**Exhibit 10.39**TERM LOAN AGREEMENTDated: As of June 28, 2005betweenHINES REIT PROPERTIES , L.P.(the “Borrower”)andKEYBANK NATIONAL ASSOCIATION(“Administrative Agent”)andand other Lenders, if any, which may become partiesto this Agreement (with KeyBank National Association, the “Lenders”)$60,000,000.00 TERM LOAN
 

 
**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 
 

 
           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 NumberExhibit 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
 

 
**TERM LOAN AGREEMENT**     This is a Term Loan Agreement (“Agreement”) made and entered into as of the 28th day of June2005, 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 anaddress at 127 Public Square, Cleveland, Ohio 44114, and the other lending institutions which maybecome parties to this Agreement pursuant to Section 11.15 hereof (each, a “Lender” andcollectively the “Lenders”) and KeyBank National Association, as agent for itself and such otherlending institutions (the “Administrative Agent”).WITNESSETH:1. BACKGROUND.     1.1 Defined Terms. Capitalized terms used in this Agreement are defined eitherin Exhibit A, or in specific sections of this Agreement, or in another Credit Document, asreferenced in Exhibit A.     1.2 Borrower. Borrower is a limited partnership organized under the laws of the Stateof Delaware, of which the sole general partner is Hines Real Estate Investment Trust, Inc., aMaryland corporation.     1.3 Use of Loan Proceeds. Borrower has applied to Administrative Agent for a loan ofSixty Million Dollars ($60,000,000) (the “Facility”) the proceeds of which are to be used solelyfor the purposes of acquiring the California Property.     1.4 Accounting Terms. Except as otherwise expressly provided herein, all accountingterms used herein shall be interpreted, and all financial statements and certificates and reportsas to financial matters required to be delivered to the Lenders hereunder shall be prepared, inaccordance with GAAP applied on a consistent basis. All calculations made for the purposes ofdetermining compliance with this Agreement shall (except as otherwise expressly provided herein) bemade by application of GAAP applied on a basis consistent with the most recent annual or quarterlyfinancial statements and reports delivered pursuant to Section 7.2 (or, prior to the delivery ofthe first financial statements pursuant to Section 7.2, consistent with the financial statementsdated March 31, 2005).2. LOAN PROVISIONS.     2.1 Amount of Facility.     (a) Commitment. Subject to all of the terms, conditions and provisions of thisAgreement, 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 suchLender’s Commitment Percentage of the Facility; provided, however: (i) with regard to each Lenderindividually, such Lender’s outstanding Loans shall not exceed such Lender’s
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Commitment Percentageof the Committed Amount and (ii) with regard to the Lenders collectively, the aggregate principalamount of outstanding Loans shall not exceed the Committed Amount.     (b) Notes. The Loans shall be evidenced by duly executed promissory note(s) of theBorrower to each Lender in the original principal amount of each Lender’s Commitment Percentage ofthe 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 mustsubmit a Notice of Borrowing in the form attached hereto as Exhibit I to AdministrativeAgent 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 RateSelection in accordance with Section 2.3.5. Provided that all conditions precedent thereto aresatisfied, Lenders will use commercially reasonable efforts to fund the requested Loan on suchdate.     2.2 Term of Facility. The Facility shall be for a term (“Term”) commencing on thedate hereof and ending ninety (90) days from the date hereof on September ___, 2005 (“MaturityDate”).     2.3 Interest Rate and Payment Terms. Amounts outstanding under the Facility shall bepayable as to interest and principal in accordance with the provisions of this Agreement. ThisAgreement also provides for interest at a Default Rate, Late Charges and prepayment rights andfees. Any and all interest rate selection and conversion provisions in this Agreement are to beadministered 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 theFacility 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 maychange the selection of, the applicable interest rate, from the alternativesotherwise provided for in this Agreement, by giving Administrative Agent a Notice ofRate Selection as provided in Section 2.3.5 hereof: (i) at least three (3) BusinessDays prior to a Loan, (ii) on any Business Day on which Borrower desires to convertan 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 outstandingVariable Rate Loan to a LIBOR Rate Loan or make any change with respect to anoutstanding LIBOR Rate Loan.2.3.3 Increased Costs. If due to any one or more of: (i) theintroduction of any applicable law or regulation or any change (other than anychange by way of imposition or increase of reserve requirements or imposition of aReserve Percentage already referred to in the definition of LIBOR Rate) in theinterpretation 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 orrequest from any governmental central bank or other governmental authority, thereshall be an increase in the cost to Administrative Agent or any Lender of agreeingto make or making, funding or maintaining LIBOR Loans, including without limitationchanges which affect or would affect the amount of capital or reserves required orexpected to be maintained by Administrative Agent or any Lender, with respect to allor any portion of the Facility, or any corporation controlling (directly orindirectly) Administrative Agent or any Lender, on account thereof, then, providedthat such increases in costs are not due to the fraud or gross negligence ofAdministrative Agent or such Lender, Borrower from time to time shall, upon demandby Administrative Agent, pay additional amounts sufficient to indemnifyAdministrative Agent or such Lender against the increased cost; provided, however,that such amounts shall be no greater than that which such Administrative Agent orLender is generally charging other borrowers similarly situated to the Borrower. Ifat any time a Lender or Lenders other than the Administrative Agent shall make adetermination of increased cost, the Borrower may at any time during the period thatsuch increased cost is being charged to Borrower instruct such Lender or Lenders tosell its or their commitments (with all Loans outstanding thereunder) to a bank tobe designated by the Borrower and approved by the Administrative Agent (suchapproval not to be unreasonably withheld) at a price equal to all outstandingprincipal and accrued and unpaid interest and fees thereunder and any otheroutstanding obligations due to such Lender hereunder, provided, however, that suchpurchasing bank shall comply with the provisions of Section 11 hereof. Acertificate as to the amount of the increased cost and the reason therefor submittedto Borrower by Administrative Agent, in the absence of manifest error, shall beconclusive and binding for all purposes.2.3.4 Illegality. Notwithstanding any other provision of thisAgreement, if the introduction of, or a change in the interpretation of, any law,treaty, statute, regulation or interpretation thereof shall make it unlawful, or anycentral bank or government authority shall assert by directive, guideline orotherwise, that it is unlawful for Administrative Agent or any Lender to make ormaintain LIBOR Loans or to continue to fund or maintain LIBOR Loans then, on writtennotice thereof and demand by Administrative Agent to Borrower, (a) the obligation ofAdministrative Agent and Lenders to make LIBOR Loans and to convert or continue anyLoan as a LIBOR Loan shall terminate and (b) Borrower shall convert all Loansoutstanding under the Facility into Variable Rate Loans until such time as suchLender may again make, maintain, and fund LIBOR Loans.          2.3.4.1 Treatment of Affected Loans. If the obligation of any Lenderto make LIBOR Loans shall be suspended pursuant to Section 2.3.4 hereof, suchLender’s LIBOR Loans shall be automatically converted into Variable Rate Loans onthe last day(s) of the then current Interest Period(s) for such LIBOR Loans or priorthereto if and to the extent LIBOR Loans may not be maintained as a result of anycondition 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 Section2.3.4 hereof that gave rise to such conversion no longer exist:     (a) to the extent that such Lender’s LIBOR Loans have been so converted, allpayments and prepayments of principal that would otherwise be applied to suchLender’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 LIBORLoans shall be made or continued instead as Variable Rate Loans, and all VariableRate Loans of such Lender that would otherwise be converted into LIBOR Loans shallremain as Variable Rate Loans.     If such Lender gives notice to the Borrower (with a copy to the AdministrativeAgent) that the circumstances specified in Section 2.3.4 hereof that gave rise tothe conversion of such Lender’s LIBOR Loans to Variable Rate Loans pursuant to thisSection 2.3.4.1 no longer exist (which such Lender agrees to do promptly upon suchcircumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders areoutstanding, such Lender’s Variable Rate Loans shall be automatically converted, onthe first day(s) of the next succeeding Interest Period(s) for such outstandingLIBOR Loans to the extent necessary so that, after giving effect thereto, all Loansheld by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as toprincipal amounts, interest rate basis, and Interest Periods) in accordance withsuch 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 orthe Administrative Agent hereunder or under any other Credit Document shall be madefree and clear of and without deduction for any and all taxes, duties, levies,imposts, deductions, charges or withholdings, and all liabilities with respectthereto, excluding, in the case of each Lender and the Administrative Agent, taxesimposed on its income, and franchise taxes imposed on it, by the jurisdiction underthe laws of which such Lender (or its Applicable Lending Office) or theAdministrative Agent (as the case may be) is organized or by the jurisdiction wheresuch Lender (or its applicable Lending Office) or the Administrative Agent has apermanent establishment or office, or is engaged in a trade or business, or anypolitical subdivision of such jurisdiction (all such non-excluded taxes, duties,levies, imposts, deductions, charges, withholdings, and liabilities beinghereinafter referred to as “Taxes”). If the Borrower shall be required by law todeduct any Taxes from or in respect of any sum payable under this Agreement or anyother Credit Document to any Lender or the Administrative Agent, (i) the sum payableshall be increased as necessary so that after making all required deductions(including deductions applicable to additional sums payable under this Section2.3.4.2) such Lender or the Administrative Agent receives an amount equal to the sumit would have received had no such deductions been
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made, (ii) the Borrower shallmake such deductions, (iii) the Borrower shall pay the full amount deducted to therelevant taxation authority or other authority in accordance with applicable law,and (iv) the Borrower shall furnish to the Administrative Agent, at its addressreferred to in Section 12.1, the original or a certified copy of a receiptevidencing payment thereof.     (b) In addition, the Borrower agrees to pay any and all present or future stampor documentary taxes and any other excise or property taxes or charges or similarlevies which arise from any payment made under this Agreement or any other CreditDocument (hereinafter referred to as “Other Taxes”).     (c) The Borrower agrees to indemnify each Lender and the Administrative Agentfor the full amount of Taxes and Other Taxes (including, without limitation, anyTaxes or Other Taxes imposed or asserted by any jurisdiction on amounts payableunder this Section 2.3.4.2) paid by such Lender or the Administrative Agent (as thecase may be) and any liability (including penalties, interest, and expenses) arisingtherefrom or with respect thereto; provided, however, that such amounts shall be nogreater than the amounts which such Administrative Agent or Lender is generallycharging other borrowers similarly situated to the Borrower.     (d) Each Lender organized under the laws of a jurisdiction outside the UnitedStates, on or prior to the date of its execution and delivery of thisAgreement in the case of each Lender listed on the signature pages hereof andon or prior to the date on which it becomes a Lender in the case of each otherLender, and from time to time thereafter if requested in writing by the Borrower orthe Administrative Agent (but only so long as such Lender remains lawfully able todo so), shall provide the Borrower and the Administrative Agent with (i) InternalRevenue Service Forms W-8ECI, W-8BEN, W-8IMY and W-9 (or their equivalent), asappropriate, or any successor form prescribed by the Internal Revenue Service,certifying if appropriate that such Lender is entitled to benefits under an incometax treaty to which the United States is a party which reduces the rate ofwithholding tax on payments of interest or certifying that the income receivablepursuant to this Agreement is effectively connected with the conduct of a trade orbusiness in the United States, and (ii) any other form or certificate required byany taxing authority (including any certificate required by Sections 871(h) and881(c) of the Code), certifying that such Lender is entitled to an exemption from ora reduced rate of tax on payments pursuant to this Agreement or any of the otherCredit Documents. If the form provided by a Lender at the time such Lender firstbecomes a party to this Agreement indicates a United States withholding tax rate inexcess of zero, withholding tax at such rate shall be considered excluded from thedefinition 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 theBorrower and the Administrative Agent with the appropriate form pursuant to Section2.3.4.2(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 beprovided), such Lender shall not be entitled to indemnification under Section2.3.4.2(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 subjectto a reduced rate of Taxes, become subject to Taxes because of its failure todeliver a form required hereunder, the Borrower shall, at such Lender’s sole costand expense, take such steps as such Lender shall reasonably request to assist suchLender to recover such Taxes.     (f) If the Borrower is required to pay additional amounts to or for the accountof any Lender pursuant to this Section 2.3.4.2, then such Lender will agree to usereasonable efforts to change the jurisdiction of its Applicable Lending Office so asto eliminate or reduce any such additional payment which may thereafter accrue ifsuch change, in the judgment of such Lender, is not otherwise disadvantageous tosuch Lender.     (g) Without prejudice to the survival of any other agreement of the Borrowerhereunder, the agreements and obligations of the Borrower contained in this Section2.3.4.2 shall survive the repayment of the Loans and the other obligations under theCredit 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 theinterpretation thereof by a court or governmental authority with appropriate jurisdiction affectsthe amount of capital required or expected to be maintained by banks or bank holding companies andany Lender or the Administrative Agent determines that the amount of capital required to bemaintained by it is increased by or based upon the existence of Loans made or deemed to be madepursuant 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, upondemand 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 faithand certify in a notice to the Borrower to be an amount that will adequately compensate such Lenderor Administrative Agent in light of these circumstances for its increased costs of maintaining suchcapital. Each Lender and the Administrative Agent shall allocate such cost increases among itscustomers in good faith and on an equitable basis, and will not charge the Borrower unless it isgenerally 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 immediatelyconfirmed by such a written notice, from an Authorized Representative of Borrower which: (i) isirrevocable; (ii) is received by Administrative Agent not later than 1:00 o’clock P.M. EasternTime: (a) at least three (3) Business Days prior to a Loan; or (b) if a Libor Rate is selected, atleast three (3) Business Days prior to the end of the current Interest Period to which suchselection is to apply; (c) if a Variable Rate is selected, on the first day of the Interest Periodto 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 inaccordance with the foregoing prior to a new Loan or as to an expiring Interest Period of anoutstanding LIBOR Loan, then such new Loan and/or such outstanding LIBOR Loan shall be deemedconverted to a LIBOR Loan with an Interest Period of one (1) month; provided, however, if a LIBORLoan is not then available, any such new Loan shall be deemed to be a Variable Rate Loan, and onthe last day of the applicable Interest Period of any such outstanding LIBOR Loan all outstandingprincipal 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 confirmin writing any telephonic notice, Administrative Agent may act without liability upon the basis oftelephonic notice, concerning interest rate selection only, believed by Administrative Agent ingood faith to be from Borrower prior to receipt of written confirmation. In each case Borrowerhereby waives the right to dispute Administrative Agent’s record of the terms of such telephonicNotice 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 minimumamount of $100,000. At no time shall there be outstanding a total of more than six (6) LIBOR Loansat 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 InterestPeriod of any previously outstanding LIBOR Loan, Administrative Agent may impose and Borrower shallpay a reasonable processing fee for each such additional selection.                    2.3.9 Payment and Calculation of Interest. Subject to the provisions of Section2.3.14, all interest shall be: (a) payable in arrears commencing on July 31, 2005 with payments tobe made on each Interest Payment Date thereafter; and (b) calculated on the basis of a 360 day yearand the actual number of days elapsed.     (i) Variable Rate Loans. During such periods as the Loans shall be comprisedin whole or in part of Variable Rate Loans, such Variable Rate Loans shall bearinterest at a per annum rate equal to the Variable Rate. Each change in the PrimeRate or Adjusted Federal Funds Rate shall, as applicable, simultaneously change theVariable Rate payable under this Agreement; and     (ii) LIBOR Loans. During such periods as the Loans shall be comprised in wholeor in part of LIBOR Loans, such LIBOR Loans shall bear interest at a per annum rateequal to the Adjusted LIBOR Rate. Interest at the LIBOR Rate shall be computed fromand including the first day of the applicable Interest Period to, but excluding, thelast day thereof.                    2.3.10 Voluntary and Mandatory Principal Payments.     (a) Voluntary Prepayments. The Borrower shall have the right to prepay Loans in wholeor 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 toa Make-Whole Provision.     (b) Mandatory Prepayments.     (i) If at any time the aggregate principal amount of outstanding Loans shallexceed the Committed Amount, the Borrower shall immediately prepay the outstandingprincipal balance on the Loans in an amount sufficient to eliminate such excess(such prepayments and any other payments designated as such herein, “MandatoryPrepayments”).     (ii) All amounts required to be paid pursuant to Section 2.3.10(b)(i) shall beapplied to the Loans. Within the parameters of the applications set forth above,Mandatory Prepayments shall be applied first to Variable Rate Loans andthen to LIBOR Loans in direct order of Interest Period maturities. Allprepayments under this Section 2.3.10(b)(ii) applied to LIBOR Loans in accordancewith the foregoing shall be subject to a Make-Whole Provision.                    2.3.11 Maturity. At Maturity all accrued interest, principal and other charges duewith respect to the Facility shall be due and payable in full and the principal balance and suchother charges, but not unpaid interest, shall continue to bear interest at the Default Rate untilso paid.                    2.3.12 Method of Payment; Date of Credit. All payments of interest, principal andfees shall be made in lawful money of the United States in immediately available funds: (a) bydirect charge to an account of Borrower maintained with Administrative Agent (or the then holder ofthe Facility), or (b) by wire transfer to Administrative Agent, or (c) to such other bank oraddress as the holder of the Facility may designate in a notice to Borrower. Payments shall becredited on the Business Day on which immediately available funds are received prior to one o’clockP.M. Eastern Time; payments received after one o’clock P.M. Eastern Time shall be credited on thenext Business Day, payments which are not in the form of immediately available funds shall not becredited until such funds become immediately available to Administrative Agent.                    2.3.13 Billings. Administrative Agent may submit monthly billings reflecting paymentsdue; however, any changes in the interest rate which occur between the date of billing and the duedate may be reflected in the billing for a subsequent month. Neither the failure of AdministrativeAgent to submit a billing nor any error in any such billing shall excuse Borrower from theobligation 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 makespayments in accordance with such billings unless and until three (3) Business Days after Borrower’sreceipt of written notice from Administrative Agent of such error in billing.                    2.3.14 Default Rate. Administrative Agent shall have the option of imposing, andBorrower shall pay upon billing therefor, a default interest rate which is four percent (4%) perannum 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 ofDefault 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 andduring 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 theLate 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 isnot paid within ten (10) days of the due date thereof. Late Charges are: (a) payable in addition to, and not inlimitation of, the Default Rate, (b) intended to compensate Administrative Agent for administrativeand processing costs incident to late payments, (c) are not interest, and (d) shall not be subjectto refund or rebate or credited against any other amount due.                    2.3.16 Make Whole Provision. Borrower shall pay to Administrative Agent, immediatelyupon 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 itactually reasonably incurs as a result of (i) any payment or prepayment, under any circumstanceswhatsoever, whether voluntary or involuntary, of all or any portion of a LIBOR Loan on a date otherthan the last day of the applicable Interest Period of such LIBOR Loan, (ii) the conversion, forany reason whatsoever, whether voluntary or involuntary, of any LIBOR Loan on a date other than thelast day of the applicable Interest Period, (iii) the failure of all or a portion of a Loan whichwas to have borne interest at the Adjusted LIBOR Rate pursuant to the request of Borrower to bemade under this Agreement (except as a result of a failure by Administrative Agent or any Lender tofulfill Administrative Agent’s or such Lender’s obligations to fund), or (iv) the failure ofBorrower to borrow in accordance with any request submitted by it for a LIBOR Loan (except as aresult of a failure by Administrative Agent or any Lender to fulfill such Administrative Agent’s orLender’s obligations to fund). Such amounts payable by Borrower shall be equal to anyadministrative costs actually incurred plus any amounts required to compensate for any loss, costor expense reasonably incurred by reason of the liquidation or re-employment of deposits or otherfunds acquired by any Lender to fund or maintain a LIBOR Loan, including, without limitation, thecosts 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 theLenders 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 FeeLetter.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) thisAgreement; (ii) separate Notes in the form of Exhibit F annexed hereto, with one Note beingpayable to each Lender in the original principal amount equal to such Lender’s Commitment, suchpromissory 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 relatedagreements and documents issued or deliveredhereunder or thereunder or pursuant hereto or thereto executed to further evidence or securethe 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, exceptas otherwise provided in this Agreement or the Pledge Agreement. With respect to each of thePortfolio Investments in a Portfolio Investment Entity listed on Exhibit K, Borrower willpledge to Administrative Agent and Lenders certain of Borrower’s right, title and interest in andto each of the Portfolio Investments, as the same may be modified from time to time in accordancewith this Section 3.2. With respect to such pledges, Borrower will execute and deliver on theClosing Date (i) the Pledge Agreement, (ii) UCC-1 financing statements with respect to suchpledges, and (iii) any additional documents or instruments reasonably requested by AdministrativeAgent on behalf of Lenders in order to evidence or perfect such pledges, with all such documents tobe 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 fileUCC financing statements, continuation statements, and amendments thereto describing the Collateralwithout the signature of Borrower. Administrative Agent shall give Borrower prompt written noticeof any such filing.     (c) As provided in Section 7.2.8, Borrower shall give written notice to Administrative Agentprior to the making of any Portfolio Disposition by Borrower or any of its Subsidiaries, whichnotice shall be accompanied by a written certification by Borrower in the form of Exhibit Lattached hereto stating that Borrower will be in full compliance with all covenants containedherein or in the other Credit Documents, including without limitation the covenants set forth inSection 7.3, after giving effect to the proposed Portfolio Disposition, and which notice shall beaccompanied by evidence of such compliance satisfactory to Administrative Agent on behalf ofLenders. Borrower shall give written notice to Administrative Agent upon its acquisition of anynew 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 Investmentsfrom any security interests, liens or other encumbrances under the Pledge Agreement or any otherSecurity Document that is the subject of a proposed Portfolio Disposition in compliance with theconditions 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 behalfof Lenders will execute and deliver such instruments as are reasonably required to confirm therelease of the security interest, lien and/or other encumbrance of Administrative Agent and Lenderswith respect to such Portfolio Investment (which release may be concurrent with and conditioned onthe consummation of such Permitted Portfolio Disposition) (i) that is the subject of a PermittedPortfolio Disposition or (ii) with respect to which Administrative Agent on behalf of Lenders hasotherwise released its security interest, including UCC-3 partial releases.     (e) Each new Portfolio Investment made by Borrower after the date hereof shall automaticallybecome 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 withrespect to the new Collateral; provided, however, that, if the terms of any third partyfinancing proposed to be obtained in connection with the acquisition of a Portfolio Asset relatingto a Portfolio Investment would prohibit the Borrower from pledging in favor of AdministrativeAgent and the Lenders 100% of a Portfolio Investment, then Borrower shall be required to pledgeonly 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 noevent shall Borrower pledge less than 49% of any such Portfolio Investment without the consent ofAdministrative 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 thefinancial covenants contained in Section 7.3 of this Agreement and an Event of Default does notexist, and provided that Borrower complies with the provisions of Section 7.2.6 of this Agreementwith respect to any proposed Portfolio Disposition, Borrower may make and may cause itsSubsidiaries to make Portfolio Dispositions.     (g) If Borrower’s Consolidated Leverage Ratio exceeds seventy percent (70%) after givingeffect to such Portfolio Disposition, the outstanding aggregate principal amount of the Loans shallbe reduced by the amount necessary to maintain compliance with Borrower’s covenants containedherein or in the other Credit Documents, including without limitation the covenants set forth inSection 7.3. The foregoing reductions in the outstanding aggregate principal amount of the Loansare collectively referred to herein as a “Required Reduction.” Any Required Reductionshall not reduce the Maximum Loan Amount. Any Required Reduction shall be calculated based on thePro Forma Reduction Calculation attached hereto as Exhibit L. The Total Asset Value of anyPortfolio Investment used for the purpose of making the calculation of the Required Reduction underthis Section 3.2(g) shall be based on the most recent Appraised Asset Values of the PortfolioAssets associated with such Portfolio Investment.     (h) Notwithstanding the foregoing or anything contained herein to the contrary, (A) after anEvent of Default and while such Event of Default is continuing, (B) if an Event of Default iscreated as a result of a Portfolio Disposition, or (C) if a Portfolio Disposition results inBorrower not being in compliance with any of Borrower’s covenants set forth in Section 7.3 (otherthan the Consolidated Leverage Ratio requirement set forth in Section 7.3(a)), then one hundredpercent (100%) of Net Sales Proceeds (or so much of such Net Sales Proceeds as is required to curesuch Event of Default or to bring Borrower into compliance with Borrower’s covenants set forth inSection 7.3, as applicable) shall be applied to reduce the outstanding aggregate principal amountof the Loans and there shall be a corresponding Required Reduction; provided, however, if theConsolidated 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 withBorrower’s covenants set forth in Section 7.3, the provisions of Section 3.2(g) shall apply toPortfolio Dispositions and Borrower shall not be required to apply Net Sales Proceeds to reduce theoutstanding 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) shallconstitute “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 placefunds in a Borrower Escrow Account as required by this Section 3.3. The Borrower Escrow Accountshall 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 immediatelypreceding fiscal quarter that is Available for Distribution to Borrower derived from any PortfolioInvestment 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 EscrowAccount shall be made within fifteen (15) days after the end of the fiscal quarter for which suchdeposit is due and, to the extent sufficient information is not available to Borrower to make afinal determination of the amounts due on or before such fifteenth (15th) day, a finalpayment (if necessary) shall be made on or before the forty-fifth (45th) day followingthe end of such quarter.     (iii) If Borrower is required to deposit funds into the Borrower Escrow Account and thereafterBorrower is able to provide written evidence reasonably satisfactory to Administrative Agent onbehalf of Lenders that no Event of Default currently exists, then (a) so long as no Default orEvent of Default shall have occurred and be continuing, the balance remaining in the BorrowerEscrow 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 Agentin writing. The written evidence of such compliance referred to in the preceding sentence will bedeemed satisfactory and approved by the Administrative Agent on behalf of Lenders unless writtennotice outlining the reason for disapproval is received by Borrower from the Administrative Agentwithin ten (10) Business Days of receipt by the Administrative Agent of first notice of suchcompliance.     (iv) Administrative Agent may, during the existence and continuation of an Event of Defaultand 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 anyincome earned on amounts deposited in the Borrower Escrow Account) as follows: (i) first, toaccrued but unpaid interest of the Loans outstanding, and (ii) second, to a reduction of theprincipal 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 toany Interest Payment Date, such amounts may be applied by Administrative Agent only to theprincipal balance of the Loans, and not to any future interest payments (until the next subsequentInterest Payment Date). After the principal amount of the Loans, all accrued and unpaid interestand all other amounts owing under the Credit Documents have been paid in full and all commitmentsunder the Credit Documents have been terminated, the Borrower Escrow Account shall be closed andthe 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 consecutivefiscal quarters, then Administrative Agent shall have the right on and after the date that thesecond 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 andauthority to enter into this Agreement and the other Credit Documents and to perform itsobligations under and consummate the transactions contemplated by such Credit Documents and has byproper action duly authorized the execution and delivery of the Credit Documents. AdministrativeAgent 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 bindBorrower 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 uponnotice to Administrative Agent accompanied by evidence, reasonably satisfactory to AdministrativeAgent, of the authority of the person giving such notice and such notice shall be effective notsooner than five (5) Business Days following receipt thereof by Administrative Agent. The presentAuthorized Representatives are listed on Exhibit C.5. CONDITIONS PRECEDENT. The obligation of Administrative Agent and Lenders to enter intothis Agreement and to make the Loan on the Closing Date shall be subject to satisfaction of thefollowing conditions (in form and substance acceptable to the Lenders):     5.1 Satisfactory Credit Documents. Each of the Credit Documents shall be satisfactoryin form, content and manner of execution and delivery to Administrative Agent and AdministrativeAgent’s counsel.     5.2 No Material Change. No change shall have occurred in the condition (financial orotherwise), business, affairs, operations or control of Borrower or any other member of theCombined Group, the General Partner, or any Portfolio Investment Entity, which would have aMaterial Adverse Effect since the date of Borrower’s financial statements most recently deliveredto Administrative Agent.     5.3 Warranties and Representations Accurate. All warranties and representations madeby or on behalf of Borrower and the General Partner to Administrative Agent or any Lender shall betrue, accurate and complete in all material respects.     5.4 Financials and Appraisals. Administrative Agent on behalf of the Lendersshall have received and approved: (i)consolidated financial statements of General Partner complying with the standards set forth inSection 7.2, and (ii) a statement of Appraised Asset Value dated as of a recent date for thePortfolio Assets, which indicates Borrower’s Pro Rata Share of each Portfolio Asset.     5.5 Environmental Compliance and Indemnification Agreements. The Borrower will executeand deliver a compliance and indemnification agreement with respect to environmental matters infavor of Administrative Agent and Lenders with respect to any assets owned directly or indirectlyby the Borrower (“Environmental Indemnity”).     5.6 Validity and Sufficiency of Security Documents. Each of the Security Documentsand related UCC filings shall have been duly recorded and filed to the satisfaction ofAdministrative 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 theCollateral.     5.7 No Other Liens; Taxes and Municipal Charges Current. The Collateral shall not besubject to any liens or encumbrances other than real estate taxes and personal property taxes notyet due and payable and other Permitted Liens, unless such liens or encumbrances have been approvedby Administrative Agent and Lenders. All real estate taxes, personal property taxes and othermunicipal charges relating to any of the Collateral shall be current.     5.8 Organizational Documents and Entity Agreements. Administrative Agent shall havereceived and approved the Partnership Agreement or other organizational documents of Borrower andof the other members of the Combined Group and the General Partner, and certificates of goodstanding and/or legal existence for such Persons issued as of a recent date by such entity’s stateof organization and each other state where such entity, by the nature of its business, is requiredto qualify or register     5.9 Votes, Consents and Authorizations. Administrative Agent shall have received andapproved certified copies of all partnership, entity and corporate votes, consents andauthorizations as may be reasonably required to evidence authority for: (i) closing the Facilityand the transactions contemplated hereby; (ii) providing continuing authorization to designatedpersons to deal in all respects on behalf of Borrower; and (iii) the execution of all CreditDocuments.     5.10 Legal and Other Opinions. Administrative Agent shall have received and approvedlegal opinion letters from counsel representing Borrower and the General Partner which meetAdministrative Agent’s legal opinion requirements.     5.11 Due Diligence. Completion and approval of all due diligence deemed necessary bythe Administrative Agent.     5.12 Fees and Expenses. Payment of all fees and expenses owing to the Lenders and theAdministrative Agent in accordance with the Fee Letter.     5.13 Guaranty. The Guarantor will execute and deliver to Administrative Agent, forthe benefit of the Lenders, the Guaranty.     5.14 No Default. There shall not be any Default or Event of Default under any of theCredit 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 areasonable probability of materially adversely effecting the ability of the Borrower to perform itsobligations under this Agreement or the other Credit Documents.     5.16 Compliance with Covenants. The Borrower shall be in compliance with allcovenants contained herein and in the other Credit Documents.
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6. WARRANTIES AND REPRESENTATIONSBorrower warrants and represents to Administrative Agent andeach 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 ofthe transactions contemplated hereby, that as of the date of this Agreement, upon the date any Loanis funded and at all times thereafter until such Loan has been repaid and all obligations to eachof the Lenders have been satisfied as follows:     6.1 Financial Information.Borrower has heretofore delivered to Administrative Agent onbehalf of the Lenders audited financial statements for General Partner for the period endedDecember 31, 2004 and unaudited financial statements for General Partner for the three monthsending March 31, 2005. Such financial statements were true, accurate and complete in all materialrespects, and fairly presented, in all material respects, the financial condition of GeneralPartner and the Borrower, as of the dates thereof and for the periods covered thereby, and the samewere prepared inaccordance 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 AdverseEffect. All financial statements of General Partner hereafter delivered to Administrative Agent onbehalf of the Lenders shall be true, accurate and complete in all material respects, and suchfinancial statements shall fairly present in all material respects the financial condition ofGeneral 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 theLenders for each Portfolio Asset. Each such operating report presents, in all material respects, atrue, accurate, and complete report of all material operating expenses and operating revenues ofthe Portfolio Asset to which it relates for the period covered by such report. Each such operatingreport hereafter delivered to the Administrative Agent on behalf of the Lenders in respect of anyPortfolio Asset shall present, in all material respects, a true, accurate, and complete report ofall material operating expenses and operating revenues of such Portfolio Asset for the periodcovered by such report.     6.2 No Violations. Neither the execution and delivery of the Credit Documents by theBorrower, nor the consummation by the Borrower of the transactions contemplated therein, norperformance 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 governancedocuments 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 materiallyconflict 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 theCombined Group is a party or by which any such Person may be bound, or (iv) except for Lienscreated by, under or in connection with this Agreement or the other Credit Documents, result in orrequire the creation of any lien, security interest or other charge or encumbrance upon or withrespect to the Portfolio Investments of the Borrower or any interest in a Portfolio Asset held by amember of the Combined Group.     6.3 No Litigation. There is no litigation, action, proceeding, investigation or suitnow 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, wouldhave a Material Adverse Effect.     6.4 Compliance With Legal Requirements. The Borrower, any Additional Pledgor and eachother 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 reasonablyexpected to have a Material Adverse Effect.     6.5 Use of Proceeds. The proceeds of any Loan shall be used solely for the purposesdescribed 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 intothe Credit Documents to which it is a party, (c) is duly qualified as a foreignentity and in good standing under the laws of each jurisdiction where the failure todo so could have a Material Adverse Effect and (d) has the limited partnership powerand authority, and the legal right to conduct the business in which it is currentlyengaged.6.6.2 General Partner. The General Partner (a) is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofMaryland, (b) has all necessary power pursuant to proper authorization to enable itto act as the general partner of Borrower and to execute and deliver the CreditDocuments to which Borrower is a party on Borrower’s behalf, (c) is duly qualifiedto do business in and is in good standing under the laws of each jurisdiction wherethe failure to do so could have a Material Adverse Effect, and (d) has the corporatepower and authority, and the legal right, to conduct the business in which it iscurrently 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., aMaryland corporation.     6.7 Valid and Binding. Each of the Credit Documents to which it is a partyconstitutes the legal, valid and binding obligations of Borrower; and the Partnership Agreementconstitutes the legal, valid and binding obligations of the parties thereto, in each caseenforceable against the relevant Person in accordance with the respective terms thereof, subject tobankruptcy, insolvency and similar laws of general application affecting the rights and remedies ofcreditors and, with respect to the availability of the remedies of specific enforcement, subject tothe discretion of the court before which any proceeding therefor may be brought. All requiredentity actions and proceedings have been duly taken with respect to Borrower and the GeneralPartner and each Portfolio Investment Entity, so as to authorize the execution, delivery andperformance by Borrower of the CreditDocuments to which it is a party. All consents and approvals that are
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required in connectionwith the execution and delivery of this Agreement and the other Credit Documents have beenobtained, including, without limitation, consents and approvals required under existing mortgageand loan agreements, organizational agreements, and from governmental authorities.     6.8 Deferred Compensation and ERISA. Borrower has not established and does not planto establish any pension, insurance or other arrangement or plan for employees covered by Title IVof the Employee Retirement Income Security Act of 1974, as now or hereafter amended (“ERISA”), andno “Reportable Event” as defined in ERISA has occurred and is now continuing with respect to anyPlan. The granting of the Facility, the performance by Borrower of its obligations under theCredit Documents to which it is a party and Borrower’s conducting of its operations do not and willnot violate any provisions of ERISA.     6.9 No Material Change; No Default. Neither Borrower, the General Partner, any othermember of the Combined Group, nor, to the best knowledge of Borrower, any Portfolio InvestmentEntity, 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 haveor would be reasonably expected to have a Material Adverse Effect. No Default or Event of Defaultpresently 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 knowledgeof Borrower, each Portfolio Investment Entity has filed all required federal, state and local taxreturns 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, orto the best knowledge of Borrower, any Portfolio Investment Entity, any Portfolio Asset or anyPortfolio Investment, that would reasonably be expected to have a Material Adverse Effect sinceMarch 31, 2005. The Partnership Agreement, a true and correct copy of which has been provided tothe Administrative Agent, is in full force and effect.     6.10 No Broker or Finder. Neither Borrower nor anyone on behalf thereof, has dealtwith any broker, finder or other person or entity who or which may be entitled to a broker’s orfinder’s fee, or other compensation, payable by Administrative Agent or any Lender in connectionwith the Facility; it being understood however, that a broker has been engaged by Borrower inconnection with the Facility and other financings which will not result in a fee or compensationpayable by the Administrative Agent or any Lender.     6.11 Background Information and Certificates. Borrower has delivered toAdministrative Agent accurate and complete copies of all the organizational documents of theBorrower, the General Partner, any other member of the Combined Group and each Portfolio InvestmentEntity. To the best knowledge of the Borrower, all of the factual information contained orreferred to in this Agreement and in the Exhibits and/or Schedules to this Agreement or the otherCredit Documents, and in the certificates andopinions furnished to Administrative Agent or any Lender by or on behalf of Borrower inconnection 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 ofthis Agreement or any of the other Credit Documents to which Borrower is a party, including withoutlimitation, 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 haveany Indebtedness. All Funded Debt outstanding as of the Closing Date is accurately reflected onExhibit B.     6.14 Government Regulation. The Borrower is not subject to regulation under thePublic 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 theInvestment 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 PublicUtility 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 AdverseEffect:     (i) Except as disclosed on Exhibit J attached hereto and made a part hereof, neitherthe Borrower, the General Partner, any other member of the Combined Group nor, to the knowledge ofthe Borrower any Portfolio Investment Entity, has received any written notice of, or inquiry fromany Governmental Authority regarding, any violation, alleged violation, non-compliance, liabilityor potential liability regarding Hazardous Materials or compliance with Environmental Laws withregard to any of the Portfolio Assets nor does the Borrower have knowledge that any such notice isbeing threatened.     (ii) No judicial proceeding or governmental or administrative action is pending or, to theknowledge of the Borrower, threatened, under any Environmental Law to which the Borrower, theGeneral Partner, any other member of the Combined Group, or, to the knowledge of the Borrower, anyPortfolio Investment Entity is or will be named as a responsible party, nor are there any consentor other decrees, remediation orders, administrative or other orders, or other similaradministrative or judicial requirements outstanding under any Environmental Lawwith 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 anyPerson under any Environmental Law.     6.16 Portfolio Assets. Set forth on Exhibit B is a complete and accurate listof all Portfolio Assets existing as of the Closing Date, together with the ownership interest (bothdirect and indirect) of the Borrower therein, and together with a list of the existing documentsevidencing 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 uponthe sale of Portfolio Assets, upon the maturity (whether at the stated maturity date or uponacceleration) of any Funded Debt or in connection with a default continuing beyond any applicablenotice 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 formsof distributions from any Portfolio Investment Entity or any member of the Combined Group to theBorrower or any other member of the Combined Group.     6.17 Full Disclosure. All information heretofore furnished by or on behalf of theBorrower to the Administrative Agent or any Lender for purposes of or in connection with thisAgreement or any transaction contemplated hereby is, and all such information hereafter furnishedby or on behalf of the Borrower to the Administrative Agent or any Lender will be, true andaccurate in all material respects on the date as of which such information is stated (except to theextent any such information is subsequently supplemented or corrected by information provided by oron behalf of Borrower); provided, however, that where such information is the work product of athird party that is unrelated to Borrower, such information is and will be, to the best ofBorrower’s knowledge, true and accurate in all material respects on the date as of whichinformation is stated. To the best of its knowledge, the Borrower has disclosed to the Lenders inwriting 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 onExhibit B and no Lien other than Permitted Liens exists on Borrower’s interests in itsSubsidiaries.     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 PortfolioInvestment Entity, is subject to any charter, corporate, partnership or other legal restriction, orany judgment, decree, order, rule or regulation, or party to any contract or agreement that has hador 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 GeneralPartner, any other member of the Combined Group nor, to the knowledge of the Borrower, anyPortfolio Investment Entity, is in violation of any provision of its partnership agreement, charteror other organizational document, as the case may be, or any agreement or instrument to which itmay 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 couldreasonably 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 theknowledge of the Borrower, each Portfolio Investment Entity, is Solvent.     6.22 REIT Status. The General Partner was organized and has operated in conformitywith the requirements for qualification and taxation as a REIT for each of its taxable yearsbeginning with the year ended December 31, 2004, and its current or anticipated organization andmethod of operation will enable it to continue to meet the requirements for qualification andtaxation as a REIT.
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     6.23 Patriot Act. Neither Borrower, the General Partner, any other member of theCombined Group nor, to the knowledge of the Borrower, any Portfolio Investment Entity, is or shallbecome a person with whom Lender is restricted from doing business under regulations of the Officeof 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 BlockedPersons list) or under Executive Order 13324 — Blocking Property and Prohibiting Transactions WithPersons Who Commit, Threaten to Commit, or Support Terrorism, or any similar Executive Order orother similar Legal Requirement, and neither Borrower, the General Partner, any other member of theCombined Group nor, to the knowledge of the Borrower, any Portfolio Investment Entity is knowinglyengaged or shall knowingly engage in any dealings or transactions or otherwise be associated withsuch persons.7. COVENANTS.     Borrower covenants and agrees that from the date hereof and so long as any indebtednessremains 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 ithas 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 Defaultor 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 whichBorrower 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 furnishedto Administrative Agent from time to time, the following financial statements and reports and otherinformation, all in form, manner of presentation and substance reasonably acceptable toAdministrative Agent:7.2.1 Annual Statements. Within ninety (90) days following the end ofeach fiscal year, a consolidated balance sheet, an income statement, a statement ofchanges in shareholders’ equity and a statement of cash flows of General Partner asof the end of such fiscal year, setting forth in comparative form consolidatedfigures for the preceding fiscal year, all such financial information describedabove to be in reasonable form and detail and audited by one of the followingaccounting firms: Deloitte & Touche LLP, Ernst & Young LLP, KPMG orPricewaterhouseCoopers (or by another independent certified public accounting firmof recognized national standing reasonably acceptable to the Administrative Agent),and whose opinion shall be to the effect that such financial statements have beenprepared in accordance with GAAP and shall not be limited as to the scope of theaudit or qualified as to the status of General Partner or the Borrower as a goingconcern or otherwise;7.2.2 Periodic Statements. Within forty-five (45) days following theend of each fiscal quarter of the Borrower (other than the fourth fiscal quarter, inwhich
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case ninety (90) days after the end thereof) an unaudited consolidated balancesheet, income statement and statement of changes in shareholders’ equity of theGeneral Partner as of the end of such fiscal quarter, in each case setting forth incomparative form consolidated figures for the corresponding period of the precedingfiscal year, all such financial information described above to be in reasonable formand detail and reasonably acceptable to the Administrative Agent (provided, however,Administrative Agent hereby confirms that the form and detail of such financialinformation, as well as any financial information submitted by Borrower pursuant toSection 7.2.1 above, shall be deemed to be acceptable if it is in substantially thesame form and detail as the financial information submitted by Borrower toAdministrative Agent prior to the date hereof), and accompanied by a certificate ofan authorized officer of Borrower to the effect that such quarterly financialstatements fairly present in all material respects the financial condition of theGeneral Partner and have been prepared in accordance with GAAP, subject tochanges resulting from audit and normal year-end adjustments.7.2.3 Data Requested. Within a reasonable period of time after arequest from Administrative Agent, such other financial data or information asAdministrative Agent may reasonably request with respect to any of the PortfolioAssets or members of the Combined Group including, without limitation, operatingstatements, budgets, mortgage information, rent rolls, and lease status/expirationreports.7.2.4 Tax Returns. Within a reasonable period of time after a requestfrom Administrative Agent, complete copies of all federal and state tax returns andsupporting schedules of Borrower, and, to the extent applicable each other member ofthe Combined Group.7.2.5 Pro Forma. Calculation of Certain Financial Covenants. Withinforty-five (45) days after the end of each fiscal quarter Borrower shall deliver apro forma calculation of the financial covenants contained in Section 7.3.7.2.6 Officer’s Certificate. (A) At the time of delivery of thefinancial statements provided for in Sections 7.2.1 and 7.2.2 above, (B) at leastfourteen (14) days prior to any sale, disposition or other transfer of a PortfolioAsset (or any material part thereof, other than the leasing of space in PortfolioAssets to tenants in the ordinary course of business), and (C) at the time Borrowerrequests a new Loan hereunder or repays any principal amount outstanding under theFacility, Borrower shall deliver a certificate of an authorized officer of Borrowersubstantially in the form of Exhibit G, (i) demonstrating compliance withthe financial covenants contained in Section 7.3 by calculation thereof as of theend of each such fiscal period or after giving effect to such transfer, borrowing orrepayment (together with such supporting documentation as Administrative Agent mayreasonably require), (ii) calculating the Applicable Margin as of the end of eachsuch 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 ofDefault does exist, specifying the nature and extent thereof and what action theBorrower proposes to take with respect thereto. In the event that any suchcertificate indicates a violation of any of the financial covenants in Section 7.3,then Borrower shall, as applicable, contemporaneously with the delivery of any suchcertificate make a principal payment by an amount necessary to achieve compliancewith such financial covenants or if caused by a transfer of a Portfolio Asset makesuch a principal payment contemporaneously with the closing of such transfer.7.2.7 Information to Owners. To the extent not otherwise providedhereunder, 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 eventwithin sixty (60) days after the close of each fiscal quarter of Borrower, a reportin a form reasonably satisfactory to Administrative Agent describing (i) eachPortfolio Investment made during such fiscal quarter and (ii) any transfer of anyPortfolio Investment during such fiscal quarter to another legal entity in whichBorrower has acquired a direct or indirect interest. Such report shall beaccompanied by a Direction Letter for each such Portfolio Investment made in aPortfolio Investment Entity that is not controlled by Borrower or affiliates ofBorrower and shall include a description of any such Portfolio Investment, and suchother information as reasonably requested by Administrative Agent. Except asprovided in Section 3.2(e), each such Portfolio Investment shall, subject to anyPermitted Liens, automatically become a part of the Collateral hereunder and shallbe subject to the terms and provisions of this Agreement and any other applicableCredit Document, including without limitation Section 3.2 of this Agreement.7.2.9 Auditor’s Reports. Promptly upon receipt thereof, a copy of anyother report or “management letter” submitted by independent accountants to theBorrower in connection with any annual, interim or special audit of the books of theBorrower.7.2.10 Environmental Reports. Promptly upon transmission thereof byBorrower or any other member of the Combined Group, copies of any filings andregistrations with, and reports to, the United States Environmental ProtectionAgency, or any state or local agency responsible for environmental matters, theUnited States Occupational Health and Safety Administration, or any state or localagency responsible for health and safety matters, or any successor agencies orauthorities concerning environmental, health or safety matters pertaining to any ofthe Assets.7.2.11 Notice of Default or Litigation. Upon the Borrower obtainingknowledge thereof, it will give notice to the Administrative Agent promptly, but inany event within five (5) Business Days of obtaining such knowledge, of theoccurrence of any of the following with respect to the Borrower, the GeneralPartner, 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 resultedin, or that Borrower reasonably believes may result in, a Material Adverse Effect,(ii) the pendency orcommencement of any litigation, arbitration or governmental proceeding againstany such Person in which damages are sought or environmental remediation demandedwhich could reasonably be expected to be adversely determined and which, ifadversely determined, could be expected to have a Material Adverse Effect, (iii) anylevy of an attachment, execution or other process against its assets which couldreasonably be expected to have a Material Adverse Effect, (iv) the receipt of anynotice alleging the occurrence of an event or condition which shall constitute adefault or event of default under any other agreement for borrowed money, or (v) theinstitution of any proceedings against, or the receipt of written notice ofpotential liability or responsibility for any violation, or alleged violation whichcould reasonably be expected to be adversely determined, of any federal, state orlocal law, rule or regulation, including but not limited to, Environmental Laws, theviolation 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) BusinessDays prior to the incurrence thereof, or (ii) in the case of any Portfolio Assetheld by a Person other than a member of the Combined Group, within five (5) BusinessDays after obtaining knowledge of the incurrence thereof if not within the knowledgeof the Borrower prior to such incurrence, notice to Administrative Agent specifyingthe amount and nature of any additional (i.e., other than the Funded Debt and theFunded Debt Documents existing as of the date hereof and reflected on ExhibitB hereto) Indebtedness, encumbrances, mortgages or other security interests(other than Permitted Liens) affecting any of the Portfolio Assets or any materialproperty or Investment of Borrower or any other member of the Combined Group.7.2.14 Other Information. With reasonable promptness upon any suchrequest, such other information regarding the business, properties or financialcondition of the Borrower or any other member of the Combined Group as theAdministrative 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 eachcalendar quarter, at the time each new Loan is made, and in connection with the delivery of anofficer’s certificate pursuant to Section 7.2.6.     (b) Minimum Interest Coverage Ratio. The ratio of the EBITDA to the Interest Expenseshall be greater than 1.65 to 1.00. This covenant shall be tested quarterly at the end of eachcalendar quarter, at the time of each Loan, and in connection with the delivery of an officer’scertificate 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 beprovided for each fiscal quarter for which actual results are not then available.     (c) Minimum Tangible Net Worth. Borrower shall maintain a Tangible Net Worth inexcess of Eighty Million Dollars ($80,000,000.00) plus seventy five percent (75%) of the proceedsof any equity offerings, contributions or sales of treasury stock received by the Borrower afterthe Closing Date. This covenant shall be tested quarterly at the end of each calendar quarter, atthe time of each Loan, and in connection with the delivery of an officer’s certificate pursuant toSection 7.2.6.     (d) Minimum Fixed Charge Covenant. The ratio of EBITDA to Fixed Charge shall begreater than 1.50 to 1.0. This covenant shall be tested quarterly at the end of each calendarquarter, at the time of each Loan, and in connection with the delivery of an officer’s certificatepursuant to Section 7.2.6, in each case with respect to the prior two (2) fiscal quarters mostrecently ended, annualized; provided that pro forma financial information shall be provided foreach fiscal quarter for which actual results are not then available.     7.4 Indebtedness and Restrictions on Liens, Transfers and Additional Debt. TheBorrower shall not, without the prior written consent of the Administrative Agent and the RequiredLenders (which may be withheld in their sole discretion):     (a) incur any Indebtedness (other than the Indebtedness arising under thisAgreement and the other Credit Documents) that is recourse to Borrower (exceptingcustomary environmental and other indemnification obligations in respect ofIndebtedness of Persons in which Borrower has an interest which is not otherwiserecourse to Borrower);     (b) provide any completion or other guarantees either directly or indirectly(including, without limitation, through a joint venture) in excess of $5,000,000.00in the aggregate; and     (c) [Reserved]     (d) further encumber the Portfolio Investments; provided that the foregoingshall not limit the right of Borrower to cause the refinancing of any Funded Debt onsuch terms and conditions as Borrower may direct (including the granting of liens onPortfolio Investments and the granting of direct and indirect interests therein, orBorrower’s becoming subject to an agreement prohibiting or otherwise restricting thecreation of liens on Portfolio Investments) so long as such refinancing does notcause the violation of any of the covenants set forth in Section 7.3 of thisAgreement. In connection with any such refinancing, Borrower covenants to usecommercially reasonable efforts to maintain in full force and effect all existingpledges and assignments of economic interestsgranted with respect to Borrower’s interests in Portfolio Investments byBorrower pursuant to this Agreement and the other Credit Documents to which it is aparty. In the event such refinancing requires the release of Lenders’ securityinterests in all or part of any Portfolio Investment that is the subject of therefinancing
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permitted by this Section 7.4(d), then Administrative Agent isauthorized and shall be obligated to release such Portfolio Investment from allpledges thereof and security interests therein created by the Credit Documents;provided however that the Administrative Agent may refuse to release anymore than 51% of any such Portfolio Investment from any such pledge or securityinterest, unless Administrative Agent has given its consent to such refinancing,such consent not to be unreasonably withheld or delayed. If such refinancing willresult in Borrower’s noncompliance with the covenants set forth in Section 7.3 ofthis Agreement, the outstanding aggregate principal amount of the Loans shall bereduced by the amount necessary to maintain compliance with Borrower’s covenantscontained in Section 7.3. Within three (3) Business Days after receipt of a writtenrequest from Borrower and provided Borrower has satisfied the foregoing reductionrequirement, if applicable, Administrative Agent on behalf of Lenders shall executesuch releases of Lenders’ security interests in the Portfolio Investments that arethe subject of a refinancing permitted by this Section 7.4(d) as Borrower reasonablyrequests in connection with such refinancing .       (e) Except as specifically set forth in Section 7.4(d) and Section 7.5which provide instances in which Administrative Agent’s consent is required, nothingin this Agreement or any other Credit Document shall, and Borrower is herebyspecifically permitted to and to permit or cause any Subsidiary or PortfolioInvestment Entity to, mortgage, grant securities interests in, and otherwiseencumber any Portfolio Asset and the direct and indirect interests of any PortfolioEntity in any Portfolio Asset.     7.5 Liens/Negative Pledges. Except as permitted in Section 7.4(d) hereof, theBorrower 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 orhereafter acquired, or (ii) enter into, assume or become subject to any agreement (other than thisAgreement, the other Credit Documents and the Funded Debt Documents listed and described onExhibit B) (A) prohibiting or otherwise restricting the creation or assumption of any Lienupon any of the Portfolio Investments or (B) requiring the Borrower to grant a Lien to a Person inthe 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 characteror conduct of its business from that conducted as of the Closing Date which is and shall be limitedto 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 inthe 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 anyother Person; and(b) [Reserved]
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     (c) Borrower will not become party to, nor will Borrower permit any other member of theCombined Group to become a party to, any document, agreement, or instrument or subject to any otherobligation or any charter or corporate or partnership restriction, as the case may be, from andafter the date hereof, which individually or in the aggregate, would have a Material AdverseEffect.     7.8 Investments. Borrower shall not make any Investment which is not a PermittedInvestment.     7.9 Dividends and Distributions. So long as no Event of Default has occurred and iscontinuing or would be directly or indirectly caused as a result thereof, the Borrower may declareand 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 ordividends but only to the extent (after taking into account all available funds of the Borrowerfrom all other sources) required in order to enable the General Partner to continue to qualify as aREIT.     7.10 Transactions with Portfolio Investments. Borrower will not, nor will it permitany of its Subsidiaries to, enter into any transaction or series of transactions with any partneror any employee of any member of the Combined Group or any Portfolio Investment Entity other thanon terms and conditions substantially as favorable to such Person as would be obtainable by it in acomparable arm’s length transaction with a Person other than any partner, employee or PortfolioInvestment Entity, unless such transaction or series of transactions, would not or could notreasonably be expected to have, in the aggregate, a Material Adverse Effect, or otherwise bematerially detrimental to the economic interests of the Combined Group taken as a whole.     7.11 Amendments. To the extent that any amendment, modification, supplement, waiveror termination of any provisions of the Partnership Agreement, or other governing or organizationaldocument of Borrower or any other member of the Combined Group would permit proceeds of the Loansto be used in a manner inconsistent with such governing or organizational document in effect at theClosing Date, the Borrower agrees that it shall not, and shall not permit any other member of theCombined Group to, apply proceeds of the Loans in a manner inconsistent with what was permittedunder 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 businessrecords at the address specified at the beginning of this Agreement. Upon reasonable prior noticeand 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 andabstracts from Borrower’s books of account, correspondence and other records and to discuss itsfinancial and other affairs with any of its investors and any accountants hired by Borrower as wellas to visit and inspect the Assets, it being agreed that Administrative Agent and each of theLenders shall use reasonable efforts to not divulge confidential information obtained from suchexamination to others except in connection with Legal Requirements and in connection withadministering the Facility, enforcing its rights and remedies under the Credit
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Documents and in theconduct, operation and regulation of its banking and lending business (which may include, withoutlimitation, the transfer of the Facility or of participation interests therein provided that anysuch transferee or participant agrees to maintain the confidentiality thereof as required by thisAgreement). Any assignee or transferee of the Facility or any holder of a participation interestin the Facility shall be entitled to deal with such information in the same manner and inconnection with any subsequent transfer of its interest in the Facility or of further participationinterests therein.     7.14 Costs and Expenses. Borrower shall pay all costs and expenses (excludingsalaries or wages of officers, directors and employees of Administrative Agent or any Lender andoverhead expenses charged by or allocated to Administrative Agent or any Lender) reasonablyincurred by Administrative Agent in connection with the implementation of the Facility and theenforcement of Administrative Agent’s and Lenders’ rights under the Credit Documents, including,without limitation, reasonable third party costs and expenses, including reasonable legal fees anddisbursements, 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 independentengineers 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 incurredfor preparing and conducting litigation or dispute resolution arising from any breach by Borrowerof any covenant, warranty, representation or agreement under any Credit Document to which a memberof the Combined Group is a party.     7.15 Compliance with Legal Requirements. Borrower shall comply, and shall cause eachother 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 providethe Lender with any additional information that the Lender reasonably requests from time to time inorder to ensure compliance by Borrower with all applicable Anti-Money Laundering Laws. As usedherein, the term “Anti-Money Laundering Laws” shall mean the USA Patriot Act of 2001, the BankSecrecy Act, andExecutive Order 13324 – Blocking Property and Prohibiting Transactions With Persons WhoCommit, Threaten to Commit, or Support Terrorism, and any similar Legal Requirements..     7.16 MAI Appraisals. Promptly upon receipt thereof, Borrower shall deliver toAdministrative Agent each appraisal of any of the Portfolio Assets available to Borrower. Duringthe existence and continuation of an Event of Default, if the most recent MAI Appraisal for anyPortfolio Asset is older than one (1) year, then Borrower shall upon Administrative Agent’s requesttherefor promptly use its best efforts to obtain a current MAI Appraisal for such Portfolio Assetat Borrower’s sole cost and expense. Administrative Agent may require Borrower to use its bestefforts to obtain updated MAI Appraisals for Portfolio Assets which Borrower has previouslydelivered MAI Appraisals to Administrative Agent, at Borrower’s sole cost and expense , but if anupdated MAI Appraisal is requested for any Portfolio Asset for which an MAI Appraisal is availablethat is less than one (1) year old, the Administrative Agent and the Lenders shall pay the costs ofsuch requested appraisal.     7.17 Title to Properties. The Borrower and each other member of the Combined Grouphas good title to all of its respective properties, assets and rights of every name and naturepurported to be owned by it.
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     7.18 Insurance. Borrower will, and will cause the other members of the Combined Groupto, maintain with respect to their respective properties, with financially sound and reputableinsurers, insurance with respect to such properties and its business against such casualties andcontingencies as shall be in accordance with the general practices of businesses engaged in similaractivities in similar geographic areas and in amounts, containing such terms, in such forms and forsuch periods as may be reasonable and prudent.     7.19 Taxes. The Borrower will, and will cause each of the other members of theCombined Group to, pay or cause to be paid taxes, assessments and other governmental chargespayable by it or as to such Person’s property and file all returns and reports relating theretobefore the same become delinquent including, without limitation, upon the income or profitstherefrom of any such Person. Promptly upon request by the Administrative Agent, the Borrower willprovide evidence of the payment of such taxes, assessments and other governmental charges in theform of receipted tax bills or other form reasonably acceptable to the Administrative Agent, orevidence 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 itspartnership 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 itsproperties may be bound, and (c) all applicabledecrees, orders, and judgments, if the failure to comply therewith will, either individuallyor in the aggregate, result in a Material Adverse Effect.     7.21 Replacement Documentation. Upon receipt of an affidavit of an officer ofAdministrative Agent or any Lender as to the loss, theft, destruction or mutilation of a Note orany other Credit Document, Borrower will issue, in lieu thereof, a replacement Note or other CreditDocument in the same principal amount thereof and otherwise of like tenor.     7.22 Perfected LP Interest Covenants. Borrower shall at all times comply with thefollowing covenants with respect to each of the Perfected LP Interests: (i) Borrower shall havefull right, title and interest to each Perfected LP Interest, subject to Permitted Liens and suchother 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 aspermitted by Section 7.4(d)) or under any Security Document; (iii) Borrower shall comply with allapplicable Legal Requirements with respect to each Perfected LP Interest; (iv) Borrower shallpromptly deliver to Administrative Agent copies of all notices given or received with respect toeach Perfected LP Interest (other than routine correspondence); and (v) Borrower shall comply withall covenants contained in the Security Documents that are in effect with respect to each PerfectedLP Interest.     7.23 Existence of the Borrower; Maintenance of REIT Status. The Borrower will do orcause to be done all things necessary to preserve and keep in full force and effect its existenceas a Delaware limited partnership. Borrower will do all things commercially reasonable andconsistent with the Partnership Agreement, to enable the General Partner to at all times maintainthe General Partner’s status as a REIT and not take any action which could lead to the GeneralPartner’s disqualification as a REIT.
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     7.24 Refinance of California Property. Borrower shall apply the proceeds received byit from any mortgage or other financing of the California Property (other than Loans under theFacility) 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 inthis Agreement to the contrary, it is agreedthat any tax, assessment, charge, levy, claim or obligation to a third party(expressly excluding an obligation to make payments to the Lenders created under theCredit Documents) need not be paid while the validity or amount thereof shall becontested currently, diligently and in good faith by appropriate proceedings and ifBorrower or the other relevant member of the Combined Group shall have adequateunencumbered (except in favor of Administrative Agent, on behalf of the Lenders orunder the Funded Debt Documents, as applicable) cash reserves with respect theretoand provided that Borrower or the other relevant member of the Combined Group shallpay all taxes, assessments, charges, levies or obligations immediately upon thecommencement of proceedings to enforce any lien which may have attached as securitytherefor, unless such proceeding is stayed by proper court order pending the outcomeof such contest.8.1.2 Legal Requirements. Any member of the Combined Group may contestany claim, demand, levy or assessment under any Legal Requirements by any person orentity if: (i) the contest is based upon a material question of law or fact raisedby such Person in good faith; (ii) the contest is properly commenced and thereafterdiligently pursued; (iii) the contest will not materially impair the ability toultimately comply with the contested Legal Requirement should the contest not besuccessful; (iv) Borrower demonstrates to Administrative Agent’s reasonablesatisfaction that such Person has the financial capability to undertake and pay forsuch contest and any corrective or remedial action then or thereafter reasonablylikely to be necessary; (v) there is no reason to believe that the contest will notbe resolved prior to the Maturity Date; and (vi) no Default or Event of Defaultexists.     8.2 Borrower Fully Liable. Borrower shall be fully liable for the Facility, each ofthe Loans and all other Borrower Obligations.9. EVENTS OF DEFAULT.     The following provisions deal with Default, Events of Default, notice, grace and cureperiods, 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 theother Credit Documents shall mean an Event of Default, or any fact or circumstance whichconstitutes, or upon the lapse of time, or giving of notice, or both, could constitute, an Event ofDefault. 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 “Eventof 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 orwarranty under this Agreement and such default remains uncured beyond any applicablespecific grace or notice period provided for in this Agreement, or as set forth inSection 9.2. below.9.1.2 Note and Other Credit Documents. A default by Borrower in theperformance 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 issufficient to cover any payment of money required thereby, and the specific grace ornotice period, if any, allowed for the default in question shall have expiredwithout such default having been cured; or any Credit Document shall fail to be infull force and effect or to give the Administrative Agent and Lenders the rights,powers and privileges purported to be created thereby (except insofar as suchrights, powers and privileges are contrary to applicable public policy and except tothe extent such failure is due to the gross negligence or willful misconduct ofAdministrative Agent or a Lender).9.1.3 Financial Status and Insolvency. (A) Borrower shall: (i) admitin writing its inability to pay its debts generally as they become due; (ii) file apetition 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 orany substantial part of its assets; (v) file a petition or answer seekingreorganization, arrangement, composition, readjustment, liquidation, dissolution orsimilar relief under the Federal Bankruptcy laws or any other applicable law; (vi)have a court of competent jurisdiction enter an order, judgment or decree appointinga receiver, liquidator or trustee of Borrower, or of the whole or any substantialpart of the assets of Borrower, and such order, judgment or decree shall remainunvacated or not set aside or unstayed for one hundred twenty (120) days; (vii) havea petition filed against it seeking reorganization, arrangement, composition,readjustment, liquidation, dissolution or similar relief under the FederalBankruptcy laws or any other applicable law and such petition shall remainundismissed for one hundred twenty (120) days; or (viii) have, under the provisionsof any other law for the relief or aid of debtors, any court of competentjurisdiction assume custody or control of Borrower or of the whole or anysubstantial part of its assets and such custody or control shall remain unterminatedor unstayed for one hundred twenty (120) days; or (B) any such event shall occurwith respect to the General Partner of Borrower.9.1.4 Breach of Representation or Warranty. Any representation orwarranty 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 Documentshall at the time made or deemed to have been remade or renewed be false ormisleading in any material respect, or any warranty shall be materially breached.9.1.5 Defaults under Other Agreements. With respect to anyIndebtedness (other than Indebtedness outstanding under this Agreement) of theBorrower 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 periodwith respect thereto, if any) with respect to any such Indebtedness and suchIndebtedness is accelerated, or (2) the occurrence and continuance of a default inthe observance or performance relating to such Indebtedness or contained in anyinstrument or agreement evidencing, securing or relating thereto, or any other eventor condition shall occur or condition exist, the effect of which default or otherevent or condition is to cause, or permit, the holder or holders of suchIndebtedness (or trustee or agent on behalf of such holders) to cause (determinedwithout regard to whether any notice or lapse of time is required), any suchIndebtedness to become due prior to its stated maturity; and (B) any suchIndebtedness shall be declared due and payable, or required to be prepaid other thanby a regularly scheduled required prepayment, prior to the stated maturity thereof;provided, however, that such Indebtedness of Borrower and Borrower’s Pro Rata Shareof such Indebtedness of any other member of the Combined Group or another PortfolioInvestment Entity, collectively and without duplication (including instances wheremore than one such Person is an obligor under such Indebtedness), then due andpayable or required to be prepaid prior to stated maturity is at least Ten MillionDollars ($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 notconsecutive, any uninsured final judgment against any member of the Combined Groupsuch that together with Borrower’s Pro Rata Share of other outstanding uninsuredfinal judgments, undischarged, unsatisfied and unstayed, against any of such partiesequals or exceeds, collectively and without duplication, in the aggregate TenMillion Dollars ($10,000,000.00).     9.2 Grace Periods and Notice. As to each of the foregoing events the following provisionsrelating to grace periods and notice shall apply:9.2.1 No Notice or Grace Period. There shall be no grace period and norequirement of notice with respect to the payment of principal at Maturity and nograce period and no requirement of notice with respect to defaults related to thevoluntary filing of bankruptcy or reorganization proceedings or a general assignmentfor the benefit of creditors, with respect to non-monetary defaults which are notreasonably capable of being cured or with respect to a breach of warranty orrepresentation under Section 6.1.(Financial Information), or with respect tobreaches under Section 7.3 (Financial Covenants), Section 7.4
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(Indebtedness andRestrictions on Liens, Transfers and Additional Debt), Section 7.7 (Limitations onCertain 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 ascheduled interest payment or a scheduled installment of principal prior toMaturity, there shall be a ten (10) day grace period without any requirement ofnotice from Administrative Agent, subject, however, to Section 2.3.13 above;provided, however, Borrower shall only be entitled to such 10-day grace period oncein any calendar year with no grace or notice period as to any subsequent nonpaymentwithin the relevant calendar year.9.2.3 Other Monetary Defaults. All other monetary defaults shall havea five (5) day grace period following notice from Administrative Agent (unlessotherwise specifically provided for herein), or, if shorter, a grace period withoutnotice until five (5) Business Days before the last day on which payment is requiredto 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 oftaxes or other municipal charges;9.2.4 Nonmonetary Defaults Capable of Cure. As to nonmonetary defaultswhich are reasonably capable of being cured or remedied, unless there is a specificshorter or longer grace period provided for in this Agreement or in another CreditDocument, there shall be a thirty (30) day grace period following notice fromAdministrative 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 onehundred eighty (180) days from Administrative Agent’s notice as may be reasonablyrequired so long as Borrower shall commence reasonable actions to remedy or cure thedefault within thirty (30) days following such notice and shall diligently prosecutesuch curative action to completion within such one hundred eighty (180) day period.As to breaches of warranties and representations (other than those set forth inSection 6.1 above)there shall be a thirty (30) day grace period following notice fromAdministrative 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 theCommitments terminated whereupon the Commitments shall be immediately terminated.9.3.2 Accelerate Debt. Administrative Agent may, and upon thedirection of the Required Lenders shall, declare the Indebtedness immediately dueand payable, provided that in the case of a voluntary petition in bankruptcy filedby Borrower or (after the expiration of the grace period if any set forth in Section9.1.3 above) an involuntary petition in bankruptcy filed against Borrower, suchacceleration shall be automatic.
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9.3.3 Pursue Remedies. Administrative Agent may pursue any and allremedies provided for hereunder, or under any one or more of the other CreditDocuments.9.3.4 Written Waivers. Notwithstanding anything to the contrarycontained herein, if a Default or an Event of Default is waived by the RequiredLenders or the Administrative Agent, in their sole discretion, pursuant to aspecific written instrument executed by an authorized officer of AdministrativeAgent, or if a Default or an Event of Default is timely cured by Borrower, theDefault or Event of Default so waived or Default so cured shall be deemed to havenever occurred.9.3.5 Reserved.9.3.6 Enforcement of Rights. Administrative Agent may enforce any andall rights and interests created and existing under the Credit Documents and allrights of set off.     Notwithstanding the foregoing, if an Event of Default specified in Section 9.1.3 shall occuras to Borrower, then the Commitments shall automatically terminate and all Loans, all accruedinterest in respect thereof, all accrued and unpaid Fees and other indebtedness or obligationsowing to the Administrative Agent and/or any of the Lenders hereunder or under theother Credit Documents automatically shall immediately become due and payable without thegiving 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, aseparate 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 obtainingthe 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 AdministrativeAgent.10. SECURITY INTEREST AND SET-OFF.     10.1 Security Interest. Borrower hereby grants to Administrative Agent, onbehalf of the Lenders a lien, security interest and right of setoff as security for all liabilitiesand 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 thepossession, custody, safekeeping or control of Administrative Agent or any Lender or any entityunder 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, anydeposits, balances or other sums credited by or due from Administrative Agent or any Lender, orfrom any affiliate of Administrative Agent or any Lender, to Borrower may to the fullest extent notprohibited 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 othercondition precedent now or hereafter imposed by statute, rule of law or otherwise, all of which arehereby 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 havebeen made and although such obligations may be unmatured, in such manner as Administrative Agent orany Lender in its sole and absolute discretion may determine. Within five (5) Business Days ofmaking any such set off, debit or appropriation and application, Administrative Agent or theapplicable Lender agrees to notify Borrower thereof, provided the failure to give such notice shallnot affect the validity of such set off, debit or appropriation and application. ANY AND ALLRIGHTS TO REQUIRE ADMINISTRATIVE AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITHRESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFFWITH 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) ifan amount to be set off is to be applied to indebtedness of the Borrower to such Lender, other thanthe obligations evidenced by the Note held by such Lender, such amount shall be applied ratably tosuch 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 rightof setoff, counterclaim, cross action, enforcement of the claim evidenced by the Note held by suchLender 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 andapply to the payment of the Note held by such Lender any amount in excess of its ratable portion ofthe 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 suchexcess, either by way of distribution, pro tanto assignment of claims, subrogation or otherwise asshall result in each Lender receiving in respect of the Note held by it its proportionate paymentas contemplated by this Agreement; provided that if all or any part of such excess payment isthereafter recovered from such Lender, such disposition and arrangements shall be rescinded and theamount restored to the extent of such recovery, but without interest.     10.3 Right to Freeze. Administrative Agent and each of the Lenders shall also havethe right, at its option, upon the occurrence of any event which would entitle Administrative Agentor any Lender to set off or debit as set forth in Section 10.2, to freeze, block or segregate anysuch deposits, balances and other sums so that Borrower may not access, control or draw upon thesame.     10.4 Additional Rights. The rights of Administrative Agent, the Lenders and eachaffiliate 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, whichAdministrative Agent, or any Lender may have.11. THE ADMINISTRATIVE AGENT AND THE LENDERS     11.1 Appointment of Administrative Agent. Each Lender hereby irrevocably designatesand appoints KeyBank National Association as Administrative Agent of such Lender to act asspecified herein and in the other Credit Documents, and each such Lender hereby irrevocablyauthorizes the Administrative Agent to take such actions, exercise such powers and perform suchduties 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 reasonablyincidental thereto. The Administrative Agent agrees to act as such upon the express conditionscontained in this Section 11. The Administrative Agent shall not have any duties orresponsibilities except those expressly set forth herein or in the other Credit Documents, norshall it have any fiduciary relationship with any Lender, and no implied covenants,responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwiseexist against the Administrative Agent. The provisions of this Section 11 (except for Sections11.10, 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) aresolely for the benefit of the AdministrativeAgent and the Lenders, and the Borrower shall not have any rights as a third party beneficiaryof any of the provisions hereof.     11.2 Administration of Facility by Administrative Agent. The Administrative Agentshall be responsible for administering the Facility on a day-to-day basis. In the exercise of suchadministrative duties, the Administrative Agent shall use the same diligence and standard of carethat is customarily used by the Administrative Agent with respect to similar loans held by theAdministrative Agent solely for its own account.     Each Lender delegates to the Administrative Agent the full right and authority on its behalfto 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 tothe extent of immediately available funds provided to the Administrative Agent by the respectiveLenders for such purpose;     (ii) to receive all payments of principal, interest, fees and other charges paid by, or onbehalf of, the Borrower and, except for fees to which the Administrative Agent is entitled pursuantto the Credit Documents or otherwise, to distribute all such funds to the respective Lenders asprovided for hereunder;     (iii) to keep and maintain complete and accurate files and records of all material matterspertaining to the Facility, and make such files and records available for inspection and copying byeach Lender and its respective employees and agents during normal business hours upon reasonableprior notice to the Administrative Agent; and     (iv) to do or omit doing all such other actions as may be reasonably necessary or incident tothe implementation, administration and servicing of the Facility and the rights and dutiesdelegated hereinabove.     11.3 Delegation of Duties. The Administrative Agent may execute any of its dutiesunder 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 andduties hereunder or under the other Credit Documents. The Administrative Agent shall not beresponsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it withreasonable care.     11.4 Exculpatory Provisions. Neither the Administrative Agent nor any of itsofficers, directors, employees, agents, attorneys-in-fact or affiliates shall be liable for anyaction lawfully taken or omitted to be taken by it or them under or in connection with thisAgreement or the
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other Credit Documents, except for its or their gross negligence or willfulmisconduct. 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 Borroweror any of its officers or agents contained in this Agreement orthe other Credit Documents or in any certificate or other document delivered in connectiontherewith; (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 ofany properties of the Borrower or the Assets, or any information contained in the books or recordsof the Borrower; (iv) the validity, enforceability, collectibility, effectiveness or genuineness ofthis Agreement or any other Credit Document or any other certificate, document or instrumentfurnished in connection therewith; or (v) the validity, priority or perfection of any lien securingor purporting to secure the Borrower Obligations.     11.5 Reliance by Administrative Agent. The Administrative Agent shall be entitled torely, and shall be fully protected in relying, upon any notice, consent, certificate, affidavit, orother document or writing believed by it to be genuine and correct and to have been signed, sent ormade 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 expertsselected by the Administrative Agent. The Administrative Agent shall be fully justified in failingor refusing to take any action under this Agreement or any other Credit Document unless it shallfirst receive such advice or concurrence of the Required Lenders as it deems appropriate or itshall first be indemnified to its satisfaction by the Lenders against any and all liability andexpense 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 fromacting, under this Agreement and the other Credit Documents in accordance with any written requestof the Required Lenders, and each such request of the Required Lenders, and any action taken orfailure to act by the Administrative Agent pursuant thereto, shall be binding upon all of theLenders; provided, however, that the Administrative Agent shall not be required in any event toact, or to refrain from acting, in any manner which is contrary to the Credit Documents or toapplicable law or in any manner reasonably believed by Administrative Agent to be commerciallyunreasonable in the applicable jurisdiction.     11.6 Notice of Default. The Administrative Agent shall not be deemed to haveknowledge or notice of the occurrence of any Event of Default unless the Administrative Agent hasactual knowledge of the same or has received notice from a Lender or the Borrower referring to thisAgreement, 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. TheAdministrative Agent shall take such action with respect to such Event of Default as shall bereasonably directed by the Required Lenders. Unless and until the Administrative Agent shall havereceived such direction, the Administrative Agent may (but shall not be obligated to) take suchaction, or refrain from taking such action, with respect to any such Event of Default as it shalldeem advisable in the best interest of the Lenders, provided, however, that the AdministrativeAgent shall not accelerate the indebtedness under this Agreement without the prior written consentof the Required Lenders.
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     11.7 Lenders’ Credit Decisions. Each Lender acknowledges that it has,independently and without reliance upon theAdministrative Agent or any other Lender, and based on the financial statements prepared by theBorrower and such other documents and information as it has deemed appropriate, made its own creditanalysis and investigation into the business, assets, operations, property, and financial and othercondition of the Borrower and has made its own decision to enter into this Agreement and the otherCredit Documents. Each Lender also acknowledges that it will, independently and without relianceupon the Administrative Agent or any other Lender, and based on such documents and information asit shall deem appropriate at the time, continue to make its own credit decisions in determiningwhether or not conditions precedent to closing any Loan hereunder have been satisfied and in takingor not taking any action under this Agreement and the other Credit Documents. Each Lenderexpressly acknowledges that is has relied upon its own legal counsel in its consideration of itsdecision to enter into this Agreement and the other Credit Documents and will so rely in regard tothe implementation of the transaction contemplated hereby and thereby and that it does not have anylawyer-client relationship with Administrative Agent’s counsel or counsels or any other Lenderswith respect thereto.     11.8 Administrative Agent’s Reimbursement and Indemnification. The Lenders agree toreimburse and indemnify the Administrative Agent, ratably in proportion to their respectiveCommitments, for (i) any amounts not reimbursed by the Borrower for which the Administrative Agentis 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 connectionwith the preparation, execution, delivery, administration, amendment, waiver and/or enforcement ofthis Agreement and the other Credit Documents, and (iii) any liabilities, obligations, losses,damages, penalties, action, judgments, suits, costs, expenses or disbursements of any kind andnature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agentin any way relating to or arising out of this Agreement or the other Credit Documents or any otherdocument delivered in connection therewith or any transaction contemplated thereby, or theenforcement of any of the terms hereof or thereof, provided that no Lender shall be liable for anyof the foregoing to the extent that they arise from the gross negligence or willful misconduct ofthe Administrative Agent. If any indemnity furnished to the Administrative Agent for any purposeshall, in the opinion of the Administrative Agent, be insufficient or become impaired, theAdministrative Agent may call for an additional indemnity and cease, or not commence, to do theaction indemnified against until such additional indemnity is furnished.     11.9 Administrative Agent in its Individual Capacity. With respect to its Commitmentas a Lender, and the Loans made by it and the Note issued to it, the Administrative Agent shallhave the same rights and powers hereunder and under any other Credit Document as any Lender and mayexercise 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 itsindividual capacity. The Administrative Agent and its subsidiaries and affiliates may acceptdeposits 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 Borroweras if it were not the Administrative Agent hereunder.
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     11.10 Successor Administrative Agent. The Administrative Agent may resign at any timeby giving thirty (30) days’ prior notice to the Lenders and Borrower (provided, however, suchresignation shall be effective only upon the appointment of a successor Administrative Agent inaccordance with the provisions of this Section 11.10). The Required Lenders, for good cause, mayremove Administrative Agent at any time by giving thirty (30) days’ prior notice to theAdministrative 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 nosuccessor Administrative Agent shall have been so appointed by the Required Lenders and acceptedsuch appointment within thirty (30) days after the retiring Administrative Agent’s giving notice ofresignation or the Required Lenders’ giving notice of removal, as the case may be, then theretiring Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successorAdministrative Agent. Each such successor Administrative Agent shall be a financial institutionwhich meets the requirements of an Eligible Assignee. Unless an Event of Default shall haveoccurred and be continuing, any successor Administrative Agent shall be subject to the priorwritten approval of the Borrower (which approval will not be unreasonably withheld, conditioned ordelayed). Upon the acceptance of any appointment as Administrative Agent hereunder by a successorAdministrative Agent, such successor Administrative Agent shall thereupon succeed to and becomevested with all the rights, powers, privileges and duties of the retiring Administrative Agent, andthe retiring Administrative Agent shall be discharged from its duties and obligations hereunder andunder 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 anyactions taken or omitted to be taken by it while it was acting as the Administrative Agenthereunder.     11.11 Duties in the Case of Enforcement. In the case one or more Events of Defaulthave occurred and shall be continuing, and whether or not acceleration of the Borrower Obligationsshall have occurred, the Administrative Agent shall, at the request, or may, upon the consent, ofthe Required Lenders, and provided that the Lenders have given to the Administrative Agent suchadditional indemnities and assurances against expenses and liabilities as the Administrative Agentmay reasonably request, proceed to enforce the provisions of this Agreement and the other CreditDocuments and the exercise of any other legal or equitable rights or remedies as it may havehereunder or under any other Credit Document or otherwise by virtue of applicable law, or torefrain from so acting if similarly requested by the Required Lenders. The Administrative Agentshall be fully protected in so acting or refraining from acting upon the instruction of theRequired Lenders, and such instruction shall be binding upon all the Lenders. The Required Lendersmay direct the Administrative Agent in writing as to the method and the extent of any suchforeclosure, sale or other disposition or the exercise of any other right or remedy, the Lendershereby agreeing to indemnify and hold the Administrative Agent harmless from all costs andliabilities 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 thatthe Administrative Agent reasonably believes the Administrative Agent’s compliance with suchdirection to be unlawful or commercially unreasonable in any applicable jurisdiction. TheAdministrative Agent may, in its discretion but without obligation, in the absence of directionfrom the Required Lenders, take such interim actions as it believes necessary to preserve therights of the Lenders hereunder, including but not limited to petitioning a court for injunctiverelief or appointment of a receiver. Each of the Lenders acknowledges and agrees that noindividual 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 writtennotice to each Lender of each request from Borrower for a Loan by facsimiletransmission, hand delivery or overnight courier, not later than 11:00 a.m. (Bostontime) two (2) Business Days prior to any Loan. Each such notice shall beaccompanied by a written summary of the request for a Loan and shall specify a) thedate of the requested Loan, (b) the aggregate amount of the requested Loan, (c) eachLender’s pro rata share of the requested Loan, and (d) the applicable interest rateselected by Borrower with respect to such Loan, or any portion thereof, togetherwith the applicable Interest Period, if any, selected, or deemed selected, byBorrower. Each Lender shall, before 11:00 a.m. (Boston time) on the date set forthin any such request for a Loan, make available to Administrative Agent, at anaccount to be designated by Administrative Agent at KeyBank National Association insame day funds, each Lender’s ratable portion of the requested Loan. AfterAdministrative Agent’s receipt of such funds and upon Administrative Agent’sdetermination that the applicable conditions to making the requested Loan have beenfulfilled, Administrative Agent shall make such funds available to Borrower asprovided for in this Agreement. Within a reasonable period of time following themaking of each Loan, but in no event later than ten (10) Business Days followingsuch Loan, Administrative Agent shall deliver to each Lender a copy of Borrower’srequest for such Loan. Promptly after receipt by Administrative Agent of writtenrequest from any Lender, Administrative Agent shall deliver to the requesting Lenderthe accompanying certifications and such other instruments, documents,certifications and approvals delivered by or on behalf of Borrower to AdministrativeAgent in support of the requested Loan.11.12.2 Nature of Obligations of Lenders. The obligations of theLenders hereunder are several and not joint. Failure of any Lender to fulfill itsobligations hereunder shall not result in any other Lender becoming obligated toadvance more than its Commitment Percentage of the Loan, nor shall such failurerelease or diminish the obligations of any other Lender to fund its CommitmentPercentage provided herein.11.12.3 Payments to Administrative Agent. All payments ofprincipal or and interest on the Loans or the Notes shall bemade to the Administrative Agent by the Borrower or any other obligor or guarantorfor the account of the Lenders in immediately available funds as provided in theNotes and this Agreement. The Administrative Agent agrees promptly to distribute toeach Lender, on the same Business Day upon which each such payment is made ifpossible, such Lender’s proportionate share of each such payment in immediatelyavailable funds, except as otherwise expressly provided herein. The AdministrativeAgent shall upon each distribution promptly notify Borrower of such distribution andeach Lender of the amounts distributed to it applicable to principal of, andinterest on, the
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proportionate share held by the applicable Lender. Each payment tothe Administrative Agent under the first sentence of this Section 11.12.3 shallconstitute a payment by the Borrower to each Lender in the amount of such Lender’sproportionate share of such payment, and any such payment to the AdministrativeAgent shall not be considered outstanding for any purpose after the date of suchpayment by the Borrower to the Administrative Agent without regard to whether orwhen the Administrative Agent makes distribution thereof as provided above. If anypayment received by the Administrative Agent from the Borrower is insufficient topay both all accrued interest and all principal then due and owing, theAdministrative Agent shall first apply such payment to all outstanding interestuntil paid in full and shall then apply the remainder of such payment to allprincipal then due and owing, and shall distribute the payment to each Lenderaccordingly.     11.12.4 Distribution of Liquidation Proceeds. Subject to the terms andconditions hereof, the Administrative Agent shall distribute all LiquidationProceeds in the order and manner set forth below:First: To the Administrative Agent, towards any fees and any expenses forwhich the Administrative Agent is entitled to reimbursement under thisAgreement or the other Credit Documents not theretofore paid to theAdministrative Agent.Second: To all applicable Lenders in accordance with their proportionalshare based upon their respective Commitment Percentages until all Lendershave been reimbursed for all expenses which such Lenders have previouslypaid to the Administrative Agent and not theretofore paid to such Lenders.Third: To all applicable Lenders based upon their respective CommitmentPercentages until all Lenders have been paid in full for any IndividualLender Litigation Expenses.Fourth: To all Lenders in accordance with their proportional share basedupon their respective Commitment Percentages until all Lenders have beenpaid in full all principal and interest due to such Lenders under theFacility, with each Lender applying such proceeds for purposes of thisAgreement first against the outstanding principal balance due to such Lenderunder the Facility and then to accrued and unpaid interest due under theFacility.Fifth: To all applicable Lenders in accordance with their proportional sharebased upon their respective Commitment Percentages until all Lenders havebeen paid in full all other amounts due to such Lenders under the Facilityincluding, without limitation, any costs and expenses incurred directly bysuch 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 claimLiquidation Proceeds.11.12.5 Adjustments. If, after Administrative Agent has paid eachLender’s proportionate share of any payment received or applied by AdministrativeAgent in respect of the Facility, that payment is rescinded or must otherwise bereturned or paid over by Administrative Agent, whether pursuant to any bankruptcy orinsolvency law, sharing of payments clause of any agreement or otherwise, suchLender shall, at Administrative Agent’s request, promptly return its proportionateshare of such payment or application to Administrative Agent, together with theLender’s proportionate share of any interest or other amount required to be paid byAdministrative 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 adeposit balance or other account of the Borrower held by such Lender on account ofthe Borrower Obligations, such Lender shall remit to the Administrative Agent allsuch sums received pursuant to the exercise of such right of setoff, and theAdministrative Agent shall apply all such sums for the benefit of all of the Lendershereunder in accordance with the terms of this Agreement.11.12.7 Distribution by Administrative Agent. If in the opinion of theAdministrative Agent, distribution of any amount received by it in such capacityhereunder or under the Notes or under any of the other Credit Documents mightinvolve any liability, it may refrain from making distribution until its right tomake distribution shall have been finally adjudicated by a court of competentjurisdiction or has been resolved by the mutual consent of all Lenders. Inaddition, the Administrative Agent may request full and complete indemnity, in formand substance satisfactory to it, prior to making any such distribution. If a courtof competent jurisdiction shall adjudge that any amount received and distributed bythe Administrative Agent is to be repaid, each personto whom any such distribution shall have been made shall either repay to theAdministrative Agent its proportionate share of the amount so adjudged to be repaidor shall pay over the same in such manner and to such persons as shall be determinedby such court.11.12.8 Actions by Administrative Agent. The Required Lenders maydirect the Administrative Agent in writing as to the method and the extent of anysale or other disposition of any collateral or other property of Borrower and shallindemnify and hold the Administrative Agent harmless from all liabilities incurredin respect to all actions taken or omitted in accordance with such directionsprovided that Administrative Agent need not comply with any such directions to theextent Administrative Agent reasonably believes the
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Administrative Agent’s compliance with such directions would constitute a violation of the obligationsundertaken by the Administrative Agent and/or Lenders under the Credit Documents, orwill constitute a violation of any statute, ordinance or regulation applicable tothe Administrative Agent or be commercially unreasonable in any applicablejurisdiction.     11.13 Delinquent Lender. If for any reason any Lender shall fail or refuse to abideby its obligations under this Agreement, including without limitation its obligation to makeavailable to Administrative Agent its pro rata share of any Loan, expenses or setoff (a “DelinquentLender”) and such failure is not cured within ten (10) days of receipt from the AdministrativeAgent of written notice thereof, then, in addition to the rights and remedies that may be availableto Administrative Agent, other Lenders, the Borrower or any other party at law or in equity, andnot at limitation thereof, (i) such Delinquent Lender’s right to participate in the administrationof, or decision-making rights related to, the Loans, this Agreement or the other Credit Documentsshall be suspended during the pendency of such failure or refusal, and (ii) a Delinquent Lendershall be deemed to have assigned any and all payments due to it from the Borrower, whether onaccount of the outstanding Loans, interest, fees or otherwise, to the remaining non-delinquentLenders for application to, and reduction of, their proportionate shares of the outstanding Loansuntil, as a result of application of such assigned payments the Lenders’ respective pro rata sharesof all the outstanding Loans shall have returned to those in effect immediately prior to suchdelinquency and without giving effect to the nonpayment causing such delinquency. The DelinquentLender’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 shareof any Loans or expenses as to which it is delinquent, together with interest thereon at theDefault Rate from the date when originally due until the date upon which any such amounts areactually paid.     The non-delinquent Lenders shall also have the right, but not the obligation, in theirrespective, sole and absolute discretion, to acquire for no cash consideration, (pro rata, based onthe respective Commitments of those Lenders electing to exercise such right) the DelinquentLender’s Commitment to fund future Loans (the “Future Commitment”). Upon any such purchase of thepro rata share of any Delinquent Lender’s Future Commitment, the DelinquentLender’s share in future Loans and its rights under the Credit Documents with respect theretoshall terminate on the date of purchase, and the Delinquent Lender shall promptly execute alldocuments reasonably requested to surrender and transfer such interest, including, if so requested,an Assignment and Acceptance. Each Delinquent Lender shall indemnify Administrative Agent and eachnon-delinquent Lender from and against any and all loss, damage or expenses, including but notlimited to reasonable attorneys’ fees and costs and funds advanced by Administrative Agent or byany non-delinquent Lender, on account of any Delinquent Lender’s failure to timely fund its prorata 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 asthe 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 AdministrativeAgent. Any request, authority or consent of any person or entity who, at the time of making suchrequest 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 ofany Note or Notes issued in exchange therefor.     11.15 Assignment and Participation.11.15.1 Conditions to Assignment by Lenders. Except as providedherein, each Lender may assign to one or more Eligible Assignees all or a portion ofits interests, rights and obligations under this Agreement (including all or aportion of its Commitment Percentage and Commitment and the same portion of theLoans at the time owing to it and the Notes held by it), upon satisfaction of thefollowing conditions: (a) each of the Administrative Agent and the Borrower shallhave given its prior written consent to such assignment (provided that, in the caseof the Borrower, such consent will not be unreasonably withheld and shall not berequired 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 ofall the assigning Lender’s rights and obligations under this Agreement, (c) otherthan when an Event of Default shall exist, each assignment shall be in an amountthat is at least Ten Million and 00/100 Dollars ($10,000,000.00), (d) other thanwhen an Event of Default shall exist, Administrative Agent shall retain, free of anysuch assignment, an amount of its Commitment of not less than Thirty Million and00/100 Dollars ($30,000,000.00), and (e) the parties to such assignment shallexecute and deliver to the Administrative Agent, for recording in the Register (ashereinafter defined), an Assignment and Acceptance, substantially in the form ofExhibit D hereto (an “Assignment and Acceptance”), together with delivery ofany Notes subject to such assignment. Upon such execution, delivery, acceptance andrecording, from and after the effective date specified in each Assignment andAcceptance, whicheffective date shall be at least five (5) Business Days after the executionthereof, (x) the assignee thereunder shall be a party hereto and, to the extentprovided in such Assignment and Acceptance, have the rights and obligations of aLender hereunder, and (y) the assigning Lender shall, to the extent provided in suchAssignment and Acceptance and upon payment to the Administrative Agent of theregistration fee referred to in Section 11.15.3, be released from its obligationsunder this Agreement.11.15.2 Certain Representations and Warranties. By executing anddelivering an Assignment and Acceptance, the parties thereunder confirm to and agreewith each other and the other parties hereto as follows:     (i) other than the representation and warranty that it is the legal andbeneficial owner of the interest being assigned thereby free and clear of anyadverse claim, the assigning Lender makes no representation or warranty, express orimplied, and assumes no responsibility with respect to any statements, warranties orrepresentations made in or in connection with this Agreement or the execution,legality, validity, enforceability, genuineness, sufficiency or value of thisAgreement, 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 noresponsibility with respect to the financial condition of the Borrower and itsaffiliates, related entities or Subsidiaries or any other person primarily orsecondarily liable in respect of any of the Borrower Obligations, or the performanceor observance by the Borrower or any other person primarily or secondarily liable inrespect of any of the Borrower Obligations or any of their obligations under thisAgreement or any of the other Credit Documents or any other instrument or documentfurnished pursuant hereto or thereto;     (iii) such assignee confirms that it has received a copy of this Agreement andthe other Credit Documents, together with copies of the most recent financialstatements provided by the Borrower as required by the terms of this Agreement,together with such other documents and information as it has deemed appropriate tomake its own credit analysis and decision to enter into such Assignment andAcceptance;     (iv) such assignee will, independently and without reliance upon the assigningLender, the Administrative Agent or any other Lender and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit decisions in taking or not taking action under this Agreement;     (v) such assignee represents and warrants that it is an Eligible Assignee ifrequired hereunder;     (vi) such assignee appoints and authorizes the Administrative Agent to takesuch action as agent on its behalf and to exercise such powers under this Agreementand the other Credit Documents as are delegated to the Administrative Agent by theterms hereof or thereof, together with such powers as are reasonably incidentalthereto;     (vii) such assignee agrees that it will perform in accordance with their termsall of the obligations that by the terms of this Agreement are required to beperformed by it as a Lender; and     (viii) such assignee represents and warrants that it is legally authorized toenter into such Assignment and Acceptance.11.15.3 Register. The Administrative Agent shall maintain a copy ofeach 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 theCommitment Percentages of, and principal amount of the Loans owing to, the Lendersfrom time to time. The entries in the Register shall be conclusive, in the absenceof manifest error, and the Borrower, the Administrative Agent and the Lenders maytreat 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 theBorrower and the Lenders at any reasonable time and from time to time uponreasonable prior notice. Upon each such recordation, the assigning Lender agrees topay to the Administrative Agent a registration fee in the sum of Three Thousand FiveHundred Dollars ($3,500.00).11.15.4 New Notes. Upon its receipt of an Assignment and Acceptanceexecuted by the parties to such assignment, together with each Note subject to suchassignment, the Administrative Agent shall (a) record the information containedtherein in the Register, and (b) give prompt notice thereof to the Borrower and theLenders (other than the assigning Lender). Within five (5) Business Days afterreceipt of such notice, the Borrower, at its own expense, shall execute and deliverto the Administrative Agent, in exchange for each surrendered Note, a new Note tothe order of such Eligible Assignee pursuant to such Assignment and Acceptance and,if the assigning Lender has retained some portion of its obligations hereunder, anew Note to the order of the assigning Lender in an amount equal to the amountretained by it hereunder. Such new Notes shall provide that they are replacementsfor the surrendered Notes, shall be in an aggregate principal amount equal to theaggregate principal amount of the surrendered Notes, shall be dated the effectivedate of such Assignment and Acceptance and shall otherwise be substantially inthe form of the assigned Notes. Within thirty (30) days of issuance of any newNotes pursuant to this Section 10.15.4, the Borrower, at the expense of the assigneeLender (which expense shall not be reimbursed by Borrower), shall deliver an opinionof counsel, addressed to the Lenders and the Administrative Agent, relating to thedue authorization, execution and delivery of such new Notes and the legality,validity and binding effect thereof, in form and substance satisfactory to theLenders. The surrendered Notes shall be canceled and returned to the Borrower.11.15.5 Participations. Each Lender may sell participations to one ormore banks or other financial institutions in all or any portion of such Lender’srights and obligations under this Agreement and the other Credit Documents; providedthat (a) each such participation shall be in a minimum amount of Five Million and00/100 Dollars ($5,000,000.00), (b) each participant shall meet the requirements ofan Eligible Assignee, (c) any such sale or participation shall not affect the rightsand duties of the selling Lender hereunder to the Borrower, and (d) the only rightsgranted to the participant pursuant to such participation arrangements with respectto waivers, amendments or modifications of the Credit Documents shall be the rightsto approve waivers, amendments or modifications that would reduce the principal ofor the interest rate on any Loans, extend the term or increase the amount of theCommitment of such Lender as it relates to such participant, reduce the amount ofany commitment fees to which such participant is entitled or extend any regularlyscheduled payment date for principal or interest.
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     11.16 Disclosure. The Borrower agrees that in addition to disclosures made inaccordance with standard and customary banking practices any Lender may disclose informationobtained by such Lender pursuant to this Agreement to assignees or participants and potentialassignees or participants hereunder; provided that such assignees or participants or potentialassignees or participants shall agree (a) to treat in confidence such information unless suchinformation otherwise becomes public knowledge, (b) not to disclose such information to a thirdparty (other than its advisors) except as required by law or legal process or to enforce the CreditDocuments and (c) not to make use of such information for purposes of transactions unrelated tosuch contemplated assignment or participation.     11.17 Miscellaneous Assignment Provisions. Anything contained in this Section 11 tothe contrary notwithstanding, any Lender may at any time pledge all or any portion of its interestand rights under this Agreement (including all or any portion of its Notes) to any of the twelveFederal Reserve Banks organized under §4 of the Federal Reserve Act, 12 U.S.C. §341. No suchpledge or the enforcement thereof shallrelease the pledgor Lender from its obligations hereunder or under any of the other CreditDocuments.     11.18 Intentionally Deleted.     11.19 Amendment, Waiver, Consent, Etc. Except as otherwise expressly provided inthis Agreement or any other Credit Document, no term or provision of this Agreement or any otherCredit Document may be changed, waived, discharged or terminated, nor may any consent required orpermitted 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 theLenders (other than a Defaulting Lender) shall be required with respect to anyproposed amendment, waiver, discharge, termination, or consent which:(i) has the effect of (a) extending the final scheduled maturity or the dateof any amortization payment of any Loan or Note, (b) reducing the rate orextending the time of payment of interest or fees thereon, (c) increasing orreducing the principal amount thereof, or (d) otherwise postponing orforgiving any indebtedness thereunder,(ii) releases or discharges any material portion of any collateral otherthan 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 thisAgreement.(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 ofany Lender’s Commitment or Commitment Percentage, or(vii) releases or waives any guaranty of the Borrower Obligations orindemnifications provided in the Credit Documents;     and provided, further, that without the consent of the Administrative Agent, nosuch action shall amend, modify or waive any provision of this Section 11 or anyother provisions of any Credit Document which relates to the rights or obligationsof the Administrative Agent.     Notwithstanding the foregoing, in the event that the Borrower or AdministrativeAgent requests any consent, waiver or approval under this Agreement or any otherCredit Document, or an amendment or modification hereof or thereof, and one or moreLenders determine not to consent or agree to such consent, waiver, approval,amendment or modification, then the Lender then acting as Administrative Agenthereunder shall have the right to purchase the Commitment of such non-consentingLender(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 suchnon-consenting Lender(s) shall immediately upon request, sell and assign itsCommitment and all of its other right, title and interest in the Loans and otherBorrower Obligations to the Lender then acting as Administrative Agent pursuant toan Assignment and Assumption (provided that the selling Lender(s) shall not beresponsible 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 Agentis required hereunder to seek or desires to seek, the approval of the Required Lenders or all ofthe Lenders, as the case may be, prior to undertaking a particular action or course of conduct, theAdministrative Agent in each such case shall provide each Lender with written notice of any suchrequest for amendment, waiver or consent or any other requested or proposed action or course ofconduct, accompanied by such detailed background information and explanations as may be reasonablynecessary to determine whether to approve or disapprove such amendment, waiver, consent or otheraction or course of conduct, the Administrative Agent may (but shall not be required to) include inany such notice, printed in capital letters or boldface type a legend substantially to thefollowing effect:“THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE, FAILURE TO RESPOND WITHIN TEN (10)CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL CONSTITUTE A DEEMEDAPPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY THE BORROWER OR THE COURSE OFCONDUCT 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 Lendershall be deemed to have approved or consented to such action or course of conduct for all purposeshereunder if such Lender fails to object to such action or course of conduct by written notice tothe 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 indemnificationsprovided by Borrower to the Lenders otherwise provided herein or in any other Credit Document,Borrower shall also indemnify AdministrativeAgent 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 resultof any Environmental Claim related to any real estate or other assets held by the Borrower or anyother member of the Combined Group, provided that the same are not due to the fraud or grossnegligence of Administrative Agent or any Lender. The Borrower will indemnify the AdministrativeAgent and Lenders against any liability, cost or expense (including, without limitation, reasonableattorneys’ fees and costs) incurred by the Administrative Agent and Lenders as a result of lawsuitsand litigation that may arise in connection with the activities of Borrower or any other member ofthe Combined Group, provided that the same are not due to the fraud or gross negligence ofAdministrative Agent or any Lender.     All indemnification provided by Borrower to Administrative Agent and Lenders, includingwithout limitation the aforementioned indemnifications, shall survive and continue for the benefitof the indemnities thereunder, notwithstanding any termination of the Facility or payment in fullof the obligations thereunder and hereunder.     11.22 Borrower’s Communication with Lenders. Notwithstanding anything to the contrarycontained in this Agreement, prior to the occurrence of an Event of Default, Borrower shall beentitled 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 theFacility.12. GENERAL PROVISIONS.     12.1 Notices. Any notice or other communication in connection with thisAgreement, the Notes, or any of the other Credit Documents, shall be in writing, and (i) depositedin the United States Mail, postage prepaid, by registered or certified mail, (ii) hand delivered byany 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 isalso contemporaneously sent by any commercially recognized courier service or overnight deliveryservice 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 UnitedStates as such addressee shall have specified by written notice given as set forth above. Allperiods of notice shall be measured from the deemed date of delivery as set forth in the nextsucceeding paragraph.     A notice shall be deemed to have been given, delivered and received for the purposes of allCredit Documents upon the earliest of: (i) if sent by such certified or registered mail, on thethird Business Day following the date of postmark, or (ii) if hand delivered at the specifiedaddress by such courier or overnight delivery service, when so delivered or tendered for deliveryduring customary business hours on a Business Day, or (iii) if so mailed, on the date of actualreceipt as evidenced by the return receipt, or (iv) if so delivered, upon actual receipt, or (v) iffacsimile transmission is a permitted means of giving notice, upon receipt as evidenced byelectronic confirmation from the sender’s fax machine of successful transmission if received duringnormal 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 moniesdue thereunder without the prior written consent of Administrative Agent and the Required Lendersin each instance.     12.3 Further Assurance. Borrower shall upon request from Administrative Agent or anyLender from time to time execute, seal, acknowledge and deliver such further instruments ordocuments which Administrative Agent or any Lender may reasonably require to better perfect andconfirm its rights and remedies hereunder, under the Notes, and under each of the other CreditDocuments,     12.4 Parties Bound. The provisions of this Agreement and of each of the other CreditDocuments shall be binding upon and inure to the benefit of Borrower, Administrative Agent and eachof the Lenders and their respective successors and assigns, except as otherwise prohibited by thisAgreement 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 theLenders for their mutual benefit, and no third person shall have any right, claim or interestagainst either Administrative Agent, or any Lender or Borrower by virtue of any provisionhereof.     12.5 Waivers and Extensions. Notwithstanding any contrary provision herein or in anyother Credit Document, Administrative Agent may, unless otherwise directed by the Required Lendersor the same requires unanimous consent of the Lenders pursuant to Section 11.19 hereof, at any timeand from time to time waive any one or more of the conditions contained herein or in any of theother Credit Documents, or extend the time of payment of any Loan, but any such waiver or extensionshall be deemed to be made in pursuance and not in modification hereof, and any such waiver in anyinstance, or under any particular circumstance, shall not be considered a waiver of such conditionin 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 allof the Credit Documents were negotiated, executed and delivered in the Commonwealthof Massachusetts, which Commonwealth the parties agree has a substantialrelationship to the parties and to the underlying transactions embodied by theCredit Documents.12.6.2 Place of Delivery. Borrower agrees to furnish to AdministrativeAgent at the Administrative Agent’s office in Boston, Massachusetts all furtherinstruments, certifications and documents to be furnished hereunder.12.6.3 Governing Law. This Agreement and each of the other CreditDocuments shall in all respects be governed, construed, applied and enforced inaccordance with the internal laws of the Commonwealth of Massachusetts withoutregard to principles of conflicts of law.12.6.4 Consent to Jurisdiction. Borrower hereby consents to personaljurisdiction in any state or Federal court located within the Commonwealth ofMassachusetts.12.6.5 JURY TRIAL WAIVER. BORROWER, ADMINISTRATIVE AGENT, AND EACH OFTHE LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHTTO A TRIAL BY JURY INRESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, ARISING OUT OF, UNDER OR INCONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BEEXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVERCONSTITUTES A MATERIAL INDUCEMENT FOR BORROWER, ADMINISTRATIVE AGENT AND EACH OF THELENDERS TO ENTER INTO THE TRANSACTIONS CONTEMPLATED HEREBY.
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     12.7 Survival. All representations, warranties, covenants and agreements of Borrowerprovided herein or in any other Credit Document, or in any notice, certificate, or other paperdelivered by or on behalf of Borrower pursuant hereto are significant and shall be deemed to havebeen relied upon by Administrative Agent and each of the Lenders notwithstanding any investigationmade by Administrative Agent or any Lender or on its behalf and shall survive the delivery of theCredit Documents and the making of the Facility and each advance pursuant thereto. No review orapproval 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 ofany nature shall relieve Borrower or anyone else of any of the obligations, warranties orrepresentations 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 Lendershereunder and under each of the other Credit Documents and any other agreement now or hereafterexecuted 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 theLenders shall not be in default under this Agreement, or under any other CreditDocument, unless a notice specifically setting forth the claim of Borrower shallhave 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 ofthe event which Borrower alleges gave rise to such claim and Administrative Agentand each of the Lenders do not remedy or cure the default, if any there be, withreasonable promptness thereafter.12.9.2 Remedies. If it is determined by thefinal order of a court of competent jurisdiction,which is not subject to further appeal, that Administrative Agent or any Lender hasbreached any of their obligations under the Credit Documents and has not remedied orcured the same with reasonable promptness following notice thereof as requiredabove, and the Administrative Agent’s and the Lenders’ responsibilities shall belimited to: (i) where the breach consists of the failure to grant consent or giveapproval in violation of the terms and requirements of a Credit Document, theobligation to grant such consent or give such approval and to pay Borrower’sreasonable costs and expenses including, without limitation, reasonable attorneys’fees and disbursements in connection with such court proceedings; (ii) where thebreach consists of the failure to make a Loan, the obligation to make such Loan andto pay Borrower’s reasonable costs and expenses including, without limitation,reasonable attorneys’ fees and disbursements in connection with such courtproceedings; and (iii) in the case of any default by Administrative Agent or anyLender, where it is also so determined that Administrative Agent or any Lender actedin bad faith, or that Administrative Agent’s or any Lenders’ default constitutedgross 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’sreasonable 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 Agentor 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 ofthe breach by Administrative Agent or any Lender of its obligations under thisAgreement or under any of the other Credit Documents. In no event shallAdministrative Agent or any Lender be liable to Borrower or to anyone else unless anotice specifically setting forth the claim of Borrower shall have been given toAdministrative Agent and each of the Lenders within the time period specified above.     12.10 Obligations Absolute, Joint and Several. Except to the extent prohibited byapplicable law which cannot be waived, the Borrower Obligations shall be absolute, unconditionaland irrevocable and shall be paid and/or performed strictly in accordance with the terms of theCredit Documents under all circumstances whatsoever, including, without limitation, the existenceof any claim, set off, defense or other right which Borrower may have at any time againstAdministrative Agent or any Lender whether in connection with the Facility or any unrelatedtransaction.     12.11 Table of Contents, Title and Headings; Exhibits and Schedules. Any table ofcontents and the titles and the headings of sections are not parts of this Agreement or any otherCredit Document and shall not be deemed to affect the meaning orconstruction of any of their provisions. All exhibits and schedules attached hereto or made apart hereof are incorporated by reference and constitute a part of this Agreement.     12.12 Counterparts. This Agreement may be executed in several counterparts, each ofwhich when executed and delivered is an original, but all of which together shall constitute oneinstrument. In making proof of this Agreement, it shall not be necessary to produce or account formore than one such counterpart which is executed by the party against whom enforcement of thisAgreement 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 thesubject matter hereof and supersedes all prior agreements, written or oral, on the subject matterhereof. Notwithstanding the foregoing, this Section 12.13 shall not be interpreted as integratingor superseding any agreements or understandings relating to the refinancing of the Facility or anyportion of the Borrower’s Obligations hereunder pursuant to a separate agreement by one or more ofthe parties hereto.     12.14 Time Of the Essence. Time is of the essence of each provision of this Agreementand each other Credit Document.     12.15 No Oral Change. This Agreement and each of the other Credit Documents may onlybe 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, pursuantto a specific provision of any Credit Document, is required to be bound by changes without suchparty’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 orotherwise modify this Agreement or any of the other Credit Documents.     12.16 Monthly Statements. While Administrative Agent may issue invoices or otherstatements on a monthly or periodic basis (a “Statement”), it is expressly acknowledged and agreedthat, subject to the terms of Section 2.3.13 above: (i) the failure of Administrative Agent toissue any Statement on one or more occasions shall not affect Borrower’s obligations to makepayments under the Credit Documents as and when due; (ii) the inaccuracy of any Statement shall notbe binding upon Administrative Agent and so Borrower shall always remain obligated to pay the fullamount(s) required under the Credit Documents as and when due notwithstanding any provision to thecontrary contained in any Statement; (iii) all Statements are issued for informational purposesonly and shall never constitute any type of offer, acceptance, modification, or waiver of theCredit Documents or any of Administrative Agent’s or any Lender’s rights or remediesthereunder; and (iv) in no event shall any Statement serve as the basis for, or a componentof, any course of dealing, course of conduct, or trade practice which would modify, alter, orotherwise affect the express written terms of the Credit Documents.     12.17 Indemnification. The Borrower agrees to indemnify and hold harmless theAdministrative 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 againstany and all claims, actions and suits, whether groundless or otherwise, and from and against anyand all liabilities, losses, settlement payments, obligations, damages and expenses of every natureand character in connection therewith, arising out of this Agreement or any of the other CreditDocuments or the transactions contemplated hereby or thereby or which otherwise arise in connectionwith the financing, including, without limitation, the reasonable fees and disbursements of counseland 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 underthis Section 12.17 to indemnify any Person for (x) liabilities arising from such Person’s own grossnegligence, willful misconduct or breach of this Agreement, as finally determined by a court ofcompetent jurisdiction (v) as to any dispute to the extent the same is exclusively among theLenders, or (z) any insolvency of a Lender if the same is caused by such Lender being a party tothe Credit Documents. If and to the extent that the obligations of the Borrower under this Section12.17 are unenforceable for any reason, the Borrower hereby agrees to make the maximum contributionto the payment in satisfaction of such obligations which is permissible under applicable law. Theprovisions of this Section 12.17 shall survive the repayment of the amounts owing under the Notesand this Agreement and the termination of this Agreement and the obligations of the Lendershereunder 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 tobe duly executed and delivered as an instrument under seal as of the date first above written.         BORROWER:           HINES REIT PROPERTIES, L.P., a Delaware limitedpartnership           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