Exhibit 10.39
TERM LOAN AGREEMENT
Dated: As of June 28, 2005
between
HINES REIT PROPERTIES , L.P.
(the “Borrower”)
and
KEYBANK NATIONAL ASSOCIATION
(“Administrative Agent”)
and
and other Lenders, if any, which may become parties
to this Agreement (with KeyBank National Association, the “Lenders”)
$60,000,000.00 TERM LOAN

 

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TABLE OF CONTENTS

                      Page   1. BACKGROUND     2  
1.1
  Defined Terms     2  
1.2
  Borrower     2  
1.3
  Use of Loan Proceeds     2  
1.4
  Accounting Terms     2   2. LOAN PROVISIONS     2  
2.1
  Amount of Facility     2  
2.2
  Term of Facility     3  
2.3
  Interest Rate and Payment Terms     3  
2.3.1
  Borrower’s Options     3  
2.3.2
  Selection To Be Made     3  
2.3.3
  Increased Costs     3  
2.3.4
  Illegality     4  
2.3.5
  Notice     7  
2.3.6
  If No Notice     8  
2.3.7
  Telephonic Notice     8  
2.3.8
  Limits On Options     8  
2.3.9
  Payment and Calculation of Interest     8  
2.3.10
  Voluntary and Mandatory Principal Payments     8  
2.3.11
  Maturity     9  
2.3.12
  Method of Payment; Date of Credit     9  
2.3.13
  Billings     9  
2.3.14
  Default Rate     9  
2.3.15
  Late Charges     10  
2.3.16
  Make Whole Provision     10  
2.4
  Fees     10   3. SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS     10  
3.1
  Credit Documents and Security Documents     10  
3.2
  Collateral     11  
3.3
  Borrower Escrow Account     13   4. CONTINUING AUTHORITY OF AUTHORIZED
REPRESENTATIVES     14   5. CONDITIONS PRECEDENT     14  
5.1
  Satisfactory Credit Documents     14  
5.2
  No Material Change     14  
5.3
  Warranties and Representations Accurate     14  
5.4
  Financials and Appraisals     14  
5.5
  Environmental Compliance and Indemnification Agreements     14  
5.6
  Validity and Sufficiency of Security Documents     14  
5.7
  No Other Liens; Taxes and Municipal Charges Current     15  
5.8
  Organizational Documents and Entity Agreements     15  
5.9
  Votes, Consents and Authorizations     15  
5.10
  Legal and Other Opinions     15  
5.11
  Due Diligence     15  
5.12
  Fees and Expenses     15  
5.13
  Guaranty     15  
5.14
  No Default     15  
5.15
  No Litigation     15  
5.16
  Compliance with Covenants     15   6. WARRANTIES AND REPRESENTATIONS     16  
6.1
  Financial Information     16  
6.2
  No Violations     16  
6.3
  No Litigation     16  

 

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                      Page  
6.4
  Compliance With Legal Requirements     17  
6.5
  Use of Proceeds     17  
6.6
  Entity Matters     17  
6.6.1
  Borrower     17  
6.6.2
  General Partner     17  
6.6.3
  Identity of General Partner     17  
6.7
  Valid and Binding     17  
6.8
  Deferred Compensation and ERISA     18  
6.9
  No Material Change; No Default     18  
6.10
  No Broker or Finder     18  
6.11
  Background Information and Certificates     18  
6.12
  Consents     18  
6.13
  Indebtedness     19  
6.14
  Government Regulation     19  
6.15
  Environmental Matters     19  
6.16
  Portfolio Assets     19  
6.17
  Full Disclosure     20  
6.18
  Subsidiaries     20  
6.19
  No Material Adverse Contracts, Etc.     20  
6.20
  Compliance With Other Instruments, Laws, Etc.     20  
6.21
  Solvency     20  
6.22
  REIT Status     20  
6.23
  Patriot Act     21   7. COVENANTS     21  
7.1
  Notices     21  
7.2
  Financial Statements and Reports     21  
7.2.1
  Annual Statements     21  
7.2.2
  Periodic Statements     21  
7.2.3
  Data Requested     22  
7.2.4
  Tax Returns     22  
7.2.5
  Pro Forma     22  
7.2.6
  Officer’s Certificate     22  
7.2.7
  Information to Owners     23  
7.2.8
  Portfolio Investments     23  
7.2.9
  Auditor’s Reports     23  
7.2.10
  Environmental Reports     23  
7.2.11
  Notice of Default or Litigation     23  
7.2.12
  Reserved     24  
7.2.13
  Debt     24  
7.2.14
  Other Information     24  
7.3
  Financial Covenants     24  
7.4
  Indebtedness and Restrictions on Liens, Transfers and Additional Debt     25  
7.5
  Liens/Negative Pledges     26  
7.6
  Nature of Business     26  
7.7
  Limitations on Certain Transactions     26  
7.8
  Investments     27  
7.9
  Dividends and Distributions     27  
7.10
  Transactions with Portfolio Investments     27  
7.11
  Amendments     27  
7.12
  ERISA     27  
7.13
  Place for Records: Inspection     27  
7.14
  Costs and Expenses     28  
7.15
  Compliance with Legal Requirements     28  
7.16
  MAI Appraisals     28  
7.17
  Title to Properties     28  
7.18
  Insurance     29  

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                      Page  
7.19
  Taxes     29  
7.20
  Compliance with Contracts, Licenses, and Permits     29  
7.21
  Replacement Documentation     29  
7.22
  Perfected LP Interest Covenants     29  
7.23
  Existence of the Borrower; Maintenance of REIT Status     29  
7.24
  Refinance of California Property     30   8. SPECIAL PROVISIONS     30  
8.1
  Right to Contest     30  
8.1.1
  Taxes and Claims by Third Parties     30  
8.1.2
  Legal Requirements     30  
8.2
  Borrower Fully Liable     30   9. EVENTS OF DEFAULT     30  
9.1
  Default and Events of Default     30  
9.1.1
  Generally     31  
9.1.2
  Note and Other Credit Documents     31  
9.1.3
  Financial Status and Insolvency     31  
9.1.4
  Breach of Representation or Warranty     31  
9.1.5
  Defaults under Other Agreements     32  
9.1.6
  Change of Control     32  
9.1.7
  Judgments     32  
9.2
  Grace Periods and Notice     32  
9.2.1
  No Notice or Grace Period     32  
9.2.2
  Nonpayment of Interest and Principal     33  
9.2.3
  Other Monetary Defaults     33  
9.2.4
  Nonmonetary Defaults Capable of Cure     33  
9.3
  Certain Remedies     33  
9.3.1
  Termination of Commitments     33  
9.3.2
  Accelerate Debt     33  
9.3.3
  Pursue Remedies     34  
9.3.4
  Written Waivers     34  
9.3.5
  Reserved     34  
9.3.6
  Enforcement of Rights     34  
10.
  SECURITY INTEREST AND SET-OFF     34  
10.1
  Security Interest     34  
10.2
  Set-Off and Debit     34  
10.3
  Right to Freeze     35  
10.4
  Additional Rights     35  
11.
  THE ADMINISTRATIVE AGENT AND THE LENDERS     35  
11.1
  Appointment of Administrative Agent     35  
11.2
  Administration of Facility by Administrative Agent     36  
11.3
  Delegation of Duties     36  
11.4
  Exculpatory Provisions     36  
11.5
  Reliance by Administrative Agent     37  
11.6
  Notice of Default     37  
11.7
  Lenders’ Credit Decisions     38  
11.8
  Administrative Agent’s Reimbursement and Indemnification     38  
11.9
  Administrative Agent in its Individual Capacity     38  
11.10
  Successor Administrative Agent     39  
11.11
  Duties in the Case of Enforcement     39  
11.12
  Respecting Loans and Payments     40  
11.12.1
  Procedures for Loans     40  
11.12.2
  Nature of Obligations of Lenders     40  
11.12.3
  Payments to Administrative Agent     40  
11.12.4
  Distribution of Liquidation Proceeds     41  
11.12.5
  Adjustments     42  
11.12.6
  Setoff     42  

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                      Page  
11.12.7
  Distribution by Administrative Agent     42  
11.12.8
  Actions by Administrative Agent     42  
11.13
  Delinquent Lender     43  
11.14
  Holders     43  
11.15
  Assignment and Participation     44  
11.15.1
  Conditions to Assignment by Lenders     44  
11.15.2
  Certain Representations and Warranties     44  
11.15.3
  Register     45  
11.15.4
  New Notes     46  
11.15.5
  Participations     46  
11.16
  Disclosure     47  
11.17
  Miscellaneous Assignment Provisions     47  
11.18
  Intentionally Deleted     47  
11.19
  Amendment, Waiver, Consent, Etc.     47  
11.20
  Deemed Consent or Approval     48  
11.21
  Borrower Indemnification of Lenders     49  
11.22
  Borrower’s Communication with Lenders     49  
12.
  GENERAL PROVISIONS     49  
12.1
  Notices     49  
12.2
  Limitations on Assignment     51  
12.3
  Further Assurance     51  
12.4
  Parties Bound     51  
12.5
  Waivers and Extensions     52  
12.6
  Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial     52  
12.6.1
  Substantial Relationship     52  
12.6.2
  Place of Delivery     52  
12.6.3
  Governing Law     52  
12.6.4
  Consent to Jurisdiction     52  
12.6.5
  JURY TRIAL WAIVER     52  
12.7
  Survival     53  
12.8
  Cumulative Rights     53  
12.9
  Claims Against Administrative Agent or the Lenders     53  
12.9.1
  Borrower Must Notify     53  
12.9.2
  Remedies     53  
12.9.3
  Limitations     54  
12.10
  Obligations Absolute, Joint and Several     54  
12.11
  Table of Contents, Title and Headings; Exhibits and Schedules     54  
12.12
  Counterparts     54  
12.13
  Integration     54  
12.14
  Time Of the Essence     54  
12.15
  No Oral Change     54  
12.16
  Monthly Statements     55  
12.17
  Indemnification     55  

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          Exhibits to Agreement:       Section Reference Number
Exhibit A
  Definitions   1.1
 
       
Exhibit B
  Assets, Funded Debt; Subsidiaries   6.13, 6.16, 6.18, 7.2.13
 
      and 7.5
 
       
Exhibit C
  Authorized Representatives   4
 
       
Exhibit D
  Form of Assignment and Acceptance   11.15.1
 
       
Exhibit E
  Lenders’ Commitment   2.1(a)
 
       
Exhibit F
  Form of Note   2.1(b)
 
       
Exhibit G
  Form of Certificate   7.2.6
 
       
Exhibit H
  Intentionally omitted    
 
       
Exhibit I
  Form of Notice of Borrowing   2.1(c)
 
       
Exhibit J
  Environmental Notices   6.15
 
       
Exhibit K
  Portfolio Investment Entities   3.2
 
       
Exhibit L
  Pro Forma Paydown Calculation   3.2

 

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TERM LOAN AGREEMENT
     This is a Term Loan Agreement (“Agreement”) made and entered into as of the
28th day of June 2005, by and between HINES REIT PROPERTIES, L.P, a Delaware
limited partnership (the “Borrower”), having an address at c/o Hines Interests
Limited Partnership, 2800 Post Oak Blvd., Suite 5000, Houston, Texas 77056, and
KEYBANK NATIONAL ASSOCIATION, a national banking association having an address
at 127 Public Square, Cleveland, Ohio 44114, and the other lending institutions
which may become parties to this Agreement pursuant to Section 11.15 hereof
(each, a “Lender” and collectively the “Lenders”) and KeyBank National
Association, as agent for itself and such other lending institutions (the
“Administrative Agent”).
WITNESSETH:
1. BACKGROUND.
     1.1 Defined Terms. Capitalized terms used in this Agreement are defined
either in Exhibit A, or in specific sections of this Agreement, or in another
Credit Document, as referenced in Exhibit A.
     1.2 Borrower. Borrower is a limited partnership organized under the laws of
the State of Delaware, of which the sole general partner is Hines Real Estate
Investment Trust, Inc., a Maryland corporation.
     1.3 Use of Loan Proceeds. Borrower has applied to Administrative Agent for
a loan of Sixty Million Dollars ($60,000,000) (the “Facility”) the proceeds of
which are to be used solely for the purposes of acquiring the California
Property.
     1.4 Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with the
most recent annual or quarterly financial statements and reports delivered
pursuant to Section 7.2 (or, prior to the delivery of the first financial
statements pursuant to Section 7.2, consistent with the financial statements
dated March 31, 2005).
2. LOAN PROVISIONS.
     2.1 Amount of Facility.
     (a) Commitment. Subject to all of the terms, conditions and provisions of
this Agreement, each Lender agrees severally to make loans (each a “Loan” and,
collectively, the “Loans”) to the Borrower for the purposes herein set forth in
an aggregate amount up to such Lender’s Commitment Percentage of the Facility;
provided, however: (i) with regard to each Lender individually, such Lender’s
outstanding Loans shall not exceed such Lender’s

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Commitment Percentage of the Committed Amount and (ii) with regard to the
Lenders collectively, the aggregate principal amount of outstanding Loans shall
not exceed the Committed Amount.
     (b) Notes. The Loans shall be evidenced by duly executed promissory note(s)
of the Borrower to each Lender in the original principal amount of each Lender’s
Commitment Percentage of the Committed Amount; such notes shall be substantially
in the form of Exhibit F.
     (c) Loans. In order to request that Lenders make a Loan hereunder, Borrower
must submit a Notice of Borrowing in the form attached hereto as Exhibit I to
Administrative Agent at least three (3) Business Days prior to the date on which
the Loan is requested to be made (which shall be a Business Day) and shall also
submit to Administrative Agent a Notice of Rate Selection in accordance with
Section 2.3.5. Provided that all conditions precedent thereto are satisfied,
Lenders will use commercially reasonable efforts to fund the requested Loan on
such date.
     2.2 Term of Facility. The Facility shall be for a term (“Term”) commencing
on the date hereof and ending ninety (90) days from the date hereof on September
___, 2005 (“Maturity Date”).
     2.3 Interest Rate and Payment Terms. Amounts outstanding under the Facility
shall be payable as to interest and principal in accordance with the provisions
of this Agreement. This Agreement also provides for interest at a Default Rate,
Late Charges and prepayment rights and fees. Any and all interest rate selection
and conversion provisions in this Agreement are to be administered by the
Administrative Agent and are to be allocated on a pro rata basis to the Note(s)
held by each Lender based upon such Lender’s Commitment Percentage.
2.3.1 Borrower’s Options. Principal amounts outstanding under the Facility shall
bear interest at the following rates, at Borrower’s selection, subject to the
conditions and limitations provided for in this Agreement: (i) Variable Rate or
(ii) Adjusted LIBOR Rate.
2.3.2 Selection To Be Made. Borrower shall select, and thereafter may change the
selection of, the applicable interest rate, from the alternatives otherwise
provided for in this Agreement, by giving Administrative Agent a Notice of Rate
Selection as provided in Section 2.3.5 hereof: (i) at least three (3) Business
Days prior to a Loan, (ii) on any Business Day on which Borrower desires to
convert an outstanding LIBOR Rate Loan to a Variable Rate Loan, or (iii) at
least three (3) Business Days before the date on which Borrower desires to
convert an outstanding Variable Rate Loan to a LIBOR Rate Loan or make any
change with respect to an outstanding LIBOR Rate Loan.
2.3.3 Increased Costs. If due to any one or more of: (i) the introduction of any
applicable law or regulation or any change (other than any change by way of
imposition or increase of reserve requirements or imposition of a Reserve
Percentage already referred to in the definition of LIBOR Rate) in the
interpretation or application by any authority charged with the interpretation
or

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application of any law or regulation; or (ii) the compliance with any guideline
or request from any governmental central bank or other governmental authority,
there shall be an increase in the cost to Administrative Agent or any Lender of
agreeing to make or making, funding or maintaining LIBOR Loans, including
without limitation changes which affect or would affect the amount of capital or
reserves required or expected to be maintained by Administrative Agent or any
Lender, with respect to all or any portion of the Facility, or any corporation
controlling (directly or indirectly) Administrative Agent or any Lender, on
account thereof, then, provided that such increases in costs are not due to the
fraud or gross negligence of Administrative Agent or such Lender, Borrower from
time to time shall, upon demand by Administrative Agent, pay additional amounts
sufficient to indemnify Administrative Agent or such Lender against the
increased cost; provided, however, that such amounts shall be no greater than
that which such Administrative Agent or Lender is generally charging other
borrowers similarly situated to the Borrower. If at any time a Lender or Lenders
other than the Administrative Agent shall make a determination of increased
cost, the Borrower may at any time during the period that such increased cost is
being charged to Borrower instruct such Lender or Lenders to sell its or their
commitments (with all Loans outstanding thereunder) to a bank to be designated
by the Borrower and approved by the Administrative Agent (such approval not to
be unreasonably withheld) at a price equal to all outstanding principal and
accrued and unpaid interest and fees thereunder and any other outstanding
obligations due to such Lender hereunder, provided, however, that such
purchasing bank shall comply with the provisions of Section 11 hereof. A
certificate as to the amount of the increased cost and the reason therefor
submitted to Borrower by Administrative Agent, in the absence of manifest error,
shall be conclusive and binding for all purposes.
2.3.4 Illegality. Notwithstanding any other provision of this Agreement, if the
introduction of, or a change in the interpretation of, any law, treaty, statute,
regulation or interpretation thereof shall make it unlawful, or any central bank
or government authority shall assert by directive, guideline or otherwise, that
it is unlawful for Administrative Agent or any Lender to make or maintain LIBOR
Loans or to continue to fund or maintain LIBOR Loans then, on written notice
thereof and demand by Administrative Agent to Borrower, (a) the obligation of
Administrative Agent and Lenders to make LIBOR Loans and to convert or continue
any Loan as a LIBOR Loan shall terminate and (b) Borrower shall convert all
Loans outstanding under the Facility into Variable Rate Loans until such time as
such Lender may again make, maintain, and fund LIBOR Loans.
          2.3.4.1 Treatment of Affected Loans. If the obligation of any Lender
to make LIBOR Loans shall be suspended pursuant to Section 2.3.4 hereof, such
Lender’s LIBOR Loans shall be automatically converted into Variable Rate Loans
on the last day(s) of the then current Interest Period(s) for such LIBOR Loans
or prior thereto if and to the extent LIBOR Loans may not be maintained as a
result of any condition or event specified in Section 2.3.4 hereof and, unless
and until

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such Lender gives notice as provided below that the circumstances specified in
Section 2.3.4 hereof that gave rise to such conversion no longer exist:
     (a) to the extent that such Lender’s LIBOR Loans have been so converted,
all payments and prepayments of principal that would otherwise be applied to
such Lender’s LIBOR Loans shall be applied instead to its Variable Rate Loans;
and
     (b) all Loans that would otherwise be made or continued by such Lender as
LIBOR Loans shall be made or continued instead as Variable Rate Loans, and all
Variable Rate Loans of such Lender that would otherwise be converted into LIBOR
Loans shall remain as Variable Rate Loans.
     If such Lender gives notice to the Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 2.3.4 hereof
that gave rise to the conversion of such Lender’s LIBOR Loans to Variable Rate
Loans pursuant to this Section 2.3.4.1 no longer exist (which such Lender agrees
to do promptly upon such circumstances ceasing to exist) at a time when LIBOR
Loans made by other Lenders are outstanding, such Lender’s Variable Rate Loans
shall be automatically converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding LIBOR Loans to the extent necessary so
that, after giving effect thereto, all Loans held by the Lenders holding LIBOR
Loans and by such Lender are held pro rata (as to principal amounts, interest
rate basis, and Interest Periods) in accordance with such Lenders’ respective
Commitment Percentages.
2.3.4.2 Taxes.
     (a) Any and all payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Administrative Agent, taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Administrative Agent (as the case may be) is
organized or by the jurisdiction where such Lender (or its applicable Lending
Office) or the Administrative Agent has a permanent establishment or office, or
is engaged in a trade or business, or any political subdivision of such
jurisdiction (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
“Taxes”). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Credit Document
to any Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.3.4.2)
such Lender or the Administrative Agent receives an amount equal to the sum it
would have received had no such deductions been

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made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law, and (iv) the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 12.1, the original
or a certified copy of a receipt evidencing payment thereof.
     (b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Credit Document (hereinafter referred to as “Other Taxes”).
     (c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 2.3.4.2) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto;
provided, however, that such amounts shall be no greater than the amounts which
such Administrative Agent or Lender is generally charging other borrowers
similarly situated to the Borrower.
     (d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Administrative Agent (but only so long as such Lender remains lawfully
able to do so), shall provide the Borrower and the Administrative Agent with
(i) Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY and W-9 (or their
equivalent), as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying if appropriate that such Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States, and (ii) any other form
or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Code), certifying that such Lender
is entitled to an exemption from or a reduced rate of tax on payments pursuant
to this Agreement or any of the other Credit Documents. If the form provided by
a Lender at the time such Lender first becomes a party to this Agreement
indicates a United States withholding tax rate in excess of zero, withholding
tax at such rate shall be considered excluded from the definition of Taxes set
forth in Section 2.3.4.2(a).
     (e) For any period with respect to which a Lender has failed to provide the
Borrower and the Administrative Agent with the appropriate form pursuant to
Section 2.3.4.2(d) (unless such failure is due to a change in treaty, law, or

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regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 2.3.4.2(a) or 2.3.4.2(b) with respect to Taxes imposed by the
United States; provided, however, that should a Lender, which is otherwise
exempt from or subject to a reduced rate of Taxes, become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall,
at such Lender’s sole cost and expense, take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
     (f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 2.3.4.2, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
     (g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.3.4.2 shall survive the repayment of the Loans and the other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
                         2.3.4.3 Capital Adequacy. If any future law,
governmental rule, regulation, policy, guideline or directive or the
interpretation thereof by a court or governmental authority with appropriate
jurisdiction affects the amount of capital required or expected to be maintained
by banks or bank holding companies and any Lender or the Administrative Agent
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of Loans made or deemed to be made
pursuant hereto, then such Lender or the Administrative Agent may notify the
Borrower of such fact, and the Borrower shall pay to such Lender or the
Administrative Agent from time to time, upon demand made by the Administrative
Agent or such Lender, as an additional fee payable hereunder, such amount as
such Lender or the Administrative Agent shall determine reasonably and in good
faith and certify in a notice to the Borrower to be an amount that will
adequately compensate such Lender or Administrative Agent in light of these
circumstances for its increased costs of maintaining such capital. Each Lender
and the Administrative Agent shall allocate such cost increases among its
customers in good faith and on an equitable basis, and will not charge the
Borrower unless it is generally imposing a similar charge on its other similarly
situated borrowers.
                    2.3.5 Notice. A “Notice of Rate Selection” shall be a
written notice, given by cable, tested telex, facsimile transmission (with
authorized signature), or by telephone if immediately confirmed by such a
written notice, from an Authorized Representative of Borrower which: (i) is
irrevocable; (ii) is received by Administrative Agent not later than 1:00
o’clock P.M. Eastern Time: (a) at least three (3) Business Days prior to a Loan;
or (b) if a Libor Rate is selected, at least three (3) Business Days prior to
the end of the current Interest Period to which such selection is to apply;
(c) if a Variable Rate is selected, on the first day of the Interest Period to
which it applies; and (iii) as to each selected interest rate option, sets forth
the aggregate

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principal amount(s) to which such interest rate option(s) shall apply and the
Interest Period(s) applicable to each LIBOR Loan.
                    2.3.6 If No Notice. If Borrower fails to timely select an
interest rate option in accordance with the foregoing prior to a new Loan or as
to an expiring Interest Period of an outstanding LIBOR Loan, then such new Loan
and/or such outstanding LIBOR Loan shall be deemed converted to a LIBOR Loan
with an Interest Period of one (1) month; provided, however, if a LIBOR Loan is
not then available, any such new Loan shall be deemed to be a Variable Rate
Loan, and on the last day of the applicable Interest Period of any such
outstanding LIBOR Loan all outstanding principal amounts thereon shall be deemed
converted to a Variable Rate Loan.
                    2.3.7 Telephonic Notice. Without in any way limiting
Borrower’s obligation to confirm in writing any telephonic notice,
Administrative Agent may act without liability upon the basis of telephonic
notice, concerning interest rate selection only, believed by Administrative
Agent in good faith to be from Borrower prior to receipt of written
confirmation. In each case Borrower hereby waives the right to dispute
Administrative Agent’s record of the terms of such telephonic Notice of Rate
Selection in the absence of manifest error.
                    2.3.8 Limits On Options. Each LIBOR Loan or Variable Rate
Loan shall be in a minimum amount of $100,000. At no time shall there be
outstanding a total of more than six (6) LIBOR Loans at any time. If Borrower
shall make more than one (1) interest rate selection in any thirty (30) day
period, excluding conversions of outstanding Loans made at the end of an
applicable Interest Period of any previously outstanding LIBOR Loan,
Administrative Agent may impose and Borrower shall pay a reasonable processing
fee for each such additional selection.
                    2.3.9 Payment and Calculation of Interest. Subject to the
provisions of Section 2.3.14, all interest shall be: (a) payable in arrears
commencing on July 31, 2005 with payments to be made on each Interest Payment
Date thereafter; and (b) calculated on the basis of a 360 day year and the
actual number of days elapsed.
     (i) Variable Rate Loans. During such periods as the Loans shall be
comprised in whole or in part of Variable Rate Loans, such Variable Rate Loans
shall bear interest at a per annum rate equal to the Variable Rate. Each change
in the Prime Rate or Adjusted Federal Funds Rate shall, as applicable,
simultaneously change the Variable Rate payable under this Agreement; and
     (ii) LIBOR Loans. During such periods as the Loans shall be comprised in
whole or in part of LIBOR Loans, such LIBOR Loans shall bear interest at a per
annum rate equal to the Adjusted LIBOR Rate. Interest at the LIBOR Rate shall be
computed from and including the first day of the applicable Interest Period to,
but excluding, the last day thereof.
                    2.3.10 Voluntary and Mandatory Principal Payments.
     (a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part at any time upon three (3) Business Days prior notice
to Administrative Agent

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without premium or penalty with respect to Variable Rate Loans and, with respect
to LIBOR Loans, subject to a Make-Whole Provision.
     (b) Mandatory Prepayments.
     (i) If at any time the aggregate principal amount of outstanding Loans
shall exceed the Committed Amount, the Borrower shall immediately prepay the
outstanding principal balance on the Loans in an amount sufficient to eliminate
such excess (such prepayments and any other payments designated as such herein,
“Mandatory Prepayments”).
     (ii) All amounts required to be paid pursuant to Section 2.3.10(b)(i) shall
be applied to the Loans. Within the parameters of the applications set forth
above, Mandatory Prepayments shall be applied first to Variable Rate Loans and
then to LIBOR Loans in direct order of Interest Period maturities. All
prepayments under this Section 2.3.10(b)(ii) applied to LIBOR Loans in
accordance with the foregoing shall be subject to a Make-Whole Provision.
                    2.3.11 Maturity. At Maturity all accrued interest, principal
and other charges due with respect to the Facility shall be due and payable in
full and the principal balance and such other charges, but not unpaid interest,
shall continue to bear interest at the Default Rate until so paid.
                    2.3.12 Method of Payment; Date of Credit. All payments of
interest, principal and fees shall be made in lawful money of the United States
in immediately available funds: (a) by direct charge to an account of Borrower
maintained with Administrative Agent (or the then holder of the Facility), or
(b) by wire transfer to Administrative Agent, or (c) to such other bank or
address as the holder of the Facility may designate in a notice to Borrower.
Payments shall be credited on the Business Day on which immediately available
funds are received prior to one o’clock P.M. Eastern Time; payments received
after one o’clock P.M. Eastern Time shall be credited on the next Business Day,
payments which are not in the form of immediately available funds shall not be
credited until such funds become immediately available to Administrative Agent.
                    2.3.13 Billings. Administrative Agent may submit monthly
billings reflecting payments due; however, any changes in the interest rate
which occur between the date of billing and the due date may be reflected in the
billing for a subsequent month. Neither the failure of Administrative Agent to
submit a billing nor any error in any such billing shall excuse Borrower from
the obligation to make full payment of all Borrower’s payment obligations when
due; provided, however, that Borrower shall not be considered in breach of this
Agreement to the extent that it makes payments in accordance with such billings
unless and until three (3) Business Days after Borrower’s receipt of written
notice from Administrative Agent of such error in billing.
                    2.3.14 Default Rate. Administrative Agent shall have the
option of imposing, and Borrower shall pay upon billing therefor, a default
interest rate which is four percent (4%) per annum above the Variable Rate (the
“Default Rate”): (a) while any monetary Default exists

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and is continuing, during that period between the due date and the date of
payment; (b) while any Event of Default exists, unless and until the Event of
Default is waived by Administrative Agent; and (c) after Maturity. Borrower’s
right to select pricing options shall cease upon the occurrence and during the
continuance of a monetary Default or any Event of Default.
                    2.3.15 Late Charges. Except with respect to payments due at
Maturity (as to which the Late Charge shall not be applicable), Borrower shall
pay, upon billing therefor, a “Late Charge” equal to five percent (5%) of the
amount of any payment of principal, interest, or both, which is not paid within
ten (10) days of the due date thereof. Late Charges are: (a) payable in addition
to, and not in limitation of, the Default Rate, (b) intended to compensate
Administrative Agent for administrative and processing costs incident to late
payments, (c) are not interest, and (d) shall not be subject to refund or rebate
or credited against any other amount due.
                    2.3.16 Make Whole Provision. Borrower shall pay to
Administrative Agent, immediately upon request and notwithstanding any contrary
provisions contained in any of the Credit Documents, such amounts as shall be
necessary to compensate each Lender for the loss, cost or expense which it
actually reasonably incurs as a result of (i) any payment or prepayment, under
any circumstances whatsoever, whether voluntary or involuntary, of all or any
portion of a LIBOR Loan on a date other than the last day of the applicable
Interest Period of such LIBOR Loan, (ii) the conversion, for any reason
whatsoever, whether voluntary or involuntary, of any LIBOR Loan on a date other
than the last day of the applicable Interest Period, (iii) the failure of all or
a portion of a Loan which was to have borne interest at the Adjusted LIBOR Rate
pursuant to the request of Borrower to be made under this Agreement (except as a
result of a failure by Administrative Agent or any Lender to fulfill
Administrative Agent’s or such Lender’s obligations to fund), or (iv) the
failure of Borrower to borrow in accordance with any request submitted by it for
a LIBOR Loan (except as a result of a failure by Administrative Agent or any
Lender to fulfill such Administrative Agent’s or Lender’s obligations to fund).
Such amounts payable by Borrower shall be equal to any administrative costs
actually incurred plus any amounts required to compensate for any loss, cost or
expense reasonably incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by any Lender to fund or maintain a LIBOR Loan,
including, without limitation, the costs associated with the cancellation of any
interest rate hedge agreement.
     2.4 Fees. The Borrower agrees to pay to the Administrative Agent for the
benefit of the Lenders in immediately available funds on or before the Closing
Date a commitment fee (the “Commitment Fee”) in the amount agreed to by Borrower
and the Administrative Agent in the Fee Letter.
3. SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS.
     3.1 Credit Documents and Security Documents. The Facility shall be made,
evidenced, administered, secured and governed by all of the terms, conditions
and provisions of the “Credit Documents”, each as the same may be hereafter
modified or amended, consisting of: (i) this Agreement; (ii) separate Notes in
the form of Exhibit F annexed hereto, with one Note being payable to each Lender
in the original principal amount equal to such Lender’s Commitment, such
promissory notes to be in the aggregate original principal amount of Sixty
Million Dollars ($60,000,000.00); (iii) the Direction Letters, if any; (iv) the
Fee Letter; (v) the Environmental

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Indemnity; (vi) the Security Documents; (vii) the Guaranty; and (viii) any and
all other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto executed to further evidence or secure
the Facility.
     3.2 Collateral. (a) Administrative Agent and Lenders shall have a first
priority, perfected security interest in the Collateral at Closing and at all
times prior to Maturity, except as otherwise provided in this Agreement or the
Pledge Agreement. With respect to each of the Portfolio Investments in a
Portfolio Investment Entity listed on Exhibit K, Borrower will pledge to
Administrative Agent and Lenders certain of Borrower’s right, title and interest
in and to each of the Portfolio Investments, as the same may be modified from
time to time in accordance with this Section 3.2. With respect to such pledges,
Borrower will execute and deliver on the Closing Date (i) the Pledge Agreement,
(ii) UCC-1 financing statements with respect to such pledges, and (iii) any
additional documents or instruments reasonably requested by Administrative Agent
on behalf of Lenders in order to evidence or perfect such pledges, with all such
documents to be in form and substance acceptable to Administrative Agent on
behalf of Lenders.
     (b) Borrower hereby authorizes Administrative Agent at any time and from
time to time to file UCC financing statements, continuation statements, and
amendments thereto describing the Collateral without the signature of Borrower.
Administrative Agent shall give Borrower prompt written notice of any such
filing.
     (c) As provided in Section 7.2.8, Borrower shall give written notice to
Administrative Agent prior to the making of any Portfolio Disposition by
Borrower or any of its Subsidiaries, which notice shall be accompanied by a
written certification by Borrower in the form of Exhibit L attached hereto
stating that Borrower will be in full compliance with all covenants contained
herein or in the other Credit Documents, including without limitation the
covenants set forth in Section 7.3, after giving effect to the proposed
Portfolio Disposition, and which notice shall be accompanied by evidence of such
compliance satisfactory to Administrative Agent on behalf of Lenders. Borrower
shall give written notice to Administrative Agent upon its acquisition of any
new Portfolio Investment.
     (d) Administrative Agent shall be authorized and obligated to release,
within three (3) Business Days after receipt of a written request from Borrower,
any of the Portfolio Investments from any security interests, liens or other
encumbrances under the Pledge Agreement or any other Security Document that is
the subject of a proposed Portfolio Disposition in compliance with the
conditions set forth in this Section 3.2 (each, a “Permitted Portfolio
Disposition”). Within three (3) Business Days after receipt of a written request
from Borrower, Administrative Agent on behalf of Lenders will execute and
deliver such instruments as are reasonably required to confirm the release of
the security interest, lien and/or other encumbrance of Administrative Agent and
Lenders with respect to such Portfolio Investment (which release may be
concurrent with and conditioned on the consummation of such Permitted Portfolio
Disposition) (i) that is the subject of a Permitted Portfolio Disposition or
(ii) with respect to which Administrative Agent on behalf of Lenders has
otherwise released its security interest, including UCC-3 partial releases.
     (e) Each new Portfolio Investment made by Borrower after the date hereof
shall automatically become a part of the Collateral, and, upon any such addition
to the Collateral,

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Borrower shall execute and deliver such Security Documents as Administrative
Agent may reasonably require to with respect to the new Collateral; provided,
however, that, if the terms of any third party financing proposed to be obtained
in connection with the acquisition of a Portfolio Asset relating to a Portfolio
Investment would prohibit the Borrower from pledging in favor of Administrative
Agent and the Lenders 100% of a Portfolio Investment, then Borrower shall be
required to pledge only that portion of such Portfolio Investment permitted to
be pledged under such financing (and, in each case, to the greatest extent so
permitted); provided further however, that in no event shall Borrower pledge
less than 49% of any such Portfolio Investment without the consent of
Administrative Agent, such consent not to be unreasonably withheld or delayed.
     (f) Subject to Section 3.2(g) below, and provided that Borrower is in
compliance with the financial covenants contained in Section 7.3 of this
Agreement and an Event of Default does not exist, and provided that Borrower
complies with the provisions of Section 7.2.6 of this Agreement with respect to
any proposed Portfolio Disposition, Borrower may make and may cause its
Subsidiaries to make Portfolio Dispositions.
     (g) If Borrower’s Consolidated Leverage Ratio exceeds seventy percent (70%)
after giving effect to such Portfolio Disposition, the outstanding aggregate
principal amount of the Loans shall be reduced by the amount necessary to
maintain compliance with Borrower’s covenants contained herein or in the other
Credit Documents, including without limitation the covenants set forth in
Section 7.3. The foregoing reductions in the outstanding aggregate principal
amount of the Loans are collectively referred to herein as a “Required
Reduction.” Any Required Reduction shall not reduce the Maximum Loan Amount. Any
Required Reduction shall be calculated based on the Pro Forma Reduction
Calculation attached hereto as Exhibit L. The Total Asset Value of any Portfolio
Investment used for the purpose of making the calculation of the Required
Reduction under this Section 3.2(g) shall be based on the most recent Appraised
Asset Values of the Portfolio Assets associated with such Portfolio Investment.
     (h) Notwithstanding the foregoing or anything contained herein to the
contrary, (A) after an Event of Default and while such Event of Default is
continuing, (B) if an Event of Default is created as a result of a Portfolio
Disposition, or (C) if a Portfolio Disposition results in Borrower not being in
compliance with any of Borrower’s covenants set forth in Section 7.3 (other than
the Consolidated Leverage Ratio requirement set forth in Section 7.3(a)), then
one hundred percent (100%) of Net Sales Proceeds (or so much of such Net Sales
Proceeds as is required to cure such Event of Default or to bring Borrower into
compliance with Borrower’s covenants set forth in Section 7.3, as applicable)
shall be applied to reduce the outstanding aggregate principal amount of the
Loans and there shall be a corresponding Required Reduction; provided, however,
if the Consolidated Leverage Ratio is greater than seventy percent (70%) and
there is no Event of Default (including as a result of a Portfolio Disposition)
and Borrower is otherwise in compliance with Borrower’s covenants set forth in
Section 7.3, the provisions of Section 3.2(g) shall apply to Portfolio
Dispositions and Borrower shall not be required to apply Net Sales Proceeds to
reduce the outstanding aggregate principal amount of the Loans as provided in
this Section 3.2(h).
     (i) All Required Reductions made by Borrower pursuant to Sections 3.2(g)
and 3.2(h) shall constitute “Mandatory Prepayments” subject to the provisions of
Section 2.3.10(b).

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     3.3 Borrower Escrow Account(i) Borrower Escrow Account. Borrower shall
place funds in a Borrower Escrow Account as required by this Section 3.3. The
Borrower Escrow Account shall serve as additional collateral for the Facility
and the Borrower Obligations.
     (ii) If an Event of Default occurs and is continuing, then, except as
provided in Section 7.9, Borrower shall deposit into the Borrower Escrow Account
all Net Cash Flow for the immediately preceding fiscal quarter that is Available
for Distribution to Borrower derived from any Portfolio Investment until such
time that Borrower is in compliance with all covenants of Borrower hereunder,
including without limitation, the covenants under Section 7.3. Deposits into the
Borrower Escrow Account shall be made within fifteen (15) days after the end of
the fiscal quarter for which such deposit is due and, to the extent sufficient
information is not available to Borrower to make a final determination of the
amounts due on or before such fifteenth (15th) day, a final payment (if
necessary) shall be made on or before the forty-fifth (45th) day following the
end of such quarter.
     (iii) If Borrower is required to deposit funds into the Borrower Escrow
Account and thereafter Borrower is able to provide written evidence reasonably
satisfactory to Administrative Agent on behalf of Lenders that no Event of
Default currently exists, then (a) so long as no Default or Event of Default
shall have occurred and be continuing, the balance remaining in the Borrower
Escrow Account (including any income earned on amounts deposited in the Borrower
Escrow Account), if any, shall be disbursed to Borrower or as Borrower shall
otherwise direct Administrative Agent in writing. The written evidence of such
compliance referred to in the preceding sentence will be deemed satisfactory and
approved by the Administrative Agent on behalf of Lenders unless written notice
outlining the reason for disapproval is received by Borrower from the
Administrative Agent within ten (10) Business Days of receipt by the
Administrative Agent of first notice of such compliance.
     (iv) Administrative Agent may, during the existence and continuation of an
Event of Default and on the Maturity Date, and, at the request of Borrower on
any Interest Payment Date, Administrative Agent will apply all amounts existing
in the Borrower Escrow Account (including any income earned on amounts deposited
in the Borrower Escrow Account) as follows: (i) first, to accrued but unpaid
interest of the Loans outstanding, and (ii) second, to a reduction of the
principal amount on the Loans outstanding and all other amounts due and owing
under this Agreement; provided that, with respect to any amounts remaining in
the Borrower Escrow Account subsequent to any Interest Payment Date, such
amounts may be applied by Administrative Agent only to the principal balance of
the Loans, and not to any future interest payments (until the next subsequent
Interest Payment Date). After the principal amount of the Loans, all accrued and
unpaid interest and all other amounts owing under the Credit Documents have been
paid in full and all commitments under the Credit Documents have been
terminated, the Borrower Escrow Account shall be closed and the balance
remaining (including any income earned thereon), if any, shall be returned to
Borrower.
     If Borrower is required to deposit funds into the Borrower Escrow Account
for two consecutive fiscal quarters, then Administrative Agent shall have the
right on and after the date that the second quarterly deposit is due to deliver
the Direction Letters to the addressees named thereon. Administrative Agent
shall not deliver the Direction Letters prior to such date.

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4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES. The Borrower has the
power and authority to enter into this Agreement and the other Credit Documents
and to perform its obligations under and consummate the transactions
contemplated by such Credit Documents and has by proper action duly authorized
the execution and delivery of the Credit Documents. Administrative Agent and
each of the Lenders is authorized to rely upon the continuing authority of the
persons, officers, signatories or agents hereafter designated (“Authorized
Representatives”) to bind Borrower with respect to all matters pertaining to the
Facility and the Credit Documents including, but not limited to, the selection
of interest rates. Such authorization may be changed only upon notice to
Administrative Agent accompanied by evidence, reasonably satisfactory to
Administrative Agent, of the authority of the person giving such notice and such
notice shall be effective not sooner than five (5) Business Days following
receipt thereof by Administrative Agent. The present Authorized Representatives
are listed on Exhibit C.
5. CONDITIONS PRECEDENT. The obligation of Administrative Agent and Lenders to
enter into this Agreement and to make the Loan on the Closing Date shall be
subject to satisfaction of the following conditions (in form and substance
acceptable to the Lenders):
     5.1 Satisfactory Credit Documents. Each of the Credit Documents shall be
satisfactory in form, content and manner of execution and delivery to
Administrative Agent and Administrative Agent’s counsel.
     5.2 No Material Change. No change shall have occurred in the condition
(financial or otherwise), business, affairs, operations or control of Borrower
or any other member of the Combined Group, the General Partner, or any Portfolio
Investment Entity, which would have a Material Adverse Effect since the date of
Borrower’s financial statements most recently delivered to Administrative Agent.
     5.3 Warranties and Representations Accurate. All warranties and
representations made by or on behalf of Borrower and the General Partner to
Administrative Agent or any Lender shall be true, accurate and complete in all
material respects.
     5.4 Financials and Appraisals. Administrative Agent on behalf of the
Lenders shall have received and approved: (i) consolidated financial statements
of General Partner complying with the standards set forth in Section 7.2, and
(ii) a statement of Appraised Asset Value dated as of a recent date for the
Portfolio Assets, which indicates Borrower’s Pro Rata Share of each Portfolio
Asset.
     5.5 Environmental Compliance and Indemnification Agreements. The Borrower
will execute and deliver a compliance and indemnification agreement with respect
to environmental matters in favor of Administrative Agent and Lenders with
respect to any assets owned directly or indirectly by the Borrower
(“Environmental Indemnity”).
     5.6 Validity and Sufficiency of Security Documents. Each of the Security
Documents and related UCC filings shall have been duly recorded and filed to the
satisfaction of Administrative Agent, and Administrative Agent’s counsel, and
the Security Documents, upon

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the filing and recordation of the UCC filing statements, shall create a
perfected lien on the Collateral.
     5.7 No Other Liens; Taxes and Municipal Charges Current. The Collateral
shall not be subject to any liens or encumbrances other than real estate taxes
and personal property taxes not yet due and payable and other Permitted Liens,
unless such liens or encumbrances have been approved by Administrative Agent and
Lenders. All real estate taxes, personal property taxes and other municipal
charges relating to any of the Collateral shall be current.
     5.8 Organizational Documents and Entity Agreements. Administrative Agent
shall have received and approved the Partnership Agreement or other
organizational documents of Borrower and of the other members of the Combined
Group and the General Partner, and certificates of good standing and/or legal
existence for such Persons issued as of a recent date by such entity’s state of
organization and each other state where such entity, by the nature of its
business, is required to qualify or register
     5.9 Votes, Consents and Authorizations. Administrative Agent shall have
received and approved certified copies of all partnership, entity and corporate
votes, consents and authorizations as may be reasonably required to evidence
authority for: (i) closing the Facility and the transactions contemplated
hereby; (ii) providing continuing authorization to designated persons to deal in
all respects on behalf of Borrower; and (iii) the execution of all Credit
Documents.
     5.10 Legal and Other Opinions. Administrative Agent shall have received and
approved legal opinion letters from counsel representing Borrower and the
General Partner which meet Administrative Agent’s legal opinion requirements.
     5.11 Due Diligence. Completion and approval of all due diligence deemed
necessary by the Administrative Agent.
     5.12 Fees and Expenses. Payment of all fees and expenses owing to the
Lenders and the Administrative Agent in accordance with the Fee Letter.
     5.13 Guaranty. The Guarantor will execute and deliver to Administrative
Agent, for the benefit of the Lenders, the Guaranty.
     5.14 No Default. There shall not be any Default or Event of Default under
any of the Credit Documents.
     5.15 No Litigation. There shall not be any action, suit, investigation or
proceeding, pending or threatened, in any court or before any arbitrator or
governmental authority, that has a reasonable probability of materially
adversely effecting the ability of the Borrower to perform its obligations under
this Agreement or the other Credit Documents.
     5.16 Compliance with Covenants. The Borrower shall be in compliance with
all covenants contained herein and in the other Credit Documents.

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6. WARRANTIES AND REPRESENTATIONSBorrower warrants and represents to
Administrative Agent and each of the Lenders for the express purpose of inducing
the Lenders to enter into this Agreement, to make the Facility available to the
Borrower, to make the Loan, and to otherwise complete all of the transactions
contemplated hereby, that as of the date of this Agreement, upon the date any
Loan is funded and at all times thereafter until such Loan has been repaid and
all obligations to each of the Lenders have been satisfied as follows:
     6.1 Financial Information.Borrower has heretofore delivered to
Administrative Agent on behalf of the Lenders audited financial statements for
General Partner for the period ended December 31, 2004 and unaudited financial
statements for General Partner for the three months ending March 31, 2005. Such
financial statements were true, accurate and complete in all material respects,
and fairly presented, in all material respects, the financial condition of
General Partner and the Borrower, as of the dates thereof and for the periods
covered thereby, and the same were prepared in accordance with GAAP. Since the
date of the most recent financial statements so delivered, there have occurred
no changes or circumstances which have had or will have a Material Adverse
Effect. All financial statements of General Partner hereafter delivered to
Administrative Agent on behalf of the Lenders shall be true, accurate and
complete in all material respects, and such financial statements shall fairly
present in all material respects the financial condition of General Partner and
the Borrower as of the dates thereof and for the periods covered thereby.
     Borrower has heretofore delivered an operating report to Administrative
Agent on behalf of the Lenders for each Portfolio Asset. Each such operating
report presents, in all material respects, a true, accurate, and complete report
of all material operating expenses and operating revenues of the Portfolio Asset
to which it relates for the period covered by such report. Each such operating
report hereafter delivered to the Administrative Agent on behalf of the Lenders
in respect of any Portfolio Asset shall present, in all material respects, a
true, accurate, and complete report of all material operating expenses and
operating revenues of such Portfolio Asset for the period covered by such
report.
     6.2 No Violations. Neither the execution and delivery of the Credit
Documents by the Borrower, nor the consummation by the Borrower of the
transactions contemplated therein, nor performance of and compliance with the
terms and provisions thereof by the Borrower will (i) violate or conflict with
any provision of the organizational documents or other governance documents of
the Borrower or any other member of the Combined Group, (ii) violate any law,
regulation (including without limitation Regulation U, Regulation X or
Regulation T), order, writ, judgment, injunction, decree or permit applicable to
the Borrower (iii) violate or materially conflict with contractual provisions
of, or cause an event of default under, any indenture, mortgage, deed of trust,
contract or other agreement or instrument to which any member of the Combined
Group is a party or by which any such Person may be bound, or (iv) except for
Liens created by, under or in connection with this Agreement or the other Credit
Documents, result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to the Portfolio Investments of
the Borrower or any interest in a Portfolio Asset held by a member of the
Combined Group.
     6.3 No Litigation. There is no litigation, action, proceeding,
investigation or suit now pending, or to the best of Borrower’s knowledge
threatened, against Borrower, a Portfolio

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Investment Entity, or any other member of the Combined Group which, if adversely
decided, would have a Material Adverse Effect.
     6.4 Compliance With Legal Requirements. The Borrower, any Additional
Pledgor and each other member of the Combined Group is in compliance in all
material respects with all laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not have or would not be
reasonably expected to have a Material Adverse Effect.
     6.5 Use of Proceeds. The proceeds of any Loan shall be used solely for the
purposes described in Section 1.3 above.
     6.6 Entity Matters.
6.6.1 Borrower. Borrower: (a) is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, (b) has
all necessary power pursuant to proper authorization to enable it to enter into
the Credit Documents to which it is a party, (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where the
failure to do so could have a Material Adverse Effect and (d) has the limited
partnership power and authority, and the legal right to conduct the business in
which it is currently engaged.
6.6.2 General Partner. The General Partner (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland,
(b) has all necessary power pursuant to proper authorization to enable it to act
as the general partner of Borrower and to execute and deliver the Credit
Documents to which Borrower is a party on Borrower’s behalf, (c) is duly
qualified to do business in and is in good standing under the laws of each
jurisdiction where the failure to do so could have a Material Adverse Effect,
and (d) has the corporate power and authority, and the legal right, to conduct
the business in which it is currently engaged.
6.6.3 Identity of General Partner. As of the date of this Agreement, the sole
General Partner of Borrower is Hines Real Estate Investment Trust, Inc., a
Maryland corporation.
     6.7 Valid and Binding. Each of the Credit Documents to which it is a party
constitutes the legal, valid and binding obligations of Borrower; and the
Partnership Agreement constitutes the legal, valid and binding obligations of
the parties thereto, in each case enforceable against the relevant Person in
accordance with the respective terms thereof, subject to bankruptcy, insolvency
and similar laws of general application affecting the rights and remedies of
creditors and, with respect to the availability of the remedies of specific
enforcement, subject to the discretion of the court before which any proceeding
therefor may be brought. All required entity actions and proceedings have been
duly taken with respect to Borrower and the General Partner and each Portfolio
Investment Entity, so as to authorize the execution, delivery and performance by
Borrower of the Credit Documents to which it is a party. All consents and
approvals that are

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required in connection with the execution and delivery of this Agreement and the
other Credit Documents have been obtained, including, without limitation,
consents and approvals required under existing mortgage and loan agreements,
organizational agreements, and from governmental authorities.
     6.8 Deferred Compensation and ERISA. Borrower has not established and does
not plan to establish any pension, insurance or other arrangement or plan for
employees covered by Title IV of the Employee Retirement Income Security Act of
1974, as now or hereafter amended (“ERISA”), and no “Reportable Event” as
defined in ERISA has occurred and is now continuing with respect to any Plan.
The granting of the Facility, the performance by Borrower of its obligations
under the Credit Documents to which it is a party and Borrower’s conducting of
its operations do not and will not violate any provisions of ERISA.
     6.9 No Material Change; No Default. Neither Borrower, the General Partner,
any other member of the Combined Group, nor, to the best knowledge of Borrower,
any Portfolio Investment Entity, is in default in any respect under any
contract, lease, agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party which default would have or would
be reasonably expected to have a Material Adverse Effect. No Default or Event of
Default presently exists hereunder or under any other Credit Document to which
Borrower is a party. Borrower, the General Partner, each other member of the
Combined Group and, to the best knowledge of Borrower, each Portfolio Investment
Entity has filed all required federal, state and local tax returns and has paid
all taxes due pursuant to such returns or any assessments against any of them.
As of the Closing Date, no change has occurred with respect to Borrower, the
General Partner, or to the best knowledge of Borrower, any Portfolio Investment
Entity, any Portfolio Asset or any Portfolio Investment, that would reasonably
be expected to have a Material Adverse Effect since March 31, 2005. The
Partnership Agreement, a true and correct copy of which has been provided to the
Administrative Agent, is in full force and effect.
     6.10 No Broker or Finder. Neither Borrower nor anyone on behalf thereof,
has dealt with any broker, finder or other person or entity who or which may be
entitled to a broker’s or finder’s fee, or other compensation, payable by
Administrative Agent or any Lender in connection with the Facility; it being
understood however, that a broker has been engaged by Borrower in connection
with the Facility and other financings which will not result in a fee or
compensation payable by the Administrative Agent or any Lender.
     6.11 Background Information and Certificates. Borrower has delivered to
Administrative Agent accurate and complete copies of all the organizational
documents of the Borrower, the General Partner, any other member of the Combined
Group and each Portfolio Investment Entity. To the best knowledge of the
Borrower, all of the factual information contained or referred to in this
Agreement and in the Exhibits and/or Schedules to this Agreement or the other
Credit Documents, and in the certificates and opinions furnished to
Administrative Agent or any Lender by or on behalf of Borrower in connection
with the Facility, is true and correct in all material respects.
     6.12 Consents. Except to the extent previously obtained, no consent,
approval, authorization or order of, or filing, registration or qualification
with, any court or governmental

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authority or other Person is required in connection with the execution, delivery
or performance of this Agreement or any of the other Credit Documents to which
Borrower is a party, including without limitation, consents and approvals
required under existing mortgage and loan agreements, organizational agreements,
and from governmental authorities.
     6.13 Indebtedness. Except as permitted under Section 7.4, the Borrower does
not have any Indebtedness. All Funded Debt outstanding as of the Closing Date is
accurately reflected on Exhibit B.
     6.14 Government Regulation. The Borrower is not subject to regulation under
the Public Utility Holding Company Act of 1935 or the Federal Power Act, each as
amended. In addition, the Borrower is not (i) an “investment company” registered
or required to be registered under the Investment Company Act of 1940, as
amended, and is not controlled by such a company, or (ii) a “holding company,”
or a “Subsidiary company” of a “holding company,” or an “affiliate” of a
“holding company” or of a “Subsidiary” or a “holding company,” within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
     6.15 Environmental Matters.
     (a) Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
     (i) Except as disclosed on Exhibit J attached hereto and made a part
hereof, neither the Borrower, the General Partner, any other member of the
Combined Group nor, to the knowledge of the Borrower any Portfolio Investment
Entity, has received any written notice of, or inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance, liability
or potential liability regarding Hazardous Materials or compliance with
Environmental Laws with regard to any of the Portfolio Assets nor does the
Borrower have knowledge that any such notice is being threatened.
     (ii) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower, the General Partner, any other member
of the Combined Group, or, to the knowledge of the Borrower, any Portfolio
Investment Entity is or will be named as a responsible party, nor are there any
consent or other decrees, remediation orders, administrative or other orders, or
other similar administrative or judicial requirements outstanding under any
Environmental Law with respect to the Borrower, the General Partner, any other
member of the Combined Group, or, to the knowledge of the Borrower, any
Portfolio Investment Entity or any of the Portfolio Assets.
     (iii) Neither the Borrower, the General Partner, any other member of the
Combined Group, nor, to the knowledge of the Borrower, any Portfolio Investment
Entity, has assumed any liability of any Person under any Environmental Law.
     6.16 Portfolio Assets. Set forth on Exhibit B is a complete and accurate
list of all Portfolio Assets existing as of the Closing Date, together with the
ownership interest (both direct and indirect) of the Borrower therein, and
together with a list of the existing documents evidencing Funded Debt currently
encumbering the same (which sets forth the names of the parties, the dates of
such documents, and the amount of Funded Debt relating to each such

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document) (collectively, the “Funded Debt Documents”). Except for mandatory
prepayments of Funded Debt upon the sale of Portfolio Assets, upon the maturity
(whether at the stated maturity date or upon acceleration) of any Funded Debt or
in connection with a default continuing beyond any applicable notice and/or cure
period under the Funded Debt Documents, there are no restrictions or limitations
(whether by contract or otherwise) on payments of dividends, returns of capital
or any other forms of distributions from any Portfolio Investment Entity or any
member of the Combined Group to the Borrower or any other member of the Combined
Group.
     6.17 Full Disclosure. All information heretofore furnished by or on behalf
of the Borrower to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is stated (except to the
extent any such information is subsequently supplemented or corrected by
information provided by or on behalf of Borrower); provided, however, that where
such information is the work product of a third party that is unrelated to
Borrower, such information is and will be, to the best of Borrower’s knowledge,
true and accurate in all material respects on the date as of which information
is stated. To the best of its knowledge, the Borrower has disclosed to the
Lenders in writing any and all facts which have had or might have in the future
a Material Adverse Effect.
     6.18 Subsidiaries. Borrower has no Subsidiaries other than those listed on
Exhibit B and no Lien other than Permitted Liens exists on Borrower’s interests
in its Subsidiaries.
     6.19 No Material Adverse Contracts, Etc. Neither the Borrower, the General
Partner, any other member of the Combined Group nor, to the knowledge of the
Borrower, any Portfolio Investment Entity, is subject to any charter, corporate,
partnership or other legal restriction, or any judgment, decree, order, rule or
regulation, or party to any contract or agreement that has had or could
reasonably be expected in the future to have a Material Adverse Effect.
     6.20 Compliance With Other Instruments, Laws, Etc.. Neither the Borrower,
the General Partner, any other member of the Combined Group nor, to the
knowledge of the Borrower, any Portfolio Investment Entity, is in violation of
any provision of its partnership agreement, charter or other organizational
document, as the case may be, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could reasonably be expected to result, individually or
in the aggregate, in a Material Adverse Effect.
     6.21 Solvency. Each member of the Combined Group, the General Partner, and
to the knowledge of the Borrower, each Portfolio Investment Entity, is Solvent.
     6.22 REIT Status. The General Partner was organized and has operated in
conformity with the requirements for qualification and taxation as a REIT for
each of its taxable years beginning with the year ended December 31, 2004, and
its current or anticipated organization and method of operation will enable it
to continue to meet the requirements for qualification and taxation as a REIT.

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     6.23 Patriot Act. Neither Borrower, the General Partner, any other member
of the Combined Group nor, to the knowledge of the Borrower, any Portfolio
Investment Entity, is or shall become a person with whom Lender is restricted
from doing business under regulations of the Office of Foreign Asset Control
(“OFAC”) of the Department of the Treasury of the United States of America
(including, without limitation, those Persons named on OFAC’s Specially
Designated and Blocked Persons list) or under Executive Order 13324 — Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism, or any similar Executive Order or other similar
Legal Requirement, and neither Borrower, the General Partner, any other member
of the Combined Group nor, to the knowledge of the Borrower, any Portfolio
Investment Entity is knowingly engaged or shall knowingly engage in any dealings
or transactions or otherwise be associated with such persons.
7. COVENANTS.
     Borrower covenants and agrees that from the date hereof and so long as any
indebtedness remains unpaid hereunder, or any of the Loans or other obligations
remain outstanding, as follows:
     7.1 Notices. Borrower shall, with reasonable promptness, but in all events
within ten (10) days after it has actual knowledge thereof, notify
Administrative Agent in writing of the occurrence of any act, event or condition
which Borrower, in its good faith determination, believes constitutes a Default
or Event of Default under any of the Credit Documents, specifying the nature and
existence thereof. Such notification shall include a written statement of any
remedial or curative actions which Borrower proposes to undertake to cure or
remedy such Default or Event of Default.
     7.2 Financial Statements and Reports. Borrower shall furnish or cause to be
furnished to Administrative Agent from time to time, the following financial
statements and reports and other information, all in form, manner of
presentation and substance reasonably acceptable to Administrative Agent:
7.2.1 Annual Statements. Within ninety (90) days following the end of each
fiscal year, a consolidated balance sheet, an income statement, a statement of
changes in shareholders’ equity and a statement of cash flows of General Partner
as of the end of such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited by
one of the following accounting firms: Deloitte & Touche LLP, Ernst & Young LLP,
KPMG or PricewaterhouseCoopers (or by another independent certified public
accounting firm of recognized national standing reasonably acceptable to the
Administrative Agent), and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP and shall not be
limited as to the scope of the audit or qualified as to the status of General
Partner or the Borrower as a going concern or otherwise;
7.2.2 Periodic Statements. Within forty-five (45) days following the end of each
fiscal quarter of the Borrower (other than the fourth fiscal quarter, in which

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case ninety (90) days after the end thereof) an unaudited consolidated balance
sheet, income statement and statement of changes in shareholders’ equity of the
General Partner as of the end of such fiscal quarter, in each case setting forth
in comparative form consolidated figures for the corresponding period of the
preceding fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Administrative Agent
(provided, however, Administrative Agent hereby confirms that the form and
detail of such financial information, as well as any financial information
submitted by Borrower pursuant to Section 7.2.1 above, shall be deemed to be
acceptable if it is in substantially the same form and detail as the financial
information submitted by Borrower to Administrative Agent prior to the date
hereof), and accompanied by a certificate of an authorized officer of Borrower
to the effect that such quarterly financial statements fairly present in all
material respects the financial condition of the General Partner and have been
prepared in accordance with GAAP, subject to changes resulting from audit and
normal year-end adjustments.
7.2.3 Data Requested. Within a reasonable period of time after a request from
Administrative Agent, such other financial data or information as Administrative
Agent may reasonably request with respect to any of the Portfolio Assets or
members of the Combined Group including, without limitation, operating
statements, budgets, mortgage information, rent rolls, and lease
status/expiration reports.
7.2.4 Tax Returns. Within a reasonable period of time after a request from
Administrative Agent, complete copies of all federal and state tax returns and
supporting schedules of Borrower, and, to the extent applicable each other
member of the Combined Group.
7.2.5 Pro Forma. Calculation of Certain Financial Covenants. Within forty-five
(45) days after the end of each fiscal quarter Borrower shall deliver a pro
forma calculation of the financial covenants contained in Section 7.3.
7.2.6 Officer’s Certificate. (A) At the time of delivery of the financial
statements provided for in Sections 7.2.1 and 7.2.2 above, (B) at least fourteen
(14) days prior to any sale, disposition or other transfer of a Portfolio Asset
(or any material part thereof, other than the leasing of space in Portfolio
Assets to tenants in the ordinary course of business), and (C) at the time
Borrower requests a new Loan hereunder or repays any principal amount
outstanding under the Facility, Borrower shall deliver a certificate of an
authorized officer of Borrower substantially in the form of Exhibit G,
(i) demonstrating compliance with the financial covenants contained in
Section 7.3 by calculation thereof as of the end of each such fiscal period or
after giving effect to such transfer, borrowing or repayment (together with such
supporting documentation as Administrative Agent may reasonably require),
(ii) calculating the Applicable Margin as of the end of each such fiscal period
or after giving effect to such transfer, borrowing or repayment, and
(iii) stating that no Default or Event of Default exists or will exist

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as a result of such transfer, borrowing or repayment, or if any Default or Event
of Default does exist, specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto. In the event that any such
certificate indicates a violation of any of the financial covenants in
Section 7.3, then Borrower shall, as applicable, contemporaneously with the
delivery of any such certificate make a principal payment by an amount necessary
to achieve compliance with such financial covenants or if caused by a transfer
of a Portfolio Asset make such a principal payment contemporaneously with the
closing of such transfer.
7.2.7 Information to Owners. To the extent not otherwise provided hereunder,
promptly upon the mailing thereof to the owners in Borrower generally, copies of
all financial statements and reports so mailed.
7.2.8 Portfolio Investments. As soon as available, and in any event within sixty
(60) days after the close of each fiscal quarter of Borrower, a report in a form
reasonably satisfactory to Administrative Agent describing (i) each Portfolio
Investment made during such fiscal quarter and (ii) any transfer of any
Portfolio Investment during such fiscal quarter to another legal entity in which
Borrower has acquired a direct or indirect interest. Such report shall be
accompanied by a Direction Letter for each such Portfolio Investment made in a
Portfolio Investment Entity that is not controlled by Borrower or affiliates of
Borrower and shall include a description of any such Portfolio Investment, and
such other information as reasonably requested by Administrative Agent. Except
as provided in Section 3.2(e), each such Portfolio Investment shall, subject to
any Permitted Liens, automatically become a part of the Collateral hereunder and
shall be subject to the terms and provisions of this Agreement and any other
applicable Credit Document, including without limitation Section 3.2 of this
Agreement.
7.2.9 Auditor’s Reports. Promptly upon receipt thereof, a copy of any other
report or “management letter” submitted by independent accountants to the
Borrower in connection with any annual, interim or special audit of the books of
the Borrower.
7.2.10 Environmental Reports. Promptly upon transmission thereof by Borrower or
any other member of the Combined Group, copies of any filings and registrations
with, and reports to, the United States Environmental Protection Agency, or any
state or local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters pertaining to any
of the Assets.
7.2.11 Notice of Default or Litigation. Upon the Borrower obtaining knowledge
thereof, it will give notice to the Administrative Agent promptly, but in any
event within five (5) Business Days of obtaining such knowledge, of the
occurrence of any of the following with respect to the Borrower, the General
Partner, any

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Portfolio Investment Entity or any other member of the Combined Group: (i) any
development in the business or affairs of any such Person that has resulted in,
or that Borrower reasonably believes may result in, a Material Adverse Effect,
(ii) the pendency or commencement of any litigation, arbitration or governmental
proceeding against any such Person in which damages are sought or environmental
remediation demanded which could reasonably be expected to be adversely
determined and which, if adversely determined, could be expected to have a
Material Adverse Effect, (iii) any levy of an attachment, execution or other
process against its assets which could reasonably be expected to have a Material
Adverse Effect, (iv) the receipt of any notice alleging the occurrence of an
event or condition which shall constitute a default or event of default under
any other agreement for borrowed money, or (v) the institution of any
proceedings against, or the receipt of written notice of potential liability or
responsibility for any violation, or alleged violation which could reasonably be
expected to be adversely determined, of any federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the violation of
which could reasonably be expected to have a Material Adverse Effect.
7.2.12 Reserved.7.2.13 Debt. (i) At least ten (10) Business Days prior to the
incurrence thereof, or (ii) in the case of any Portfolio Asset held by a Person
other than a member of the Combined Group, within five (5) Business Days after
obtaining knowledge of the incurrence thereof if not within the knowledge of the
Borrower prior to such incurrence, notice to Administrative Agent specifying the
amount and nature of any additional (i.e., other than the Funded Debt and the
Funded Debt Documents existing as of the date hereof and reflected on Exhibit B
hereto) Indebtedness, encumbrances, mortgages or other security interests (other
than Permitted Liens) affecting any of the Portfolio Assets or any material
property or Investment of Borrower or any other member of the Combined Group.
7.2.14 Other Information. With reasonable promptness upon any such request, such
other information regarding the business, properties or financial condition of
the Borrower or any other member of the Combined Group as the Administrative
Agent may reasonably request.
     7.3 Financial Covenants.
     (a) Consolidated Leverage Ratio. The Borrower will not permit Funded Debt
(including, without limitation, the outstanding balance under the subject
Facility) to exceed seventy percent (70%) of the Total Asset Value. This
covenant shall be tested quarterly at the end of each calendar quarter, at the
time each new Loan is made, and in connection with the delivery of an officer’s
certificate pursuant to Section 7.2.6.
     (b) Minimum Interest Coverage Ratio. The ratio of the EBITDA to the
Interest Expense shall be greater than 1.65 to 1.00. This covenant shall be
tested quarterly at the end of each calendar quarter, at the time of each Loan,
and in connection with the delivery of an officer’s certificate pursuant to
Section 7.2.6, in each case with respect to the prior two (2) fiscal

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quarters most recently ended, annualized; provided that pro forma financial
information shall be provided for each fiscal quarter for which actual results
are not then available.
     (c) Minimum Tangible Net Worth. Borrower shall maintain a Tangible Net
Worth in excess of Eighty Million Dollars ($80,000,000.00) plus seventy five
percent (75%) of the proceeds of any equity offerings, contributions or sales of
treasury stock received by the Borrower after the Closing Date. This covenant
shall be tested quarterly at the end of each calendar quarter, at the time of
each Loan, and in connection with the delivery of an officer’s certificate
pursuant to Section 7.2.6.
     (d) Minimum Fixed Charge Covenant. The ratio of EBITDA to Fixed Charge
shall be greater than 1.50 to 1.0. This covenant shall be tested quarterly at
the end of each calendar quarter, at the time of each Loan, and in connection
with the delivery of an officer’s certificate pursuant to Section 7.2.6, in each
case with respect to the prior two (2) fiscal quarters most recently ended,
annualized; provided that pro forma financial information shall be provided for
each fiscal quarter for which actual results are not then available.
     7.4 Indebtedness and Restrictions on Liens, Transfers and Additional Debt.
The Borrower shall not, without the prior written consent of the Administrative
Agent and the Required Lenders (which may be withheld in their sole discretion):
     (a) incur any Indebtedness (other than the Indebtedness arising under this
Agreement and the other Credit Documents) that is recourse to Borrower
(excepting customary environmental and other indemnification obligations in
respect of Indebtedness of Persons in which Borrower has an interest which is
not otherwise recourse to Borrower);
     (b) provide any completion or other guarantees either directly or
indirectly (including, without limitation, through a joint venture) in excess of
$5,000,000.00 in the aggregate; and
     (c) [Reserved]
     (d) further encumber the Portfolio Investments; provided that the foregoing
shall not limit the right of Borrower to cause the refinancing of any Funded
Debt on such terms and conditions as Borrower may direct (including the granting
of liens on Portfolio Investments and the granting of direct and indirect
interests therein, or Borrower’s becoming subject to an agreement prohibiting or
otherwise restricting the creation of liens on Portfolio Investments) so long as
such refinancing does not cause the violation of any of the covenants set forth
in Section 7.3 of this Agreement. In connection with any such refinancing,
Borrower covenants to use commercially reasonable efforts to maintain in full
force and effect all existing pledges and assignments of economic interests
granted with respect to Borrower’s interests in Portfolio Investments by
Borrower pursuant to this Agreement and the other Credit Documents to which it
is a party. In the event such refinancing requires the release of Lenders’
security interests in all or part of any Portfolio Investment that is the
subject of the refinancing

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permitted by this Section 7.4(d), then Administrative Agent is authorized and
shall be obligated to release such Portfolio Investment from all pledges thereof
and security interests therein created by the Credit Documents; provided however
that the Administrative Agent may refuse to release any more than 51% of any
such Portfolio Investment from any such pledge or security interest, unless
Administrative Agent has given its consent to such refinancing, such consent not
to be unreasonably withheld or delayed. If such refinancing will result in
Borrower’s noncompliance with the covenants set forth in Section 7.3 of this
Agreement, the outstanding aggregate principal amount of the Loans shall be
reduced by the amount necessary to maintain compliance with Borrower’s covenants
contained in Section 7.3. Within three (3) Business Days after receipt of a
written request from Borrower and provided Borrower has satisfied the foregoing
reduction requirement, if applicable, Administrative Agent on behalf of Lenders
shall execute such releases of Lenders’ security interests in the Portfolio
Investments that are the subject of a refinancing permitted by this
Section 7.4(d) as Borrower reasonably requests in connection with such
refinancing .
       (e) Except as specifically set forth in Section 7.4(d) and Section 7.5
which provide instances in which Administrative Agent’s consent is required,
nothing in this Agreement or any other Credit Document shall, and Borrower is
hereby specifically permitted to and to permit or cause any Subsidiary or
Portfolio Investment Entity to, mortgage, grant securities interests in, and
otherwise encumber any Portfolio Asset and the direct and indirect interests of
any Portfolio Entity in any Portfolio Asset.
     7.5 Liens/Negative Pledges. Except as permitted in Section 7.4(d) hereof,
the Borrower will not either (i) contract, create, incur, assume or permit to
exist any additional Lien (other than Permitted Liens) with respect to any of
the Portfolio Investments, whether now owned or hereafter acquired, or
(ii) enter into, assume or become subject to any agreement (other than this
Agreement, the other Credit Documents and the Funded Debt Documents listed and
described on Exhibit B) (A) prohibiting or otherwise restricting the creation or
assumption of any Lien upon any of the Portfolio Investments or (B) requiring
the Borrower to grant a Lien to a Person in the event Borrower grants a Lien on
a Portfolio Investment to another Person.
     7.6 Nature of Business. The Borrower will not alter in a material way the
character or conduct of its business from that conducted as of the Closing Date
which is and shall be limited to the business permitted by the Partnership
Agreement as of the Closing Date; provided, however, this Section 7.6 shall not
be construed to prevent the Borrower from making procedural changes in the
manner in which Borrower conducts its ordinary business operations.
7.7 Limitations on Certain Transactions
     (a) Borrower shall not dissolve, terminate or liquidate, nor merge or
consolidate with any other Person; and
(b) [Reserved]

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     (c) Borrower will not become party to, nor will Borrower permit any other
member of the Combined Group to become a party to, any document, agreement, or
instrument or subject to any other obligation or any charter or corporate or
partnership restriction, as the case may be, from and after the date hereof,
which individually or in the aggregate, would have a Material Adverse Effect.
     7.8 Investments. Borrower shall not make any Investment which is not a
Permitted Investment.
     7.9 Dividends and Distributions. So long as no Event of Default has
occurred and is continuing or would be directly or indirectly caused as a result
thereof, the Borrower may declare and make any dividends or distributions as
permitted under the Partnership Agreement; provided, however, that the Borrower
may while an Event of Default is continuing make distributions or dividends but
only to the extent (after taking into account all available funds of the
Borrower from all other sources) required in order to enable the General Partner
to continue to qualify as a REIT.
     7.10 Transactions with Portfolio Investments. Borrower will not, nor will
it permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any partner or any employee of any member of the Combined
Group or any Portfolio Investment Entity other than on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
comparable arm’s length transaction with a Person other than any partner,
employee or Portfolio Investment Entity, unless such transaction or series of
transactions, would not or could not reasonably be expected to have, in the
aggregate, a Material Adverse Effect, or otherwise be materially detrimental to
the economic interests of the Combined Group taken as a whole.
     7.11 Amendments. To the extent that any amendment, modification,
supplement, waiver or termination of any provisions of the Partnership
Agreement, or other governing or organizational document of Borrower or any
other member of the Combined Group would permit proceeds of the Loans to be used
in a manner inconsistent with such governing or organizational document in
effect at the Closing Date, the Borrower agrees that it shall not, and shall not
permit any other member of the Combined Group to, apply proceeds of the Loans in
a manner inconsistent with what was permitted under the governing or
organizational documents in effect on the Closing Date.
     7.12 ERISA. The Borrower will not establish any Plan.
     7.13 Place for Records: Inspection. Borrower shall maintain all of its
business records at the address specified at the beginning of this Agreement.
Upon reasonable prior notice and at reasonable times during normal business
hours, Administrative Agent shall have the right (through such agents or
consultants as Administrative Agent may designate) to make copies of and
abstracts from Borrower’s books of account, correspondence and other records and
to discuss its financial and other affairs with any of its investors and any
accountants hired by Borrower as well as to visit and inspect the Assets, it
being agreed that Administrative Agent and each of the Lenders shall use
reasonable efforts to not divulge confidential information obtained from such
examination to others except in connection with Legal Requirements and in
connection with administering the Facility, enforcing its rights and remedies
under the Credit

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Documents and in the conduct, operation and regulation of its banking and
lending business (which may include, without limitation, the transfer of the
Facility or of participation interests therein provided that any such transferee
or participant agrees to maintain the confidentiality thereof as required by
this Agreement). Any assignee or transferee of the Facility or any holder of a
participation interest in the Facility shall be entitled to deal with such
information in the same manner and in connection with any subsequent transfer of
its interest in the Facility or of further participation interests therein.
     7.14 Costs and Expenses. Borrower shall pay all costs and expenses
(excluding salaries or wages of officers, directors and employees of
Administrative Agent or any Lender and overhead expenses charged by or allocated
to Administrative Agent or any Lender) reasonably incurred by Administrative
Agent in connection with the implementation of the Facility and the enforcement
of Administrative Agent’s and Lenders’ rights under the Credit Documents,
including, without limitation, reasonable third party costs and expenses,
including reasonable legal fees and disbursements, appraisal fees (in accordance
with, and subject to the terms of, this Agreement), inspection fees, plan review
fees, travel costs, fees and out-of-pocket costs of independent engineers and
consultants. Borrower’s obligations to pay such costs and expenses shall
include, without limitation, all reasonable attorneys’ fees and other costs and
expenses reasonably incurred for preparing and conducting litigation or dispute
resolution arising from any breach by Borrower of any covenant, warranty,
representation or agreement under any Credit Document to which a member of the
Combined Group is a party.
     7.15 Compliance with Legal Requirements. Borrower shall comply, and shall
cause each other member of the Combined Group to comply, in all material
respects with all Legal Requirements. In furtherance of the foregoing and not in
limitation thereof, Borrower hereby agrees to provide the Lender with any
additional information that the Lender reasonably requests from time to time in
order to ensure compliance by Borrower with all applicable Anti-Money Laundering
Laws. As used herein, the term “Anti-Money Laundering Laws” shall mean the USA
Patriot Act of 2001, the Bank Secrecy Act, and Executive Order 13324 – Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism, and any similar Legal Requirements..
     7.16 MAI Appraisals. Promptly upon receipt thereof, Borrower shall deliver
to Administrative Agent each appraisal of any of the Portfolio Assets available
to Borrower. During the existence and continuation of an Event of Default, if
the most recent MAI Appraisal for any Portfolio Asset is older than one
(1) year, then Borrower shall upon Administrative Agent’s request therefor
promptly use its best efforts to obtain a current MAI Appraisal for such
Portfolio Asset at Borrower’s sole cost and expense. Administrative Agent may
require Borrower to use its best efforts to obtain updated MAI Appraisals for
Portfolio Assets which Borrower has previously delivered MAI Appraisals to
Administrative Agent, at Borrower’s sole cost and expense , but if an updated
MAI Appraisal is requested for any Portfolio Asset for which an MAI Appraisal is
available that is less than one (1) year old, the Administrative Agent and the
Lenders shall pay the costs of such requested appraisal.
     7.17 Title to Properties. The Borrower and each other member of the
Combined Group has good title to all of its respective properties, assets and
rights of every name and nature purported to be owned by it.

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     7.18 Insurance. Borrower will, and will cause the other members of the
Combined Group to, maintain with respect to their respective properties, with
financially sound and reputable insurers, insurance with respect to such
properties and its business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent.
     7.19 Taxes. The Borrower will, and will cause each of the other members of
the Combined Group to, pay or cause to be paid taxes, assessments and other
governmental charges payable by it or as to such Person’s property and file all
returns and reports relating thereto before the same become delinquent
including, without limitation, upon the income or profits therefrom of any such
Person. Promptly upon request by the Administrative Agent, the Borrower will
provide evidence of the payment of such taxes, assessments and other
governmental charges in the form of receipted tax bills or other form reasonably
acceptable to the Administrative Agent, or evidence of the existence of
applicable contests as permitted herein.
     7.20 Compliance with Contracts, Licenses, and Permits. The Borrower will
comply with, and will cause each other member of the Combined Group to comply
with (a) the provisions of its partnership agreement or corporate charter and
other organizational documents, as applicable, (b) all material agreements and
instruments to which it is a party or by which it or any of its properties may
be bound, and (c) all applicable decrees, orders, and judgments, if the failure
to comply therewith will, either individually or in the aggregate, result in a
Material Adverse Effect.
     7.21 Replacement Documentation. Upon receipt of an affidavit of an officer
of Administrative Agent or any Lender as to the loss, theft, destruction or
mutilation of a Note or any other Credit Document, Borrower will issue, in lieu
thereof, a replacement Note or other Credit Document in the same principal
amount thereof and otherwise of like tenor.
     7.22 Perfected LP Interest Covenants. Borrower shall at all times comply
with the following covenants with respect to each of the Perfected LP Interests:
(i) Borrower shall have full right, title and interest to each Perfected LP
Interest, subject to Permitted Liens and such other exceptions set forth herein
or in the Pledge Agreement or other Credit Documents; (ii) Borrower shall not
encumber any Perfected LP Interest except as permitted hereunder (including as
permitted by Section 7.4(d)) or under any Security Document; (iii) Borrower
shall comply with all applicable Legal Requirements with respect to each
Perfected LP Interest; (iv) Borrower shall promptly deliver to Administrative
Agent copies of all notices given or received with respect to each Perfected LP
Interest (other than routine correspondence); and (v) Borrower shall comply with
all covenants contained in the Security Documents that are in effect with
respect to each Perfected LP Interest.
     7.23 Existence of the Borrower; Maintenance of REIT Status. The Borrower
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence as a Delaware limited partnership. Borrower will
do all things commercially reasonable and consistent with the Partnership
Agreement, to enable the General Partner to at all times maintain the General
Partner’s status as a REIT and not take any action which could lead to the
General Partner’s disqualification as a REIT.

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     7.24 Refinance of California Property. Borrower shall apply the proceeds
received by it from any mortgage or other financing of the California Property
(other than Loans under the Facility) to the reduction of the outstanding
principal balance of the Loans.
8. SPECIAL PROVISIONS.
     8.1 Right to Contest.
8.1.1 Taxes and Claims by Third Parties. Notwithstanding anything in this
Agreement to the contrary, it is agreed that any tax, assessment, charge, levy,
claim or obligation to a third party (expressly excluding an obligation to make
payments to the Lenders created under the Credit Documents) need not be paid
while the validity or amount thereof shall be contested currently, diligently
and in good faith by appropriate proceedings and if Borrower or the other
relevant member of the Combined Group shall have adequate unencumbered (except
in favor of Administrative Agent, on behalf of the Lenders or under the Funded
Debt Documents, as applicable) cash reserves with respect thereto and provided
that Borrower or the other relevant member of the Combined Group shall pay all
taxes, assessments, charges, levies or obligations immediately upon the
commencement of proceedings to enforce any lien which may have attached as
security therefor, unless such proceeding is stayed by proper court order
pending the outcome of such contest.
8.1.2 Legal Requirements. Any member of the Combined Group may contest any
claim, demand, levy or assessment under any Legal Requirements by any person or
entity if: (i) the contest is based upon a material question of law or fact
raised by such Person in good faith; (ii) the contest is properly commenced and
thereafter diligently pursued; (iii) the contest will not materially impair the
ability to ultimately comply with the contested Legal Requirement should the
contest not be successful; (iv) Borrower demonstrates to Administrative Agent’s
reasonable satisfaction that such Person has the financial capability to
undertake and pay for such contest and any corrective or remedial action then or
thereafter reasonably likely to be necessary; (v) there is no reason to believe
that the contest will not be resolved prior to the Maturity Date; and (vi) no
Default or Event of Default exists.
     8.2 Borrower Fully Liable. Borrower shall be fully liable for the Facility,
each of the Loans and all other Borrower Obligations.
9. EVENTS OF DEFAULT.
     The following provisions deal with Default, Events of Default, notice,
grace and cure periods, and certain rights of Administrative Agent and the
Lenders following an Event of Default.
     9.1 Default and Events of Default. The term “Default” as used herein or in
any of the other Credit Documents shall mean an Event of Default, or any fact or
circumstance which constitutes, or upon the lapse of time, or giving of notice,
or both, could constitute, an Event of Default. Each of the following events,
unless cured within any applicable grace or notice period

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set forth or referred to below in this Section 9.1, or in Section 9.2, shall
constitute an “Event of Default”:
9.1.1 Generally. A default by Borrower in the performance of any term, provision
or condition of this Agreement to be performed by Borrower, or a breach, or
other failure to satisfy, any other term, provision, condition, covenant or
warranty under this Agreement and such default remains uncured beyond any
applicable specific grace or notice period provided for in this Agreement, or as
set forth in Section 9.2. below.
9.1.2 Note and Other Credit Documents. A default by Borrower in the performance
of or a breach, or other failure to satisfy, any term, provision, condition,
covenant, or warranty under any Note or any other Credit Document, regardless of
whether the then undisbursed portion of the Maximum Loan Amount is sufficient to
cover any payment of money required thereby, and the specific grace or notice
period, if any, allowed for the default in question shall have expired without
such default having been cured; or any Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and Lenders the rights,
powers and privileges purported to be created thereby (except insofar as such
rights, powers and privileges are contrary to applicable public policy and
except to the extent such failure is due to the gross negligence or willful
misconduct of Administrative Agent or a Lender).
9.1.3 Financial Status and Insolvency. (A) Borrower shall: (i) admit in writing
its inability to pay its debts generally as they become due; (ii) file a
petition in bankruptcy or a petition to take advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors; (iv) consent to, or
acquiesce in, the appointment of a receiver, liquidator or trustee of itself or
of the whole or any substantial part of its assets; (v) file a petition or
answer seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Federal Bankruptcy laws or
any other applicable law; (vi) have a court of competent jurisdiction enter an
order, judgment or decree appointing a receiver, liquidator or trustee of
Borrower, or of the whole or any substantial part of the assets of Borrower, and
such order, judgment or decree shall remain unvacated or not set aside or
unstayed for one hundred twenty (120) days; (vii) have a petition filed against
it seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the Federal Bankruptcy laws or any other
applicable law and such petition shall remain undismissed for one hundred twenty
(120) days; or (viii) have, under the provisions of any other law for the relief
or aid of debtors, any court of competent jurisdiction assume custody or control
of Borrower or of the whole or any substantial part of its assets and such
custody or control shall remain unterminated or unstayed for one hundred twenty
(120) days; or (B) any such event shall occur with respect to the General
Partner of Borrower.
9.1.4 Breach of Representation or Warranty. Any representation or warranty made
by Borrower herein or in any other certificate, instrument or document

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relating to the Facility required to be delivered pursuant to any Credit
Document shall at the time made or deemed to have been remade or renewed be
false or misleading in any material respect, or any warranty shall be materially
breached.
9.1.5 Defaults under Other Agreements. With respect to any Indebtedness (other
than Indebtedness outstanding under this Agreement) of the Borrower or any other
member of the Combined Group or Portfolio Investment Entity, (A) such Person
shall (1) default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness and such
Indebtedness is accelerated, or (2) the occurrence and continuance of a default
in the observance or performance relating to such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event or condition shall occur or condition exist, the effect of which
default or other event or condition is to cause, or permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such holders) to
cause (determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated maturity; and
(B) any such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof; provided, however, that such Indebtedness of Borrower
and Borrower’s Pro Rata Share of such Indebtedness of any other member of the
Combined Group or another Portfolio Investment Entity, collectively and without
duplication (including instances where more than one such Person is an obligor
under such Indebtedness), then due and payable or required to be prepaid prior
to stated maturity is at least Ten Million Dollars ($10,000,000.00).
9.1.6 Change of Control. The occurrence of a Change of Control.
9.1.7 Judgments. There shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any
uninsured final judgment against any member of the Combined Group such that
together with Borrower’s Pro Rata Share of other outstanding uninsured final
judgments, undischarged, unsatisfied and unstayed, against any of such parties
equals or exceeds, collectively and without duplication, in the aggregate Ten
Million Dollars ($10,000,000.00).
     9.2 Grace Periods and Notice. As to each of the foregoing events the
following provisions relating to grace periods and notice shall apply:
9.2.1 No Notice or Grace Period. There shall be no grace period and no
requirement of notice with respect to the payment of principal at Maturity and
no grace period and no requirement of notice with respect to defaults related to
the voluntary filing of bankruptcy or reorganization proceedings or a general
assignment for the benefit of creditors, with respect to non-monetary defaults
which are not reasonably capable of being cured or with respect to a breach of
warranty or representation under Section 6.1.(Financial Information), or with
respect to breaches under Section 7.3 (Financial Covenants), Section 7.4

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(Indebtedness and Restrictions on Liens, Transfers and Additional Debt),
Section 7.7 (Limitations on Certain Transactions), Section 9.1.6 (Change of
Control) or Section 9.1.7 (Judgments).
9.2.2 Nonpayment of Interest and Principal. As to the nonpayment of a scheduled
interest payment or a scheduled installment of principal prior to Maturity,
there shall be a ten (10) day grace period without any requirement of notice
from Administrative Agent, subject, however, to Section 2.3.13 above; provided,
however, Borrower shall only be entitled to such 10-day grace period once in any
calendar year with no grace or notice period as to any subsequent nonpayment
within the relevant calendar year.
9.2.3 Other Monetary Defaults. All other monetary defaults shall have a five
(5) day grace period following notice from Administrative Agent (unless
otherwise specifically provided for herein), or, if shorter, a grace period
without notice until five (5) Business Days before the last day on which payment
is required to be made in order to avoid: (i) the cancellation or lapse of
required insurance, or (ii) a tax sale or the imposition of late charges or
penalties in respect of taxes or other municipal charges;
9.2.4 Nonmonetary Defaults Capable of Cure. As to nonmonetary defaults which are
reasonably capable of being cured or remedied, unless there is a specific
shorter or longer grace period provided for in this Agreement or in another
Credit Document, there shall be a thirty (30) day grace period following notice
from Administrative Agent or, if such default would reasonably require more than
thirty (30) days to cure or remedy, such longer period of time not to exceed a
total of one hundred eighty (180) days from Administrative Agent’s notice as may
be reasonably required so long as Borrower shall commence reasonable actions to
remedy or cure the default within thirty (30) days following such notice and
shall diligently prosecute such curative action to completion within such one
hundred eighty (180) day period. As to breaches of warranties and
representations (other than those set forth in Section 6.1 above) there shall be
a thirty (30) day grace period following notice from Administrative Agent.
     9.3 Certain Remedies. If an Event of Default shall occur and be continuing:
9.3.1 Termination of Commitments. Administrative Agent may declare the
Commitments terminated whereupon the Commitments shall be immediately
terminated.
9.3.2 Accelerate Debt. Administrative Agent may, and upon the direction of the
Required Lenders shall, declare the Indebtedness immediately due and payable,
provided that in the case of a voluntary petition in bankruptcy filed by
Borrower or (after the expiration of the grace period if any set forth in
Section 9.1.3 above) an involuntary petition in bankruptcy filed against
Borrower, such acceleration shall be automatic.

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9.3.3 Pursue Remedies. Administrative Agent may pursue any and all remedies
provided for hereunder, or under any one or more of the other Credit Documents.
9.3.4 Written Waivers. Notwithstanding anything to the contrary contained
herein, if a Default or an Event of Default is waived by the Required Lenders or
the Administrative Agent, in their sole discretion, pursuant to a specific
written instrument executed by an authorized officer of Administrative Agent, or
if a Default or an Event of Default is timely cured by Borrower, the Default or
Event of Default so waived or Default so cured shall be deemed to have never
occurred.
9.3.5 Reserved.
9.3.6 Enforcement of Rights. Administrative Agent may enforce any and all rights
and interests created and existing under the Credit Documents and all rights of
set off.
     Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1.3 shall occur as to Borrower, then the Commitments shall
automatically terminate and all Loans, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Administrative Agent and/or any of the Lenders hereunder or under the other
Credit Documents automatically shall immediately become due and payable without
the giving of any notice or other action by the Administrative Agent or the
Lenders.
     Notwithstanding the fact that enforcement powers reside primarily with
Administrative Agent, subject to the provisions of Section 11, each Lender has,
to the extent permitted by law, a separate right of payment and shall be
considered a separate “creditor” holding a separate “claim” within the meaning
of Section 101(5) of the Bankruptcy Code or any other insolvency statute;
provided however, no Lender shall take any action with respect to its claim
without first obtaining the consent of the Required Lenders and Administrative
Agent (other than filing a proof of claim) or vote its claim in a manner
inconsistent with the vote of the Required Lenders and Administrative Agent.
10. SECURITY INTEREST AND SET-OFF.
     10.1 Security Interest. Borrower hereby grants to Administrative Agent, on
behalf of the Lenders a lien, security interest and right of setoff as security
for all liabilities and obligations to Administrative Agent and the Lenders,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Administrative Agent or any Lender or any entity under
the control of Key Corp. or in transit to any of them.
     10.2 Set-Off and Debit. If an Event of Default occurs and is continuing,
any deposits, balances or other sums credited by or due from Administrative
Agent or any Lender, or from any affiliate of Administrative Agent or any
Lender, to Borrower may to the fullest extent not prohibited by applicable law
at any time or from time to time, without regard to the existence, sufficiency
or adequacy of any other collateral, and without notice or compliance with any
other condition precedent now or hereafter imposed by statute, rule of law or
otherwise, all of which are hereby waived, be set off, debited and appropriated,
and applied by Administrative Agent or

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any Lender against any or all of the Borrower Obligations irrespective of
whether demand shall have been made and although such obligations may be
unmatured, in such manner as Administrative Agent or any Lender in its sole and
absolute discretion may determine. Within five (5) Business Days of making any
such set off, debit or appropriation and application, Administrative Agent or
the applicable Lender agrees to notify Borrower thereof, provided the failure to
give such notice shall not affect the validity of such set off, debit or
appropriation and application. ANY AND ALL RIGHTS TO REQUIRE ADMINISTRATIVE
AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with
each other Lender that (a) if an amount to be set off is to be applied to
indebtedness of the Borrower to such Lender, other than the obligations
evidenced by the Note held by such Lender, such amount shall be applied ratably
to such other indebtedness and to the obligations evidenced by all of the Notes
held by such Lender, and (b) if such Lender shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Note held by such Lender
by proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note held by such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Notes held by all of the Lenders, such
Lender will make such disposition and arrangements with the other Lenders with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Note held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
     10.3 Right to Freeze. Administrative Agent and each of the Lenders shall
also have the right, at its option, upon the occurrence of any event which would
entitle Administrative Agent or any Lender to set off or debit as set forth in
Section 10.2, to freeze, block or segregate any such deposits, balances and
other sums so that Borrower may not access, control or draw upon the same.
     10.4 Additional Rights. The rights of Administrative Agent, the Lenders and
each affiliate of Administrative Agent and each of the Lenders under this
Section 10 are in addition to, and not in limitation of, other rights and
remedies, including other rights of set off, which Administrative Agent, or any
Lender may have.
11. THE ADMINISTRATIVE AGENT AND THE LENDERS
     11.1 Appointment of Administrative Agent. Each Lender hereby irrevocably
designates and appoints KeyBank National Association as Administrative Agent of
such Lender to act as specified herein and in the other Credit Documents, and
each such Lender hereby irrevocably authorizes the Administrative Agent to take
such actions, exercise such powers and perform such duties as are expressly
delegated to or conferred upon the Administrative Agent by the terms of

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this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. The Administrative Agent agrees to act as
such upon the express conditions contained in this Section 11. The
Administrative Agent shall not have any duties or responsibilities except those
expressly set forth herein or in the other Credit Documents, nor shall it have
any fiduciary relationship with any Lender, and no implied covenants,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent. The provisions of
this Section 11 (except for Sections 11.10, 11.12, 11.15.1, 11.15.2 (v) —
(viii), 11.15.3, 11.15.4, 11.15.5, 11.16, 11.20 and 11.22) are solely for the
benefit of the Administrative Agent and the Lenders, and the Borrower shall not
have any rights as a third party beneficiary of any of the provisions hereof.
     11.2 Administration of Facility by Administrative Agent. The Administrative
Agent shall be responsible for administering the Facility on a day-to-day basis.
In the exercise of such administrative duties, the Administrative Agent shall
use the same diligence and standard of care that is customarily used by the
Administrative Agent with respect to similar loans held by the Administrative
Agent solely for its own account.
     Each Lender delegates to the Administrative Agent the full right and
authority on its behalf to take the following specific actions in connection
with its administration of the Facility:
     (i) to fund the Loans in accordance with the provisions of the Credit
Documents, but only to the extent of immediately available funds provided to the
Administrative Agent by the respective Lenders for such purpose;
     (ii) to receive all payments of principal, interest, fees and other charges
paid by, or on behalf of, the Borrower and, except for fees to which the
Administrative Agent is entitled pursuant to the Credit Documents or otherwise,
to distribute all such funds to the respective Lenders as provided for
hereunder;
     (iii) to keep and maintain complete and accurate files and records of all
material matters pertaining to the Facility, and make such files and records
available for inspection and copying by each Lender and its respective employees
and agents during normal business hours upon reasonable prior notice to the
Administrative Agent; and
     (iv) to do or omit doing all such other actions as may be reasonably
necessary or incident to the implementation, administration and servicing of the
Facility and the rights and duties delegated hereinabove.
     11.3 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Credit Document by or through its
agents or attorneys-in-fact, and shall be entitled to the advice of counsel
concerning all matters pertaining to its rights and duties hereunder or under
the other Credit Documents. The Administrative Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
     11.4 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be liable for any action lawfully taken or omitted to be taken by it or
them under or in connection with this Agreement or the

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other Credit Documents, except for its or their gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be responsible for or
have any duty to ascertain, inquire into, or verify (i) any recital, statement,
representation or warranty made by the Borrower or any of its officers or agents
contained in this Agreement or the other Credit Documents or in any certificate
or other document delivered in connection therewith; (ii) the performance or
observance of any of the covenants or agreements contained in, or the conditions
of, this Agreement or the other Credit Documents; (iii) the state or condition
of any properties of the Borrower or the Assets, or any information contained in
the books or records of the Borrower; (iv) the validity, enforceability,
collectibility, effectiveness or genuineness of this Agreement or any other
Credit Document or any other certificate, document or instrument furnished in
connection therewith; or (v) the validity, priority or perfection of any lien
securing or purporting to secure the Borrower Obligations.
     11.5 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any notice,
consent, certificate, affidavit, or other document or writing believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person or persons, and upon the advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of the taking or failing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with any written
request of the Required Lenders, and each such request of the Required Lenders,
and any action taken or failure to act by the Administrative Agent pursuant
thereto, shall be binding upon all of the Lenders; provided, however, that the
Administrative Agent shall not be required in any event to act, or to refrain
from acting, in any manner which is contrary to the Credit Documents or to
applicable law or in any manner reasonably believed by Administrative Agent to
be commercially unreasonable in the applicable jurisdiction.
     11.6 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default unless the
Administrative Agent has actual knowledge of the same or has received notice
from a Lender or the Borrower referring to this Agreement, describing such Event
of Default and stating that such notice is a “notice of default.” In the event
that the Administrative Agent obtains such actual knowledge or receives such a
notice, the Administrative Agent shall give prompt notice thereof to each of the
Lenders. The Administrative Agent shall take such action with respect to such
Event of Default as shall be reasonably directed by the Required Lenders. Unless
and until the Administrative Agent shall have received such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to any such Event of Default as it
shall deem advisable in the best interest of the Lenders, provided, however,
that the Administrative Agent shall not accelerate the indebtedness under this
Agreement without the prior written consent of the Required Lenders.

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     11.7 Lenders’ Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and investigation into the business, assets, operations,
property, and financial and other condition of the Borrower and has made its own
decision to enter into this Agreement and the other Credit Documents. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in determining whether or not conditions precedent to closing
any Loan hereunder have been satisfied and in taking or not taking any action
under this Agreement and the other Credit Documents. Each Lender expressly
acknowledges that is has relied upon its own legal counsel in its consideration
of its decision to enter into this Agreement and the other Credit Documents and
will so rely in regard to the implementation of the transaction contemplated
hereby and thereby and that it does not have any lawyer-client relationship with
Administrative Agent’s counsel or counsels or any other Lenders with respect
thereto.
     11.8 Administrative Agent’s Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Administrative Agent, ratably in proportion
to their respective Commitments, for (i) any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under this Agreement or the other Credit Documents, (ii) any other
expenses incurred by the Administrative Agent on behalf of the Lenders in
connection with the preparation, execution, delivery, administration, amendment,
waiver and/or enforcement of this Agreement and the other Credit Documents, and
(iii) any liabilities, obligations, losses, damages, penalties, action,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
the other Credit Documents or any other document delivered in connection
therewith or any transaction contemplated thereby, or the enforcement of any of
the terms hereof or thereof, provided that no Lender shall be liable for any of
the foregoing to the extent that they arise from the gross negligence or willful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
an additional indemnity and cease, or not commence, to do the action indemnified
against until such additional indemnity is furnished.
     11.9 Administrative Agent in its Individual Capacity. With respect to its
Commitment as a Lender, and the Loans made by it and the Note issued to it, the
Administrative Agent shall have the same rights and powers hereunder and under
any other Credit Document as any Lender and may exercise the same as though it
were not the Administrative Agent, and the term “Lender” or “Lenders” shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent and its subsidiaries and
affiliates may accept deposits from, lend money to, and generally engage in any
kind of commercial or investment banking, trust, advisory or other business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Administrative Agent hereunder.

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     11.10 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving thirty (30) days’ prior notice to the Lenders and Borrower
(provided, however, such resignation shall be effective only upon the
appointment of a successor Administrative Agent in accordance with the
provisions of this Section 11.10). The Required Lenders, for good cause, may
remove Administrative Agent at any time by giving thirty (30) days’ prior notice
to the Administrative Agent, the Borrower and the other Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and accepted such appointment within
thirty (30) days after the retiring Administrative Agent’s giving notice of
resignation or the Required Lenders’ giving notice of removal, as the case may
be, then the retiring Administrative Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Administrative Agent. Each such successor
Administrative Agent shall be a financial institution which meets the
requirements of an Eligible Assignee. Unless an Event of Default shall have
occurred and be continuing, any successor Administrative Agent shall be subject
to the prior written approval of the Borrower (which approval will not be
unreasonably withheld, conditioned or delayed). Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Credit Documents.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Section 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder.
     11.11 Duties in the Case of Enforcement. In the case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Borrower Obligations shall have occurred, the Administrative Agent shall,
at the request, or may, upon the consent, of the Required Lenders, and provided
that the Lenders have given to the Administrative Agent such additional
indemnities and assurances against expenses and liabilities as the
Administrative Agent may reasonably request, proceed to enforce the provisions
of this Agreement and the other Credit Documents and the exercise of any other
legal or equitable rights or remedies as it may have hereunder or under any
other Credit Document or otherwise by virtue of applicable law, or to refrain
from so acting if similarly requested by the Required Lenders. The
Administrative Agent shall be fully protected in so acting or refraining from
acting upon the instruction of the Required Lenders, and such instruction shall
be binding upon all the Lenders. The Required Lenders may direct the
Administrative Agent in writing as to the method and the extent of any such
foreclosure, sale or other disposition or the exercise of any other right or
remedy, the Lenders hereby agreeing to indemnify and hold the Administrative
Agent harmless from all costs and liabilities incurred in respect of all actions
taken or omitted in accordance with such direction, provided that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agent’s
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction. The Administrative Agent may, in its discretion but
without obligation, in the absence of direction from the Required Lenders, take
such interim actions as it believes necessary to preserve the rights of the
Lenders hereunder, including but not limited to petitioning a court for
injunctive relief or appointment of a receiver. Each of the Lenders acknowledges
and agrees that no individual Lender may separately enforce or exercise any of
the provisions of any of the

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Credit Documents, including without limitation the Notes, other than through the
Administrative Agent.
     11.12 Respecting Loans and Payments.
11.12.1 Procedures for Loans. Administrative Agent shall give written notice to
each Lender of each request from Borrower for a Loan by facsimile transmission,
hand delivery or overnight courier, not later than 11:00 a.m. (Boston time) two
(2) Business Days prior to any Loan. Each such notice shall be accompanied by a
written summary of the request for a Loan and shall specify a) the date of the
requested Loan, (b) the aggregate amount of the requested Loan, (c) each
Lender’s pro rata share of the requested Loan, and (d) the applicable interest
rate selected by Borrower with respect to such Loan, or any portion thereof,
together with the applicable Interest Period, if any, selected, or deemed
selected, by Borrower. Each Lender shall, before 11:00 a.m. (Boston time) on the
date set forth in any such request for a Loan, make available to Administrative
Agent, at an account to be designated by Administrative Agent at KeyBank
National Association in same day funds, each Lender’s ratable portion of the
requested Loan. After Administrative Agent’s receipt of such funds and upon
Administrative Agent’s determination that the applicable conditions to making
the requested Loan have been fulfilled, Administrative Agent shall make such
funds available to Borrower as provided for in this Agreement. Within a
reasonable period of time following the making of each Loan, but in no event
later than ten (10) Business Days following such Loan, Administrative Agent
shall deliver to each Lender a copy of Borrower’s request for such Loan.
Promptly after receipt by Administrative Agent of written request from any
Lender, Administrative Agent shall deliver to the requesting Lender the
accompanying certifications and such other instruments, documents,
certifications and approvals delivered by or on behalf of Borrower to
Administrative Agent in support of the requested Loan.
11.12.2 Nature of Obligations of Lenders. The obligations of the Lenders
hereunder are several and not joint. Failure of any Lender to fulfill its
obligations hereunder shall not result in any other Lender becoming obligated to
advance more than its Commitment Percentage of the Loan, nor shall such failure
release or diminish the obligations of any other Lender to fund its Commitment
Percentage provided herein.
11.12.3 Payments to Administrative Agent. All payments of principal or and
interest on the Loans or the Notes shall be made to the Administrative Agent by
the Borrower or any other obligor or guarantor for the account of the Lenders in
immediately available funds as provided in the Notes and this Agreement. The
Administrative Agent agrees promptly to distribute to each Lender, on the same
Business Day upon which each such payment is made if possible, such Lender’s
proportionate share of each such payment in immediately available funds, except
as otherwise expressly provided herein. The Administrative Agent shall upon each
distribution promptly notify Borrower of such distribution and each Lender of
the amounts distributed to it applicable to principal of, and interest on, the

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proportionate share held by the applicable Lender. Each payment to the
Administrative Agent under the first sentence of this Section 11.12.3 shall
constitute a payment by the Borrower to each Lender in the amount of such
Lender’s proportionate share of such payment, and any such payment to the
Administrative Agent shall not be considered outstanding for any purpose after
the date of such payment by the Borrower to the Administrative Agent without
regard to whether or when the Administrative Agent makes distribution thereof as
provided above. If any payment received by the Administrative Agent from the
Borrower is insufficient to pay both all accrued interest and all principal then
due and owing, the Administrative Agent shall first apply such payment to all
outstanding interest until paid in full and shall then apply the remainder of
such payment to all principal then due and owing, and shall distribute the
payment to each Lender accordingly.
     11.12.4 Distribution of Liquidation Proceeds. Subject to the terms and
conditions hereof, the Administrative Agent shall distribute all Liquidation
Proceeds in the order and manner set forth below:
First: To the Administrative Agent, towards any fees and any expenses for which
the Administrative Agent is entitled to reimbursement under this Agreement or
the other Credit Documents not theretofore paid to the Administrative Agent.
Second: To all applicable Lenders in accordance with their proportional share
based upon their respective Commitment Percentages until all Lenders have been
reimbursed for all expenses which such Lenders have previously paid to the
Administrative Agent and not theretofore paid to such Lenders.
Third: To all applicable Lenders based upon their respective Commitment
Percentages until all Lenders have been paid in full for any Individual Lender
Litigation Expenses.
Fourth: To all Lenders in accordance with their proportional share based upon
their respective Commitment Percentages until all Lenders have been paid in full
all principal and interest due to such Lenders under the Facility, with each
Lender applying such proceeds for purposes of this Agreement first against the
outstanding principal balance due to such Lender under the Facility and then to
accrued and unpaid interest due under the Facility.
Fifth: To all applicable Lenders in accordance with their proportional share
based upon their respective Commitment Percentages until all Lenders have been
paid in full all other amounts due to such Lenders under the Facility including,
without limitation, any costs and expenses incurred directly by such Lenders to
the extent such costs and expenses are

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reimbursable to such Lenders by the Borrower under the Credit Documents.
Sixth: To the Borrower or such third parties as may be entitled to claim
Liquidation Proceeds.
11.12.5 Adjustments. If, after Administrative Agent has paid each Lender’s
proportionate share of any payment received or applied by Administrative Agent
in respect of the Facility, that payment is rescinded or must otherwise be
returned or paid over by Administrative Agent, whether pursuant to any
bankruptcy or insolvency law, sharing of payments clause of any agreement or
otherwise, such Lender shall, at Administrative Agent’s request, promptly return
its proportionate share of such payment or application to Administrative Agent,
together with the Lender’s proportionate share of any interest or other amount
required to be paid by Administrative Agent with respect to such payment or
application.
11.12.6 Setoff. If any Lender (including the Administrative Agent), acting in
its individual capacity, shall exercise any right of setoff against a deposit
balance or other account of the Borrower held by such Lender on account of the
Borrower Obligations, such Lender shall remit to the Administrative Agent all
such sums received pursuant to the exercise of such right of setoff, and the
Administrative Agent shall apply all such sums for the benefit of all of the
Lenders hereunder in accordance with the terms of this Agreement.
11.12.7 Distribution by Administrative Agent. If in the opinion of the
Administrative Agent, distribution of any amount received by it in such capacity
hereunder or under the Notes or under any of the other Credit Documents might
involve any liability, it may refrain from making distribution until its right
to make distribution shall have been finally adjudicated by a court of competent
jurisdiction or has been resolved by the mutual consent of all Lenders. In
addition, the Administrative Agent may request full and complete indemnity, in
form and substance satisfactory to it, prior to making any such distribution. If
a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each person to whom any
such distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such persons as shall be determined by
such court.
11.12.8 Actions by Administrative Agent. The Required Lenders may direct the
Administrative Agent in writing as to the method and the extent of any sale or
other disposition of any collateral or other property of Borrower and shall
indemnify and hold the Administrative Agent harmless from all liabilities
incurred in respect to all actions taken or omitted in accordance with such
directions provided that Administrative Agent need not comply with any such
directions to the extent Administrative Agent reasonably believes the

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Administrative Agent’s compliance with such directions would constitute a
violation of the obligations undertaken by the Administrative Agent and/or
Lenders under the Credit Documents, or will constitute a violation of any
statute, ordinance or regulation applicable to the Administrative Agent or be
commercially unreasonable in any applicable jurisdiction.
     11.13 Delinquent Lender. If for any reason any Lender shall fail or refuse
to abide by its obligations under this Agreement, including without limitation
its obligation to make available to Administrative Agent its pro rata share of
any Loan, expenses or setoff (a “Delinquent Lender”) and such failure is not
cured within ten (10) days of receipt from the Administrative Agent of written
notice thereof, then, in addition to the rights and remedies that may be
available to Administrative Agent, other Lenders, the Borrower or any other
party at law or in equity, and not at limitation thereof, (i) such Delinquent
Lender’s right to participate in the administration of, or decision-making
rights related to, the Loans, this Agreement or the other Credit Documents shall
be suspended during the pendency of such failure or refusal, and (ii) a
Delinquent Lender shall be deemed to have assigned any and all payments due to
it from the Borrower, whether on account of the outstanding Loans, interest,
fees or otherwise, to the remaining non-delinquent Lenders for application to,
and reduction of, their proportionate shares of the outstanding Loans until, as
a result of application of such assigned payments the Lenders’ respective pro
rata shares of all the outstanding Loans shall have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency. The Delinquent Lender’s decision-making and
participation rights to payments as set forth in clauses (i) and (ii)
hereinabove shall be restored only upon the payment by the Delinquent Lender of
its pro rata share of any Loans or expenses as to which it is delinquent,
together with interest thereon at the Default Rate from the date when originally
due until the date upon which any such amounts are actually paid.
     The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Delinquent Lender’s Commitment to
fund future Loans (the “Future Commitment”). Upon any such purchase of the pro
rata share of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s
share in future Loans and its rights under the Credit Documents with respect
thereto shall terminate on the date of purchase, and the Delinquent Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and Acceptance. Each
Delinquent Lender shall indemnify Administrative Agent and each non-delinquent
Lender from and against any and all loss, damage or expenses, including but not
limited to reasonable attorneys’ fees and costs and funds advanced by
Administrative Agent or by any non-delinquent Lender, on account of any
Delinquent Lender’s failure to timely fund its pro rata share of a Loan or to
otherwise perform its obligations under the Credit Documents.
     11.14 Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be

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conclusive and binding on any subsequent holder, transferee or endorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
     11.15 Assignment and Participation.
11.15.1 Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it), upon satisfaction of
the following conditions: (a) each of the Administrative Agent and the Borrower
shall have given its prior written consent to such assignment (provided that, in
the case of the Borrower, such consent will not be unreasonably withheld and
shall not be required if a Default or Event of Default shall have occurred and
be continuing), (b) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender’s rights and obligations under
this Agreement, (c) other than when an Event of Default shall exist, each
assignment shall be in an amount that is at least Ten Million and 00/100 Dollars
($10,000,000.00), (d) other than when an Event of Default shall exist,
Administrative Agent shall retain, free of any such assignment, an amount of its
Commitment of not less than Thirty Million and 00/100 Dollars ($30,000,000.00),
and (e) the parties to such assignment shall execute and deliver to the
Administrative Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit D hereto (an
“Assignment and Acceptance”), together with delivery of any Notes subject to
such assignment. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder, and (y) the assigning Lender shall, to the extent provided in
such Assignment and Acceptance and upon payment to the Administrative Agent of
the registration fee referred to in Section 11.15.3, be released from its
obligations under this Agreement.
11.15.2 Certain Representations and Warranties. By executing and delivering an
Assignment and Acceptance, the parties thereunder confirm to and agree with each
other and the other parties hereto as follows:
     (i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no representation or warranty, express
or implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Credit Documents or any other instrument or
document

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furnished pursuant hereto or the attachment, perfection or priority of any
security interest;
     (ii) the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower and
its affiliates, related entities or Subsidiaries or any other person primarily
or secondarily liable in respect of any of the Borrower Obligations, or the
performance or observance by the Borrower or any other person primarily or
secondarily liable in respect of any of the Borrower Obligations or any of their
obligations under this Agreement or any of the other Credit Documents or any
other instrument or document furnished pursuant hereto or thereto;
     (iii) such assignee confirms that it has received a copy of this Agreement
and the other Credit Documents, together with copies of the most recent
financial statements provided by the Borrower as required by the terms of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
     (iv) such assignee will, independently and without reliance upon the
assigning Lender, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement;
     (v) such assignee represents and warrants that it is an Eligible Assignee
if required hereunder;
     (vi) such assignee appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Credit Documents as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
     (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender; and
     (viii) such assignee represents and warrants that it is legally authorized
to enter into such Assignment and Acceptance.
11.15.3 Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
“Register”) for the recordation of the names and addresses of the Lenders and
the Commitment Percentages of, and principal amount of the Loans owing to, the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a

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Lender hereunder. Administrative Agent shall make available the Register for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Lender agrees to pay to the Administrative Agent a registration fee in the sum
of Three Thousand Five Hundred Dollars ($3,500.00).
11.15.4 New Notes. Upon its receipt of an Assignment and Acceptance executed by
the parties to such assignment, together with each Note subject to such
assignment, the Administrative Agent shall (a) record the information contained
therein in the Register, and (b) give prompt notice thereof to the Borrower and
the Lenders (other than the assigning Lender). Within five (5) Business Days
after receipt of such notice, the Borrower, at its own expense, shall execute
and deliver to the Administrative Agent, in exchange for each surrendered Note,
a new Note to the order of such Eligible Assignee pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Lender in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be substantially in the form of the assigned
Notes. Within thirty (30) days of issuance of any new Notes pursuant to this
Section 10.15.4, the Borrower, at the expense of the assignee Lender (which
expense shall not be reimbursed by Borrower), shall deliver an opinion of
counsel, addressed to the Lenders and the Administrative Agent, relating to the
due authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to the
Lenders. The surrendered Notes shall be canceled and returned to the Borrower.
11.15.5 Participations. Each Lender may sell participations to one or more banks
or other financial institutions in all or any portion of such Lender’s rights
and obligations under this Agreement and the other Credit Documents; provided
that (a) each such participation shall be in a minimum amount of Five Million
and 00/100 Dollars ($5,000,000.00), (b) each participant shall meet the
requirements of an Eligible Assignee, (c) any such sale or participation shall
not affect the rights and duties of the selling Lender hereunder to the
Borrower, and (d) the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or modifications
of the Credit Documents shall be the rights to approve waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Commitment of such Lender
as it relates to such participant, reduce the amount of any commitment fees to
which such participant is entitled or extend any regularly scheduled payment
date for principal or interest.

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     11.16 Disclosure. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking practices any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party (other than its advisors) except as required by law
or legal process or to enforce the Credit Documents and (c) not to make use of
such information for purposes of transactions unrelated to such contemplated
assignment or participation.
     11.17 Miscellaneous Assignment Provisions. Anything contained in this
Section 11 to the contrary notwithstanding, any Lender may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under §4 of the Federal Reserve Act, 12 U.S.C. §341. No such pledge or
the enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Credit Documents.
     11.18 Intentionally Deleted.
     11.19 Amendment, Waiver, Consent, Etc. Except as otherwise expressly
provided in this Agreement or any other Credit Document, no term or provision of
this Agreement or any other Credit Document may be changed, waived, discharged
or terminated, nor may any consent required or permitted by this Agreement or
any other Credit Document be given, unless such change, waiver, discharge,
termination or consent receives the written approval of the Required Lenders.
     Notwithstanding the foregoing, the unanimous written approval of all the
Lenders (other than a Defaulting Lender) shall be required with respect to any
proposed amendment, waiver, discharge, termination, or consent which:
(i) has the effect of (a) extending the final scheduled maturity or the date of
any amortization payment of any Loan or Note, (b) reducing the rate or extending
the time of payment of interest or fees thereon, (c) increasing or reducing the
principal amount thereof, or (d) otherwise postponing or forgiving any
indebtedness thereunder,
(ii) releases or discharges any material portion of any collateral other than in
accordance with the express provisions of the Credit Documents.
(iii) amends, modifies or waives any provisions of this paragraph.
(iv) amends any of the financial covenants set forth in Section 6.3 of this
Agreement.
(v) reduces the percentage specified in the definition of Required Lenders,

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(vi) except as otherwise provided in this Agreement, changes the amount of any
Lender’s Commitment or Commitment Percentage, or
(vii) releases or waives any guaranty of the Borrower Obligations or
indemnifications provided in the Credit Documents;
     and provided, further, that without the consent of the Administrative
Agent, no such action shall amend, modify or waive any provision of this
Section 11 or any other provisions of any Credit Document which relates to the
rights or obligations of the Administrative Agent.
     Notwithstanding the foregoing, in the event that the Borrower or
Administrative Agent requests any consent, waiver or approval under this
Agreement or any other Credit Document, or an amendment or modification hereof
or thereof, and one or more Lenders determine not to consent or agree to such
consent, waiver, approval, amendment or modification, then the Lender then
acting as Administrative Agent hereunder shall have the right to purchase the
Commitment of such non-consenting Lender(s) at a purchase price equal to the
then outstanding amount of principal, interest and fees then owing to such
Lender(s) by the Borrower hereunder, and such non-consenting Lender(s) shall
immediately upon request, sell and assign its Commitment and all of its other
right, title and interest in the Loans and other Borrower Obligations to the
Lender then acting as Administrative Agent pursuant to an Assignment and
Assumption (provided that the selling Lender(s) shall not be responsible to pay
any assignment fee in connection therewith).
     11.20 Deemed Consent or Approval. With respect to any requested amendment,
waiver, consent or other action which requires the approval of the Required
Lenders or all of the Lenders, as the case may be in accordance with the terms
of this Agreement, or if the Administrative Agent is required hereunder to seek
or desires to seek, the approval of the Required Lenders or all of the Lenders,
as the case may be, prior to undertaking a particular action or course of
conduct, the Administrative Agent in each such case shall provide each Lender
with written notice of any such request for amendment, waiver or consent or any
other requested or proposed action or course of conduct, accompanied by such
detailed background information and explanations as may be reasonably necessary
to determine whether to approve or disapprove such amendment, waiver, consent or
other action or course of conduct, the Administrative Agent may (but shall not
be required to) include in any such notice, printed in capital letters or
boldface type a legend substantially to the following effect:
“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE, FAILURE TO RESPOND WITHIN TEN
(10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL CONSTITUTE A
DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY THE BORROWER OR THE
COURSE OF CONDUCT PROPOSED BY THE ADMINISTRATIVE AGENT AND RECITED ABOVE.”

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If the foregoing legend is included by the Administrative Agent in its
communication, a Lender shall be deemed to have approved or consented to such
action or course of conduct for all purposes hereunder if such Lender fails to
object to such action or course of conduct by written notice to the
Administrative Agent within ten (10) calendar days of such Lender’s receipt of
such notice.
     11.21 Borrower Indemnification of Lenders. In addition to the
indemnifications provided by Borrower to the Lenders otherwise provided herein
or in any other Credit Document, Borrower shall also indemnify Administrative
Agent and Lenders against any liability, cost or expense (including, without
limitation, reasonable attorneys’ fees and costs) incurred by the Administrative
Agent and Lenders as a result of any Environmental Claim related to any real
estate or other assets held by the Borrower or any other member of the Combined
Group, provided that the same are not due to the fraud or gross negligence of
Administrative Agent or any Lender. The Borrower will indemnify the
Administrative Agent and Lenders against any liability, cost or expense
(including, without limitation, reasonable attorneys’ fees and costs) incurred
by the Administrative Agent and Lenders as a result of lawsuits and litigation
that may arise in connection with the activities of Borrower or any other member
of the Combined Group, provided that the same are not due to the fraud or gross
negligence of Administrative Agent or any Lender.
     All indemnification provided by Borrower to Administrative Agent and
Lenders, including without limitation the aforementioned indemnifications, shall
survive and continue for the benefit of the indemnities thereunder,
notwithstanding any termination of the Facility or payment in full of the
obligations thereunder and hereunder.
     11.22 Borrower’s Communication with Lenders. Notwithstanding anything to
the contrary contained in this Agreement, prior to the occurrence of an Event of
Default, Borrower shall be entitled to rely on its communications with the
Administrative Agent as the agent of the Lenders, and may, but shall not be
required to, communicate separately with any Lender with respect to the
Facility.
12. GENERAL PROVISIONS.
     12.1 Notices. Any notice or other communication in connection with this
Agreement, the Notes, or any of the other Credit Documents, shall be in writing,
and (i) deposited in the United States Mail, postage prepaid, by registered or
certified mail, (ii) hand delivered by any commercially recognized courier
service or overnight delivery service such as Federal Express, or (iii) sent by
facsimile transmission, if a FAX Number is designated below, provided a copy is
also contemporaneously sent by any commercially recognized courier service or
overnight delivery service such as Federal Express addressed:

         
 
      If to Borrower:
 
       
 
      Hines REIT Properties, L.P.
 
      c/o Hines Interests Limited Partnership
 
      2800 Post Oak Boulevard, Suite 5000
 
      Houston, Texas 77056-6118

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      FAX Number: (713) 966-2636
 
      Attention: Charles M. Baughn
 
            with copies by regular mail or such hand delivery or facsimile
transmission to:
 
       
 
      Hines REIT Properties, L.P.
 
      c/o Hines Interests Limited Partnership
 
      2800 Post Oak Boulevard, Suite 5000
 
      Houston, Texas 77056-6118
 
      FAX Number: (713) 966-7851
 
      Attention: Charles N. Hazen
 
       
 
      and
 
       
 
      Baker Botts L.L.P.
 
      2001 Ross Avenue
 
      Dallas, Texas 75201-2980
 
      FAX Number: (214) 953-6503
 
      Attention: Curt Anderson, Esquire
 
       
 
      If to Administrative Agent:
 
       
 
      KeyBank National Association
 
      101 Federal Street
 
      Boston, Massachusetts 02110
 
      FAX Number: (617) 204-5769
 
      Attention: Mr. John J. Murphy, Vice President
 
       
 
      and
 
       
 
      KeyBank National Association
 
      127 Public Square, 2nd Floor
 
      Cleveland, Ohio 44114-1306
 
      FAX Number: (216) 689-5681
 
      Attention: Robert C. Bowes, Esquire
 
           General Counsel
 
            with copies by regular mail or such hand delivery or facsimile
transmission to:
 
       
 
      Goulston & Storrs, P.C.
 
      400 Atlantic Avenue
 
      Boston, Massachusetts 02110
 
      FAX Number: (617) 574-7607
 
      Attention: James H. Lerner, Esquire
 
       
 
      If to Lenders:

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      KeyBank National Association
 
      101 Federal Street
 
      Boston, Massachusetts 02110
 
      FAX Number: (617) 204-5769
 
      Attention: Mr. John J. Murphy, Vice President
 
            with a copy by regular mail or such hand delivery to:
 
       
 
      Goulston & Storrs, P.C.
 
      400 Atlantic Avenue
 
      Boston, Massachusetts 02110
 
      FAX Number: (617) 574-7607
 
      Attention: James H. Lerner, Esquire

     and to such addresses as are set forth in any Assignment and Acceptance.
     Any such addressee may change its address for such notices to such other
address in the United States as such addressee shall have specified by written
notice given as set forth above. All periods of notice shall be measured from
the deemed date of delivery as set forth in the next succeeding paragraph.
     A notice shall be deemed to have been given, delivered and received for the
purposes of all Credit Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the third Business Day following the date of
postmark, or (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, or (iii) if so mailed, on the date
of actual receipt as evidenced by the return receipt, or (iv) if so delivered,
upon actual receipt, or (v) if facsimile transmission is a permitted means of
giving notice, upon receipt as evidenced by electronic confirmation from the
sender’s fax machine of successful transmission if received during normal
business hours during a Business Day and otherwise on the next Business Day.
     12.2 Limitations on Assignment. Borrower may not assign this Agreement or
the monies due thereunder without the prior written consent of Administrative
Agent and the Required Lenders in each instance.
     12.3 Further Assurance. Borrower shall upon request from Administrative
Agent or any Lender from time to time execute, seal, acknowledge and deliver
such further instruments or documents which Administrative Agent or any Lender
may reasonably require to better perfect and confirm its rights and remedies
hereunder, under the Notes, and under each of the other Credit Documents,
     12.4 Parties Bound. The provisions of this Agreement and of each of the
other Credit Documents shall be binding upon and inure to the benefit of
Borrower, Administrative Agent and each of the Lenders and their respective
successors and assigns, except as otherwise prohibited by this Agreement or any
of the other Credit Documents.

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     This Agreement is a contract by and among Borrower, Administrative Agent
and each of the Lenders for their mutual benefit, and no third person shall have
any right, claim or interest against either Administrative Agent, or any Lender
or Borrower by virtue of any provision hereof.
     12.5 Waivers and Extensions. Notwithstanding any contrary provision herein
or in any other Credit Document, Administrative Agent may, unless otherwise
directed by the Required Lenders or the same requires unanimous consent of the
Lenders pursuant to Section 11.19 hereof, at any time and from time to time
waive any one or more of the conditions contained herein or in any of the other
Credit Documents, or extend the time of payment of any Loan, but any such waiver
or extension shall be deemed to be made in pursuance and not in modification
hereof, and any such waiver in any instance, or under any particular
circumstance, shall not be considered a waiver of such condition in any other
instance or any other circumstance.
     12.6 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.
12.6.1 Substantial Relationship. It is understood and agreed that all of the
Credit Documents were negotiated, executed and delivered in the Commonwealth of
Massachusetts, which Commonwealth the parties agree has a substantial
relationship to the parties and to the underlying transactions embodied by the
Credit Documents.
12.6.2 Place of Delivery. Borrower agrees to furnish to Administrative Agent at
the Administrative Agent’s office in Boston, Massachusetts all further
instruments, certifications and documents to be furnished hereunder.
12.6.3 Governing Law. This Agreement and each of the other Credit Documents
shall in all respects be governed, construed, applied and enforced in accordance
with the internal laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
12.6.4 Consent to Jurisdiction. Borrower hereby consents to personal
jurisdiction in any state or Federal court located within the Commonwealth of
Massachusetts.
12.6.5 JURY TRIAL WAIVER. BORROWER, ADMINISTRATIVE AGENT, AND EACH OF THE
LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BORROWER,
ADMINISTRATIVE AGENT AND EACH OF THE LENDERS TO ENTER INTO THE TRANSACTIONS
CONTEMPLATED HEREBY.

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     12.7 Survival. All representations, warranties, covenants and agreements of
Borrower provided herein or in any other Credit Document, or in any notice,
certificate, or other paper delivered by or on behalf of Borrower pursuant
hereto are significant and shall be deemed to have been relied upon by
Administrative Agent and each of the Lenders notwithstanding any investigation
made by Administrative Agent or any Lender or on its behalf and shall survive
the delivery of the Credit Documents and the making of the Facility and each
advance pursuant thereto. No review or approval by Administrative Agent, or any
Lender, or by Lenders’ consultants or any representatives, of any plans and
specifications, opinion letters, certificates by professionals or other item of
any nature shall relieve Borrower or anyone else of any of the obligations,
warranties or representations made by or on behalf of Borrower under any one or
more of the Credit Documents.
     12.8 Cumulative Rights. All of the rights of Administrative Agent and the
Lenders hereunder and under each of the other Credit Documents and any other
agreement now or hereafter executed in connection herewith or therewith, shall
be cumulative and may be exercised singly, together, or in such combination as
Administrative Agent may determine in its sole judgment.
     12.9 Claims Against Administrative Agent or the Lenders.
12.9.1 Borrower Must Notify. Administrative Agent and each of the Lenders shall
not be in default under this Agreement, or under any other Credit Document,
unless a notice specifically setting forth the claim of Borrower shall have been
given to Administrative Agent and each of the Lenders within thirty (30) days
after Borrower first had actual knowledge or actual notice of the occurrence of
the event which Borrower alleges gave rise to such claim and Administrative
Agent and each of the Lenders do not remedy or cure the default, if any there
be, with reasonable promptness thereafter.
12.9.2 Remedies. If it is determined by the final order of a court of competent
jurisdiction, which is not subject to further appeal, that Administrative Agent
or any Lender has breached any of their obligations under the Credit Documents
and has not remedied or cured the same with reasonable promptness following
notice thereof as required above, and the Administrative Agent’s and the
Lenders’ responsibilities shall be limited to: (i) where the breach consists of
the failure to grant consent or give approval in violation of the terms and
requirements of a Credit Document, the obligation to grant such consent or give
such approval and to pay Borrower’s reasonable costs and expenses including,
without limitation, reasonable attorneys’ fees and disbursements in connection
with such court proceedings; (ii) where the breach consists of the failure to
make a Loan, the obligation to make such Loan and to pay Borrower’s reasonable
costs and expenses including, without limitation, reasonable attorneys’ fees and
disbursements in connection with such court proceedings; and (iii) in the case
of any default by Administrative Agent or any Lender, where it is also so
determined that Administrative Agent or any Lender acted in bad faith, or that
Administrative Agent’s or any Lenders’ default constituted gross negligence or
willful misconduct, the payment of any actual, direct, compensatory damages
sustained

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by Borrower as a result thereof plus Borrower’s reasonable costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements in
connection with such court proceedings.
12.9.3 Limitations. In no event, however, shall Administrative Agent or the
Lenders be liable to Borrower or to anyone else for other damages such as, but
not limited to, indirect, speculative or punitive damages whatever the nature of
the breach by Administrative Agent or any Lender of its obligations under this
Agreement or under any of the other Credit Documents. In no event shall
Administrative Agent or any Lender be liable to Borrower or to anyone else
unless a notice specifically setting forth the claim of Borrower shall have been
given to Administrative Agent and each of the Lenders within the time period
specified above.
     12.10 Obligations Absolute, Joint and Several. Except to the extent
prohibited by applicable law which cannot be waived, the Borrower Obligations
shall be absolute, unconditional and irrevocable and shall be paid and/or
performed strictly in accordance with the terms of the Credit Documents under
all circumstances whatsoever, including, without limitation, the existence of
any claim, set off, defense or other right which Borrower may have at any time
against Administrative Agent or any Lender whether in connection with the
Facility or any unrelated transaction.
     12.11 Table of Contents, Title and Headings; Exhibits and Schedules. Any
table of contents and the titles and the headings of sections are not parts of
this Agreement or any other Credit Document and shall not be deemed to affect
the meaning or construction of any of their provisions. All exhibits and
schedules attached hereto or made a part hereof are incorporated by reference
and constitute a part of this Agreement.
     12.12 Counterparts. This Agreement may be executed in several counterparts,
each of which when executed and delivered is an original, but all of which
together shall constitute one instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart
which is executed by the party against whom enforcement of this Agreement is
sought.
     12.13 Integration. This Agreement, together with the other Credit
Documents, comprises the complete and integrated agreement of the parties to the
Credit Documents on the subject matter hereof and supersedes all prior
agreements, written or oral, on the subject matter hereof. Notwithstanding the
foregoing, this Section 12.13 shall not be interpreted as integrating or
superseding any agreements or understandings relating to the refinancing of the
Facility or any portion of the Borrower’s Obligations hereunder pursuant to a
separate agreement by one or more of the parties hereto.
     12.14 Time Of the Essence. Time is of the essence of each provision of this
Agreement and each other Credit Document.
     12.15 No Oral Change. This Agreement and each of the other Credit Documents
may only be amended, terminated, extended or otherwise modified by a writing
signed by the party

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against which enforcement is sought (except no such writing shall be required
for any party which, pursuant to a specific provision of any Credit Document, is
required to be bound by changes without such party’s assent). In no event shall
any oral agreements, promises, actions, inactions, knowledge, course of conduct,
course of dealings or the like be effective to amend, terminate, extend or
otherwise modify this Agreement or any of the other Credit Documents.
     12.16 Monthly Statements. While Administrative Agent may issue invoices or
other statements on a monthly or periodic basis (a “Statement”), it is expressly
acknowledged and agreed that, subject to the terms of Section 2.3.13 above:
(i) the failure of Administrative Agent to issue any Statement on one or more
occasions shall not affect Borrower’s obligations to make payments under the
Credit Documents as and when due; (ii) the inaccuracy of any Statement shall not
be binding upon Administrative Agent and so Borrower shall always remain
obligated to pay the full amount(s) required under the Credit Documents as and
when due notwithstanding any provision to the contrary contained in any
Statement; (iii) all Statements are issued for informational purposes only and
shall never constitute any type of offer, acceptance, modification, or waiver of
the Credit Documents or any of Administrative Agent’s or any Lender’s rights or
remedies thereunder; and (iv) in no event shall any Statement serve as the basis
for, or a component of, any course of dealing, course of conduct, or trade
practice which would modify, alter, or otherwise affect the express written
terms of the Credit Documents.
     12.17 Indemnification. The Borrower agrees to indemnify and hold harmless
the Administrative Agent and each of the Lenders and the shareholders,
directors, agents, officers, subsidiaries and affiliates of the Administrative
Agent and each of the Lenders from and against any and all claims, actions and
suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, settlement payments, obligations, damages and expenses of
every nature and character in connection therewith, arising out of this
Agreement or any of the other Credit Documents or the transactions contemplated
hereby or thereby or which otherwise arise in connection with the financing,
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding, provided, however, that the
Borrower shall not be obligated under this Section 12.17 to indemnify any Person
for (x) liabilities arising from such Person’s own gross negligence, willful
misconduct or breach of this Agreement, as finally determined by a court of
competent jurisdiction (v) as to any dispute to the extent the same is
exclusively among the Lenders, or (z) any insolvency of a Lender if the same is
caused by such Lender being a party to the Credit Documents. If and to the
extent that the obligations of the Borrower under this Section 12.17 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this Section 12.17 shall
survive the repayment of the amounts owing under the Notes and this Agreement
and the termination of this Agreement and the obligations of the Lenders
hereunder and shall continue in full force and effect as long as the possibility
of any such claim, action, cause of action or suit exists.
[Signature page attached]

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     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as an instrument under seal as
of the date first above written.

                  BORROWER:    
 
                HINES REIT PROPERTIES, L.P., a Delaware limited partnership    
 
           
 
  By:   Hines Real Estate Investment Trust, Inc., a    
 
      Maryland corporation, its general partner    
 
           
 
      By: /s/ Frank Apollo    
 
           
 
      Name: Frank Apollo    
 
      Title: Chief Accounting Officer    
 
                AGENT AND LENDER:    
 
                KEYBANK NATIONAL ASSOCIATION
as Administrative Agent and as a Lender    
 
           
 
  By:   /s/ John J. Murphy    
 
           
 
      Name: John J. Murphy    
 
      Title: Vice President    

 

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EXHIBITS:

                  Section Reference Number
Exhibit A
  Definitions   1.1
 
       
Exhibit B
  Assets, Funded Debt; Subsidiaries   6.13, 6.16, 6.18,
 
      7.2.13 and 7.5
 
       
Exhibit C
  Authorized Representatives   4
 
       
Exhibit D
  Form of Assignment and Acceptance   11.15.1
 
       
Exhibit E
  Lenders’ Commitment   2.1(a)
 
       
Exhibit F
  Form of Note   2.1(B)
 
       
Exhibit G
  Form of Certificate   7.2.6
 
       
Exhibit H
  Form of Direction Letter    
 
       
Exhibit I
  Form of Notice of Borrowing   2.1(c)
 
       
Exhibit J
  Environmental Notices   6.15
 
       
Exhibit K
  Portfolio Investments   3.2
 
       
Exhibit L
  Pro Forma Reduction Calculation   3.2 (g)

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EXHIBIT A TO AGREEMENT
DEFINITIONS
     Adjusted Federal Funds Rate means the Federal Funds Rate plus fifty
(50) basis points.
     Adjusted LIBOR Rate means the LIBOR Rate plus the Applicable Margin.
     Administrative Agent means KeyBank National Association acting as agent for
the Lenders.
     Agreement as defined in the Preamble.
     Applicable Lending Office means, for each Lender, the office of such Lender
(or of an affiliate of such Lender) as such Lender may from time to time specify
to the Administrative Agent and the Borrower by written notice as the office by
which its LIBOR Loans are made and maintained.
     Applicable Margin means (a) 150 basis points if the ratio of Funded Debt to
Total Asset Value is equal to or less than fifty percent (50%), (b) 175 basis
points if the ratio of Funded Debt to Total Asset Value is equal to or less than
fifty-five percent (55%), (c) 200 basis points if the ratio of Funded Debt to
Total Asset Value is equal to or less than sixty percent (60%), (d) 225 basis
points if the ratio of Funded Debt to Total Asset Value is equal to or less than
sixty-five percent (65%) and (e) 250 basis points if the ratio of Funded Debt to
Total Asset Value is equal to or less than seventy percent (70%). The Applicable
Margin shall be calculated in connection with the delivery of and included in
the certificate delivered pursuant to Section 7.2.6 hereof, with any change in
the Applicable Margin taking effect on the first day of the first month
immediately following the date of delivery to Administrative Agent of such
certificate.
     Appraised Asset Value means the aggregate fair market value of the
Portfolio Assets as reflected in the most recent MAI Appraisals for each
Portfolio Asset; provided that in the event an MAI Appraisal is not available
for a Portfolio Asset at the time of the calculation of the aggregate fair
market value of the Portfolio Assets, the fair market value of such Portfolio
Asset shall be equal to the value based upon (i) the cost of acquiring the
Asset, which costs shall include the purchase price, financing costs, and fees,
expenses and costs relating thereto, including fees and expenses of counsel; or
(ii) to the extent available, the annualized amount of a Portfolio Asset’s net
operating income based on the two (2) most recently completed full fiscal
quarters, less $0.50 per square foot of such Portfolio Asset’s leaseable space,
and divided by a capitalization rate of (x) 8.50% for “non-core” Portfolio
Assets, or (y) 7.50% for “core” Portfolio Assets (including Portfolio Assets in
which the Core Fund invests).
     Assets means the real property owned in fee by Borrower or any other member
of the Combined Group.
     Assignment and Acceptance as defined in Section 11.15.1.

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     Authorized Representatives as defined in Section 4 and listed on Exhibit C.
     Available For Distribution means that the amount in question (i) has been
or is being distributed to Borrower or (ii) upon the request of Borrower will be
distributed to Borrower without restriction, deduction or offset.
     Banking Day means a day on which banks are not required or authorized by
law to close in the city in which Administrative Agent’s principal office is
situated.
     Bankruptcy Code means the Bankruptcy Code in Title 11 of the United States
Code, as amended, modified, succeeded or replaced from time to time.
     Borrower as defined in the Preamble.
     Borrower Escrow Account means that certain interest-bearing account
established with KeyBank National Association in the name of KeyBank National
Association, as escrow agent for Borrower, or such other escrow account as might
be approved by Administrative Agent in its sole discretion, as more particularly
described in Section 3.3.
     Borrower Obligations means, without duplication, all of the obligations of
the Borrower to the Lenders and the Administrative Agent, whenever arising,
under this Agreement, the Notes, or any of the other Credit Documents to which
the Borrower is a party.
     Borrower’s Ownership Interests as defined in Section 3.2(e).
     Borrower’s Pro Rata Share means, as to any referenced Subsidiary or other
Portfolio Investment Entity, or any Portfolio Assets, Indebtedness or other
assets, liabilities, revenues, earnings, costs and/or other interests, the
greater of (1) Borrower’s direct or indirect percentage ownership interest
therein, or (2) in the case of Indebtedness, the amount thereof that is recourse
to the Borrower.
     Business Day means any day of the year on which offices of KeyBank National
Association are not required or authorized by law to be closed for business in
Boston, Massachusetts. If any day on which a payment is due is not a Business
Day, then the payment shall be due on the next day following which is a Business
Day. Further, if there is no corresponding day for a payment in the given
calendar month (i.e., there is no “February 30th”), the payment shall be due on
the last Business Day of the calendar month.
     California Property means the property known as the California Casualty
Plaza consisting of approximately 10.58 acres of land located at 1900 & 2000
Alameda de las Pulgas, San Mateo, California.
     Change of Control means (i) any failure by the investment advisor for the
General Partner to be a Controlled Subsidiary of Hines Interests Limited
Partnership (“HILP”); (ii) any failure by HILP to be Controlled, directly or
indirectly, and majority-owned, directly or indirectly by Jeffrey C. Hines,
Gerald D. Hines, their parents, brothers and sisters, and the spouses, children,
grandchildren (natural or adopted) of any of the foregoing, the estate of
Jeffrey C. Hines and/or Gerald D. Hines, any trust for any of the foregoing,
and/or any entity owned by any combination

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of the foregoing; or (iii) any failure by the Borrower to be Controlled by the
General Partner. For purposes of this definition, the terms “Control” and
“Controlled” (and grammatical variations thereof) mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a referenced Person and direct the day-to-day operations of such
Person, whether through the ownership of voting interests of such Person, by
contract or otherwise.
     Closing Date means the date hereof.
     Code means the Internal Revenue Code of 1986 and the rules and regulations
issued or promulgated thereunder, as amended, modified, succeeded or replaced
from time to time. References to specific sections of the Code shall be
construed also to refer to any successor sections.
     Collateral. The term “Collateral” shall mean and include the following
property, wherever located, and, to the extent provided in Section 3.2(a), any
such property as the Borrower may hereafter acquire or which may hereafter
arise:

  (a)   all of Pledgor’s right, title and interest in any interest in each
Portfolio Investment (any such Portfolio Investment, a “Pledged Interest”) (as
of the Closing Date, the Pledged Interests consist solely of the Portfolio
Investments listed on Exhibit K);     (b)   all certificates or other
instruments, if any, representing a Pledged Interest;     (c)   all Borrower’s
income, cash flow, rights of distribution, dividends, interest, proceeds,
accounts, fees, profits, or other rights to payment which in any way relate to
or arise out of the Pledged Interests;     (d)   all rights of access arising
from the Pledge Interests to books, records, information and electronically
stored data relating to any of the foregoing;     (e)   the Borrower Escrow
Account, including all funds deposited therein pursuant to Section 3.3 of the
Term Loan Agreement and any income earned on such funds.

     Combined Group means the Borrower, the Core Fund and each Subsidiary of
Borrower from time to time.
     Commitment means, with respect to each Lender, the commitment of such
Lender in an aggregate principal amount of up to such Lender’s Commitment
Percentage of the Committed Amount to make Loans in accordance with the
provisions of Section 2.1(a).
     Commitment Fee as defined in Section 2.4.
     Commitment Percentage means, for each Lender, the percentage identified as
its Commitment Percentage on Exhibit E as such percentage may be modified by
assignment in accordance with the terms of this Agreement.

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     Committed Amount means the Maximum Loan Amount.
     Consolidated Leverage Ratio means the ratio, expressed as a percentage, of
Funded Debt (including, without limitation, the outstanding balance under the
Facility) over Total Asset Value.
     Core Fund means Hines-Sumisei U.S. Core Office Fund, L.P., a Delaware
limited partnership
     Credit Documents as defined in Section 3.1.
     Default means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default, as more particularly
defined in Section 9.
     Default Rate means the Variable Rate plus 4% per annum.
     Delinquent Lender as defined in Section 11.13.
     Direction Letters means the letters delivered by Borrower to Administrative
Agent pursuant to which Portfolio Investment Entities that are not controlled by
affiliates of Borrower are directed to make distributions with respect to
Portfolio Investments substantially in the form of Exhibit H.
     Dollars means lawful money of the United States.
     EBITDA means Net Operating Income less the sum of (x) all general and
administrative fees and expenses actually paid and asset management fees paid in
cash by Borrower plus (y) Borrower’s Pro Rata Share of (A) all administrative
fees and expenses actually paid by any Portfolio Investment Entity or any Person
in which any Portfolio Investment Entity has a direct or indirect interest, and
(B) asset management fees paid in cash by any Portfolio Investment Entity or any
Person in which any Portfolio Investment Entity has a direct or indirect
interest, in each case to the extent Borrower is directly or indirectly subject
thereto. (For example, asset management fees paid by the Core Fund are not
included in this calculation, because the Borrower does not bear any of the cost
of any such asset management fees in respect of its interest in the Core Fund.)
For the avoidance of doubt, the calculation of EBITDA provided for in this
definition shall not duplicate the deduction of any expenses accounted for in
the definition of Net Operating Income and shall not include any organizational
or offering expenses paid from offering proceeds.
     Eligible Assignee means any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia and
having total assets in excess of $1,000,000,000; and (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000 calculated in accordance with generally accepted accounting
principles.
     Environmental Claim means any investigation, written notice, violation,
written demand, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or

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written claim whether administrative, judicial, or private in nature arising
(a) pursuant to, or in connection with, an actual or alleged violation of, any
Environmental Law, (b) in connection with any Hazardous Material, (c) from any
assessment, abatement, removal, remedial, corrective, or other response action
in connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged environmental damage, injury,
threat, or harm to health, safety, natural resources, or the environment.
     Environmental Indemnity has the meaning assigned in Section 5.5.
     Environmental Law(s) means any current or future requirement of any
Governmental Authority pertaining to (a) in connection with Hazardous Materials
or environmental matters, the protection of health, safety, and the indoor or
outdoor environment, (b) in connection with Hazardous Materials or environmental
matters, the conservation, management, or use of natural resources and wildlife,
(c) in connection with Hazardous Materials or environmental matters, the
protection or use of surface water and groundwater, (d) the management,
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal, remediation
or handling of, or exposure to, any Hazardous Material or (e) pollution
(including, without limitation, any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC
1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials
Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and Health Act
of 1970, as amended, 29 USC 651 et seq. (to the extent only that the same
relates to environmental matters), Oil Pollution Act of 1990, 33 USC 2701 et
seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC 111001
et seq. (to the extent only that the same relates to environmental matters),
National Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking
Water Act of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing
or successor law, and any amendment, rule, regulation, order, or binding
directive issued thereunder.
     ERISA as defined in Section 6.8.
     Event of Default as defined in Section 9.1.
     Facility as defined in Section 1.3.
     Federal Funds Rate means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so

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published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to the Administrative Agent (in its
individual capacity) on such day on such transactions as determined by the
Administrative Agent.
     Fee Letter means the fee and expense letter of even date between the
Administrative Agent and the Borrower.
     Fees means all fees payable pursuant to Section 2.4.
     Fixed Charges means, for any period, the sum of (i) Interest Expense, plus
(ii) principal amortization of any Indebtedness of Borrower and Borrower’s Pro
Rate Share of any principal amortization of any Indebtedness of any Portfolio
Entity or any Person in which any Portfolio Entity has a direct or indirect
interest, plus (iii) dividends on preferred stock issued by Borrower and
Borrower’s Pro Rata Share of dividends on preferred stock issued by any
Portfolio Entity or any Person in which any Portfolio Entity has a direct or
indirect interest, in each case during such period.
     Funded Debt means, as of any date, all Indebtedness and Guaranty
Obligations of Borrower and Borrower’s Pro Rata Share of all Indebtedness and
Guaranty Obligations of the Portfolio Investment Entities and of all Persons in
which any Portfolio Investment Entity has a direct or indirect interest as of
such date; provided, that Funded Debt shall not include any liabilities shown on
the Borrower’s balance sheet as “due to affiliates” that are subordinate to the
Facility.
     Funded Debt Documents as defined in Section 6.16.
     Future Commitment as defined in Section 11.13.
     GAAP means generally accepted accounting principles in the United States
applied on a consistent basis and subject to Section 1.4, and, with respect to
assets located outside the United States, subject to generally accepted
accounting principles as applied in the jurisdiction where such foreign assets
are located.
     General Partner means the general partner of the Borrower, as such general
partner is identified in Section 6.6.3.
     Governmental Authority means any federal, state, local, provincial or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
     Guarantor means Hines Real Estate Investment Trust, Inc., a Maryland
corporation.
     Guaranty means that certain Unconditional Guaranty of Payment and
Performance dated of even date herewith and executed by Guarantor in favor of
Administrative Agent and the Lenders.
     Guaranty Obligations means any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing any Indebtedness, leases, dividends or other obligations of any
other Person in any manner, whether

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direct or indirect, and including, without limitation, any obligation, whether
or not contingent, (a) to purchase any such Indebtedness or other obligation or
any property constituting security therefor; (b) to advance or provide funds or
other support for the payment or purchase of such Indebtedness or obligation or
to maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements), (c) to lease
or purchase property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or obligation, or (d) to otherwise
assure or hold harmless the owner of such Indebtedness or obligation against
loss in respect thereof.
     Hazardous Materials means and includes asbestos, flammable materials,
explosives, radioactive substances, polychlorinated biphenyls, radioactive
substances, other carcinogens, oil and other petroleum products, pollutants or
contaminants that could be a detriment to the environment, and any other
hazardous or toxic materials, wastes, or substances which are defined,
determined or identified as such in any past, present or future Environmental
Laws.
     Indebtedness means, with respect to any Person at any time, without
duplication, (a) all indebtedness for borrowed money outstanding at such time,
(b) the deferred purchase price of assets or services which in accordance with
GAAP would be shown to be a liability (or on the liability side of a balance
sheet) at such time, (c) all Guaranty Obligations of such Person outstanding at
such time, (d) the maximum amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder and
not reimbursed at such time, (e) all capitalized lease obligations outstanding
at such time, (f) all Indebtedness of another Person outstanding at such time
secured by any Lien on any property of such Person, whether or not such
Indebtedness has been assumed (limited to the greater of (i) the amount of such
Indebtedness as to which there is recourse to such Person at such time and
(ii) the fair market value of the property which is subject to the Lien),
(g) all obligations existing at such time under take-or-pay or similar
arrangements or under interest rate, currency, or commodities agreements, (h)
indebtedness outstanding at such time created or arising under any conditional
sale or title retention agreement, (i) obligations of such Person outstanding at
such time with respect to withdrawal liability or insufficiency under ERISA or
under any Plan and (j) the principal portion of all obligations of such Person
outstanding at such time under any synthetic lease, tax retention operating
lease, off balance sheet loan or similar off balance sheet financing product of
such Person where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with GAAP;
provided, however, that Indebtedness shall not include trade payables and
accrued expenses arising or incurred in the ordinary course of business. The
Indebtedness of any Person shall include the Indebtedness of any partnership or
unincorporated joint venture in which such Person is legally obligated with
respect thereto (to the extent of such obligation) and shall include all
Indebtedness of such Person under this Agreement.
     Individual Lender Litigation Expenses means all costs and expenses
(including, without limitation, reasonable attorneys’ fees and costs) incurred
by any individual Lender in any litigation concerning the Facility in which such
Lender has been named as a party defendant, but only to the extent such costs
and expenses are reimbursable to such Lender by the Borrower under the Credit
Documents.

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     Interest Expense means, for any period, the aggregate amount of interest
paid by Borrower during such period on any Indebtedness of Borrower (including
the Facility) plus Borrower’s Pro Rata Share of all interest paid during such
period on any Indebtedness of any Portfolio Investment Entity or of any Person
in which a Portfolio Investment Entity has a direct or indirect interest.
     Interest Payment Date means (a) as to Variable Rate Loans, the last day of
each calendar month and the Maturity Date, and (b) as to LIBOR Loans, the last
day of each calendar month, the last day of each applicable Interest Period and
the Maturity Date; provided, however, if such day is not a Business Day, then
the Interest Payment Date shall be (x) as to the Variable Rate Loans, the next
day following that is a Business Day and (y) as to LIBOR Loans, the next day
following that is a Business Day unless such Business Day is in the next
calendar month in which case the Interest Payment Date shall be the immediately
preceding Business Day.
     Interest Period.
     (A) The term “Interest Period” means with respect to each LIBOR Loan: a
period of one (1), two (2), or three (3) consecutive months, subject to
availability, as selected, or deemed selected, by Borrower at least three
(3) Business Days prior to the Loan, or if a Loan is already outstanding, at
least three (3) Business Days prior to the end of the current Interest Period
with respect to that Loan. Each such Interest Period shall commence on the
Business Day so selected, or deemed selected, by Borrower and shall end on the
numerically corresponding day in the first, second, or third month thereafter,
as applicable. Provided, however: (i) if there is no such numerically
corresponding day, such Interest Period shall end on the last Business Day of
the applicable month, (ii) if the last day of such an Interest Period would
otherwise occur on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day; but (iii) if such extension
would otherwise cause such last day to occur in a new calendar month, then such
last day shall occur on the next preceding Business Day.
     (B) The term “Interest Period” shall mean with respect to each Variable
Rate Loan consecutive periods of one (1) day each.
     (C) No Interest Period may be selected which would extend beyond the then
current Maturity Date of the Facility (as actually extended).
     Investment shall mean the acquisition of any real or tangible personal
property, stock or other interest (whether economic, legal or beneficial and
whether direct or indirect), security, loan, advance, bank deposit, money market
fund, contribution to capital, extension of credit (except for accounts
receivable arising in the ordinary course of business and payable in accordance
with customary terms), or purchase or commitment or option to purchase or
otherwise acquire real estate or tangible personal property or stock or other
interests or securities of any party or any part of the business or assets
comprising such business, or any part thereof.
     Late Charges as defined in Section 2.3.15.
     Legal Requirements means all applicable federal, state, county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any governmental agency or authority having or claiming jurisdiction with
respect thereto, including, but not limited to, those

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applicable to zoning, subdivision, building, health, fire, safety, sanitation,
the protection of the handicapped, and environmental matters and shall also
include all orders and directives of any court, governmental agency or authority
having or claiming jurisdiction with respect thereto.
     Lenders as defined in the Preamble.
     LIBOR Rate Loan or LIBOR Loan means any principal outstanding under this
Agreement which bears interest at a rate determined by the LIBOR Rate.
     LIBOR Rate means, as applicable to any LIBOR Loan, the rate per annum
(rounded upward, if necessary, to the nearest one hundred-thousandth of a
percentage point) as determined on the basis of the offered rates for deposits
in U.S. dollars, for a period of time comparable to such LIBOR Loan which
appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that
is two London Banking Days preceding the first day of such LIBOR Loan; provided,
however, if the rate described above does not appear on the Telerate System on
any applicable interest determination date, the LIBOR Rate shall be the rate
(rounded upwards as described above, if necessary) determined on the basis of
the offered rates for deposits in U.S. dollars for a period of time comparable
to such LIBOR Loan which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two
(2) London Banking Days preceding the first day of such LIBOR Loan as selected
by Lender. The principal London office of each of the four major London banks
will be required to provide a quotation of its U.S. dollars deposit offered
rate. If at least two such quotations are provided, the rate for that date will
be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such LIBOR Loan offered by major banks in New York
City at approximately 11:00 a.m. New York City time, on the day that is two
London Banking Days preceding the first day of such LIBOR Loan. In the event
that Lender is unable to obtain any such quotation as provided above, it will be
deemed that the LIBOR Rate for a LIBOR Loan cannot be determined. In the event
that the Board of Governors of the Federal Reserve System shall impose a Reserve
Percentage with respect to LIBOR Rate deposits of Lender, then for any period
during which such Reserve Percentage shall apply, the LIBOR Rate shall be equal
to the amount determined above divided by an amount equal to 1 minus the Reserve
Percentage. “Reserve Percentage” shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed on member banks of the Federal Reserve System against
“Euro-Currency Liabilities” as defined in Regulation D.
     Lien means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing), any conditional sale or other title retention agreement, any
financing or similar statement or notice perfecting a security interest under
the Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction, or other similar recording or notice statute, and any lease in the
nature thereof. Provided, however, liens for the payment of real estate taxes
and for other state, municipal or utility charges shall not be considered
“Liens” for purposes of the Facility to the extent that such liens relate to
taxes and other charges that are not then due and payable.

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     Liquidation Proceeds means, without duplication, the proceeds and cash
recovered by or paid to Administrative Agent and the Lenders during an Event of
Default.
     Loan or Loans as defined in Section 2.1(a).
     London Banking Day means any day on which dealings in deposits in Dollars
are transacted in the London interbank market.
     MAI Appraisal means real property appraisal(s) of the value of any
Portfolio Asset, determined on a market value basis, performed and prepared,
impartially by an independent MAI qualified appraiser(s) that is reasonably
acceptable to the Administrative Agent, (provided, however, CB Richard Ellis and
Cushman & Wakefield shall be deemed acceptable for the purposes hereof). Each
such MAI Appraisal shall have been prepared in accordance with the Uniform
Standards of Professional Appraisal Practice and the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
     Mandatory Prepayments as defined in Section 2.3.10(b)(i).
     Make Whole Provision as set forth in Section 2.3.16.
     Material Adverse Effect means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets, liabilities or
prospects of the Borrower, (ii) the ability of the Borrower to perform any
material obligation under the Credit Documents to which it is a party, or
(iii) the material rights and remedies of the Administrative Agent or any Lender
under the Credit Documents.
     Maturity shall mean the Maturity Date, or in any instance, upon
acceleration of the indebtedness under the Facility, if such indebtedness has
been accelerated by Administrative Agent.
     Maturity Date as defined in Section 2.2.
     Maximum Loan Amount means Sixty Million Dollars ($60,000,000.00) as the
same may be reduced pursuant to the terms of this Agreement.
     Net Cash Flow means, for any period and without duplication, the sum of
(a) dividends in connection with marketable securities owned by Borrower and
interest income earned by Borrower on its cash and Investments plus (b) the
portion of the following amount (without duplication) that is Available for
Distribution to Borrower from its Investments: (i) Borrower’s Pro Rata Share of
all cash received from all of Borrower’s Investments, including without
limitation, all rents, common area maintenance charges, insurance premiums and
tax reimbursements and proceeds from rental interruption insurance, but
specifically excluding any proceeds from any casualty or condemnation related
to, or from the refinancing of or the sale or other disposition of, any of
Borrower’s Investments (unless approved by Administrative Agent and other than
where the primary business of a Portfolio Investment Entity is the sale of
individual residential condominiums or units; with respect to the sale of
individual residential condominiums or units actually closed during the
applicable quarter, Net Cash Flow shall be calculated based on the actual sale
proceeds of such units closed in the applicable quarter less the

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actual costs of such units), minus (ii) Borrower’s Pro Rata Share of the sum of
the following costs and expenses paid in cash in connection with Borrower’s
Investments during such period: (A) all Capital Expenditures other than Capital
Expenditures made with either the proceeds of Funded Debt or the proceeds of
additional equity contributions made by Borrower, plus (B) any and all costs and
expenses of a non-capital nature, including but not limited to, operating,
maintenance, administrative, legal and accounting expenses (unless already
deducted when reserved pursuant to the following subclause C) plus (C) without
duplication of any cost or expense in the preceding subclause (B), amounts
reserved for taxes, insurance and replacement reserves in accordance with the
past practices of the entity that owns such Investment, plus (D) all interest
and principal payments made in respect of Funded Debt.
     Net Operating Income means, for any period and without duplication,
Borrower’s Pro Rata Share of the following amount: (i) all operating revenues
from all Portfolio Assets, including without limitation, all rents, common area
maintenance charges, insurance premium and tax reimbursements and proceeds from
rental interruption insurance, but specifically excluding revenues from
extraordinary events, any proceeds from any casualty or condemnation related to,
or from the refinancing of or the sale or other disposition of, any Portfolio
Assets minus (ii) the sum of the following costs and expenses incurred in
connection with Portfolio Assets during such period: (A) any and all costs and
expenses of a non-capital nature, including but not limited to, operating,
maintenance, administrative, legal and accounting expenses (unless already
deducted when reserved pursuant to the following subclause (B)) but excluding
payments on Funded Debt plus (B) without duplication of any cost or expense in
the preceding subclause (A) amounts reserved for taxes, insurance and
replacement reserves, plus (C) a capital expense reserve equal to $.50 per
square foot of the Portfolio Assets per annum calculated on a pro rata basis for
any period less than one (1) year.
     Net Sales Proceeds means, with respect to the Borrower, the aggregate cash
proceeds received by the Borrower in respect of any Portfolio Disposition by the
Borrower, or cash distributions to Borrower from the aggregate cash proceeds of
Portfolio Distributions by another Person, net of (a) all reasonable and
customary direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions), (b) taxes paid or payable as a
result thereof and (c) existing Indebtedness (other than the Facility) repaid
with the proceeds received from such Portfolio Disposition; it being understood
that “Net Sales Proceeds” shall include, without limitation, Borrower’s Pro Rata
Share of any cash received upon the financing, sale or other disposition of any
non-cash consideration received in any Portfolio Disposition to the extent
Borrower receives such cash.
     Notes means the promissory notes payable to each of the Lenders in the
aggregate principal amount of Sixty Million and 00/100 Dollars ($60,000,000.00),
substantially in the form of Exhibit F attached hereto, with the term “Note”
meaning any one of the Notes.
     Other Taxes as defined in Section 2.3.4.2(b).
     Partnership Agreement means that certain Second Amended and Restated
Agreement of Limited Partnership of Hines REIT Properties, L.P., dated as of
May 25, 2004, as may be amended or modified from time to time hereafter in
accordance with the terms hereof.

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     Perfected LP Interest shall mean an assignment of ownership or economic
interest in favor of Administrative Agent on behalf of Lenders in effect with
respect to a Portfolio Investment.
     Permitted Investment means all Investments reflected on the financial
statements of Borrower heretofore delivered to Administrative Agent and all
Investments of a substantially similar type, the Portfolio Investment Entities
in which Borrower has an interest as of the date hereof and which have been
identified to Administrative Agent, all Investments held by Borrower through
such Portfolio Investment Entities as of the date hereof, including the
California Property, and all other Investments hereafter made by Borrower which
Administrative Agent consents to being Permitted Investments, such consent not
to be unreasonably withheld.
     Permitted Liens means (a) Liens created by, under or in connection with
this Agreement or the other Credit Documents in favor of the Administrative
Agent for the benefit of the Lenders or evidenced by the Funded Debt Documents
listed on Exhibit B, (b) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
have been established (and as to which the property subject to such Lien is not
yet subject to foreclosure, sale or loss on account thereof); (c) Liens in
respect of property imposed by law arising in the ordinary course of business
such as materialmen’s, mechanics’, warehousemen’s and other like Liens; provided
that such Liens secure only amounts not yet due and payable or amounts being
contested in good faith by appropriate proceedings for which adequate reserves
have been established (and as to which the property subject to such Lien is not
yet subject to foreclosure, sale or loss on account thereof); (d) pledges or
deposits made to secure payment under worker’s compensation insurance,
unemployment insurance, pensions, social security programs, public liability
laws or similar legislation; (e) any attachment or judgment Lien, unless the
judgment it secures is not, within 30 days after entry thereof, discharged or
the execution thereof stayed pending appeal, or is not discharged within 30 days
after the expiration of such stay; (f) Liens securing Indebtedness permitted
under Section 7.4; or (g) Liens on any Portfolio Investment, including any
transfer restrictions thereon, pursuant to the terms of any organizational
documents to which such Portfolio Investment is subject to or (ii) the terms of
any instrument representing or governing such Portfolio Investment.
     Permitted Portfolio Disposition as defined in Section 3.2(d).
     Person means any individual, partnership, joint venture, firm, corporation,
limited liability company, association, trust or other entity or enterprise
(whether or not incorporated), or any Governmental Authority.
     Plan means any “multiemployer plan” or “single-employer plan” as defined in
Section 4001 of ERISA which the Borrower sponsors, maintains or contributes to
or has any liability.
     Plan Assets means such term within the meaning and as defined in the
Department of Labor Regulation 29 CFR §2510.3-101, as amended, modified,
succeeded or replaced from time to time and the advisory opinions and rulings
issued thereunder.
     Pledge Agreement means that certain Ownership Interests Pledge and Security
Agreement dated as of even date herewith executed by Borrower for the benefit of

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Administrative Agent and Lenders, as may be amended from time to time in
accordance with this Agreement.
     Portfolio Asset means any real property asset directly or indirectly held
by a Portfolio Investment Entity.
     Portfolio Disposition means any disposition of all or any portion of any or
all of the Portfolio Investments of Borrower or Portfolio Assets by a Subsidiary
of Borrower, whether by sale, transfer or otherwise, other than (i) leasing of
space in a Portfolio Asset in the normal course of business, or (ii) where the
primary business of such Subsidiary is the sale of multiple condominium or
housing units, the disposition of any such units in the ordinary course of
business.
     Portfolio Investment Entity means a Person in which Borrower has a direct
ownership interest and which directly or indirectly holds interests in real
property.
     Portfolio Investment means all of Borrower’s interest as a general partner,
limited partner, member or shareholder (including, without limitation,
Borrower’s voting rights) in any Portfolio Investment Entity.
     Prime Rate means the per annum rate of interest so designated from time to
time by KeyBank National Association as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.
     Register as defined in Section 11.15.3.
     Regulation D, G, T, U or X means, respectively, Regulation D, G, T, U and X
of the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
     REIT means a “real estate investment trust”, as such term is defined in
Section 856 of the Code.
     Reportable Event as defined in Section 6.8.
     Required Lenders means, at any time, Lenders which are then in compliance
with their obligations hereunder (as determined by the Administrative Agent) and
holding in the aggregate at least sixty-six and two thirds percent (66 2/3%) of
(i) the Commitments (and participation interests therein) or (ii) if the
Commitments have been terminated, the outstanding Loans and participation
interests therein.
     Required Reduction shall have the meaning set forth in Section 3.2(g).
     Reserve Percentage shall have the meaning set forth within the definition
of LIBOR Rate.
     Security Documents shall mean, collectively, the Pledge Agreement and the
related UCC-1 Financing Statements.

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     Solvent means, with respect to any Person as of a particular date, that on
such date (a) such Person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person’s assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value of
the assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person and
(e) the present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that would be expected to become an
actual or matured liability.
     Subsidiary means as to any Person (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of stock of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time.
     Tangible Net Worth means the excess of Total Asset Value over Funded Debt.
     Taxes shall having the meaning set forth in Section 2.3.4.2(a).
     Term as defined in Section 2.2.
     Total Asset Value means the sum of (a) Borrower’s Pro Rata Share of the
Appraised Asset Value of the Portfolio Assets, (b) unrestricted cash then held
by Borrower and Borrower’s Pro Rata Share of any unrestricted cash held by any
Portfolio Investment Entity or any Person in which a Portfolio Investment Entity
has a direct or indirect interest, plus (c) the value of unencumbered marketable
securities then owned by Borrower and Borrower’s Pro Rata Share of the value of
unencumbered marketable securities then owned by any Portfolio Investment Entity
or any Person in which a Portfolio Investment Entity has a direct or indirect
interest, in each case as determined by the closing price thereof on a major
exchange on the last Business Day of the relevant calendar quarter or, if
applicable, on such other Business Day as to which Total Asset Value is being
determined.
     UCC means the Uniform Commercial Code in effect in the Commonwealth of
Massachusetts and in each jurisdiction in which the Portfolio Assets are
situated, as the same may be amended from time to time.

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     Variable Rate means a per annum rate equal at all times to the greater of
(a) Prime Rate and (b) Adjusted Federal Funds Rate. Changes in the Variable Rate
shall be effective simultaneously with any change in the Prime Rate or Federal
Funds Rate, as applicable.
     Variable Rate Loan means any Loan bearing interest at a rate determined by
reference to the Variable Rate.

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Exhibit B
ASSETS; FUNDED DEBT; SUBSIDIARIES
Subsidiary
     Hines REIT 1900/2000 Alameda de Las Pulgas LLC, a Delaware limited
liability company (“SPE Subsidiary”). SPE Subsidiary is a direct wholly owned
Subsidiary of Borrower.
Portfolio Investments

      Name of Portfolio Investment Entity   Ownership Interest      
Hines-Sumisei U.S. Core Office Fund, L.P.   90,186.529 Partnership     Units    
(representing 22.0921% of     outstanding Partnership Units) (Following the
closing of the acquisition of the     California Property) SPE Subsidiary  
100.000%

Portfolio Assets

          Indirect Portfolio Asset   Ownership Interest
425 Lexington Avenue, New York, New York
  8.969%
499 Park Avenue, New York, New York
  8.969%
1200 Nineteenth Street, N.W., Washington, D.C.
  8.969%
Manhattan Tower, 600 Lexington Avenue (101 East 52nd Street),
New York, New York
  8.969%
One Shell Plaza, 910 Louisiana Street, Houston, Texas
  10.050%
Two Shell Plaza, 777 Walker Street, Houston, Texas
  10.050%
The KPMG Building, 55 Second Street, San Francisco, California
  20.100%
101 Second Street, San Francisco, California
  20.100%
Three First National Plaza, 70 West Madison Street, Chicago,
Illinois
  16.080%

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          Indirect Portfolio Asset   Ownership Interest
1900 Alameda de Las Pulgas and 2000 Alameda de Las Pulgas in San Mateo,
California, commonly known as California Casualty Plaza 1
  100.000%

 

1.   California Casualty Plaza will not constitute a Portfolio Asset until the
acquisition of the California Property is consummated on or after the Closing
Date with the proceeds of the Facility.

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Existing Funded Debt and Funded Debt Documents 2

A.   Mortgage Loan for 425 Lexington Avenue, New York, NY, 499 Park Avenue, New
York, NY and 1200 Nineteenth Street, N.W., Washington,
D.C.                         

     Loan Agreement, dated August 19, 2003, executed by and among Hines 425,
Hines 499, Hines 1200 and Bank of America, N.A., a national banking association
(“BofA”) and Connecticut General Life Insurance Company, a Connecticut
corporation (“CIGNA”; BofA and Cigna, collectively, “Portfolio Lender”), as
acknowledged and agreed to by HSNY and various other parties. The aggregate
principal balance outstanding under such Loan Agreement and the Notes described
below is $316,405,000.00.
     Note Severance and Modification Agreement, dated August 19, 2003, executed
by and among Hines 425, Hines 499, Hines 1200 and Portfolio Lender.
     $316,405,000.00 Consolidated, Amended, and Restated Promissory Note, dated
August 19, 2003, executed by and among Hines 425, Hines 499, Hines 1200 and
Portfolio Lender.
     $160,000,000.00 Replacement Note A-1, dated August 19, 2003, executed by
Hines 425, Hines 499 and Hines 1200 for the benefit of BofA.
     $104,600,000.00 Replacement Note A-2, dated August 19, 2003, executed by
Hines 425, Hines 499 and Hines 1200 for the benefit of BofA.
     $51,805,000.00 Replacement Note B, dated August 19, 2003, executed by Hines
425, Hines 499 and Hines 1200 for the benefit of CIGNA.
     Guaranty of Payment, dated August 19, 2003, executed by Hines Real Estate
Holdings Limited Partnership, a Texas limited partnership (“HREH”), for the
benefit of Portfolio Lender.
     Agreement of Consolidation and Modification of Mortgage, Assignment of
Leases and Rents, and Security Agreement, dated August 19, 2003, executed by and
among Hines 425, Hines 499 and Portfolio Lender.
     Deed of Trust and Security Agreement, dated August 19, 2003, executed by
Hines 1200, for the benefit of Portfolio Lender.
     UCC-1 Financing Statements of each of the following:
     Hines 425, as Debtor, filed in the UCC Records of the Delaware Secretary of
State
     Hines 499, as Debtor, filed in the UCC Records of the Delaware Secretary of
State
 

2.   This list of Funded Debt and Funded Debt Documents is in addition to the
Funded Debt under the Facility and the Credit Documents (in each case as defined
in the Agreement to which this Exhibit B is attached).

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     Hines 499 and Hines 425, as Debtor, filed in the Real Property Records of
New York County, New York
     Hines 1200, as Debtor, filed in the UCC Records of the Delaware Secretary
of State
     Hines 1200, as Debtor, filed in the Real Property Records of the District
of Columbia
     Assignments and Subordinations of Management Agreements, each dated
August 19, 2003, executed by and among:
     Hines 425, Portfolio Lender and Hines Interests Limited Partnership, a
Delaware limited partnership (“Manager”), as acknowledged and agreed to by HSNY
     Hines 499, Portfolio Lender and Manager, as acknowledged and agreed to by
HSNY
     Hines 1200, Portfolio Lender and Manager, as acknowledged and agreed to by
HSNY
     Five Party Agreements Relating to Lockbox Services, each dated August 19,
2003, executed by and among the following, together with Portfolio Lender’s
Initial Instructions to Bank, dated of even date therewith:
     Hines 425, Hines NYOP and Portfolio Lender
     Hines 499, Hines NYOP and Portfolio Lender
     Hines 1200, Hines NYOP and Portfolio Lender

B.   Mortgage Loan for Manhattan Tower, 600 Lexington Avenue, New York, NY

     Consolidation, Modification and Restatement of Notes, dated February 2,
2004, executed by and among Hines 600 and CIGNA. The principle balance
outstanding under such Note is $49,850,000.
     Consolidation, Modification and Restatement of Mortgages and Security
Agreement, dated February 2, 2004, by and between Hines 600 and CIGNA.
     Assignment of Rent and Leases, dated February 2, 2004, executed by and
among Hines 600 and CIGNA.
     Collateral Assignment of Contracts, Licenses, Permits and Warranties and
Security Agreement, dated February 2, 2004, executed by and among Hines 600 and
CIGNA
     Prepaid Rent Escrow and Security Agreement, dated February 2, 2004,
executed by and among Hines 600, CIGNA and GMAC Commercial Mortgage Corporation
(“GMAC”), a California corporation.
     Real Estate Tax Escrow and Security Agreement, dated February 2, 2004,
executed by and among Hines 600, CIGNA, and GMAC.
     Real Estate Tax Payment Guaranty, dated February 2, 2004, executed by and
among Hines Real Estate Holdings Limited for the benefit of CIGNA.

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     Recourse Exceptions Guaranty, dated February 2, 2004, executed by Hines 600
for the benefit of CIGNA.
     Environmental Indemnification Agreement, dated February 2, 2004, executed
by Hines 600 for the benefit of CIGNA.
     Subordination of Property Management and Leasing Agreement, dated
February 2, 2004, executed by Hines 600, Hines Interests Limited Partnership in
favor of CIGNA.
     Assignment of Consolidation, Modification and Restatement of Mortgage,
Assignment of Leases and Rents and Security Agreement, dated February 2, 2004,
executed by and among Fleet National Bank and CIGNA.
     Assignment of Note, dated February 2, 2004, executed by and among Fleet
National Bank and CIGNA.
     Letter re Agreement & Conditions, dated February 2, 2004, executed by and
among Hines 600 and CIGNA.
     Mortgage Spreader Agreement, dated February 2, 2004, executed by and among
No. 1 Times Square Development LLC, Hines 600 and Fleet National Bank.
     Partial Release of Lien of Mortgaged Premises, dated February 2, 2004,
executed by and among Fleet National Bank and No. 1 Times Square Development
LLC.
     UCC-1 Financing Statement of Hines 600, as Debtor, filed in the UCC Records
of the Delaware Secretary of State.
     UCC-1 Financing Statement of Hines 600, as Debtor, filed in the UCC Records
of New York City.
     Letter Agreement, dated February 2, 2004, by Hines 600 issued to CIGNA
regarding certain post-closing matters.
     C. Mortgage Loan for One Shell Plaza & Two Shell Plaza, Houston, TX
     Loan Agreement, dated May 10, 2004, executed by and among Hines Louisiana
Walker One, LP (“Hines I Borrower”), Hines Louisiana Walker Two, LP (“Hines II
Borrower”), Hines Louisiana Walker Three, LP (“Hines III Borrower”) (jointly and
severally, “Borrower”), and Prudential Mortgage Capital Company, LLC (“PMCC”).
The aggregate principle balance outstanding under such Loan Agreement and Notes
described below is $195,500,000.
     $131,962,500 Promissory Note (A), dated May 10, 2004, executed by and among
Borrower and PMCC.
     $63,537,500 Promissory Note (B), dated May 10, 2004, executed by and among
Borrower and PMCC.

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     Assignment of Assignment of Leases and Rents, dated May 10, 2004, executed
by and among Borrower and PMCC.
     Assignment of Fee and Leasehold Deed of Trust and Security Agreement (with
Fixture Filing), dated May 10, 2004, executed by and among Borrower, PMCC, and
Prudential Mortgage Capital Funding, LLC.
     Assignment of Leases and Rents, dated May 10, 2004, executed by and among
Borrower and PMCC.
     Assignment of Parking Management Agreement and Subordination of Parking
Management Fees, dated May 10, 2004, executed by and among Borrower, PMCC, and
Hines US Services, Inc.
     Assignment of Permits, dated May 10, 2004, executed by and among Borrower
and PMCC.
     Assignment of Property Management Agreement and Subordination of Property
Management Fees, dated May 10, 2004, executed by and among Borrower, PMCC, and
Hines Interests Limited Partnership.
     Cash Management Agreement, dated May 10, 2004, executed by and among
Borrower, PMCC and Hines Interests Limited Partnership.
     Closing Certification, dated May 10, 2004, executed by and among Borrower
and PMCC.
     Confirmatory Agreement, dated January 19, 2005, executed by and among Hines
I Borrower, LaSalle Bank National Association and the Prudential Insurance
Company of America.
     Environmental Indemnity Agreement, dated May 10, 2004, executed by Borrower
for the benefit of PMCC.
     Fee and Leasehold Deed of Trust and Security Agreement (with Fixture
Filing), dated May 10, 2004, executed by and among Borrower and PMCC.
     Restricted Account Agreement, dated May 10, 2004, executed by and among
executed by and among Borrower and PMCC.
     UCC-1 Financing Statement of Borrower, as Debtor, filed in the UCC Records
of the Delaware Secretary of State.
     D. Mortgage Loan for The KPMG Building, 55 Second Street, San Francisco, CA
     Deed of Trust, Security Agreement with Assignment of Rents and Leases and
Fixture Filing, dated September 20, 2004, executed by and among Hines 55, NLI
Properties West, Inc

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(“NLI”) and Hines Interests Limited Partnership (“HILP”). The principle balance
outstanding under such agreement is $80,000,000.
     $80,000,000 Promissory Note, dated September 20, 2004, executed by and
among Hines 55 and NLI.
     Cash Management Agreement, dated September 20, 2004, executed by and among
Hines 55, NLI and HILP.
     Collateral Assignment of Contracts, Licenses and Permits, dated
September 20, 2004, executed by and among Hines 55, NLI and HILP.
     Environmental Indemnification Agreement, dated September 20, 2004, executed
by Hines 55 for the benefit of NLI.
     Letter re Loan from NLI, dated September 20, 2004, executed by and among
Hines 55 and NLI.
     Restricted Account Agreement, dated September 20, 2004, executed by and
among NLI, Hines 55 and Wells Fargo Bank, N.A.
     Subordination of Property Management and Leasing Agreement, dated
September 20, 2004, executed by Hines 55 in favor of NLI.
     Tax and Insurance Escrow Account, dated September 20, 2004, executed by and
among Hines 55, NLI and L.J. Melody and Company of Texas, LP.
     UCC-1 Financing Statement of Hines 55, as Debtor, filed in the UCC Records
of the Delaware Secretary of State.
     E. Mortgage Loan for 101 Second Street, San Francisco, CA
     Amended and Restated Deed of Trust, Security Agreement with Assignment of
Rents and Leases and Fixture Filing, dated September 20, 2004, executed by and
among Hines 101 Second Street LP (“Hines 101”), First American Title Insurance
Company (“Trustee”) and NLI Properties West, Inc. (“NLI”). The principle balance
outstanding under such agreement is $75,000,000.
     $75,000,000 Loan Modification Agreement dated September 20, 2004, executed
by and among Hines 101 and NLI.
     $90,000,000 Loan Assumption and Release Agreement dated September 20, 2004,
executed by and among Cousin/Myers Second Street Partners, L.L.C., Cousins
Properties Incorporated, Hines 101 and NLI.
     $90,000,000 Promissory Note dated April 19, 2000, executed by and among
Cousins/Meyers Second Street Partners, L.L.C. and NLI.

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     Cash Management Agreement, dated September 20, 2004, executed by and among
Hines 101, NLI and Hines Interests Limited Partnership.
     Collateral Assignment of Contracts, Licenses and Permits dated April 19,
2000, executed by and among Cousins/Myers Second Street Partners, L.L.C. and
NLI.
     Environmental Indemnification Agreement dated September 20, 2004, executed
by Hines 101 for the benefit of NLI.
     Letter re Loan from NLI Properties West dated September 20, 2004, executed
by and among Hines 101 and NLI.
     Restricted Account Agreement dated September 20, 2004, executed by and
among NLI, Hines 101 and Wells Fargo Bank, N.A.
     Subordination of Property Management and Leasing Agreement dated
September 20, 2004, executed by Hines and HILP for the benefit of NLI.
     Tax and Insurance Escrow Agreement dated September 20, 2004, executed by
and among Hines 101, NLI and L.J. Melody and Company of Texas, LP.
     UCC-1 Financing Statement of Hines 101, as Debtor, filed in the UCC Records
of the Delaware Secretary of State.
     F. Mortgage Loan for Three First National Plaza
     Absolute Assignment of Leases and Rents, dated March 22, 2005, executed by
and among Hines 70 West Madison LP (“Hines 70”) and The Northwestern Mutual Life
Insurance Company (“NWM”). The principal balance outstanding under such
agreement is $141,000,000.
     $126,900,000 Promissory Note, dated March 22, 2005, executed by and among
Hines 70 and NWM.
     $14,100,000 Promissory Note, dated March 22, 2005, executed by and among
Hines 70 and NWM.
     Environmental Indemnity Agreement, dated March 22, 2005, executed by Hines
70 for the benefit of NWM.
     Fee and Leasehold Mortgage and Security Agreement, dated March 22, 2005,
executed by and among Hines 70 West Madison LP and The Northwestern Mutual Life
Insurance Company.
     Non-Disturbance and Attornment Agreement, executed by and among Bear Sterns
& Co., Inc., Hines 70 and NWM.
     Non-Disturbance and Attornment Agreement, dated March 9 2005, executed by
and among Bell, Boyd & Lloyd LLC, Hines 70 and NWM.

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     Non-Disturbance and Attornment Agreement, executed by and among Foley &
Lardner LLP, Hines 70 and NWM.
     Non-Disturbance and Attornment Agreement, dated March 3, 2005, executed by
and among The Privatebank and Trust Company, Hines 70 and NWM.
     Non-Disturbance and Attornment Agreement, dated February 17, 2005, executed
by and among Ungaretti & Harris, Limited, Hines 70 and NWM.
     UCC-1 Financing Statement of Hines 70, as Debtor filed in the UCC Records
of the Delaware Secretary of State.

G.   Credit Facility for Hines-Sumisei NY Core Office Trust and Hines-Sumisei NY
Core Office Trust II                         

     Credit Agreement, dated January 28, 2005, executed by and among
Hines-Sumisei NY Core Office Trust (“HSNY”), Hines-Sumisei NY Core Office Trust
II (“HSNYII”) and KeyBank National Association (“KeyBank”). The principal
balance outstanding under such Credit Agreement is $15,000,000.
     $15,000,000 Promissory Note, dated January 28, 2005, executed by HSNY and
HSNYII.
     Indemnity Agreement Regarding Hazardous Materials, dated January 28, 2005,
executed by HSNY and HSNYII for the benefit of KeyBank.
     Letter (re: Loan from KeyBank (Fee Letter)), dated January 27, 2005,
executed by and among HSNY, HSNYII and KeyBank.

H.   Hines-Sumisei US Core Office Properties LP Demand Promissory Note

     $4,000,000 Demand Promissory Note, dated June 28, 2005, issued by
Hines-Sumisei US Core Office Properties LP (“US Core Properties”) to KeyBank
National Association (“KeyBank”). The principal balance outstanding under such
Demand Promissory Note is $4,000,000.
     Letter (Re: $4,000,000 Demand Promissory Note made by Borrower in favor of
KeyBank National Association), dated June 28, 2005, by and between KeyBank and
US Core Properties.

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EXHIBIT C TO AGREEMENT
AUTHORIZED REPRESENTATIVES
Frank Apollo
Charles N. Hazen
Sherri W. Schugart
Ryan Sims

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EXHIBIT D TO AGREEMENT
 
FORM OF ASSIGNMENT AND ACCEPTANCE

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ASSIGNMENT AND ACCEPTANCE
Dated: _________, 200_
     Reference is made to the Term Loan Agreement dated as of June ___, 2005 (as
amended and in effect from time to time, the “Agreement”), among Hines REIT
Properties, L.P., a Delaware limited partnership, having an address at c/o Hines
Interests Limited Partnership, 2800 Post Oak Boulevard, Suite 5000, Houston,
Texas 77056-6118 (the “Borrower”), the banking institutions referred to therein
as Lenders (the “Lenders”), and KeyBank National Association as administrative
agent (the “Administrative Agent”) for the Lenders. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Agreement.
                                                                 (the
“Assignor”) and                                                             
(the “Assignee”) agree as follows:
     1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a ___% interest in and to all of
the Assignor’s rights and obligations under the Credit Documents as of the
Effective Date (as hereinafter defined). The amount of the Assignor’s Commitment
being purchased by and assigned to the Assignee as of the Effective Date is
$                                         .
     2. The Assignor (i) represents that as of the date hereof, its Commitment
Percentage (without giving effect to assignments thereof which have not yet
become effective) is ___%, and the outstanding balance of the Loans owing to the
Assignor under the Note held by the Assignor (unreduced by any assignments
thereof which have not yet become effective) is $___; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Documents or any other
instrument or document furnished pursuant thereto, other than that the Assignor
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, or any other Person which may be primarily
or secondarily liable in respect of any of the Borrower Obligations or any of
their obligations, or the performance or observance by the Borrower, or any
other Person primarily or secondarily liable in respect of any of the
obligations under any of the Credit Documents or any other instrument or
document delivered or executed pursuant thereto; and (iv) attaches the Note
delivered to it under the Agreement and requests that the Borrower exchange such
Note for new Notes payable to each of the Assignor and the Assignee as follows:

      Note Payable to the Order of:   Amount of Note      
                                           ($                    )      
                                           ($                    )

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     3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Documents, together with copies of the most recent
financial statements delivered pursuant to Section 7.2 of the Agreement and such
other documents and information as the Assignee has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it will, independently and without reliance upon
the Assignor, any other Lender or the Administrative Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Documents; (iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers as are reasonably incidental thereto pursuant to the
terms of the Credit Documents; (vi) agrees that it will perform all the
obligations which by the terms of the Credit Documents are required to be
performed by the Assignee as a Lender in accordance with the terms of the Credit
Documents; and (vi) specifies as to its address for notices the office set forth
beneath its name on the signature page hereof.
     4. The effective date for this Assignment and Acceptance shall be ___,
200___(the “Effective Date”). Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for acceptance by
the Administrative Agent. Prior to such assignment being effective the Assignee
shall pay the Administrative Agent (for the Administrative Agent’s own account)
a registration fee in the sum of $3,500.00.
     5. Upon such acceptance, from and after the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder, and (ii) the Assignor shall, with respect to that portion of its
interest under the Credit Documents assigned hereunder relinquish its future
rights and be released from its future obligations under the Credit Documents
but shall remain liable for all obligations which arose prior to such
assignment.
     6. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the rights and
obligations assigned hereby (including payments of principal, interest, fees and
other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
     7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.

     
 
  ASSIGNOR:
 
   
 
  By:                                                            ___
 
   
 
  Title:                                                            

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  ASSIGNEE:    
 
       
 
  By:                                                                
 
  Title:                                                                
Notice Address:
 
                                                                                
   
 
 
                                                                                
   
 
 
                                                                                
   
 
       
 
  Attn:    
 
  Telephone No. :    
 
  Telecopier No.:    

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EXHIBIT E
LENDER’S COMMITMENT PERCENTAGES

         
Bank:
  Commitment Percentage:
KeyBank National Association
    100 %

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EXHIBIT F TO AGREEMENT
FORM OF NOTE

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PROMISSORY NOTE

     $                                          
                                         ___, 200_

     1. Promise To Pay.
     FOR VALUE RECEIVED, HINES REIT PROPERTIES, L.P., a Delaware limited
partnership, having an address at c/o Hines Interests Limited Partnership, 2800
Post Oak Boulevard, Suite 5000, Houston, Texas 77056-6118 (the “Borrower”)
promises to pay to the order of                     , a                     
having an address at                                          (“Lender”), the
principal sum of                      DOLLARS ($                    ) or so much
thereof as may be advanced from time to time, with interest thereon, or on the
amount thereof from time to time outstanding, to be computed, as hereinafter
provided, on each advance from the date of its disbursement until such principal
sum shall be fully paid. Interest shall be payable at such rates and amounts and
in installments as provided in the Agreement (as defined below). The total
principal sum, or the amount thereof outstanding, together with any accrued but
unpaid interest, shall be due and payable in full on September 28, 2005 subject
however to acceleration, in accordance with the Agreement (as defined below)
pursuant to which this Note has been issued (as so accelerated, the “Maturity
Date”).
     2. Term Loan Agreement.
     This Note is issued pursuant to the terms, provisions and conditions of an
agreement captioned “Term Loan Agreement” (as the same may be amended the
“Agreement”) dated as of even date by and among Borrower, Lender, and KeyBank
National Association as Administrative Agent for itself and for such other
financial institutions as may become parties to the Agreement (the Lender and
such other institutions are collectively referred to herein as the “Lenders”),
and the Agreement evidences the Facility (as defined in the Agreement) and the
Loans (as defined in the Agreement) made pursuant thereto. Capitalized terms
used herein which are not otherwise specifically defined herein shall have the
same meaning herein as in the Agreement.
     3. Acceleration; Event of Default.
     To the extent permitted in the Agreement, this Note and the indebtedness
evidenced hereby shall become immediately due and payable without further notice
or demand, and notwithstanding any prior waiver of any breach or default, or
other indulgence, during the existence at any time of any one or more of the
events defined in the Agreement as an “Event of Default”.
     4. Certain Waivers, Consents and Agreements.
     Each and every party liable hereon or for the indebtedness evidenced hereby
whether as maker, endorser, guarantor, surety or otherwise hereby: (a) waives
presentment, demand, protest, suretyship defenses and defenses in the nature
thereof; (b) waives any defenses based upon and specifically assents to any and
all extensions and postponements of the time for payment,

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changes in terms and conditions and all other indulgences and forbearances which
may be granted by the holder to any party now or hereafter liable hereunder or
for the indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any security or collateral now or
hereafter held hereunder or in connection with the Agreement, or any of the
other Credit Documents, and to the addition or release of any other party or
person primarily or secondarily liable; (d) agrees that if any security or
collateral given to secure this Note or the indebtedness evidenced hereby or to
secure any of the obligations set forth or referred to in the Agreement, or any
of the other Credit Documents, shall be found to be unenforceable in full or to
any extent, or if Administrative Agent or any other party shall fail to duly
perfect or protect such collateral, the same shall not relieve or release any
party liable hereon or thereon nor vitiate any other security or collateral
given for any obligations evidenced hereby or thereby; (e) to the extent
required by the terms of the Agreement, agrees to pay all costs and expenses
incurred by Administrative Agent and Lenders or any other holder of this Note in
connection with the collection of the indebtedness evidenced hereby and the
enforcement of rights and remedies hereunder or under the other Credit
Documents, whether or not suit is instituted and certain other costs or expenses
incurred by Administrative Agent and/or the Lender as provided in the Agreement;
and (f) consents to all of the terms and conditions contained in this Note, the
Agreement, and all other instruments now or hereafter executed evidencing or
governing all or any portion of the Borrower Obligations or the security or
collateral for this Note and for such Agreement, or any one or more of the other
Credit Documents to which such Person is a party.
     5. Delay Not A Bar.
     No delay or omission on the part of the holder in exercising any right
hereunder or any right under any instrument or agreement now or hereafter
executed in connection herewith, or any agreement or instrument which is given
or may be given to secure the indebtedness evidenced hereby or by the Agreement,
or any other agreement now or hereafter executed in connection herewith or
therewith shall operate as a waiver of any such right or of any other right of
such holder, nor shall any delay, omission or waiver on any one occasion be
deemed to be a bar to or waiver of the same or of any other right on any future
occasion.
     6. Partial Invalidity.
     The invalidity or unenforceability of any provision hereof, of the
Agreement, of the other Credit Documents, or of any other instrument, agreement
or document now or hereafter executed in connection with the Facility made
pursuant hereto and thereto shall not impair or vitiate any other provision of
any of such instruments, agreements and documents, all of which provisions shall
be enforceable to the fullest extent now or hereafter permitted by law.
     7. Compliance With Usury Laws.
     All agreements between Borrower, Administrative Agent, and Lenders are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Administrative Agent or
Lenders for the use or the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used

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herein, the term “applicable law” shall mean the law in effect as of the date
hereof, provided, however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Borrower, Administrative Agent and
Lenders in the execution, delivery and acceptance of this Note to contract in
strict compliance with the laws of the Commonwealth of Massachusetts from time
to time in effect. If, under or from any circumstances whatsoever, fulfillment
of any provision hereof or of any of the other Credit Documents at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by applicable law, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if under or
from any circumstances whatsoever Administrative Agent or Lenders should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements among Borrower,
Administrative Agent, and Lenders.
     8. Use of Proceeds.
     All proceeds of the Facility shall be used solely for the purposes more
particularly provided for and limited by the Agreement.
     9. Security.
     This Note is secured by certain Security Documents as are more particularly
described in the Agreement and is further secured by other Collateral as set
forth in the Agreement.
     10. Notices.
     Any notices given with respect to this Note shall be given in the manner
provided for in the Agreement.
     11. Governing Law and Consent to Jurisdiction.
     11.1. Substantial Relationship. It is understood and agreed that all of the
Credit Documents were negotiated, executed and delivered in the Commonwealth of
Massachusetts, which State the parties agree has a substantial relationship to
the parties and to the underlying transactions embodied by the Credit Documents.
     11.2. Place of Delivery. Borrower agrees to furnish to Administrative Agent
at Administrative Agent’s office in Boston, Massachusetts all further
instruments, certifications and documents to be furnished hereunder.
     11.3. Governing Law. This Note and each of the other Credit Documents,
shall in all respects be governed, construed, applied and enforced in accordance
with the internal laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
     11.4. Consent to Jurisdiction. The Borrower hereby consents to personal
jurisdiction in any state or Federal court located within the Commonwealth of
Massachusetts.

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     12. Waiver of Jury Trial.
     BORROWER, ADMINISTRATIVE AGENT AND LENDERS MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
NOTE OR ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE THE FACILITY.
     13. No Oral Change.
     This Note and the other Credit Documents may only be amended, terminated,
extended or otherwise modified by a writing signed by the party against which
enforcement is sought. In no event shall any oral agreements, promises, actions,
inactions, knowledge, course of conduct, course of dealing, or the like be
effective to amend, terminate, extend or otherwise modify this Note or any of
the other Credit Documents.
     14. Rights of the Holder.
     This Note and the rights and remedies provided for herein may be enforced
by Administrative Agent or any holder hereof. Wherever the context permits each
reference to the term “holder” herein shall mean and refer to Administrative
Agent or the then holder of this Note.
     15. Survival.
     This Note shall survive and continue in full force and effect beyond and
after the payment and satisfaction of the Borrower Obligations in the event that
Administrative Agent or any Lender is required to disgorge or return any payment
or property received as a result of any laws pertaining to preferences,
fraudulent transfers or fraudulent conveyances but such survival and
continuation shall be limited to the amount of such disgorgement or return.
(signatures on following page)

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     IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of
the date set forth above as a sealed instrument at Boston, Massachusetts.

     
 
  BORROWER:
 
   
 
  HINES REIT PROPERTIES, L.P., a Delaware limited partnership
 
   
 
  By: Hines Real Estate Investment Trust, Inc., a       Maryland corporation,
its general partner
 
   
 
  By:                                                             
 
  Name:                                                             
 
  Title:                                                             

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EXHIBIT G TO AGREEMENT
FORM OF BORROWER’S CERTIFICATE

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CERTIFICATE OF
HINES REIT PROPERTIES, L.P.
     HINES REIT PROPERTIES, L.P., a Delaware limited partnership (the
“Borrower”) do hereby certifies as follows as required pursuant to Section 7.2.6
of that certain Term Loan Agreement (as the same may be amended, the “Term Loan
Agreement”), dated as of June ___, 2005 and being by and among the Borrower,
KeyBank National Association as Administrative Agent, and the Lenders party
thereto (capitalized terms not herein defined shall have the meanings ascribed
to such terms in the Term Loan Agreement), that:
     1. Attached hereto is a schedule which contains detailed calculations of
each of the financial covenants set forth in Section 7.3 of the Term Loan
Agreement [for the period ending] [as of] [___, 200___] [after giving effect to
the [Portfolio Disposition] [repayment] [borrowing] scheduled to be made on such
date] demonstrating that Borrower is in compliance with such covenants as of the
end of such date and stating the Applicable Margin as of the end of such fiscal
quarter (together with the calculation thereof); and
2. (A) No Default or Event of Default exists, and (B) all representations and
warranties of the Borrower that are contained in the Term Loan Agreement and in
the other Credit Documents are true and correct in all material respects as of
the date therein made and as of the date hereof (other than such warranties and
representations as are made as of another date, which shall be true and correct
in all material respects of such other date).
     DATED as of the ___day of                                         ,
                    

     
 
  HINES REIT PROPERTIES, L.P., a Delaware limited partnership
 
   
 
  By: Hines Real Estate Investment Trust, Inc., a
 
       Maryland corporation, its general partner
 
   
 
  By:                                                             
 
  Name:                                                             
 
  Title:                                                             

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EXHIBIT H TO AGREEMENT
INTENTIONALLY OMITTED

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EXHIBIT I TO AGREEMENT
FORM OF NOTICE OF BORROWING

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NOTICE OF BORROWING

         
 
  TO:   KEYBANK NATIONAL ASSOCIATION, as agent (“Administrative Agent”) for
itself and such other financial institutions as may become parties to the Term
Loan Agreement (as hereinafter defined). Administrative Agent and such other
financial institutions are collectively referred to herein as “Lender”.
 
       
 
  RE:   Term Loan Agreement dated as of June ___, 2005 (as the same may be
amended, the “Term Loan Agreement”), between Lender and HINES REIT PROPERTIES,
L.P. (the “Borrower”)

     LOAN REQUEST NO:                     
     AMOUNT OF LOAN REQUESTED: $                                        
     DATE:                                          200_
     1. This Notice of Borrowing (this “Notice of Borrowing”) is submitted by
Borrower to Lender pursuant to the provisions of the Term Loan Agreement in
order to induce Lender to make the Loan requested. Capitalized terms used herein
which are not otherwise specifically defined herein shall have the same meaning
herein as in the Term Loan Agreement.
     2. Borrower hereby requests Lender to make a Loan for the following
purposes and in the following amounts and on the following date:

             
 
  (i)                                              $                    
 
           
 
  (ii)                                              $                    
 
           
 
  (iii)                                              $                    
 
                    Total Loan requested $                    

     Date on which Loan is requested to be made:
                                         ___, 200_
     3. Borrower hereby certifies, warrants and represents to Lender that
(except for Lender’s approval of this Loan Request) each condition precedent to
Lender’s obligation to make the requested Loan has been satisfied, and further
that:
          3.1. Borrower is not in Default under any Credit Document as of the
date hereof, nor does there exist any condition or circumstance which, with the
lapse of time, or the giving of notice, or both, would constitute such a
Default; and there exists no Event of Default under the Term Loan Agreement or
any of the other Credit Documents.

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          3.2 Borrower is in full compliance with all of the terms, covenants
and conditions of the Term Loan Agreement and each other Credit Document.
          3.3 No change that would have a material adverse effect on the ability
of the Borrower to perform its obligations under the Credit Documents has
occurred in the condition (financial or otherwise), operations, business,
management or prospects of the Borrower or any other member of the Combined
Group since the date of the most recent financial statements furnished to
Administrative Agent pursuant to Section 7.2 of the Term Loan Agreement, and no
change that would have a material adverse effect on the ability of the Borrower
to perform its obligations under the Credit Documents has occurred with respect
to any of the Assets.
          3.4 Immediately after the Loan requested hereby is made: (i) the sum
of the aggregate principal amount of outstanding Loans shall not exceed the
Committed Amount, and (ii) Borrower shall be in compliance with Section 7.3 of
the Term Loan Agreement.
          3.5 Borrower has no knowledge that Lender has failed to perform any of
Lender’s obligations under the Credit Documents.
     4. This Loan Request: (i) constitutes an affirmation by Borrower that each
of the warranties and representations made in the Credit Documents remain true
and correct in all material respects (except as stated below) as of the date of
this Loan Request and, unless Lender is notified to the contrary prior to the
disbursement of the Loan, will be so on the date of such Loan; and (ii)
constitutes the representation and warranty of Borrower that the information set
forth in this request and the accompanying documentation is true and correct and
omits no material fact necessary to make the same not misleading. The following
are exceptions to the foregoing affirmation of warranties and representations
[if none are stated, there are no exceptions]:
 
     
 
     
 
     5. This request and the accompanying documentation (including a Notice of
Rate Selection) are submitted to Lender for the purpose of inducing Lender to
make a Loan and Borrower intends that Lender shall rely upon each of the same
being true, accurate and complete.
     6. Each Person comprising Borrower shall be jointly and severally liable
for the obligations of Borrower hereunder.

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     EXECUTED and delivered under seal as of the
                                         day of
                                         , 200___at Boston, Massachusetts.

                  BORROWER:    
 
                HINES REIT PROPERTIES, L.P., a Delaware limited partnership    
 
           
 
  By:   Hines Real Estate Investment Trust, Inc., a Maryland corporation, its
general partner    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

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EXHIBIT J TO AGREEMENT
ENVIRONMENTAL NOTICES
NONE

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EXHIBIT K TO AGREEMENT
Portfolio Investment Entities

1.   Hines-Sumisei U.S. Core Office Fund, L.P., a Delaware limited partnership
(the “Core Fund”).

2.   (Following the closing of the acquisition of the California Property) Hines
REIT 1900/2000 Alameda de Las Pulgas LLC, a Delaware limited liability company
(“SPE Subsidiary”).

Portfolio Investments/Pledged Interests

1.   90,186.529 units of partnership interest in the Core Fund, representing
approximately 22.0921% of the interests in the Core Fund. Interest is a
non-managing general partner interest but would convert to a limited partner
interest upon transfer to any Person other than Borrower.

2.   (Following the closing of the acquisition of the California Property) 100%
of the member interests in SPE Subsidiary.

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EXHIBIT L TO AGREEMENT
PRO FORMA REDUCTION CALCULATION
Hines REIT Properties, L.P. — Pro Forma Reduction Calculation
Pro Forma Reduction
      Calculation
****Complete for non-residential sales only

                                                                      Net Sales
        Date   Investment     Sale Date     Trans. Type     Proceeds     Net
Asset Value  
 
                          Total   $ 0       Borrower’s Tangible Net Worth as of
xx/xx/xxxx                     Less: Reduction in Net Worth from Current Sale  
                       Adjusted Tangible Net Worth                   $ —  
 
                                            Tangible Net Worth <= $80,000,000?  
          Y  
 
                                        A   Reduction Required based on Tangible
Net Worth           $ —       Fund Share of Project Level Debt, after effect of
portfolio dispositions above        
 
  Outstanding                                
 
  Facility                                                   Total Debt
Outstanding                   $ —  
 
                                            Fund Share of Asset FMV, after
effect of portfolio dispositions above        
 
                                       
 
  Fund Leverage                         #DIV/0!
 
                                       
 
  Leverage > 70%?                       #DIV/0!
B
  Required Reduction based on Leverage Ratio           #DIV/0!
 
                                       
 
  Minimum Required Reduction — Greater of A or B   #DIV/0!
 
                                            Actual Reduction (enter as a
negative)                     Total Outstanding after paydown                  
$ —  
 
                                       
 
  Availability                           #DIV/0!

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