minnpromissorynote.htm


    PROMISSORY
      NOTE

    


    DEFINED
      TERMS

    
      	
              Execution
                Date:    December 20, 2007

               

            	
              City
                and State of Signing: Houston, Texas

            
	
              Loan
                Amount: Forty-Five Million and no/00 Dollars ($45,000,000.00) to
                be
                disbursed to Borrower on the Advance Date.

               

            	
              Interest
                Rate: 5.70% per annum

            
	
              Borrower:                      Hines
                REIT Minneapolis Industrial LLC, a Delaware limited liability
                company

               

            
	
              Borrower’s
                Address:Hines REIT Minneapolis Industrial LLC

              c/o
                Hines Interests Limited
                Partnership

              2800
                Post Oak Blvd., Suite
                5000

              Houston,
                Texas
                77056

              Attention:  Charles
                N. Hazen

               

              With
                a Copy to:Hines Interests Limited Partnership

              1
                South Dearborn Street

              Suite
                2000

              Chicago,
                Illinois
                60603

              Attention:  C.
                Kevin
                Shannahan 

               

              With
                a Copy to:Hines REIT Minneapolis Industrial LLC

              c/o
                Hines Interests Limited
                Partnership

              2800
                Post Oak Blvd., Suite
                5000

              Houston,
                Texas
                77056

              Attention:  Jason
                P.
                Maxwell

               

            
	
              Holder:                      Metropolitan
                Life Insurance Company, a New York corporation

               

            
	
              Holder’s
                Address:Metropolitan Life Insurance Company

              10
                Park Avenue

              Morristown,
                New
                Jersey  07962

              Attention:  Senior
                Vice-President, Real Estate Investments

               

              With
                a Copy
                to:                                                     Metropolitan
                Life Insurance Company

              125
                South Wacker Drive, Suite 1100

              Chicago,
                Illinois 60606

              Attention:  Director,
                Mortgage Portfolio Services

               

            
	
              Maturity
                Date: January 1, 2013

            	
              Advance
                Date: The date funds are disbursed to Borrower.

            
	
              Interest
                Only Period: The period from the Advance Date and ending on the Maturity
                Date.

               

               

              Monthly
                Installment: Equal monthly installments of interest only at the Interest
                Rate each in the amount of $213,750.00.

               

            	
              Permitted
                Prepayment Period: The Loan may not be prepaid in whole or in part
                prior
                to the Maturity Date except as follows: During the 90 day period
                prior to
                the Maturity Date, Borrower may prepay the Loan, in whole or in part,
                without a Prepayment Fee on not less than 30 days prior written notice
                (“Prepayment Notice”). In addition, commencing on the
                first day of January, 2010, Borrower may prepay the Loan, in whole
                or in
                part, with a Prepayment Fee on the amount of the Loan being prepaid
                on not
                less than 10 days’ prior written notice.

            
	
              Late
                Charge:  An amount equal to four cents ($.04) for each dollar
                that is overdue.

              Default
                Rate:  An annual rate equal to the lesser of (a) the Interest
                Rate plus four percent (4%), or (b) the maximum rate of interest
                allowed
                by law.

               

            
	
              Note:  This
                Promissory Note.  Mortgage:  Mortgage, Security
                Agreement, and Fixture Filing dated as of the Execution Date granted
                by
                Borrower to Holder.  Loan Documents:  This Note, the
                Mortgage and any other documents executed by Borrower and related
                to this
                Note, and/or the Mortgage and all renewals, amendments, modifications,
                restatements and extensions of these documents.  Indemnity
                Agreement: Unsecured Indemnity Agreement dated as of the Execution
                Date
                and executed by Borrower in favor of Holder.  The Indemnity
                Agreement is not a Loan Document and shall survive repayment of the
                Loan
                or other termination of the Loan
                Documents.

            


    

    


    FOR
      VALUE RECEIVED, Borrower promises
      to pay to the order of Holder, at Holder's Address or such other place as Holder
      may from time to time designate, the Loan Amount with interest payable in the
      manner described below, in money of the United States of America that at the
      time of payment shall be legal tender for payment of all
      obligations.

    


    Capitalized
      terms which are not defined
      in this Note shall have the meanings set forth in the Mortgage.

    


    1.           Payment
      of Principal and Interest.  Principal and interest under this Note
      shall be payable as follows:

    


    (a)           Interest
      on the funded portion of the Loan Amount shall accrue from the Advance Date
      at
      the Interest Rate;

    


    (b)           Borrower
      shall pay accrued interest on the Loan from the Advance Date through December
      31, 2007, on January 1, 2008 and thereafter shall pay the Monthly Installment
      on
      the first day of each month until the Maturity Date; and

    


    (c)           On
      the Maturity Date, a final payment in the aggregate amount of the unpaid
      principal sum evidenced by this Note, all accrued and unpaid interest, and
      all
      other outstanding sums evidenced by this Note or secured by the Mortgage and/or
      any other Loan Documents as well as any future advances under the Mortgage
      that
      may be made to or on behalf of Borrower by Holder following the Advance Date
      and
      which remain unpaid as of the Maturity Date (collectively, the “Secured
      Indebtedness”), shall become immediately payable in full.

    


    Borrower
      acknowledges and agrees that,
      except for a prepayment permitted under the Loan Documents, the entire original
      Loan Amount shall be outstanding and due on the Maturity Date.

    


    Interest
      shall be calculated on the
      basis of a thirty (30) day month and a three hundred sixty (360) day year,
      except that (i) if the Advance Date occurs on a date other than the first day
      of
      a calendar month, interest payable for the period commencing on the Advance
      Date
      and ending on the last day of the month in which the Advance Date occurs shall
      be calculated on the basis of the actual number of days elapsed over a 365
      day
      or 366 day year, as applicable, and (ii) if the Maturity Date occurs on a date
      other than the last day of the month, interest payable for the period commencing
      on the first day of the month in which the Maturity Date occurs and ending
      on
      the Maturity Date shall be calculated on the basis of the actual number of
      days
      elapsed over a 365 day or 366 day year, as applicable.

    


    2.           Application
      of Payments.  At the election of Holder, and to the extent
      permitted by law, all payments shall be applied in the order selected by Holder
      to any expenses, prepayment fees, late charges, escrow deposits and other sums
      due and payable under the Loan Documents, and to unpaid interest at the Interest
      Rate or at the Default Rate, as applicable.  The balance of any
      payments shall be applied to reduce the then unpaid Loan Amount.

    


    3.           Security.  The
      covenants of the Mortgage are incorporated by reference into this
      Note.  This Note shall evidence, and the Mortgage shall secure, the
      Secured Indebtedness and this Note is secured by those certain other Mortgage,
      Security Agreement and Fixture Filings and Deed of Trust, Security Agreement
      and
      Fixture Filings listed on Schedule A attached hereto and made a part
      hereof and all other mortgages, deeds of trust and similar instruments, if
      any,
      which secure a “Loan” under the Loan Facility Agreement (as defined in the
      Mortgage) (such Mortgage, Security Agreement and Fixture Filings and Deed of
      Trust, Security Agreement and Fixture Filings, as amended, modified,
      supplemented, consolidated, extended or restated from time to time, are herein
      sometimes referred to as the “Other Mortgages”).  The
      Mortgage and the Other Mortgages also secure those certain promissory notes
      listed on Schedule B attached hereto and made a part hereof and all other
      promissory notes issued for any future “Loan” under the Loan Facility Agreement
      (such promissory notes are referred to collectively as, the “Other
      Notes”).

    


    4.           Late
      Charge.  If any payment of interest, any payment of a Monthly
      Installment or any payment of a required escrow deposit is not paid within
      seven
      (7) days after the due date, Holder shall have the option to charge Borrower
      the
      Late Charge; provided that the Late Charge shall be applicable with respect
      to
      any payment other than payments made on the Maturity Date.  The Late
      Charge is for the purpose of defraying the expenses incurred in connection
      with
      handling and processing delinquent payments and is payable in addition to any
      other remedy Holder may have.  Unpaid Late Charges shall become part
      of the Secured Indebtedness and shall be added to any subsequent payments due
      under the Loan Documents.

    


    5.           Acceleration
      Upon Default.  At
      the
      option of Holder, if Borrower fails to pay any sum specified in this Note
      within seven (7) days after Holder shall have given written notice of such
      failure to Borrower (provided, however, such written notice shall not be
      required more than once in any period of twelve (12) consecutive months, and
      after such written notice shall have been given once during any such 12 month
      period, the provisions of this Section 5 shall be applicable to any such failure
      to pay such sums which continues for more than seven (7) days after the due
      date
      thereof and further provided such notice shall not be required for any payment
      which is not made on the Maturity Date), or if an Event of Default occurs,
      the
      Secured Indebtedness, and all
      other sums
      evidenced and/or secured by the Loan Documents, including without limitation
      any
      applicable Prepayment Fees (collectively, the “Accelerated
      Loan Amount”)
      shall become
      immediately due and payable.

    


    6.           Interest
      Upon Default.  The Accelerated Loan Amount shall bear interest at
      the Default Rate which shall never exceed the maximum rate of interest permitted
      to be contracted for under the laws of Minnesota.  The Default Rate
      shall commence upon the occurrence of an Event of Default and shall continue
      until all defaults are cured.  The Secured Indebtedness evidenced by
      this Note, all accrued and unpaid interest thereon and all other sums evidenced
      and/or secured by the Loan Documents shall also bear interest at the Default
      Rate following any judgment on this Note in favor of Holder.

    


    7.           Limitation
      on Interest.  The agreements made by Borrower with respect to this
      Note and the other Loan Documents are expressly limited so that in no event
      shall the amount of interest received, charged or contracted for by Holder
      exceed the highest lawful amount of interest permissible under the laws
      applicable to the Loan.  If at any time performance of any provision
      of this Note or the other Loan Documents results in the highest lawful rate
      of
      interest per­missible under applicable laws being exceeded, then the amount
      of interest received, charged or contracted for by Holder shall automatically
      and without further action by any party be deemed to have been reduced to the
      highest lawful amount of interest then permissible under applicable
      laws.  If Holder shall ever receive, charge or contract for, as
      interest, an amount which is unlawful, at Holder's election, the amount of
      unlawful interest shall be refunded to Borrower (if actually paid) or applied
      to
      reduce the then unpaid Loan Amount.  To the fullest extent permitted
      by applicable laws, any amounts contracted for, charged or received under the
      Loan Documents included for the purpose of determining whether the Interest
      Rate
      would exceed the highest lawful rate shall be calculated by allocating and
      spreading such interest to and over the full stated term of this
      Note.

    


    8.           Prepayment.  Borrower
      shall not have the right to prepay all or any portion of the Loan Amount at
      any
      time during the term of this Note except as expressly set forth in the Loan
      Documents.  If Borrower provides a Prepayment Notice, the Accelerated
      Loan Amount (or such lesser portion of the Loan Amount specified by Borrower
      in
      the Prepayment Notice) shall become due and payable on the date specified in
      the
      Prepayment Notice; provided, however, that Borrower shall have the right, no
      more than twice per calendar year, to revoke any such notice, in which event
      the
      Accelerated Loan Amount (or such lesser amount) shall not be due.

    


    9.           Prepayment
      Fee.  Any
      tender of payment by Borrower or any other person or entity of the Secured
      Indebtedness, other than as expressly provided in the Loan Documents, shall
      constitute a prohibited prepayment.  If a prepayment of all or any
      part of the Secured Indebtedness is made (i) following an Event of Default
      and
      an acceleration of the Maturity Date, (ii) subject to Section 9(d) below,
      following the application of money to the principal of the Loan after a casualty
      or, to the extent not prohibited by law, a condemnation, or (iii) in connection
      with a purchase of the Property or a repayment of the Secured Indebtedness
      in
      connection with a judicial or non-judicial foreclosure or sale of the Property,
      then to compensate Holder for the loss of the investment, Borrower shall pay
      an
      amount equal to the Prepayment Fee (as hereinafter defined).

    


    (a)           The
      “Prepayment Fee” shall be the greater of (A) the Prepayment
      Ratio (as hereinafter defined) multiplied by the difference between (x) and
      (y),
      where (x) is the present value of all remaining payments of principal and
      interest including the outstanding principal due on the Maturity Date,
      discounted monthly at the rate which, when compounded monthly, is equivalent
      to
      the Treasury Rate plus 25 basis points compounded semi-annually, and (y) is
      the
      amount of the principal then outstanding (to be adjusted in the event of a
      partial prepayment), or (B) one-half of one percent (0.5%) of the amount of
      the
      principal being prepaid.

    


    (b)           The
      “Treasury Rate” shall be the annualized yield on securities
      issued by the United States Treasury having a maturity equal to the remaining
      stated term of this Note, as quoted in the Federal Reserve Statistical
      Release [H. 15 (519)] under the heading "U.S. Government Securities -
      Treasury Constant Maturities" for the date which is 5 Business Days prior to
      the
      date on which prepayment is being made.  If this rate is not available
      on such date, the Treasury Rate shall be determined by interpolating between
      the
      yield on securities of the next longer and next shorter maturity.  If
      the Treasury Rate is no longer published, Holder shall select a comparable
      rate.
      Holder will, upon request, provide an estimate of the amount of the Prepayment
      Fee two weeks before the date of the scheduled prepayment.  A Business
      Day is a day on which Holder is conducting normal business
      operations.

    


    (c)           The
      “Prepayment Ratio” shall be a fraction, the numerator of which
      shall be the amount of principal being prepaid, and the denominator of which
      shall be the principal then outstanding.

    


    (d)           In
      the event of a casualty or condemnation, Borrower shall file a claim to recover
      from the insurer or condemning authority any Prepayment Fee which would be
      payable in connection with a prepayment of the Loan.  If Borrower does
      not recover under its claim all or any portion of such Prepayment Fee (and
      such
      recovery shall not be deemed to have occurred unless such amounts recovered
      are
      determinable in some objective way as compensation for such Prepayment Fee),
      then the Prepayment Fee shall be reduced by the amount of such shortfall (and
      if
      there is no such recovery, no Prepayment Fee shall be
      due).  Notwithstanding the foregoing, so long as Borrower makes a good
      faith effort to recover any Prepayment Fee which would be due as a result of
      a
      casualty or condemnation, from the insurer in the case of a casualty or from
      the
      condemning authority, then the Prepayment Fee due as a result of the casualty
      or
      condemnation shall be waived except to the extent recovered by the
      Borrower.

    


    10.           Waiver
      of Right to Prepay Note Without Prepayment Fee.  Borrower
      acknowledges that
      Holder has relied upon the anticipated investment return under this Note in
      entering into transactions with, and in making commitments to, third parties
      and
      that the tender of any prohibited prepayment, shall, to the extent permitted
      by
      law and not otherwise provided to the contrary in the Loan Documents, include
      the Prepayment Fee calculated as of the date such prepayment is
      tendered.  Borrower agrees that the Prepayment Fee represents the
      reasonable estimate of Holder and Borrower of a fair average compensation for
      the loss that may be sustained by Holder as a result of a prohibited prepayment
      of this Note and it shall be paid without prejudice to the right of Holder
      to
      collect any other amounts provided to be paid under the Loan
      Documents.

    


    BORROWER
      EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER MINNESOTA LAW TO PREPAY THIS
      NOTE, IN WHOLE OR IN PART, WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE
      MATURITY DATE OF THIS NOTE, AND (B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT
      OF THIS NOTE IS MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE
      OF
      THIS NOTE BY HOLDER ON ACCOUNT OF ANY EVENT OF DEFAULT BY BORROWER UNDER ANY
      LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY TRANSFER, FURTHER ENCUMBRANCE
      OR
      DISPOSITION WHICH IS PROHIBITED OR RESTRICTED BY THE MORTGAGE, THEN BORROWER
      SHALL BE OBLIGATED TO PAY CONCURRENTLY THE PREPAYMENT FEE SPECIFIED IN SECTION
      9.  BY EXECUTING THIS NOTE, BORROWER AGREES THAT HOLDER'S AGREEMENT TO
      MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE
      CONSTITUTES ADEQUATE CONSIDERATION FOR THIS WAIVER AND AGREEMENT.

    


    11.           Liability
      of Borrower.  Notwithstanding anything to the contrary contained
      herein or in the Mortgage or other Loan Documents, upon the occurrence of an
      Event of Default, except as provided in this Section 11, Holder will look solely
      to the Property and the security under the Loan Documents for the repayment
      of
      the Loan and will not enforce a deficiency judgment against Borrower or any
      direct or indirect partner, member, shareholder or other holder of a beneficial
      interest in Borrower.  However, nothing contained in this section
      shall limit the rights of Holder to proceed against Borrower (but not its direct
      or indirect partners, members, shareholders or other holders of any beneficial
      interests in Borrower), (i) to enforce any Leases entered into by Borrower
      or
      its affiliates as tenant, or guarantees, or other agreements entered into by
      Borrower in a capacity other than as borrower or any policies of insurance;
      (ii)
      to recover damages for fraud, intentional material misrepresentation or breach
      of warranty or intentional physical waste; (iii) to recover any condemnation
      proceeds or insurance proceeds or other similar funds which have been misapplied
      by Borrower or which, under the terms of the Loan Documents, should have been
      paid to Holder; (iv) to recover any tenant security deposits, tenant letters
      of
      credit or other deposits or fees paid to Borrower and not applied to rent or
      returned to the tenants pursuant to the terms of the tenant leases that are
      part
      of the collateral for the Loan or prepaid rents for a period of more than 30
      days which have not been delivered to Holder; (v) to recover Rents and Profits
      (as defined in the Mortgage) received by Borrower during the period beginning
      six (6) months prior to the date a notice of acceleration of maturity of this
      Note is delivered to Borrower through the date Holder acquires title to the
      Property which have not been applied to the Loan or in accordance with the
      Loan
      Documents for leasing, repair, management, operating and maintenance expenses
      of
      the Property, insurance premiums, imposition deposits, deposits into a reserve
      for replacements or taxes upon the Property or any other sum required to be
      paid
      under the Loan Documents, but only to the extent Rents and Profits were
      available but not so applied; (vi) to recover damages, costs and expenses
      arising from, or in connection with Article VI of the Mortgage pertaining to
      hazardous materials or any warranty in the Indemnity Agreement; and (vii) to
      recover damages arising from Borrower’s failure to comply with Section 8.01 of
      the Mortgage pertaining to ERISA.  If Lender exercises the rights and
      remedies of an unsecured creditor in accordance with the preceding sentence,
      Borrower promises to pay to Lender, on demand by Lender following such exercise,
      all amounts owed to Lender under any Loan Document, and Borrower agrees that
      it
      (but not any direct or indirect partner, member, shareholder or other holder
      of
      a beneficial interest in Borrower) will be personally liable for the payment
      of
      all such sums.

    


    Notwithstanding
      the foregoing, the
      limitation of liability set forth in this Section 11 shall not apply and the
      Loan shall be fully recourse to Borrower (but not to any direct or indirect
      partner, member, shareholder or other holder of a beneficial interest in
      Borrower) in the event that (i) a Transfer occurs without the consent of Holder
      (other than a transfer which is permitted without Holder’s consent pursuant to
      the terms of Section 10.01 of the Mortgage or Section 3.3 or Section 3.4 of
      the
      Loan Facility Agreement), (ii) a Subordinate Financing occurs in violation
      of
      Section 10.02 of the Mortgage without the consent of Holder (other than Credit
      Facility Pledge which is permitted without Holder’s consent pursuant to the
      terms of Section 10.2 of the Mortgage, (iii) Borrower commences a voluntary
      proceeding under applicable federal bankruptcy law, or (iv) a collusive
      involuntary proceeding under applicable federal bankruptcy law is commenced
      against Borrower and is not dismissed within 120 days of filing.  In
      addition, this agreement shall not waive any rights which Holder would have
      under any provisions of the U.S. Bankruptcy Code to file a claim for the full
      amount of the Secured Indebtedness or to require that the Property shall
      continue to secure all of the Secured Indebtedness.

    


    12.           Waiver
      by Borrower.  Borrower and others who may become liable for the
      payment of all or any part of this Note, and each of them, waive diligence,
      demand, presentment for payment, notice of nonpayment (except any notice of
      nonpayment specifically required under the terms of this Note or the other
      Loan
      Documents),  protest, notice of dishonor and notice of protest, notice
      of intent to accelerate and notice of acceleration and specifically consent
      to
      and waive notice of any amendments, modifications, renewals or extensions of
      this Note, including the granting of extension of time for payment, whether
      made
      to or in favor of Borrower or any other person or persons.

    


    13.           Exercise
      of Rights.  No single or partial exercise by Holder, or delay or
      omission in the exercise by Holder, of any right or remedy under the Loan
      Documents shall waive or limit the exercise of any such right or
      remedy.  Holder shall at all times have the right to proceed against
      any portion of or interest in the Property
      in the manner that Holder may deem appropriate, without waiving any other rights
      or remedies.  The release of any party under this Note shall not
      operate to release any other party which is liable under this Note and/or under
      the other Loan Documents or under the Indemnity Agreement.

    


    14.           Fees
      and Expenses.  If Borrower defaults under this Note, Borrower (but
      not any direct or indirect partner, member, shareholder or other holder of
      a
      beneficial interest in Borrower) shall be personally liable for and shall pay
      to
      Holder, in addition to the sums stated above, the costs and expenses of
      enforcement and collection, including a reasonable sum as an attorney's
      fee.  This obligation is not limited by Section 11.

    


    15.           No
      Amendments.  This Note may not be modified or amended except in a
      writing executed by Borrower and Holder.  No waivers shall be
      effective unless they are set forth in a writing signed by the party which
      is
      waiving a right.  This Note and the other Loan Documents are the final
      expression of the
      lending
relationship between Borrower and Holder, and there is no unwritten
      agreement with respect to the subject matter of the Loan.

    


    16.           Governing
      Law.  This Note is to be construed and enforced in accordance with
      the laws of the State of Minnesota.

    


    17.           Construction.  The
      words “Borrower” and “Holder” shall be deemed to include their respective heirs,
      representatives, successors and assigns, and shall denote the singular and/or
      plural, and the masculine and/or feminine, and natural and/or artificial
      persons, as appropriate.  The provisions of this Note shall remain in
      full force and effect notwithstanding any changes in the shareholders, partners
      or members of Borrower.  If more than one party is Borrower, the
      obligations of each party shall be joint and several.  The captions in
      this Note are inserted only for convenience of reference and do not expand,
      limit or define the scope or intent of any section of this Note.

    


    18.           Notices.  All
      notices, demands, requests and consents permitted or required under this Note
      shall be given in the manner prescribed in the Mortgage.

    


    19.           Time
      of the Essence.  Time shall be of the essence with respect to all
      of Borrower's obligations under this Note.

    


    20.           Severability.  If
      any provision of this Note should be held unenforceable or void, then that
      provision shall be deemed separable from the remaining provisions and shall
      not
      affect the validity of this Note, except that if that provision relates to
      the
      payment of any monetary sum, then Holder may, at its option, declare the Secured
      Indebtedness (together with the Prepayment Fee) immediately due and
      payable.

    


    21.           Cross
      Default.  The Loan may be accelerated as provided in any of the
      Loan Documents and an Event of Default shall occur under this Note upon the
      occurrence of an Event of Default under any other “Loan” (as defined in the Loan
      Facility Agreement) or the Loan Facility Agreement.

    


    [Remainder
      of Page Intentionally Left Blank;

    Signature
      Page Follows]

    


    


    IN
      WITNESS WHEREOF,
      Borrower has executed this Note as of the Execution Date.

    


    BORROWER:

    


    HINES
      REIT MINNEAPOLIS INDUSTRIAL LLC, a Delaware limited liability
      company

    


    


    
      	
               

            	
              By:

            	 	 


    

    
      	
               

            	
              Name:

            	 	 


    

    Title:                      

    


    SCHEDULE
      A

    


    OTHER
      MORTGAGES

    


    


    Deed
      of
      Trust, Security Agreement and Fixture Filing dated December 20, 2007 by Hines
      REIT 2200 Ross Avenue LP, a Delaware limited partnership, to
      Lender.

    SCHEDULE
      B

    


    OTHER
      NOTES

    


    Promissory
      Note dated December 20, 2007 executed by Hines REIT 2200 Ross Avenue LP, a
      Delaware limited partnership, in favor of Lender.