






 









 








          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:  	 	 
	 



Receipt and Consent acknowledged this

__ day of __, 200_:




	 	 	 	 	 
	BANK OF AMERICA, N.A.,

as Administrative Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	[IF REQUIRED ADD THE FOLLOWING:]



ERP OPERATING LIMITED PARTNERSHIP

 	 	 
	By:  	Equity Residential
 	 	 
	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



E-6





 











 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	107 Lawrence

	 	Brooklyn, NY
	1111 25th St

	 	Washington, D.C.
	1210 Mass

	 	Washington, D.C.
	2300 Elliott

	 	Seattle, WA
	303 Third Street — Residential

	 	Cambridge, MA (G)
	303 Third Street — Condo

	 	Cambridge, MA (G)
	500 Elliott, LLC

	 	Seattle, WA (G)
	71 Broadway

	 	New York, NY (G)
	77 Hudson

	 	Jersey City, NJ
	420 East 80th Street

	 	New York, NY
	600 Washington

	 	New York, NY (G)
	Abington Glen

	 	Abington, MA
	Acacia Creek

	 	Scottsdale, AZ
	Alborada

	 	Fremont, CA
	Alexander on Ponce

	 	Atlanta, OA
	Alexandria at Lake Buena Vista

	 	Orlando, FL
	Arbors of Brentwood

	 	Nashville, TN
	Ashley Park at Brier Creek

	 	Raleigh, NC
	Ashton, The

	 	Corona Hills, CA
	Aspen Crossing

	 	Silver Spring, MD
	Audubon Village

	 	Tampa, FL
	Auvers Village

	 	Orlando, FL
	Avenue Royale

	 	Jacksonville, FL
	Azure Creek at Tatum Ranch

	 	Phoenix, AZ
	Balcones Club

	 	Austin, TX
	Ball Park Lofts

	 	Denver, CO
	Barrington Place

	 	Oviedo, FL
	Bay Ridge

	 	San Pedro, CA
	Bayside at the Islands

	 	Gilbert, AZ
	Bell Road I & II

	 	Nashville, TN
	Bella Vista I & II

	 	Los Angeles, CA
	Bella Vista III

	 	Los Angeles, CA
	Bella Vista

	 	Phoenix, AZ
	Bellagio Apartment Homes

	 	Scottsdale, AZ
	Belle Arts Condominium Homes, LLC

	 	Bellevue, WA
	Bellevue Meadows

	 	Bellevue, WA
	Beneva Place

	 	Sarasota, FL
	Bermuda Cove

	 	Jacksonville, FL
	Bishop Park

	 	Winter Park, FL
	Braewood, LLC

	 	Bothell, WA
	Bramblewood

	 	San Jose, CA
	Brentwood

	 	Vancouver, WA
	Breton Mill

	 	Houston, TX
	Bridford Lakes II

	 	Greensboro, NC
	Bridgeport

	 	Raleigh, NC






F-1









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Bridgewater at Wells Crossing

	 	Orange Park, FL
	Broadway

	 	Garland, TX
	Brookside (CO)

	 	Boulder, CO
	Brookside II (MD)

	 	Frederick, MD
	Cambridge at Hickory Hollow

	 	Antioch, TN
	Cambridge Estates

	 	Norwich, CT
	Camellero

	 	Scottsdale, AZ
	Canyon Crest

	 	Santa Clarita,CA
	Canyon Ridge

	 	San Diego, CA
	Carlyle Mill

	 	Alexandria, VA
	Canmel Terrace

	 	San Diego, CA
	Casa Capricorn

	 	San Diego, CA
	Casa Ruiz

	 	San Diego, CA
	Cascade at Landmark

	 	Alexandria, VA
	Center Pointe

	 	Beaverton, OR
	Centre Club

	 	Ontario, CA
	Centre Club II

	 	Ontario, CA
	Champion Oaks

	 	Houston, TX
	Chandler Court

	 	Chandler, AZ
	Chantecleer Lakes
Condominium Home:

	 	Naperville, IL
	Chatelaine Park

	 	Duluth, GA
	Chelsea Square

	 	Redmond, WA
	Cherry Creek IV

	 	Hermitage, TN
	Chestnut Hills

	 	Puyaliup, WA
	Chinatown Gateway (Land)

	 	Los Angeles, CA
	Cimarron Ridge

	 	Aurora, CO
	City View (GA)

	 	Atlanta, GA (G)
	Clarion

	 	Decatur, GA
	Clarys Crossing

	 	Columbia, MD
	Club at the Green

	 	Beaverton, OR
	Coach Lantern

	 	Scarborough, ME
	Coachman Trails

	 	Plymouth, MN
	Coconut Palm Club

	 	Coconut Creek, GA
	Colinas Pointe

	 	Denver, CO
	Collier Ridge

	 	Atlanta, GA
	Colonial Village

	 	Plainville, CT
	Colorado Pointe

	 	Denver, CO
	Copper Canyon

	 	Highlands Ranch, CO
	Copper Creek

	 	Tempe, AZ
	Copper Terrace

	 	Orlando, FL
	Cortona at Dana Park

	 	Mesa, AZ
	Country Brook

	 	Chandler, AZ
	Country Gables

	 	Beaverton, OR
	Cove at Boynton Beach I

	 	Boynton Beach, FL
	Cove at Boynton Beach II

	 	Boynton Beach, FL
	Cove at Fishers Landing

	 	Vancouver, WA






F-2









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Creekside Village

	 	Mountlake Terrace, WA
	Creekwood

	 	Charlotte, NC
	Crescent at Cherry Creek

	 	Denver, CO
	Crosswinds

	 	St. Petersburg, FL
	Crowntree Lakes

	 	Orlando, FL
	Crystal Village

	 	Attleboro, MA
	Cypress Lake at Waterford

	 	Orlando, FI
	Dartmouth Woods

	 	Lakewood, CO
	Dean Estates

	 	Taunton, MA
	Deerwood (SD)

	 	San Diego, CA
	Defoor Village

	 	Atlanta, GA
	Desert Homes

	 	Phoenix, AZ
	Duraleigh Woods

	 	Raleigh, NC
	Eagle Canyon

	 	Chino Hills, CA
	Emerson Place

	 	Boston, MA (G)
	Emerson Place/CRP II

	 	Boston, MA
	Enclave at Winston Park

	 	Coconut Creek, FL
	Enclave, The

	 	Tempe, AZ
	EOF Orange

	 	Orange, CA
	Estate at Wellington Green

	 	Wellington, FL
	Estates at Maitland Summit

	 	Orlando, FL
	Estates at Phipps

	 	Atlanta, GA
	Estates at Tanglewood

	 	Westminster, CO
	Fairfield

	 	Stamford, CT (G)
	Fairland Gardens

	 	Silver Spring, MD
	Fairway Greens, LLC

	 	Pembroke Pines, FL
	Famham Park

	 	Houston, TX
	Fifth Avenue North Combined

	 	Seattle, WA (G)
	Four Lakes 5

	 	Lisle, IL (G)
	Four Lakes Athletic Club

	 	Lisle, IL (G)
	Four Lakes Condo, LLC Phase VI

	 	Lisle, IL
	Four Lakes Condo, LLC Phase VIII

	 	Lisle, IL
	Fox Run (WA)

	 	Federal Way, WA
	Fox Run II (WA)

	 	Federal Way, WA
	Foxcroft

	 	Scarborough, ME
	Gables Grand Plaza

	 	Coral Gables, FL (G)
	Gatehouse at Pine Lake

	 	Pembroke Pines, FL
	Gatehouse on the Green

	 	Plantation, FL
	Gates of Redmond

	 	Redmond, WA
	Gateway at Maiden Center

	 	Maiden, MA (G)
	Gatewood

	 	Pleasanton, CA
	Glastonbury Center

	 	Glastonbury, CT
	Gore Meadows

	 	Watertown, MA
	Gramercy Park

	 	Houston, TX
	Granada Highlands

	 	Maiden, MA (G)
	Grand Marquis Condominium, LLC

	 	Plantation, FL






F-3









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Grandeville at River Place

	 	Oviedo, FL
	Greenfield Village

	 	Rocky Hill, CT
	Greentree I

	 	Glen Bumie, MD
	Greentree 2

	 	Glen Bumie, MD
	Greentree 3

	 	Glen Bumie, MD
	Hammocks Place

	 	Miami, FL
	Hamptons

	 	Puyallup, WA
	Harborview

	 	San Pedro, CA
	Harbour Town

	 	Boca Raton, FL
	Hathaway

	 	Long Beach, CA
	Heights on Capitol Hill

	 	Seattle, WA(G)
	Heritage Ridge

	 	Lynwood, WA
	Heritage, The

	 	Phoenix, AZ
	Heron Pointe

	 	Boynton Beach, FL
	Hidden Lakes

	 	Haltom City, TX
	Hidden Oaks

	 	Cary, NC
	Hidden Palms

	 	Tampa, FL
	Highland Glen

	 	Westwood, MA
	Highlands, The

	 	Scottsdale, AZ
	Hudson Crossing

	 	New York, NY (G)
	Hudson Crossing II

	 	NewYork, NY
	Hudson Pointe

	 	Jersey City, NJ
	Hunt Club

	 	Charlotte, NC
	Hunt Club II

	 	Charlotte, NC
	Huntington Park

	 	Everett, WA
	Indian Bend

	 	Scottsdale, AZ
	Indian Tree

	 	Arvada, CO
	Indigo Springs

	 	Kent, WA
	Ivy Place

	 	Atlanta, GA
	Junipers at Yarmouth

	 	Yarmouth, ME
	Kempton Downs

	 	Gresham, OR
	Kenwood Mews

	 	Los Angeles, CA
	Keystone

	 	Austin, TX
	Kings Colony

	 	Miami, FL
	Kingsport

	 	Alexandria, VA
	Kirby Place

	 	Houston, TX
	La Mirage

	 	San Diego, CA
	La Mirage IV

	 	San Diego, CA
	La Tour Fontaine

	 	Houston, TX
	Lakes at Vinings

	 	Atlanta, GA
	Lakeshore at Preston

	 	Plano, TX
	Lakeville Resort

	 	Petaluma, CA
	Lakewood Oaks

	 	Dallas, TX
	Landings at Port Imperial

	 	W. New York, NJ
	Larkspur Shores

	 	Hilliard, OH
	Larkspur Woods

	 	Sacramento, CA






F-4









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Laurel Ridge

	 	Chapel Hill, NC
	Laurel Ridge II

	 	Chapel Hill, NC
	Lexington Farm

	 	Alpharetta, GA
	Lexington Park

	 	Orlando, FL
	Lincoln Green

	 	Pleasant Hill, CA
	Little Cottonwoods

	 	Tempe, AZ
	Lofton Place

	 	Tampa, FL
	Longfellow Place

	 	Boston, MA (G)
	Longview Place

	 	Waltham, MA
	Madison at Stone Creek

	 	Austin, TX
	Madison at the Arboretum

	 	Austin, TX
	Madison at Walnut Creek

	 	Austin, TX
	Madison at Wells Branch

	 	Austin, TX
	Madison on Melrose

	 	Richardson, TX
	Madison on the Parkway

	 	Dallas, TX
	Magnolia at Whitlock

	 	Marietta, GA
	Magnuson Pointe, LLC

	 	Seattle, WA
	Mariners Wharf

	 	Orange Park, FL
	Marquessa

	 	Corona Hills, CA
	Martha Lake

	 	Lynnwood, WA
	Merrill Creek

	 	Lakewood, WA
	Metro on First

	 	Seattle, WA (G)
	Milano Terrace Private Residences

	 	Scottsdale, AZ
	Mill Creek

	 	Milpitas, CA
	Millbrook I

	 	Alexandria, VA
	Mira Flores

	 	Palm Beach Gardens, FL
	Mission Bay

	 	Orlando, FL
	Missions at Sunbow

	 	Chula Vista, CA
	Misty Woods

	 	Cary, NC
	Montecito

	 	Valencia, CA
	Monterra in Mill Creek

	 	Mill Creek, WA
	Montevista

	 	Dallas, TX
	Montclair Metro

	 	Montclair, NJ
	Morningside

	 	Scottsdale, AZ
	Mountain Park Ranch

	 	Phoenix, AZ
	Mountain Terrace

	 	Stevenson Ranch, CA
	Newport Heights

	 	Tukwila, WA
	North Pier at Harborside

	 	Jersey City, NJ
	Northampton 2

	 	Largo, MD
	Northlake (MD)

	 	Germantown, MD
	Northridge

	 	Pleasant Hill, CA
	Northwoods Village

	 	Cary,NC
	Oaks (NC)

	 	Charlotte, NC
	Oaks at Falls Church

	 	Falls Church, VA
	Ocean Crest

	 	Solana Beach, CA
	Olympus Towers

	 	Seattle, WA (G)






F-5









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Orchard Ridge

	 	Lynnwood, WA
	Overlook Manor

	 	Frederick, MD
	Overlook Manor II

	 	Frederick, MD
	Overtook Manor III

	 	Frederick, MD
	Paces Station

	 	Atlanta, OA
	Pacific Cove at Playa Del Rey, LLC

	 	Playa Del Ray, CA
	Palladia

	 	Hillsboro, OR
	Panther Ridge

	 	Federal Way, WA
	Paradise Pointe

	 	Dania, FL
	Parc Royale

	 	Houston, TX
	Pare Vue at Lake Buena Vista

	 	Orlando, FL
	Park at Turtle Run

	 	Coral Springs, FL
	Park Bloomingdale Condominium Home

	 	Bloomingdale, IL
	Park Meadow

	 	Gilbert, AZ
	Park Place (TX)

	 	Houston, TX
	Park West (CA)

	 	Los Angeles, CA
	Parkside

	 	Union City, CA
	Parkview Terrace

	 	Redlands, CA
	Parkwood (CT)

	 	East Haven, CT
	Phillips Park

	 	Wellesley, MA
	Pine Harbour

	 	Orlando, FL
	Playa Pacifica

	 	Hermosa Beach,CA
	Plum Tree

	 	Hales Comers, WI
	Pointe at South Mountain

	 	Phoenix, AZ
	Polos East

	 	Orlando, FL
	Port Royale

	 	Ft Lauderdale, FL (G)
	Port Royale II

	 	Ft Lauderdale, FL (G)
	Port Royale III

	 	Ft Lauderdale, FL (G)
	Port Royale IV

	 	Ft Lauderdale, FL
	Portofino

	 	Chino Hills, CA
	Preakness

	 	Antioch, TN
	Preserve at Deer Creek

	 	Deerfield Beach, FL
	Prime, The

	 	Arlington, VA
	Promenade (FL)

	 	St Petersburg, FL
	Promenade at Aventura

	 	Aventura, FL
	Promenade at Peachtree

	 	Chamblee, GA
	Promenade at Town Center I

	 	Valencia, CA
	Promenade at Wyndham Lakes

	 	Coral Springs, FL
	Promenade Terrace

	 	Corona, CA
	Promontory Pointe I & II

	 	Phoenix, AZ
	Prospect Towers

	 	Hackensack, NJ
	Prospect Towers II

	 	Hackensack, NJ
	Providence

	 	Bothell, WA
	Ranch at Fossil Creek

	 	Haltom City, TX
	Ravinia

	 	Greenfield, WI
	Redlands Lawn and Tennis

	 	Redlands, CA






F-6









 






EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Redmond Ridge (Land)

	 	Redmond, WA
	Regency

	 	Charlotte, NC
	Regency Palms

	 	Huntington Beach, CA
	Regency Park

	 	Centreville, VA
	Remington Place

	 	Phoenix, AZ
	Reserve at Clarendon Centre, The

	 	Arlington, VA (G)
	Reserve at Eisenhower, The

	 	Alexandria, VA
	Reserve at Empire Lakes

	 	Rancho Cucamonga, CA
	Reserve at Moreno Valley Ranch

	 	Moreno Valley, CA
	Residences at Little River

	 	Haverhill, MA
	Richmond Townhomes

	 	Houston, TX
	Ridgewood Village

	 	San Diego, CA
	Ridgewood Village II

	 	San Diego, CA
	Rincon

	 	Houston, TX
	River Hill

	 	Grand Prairie, TX
	River Park

	 	Fort Worth, TX
	River Stone Ranch

	 	Austin, TX
	Rivera at West Village

	 	Dallas, TX
	Rivers Edge

	 	Waterbury, CT
	Rock Creek

	 	Canboro, NC
	Rosecliff

	 	Quincy, MA
	Rosecliff II

	 	Quincy, MA
	Royal Oaks (FL)

	 	Jacksonville, FL
	Sabal Palm at Boot Ranch

	 	Palm Harbor, FL
	Sabal Palm at Carrollwood Place

	 	Tampa, FL
	Sabal Palm at Lake Buena Vista

	 	Orlando, FL
	Sabal Palm at Metrowest

	 	Orlando, FL
	Sabal Palm at Metrowest II

	 	Orlando, FL
	Sabal Pointe

	 	Coral Springs, FL
	Saddle Ridge

	 	Ashburn, VA
	Sailboat Bay

	 	Raleigh, NC
	San Marcos

	 	Scottsdale, AZ
	Savannah at Park Place

	 	Atlanta, GA
	Savannah Lakes

	 	Boynton Beach, FL
	Scottsdale Meadows

	 	Scottsdale, AZ
	Seeley Lake

	 	Lakewood, WA
	Seventh & James

	 	Seattle, WA
	Shadow Creek

	 	Winter Springs, FL
	Shadow Lake

	 	Doraville, GA
	Sheffield Court

	 	Arlington, VA
	Silver Spring

	 	Silver Spring, MD
	Silver Springs (FL)

	 	Jacksonville, FL
	Skylark

	 	Union City, CA
	Sommerset Place

	 	Raleigh, NC
	Sonata at Cherry Creek

	 	Denver, CO
	Sonoran

	 	Phoenix, AZ






F-7









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	South Palm Place
Condominium Homes

	 	Tamarac, FL
	Southwood

	 	Palo Alto, CA
	Spring Hill Commons

	 	Acton, MA
	Springbrook Estates

	 	Riverside, CA
	St.
Andrews at Winston Park

	 	Coconut Creek, FL
	Steeplechase

	 	Charlotte, NC
	Stone Oak

	 	Houston, TX
	Stonegate (CO)

	 	Broomfield, CO
	Stoneleigh at Deerfield

	 	Alpharetta, GA
	Stoney Creek

	 	Lakewood, WA
	Sturbridge Meadows

	 	Sturbridge, MA
	Summer Creek

	 	Plymouth, MN
	Summer Ridge

	 	Riverside, CA
	Summerset Village II

	 	Chatsworth, CA
	Summerwood

	 	Hayward, CA
	Summit at Lake Union

	 	Seattle, WA
	Sunforest

	 	Davie, FL
	Surrey Downs

	 	Bellevue, WA
	Sycamore Creek

	 	Scottsdale, AZ
	Tamarlane

	 	Portland, ME
	Timber Hollow

	 	Chapel Hill, NC
	Timber Ridge, LLC

	 	Woodinville, WA
	Timberwalk

	 	Jacksonville, FL
	Tortuga Bay

	 	Orlando, FL
	Toscana

	 	Irvine, CA
	Town Center (TX)

	 	Kingwood, TX
	Town Center II (TX)

	 	Kingwood,TX
	Townes at Hemdon

	 	Hemdon, VA
	Tradition at Alafaya

	 	Oviedo, FL
	Trails at Dominion Park

	 	Houston, TX
	Trump Place, 140 Riverside

	 	New York, NY (G)
	Tramp Place, 160 Riverside

	 	New York, NY (G)
	Trump Place, 180 Riverside

	 	New York, NY (G)
	Tumberry Isle

	 	Dallas, TX
	Tuscany at Lindbergh

	 	Atlanta, GA
	Tuscany Villas, LLC

	 	Los Angeles, CA
	Tyrone Gardens

	 	Randolph, MA
	Uptown Square

	 	Denver, CO (G)
	Valencia Plantation

	 	Orlando, FL
	Venetian Condominium, LLC

	 	Phoenix, AZ
	Versailles

	 	Woodland Hills, CA
	Via Ventura

	 	Scottsdale, AZ
	View Pointe

	 	Riverside, CA
	Villa Solana

	 	Laguna Hills, CA
	Village at Lakewood

	 	Phoenix, AZ
	Village Oaks

	 	Austin, TX






F-8









 





EXHIBIT F

ERP OPERATING LIMITED PARTNERSHIP

31-Dec-06




	 	 	 
	Apartment Name	 	Location
	Village of Newport

	 	Kent, WA
	Virgil Square

	 	Los Angeles, CA
	Vista Del Lago

	 	Mission Viejo, CA
	Vista Grove

	 	Mesa, AZ
	Vista Montana — Residential
	 	 
	Vista Montana — Condo
	 	 
	Waterford (Jax) II

	 	Jacksonville, FL
	Waterford at Deerwood

	 	Jacksonville, FL
	Waterford Place (CO)

	 	Thornton, CO
	Waterside

	 	Reston, VA
	Webster Green

	 	Needham,MA
	Welleby Lake Club

	 	Sunrise, FL
	Westfield Village

	 	Centerville, VA
	Westridge

	 	Tacoma, WA
	Westside Villas I

	 	Los Angeles, CA
	Westside Villas II

	 	Los Angeles, CA
	Westside Villas III

	 	Los Angeles, CA
	Westside Villas IV

	 	Los Angeles, CA
	Westside Villas V

	 	Los Angeles, CA
	Westside Villas VI

	 	Los Angeles, CA
	Westside Villas VII

	 	Los Angeles, CA
	Whispering Oaks

	 	Walnut Creek, CA
	Willow Trail

	 	Norcross, GA
	Wimberly

	 	Dallas, TX
	Wimberly at Deerwood

	 	Jacksonville, FL
	Wimbledon Oaks

	 	Arlington, TX
	Winchester Park

	 	Riverside, RI
	Winchester Wood

	 	Riverside, RI
	Windemere

	 	Mesa, AZ
	Windmont

	 	Atlanta, GA
	Windsor at Fair Lakes

	 	Fairfax, VA
	Winterwood

	 	Charlotte, NC
	Wood Creek (CA)

	 	Pleasant Hill, CA
	Woodbridge II

	 	Cary,GA
	Woodland Hills

	 	Decatur, GA
	Woodlands of Brookfield

	 	Brookfield, WI
	Woodmoor

	 	Austin, TX
	Woodside

	 	Lorton, VA
	Yarmouth Woods

	 	Yarmouth, ME







F-9











 





GUARANTY OF PAYMENT




          GUARANTY OF PAYMENT (this “Guaranty”), made as of October 5, 2007, between LEXFORD PROPERTIES,
L.P., an Ohio limited partnership, having an address at Two North Riverside Plaza, Suite 400,
Chicago, Illinois 60606 (“Guarantor”), and BANK OF AMERICA, N.A., having an office at 231 South
LaSalle Street, Chicago, Illinois 60697, as administrative agent (“Administrative Agent”) for the
banks (the “Banks”) party to the Credit Agreement (as the same may be amended, modified,
supplemented or restated, the “Credit Agreement”), dated as of the date hereof, among ERP Operating
Limited Partnership (“Borrower”), the Banks, Administrative Agent, JP MORGAN CHASE BANK, N.A., and
as Syndication Agent.




WITNESSETH:




          WHEREAS, the Banks have agreed to make loans (hereinafter collectively referred to as the
“Loans”) and otherwise extend credit to Borrower in an aggregate principal amount not to exceed
$500,000,000.00, (which amount may be increased to an amount not to exceed $750,000,000);




          WHEREAS, the Loans will be evidenced by certain promissory notes (the “Notes”) of Borrower
made to each of the Banks in accordance with the terms of the Credit Agreement;




          WHEREAS, the Credit Agreement and the Notes and any other documents executed in connection
therewith are hereinafter collectively referred to as the “Loan Documents”;




          WHEREAS, capitalized terms used herein and not otherwise defined shall have the meanings
ascribed thereto in the Credit Agreement;




          WHEREAS, Guarantor is a limited partnership which, except for certain preference units, is
wholly-owned (directly and indirectly) by Borrower; and




          WHEREAS, in order further to induce the Administrative Agent and the Banks to enter into the
Loan Documents, Guarantor has agreed to enter into this Guaranty;




          NOW, THEREFORE, in consideration of the premises and the benefits to be derived from the
making of the Loans and other extensions of credit under the Credit Agreement by the Banks to
Borrower, and in order to induce the Administrative Agent and the Banks to enter into the Loan
Documents, Guarantor hereby agrees as follows:




          1. Guarantor, on behalf of itself and its successors and assigns, hereby irrevocably,
absolutely and unconditionally guarantees the full and punctual payment when due, whether at stated
maturity or otherwise, of all Obligations of Borrower now or hereafter existing under the Notes and
the Credit Agreement, for principal and/or interest as well as any and all other amounts due
thereunder, including, without limitation, all indemnity obligations of Borrower thereunder, and
any and all reasonable costs and expenses (including, without limitation, reasonable attorneys’
fees and disbursements) incurred by the Administrative Agent or the Banks in enforcing its or their
rights under this Guaranty (all of the foregoing obligations being the “Guaranteed Obligations”).






 









 








          2. It is agreed that the Guaranteed Obligations are primary and this Guaranty shall be
enforceable against Guarantor and its successors and assigns without the necessity for any suit or
proceeding of any kind or nature whatsoever brought by the Administrative Agent or any Bank against
Borrower or its respective successors or assigns or any other party or against any security for the
payment and performance of the Guaranteed Obligations and without the necessity of any notice of
nonpayment or nonobservance or of any notice of acceptance of this Guaranty or of any notice or
demand to which Guarantor might otherwise be entitled (including, without limitation, diligence,
presentment, notice of the incurrence of any Guaranteed Obligation, maturity, extension of time,
change in nature or form of the Guaranteed Obligations, acceptance of further security, release of
further security, imposition or agreement arrived at as to the amount of or the terms of the
Guaranteed Obligations, notice of adverse change in Borrower’s financial condition and any other
fact which might materially increase the risk to Guarantor), all of which Guarantor hereby
expressly waives; and Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of Guarantor hereunder shall in no way be terminated, affected, diminished, modified or
impaired by reason of the assertion of or the failure to assert by the Administrative Agent or any
Bank against Borrower or its respective successors or assigns, any of the rights or remedies
reserved to the Administrative Agent and the Banks pursuant to the provisions of the Loan
Documents. Guarantor agrees that any notice or directive given at any time to the Administrative
Agent which is inconsistent with the waiver in the immediately preceding sentence shall be void and
may be ignored by the Administrative Agent and the Banks, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this Guaranty, unless the
Administrative Agent and the Banks have specifically agreed otherwise in a writing, signed by a
duly authorized officer. Guarantor specifically acknowledges and agrees that the foregoing waivers
are of the essence of this transaction and that, but for this Guaranty and such waivers, the
Administrative Agent and the Banks would decline to execute the Loan Documents.




          3. Guarantor waives, and covenants and agrees that it will not at any time insist upon, plead
or in any manner whatsoever claim or take the benefit or advantage of, any and all appraisal,
valuation, stay, extension, marshalling of assets or redemption laws, or right of homestead or
exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise
affect the performance by Guarantor of its obligations under, or the enforcement by the
Administrative Agent of, this Guaranty. Guarantor further covenants and agrees not to set up or
claim any defense, counterclaim, offset, setoff or other objection of any kind to any action, suit
or proceeding at law, in equity or otherwise, or to any demand or claim that may be instituted or
made by the Administrative Agent other than the defense of the actual timely payment and
performance by Borrower of the Guaranteed Obligations; provided, however, that the foregoing shall
not be deemed a waiver of Guarantor’s right to assert any compulsory counterclaim, if such
counterclaim is compelled under local law or rule of procedure, nor shall the foregoing be deemed a
waiver of Guarantor’s right to assert any claim which would constitute a defense, setoff,
counterclaim or crossclaim of any nature whatsoever against Administrative Agent or any Bank in any
separate action or proceeding. Guarantor represents, warrants and agrees that, as of the date
hereof, its obligations under this Guaranty are not subject to any counterclaims, offsets or
defenses against the Administrative Agent or any Bank of any kind.







2









 








          4. The provisions of this Guaranty are for the benefit of the Administrative Agent and the
Banks and their successors and permitted assigns, and nothing herein contained shall impair as
between Borrower or Guarantor and the Administrative Agent and the Banks the obligations of
Borrower and Guarantor under the Loan Documents.




          5. This Guaranty shall be a continuing, irrevocable, unconditional and absolute guaranty and
the liability of Guarantor hereunder shall in no way be terminated, affected, modified, impaired or
diminished by reason of the happening, from time to time, of any of the following, although without
notice or the further consent of Guarantor:





          (a) any assignment, amendment, modification or waiver of or change in any of the terms,
covenants, conditions or provisions of any of the Guaranteed Obligations or the Loan
Documents or the invalidity or unenforceability of any of the foregoing; or




          (b) any extension of time that may be granted by the Administrative Agent or any Bank
to Borrower, any guarantor, or their respective successors or assigns, heirs, executors,
administrators or personal representatives; or




          (c) any action which the Administrative Agent or any Bank may take or fail to take
under or in respect of any of the Loan Documents or by reason of any waiver of, or failure
to enforce, any of the rights, remedies, powers or privileges available to the
Administrative Agent and the Banks under this Guaranty or available to the Administrative
Agent and the Banks at law, in equity or otherwise, or any action on the part of the
Administrative Agent or any Bank granting indulgence or extension in any form whatsoever; or




          (d) any sale, exchange, release, or other disposition of any property pledged,
mortgaged or conveyed, or any property in which the Administrative Agent and/or the Banks
have been granted a lien or security interest to secure any indebtedness of Borrower to the
Administrative Agent and/or the Banks or any impairment of or failure to perfect any
security interest therein; or




          (e) any release of any person or entity who may be liable in any manner for the payment
and collection of any amounts owed by Borrower to the Administrative Agent and/or the Banks;
or




          (f) the application of any sums by whomsoever paid or however realized to any amounts
owing by Borrower to the Administrative Agent and/or the Banks under the Loan Documents in
such manner as the Administrative Agent shall determine in its sole discretion; or




          (g) Borrower’s or any guarantor’s voluntary or involuntary liquidation, dissolution,
sale of all or substantially all of their respective assets and liabilities, appointment of
a trustee, receiver, liquidator, sequestrator or conservator for all or any part of
Borrower’s or any guarantor’s assets, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment, or the commencement of
other similar proceedings affecting Borrower or any guarantor or any of the assets of any of
them, including, without limitation, (i) the release or discharge of Borrower or any
guarantor from the payment and performance of their respective



3









 







obligations under any of the Loan Documents by operation of law, or (ii) the
impairment, limitation or modification of the liability of Borrower or any guarantor in
bankruptcy, or of any remedy for the enforcement of the Guaranteed Obligations under any of
the Loan Documents, or Guarantor’s liability under this Guaranty, resulting from the
operation of any present or future provisions of the Bankruptcy Code or other present or
future federal, state or applicable statute or law or from the decision in any court; or




          (h) any improper disposition by Borrower of the proceeds of the Loans, it being
acknowledged by Guarantor that the Administrative Agent or any Bank shall be entitled to
honor any request made by Borrower for a disbursement of such proceeds and that neither the
Administrative Agent nor any Bank shall have any obligation to see to the proper disposition
by Borrower of such proceeds.



          6. Guarantor agrees that if at any time all or any part of any payment at any time received by
the Administrative Agent or any Bank from Borrower or Guarantor or any other Person obligated in
respect of the Guaranteed Obligations under or with respect to this Guaranty is or must be
rescinded or returned by the Administrative Agent or any Bank for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of Borrower or Guarantor or such
other Person), then Guarantor’s obligations hereunder shall, to the extent of the payment rescinded
or returned, be deemed to have continued in existence notwithstanding such previous receipt by such
party, and Guarantor’s obligations hereunder shall continue to be effective or be reinstated, as
the case may be, as to such payment, as though such previous payment had never been made.




          7. Until this Guaranty is terminated pursuant to the terms hereof, Guarantor (i) shall have no
right of subrogation against Borrower or any entity comprising same by reason of any payments or
acts of performance by Guarantor in compliance with the obligations of Guarantor hereunder; (ii)
waives any right to enforce any remedy which Guarantor now or hereafter shall have against Borrower
or any entity comprising same by reason of any one or more payments or acts of performance in
compliance with the obligations of Guarantor hereunder and (iii) from and after an Event of
Default, subordinates any liability or indebtedness of Borrower or any entity comprising same now
or hereafter held by Guarantor or any affiliate of Guarantor to the obligations of Borrower under
the Loan Documents.




          8. Guarantor represents and warrants to the Administrative Agent and the Banks with the
knowledge that the Administrative Agent and the Banks are relying upon the same, as follows:





          (a) as of the date hereof, Guarantor is a limited partnership which, except for certain
preference units, is wholly-owned (directly and indirectly) by Borrower;




          (b) based upon such relationship, Guarantor has determined that it is in its best
interests to enter into this Guaranty;




          (c) this Guaranty is necessary and convenient to the conduct, promotion and attainment
of Guarantor’s business, and is in furtherance of Guarantor’s business purposes;



4









 






          (d) the benefits to be derived by Guarantor from Borrower’s access to funds and other
credit made possible by the Loan Documents are at least equal to the obligations undertaken
pursuant to this Guaranty;




          (e) Guarantor is solvent and has full power and legal right to enter into this Guaranty
and to perform its obligations under the terms hereof and (i) Guarantor is organized and
validly existing under the laws of the State of Ohio, (ii) Guarantor has complied with all
provisions of applicable law in connection with all aspects of this Guaranty, and (iii) the
person executing this Guaranty has all the requisite power and authority to execute and
deliver this Guaranty;




          (f) to the best of Guarantor’s knowledge, there is no action, suit, proceeding, or
investigation pending or threatened against or affecting Guarantor at law, in equity, in
admiralty or before any arbitrator or any governmental department, commission, board,
bureau, agency or instrumentality (domestic or foreign) which is likely to materially and
adversely affect the property, assets or condition (financial or otherwise) of Guarantor or
which is likely to materially and adversely impair the ability of Guarantor to perform its
obligations under this Guaranty;




          (g) the execution and delivery of and the performance by Guarantor of its obligations
under this Guaranty have been duly authorized by all necessary action on the part of
Guarantor and do not (i) violate any provision of any law, rule, regulation (including,
without limitation, Regulation U or X of the Board of Governors of the Federal Reserve
System of the United States), order, writ, judgment, decree, determination or award
presently in effect having applicability to Guarantor or the organizational documents of
Guarantor, the consequences of which violation would materially and adversely affect the
property, assets or condition (financial or otherwise) of Guarantor or which is likely to
materially and adversely impair the ability of Guarantor to perform its obligations under
this Guaranty or (ii) violate or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any indenture, agreement or other
instrument to which Guarantor is a party, or by which Guarantor or any of its property is
bound, the consequences of which violation, conflict, breach or default would materially and
adversely affect the property, assets or condition (financial or otherwise) of Guarantor or
which is likely to materially and adversely impair the ability of Guarantor to perform its
obligations under this Guaranty;




          (h) this Guaranty has been duly executed by Guarantor and constitutes the legal, valid
and binding obligation of Guarantor, enforceable against it 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;




          (i) no authorization, consent, approval, license or formal exemption from, nor any
filing, declaration or registration with, any Federal, state, local or foreign court,
governmental agency or regulatory authority is required in connection with the making and
performance by Guarantor of this Guaranty, except those which have already been obtained;



5









 






          (j) Guarantor is not an “investment company” as that term is defined in, nor is it
otherwise subject to regulation under, the Investment Company Act of 1940, as amended; and




          (k) Guarantor is not engaged principally, or as one of its important activities, in the
business of purchasing, carrying, or extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States).



          9. Guarantor and the Administrative Agent each acknowledge and agree that this Guaranty is a
guarantee of payment and performance and not of collection and enforcement in respect of any
obligations which may accrue to the Administrative Agent and/or the Banks from Borrower under the
provisions of any Loan Document.




          10. Subject to the terms and conditions of the Credit Agreement, and in conjunction therewith,
the Administrative Agent or any Bank may assign any or all of its rights under this Guaranty. In
the event of any such assignment, the Administrative Agent shall give Guarantor prompt notice of
same. If the Administrative Agent or any Bank elects to sell all the Loans or participations in
the Loans and the Loan Documents, including this Guaranty, the Administrative Agent or any Bank may
forward to each purchaser and prospective purchaser all documents and information relating to this
Guaranty or to Guarantor, whether furnished by Borrower or Guarantor or otherwise, subject to the
terms and conditions of the Credit Agreement.




          11. Guarantor agrees, upon the written request of the Administrative Agent, to execute and
deliver to the Administrative Agent, from time to time, any modification or amendment hereto or any
additional instruments or documents reasonably considered necessary by the Administrative Agent or
its counsel to cause this Guaranty to be, become or remain valid and effective in accordance with
its terms, provided, that any such modification, amendment, additional instrument or document shall
not increase Guarantor’s obligations or diminish its rights hereunder and shall be reasonably
satisfactory as to form to Guarantor and to Guarantor’s counsel.




          12. The representations and warranties of Guarantor set forth in this Guaranty shall survive
until this Guaranty shall terminate in accordance with the terms hereof.




          13. This Guaranty contains the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements relating to such subject matter and may not be
modified, amended, supplemented or discharged except by a written agreement signed by Guarantor and
the Administrative Agent (acting with the requisite consent of the Banks as provided in the Credit
Agreement).




          14. If all or any portion of any provision contained in this Guaranty shall be determined to
be invalid, illegal or unenforceable in any respect for any reason, such provision or portion
thereof shall be deemed stricken and severed from this Guaranty and the remaining provisions and
portions thereof shall continue in full force and effect.




          15. This Guaranty may be executed in counterparts which together shall constitute the same
instrument.





6









 








          16. 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 addressed to such party at the address set forth below or to such other
address as may be identified by any party in a written notice to the others:




	 	 	 

	 
	 	 
	If to Guarantor:

	 	Lexford Properties, L.P.
	 

	 	c/o Equity Residential
	 

	 	Two North Riverside Plaza
	 

	 	Suite 400
	 

	 	Chicago, Illinois 60606
	 

	 	Attn: Chief Financial Officer
	 

	 	Facsimile: (312) 454-0039
	 
	 	 
	With Copies of
Notices to
Guarantor to:

	 	Equity Residential
	 

	 	Two North Riverside Plaza
	 

	 	Suite 400
	 

	 	Chicago, Illinois 60606
	 

	 	Attn: General Counsel
	 

	 	Facsimile: (312) 454-0039
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	DLA Piper US LLP
	 

	 	203 North LaSalle Street, Suite 1900
	 

	 	Chicago, Illinois 60601
	 

	 	Attn: James M. Phipps, Esq.
	 

	 	Facsimile: (312) 251-5735
	 
	 	 
	If to the
Administrative
Agent:

	 	Bank of America, N.A.
	 

	 	Structured Debt Group
	 

	 	Mail Code ______
	 

	 	231 South LaSalle Street
	 

	 	Chicago, IL 60697
	 

	 	Attn:
	 

	 	Facsimile: (312) __-____
	 
	 	 
	With Copies of
Notices to the
Administrative
Agent to:

	 	Skadden, Arps, Slate,
	 

	 	Meagher & Flom LLP
	 

	 	Four Times Square
	 

	 	New York, New York 10036
	 

	 	Attn: Martha Feltenstein, Esq.
	 

	 	Facsimile: (917) 777-2272






          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 facsimile confirmation is received, (ii) if given by certified or registered
mail, return receipt requested, with first class postage prepaid, addressed as aforesaid,






7









 







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.




          17. Any acknowledgment or new promise, whether by payment of principal or interest or
otherwise by Borrower or Guarantor, with respect to the Guaranteed Obligations shall, if the
statute of limitations in favor of Guarantor against the Administrative Agent and the Banks shall
have commenced to run, toll the running of such statute of limitations, and if the period of such
statute of limitations shall have expired, prevent the operation of such statute of limitations.




          18. This Guaranty shall be binding upon Guarantor and its successors and assigns and shall
inure to the benefit of the Administrative Agent and the Banks and their successors and permitted
assigns; provided, however, that Guarantor may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of all of the Banks, and any such attempted
assignment or transfer without such consent shall be null and void.




          19. The failure of the Administrative Agent to enforce any right or remedy hereunder, or
promptly to enforce any such right or remedy, shall not constitute a waiver thereof, nor give rise
to any estoppel against the Administrative Agent or any Bank, nor excuse Guarantor from its
obligations hereunder. Any waiver of any such right or remedy to be enforceable against the
Administrative Agent and the Banks must be expressly set forth in a writing signed by the
Administrative Agent (acting with the requisite consent of the Banks as provided in the Credit
Agreement).




          20. (a) THIS GUARANTY 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.





          (b) Any legal action or proceeding with respect to this Guaranty 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 Guaranty, the Guarantor hereby accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive jurisdiction of the aforesaid courts
and appellate courts from any thereof. The Guarantor irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Guarantor at its address
for notices set forth herein. The Guarantor 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 Guaranty 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 Guarantor in any other
jurisdiction.




          (c) GUARANTOR HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY AND ALL CLAIMS OR CAUSES OF
ACTION BASED UPON OR ARISING OUT OF THIS



8









 







GUARANTY. IT IS HEREBY ACKNOWLEDGED BY GUARANTOR THAT THE WAIVER OF A JURY TRIAL IS A
MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE BANKS TO ACCEPT THIS GUARANTY AND THAT THE
LOANS AND OTHER EXTENSIONS OF CREDIT MADE BY THE BANKS ARE MADE IN RELIANCE UPON SUCH WAIVER.
GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE,
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED
BY THE ADMINISTRATIVE AGENT IN COURT AS A WRITTEN CONSENT TO A NONJURY TRIAL.




          (d) Guarantor does hereby further covenant and agree to and with the Administrative Agent and
the Banks that Guarantor may be joined in any action against Borrower in connection with the Loan
Documents and that recovery may be had against Guarantor in such action or in any independent
action against Guarantor (with respect to the Guaranteed Obligations), without the Administrative
Agent or any Bank first pursuing or exhausting any remedy or claim against Borrower or its
successors or assigns. Guarantor also agrees that, in an action brought with respect to the
Guaranteed Obligations in any jurisdiction, it shall be conclusively bound by the judgment in any
such action by the Administrative Agent (wherever brought) against Borrower or its successors or
assigns, as if Guarantor were a party to such action, even though Guarantor was not joined as a
party in such action.




          (e) Guarantor agrees to pay all reasonable expenses (including, without limitation, attorneys’
fees and disbursements) which may be incurred by the Administrative Agent or the Banks in
connection with the enforcement of their rights under this Guaranty, whether or not suit is
initiated.



          21. Notwithstanding anything to the contrary contained herein (but subject to Section 6
hereof), this Guaranty shall terminate and be of no further force or effect upon the full
performance and payment of the Guaranteed Obligations hereunder. Upon termination of this Guaranty
in accordance with the terms of this Guaranty, the Administrative Agent promptly shall deliver to
Guarantor such documents as Guarantor or Guarantor’s counsel reasonably may request in order to
evidence such termination.




          22. All of the Administrative Agent’s and the Banks’ rights and remedies under each of the
Loan Documents or under this Guaranty are intended to be distinct, separate and cumulative and no
such right or remedy therein or herein mentioned is intended to be in exclusion of or a waiver of
any other right or remedy available to the Administrative Agent or any Bank.




          23. Notwithstanding anything contained herein to the contrary, in no event shall the
Guaranteed Obligations equal or exceed such an amount that, as of the date hereof, would render, or
would be deemed to render, Guarantor insolvent.




          24. Notwithstanding anything contained herein to the contrary, this Guaranty shall terminate
in accordance with and upon the occurrence of the event described in Section 9.5 of the Revolving
Credit Agreement.




          25. No claim may be made by the Guarantor or any other Person acting by or through Guarantor
against the Administrative Agent or any Bank or the affiliates, directors, officers, employees,
attorneys or agents 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




9









 







Documents, or any act, omission or event occurring in connection therewith; and Guarantor
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.




(signature page to follow)








10









 








          IN WITNESS WHEREOF, the parties hereto have executed and delivered this Guaranty as of the
date and year first above written.




	 	 	 	 	 
	 	GUARANTOR:



LEXFORD PROPERTIES, L.P., an Ohio limited partnership

 	 
	 	By:  	Lexford Partners, L.L.C., an Ohio limited
 	 
	 	 	liability company, its general partner 	 
	 	 	 
	 	By:  	ERP Operating Limited
 	 
	 	 	Partnership, an Illinois limited partnership, its sole member 	 
	 	 	 
	 	By:  	Equity Residential, a Maryland real estate
 	 
	 	 	investment trust, its general partner 	 
	 	 	 
	 	By:  	         /s/ Mark J. Parrell
 	 
	 	 	Name:  	Mark J. Parrell 	 
	 	 	Title:  	Chief Financial Officer 	 
	 


ACCEPTED:




	 	 	 	 	 
	BANK OF AMERICA, N.A.,

AS ADMINISTRATIVE AGENT

 	 	 
	By:  	/s/
Mark A. Mokelke
 	 	 
	 	Name:  	Mark A. Mokelke 	 	 
	 	Title:  	Vice President 	 	 
	 



ACKNOWLEDGMENT FOR GUARANTOR




	 	 	 	 	 	 	 

	STATE OF ILLINOIS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss
	COUNTY OF COOK

	 	 	)	 	 	 






          On October 3, 2007, before me personally came Mark J. Parrell, to me known to be the
person who executed the foregoing instrument, and who, being duly sworn by me, did depose and say
that he is senior chief financial officer of Equity Residential, and that he executed the foregoing
instrument in the organization’s name, and that he had authority to sign the same, and he
acknowledged to me that he executed the same as the act and deed of said organization for the uses
and purposes therein mentioned.



[Seal]




	 	 	 	 	 
	 	 	 
	 	     /s/ Bertha E. Hunt
 	 
	 	Notary Public 	 
	 	 	 
	 




11











 





TABLE OF CONTENTS




ARTICLE
I DEFINITIONS



	 	 	 	 	 

	SECTION 1.1 Definitions
	 	 	1	 
	SECTION 1.2 Accounting Terms and Determinations
	 	 	28	 
	SECTION 1.3 Types of Borrowings
	 	 	29	 
	 
	 	 	 	 
	ARTICLE II THE CREDITS

	 
	 	 	 	 
	SECTION 2.1 Commitments to Lend
	 	 	29	 
	SECTION 2.2 Notice of Borrowing
	 	 	30	 
	SECTION 2.3 Intentionally Omitted
	 	 	30	 
	SECTION 2.4 Notice to Banks; Funding of Loans
	 	 	30	 
	SECTION 2.5 Notes
	 	 	31	 
	SECTION 2.6 Method of Electing Interest Rates
	 	 	32	 
	SECTION 2.7 Interest Rates
	 	 	34	 
	SECTION 2.8 Fees
	 	 	35	 
	SECTION 2.9 Maturity Date
	 	 	35	 
	SECTION 2.10 Intentionally Omitted
	 	 	35	 
	SECTION 2.11 Optional Prepayments
	 	 	35	 
	SECTION 2.12 General Provisions as to Payments
	 	 	36	 
	SECTION 2.13 Funding Losses
	 	 	37	 
	SECTION 2.14 Computation of Interest and Fees
	 	 	37	 
	SECTION 2.15 Use of Proceeds
	 	 	38	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS

	 
	 	 	 	 
	SECTION 3.1 Closing
	 	 	38	 
	SECTION 3.2 Borrowings
	 	 	40	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 
	SECTION 4.1 Existence and Power
	 	 	41	 
	SECTION 4.2 Power and Authority
	 	 	42	 
	SECTION 4.3 No Violation
	 	 	42	 
	SECTION 4.4 Financial Information
	 	 	42	 
	SECTION 4.5 Litigation
	 	 	43	 
	SECTION 4.6 Compliance with ERISA
	 	 	43	 
	SECTION 4.7 Environmental Matters
	 	 	44	 
	SECTION 4.8 Taxes
	 	 	44	 






i









 






	 	 	 	 	 

	SECTION 4.9 Full Disclosure
	 	 	44	 
	SECTION 4.10 Solvency
	 	 	44	 
	SECTION 4.11 Use of Proceeds; Margin Regulations
	 	 	45	 
	SECTION 4.12 Governmental Approvals
	 	 	45	 
	SECTION 4.13 Investment Company Act; Public Utility Holding Company Act
	 	 	45	 
	SECTION 4.14 Principal Offices
	 	 	45	 
	SECTION 4.15 REIT Status
	 	 	45	 
	SECTION 4.16 No Default
	 	 	45	 
	SECTION 4.17 Compliance With Law
	 	 	46	 
	SECTION 4.18 Organizational Documents
	 	 	46	 
	SECTION 4.19 Qualifying Unencumbered Properties
	 	 	46	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE AND NEGATIVE COVENANTS

	 
	 	 	 	 
	SECTION 5.1 Information
	 	 	46	 
	SECTION 5.2 Payment of Obligations
	 	 	50	 
	SECTION 5.3 Maintenance of Property; Insurance; Leases
	 	 	50	 
	SECTION 5.4 Conduct of Business and Maintenance of Existence
	 	 	50	 
	SECTION 5.5 Compliance with Laws
	 	 	50	 
	SECTION 5.6 Inspection of Property, Books and Records
	 	 	51	 
	SECTION 5.7 Intentionally Omitted
	 	 	51	 
	SECTION 5.8 Financial Covenants
	 	 	51	 
	SECTION 5.9 Restriction on Fundamental Changes
	 	 	52	 
	SECTION 5.10 Changes in Business
	 	 	53	 
	SECTION 5.11 Margin Stock
	 	 	53	 
	SECTION 5.12 Intentionally Omitted
	 	 	53	 
	SECTION 5.13 EQR Status
	 	 	53	 
	 
	 	 	 	 
	ARTICLE VI DEFAULTS

	 
	 	 	 	 
	SECTION 6.1 Events of Default
	 	 	53	 
	SECTION 6.2 Rights and Remedies
	 	 	56	 
	SECTION 6.3 Notice of Default
	 	 	57	 
	SECTION 6.4 Distribution of Proceeds after Default
	 	 	58	 
	 
	 	 	 	 
	ARTICLE VII THE AGENTS

	 
	 	 	 	 
	SECTION 7.1 Appointment and Authorization
	 	 	58	 
	SECTION 7.2 Agency and Affiliates
	 	 	58	 
	SECTION 7.3 Action by Administrative Agent
	 	 	58	 
	SECTION 7.4 Consultation with Experts
	 	 	58	 
	SECTION 7.5 Liability of Administrative Agent, Syndication Agent,
Documentation Agents
	 	 	59	 






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	SECTION 7.6 Indemnification
	 	 	59	 
	SECTION 7.7 Credit Decision
	 	 	60	 
	SECTION 7.8 Successor Administrative Agent or Syndication Agent
	 	 	61	 
	SECTION 7.9 Consents and Approvals
	 	 	62	 
	 
	 	 	 	 
	ARTICLE VIII CHANGE IN CIRCUMSTANCES

	 
	 	 	 	 
	SECTION 8.1 Basis for Determining Interest Rate Inadequate or Unfair
	 	 	62	 
	SECTION 8.2 Illegality
	 	 	63	 
	SECTION 8.3 Increased Cost and Reduced Return
	 	 	64	 
	SECTION 8.4 Taxes
	 	 	66	 
	SECTION 8.5 Base Rate Loans Substituted for Affected Euro-Dollar Loans
	 	 	69	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS

	 
	 	 	 	 
	SECTION 9.1 Notices
	 	 	70	 
	SECTION 9.2 No Waivers
	 	 	70	 
	SECTION 9.3 Expenses; Indemnification
	 	 	70	 
	SECTION 9.4 Sharing of Set-Offs
	 	 	72	 
	SECTION 9.5 Amendments and Waivers
	 	 	73	 
	SECTION 9.6 Successors and Assigns
	 	 	73	 
	SECTION 9.7 Collateral
	 	 	75	 
	SECTION 9.8 Governing Law; Submission to Jurisdiction
	 	 	76	 
	SECTION 9.9 Counterparts; Integration; Effectiveness
	 	 	76	 
	SECTION 9.10 WAIVER OF JURY TRIAL
	 	 	77	 
	SECTION 9.11 Survival
	 	 	77	 
	SECTION 9.12 Domicile of Loans
	 	 	77	 
	SECTION 9.13 Limitation of Liability
	 	 	77	 
	SECTION 9.14 Recourse Obligation
	 	 	77	 
	SECTION 9.15 Confidentiality
	 	 	78	 
	SECTION 9.16 Bank’s Failure to Fund
	 	 	78	 
	SECTION 9.17 Intentionally Omitted
	 	 	84	 
	SECTION 9.18 Down REIT Guaranties
	 	 	84	 
	SECTION 9.19 USA PATRIOT Act Notice
	 	 	85	 
	SECTION 9.20 Public/Private Information
	 	 	86	 
	SECTION 9.21 No Advisory or Fiduciary Responsibility
	 	 	87	 






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	Exhibit A — Form of Note
	 	 	 	 
	Exhibit B — Intentionally Omitted
	 	 	 	 
	Exhibit C — Notice of Borrowing
	 	 	 	 
	Exhibit D — Intentionally Omitted
	 	 	 	 
	Exhibit E — Transfer Supplement
	 	 	 	 
	Exhibit F — Qualified Unencumbered Properties
	 	 	 	 
	Exhibit G — Down REIT Guaranty
	 	 	 	 







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