TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

 

LOAN AGREEMENT

 

           THIS LOAN AGREEMENT is made and entered into as of May 11, 2012 by
TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a national banking association
(together with its successors and assigns, the “Bank”), HARTMAN RICHARDSON
HEIGHTS PROPERTIES, LLC, a Texas limited liability company (“Richardson”),
HARTMAN SHORT TERM INCOME PROPERTIES XX, INC., a Maryland corporation (“XX”),
and HARTMAN COOPER STREET PLAZA, LLC, a Texas limited liability company
(“Cooper” and collectively with Richardson, XX and each Person which, from time
to time, executes a Joinder Agreement, the “Borrower”).

 

RECITALS:

 

           A.            Borrower has requested that Bank extend credit to
Borrower as described in this Agreement.  Bank is willing to make such credit
available to Borrower upon and subject to the provisions, terms, and conditions
hereinafter set forth.

           B.            Subject to and upon the terms and conditions of this
Agreement, Bank has agreed to lend to Borrower the amounts herein described for
the purposes set forth below.

AGREEMENT:

 

NOW, THEREFORE, in consideration of the premises, the covenants,
representations, warranties and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

Article One
Definitions and Use of Terms

1.1                Definitions.  As used in this Agreement, all exhibits and
schedules hereto and in any note, certificate, report or other Loan Documents
made or delivered pursuant to this Agreement, the following terms will have the
meanings given such terms in Article One.

“Adjusted EBITDA” shall have the meaning set forth in Section 4.9(c)(i).

“Administrative Borrower” has the meaning set forth in Section 8.23.

“Advance” means a disbursement by Bank, whether by journal entry, deposit to
Borrower’s account, check to third party or otherwise of any of the proceeds of
the Loan, or any insurance proceeds.

“Affiliate” means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person, (b) that directly or indirectly
beneficially owns or holds ten percent (10%) or more of any class of voting
stock of such Person, or (c) ten percent (10%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question.  The term “control” means the possession, directly or indirectly, of
the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise; provided, however, in no event shall Bank be deemed an Affiliate of
Borrower.  For purposes of the Loan Documents, each of the following shall be
deemed to be an Affiliate of Borrower:  Hartman 1960 Properties, LLC, Hartman
Income REIT, Inc., Hartman Income REIT Operating Partnership, LP, Hartman
Prestonwood Properties, LLC, Hartman Short Term Income Properties XIX, Inc., and
Hartman 601 Sawyer, LLC.

“Agreement” means this Loan Agreement, as the same may from time to time be
amended, supplemented, or replaced.

“Approved Purpose” means (a) the acquisition and refinance of real estate by
Borrower in accordance with this Agreement, and (b) general corporate purposes.

“Bank” means Texas Capital Bank, National Association and its successors and
assigns, in whole or in part.

“Borrower” means, collectively, the Persons identified as such in the
introductory paragraph hereof, and their successors and assigns.

“Borrowing Base” means the amount most recently determined and designated by the
Bank as the Borrowing Base in accordance with Section 2.13 hereof, as such
Borrowing Base is reduced or increased in accordance with Section 2.13 hereof. 
The Borrowing Base under Section 2.13 is deemed to be $14,000,000 as of the
Closing Date, provided, however, if Richardson shall sell the McDonald’s Pad
Site, the Borrowing Base shall be reduced to $13,500,000. 

“Borrowing Base Properties” means the real property and improvements identified
on Exhibit B provided such real property and improvements are secured by a first
and prior deed of trust liens encumbering such real property and improvements
satisfactory to Bank.

“Borrowing Limit” means the amount of the Borrowing Base.

“Business Day” means a day other than a Saturday, Sunday or a day on which Bank
is authorized to be closed.  Unless otherwise provided, the term “days” means
calendar days.

“Capital Expenditures” means any expenditure for (a) an asset which will be used
in a year or years subsequent to the year in which the expenditure is made and
which asset is properly classified in relevant financial statements as
equipment, real property, a fixed asset or a similar type of capitalized asset
in accordance with GAAP or (b) an asset relating to or acquired in connection
with an acquired business, and any and all acquisition costs related to clause
(a) or (b) above.

“Capitalized Lease Obligation” shall have the meaning set forth in Section
4.9(c)(ii).

“Closing Date” means the date hereof.

“Code” means the Uniform Commercial Code of the State of Texas or other
applicable jurisdiction as it may be amended from time to time.

“Collateral” means all property which secures, either directly or indirectly,
the payment and performance of the Indebtedness and the Obligations, including,
without limitation all Loans and the Mortgaged Property, wherever located, and
all Proceeds and products thereof.

“Commitment” means the obligation of Bank to make the Loans in an aggregate
principal amount at any time outstanding up to but not to exceed in the
aggregate the Borrowing Limit in effect from time to time.

“Commitment Fee” means the Commitment Fee specified in Exhibit B to be paid to
Bank in consideration of the commitment of Bank to make the proceeds of the Loan
available to Borrower from time to time during the term of, and as provided in,
this Agreement.  Unless otherwise provided in Exhibit B, the Commitment Fee
shall be paid to Bank as of the Closing Date.

“Debt” means, as of any applicable date of determination thereof, all items of
indebtedness, obligation or liability of a Person, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, joint or
several, including all items that should be classified as liabilities in
accordance with GAAP.  In the case of Borrower, the term “Debt” shall include,
without limitation, the Indebtedness.

“Debt Service” shall have the meanings set forth in Section 4.9(a)(i) and
Section 4.9(c)(iii) as applicable to such section.

“Debt Service Coverage Ratio” shall have the meaning set forth in Section
4.9(a)(ii).

“Debtor Relief Laws” means Title 11 of the United States Code, as now or
hereafter in effect, or any other applicable law, domestic or foreign, as now or
hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors generally
from time to time in effect.

“Deed of Trust” means, collectively, one or more Deeds of Trust, Security
Agreement, Financing Statement and Absolute Assignment of Rents covering the
Property to secure payment and performance of the Indebtedness and the
Obligations, as such may be amended from time to time.

“Default” means any condition or eventwhich, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.

“Disposition” means any sale, lease (except as permitted in the Loan Documents
or otherwise in the ordinary course of the business of the Borrower), exchange,
assignment, conveyance, transfer, trade, encumbrance (except in favor of Bank or
otherwise permitted in the Loan Documents) or other disposition of all or any
portion of the Mortgaged Property (or any interest therein) (except as expressly
permitted in the Loan Documents).

“EBITDA” shall have the meaning set forth in Section 4.9(c)(iv).

“Event of Default” has the meaning set forth in Article Six hereof and in the
other Loan Documents.

“Financial Statements” means all balance sheets, income statements, statements
of profit and loss, statements of cash flow, statements of sources and uses of
funds, and other financial data, statements and reports (whether of Borrower,
any Guarantor, or any other Person or otherwise) which are required to, have
been, or may from time to time hereafter, be furnished to Bank, for the purposes
of, or in connection with, this Agreement.

“Fixed Charges” shall have the meaning set forth in Section 4.9(c)(vi).

“Fixed Charge Coverage Ratio” shall have the meaning set forth in Section
4.9(c)(v).

“GAAP” means generally accepted accounting principles, applied on a consistent
basis, set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board which are applicable in the circumstances as of the
date in question; and the requisite that such principles be applied on a
consistent basis means that the accounting principles observed in a current
period are comparable in all material respects to those applied in a preceding
period, except to the extent that a deviation therefrom is expressly permitted
by this Agreement.

“Governmental Authority” means the United States, the state, the county, the
city or any other political subdivision in which the Mortgaged Property is
located, and any court or political subdivision, agency, or instrumentality
having jurisdiction over Borrower, any Guarantor or the Mortgaged Property.

“Guarantor” means any Person who from time to time guarantees all or any part of
the Indebtedness, including any Person who enters into a validity guaranty
agreement.

“Hedge Agreement” means (a) any and all interest rate swap transactions, forward
rate transactions, interest rate options, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, or any other swap, forward, futures, option or
other similar agreements or transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, (b)
any and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., or any other master agreement (any such master agreement, together with
any related schedules and annexes, a “Master Agreement”) and (c) any and all
Master Agreements and any and all related confirmations.

“Impositions” means: (i) all real estate and personal property taxes, charges,
assessments, standby fees, excises, and levies and any interest, costs, or
penalties with respect thereto, general and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever which at any time
prior to or after the execution hereof may be assessed, levied, or imposed upon
the Mortgaged Property or the ownership, use, occupancy, or enjoyment thereof,
or any portion thereof, or the sidewalks, streets, or alleyways adjacent
thereto; (ii) any charges, fees, license payments, or other sums payable for or
under any easement, license, or agreement maintained for the benefit of the
Mortgaged Property; (iii) water, gas, sewer, electricity, and other utility
charges and fees relating to the Mortgaged Property; and (iv) assessments and
charges arising under any subdivision, condominium, planned unit development, or
other declarations, restrictions, regimes, or agreements affecting the Mortgaged
Property.

“Improvements” means the improvements, if any, situated on the Land.

“Indebtedness” means all present and future indebtedness, obligations, and
liabilities, including all direct and contingent obligations arising under
letters of credit, banker’s acceptances, bank guaranties and similar
instruments, net obligations under any swap contract, overdrafts, Automated
Clearing House obligations, and other financial accommodations which could be
considered a liability under GAAP, and all renewals, extensions, and
modifications thereof, or any part thereof, now or hereafter owed to Bank by
Borrower, and all interest accruing thereon and costs, expenses, and reasonable
attorneys’ fees incurred in the enforcement or collection thereof, regardless of
whether such indebtedness, obligations, and liabilities are direct, indirect,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, but not limited to, the indebtedness, obligations, and
liabilities evidenced, secured, or arising pursuant to any of the Loan
Documents, and all renewals and extensions thereof, or any part thereof, and all
present and future amendments thereto.

“Indemnified Parties” shall have the meaning set forth in Section 7.7. 

“Joinder Agreement” means the Joinder Agreement in the form attached hereto as
Exhibit G.

“Land” means the parcels of real property described in Exhibit A.

“Leases” means any and all leases, subleases, licenses, concessions, or other
agreements (whether written or oral, or now or hereafter in effect) which grant
to third parties a possessory interest in and to, or the right to use or occupy,
all or any part of the Mortgaged Property, together with all security and other
deposits or payments made in connection therewith.

“Legal Requirements” means (i) any and all present and future judicial
decisions, statutes, rulings, rules, regulations, permits, certificates, or
ordinances of any Governmental Authority in any way applicable to Borrower, any
Guarantor or the Mortgaged Property, including, without limiting the generality
of the foregoing, the ownership, use, occupancy, possession, construction,
operation, maintenance, alteration, repair, or reconstruction thereof, (ii) any
and all covenants, conditions, and restrictions contained in any deeds, other
forms of conveyance, or in any other instruments of any nature that relate in
anyway or are applicable to the Mortgaged Property or the ownership, use, or
occupancy thereof, (iii) Borrower’s or any Guarantor’s present or subsequently
effective bylaws and articles of incorporation, operating agreement or
regulations and articles of organization or partnership, limited partnership,
joint venture, trust, or other form of business association agreement, and (iv)
any and all Leases and other contracts (written or oral), of any nature that
relate in any way to the Mortgaged Property and to which Borrower or any
Guarantor may be bound.

“Lien” means any valid and enforceable interest in any property, whether real,
personal or mixed, securing an indebtedness, obligation or liability owed to or
claimed by any Person other than the owner of such property, whether such
indebtedness is based on the common law or any statute, ordinance or contract
and including, but not limited to, liens created by or pursuant to, a security
interest, pledge, mortgage, assignment, conditional sale, trust receipt, lease,
consignment or bailment for security purposes.

“Loan” or “Loans” means the loan or loans by Bank to Borrower pursuant to this
Agreement.

“Loan Documents” means this Agreement, the Note, the Deed of Trust, and such
other documents evidencing, securing or pertaining to the Loan as shall from
time to time be executed and delivered to Bank by Borrower or any other party
pursuant to this Agreement, including, without limitation, any future amendments
hereto, or restatements hereof, or pursuant to the terms of any of the other
loan documents, together with any and all renewals, extensions, and restatements
of, and amendments and modifications to, any such agreements, documents, and
instruments.

“Management Agreement” shall have the meaning set forth in Section 5.17. 

“Material Adverse Effect” means any set of circumstances or event which (a)
could reasonably be expected to have any adverse effect whatsoever upon the
validity, performance, or enforceability of any Loan Document, (b) is or could
reasonably be expected to become material and adverse to the financial
condition, properties, or business operations of the Person in question, (c)
could reasonably be expected to impair the ability of the Person in question to
fulfill its obligations under the terms and conditions of the Loan Documents, or
(d) could reasonably be expected to cause an Event of Default.

“Material Contract” means any agreement or contract of Borrower which (a)
involves consideration to Borrower of $100,000.00 or more in any year, (b)
involves consideration by Borrower of $100,000.00 or more in any year, (c)
imposes financial obligations on Borrower of $100,000.00 or more in any year,
(d) is a Hedge Agreement, (e) is otherwise material (or together with related
agreements and contracts, is material) to the business, operations, financial
condition, performance or properties of Borrower, taken as a whole.

“Maturity Date”means May __, 2015.

“Maximum Rate” means the maximum non-usurious rate of interest (or, if the
context so requires, an amount calculated at such rate) which Bank is allowed to
contract for, charge, take, reserve, or receive in this transaction under
applicable federal or state (whichever is higher) law from time to time in
effect after taking into account, to the extent required by applicable federal
or state (whichever is higher) law from time to time in effect, any and all
relevant payments or charges under the Loan Documents.

“McDonald’s Pad Site” means an approximately 28,512 square foot McDonald’s Pad
site owed by Richardson in the Richardson Heights Shopping Center located at 120
S. Central Expressway, Richardson, Texas 75080.

“Mortgaged Property” has the meaning assigned to such term in the Deed of Trust.

“NOI” shall have the meaning set forth in Section 4.9(a)(iii).

“Note” means the Promissory Note made by Borrower payable to the order of Bank
in the maximum amount of $30,000,000.00 and evidencing the Loan, as such may be
amended, increased, replaced, renewed and extended from time to time.

“Obligated Party” means the Borrower, the Guarantor and any other Person who is
or becomes party to any agreement that guarantees or secures payment and
performance of the Indebtedness and/or Obligations or any part thereof.

“Obligations” means any and all of the covenants, conditions, warranties,
representations and other obligations (other than to repay the Indebtedness)
made or undertaken by Borrower or any Obligated Party to Bank as set forth in
the Loan Documents, or any other agreement as to which Borrower is granted a
possessory interest in the Property.

“Permitted Encumbrances” has the meaning assigned to such term in the Deed of
Trust.

“Person” means any individual, firm, corporation, association, partnership,
joint venture, trust, other entity, unincorporated organization or Governmental
Authority.

“Principal Balance” means the aggregate unpaid balance of all Advances of the
Loan and all other principal indebtedness, if any, under the Note at the time in
question.

“Proceeds” means any “proceeds,” as such term is defined in Chapter 9 of the
Code and, in any event, shall include, but not be limited to, (a) any and all
proceeds of any insurance, indemnity, warranty, or guaranty payable to Borrower
from time to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to Borrower from time
to time in connection with any requisition, confiscation, condemnation, seizure,
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any person acting under color of any Governmental Authority), and (c) any
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral.

“Property” means the Land, the Improvements and all other property, real and
personal, now or hereafter subject to a Right, or Lien to secure the Loan as
described herein, in the Deed of Trust or in any of the other Loan Documents.

“Related Indebtedness” shall have the meaning set forth in Section 8.10. 

“Rights” means any remedies, powers, and privileges exercisable by Bank under
the Loan Documents, at law, equity, or otherwise.

“Subordinated Debt” means all Debt of Borrower whether now existing or hereafter
incurred which is subordinate in right of payment to the Indebtedness, pursuant
to a written agreement in form and content satisfactory to Bank.

“Survey” means a survey of the Land consisting of a plat and field notes,
prepared by a licensed surveyor acceptable to Bank and the Title Company which
survey shall:  (a) reflect the actual dimensions of the Land, the gross and net
area of the Land, the location of any easements, rights-of-way, setback lines,
encroachments or overlaps thereof or thereover and the outside boundary lines of
any Improvements located thereon; (b) identify by recording reference any
easements, setback lines or other matters referred to in the title commitment
issued by the title Company; (c) include the surveyor’s registration number and
seal and the date of the Survey; (d) include a surveyor’s certificate acceptable
to bank within its reasonable discretion; (e) reflect that the Land has access
to and from a publicly dedicated street, roadway or highway; (f) be sufficient
to cause the Title Company to delete the “survey exception” in Schedule B of the
title Policy  to the extent permitted by the rules of the State Board of
Insurance; and (g) reflect the area within the Land that has been designated by
the Federal Insurance Administration, the Army Corps of Engineers or any other
governmental agency or body as being subject to special or increased flood
hazards.

“Taxes” means all taxes (including withholding), assessments, fees, levies,
impositions, imposts, duties, deductions, withholdings, or other charges of any
nature whatsoever from time to time or at any time imposed by any laws or by any
Governmental Authority, excluding state and local sales and use taxes.

“Title Company” means the title company or title companies name in Exhibit C.

“Title Policy” means a loan policy (or policies) of title insurance, and any
reinsurance agreement (or agreements) issued by the Title Company in accordance
with Exhibit C.

1.2                Headings.  The headings, captions, and arrangements used in
any of the Loan Documents are, unless specified otherwise, for convenience only
and shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents nor to affect the meaning thereof.

1.3                Number and Gender of Words.  Whenever herein the singular
number is used, the same shall include the plural where appropriate, and words
of any gender shall include each other gender where appropriate.  Reference
herein to Borrower shall mean, jointly and severally, each Person comprising
same.

1.4                Articles, Sections and Exhibits.  All references herein to
“Articles” and “Sections” are, unless specified otherwise, references to
articles and sections of this Agreement.  All references herein to an “Exhibit”
or “Schedule” are references to exhibits or schedules attached hereto, all of
which are made a part hereof for all purposes, the same as if set forth herein
verbatim, it being understood that if any exhibit or schedule attached hereto,
which is to be executed and delivered, contains blanks, the same shall be
completed correctly and in accordance with the terms and provisions contained
and as contemplated herein prior to or at the time of the execution and delivery
thereof.  The words “herein,” “hereof,” “hereunder” and other similar compounds
of the word “here” when used in this Agreement shall refer to the entire
Agreement and not to any particular provision or section.

Article Two
Commitment to Lend

2.1                Commitment to Lend.  Subject to and upon the terms and
conditions of this Agreement, Bank agrees to make one or more Advances to
Borrower for Approved Purposes in an aggregate principal amount at any one time
outstanding up to but not exceeding the Borrowing Limit.  Within the limit of
the Borrowing Limit in effect from time to time, Borrower may borrow, repay, and
reborrow at any time and from time to time from the Closing Date to the earlier
of (a) the Maturity Date, or (b) the termination of Bank’s Commitment
hereunder.  Each Loan shall be in the principal amount of not less than
$100,000.00.  If, by virtue of payments made on the Note, the principal amount
owed on the Note during its term reaches zero at any point, Borrower agrees that
all of the Collateral and all of the Loan Documents shall remain in full force
and effect to secure any Advances made thereafter, and Bank shall be fully
entitled to rely on all of the Collateral and all of the Loan Documents unless
an appropriate release of all or any part of the Collateral or all or any part
of the Loan Documents has been executed by Bank.  Notwithstanding the principal
amount listed in the Note, the Principal Balance may not at any time exceed the
Borrowing Limit at any time.

2.2                Note.  The Loans shall be evidenced by, be repayable, and
accrue interest in accordance with, the Note.  Interest at the rate specified in
the Note shall be computed on the Principal Balance which exists from time to
time and shall be computed with respect to each Advance only from the date of
the Advance.  Subject to the terms and conditions in this Agreement, the Note,
and the other Loan Documents, Borrower may borrow, repay, and reborrow under the
Note.  The unpaid principal balance of the Note shall be repaid as provided
therein. 

2.3                Borrowing Procedure.  Borrower shall give Bank notice of each
request for an Advance by means of a written request substantially in the form
of Exhibit E attached hereto containing the information required by Bank and
delivered (by hand or by mechanically confirmed facsimile) to Bank no later than
1:00 p.m. (Texas time) on (a) the day on which any Advance for general corporate
purposes is desired to be funded and (b) a day no later than twenty (20) days
prior to the day on which any Advance for acquisition of real estate is desired
to be funded and, prior to the making of any such Advance, all matters in
connection with such acquisition shall be in form and substance satisfactory to
Bank.  Bank, at its option, may accept telephonic requests for such Advances,
provided that such acceptance shall not constitute a waiver of Bank’s right to
require delivery of a written request in connection with subsequent Advances. 
Any telephonic request for an Advance by Borrower shall be promptly confirmed by
submission of a properly completed written request to Bank, but failure to
deliver a written request shall not be a defense to payment of the Loan.  Bank
shall have no liability to Borrower for any loss or damage suffered by Borrower
as a result of Bank’s honoring of any requests, execution of any instructions,
authorizations or agreements or reliance on any reports communicated to it
telephonically, by facsimile or electronically, and purporting to have been sent
to Bank by Borrower and Bank shall have no duty to verify the origin of any such
communication or the identity or authority of the Person sending it.  Subject to
the terms and conditions of this Agreement, each Advance shall be made available
to Borrower by depositing the same, in immediately available funds, in an
account of Borrower maintained with Bank.  Loan proceeds disbursed by Bank by
journal entry to pay interest or financing costs, and Loan proceeds disbursed
directly by Bank to pay costs or expenses required to be paid by Borrower
pursuant to this Agreement, shall constitute Advances to Borrower.  Any request
for an Advance, once communicated to Bank, shall not be revocable by Borrower
and shall constitute a representation, warranty and certification by Borrower as
of the date thereof that (a) both before and after the making of such Advance,
all of the Loan Documents are and shall be valid, binding and enforceable
against each Obligated Party, as applicable; (b) all terms and conditions
precedent to the making of such Advance have been satisfied, and shall remain
satisfied through the date of such Advance; (c) the making of such Advance will
not cause the Principal Amount to exceed the Borrowing Limit; (d) no Default or
Event of Default shall have occurred or be in existence, and none will exist or
arise upon the making of such Advance; (e) the representations and warranties
contained in this Agreement, and the other Loan Documents are true and correct
in all material respects and shall be true and correct in all material respects
as of the making of such Advance; and (f) the Advance will not violate the terms
or conditions of any contract, indenture, agreement or other borrowing of any
Obligated Party. 

2.4                Payments.  If a scheduled payment under the Note is not made
in a timely manner, Bank is authorized by Borrower to debit the amount of any
such payments from an account of Borrower maintained with Bank.  If at any time
the Principal Balance exceeds the Borrowing Limit, Borrower shall immediately
pay to Bank an amount sufficient to eliminate such excess.

2.5                Purpose of Loans.  Borrower represents that the Advances will
be used only for Approved Purposes.

2.6                Order of Application.  Except as otherwise provided in the
Loan Documents or otherwise agreed by Bank, all payments and prepayments of the
Indebtedness, including proceeds of any of the Collateral, shall be applied to
the Indebtedness in the following order, any instructions from Borrower to the
contrary notwithstanding:  (a) to the expenses for which Bank shall not have
been reimbursed under the Loan Documents, and then to all indemnified amounts
due under the Loan Documents; (b) to fees then owed Bank hereunder; (c) to
accrued interest on the portion of the Indebtedness being paid or prepaid; (d)
to the portion of the principal being paid or prepaid; (e) to the remaining
accrued interest on the Indebtedness; (f) to the remaining principal; and (g) to
the remaining Indebtedness.  All amounts remaining after the foregoing
application of funds shall be paid to Borrower.

2.7                Commitment Fee.  Borrower shall pay to Bank the Commitment
Fee for agreeing to make the Loans.  The Commitment Fee shall be due and payable
by Borrower to Bank on or before the Closing Date.

2.8                Bank’s Books and Records.  The amount and date of each
Advance hereunder, the amount from time to time outstanding under the Note, the
interest rate in respect of the Loan, and the amount and date of any repayment
hereunder or under the Note, shall be noted on Bank’s books and records, which
shall be conclusive evidence thereof, absent manifest error; provided, however,
any failure by Bank to make any such notation, or any error in any such
notation, shall not relieve Borrower of its obligations to pay to Bank all
amounts owing to Bank under or pursuant to the Loan Documents, in each case,
when due in accordance with the terms hereof or thereof.

2.9                Payments on Non-Business Day.  If any payment of any
principal, interest, fees or any other amounts payableby Borrower under or
pursuant to any Loan Document shall become due on any day which is not a
Business Day, such due date shall be extended to the next succeeding Business
Day, and, to the extent applicable, interest shall continue to accrue and be
payable at the Note Rate for and during any such extension.

2.10            Payment Procedures.  Unless otherwise expressly provided in a
Loan Document, all sums payable by Borrower to Bank under or pursuant to any
Loan Document, whether principal, interest, or otherwise, shall be paid, when
due, directly to Bank at the office of Bank identified on the signature page of
this Agreement, or at such other office of Bank as Bank may designate in writing
to Borrower from time to time, in immediately available United States funds, and
without setoff, deduction or counterclaim.  Bank may, in its discretion, charge
any and all deposit or other accounts (including, without limitation, any
account evidenced by a certificate of deposit or time deposit, or any reserve
amount) of Borrower maintained with Bank for all or any part of any Indebtedness
then due and payable; provided, however, that such authorization shall not
affect Borrower’s obligations to pay all Indebtedness, when due, whether or not
any such account balances maintained by Borrower with Bank are insufficient to
pay any amounts then due.

2.11            Conditions to Advances.  As conditions precedent to any Advance
of the proceeds of the Loan, Borrower must satisfy the conditions required
hereby and Bank must have received and approved all of the documents,
certificates and other items specified in Exhibit B, together with such other
documents, certificates and items as Bank may require from time to time.  Bank,
at Bank’s option, may waive any of the preceding or elect not to require any of
the preceding.  No waiver by Bank of any of the preceding shall be deemed to be
a waiver of any other then existing or subsequent conditions precedent to the
Advance.

2.12            Unused Facility Fee.  TheBorrower shallpay to Bank an unused
facility fee on the daily average unused amount of the Borrowing Limit for the
period from and including the date of this Agreement to and including the
Maturity Date, at the rate of ½% per annum based on a 360 day year and the
actual number of days elapsed.  For the purpose of calculating the unused
facility fee hereunder, the Borrowing Limit shall be deemed utilized by the
amount of all outstanding Advances.  Accrued unused facility fees shall be
payable in arrears on the last day of each calendar quarter commencing June 30,
2012 and on the Maturity Date.

2.13            Determination of Borrowing Base.  On the basis of the
information furnished to the Bank hereunder and such other reports, appraisals
and information as the Bank may reasonably deem appropriate, the Bank shall have
the right from time to time to determine a new Borrowing Base.  Such
determinations, if made, shall be in accordance with the customary practices and
standards of the Bank for loans of a similar nature as in effect at the time
such determinations are made (except that the Bank may make adjustments to such
determinations based on the practices and standards of any participant, if any),
may be reduced to take into account Indebtedness secured by the Borrowing Base
Properties other than the Note and Debt of Affiliates of Borrower and shall be
conclusive as to the Borrower, and any increases in the Borrowing Base shall be
subject to the Bank’s complete credit approval process.  There is no duty,
implied or explicit, on the Bank to ever increase the Borrowing Base.

Article Three
Representations and Warranties of Borrower

           Borrower represents and warrants to Bank as follows:

3.1                Financial Statements.  The Financial Statements are true,
correct and complete as of the dates specified therein and fully and accurately
present the financial condition of Borrower as of the dates specified.  Since
the date of the Financial Statements most recently submitted to Bank by
Borrower, no material adverse change has occurred in the financial condition of
Borrower nor, except as heretofore disclosed in writing to Bank, has Borrower
incurred any material liability, direct or indirect, fixed or contingent. 
Borrower is solvent.  Neither Borrower nor any Obligated Party has any material
Debt, other contingent liabilities, liabilities for taxes, any long-term lease
obligations or unusual forward or long-term commitments, or any Hedge Agreement
or other transaction or obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.

3.2                Suits, Actions, Etc.  There are no actions, suits or
proceedings pending or to the knowledge of Borrower threatened before or by any
Governmental Authority against or affecting Borrower or the Property, or
involving the validity, enforceability or priority of any of the Loan Documents,
and there are no outstanding or unpaid judgments against Borrower.  Borrower is
not, and the consummation of the transactions contemplated hereby and the
performance or satisfaction of any of the terms or conditions hereof and of the
other Loan Documents will not cause Borrower to be, in violation of or in
default with respect to any Legal Requirement or in default (or provide cause
for acceleration of indebtedness) under any agreement or restriction to which
Borrower is a party or by which Borrower or the Property may be bound.

3.3                Status of Borrower; Valid and Binding Obligations.  If
Borrower is a corporation, limited liability company, partnership or other
entity, Borrower is and shall until the Indebtedness is fully discharged
continue to be (a) duly organized and validly existing and in good standing
under the laws of the state of its organization, and in good standing under
Texas law, (b) in compliance with all conditions prerequisite to its lawfully
doing business in Texas, and (c) possessed of all power and authority necessary
to own and operate the Mortgaged Property.  All of the Loan Documents, upon
execution and delivery will constitute valid and binding obligations of
Borrower, enforceable in accordance with their terms except as the enforcement
thereof may be limited by Debtor Relief Laws.

3.4                Title to the Property.  The Person designated as the grantor
in the Deed of Trust holds good and indefeasible fee simple title to the Land
and all Improvements thereon subject only to the Permitted Encumbrances. 

3.5                Purpose of Loan.  The proceeds of the Loan will be used for
the Approved Purpose.

3.6                No Failure To Disclose.  No representation or warranty made
by Borrower under this Agreement and no document, instrument or certificate
furnished, to be furnished or caused or to be furnished by Borrower to Bank in
anticipation of or pursuant to this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading.

3.7                Taxes.  All federal, state, foreign, and other Tax returns or
extensions of Borrower required to be filed have been filed, all federal, state,
foreign, and other Taxes imposed upon Borrower which are due and payable have
been paid, and no material amounts of Taxes not reflected on such returns are
payable by Borrower, other than Taxes being contested in good faith by
appropriate legal proceedings.

3.8                Consents, Approvals and Filings, Etc.  Except as have been
previously obtained or as otherwise expressly provided in this Agreement, no
authorization, license, or formal exemption from, any Governmental Authority or
other Person, is required in connection with the execution and performance by
Borrower of any Loan Document.

3.9                Contracts, Agreements and Leases.  To Borrower’s knowledge,
Borrower is not in default (beyond any applicable period of grace or cure) in
complying with any provision of any Material Contract to which it is a party or
by which it or any of its properties or assets are bound, where such default
would have a Material Adverse Effect.

3.10            Relationship.  The relationship between Borrower and Bank is
solely that of borrower and lender, and Bank has no fiduciary or other special
relationship with Borrower, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower and
Bank to be other than that of borrower and lender.

3.11            No Assignment.  Borrower has made no previous assignment of its
interest in the Leases or rents due thereunder which has not already been
released other than to Bank.

3.12            Compliance with Laws.  The Improvements comply with all
applicable Legal Requirements, and the use to which Borrower is using and
intends to use the Land and Improvements complies with or will comply with such
Legal Requirements.  Borrower has obtained or applied for all consents or
approvals necessary to comply with all Legal Requirements.

3.13            Disclaimer of Additional Financing.  Borrower acknowledges and
agrees that Bank has not made any commitments, either express or implied, to
extend the term of the Loan past its stated maturity date or to provide Borrower
with any permanent financing, except to the extent, if any, that the same is
expressly stated in this Agreement or in the other Loan Documents.

3.14            Mortgaged Property.  Borrower hereby represents and warrants
with respect to each Mortgaged Property:

(a)                 Borrower has good and marketable title to the Mortgaged
Property, is the sole owner thereof and has full right to pledge the Mortgaged
Property to Bank free and clear of any other Lien except any such Lien which has
been disclosed to Bank in writing and which is permitted hereunder;

(b)                 The physical condition of the real property, improvements,
and personal property subject to the Deed of Trust has not deteriorated since
the date of origination of the related Loan (normal wear and tear excepted) and
there is no proceeding pending for the total or partial condemnation of any of
the Mortgaged Property;

(c)                 Each Deed of Trust contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the related real property, improvements,
and personal property subject to the Deed of Trust of the benefits of the
security provided thereby, including by trustee’s sale and by judicial
foreclosure; and

(d)                 No Deed of Trust securing Mortgaged Property secures
residential property.

3.15            Solvency.  Borrower is solvent and generally able to pay its
debts as they come due.

3.16            Common Enterprise.  The successful operation and condition of
each Obligated Party is dependent on the continued successful performance of the
functions of the group of Obligated Parties as a whole and the successful
operation of each Obligated Party is dependent on the successful performance and
operation of each other Obligated Party.  Each Obligated Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
successful operations of each of the other Obligated Parties.  Each Obligated
Party expects to derive benefit (and the boards of directors or other governing
body of each Obligated Party has determined that it may reasonably be expected
to derive benefit), directly and indirectly, from the credit extended by Bank to
the Obligated Parties hereunder, both in their separate capacities and as
members of the group of companies.  Each Obligated Party has determined that
execution, delivery, and performance of this Agreement and any other Loan
Documents to be executed by such Obligated Party is within its purpose, will be
of direct and indirect benefit to such Obligated Party, and is in its best
interest.

Article Four
Certain Affirmative Covenants

                Borrower covenants and agrees that, so long as any of the
Indebtedness remains outstanding, or Bank has any further obligation under the
Loan Documents:

 

4.1                Hazard and Other Insurance. 

(a)                 Borrower shall obtain and maintain the insurance coverage
required by Exhibit D and any other Loan Documents and shall furnish to Bank
promptly upon request a certificate or certificates from the respective
insurer(s) setting forth the nature and extent of all such insurance maintained
by Borrower and, a certified copy of the original policy and a satisfactory
certificate of insurance with premiums fully paid.  Any such insurance may be
evidenced by blanket insurance policies covering the Mortgaged Property and
other property and assets, provided that each policy otherwise complies with the
requirements of the Loan Documents and specifies the amount (if less than all)
of the total coverage that is allocated to the Mortgaged Property.  Borrower
shall not take out separate insurance concurrent in form or contributing in the
event of loss with that required to be maintained hereunder unless Bank is
included thereon under a standard mortgagee clause (without contribution)
acceptable to Bank, with loss payable as provided herein.  All insurance shall
be primary without right of contribution from any other insurance that may be
carried by Borrower or Bank and all of the provisions thereof shall operate in
the manner as if there were a separate policy covering each insured.  Borrower
shall immediately notify Bank whenever any such separate insurance is taken out
and shall promptly deliver to Bank any policy or certificate of such separate
insurance. 

(b)                 Not later than ten (10) days before the expiration date of
any such insurance policy, Borrower shall deliver to Bank a binder or
certificate of the insurer evidencing the renewal or replacement of that policy,
with premiums fully paid together with (in the case of a renewal) a copy of all
endorsements to the policy affecting the Mortgaged Property and not previously
delivered to Bank, or (in the case of a replacement) an original or certified
copy of the replacement policy.  Borrower shall pay all premiums on policies
required hereunder as they become due and payable and promptly deliver to Bank
evidence satisfactory to Bank of the timely payment thereof.  Borrower shall at
all times comply with the requirements of the insurance policies required
hereunder and of the issuers of such policies and of any board of fire
underwriters or similar body as applicable to or affecting the Mortgaged
Property.

(c)                 If Borrower fails to obtain and/or maintain the insurance
required under the Loan Documents, (i) Borrower will indemnify and hold Bank
harmless from and against any damage, loss, liability or expense resulting from
all risks that would have been covered by the required insurance if so
maintained, (ii) if any loss occurs, Bank shall nevertheless be entitled to the
benefit of all insurance covering the loss and held by or for Borrower, to the
same extent as if it had been made payable to Bank, and (iii) Bank has the Right
(but not the obligation) to obtain such insurance at Borrower’s expense, which
may at Bank’s election be coverage for Bank’s interest in the Property only
(excluding Borrower’s equity in the Property, if any), or such other amount as
Bank may determine in Bank’s sole discretion, and the costs and expenses so
expended by Bank shall be due and payable by Borrower on demand, as part of the
Indebtedness, even if in excess of the amount set forth in Section 2.1, and
secured by the Loan Documents.  TEXAS FINANCE CODE SECTION 307.052 COLLATERAL
PROTECTION INSURANCE NOTICE: (A) BORROWER IS REQUIRED TO (i) KEEP THE MORTGAGED
PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED HEREIN; (ii) PURCHASE
THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF
TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED HEREIN; AND
(iii) NAME BANK AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS
AS PROVIDED HEREIN; (B) SUBJECT TO THE PROVISIONS HEREOF, BORROWER MUST, IF
REQUIRED BY BANK, DELIVER TO BANK A COPY OF THE POLICY AND PROOF OF THE PAYMENT
OF PREMIUMS; AND (C) SUBJECT TO THE PROVISIONS HEREOF, IF BORROWER FAILS TO MEET
ANY REQUIREMENT LISTED IN THE FOREGOING SUBPARTS (A) OR (B), BANK MAY OBTAIN
COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER’S EXPENSE.

(d)                 Upon any foreclosure of the Deed of Trust or transfer of
title to the Mortgaged Property in lieu of foreclosure, all of Borrower’s Right,
title and interest in and to the insurance policies referred to in this Section
(including unearned premiums) and all proceeds payable thereunder shall
thereupon vest in the purchaser at foreclosure or other such transferee to the
extent permissible under such policies.

(e)                 Bank has the Right (but not the obligation) to make proof of
loss for, settle and adjust any claim under, and receive the proceeds of, all
insurance for loss of or damage to the Mortgaged Property, and the costs and
expenses (including reasonable attorneys’ fees), appraisal costs, and consultant
fees incurred by Bank in the adjustment and collection of insurance proceeds
shall be due and payable by Borrower on demand, as part of the Indebtedness,
even if in excess of the amount set forth in Section 2.1, and secured by the
Loan Documents.  Bank shall not be, under any circumstances, liable or
responsible for failure to collect or exercise diligence in the collection of
any of such proceeds or for the obtaining, maintaining or adequacy of any
insurance or for failure to see to the proper application of any amount paid
over to Borrower.

(f)                  Borrower shall take all necessary action, with Bank’s
consent, to obtain the benefit of any insurance proceeds lawfully or equitably
payable to Borrower or Bank in connection with any loss of or damage to the
Mortgaged Property.  The unpaid portion of the Indebtedness shall remain in full
force and effect and the payment thereof shall not be excused.

4.2                Compliance with Legal Requirements.  All Legal Requirements
shall be timely complied with and evidence thereof delivered to Bank if
requested by Bank.  Borrower assumes full responsibility for the compliance of
the Mortgaged Property with all Legal Requirements, notwithstanding any
approvals by Bank.  Bank shall have no obligation or responsibility for any
matter incident to the Mortgaged Property.

4.3                Notices by Governmental Authority; Fire and Casualty Losses,
Etc.  Borrower shall timely comply with and promptly furnish to Bank true and
complete copies of any notice or claim by any Governmental Authority pertaining
to the Mortgaged Property.  Borrower shall promptly notify Bank of any fire or
other casualty or any notice of taking or eminent domain action or proceeding
affecting the Mortgaged Property.

4.4                Utilities; Access.  All utility services necessary for the
operation of the Improvements for their intended purposes are available and
connected to the Improvements and all roads necessary for access to and from the
Mortgaged Property have been completed.

4.5                Correction of Defects.  Borrower shall correct or cause to be
corrected (a) any material defect in the Improvements, (b) any material
departure of the Improvements from the Legal Requirements or the requirements of
any Lease, if applicable, or (c) any encroachment by any part of the
Improvements or any structure located on the Land on any building line,
easement, property line, or restricted area.

4.6                Costs and Expenses.  Borrower shall pay when due all costs
and expenses required by this Agreement and the other Loan Documents.

4.7                Additional Documents.  Borrower shall execute and deliver to
Bank, from time to time as required by Bank, such other documents as shall
reasonably be necessary to provide the Rights and remedies to Bank granted or
provided for by the Loan Documents.

4.8                Financial Statements; Inspection of Books and Records; Other
Reports.  Until the Indebtedness is fully paid and satisfied, and Bank has no
further commitment to lend hereunder, Borrower will, unless Bank shall otherwise
consent in writing, furnish to Bank the following:

(a)                 Annual Financial Statements and Tax Returns of Borrower. 

(i)                   Within 120 days after the last day of each fiscal year of
XX, beginning with the fiscal year that ends December 31, 2012, audited (by a
certified public accountant acceptable to Bank) Financial Statements showing the
financial position and results of operations of XX, on a consolidated basis, as
of, and for the year ended on, such last day, together with (i) the unqualified
opinion of such certified public accountant that such financial statements
present fairly, in all material respects, the financial position of XX as of the
last day of such fiscal year and the results of operations and the cash flow of
XX for the fiscal year then ended in conformity with GAAP, with no exceptions,
inconsistencies, or uncertainties described or disclosed therein; and (ii) the
certificate of the chief financial officer of XX that all of such Financial
Statements present fairly the financial position of XX as of the last day of
such fiscal year and the results of the operations and the cash flow of XX for
the fiscal year then ended in accordance with GAAP. 

(ii)                 Within 120 days after the last day of each fiscal year of
Borrower (excluding XX), beginning with the fiscal year that ends December 31,
2012, Financial Statements showing the financial position and results of
operations of Borrower (excluding XX) as of, and for the year ended on, such
last day, together with the certificate of the chief financial officer of
Borrower that all of such Financial Statements present fairly the financial
position of Borrower (excluding XX) as of the last day of such fiscal year and
the results of the operations and the cash flow of Borrower (excluding XX) for
the fiscal year then ended in accordance with GAAP. 

(iii)                Each such Financial Statement shall contain at least a
balance sheet of Borrower as at the end of such fiscal year and statements of
income, cash flow, retained earnings, and contingent liabilities.  In addition,
Borrower shall provide to Bank a copy of Borrower’s federal income tax for each
fiscal year of Borrower from and after the date hereof, within thirty (30) days
after same has been filed with the Internal Revenue Service (provided, however,
if Borrower shall have duly filed for an extension of the filing deadline for
such tax return, Borrower shall promptly furnish evidence thereof to Bank).

(b)                 Quarterly Financial Statements of Borrower.  Within
forty-five (45) days after the last day of each fiscal quarter, internally
prepared financial statements of Borrower (including, but not necessarily
limited to, balance sheets and a related statement of income), showing the
financial position and results of operations of Borrower as of and for such
fiscal quarter and for the period from the beginning of the current fiscal year
to the last day of such fiscal quarter, together with a certificate executed by
Borrower certifying that such financial statements present fairly the financial
position of Borrower as of the last day of such periods in conformity with GAAP,
or other method of accounting acceptable to Bank (except as to reasonable
year-end adjustments and the absence of notes with respect to interim financial
statements).

(c)                 Annual Financial Statements and Tax Returns of Guarantor. 
Within 120 days after the last day of each calendar year, beginning with the
calendar year that ends December 31, 2012, Financial Statements showing the
financial position of Guarantor as of the most recent calendar year, together
with, in the case of an individual Guarantor, Guarantor’s signed statement, and
in the case of an entity Guarantor, a certificate of the chief financial officer
of such Guarantor, that all of such Financial Statements present fairly the
financial position of Guarantor as of the last day of such calendar year.  For
any individual Guarantor, such Financial Statements shall be on Bank’s standard
Financial Statement form (or an acceptable alternate).  Financial Statements of
Guarantors shall contain at least a balance sheet of Guarantor as at the end of
such calendar year and related statements of cash flow and contingent
liabilities.  In addition, Borrower shall cause Guarantor to provide to Bank a
copy of Guarantor’s tax return for each fiscal year of Guarantor from and after
the date hereof within thirty (30) days after same has been filed with the
Internal Revenue Service (provided, however, if Guarantor shall have duly filed
for an extension of the deadline for such tax return, Guarantor shall promptly
furnish evidence thereof to Bank).

(d)                 Rent Roll.  Borrower will furnish to Bank, within forty-five
(45) days after the last day of each fiscal quarter, or more often upon request
of Bank, a written statement (rent roll) certified as true, correct, and
complete by an authorized representative of Borrower, containing the following
information for each tenant of the Mortgaged Property: tenant name; suite or
unit number; square feet of leased space; commencement and expiration date; base
rent; whether the tenant is in default under the subject lease; and other
pertinent information which Bank may reasonably request  In addition, Borrower
will furnish to Bank true and correct copies of each Lease which exists on the
date of this Agreement, and all new Leases prior to each such Lease’s effective
date.

(e)                 Operating Statements.  Borrower will furnish to Bank, within
forty-five (45) days after the last day of each fiscal quarter, or more often
upon request of Bank, an operating statement for the Mortgaged Property, in such
form and detail as Bank may reasonably request, setting forth the financial
condition and the income and expenses for the Mortgaged Property for the
preceding fiscal year, and a certificate executed by an authorized
representative of Borrower, certifying that such report is true and correct.

(f)                  Compliance Certificate.  Concurrently with the delivery of
each of the financial statements referred to in Section 4.8(b), (i) a
certificate of the chief financial officer of Borrower in form and substance
satisfactory to Bank, an initial form of which is attached hereto as Exhibit F
(a) stating that to the best of such officer’s knowledge, no Default or Event of
Default has occurred and is continuing, or if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto and (b) showing in reasonable
detail the calculations demonstrating compliance with the covenants set forth in
Section 4.9.

(g)                 Notice of Litigation.  Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting Borrower or any of its subsidiaries which, if
determined adversely to Borrower or such subsidiary, could cause a Material
Adverse Effect;

(h)                 Notice of Default.  As soon as possible and in any event
within five (5) days after the occurrence of any Default, a written notice
setting forth the details of such Default and the action that Borrower has taken
and proposes to take with respect thereto.

(i)                   Notice of Material Adverse Effect.  As soon as possible
and in any event within five (5) days after the occurrence thereof, written
notice of any event or circumstance that could result in a Material Adverse
Effect.

(j)                  Additional Information.  Borrower will promptly provide to
Bank, from time to time, such additional Financial Statements and information as
Bank may reasonably request.

4.9                Financial Covenants.  Borrower covenants and agrees that,
until the Indebtedness is fully paid and satisfied, or Bank has any further
commitment to lend hereunder:

(a)                 Debt Service Coverage Ratio.  Borrower will maintain the
Debt Service Coverage Ratio of not less than 1.35 to 1.00.  The Debt Service
Coverage Ratio shall be calculated as of the end of each fiscal quarter,
commencing with the fiscal quarter which ends June 30, 2012, on a rolling twelve
(12) month basis.  For purposes of this section, the following terms have the
following meanings:

(i)                   “Debt Service” means the sum of all principal and interest
payments which are scheduled for payment under the Note in the following twelve
(12) months based on a $14,000,000.00 loan amount amortized over a 20-year
period at the greater of the rate then in effect or 8% through regular, even
monthly installments of principal and interest.

(ii)                 “Debt Service Coverage Ratio” means, as of the date in
question, the ratio of (a) NOI to (b) Debt Service.

(iii)                “NOI” means, for the twelve (12) month period immediately
prior to the (effective) date of computation, the net income of Borrower
(excluding XX) generated by the Mortgaged Property for such period before
interest expense, depreciation and amortization.

(b)                 Fixed Charge Coverage Ratio.  Calculated as of the end of
each of Borrower’s fiscal quarters, commencing with the fiscal quarter which
ends June 30, 2012, Borrower will not permit a Fixed Charge Coverage Ratio for
the twelve (12) months ending on the last day of such fiscal quarter, to be less
than 1.00 to 1.00.  For purposes of this section, the following terms have the
following meanings:

(i)                   “Adjusted EBITDA” means, for any applicable period of
determination thereof, an amount equal to (a) EBITDA minus (b) cash income taxes
minus (c) the sum of distributions, dividends and non-financed Capital
Expenditures.

(ii)                 “Capitalized Lease Obligation” means the amount of Debt
under a lease of property (whether real, personal, tangible, intangible or
mixed) that would be shown as a liability on a balance sheet prepared for
financial reporting purposes in accordance with GAAP.

(iii)                “Debt Service” means, for any period, the sum of all
regularly scheduled principal payments and all cash interest expense that are
paid or payable during such period in respect of all Debt.

(iv)               “EBITDA” means, for any period, an amount equal to (a) net
income determined in accordance with GAAP, plus (b) the sum of the following to
the extent deducted in the calculation of net income: (i) interest expense; (ii)
cash income taxes; (iii) depreciation; (iv) amortization; (v) extraordinary
losses determined in accordance with GAAP; and (vi) other non-recurring expenses
reducing such net income which do not represent a cash item in such period or
any future period, minus (c) the sum of the following to the extent included in
the calculation of net income: (i) income tax credits; (ii) extraordinary gains
determined in accordance with GAAP; and (iii) all non-recurring, non-cash items
increasing net income.

(v)                 “Fixed Charge Coverage Ratio” means, as of the date in
question, the ratio of (a) Adjusted EBITDA to (b) Fixed Charges.

(vi)               “Fixed Charges” means the sum of (a) Debt Service plus (b)
Capitalized Lease Obligations.

4.10            Compliance with Leases.  Subject to provisions contained in the
Deed of Trust, Borrower shall comply with all terms and conditions of the
Leases, if any, and all other lease or rental agreements covering any premises
or property (real or personal) wherein any of the Mortgaged Property is or may
be located, and any Legal Requirement, except where the failure to so comply
could not cause a Material Adverse Effect.

4.11            No Liability of Bank.  Bank shall not be obligated to inspect
the Mortgaged Property or to perform any obligation of Borrower.  Nothing,
including, without limitation, any Advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or
implied, to any party by Bank.  Further, Bank shall not have, and has not
assumed, and by its execution and acceptance of this Agreement hereby expressly
disclaims any liability or responsibility for the payment or performance of any
indebtedness or obligation of Borrower, and no term or condition hereof, or of
any of the Loan Documents, shall be construed otherwise.  Bank has no liability
or obligation in connection with the Mortgaged Property and Loan Documents
except to disburse Loan proceeds as herein agreed.

4.12            Defense of Actions.  Bank may (but shall not be obligated to)
commence, appear in or defend any action or proceeding purporting to affect the
Loan, the Mortgaged Property or the respective Rights and obligations of Bank or
Borrower pursuant to this Agreement.  Bank may (but shall not be obligated to)
pay all necessary expenses, including reasonable attorney’s fees and expenses
incurred in connection with any such proceedings or actions, which Borrower
agrees to repay to Bank upon demand.

4.13            Restrictions and Annexation.  Borrower shall not impose any
restrictive covenants or encumbrances upon the Mortgaged Property, execute or
file any subdivision plat affecting the Mortgaged Property or consent to the
annexation of the Mortgaged Property to any city without the prior written
consent of Bank.

4.14            Maintenance of Entity Existence, Assets and Business;
Continuance of Present Business.  Each Borrower will preserve and maintain its
existence and all of its leases, licenses, permits, franchises, qualifications,
and rights that are necessary or desirable in the ordinary conduct of its
business.  Each Borrower will conduct its business in an orderly and efficient
manner in accordance with good business practices.  Each Borrower will keep or
cause to be kept all of Borrower’s assets which are useful and necessary in
their respective businesses in good repair, working order and condition, and
will make or cause to be made all necessary repairs, renewals and replacements
as may be reasonably required.  Each Borrower will continuously carry on and
conduct its business in the same manner and in substantially the same fields as
such business is now and has heretofore been carried on.  Borrower (excluding
XX) (a) shall not engage or be authorized to engage in any business other than
ownership, management and operations of the Mortgaged Property, (b) shall not
have assets other than the Mortgaged Property and personal property necessary
for the ownership of the Mortgaged Property, (c) shall have its own books and
records separate and apart from any other Person and will file its own tax
returns, (d) shall hold itself out as being, and shall conduct all business as,
a legal entity, separate and apart from any other Person, with separate
stationery, invoices and checks, and (e) shall not commingle its assets or funds
with those of any other Person.  Each Borrower’s organizational documents shall
at all times provide that any dissolution and winding up or insolvency filing
for Borrower requires the unanimous consent of all partners, directors, managers
or members, as applicable.  Borrower will not amend, modify or otherwise change
the Certificate of Formation, Company Agreement or other organizational
documents of Borrower without the prior written consent of Bank which will not
be unreasonably withheld or delayed.

4.15            Tax Receipts.  To the extent applicable, Borrower shall furnish
to Bank receipts or tax statements marked “paid” to evidence the payment of all
Taxes levied on the Mortgaged Property before the date on which such taxes
become delinquent.

4.16            Incumbency.  Borrower shall from time to time, at the request of
Bank, certify to Bank the names, signatures and positions of all persons
authorized to execute and deliver any of the Loan Documents. 

4.17            Depository Relationship.  To induce Bank to establish the
interest rates provided for in the Note, and if and to the extent permitted by
applicable laws, Borrower will use and maintain Bank as its principal depository
bank, including for the maintenance of business, cash management, operating and
administrative deposit accounts.

4.18            Comply with Loan Documents.  Borrower will fully comply with the
terms, provisions and conditions of this Agreement and the other Loan Documents.

4.19            Additional Deeds of Trust and Joinder Agreement.  In connection
with the use by Borrower of any Advance for the acquisition of real property,
Borrower shall cause the filing of a Deed of Trust with respect to such acquired
property in form and substance satisfactory to Bank to be filed in the
appropriate real estate records immediately following the acquisition of such
property by Borrower.  If the post-acquisition owner of such acquired property
will be an Affiliate of Borrower, such Affiliate shall become a party to this
Agreement by execution of a Joinder Agreement and the Loan Documents shall
otherwise be modified in form and substance satisfactory to Bank.  Such Deed of
Trust will evidence a first lien priority security interest in the acquired
property. 

Article Five
Negative Covenants

           Borrower covenants and agrees that, so long as any Indebtedness
remains outstanding, or Bank has any further obligation under the Loan
Documents, it will not, without the prior written consent of Bank:

5.1                Debt.  Borrower will not incur, create, assume, or permit to
exist, any Debt, except:

(a)                 Debt to Bank;

(b)                 Debt which exists on the Closing Date which is listed on
Schedule 5.1 attached hereto;

(c)                 Trade Debt incurred in the ordinary course of business
provided that all such obligations are paid within sixty (60) days of the date
when due; and

(d)                 Subordinated Debt.

5.2                Contingent Liabilities. Borrower will not assume, guarantee,
endorse, contingently agree to purchase or otherwise become liable upon the
obligation of any Person (other than Borrower) except by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; provided, however, Borrower may, from time to time,
guaranty loans of its subsidiaries and/or Affiliates so long as (a) prior
written consent of Bank, which shall not be unreasonably withheld, is obtained,
(b) immediately before and immediately after giving effect to such guaranty, no
Default or Event of Default exists or will exist, and (c) such guaranty is at
all times unsecured and the indebtedness thereunder is subordinated to the
Indebtedness in form and substance satisfactory to Bank pursuant to a written
agreement.

5.3                Limitation on Liens.  Borrower will not incur, create,
assume, or permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except:

(a)                 The Permitted Encumbrances;

(b)                 Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do not
(individually or in the aggregate) materially affect the value of the assets
encumbered thereby or materially impair the ability of Borrower to use such
assets in their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;

(c)                 Liens for taxes, assessments, or other governmental charges
which are being contested in good faith and for which adequate reserves have
been established; and

(d)                 Liens resulting from good faith deposits to secure payments
of workmen’s compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids, or
contracts (other than for payment of Debt), or Leases made in the ordinary
course of business.

5.4                Mergers, Etc.  Except with the prior written consent of Bank,
which shall not be unreasonably withheld or delayed, Borrower will not become a
party to a merger or consolidation, or, except as expressly permitted in Section
5.5 below, purchase or otherwise acquire all or any part of the assets of any
Person or any shares or other evidence of beneficial ownership of any Person, or
wind-up, dissolve, or liquidate; provided, however, so long as immediately
before and immediately after giving effect to such acquisition no Default or
Event of Default exists or will exist, XXmay purchase or otherwise acquire
assets in the ordinary course of its business.

5.5                Restricted Payments.  Borrower will not declare or pay any
dividends or make any other payment or distribution (in cash, property, or
obligations) on account of its equity interests, or redeem, purchase, retire, or
otherwise acquire any of its equity interests, or set apart any money for a
sinking or other analogous fund for any dividend or other distribution on its
equity interests or for any redemption, purchase, retirement, or other
acquisition of any of its equity interests.  Notwithstanding the foregoing,
provided no Default or Event of Default exists or will exist (including without
limitation compliance with the financial covenants) after giving effect to the
distribution (or the redemption, purchase, retirement or acquisition of its
equity interest from its members or shareholders), Borrower may distribute no
more frequently than monthly to the holders of its equity interests a cash
distribution (or redeem, purchase, retire or acquire equity interest from its
members or shareholders).

5.6                Loans and Investments.  Borrower will not make any advance,
loan, extension of credit, or capital contribution to or investment in, or
purchase, any stock, bonds, notes, debentures, or other securities of, any
Person, except:

(a)                 readily marketable direct obligations of the United States
of America or any agency thereof with maturities of one year or less from the
date of acquisition;

(b)                 fully insured depository accounts maintained at a commercial
bank operating in the United States of America having capital and surplus in
excess of $50,000,000.00; and

(c)                 investments by Borrower in its subsidiaries or Affiliates in
the ordinary course of the business of Borrower provided that the prior written
consent of Lender, which shall not be unreasonably withheld, is obtained and
immediately before and immediately after giving effect to such investment, no
Default or Event of Default exists or will exist.

provided, however, the preceding is not intended to prohibit nominal loans by
Borrower to one or more of its employees as long as the aggregate principal
amount of such loans does not exceed $10,000.00 at any one time.

5.7                Limitation on Issuance of Equity.  Borrower will not at any
time issue, sell, assign, or otherwise dispose of (a) or permit the sale,
assignment or other disposition by any Person of, any of its equity interests,
(b) any securities exchangeable for or convertible into or carrying any rights
to acquire any of its equity interests, or (c) any option, warrant, or other
right to acquire any of its equity interests except in connection with (i)
employee incentive plans and dividend reinvestment plans of Borrower not to
exceed, in the aggregate, ten percent (10%) of the equity of Borrower or (ii)
issuance, sale, assignment or disposition of equity of Borrower to an Affiliate
or existing member or existing shareholder of Borrower as provided in Section
5.13 below.  Notwithstanding the foregoing, XX may issue, sell and otherwise
dispose of up to 25,000,000 shares of its common stock pursuant to the terms of
that certain prospectus dated February 9, 2010.

5.8                Transactions With Affiliates.  Borrower will not enter into
any transaction, including, without limitation, the purchase, sale, or exchange
of property or the rendering of any service, with any Affiliate of Borrower,
except in the ordinary course of and pursuant to the reasonable requirements of
Borrower’s business and upon fair and reasonable terms no less favorable to
Borrower than would be obtained in a comparable arm’s-length transaction with a
Person not an Affiliate of Borrower.

5.9                Nature of Business.  Borrower will not engage in any business
other than the businesses in which it is engaged as of the Closing Date.

5.10            No Negative Pledge.  Borrower will not enter into or permit to
exist any arrangement or agreement, other than pursuant to this Agreement or any
Loan Document, which directly or indirectly prohibits Borrower from creating or
incurring a Lien on any of its assets.

5.11            Judgments.  Borrower will not allow any judgment for the payment
of money in excess of $10,000.00 rendered against it to remain undischarged or
unsuperseded for a period of thirty (30) days during which execution shall not
be effectively stayed.

5.12            Hedge Agreements.  Enter into any Hedge Agreement. 

5.13            Disposition of Assets.  Borrower acknowledges that Bank has
examined and relied on the experience of Borrower and its partners, members,
shareholders, principals and beneficial owners in owning and operating
properties such as the Mortgaged Property in agreeing to make the Loans, and
will continue to rely on Borrower’s ownership of the Mortgaged Property as a
means of maintaining the value of the Mortgaged Property as security for
repayment of the Indebtedness and the performance of the Obligations.  Borrower
acknowledges that Bank has a valid interest in maintaining the value of the
Mortgaged Property so as to ensure that, should Borrower default in the
repayment of the Indebtedness or the performance of the Obligations, Bank can
recover the Indebtedness by a sale of the Mortgaged Property.  Consequently,
Borrower will not, directly or indirectly, permit a Disposition except (a)
dispositions of inventory in the ordinary course of business, (b) dispositions,
for fair value, of worn-out and obsolete equipment not necessary to the conduct
of its business, (c) dispositions, including issuance, sale and assignment, of
equity of Borrower to an Affiliate or existing member or existing shareholder of
Borrower, provided prior written notice thereof is delivered by Borrower to
Bank, or dispositions of equity interests by XX in accordance with Section 5.7,
or (d) with the prior written consent of the Bank which shall not be
unreasonably withheld or delayed (and, subject to the Borrowing Base reduction
set forth in the definition of Borrowing Base and any payment in connection
therewith required by Borrower, if any, Bank hereby consents to the Disposition
by Richardson of the McDonald’s Pad Site).  If, except as expressly set forth
herein, there is a Disposition without the prior written consent of Bank,
whether voluntarily, involuntarily or by operation of law, THEN Bank may, at its
sole option, declare the Indebtedness immediately due and payable in full. 

5.14            Sale and Leaseback.  The Borrower will not enter into any
arrangement with any Person pursuant to which it leases from such Person real or
personal property that has been or is to be sold or transferred, directly or
indirectly, by it to such Person.

5.15            Prepayment of Debt.  The Borrower will not prepay any Debt,
except the Indebtedness.

5.16            Capital Expenditures.  Borrower will not permit the aggregate
Capital Expenditures of Borrower to exceed $500,000.00 during any fiscal year of
Borrower.

5.17            Management Agreement.  No Borrower shall enter into any
contracts for the management of the Borrower (other than the organizational
documents of Borrower, true and correct copies of which have been delivered to
Bank prior to the date hereof (the “Organizational Documents”)) or the Mortgaged
Property (other than the property management agreement executed by each Borrower
and its respective property manager, true and correct copies of which have been
delivered to Bank prior to the date hereof (the “Management Agreements”)). 
Borrower shall not materially modify, amend, terminate or cancel the Management
Agreements without the prior written approval of Bank, which shall not be
unreasonably withheld or delayed, and Borrower will not pay any fees or expenses
in connection with the management of the Borrower or the Mortgaged Property
except in accordance with the terms of the Organizational Documents and
Management Agreements and then only if no Default or Event of Default has
occurred or will occur as a result of such payment.

Article Six
Event of Default

           The term “Event of Default,” as used herein, shall include the
occurrence of any one or more of the following events:

6.1                Payment of Indebtedness.  The failure of Borrower to pay the
Indebtedness, or any part thereof, or any sum of money in accordance with the
Loan Documents, on the date on which the payment is due.

6.2                Covenants.  Borrower shall fail to provide to Bank timely any
notice of Default or Event of Default as required by Section 4.8(h) of this
Agreement or Borrower shall breach any provision of Article Four or Article Five
of this Agreement.

6.3                Other Obligations.  The failure of Borrower or any Obligated
Party punctually and properly to perform, observe or comply with any covenant,
agreement, undertaking or condition contained in any of the Loan Documents
(other than covenants to pay any sum of money in accordance with the Loan
Documents and covenants contained in Article Four and Article Five), which
failure is not otherwise specifically addressed in this Section, and such
failure continues for a period of ten (10) days after the date Bank sends notice
to Borrower of such failure, provided, however, that Bank shall not be required
to give any such notice more than three (3) times in any twelve (12) month
period.

6.4                Voluntary Debtor Relief.  Borrower or any Obligated Party
shall (i) execute an assignment for the benefit of creditors or take any action
in furtherance thereof, or (ii) admit in writing its inability to pay, or fail
to pay, its debts generally as they become due, or (iii) as a debtor, file a
petition, case, proceeding or other action pursuant to, or voluntarily seek the
benefit or benefits of, any Debtor Relief Law or take any action in furtherance
thereof, or (iv) seek, acquiesce in or suffer the appointment of a receiver,
trustee, custodian or liquidator of it or of the Mortgaged Property or any part
thereof or of any significant portion of its other property, or (v) voluntarily
become a party to any proceeding seeking to effect a suspension or having the
effect of suspending any of the Rights of Bank granted or referred to in the
Loan Documents or of the trustee under the Deed of Trust or take any action in
furtherance thereof.

6.5                Involuntary Proceedings.  The filing of a petition, case,
proceeding or other action against Borrower or any Obligated Party as a debtor
under any Debtor Relief Law or seeking appointment of a receiver, trustee,
custodian or liquidator of it or of the Mortgaged Property or any part thereof
or of any significant portion of its other property or seeking to effect a
suspension or having the effect of suspending any of the Rights of Bank granted
or referred to in the Loan Documents or of the trustee under the Deed of Trust
and (i) Borrower or any Obligated Party admits, acquiesces in or fails to
contest diligently the material allegations thereof, or (ii) the petition, case,
proceeding or other action results in entry of an order for relief or order
granting the relief sought against it, or (iii) the petition, case, proceeding
or other action is not permanently dismissed or discharged on or before the
earlier of trial thereon or thirty (30) days next following the date of its
filing.

6.6                Default Under Other Security Instrument.  An event of
default, or the occurrence of an event which with the lapse of time or the
giving of notice, or both, could become an event of default, under, or the
acceleration of any indebtedness secured by, any other mortgage, security
interest or assignment which covers or affects any part of the Property (but
this provision does not grant or imply consent to any such deed of trust,
security interest or assignment).

6.7                Levy.  The levy against the Mortgaged Property or any part
thereof, or against any significant portion of Borrower’s or any Obligated
Party’s other property, of any execution, garnishment, attachment, sequestration
or other writ or similar proceeding which is not permanently dismissed or
discharged within thirty (30) days after the levy.

6.8                Misrepresentation.  The discovery by Bank that any
representation or warranty made by Borrower or any Obligated Party in any of the
Loan Documents or in any other document ever delivered by Borrower or any
Obligated Party to Bank in connection with the Indebtedness is false,
misleading, erroneous or breached in any material respect at the time made.

6.9                Abandonment.  Abandonment of any portion of the Land or
Improvements.

6.10            Judgment.  Borrower shall allow any judgment for the payment of
money in excess of $10,000.00 rendered against it to remain undischarged or
unsuperseded for a period of sixty (60) days during which execution shall not be
effectively stayed.

6.11            Dissolution, Liquidation, Termination.  The dissolution,
liquidation, termination or forfeiture of the Right to do business of Borrower.

6.12            Non-Compliance with Legal Requirements.  A failure of any part
of the Improvements to comply with any Legal Requirement, or the requirements of
any Lease, if applicable in any material respect.

6.13            Fraudulent Transfer.  Borrower shall have (i) concealed,
removed, or permitted to be concealed or removed any part of its property with
the intent to hinder, delay or defraud any of its creditors, or (ii) made or
suffered a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law, or (iii) suffered or permitted
while insolvent (under any applicable definition of the term) any creditor to
obtain a Lien upon any of its property through legal proceedings or distraint
which Lien is not permanently vacated within thirty (30) days from the date
thereof.

6.14            Destruction or Condemnation of Improvements.  If any portion of
the Improvements is demolished, destroyed, or substantially damaged, or any
portion of the Land or Improvements is taken or threatened to be taken by
eminent domain, so that in any event, in Bank’s reasonable judgment, the same
cannot be restored or rebuilt with available funds to the condition existing
immediately prior to such demolition, destruction, or damage within a reasonable
period of time.

6.15            Defaults on Other Debt or Agreements.  Borrower fails to perform
or comply with any covenant, agreement or other obligation to be performed,
observed or complied with by Borrower for the benefit of a Person other than
Bank, subject to any grace and/or cure periods provided therein, which failure
could reasonably be expected to have a material adverse effect on the business,
operations, condition (financial or otherwise), or assets of Borrower, the
ability of Borrower to perform its Obligations under any Loan Document to which
it is a party or by which it is bound or the enforceability of any Loan
Document.

6.16            Other Agreements with Bank.  A default or event of default shall
occur and be continuing after the expiration of any applicable grace, notice,
and cure periods under any other written agreement (which is not this Agreement
or a Loan Document executed in connection herewith) between Bank and Borrower or
any of its Affiliates, or by Borrower or any of its Affiliates in favor of Bank,
including without limitation any default or event of default under any other
loans among Borrower or any of its Affiliates (including without limitation
Hartman 1960 Properties, LLC, Hartman Income REIT, Inc., Hartman Income REIT
Operating Partnership, LP, and Hartman Prestonwood Properties, LLC) and Bank.

6.17            Death.  Guarantor, if a natural person, shall die; provided,
however, the death of an individual Guarantor will not constitute an Event of
Default until ninety (90) days after Bank has provided Borrower with written
notice of Bank’s intent to accelerate the maturity of the Indebtedness as a
result of Guarantor’s death and Borrower fails to find a replacement guarantor
satisfactory in all respects to Bank.

6.18            Application to Guarantors.  The occurrence of any event referred
to in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.10, 6.12, 6.14, 6.15 or 6.16
above with respect to any Guarantor (as if such Guarantor were “Borrower” in
such Sections).

6.19            Change in Management.  If there shall be any change in the
management of Borrower, including without limitation, if Allen R. Hartman shall
at any time and for any reason cease to be involved in the day to day executive
management of Borrower, except by reason of death or disability.

6.20            Full Force and Effect.  If any Loan Document shall cease to be
in full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by the Borrower or any
Guarantor or any of their respective partners, members, shareholders or other
equity holders, or the Borrower or any Guarantor shall deny that it has any
further liability or obligation under any of the Loan Documents, or any lien or
security interest created by the Loan Documents shall for any reason cease to be
a valid, first priority perfected security interest in and lien upon the
Mortgaged Property.

6.21            Management Agreement.  Any material modification of any
management agreement with respect to any Mortgaged Property without the prior
written consent of Bank, which shall not be unreasonably withheld or delayed.

Article Seven
Certain Rights and Remedies of Bank

7.1                Rights Upon Event of Default.  If any Event of Default shall
occur and be continuing, Bank may without notice terminate its commitment to
Advance and/or declare the Indebtedness or any party thereof to be immediately
due and payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by Borrower; provided, however, that upon the occurrence of an Event of
Default under Sections 6.4 or 6.5, Bank’s commitment to Advance shall
automatically terminate, and the Indebtedness shall become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by Borrower.  If any Event of Default shall occur and be continuing, Bank
may exercise all Rights and remedies available to it in law or in equity, under
the Loan Documents, or otherwise.

7.2                Performance by Bank.  Should any covenant, duty, or agreement
of Borrower fail to be performed in accordance with the terms of the Loan
Documents, Bank may, at its option, perform, or attempt to perform, such
covenant, duty or agreement on behalf of Borrower.  In such event, Borrower
shall pay to Bank on demand any amount expended by Bank in such performance or
attempted performance, together with interest thereon at the Maximum Rate from
the date of such expenditure by Bank until paid.  Notwithstanding the foregoing,
it is expressly understood that Bank does not assume and shall never have any
liability or responsibility for the performance of any duties of Borrower
hereunder.  Without limiting the generality of the foregoing, upon the
occurrence of an Event of Default, Bank shall have the Right, in addition to any
other Right of Bank, but not the obligation, in its own name or in the name of
Borrower, to enter into possession of the Mortgaged Property; to perform all
work necessary to satisfy the requirements of any Lease, if applicable; and to
employ watchmen and other safeguards to protect the Mortgaged Property. 
Borrower hereby appoints Bank as the attorney-in-fact of Borrower with full
power of substitution, and in the name of Borrower if Bank elects to do so, upon
the occurrence of an Event of Default, to (a) use such sums as are necessary,
including any proceeds of the Loan to perform all work necessary to satisfy the
Legal Requirements and the requirements of any Lease, if applicable, (b) endorse
the name of Borrower on any checks or drafts representing proceeds of the
insurance policies required hereunder, or other checks or instruments payable to
Borrower with respect to the Mortgaged Property, (c) do every act with respect
to the Mortgaged Property which Borrower may do, and (d) prosecute or defend any
action or proceeding incident to the Mortgaged Property.  The power-of-attorney
granted hereby is a power coupled with an interest, is irrevocable and shall not
terminate upon disability of the principal.  Bank shall have no obligation to
undertake any of the foregoing actions, and if Bank should do so, it shall have
no liability to Borrower for the sufficiency or adequacy of any such actions
taken by Bank.

7.3                Bank Not in Control.  None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give Bank
the Right or power to exercise control over the affairs and/or management of
Borrower, the power of Bank being limited to the Rights to exercise the remedies
referred to in the other Sections of this Article; provided that if Bank becomes
the owner of any stock of any entity, whether through foreclosure or otherwise,
Bank shall be entitled to exercise such legal Rights as it may have by being a
shareholder of such entity.

7.4                Waivers.  The acceptance by Bank at any time and from time to
time of part payment on the Indebtedness shall not be deemed to be a waiver of
any Event of Default then existing.  No waiver by Bank of any Event of Default
shall be deemed to be a waiver of any other then existing or subsequent Event of
Default.  No waiver by Bank of any of its Rights hereunder, in the other Loan
Documents or otherwise shall be considered a waiver of any other or subsequent
Right of Bank.  No delay or omission by Bank in exercising any Right under the
Loan Documents or otherwise shall impair such Right or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such Right exhaust the same or preclude other or further exercise thereof or
the exercise of any other Right under the Loan Documents or otherwise.

7.5                Cumulative Rights.  All Rights available to Bank under the
Loan Documents shall be cumulative of and in addition to all other Rights of
Bank at law, in equity or otherwise whether or not the Indebtedness is due and
payable and whether or not Bank shall have instituted any suit for collection,
foreclosure or other action in connection with the Loan Documents.

7.6                Offset.  At any time an Event of Default then exists, Bank
shall be entitled to exercise the Rights of offset and/or banker’s lien against
the interest of Borrower in and to each and every account and other property of
Borrower which are in the possession of Bank to the extent of the full amount of
the Indebtedness.

7.7                BORROWER’S INDEMNITY.  BORROWER SHALL INDEMNIFY, DEFEND,
PROTECT AND HOLD HARMLESS BANK, BANK’S PARENTS, AFFILIATES, SUBSIDIARIES,
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, SUCCESSORS,
AND ASSIGNS AND THE TRUSTEE UNDER THE DEED OF TRUST (COLLECTIVELY, THE
“INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL LIABILITIES, DAMAGES,
LOSSES, COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND
EXPENSES), ACTIONS, PROCEEDINGS, CLAIMS OR DISPUTES INCURRED OR SUFFERED BY THE
FOREGOING PARTIES SO INDEMNIFIED WHETHER OR NOT AS THE RESULT OF, IN WHOLE OR IN
PART, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR CONTRIBUTORY) OR STRICT
LIABILITY OF ANY PARTY SO INDEMNIFIED, WHETHER VOLUNTARILY OR INVOLUNTARILY
INCURRED OR SUFFERED, IN RESPECT OF THE FOLLOWING; PROVIDED, HOWEVER, BORROWER
WILL NOT BE LIABLE TO ANY INDEMNIFIED PARTY FOR LIABILITIES, DAMAGES, LOSSES,
COSTS, OR EXPENSES CAUSED PRIMARILY BY SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT:

(i)                   ANY LITIGATION CONCERNING THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE MORTGAGED PROPERTY, OR ANY INTEREST OF BORROWER OR BANK
THEREIN, OR THE RIGHT OF OCCUPANCY THEREOF BY BORROWER OR BANK, WHETHER OR NOT
ANY SUCH LITIGATION IS PROSECUTED TO A FINAL, NON-APPEALABLE JUDGMENT;

(ii)                 ANY DISPUTE, INCLUDING DISPUTES AS TO THE DISBURSEMENT OF
PROCEEDS OF THE NOTE NOT YET DISBURSED, AMONG OR BETWEEN BORROWER OR OTHER
PARTNERS OR VENTURERS OF BORROWER IF BORROWER IS A GENERAL OR LIMITED
PARTNERSHIP, OR AMONG OR BETWEEN ANY EMPLOYEES, OFFICERS, DIRECTORS,
SHAREHOLDERS, MEMBERS OR MANAGERS OF BORROWER IF BORROWER IS A CORPORATION OR
LIMITED LIABILITY COMPANY OR PARTNERSHIP, OR AMONG OR BETWEEN ANY MEMBERS,
TRUSTEES OR OTHER RESPONSIBLE PARTIES IF BORROWER IS AN ASSOCIATION, TRUST OR
OTHER ENTITY;

(iii)                ANY ACTION TAKEN OR NOT TAKEN BY BANK OR TRUSTEE WHICH IS
ALLOWED OR PERMITTED UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
RELATING TO BORROWER, THE MORTGAGED PROPERTY, OR OTHERWISE IN CONNECTION WITH
THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE PROTECTION OR ENFORCEMENT
OF ANY LIEN, SECURITY INTEREST OR OTHER RIGHT, REMEDY OR RECOURSE CREATED OR
AFFORDED BY THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS; AND

(iv)               ANY ACTION BROUGHT BY BANK AGAINST BORROWER UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, WHETHER OR NOT SUCH ACTION IS PROSECUTED
TO A FINAL, NON-APPEALABLE JUDGMENT.

BANK MAY EMPLOY AN ATTORNEY OR ATTORNEYS TO PROTECT OR ENFORCE ITS RIGHTS,
REMEDIES AND RECOURSES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND TO
ADVISE AND DEFEND BANK WITH RESPECT TO ANY SUCH ACTIONS AND OTHER MATTERS. 
BORROWER SHALL REIMBURSE BANK FOR THEIR RESPECTIVE ATTORNEYS’ FEES AND EXPENSES
(INCLUDING EXPENSES AND COSTS FOR EXPERTS) IMMEDIATELY UPON RECEIPT OF A WRITTEN
DEMAND THEREFOR, WHETHER ON A MONTHLY OR OTHER TIME INTERVAL, AND WHETHER OR NOT
AN ACTION IS ACTUALLY COMMENCED OR CONCLUDED.  ALL OTHER REIMBURSEMENT AND
INDEMNITY OBLIGATIONS HEREUNDER SHALL BECOME DUE AND PAYABLE WHEN ACTUALLY
INCURRED BY BANK.  ANY PAYMENTS NOT MADE WITHIN FIVE (5) DAYS AFTER WRITTEN
DEMAND THEREFOR SHALL BEAR INTEREST AT THE EVENT OF DEFAULT RATE FROM THE DATE
OF SUCH DEMAND UNTIL FULLY PAID.  THE PROVISIONS OF THIS SECTION 7.7 SHALL
SURVIVE REPAYMENT OF THE INDEBTEDNESS AND PERFORMANCE OF THE OBLIGATIONS, THE
RELEASE OF THE LIEN OF THE DEED OF TRUST, ANY FORECLOSURE (OR ACTION IN LIEU OF
FORECLOSURE), THE TRANSFER BY BORROWER OF ANY OR ALL OF ITS RIGHT, TITLE AND
INTEREST IN OR TO THE PROPERTY AND THE EXERCISE BY BANK OF ANY AND ALL REMEDIES
SET FORTH HEREIN OR IN ANY OTHER LOAN DOCUMENT.

Article Eight
Miscellaneous

8.1                Headings.  The headings, captions, and arrangements used in
any of the Loan Documents are, unless specified otherwise, for convenience only
and shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.

8.2                Articles, Sections, and Exhibits.  All references to
“Article,” “Articles,” “Section,” “Sections,” “Subsection,” or “Subsections”
contained herein are, unless specifically indicated otherwise, references to
articles, sections, and subsections of this Agreement.  All references to
“Exhibits” contained herein are references to exhibits attached hereto, all of
which are made a part hereof for all purposes, the same as if set forth herein
verbatim, it being understood that if any exhibit attached hereto, which is to
be executed and delivered, contains blanks, the same shall be completed
correctly and in accordance with the terms and provisions contained and as
contemplated herein prior to or at the time of the execution and delivery
thereof.

8.3                Number and Gender of Words.  Whenever herein the singular
number is used, the same shall include the plural where appropriate, and vice
versa; and words of any gender shall include each other gender where
appropriate.

8.4                Notices.  Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed, or delivered, to the
address, facsimile number to the address specified for notices on the signature
page below or to such other address as shall be designated by such party in a
notice to the other parties.  All such other notices and other communications
shall be deemed to have been given or made upon the earliest to occur of (a)
actual receipt by the intended recipient, or (b) (i) if delivered by hand or
courier, when signed for by the designated recipient, (ii) if delivered by mail,
four (4) business days after deposit in the mail, postage prepaid, and (iii) if
delivered by facsimile when sent and receipt has been confirmed by telephone. 
Electronic mail and internet websites may be used only to distribute routine
communications, such as Financial Statements and other information, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.

8.5                Audits of Mortgaged Property; Fees.  Bank shall have the
right from time to time to audit the Mortgaged Property, provided that such
audits will be conducted no more than two (2) times in any calendar year unless
an Event of Default has occurred.  Borrower agrees to reimburse Bank, on demand,
for customary and reasonable fees and costs incurred by Bank for such audits
(provided that unless an Event of Default has occurred, Borrower shall only be
obligated to pay the fees and costs associated with one audit per calendar year
not to exceed $5,000.00 per Mortgaged Property audited) and for each appraisal
of Mortgaged Property and financial analysis and examination of Borrower or any
other Obligated Party performed from time to time.

8.6                Costs and Expenses.  Borrower shall pay Bank, on demand, all
reasonable costs and expenses, including, without limitation, reasonable
attorneys’ fees and legal expenses, incurred by Bank in perfecting, revising,
protecting or enforcing any of its rights or remedies against any Obligated
Party or any Mortgaged Property, or otherwise incurred by Bank in connection
with any Default or Event of Default or the enforcement of the Loan Documents or
the Indebtedness.  Following Bank’s demand upon Borrower for the payment of any
such costs and expenses, and until the same are paid in full, the unpaid amount
of such costs and expenses shall constitute Indebtedness and shall bear interest
at the default rate of interest provided for in the Note.

8.7                Form and Number of Documents.  Each agreement, document,
instrument, or other writing to be furnished to Bank under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be satisfactory to Bank and its counsel.

8.8                Survival.  All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents shall survive
all closings under the Loan Documents and shall continue in full force and
effect so long as any part of the Indebtedness remain and, except as otherwise
indicated, shall not be affected by any investigation made by any party. 
Notwithstanding anything contained herein to the contrary, the covenants,
agreements, undertakings, representations, and warranties made in Section 4.11
and Section 7.7 shall survive the expiration or termination of this Agreement,
regardless of the means of such expiration or termination.

8.9                GOVERNING LAW; PLACE OF PERFORMANCE.  THE LOAN DOCUMENTS ARE
BEING EXECUTED AND DELIVERED, AND ARE INTENDED TO BE PERFORMED, IN THE STATE OF
TEXAS, AND THE LAWS OF SUCH STATE AND OF THE UNITED STATES SHALL GOVERN THE
RIGHTS AND DUTIES OF THE PARTIES HERETO AND THE VALIDITY, CONSTRUCTION,
ENFORCEMENT, AND INTERPRETATION OF THE LOAN DOCUMENTS, EXCEPT TO THE EXTENT
OTHERWISE SPECIFIED IN ANY OF THE LOAN DOCUMENTS.  THIS AGREEMENT, ALL OF THE
OTHER LOAN DOCUMENTS, AND ALL OF THE OBLIGATIONS OF BORROWER UNDER ANY OF THE
LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS COUNTY, TEXAS.  VENUE OF ANY LITIGATION
INVOLVING THIS AGREEMENT OR ANY LOAN DOCUMENT SHALL BE MAINTAINED IN AN
APPROPRIATE STATE OR FEDERAL COURT LOCATED IN DALLAS COUNTY, TEXAS, TO THE
EXCLUSION OF ALL OTHER VENUES.

8.10            Maximum Interest.  It is expressly stipulated and agreed to be
the intent of Borrower and Bank at all times to comply strictly with the
applicable Texas law governing the maximum rate or amount of interest payable on
the indebtedness evidenced by the Note or any Loan Document, and the Related
Indebtedness (or applicable United States federal law to the extent that it
permits Bank to contract for, charge, take, reserve or receive a greater amount
of interest than under Texas law).  If the applicable law is ever judicially
interpreted so as to render usurious any amount (a) contracted for, charged,
taken, reserved or received pursuant to the Note, any of the other Loan
Documents or any other communication or writing by or between Borrower and Bank
related to the transaction or transactions that are the subject matter of the
Loan Documents, (b) contracted for, charged, taken, reserved or received by
reason of Bank’s exercise of the option to accelerate the maturity of the Note
and/or any and all indebtedness paid or payable by Borrower to Bank pursuant to
any Loan Document other than the Note (such other indebtedness being referred to
in this Section as the “Related Indebtedness”), or (c) Borrower will have paid
or Bank will have received by reason of any prepayment by Borrower of the Note
and/or the Related Indebtedness, then it is Borrower’s and Bank’s express intent
that all amounts charged in excess of the Maximum Rate shall be automatically
canceled, ab initio, and all amounts in excess of the Maximum Rate theretofore
collected by Bank shall be credited on the principal balance of the Note and/or
the Related Indebtedness (or, if the Note and the Related Indebtedness have been
or would thereby be paid in full, refunded to Borrower), and the provisions of
the Note and the other Loan Documents shall immediately be deemed reformed and
the amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder; provided, however, if the Note has been
paid in full before the end of the stated term of the Note, then Borrower and
Bank agree that Bank shall, with reasonable promptness after Bank discovers or
is advised by Borrower that interest was received in an amount in excess of the
Maximum Rate, either refund such excess interest to Borrower and/or credit such
excess interest against the Note and/or any Related Indebtedness then owing by
Borrower to Bank. Borrower hereby agrees that as a condition precedent to any
claim or counterclaim (in which event such proceeding shall be abated for such
time period) seeking usury penalties against Bank, Borrower will provide written
notice to Bank, advising Bank in reasonable detail of the nature and amount of
the violation, and Bank shall have sixty (60) days after receipt of such notice
in which to correct such usury violation, if any, by either refunding such
excess interest to Borrower or crediting such excess interest against the Note
to which the alleged violation relates and/or the Related Indebtedness then
owing by Borrower to Bank.  All sums contracted for, charged, taken, reserved or
received by Bank for the use, forbearance or detention of any debt evidenced by
the Note and/or the Related Indebtedness shall, to the extent permitted by
applicable law, be amortized or spread, using the actuarial method, throughout
the stated term of the Note and/or the Related Indebtedness (including any and
all renewal and extension periods) until payment in full so that the rate or
amount of interest on account of the Note and/or the Related Indebtedness does
not exceed the Maximum Rate from time to time in effect and applicable to the
Note and/or the Related Indebtedness for so long as debt is outstanding.  In no
event shall the provisions of Chapter 346 of the Texas Finance Code which
regulates certain revolving credit loan accounts and revolving triparty accounts
apply to the Note and/or any of the Related Indebtedness. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Bank to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned interest
at the time of such acceleration.

8.11            Ceiling Election.  To the extent that Bank is relying on Chapter
303 of the Texas Finance Code to determine the Maximum Rate payable on the Note
and/or any other portion of the Indebtedness, Bank will utilize the weekly
ceiling from time to time in effect as provided in such Chapter 303, as
amended.  To the extent federal law permits Bank to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Bank will
rely on federal law instead of such Chapter 303 of the purpose of determining
the Maximum Rate.  Additionally, to the extent permitted by applicable law now
or hereafter in effect, Bank may, at its option and from time to time, utilize
any other method of establishing the Maximum Rate under such Chapter 303 or
under other applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.

8.12            Invalid Provisions.  If any provision of any of the Loan
Documents is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term thereof, such provision shall be fully
severable, the appropriate Loan Document shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part
thereof; and the remaining provisions thereof shall remain in full force and
effect and shall not be effected by the illegal, invalid, or unenforceable
provision or by its severance therefrom.  Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of such Loan Document a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be legal, valid, and
enforceable.

8.13            Entirety and Amendments.  This instrument embodies the entire
agreement between the parties relating to the subject matter hereof (except
documents, agreements and instruments delivered or to be delivered in accordance
with the express terms hereof), supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof, and may be
amended only by an instrument in writing executed jointly by Borrower and Bank
and supplemented only by documents delivered or to be delivered in accordance
with the express terms hereof.

8.14            Multiple Counterparts.  This Agreement has been executed in a
number of identical counterparts, each of which constitutes an original and all
of which constitute, collectively, one agreement; but in making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.  Delivery of an executed counterpart of this Agreement by
facsimile transmission or portable document format (pdf) shall be equally as
effective as delivery of an executed original counterpart and shall constitute a
covenant to deliver an executed original counterpart, but the failure to do so
shall not affect the validity, enforceability and binding effect of this
Agreement.  This provision shall apply to all of the Loan Documents as if fully
set forth therein.

8.15            Parties Bound.  This Agreement shall be binding upon and inure
to the benefit of Borrower, Bank and their respective successors and assigns;
provided that Borrower may not, without the prior written consent of Bank,
assign any of its Rights, duties, or obligations hereunder.  No term or
provision of this Agreement shall inure to the benefit of any Person other than
Borrower and Bank and their respective successors and assigns; consequently, no
Person other than Borrower and Bank and their respective successors and assigns,
shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of Borrower or Bank to perform, observe, or comply with
any such term or provision.

8.16            Bank’s Consent or Approval.  Except where otherwise expressly
provided in the Loan Documents, in any instance where the approval, consent or
the exercise of judgment of Bank is required, the granting or denial of such
approval or consent and the exercise of such judgment shall be (a) within the
sole discretion of Bank, and (b) deemed to have been given only by a specific
writing intended for the purpose and executed by Bank.  Each provision for
consent, approval, inspection, review, or verification by Bank is for Bank’s own
purposes and benefit only.

8.17            Sale of Participations.  Bank may, from time to time and without
notice to Borrower, sell or offer to sell the Indebtedness, or interests
therein, to one or more assignees or participants and Bank is hereby authorized
to disseminate and disclose any information (whether or not confidential or
proprietary in nature) Bank now has or may hereafter obtain pertaining to
Borrower, the Indebtedness or the Loan Documents (including, without limitation,
any credit or other information regarding Borrower, any of its principals, or
any other person or entity liable, directly or indirectly, for any part of the
Loan, to (a) any assignee or participant or any prospective assignee or
prospective participant, (b) any regulatory body having jurisdiction over Bank
or the Indebtedness, and (c) any other persons or entities as may be necessary
or appropriate in Bank’s reasonable judgment).  Bank, as a courtesy to Borrower,
will endeavor to notify Borrower of any such assignees or participants, or
prospective assignees or participants, to which Bank disseminates any of the
information described above.

8.18            Loan Agreement Governs.  In the event of any conflict between
the terms of this Agreement and any terms of any other Loan Document, the terms
of this Agreement shall govern.  All of the Loan Documents are by this reference
incorporated into this Agreement.

8.19            WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF BANK IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

8.20            STATUTE OF FRAUDS NOTICE.  THIS WRITTEN LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

8.21            ATTORNEY FEE AGREEMENT AND REPRESENTATION DISCLAIMER
ACKNOWLEDGMENT.  Legal instruments involved in the above-referenced Loan have
been prepared for the Bank by the law firm of McGuire, Craddock & Strother, P.C.
(the “Firm”).  As part of the obligation of the Borrower to pay the reasonable
expenses of the Bank in connection with the Loan, the Borrower hereby agrees to
pay, at closing, the legal fees and related expenses charged to Bank by the Firm
in connection with the preparation of the aforementioned legal instruments. 
Borrower acknowledges that the Firm has acted only as counsel to Bank, and has
not, in any manner, undertaken to represent or render legal counsel to the
Borrower with respect to the Loan or the Mortgaged Property, or with respect to
any of the documents or instruments being executed in connection therewith. 
Borrower has been and is hereby advised to obtain legal counsel of their own
choice to represent them in this transaction.

8.22            CROSS DEFAULT; CROSS COLLATERAL.  The Borrowerand Bank hereby
agree that (a) all other agreements between Borrower(or any of its Affiliates)
and the Bank (or any of its Affiliates) are hereby amended so that a Default or
Event of Default under this Agreement is a default and event of default under
all other agreements and a default or event of default under any one of the
other agreements is a Default and Event of Default under this Agreement, and (b)
the Collateral under this Agreement secures the obligations now or hereafter
outstanding under all other agreements between Borrower(or any of its
Affiliates) and the Bank (or any of its Affiliates) and the collateral pledged
under any one of the other agreements secures the obligations under this
Agreement; provided, however, that no Default or Event of Default shall result
from additional Liens granted to Bank (or any of its Affiliates) by Borrower(or
any of its Affiliates) as a result of such amendment.

8.23            XX as Agent for Borrower.  Borrower hereby irrevocably appoints
XX as the borrowing agent and attorney-in-fact for the Borrower (the
“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Bank shall have received prior written notice signed by
Borrower that such appointment has been revoked and that another Borrower has
been appointed Administrative Borrower.  Borrower hereby irrevocably appoints
and authorized the Administrative Borrower (i) to provide Bank with all notices
with respect to Loans obtained for the benefit of Borrower and all other notices
and instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Loans and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement.  Borrower hereby jointly and severally agrees to
indemnify Bank harmless against any and all liability, expense, loss or claim of
damage or injury, made against Bank by any Borrower or by any third party
whosoever, arising from or incurred by reason of (a) Bank’s relying on any
instructions of the Administrative Borrower, or (b) any other action taken by
Bank hereunder or under the other Loan Documents.

[Remainder of page intentionally left blank.]

 

 

           EFFECTIVE as of the date first set forth above.

BANK:

 

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

 

 

By:        
                                                                               

                Elizabeth W. Falco, SVP Corporate Banking

 

Address for Notices:

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Facsimile No.:  (214) 932-6607

Attention:  Elizabeth W. Falco

 

BORROWER:

 

HARTMANCOOPER STREET PLAZA, LLC,

a Texas limited liability company

 

 

By:        
                                                                               

                Allen R. Hartman, President

 

HARTMAN RICHARDSON HEIGHTS PROPERTIES, LLC,

a Texas limited liability company

 

 

By:                                                                        
               

                Allen R. Hartman, President

 

HARTMAN SHORT TERM INCOME PROPERTIES XX, INC.,

a Maryland corporation

 

 

By:        
                                                                               

                Allen R. Hartman, President

 

Address for Notices:

2909 Hillcroft, Ste 420

Houston, Texas 77057

Facsimile No.:  713.465.3132

Attention:  Jim Stokes, General Counsel

 

 

LIST OF SCHEDULES AND EXHIBITS

 

EXHIBIT A          -               Land

EXHIBIT B          -               Conditions Precedent

EXHIBIT C          -               Title Policy Requirements

EXHIBIT D          -               Insurance Requirements

EXHIBIT E          -               Notice of Borrowing

EXHIBIT F           -               Compliance Certificate

EXHIBIT G          -               Joinder Agreement

 

SCHEDULE 5.1                   Existing Debt

 

EXHIBIT A

TO

LOAN AGREEMENT

 

 

Land

 

[see attached]

 

 

 

EXHIBIT B

TO

LOAN AGREEMENT

 

A.                  Initial Extension of Credit.  The obligation of Bank to make
the initial Advance under the Note is subject to the condition precedent that
Bank shall have received on or before the day of such Advance all of the
following, each dated (as applicable and unless otherwise indicated) on or as of
the Closing Date, in form and substance satisfactory to Bank:

1.                   Resolutions.  Resolutions of the Board of Directors (or
other governing body) of Borrower and each other Obligated Party certified by
the Secretary (or other custodian of records) of Borrower and each other
Obligated Party which authorize the execution, delivery, and performance by
Borrower or any such Obligated Party of this Agreement and the other Loan
Documents to which Borrower or any such Obligated Party is or is to be a party;

2.                   Incumbency Certificate.  A certificate of incumbency
certified by an authorized officer or representative certifying the names of the
individuals or other Persons authorized to sign this Agreement and the other
Loan Documents to which Borrower or any other Obligated Party is or is to be a
party on behalf of Borrower or any such Obligated Party together with specimen
signatures of such Persons;

3.                   Organizational Documents.  The Organizational Documents for
Borrower and each other Obligated Party as of a date acceptable to Bank;

4.                   Governmental Certificates.  Certificates of the appropriate
government officials of the state of incorporation or organization of Borrower
and each other Obligated Party as to the existence and good standing of Borrower
or any such Obligated Party, each dated within ten (10) days prior to the date
of the initial Advance;

5.                   Note.  The Note, executed by Borrower;

6.                   Loan Agreement.  This Agreement, executed by Borrower;

7.                   Insurance Matters.  Copies of insurance certificates
describing all insurance policies required by the Agreement and the other Loan
Documents, together with loss payable and lender endorsements in favor of Bank
with respect to all insurance policies covering Collateral;

8.                   Fees.  Payment of a commitment fee of $140,000.00 to Bank
from the Borrower;

9.                   Guaranty.  The Guaranty executed by each Guarantor;

10.                Deed of Trust.  The Deed of Trust executed by Richardson and
a Deed of Trust executed by Cooper;

11.                Other Loan Documents.  Each other Loan Document, duly
executed by each Obligated Party which is a party thereto;

12.                Title Policies.  Title policies (or a commitment from the
Title Insurer to issue the title policies) together with legible copies of all
title exception documents cited in the Title Policy and all other legal
documents affecting the Borrowing Base Properties or the use thereof. 

13.                Survey.  Land Title Surveys of the Mortgaged Property in form
and substance satisfactory to Bank.

14.                Appraisals.  Bank shall have obtained appraisals indicating
an appraised value satisfactory to Bank in all respects.

15.                ADA.  Satisfactory evidence that the Mortgaged Property is in
compliance with the Americans with Disabilities Act of 1990, as amended.

16.                Zoning.  Satisfactory evidence that the zoning ordinances and
restrictive covenants affecting the Mortgaged Property permit the present and
intended uses of the Mortgaged Property and have been and will be complied with.

17.                Environmental.  Satisfactory evidence of the Mortgaged
Property’s compliance with the requirements of all applicable environmental
protection laws, rules and regulations, whether federal, state or municipal.

18.                Utility.  Satisfactory evidence that all utility and sanitary
sewage services and facilities necessary for the use of the Improvements are
available to the Land.

19.                Access.  Satisfactory evidence that all of the streets
providing access to the Mortgaged Property have been either dedicated to public
use or established by private easement, duly recorded in the records of the
county in which the Mortgaged Property is located, and have been fully installed
and accepted by Governmental Authority, that all costs and expenses of the
installation and acceptance thereof have been paid in full and that there are no
restrictions on the use and enjoyment of such streets that adversely affect,
limit or impair Borrower’s ability to operate the Mortgaged Property for the
purposes and in the manner represented to Bank.

20.                Leases.  Copies of the leases for the Mortgaged Property
satisfactory to Bank, together with tenant estoppels and SNDA’s satisfactory to
Bank.

21.                Financial Statements.  Bank shall have received current
financial statements of Borrower and the Guarantors, each in form and substance
and certified by such individual as acceptable to Bank.  Borrower and the
Guarantors shall provide such other additional financial information Bank
reasonably requires.

22.                Management Agreement and other Agreements:  Bank shall have
received executed copies of the Management Agreements and any other leasing,
management and development agreements entered into by Borrower in connection
with the Mortgaged Property and Bank shall have received a subordination,
estoppel certificate and assignment agreement in connection with the Management
Agreements from the manager and such other agreements as the Bank may require in
form and substance acceptable to Bank.

23.                UCC Search.  The results of a UCC search showing all
financing statements and other documents or instruments on file against Borrower
in the offices of the Secretaries of State of Texas, such search to be as of a
date no more than ten (10) days prior to the date of the initial Advance;

24.                Opinion of Counsel.  A favorable opinion of Jim Stokes,
general counsel to Borrower and the Guarantor, as to such other matters as Bank
may reasonably request;

25.                Attorneys’ Fees and Expenses.  Evidence that the costs and
expenses (including reasonable attorneys’ fees), to the extent incurred, shall
have been paid in full by Borrower;

26.                No Default:  There shall be no uncured Event of Default by
Borrower hereunder nor any event, circumstance or condition which with notice or
passage of time or both would be an Event of Default.

27.                Environmental.  A Phase I Environmental Site Assessment
prepared by an environmental consultant acceptable to Bank with evidence
satisfactory to Bank of the Mortgaged Property’s compliance with the
requirements of all applicable environmental protection laws, rules and
regulations, whether federal, state or municipal.

28.                Additional Items.  Borrower shall have furnished to Bank such
other materials, documents, papers or requirements regarding the Property,
Borrower, and any Guarantor as Bank shall reasonably request.

B.               Conditions to All Advances.  In addition to the conditions
precedent stated elsewhere herein, including all of the conditions precedent for
the initial extension of credit, Bank shall not be obligated to make any Advance
unless

1.                   Representations and Warranties.  The representations and
warranties made by Borrower and each Obligated Party in the Loan Documents shall
be true and correct at and as of the time the Advance is to be made, and the
request for an Advance shall constitute the representation and warranty by
Borrower that such representations and warranties are true and correct at such
time.

2.                   No Event of Default.  On the date of, and upon receipt of,
the Advance, no Event of Default, and no event which, with the lapse of time or
notice or both, could reasonably be expected to become an Event of Default,
shall have occurred and be continuing.

3.                   Advance Request.  Bank has received an Advance Request in
form and substance satisfactory to Bank, as well as such other documents,
opinions, certificates, agreements, instruments and evidences as Bank may
reasonably request.

4.                   Title.  To the extent proceeds from the request advance are
to be used for the acquisition of real estate, Borrower shall provide to Bank
such information regarding the property, including title, survey and appraisals
as Bank may request.  In addition, contemporaneously with any such advance,
Borrower shall cause to be filed, at Bank’s option, a first lien Deed of Trust
or Negative Pledge in form and substance satisfactory to Bank.

5.                   Additional Documentation.  Bank shall have received such
additional approvals, opinions, or documents as Bank may reasonably request.

C.                  Each Advance shall be deemed to be a representation and
warranty by the Borrower to Bank that the conditions specified herein have been
satisfied on and as of the date of the applicable Advance.

D.                  Borrowing Base Properties.  As of the date of this
Agreement, the Borrowing Base Properties are as follows:

RichardsonHeights – (100 South Central Expressway, Richardson, Texas, 75080)

CooperStreet Plaza– (4601 South Cooper Street, Arlington, Texas 76017)

 

 

 

 

EXHIBIT C

TO

LOAN AGREEMENT

 

Title Company:  Fidelity National Title Insurance Company

 

 

Title Policy Requirements

 

                Borrower shall deliver to Bank, at Borrower’s expense, for Texas
property, a Texas loan policy of title insurance (Form T-2), acceptable to Bank
and Bank’s counsel.  The Title Policy shall (a) show “Texas Capital Bank,
National Association” as the insured mortgagee, (b) insure the Lien of the Deed
of Trust as a first lien against the Land and Improvements in the full amount of
the Loan, (c) delete the exception for matters which a current survey would
show, and all “standard” exceptions which can be deleted, to the fullest extent
authorized under applicable title insurance rules and Borrower shall satisfy all
requirements therefor, (d) contain (i) no exception for standby fees or real
estate taxes other than standby fees and real estate taxes for the year in which
the Closing Date occurs to the extent the same are not then due and payable in
which case the same shall be endorsed “not yet due and payable” and (ii) no
exception for subsequent assessments for prior years, (e) provide full coverage
against mechanic’s liens to the extent authorized by applicable title insurance
rules and Borrower shall satisfy all requirements therefor, (f) contain only
such exceptions (regardless of rank or priority) Bank approves, and Borrower
shall cause to be delivered to Bank true, complete and fully legible copies of
all recorded instruments shown as exceptions, including the subdivision plat (if
any) and any restrictive covenants, (g) insure that no restrictive covenants
shown in the Title Policy have been violated, and that no violation of the
restrictions will result in a reversion or forfeiture of title, (h) insure that
the lands shown in the required Survey are one and the same as the lands
encumbered by the Deed of Trust, and that all recorded easements and other
exceptions locatable on the ground are located as shown on the Survey, (i)
insure that indefeasible or marketable (as coverage is available) fee simple
title to the Land and Improvements is vested in Borrower, (j) contain such
endorsements Bank requires and are available under applicable title insurance
rules and Borrower shall satisfy all requirements therefor, (k) insure any
easements, leasehold estates or other matters appurtenant to or benefiting the
Land and/or the Improvements as part of the insured estate and not show the same
as exceptions, (l) provide the recording information for the UCC financing
statement (if any) filed in the real estate records of the county where the Land
is located, and (m) insure the zoning of, and the Right of access to, the Land
to the extent authorized under applicable title insurance rules and Borrower
shall satisfy all requirements therefor.

 

                Borrower shall be solely responsible for satisfying the
requirements of the Title Company necessary to allow the Company to issue the
Title Policy required by this Agreement. The conditions to Bank’s obligation to
make the Loan will not be satisfied if the Title Policy required by this
Agreement is not, or cannot be, issued, whether caused by Borrower’s failure to
satisfy the underwriter’s requirements or otherwise. 

 

 

 

 

 

 

 

 

 

 

EXHIBIT D

TO

LOAN AGREEMENT

 

Insurance Requirements

 

                Borrower shall maintain with responsible insurance companies
having at least an A Policyholder’s Rating and a Financial Size Rating of XII by
Alfred M. Best Company (or another company approved by Bank) the following:

 

                1.             Hazard Insurance.  Insurance with respect to all
insurable Property against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado, collapse, riot, riot attending a strike, sprinkler
leakage, civil commotion, damage from aircraft and vehicles, and smoke damage
and loss or damage from such hazards as are presently included in so called
“extended coverage” and against vandalism and malicious mischief and against
such other insurable hazards as may be required by Bank for the benefit of
Borrower and Bank as named insured and/or loss payees.  The amount of such
insurance shall be the full replacement cost of the buildings, improvements,
furniture, furnishings, fixtures, equipment and other items (whether personalty
or fixtures) included in the Mortgaged Property, without deduction for
depreciation.  Full replacement cost, as used herein, means, with respect to the
buildings and improvements, the cost of replacing the buildings and
improvements, exclusive of the cost of excavations, foundations and footings
below the first floor slab grade, but including the cost of debris removal, and
means, with respect to such furniture, furnishings, fixtures, equipment and
other items, the cost of replacing same.  Each such policy shall contain a
replacement cost endorsement and such other endorsements as are sufficient to
prevent Borrower and Bank from becoming a coinsurer with respect to such
buildings and improvements.  Such insurance shall be “All-Risk” form. 

 

                2.             Flood Insurance.  If and to the extent any of the
Mortgaged Property is located in a flood hazard area, a federal flood insurance
policy in an amount equal to the lesser of the amount of the Loan or the maximum
amount available.

 

                3.             Other.  Such other insurance on the Mortgaged
Property, or any replacements or substitutions thereof, or additions thereto,
and in such amounts as may from time to time be required by Bank against other
insurable hazards or casualties which at the time are commonly insured against
in the case of premises similarly situated, due regard being given to the height
and type of the buildings and improvements, or any replacements or substitutions
therefor, or additions thereto, and their construction, location, use and
occupancy.  Bank may also require Borrower to maintain comprehensive general
liability insurance for owners and contractors in amounts and form acceptable to
Bank.

 

                4.             Contracts.  With respect to any Contractor
performing work in connection with the Improvements such insurance as Bank shall
reasonably require, including, but not limited to, Worker’s Compensation
Insurance for statutory limits.

 

All insurance policies shall be “occurrence” based policies, issued and
maintained by Insurers, in amounts, with deductibles, and in form satisfactory
to Bank, shall require not less than thirty (30) days’ prior written notice to
Bank of any cancellation lapse, expiration, reduction or other change of
coverage, and shall provide, if possible, for payment of all costs and expenses
incurred by Bank in the event of any contested claim.  Without limiting the
discretion of Bank with respect to required endorsements to insurance policies,
all such policies for loss or damage to the Mortgaged Property shall contain a
standard mortgagee clause (without contribution) naming Bank as mortgagee with
loss proceeds payable to Bank.  All such policies also shall provide that the
validity and enforceability of such policies will not be affected by, and the
proceeds of such policies will be payable to Bank notwithstanding any (i) act,
failure to act, or negligence of the insured, (ii) any violation of any
warranty, declaration or condition contained in any such policy by the insured,
(iii) the occupancy or use of the Mortgaged Property for purposes more hazardous
than permitted by the terms of the policy, (iv) the exercise of the power of
sale or any foreclosure or other action or proceeding taken by Bank pursuant to
the Loan Documents, or (v) any change in title to or ownership of the Mortgaged
Property.  In the case of policies of “extended coverage” insurance carried by a
lessee of the Mortgaged Property for the benefit of Borrower, Borrower will upon
request of Bank cause such policies to be endorsed to provide for payment of
proceeds to Bank as its interests may appear.

EXHIBIT E

TO

LOAN AGREEMENT

 

NOTICE OF BORROWING

 

Date:  ________________

Texas Capital Bank, National Association

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention:  Elizabeth W. Falco

Re:           Loan Agreement dated as of May __, 2012 (the “Loan Agreement”)
among TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a national banking association
(together with its successors and assigns, the “Lender”), HARTMAN RICHARDSON
HEIGHTS PROPERTIES, LLC, a Texas limited liability company (“Richardson”),
HARTMAN SHORT TERM INCOME PROPERTIES XX, INC., a Maryland corporation (“XX”),
and HARTMAN COOPER STREET PLAZA, LLC, a Texas limited liability company
(“Cooper” and collectively with Richardson, XX and each Person which, from time
to time, executes a Joinder Agreement, the “Borrower”); capitalized terms not
defined herein have the respective meanings contained in the Loan Agreement.

Ladies and Gentlemen:

                Pursuant to Section 2.3 of the Loan Agreement, Borrower hereby
gives Lender irrevocable notice that the undersigned hereby requests an Advance
under the Loan Agreement and hereby states as follows:

1.             The aggregate principal amount of the proposed Advance is
$______________.

2.             The proceeds of the Advance shall be used in accordance with the
terms of the Loan Agreement as follows:                                        
                                                                                                                                                               
                               

                                                                                                                                                                                                               

                                                                                                                                                                                               
               

3.             The date of the requested Advance is __________________.

The undersigned hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date of the
proposed Advance:

a.             The representations and warranties set forth in Article Three of
the Loan Agreement are true and correct with the same effect as though such
representations and warranties had been made as of the date hereof and/or on the
date of the proposed Advance, except to the extent that such representations and
warranties expressly relate to a specific earlier date.

b.             Borrower has fulfilled all of the covenants of the Loan Agreement
(including, but not limited to, the affirmative covenants set forth in Article
Four of the Loan Agreement and the negative covenants set forth in Article Five
of the Loan Agreement) and the other Loan Documents.

c.             No act or omission has occurred which has resulted in a Default
or an Event or Default.

d.             There has not occurred any Material Adverse Effect since the date
of the Loan Agreement, nor any condition, event or act that, in any case or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

The undersigned officer is authorized to make this certificate on behalf of
Borrower and has reviewed the terms of the Loan Agreement and has made, or
caused to be made under such officer’s supervision, a review in reasonable
detail of the facts necessary to make the certifications contained herein.

 

AGENT FOR BORROWER UNDER SECTION 8.23 OF THE LOAN AGREEMENT:

HARTMAN SHORT TERM INCOME PROPERTIES XX, INC.,

a Maryland corporation

 

 

By:                                                                                                          

Name:                                                                                                     

Title:                                                                                                       

 

EXHIBIT F

TO

LOAN AGREEMENT

 

Compliance Certificate

 

FOR QUARTER ENDED _______________________ (THE “SUBJECT PERIOD”)

LENDER:                               TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

 

BORROWER:                        HARTMAN RICHARDSON HEIGHTS PROPERTIES, LLC;

HARTMAN SHORT TERM INCOME PROPERTIES XX, INC.;

HARTMANCOOPER STREET PLAZA, LLC; and

each Person which, from time to time, executes a Joinder Agreement

 

This Compliance Certificate (this “Certificate”) is delivered under the Loan
Agreement (the “Loan Agreement”) dated as of May __, 2012, by and between
Borrower and Lender.  Capitalized terms used in this Certificate shall, unless
otherwise indicated, have the meanings set forth in the Loan Agreement.  The
undersigned hereby certifies to Lender as of the date hereof that: (a) he/she is
the Chief Financial Officer of Borrower, and that, as such, he/she is authorized
to execute and deliver this Certificate to Lender on behalf of Borrower; (b)
he/she has reviewed and is familiar with the terms of the Loan Agreement and has
made, or has caused to be made under his/her supervision, a detailed review of
the transactions and condition (financial or otherwise) of Borrower during the
Subject Period; (c) during the Subject Period, Borrower performed and observed
each covenant and condition of the Loan Documents applicable to it and no Event
of Default or Default currently exists or has occurred which has not been cured
or waived by Lender; (d) the representations and warranties of Borrower
contained in Article Three of the Loan Agreement, and any representations and
warranties of Borrower that are contained in any document furnished at any time
under or in connection with the Loan Documents, are true and correct on and as
of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Certificate, the representations and warranties contained in Section 3.1 of the
Loan Agreement shall be deemed to refer to the most recent statements furnished
pursuant to Section 4.8 of the Loan Agreement;(e) the financial statements of
Borrower previously delivered to lender were prepared in accordance with GAAP,
and present, on a consolidated basis, fairly and accurately the financial
condition and results of operations of Borrower and its Subsidiaries as of the
end of and for the period reported; (f) the financial covenant analyses and
information attached hereto are true and accurate on and as of the date of this
Certificate; and (g) the status of compliance by Borrower with certain covenants
of the Loan Agreement at the end of the Subject Period is as set forth below:

 

 

 

 

In Compliance as of
End of Subject Period
(Please Indicate)

1.

Financial Statements and Reports

 

(a)

Provide annual audited FYE financial statements within 120 days after the last
day of each fiscal year.

Yes

No

 

(b)

Provide quarterly financial statements within 45 days after the last day of each
fiscal quarter.

Yes

No

 

(c)

Provide a quarterly rent roll and operating statements within 45 days after the
last day of each fiscal quarter

Yes

No

 

(d)

Provide a quarterly Compliance Certificate within 45 days after the last day of
each fiscal quarter.

Yes

No

 

(e)

Provide other required reporting timely.

Yes

No

2.

Depository Relationship
As required by Section 4.17.

Yes

No

3.

Debt
None, except Debt permitted by Section 5.1 of the Loan Agreement.

Yes

No

4.

Contingent Liabilities
None, except Liens permitted by Section 5.2 of the Loan Agreement.

Yes

No

5.

Liens
None, except Liens permitted by Section 5.3 of the Loan Agreement.

Yes

No

6.

Acquisitions and Mergers
None, except those permitted by Section 5.4 of the Loan Agreement.

Yes

No

7.

Dividends and Distributions
None, except as permitted by Section 5.5 of the Loan Agreement.

Yes

No

8.

Loans and Investments
None, except those permitted by Section 5.6 of the Loan Agreement.

Yes

No

9.

Issuance of Equity
None, except issuances permitted by Section 5.7 of the Loan Agreement.

Yes

No

10.

Affiliate Transactions
None, except transactions permitted by Section 5.8 of the Loan Agreement.

Yes

No

11.

Changes in Nature of Business 
None, except changes permitted by Section 5.9 of the Loan Agreement.

Yes

No

12.

No Negative Pledge 
None, except those permitted by Section 5.10 of the Loan Agreement.

Yes

No

13.

Judgments
None in excess of $10,000.00, except as permitted by Section 5.11 of the Loan
Agreement.

Yes

No

14.

Hedge Agreements
None, except as permitted by Section 5.12 of the Loan Agreement.

Yes

No

15.

Dispositions of Assets 
None, except dispositions permitted by Section 5.13 of the Loan Agreement.

Yes

No

16.

Sale and Leaseback Transactions 
None, except transactions permitted by Section 5.14 of the Loan Agreement.

Yes

No

17.

Prepayment of Debt  
None, except prepayments permitted by Section 5.15 of the Loan Agreement.

Yes

No

18.

Capital Expenditures
None, except as permitted by Section 5.16 of the Loan Agreement.
NTE $500,000.00 in any fiscal year

Capital Expenditures to date in current fiscal year:                 
$_____________

Yes

No

19.

Management Fees
None, except as permitted by Section 5.17 of the Loan Agreement. .

Management Fees to date in current fiscal year:
                                     $_____________

Yes

No

19.

Financial Covenants
Section 4.9 of the Loan Agreement.

                Debt Service Coverage Ratio                  __ to __

                Fixed Charge Coverage Ratio                 __ to __

 

 

IN WITNESS WHEREOF,the undersigned has executed this Certificate as of
_____________________ __, 20__.

 

Signature:                                                                               

Printed
Name:                                                                        

 

 

EXHIBIT G

TO

LOAN AGREEMENT

 

JOINDER AGREEMENT

[Date of Joinder Agreement]

 

Texas Capital Bank, National Association

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention:  Elizabeth W. Falco         

Re:          Loan Agreement dated as of May __, 2012 (the “Loan Agreement”)
among TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a national banking association
(together with its successors and assigns, the “Lender”), HARTMAN RICHARDSON
HEIGHTS PROPERTIES, LLC, a Texas limited liability company (“Richardson”),
HARTMAN SHORT TERM INCOME PROPERTIES XX, INC., a Maryland corporation (“XX”),
and HARTMAN COOPER STREET PLAZA, LLC, a Texas limited liability company
(“Cooper” and collectively with Richardson, XX and each Person which, from time
to time, executes a Joinder Agreement, the “Borrower”); capitalized terms not
defined herein have the respective meanings contained in the Loan Agreement.

Ladies and Gentlemen:

1.                   Representations and Warranties.  The undersigned hereby
makes each representation and warrant set forth in Article Three of the Loan
Agreement (as supplemented by the attached supplemental schedules, if any) to
the same extent as each other Borrower.

2.                   Obligations Under the Loan Agreement.  The undersigned
hereby agrees, as of the date first above written to be bound as a Borrower by
all of the terms and provisions of the Loan Agreement and the other Loan
Documents to the same extent of each of the other borrowers.  The undersigned
further agrees, as of the date first above written, that each reference in the
Loan Documents to a “Borrower” and the like shall also mean and be a reference
to the undersigned.

3.                   Notices.  All communications and notices hereunder shall be
in writing and given as provided in the Loan Agreement.  All communications and
notices hereunder to the undersigned shall be given to it at the address set
forth under its signature.

4.                   Governing Law.  This supplement shall be governed by, and
construed in accordance with, the laws of the State of Texas.

BORROWER:

_________________________________________

By:______________________________________

Name:___________________________________

Title:_____________________________________

 

Address:

________________________________________________

________________________________________________

________________________________________________

Telephone No.:____________________________________

Fax No.:_________________________________________

Email:___________________________________________

Attention:________________________________________

SCHEDULE 5.1

TO

LOAN AGREEMENT

 

Existing Debt

 

[see attached]