Document:

Exhibit
10.1

 

REVOLVING CREDIT
AGREEMENT

dated as of May 7,
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,

DEUTSCHE BANK SECURITIES,

as Joint Lead
Arranger and Joint Book Runner,

and

DEUTSCHE BANK AG, NEW
YORK BRANCH,

as Documentation Agent

 

REVOLVING CREDIT
AGREEMENT

THIS REVOLVING
CREDIT AGREEMENT, dated as of May 7, 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 DEUTSCHE BANK AG, NEW YORK BRANCH, as Documentation Agent.

W  I  T  N  E  S  S
E  T  H

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

ARTICLE I

DEFINITIONS

1.1                                 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 Revolving Credit Agreement as the same may from time to time
hereafter be modified, supplemented or amended.

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

“Applicable
Lending Office” means, with respect to any Bank, (i) in the case of its
Base Rate Loans, 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.

 2
 

 

	
  Range of

  	
   

  	
  Applicable

  	
   

  	
   

  	
   

  
	
  Borrower’s

  	
   

  	
  Margin for

  	
   

  	
  Applicable

  	
   

  
	
  Credit Rating

  	
   

  	
  Base Rate

  	
   

  	
  Margin for Euro

  	
   

  
	
  (S&P/Moody’s

  	
   

  	
  Loans

  	
   

  	
  Dollar Loans

  	
   

  
	
  Ratings)

  	
   

  	
  (% per annum)

  	
   

  	
  (% per annum)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Investment
  Grade

  	
   

  	
  0.250

  	
   

  	
  1.000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.0

  	
   

  	
  0.750

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.0

  	
   

  	
  0.475

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.0

  	
   

  	
  0.375

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-/A3

  	
   

  	
  0.0

  	
   

  	
  0.325

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A/A2 or better

  	
   

  	
  0.0

  	
   

  	
  0.300

  	
   

  

 

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

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

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

“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.

 3
 

“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) time

 4
 

deposits, foreign
deposits, domestic and foreign certificates of deposit, bankers acceptances
(foreign and domestic), commercial paper in Dollars 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 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).

 6
 

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

“Contingent
Obligation” as to any Person means, without duplication, (i) any contingent
obligation of such Person required to be shown on such Person’s balance sheet
in accordance with GAAP, and (ii) any obligation required to be disclosed in
the footnotes to such Person’s financial statements, guaranteeing partially or
in whole any Non-Recourse Indebtedness, lease, dividend or other obligation,
exclusive of contractual indemnities (including, without limitation, any
indemnity or price-adjustment provision relating to the purchase or sale of
securities or other assets) and guarantees of non-monetary obligations (other
than guarantees of completion) which have not yet been called on or quantified,
of such Person or of any other Person. 
The amount of any Contingent Obligation described in clause (ii) shall
be deemed to be (a) with respect to a guaranty of interest or interest and
principal, or operating income guaranty, the Net Present Value of the sum of
all payments required to be made thereunder (which in the case of an operating
income guaranty shall be deemed to be equal to the debt service for the note
secured thereby), calculated at the Applicable Interest Rate, through (I) in
the case of an interest or interest and principal guaranty, the stated date of
maturity of the obligation (and commencing on the date interest could first be
payable thereunder), or (II) in the case of an operating income guaranty, the
date through which such guaranty will remain in effect, and (b) with respect to
all guarantees not covered by the preceding clause (a), an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to
the most recent financial statements of Borrower required to be delivered
pursuant to Section 4.4 hereof. 
Notwithstanding anything contained herein to the contrary, guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment or performance has been made thereunder, at which time any
such guaranty of completion shall be deemed to be a Contingent Obligation in an
amount equal to any such claim.  Subject
to the preceding sentence, (i) in the case of a joint and several guaranty
given by such Person and another Person (but only to the extent such guaranty
is recourse, directly or indirectly to Borrower), the amount of the guaranty
shall be deemed to be 100% thereof unless and only to the extent that such
other Person has

 7
 

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

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

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

“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

 8
 

Consolidated
Subsidiaries and Investment Affiliates that is recourse to EQR or Borrower (or
any Property thereof).

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

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

“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 DEUTSCHE BANK AG, NEW YORK BRANCH, in its capacity as
Documentation Agent hereunder, and its 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

 9
 

Guaranty,
including, without limitation, the organizational documents of such Down REIT
Guarantor, modified or supplemented prior to the date of such Down REIT
Guaranty, each certified to be true, correct and complete by such Down REIT
Guarantor, not more than ten (10) days prior to the date of such Down REIT
Guaranty, together with a good standing certificate from the Secretary of State
(or the equivalent thereof) of the State of formation of such Down REIT
Guarantor, to be dated not more than ten (10) days prior to the date of such
Down REIT Guaranty, as well as authorizing resolutions in respect of such Down
REIT Guaranty, and (iii) an opinion of counsel with respect to such Down REIT
Guarantor and Down REIT Guaranty, in form and substance reasonably acceptable
to the Administrative Agent, with respect to due organization, existence, good
standing and authority, and validity and enforceability of such Down REIT
Guaranty.  In addition, for purposes of
this definition, a Down REIT Guaranty shall not be deemed to constitute
Unsecured Debt of the applicable Down REIT Guarantor.

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

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

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

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

 10
 

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

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

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

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

 11
 

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

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

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

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

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

“Euro-Dollar
Loan” means a 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.

 12
 

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

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

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

“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.

“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.

 13
 

“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 circumstances as of the date of determination; provided,
however, that with respect to the financial covenants, including the related
definitions, (i) GAAP shall be deemed modified to eliminate the effect of FASB
Interpretations No. 46(R), Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB) No. 51 (“FIN 46(R)”),
issued by the Financial Accounting Standards Board, on the operation of such

 14
 

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
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

 15
 

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 payable to the
Banks in accordance with Section 2.8, plus Borrower’s Share of accrued
or paid interest with respect to any Indebtedness of Consolidated Subsidiaries
or Investment Affiliates for which there is no recourse to EQR or Borrower, plus,
without duplication, EQR’s and Borrower’s actual or potential liability for
accrued, paid or capitalized interest (excluding nonrecurring prepayment
premiums or penalties and the interest component of Capital Leases, as well as
excluding interest expense covered by an interest reserve established under a
loan facility, as well as any interest expense under any construction loan or
construction activity that under GAAP is required to be capitalized) with
respect to Indebtedness of Consolidated Subsidiaries or Investment Affiliates
that is recourse to EQR or Borrower, calculated for all Fixed Rate Indebtedness
at the actual interest rate in effect with respect to all Indebtedness
outstanding as of the last day of such period and, in the case of all Floating
Rate Indebtedness, the actual rate of interest in effect with respect to such
Floating Rate Indebtedness outstanding for the period during which no Interest
Rate Contract is in effect, and, during the period that an Interest Rate
Contract is in effect with respect to such Floating Rate Indebtedness, the
strike rate payable under such Interest Rate Contract if lower than the actual
rate of interest.

 16

“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 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.

 17
 

“Joint Lead
Arrangers” means Banc of America Securities LLC, J.P. Morgan Securities
Inc., and Deutsche Bank AG, New York Branch.

“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.

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

 18
 

“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 May 5, 2008, unless accelerated pursuant to the terms
hereof or extended pursuant to Section 2.9(b) hereof.

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

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

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

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

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

 19
 

“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.

“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.

 20
 

“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.

“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.

“Parent”
means, with respect to any Bank, any Person controlling such Bank.

“Participant”
has the meaning set forth in Section 9.6(b).

 21
 

“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); 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

 22
 

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.

“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

 23
 

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

 24
 

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

 25
 

“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.

“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

 26
 

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 Investment

 27
 

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.

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

 28
 

1.2           Accounting
Terms and Determinations.  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP applied on a basis consistent (except for changes
concurred in by the Borrower’s independent public accountants and, with respect
to financial covenants including the related definitions, except for
eliminating the effects of FIN 46(R)) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries
delivered to the Administrative Agent; provided that for purposes of
references to the financial results and information of “EQR, on a consolidated
basis,” EQR shall be deemed to own one hundred percent (100%) of the
partnership interests in Borrower; and provided further that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article V to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Banks wish to amend Article V for such purpose),
then the Borrower’s compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner reasonably satisfactory to the Borrower and the Required Banks.

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

 29
 

ARTICLE II

THE CREDITS

2.1           Commitments
to Lend.        Each Bank severally
agrees, on the terms and conditions set forth in this Agreement, to make Loans
to the Borrower 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. Each Borrowing outstanding under this Section 2.1
shall be in an aggregate principal amount of $3,000,000, or an integral multiple
of $100,000 in excess thereof (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.2(b)) and shall be made
from the several Banks ratably in proportion to their respective Commitments.  In no event shall the aggregate Loans
outstanding at any time exceed $500,000,000 (the “Facility Amount”). Any
amounts repaid may be reborrowed.

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

(i)                    the date of such Borrowing,
which shall be a 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.

2.3           Intentionally Omitted.

2.4           Notice to Banks; Funding of Loans.

(a)           Upon receipt of a
Notice of Borrowing from Borrower in accordance with Section 2.2 hereof, the
Administrative Agent shall, on the date such Notice of Borrowing is received by
the Administrative Agent, promptly notify each Bank of the contents thereof and
of such Bank’s share of such Borrowing, of the interest rate determined
pursuant thereto and the Interest Period(s) (if different from those requested
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.

 30
 

(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.

2.5           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.

(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

 31
 

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.

2.6           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:

(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;

 32

(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.

(c)                                  Upon
receipt of a Notice of Interest Rate Election from the Borrower pursuant to
subsection (a) above, the Administrative Agent shall notify each

 33
 

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.

2.7                                 Interest
Rates.

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

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

(c)                                  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.

2.8                                 Fees.

(a)                                  Unused
Fee.  If at any time from and after
May 10, 2007 and on or prior to December 14, 2007, Borrower shall fail to
maintain an average outstanding daily

 34
 

balance of Loans
of not less than $100,000,000, then the Borrower shall pay to the
Administrative Agent for the account of the Banks ratably in proportion to
their respective Commitments an unused fee (the “Unused Fee”) equal to
0.325% per annum (prorated) of the amount by which the average outstanding
daily balance of Loans during such period are less than $100,000,000. The
Unused Fee shall be payable, in arrears, on June 30, 2007, September 30, 2007,
December 31, 2007 or on the Maturity Date, if sooner.

(b)                                 Upfront
Fee.  If the Commitments shall not
have been cancelled and the Loans repaid in full on or before December 14,
2007, then on December 15, 2007 the Borrower shall pay to the Administrative
Agent for the account of the Banks ratably in proportion to their respective
Commitments a fee equal to 0.10% per annum on the aggregate Commitments.

(c)                                  Facility
Fee.  Commencing as of December 15,
2007, the Borrower shall pay to the Administrative Agent for the account of the
Banks ratably in proportion to their respective Commitments a facility fee (the
“Facility Fee”) equal to 0.10% per annum on the aggregate
Commitments.  The Facility Fee shall be
payable in arrears on March 15, 2007 and on the Maturity Date, and in each case
shall be prorated for the number of days for the quarter preceding thereto
during which the Commitments were outstanding.

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

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

 35
 

2.10                           Mandatory
Prepayment.  If at any time the
Revolving Credit Agreement, dated as of February 28, 2007, among the Borrower,
the Administrative Agent and the banks party thereto, as amended by the Amendment
to Revolving Credit Agreement, dated as of March 30, 2007, shall be amended or
amended and restated or replaced, whether pursuant to the Increase Option (as
defined therein) or otherwise, so as to increase the aggregate commitments
thereunder, Borrower shall pay to the Administrative Agent, for the account of
the Banks, on or before the earlier to occur of (x) thirty (30) days after the
date of such amendment or replacement or the closing of the Increase Option,
and (y) the end of any Interest Period occurring after such amendment or
replacement (but only to the extent of the Loans maturing at the end of any
such Interest Period), an amount equal to the increase in the aggregate
commitments thereunder (but in no event more than the outstanding balance of the
Loans).  Borrower shall make such
prepayment together with interest accrued to the date of the prepayment on the
principal amount prepaid.  In connection
with the prepayment of a Euro-Dollar Loan prior to the maturity thereof, the
Borrower shall also pay any applicable expenses pursuant to Section 2.13.  Each such prepayment shall be applied to
prepay ratably the Loans of the Banks. 
Amounts prepaid pursuant to this Section 2.10 may not be reborrowed and
the Commitments shall be deemed to have been reduced accordingly.

2.11                           Optional
Prepayments and Optional Decreases and Termination.

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

(b)                                 The
Borrower may, upon at least one (1) Euro-Dollar Business Day’s notice to the
Administrative Agent (which shall promptly notify each of the Banks), prepay
any Euro-Dollar Loan as of the last day of the Interest Period applicable
thereto.  Except as provided in Article
VIII and except with respect to any Euro-Dollar Loan which has been converted
to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4 hereof, the Borrower
may not prepay all or any portion of the principal amount of any Euro-Dollar
Loan prior to the end of the Interest Period applicable thereto unless the
Borrower shall also pay any applicable expenses pursuant to Section 2.13.  Any such prepayment shall be upon at least
three (3) Euro-Dollar Business Days’ notice to the Administrative Agent.  Each such optional prepayment shall be in the
amounts set forth in Section 2.11(a) above and shall be applied to prepay
ratably the Loans of the Banks included in any Group of

 36
 

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)                                  Intentionally
Omitted.

(d)                                 Intentionally
Omitted.

(e)                                  The
Borrower may at any time and from time to time cancel all or any part of the
Commitments. If there are Loans then outstanding or, if there are no Loans
outstanding at such time as to which the Commitments with respect thereto are
being cancelled, upon at least one (1) Business Day’s notice to the
Administrative Agent (which shall promptly notify each of the Banks),
whereupon, in either event, all or such portion of the Commitments, as
applicable, shall terminate as to the Banks, pro rata on the date set forth in
such notice of cancellation, and, if there are any Loans then outstanding,
Borrower shall prepay, as applicable, all or such portion of Loans outstanding
on such date in accordance with the requirements of Section 2.11(a) and (b).
Borrower shall be permitted to designate in its notice of cancellation which
Loans, if any, are to be prepaid.

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

2.12                           General
Provisions as to Payments.

(a)                                  The
Borrower shall make each payment of interest on the Loans and of fees
hereunder, not later than 12:00 Noon (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

 37
 

Day, the date for
payment thereof shall be extended to the next succeeding Business Day.  Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.   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.

2.13                           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.

 38
 

2.14                           Computation
of Interest and Fees. All interest based on the Euro-Dollar Rate (other
than with respect to Loans denominated in Pounds Sterling) and all fees shall
be computed on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last day). All
interest based on the Base Rate and all interest on Loans denominated in Pounds
Sterling shall be computed on the basis of a year of 365 days (or, in the case
of interest based on the Base Rate only, 366 days in a leap year) and paid for
the actual number of days elapsed (including the first day but excluding the
last day).

2.15                           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

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

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

(b)                                 the
Borrower, 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;

 39
 

(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 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, 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;

 40
 

(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

(m)                               no
Event of Default shall have occurred.

3.2                                 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
as required by Section 2.3;

(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

 41
 

(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 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.

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

 42
 

4.2                                 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.

4.3                                 No
Violation.

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

 43
 

4.4                                 Financial
Information.

(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
December 31, 2006, (i) except as may have been disclosed in writing to the
Banks, nothing has occurred prior to the Closing Date having a Material Adverse
Effect, and (ii) except as previously disclosed to the Banks, neither the
Borrower nor EQR has incurred any material indebtedness or guaranty on or
before the Closing Date.

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

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

 44
 

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

4.8                                 Taxes.  United States Federal income tax returns of
the Borrower, EQR and their Consolidated Subsidiaries have been prepared and
filed through the fiscal year ended December 31, 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.

4.9                                 Full
Disclosure.  All information
heretofore furnished by the Borrower to the Administrative Agent or any Bank
for purposes of or in connection with 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.

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

 45
 

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

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

4.13                           Investment
Company Act; Public Utility Holding Company Act.  Neither the Borrower, EQR nor any
Consolidated Subsidiary is (x) an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company
Act of 1940, as amended, (y) a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a
“holding company” or a “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.

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

4.15                           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.

 46

4.16                           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.

4.17                           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.

4.18                           Organizational
Documents.  The documents delivered
pursuant to Section 3.1(f) constitute, as of the Closing Date, all of the
organizational documents (together with all amendments and modifications
thereof) of the Borrower 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.

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

 47
 

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:

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

(a)                                  as
soon as available and in any event within five (5) Business Days after the same
is filed with the Securities and Exchange Commission (but in no event later
than 125 days after the end of each fiscal year of the Borrower) a consolidated
balance sheet of the Borrower, EQR and their Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of Borrower’s
and EQR’s operations and consolidated statements of Borrower’s and EQR’s cash
flow for such fiscal year, setting forth in each case in comparative form the
figures as of the end of and for the previous fiscal year, all as reported on
the form provided to the Securities and Exchange 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)

 48
 

Business Days
prior to the date of such delivery and that (1) on the basis of such financial
statements and such review of the Loan Documents, no Event of Default existed
under Section 6.1(b) with respect to Sections 5.8 and 5.9 at or as of the date
of said financial statements, and (2) on the basis of such review of the Loan
Documents and the business and condition of the Borrower, to the best knowledge
of such officer, as of the last day of the period covered by such certificate
no Default or Event of Default under any other provision of Section 6.1
occurred and is continuing or, if any such Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof and the
action the Borrower proposes to take in respect thereof.  Such certificate shall set forth the
calculations required to establish the matters described in clauses (1) and (2)
above;

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

 49
 

to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer, any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of the
Code, a copy of such application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other 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

 50
 

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.

5.2                                 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.

5.3                                 Maintenance
of Property; Insurance; Leases.

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

(b)                                 The
Borrower and/or EQR shall maintain, or cause to be maintained, insurance 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.

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

 51
 

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

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

5.7                                 Intentionally
Omitted.

5.8                                 Financial
Covenants.

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

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(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.

(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.

5.9                                 Restriction
on Fundamental Changes.

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

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

 53
 

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.

5.10                           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.

5.11                           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.

5.12                           Intentionally
Omitted.

5.13                           EQR
Status.

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

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

(1)                                  the
Obligations; and

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

(c)                                  Disposal
of Partnership Interests.  EQR will
not directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any

 54
 

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

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

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

(b)                                 the
Borrower shall fail to observe or perform any covenant contained in Section
5.8, Section 5.9, 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

 55
 

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;

(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;

 56
 

(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;

(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.

 57
 

6.2                                 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 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.

 58
 

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

6.4                                   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

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

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

 59
 

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

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

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

 60

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

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

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7.8           Successor
Administrative Agent or Syndication Agent. 
The Administrative Agent, the Syndication Agent, or the Documentation
Agents may resign at any time by giving notice thereof to the Banks, the
Borrower and each other and the Administrative Agent or the Syndication Agent,
as applicable, shall resign in the event the Commitment of the Bank serving as
the Administrative Agent or the Syndication Agent is reduced to less than
$10,000,000.  Upon any such resignation,
the Required Banks shall have the right to appoint a successor Administrative
Agent or Syndication Agent, as applicable, which successor Administrative Agent
or successor Syndication Agent (as applicable) shall, provided no Event of
Default has occurred and is then continuing, be subject to Borrower’s approval,
which approval shall not be unreasonably withheld or delayed (except that
Borrower shall, in all events, be deemed to have approved Bank of America, N.A.
as a successor Syndication Agent and JPMorgan Chase Bank, N.A. as a successor
Administrative Agent).  If no successor
Administrative Agent or Syndication Agent (as applicable) shall have been so
appointed by the Required Banks and (if required) approved by the Borrower, or,
if so appointed, shall not have accepted such appointment within 30 days after
the retiring Administrative Agent or Syndication Agent (as applicable) gives
notice of resignation, then the retiring Administrative Agent or retiring
Syndication Agent (as applicable) may, on behalf of the Banks, appoint a
successor Administrative Agent or Syndication Agent (as applicable), which
shall be the Syndication Agent or the Administrative Agent, as the case may be,
who shall act until the Required Banks shall appoint a successor Administrative
Agent or Syndication Agent.  In any
event, the retiring Administrative Agent shall continue to act as
Administrative Agent until such time as a successor Administrative Agent shall
have been so appointed by the Required Banks, approved by Borrower (if
required), and assumed its duties hereunder. Upon the acceptance of its
appointment as the Administrative Agent or Syndication Agent hereunder by a
successor Administrative Agent or successor Syndication Agent, as applicable,
such successor Administrative Agent or successor Syndication Agent, as
applicable, shall thereupon succeed to and become vested with all the rights
and duties of the retiring Administrative Agent or retiring Syndication Agent,
as applicable, and the retiring Administrative Agent or the retiring
Syndication Agent, as applicable, shall be discharged from its duties and
obligations hereunder.  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

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successor
Administrative Agent or Syndication Agent, as applicable, in accordance with
the provisions of this Section 7.8.

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

ARTICLE VIII

CHANGE IN
CIRCUMSTANCES

8.1           Basis
for Determining Interest Rate Inadequate or Unfair.  If on or prior to the first day of any
Interest Period for any Euro-Dollar Borrowing:

(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

 63
 

(b)           Banks
having 50% or more of the aggregate amount of the applicable Commitments advise
the Administrative Agent that the Euro-Dollar Rate, as determined by the
Administrative Agent will not adequately and fairly reflect the cost to each
such Bank of funding its Euro-Dollar Loans for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans shall be suspended.  In such event, unless the Borrower notifies
the Administrative Agent at least two Business Days before the date of (i) any
Euro-Dollar Borrowing denominated in Dollars for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, such
Borrowing shall instead be made as a Base Rate Borrowing.  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.

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8.2           Illegality.  If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) made after the Closing Date
of any such authority, central bank or comparable agency shall make it unlawful
for any Bank (or its Euro-Dollar Lending Office) 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.

If,
at any time, it shall be unlawful for any Bank to make, maintain or fund its
Euro-Dollar Loans, the Borrower shall have the right, upon five (5) Business
Day’s notice to the Administrative Agent, to either (x) cause a bank,
reasonably acceptable to the Administrative Agent, to offer to purchase the
Commitments of such Bank for an amount equal to such Bank’s outstanding Loans
and all amounts due such Bank hereunder (including, without limitation,
interest, Facility Fees and all amounts payable pursuant to Section 2.13), and
to become a Bank hereunder, or obtain the agreement of one or more existing Banks
to offer to purchase the Commitments of such Bank for such amount, which offer
such Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest thereon, Facility Fees and all
other amounts due such Bank hereunder (including, without limitation, amounts
payable pursuant to Section 2.13), upon which event, such Bank’s Commitment
shall be deemed to be cancelled pursuant to Section 2.11(e).  Any Bank subject to this paragraph shall
retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.

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8.3           Increased
Cost and Reduced Return.

(a)           If, on or
after the date hereof in the case of Loans made pursuant to Section 2.1, 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
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

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for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within 15 days after demand by such Bank
(with a copy to the Administrative Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank (or its Parent)
for such reduction to the extent such Bank generally imposes such additional
amounts on other borrowers of such Bank in similar circumstances.

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

(d)           If at any
time, any Bank shall be owed amounts pursuant to this Section 8.3, the Borrower
shall have the right, upon five (5) Business Day’s notice to the Administrative
Agent to either (x) cause a bank, reasonably acceptable to the Administrative
Agent, to offer to purchase the Commitments of such Bank for an amount equal to
such Bank’s outstanding Loans and all amounts due such Bank hereunder
(including, without limitation, interest, Facility Fees and all amounts payable
pursuant to Section 2.13 and this Section 8.3), and to become a Bank hereunder,
or to obtain the agreement of one or more existing Banks to offer to purchase
the Commitments of such Bank for such amount, which offer such Bank is hereby
required to accept, or (y) to repay in full all Loans then outstanding of such
Bank, together with interest thereon, Facility Fees 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 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.

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8.4           Taxes.

(a)           Any and
all payments by the Borrower to or for the account of any Bank or the
Administrative Agent hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank
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 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.

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

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

(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

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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 Commitments of such Bank for an
amount equal to such Bank’s outstanding Loans and all amounts due such Bank
hereunder (including, without limitation, interest, Facility Fees and all
amounts payable pursuant to Section 2.13 and this Section 8.4), and to become a
Bank hereunder, or to obtain the agreement of one or more existing Banks to
offer to purchase the Commitments of such Bank for such amount, which offer
such Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest thereon, Facility Fees and all
other amounts due such Bank hereunder (including, without limitation, amounts
payable pursuant to Section 2.13 and this Section 8.4), upon which event, such
Bank’s Commitment shall be deemed to be cancelled pursuant to Section
2.11(c).  Any Bank subject to this
Section 8.4(d) shall retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4
and 9.3 for the period prior to such purchase or cancellation.

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

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

 70
 

(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

9.1           Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission followed by telephonic confirmation or similar writing)
and shall be given to such party:  (x) in
the case of the Borrower 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.

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

9.3           Expenses;
Indemnification.

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

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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 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.

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9.4           Sharing
of Set-Offs.  In addition to any
rights now or hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, upon the occurrence and during the continuance
of any Event of Default, each Bank is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or to any other Person, any such notice being hereby expressly
waived, but subject to the prior consent of the Administrative Agent, to set
off and to appropriate and apply any and all deposits (general or special, time
or demand, provisional or final) and any other indebtedness at any time held or
owing by such Bank (including, without limitation, by branches and agencies of
such Bank wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations of the Borrower then due and payable
to such Bank under this Agreement or under any of the other Loan Documents,
including, without limitation, all interests in Obligations purchased by such
Bank.  Each Bank agrees that if it shall
by exercising any right of set-off or counterclaim or otherwise (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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9.5                                 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) 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 the
Borrower shall sell its interest in any Down REIT Guarantor to an unaffiliated
third party in an arms-length transaction, the Down REIT Guaranty of such Down
REIT Guarantor shall be deemed to have terminated and released, and the Banks
hereby authorize the Administrative Agent to enter into an agreement,
confirming the termination and release of such Down REIT Guaranty, at the
Borrower’s sole cost and expense.

9.6                                 Successors
and Assigns.

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

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

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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 Commitments of less than
$10,000,000 in the aggregate, unless its Commitments shall have been reduced to
zero) and (ii) after the occurrence and during the continuance of an Event of
Default, to any Person in any amount (in each case, an “Assignee”), all
or a proportionate part of all, of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, and, in either case, such
Assignee shall assume such rights

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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.

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

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9.8                                 Governing
Law; Submission to Jurisdiction.

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

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

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

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

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

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

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

9.14                           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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9.15                           Confidentiality.  The Administrative Agent and each Bank shall
use reasonable efforts to assure that information about Borrower, EQR and its
Subsidiaries and Investment Affiliates, and the Properties thereof and their
operations, affairs and financial condition, not generally disclosed to the
public, which is furnished to Administrative Agent or any Bank pursuant to the
provisions hereof or any other Loan Document is used only for the purposes of
this Agreement and shall not be divulged to any Person other than the
Administrative Agent, the Banks, and their affiliates and respective officers,
directors, employees and agents who are actively and directly participating in
the evaluation, administration or enforcement of the Loan, this Agreement, the
Loan Documents and the extension of credit hereunder, except:  (a) to their attorneys and accountants, (b)
in connection with the enforcement of the rights and exercise of any remedies
of the Administrative Agent and the Banks hereunder and under the other Loan
Documents, (c) in connection with assignments and participations and the
solicitation of prospective assignees and participants referred to in Section
9.6 hereof, who have agreed in writing to be bound by a confidentiality
agreement substantially equivalent to the terms of this Section 9.15, and (d)
as may otherwise be required or requested by any regulatory authority or
self-regulatory body having jurisdiction over, or claiming jurisdiction or
authority to oversee or regulate, the Administrative Agent or any Bank or by
any applicable law, rule, regulation or judicial process.

9.16                           Bank’s
Failure to Fund.

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

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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

 81
 

to in Section
6.1(f) or (g)), reimbursement for fees, indemnities, costs, expenses or
otherwise, which arise under, in connection with or in respect of the Loans or
the Loan Documents, and (y) any and all deferrals, renewals, extensions and
refundings of, or amendments, restatements, rearrangements, modifications or
supplements to, any such indebtedness, obligation or liability.

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

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

(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;

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

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

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

(v)                                                         any
other 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.

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

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

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

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

 85
 

such Bank is a
Defaulting Bank; provided, however, that in the case of any vote
requiring the unanimous consent of the Banks, if all the Banks other than the
Defaulting Bank shall have voted in accordance with each other, then the
Defaulting Bank shall be deemed to have voted in accordance with such Banks.

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

9.17                           Intentionally
Omitted.

9.18                           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

 86
 

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 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).

9.19                           USA
PATRIOT Act Notice.  Each Bank that
is subject to the Act (as hereinafter defined) and the Administrative Agent
(for itself and not on behalf of any Bank) hereby notifies the Borrower 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.

 87

9.20         Public/Private Information.  The Borrower hereby acknowledges that (a) the
Administrative Agent and/or the Syndication Agent will make available to the
Banks 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.”

 88
 

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

 89
 

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

 90
 

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

  	
   

  

 

 91
 

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:
$166,666,666.67

 92
 

 

	
  

  	
  JPMORGAN CHASE BANK, N.A., as Syndication 

  Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Marc E. Costantino

  	
   

  
	
   

  	
   

  	
  Name: Marc E. Costantino

  
	
   

  	
   

  	
  Title: Executive Director

  
					

 

Commitment:
$166,666,666.67

 93
 

 

	
  

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH,

  as Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ James Rolison

  	
   

  
	
   

  	
   

  	
  Name: James Rolison

  
	
   

  	
   

  	
  Title:  
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Linda Wang

  	
   

  
	
   

  	
   

  	
  Name: Linda Wang

  
	
   

  	
   

  	
  Title:  
  Director

  
	
   

  	
   

  	
   

  
					

 

Commitment:
$166,666,666.66

 94

Total Commitments

$500,000,000Exhibit 10.2

GUARANTY OF PAYMENT

GUARANTY OF
PAYMENT (this “Guaranty”), made as of May 7, 2007, between EQUITY
RESIDENTIAL, a Maryland real estate investment trust, 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 Revolving 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, JPMORGAN
CHASE BANK, N.A., as Syndication Agent, and DEUTSCHE BANK AG, NEW YORK BRANCH,
as Documentation Agent.

W  I  T  N  E  S  S
E  T  H:

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 the
Dollar Equivalent Amount of which is not to exceed $500,000,000;

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 the sole general partner of 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 the 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 non-payment or
non-observance 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 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 

 2
 

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, set-off 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.

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 and the Administrative Agent and the Banks the obligations of Borrower
under the Loan Documents.

 3
 

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 or,
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 interests 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

 4
 

(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 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.

 5
 

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 payment 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. The
foregoing, however, shall not be deemed in any way to limit any rights that
Guarantor may have pursuant to the Agreement of Limited Partnership of Borrower
or which it may have at law or in equity with respect to any other partners of
Borrower.

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 the sole general partner of 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;

(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 Maryland, (ii)
Guarantor has complied with all provisions of applicable law in connection with
all aspects of this 

 6
 

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 Federal
Reserve Board 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;

 7
 

(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;

(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;

(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); and

(l)            All
of the representations and warranties in the Credit Agreement concerning
Guarantor are true and correct.

Guarantor
covenants that it will comply or cause compliance with all covenants in the
Credit Agreement which are applicable to it.

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.

 8
 

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.

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:

  	
  Equity Residential

  
	
   

  	
  Two North
  Riverside Plaza

  
	
   

  	
  Suite 400

  
	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
  Attn: Chief
  Financial Officer

  

 

 9
 

 

	
  

  	
  Facsimile: (312) 454-0399

  
	
   

  	
   

  
	
  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

  

 

 10
 

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, 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 the 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 attempted such 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.

 11
 

(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
non-exclusive 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 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
NON-JURY 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 and the Banks 

 12
 

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 (i) upon the full performance
and payment of the Guaranteed Obligations hereunder, or (ii) in accordance with
the last sentence of Section 9.5 of the Credit Agreement.  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.  No claim may be made by 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 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 Guaranty or by the other Loan
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.

 13

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

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  EQUITY RESIDENTIAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Mark J. Parrell

  	
   

  
	
   

  	
   

  	
  Name: Mark J. Parrel

  
	
   

  	
   

  	
  Title: Senior Vice President and Treasurer

  
	
   

  	
   

  
					

 

	
  ACCEPTED:

  
	
   

  
	
  BANK OF AMERICA, N.A.,

  
	
  AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mark K. Mokelke

  	
   

  
	
   

  	
  Name: Mark K. Mokelke

  
	
   

  	
  Title:   Vice
  President

  
				

 

ACKNOWLEDGMENT FOR
GUARANTOR

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF COOK

  	
  )

  

 

On May 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 vice
president and treasurer 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 Hunt

  	
   

  
	
   

  	
  Notary Public

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