**Exhibit 10.88**

 

CREDITAGREEMENT

 

DATED AS OF DECEMBER 11,2007

 

by and among

 

BEHRINGERHARVARD OPERATING PARTNERSHIP I LP,

 

AS BORROWER,

 

KEYBANKNATIONAL ASSOCIATION,

 

THE OTHERLENDERS WHICH ARE PARTIES TO THIS AGREEMENT

 

AND

 

OTHER LENDERSTHAT MAY BECOME

 

PARTIES TOTHIS AGREEMENT,

 

KEYBANKNATIONAL ASSOCIATION,

 

AS AGENT,

 

KEYBANCCAPITAL MARKETS,AS SOLE BOOK MANAGER,

 

KEYBANKCAPITAL MARKETS

 

AND

 

WACHOVIA BANK,NATIONAL ASSOCIATION,

 

AS CO-LEADARRANGERS,

 

AND

 

AAREAL BANK AG

 

AND

 

WESTDEUTSCHEIMMOBILIENBANK AG,

 

ASCO-DOCUMENTATION AGENTS

 

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**TABLE OFCONTENTS**

 
|     |   |                                         |                                                          |   | **Page**   |
|----------|--------|----------------------------------------------|---------------------------------------------------------------|--------|------------|
|     |   |                                         |                                                          |   | ** ** |
| §1. |   | DEFINITIONS AND RULES OF INTERPRETATION |                                                          | 1      |
|     |   | §1.1                                    | Definitions                                                   |   | 1          |
|     |   | §1.2                                    | Rules of Interpretation                                  |   | 25         |
| §2. |   | THE CREDIT FACILITY                          |                                                          | 26     |
|     |   | §2.1                                    | Revolving Credit Loans                                        |   | 26         |
|     |   | §2.2                                    | Commitment to Lend Term Loan                                  |   | 27         |
|     |   | §2.3                                    | Facility Unused Fee                                           |   | 27         |
|     |   | §2.4                                    | Reduction and Termination of the Revolving Credit Commitments |   | 27         |
|     |   | §2.5                                    | Swing Loan Commitment                                         |   | 28         |
|     |   | §2.6                                    | Interest on Loans                                             |   | 30         |
|     |   | §2.7                                    | Requests for Revolving Credit Loans                           |   | 31         |
|     |   | §2.8                                    | Funds for Loans                                               |   | 31         |
|     |   | §2.9                                    | Use of Proceeds                                               |   | 32         |
|     |   | §2.10                                   | Letters of Credit                                             |   | 32         |
|     |   | §2.11                                   | Increase in Total Revolving Credit Commitment                 |   | 36         |
|     |   | §2.12                                   | Extension of Revolving Credit Maturity Date                   |   | 38         |
|     |   | §2.13                                   | Extension of Term Loan Maturity Date                          |   | 39         |
| §3. |   | REPAYMENT OF THE LOANS                       |                                                          | 40     |
|     |   | §3.1                                    | Stated Maturity                                               |   | 40         |
|     |   | §3.2                                    | Mandatory Prepayments                                         |   | 40         |
|     |   | §3.3                                    | Optional Prepayments                                          |   | 40         |
|     |   | §3.4                                    | Partial Prepayments                                           |   | 41         |
|     |   | §3.5                                    | Effect of Prepayments                                         |   | 41         |
| §4. |   | CERTAIN GENERAL PROVISIONS                   |                                                          | 41     |
|     |   | §4.1                                    | Conversion Options                                            |   | 41         |
|     |   | §4.2                                    | Fees                                                          |   | 42         |
|     |   | §4.3                                    | Funds for Payments                                            |   | 42         |
|     |   | §4.4                                    | Computations                                                  |   | 44         |
|     |   | §4.5                                    | Suspension of LIBOR Rate Loans                                |   | 44         |
|     |   | §4.6                                    | Illegality                                                    |   | 44         |
|     |   | §4.7                                    | Additional Interest                                           |   | 45         |

 

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|     |   |                            |                                                                    |   | **Page**   |
|----------|--------|---------------------------------|-------------------------------------------------------------------------|--------|------------|
|     |   |                            |                                                                    |   | ** ** |
|     |   | §4.8                       | Additional Costs, Etc.                                                  |   | 45         |
|     |   | §4.9                       | Capital Adequacy                                                        |   | 46         |
|     |   | §4.10                      | Breakage Costs                                                          |   | 47         |
|     |   | §4.11                      | Default Interest; Late Charge                                           |   | 47         |
|     |   | §4.12                      | Certificate                                                             |   | 47         |
|     |   | §4.13                      | Limitation on Interest                                                  |   | 47         |
|     |   | §4.14                      | Certain Provisions Relating to Increased Costs and Non-Funding  Lenders |   | 48         |
| §5. |   | COLLATERAL SECURITY; GUARANTORS |                                                                    | 49     |
|     |   | §5.1                       | Collateral                                                              |   | 49         |
|     |   | §5.2                       | Additional Guarantors                                                   |   | 49         |
|     |   | §5.3                       | Additional Collateral                                                   |   | 49         |
|     |   | §5.4                       | Release of Collateral; Release of Guarantor                             |   | 50         |
| §6. |   | REPRESENTATIONS AND WARRANTIES  |                                                                    | 51     |
|     |   | §6.1                       | Corporate Authority, Etc.                                               |   | 51         |
|     |   | §6.2                       | Governmental Approvals                                                  |   | 52         |
|     |   | §6.3                       | Title to Properties                                                     |   | 52         |
|     |   | §6.4                       | Financial Statements                                                    |   | 52         |
|     |   | §6.5                       | No Material Changes                                                     |   | 52         |
|     |   | §6.6                       | Franchises, Patents, Copyrights, Etc.                                   |   | 53         |
|     |   | §6.7                       | Litigation                                                              |   | 53         |
|     |   | §6.8                       | No Material Adverse Contracts, Etc.                                     |   | 53         |
|     |   | §6.9                       | Compliance with Other Instruments, Laws, Etc.                           |   | 53         |
|     |   | §6.10                      | Tax Status                                                              |   | 53         |
|     |   | §6.11                      | No Event of Default                                                     |   | 54         |
|     |   | §6.12                      | Investment Company Act                                                  |   | 54         |
|     |   | §6.13                      | Setoff, Etc.                                                            |   | 54         |
|     |   | §6.14                      | Certain Transactions                                                    |   | 54         |
|     |   | §6.15                      | Employee Benefit Plans                                                  |   | 54         |
|     |   | §6.16                      | Disclosure                                                              |   | 55         |
|     |   | §6.17                      | Place of Business                                                       |   | 55         |
|     |   | §6.18                      | Regulations T, U and X                                                  |   | 55         |

 

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|     |   |                  |                                                                     |   | **Page**   |
|----------|--------|-----------------------|--------------------------------------------------------------------------|--------|------------|
|     |   |                  |                                                                     |   | ** ** |
|     |   | §6.19            | Environmental Compliance                                                 |   | 55         |
|     |   | §6.20            | Subsidiaries; Organizational Structure                                   |   | 57         |
|     |   | §6.21            | Property                                                                 |   | 57         |
|     |   | §6.22            | Brokers                                                                  |   | 58         |
|     |   | §6.23            | Other Debt                                                               |   | 58         |
|     |   | §6.24            | Solvency                                                                 |   | 58         |
|     |   | §6.25            | No Bankruptcy Filing                                                     |   | 58         |
|     |   | §6.26            | No Fraudulent Intent                                                     |   | 58         |
|     |   | §6.27            | Transaction in Best Interests of Borrower and Guarantors;  Consideration |   | 59         |
|     |   | §6.28            | Contribution Agreement                                                   |   | 59         |
|     |   | §6.29            | OFAC                                                                     |   | 59         |
| §7. |   | AFFIRMATIVE COVENANTS |                                                                     | 59     |
|     |   | §7.1             | Punctual Payment                                                         |   | 59         |
|     |   | §7.2             | Maintenance of Office                                                    |   | 59         |
|     |   | §7.3             | Records and Accounts                                                     |   | 60         |
|     |   | §7.4             | Financial Statements, Certificates and Information                       |   | 60         |
|     |   | §7.5             | Notices                                                                  |   | 63         |
|     |   | §7.6             | Existence; Maintenance of Properties                                     |   | 64         |
|     |   | §7.7             | Insurance                                                                |   | 64         |
|     |   | §7.8             | Taxes; Liens                                                             |   | 64         |
|     |   | §7.9             | Inspection of Properties and Books                                       |   | 65         |
|     |   | §7.10            | Compliance with Laws, Contracts, Licenses, and Permits                   |   | 65         |
|     |   | §7.11            | Further Assurances                                                       |   | 66         |
|     |   | §7.12            | Business Operations                                                      |   | 66         |
|     |   | §7.13            | Subordination of Advisory Fees                                           |   | 66         |
|     |   | §7.14            | Ownership of Real Estate                                                 |   | 66         |
|     |   | §7.15            | Distributions of Income to Borrower                                      |   | 67         |
|     |   | §7.16            | Plan Assets                                                              |   | 67         |
| §8. |   | NEGATIVE COVENANTS    |                                                                     | 67     |
|     |   | §8.1             | Restrictions on Indebtedness                                             |   | 67         |
|     |   | §8.2             | Restrictions on Liens, Etc.                                              |   | 68         |

 

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|      |   |                         |                                                       |   | **Page**   |
|-----------|--------|------------------------------|------------------------------------------------------------|--------|------------|
|      |   |                         |                                                       |   | ** ** |
|      |   | §8.3                    | Restrictions on Investments                                |   | 70         |
|      |   | §8.4                    | Merger, Consolidation                                      |   | 71         |
|      |   | §8.5                    | Sale and Leaseback                                         |   | 72         |
|      |   | §8.6                    | Compliance with Environmental Laws                         |   | 72         |
|      |   | §8.7                    | Distributions                                              |   | 74         |
|      |   | §8.8                    | Asset Sales                                                |   | 74         |
|      |   | §8.9                    | Restriction on Prepayment of Indebtedness                  |   | 74         |
|      |   | §8.10                   | Derivatives Contracts                                      |   | 75         |
|      |   | §8.11                   | Transactions with Affiliates                               |   | 75         |
|      |   | §8.12                   | Equity Pledges                                             |   | 75         |
|      |   | §8.13                   | Advisory Fees                                              |   | 75         |
| §9.  |   | FINANCIAL COVENANTS          |                                                       | 75     |
|      |   | §9.1                    | Consolidated Total Indebtedness to Gross Asset Value       |   | 75         |
|      |   | §9.2                    | Adjusted Consolidated EBITDA to Consolidated Fixed Charges |   | 75         |
|      |   | §9.3                    | Minimum Consolidated Tangible Net Worth                    |   | 76         |
|      |   | §9.4                    | Unhedged Variable Rate Debt                                |   | 76         |
| §10. |   | CLOSING CONDITIONS           |                                                       | 76     |
|      |   | §10.1                   | Loan Documents                                             |   | 76         |
|      |   | §10.2                   | Certified Copies of Organizational Documents               |   | 76         |
|      |   | §10.3                   | Resolutions                                                |   | 76         |
|      |   | §10.4                   | Incumbency Certificate; Authorized Signers                 |   | 76         |
|      |   | §10.5                   | Opinion of Counsel                                         |   | 76         |
|      |   | §10.6                   | Payment of Fees                                            |   | 77         |
|      |   | §10.7                   | Performance; No Default                                    |   | 77         |
|      |   | §10.8                   | Representations and Warranties                             |   | 77         |
|      |   | §10.9                   | Proceedings and Documents                                  |   | 77         |
|      |   | §10.10                  | Compliance Certificate                                     |   | 77         |
|      |   | §10.11                  | Consents                                                   |   | 77         |
|      |   | §10.12                  | Contribution Agreement                                     |   | 77         |
|      |   | §10.13                  | Other                                                      |   | 77         |
| §11. |   | CONDITIONS TO ALL BORROWINGS |                                                       | 77     |

 

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|      |   |                                  |                                             |   | **Page**   |
|-----------|--------|---------------------------------------|--------------------------------------------------|--------|------------|
|      |   |                                  |                                             |   | ** ** |
|      |   | §11.1                            | Prior Conditions Satisfied                       |   | 77         |
|      |   | §11.2                            | Representations True; No Default                 |   | 78         |
|      |   | §11.3                            | Borrowing Documents                              |   | 78         |
| §12. |   | EVENTS OF DEFAULT; ACCELERATION; ETC. |                                             | 78     |
|      |   | §12.1                            | Events of Default and Acceleration               |   | 78         |
|      |   | §12.2                            | Certain Cure Periods; Limitation of Cure Periods |   | 81         |
|      |   | §12.3                            | Termination of Commitments                       |   | 81         |
|      |   | §12.4                            | Remedies                                         |   | 82         |
|      |   | §12.5                            | Distribution of Collateral Proceeds              |   | 82         |
| §13. |   | SETOFF                                |                                             | 83     |
| §14. |   | THE AGENT                             |                                             | 84     |
|      |   | §14.1                            | Authorization                                    |   | 84         |
|      |   | §14.2                            | Employees and Agents                             |   | 84         |
|      |   | §14.3                            | No Liability                                     |   | 84         |
|      |   | §14.4                            | No Representations                               |   | 84         |
|      |   | §14.5                            | Payments                                         |   | 85         |
|      |   | §14.6                            | Holders of Notes                                 |   | 86         |
|      |   | §14.7                            | Indemnity                                        |   | 87         |
|      |   | §14.8                            | Agent as Lender                                  |   | 87         |
|      |   | §14.9                            | Resignation                                      |   | 87         |
|      |   | §14.10                           | Duties in the Case of Enforcement                |   | 88         |
|      |   | §14.11                           | Bankruptcy                                       |   | 88         |
|      |   | §14.12                           | Reliance by Agent                                |   | 89         |
|      |   | §14.13                           | Approvals                                        |   | 89         |
|      |   | §14.14                           | Borrower Not Beneficiary                         |   | 89         |
| §15. |   | EXPENSES                              |                                             | 89     |
| §16. |   | INDEMNIFICATION                       |                                             | 90     |
| §17. |   | SURVIVAL OF COVENANTS, ETC.           |                                             | 91     |
| §18. |   | ASSIGNMENT AND PARTICIPATION          |                                             | 91     |
|      |   | §18.1                            | Conditions to Assignment by Lenders              |   | 91         |
|      |   | §18.2                            | Register                                         |   | 92         |

 

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|      |   |                                               |                         |   | **Page**   |
|-----------|--------|----------------------------------------------------|------------------------------|--------|------------|
|      |   |                                               |                         |   | ** ** |
|      |   | §18.3                                         | New Notes                    |   | 93         |
|      |   | §18.4                                         | Participations               |   | 93         |
|      |   | §18.5                                         | Pledge by Lender             |   | 93         |
|      |   | §18.6                                         | No Assignment by Borrower    |   | 93         |
|      |   | §18.7                                         | Disclosure                   |   | 94         |
|      |   | §18.8                                         | Mandatory Assignment         |   | 94         |
|      |   | §18.9                                         | Amendments to Loan Documents |   | 95         |
|      |   | §18.10                                        | Titled Agents                |   | 95         |
| §19. |   | NOTICES                                            |                         | 95     |
| §20. |   | RELATIONSHIP                                       |                         | 97     |
| §21. |   | GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE |                         | 97     |
| §22. |   | HEADINGS                                           |                         | 98     |
| §23. |   | COUNTERPARTS                                       |                         | 98     |
| §24. |   | ENTIRE AGREEMENT, ETC.                             |                         | 98     |
| §25. |   | WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS     |                         | 98     |
| §26. |   | DEALINGS WITH THE BORROWER                         |                         | 99     |
| §27. |   | CONSENTS, AMENDMENTS, WAIVERS, ETC.                |                         | 99     |
| §28. |   | SEVERABILITY                                       |                         | 100    |
| §29. |   | TIME OF THE ESSENCE                                |                         | 100    |
| §30. |   | NO UNWRITTEN AGREEMENTS                            |                         | 100    |
| §31. |   | REPLACEMENT NOTES                                  |                         | 100    |
| §32. |   | NO THIRD PARTIES BENEFITED                         |                         | 100    |
| §33. |   | PATRIOT ACT                                        |                         | 101    |

 

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**CREDIT AGREEMENT**

 

**THIS CREDIT AGREEMENT** (this “Agreement”) ismade as of the 11th day of December, 2007, by and among **BEHRINGER HARVARD OPERATING PARTNERSHIP I LP**, a Texaslimited partnership (the “Borrower”), **KEYBANK NATIONALASSOCIATION** (“KeyBank”), the other lending institutions which areparties to this Agreement as “Lenders”, and the other lending institutions thatmay become parties hereto pursuant to §18 (together with KeyBank, the “Lenders”),and **KEYBANK NATIONAL ASSOCIATION**, as Agentfor the Lenders (the “Agent”), and **KEYBANC CAPITAL MARKETS**,as Sole Lead Arranger and Sole Book Manager.

 

**R E C I T AL S**

 

**WHEREAS**, theBorrower has requested that the Lenders provide a revolving credit and termloan facility to the Borrower; and

 

**WHEREAS**, the Agent and the Lenders are willingto provide such revolving credit and term loan facility to the Borrower on andsubject to the terms and conditions set forth herein;

 

**NOW, THEREFORE**, in consideration of therecitals herein and mutual covenants and agreements contained herein, theparties hereto hereby covenant and agree as follows:

 

§1.                                DEFINITIONSAND RULES OF INTERPRETATION.

 

§1.1                          Definitions.The following terms shall have the meanings set forth in this §l or elsewherein the provisions of this Agreement referred to below:

 

222 Riverside Plaza.The Real Estate located at 222 Riverside Plaza, Chicago, Illinois.

 

1325 G Street. TheReal Estate located at 1325 G Street, Washington, D.C.

 

Acknowledgments. TheAcknowledgments executed by the applicable Companies in favor of the Agent,acknowledging the pledge of Equity Interests in such Company to Agent, suchAcknowledgement to be in form and substance reasonably satisfactory toAgent.

 

Additional Commitment Request Notice.See §2.11(a).

 

Additional Guarantor.Each additional Subsidiary of Borrower which becomes a Subsidiary Guarantorpursuant to §5.2.

 

Additional Pledgor. Eachadditional Pledgor which becomes a Pledgor pursuant to §5.3.

 

Adjusted Consolidated EBITDA.On any date of determination, the sum of (a) the Consolidated EBITDA forthe prior four (4) fiscal quarters most recently ended, less (b) theCapital Reserve.

 

[Credit Agreement]

 

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Advisor. BehringerAdvisors, LLC, a Texas limited liability company and successor by merger toBehringer Advisors LP, a Texas limited partnership, Behringer Harvard RealEstate Services, LLC, or any other Affiliate of Behringer Advisors, LLC to whomrelevant duties under the Advisory Agreement are delegated (provided that anysuch delegation is subject to, and the applicable Affiliate agrees to be boundby, the Subordination of Advisory Agreement).

 

Advisory Agreement. TheFifth Amended and Restated Advisory Management Agreement dated December 29,2006, by and between REIT, Advisor and Behringer Harvard Real Estate Services,LLC, a Texas limited liability company, as the same may be amended,restated, supplemented or otherwise modified in accordance with the termshereof.

 

Affiliate. AnAffiliate, as applied to any Person, shall mean any other Person directly orindirectly controlling, controlled by, or under common control with, thatPerson. For purposes of this definition, “control” (including, with correlativemeanings, the terms “controlling”, “controlled by” and “under common controlwith”), as applied to any Person, means (a) the possession, directly orindirectly, of the power to vote twenty percent (20%) or more of the stock,shares, voting trust certificates, beneficial interest, partnership interests,member interests or other interests having voting power for the election ofdirectors of such Person or otherwise to direct or cause the direction of themanagement and policies of that Person, whether through the ownership of votingsecurities or by contract or otherwise, or (b) the ownership of (i) ageneral partnership interest, (ii) a managing member’s or manager’sinterest in a limited liability company or (iii) a limited partnershipinterest or preferred stock (or other ownership interest) representing twentypercent (20%) or more of the outstanding limited partnership interests,preferred stock or other ownership interests of such Person.

 

Agent. KeyBankNational Association, acting as administrative agent for the Lenders, and itssuccessors and assigns.

 

Agent’s Head Office.The Agent’s head office located at 127 Public Square, Cleveland, Ohio44114-1306, or at such other location as the Agent may designate from timeto time by notice to the Borrower and the Lenders.

 

Agent’s Special Counsel.McKenna Long & Aldridge LLP or such other counsel as selected byAgent.

 

Agreement. ThisCredit Agreement, including the Schedules and Exhibits hereto.

 

Agreement Regarding Fees.See §4.2.

 

Applicable Margin. Onany date, the Applicable Margin set forth below based on the ratio of theConsolidated Total Indebtedness to the Gross Asset Value:

 

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| **Pricing Level** | ** ** | **Ratio**                                       | ** ** | **Applicable  Margin for  LIBOR Rate  Loans** | ** ** | **Applicable  Margin for  Base Rate  Loans** | ** ** |
|------------------------|------------|-------------------------------------------------|------------|---------------------------------------------------------|------------|--------------------------------------------------------|------------|
|                   |       |                                            |       |                                                    |       |                                                   |       |
| Pricing  Level 1       |       | Less than or equal to 50%                       |       | 1.50                                                    | %          | 0.00                                                   | %          |
|                   |       |                                            |       |                                                    |       |                                                   |       |
| Pricing  Level 2       |       | Greater than 50% but less than or equal to  60% |       | 1.65                                                    | %          | 0.00                                                   | %          |
|                   |       |                                            |       |                                                    |       |                                                   |       |
| Pricing  Level 3       |       | Greater than 60% but less than or equal to  65% |       | 1.80                                                    | %          | 0.25                                                   | %          |
|                   |       |                                            |       |                                                    |       |                                                   |       |
| Pricing  Level 4       |       | Greater than 65%                                |       | 2.00                                                    | %          | 0.50                                                   | %          |

 

The initial Applicable Margin shall be at Pricing Level 4. TheApplicable Margin shall not be adjusted based upon such ratio, if at all, untilthe first (1st) day of the first (1st) month followingthe delivery by Borrower to the Agent of the Compliance Certificate at the endof a calendar quarter. In the event that Borrower shall fail to deliver to theAgent a quarterly Compliance Certificate on or before the date required by§7.4(c), then without limiting any other rights of the Agent and the Lendersunder this Agreement, the Applicable Margin for Loans shall be at PricingLevel 4 until such failure is cured within any applicable cure period, inwhich event the Applicable Margin shall adjust, if necessary, on the first (1st)day of the first (1st) month following receipt of such ComplianceCertificate.

 

If the consolidated financial statements of REIT and its Subsidiariesare revised, restated or otherwise adjusted, and any such adjustmentestablishes that the Applicable Margin was calculated at a level which resultedin lower (or higher) pricing than warranted for any period, the Borrower shallwithin five (5) Business Days of such determination pay to Agent for theaccount of the Lenders the amount of the excess that should have been paid forsuch period (or, if it is determined as a result of such adjustment that suchApplicable Margin was originally miscalculated at a higher pricing level, theAgent shall credit the amount of such overpayment towards any additionalamounts due pursuant to this paragraph).

 

Arranger. KeyBancCapital Markets or any successor.

 

Assignment and Acceptance Agreement.See §18.1.

 

Authorized Officer. Anyof the following Persons:  Gary S.Bresky, Cindy Cooper, Andrew Bruce, Gerald J. Reihsen, III and such otherPersons as Borrower shall designate in a written notice to Agent.

 

Balance Sheet Date.September 30, 2007.

 

Bankruptcy Code. Title11, U.S.C.A., as amended from time to time or any successor statute thereto.

 

3

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Base Rate. Thegreater of (a) the fluctuating annual rate of interest announced from timeto time by the Agent at the Agent’s Head Office as its “prime rate” or (b) onehalf of one percent (0.5%) above the Federal Funds Effective Rate. The BaseRate is a reference rate and does not necessarily represent the lowest or bestrate being charged to any customer. Any change in the rate of interest payablehereunder resulting from a change in the Base Rate shall become effective as ofthe opening of business on the day on which such change in the Base Ratebecomes effective, without notice or demand of any kind.

 

Base Rate Loans. Collectively,the Revolving Credit Base Rate Loans, the Term Base Rate Loans and the SwingLoans.

 

Borrower. BehringerHarvard Operating Partnership I LP, a Texas limited partnership.

 

Breakage Costs. Thecost to any Lender of re-employing funds bearing interest at LIBOR incurred (orreasonably expected to be incurred) in connection with (i) any payment ofany portion of the Loans bearing interest at LIBOR prior to the termination ofany applicable Interest Period, (ii) the conversion of a LIBOR Rate Loanto any other applicable interest rate on a date other than the last day of therelevant Interest Period, or (iii) the failure of the Borrower to drawdown, on the first day of the applicable Interest Period, any amount as towhich the Borrower has elected a LIBOR Rate Loan.

 

Building. Withrespect to each parcel of Real Estate, all of the buildings, structures andimprovements now or hereafter located thereon.

 

Business Day. Anyday on which banking institutions located in the same city and State as theAgent’s Head Office are located are open for the transaction of bankingbusiness and, in the case of LIBOR Rate Loans, which also is a LIBOR BusinessDay.

 

Capital Reserve. Forany period of four (4) consecutive fiscal quarters and with respect to anyimproved Real Estate, an amount equal to $0.15 multiplied by the total squarefootage of the Buildings in such Real Estate on a Consolidated basis. If theterm Capital Reserve is used without reference to any specific Real Estate,then the amount shall be determined on an aggregate basis with respect to allReal Estate of the Borrower and its Subsidiaries and a proportionate share ofall Real Estate of all Unconsolidated Affiliates. The Capital Reserve shall becalculated based on the total square footage of the Buildings owned (or groundleased) at the end of each fiscal quarter.

 

Capitalization Rate.7.50%.

 

Capitalized Lease. Alease under which the discounted future rental payment obligations of thelessee or the obligor are required to be capitalized on the balance sheet ofsuch Person in accordance with GAAP.

 

Cash Equivalents. Asof any date, (i) securities issued or directly and fully guaranteed orinsured by the United States government or any agency or instrumentalitythereof having maturities of not more than one year from such date, (ii) timedeposits and certificates of deposits having maturities of not more than oneyear from such date and issued by any domestic

 

4

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commercial bank having, (A) senior longterm unsecured debt rated at least A or the equivalent thereof by S&P or A2or the equivalent thereof by Moody’s and (B) capital and surplus in excessof $100,000,000.00; (iii) commercial paper or municipal bonds rated atleast A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereofby Moody’s and in either case maturing within one hundred twenty (120) daysfrom such date, and (iv) shares of any money market mutual fund rated atleast AAA or the equivalent thereof by S&P or at least Aaa or theequivalent thereof by Moody’s.

 

CERCLA. See §6.19.

 

Change of Control. AChange of Control shall exist upon the occurrence of any of the following:

 

(a)                                  followingthe IPO Event, any Person (including a Person’s Affiliates and associates) orgroup (as that term is understood under Section 13(d) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules andregulations thereunder), shall have acquired beneficial ownership (within themeaning of Rule 13d-3 under the Exchange Act) of a percentage (based onvoting power, in the event different classes of stock or voting interests shallhave different voting powers) of the voting stock or voting interests of REITor the Borrower equal to at least twenty percent (20.0%);

 

(b)                                 asof any date a majority of the Board of Directors or Trustees or similar body(the “Board”)****of REIT or the Borrower consistsof individuals who were not either (i) directors or trustees of REIT orthe Borrower as of the corresponding date of the previous year, or (ii) selectedor nominated to become directors or trustees by the Board of REIT or theBorrower of which a majority consisted of individuals described in clause (b)(i) above,or (iii) selected or nominated to become directors or trustees by theBoard of REIT or the Borrower, of which a majority consisted of individualsdescribed in clause (b)(i) above and individuals described in clause (b)(ii) above(excluding, in the case of both clause (ii) and (iii) above, anyindividual whose initial nomination for, or assumption of office as, a memberof the Board occurs as a result of an actual or threatened solicitation ofproxies or consents for the election or removal of one or more directors ortrustees by any Person or group other than a solicitation for the election ofone or more directors or trustees by or on behalf of the Board); or

 

(c)                                  REITor the Borrower consolidates with, is acquired by, or merges into or with anyPerson (other than a merger permitted by §8.4); or

 

(d)                                 theBorrower shall no longer be directly or indirectly eighty percent (80%) ownedand controlled by REIT; or

 

(e)                                  theBorrower fails to own, directly or indirectly, free of any lien, encumbrance orother adverse claim, at least one hundred percent (100%) of the economic,voting and beneficial interest of each Subsidiary Guarantor (subject to theterms of §5.4 regarding the release of Subsidiary Guarantors); or

 

(f)                                    anytwo (2) of Robert S. Aisner, Gerald J. Reihsen, III, Robert M.Behringer and Gary S. Bresky shall die or become disabled or otherwise cease tobe active on a daily basis in the management of the Borrower and, prior to themerger of the Advisor with and

 

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intothe Borrower, the Advisor, provided that if any two (2) of suchindividuals shall die or become disabled or otherwise cease to be active on adaily basis in the management of the Borrower and, prior to the merger of theAdvisor with and into the Borrower, the Advisor, it shall not be a “Change ofControl” if a replacement executive of comparable experience and reasonablysatisfactory to the Agent shall have been retained within three (3) monthsof such event; or

 

(g)                                 priorto the merger of the Advisor with and into the Borrower or REIT, (i) theBorrower shall no longer be managed and advised by Advisor, or (ii) theAdvisor shall no longer be directly or indirectly majority owned and controlledby Behringer Harvard Holdings.

 

Closing Date. Thefirst date on which all of the conditions set forth in §10 and §11 have beensatisfied.

 

Code. The InternalRevenue Code of 1986, as amended.

 

Collateral. All ofthe property, rights and interests of the Borrower and its Subsidiaries whichare subject to the security interests and liens created by the SecurityDocuments.

 

Commitment. Withrespect to each Lender, the aggregate of (a) the Revolving CreditCommitment of such Lender and (b) the Term Loan Commitment of such Lender.

 

Commitment Increase.An increase in the Total Revolving Credit Commitment to not more than$600,000,000.00 pursuant to §2.11.

 

Commitment Increase Date.See §2.11(a).

 

Commitment Percentage.With respect to each Lender, the percentage set forth on Schedule 1.1hereto as such Lender’s percentage of the aggregate Commitments of all of theLenders, as the same may be changed from time to time in accordance withthe terms of this Agreement.

 

Company. Any Personwhich directly owns Real Estate in which the Borrower or an Additional Pledgordirectly owns an Equity Interest and through which the Borrower or suchAdditional Pledgor receives or is entitled to receive Distributions withrespect to such Real Estate, including, without limitation, each “Company” asdefined in the Pledge of Distributions and the Pledge Agreement.

 

Compliance Certificate.See §7.4(c).

 

Consolidated. Withreference to any term defined herein, that term as applied to the accounts of aPerson and its Subsidiaries, determined on a consolidated basis in accordancewith GAAP.

 

Consolidated EBITDA.With respect to any period, an amount equal to the EBITDA of REIT, the Borrowerand their respective Subsidiaries for such period determined on a Consolidatedbasis.

 

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Consolidated Fixed Charges.On any date of determination, the sum of (a) Consolidated Interest Expensefor the period of four (4) fiscal quarters most recently ended (bothexpensed and capitalized), plus (b) all regularly scheduled principalpayments made with respect to Indebtedness of REIT, the Borrower and theirrespective Subsidiaries during such period, other than any balloon, bullet orsimilar principal payment which repays such Indebtedness in full, plus (c) allPreferred Distributions paid during such period. Such Person’s EquityPercentage in the fixed charges referred to above of its UnconsolidatedAffiliates shall be included in the determination of Consolidated Fixed Charges.Consolidated Fixed Charges of a Person and its Subsidiaries relating toIndebtedness that has been Defeased shall not be deemed part ofConsolidated Fixed Charges.

 

Consolidated Interest Expense.On any date of determination, without duplication, (a) total InterestExpense of REIT, the Borrower and their respective Subsidiaries determined on aConsolidated basis in accordance with GAAP for the period of four (4) fiscalquarters most recently ended, plus (b) such Person’s EquityPercentage of Interest Expense of its Unconsolidated Affiliates for such period.

 

Consolidated Tangible Net Worth.The amount by which Gross Asset Value exceeds Consolidated Total Indebtedness.

 

Consolidated Total Indebtedness.All Indebtedness of REIT, the Borrower and their respective Subsidiariesdetermined on a Consolidated basis and shall include (without duplication),such Person’s Equity Percentage of the Indebtedness of its UnconsolidatedAffiliates. Indebtedness or other liabilities of a Person and its Subsidiariesthat would otherwise be included in Consolidated Total Indebtedness that hasbeen Defeased or paid shall not be deemed part of Consolidated TotalIndebtedness.

 

Construction in Progress.On a Consolidated basis for REIT, the Borrower and their respectiveSubsidiaries, the sum of all cash expenditures for land and improvements(including indirect costs internally allocated and development costs) inaccordance with GAAP on properties that are under construction or with respectto which construction is reasonably scheduled to commence within twelve (12)months of the relevant determination. For the purposes of calculatingConstruction in Progress of REIT, the Borrower and their respectiveSubsidiaries with respect to properties under construction of UnconsolidatedAffiliates, the Construction in Progress of REIT, the Borrower and theirrespective Subsidiaries shall be the lesser of (a) the Investment of REIT,the Borrower or such Subsidiary in the applicable Unconsolidated Affiliate or (b) REIT’s,the Borrower’s or such Subsidiary’s pro rata share (based upon the Equity Percentageof such Person in such Unconsolidated Affiliate) of such UnconsolidatedAffiliate’s Construction in Progress.

 

Contribution Agreement.That certain Contribution Agreement dated of even date herewith among REIT, theBorrower, the Guarantors and each Additional Guarantor which may hereafterbecome a party thereto, as the same may be modified, amended or ratifiedfrom time to time.

 

Conversion/Continuation Request.A notice given by the Borrower to the Agent of its election to convert orcontinue a Loan in accordance with §4.1.

 

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Default. See §12.1.

 

Default Rate. See§4.12.

 

Defeased. Indebtednessis deemed “Defeased” when it has been defeased in accordance with its terms. Inaddition, the $40,000,000 of 6.00% convertible debentures issued by IPC US RealEstate Investment Trust in the aggregate outstanding principal amount of$11,294,000.00 as of the date hereof and the $60,000,000 of 5.75% convertibledebentures issued by IPC US Real Estate Investment Trust in the aggregateoutstanding principal amount of $56,320,000.00 as of the date hereof shall forthe purposes of this Agreement be deemed “Defeased” so long as Borrower hasirrevocably deposited with the applicable trustee as security cash or other liquidsecurities in an amount sufficient to pay all interest and principal on suchobligations through maturity.

 

Delinquent Lender. See§14.5(c).

 

Derivatives Contract.Any and all rate swap transactions, basis swaps, credit derivativetransactions, forward rate transactions, commodity swaps, commodity options,forward commodity contracts, equity or equity index swaps or options, bond orbond price or bond index swaps or options or forward bond or forward bond priceor forward bond index transactions, interest rate options, forward foreignexchange transactions, cap transactions, floor transactions, collartransactions, currency swap transactions, cross-currency rate swaptransactions, currency options, spot contracts, or any other similartransactions or any combination of any of the foregoing (including any optionsto enter into any of the foregoing), whether or not any such transaction isgoverned by or subject to any master agreement. Not in limitation of theforegoing, the term “Derivatives Contract” includes any and all transactions ofany kind, and the related confirmations, which are subject to the terms andconditions of, or governed by, any form of master agreement published bythe International Swaps and Derivatives Association, Inc., any InternationalForeign Exchange Master Agreement, or any other master agreement of similartype, including any such obligations or liabilities under any such masteragreement.

 

Derivatives Termination Value.In respect of any one or more Derivatives Contracts, after taking into accountthe effect of any legally enforceable netting agreement relating to suchDerivatives Contracts, (a) for any date on or after the date suchDerivatives Contracts have been closed out and termination value(s) determinedin accordance therewith, such termination value(s), and (b) for any dateprior to the date referenced in clause (a) the amount(s) determinedas the mark-to-market value(s) for such Derivatives Contracts, asdetermined based upon one or more mid-market or other readily availablequotations provided by any recognized dealer in such Derivatives Contracts(which may include Chatham Financial, the Agent or any Lender).

 

Development Property.Real Estate currently under development that has not become a StabilizedProperty or on which the improvements related to the development have not beencompleted, provided that such a Development Property on which all improvementsrelated to the development of such Real Estate have been substantiallycompleted (excluding tenants improvements) for at least twelve (12) monthsshall cease to constitute a Development Property

 

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notwithstanding the fact that such Propertyhas not become a Stabilized Property, and shall be considered a Stabilized Propertyfor the purposes of the calculation of Gross Asset Value.

 

Distribution. Any (a) dividendor other distribution, direct or indirect, on account of any Equity Interest ofREIT, the Borrower or any of their respective Subsidiaries now or hereafter outstanding,except a dividend payable solely in Equity Interests of identical class tothe holders of that class; (b) redemption, conversion, exchange,retirement, sinking fund or similar payment, purchase or other acquisition forvalue, direct or indirect, of any Equity Interest of REIT, the Borrower or anyof their respective Subsidiaries now or hereafter outstanding; and (c) paymentmade to retire, or to obtain the surrender of, any outstanding warrants,options or other rights to acquire any Equity Interests of REIT, the Borroweror any of their respective Subsidiaries now or hereafter outstanding.

 

Distribution Interests.Collectively, one hundred percent (100%) of the Borrower’s or a Pledgor’sright, title and interest in and to any “Distributions” (as such term isgenerally used in the Pledge of Distributions and the Pledge Agreement)directly from a Company.

 

Dividend Reinvestment Proceeds.All dividends or other distributions, direct or indirect, on account of anyEquity Interest of any Person which any holder(s) of such Equity Interestsdirect to be used, concurrently with the making of such dividend ordistribution, for the purposes of purchasing for the account of such holder(s) additionalEquity Interests in such Person or any of its Subsidiaries.

 

Dollars or $.Dollars in lawful currency of the United States of America.

 

Domestic Lending Office.Initially, the office of each Lender designated as such on Schedule 1.1hereto; thereafter, such other office of such Lender, if any, located withinthe United States that will be making or maintaining Base Rate Loans.

 

Drawdown Date. Thedate on which any Loan is made or is to be made, and the date on which any Loanwhich is made prior to the Revolving Credit Maturity Date or the Term LoanMaturity Date, as applicable, is converted in accordance with §4.1.

 

EBITDA. With respect to a Person for any period(without duplication): (a) net income (or loss) of such Person for suchperiod determined on a Consolidated basis in accordance with GAAP, exclusive ofthe following (but only to the extent included in the determination of such netincome (loss)):  (i) depreciationand amortization expense; (ii) Interest Expense; (iii) income taxexpense; and (iv) extraordinary or non-recurring gains and losses; plus (b) suchPerson’s pro rata share of EBITDA determined in accordance with clause (a) aboveof its Unconsolidated Affiliates. “EBITDA” shall be adjusted to removeany impact of straight lining of rents and amortization of intangibles pursuantto FAS 141, as issued by the Financial Accounting Standards Board in June of2001. EBITDA shall not include any income or other items from assets which arepledged for Indebtedness that has been Defeased.

 

Employee Benefit Plan.Any employee benefit plan within the meaning of §3(3) of ERISA maintainedor contributed to by REIT or any ERISA Affiliate, other than a MultiemployerPlan.

 

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Environmental Engineer.Any firm of independent professional engineers or other scientists generallyrecognized as expert in the detection, analysis and remediation of HazardousSubstances and related environmental matters and acceptable to the Agent in itsreasonable discretion.

 

Environmental Laws. Asdefined in the Indemnity Agreement.

 

Equity Interests. Withrespect to any Person, (i) any share of capital stock of (or otherownership or profit interests in) such Person; (ii) any warrant, option orother right for the purchase or other acquisition from such Person of (a) anyshare of capital stock of (or other ownership or profit interests in) suchPerson, or (b) any security convertible into or exchangeable for any shareof capital stock of (or other ownership or profit interests in) such Person orwarrant, right or option for the purchase or other acquisition from such Personof such shares (or such other interests) and whether or not such share,warrant, option, right or other interest is authorized or otherwise existing onany date of determination; and (iii) any other ownership or profitinterest in such Person (including, without limitation, partnership, member ortrust interests therein), whether voting or nonvoting.

 

Equity Offering. Theissuance and sale after the Closing Date by the Borrower or any of itsSubsidiaries or REIT of any equity securities of such Person (other than equitysecurities issued to Borrower, REIT or any one or more of their Subsidiaries intheir respective Subsidiaries).

 

Equity Percentage. Theaggregate ownership percentage of REIT, the Borrower or their respective Subsidiariesin each Unconsolidated Affiliate, as reasonably approved by the Agent.

 

ERISA. The EmployeeRetirement Income Security Act of 1974, as amended and in effect from time totime.

 

ERISA Affiliate. AnyPerson which is treated as a single employer with REIT or its Subsidiariesunder §414 of the Code.

 

ERISA Reportable Event.A reportable event with respect to a Guaranteed Pension Plan within the meaningof §4043 of ERISA and the regulations promulgated thereunder as to which therequirement of notice has not been waived.

 

Event of Default. See§12.1.

 

Federal Funds Effective Rate.For any day, the rate per annum (rounded upward to the nearest one-hundredth ofone percent (1/100 of 1%)) announced by the Federal Reserve Bank of Clevelandon such day as being the weighted average of the rates on overnight federalfunds transactions arranged by federal funds brokers on the previous tradingday, as computed and announced by such Federal Reserve Bank in substantiallythe same manner as such Federal Reserve Bank computes and announces theweighted average it refers to as the “Federal Funds Effective Rate.”

 

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Funds from Operations.With respect to any Person for any period, an amount equal to the Net Income(or Loss) of such Person for such period, computed in accordance with GAAP,excluding gains (or losses) from extraordinary items or non-recurring gains orlosses (but including gains or losses on sales of Real Estate in the ordinarycourse of business, e.g. build to suits), plus depreciation and amortization,plus asset management fees that are subordinate to the Obligations, and afteradjustments for unconsolidated partnerships and joint ventures. Adjustments forunconsolidated partnerships and joint ventures will be recalculated to reflectfunds from operations on the same basis.

 

GAAP. Principlesthat are (a) consistent with the principles promulgated or adopted by theFinancial Accounting Standards Board and its predecessors, as in effect fromtime to time and (b) consistently applied with past financial statementsof the Person adopting the same principles; provided that a certifiedpublic accountant would, insofar as the use of such accounting principles ispertinent, be in a position to deliver an unqualified opinion (other than aqualification regarding changes in generally accepted accounting principles) asto financial statements in which such principles have been properly applied.

 

Gross Asset Value. Ona Consolidated basis for REIT, the Borrower and their respective Subsidiaries,Gross Asset Value shall mean at any time the sum of (without duplication withrespect to any Real Estate):

 

(i)                                     withrespect to each Stabilized Property owned by REIT, the Borrower or any of theirrespective Subsidiaries for the prior six (6) fiscal quarters (other than222 Riverside Plaza and 1325 G Street) (x) the sum of (A) the NetOperating Income attributable to such Real Estate for the period of the four (4) consecutivefiscal quarters just ended prior to the date of determination, minus (B) theCapital Reserve for such Real Estate for such period, divided by (y) theCapitalization Rate; plus

 

(ii)                                  withrespect to Real Estate acquired during the prior six (6) fiscal quarterperiod (other than 222 Riverside Plaza and 1325 G Street), the acquisition costof such Real Estate; plus

 

(iii)                               withrespect to Development Properties, the Construction in Progress of suchDevelopment Property until the earlier of (A) the one (1) yearanniversary of project completion of such Real Estate (as evidenced by theissuance of a temporary or shell certificate of occupancy or similar permit) or(B) the first day of the first fiscal quarter following the date such RealEstate achieves a Lease Rate of at least eighty-five percent (85%); plus

 

(iv)                              withrespect to 222 Riverside Plaza and 1325 G Street, the acquisition cost of suchReal Estate; plus

 

(v)                                 theaggregate amount of all Unrestricted Cash and Cash Equivalents of REIT, theBorrower and their respective Subsidiaries as of the date of determination;plus

 

(vi)                              thebook value determined in accordance with GAAP of Land Assets of REIT, theBorrower and their respective Subsidiaries; plus

 

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(vii)                           thelesser of the book value or outstanding principal balance of MortgageReceivables secured by office properties and the Multifamily Facility.

 

Gross Asset Value will be adjusted, as appropriate, for acquisitions,dispositions and other changes to the portfolio during the calendar quartermost recently ended prior to a date of determination. All income, expense andvalue associated with assets included in Gross Asset Value disposed of duringthe four (4) calendar quarter period most recently ended prior to a dateof determination will be eliminated from calculations. Gross Asset Value willbe adjusted to include an amount equal to REIT’s or any of its Subsidiaries’pro rata share (based upon such Person’s Equity Percentage in suchUnconsolidated Affiliate) of the Gross Asset Value attributable to any of theitems listed above in this definition owned by such Unconsolidated Affiliate. Assetswhich are pledged for Indebtedness that has been Defeased will be excluded fromGross Asset Value.

 

Guaranteed Pension Plan.Any employee pension benefit plan within the meaning of §3(2) of ERISAmaintained or contributed to by REIT or any ERISA Affiliate the benefits ofwhich are guaranteed on termination in full or in part by the PBGCpursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

Guarantor. Collectively,REIT, the Subsidiary Guarantors and each Additional Guarantor, and individuallyany one of them.

 

Guaranty. TheUnconditional Guaranty of Payment and Performance dated of even date herewithmade by REIT, the Subsidiary Guarantors and each Additional Guarantor in favorof the Agent and the Lenders, as the same may be modified, amended orratified, such Guaranty to be in form and substance satisfactory to theAgent.

 

Hazardous Substances.As defined in the Indemnity Agreement.

 

Increase Notice. See§2.11(a).

 

Indebtedness. Withrespect to a Person, at the time of computation thereof, all of the following(without duplication): (a) all obligations of such Person in respect ofmoney borrowed (other than trade debt incurred in the ordinary course ofbusiness which is not more than one hundred eighty (180) days past due); (b) allobligations of such Person, whether or not for money borrowed (i) representedby notes payable, or drafts accepted, in each case representing extensions ofcredit, (ii) evidenced by bonds, debentures, notes or similar instruments,or (iii) constituting purchase money indebtedness, conditional salescontracts, title retention debt instruments or other similar instruments, uponwhich interest charges are customarily paid or that are issued or assumed asfull or partial payment for property or services rendered; (c) obligationof such Person as a lessee or obligor under a Capitalized Lease; (d) allreimbursement obligations of such Person under any letters of credit oracceptances (whether or not the same have been presented for payment); (e) allOff-Balance Sheet Obligations of such Person; (f) all obligations of suchPerson in respect of any purchase obligation, repurchase obligation, takeoutcommitment or forward equity commitment, in each case evidenced by a bindingagreement (excluding any such obligation to the extent the obligation can besatisfied by the issuance of Equity Interests), (g) net obligations underany Derivatives Contract not entered

 

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into as a hedge against existingIndebtedness, in an amount equal to the Derivatives Termination Value thereof; (h) allIndebtedness of other Persons which such Person has guaranteed or is otherwiserecourse to such Person (except for guaranties of customary exceptions forfraud, misapplication of funds, environmental indemnities, violation of “specialpurpose entity” covenants, and other similar exceptions to recourse liabilityuntil a claim is made with respect thereto, and then shall be included only tothe extent of the amount of such claim ), including liability of a generalpartner in respect of liabilities of a partnership in which it is a generalpartner which would constitute “Indebtedness” hereunder, any obligation tosupply funds to or in any manner to invest directly or indirectly in a Person,to maintain working capital or equity capital of a Person or otherwise tomaintain net worth, solvency or other financial condition of a Person, topurchase indebtedness, or to assure the owner of indebtedness against loss,including, without limitation, through an agreement to purchase property,securities, goods, supplies or services for the purpose of enabling the debtorto make payment of the indebtedness held by such owner or otherwise; (i) allIndebtedness of another Person secured by (or for which the holder of suchIndebtedness has an existing right, contingent or otherwise, to be secured by)any Lien on property or assets owned by such Person, even though such Personhas not assumed or become liable for the payment of such Indebtedness or otherpayment obligation; and (j) such Person’s pro rata share of theIndebtedness (based upon its Equity Percentage in such UnconsolidatedAffiliates) of any Unconsolidated Affiliate of such Person; provided thatIndebtedness that would otherwise meet one of the requirements above that hasbeen Defeased shall not be deemed Indebtedness. “Indebtedness” shall beadjusted to remove any impact of intangibles pursuant to FAS 141, as issued bythe Financial Accounting Standards Board in June of 2001.

 

Indemnity Agreement.The Indemnity Agreement Regarding Hazardous Materials made by the Borrower andGuarantors in favor of the Agent and the Lenders, as the same may bemodified, amended or ratified, pursuant to which the Borrower and eachGuarantor agrees to indemnify the Agent and the Lenders with respect toHazardous Substances and Environmental Laws.

 

Interest Expense. Onany date of determination, with respect to REIT, the Borrower and theirrespective Subsidiaries, without duplication, (a) interest incurred (inaccordance with GAAP) for the period of four (4) fiscal quarters mostrecently ended, including capitalized interest not funded under a constructionloan, plus (b) REIT’s, the Borrower’s and their respectiveSubsidiaries’ Equity Percentage of Interest Expense of their UnconsolidatedAffiliates for such period. Interest Expense shall exclude the effect of anymark to market of assumed debt pursuant to FAS 157 or FAS 141.

 

Interest Payment Date.As to each Loan, the first (1st) day of each calendar month duringthe term of such Loan.

 

Interest Period. Withrespect to each LIBOR Rate Loan (a) initially, the period commencing onthe Drawdown Date of such LIBOR Rate Loan and ending one, two, three or sixmonths thereafter (provided, however, until the completion of thesyndication of the Loan as determined by Agent, the interest period for anyLIBOR Rate Loan shall be one month), and (b) thereafter, each periodcommencing on the day following the last day of the next preceding InterestPeriod applicable to such Loan and ending on the last day of one of the periodsset forth above, as selected by the Borrower in a Loan Request orConversion/Continuation Request;

 

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provided that all ofthe foregoing provisions relating to Interest Periods are subject to thefollowing:

 

(i)                                     ifany Interest Period with respect to a LIBOR Rate Loan would otherwise end on aday that is not a LIBOR Business Day, such Interest Period shall end on thenext succeeding LIBOR Business Day, unless such next succeeding LIBOR BusinessDay occurs in the next calendar month, in which case such Interest Period shallend on the next preceding LIBOR Business Day, as determined conclusively by theAgent in accordance with the then current bank practice in London;

 

(ii)                                  ifthe Borrower shall fail to give notice as provided in §4.1, the Borrower shallbe deemed to have requested a continuation of the affected LIBOR Rate Loan as aBase Rate Loan on the last day of the then current Interest Period with respectthereto;

 

(iii)                               anyInterest Period pertaining to a LIBOR Rate Loan that begins on the lastBusiness Day of a calendar month (or on a day for which there is no numericallycorresponding day in the calendar month at the end of such Interest Period)shall end on the last Business Day of the applicable calendar month; and

 

(iv)                              noInterest Period relating to any LIBOR Rate Loan shall extend beyond theRevolving Credit Maturity Date or Term Loan Maturity Date, as applicable.

 

Investments. Withrespect to any Person, all shares of capital stock, evidences of Indebtednessand other securities issued by any other Person and owned by such Person, allloans, advances, or extensions of credit to, or contributions to the capitalof, any other Person, all purchases of the securities or business or integral part ofthe business of any other Person and commitments and options to make suchpurchases, all interests in real property, and all other investments; provided,however, that the term “Investment” shall not include (i) equipment,inventory and other tangible personal property acquired in the ordinary courseof business, or (ii) current trade and customer accounts receivable forservices rendered in the ordinary course of business and payable in accordancewith customary trade terms. In determining the aggregate amount of Investmentsoutstanding at any particular time:  (a) thereshall be included as an Investment all interest accrued with respect toIndebtedness constituting an Investment unless and until such interest is paid;(b) there shall be deducted in respect of each Investment any amountreceived as a return of capital; (c) there shall not be deducted inrespect of any Investment any amounts received as earnings on such Investment,whether as dividends, interest or otherwise, except that accrued interestincluded as provided in the foregoing clause (a) shall be deducted whenpaid; and (d) there shall not be deducted in respect of any Investment anydecrease in the value thereof.

 

IPO Event. A publicEquity Offering of equity interests of REIT, the shares of such offering beinglisted on the New York Stock Exchange or such other national exchange approvedby the Agent, such approval not to be unreasonably withheld.

 

Issuing Lender. KeyBank,in its capacity as the Lender issuing the Letters of Credit and any successorthereto.

 

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Joinder Agreement. TheJoinder Agreement with respect to the Guaranty, the Contribution Agreement andthe Indemnity Agreement to be executed and delivered pursuant to §5.2 by anyAdditional Guarantor, such Joinder Agreement to be substantially in the form ofExhibit D hereto.

 

KeyBank. As definedin the preamble hereto.

 

Land Assets. Landwith respect to which the commencement of grading, construction of improvements(other than improvements that are not material and are temporary in nature) orinfrastructure has not yet commenced and for which no such work is reasonablyscheduled to commence within the following six (6) months. A Land Assetshall cease to be a Land Asset when it becomes a Development Property.

 

Leased Rate. Withrespect to Real Estate at any time, the ratio, expressed as a percentage, of (a) theNet Rentable Area of such Real Estate actually leased by tenants that are notaffiliated with the Borrower and paying rent at rates not materially less thanrates generally prevailing at the time the applicable lease was entered into,pursuant to binding leases as to which no default has occurred and hascontinued unremedied for 30 or more days to (b) the aggregate Net RentableArea of such Real Estate.

 

Leases. Leases,licenses and agreements, whether written or oral, relating to the use oroccupation of space in any Building or of any Real Estate.

 

Lenders. KeyBank,the other lending institutions which are party hereto and any other Personwhich becomes an assignee of any rights of a Lender pursuant to §18 (but notincluding any participant as described in §18); and collectively, the RevolvingCredit Lenders, the Term Loan Lenders and the Swing Line Lender. The IssuingLender shall be a Revolving Credit Lender, as applicable.

 

Letter of Credit. Anystandby letter of credit issued at the request of the Borrower and  for the account of the Borrower in accordancewith §2.10.

 

Letter of Credit Liabilities.At any time and in respect of any Letter of Credit, the sum of (a) themaximum undrawn face amount of such Letter of Credit plus (b) theaggregate unpaid principal amount of all drawings made under such Letter ofCredit which have not been repaid (including repayment by a Revolving CreditLoan). For purposes of this Agreement, a Revolving Credit Lender (other thanthe Revolving Credit Lender acting as the Issuing Lender) shall be deemed to holda Letter of Credit Liability in an amount equal to its participation interestin the related Letter of Credit under §2.10, and the Revolving Credit Lenderacting as the Issuing Lender shall be deemed to hold a Letter of CreditLiability in an amount equal to its retained interest in the related Letter ofCredit after giving effect to the acquisition by the Revolving Credit Lendersother than the Revolving Credit Lender acting as the Issuing Lender of theirparticipation interests under such Section.

 

Letter of Credit Request.See §2.10(a).

 

LIBOR. For any LIBORRate Loan for any Interest Period, the average rate as shown in Reuters ScreenLIBOR01 Page at which deposits in U.S. dollars are offered by first

 

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class banks in the London InterbankMarket at approximately 11:00 a.m. (London time) on the day that is two (2) LIBORBusiness Days prior to the first day of such Interest Period with a maturityapproximately equal to such Interest Period and in an amount approximatelyequal to the amount to which such Interest Period relates, adjusted forreserves and taxes if required by future regulations. If such service no longerreports such rate or Agent determines in good faith that the rate so reportedno longer accurately reflects the rate available to Agent in the LondonInterbank Market, Loans shall accrue interest at the Base Rate plus theApplicable Margin for such Loan. For any period during which a ReservePercentage shall apply, LIBOR with respect to LIBOR Rate Loans shall be equalto the amount determined above divided by an amount equal to 1 minus theReserve Percentage.

 

LIBOR Business Day. Anyday on which commercial banks are open for international business (includingdealings in Dollar deposits) in London, England.

 

LIBOR Lending Office.Initially, the office of each Lender designated as such on Schedule 1.1hereto; thereafter, such other office of such Lender, if any, that shall bemaking or maintaining LIBOR Rate Loans.

 

LIBOR Rate Loans. Collectively,the Revolving Credit LIBOR Rate Loans and the Term LIBOR Rate Loans.

 

Lien. See §8.2.

 

Loan Documents. ThisAgreement, the Notes, the Letter of Credit Request, the Security Documents, theSubordination of Management Fee Agreements and all other documents, instrumentsor agreements now or hereafter executed or delivered by or on behalf of theBorrower or any Guarantor in connection with the Loans.

 

Loan Request. See§2.7.

 

Loan and Loans.An individual loan or the aggregate loans (including a Revolving Credit Loan(or Loans), Term Loan (or Loans)  and aSwing Loan (or Loans)), as the case may be, to be made by the Lendershereunder. All Loans shall be made in Dollars. Amounts drawn under a Letter ofCredit shall also be considered Revolving Credit Loans as provided in §2.10(a).

 

Majority Revolving Credit Lenders.As of any date, any Revolving Credit Lender or collection of Revolving CreditLenders whose aggregate Revolving Credit Commitment Percentage is greater thansixty-six and 7/10 percent (66.7%); provided that in determining saidpercentage at any given time, all the existing Revolving Credit Lenders thatare Delinquent Lenders will be disregarded and excluded and the RevolvingCredit Commitment Percentages of the Revolving Credit Lenders shall be redeterminedfor voting purposes only to exclude the Revolving Credit Commitment Percentagesof such Delinquent Lenders.

 

Material Adverse Effect.A material adverse effect on (a) the business, properties, assets,condition (financial or otherwise) or results of operations of REIT, theBorrower and their respective Subsidiaries considered as a whole; (b) theability of REIT, the Borrower or any Subsidiary Guarantor to perform anyof its material obligations under the Loan Documents; or

 

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(c) the validity or enforceability ofany of the Loan Documents or the creation, perfection and priority of any Liensof Agent in the Collateral; or (d) or the rights or remedies of Agent orthe Lenders thereunder.

 

Material Subsidiary.Any existing or future Wholly Owned Subsidiary of the Borrower which at anytime (a) has assets that constitute five percent (5%) or more of the GrossAsset Value, (b) owns a Real Estate asset, or (c) any Subsidiary ofBorrower which is required by Agent to grant Collateral pursuant to §5.3.

 

Moody’s. Moody’sInvestor Service, Inc.

 

Mortgage Receivable.A mortgage loan on one or more income-producing properties which is being paidon a current basis and performing in accordance with its terms, which isoriginated by Borrower or a Guarantor, and which Mortgage Receivable includes,without limitation, the indebtedness evidenced by a note and secured by arelated first mortgage.

 

Multiemployer Plan. Anymultiemployer plan within the meaning of §3(37) of ERISA maintained orcontributed to by REIT or any ERISA Affiliate.

 

Multifamily Facility.The $100,000,000 (increasable to $400,000,000) revolving credit facility dated April 2,2007 provided by Borrower to Behringer Harvard Multifamily OP I LP.

 

Net Income (or Loss).With respect to any Person (or any asset of any Person) for any period, the netincome (or loss) of such Person (or attributable to such asset), determined inaccordance with GAAP.

 

Net Offering Proceeds.The gross cash proceeds received by the Borrower or any of its Subsidiaries orREIT as a result of an Equity Offering less the customary and reasonablecosts, expenses and discounts paid by the Borrower or such Subsidiary or REITin connection therewith. Net Offering Proceeds shall not include cash proceedsreceived by a Subsidiary as a result of an investment by a joint venturepartner.

 

Net Operating Income.For any Real Estate and for a given period, an amount equal to the sum of (a) therents, common area and other tenant reimbursements and other revenue (includinginterest income) for such Real Estate for such period received in the ordinarycourse of business from tenants in occupancy (excluding pre-paid rents andrevenues and security deposits except to the extent applied in satisfaction oftenants’ obligations for rent) minus (b) all expenses paid oraccrued and related to the ownership, operation or maintenance of such RealEstate for such period, including, but not limited to, taxes, assessments andthe like, insurance, utilities, payroll costs, maintenance, repair andlandscaping expenses, marketing expenses, and general and administrativeexpenses (including an appropriate allocation for legal, accounting,advertising, marketing and other expenses incurred in connection with such RealEstate, but specifically excluding general overhead expenses of REIT, theBorrower and their respective Subsidiaries and any property management fees), minus(c)  the greater of (i) actual property management expenses of suchReal Estate or (ii) an amount equal to three percent (3.0%) of the grossrevenues from such Real Estate. “Net Operating Income” shall be adjusted

 

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to remove any impact of straight lining ofrents and amortization of intangibles pursuant to FAS 141, as issued by theFinancial Accounting Standards Board in June of 2001.

 

Net Rentable Area. Withrespect to any Real Estate, the floor area of any buildings, structures orother improvements available for leasing to tenants determined in accordancewith the Rent Roll for such Real Estate, the manner of such determination to bereasonably consistent for all Real Estate of the same type unless otherwiseapproved by the Agent.

 

Non-Recourse Exclusions.With respect to any Non-Recourse Indebtedness of any Person, any usual andcustomary exclusions from the non-recourse limitations governing suchIndebtedness, including, without limitation, exclusions for claims that (i) arebased on fraud, intentional or material misrepresentation, misapplication offunds, gross negligence or willful misconduct, (ii) result fromintentional mismanagement of or waste at the Real Property securing suchNon-Recourse Indebtedness, (iii) arise from the presence of HazardousSubstances on the Real Property securing such Non-Recourse Indebtedness; (iv) arethe result of any unpaid real estate taxes and assessments (whether containedin a loan agreement, promissory note, indemnity agreement or other document);or (v) result from the borrowing Subsidiary and/or its assets becoming thesubject of a voluntary or involuntary bankruptcy, insolvency or similarproceeding.

 

Non-Recourse Indebtedness.With respect to a Person, (a) Indebtedness in respect of which recoursefor payment (except for Non-Recourse Exclusions until a claim is made withrespect thereto, and then such Indebtedness shall not constitute Non-RecourseIndebtedness only to the extent of the amount of such claim) is contractuallylimited to specific assets of such Person encumbered by a Lien securing suchIndebtedness or (b) if such Person is a Single Asset Entity, anyIndebtedness of such Person. A loan secured by multiple properties owned bySingle Asset Entities shall be considered Non-Recourse Indebtedness of suchSingle Asset Entities even if such Indebtedness is cross-defaulted andcross-collateralized with the loans to such other Single Asset Entities.

 

Notes.    Collectively, the Revolving Credit Notes,the Term Loan Notes and the Swing Loan Note.

 

Notice.   See §19.

 

Obligations. Allindebtedness, obligations and liabilities of the Borrower or any Guarantor toany of the Lenders or the Agent, individually or collectively, under thisAgreement or any of the other Loan Documents or in respect of any of the Loans,the Notes or the Letters of Credit, or other instruments at any time evidencingany of the foregoing, whether existing on the date of this Agreement or arisingor incurred hereafter, direct or indirect, joint or several, absolute orcontingent, matured or unmatured, liquidated or unliquidated, secured orunsecured, arising by contract, operation of law or otherwise.

 

OFAC. Office ofForeign Asset Control of the Department of the Treasury of the United States ofAmerica.

 

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Off-Balance Sheet Obligations.Liabilities and obligations of REIT, the Borrower or any of their respectiveSubsidiaries or any other Person in respect of “off-balance sheet arrangements”(as defined in the SEC Off-Balance Sheet Rules) which REIT would be required todisclose in the “Management’s Discussion and Analysis of Financial Conditionand Results of Operations” section of REIT’s report on Form 10-Q or Form 10-K(or their equivalents) which REIT is required to file with the SEC or would berequired to file if it were subject to the jurisdiction of the SEC (or anyGovernmental Authority substituted therefore). As used in this definition, theterm “SEC Off-Balance Sheet Rules” means the Disclosure in Management’sDiscussion and Analysis About Off-Balance Sheet Arrangements, Securities ActRelease No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17CFR pts. 228, 229 and 249).

 

Outstanding. Withrespect to the Loans, the aggregate unpaid principal thereof as of any date ofdetermination. With respect to Letters of Credit, the aggregate undrawn faceamount of issued Letters of Credit.

 

Patriot Act. TheUniting and Strengthening America by Providing Appropriate Tools Required toIntercept and Obstruct Terrorism Act of 2001, as the same may be amendedfrom time to time, and corresponding provisions of future laws.

 

PBGC. The PensionBenefit Guaranty Corporation created by §4002 of ERISA and any successor entityor entities having similar responsibilities.

 

Permitted Liens. Liens,security interests and other encumbrances permitted by §8.2.

 

Person. Anyindividual, corporation, limited liability company, partnership, trust,unincorporated association, business, or other legal entity, and any governmentor any governmental agency or political subdivision thereof.

 

Plan Assets. Assetsof any employee benefit plan subject to Part 4, Subtitle B, Title I ofERISA.

 

Pledge Agreement. ThePledge Agreement dated of even date herewith made by Borrower in favor of Agentfor the benefit of the Lenders.

 

Pledge of Distributions.The Pledge of Distributions dated as of even date herewith by which thePledgors will collaterally assign to Agent the Distribution Interests from allof the partnership, shareholder and/or membership interests owned by suchPersons in the Companies, as the same may be amended, restated,supplemented or otherwise modified in accordance with the terms hereof.

 

Pledgors. Collectively,the Borrower and each Additional Pledgor, and individually any one of them.

 

Preferred Distributions. Forany period and without duplication, all Distributions paid, declared but notyet paid or otherwise due and payable during such period on PreferredSecurities issued by the Borrower or any of its Subsidiaries or REIT. PreferredDistributions shall not include dividends or distributions: (a) paid orpayable solely in Equity Interests of

 

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identical class payable to holders ofsuch class of Equity Interests; (b) paid or payable to the Borroweror any of its Subsidiaries; or (c) constituting or resulting in theredemption of Preferred Securities, other than scheduled redemptions notconstituting balloon, bullet or similar redemptions in full.

 

Preferred Securities.With respect to any Person, Equity Interests in such Person, which are entitledto preference or priority over any other Equity Interest in such Person inrespect of the payment of dividends or distribution of assets upon liquidation,or both.

 

Prepayment Period. Theperiod from the date of this Agreement through and including December 11, 2008.

 

Pricing Level. Suchterm shall have the meaning established within the definition of ApplicableMargin.

 

Real Estate. Allreal property at any time owned or leased (as lessee or sublessee) in whole orin part or operated by REIT, the Borrower or any of their respectiveSubsidiaries, or an Unconsolidated Affiliate of the Borrower and which islocated in the United States of America or the District of Columbia.

 

Record. The gridattached to any Note, or the continuation of such grid, or any other similarrecord, including computer records, maintained by the Agent with respect to anyLoan referred to in such Note.

 

Recourse Indebtedness.As of any date of determination, any Indebtedness (whether secured orunsecured) which is recourse to REIT, the Borrower or any of their respectiveSubsidiaries. Recourse Indebtedness shall not include Non-RecourseIndebtedness.

 

Register. See §18.2.

 

REIT. BehringerHarvard REIT I, Inc., a Maryland corporation.

 

REIT Status. Withrespect to a Person, its status as a real estate investment trust as defined in§856(a) of the Code.

 

Release. Anyreleasing, spilling, leaking, pumping, pouring, emitting, emptying,discharging, injecting, escaping, disposing or dumping (other than the storingof materials in reasonable quantities to the extent necessary for the operationof property in the ordinary course of business, and in any event in compliancewith all Environmental Laws) of Hazardous Substances.

 

Rent Roll. A reportprepared by the Borrower showing for all Real Estate owned or leased by theBorrower or its Subsidiaries, its occupancy, lease expiration dates, lease rentand other information in substantially the form presented to Agent priorto the date hereof or in such other form as may be reasonablyacceptable to the Agent.

 

Required Lenders. Asof any date, the Lender or Lenders whose aggregate Commitment Percentage isequal to or greater than sixty-six and 7/10 percent (66.7%) of the

 

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Total Commitment; provided that in determiningsaid percentage at any given time, all then existing Delinquent Lenders will bedisregarded and excluded and the Commitment Percentages of the Lenders shall beredetermined for voting purposes only to exclude the Commitment Percentages ofsuch Delinquent Lenders.

 

Reserve Percentage. Forany Interest Period, that percentage which is specified three (3) BusinessDays before the first day of such Interest Period by the Board of Governors ofthe Federal Reserve System (or any successor) or any other governmental orquasi-governmental authority with jurisdiction over Agent or any Lender fordetermining the maximum reserve requirement (including, but not limited to, anymarginal reserve requirement) for Agent or any Lender with respect toliabilities constituting of or including (among other liabilities) Eurocurrencyliabilities in an amount equal to that portion of the Loan affected by suchInterest Period and with a maturity equal to such Interest Period.

 

Revolving Credit Base Rate Loans.Revolving Credit Loans bearing interest calculated by reference to the BaseRate.

 

Revolving Credit Commitment.With respect to each Revolving Credit Lender, the amount set forth on Schedule 1.1hereto as the amount of such Revolving Credit Lender’s Revolving CreditCommitment to make or maintain Revolving Credit Loans (other than Swing Loans)to the Borrower, to participate in Letters of Credit for the account of theBorrower and to participate in Swing Loans to the Borrower, as the same may bechanged from time to time in accordance with the terms of this Agreement.

 

Revolving Credit Commitment Percentage.With respect to each Revolving Credit Lender, the percentage set forth on Schedule 1.1hereto as such Revolving Credit Lender’s percentage of the Total Revolving CreditCommitment, as the same may be changed from time to time in accordancewith the terms of this Agreement; provided that if the Revolving CreditCommitments of the Revolving Credit Lenders have been terminated as provided inthis Agreement, then the Revolving Credit Commitment of each Revolving CreditLender shall be determined based on the Revolving Credit Commitment Percentageof such Revolving Credit Lender immediately prior to such termination and aftergiving effect to any subsequent assignments made pursuant to the terms hereof.

 

Revolving Credit Extension Request.See §2.12.

 

Revolving Credit Lenders.Collectively, the Lenders which have a Revolving Credit Commitment, the initialRevolving Credit Lenders being identified on Schedule 1.1 hereto.

 

Revolving Credit LIBOR Rate Loans.Revolving Credit Loans bearing interest calculated by reference to LIBOR.

 

Revolving Credit Loan or Loans.An individual Revolving Credit Loan or the aggregate Revolving Credit Loans, asthe case may be, in the maximum principal amount of $300,000,000.00(subject to increase as provided in §2.11) to be made by the Revolving CreditLenders hereunder as more particularly described in §2. Without limiting theforegoing, Revolving Credit Loans shall also include Revolving Credit Loansmade pursuant to §2.10(f).

 

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Revolving Credit Maturity Date.December 11, 2010, as such date may be extended as provided in §2.12,or such earlier date on which the Revolving Credit Loans shall become due andpayable pursuant to the terms hereof.

 

Revolving Credit Notes.See §2.1(b).

 

SEC. The federalSecurities and Exchange Commission.

 

Secured Debt. Withrespect to REIT, the Borrower or any of their respective Subsidiaries as of anygiven date, the aggregate principal amount of all Indebtedness of such Personson a Consolidated basis outstanding at such date and that is secured in anymanner by any Lien.

 

Security Documents. Collectively,the Acknowledgements, the Joinder Agreements, the Pledge Agreement, the Pledgeof Distributions, the Indemnity Agreement, the Guaranty, and any furthercollateral assignments to the Agent for the benefit of the Lenders.

 

Single Asset Entity.A bankruptcy remote, single purpose entity which is a Subsidiary of the Borrowerand which is not a Subsidiary Guarantor which owns real property and relatedassets which are security for Indebtedness of such entity, and whichIndebtedness does not constitute Indebtedness of any other Person except asprovided in the definition of Non-Recourse Indebtedness (except forNon-Recourse Exclusions).

 

S&P. Standard &Poor’s Ratings Group.

 

Stabilized Property.A completed project that has achieved a Leased Rate of at least eighty-fivepercent (85%) for a period of not less than thirty (30) consecutive days,provided that a Development Property on which all improvements related to thedevelopment of such Real Estate have been substantially completed (excludingtenants improvements) for at least twelve (12) months shall constitute a StabilizedProperty. Once a project becomes a Stabilized Property under this Agreement, itshall remain a Stabilized Property.

 

State. A state ofthe United States of America and the District of Columbia.

 

Subordination of Advisory Agreement.The Subordination of Advisory Agreement dated as of the date hereof and enteredinto between REIT, the Advisor and Behringer Harvard Real Estate Services, LLC, a Texas limited liabilitycompany evidencing the subordination of the advisory fees payable by REITpursuant to the Advisory Agreement to the Obligations, as the same may beamended, restated, supplemented or otherwise modified in accordance with theterms hereof.

 

Subsidiary. For anyPerson, any corporation, partnership, limited liability company or other entityof which at least a majority of the securities or other ownership interestshaving by the terms thereof ordinary voting power to elect a majority of theboard of directors or other persons performing similar functions of suchcorporation, partnership, limited liability company or other entity (withoutregard to the occurrence of any contingency) is at the time directly orindirectly owned or controlled by such Person or one or more Subsidiaries ofsuch

 

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Person or by such Person and one or moreSubsidiaries of such Person, and shall include all Persons the accounts ofwhich are consolidated with those of such Person pursuant to GAAP.

 

Subsidiary Guarantors.Initially, those Persons described on Schedule 1.2 hereto and eachAdditional Guarantor. Upon any Additional Guarantor becoming a SubsidiaryGuarantor or upon the release of a Subsidiary Guarantor in accordance with theterms of this Agreement, Agent may unilaterally amend Schedule 1.2.

 

Swing Loan. See§2.5(a).

 

Swing Loan Lender. KeyBank,in its capacity as Swing Loan Lender and any successor thereof.

 

Swing Loan Commitment.The sum of $50,000,000.00, as the same may be changed from time to time inaccordance with the terms of this Agreement.

 

Swing Loan Note. See§2.5(b).

 

Tenant In Common Asset.Real Estate jointly owned by more than one Person, the ownership of which is inthe form of undivided interests as tenants in common in such Real Estate,other than Real Estate wholly owned by REIT, the Borrower and any of theirrespective Subsidiaries individually or collectively as tenants in common.

 

Term Base Rate Loans.The Term Loans bearing interest by reference to the Base Rate.

 

Term LIBOR Rate Loans.The Term Loans bearing interest by reference to LIBOR.

 

Term Loan or Term Loans.An individual Term Loan or the aggregate Term Loans, as the case may be,in the maximum principal amount of $200,000,000.00 made by the Term LoanLenders hereunder.

 

Term Loan Commitment.As to each Term Loan Lender, the amount equal to such Term Loan Lender’s TermLoan Commitment Percentage of the aggregate principal amount of the Term Loansfrom time to time outstanding to the Borrower.

 

Term Loan Commitment Percentage.With respect to each Term Loan Lender, the percentage set forth on Schedule 1.1hereto as such Term Loan Lender’s percentage of the aggregate Term Loan to theBorrower, as the same may be changed from time to time in accordance withthe terms of this Agreement.

 

Term Loan Extension Request.See §2.13(a).

 

Term Loan Lenders. Collectively,the Lenders which have a Term Loan Commitment, the initial Term Loan Lendersbeing identified on Schedule 1.1 hereto.

 

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Term Loan Maturity Date.December 11, 2010, as such date may be extended as provided in §2.13,or such earlier date on which the Term Loans shall become due and payablepursuant to the terms hereof.

 

Term Loan Note. Apromissory note made by the Borrower in favor of a Term Loan Lender in theprincipal face amount equal to such Term Loan Lender’s Term Loan Commitment, insubstantially the form of Exhibit C hereto.

 

Titled Agents. TheArranger, and any co-syndication agents or documentation agent.

 

Total Commitment. Thesum of the Commitments of the Lenders, as in effect from time to time. As ofthe date of this Agreement, the Total Commitment is Five Hundred Million andNo/100 Dollars ($500,000,000.00). The Total Commitment may increase inaccordance with §2.11.

 

Total Revolving Credit Commitment.The sum of the Revolving Credit Commitments of the Revolving Credit Lenders, asin effect from time to time. As of the date of this Agreement, the TotalRevolving Credit Commitment is Three Hundred Million and No/100 Dollars($300,000,000.00). The Total Revolving Credit Commitment may increase inaccordance with §2.11.

 

Type. As to anyLoan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

 

Unconsolidated Affiliate.In respect of any Person, any other Person in whom such Person holds anInvestment, (a) which Investment is accounted for in the financialstatements of such Person on an equity basis of accounting and whose financialresults would not be consolidated under GAAP with the financial results of suchfirst Person on the consolidated financial statements of such first Person, or (b) whichis not a Subsidiary of such first Person.

 

Unhedged Variable Rate Debt.Any Indebtedness with respect to which the interest is not fixed (or hedged toa fixed rate) for the entire term of such Indebtedness to maturity.

 

Unrestricted Cash and Cash Equivalents.As of any date of determination, the sum of (a) the aggregate amount ofUnrestricted cash and (b) the aggregate amount of Unrestricted CashEquivalents (valued at fair market value). As used in this definition, “Unrestricted”means the specified asset is readily available for the satisfaction of any andall obligations of such Person.

 

Unsecured Debt. Indebtednessof REIT, the Borrower and their respective Subsidiaries outstanding at any timewhich is not Secured Indebtedness.

 

Wholly Owned Subsidiary.As to the Borrower, any Subsidiary of Borrower that is directly or indirectlyowned 100% by the Borrower.

 

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§1.2                          Rules ofInterpretation.

 

(a)                                  Areference to any document or agreement shall include such document or agreementas amended, modified or supplemented from time to time in accordance with itsterms and the terms of this Agreement.

 

(b)                                 Thesingular includes the plural and the plural includes the singular.

 

(c)                                  Areference to any law includes any amendment or modification of such law.

 

(d)                                 Areference to any Person includes its permitted successors and permittedassigns.

 

(e)                                  Accountingterms not otherwise defined herein have the meanings assigned to them by GAAPapplied on a consistent basis by the accounting entity to which they refer.

 

(f)                                    Thewords “include”, “includes” and “including” are not limiting.

 

(g)                                 Thewords “approval” and “approved”, as the context requires, means an approval inwriting given to the party seeking approval after full and fair disclosure tothe party giving approval of all material facts necessary in order to determinewhether approval should be granted.

 

(h)                                 Allterms not specifically defined herein or by GAAP, which terms are defined inthe Uniform Commercial Code as in effect in the State of New York, havethe meanings assigned to them therein.

 

(i)                                     Referenceto a particular “§”, refers to that section of this Agreement unlessotherwise indicated.

 

(j)                                     Thewords “herein”, “hereof”, “hereunder” and words of like import shall refer tothis Agreement as a whole and not to any particular section or subdivisionof this Agreement.

 

(k)                                  Inthe event of any change in GAAP after the date hereof or any other change inaccounting procedures pursuant to §7.3 which would affect the computation ofany financial covenant, ratio or other requirement set forth in any LoanDocument, then upon the request of the Borrower or Agent, the Borrower, theGuarantors, the Agent and the Lenders shall negotiate promptly, diligently andin good faith in order to amend the provisions of the Loan Documents such thatsuch financial covenant, ratio or other requirement shall continue to providesubstantially the same financial tests or restrictions of the Borrower and theGuarantors as in effect prior to such accounting change, as determined by theRequired Lenders in their good faith judgment. Until such time as suchamendment shall have been executed and delivered by the Borrower, theGuarantors, the Agent and the Required Lenders, such financial covenants, ratioand other requirements, and all financial statements and other documentsrequired to be

 

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deliveredunder the Loan Documents, shall be calculated and reported as if such change hadnot occurred.

 

(l)                                     Notwithstandinganything to the contrary in this Agreement, except for the purposes of thefinancial statements required to be delivered under §§7.4(a) and (b),wherever a reference is made in this Agreement to a matter being Consolidatedin accordance with GAAP or a similar phrase, in lieu of being Consolidated inaccordance with GAAP such matter (including any requirement that a calculationof any limitation or covenant be made in accordance with GAAP) shall bepresented or calculated, as applicable, based on the pro rata share of theownership interests of any Person held by REIT, the Borrower and theirrespective Subsidiaries, such pro rata share of such ownership interests to bebased on the right of REIT, the Borrower and their respective Subsidiaries, asapplicable, to receive cash flow and other distributions, as reasonablyapproved by the Agent.

 

§2.                                THECREDIT FACILITY.

 

§2.1                          RevolvingCredit Loans.

 

(a)                                  Subjectto the terms and conditions set forth in this Agreement, each of the RevolvingCredit Lenders severally agrees to lend to the Borrower, and the Borrower may borrow(and repay and reborrow) from time to time between the Closing Date and theRevolving Credit Maturity Date upon notice by the Borrower to the Agent givenin accordance with §2.7, such sums as are requested by the Borrower for thepurposes set forth in §2.9 up to a maximum aggregate principal amountoutstanding (after giving effect to all amounts requested) at any one timeequal to the lesser of (i) such Revolving Credit Lender’s Revolving CreditCommitment and (ii) such Revolving Credit Lender’s Revolving CreditCommitment Percentage of the sum of (1) the amount of all outstandingRevolving Credit Loans and Swing Loans, and (2) the aggregate amount ofLetter of Credit Liabilities; provided, that, in all events no Defaultor Event of Default shall have occurred and be continuing; and provided,further, that the outstanding principal amount of the Revolving CreditLoans (after giving effect to all amounts requested), Swing Loans and Letter ofCredit Liabilities shall not at any time exceed the Total Revolving CreditCommitment and the outstanding principal amount of the Revolving Credit Loans(after giving effect to all amounts requested), Swing Loans, Term Loans andLetter of Credit Liabilities shall not at any time exceed the Total Commitment.The Revolving Credit Loans shall be made prorata in accordancewith each Revolving Credit Lender’s Revolving Credit Commitment Percentage. Eachrequest for a Revolving Credit Loan hereunder shall constitute a representationand warranty by the Borrower that all of the conditions required of theBorrower set forth in §10 and §11 have been satisfied on the date of suchrequest. The Agent may assume that the conditions in §10 and §11 have beensatisfied unless it receives prior written notice from a Revolving CreditLender that such conditions have not been satisfied. No Revolving Credit Lendershall have any obligation to make Revolving Credit Loans to the Borrower in themaximum aggregate principal outstanding balance of more than the principal faceamount of its Revolving Credit Note.

 

(b)                                 TheRevolving Credit Loans shall be evidenced by separate promissory notes of theBorrower in substantially the form of Exhibit A hereto (collectively,the “Revolving Credit Notes”), dated of even date with this Agreement (exceptas otherwise provided in §18.3)

 

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andcompleted with appropriate insertions. One Revolving Credit Note shall be payableto the order of each Revolving Credit Lender in the principal amount equal tosuch Revolving Credit Lender’s Revolving Credit Commitment or, if less, theoutstanding amount of all Revolving Credit Loans made by such Revolving CreditLender, plus interest accrued thereon, as set forth below. The Borrowerirrevocably authorizes Agent to make or cause to be made, at or about the timeof the Drawdown Date of any Revolving Credit Loan or the time of receipt of anypayment of principal thereof, an appropriate notation on Agent’s Recordreflecting the making of such Revolving Credit Loan or (as the case may be)the receipt of such payment. The outstanding amount of the Revolving CreditLoans set forth on Agent’s Record shall be primafacie evidenceof the principal amount thereof owing and unpaid to each Revolving CreditLender, but the failure to record, or any error in so recording, any suchamount on Agent’s Record shall not limit or otherwise affect the obligations ofthe Borrower hereunder or under any Revolving Credit Note to make payments ofprincipal of or interest on any Revolving Credit Note when due.

 

§2.2                          Commitmentto Lend Term Loan. Subject to the terms and conditions set forth in thisAgreement, each of the Term Loan Lenders severally agrees to lend to theBorrower on the Closing Date such Term Loan Lender’s Term Loan Commitment,which Term Loans shall be evidenced by the Term Loan Notes.

 

§2.3                          FacilityUnused Fee. The Borrower agrees to pay to the Agent for the account of theRevolving Credit Lenders in accordance with their respective Revolving CreditCommitment Percentages a facility unused fee calculated in accordance with §4.4at the rate per annum as set forth below on the average daily amount by whichthe Total Revolving Credit Commitment exceeds the outstanding principal amountof Revolving Credit Loans, Swing Loans and the face amount of Letters of CreditOutstanding during each calendar quarter or portion thereof commencing on thedate hereof and ending on the Revolving Credit Maturity Date. The facilityunused fee shall be calculated for each day based on the ratio (expressed as apercentage) of (a) the average daily amount of the outstanding principalamount of the Revolving Credit Loans and Swing Loans and the face amount ofLetters of Credit Outstanding during such quarter to (b) the TotalRevolving Credit Commitment, and if such ratio is less than or equal to fiftypercent (50%), the facility unused fee shall be payable at the rate of 0.20%,and if such ratio is greater than fifty percent (50%), the facility unused feeshall be payable at the rate of 0.15%. The facility unused fee shall be payablequarterly in arrears on the first (1st) day of each calendar quarterfor the immediately preceding calendar quarter or portion thereof, and on anyearlier date on which the Revolving Credit Commitments shall be reduced orshall terminate as provided in §2.4, with a final payment on the RevolvingCredit Maturity Date.

 

§2.4                          Reductionand Termination of the Revolving Credit Commitments. The Borrower shallhave the right at any time and from time to time upon five (5) BusinessDays’ prior written notice to the Agent to reduce by $5,000,000.00 or anintegral multiple of $1,000,000.00 in excess thereof (provided that inno event shall the Total Revolving Credit Commitment be reduced in such mannerto an amount less than $100,000,000.00) or to terminate entirely the RevolvingCredit Commitments, whereupon the Revolving Credit Commitments of the RevolvingCredit Lenders shall be reduced pro rata in accordance with their respectiveRevolving Credit Commitment Percentages of the amount specified in such noticeor, as the case may be, terminated, any such termination or reduction tobe without penalty except as otherwise set forth in §4.8; provided, however,that no such termination or reduction shall be permitted if,

 

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aftergiving effect thereto, the sum of Outstanding Revolving Credit Loans, theOutstanding Swing Loans and the Letter of Credit Liabilities would exceed theRevolving Credit Commitments of the Revolving Credit Lenders as so terminatedor reduced. Promptly after receiving any notice from the Borrower deliveredpursuant to this §2.4, the Agent will notify the Revolving Credit Lenders ofthe substance thereof. Any reduction of the Revolving Credit Commitments shallalso result in a proportionate reduction (rounded to the next lowest integralmultiple of $100,000.00) in the maximum amount of Swing Loans and Letters ofCredit. Upon the effective date of any such reduction or termination, theBorrower shall pay to the Agent for the respective accounts of the RevolvingCredit Lenders the full amount of any facility fee under §2.3 then accrued onthe amount of the reduction. No reduction or termination of the RevolvingCredit Commitments may be reinstated.

 

§2.5                          SwingLoan Commitment.

 

(a)                                  Subjectto the terms and conditions set forth in this Agreement, Swing Loan Lenderagrees to lend to the Borrower (the “Swing Loans”), and the Borrower may borrow(and repay and reborrow) from time to time between the Closing Date and thedate which is five (5) Business Days prior to the Revolving CreditMaturity Date upon notice by the Borrower to the Swing Loan Lender given inaccordance with this §2.5, such sums as are requested by the Borrower for thepurposes set forth in §2.9 in an aggregate principal amount at any one time outstandingnot exceeding the Swing Loan Commitment; provided that in all events (i) noDefault or Event of Default shall have occurred and be continuing; (ii) noRevolving Credit Lender shall be a Delinquent Lender (provided Swing LoanLender may, in its sole discretion, be entitled to waive this condition); (iii) theoutstanding principal amount of the Revolving Credit Loans and Swing Loans(after giving effect to all amounts requested) plus Letter of CreditLiabilities shall not at any time exceed the Total Revolving Credit Commitment;and (iv) the outstanding principal amount of the Revolving Credit Loans,Term Loans and Swing Loans (after giving effect to all amounts requested), plusLetter of Credit Liabilities shall not at any time exceed the Total Commitment.Swing Loans shall constitute “Revolving Credit Loans” for all purposeshereunder. The funding of a Swing Loan hereunder shall constitute arepresentation and warranty by the Borrower that all of the conditions setforth in §10 and §11 have been satisfied on the date of such funding. The SwingLoan Lender may assume that the conditions in §10 and §11 have beensatisfied unless Swing Loan Lender has received written notice from a RevolvingCredit Lender that such conditions have not been satisfied. Each Swing Loanshall be due and payable within five (5) Business Days of the date suchSwing Loan was provided and the Borrower hereby agrees (to the extent notrepaid as contemplated by §2.5(d) below) to repay each Swing Loan on orbefore the date that is five (5) Business Days from the date such SwingLoan was provided.

 

(b)                                 TheSwing Loans shall be evidenced by a separate promissory note of the Borrower insubstantially the form of Exhibit B hereto (the “Swing Note”),dated the date of this Agreement and completed with appropriate insertions. TheSwing Loan Note shall be payable to the order of the Swing Loan Lender in theprincipal face amount equal to the Swing Loan Commitment and shall be payableas set forth below. The Borrower irrevocably authorizes the Swing Loan Lenderto make or cause to be made, at or about the time of the Drawdown Date of anySwing Loan or at the time of receipt of any payment of principal thereof, anappropriate notation on the Swing Loan Lender’s Record reflecting the making ofsuch Swing Loan or (as

 

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thecase may be) the receipt of such payment. The outstanding amount of theSwing Loans set forth on the Swing Loan Lender’s Record shall be primafacieevidence of the principal amount thereof owing and unpaid to the Swing LoanLender, but the failure to record, or any error in so recording, any suchamount on the Swing Loan Lender’s Record shall not limit or otherwise affectthe obligations of the Borrower hereunder or under the Swing Loan Note to makepayments of principal of or interest on any Swing Loan Note when due.

 

(c)                                  TheBorrower shall request a Swing Loan by delivering to the Swing Loan Lender aLoan Request executed by an Authorized Officer no later than 11:00 a.m. (Clevelandtime) on the requested Drawdown Date specifying the amount of the requestedSwing Loan (which shall be in the minimum amount of $1,000,000.00) andproviding the wire instructions for the delivery of the Swing Loan proceeds. TheLoan Request shall also contain the statements and certifications required by§2.7(i) and (ii). Each such Loan Request shall be irrevocable and bindingon the Borrower and shall obligate the Borrower to accept such Swing Loan onthe Drawdown Date. Notwithstanding anything herein to the contrary, a SwingLoan shall be a Base Rate Loan and shall bear interest at the Base Rate plusthe Applicable Margin for Revolving Credit Base Rate Loans. The proceeds of theSwing Loan will be disbursed by wire by the Swing Loan Lender to the Borrowerno later than 1:00 p.m. (Cleveland time).

 

(d)                                 TheSwing Loan Lender shall, within two (2) Business Days after theDrawdown Date with respect to such Swing Loan, request each Revolving CreditLender, including the Swing Loan Lender, to make a Revolving Credit Loanpursuant to §2.1 in an amount equal to such Revolving Credit Lender’s RevolvingCredit Commitment Percentage of the amount of the Swing Loan outstanding on thedate such notice is given. In the event that the Borrower does not notify theAgent in writing otherwise on or before noon (Cleveland Time) on the second (2nd)Business Day after the Drawdown Date with respect to such Swing Loan, Agentshall notify the Revolving Credit Lenders that such Revolving Credit Loan shallbe a Revolving Credit LIBOR Rate Loan with an Interest Period of one (1) month,provided that the making of such Revolving Credit LIBOR Rate Loan will not bein contravention of any other provision of this Agreement, or if the making ofa Revolving Credit LIBOR Rate Loan would be in contravention of this Agreement,then such notice shall indicate that such loan shall be a Revolving Credit BaseRate Loan. The Borrower hereby irrevocably authorizes and directs the SwingLoan Lender to so act on its behalf, and agrees that any amount advanced to theAgent for the benefit of the Swing Loan Lender pursuant to this §2.5(d) shallbe considered a Revolving Credit Loan pursuant to §2.1. Unless any of theevents described in paragraph (h), (i) or (j) of §12.1 shall haveoccurred (in which event the procedures of §2.5(e) shall apply), eachRevolving Credit Lender shall make the proceeds of its Revolving Credit Loanavailable to the Swing Loan Lender for the account of the Swing Loan Lender atthe Agent’s Head Office prior to 12:00 noon (Cleveland time) in fundsimmediately available no later than the third (3rd) Business Day after the datesuch notice is given just as if the Revolving Credit Lenders were fundingdirectly to the Borrower, so that thereafter such Obligations shall be evidencedby the Revolving Credit Notes. The proceeds of such Revolving Credit Loan shallbe immediately applied to repay the Swing Loans.

 

(e)                                  Iffor any reason a Swing Loan cannot be refinanced by a Revolving Credit Loanpursuant to §2.5(d), each Revolving Credit Lender will, on the date suchRevolving Credit Loan pursuant to §2.5(d) was to have been made, purchasean undivided participation

 

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interestin the Swing Loan in an amount equal to its Revolving Credit CommitmentPercentage of such Swing Loan. Each Revolving Credit Lender will immediatelytransfer to the Swing Loan Lender in immediately available funds the amount ofits participation and upon receipt thereof the Swing Loan Lender will deliverto such Revolving Credit Lender a Swing Loan participation certificate datedthe date of receipt of such funds and in such amount.

 

(f)                                    Wheneverat any time after the Swing Loan Lender has received from any Revolving CreditLender such Revolving Credit Lender’s participation interest in a Swing Loan,the Swing Loan Lender receives any payment on account thereof, the Swing LoanLender will distribute to such Revolving Credit Lender its participationinterest in such amount (appropriately adjusted in the case of interestpayments to reflect the period of time during which such Revolving CreditLender’s participating interest was outstanding and funded); provided, however,that in the event that such payment received by the Swing Loan Lender isrequired to be returned, such Revolving Credit Lender will return to the SwingLoan Lender any portion thereof previously distributed by the Swing Loan Lenderto it.

 

(g)                                 EachRevolving Credit Lender’s obligation to fund a Revolving Credit Loan asprovided in §2.5(d) or to purchase participation interests pursuant to§2.5(e) shall be absolute and unconditional and shall not be affected byany circumstance, including, without limitation, (i) any setoff,counterclaim, recoupment, defense or other right which such Revolving Credit Lenderor the Borrower may have against the Swing Loan Lender, the Borrower oranyone else for any reason whatsoever; (ii) the occurrence or continuanceof a Default or an Event of Default; (iii) any adverse change in thecondition (financial or otherwise) of REIT, the Borrower or any of theirrespective Subsidiaries; (iv) any breach of this Agreement or any of theother Loan Documents by the Borrower or any Guarantor or any Lender; or (v) anyother circumstance, happening or event whatsoever, whether or not similar toany of the foregoing. Any portions of a Swing Loan not so purchased orconverted may be treated by the Agent and Swing Loan Lender as againstsuch Revolving Credit Lender as a Revolving Credit Loan which was not funded bythe non-purchasing Revolving Credit Lender as contemplated by §2.8 and §12.5,and shall have such rights and remedies against such Revolving Credit Lender asare set forth in §§2.8, 12.5 and 14.5. Each Swing Loan, once so sold orconverted, shall cease to be a Swing Loan for the purposes of this Agreement,but shall be a Revolving Credit Loan made by each Revolving Credit Lender underits Revolving Credit Commitment.

 

§2.6                          Intereston Loans.

 

(a)                                  EachRevolving Credit Base Rate Loan shall bear interest for the period commencing withthe Drawdown Date thereof and ending on, but excluding, the date on which suchRevolving Credit Base Rate Loan is repaid or converted to a Revolving CreditLIBOR Rate Loan at the rate per annum equal to the sum of the Base Rate plusthe Applicable Margin for Base Rate Loans.

 

(b)                                 EachRevolving Credit LIBOR Rate Loan shall bear interest for the period commencingwith the Drawdown Date thereof and ending on the last day of each InterestPeriod with respect thereto at the rate per annum equal to the sum of LIBORdetermined for such Interest Period plus the Applicable Margin for LIBOR RateLoans.

 

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(c)                                  EachTerm Base Rate Loan shall bear interest for the period commencing with theDrawdown Date thereof and ending on, but excluding, the date on which such TermBase Rate Loan is repaid or is converted to a Term LIBOR Rate Loan at a rateper annum equal to the sum of the Applicable Margin for Base Rate Loans plusthe Base Rate.

 

(d)                                 EachTerm LIBOR Rate Loan shall bear interest for the period commencing with theDrawdown Date thereof and ending on the last day of each Interest Period withrespect thereto at the rate per annum equal to the sum of LIBOR determined forsuch Interest Period plus the Applicable Margin for LIBOR Rate Loans.

 

(e)                                  TheBorrower promises to pay interest on each Loan in arrears on each InterestPayment Date with respect thereto.

 

(f)                                    BaseRate Loans and LIBOR Rate Loans may be converted to Loans of the otherType as provided in §4.1.

 

§2.7                          Requestsfor Revolving Credit Loans. Except with respect to the initial RevolvingCredit Loan on the Closing Date, the Borrower shall give to the Agent writtennotice executed by an Authorized Officer in the form of Exhibit Ehereto (or telephonic notice confirmed in writing in the form of Exhibit Ehereto) of each Revolving Credit Loan requested hereunder (a “Loan Request”) by11:00 a.m. (Cleveland time) one (1) Business Day prior to theproposed Drawdown Date with respect to Revolving Credit Base Rate Loans andthree (3) Business Days prior to the proposed Drawdown Date withrespect to Revolving Credit LIBOR Rate Loans. Each such notice shall specifywith respect to the requested Revolving Credit Loan the proposed principalamount of such Revolving Credit Loan, the Type of Revolving Credit Loan, theinitial Interest Period (if applicable) for such Revolving Credit Loan and theDrawdown Date. Each such notice shall also contain (i) a general statementas to the purpose for which such advance shall be used (which purpose shall bein accordance with the terms of §2.9) and (ii) a certification by thechief financial officer or chief accounting officer of the Borrower that theBorrower and Guarantors are and will be in compliance with all covenants underthe Loan Documents after giving effect to the making of such Revolving CreditLoan. Promptly upon receipt of any such notice, the Agent shall notify each ofthe Revolving Credit Lenders thereof. Each such Loan Request shall beirrevocable and binding on the Borrower and shall obligate the Borrower toaccept the Revolving Credit Loan requested from the Revolving Credit Lenders onthe proposed Drawdown Date. Nothing herein shall prevent the Borrower fromseeking recourse against any Revolving Credit Lender that fails to advance itsproportionate share of a requested Revolving Credit Loan as required by thisAgreement. Each Loan Request shall be (a) for a Revolving Credit Base RateLoan in a minimum aggregate amount of $1,000,000.00****oran integral multiple of $100,000.00****in excessthereof; or (b) for a Revolving Credit LIBOR Rate Loan in a minimumaggregate amount of $1,000,000.00 or an integral multiple of $250,000.00 inexcess thereof; provided, however, that there shall be no morethan six (6) Revolving Credit LIBOR Rate Loans outstanding at any onetime.

 

§2.8                          Fundsfor Loans.

 

(a)                                  Notlater than 1:00 p.m. (Cleveland time) on the proposed Drawdown Date of anyRevolving Credit Loans or Term Loans, each of the Revolving Credit Lenders or

 

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TermLoan Lenders, as applicable, will make available to the Agent, at the Agent’sHead Office, in immediately available funds, the amount of such Lender’sCommitment Percentage of the amount of the requested Loans which may bedisbursed pursuant to §2.1 or §2.2. Upon receipt from each such RevolvingCredit Lender or Term Loan Lender, as applicable, of such amount, and uponreceipt of the documents required by §10 and §11 and the satisfaction of theother conditions set forth therein, to the extent applicable, the Agent willmake available to the Borrower the aggregate amount of such Revolving CreditLoans or Term Loans made available to the Agent by the Revolving Credit Lendersor Term Loan Lenders, as applicable, by crediting such amount to the account ofthe Borrower maintained at the Agent’s Head Office. The failure or refusal ofany Revolving Credit Lender or Term Loan Lender to make available to the Agentat the aforesaid time and place on any Drawdown Date the amount of its CommitmentPercentage of the requested Loans shall not relieve any other Revolving CreditLender or Term Loan Lender from its several obligation hereunder to makeavailable to the Agent the amount of such other Lender’s Commitment Percentageof any requested Loans, including any additional Revolving Credit Loans that may berequested subject to the terms and conditions hereof to provide funds toreplace those not advanced by the Lender so failing or refusing. In the eventof any such failure or refusal, the Lenders not so failing or refusing shall beentitled to a priority secured position as against the Lender or Lenders sofailing or refusing to make available to the Borrower the amount of its ortheir Commitment Percentage for such Loans as provided in §12.5.

 

(b)                                 Unlessthe Agent shall have been notified by any Lender prior to the applicableDrawdown Date that such Lender will not make available to Agent such Lender’sCommitment Percentage of a proposed Loan, Agent may in its discretionassume that such Lender has made such Loan available to Agent in accordancewith the provisions of this Agreement and the Agent may, if it chooses, inreliance upon such assumption make such Loan available to the Borrower, andsuch Lender shall be liable to the Agent for the amount of such advance. Ifsuch Lender does not pay such corresponding amount upon the Agent’s demandtherefor, the Agent will promptly notify the Borrower, and the Borrower shallpromptly pay such corresponding amount to the Agent. The Agent shall also be entitledto recover from the Lender or the Borrower, as the case may be, intereston such corresponding amount in respect of each day from the date suchcorresponding amount was made available by the Agent to the Borrower to thedate such corresponding amount is recovered by the Agent at a per annum rateequal to (i) from the Borrower at the applicable rate for such Loan or (ii) froma Lender at the Federal Funds Effective Rate.

 

§2.9                          Useof Proceeds. The Borrower will use the proceeds of the Loans and the Lettersof Credit solely for general corporate and working capital purposes.

 

§2.10                    Lettersof Credit.

 

(a)                                  Subjectto the terms and conditions set forth in this Agreement, at any time and fromtime to time from the Closing Date through the day that is ninety (90) daysprior to the Revolving Credit Maturity Date, the Issuing Lender shall issuesuch Letters of Credit as the Borrower may request upon the delivery of awritten request in the form of Exhibit F hereto (a “Letter ofCredit Request”) to the Issuing Lender, provided that (i) noDefault or Event of Default shall have occurred and be continuing, (ii) uponissuance of such Letter of Credit, the

 

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Letterof Credit Liabilities shall not exceed Fifty Million Dollars ($50,000,000.00), (iii) inno event shall the sum of (A) the Revolving Credit Loans Outstanding, (B) theSwing Loans Outstanding and (C) the amount of Letter of Credit Liabilities(after giving effect to all Letters of Credit requested) exceed the TotalRevolving Credit Commitment, (iv) in no event shall the outstandingprincipal amount of the Revolving Credit Loans, Swing Loans, Letters of CreditLiabilities and Term Loans (after giving effect to any requested Letters ofCredit) exceed the Total Commitment, (v) the conditions set forth in §§10and 11 shall have been satisfied, (vi) no Revolving Credit Lender is aDelinquent Lender (provided Issuing Lender may, in its sole discretion, beentitled to waive this condition), and (vii) in no event shall any amountdrawn under a Letter of Credit be available for reinstatement or a subsequentdrawing under such Letter of Credit. The Issuing Lender may assume thatthe conditions in §10 and §11 have been satisfied unless it receives writtennotice from a Revolving Credit Lender that such conditions have not beensatisfied. Each Letter of Credit Request shall be executed by an AuthorizedOfficer of the Borrower. The Issuing Lender shall be entitled to conclusivelyrely on such Person’s authority to request a Letter of Credit on behalf of theBorrower. The Issuing Lender shall have no duty to verify the authenticity ofany signature appearing on a Letter of Credit Request. The Borrower assumes allrisks with respect to the use of the Letters of Credit. Unless the IssuingLender and the Majority Revolving Credit Lenders otherwise consent, the term ofany Letter of Credit shall not exceed a period of time commencing on theissuance of the Letter of Credit and ending one year after the date of issuancethereof, subject to extension pursuant to an “evergreen” clause acceptable toAgent and Issuing Lender (but in any event the term shall not extend beyond theRevolving Credit Maturity Date). The amount available to be drawn under anyLetter of Credit shall reduce on a dollar-for-dollar basis the amount availableto be drawn under the Total Revolving Credit Commitment as a Revolving CreditLoan.

 

(b)                                 EachLetter of Credit Request shall be submitted to the Issuing Lender at least five(5) Business Days (or such shorter period as the Issuing Lender may approve)prior to the date upon which the requested Letter of Credit is to be issued. Eachsuch Letter of Credit Request shall contain (i) a statement as to thepurpose for which such Letter of Credit shall be used (which purpose shall bein accordance with the terms of this Agreement), and (ii) a certificationby the chief financial or chief accounting officer of the Borrower that theBorrower and Guarantors are and will be in compliance with all covenants underthe Loan Documents after giving effect to the issuance of such Letter of Credit.The Borrower shall further deliver to the Issuing Lender such additionalapplications (which application as of the date hereof is in the form of Exhibit Iattached hereto) and documents as the Issuing Lender may require, inconformity with the then standard practices of its letter of credit department,in connection with the issuance of such Letter of Credit; provided thatin the event of any conflict, the terms of this Agreement shall control.

 

(c)                                  TheIssuing Lender shall, subject to the conditions set forth in this Agreement,issue the Letter of Credit on or before five (5) Business Days followingreceipt of the documents last due pursuant to §2.10(b). Each Letter of Creditshall be in form and substance reasonably satisfactory to the IssuingLender in its reasonable discretion.

 

(d)                                 Uponthe issuance of a Letter of Credit, each Revolving Credit Lender shall bedeemed to have purchased a participation therein from Issuing Lender in an amountequal to its respective Commitment Percentage of the amount of such Letter ofCredit. No

 

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RevolvingCredit Lender’s obligation to participate in a Letter of Credit shall beaffected by any other Revolving Credit Lender’s failure to perform asrequired herein with respect to such Letter of Credit or any other Letter ofCredit.

 

(e)                                  Uponthe issuance of each Letter of Credit, the Borrower shall pay to the IssuingLender (i) for its own account, a Letter of Credit fronting fee calculatedat the rate set forth in the Agreement Regarding Fees, and (ii) for theaccounts of the Revolving Credit Lenders (including the Issuing Lender) inaccordance with their respective percentage shares of participation in suchLetter of Credit, a Letter of Credit fee calculated at the rate per annum equalto the Applicable Margin then applicable to LIBOR Rate Loans on the amountavailable to be drawn under such Letter of Credit. Such fees shall be payablein quarterly installments in arrears with respect to each Letter of Credit onthe first day of each calendar quarter following the date of issuance andcontinuing on each quarter or portion thereof thereafter, as applicable, or onany earlier date on which the Commitments shall terminate and on the expirationor return of any Letter of Credit. In addition, the Borrower shall pay toIssuing Lender for its own account within five (5) days of demand ofIssuing Lender the standard issuance, documentation and service charges forLetters of Credit issued from time to time by Issuing Lender.

 

(f)                                    Inthe event that any amount is drawn under a Letter of Credit by the beneficiarythereof, the Borrower shall reimburse the Issuing Lender by having such amountdrawn treated as an outstanding Revolving Credit Base Rate Loan under thisAgreement (the Borrower being deemed to have requested a Revolving Credit BaseRate Loan on such date in an amount equal to the amount of such drawing andsuch amount drawn shall be treated as an outstanding Revolving Credit Base RateLoan under this Agreement) and the Agent shall promptly notify each RevolvingCredit Lender by telex, telecopy, telegram, telephone (confirmed in writing) orother similar means of transmission, and each Revolving Credit Lender shall promptlyand unconditionally pay to the Agent, for the Issuing Lender’s own account, anamount equal to such Revolving Credit Lender’s Revolving Credit CommitmentPercentage of such Letter of Credit (to the extent of the amount drawn). TheBorrower further hereby irrevocably authorizes and directs Agent to notify theRevolving Credit Lenders of the Borrower’s intent to convert such RevolvingCredit Base Rate Loan to a Revolving Credit LIBOR Rate Loan with an InterestPeriod of one (1) month on the third (3rd) Business Dayfollowing the funding by the Revolving Credit Lenders of their advance underthis §2.10(f), provided that the making of such Revolving Credit LIBOR RateLoan shall not be a contravention of any provision of this Agreement. If and tothe extent any Revolving Credit Lender shall not make such amount available onthe Business Day on which such draw is funded, such Revolving Credit Lenderagrees to pay such amount to the Agent forthwith on demand, together withinterest thereon, for each day from the date on which such draw was fundeduntil the date on which such amount is paid to the Agent, at the Federal FundsEffective Rate until three (3) days after the date on which the Agentgives notice of such draw and at the Federal Funds Effective Rate plus onepercent (1.0%) for each day thereafter. Further, such Revolving Credit Lendershall be deemed to have assigned any and all payments made of principal andinterest on its Revolving Credit Loans, amounts due with respect to itsparticipations in Letters of Credit and any other amounts due to it hereunderto the Agent to fund the amount of any drawn Letter of Credit which suchRevolving Credit Lender was required to fund pursuant to this §2.10(f) untilsuch amount has been funded (as a result of such assignment or otherwise). Inthe event of any such failure or refusal, the Revolving Credit Lenders not so

 

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failingor refusing shall be entitled to a priority secured position for such amountsas provided in §12.5. The failure of any Revolving Credit Lender to make fundsavailable to the Agent in such amount shall not relieve any other RevolvingCredit Lender of its obligation hereunder to make funds available to the Agentpursuant to this §2.10(f).

 

(g)                                 Ifafter the issuance of a Letter of Credit pursuant to §2.10(c) by theIssuing Lender, but prior to the funding of any portion thereof by a RevolvingCredit Lender, for any reason a drawing under a Letter of Credit cannot berefinanced as a Revolving Credit Loan, each Revolving Credit Lender will, onthe date such Revolving Credit Loan pursuant to §2.10(f) was to have beenmade, purchase an undivided participation interest in the Letter of Credit inan amount equal to its Revolving Credit Commitment Percentage of the amount ofsuch Letter of Credit. Each Revolving Credit Lender will immediately transferto the Issuing Lender in immediately available funds the amount of itsparticipation and upon receipt thereof the Issuing Lender will deliver to suchRevolving Credit Lender a Letter of Credit participation certificate dated thedate of receipt of such funds and in such amount.

 

(h)                                 Wheneverat any time after the Issuing Lender has received from any Revolving CreditLender any such Revolving Credit Lender’s payment of funds under a Letter ofCredit and thereafter the Issuing Lender receives any payment on accountthereof, then the Issuing Lender will distribute to such Revolving CreditLender its participation interest in such amount (appropriately adjusted in thecase of interest payments to reflect the period of time during which suchRevolving Credit Lender’s participation interest was outstanding and funded); provided,however, that in the event that such payment received by the IssuingLender is required to be returned, such Revolving Credit Lender will return tothe Issuing Lender any portion thereof previously distributed by the IssuingLender to it.

 

(i)                                     Theissuance of any supplement, modification, amendment, renewal or extension to orof any Letter of Credit shall be treated in all respects the same as theissuance of a new Letter of Credit.

 

(j)                                     TheBorrower assumes all risks of the acts, omissions, or misuse of any Letter ofCredit by the beneficiary thereof. Neither Agent, Issuing Lender nor any Lenderwill be responsible for (i) the form, validity, sufficiency, accuracy,genuineness or legal effect of any Letter of Credit or any document submittedby any party in connection with the issuance of any Letter of Credit, even ifsuch document should in fact prove to be in any or all respects invalid,insufficient, inaccurate, fraudulent or forged; (ii) the form, validity,sufficiency, accuracy, genuineness or legal effect of any instrumenttransferring or assigning or purporting to transfer or assign any Letter ofCredit or the rights or benefits thereunder or proceeds thereof in whole or inpart, which may prove to be invalid or ineffective for any reason; (iii) failureof any beneficiary of any Letter of Credit to comply fully with the conditionsrequired in order to demand payment under a Letter of Credit; (iv) errors,omissions, interruptions or delays in transmission or delivery of any messages,by mail, cable, telegraph, telex or otherwise; (v) errors ininterpretation of technical terms; (vi) any loss or delay in thetransmission or otherwise of any document or draft required by or from abeneficiary in order to make a disbursement under a Letter of Credit or theproceeds thereof; (vii) for the misapplication by the beneficiary of anyLetter of Credit of the proceeds of any drawing under such Letter of Credit;and (viii) for any consequences arising from causes beyond the control ofAgent or any Lender. None of the foregoing will affect,

 

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impairor prevent the vesting of any of the rights or powers granted to Agent, IssuingLender or the Lenders hereunder. In furtherance and extension and not inlimitation or derogation of any of the foregoing, any act taken or omitted tobe taken by Agent, Issuing Lender or the other Lenders in good faith will bebinding on the Borrower and will not put Agent, Issuing Lender or the otherLenders under any resulting liability to the Borrower; provided nothingcontained herein shall relieve Issuing Lender for liability to the Borrowerarising as a result of the gross negligence or willful misconduct of IssuingLender as determined by a court of competent jurisdiction after the exhaustionof all applicable appeal periods.

 

§2.11                    Increasein Total Revolving Credit Commitment.

 

(a)                                  Providedthat no Default or Event of Default has occurred and is continuing, subject tothe terms and conditions set forth in this §2.11, the Borrower shall have theoption at any time and from time to time before the date that is ninety (90)days prior to the Revolving Credit Maturity Date (or the extended maturity dateif the Borrower exercises its extension option pursuant to §2.12) to request anincrease in the Total Revolving Credit Commitment to not more than$600,000,000.00 by giving written notice to the Agent (an “Increase Notice”;and the amount of such requested increase is the “Commitment Increase”), providedthat any such individual increase must be in a minimum amount of $25,000,000.00.Upon receipt of any Increase Notice, the Agent shall consult with Arranger andshall notify the Borrower of the amount of facility fees to be paid to anyRevolving Credit Lenders who provide an additional Revolving Credit Commitmentin connection with such increase in the Total Revolving Credit Commitment (whichshall be in addition to the fees to be paid to Agent or Arranger pursuant tothe Agreement Regarding Fees). If the Borrower agrees to pay the facility feesso determined, then the Agent shall send a notice to all Revolving CreditLenders (the “Additional Commitment Request Notice”) informing them of theBorrower’s request to increase the Total Revolving Credit Commitment and of thefacility fees to be paid with respect thereto. Each Revolving Credit Lender whodesires to provide an additional Revolving Credit Commitment upon such termsshall provide Agent with a written commitment letter specifying the amount ofthe additional Revolving Credit Commitment by which it is willing to provideprior to such deadline as may be specified in the Additional CommitmentRequest Notice. If the requested increase is oversubscribed then the Agent andthe Arranger shall allocate the Commitment Increase among the Revolving CreditLenders who provide such commitment letters on such basis as the Agent and theArranger shall determine in their sole discretion. If the additional RevolvingCredit Commitments so provided are not sufficient to provide the full amount ofthe Commitment Increase requested by the Borrower, then the Agent, Arranger orthe Borrower may, but shall not be obligated to, invite one or more banks orlending institutions (which banks or lending institutions shall be acceptableto Agent, Arranger and the Borrower) to become a Revolving Credit Lender andprovide an additional Revolving Credit Commitment. The Agent shall provide allRevolving Credit Lenders with a notice setting forth the amount, if any, of theadditional Revolving Credit Commitment to be provided by each Revolving CreditLender and the revised Revolving Credit Commitment Percentages which shall beapplicable after the effective date of the Commitment Increase specifiedtherein (the “Commitment Increase Date”). In no event shall any RevolvingCredit Lender be obligated to provide an additional Revolving CreditCommitment.

 

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(b)                                 Onany Commitment Increase Date the outstanding principal balance of the RevolvingCredit Loans shall be reallocated among the Revolving Credit Lenders such thatafter the applicable Commitment Increase Date the outstanding principal amountof Revolving Credit Loans owed to each Revolving Credit Lender shall be equalto such Revolving Credit Lender’s Revolving Credit Commitment Percentage (as ineffect after the applicable Commitment Increase Date) of the outstanding principalamount of all Revolving Credit Loans. The participation interests of theRevolving Credit Lenders in Swing Loans and Letters of Credit shall besimilarly adjusted. On any Commitment Increase Date those Revolving CreditLenders whose Revolving Credit Commitment Percentage is increasing shalladvance the funds to the Agent and the funds so advanced shall be distributedamong the Revolving Credit Lenders whose Revolving Credit Commitment Percentageis decreasing as necessary to accomplish the required reallocation of theoutstanding Revolving Credit Loans. The funds so advanced shall be RevolvingCredit Base Rate Loans until converted to Revolving Credit LIBOR Rate Loanswhich are allocated among all Revolving Credit Lenders based on their RevolvingCredit Commitment Percentages.

 

(c)                                  Uponthe effective date of each increase in the Total Revolving Credit Commitmentpursuant to this §2.11 the Agent may unilaterally revise Schedule 1.1and the Borrower shall execute and deliver to the Agent new Revolving CreditNotes for each Revolving Credit Lender whose Revolving Credit Commitment haschanged so that the principal amount of such Revolving Credit Lender’sRevolving Credit Note shall equal its Revolving Credit Commitment. The Agentshall deliver such replacement Revolving Credit Notes to the respectiveRevolving Credit Lenders in exchange for the Revolving Credit Notes replacedthereby which shall be surrendered by such Revolving Credit Lenders. Such newRevolving Credit Notes shall provide that they are replacements for thesurrendered Revolving Credit Notes and that they do not constitute a novation,shall be dated as of the Commitment Increase Date and shall otherwise be insubstantially the form of the replaced Revolving Credit Notes. Within five(5) days of issuance of any new Revolving Credit Notes pursuant to this§2.11(c), the Borrower shall deliver an opinion of counsel, addressed to theRevolving Credit Lenders and the Agent, relating to the due authorization,execution and delivery of such new Revolving Credit Notes and theenforceability thereof, in form and substance substantially similar to theopinion delivered in connection with the first disbursement under thisAgreement. The surrendered Revolving Credit Notes shall be canceled andreturned to the Borrower.

 

(d)                                 Notwithstandinganything to the contrary contained herein, the obligation of the Agent and theRevolving Credit Lenders to increase the Total Revolving Credit Commitmentpursuant to this §2.11 shall be conditioned upon satisfaction of the followingconditions precedent which must be satisfied prior to the effectiveness of anyincrease of the Total Commitment:

 

(i)                                     Paymentof Activation Fee. The Borrower shall pay (A) to the Agent those feesdescribed in and contemplated by the Agreement Regarding Fees with respect tothe applicable Commitment Increase, and (B) to the Arranger such facilityfees as the Revolving Credit Lenders who are providing an additional RevolvingCredit Commitment may require to increase the aggregate Revolving CreditCommitment, which fees shall, when paid, be fully earned and non-refundableunder any circumstances. The Arranger shall pay to the

 

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RevolvingCredit Lenders acquiring the increased Revolving Credit Commitment certain feespursuant to their separate agreement; and

 

(ii)                                  NoDefault. On the date any Increase Notice is given and on the date suchincrease becomes effective, both immediately before and after the TotalRevolving Credit Commitment is increased, there shall exist no Default or Eventof Default; and

 

(iii)                               RepresentationsTrue. The representations and warranties made by the Borrower andGuarantors in the Loan Documents or otherwise made by or on behalf of theBorrower or the Guarantors in connection therewith or after the date thereofshall have been true and correct in all material respects when made and shallalso be true and correct in all material respects on the date of such IncreaseNotice and on the date the Total Revolving Credit Commitment is increased, bothimmediately before and after the Total Revolving Credit Commitment isincreased, except to the extent of changes resulting from transactionspermitted by the Loan Documents and except as previously disclosed in writingby the Borrower to Agent and approved by the Agent in writing (whichdisclosures shall be deemed to amend the Schedules and other disclosuresdelivered as contemplated in this Agreement) (it being understood and agreedthat any representation or warranty which by its terms is made as of aspecified date shall be required to be true and correct only as of suchspecified date); and

 

(iv)                              AdditionalDocuments and Expenses. The Borrower shall execute and deliver to Agent andthe Revolving Credit Lenders such additional documents (including, withoutlimitation, amendments to the Security Documents), instruments, certificationsand opinions as the Agent may reasonably require in its sole and absolutediscretion, including, without limitation, a Compliance Certificate,demonstrating compliance with all covenants, representations and warranties setforth in the Loan Documents after giving effect to the increase; and

 

(v)                                 Other.The Borrower shall satisfy such other conditions to such increase as Agent may requirein its reasonable discretion.

 

§2.12                    Extensionof Revolving Credit Maturity Date. The Borrower shall have the one-timeright and option to extend the Revolving Credit Maturity Date to December 11,2011, upon satisfaction of the following conditions precedent, which must besatisfied prior to the effectiveness of any extension of the Revolving CreditMaturity Date:

 

(a)                                  ExtensionRequest. The Borrower shall deliver written notice of such request (the “RevolvingCredit Extension Request”) to the Agent not earlier than the date which is onehundred twenty (120) days and not later than the date which is sixty (60) daysprior to the Revolving Credit Maturity Date (as determined without regard tosuch extension). Any such Extension Request shall be irrevocable and binding onthe Borrower.

 

(b)                                 Paymentof Extension Fee. The Borrower shall pay to the Agent for the prorataaccounts of the Revolving Credit Lenders in accordance with their respectiveRevolving Credit Commitments an extension fee in an amount equal to fifteen(15) basis points on the Total Revolving Credit Commitment in effect on theRevolving Credit Maturity Date (as determined

 

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withoutregard to such extension), which fee shall, when paid, be fully earned andnon-refundable under any circumstances.

 

(c)                                  NoDefault. On the date the Revolving Credit Extension Request is given and onthe Revolving Credit Maturity Date (as determined without regard to suchextension) there shall exist no Default or Event of Default.

 

(d)                                 Representationsand Warranties. The representations and warranties made by the Borrower andthe Guarantors in the Loan Documents or otherwise made by or on behalf of theBorrower and the Guarantors in connection therewith or after the date thereofshall have been true and correct in all material respects when made and shallalso be true and correct in all material respects on the date the RevolvingCredit Extension Request is given and on the Revolving Credit Maturity Date (asdetermined without regard to such extension), except to the extent of changesresulting from transactions permitted by the Loan Documents and except aspreviously disclosed in writing by the Borrower to Agent and approved by theAgent in writing (which disclosures shall be deemed to amend the Schedules andother disclosures delivered as contemplated in this Agreement) (it beingunderstood and agreed that any representation or warranty which by its terms ismade as of a specified date shall be required to be true and correct only as ofsuch specified date).

 

§2.13                    Extensionof Term Loan Maturity Date. The Borrower shall have the one-time right andoption to extend the Term Loan Maturity Date to December 11, 2011, uponsatisfaction of the following conditions precedent, which must be satisfiedprior to the effectiveness of any extension of the Term Loan Maturity Date:

 

(a)                                  ExtensionRequest. The Borrower shall deliver written notice of such request (the “TermLoan Extension Request”) to the Agent not earlier than the date which is onehundred twenty (120) days and not later than the date which is sixty (60) daysprior to the Term Loan Maturity Date (as determined without regard to suchextension). Any such Term Loan Extension Request shall be irrevocable andbinding on the Borrower.

 

(b)                                 Paymentof Extension Fee. The Borrower shall pay to the Agent for the prorataaccounts of the Term Loan Lenders in accordance with their respective Term LoanCommitment Percentages an extension fee in an amount equal to ten (10) basispoints on the Term Loans Outstanding as of the Term Loan Maturity Date (asdetermined without regard to such extension), which fee shall, when paid, befully earned and non-refundable under any circumstances.

 

(c)                                  NoDefault. On the date the Term Loan Extension Request is given and on theTerm Loan Maturity Date (as determined without regard to such extension) thereshall exist no Default or Event of Default.

 

(d)                                 Representationsand Warranties. The representations and warranties made by the Borrower andthe Guarantors in the Loan Documents or otherwise made by or on behalf of theBorrower and the Guarantors in connection therewith or after the date thereofshall have been true and correct in all material respects when made and shallalso be true and correct in all material respects on the date the Term LoanExtension Request is given and on the Term Loan

 

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MaturityDate (as determined without regard to such extension), except to the extent ofchanges resulting from transactions permitted by the Loan Documents and exceptas previously disclosed in writing by the Borrower to Agent and approved by theAgent in writing (which disclosures shall be deemed to amend the Schedules andother disclosures delivered as contemplated in this Agreement) (it beingunderstood and agreed that any representation or warranty which by its terms ismade as of a specified date shall be required to be true and correct only as ofsuch specified date).

 

§3.                                REPAYMENTOF THE LOANS.

 

§3.1                          StatedMaturity. The Borrower promises to pay on the Revolving Credit MaturityDate and there shall become absolutely due and payable on the Revolving CreditMaturity Date all of the Revolving Credit Loans, Swing Loans and other Letterof Credit Liabilities outstanding on such date, together with any and allaccrued and unpaid interest thereon. The Borrower promises to pay on the TermLoan Maturity Date and there shall become absolutely due and payable on theTerm Loan Maturity Date all of the Term Loans outstanding on such date,together with any and all accrued and unpaid interest thereon.

 

§3.2                          MandatoryPrepayments. If at any time the sum of the aggregate outstanding principalamount of the Revolving Credit Loans, the Swing Loans and the Letter of CreditLiabilities exceeds the Total Revolving Credit Commitment, then theBorrower shall, within five (5) Business Days of such occurrence pay theamount of such excess to the Agent for the respective accounts of the RevolvingCredit Lenders, as applicable, for application to the Revolving Credit Loans asprovided in §3.4, together with any additional amounts payable pursuant to§4.8, except that the amount of any Swing Loans shall be paid solely to theSwing Loan Lender.

 

§3.3                          OptionalPrepayments.

 

(a)                                  TheBorrower shall have the right, at its election, to prepay the outstandingamount of the Revolving Credit Loans and Swing Loans, as a whole or in part, atany time without penalty or premium; provided, that if any prepayment ofthe outstanding amount of any Revolving Credit LIBOR Rate Loans pursuant tothis §3.3 is made on a date that is not the last day of the Interest Periodrelating thereto, such prepayment shall be accompanied by the payment of anyamounts due pursuant to §4.8.

 

(b)                                 TheBorrower shall have the right, at its election, to prepay the outstandingamount of the Term Loans, as a whole or in part, at any time without penalty orpremium except as otherwise provided herein. In connection with any prepaymentof the Term Loan permitted hereunder (or accepted with the approval of the TermLoan Lenders) during the Prepayment Period, the Borrower shall pay Agent forthe account of the Term Loan Lenders any sums that may be due under §4.8and a prepayment fee in an amount equal to one half of one percent (0.5%) ofthe amount of the Term Loans prepaid if prepayment occurs prior to theexpiration of the Prepayment Period. No prepayment fees shall be due on prepaymentsmade after the expiration of the Prepayment Period. Under any and allcircumstances where all or any portion of the Term Loans is paid prior to theexpiration of the Prepayment Period, whether such prepayment is voluntary orinvoluntary, even if such prepayment results from Agent’s or the

 

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Lenders’exercise of its rights upon the occurrence of an Event of Default andacceleration of the Revolving Credit Maturity Date or the Term Loan MaturityDate (irrespective of whether foreclosure proceedings have been commenced), theBorrower shall to the extent permitted by applicable law pay to the Lenders theprepayment fee calculated as provided above, which prepayment fee shall be inaddition to any other sums due hereunder or under any of the other LoanDocuments. No tender of a prepayment of the Term Loans with respect to which aprepayment fee is due shall be effective unless such prepayment is accompaniedby the prepayment fee.

 

(c)                                  TheBorrower shall give the Agent, no later than 10:00 a.m. (Cleveland time)at least three (3) days prior written notice of any prepayment pursuant tothis §3.3, in each case specifying the proposed date of prepayment of the Loansand the principal amount to be prepaid (provided that any such notice may berevoked or modified upon one (1) day’s prior notice to the Agent). Notwithstandingthe foregoing, no prior notice shall be required for the prepayment of anySwing Loan.

 

§3.4                          PartialPrepayments. Each partial prepayment of the Loans under §3.3 shall be in aminimum amount of $1,000,000.00 or an integral multiple of $100,000.00 inexcess thereof, shall be accompanied by the payment of accrued interest on theprincipal prepaid to the date of payment. Each partial payment under §3.2 and§3.3 shall be applied first to the principal of any Outstanding Swing Loans,then, in the absence of instruction by the Borrower, to the principal ofRevolving Credit Loans and then to the principal of Term Loans (and withrespect to each category of Loans, first to the principal of Base Rate Loans,and then to the principal of LIBOR Rate Loans).

 

§3.5                          Effectof Prepayments. Amounts of the Revolving Credit Loans prepaid under §3.2and §3.3 prior to the Revolving Credit Maturity Date may be reborrowed asprovided in §2. Any portion of the Term Loans that is prepaid may not bereborrowed.

 

§4.                                CERTAINGENERAL PROVISIONS.

 

§4.1                          ConversionOptions.

 

(a)                                  TheBorrower may elect from time to time to convert any of its outstandingRevolving Credit Loans or Term Loans to a Revolving Credit Loan or Term Loan ofanother Type and such Revolving Credit Loans or Term Loans shall thereafterbear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; providedthat (i) with respect to any such conversion of a LIBOR Rate Loan to aBase Rate Loan, the Borrower shall give the Agent at least one (1) BusinessDay’s prior written notice of such election, and such conversion shall only bemade on the last day of the Interest Period with respect to such LIBOR RateLoan; (ii) with respect to any such conversion of a Base Rate Loan to aLIBOR Rate Loan, the Borrower shall give the Agent at least three (3) LIBORBusiness Days’ prior written notice of such election and the Interest Periodrequested for such Loan, the principal amount of the Loan so converted shall bein a minimum aggregate amount of $1,000,000.00 or an integral multiple of$250,000.00 in excess thereof and, after giving effect to the making of suchLoan, there shall be no more than six (6) Revolving Credit LIBOR RateLoans and two (2) Term LIBOR Rate Loans outstanding at any one time; and (iii) noLoan may be converted into a LIBOR Rate Loan when any Default or

 

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Eventof Default has occurred and is continuing. All or any part of theoutstanding Revolving Credit Loans or Term Loans of any Type may beconverted as provided herein, provided that no partial conversion shallresult in a Revolving Credit Base Rate Loan or Term Base Rate Loan in a principalamount of less than $1,000,000.00 or a Revolving Credit LIBOR Rate Loan or aTerm LIBOR Rate Loan in a principal amount of less than $1,000,000.00 or anintegral multiple of $250,000.00. On the date on which such conversion is beingmade, each Lender shall take such action as is necessary to transfer itsCommitment Percentage of such Loans to its Domestic Lending Office or its LIBORLending Office, as the case may be. Each Conversion/Continuation Requestrelating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall beirrevocable by the Borrower.

 

(b)                                 AnyLIBOR Rate Loan may be continued as such Type upon the expiration of anInterest Period with respect thereto by compliance by the Borrower with theterms of §4.1; provided that no LIBOR Rate Loan may be continued assuch when any Default or Event of Default has occurred and is continuing, butshall be automatically converted to a Base Rate Loan on the last day of theInterest Period relating thereto ending during the continuance of any Defaultor Event of Default.

 

(c)                                  Inthe event that the Borrower does not notify the Agent of its election hereunderwith respect to any LIBOR Rate Loan, such Loan shall be automatically convertedat the end of the applicable Interest Period to a Base Rate Loan.

 

§4.2                          Fees.The Borrower agrees to pay to KeyBank and Agent for their own account certainfees for services rendered or to be rendered in connection with the Loans asprovided pursuant to a fee letter dated September 19, 2007 between theBorrower and KeyBank (the “Agreement Regarding Fees”). All such fees shall befully earned when paid and nonrefundable under any circumstances.

 

§4.3                          Fundsfor Payments.

 

(a)                                  Allpayments of principal, interest, facility fees, Letter of Credit fees, closingfees and any other amounts due hereunder or under any of the other LoanDocuments shall be made to the Agent, for the respective accounts of theLenders and the Agent, as the case may be, at the Agent’s Head Office, notlater than 2:00 p.m. (Cleveland time) on the day when due, in each case inlawful money of the United States in immediately available funds. The Agent ishereby authorized to charge the accounts of the Borrower with KeyBank set forthon Schedule 4.3, on the dates when the amount thereof shall become due andpayable, with the amounts of the principal of and interest on the Loans and allfees, charges, expenses and other amounts owing to the Agent and/or the Lenders(including the Swing Loan Lender) under the Loan Documents. Subject to theforegoing, all payments made to Agent on behalf of the Lenders, and actuallyreceived by Agent, shall be deemed received by the Lenders on the date actuallyreceived by Agent.

 

(b)                                 Allpayments by the Borrower hereunder and under any of the other Loan Documentsshall be made without setoff or counterclaim and free and clear of and withoutdeduction for any taxes (other than income or franchise taxes imposed on anyLender), levies, imposts, duties, charges, fees, deductions, withholdings,compulsory loans, restrictions or

 

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conditionsof any nature now or hereafter imposed or levied by any jurisdiction or anypolitical subdivision thereof or taxing or other authority therein unless theBorrower is compelled by law to make such deduction or withholding. If any suchobligation is imposed upon the Borrower with respect to any amount payable byit hereunder or under any of the other Loan Documents, the Borrower will pay tothe Agent, for the account of the Lenders (including the Swing Loan Lender) or(as the case may be) the Agent, on the date on which such amount is dueand payable hereunder or under such other Loan Document, such additional amountin Dollars as shall be necessary to enable the Lenders or the Agent to receivethe same net amount which the Lenders or the Agent would have received on suchdue date had no such obligation been imposed upon the Borrower. The Borrowerwill deliver promptly to the Agent certificates or other valid vouchers for alltaxes or other charges deducted from or paid with respect to payments made bythe Borrower hereunder or under any other Loan Document.

 

(c)                                  EachLender organized under the laws of a jurisdiction outside the United States(but only so long as such Lender remains lawfully able to do so), shall providethe Borrower with such duly executed form(s) or statement(s) whichmay, from time to time, be prescribed by law and, which, pursuant to applicableprovisions of  (i) an income taxtreaty between the United States and the country of residence of such Lender, (ii) theCode, or (iii) any applicable rules or regulations in effect under (i) or(ii) above, indicates the withholding status of such Lender; providedthat nothing herein (including without limitation the failure or inability toprovide such form or statement) shall relieve the Borrower of itsobligations under §4.3(b). In the event that the Borrower shall have deliveredthe certificates or vouchers described above for any payments made by theBorrower and such Lender receives a refund of any taxes paid by the Borrowerpursuant to §4.3(b), such Lender will pay to the Borrower the amount of suchrefund promptly upon receipt thereof; provided that if at any timethereafter such Lender is required to return such refund, the Borrower shallpromptly repay to such Lender the amount of such refund.

 

(d)                                 Theobligations of the Borrower to the Lenders under this Agreement with respect toLetters of Credit (and of the Revolving Credit Lenders to make payments to theIssuing Lender with respect to Letters of Credit and to the Swing Loan Lenderwith respect to Swing Loans) shall be absolute, unconditional and irrevocable,and shall be paid and performed strictly in accordance with the terms of thisAgreement, under all circumstances whatsoever, including, without limitation,the following circumstances:  (i) anylack of validity or enforceability of this Agreement, any Letter of Credit orany of the other Loan Documents; (ii) any improper use which may bemade of any Letter of Credit or any improper acts or omissions of anybeneficiary or transferee of any Letter of Credit in connection therewith; (iii) theexistence of any claim, set-off, defense or any right which the Borrower or anyof its Subsidiaries or Affiliates may have at any time against anybeneficiary or any transferee of any Letter of Credit (or persons or entitiesfor whom any such beneficiary or any such transferee may be acting) or theLenders (other than the defense of payment to the Lenders in accordance withthe terms of this Agreement) or any other person, whether in connection withany Letter of Credit, this Agreement, any other Loan Document, or any unrelatedtransaction; (iv) any draft, demand, certificate, statement or any otherdocuments presented under any Letter of Credit proving to be insufficient,forged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect whatsoever; (v) any breach of anyagreement between the Borrower or any of its Subsidiaries or Affiliates and anybeneficiary or transferee of any Letter of Credit; (vi) any irregularityin the transaction with respect to which any Letter of Credit

 

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isissued, including any fraud by the beneficiary or any transferee of such Letterof Credit; (vii) payment by the Issuing Lender under any Letter of Creditagainst presentation of a sight draft, demand, certificate or other documentwhich does not comply with the terms of such Letter of Credit, providedthat such payment shall not have constituted gross negligence or willfulmisconduct on the part of the Issuing Lender as determined by a court ofcompetent jurisdiction after the exhaustion of all applicable appeal periods; (viii) anynon-application or misapplication by the beneficiary of a Letter of Credit ofthe proceeds of such Letter of Credit; (ix) the legality, validity, form,regularity or enforceability of the Letter of Credit; (x) the failure ofany payment by Issuing Lender to conform to the terms of a Letter ofCredit (if, in Issuing Lender’s good faith judgment, such payment is determinedto be appropriate); (xi) the surrender or impairment of any security forthe performance or observance of any of the terms of any of the Loan Documents;(xii) the occurrence of any Default or Event of Default; and(xiii) any other circumstance or happening whatsoever, whether or notsimilar to any of the foregoing, provided that such other circumstancesor happenings shall not have been the result of gross negligence or willfulmisconduct on the part of the Issuing Lender or the Swing Loan Lender, asapplicable as determined by a court of competent jurisdiction after theexhaustion of all applicable appeal periods.

 

§4.4                          Computations.All computations of interest on the Loans and of other fees to the extentapplicable shall be based on a 360-day year (or a 365 day year in the case ofBase Rate Loans) and paid for the actual number of days elapsed. Except asotherwise provided in the definition of the term “Interest Period” with respectto LIBOR Rate Loans, whenever a payment hereunder or under any of the otherLoan Documents becomes due on a day that is not a Business Day, the due datefor such payment shall be extended to the next succeeding Business Day, andinterest shall accrue during such extension. The Outstanding Loans and Letterof Credit Liabilities as reflected on the records of the Agent from time totime shall be considered prima facie evidence of such amount absent manifesterror.

 

§4.5                          Suspensionof LIBOR Rate Loans. In the event that, prior to the commencement of anyInterest Period relating to any LIBOR Rate Loan, the Agent shall determine thatadequate and reasonable methods do not exist for ascertaining LIBOR for suchInterest Period, or the Agent shall reasonably determine that LIBOR will notaccurately and fairly reflect the cost of the Lenders making or maintainingLIBOR Rate Loans for such Interest Period, the Agent shall forthwith givenotice of such determination (which shall be conclusive and binding on theBorrower and the Lenders absent manifest error) to the Borrower and the Lenders.In such event (a) any Loan Request with respect to a LIBOR Rate Loan shallbe automatically withdrawn and shall be deemed a request for a Base Rate Loanand (b) each LIBOR Rate Loan will automatically, on the last day of thethen current Interest Period applicable thereto, become a Base Rate Loan, andthe obligations of the Lenders to make LIBOR Rate Loans shall be suspendeduntil the Agent determines that the circumstances giving rise to suchsuspension no longer exist, whereupon the Agent shall so notify the Borrowerand the Lenders.

 

§4.6                          Illegality.Notwithstanding any other provisions herein, if any present or future law,regulation, treaty or directive or the interpretation or application thereofshall make it unlawful, or any central bank or other governmental authorityhaving jurisdiction over a Lender or its LIBOR Lending Office shall assert thatit is unlawful, for any Lender to make or maintain LIBOR Rate Loans, suchLender shall forthwith give notice of such circumstances to the Agent

 

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andthe Borrower and thereupon (a) the commitment of the Lenders to make LIBORRate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans thenoutstanding shall be converted automatically to Base Rate Loans on the last dayof each Interest Period applicable to such LIBOR Rate Loans or within suchearlier period as may be required by law. Notwithstanding the foregoing,before giving such notice, the applicable Lender shall designate a differentlending office if such designation will void the need for giving such noticeand will not, in the judgment of such Lender, be otherwise materiallydisadvantageous to such Lender or increase any costs payable by the Borrowerhereunder.

 

§4.7                          AdditionalInterest. If any LIBOR Rate Loan or any portion thereof is repaid or isconverted to a Base Rate Loan for any reason on a date which is prior to thelast day of the Interest Period applicable to such LIBOR Rate Loan, or ifrepayment of the Loans has been accelerated as provided in §12.1, or if theBorrower fails to draw down on the first day of the applicable Interest Periodany amount as to which Borrower has elected a LIBOR Rate Loan, the Borrower willpay to the Agent upon demand for the account of the applicable Lenders inaccordance with their respective Commitment Percentages (or to the Swing LoanLender with respect to a Swing Loan), in addition to any amounts of interestotherwise payable hereunder, the Breakage Costs. The Borrower understands,agrees and acknowledges the following:  (i) noLender has any obligation to purchase, sell and/or match funds in connectionwith the use of LIBOR as a basis for calculating the rate of interest on aLIBOR Rate Loan; (ii) LIBOR is used merely as a reference in determiningsuch rate; and (iii) the Borrower has accepted LIBOR as a reasonable andfair basis for calculating such rate and any Breakage Costs. The Borrowerfurther agrees to pay the Breakage Costs, if any, whether or not a Lenderelects to purchase, sell and/or match funds.

 

§4.8                          AdditionalCosts, Etc. Notwithstanding anything herein to the contrary, if any presentor future applicable law, which expression, as used herein, includes statutes, rules andregulations thereunder and interpretations thereof by any competent court or byany governmental or other regulatory body or official charged with theadministration or the interpretation thereof and requests, directives,instructions and notices at any time (or from time to time) hereafter made uponor otherwise issued to any Lender or the Agent by any central bank or otherfiscal, monetary or other authority (whether or not having the force of law),shall:

 

(a)                                  subjectany Lender or the Agent to any tax, levy, impost, duty, charge, fee, deductionor withholding of any nature with respect to this Agreement, the other LoanDocuments, such Lender’s Commitment, a Letter of Credit or the Loans (otherthan taxes based upon or measured by the gross receipts, income or profits ofsuch Lender or the Agent or its franchise tax), or

 

(b)                                 materiallychange the basis of taxation (except for changes in taxes on gross receipts,income or profits or its franchise tax) of payments to any Lender of theprincipal of or the interest on any Loans or any other amounts payable to anyLender under this Agreement or the other Loan Documents, or

 

(c)                                  imposeor increase or render applicable any special deposit, reserve, assessment,liquidity, capital adequacy or other similar requirements (whether or nothaving the force of law and which are not already reflected in any amountspayable by the Borrower

 

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hereunder)against assets held by, or deposits in or for the account of, or loans by, orcommitments of an office of any Lender, or

 

(d)                                 imposeon any Lender or the Agent any other conditions or requirements with respect tothis Agreement, the other Loan Documents, the Loans, such Lender’s Commitment,a Letter of Credit or any class of loans or commitments of which any ofthe Loans or such Lender’s Commitment forms a part; and the result of any ofthe foregoing is:

 

(i)                                     toincrease the cost to any Lender of making, funding, issuing, renewing,extending or maintaining any of the Loans, the Letters of Credit or such Lender’sCommitment, or

 

(ii)                                  toreduce the amount of principal, interest or other amount payable to any Lenderor the Agent hereunder on account of such Lender’s Commitment or any of theLoans or the Letters of Credit, or

 

(iii)                               torequire any Lender or the Agent to make any payment or to forego any interestor other sum payable hereunder, the amount of which payment or foregoneinterest or other sum is calculated by reference to the gross amount of any sumreceivable or deemed received by such Lender or the Agent from the Borrowerhereunder, then, and in each such case, the Borrower will, within fifteen (15)days of demand made by such Lender or (as the case may be) the Agent atany time and from time to time and as often as the occasion therefor may arise,pay to such Lender or the Agent such additional amounts as such Lender or theAgent shall determine in good faith to be sufficient to compensate such Lenderor the Agent for such additional cost, reduction, payment or foregone interestor other sum. Each Lender and the Agent in determining such amounts may useany reasonable averaging and attribution methods generally applied by suchLender or the Agent.

 

§4.9                          CapitalAdequacy. If after the date hereof any Lender determines that (a) theadoption of or change in any law, rule, regulation or guideline regardingcapital requirements for banks or bank holding companies or any change in theinterpretation or application thereof by any governmental authority chargedwith the administration thereof, or (b) compliance by such Lender or itsparent bank holding company with any guideline, request or directive of anysuch entity regarding capital adequacy (whether or not having the force oflaw), has the effect of reducing the return on such Lender’s or such holdingcompany’s capital as a consequence of such Lender’s commitment to make Loans orparticipate in Letters of Credit hereunder to a level below that which suchLender or holding company could have achieved but for such adoption, change orcompliance (taking into consideration such Lender’s or such holding company’sthen existing policies with respect to capital adequacy and assuming the fullutilization of such entity’s capital) by any amount deemed by such Lender to bematerial, then such Lender may notify the Borrower thereof. The Borroweragrees to pay to such Lender the amount of such reduction in the return oncapital as and when such reduction is determined, upon presentation by suchLender of a statement of the amount setting forth the Lender’s calculationthereof. In determining such amount, such Lender may use any reasonableaveraging and attribution methods generally applied by such Lender.

 

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§4.10                    BreakageCosts. The Borrower shall pay all Breakage Costs required to be paid by itpursuant to this Agreement and incurred from time to time by any Lender upondemand within fifteen (15) days from receipt of written notice from Agent, orsuch earlier date as may be required by this Agreement.

 

§4.11                    DefaultInterest; Late Charge. Following the occurrence and during the continuanceof any Event of Default, and regardless of whether or not the Agent or theLenders shall have accelerated the maturity of the Loans, all Loans shall bearinterest payable on demand at a rate per annum equal to three percent (3.0%)above the Base Rate (the “Default Rate”), until such amount shall be paid infull (after as well as before judgment), and the fee payable with respect toLetters of Credit shall be increased to a rate equal to three percent (3.0%)above the Letter of Credit fee that would otherwise be applicable to such time,or if any of such amounts shall exceed the maximum rate permitted by law, thenat the maximum rate permitted by law. In addition, the Borrower shall pay alate charge equal to four percent (4.0%) of any amount of interest and/orprincipal payable on the Loans or any other amounts payable hereunder or underthe other Loan Documents, which is not paid by the Borrower within five (5) BusinessDays of the date when due (or, in the case of amounts due at the RevolvingCredit Maturity Date or the Term Loan Maturity Date, as applicable, withinfifteen (15) Business Days of such date).

 

§4.12                    Certificate.A certificate setting forth any amounts payable pursuant to §4.7, §4.8, §4.9,§4.10 or §4.11 and a reasonably detailed explanation of such amounts which aredue, submitted by any Lender or the Agent to the Borrower, shall be *prima facie* evidence of the amount owed. Any suchCertificate setting forth any amounts payable pursuant to §4.8 or §4.9 must bedelivered to the Agent and the Borrower within one hundred eighty (180) daysafter the affected Bank becomes aware of the basis for any such claim; providedthat if such Certificate is not delivered to the Agent and the Borrower withinone hundred eighty (180) days after the affected Bank becomes aware of thebasis for any such claim, such Bank shall only be entitled to receive paymentpursuant to §4.8 or §4.9, as applicable, with respect to amounts which aroseduring the one hundred eighty (180) day period prior to the date such Bankdelivered such Certificate to the Agent and the Borrower.

 

§4.13                    Limitationon Interest. Notwithstanding anything in this Agreement or the other LoanDocuments to the contrary, all agreements between or among the Borrower, theLenders and the Agent, whether now existing or hereafter arising and whetherwritten or oral, are hereby limited so that in no contingency, whether byreason of acceleration of the maturity of any of the Obligations or otherwise,shall the interest contracted for, charged or received by the Lenders exceedthe maximum amount permissible under applicable law. If, from any circumstancewhatsoever, interest would otherwise be payable to the Lenders in excess of themaximum lawful amount, the interest payable to the Lenders shall be reduced tothe maximum amount permitted under applicable law; and if from any circumstancethe Lenders shall ever receive anything of value deemed interest by applicablelaw in excess of the maximum lawful amount, an amount equal to any excessiveinterest shall be applied to the reduction of the principal balance of theObligations and to the payment of interest or, if such excessive interestexceeds the unpaid balance of principal of the Obligations, such excess shallbe refunded to the Borrower. All interest paid or agreed to be paid to theLenders shall, to the extent permitted by applicable law, be amortized,prorated, allocated and spread throughout the full period until payment in fullof the principal of the Obligations (including the period of any renewal orextension thereof) so that

 

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theinterest thereon for such full period shall not exceed the maximum amountpermitted by applicable law. This Section shall control all agreementsbetween or among the Borrower, the Lenders and the Agent.

 

§4.14                    CertainProvisions Relating to Increased Costs and Non-Funding Lenders. If a Lendergives notice of the existence of the circumstances set forth in §4.8 or anyLender requests compensation for any losses or costs to be reimbursed pursuantto any one or more of the provisions of §4.3(b) (as a result of theimposition of U.S. withholding taxes on amounts paid to such Lender under thisAgreement), §4.8 or §4.9, then, upon request of the Borrower, such Lender, asapplicable, shall use reasonable efforts in a manner consistent with suchinstitution’s practice in connection with loans like the Loan of such Lender toeliminate, mitigate or reduce amounts that would otherwise be payable by theBorrower under the foregoing provisions, provided that such action wouldnot be otherwise prejudicial to such Lender, including, without limitation, bydesignating another of such Lender’s offices, branches or affiliates; theBorrower agreeing to pay all reasonably incurred costs and expenses incurred bysuch Lender in connection with any such action. Notwithstanding anything to thecontrary contained herein, if no Default or Event of Default shall haveoccurred and be continuing, and if any Lender (a) has given notice of theexistence of the circumstances set forth in §4.8 or has requested payment orcompensation for any losses or costs to be reimbursed pursuant to any one ormore of the provisions of §4.3(b) (as a result of the imposition of U.S.withholding taxes on amounts paid to such Lender under this Agreement), §4.8 or§4.9 and following the request of the Borrower has been unable to take thesteps described above to mitigate such amounts (each, an “Affected Lender”) or (b) hasfailed to make available to Agent its pro rata share of any Loan orparticipation in a Letter of Credit or Swing Loan and such failure has not beencured (a “Non-Funding Lender”), then, within thirty (30) days after such noticeor request for payment or compensation or failure to fund, as applicable, theBorrower shall have the one-time right as to such Affected Lender orNon-Funding Lender, as applicable, to be exercised by delivery of writtennotice delivered to the Agent and the Affected Lender or Non-Funding Lender, asapplicable, within thirty (30) days of receipt of such notice or failure tofund, as applicable, to elect to cause the Affected Lender or Non-FundingLender, as applicable, to transfer its Commitment. The Agent shall promptlynotify the remaining Lenders that each of such Lenders shall have the right,but not the obligation, to acquire a portion of the Commitment, pro rata basedupon their relevant Commitment Percentages, of the Affected Lender or Non-FundingLender, as applicable (or if any of such Lenders does not elect to purchase itspro rata share, then to such remaining Lenders in such proportion as approvedby the Agent). In the event that the Lenders do not elect to acquire all of theAffected Lender’s or Non-Funding Lender’s Commitment, then the Agent shallendeavor to obtain a new Lender to acquire such remaining Commitment. Upon anysuch purchase of the Commitment of the Affected Lender or Non-Funding Lender,as applicable, the Affected Lender’s or Non-Funding Lender’s interest in theObligations and its rights hereunder and under the Loan Documents shallterminate at the date of purchase, and the Affected Lender or Non-FundingLender, as applicable, shall promptly execute all documents reasonablyrequested to surrender and transfer such interest. The purchase price for theAffected Lender’s or Non-Funding Lender’s Commitment shall equal any and allamounts outstanding and owed by the Borrower to the Affected Lender orNon-Funding Lender, as applicable, including principal, prepayment premium orfee, and all accrued and unpaid interest or fees.

 

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§5.                                COLLATERALSECURITY; GUARANTORS.

 

§5.1                          Collateral.The Obligations shall be secured by a perfected first priority lien andsecurity interest to be held by the Agent for the benefit of the Lenders on theCollateral, pursuant to the terms of the Security Documents.

 

§5.2                          AdditionalGuarantors. In the event any Subsidiary of the Borrower shall satisfy thedefinition of “Material Subsidiary” after the date hereof (other than anySubsidiary which is prohibited from guarantying indebtedness by the expressterms of its organizational documents or any mortgage loan document to whichsuch Subsidiary is party), the Borrower shall cause each such Subsidiary topromptly, but in any event within fifteen (15) Business Days (as such date may beextended by Agent in its discretion), execute and deliver to Agent a JoinderAgreement, and such Subsidiary shall become a Guarantor hereunder andthereunder. Each such Subsidiary shall be specifically authorized, inaccordance with its respective organizational documents, to be a Guarantorhereunder and thereunder and to execute the Contribution Agreement and suchSecurity Documents as Agent may require. The Borrower shall further causeall representations, covenants and agreements in the Loan Documents withrespect to Guarantors to be true and correct with respect to each suchSubsidiary. In connection with the delivery of such Joinder Agreement, theBorrower shall deliver to the Agent such organizational agreements,resolutions, consents, opinions and other documents and instruments as theAgent may reasonably require.

 

§5.3                          AdditionalCollateral. Promptly, but in any event within fifteen (15) Business Days(as such date may be extended by Agent in its discretion), following theoccurrence of:

 

(a)                                  theacquisition of an asset,

 

(b)                                 anyacquisition or creation of a Subsidiary by REIT or the Borrower (provided thatsuch fifteen (15) Business Day  (as suchdate may be extended by Agent in its discretion) period shall not commenceunless and until such Subsidiary owns or acquires an asset), or

 

(c)                                  therefinancing, prepayment or repayment of any indebtedness of any Subsidiary ofREIT or the Borrower, whether or not secured by any Real Estate, which permits,or removes or terminates (without replacing) any prohibition on, the grantingof any pledge of Equity Interests or Distribution Interests (or any portionthereof) in any such Subsidiary,

 

theBorrower shall, and shall cause each of its Subsidiaries to, execute anddeliver such documents, instruments, agreements and certificates as the Agent may reasonablyrequest, including any amendments to or additional Security Documents, in orderto grant to the Agent, for the benefit of the Lenders, the best possible firstpriority lien and security interest in as much of such Equity Interests and/orDistribution Interests (or such portion thereof) as may be granted by theBorrower and any such Subsidiary (and the Borrower covenants and agrees to, ona commercially reasonable best efforts basis, enter into loan documentation inconnection with any such refinancing that permits the best possible firstpriority lien and security interest in as much of such Equity Interests and/orDistribution Interests (or such portion thereof) in favor of the Agent and theLenders). In connection with the delivery of such documents, instruments,

 

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agreements and certificates, the Borrowershall also deliver to the Agent such loan documents, organizational agreements,UCC search results, resolutions, consents, opinions and other documents andinstruments as the Agent may reasonably require.

 

§5.4                          Releaseof Collateral; Release of Guarantor.

 

(a)                                  Uponthe refinancing or repayment of the Obligations in full and termination of theobligation to provide additional Loans or Letters of Credit to the Borrower,then the Agent shall release the Collateral from the lien and security interestof the Security Documents and to release the Borrower.

 

(b)                                 Upon(i) the sale, transfer or other disposition of all or substantially all ofthe assets of (or interests in) a Subsidiary of the Borrower in accordance withthe terms of §8.8 or (ii) the incurrence or refinancing of anyIndebtedness of a Subsidiary of the Borrower, the Agent shall, if requested inwriting by the Borrower and provided no Default or Event of Default shall thenbe in existence or would occur as a result thereof, release the Collateralapplicable to such Subsidiary from the lien and security interest of theSecurity Documents so long as the Agent shall have received (A) documentationreasonably requested by Agent evidencing such disposition or refinancing, (B) inconnection with any such disposition, evidence that the net cash proceeds fromsuch disposition are being distributed to the Borrower and (C) aCompliance Certificate demonstrating that the Borrower is in compliance withthe covenants set forth in §9 immediately before and after giving effect tosuch release. The Agent shall, within ten (10) Business Days of receipt ofsuch documentation and Compliance Certificate, execute and deliver suchdocuments, instruments and other agreements as may be reasonably requiredto evidence and effect such release.

 

(c)                                  TheBorrower may request in writing that the Agent release, and upon receiptof such request the Agent shall release (subject to the terms hereof), aGuarantor from the Guaranty and the other Loan Documents to which suchGuarantor is a party so long as:  (i) noDefault or Event of Default shall then be in existence or would occur as aresult of such release; (ii) the Agent shall have received such writtenrequest at least ten (10) Business Days prior to the requested date ofrelease; (iii) the Borrower shall deliver to Agent evidence reasonablysatisfactory to Agent either that (A) such Guarantor and/or the Borrowerhas disposed of or simultaneously with such release will dispose of its entireinterest in such Guarantor or that all or substantially all of the assets ofsuch Guarantor will be disposed of in compliance with the terms of thisAgreement, and if such transaction involves the disposition by such Guarantorof all or substantially all of its assets, the net cash proceeds from suchdisposition are being distributed to the Borrower in connection with suchdisposition, or (B) such Guarantor will be the borrower with respect toSecured Debt permitted under this Agreement, which Indebtedness will be securedby a Lien on the assets of such Guarantor. Delivery by the Borrower to theAgent of any such request for a release shall constitute a representation bythe Borrower that the matters set forth in the preceding sentence (both as ofthe date of the giving of such request and as of the date of the effectivenessof such request) are true and correct with respect to such request. Notwithstandingthe foregoing, the provisions of this §5.4(c) shall not apply to REIT,which may not be released as a Guarantor.

 

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§6.                                REPRESENTATIONSAND WARRANTIES.

 

The Borrower represents and warrants to the Agent and the Lenders asfollows.

 

§6.1                          CorporateAuthority, Etc.

 

(a)                                  Incorporation;Good Standing. REIT is a Maryland corporation duly organized pursuant toarticles of incorporation filed with the Maryland Secretary of State, and isvalidly existing and in good standing under the laws of Maryland. REIT conductsits business in a manner which enables it to qualify as a real estate investmenttrust under, and to be entitled to the benefits of, §856 of the Code, and haselected to be treated as and is entitled to the benefits of a real estateinvestment trust thereunder. The Borrower is a Texas limited partnership dulyorganized pursuant to its certificate of limited partnership filed with theTexas Secretary of State, and is validly existing and in good standing underthe laws of Texas. The Borrower (i) has all requisite power to own itsproperty and conduct its business as now conducted and as presentlycontemplated, and (ii) is in good standing and is duly authorized to dobusiness in the jurisdiction of its organization and in each other jurisdictionwhere a failure to be so qualified in such other jurisdiction could have aMaterial Adverse Effect.

 

(b)                                 Subsidiaries.Each of the Guarantors and each of the Subsidiaries of the Borrower and theGuarantors (i) is a corporation, limited partnership, general partnership,limited liability company or trust duly organized under the laws of its Stateof organization and is validly existing and in good standing under the lawsthereof, (ii) has all requisite power to own its property and conduct itsbusiness as now conducted and as presently contemplated and (iii) is ingood standing and is duly authorized to do business in each jurisdiction whereit is organized and in each other jurisdiction where a failure to be soqualified could have a Material Adverse Effect.

 

(c)                                  Authorization.The execution, delivery and performance of this Agreement and the other LoanDocuments to which any of the Borrower or any Guarantor is a party and thetransactions contemplated hereby and thereby (i) are within the authorityof such Person, (ii) have been duly authorized by all necessaryproceedings on the part of such Person, (iii) do not and will notconflict with or result in any breach or contravention of any provision of law,statute, rule or regulation to which such Person is subject or anyjudgment, order, writ, injunction, license or permit applicable to such Person,(iv) do not and will not conflict with or constitute a default (whetherwith the passage of time or the giving of notice, or both) under any provisionof the partnership agreement, articles of incorporation or other charterdocuments or bylaws of, or any agreement or other instrument binding upon, suchPerson or any of its properties, (v) do not and will not result in orrequire the imposition of any lien or other encumbrance on any of theproperties, assets or rights of such Person other than the liens andencumbrances in favor of Agent contemplated by this Agreement and the otherLoan Documents, and (vi) do not, as of the date of execution and deliverythereof, require the approval or consent of any Person other than those alreadyobtained and delivered to Agent.

 

(d)                                 Enforceability.The execution and delivery of this Agreement and the other Loan Documents towhich any of the Borrower or any Guarantor is a party are valid and legallybinding obligations of such Person enforceable in accordance with therespective terms and provisions hereof and thereof, except as enforceability islimited by bankruptcy, insolvency,

 

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reorganization,moratorium or other laws relating to or affecting generally the enforcement ofcreditors’  rights and general principlesof equity.

 

§6.2                          GovernmentalApprovals. The execution, delivery and performance of this Agreement andthe other Loan Documents to which the Borrower or any Guarantor is a party andthe transactions contemplated hereby and thereby do not require the approval orconsent of, or filing or registration with, or the giving of any notice to, anycourt, department, board, governmental agency or authority other than thosealready obtained, the filing of the Security Documents in the appropriaterecords office with respect thereto, and filings after the date hereof ofdisclosures with the SEC.

 

§6.3                          Titleto Properties. Except as indicated on Schedule 6.3 hereto orother adjustments that are not material in amount, REIT, the Borrower and theirrespective Subsidiaries own or lease all of the assets reflected in theconsolidated balance sheet of REIT as of the Balance Sheet Date or acquired orleased since that date (except property and assets sold or otherwise disposedof in the ordinary course since that date) subject to no rights of others,including any mortgages, leases pursuant to which REIT, the Borrower or any oftheir respective Subsidiaries or any of their respective Affiliates is thelessee, conditional sales agreements, title retention agreements, liens orother encumbrances except Permitted Liens.

 

§6.4                          FinancialStatements. The Borrower has furnished to Agent:  (a) the consolidated balance sheet ofREIT and its Subsidiaries as of the Balance Sheet Date and the relatedconsolidated statement of income and cash flow for the calendar year then endedcertified by the chief financial or accounting officer of REIT, (b) as ofthe Closing Date, an unaudited statement of Consolidated Net Operating Incomefor the period ending September 30, 2007 reasonably satisfactory in form tothe Agent and certified by the chief financial or accounting officer of REIT asfairly presenting the Consolidated Net Operating Income for such periods, and (c) certainother financial information relating to the Borrower, the Guarantors and theCollateral. Such balance sheet and statements have been prepared in accordancewith generally accepted accounting principles and fairly present theconsolidated financial condition of REIT and its Subsidiaries as of such datesand the consolidated results of the operations of REIT and its Subsidiaries****for such periods. There are no liabilities, contingent orotherwise, of REIT or any of its Subsidiaries involving material amounts notdisclosed in said financial statements and the related notes thereto.

 

§6.5                          NoMaterial Changes. Since the Balance Sheet Date or the date of the mostrecent financial statements delivered pursuant to §7.4, as applicable, therehas occurred no materially adverse change in the financial condition, prospectsor business of REIT, the Borrower, and their respective Subsidiaries taken as awhole as shown on or reflected in the consolidated balance sheet of REIT as ofthe Balance Sheet Date, or its consolidated statement of income or cash flowsfor the calendar year then ended, other than changes in the ordinary course ofbusiness that have not and could not reasonably be expected to have a MaterialAdverse Effect. As of the date hereof, except as set forth on Schedule 6.5hereto, there has occurred no materially adverse change in the financialcondition, prospects, operations or business activities of REIT, the Borrower,or their respective Subsidiaries from the condition shown on the statements ofincome delivered to the Agent pursuant to §6.4 other than changes in theordinary course of business that have not had any materially adverse effecteither individually or in the aggregate on the business,

 

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prospects,operation or financial condition of REIT, the Borrower, and their respectiveSubsidiaries, considered as a whole.

 

§6.6                          Franchises,Patents, Copyrights, Etc. The Borrower, the Guarantors and their respectiveSubsidiaries possess all franchises, patents, copyrights, trademarks, tradenames, service marks, licenses and permits, and rights in respect of theforegoing, adequate for the conduct of their business substantially as nowconducted without known conflict with any rights of others, except where suchfailure individually or in the aggregate has not had and could not reasonablybe expected to have a Material Adverse Effect.

 

§6.7                          Litigation.Except as stated on Schedule 6.7, there are no actions, suits,proceedings or investigations of any kind pending or to the knowledge of theBorrower threatened against the Borrower, any Guarantor, any of theirrespective Subsidiaries before any court, tribunal, arbitrator, mediator oradministrative agency or board which question the validity of this Agreement orany of the other Loan Documents, any action taken or to be taken pursuanthereto or thereto, the Collateral or any lien, security title or securityinterest created or intended to be created pursuant hereto or thereto, or whichif adversely determined could reasonably be expected to have a Material AdverseEffect. Except as set forth on Schedule 6.7, there are nojudgments, final orders or awards outstanding against or affecting theBorrower, any Guarantor, any of their respective Subsidiaries or anyCollateral, individually or in the aggregate, in excess of $1,000,000.00.

 

§6.8                          NoMaterial Adverse Contracts, Etc. None of the Borrower, any Guarantor or anyof their respective Subsidiaries is subject to any charter, corporate or otherlegal restriction, or any judgment, decree, order, rule or regulation thathas or is expected in the future to have a Material Adverse Effect. None of theBorrower, any Guarantor or any of their respective Subsidiaries is a party toany contract or agreement that has or could reasonably be expected to have aMaterial Adverse Effect.

 

§6.9                          Compliancewith Other Instruments, Laws, Etc. None of the Borrower, any Guarantor orany of their respective Subsidiaries is in violation of any provision of itscharter or other organizational documents, bylaws, or any agreement orinstrument to which it is subject or by which it or any of its properties isbound or any decree, order, judgment, statute, license, rule orregulation, in any of the foregoing cases in a manner that has had or couldreasonably be expected to have a Material Adverse Effect.

 

§6.10                    TaxStatus. Each of the Borrower, the Guarantors and their respectiveSubsidiaries (a) has made or filed all federal and state income and allother tax returns, reports and declarations required by any jurisdiction towhich it is subject or has obtained an extension for filing, (b) has paidprior to delinquency all taxes and other governmental assessments and chargesshown or determined to be due on such returns, reports and declarations, exceptthose being contested in good faith and by appropriate proceedings and (c) hasset aside on its books provisions reasonably adequate for the payment of alltaxes for periods subsequent to the periods to which such returns, reports ordeclarations apply. Except as set forth on Schedule 6.10, there areno unpaid taxes in any material amount claimed to be due by the taxingauthority of any jurisdiction, and the officers or partners of such Person knowof no basis for any such claim. There are no audits pending or to the knowledgeof the Borrower threatened with respect to any

 

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taxreturns filed by the Borrower, any Guarantor or their respective Subsidiaries. Thetaxpayer identification number for REIT is 68-0509956 and for the Borrower is14-183660.

 

§6.11                    NoEvent of Default. No Default or Event of Default has occurred and iscontinuing.

 

§6.12                    InvestmentCompany Act. None of the Borrower, the Guarantors or any of theirrespective Subsidiaries is an “investment company”, or an “affiliated company”or a “principal underwriter” of an “investment company”, as such terms aredefined in the Investment Company Act of 1940.

 

§6.13                    Setoff,Etc. The Collateral and the rights of the Agent and the Lenders withrespect to the Collateral are not subject to any setoff, claims, withholdingsor other defenses by the Borrower or any of their Subsidiaries or Affiliatesor, to the best knowledge of the Borrower, any other Person other thanPermitted Liens described in §8.2(i)(A), (v) and (vi).

 

§6.14                    CertainTransactions. Except as disclosed on Schedule 6.14 hereto, noneof the partners, officers, trustees, managers, members, directors, or employeesof the Borrower, any Guarantor or any of their respective Subsidiaries is, norshall any such Person become, a party to any transaction with the Borrower, anyGuarantor or any of their respective Subsidiaries or Affiliates (other than forservices as partners, managers, members, employees, officers and directors),including any agreement or other arrangement providing for the furnishing ofservices to or by, providing for rental of real or personal property to orfrom, or otherwise requiring payments to or from any partner, officer, trustee,director or such employee or, to the knowledge of the Borrower, anycorporation, partnership, trust or other entity in which any partner, officer,trustee, director, or any such employee has a substantial interest or is anofficer, director, trustee or partner, which are on terms less favorable to theBorrower, a Guarantor or any of their respective Subsidiaries than those thatwould be obtained in a comparable arms-length transaction.

 

§6.15                    EmployeeBenefit Plans. The Borrower, each Guarantor and each ERISA Affiliate hasfulfilled its obligation, if any, under the minimum funding standards of ERISAand the Code with respect to each Employee Benefit Plan, Multiemployer Plan orGuaranteed Pension Plan and is in compliance in all material respects with thepresently applicable provisions of ERISA and the Code with respect to eachEmployee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan. Neitherthe Borrower, any Guarantor nor any ERISA Affiliate has (a) sought awaiver of the minimum funding standard under §412 of the Code in respect of anyEmployee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, (b) failedto make any contribution or payment to any Employee Benefit Plan, MultiemployerPlan or Guaranteed Pension Plan, or made any amendment to any Employee BenefitPlan, Multiemployer Plan or Guaranteed Pension Plan, which has resulted orcould result in the imposition of a Lien or the posting of a bond or othersecurity under ERISA or the Code, or (c) incurred any liability underTitle IV of ERISA other than a liability to the PBGC for premiums under §4007of ERISA. None of the assets of REIT, the Borrower or any of their respectiveSubsidiaries constitutes a “plan asset” of any Employee Plan, MultiemployerPlan or Guaranteed Pension Plan.

 

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§6.16                    Disclosure.All of the representations and warranties made by or on behalf of the Borrower,the Guarantors and their respective Subsidiaries in this Agreement and theother Loan Documents or any document or instrument delivered to the Agent orthe Lenders pursuant to or in connection with any of such Loan Documents aretrue and correct in all material respects, and neither the Borrower nor anyGuarantor has failed to disclose such information as is necessary to make suchrepresentations and warranties not misleading. All information contained inthis Agreement, the other Loan Documents or otherwise furnished to or madeavailable to the Agent or the Lenders by or on behalf of the Borrower, anySubsidiary or any Guarantor, as supplemented to date, is and, when delivered,will be true and correct in all material respects and, as supplemented to date,does not, and when delivered will not, contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementscontained therein not misleading. The written information, reports and otherpapers and data with respect to the Borrower, any Subsidiary, any Guarantor orthe Collateral (other than projections and estimates) furnished to the Agent orthe Lenders in connection with this Agreement or the obtaining of theCommitments of the Lenders hereunder was, at the time so furnished, completeand correct in all material respects, or has been subsequently supplemented byother written information, reports or other papers or data, to the extentnecessary to give in all material respects a true and accurate knowledge of thesubject matter in all material respects; provided that suchrepresentation shall not apply to (a) the accuracy of any appraisal, titlecommitment, survey, or engineering and environmental reports prepared by thirdparties or legal conclusions or analysis provided by the Borrower’s orGuarantor’s counsel (although the Borrower and the Guarantors have no reason tobelieve that the Agent and the Lenders may not rely on the accuracythereof) or (b) budgets, projections and other forward-looking speculativeinformation prepared in good faith by the Borrower (except to the extent therelated assumptions were when made manifestly unreasonable).

 

§6.17                    Placeof Business. The principal place of business of the Borrower is 15601Dallas Parkway, Suite 600, Addison, Texas 75001-6206.

 

§6.18                    RegulationsT, U and X. No portion of any Loan is to be used for the purpose ofpurchasing or carrying any “margin security” or “margin stock” as such termsare used in Regulations T, U and X of the Board of Governors of the FederalReserve System, 12 C.F.R. Parts 220, 221 and 224. Neither the Borrower nor anyGuarantor is engaged, nor will it engage, principally or as one of itsimportant activities, in the business of extending credit for the purpose ofpurchasing or carrying any “margin security” or “margin stock” as such termsare used in Regulations T, U and X of the Board of Governors of the FederalReserve System, 12 C.F.R. Parts 220, 221 and 224.

 

§6.19                    EnvironmentalCompliance. The Borrower has taken all commercially reasonable steps toinvestigate the past and present conditions and usage of the Real Estate andthe operations conducted thereon and, to the best of Borrower’s knowledge andbelief, except as specifically set forth (i) in the written environmentalsite assessment reports of an Environmental Engineer provided to the Agent onor before the date hereof, or in the case of Real Estate acquired after thedate hereof, the environmental site assessment reports with respect theretoprovided to the Agent, or (ii) on Schedule 6.19(c) or(d), makes the following representations and warranties:

 

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(a)                                  Noneof the Borrower, the Guarantors or their respective Subsidiaries nor anyoperator of the Real Estate, nor any tenant or operations thereon, is inviolation, or alleged violation, of any judgment, decree, order, law, license, rule orregulation pertaining to environmental matters, including without limitation,those arising under any Environmental Law, which violation involves RealEstate and has had or could reasonably be expected to have a Material AdverseEffect.

 

(b)                                 Noneof the Borrower, the Guarantors nor any of their respective Subsidiaries hasreceived written notice from any third party including, without limitation, anyfederal, state or local governmental authority, (i) that it has beenidentified by the United States Environmental Protection Agency (“EPA”) as apotentially responsible party under CERCLA with respect to a site listed on theNational Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) thatany Hazardous Substance(s) which it has generated, transported or disposedof have been found at any site at which a federal, state or local agency orother third party has conducted or has ordered that the Borrower, any Guarantoror any of their respective Subsidiaries conduct a remedial investigation,removal or other response action pursuant to any Environmental Law; or (iii) thatit is or shall be a named party to any claim, action, cause of action,complaint, or legal or administrative proceeding (in each case, contingent orotherwise) arising out of any third party’s incurrence of costs, expenses,losses or damages of any kind whatsoever in connection with the release ofHazardous Substances, which in any case involves Real Estate and has had orcould reasonably be expected to have a Material Adverse Effect.

 

(c)                                  (i) noportion of the Real Estate has been used for the handling, processing, storageor disposal of Hazardous Substances except in accordance with applicableEnvironmental Laws, and no underground tank or other underground storage receptaclefor Hazardous Substances is located on any portion of the Real Estate exceptthose which are being operated and maintained in compliance with EnvironmentalLaws; (ii) in the course of any activities conducted by the Borrower, theGuarantors, their respective Subsidiaries or the tenants and operators of theirproperties, no Hazardous Substances have been generated or are being used onthe Real Estate except in the ordinary course of Borrower’s, the Guarantors’and their respective Subsidiaries’ respective businesses and in accordance withapplicable Environmental Laws; (iii) there has been no past or presentRelease or threatened Release of Hazardous Substances on, upon, into or fromthe Real Estate, which Release would have a material adverse effect on thevalue of such Real Estate or adjacent properties, which Release has had orcould reasonably be expected to have a Material Adverse Effect; (iv) therehave been no Releases on, upon, from or into any real property in the vicinityof any of the Real Estate which, through soil or groundwater contamination, may havecome to be located on, and which could be reasonably anticipated to have amaterial adverse effect on the value of, the Real Estate; and (v) anyHazardous Substances that have been generated on any of the Real Estate havebeen transported off-site in accordance with all applicable Environmental Laws(except with respect to the foregoing in this §6.19(c) as to any RealEstate where the foregoing has not had or could not reasonably be expected tohave a Material Adverse Effect).

 

(d)                                 noneof the Borrower, the Guarantors, their respective Subsidiaries nor the RealEstate is subject to any applicable Environmental Law requiring the performanceof Hazardous Substances site assessments, or the removal or remediation ofHazardous Substances, or the giving of notice to any governmental agency or therecording or delivery to other Persons

 

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of anenvironmental disclosure document or statement in each case by virtue of thetransactions set forth herein and contemplated hereby, or as a condition to theeffectiveness of any other transactions contemplated hereby except for suchmatters that shall be complied with as of the Closing Date.

 

(e)                                  Thereare no existing or closed sanitary landfills, solid waste disposal sites, orhazardous waste treatment, storage or disposal facilities on or affecting theReal Estate except where such existence has not had or could not be reasonablybe expected to have a Material Adverse Effect.

 

(f)                                    TheBorrower has not received any written notice of any claim by any party that anyuse, operation, or condition of the Real Estate has caused any nuisance or anyother liability or adverse condition on any other property which as to any RealEstate has had or could reasonably be expected to have a Material AdverseEffect, nor is there any basis for such a claim.

 

§6.20                    Subsidiaries;Organizational Structure. Schedule 6.20(a) sets forth, asof the date hereof, all of the Subsidiaries of REIT, the form andjurisdiction of organization of each of the Subsidiaries, and REIT’s direct andindirect ownership interests therein. Schedule 6.20(b) setsforth, as of the date hereof, all of the Unconsolidated Affiliates of REIT andits Subsidiaries, the form and jurisdiction of organization of each of theUnconsolidated Affiliates, REIT’s or its Subsidiary’s ownership interesttherein and the other owners of the applicable Unconsolidated Affiliate. NoPerson owns any legal, equitable or beneficial interest in any of the Personsset forth on Schedules 6.20(a) and 6.20(b) exceptas set forth on such Schedules.

 

§6.21                    Property.Subject to Schedule 6.21, (i) all of the Real Estate of theBorrower, the Guarantors and their respective Subsidiaries is structurallysound, in good condition and working order, subject to ordinary wear and tear,except for such portion of such Real Estate which is not occupied by any tenantand where such defects have not had and could not reasonably be expected tohave a Material Adverse Effect, (ii) the Real Estate, and the use andoperation thereof, is in material compliance with all applicable federal andstate law and governmental regulations and any local ordinances, orders orregulations, including without limitation, laws, regulations and ordinancesrelating to zoning, building codes, subdivision, fire protection, health,safety, handicapped access, historic preservation and protection, wetlands andtidelands (but excluding for purposes of this §6.21, Environmental Laws) exceptwhere a failure to so comply has not and could not reasonably be expected tohave a Material Adverse Effect, (iii) there are no unpaid or outstandingreal estate or other taxes or assessments on or against any of the Real Estatewhich are payable by the Borrower, any Guarantor or any of their respectiveSubsidiaries (except only real estate or other taxes or assessments, that arenot yet delinquent or are being protested as permitted by this Agreement), (iv) eachReal Estate asset is separately assessed for purposes of real estate taxassessment and payment, (v) there are no unpaid or outstanding real estateor other taxes or assessments on or against any other property of the Borrower,the Guarantors or any of their respective Subsidiaries which are payable by anyof such Persons in any material amount (except only real estate or other taxesor assessments, that are not yet delinquent or are being protested as permittedby this Agreement), (vi) there are no pending, or to the knowledge of theBorrower, threatened or contemplated, eminent domain proceedings against anyReal Estate, (vii) none of the Real Estate is now damaged as a result ofany fire,

 

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explosion,accident, flood or other casualty, (viii) none of the Borrower, theGuarantors or any of their respective Subsidiaries has received any outstandingnotice from any insurer or its agent requiring performance of any work withrespect to any of the Real Estate or canceling or threatening to cancel anypolicy of insurance, and each of the Real Estate complies with the materialrequirements of all of the Borrower’s, Guarantors’ and their respectiveSubsidiaries’ insurance carriers and (ix) no person or entity has anyright or option to acquire any Real Estate or any Building thereon or anyportion thereof or interest therein, except for certain tenants of such RealEstate pursuant to the terms of their Leases and tenants in common underapplicable tenant in common agreements.

 

§6.22                    Brokers.None of REIT, the Borrower nor any of their respective Subsidiaries has engagedor otherwise dealt with any broker, finder or similar entity in connection withthis Agreement or the Loans contemplated hereunder.

 

§6.23                    OtherDebt. As of the date hereof, none of the Borrower, any Guarantor nor any oftheir respective Subsidiaries is in default of the payment of any Indebtednessor the performance of any material obligation under any related agreement,mortgage, deed of trust, security agreement, financing agreement or indentureto which any of them is a party. Neither the Borrower nor any Guarantor is aparty to or bound by any agreement, instrument or indenture that may requirethe subordination in right or time or payment of any of the Obligations to anyother indebtedness or obligation of the Borrower or any Guarantor. Schedule 6.23hereto sets forth all agreements, mortgages, deeds of trust, financingagreements or other material agreements binding upon the Borrower and eachGuarantor or their respective properties and entered into by the Borrowerand/or such Guarantor as of the date of this Agreement with respect to anyIndebtedness of the Borrower or any Guarantor in an amount greater than$1,000,000.00, and the Borrower has provided the Agent with such true, correctand complete copies thereof as Agent has requested.

 

§6.24                    Solvency.As of the Closing Date and after giving effect to the transactions contemplatedby this Agreement and the other Loan Documents, including all Loans made or tobe made hereunder, neither the Borrower nor any Guarantor is insolvent on abalance sheet basis such that the sum of such Person’s assets exceeds the sumof such Person’s liabilities, the Borrower and each Guarantor is able to payits debts as they become due, and the Borrower and each Guarantor hassufficient capital to carry on its business.

 

§6.25                    NoBankruptcy Filing. Neither the Borrower nor any Guarantor is contemplatingeither the filing of a petition by it under any state or federal bankruptcy orinsolvency laws or the liquidation of its assets or property, and the Borrowerhas no knowledge of any Person contemplating the filing of any such petitionagainst it.

 

§6.26                    NoFraudulent Intent. Neither the execution and delivery of this Agreement orany of the other Loan Documents nor the performance of any actions requiredhereunder or thereunder is being undertaken by the Borrower, any Guarantor orany of their respective Subsidiaries with or as a result of any actual intentby any of such Persons to hinder, delay or defraud any entity to which any ofsuch Persons is now or will hereafter become indebted.

 

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§6.27                    Transactionin Best Interests of Borrower and Guarantors; Consideration. Thetransaction evidenced by this Agreement and the other Loan Documents is in thebest interests of the Borrower, each Guarantor and their respectiveSubsidiaries. The direct and indirect benefits to inure to the Borrower, eachGuarantor and their respective Subsidiaries pursuant to this Agreement and theother Loan Documents constitute more than “reasonably equivalent value” (assuch term is used in §548 of the Bankruptcy Code) and “valuable consideration,”“fair value,” and “fair consideration,” (as such terms are used in anyapplicable state fraudulent conveyance law), in exchange for the benefits to beprovided by the Borrower, the Guarantors and their respective Subsidiariespursuant to this Agreement and the other Loan Documents, and but for thewillingness of each Guarantor to guaranty the Loan, the Borrower would beunable to obtain the financing contemplated hereunder which financing willenable the Borrower, each Guarantor and their respective Subsidiaries to haveavailable financing to conduct and expand their business.

 

§6.28                    ContributionAgreement. The Borrower and the Guarantors have executed and delivered theContribution Agreement, and the Contribution Agreement constitutes the validand legally binding obligations of such parties enforceable against them inaccordance with the terms and provisions thereof, except as enforceability islimited by bankruptcy, insolvency, reorganization, moratorium or other lawsrelating to or affecting generally the enforcement of creditors’ rights andexcept to the extent that availability of the remedy of specific performance orinjunctive relief is subject to the discretion of the court before which anyproceeding therefor may be brought.

 

§6.29                    OFAC.None of the Borrower or the Guarantors (i) is (or will be) a person withwhom any Lender is restricted from doing business under OFAC (including, thosePersons named on OFAC’s Specially Designated and Blocked Persons list) or underany statute, executive order (including the September 24, 2001 ExecutiveOrder Blocking Property and Prohibiting Transactions With Persons Who Commit,Threaten to Commit, or Support Terrorism), or other governmental action or (ii) isengaged (or will engage) in any dealings or transactions or otherwise beassociated with such persons. In addition, the Borrower hereby agrees to provideto the Lenders any additional information that a Lender reasonably deemsnecessary from time to time in order to ensure compliance with all applicablelaws concerning money laundering and similar activities.

 

§7.                                AFFIRMATIVECOVENANTS.

 

The Borrower covenants and agrees that, so long as any Loan, Note orLetter of Credit is outstanding or any Lender has any obligation to make anyLoans or issue Letters of Credit:

 

§7.1                          PunctualPayment. The Borrower will duly and punctually pay or cause to be paid theprincipal and interest on the Loans and all interest and fees provided for inthis Agreement, all in accordance with the terms of this Agreement and theNotes, as well as all other sums owing pursuant to the Loan Documents.

 

§7.2                          Maintenanceof Office. The Borrower and each Guarantor will maintain their respectivechief executive office at 15601 Dallas Parkway, Suite 600, Addison,Texas  75001-6206, or at such other placein the United States of America as the Borrower or any

 

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Guarantorshall designate upon thirty (30) days prior written notice to the Agent and theLenders, where notices, presentations and demands to or upon the Borrower orsuch Guarantor in respect of the Loan Documents may be given or made.

 

§7.3                          Recordsand Accounts. The Borrower and each Guarantor will (a) keep, and causeeach of their respective Subsidiaries to keep true and accurate records andbooks of account in which full, true and correct entries will be made inaccordance with GAAP and (b) maintain adequate accounts and reserves forall taxes (including income taxes), depreciation and amortization of itsproperties and the properties of their respective Subsidiaries, contingenciesand other reserves. Neither the Borrower, any Guarantor nor any of theirrespective Subsidiaries shall, without the prior written consent of the Agent, (x) exceptas may be required by GAAP or by law, make any material change to theaccounting policies/principles used by such Person in preparing the financialstatements and other information described in §6.4 or §7.4, or (y) changeits fiscal year. Agent and the Lenders acknowledge that REIT’s fiscal year is acalendar year.

 

§7.4                          FinancialStatements, Certificates and Information. The Borrower will deliver orcause to be delivered to the Agent with sufficient copies for each of theLenders:

 

(a)                                  (i) withinfifteen (15) days of the filing of REIT’s Form 10-K with the SEC, but inany event not later than one hundred twenty (120) days after the end of eachcalendar year, the audited Consolidated balance sheet of REIT and its Subsidiariesat the end of such year, and the related audited consolidated statements ofincome, changes in capital and cash flows for such year, setting forth incomparative form the figures for the previous fiscal year and all suchstatements to be in reasonable detail, prepared in accordance with GAAP,together with a certification by the chief financial officer or accountingofficer of REIT, on its behalf, that the information contained in suchfinancial statements fairly presents the financial position of REIT and itsSubsidiaries, and accompanied by an auditor’s report prepared withoutqualification as to the scope of the audit by a nationally recognizedaccounting firm reasonably approved by Agent, and (ii) within a reasonableperiod of time following request therefor, any other information the Lenders may reasonablyrequest to complete a financial analysis of REIT and its Subsidiaries;

 

(b)                                 withinfifteen (15) days of the filing of REIT’s Form 10-Q with the SEC, ifapplicable, but in any event not later than sixty (60) days after the end ofeach calendar quarter of each year, copies of the unaudited consolidatedbalance sheet of REIT and its Subsidiaries, as at the end of such quarter, andthe related unaudited consolidated statements of income and cash flows for theportion of REIT’s fiscal year then elapsed, all in reasonable detail andprepared in accordance with GAAP, together with a certification by the chieffinancial officer or accounting officer of REIT, on its behalf, that theinformation contained in such financial statements fairly presents thefinancial position of REIT and its Subsidiaries on the date thereof (subject toyear-end adjustments);

 

(c)                                  simultaneouslywith the delivery of the financial statements referred to in subsections (a) and(b) above, a statement (a “Compliance Certificate”) certified by the chieffinancial officer or chief accounting officer of REIT, on its behalf, in the form ofExhibit G hereto (or in such other form as the Agent may approvefrom time to time) setting forth in reasonable detail computations evidencingcompliance or non-compliance (as the case may be)

 

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withthe covenants contained in §9 and the other covenants described in suchcertificate and (if applicable) setting forth reconciliations to reflectchanges in GAAP since the Balance Sheet Date. All income, expense and valueassociated with Real Estate or other Investments disposed of during any quarterwill be eliminated from calculations, where applicable. The ComplianceCertificate shall be accompanied by copies of the statements of Funds fromOperations and Net Operating Income for such calendar quarter, prepared on abasis consistent with the statements furnished to the Agent prior to the datehereof and otherwise in form and substance reasonably satisfactory to theAgent, together with a certification by the chief financial officer or chiefaccounting officer of REIT, on its behalf, that the information contained insuch statement fairly presents the Funds from Operations and Net OperatingIncome for such periods;

 

(d)                                 simultaneouslywith the delivery of the financial statements referred to in clause (a) above,the statement of all contingent liabilities involving amounts of $1,000,000.00or more of the REIT and its Subsidiaries which are not reflected in suchfinancial statements or referred to in the notes thereto (including, withoutlimitation, all guaranties and other contingent obligations in respect of theindebtedness of others, and obligations to reimburse the issuer in respect ofany letters of credit);

 

(e)                                  promptlyfollowing a request by the Agent, as of such date or for such period or periodsof time as Agent may reasonably request, (i) a Rent Roll for eachReal Estate asset and a summary thereof in form satisfactory to Agent,together with a listing of each tenant that has taken occupancy of such RealEstate, (ii) an operating statement for each Real Estate asset and aconsolidated operating statement for the Real Estate assets (such statementsand reports to be in form reasonably satisfactory to Agent), and (iii) acopy of each Lease or amendment to any Lease entered into with respect to aReal Estate asset;

 

(f)                                    simultaneouslywith the delivery of the financial statements referred to in subsections (a) and(b) above, a statement (i) listing the Real Estate owned by REIT, theBorrower and their respective Subsidiaries (or in which REIT, the Borrower orany of their respective Subsidiaries owns an interest) and stating the locationthereof, the date acquired and the acquisition cost, (ii) listing theIndebtedness of REIT, the Borrower and their respective Subsidiaries (excludingIndebtedness of the type described in §8.1(b)-(e)), which statement shallinclude, without limitation, a statement of the original principal amount ofsuch Indebtedness and the current amount outstanding, the holder thereof, thematurity date and any extension options, the interest rate, the collateralprovided for such Indebtedness and whether such Indebtedness is RecourseIndebtedness or Non-Recourse Indebtedness, (iii) listing the properties ofREIT, the Borrower and their Subsidiaries which are Development Properties andproviding a brief summary of the status of such development, and (iv) attachingcopies of any new material mortgage loan documents and amendments to existingmortgage loan documents entered into by any Company subsequent to the date ofthis Agreement or the last statement delivered pursuant to this §7.4(f),whichever is later;

 

(g)                                 contemporaneouslywith the filing or mailing thereof, copies of all material of a financialnature, reports or proxy statements sent to the owners of the Borrower or REIT;

 

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(h)                                 promptlyafter they are filed with the Internal Revenue Service, copies of all annualfederal income tax returns and amendments thereto of the Borrower and REIT;

 

(i)                                     promptlyupon the filing hereof, copies of any registration statements (other than theexhibits thereto and any registration statements on Form S-8 or itsequivalent) and any annual, quarterly or monthly reports and other statementsand reports which the Borrower or REIT shall file with the SEC;

 

(j)                                     noticeof any audits pending or threatened in writing with respect to any tax returnsfiled by the Borrower or REIT promptly following notice of such audit;

 

(k)                                  withinseven (7) Business Days of notice or receipt, copies of any and allnotices of default under any of the organizational agreements of any Company inwhich the Borrower or a Pledgor is a member, shareholder or partner or of anyfailure by the Borrower or such Pledgor to perform any obligation underany of such organizational agreements;

 

(l)                                     promptlyupon receipt thereof, copies of any and all notices of default under any loandocument securing or evidencing a mortgage loan made to the Borrower or any ofits Subsidiaries secured by a Lien on Real Estate;

 

(m)                               withinfive (5) Business Days of becoming aware of the occurrence thereof, noticeof and a description of any material reduction, dilution or diminution of anyinterest of the Borrower or a Pledgor in any of the Companies;

 

(n)                                 notlater than January 31 of each year, a budget and business plan for theBorrower and its Subsidiaries for the then-current calendar year; and

 

(o)                                 fromtime to time such other financial data and information in the possession ofREIT, the Borrower or their respective Subsidiaries (including withoutlimitation auditors’ management letters, status of litigation or investigationsagainst REIT, the Borrower or any of their respective Subsidiaries and anysettlement discussions relating thereto (to the extent that disclosure of anysuch letters, litigation or investigation status or settlement discussionswould not waive any applicable privilege), property inspection andenvironmental reports and information as to zoning and other legal andregulatory changes affecting the Borrower or any of its Subsidiaries) as theAgent may reasonably request.

 

Any material to be delivered pursuant to this §7.4 may bedelivered electronically directly to Agent and the Lenders provided that suchmaterial is in a format reasonably acceptable to Agent, and such material shallbe deemed to have been delivered to Agent and the Lenders upon Agent’s receiptthereof. Upon the request of Agent, the Borrower shall deliver paper copiesthereof to Agent and the Lenders. The Borrower authorizes Agent and Arranger todisseminate any such materials through the use of Intralinks, SyndTrak or anyother electronic information dissemination system, and the Borrower releasesAgent and the Lenders from any liability in connection therewith. Unlessotherwise requested by Agent, any materials to be delivered pursuant to §7.4(g) or(i) may be delivered to Agent by posting such materials to theBorrower’s website (at www.berhingerharvard.com) or on EDGAR(www.sec.gov/edgar) and

 

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simultaneously notifying the Agent of the availability of such materialsat such website (or such other website as the Borrower may designate in writingto the Agent).

 

§7.5                          Notices.

 

(a)                                  Defaults.The Borrower will promptly upon becoming aware of same notify the Agent inwriting of the occurrence of any Default or Event of Default, which noticeshall describe such occurrence with reasonable specificity and shall state thatsuch notice is a “notice of default”. If any Person shall give any notice ofthe existence of a claimed default or take any other action in respect of aclaimed default (whether or not constituting an Event of Default) under thisAgreement or under any note, evidence of indebtedness, indenture or otherobligation to which or with respect to which the Borrower, any Guarantor or anyof their respective Subsidiaries is a party or obligor, whether as principal orsurety, and such default would permit the holder of such note or obligation orother evidence of indebtedness to accelerate the maturity thereof, whichacceleration would either cause a Default or have a Material Adverse Effect,the Borrower shall forthwith give written notice thereof to the Agent and eachof the Lenders, describing the notice or action and the nature of the claimeddefault.

 

(b)                                 EnvironmentalEvents. The Borrower will give notice to the Agent within five (5) BusinessDays of becoming aware of (i) any potential or known Release, or threat ofRelease, of any Hazardous Substances in violation of any applicableEnvironmental Law; (ii) any violation of any Environmental Law that theBorrower, any Guarantor or any of their respective Subsidiaries reports inwriting or is reportable by such Person in writing (or for which any writtenreport supplemental to any oral report is made) to any federal, state or localenvironmental agency or (iii) any inquiry, proceeding, investigation, orother action, including a written notice from any agency of potentialenvironmental liability, of any federal, state or local environmental agency orboard, that in any case involves (A)  any Real Estate and could reasonablybe expected to have a Material Adverse Effect, or (B) or the Agent’s liensor security title on the Collateral pursuant to the Security Documents.

 

(c)                                  Notificationof Claims Against Collateral. The Borrower will give notice to the Agent inwriting within seven (7) Business Days of becoming aware of any materialsetoff, claims, withholdings or other defenses to which any of the Collateral,or the rights of the Agent or the Lenders with respect to the Collateral, aresubject.

 

(d)                                 Noticeof Litigation and Judgments. The Borrower will give notice to the Agent inwriting within five (5) Business Days of becoming aware of any litigationor proceedings threatened in writing or any pending litigation and proceedingsaffecting the Borrower, any Guarantor or any of their respective Subsidiariesor to which the Borrower, any Guarantor or any of their respective Subsidiariesis or is to become a party involving an uninsured claim against the Borrower,any Guarantor or any of their respective Subsidiaries that could eitherreasonably be expected to cause a Default or could reasonably be expected tohave a Material Adverse Effect and stating the nature and status of suchlitigation or proceedings. The Borrower will give notice to the Agent, inwriting, in form and detail reasonably satisfactory to the Agent and each ofthe Lenders, within ten (10) days of any judgment not covered byinsurance, whether final or otherwise, against the Borrower or any of theirrespective Subsidiaries in an amount in excess of $10,000,000.00.

 

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(e)           ERISA.  The Borrower will give notice to the Agentwithin five (5) Business Days after the Borrower or any ERISA Affiliate (i) givesor is required to give notice to the PBGC of any “reportable event” (as definedin §4043 of ERISA) with respect to any Guaranteed Pension Plan, MultiemployerPlan or Employee Benefit Plan, or knows that the plan administrator of any suchplan has given or is required to give notice of any such reportable event; (ii) givesa copy of any notice of complete or partial withdrawal liability under Title IVof ERISA; or (iii) receives any notice from the PBGC under Title IV orERISA of an intent to terminate or appoint a trustee to administer any suchplan.

 

(f)            Notification ofLenders.  Within five (5) BusinessDays after receiving any notice under this §7.5, the Agent will forward a copythereof to each of the Lenders, together with copies of any certificates orother written information that accompanied such notice.

 

§7.6         Existence;Maintenance of Properties.

 

(a)           Except as permittedunder §8.4 and §8.8, the Borrower and each Guarantor will and will cause eachof their respective Subsidiaries to preserve and keep in full force and effecttheir legal existence in the jurisdiction of its incorporation or formation.  The Borrower and each Guarantor will preserveand keep in full force all of their rights and franchises and those of theirSubsidiaries, the preservation of which is necessary to the conduct of theirbusiness and the failure to have which could reasonably be expected to have aMaterial Adverse Effect.  REIT shall atall times comply with all requirements and applicable laws and regulationsnecessary to maintain REIT Status and shall continue to receive REIT Status.  From and after the IPO Event, the commonstock of REIT shall at all times be listed for trading and be traded on the NewYork Stock Exchange or another national exchange approved by Agent, unlessotherwise consented to by the Required Lenders.

 

(b)           The Borrower and eachGuarantor (i) will cause all of its properties and those of itsSubsidiaries used or useful in the conduct of its business or the business ofits Subsidiaries to be maintained and kept in good condition, repair andworking order (ordinary wear and tear excepted) and supplied with all necessaryequipment, and (ii) will cause to be made all necessary repairs, renewals,replacements, betterments and improvements thereof in all cases in which thefailure so to do would have a material adverse effect on the condition of anyReal Estate or would cause a Material Adverse Effect.  Without limitation of the obligations of theBorrower and the Guarantors under this Agreement with respect to themaintenance of the Real Estate, the Borrower and the Guarantors shall promptlyand diligently comply with the recommendations of the Environmental Engineerretained by Agent or Borrower, Guarantors or their respective Subsidiariesconcerning the maintenance, operation or upkeep of the Real Estate contained inthe building inspection and environmental reports delivered to the Agent orotherwise obtained by the Borrower or any Guarantor with respect to the RealEstate.

 

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§7.7         Insurance.  The Borrower, the Guarantors and theirrespective Subsidiaries (as applicable) will, at their expense, procure andmaintain insurance covering such Person and its properties and assets in suchamounts and against such risks and casualties as are customary for propertiesand assets of similar character and location, due regard being given to thetype of improvements thereon, their construction, location, use and occupancy.

 

§7.8         Taxes; Liens.  The Borrower and the Guarantors will, andwill cause their respective Subsidiaries to, duly pay and discharge, or causeto be paid and discharged, before the same shall become delinquent, all taxes,assessments and other governmental charges imposed upon them or upon theirproperties, sales and activities, or any part thereof, or upon the income orprofits therefrom as well as all claims for labor, materials or supplies thatif unpaid might by law become a lien or charge upon any of its property orother Liens affecting any of the Collateral or other property of the Borrower,the Guarantors or their respective Subsidiaries, provided that any suchtax, assessment, charge or levy or claim need not be paid if the validity oramount thereof shall currently be contested in good faith by appropriateproceedings which shall suspend the collection thereof with respect to suchproperty, neither such property nor any portion thereof or interest thereinwould be in any danger of sale, forfeiture or loss by reason of such proceedingand the Borrower, such Guarantor or any such Subsidiary shall have set aside onits books adequate reserves in accordance with GAAP; and provided, further,that forthwith upon the commencement of proceedings to foreclose any lien thatmay have attached as security therefor, the Borrower, such Guarantor or anysuch Subsidiary either (i) will provide a bond issued by a suretyreasonably acceptable to the Agent and sufficient to stay all such proceedingsor (ii) if no such bond is provided, will pay each such tax, assessment,charge or levy.

 

§7.9         Inspection ofProperties and Books.  The Borrowerand the Guarantors will, and will cause their respective Subsidiaries to,permit the Agent and the Lenders, at the Borrower’s expense (to the extentprovided for below) and upon reasonable prior notice, to visit and inspect anyof the properties of the Borrower, each Guarantor or any of their respectiveSubsidiaries (subject to the rights of tenants under their Leases), to examinethe books of account of the Borrower, any Guarantor and their respectiveSubsidiaries (and to make copies thereof and extracts therefrom) and to discussthe affairs, finances and accounts of the Borrower, any Guarantor and theirrespective Subsidiaries with, and to be advised as to the same by, theirrespective officers, partners or members, all at such reasonable times andintervals as the Agent or any Lender may reasonably request, providedthat so long as no Event of Default shall have occurred and be continuing, theBorrower shall not be required to pay for such visits and inspections.  The Lenders shall use good faith efforts tocoordinate such visits and inspections so as to minimize the interference withand disruption to the normal business operations of such Persons.

 

§7.10       Compliance with Laws,Contracts, Licenses, and Permits. The Borrower and the Guarantors will, and will cause each of theirrespective Subsidiaries to, comply in all respects with (i) all applicablelaws and regulations now or hereafter in effect wherever its business isconducted, including all Environmental Laws, (ii) the provisions of itscorporate charter, partnership agreement, limited liability company agreementor declaration of trust, as the case may be, and other charter documents andbylaws, (iii) all agreements and instruments to which it is a party or bywhich it or any of its properties may be bound, (iv) all applicabledecrees, orders, and judgments, and (v) all licenses and permits requiredby applicable laws and regulations for

 

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the conduct of itsbusiness or the ownership, use or operation of its properties, except where afailure to so comply with any of clauses (i) through (v) could notreasonably be expected to have a Material Adverse Effect.  If any authorization, consent, approval,permit or license from any officer, agency or instrumentality of any governmentshall become necessary or required in order that the Borrower, any Guarantor ortheir respective Subsidiaries may fulfill any of its obligations hereunder, theBorrower, such Guarantor or such Subsidiary will promptly take or cause to betaken all steps necessary to obtain such authorization, consent, approval,permit or license and furnish the Agent and the Lenders with evidencethereof.  The Borrower shall develop andimplement such programs, policies and procedures as are necessary to complywith the Patriot Act and shall promptly advise Agent in writing in the eventthat the Borrower shall determine that any investors in the Borrower are inviolation of such act.

 

§7.11       Further Assurances.  The Borrower and each Guarantor will and willcause each of their respective Subsidiaries to, cooperate with the Agent andthe Lenders and execute such further instruments and documents as the Lendersor the Agent shall reasonably request to carry out to their satisfaction thetransactions contemplated by this Agreement and the other Loan Documents.

 

§7.12       Business Operations.  REIT, the Borrower and their respectiveSubsidiaries shall operate their respective businesses in substantially thesame manner and in substantially the same fields and lines of business as suchbusiness is now conducted and in compliance with the terms and conditions ofthis Agreement and the Loan Documents. Neither REIT nor the Borrowers will, and will not permit any Subsidiaryto, directly or indirectly, engage in any line of business other than theownership, operation and development of office properties, non-officeproperties and other activities and businesses to the extent permitted under§8.3, or businesses incidental thereto.

 

§7.13       Subordination ofAdvisory Fees.  The Borrower shallcause the advisory fees payable to the Advisor under the Advisory Agreement andany and all other similar agreements, whether written or oral, to besubordinated to the prior payment in full of the Obligations on terms andconditions reasonably satisfactory to the Agent.   Neither Borrower nor REIT shall (i) amend,supplement or otherwise modify in any material respect the Advisory Agreementto impose additional obligations on the REIT without the prior written consentof the Agent (which consent shall not be unreasonably withheld) or (ii) enterinto any agreement in replacement of the Advisory Agreement with an advisorwithout the prior written consent of the Agent (which consent shall not beunreasonably withheld), and after such approval, no such replacement managementagreement shall be amended, supplemented or otherwise modified in any materialrespect without Agent’s prior written approval, such approval not to beunreasonably withheld.  Agent maycondition any approval of a new advisor upon the execution and delivery to Agentof a subordination of the advisor’s rights thereunder to the rights of theAgent and the Lenders under the Loan Documents in substantially the form of theSubordination of Advisory Fees executed in connection with the closing.  The Advisor shall be permitted to delegateany of its responsibilities under the Advisory Agreement to other Affiliates ofAdvisor (who shall also be the “Advisor” under this Agreement), provided thatsuch other Person acknowledges and agrees that its rights to compensation underthe Advisory Agreement are subject to, and agrees to be bound by, theSubordination of Advisory Agreement.  TheBorrower shall provide prompt

 

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written notice to Agentof each such delegation together with evidence that such delegation was incompliance with the preceding sentence.

 

§7.14       Ownership of Real Estate.  Without the prior written consent of Agent,all Real Estate and all interests (whether direct or indirect) of REIT or theBorrower in any Real Estate assets now owned or leased or acquired or leasedafter the date hereof shall be owned or leased directly by REIT, the Borroweror a Wholly Owned Subsidiary of the Borrower; provided, howeverthat REIT and the Borrower shall be permitted to own or lease interests in RealEstate through non-Wholly Owned Subsidiaries and Unconsolidated Affiliates aspermitted by §8.3.

 

§7.15       Distributions of Incometo Borrower.  The Borrower shallcause all of its Subsidiaries (subject to applicable law, the terms of any loandocuments under which such Subsidiary is the borrower, and the terms of anyorganizational documents of a joint venture with a Person that is not anAffiliate of REIT or Borrower entered into in the ordinary course of business)to promptly distribute to the Borrower (but not less frequently than once eachcalendar quarter, unless otherwise approved by the Agent), whether in the formof dividends, distributions or otherwise, all profits, proceeds or other incomerelating to or arising from its Subsidiaries’ use, operation, financing,refinancing, sale or other disposition of their respective assets andproperties after (a) the payment by each Subsidiary of its debt service,operating expenses, capital improvements and leasing commissions for such quarterand (b) the establishment of reasonable reserves for the payment ofoperating expenses not paid on at least a quarterly basis and capitalimprovements and tenant improvements to be made to such Subsidiary’s assets andproperties approved by such Subsidiary in the course of its business consistentwith its past practices.

 

§7.16       Plan Assets.  The Borrower, the Guarantors and each oftheir respective Subsidiaries will do, or cause to be done, all thingsnecessary to ensure that none of its Real Estate will be deemed to be PlanAssets at any time.

 

§8.           NEGATIVE COVENANTS.

 

The Borrowercovenants and agrees that, so long as any Loan, Note or Letter of Credit isoutstanding or any of the Lenders has any obligation to make any Loans or issueany Letter of Credit:

 

§8.1         Restrictions onIndebtedness.  The Borrower will not,and will not permit any Guarantor or their respective Subsidiaries to, create,incur, assume, guarantee or be or remain liable, contingently or otherwise,with respect to any Indebtedness other than:

 

(a)           Indebtedness to theLenders arising under any of the Loan Documents;

 

(b)           current liabilities ofthe Borrower, the Guarantor or their respective Subsidiaries incurred in theordinary course of business but not incurred through (i) the borrowing ofmoney, or (ii) the obtaining of credit except for credit on an openaccount basis customarily extended and in fact extended in connection withnormal purchases of goods and services;

 

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(c)           Indebtedness in respectof taxes, assessments, governmental charges or levies and claims for labor,materials and supplies to the extent that payment therefor shall not at thetime be required to be made in accordance with the provisions of §7.8;

 

(d)           Indebtedness in respectof judgments only to the extent, for the period and for an amount not resultingin an Event of Default;

 

(e)           endorsements forcollection, deposit or negotiation and warranties of products or services, ineach case incurred in the ordinary course of business; and

 

(f)            subject to theprovisions of §9, Indebtedness in respect of Derivatives Contracts that areentered into in the ordinary course of business and not for speculativepurposes;

 

(g)           subject to theprovisions of §9, Indebtedness in respect of Capitalized Leases and claimsunder environmental indemnities or with respect to Non-Recourse Exclusions notto exceed $15,000,000.00 (excluding environmental claims covered by insurance)in the aggregate at any one time;

 

(h)           subject to theprovisions of §9, Non-Recourse Indebtedness that is secured by Real Estate andrelated assets;

 

(i)            subject to theprovisions of §9, Secured Debt that is Recourse Indebtedness, providedthat the aggregate amount of such Indebtedness (excluding the Obligations)shall not exceed ten percent (10%) of Gross Asset Value; and

 

(j)            unsecured Indebtednessof Subsidiaries of Borrower to Borrower; provided that any such Indebtedness ofa Subsidiary of Borrower that is a Guarantor shall be subordinate to therepayment of the Obligations on terms reasonably acceptable to Agent.

 

Notwithstandinganything in this Agreement to the contrary, none of the Borrower, theGuarantors or their respective Subsidiaries shall create, incur, assume,guarantee or be or remain liable, contingently or otherwise, with respect to (x) anyIndebtedness (other than Indebtedness to the Lenders arising under the LoanDocuments) with respect to which there is a Lien on any Equity Interests, rightto receive Distributions or similar right in any Subsidiary or UnconsolidatedAffiliate of such Person****or (y) anyUnsecured Debt other than Indebtedness permitted under clauses (b)-(g) ofthis §8.1.

 

§8.2         Restrictions on Liens,Etc.  The Borrower will not, and willnot permit any Guarantor or their respective Subsidiaries to (a) create orincur or suffer to be created or incurred or to exist any lien, security title,encumbrance, mortgage, pledge, negative pledge, charge, restriction or othersecurity interest of any kind upon any of their respective property or assetsof any character whether now owned or hereafter acquired, or upon the income orprofits therefrom; (b) transfer any of their property or assets or theincome or profits therefrom for the purpose of subjecting the same to thepayment of Indebtedness or performance of any other obligation in priority topayment of its general creditors; (c) acquire, or agree or have an optionto acquire, any property or assets upon conditional sale or other titleretention or purchase money security agreement, device or arrangement; (d) sufferto exist for a period of more than thirty (30) days

 

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after the same shall havebeen incurred any Indebtedness or claim or demand against any of them that ifunpaid could by law or upon bankruptcy or insolvency, or otherwise, be givenany priority whatsoever over any of their general creditors; (e) sell,assign, pledge or otherwise transfer any accounts, contract rights, generalintangibles, chattel paper or instruments, with or without recourse; or (f) incuror maintain any obligation to any holder of Indebtedness of any of such Personswhich prohibits the creation or maintenance of any lien securing theObligations (collectively, “Liens”); provided that notwithstandinganything to the contrary contained herein, the Borrower, any Guarantor or anysuch Subsidiary may create or incur or suffer to be created or incurred or toexist:

 

(i)            (A) Liens onproperties to secure taxes, assessments and other governmental charges(excluding any Lien imposed pursuant to any of the provisions of ERISA orpursuant to any Environmental Laws) or claims for labor, material or suppliesincurred in the ordinary course of business in respect of obligations not thendelinquent or not otherwise required to be paid or discharged under the termsof this Agreement or any of the other Loan Documents and (B) Liens onassets other than (I) the Collateral and (II) any direct or indirectinterest of the Borrower and any Subsidiary of the Borrower in any Guarantor orany Company in respect of judgments permitted by §8.1(d);

 

(ii)           deposits or pledgesmade in connection with, or to secure payment of, workers’ compensation,unemployment insurance, old age pensions or other social security obligations;

 

(iii)          Liens consisting ofmortgage liens on Real Estate (including the rents, issues and profitstherefrom), or any interest therein (including the rents, issues and profitstherefrom), and related personal property securing Indebtedness which ispermitted by §8.1(h) or (i);

 

(iv)          encumbrances onproperties consisting of easements, tenant leases, rights of way, zoningrestrictions, restrictions on the use of real property and defects andirregularities in the title thereto, landlord’s or lessor’s liens under leasesto which the Borrower or any such Subsidiary is a party, and other non-monetaryliens or encumbrances, which do not individually or in the aggregate have aMaterial Adverse Effect;

 

(v)           cash deposits to securethe performance of bids, trade contracts (other than for Indebtedness),purchase contracts, leases, statutory obligations, surety and appeal bonds,performance bonds and other obligations of a like nature incurred in theordinary course of business;

 

(vi)          rights of setoff orbankers’ liens upon deposits of cash in favor of banks or other depositoryinstitutions, solely to the extent incurred in connection with the maintenanceof such deposit accounts in the ordinary course of business;

 

(vii)         Liens of CapitalizedLeases; and

 

(viii)        Liens in favor of theAgent and the Lenders under the Loan Documents to secure the Obligations.

 

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Notwithstandinganything in this Agreement to the contrary, (x) no Subsidiary Guarantorshall create or incur or suffer to be created or incurred or to exist any Lienother than Liens contemplated in §§8.2(i), (iv), (v), (vi) and (vii) and(y) REIT shall not create or suffer to be created or incurred or to existany Lien on any of its properties or assets or those of the general partner ofthe Borrower, other than Liens contemplated in §8.2(i)(A), (v) and (vi),and any assignment of claims which REIT may have against Borrower or anySubsidiary or Unconsolidated Affiliate in a bankruptcy proceeding of Borrower,such Subsidiary or Unconsolidated Affiliate to a lender contained in aguaranty.

 

§8.3         Restrictions onInvestments.  Neither the Borrowernor any Guarantor will, nor will it permit any of its Subsidiaries to, make orpermit to exist or to remain outstanding any Investment except Investments in:

 

(a)           marketable direct orguaranteed obligations of the United States of America that mature within one (1) yearfrom the date of purchase by Borrower or its Subsidiary;

 

(b)           marketable directobligations of any of the following: Federal Home Loan Mortgage Corporation,Student Loan Marketing Association, Federal Home Loan Banks, Federal NationalMortgage Association, Government National Mortgage Association, Bank forCooperatives, Federal Intermediate Credit Banks, Federal Financing Banks,Export-Import Bank of the United States, Federal Land Banks, or any otheragency or instrumentality of the United States of America;

 

(c)           demand deposits,certificates of deposit, bankers acceptances and time deposits of United Statesbanks having total assets in excess of $100,000,000.00; provided, however,that the aggregate amount at any time so invested with any single bank havingtotal assets of less than $1,000,000,000.00 will not exceed $500,000.00;

 

(d)           securities commonlyknown as “commercial paper” issued by a corporation organized and existingunder the laws of the United States of America or any State which at the timeof purchase are rated by Moody’s Investors Service, Inc. or by Standard &Poor’s Corporation at not less than “P 1” if then rated by Moody’s InvestorsService, Inc., and not less than “A 1”, if then rated by Standard &Poor’s Corporation;

 

(e)           mortgage-backedsecurities guaranteed by the Government National Mortgage Association, theFederal National Mortgage Association or the Federal Home Loan MortgageCorporation and other mortgage-backed bonds (excluding those backed by singlefamily residential mortgages) which at the time of purchase are rated by Moody’sInvestors Service, Inc. or by Standard & Poor’s Corporation atnot less than “Aa” if then rated by Moody’s Investors Service, Inc. andnot less than “AA” if then rated by Standard & Poor’s Corporation;

 

(f)            repurchase agreementshaving a term not greater than ninety (90) days and fully secured by securitiesdescribed in the foregoing subsection (a), (b) or (e) with banksdescribed in the foregoing subsection (c) or with financial institutionsor other corporations having total assets in excess of $500,000,000.00;

 

(g)           shares of so-called “moneymarket funds” registered with the SEC under the Investment Company Act of 1940which maintain a level per-share value, invest principally

 

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in investments describedin the foregoing subsections (a) through (f) and have total assets inexcess of $50,000,000.00;

 

(h)           the acquisition of feeinterests or long-term ground lease interests by the Borrower or itsSubsidiaries in (i) Real Estate which is utilized for income-producingoffice properties located in the United States or the District of Columbia and businessesand investments incidental thereto, and (ii) subject to the restrictionsset forth in §8.3(j), the acquisition of Land Assets to be developed for theforegoing purposes and Development Properties to be used for the purposes setforth in §8.3(h)(i);

 

(i)            Investments by theBorrower or Wholly Owned Subsidiaries of the Borrower in Wholly OwnedSubsidiaries of the Borrower;

 

(j)            Investments in LandAssets, provided that the aggregate Investment therein shall not exceed fivepercent (5%) of Gross Asset Value;

 

(k)           Investments in MortgageReceivables and mezzanine loans secured by properties (or equity interests inPersons owning properties) of the types described in §§8.3(h)(i), (m) or(o), and in the Multifamily Facility, provided that the aggregate Investmenttherein shall not exceed five percent (5%) of Gross Asset Value;

 

(l)            Investments innon-wholly owned Subsidiaries and Unconsolidated Affiliates, provided that theaggregate Investment therein shall not exceed ten percent (10%) of Gross AssetValue;

 

(m)          Investments inDevelopment Properties in respect of Construction in Progress for properties ofthe type described in §8.3(h)(i), provided that the aggregate construction anddevelopment budget for Construction in Progress (including land), together withany Investments in Mortgage Receivables secured by real estate in respect ofConstruction in Progress (which amount shall include any amounts to be advancedunder such Mortgage Receivable), shall not exceed ten percent (10%) of GrossAsset Value;

 

(n)           Investments in TenantIn Common Assets, provided that the aggregate Investment therein shall notexceed seven and one-half percent (7.5%) of Gross Asset Value; and

 

(o)           Investments inincome-producing Real Estate (other than office properties) located in theUnited States or the District of Columbia and businesses and investmentsincidental thereto, provided that the aggregate Investment therein shall notexceed five percent (5%) of Gross Asset Value.

 

Notwithstandingthe foregoing, in no event shall the aggregate value of the holdings of theBorrower, the Guarantors and their respective Subsidiaries in the Investmentsdescribed in §8.3(j)-(o) exceed twenty-five percent (25%) of Gross AssetValue at any time.

 

For thepurposes of this §8.3, the Investment of the Borrower, any Guarantor or itsSubsidiaries in any non-Wholly Owned Subsidiaries and Unconsolidated Affiliateswill equal (without duplication) the sum of (i) such Person’s pro ratashare of Investment in Land Assets;

 

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plus(ii) such Person’s pro rata share of any other Investments valued at theGAAP book value; plus (iii) such Person’s pro-rata share ofConstruction in Progress.

 

§8.4         Merger, Consolidation.  Other than with respect to or in connectionwith any disposition permitted under §8.8, the Borrower will not, nor will itpermit the Guarantors or any of their respective Subsidiaries to, become aparty to any dissolution, liquidation, disposition of all or substantially allof its assets or business, merger, reorganization, consolidation or otherbusiness combination or agree to effect any asset acquisition, stockacquisition or other acquisition individually or in a series of transactionswhich may have a similar effect as any of the foregoing, in each case withoutthe prior written consent of the Required Lenders.  Notwithstanding the foregoing, so long as noDefault or Event of Default has occurred and is continuing immediately beforeand after giving effect thereto, the following shall be permitted: (i) themerger or consolidation of one or more of the Subsidiaries of the Borrower withand into the Borrower (it being understood and agreed that in any such eventthe Borrower will be the surviving Person), (ii) the merger orconsolidation of two or more Subsidiaries of the Borrower; provided thatno such merger or consolidation shall involve any Subsidiary that is aGuarantor unless such Guarantor will be the surviving Person or (iii) theacquisition of all or substantially all of the assets of another Person in abona fide arm’s length transaction that otherwise satisfies the requirements of§7.12 and §8.3 and which does not create or result in a Default or Event ofDefault.

 

§8.5         Sale and Leaseback.  The Borrower will not, and will not permit itsSubsidiaries, to enter into any arrangement, directly or indirectly, wherebythe Borrower or any such Subsidiary shall sell or transfer any Real Estateowned by it in order that then or thereafter the Borrower or any suchSubsidiary shall lease back such Real Estate without the prior written consentof Agent, such consent not to be unreasonably withheld.

 

§8.6         Compliance withEnvironmental Laws.  None of theBorrower nor any Guarantor will, nor will any of them permit any of theirrespective Subsidiaries or any other Person to, do any of the following: (a) useany of the Real Estate or any portion thereof as a facility for the handling,processing, storage or disposal of Hazardous Substances, except for quantitiesof Hazardous Substances used in the ordinary course of operating officeproperties and non-office properties as permitted under this Agreement and inmaterial compliance with all applicable Environmental Laws, (b) cause orpermit to be located on any of the Real Estate any underground tank or otherunderground storage receptacle for Hazardous Substances except in fullcompliance with Environmental Laws, (c) generate any Hazardous Substanceson any of the Real Estate except in full compliance with Environmental Laws, (d) conductany activity at any Real Estate or use any Real Estate in any manner that couldreasonably be contemplated to cause a Release of Hazardous Substances on, uponor into the Real Estate or any surrounding properties or any threatened Releaseof Hazardous Substances which might give rise to liability under CERCLA or anyother Environmental Law, or (e) directly or indirectly transport orarrange for the transport of any Hazardous Substances (except in compliancewith all Environmental Laws), except where any such use, generation, conduct orother activity has not had and could not reasonably be expected to have aMaterial Adverse Effect.

 

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The Borrower and the Guarantors shall, and shall cause their respectiveSubsidiaries to:

 

(i)            in the event of anychange in Environmental Laws governing the assessment, release or removal ofHazardous Substances, which change either adds any Hazardous Substances to itsapplicability, decreases any threshold at which any action must be taken with respectto remediation of any Hazardous Substances, or institutes more burdensomerequirements with respect to testing for or storage or containment of anyHazardous Substances (or has the effect of any of the foregoing), take allreasonable action (including, without limitation, the conducting of engineeringtests at the sole expense of the Borrower) determine whether such HazardousSubstances are or ever were Released or disposed of on any Real Estate inviolation of applicable Environmental Laws; and

 

(ii)           if any Release ordisposal of Hazardous Substances which any Person may be legally obligated tocontain, correct or otherwise remediate or which may otherwise expose it toliability shall occur or shall have occurred on any Real Estate (includingwithout limitation any such Release or disposal occurring prior to theacquisition or leasing of such Real Estate by the Borrower, any such Guarantoror any such Subsidiary), the Borrower shall, after obtaining knowledge thereof,cause the prompt containment and removal of such Hazardous Substances andremediation of the Real Estate in full compliance with all applicableEnvironmental Laws; provided, that the Borrower, the Guarantors andtheir respective Subsidiaries shall be deemed to be in compliance with EnvironmentalLaws for the purpose of this clause (ii) so long as it or a responsiblethird party with sufficient financial resources is taking reasonable action toremediate or manage any event of noncompliance in accordance with applicablelaw to the reasonable satisfaction of the Agent and no legal or administrativeaction shall have been commenced or filed by any enforcement agency to requireremediation, containment, mitigation or other action.  The Agent may engage its own EnvironmentalEngineer to review the environmental assessments and the compliance with thecovenants contained herein.

 

(iii)          At any time during thecontinuance of an Event of Default hereunder the Agent may at its election (andwill at the request of the Required Lenders) obtain such environmentalassessments of any or all of the Real Estate prepared by an EnvironmentalEngineer as may be necessary or advisable for the purpose of evaluating orconfirming (i) whether any Hazardous Substances are present in the soil orwater at or adjacent to any such Real Estate and (ii) whether the use andoperation of any such Real Estate complies with all Environmental Laws to theextent required by the Loan Documents. Additionally, at any time that the Agent or the Required Lenders shallhave reasonable and objective grounds to believe that a Release or threatenedRelease of Hazardous Substances which any Person may be legally obligated tocontain, correct or otherwise remediate or which otherwise may expose suchPerson to liability may have occurred, relating to any Real Estate, or that anyof the Real Estate is not in compliance with Environmental Laws to the extentrequired by the Loan Documents, and such Release or threatened Release ornon-compliance involves estimated or potential liabilities for remediation orcompliance of $500,000.00 or more, as determined by the Agent in its sole andabsolute discretion, the Borrower shall promptly upon the request of Agentobtain and deliver to Agent such environmental assessments of such Real Estateprepared by an Environmental Engineer as may be necessary or advisable for thepurpose of evaluating or confirming (i) whether any Hazardous Substancesare present in the soil or water at or adjacent to such Real

 

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Estate and (ii) whetherthe use and operation of such Real Estate comply with all Environmental Laws tothe extent required by the Loan Documents. Environmental assessments may include detailed visual inspections ofsuch Real Estate including, without limitation, any and all storage areas,storage tanks, drains, dry wells and leaching areas, and the taking of soilsamples, as well as such other investigations or analyses as are reasonablynecessary or appropriate for a complete determination of the compliance of suchReal Estate and the use and operation thereof with all applicable EnvironmentalLaws.  All environmental assessmentscontemplated by this §8.6 shall be at the sole cost and expense of theBorrower.

 

§8.7         Distributions.

 

(a)           (i) The Borrowershall not pay any Distribution to the partners, members or other owners of theBorrower, and REIT shall not pay any Distribution to its partners, members orother owners, during any period of four (4) consecutive calendar quartersto the extent that such Distribution would cause the aggregate Distributions(less any amount of such Distribution constituting Dividend ReinvestmentProceeds) paid or declared during such period to exceed ninety-five percent(95%) of such Person’s Funds from Operations for such period; provided that solong as no Default or Event of Default shall be continuing or would arise as aresult thereof, an amount not to exceed $15,000,000.00 in any period of four (4) consecutivefiscal quarters paid to redeem Equity Interests in Borrower or REIT shall notbe considered Distributions for the purpose of the foregoing limit; and  providedfurther that thelimitations contained in this §8.7(a) shall not preclude the Borrower frommaking Distributions in an amount equal to the minimum distributions requiredunder the Code to maintain the REIT Status of REIT, as evidenced by acertification of the principal financial or accounting officer of REITcontaining calculations in detail reasonably satisfactory in form and substanceto the Agent.

 

(b)           If an Event of Defaultshall have occurred and be continuing, the Borrower shall make noDistributions, and REIT shall not pay any Distribution to its partners, membersor other owners, other than Distributions in an amount equal to the minimumdistributions required under the Code to maintain the REIT Status of REIT, asevidenced by a certification of the principal financial or accounting officerof REIT containing calculations in detail reasonably satisfactory in form andsubstance to the Agent.

 

(c)           Notwithstanding theforegoing, at any time when an Event of Default under §12.1(a) or (b) shallhave occurred, an Event of Default as to Borrower or REIT under §12.1 (g), (h) or(i) shall have occurred, or the maturity of the Obligations has beenaccelerated, neither the Borrower nor REIT shall make any Distributionswhatsoever, directly or indirectly.

 

§8.8         Asset Sales.  The Borrower will not, and will not permitthe Guarantors or their respective Subsidiaries to, sell, transfer or otherwisedispose of any material asset other than pursuant to a bona fide arm’s lengthtransaction.  Neither the Borrower, anyGuarantor nor any Subsidiary thereof shall sell, transfer or otherwise disposeof any Real Estate in one transaction or a series of transactions during anyfour (4) consecutive fiscal quarters in excess of an amount equal totwenty percent (20%) of Gross Asset Value as at the beginning of such four (4) quarterperiod, except as the result of a condemnation or casualty, without the priorwritten consent of Agent and the Required Lenders.

 

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§8.9         Restriction onPrepayment of Indebtedness.  TheBorrower and the Guarantors will not, and will not permit their respectiveSubsidiaries to, (a) during the existence of any Event of Default, prepay,redeem, defease, purchase or otherwise retire (except for regularly scheduledinstallments of principal) the principal amount, in whole or in part, of anyIndebtedness other than the Obligations; provided, that the foregoingshall not prohibit (x) the prepayment of Indebtedness which is financedsolely from the proceeds of a new loan which would otherwise be permitted bythe terms of §8.1; and (y) the prepayment, redemption, defeasance or otherretirement of the principal of Indebtedness secured by Real Estate which issatisfied solely from the proceeds of a sale of the Real Estate securing suchIndebtedness or proceeds resulting from a casualty or condemnation relating tosuch Real Estate (and such insurance or condemnation proceeds are not otherwiserequired by the terms of any applicable loan documents to be applied to therestoration or rebuilding of such Real Estate); or (b) modify any documentevidencing any Indebtedness (other than the Obligations) to accelerate thematurity date or required payments of principal of such Indebtedness during theexistence of an Event of Default.

 

§8.10       Derivatives Contracts.  Neither the Borrower, the Guarantors nor anyof their respective Subsidiaries shall contract, create, incur, assume or sufferto exist any Derivatives Contracts except for interest rate swap, collar, capor similar agreements providing interest rate protection and currency swaps andcurrency options made in the ordinary course of business and permitted pursuantto §8.1.

 

§8.11       Transactions withAffiliates.  The Borrower shall not,and shall not permit any Guarantor or Subsidiary of any of them to, permit toexist or enter into, any transaction (including the purchase, sale, lease orexchange of any property or the rendering of any service) with any Affiliate(but not including any Subsidiary of REIT, the Borrower or any otherGuarantor), except (i)  transactions set forth on Schedule 6.14attached hereto and (ii) transactions pursuant to the reasonablerequirements of the business of such Person and upon fair and reasonable termswhich are no less favorable to such Person than would be obtained in acomparable arm’s length transaction with a Person that is not an Affiliate.

 

§8.12       Equity Pledges.  Except for Liens permitted under §8.2(i)(A),(ii), (v), (vi) and (viii), neither REIT nor Borrower will create or incuror suffer to be created or incurred any Lien on any of its direct or indirectlegal, equitable or beneficial interest in the Borrower or any Subsidiary ofBorrower, including, without limitation, any Distributions or rights toDistributions on account thereof (provided that the foregoing shall not bedeemed to prohibit a Subsidiary that owns Real Estate to have Liens permittedpursuant to §8.2(iii)).

 

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§8.13       Advisory Fees.  The Borrower and the Guarantors shall not,and shall not permit any of their respective Subsidiaries to, pay any advisoryfees or other payments under the Advisory Agreement or any replacement thereofto any advisor that is an Affiliate of the Borrower, such Guarantor or suchSubsidiary in the event that a Default or Event of Default shall haveoccurred and be continuing.

 

§9.           FINANCIAL COVENANTS.

 

The Borrowercovenants and agrees that, so long as any Loan, Note or Letter of Credit isoutstanding or any Lender has any obligation to make any Loans or issue anyLetter of Credit:

 

§9.1         Consolidated TotalIndebtedness to Gross Asset Value. The Borrower will not permit Consolidated Total Indebtedness to exceedseventy percent (70%) of Gross Asset Value.

 

§9.2         Adjusted ConsolidatedEBITDA to Consolidated Fixed Charges. The Borrower will not permit the ratio of Adjusted Consolidated EBITDAdetermined as of the end of the most recently ended calendar quarter toConsolidated Fixed Charges for the most recently ended calendar quarterannualized, to be less than 1.45 to 1.00.

 

§9.3         Minimum ConsolidatedTangible Net Worth.  The Borrowerwill not at any time permit Consolidated Tangible Net Worth to be less than thesum of (i) $1,000,000,000.00, plus (ii) seventy-five percent (75%) ofthe sum of (A) any additional Net Offering Proceeds after the date hereof,plus (B) the value of interests in the Borrower or interests in REITissued upon the contribution of assets to the Borrower or its Subsidiaries.

 

§9.4         Unhedged Variable RateDebt.  The Borrower shall not permitthe Unhedged Variable Rate Debt of the Borrower, the Guarantors and theirrespective Subsidiaries to exceed twenty percent (20%) of Gross Asset Value.

 

§10.         CLOSING CONDITIONS.

 

The obligationof the Lenders to make the initial Loans or issue the initial Letter(s) ofCredit shall be subject to the satisfaction of the following conditionsprecedent:

 

§10.1       Loan Documents.  Each of the Loan Documents shall have beenduly executed and delivered by the respective parties thereto and shall be infull force and effect.  The Agent shallhave received a fully executed counterpart of each such document.

 

§10.2       Certified Copies ofOrganizational Documents.  The Agentshall have received from the Borrower and each Guarantor a copy, certified asof a recent date by the appropriate officer of each State in which such Personis organized and a duly authorized officer, partner or member of such Person,as applicable, to be true and complete, of the partnership agreement, corporatecharter or operating agreement and/or other organizational agreements of theBorrower and each such Guarantor, as applicable, and its qualification to dobusiness, as applicable, as in effect on such date of certification.

 

§10.3       Resolutions.  All action on the part of the Borrower andeach Guarantor, as applicable, necessary for the valid execution, delivery andperformance by such Person of this

 

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Agreement and the otherLoan Documents to which such Person is or is to become a party shall have beenduly and effectively taken, and evidence thereof reasonably satisfactory to theAgent shall have been provided to the Agent.

 

§10.4       Incumbency Certificate;Authorized Signers.  The Agent shallhave received from the Borrower and each Guarantor an incumbency certificate,dated as of the Closing Date, signed by a duly authorized officer of suchPerson and giving the name and bearing a specimen signature of each individualwho shall be authorized to sign, in the name and on behalf of such Person, eachof the Loan Documents to which such Person is or is to become a party.  The Agent shall have also received from theBorrower a certificate, dated as of the Closing Date, signed by a duly authorizedrepresentative of the Borrower and giving the name and specimen signature ofeach Authorized Officer who shall be authorized to make Loan Requests, Letterof Credit Requests and Conversion/Continuation Requests and to give notices andto take other action on behalf of the Borrower under the Loan Documents.

 

§10.5       Opinion of Counsel.  The Agent shall have received an opinionaddressed to the Lenders and the Agent and dated as of the Closing Date fromcounsel to the Borrower and each Guarantor in form and substance reasonablysatisfactory to the Agent.

 

§10.6       Payment of Fees.  The Borrower shall have paid to the Agent thefees payable pursuant to §4.2.

 

§10.7       Performance; No Default.  The Borrower and each Guarantor shall haveperformed and complied with all terms and conditions herein required to beperformed or complied with by it on or prior to the Closing Date, and on theClosing Date there shall exist no Default or Event of Default.

 

§10.8       Representations andWarranties.  The representations andwarranties made by the Borrower and each Guarantor in the Loan Documents orotherwise made by or on behalf of the Borrower, the Guarantors and theirrespective Subsidiaries in connection therewith or after the date thereof shallhave been true and correct in all material respects when made and shall also betrue and correct in all material respects on the Closing Date.

 

§10.9       Proceedings andDocuments.  All proceedings inconnection with the transactions contemplated by this Agreement and the otherLoan Documents shall be reasonably satisfactory to the Agent and the Agent’scounsel in form and substance, and the Agent shall have received allinformation and such counterpart originals or certified copies of suchdocuments and such other certificates, opinions, assurances, consents,approvals or documents as the Agent and the Agent’s counsel may reasonablyrequire.

 

§10.10     Compliance Certificate.  The Agent shall have received a ComplianceCertificate dated as of the date of the Closing Date demonstrating compliancewith each of the covenants calculated therein as of the most recent calendarquarter for which REIT has provided financial statements under §6.4 adjusted inthe best good faith estimate of REIT as of the Closing Date.

 

§10.11     Consents.  The Agent shall have received evidencereasonably satisfactory to the Agent that all necessary stockholder, partner,member or other consents required in connection

 

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with the consummation ofthe transactions contemplated by this Agreement and the other Loan Documentshave been obtained.

 

§10.12     Contribution Agreement.  The Agent shall have received an executedcounterpart of the Contribution Agreement.

 

§10.13     Other.  The Agent shall have reviewed such otherdocuments, instruments, certificates, opinions, assurances, consents andapprovals as the Agent or the Agent’s Special Counsel may reasonably haverequested.

 

§11.         CONDITIONS TO ALLBORROWINGS.

 

Theobligations of the Lenders to make any Loan or issue any Letter of Credit,whether on or after the Closing Date, shall also be subject to the satisfactionof the following conditions precedent:

 

§11.1       Prior ConditionsSatisfied.  All conditions set forthin §10 shall continue to be satisfied as of the date upon which any Loan is tobe made or any Letter of Credit is to be issued.

 

§11.2       Representations True; NoDefault.  Each of the representationsand warranties made by or on behalf of the Borrower, the Guarantors or any oftheir respective Subsidiaries contained in this Agreement, the other LoanDocuments or in any document or instrument delivered pursuant to or inconnection with this Agreement shall be true and correct in all materialrespects both as of the date as of which they were made and shall also be trueand correct in all material respects as of the time of the making of such Loanor the issuance of such Letter of Credit, with the same effect as if made atand as of that time, except to the extent of changes resulting fromtransactions permitted by the Loan Documents and except as previously disclosedin writing by the Borrower to Agent and approved by the Agent in writing (whichdisclosures shall be deemed to amend the Schedules and other disclosuresdelivered as contemplated in this Agreement) (it being understood and agreedthat any representation or warranty which by its terms is made as of aspecified date shall be required to be true and correct only as of suchspecified date), and no Default or Event of Default shall have occurred and becontinuing.

 

§11.3       Borrowing Documents.  The Agent shall have received a fullycompleted Loan Request for such Loan and the other documents and information(including, without limitation, a Compliance Certificate) as required by §2.7,or a fully completed Letter of Credit Request required by §2.10 in the form of Exhibit Fhereto fully completed, as applicable.

 

§12.         EVENTS OF DEFAULT;ACCELERATION; ETC.

 

§12.1       Events of Default andAcceleration.  If any of thefollowing events (“Events of Default” or, if the giving of notice or the lapseof time or both is required, then, prior to such notice or lapse of time, “Defaults”)shall occur:

 

(a)           the Borrower shall failto pay any principal of the Loans when the same shall become due and payable,whether at the stated date of maturity or any accelerated date of maturity orat any other date fixed for payment;

 

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(b)           the Borrower shall failto pay any interest on the Loans, any reimbursement obligations with respect tothe Letters of Credit or any fees or other sums due hereunder or under any ofthe other Loan Documents when the same shall become due and payable, whether atthe stated date of maturity or any accelerated date of maturity or at any otherdate fixed for payment;

 

(c)           the Borrower shall failto perform any other term, covenant or agreement contained in §9;

 

(d)           the Borrower, theGuarantors or any of their respective Subsidiaries shall fail to perform anyother term, covenant or agreement contained herein or in any of the other LoanDocuments which they are required to perform (other than those specified in theother subclauses of this §12 or in the other Loan Documents);

 

(e)           any representation orwarranty made by or on behalf of the Borrower, the Guarantors or any of theirrespective Subsidiaries in this Agreement or any other Loan Document, or anyreport, certificate, financial statement, request for a Loan, Letter of CreditRequest, or in any other document or instrument delivered pursuant to or inconnection with this Agreement, any advance of a Loan, the issuance of anyLetter of Credit or any of the other Loan Documents shall prove to have beenfalse in any material respect upon the date when made or deemed to have beenmade or repeated;

 

(f)            the Borrower, anyGuarantor or any of their Subsidiaries shall fail to pay when due (including,without limitation, at maturity), or within any applicable period of grace, anyprincipal, interest or other amount on account any obligation for borrowedmoney or credit received or other Indebtedness, or shall fail to observe orperform any term, covenant or agreement contained in any agreement by which itis bound, evidencing or securing any obligation for borrowed money or creditreceived or other Indebtedness (including under any Derivatives Contract) forsuch period of time as would permit (assuming the giving of appropriate noticeif required) the holder or holders thereof or of any obligations issuedthereunder to accelerate the maturity thereof; provided that the eventsdescribed in §12.1(f) shall not constitute an Event of Default unless suchfailure to perform, together with other failures to perform as described in§12.1(f), involve singly or in the aggregate obligations for RecourseIndebtedness totaling in excess of $10,000,000.00 or Non-Recourse Indebtednesstotaling in excess of $50,000,000.00;

 

(g)           the Borrower, anyGuarantor or any of their respective Subsidiaries, (i) shall make anassignment for the benefit of creditors, or admit in writing its generalinability to pay or generally fail to pay its debts as they mature or becomedue, or shall petition or apply for the appointment of a trustee or othercustodian, liquidator or receiver for it or any substantial part of its assets,(ii) shall commence any case or other proceeding relating to it under anybankruptcy, reorganization, arrangement, insolvency, readjustment of debt,dissolution or liquidation or similar law of any jurisdiction, now or hereafterin effect, or (iii) shall take any action to authorize or in furtheranceof any of the foregoing;

 

(h)           a petition orapplication shall be filed for the appointment of a trustee or other custodian,liquidator or receiver of the Borrower, any Guarantor or any of theirrespective

 

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Subsidiaries or anysubstantial part of the assets of any thereof, or a case or other proceedingshall be commenced against any such Person under any bankruptcy,reorganization, arrangement, insolvency, readjustment of debt, dissolution orliquidation or similar law of any jurisdiction, now or hereafter in effect, andany such Person shall indicate its approval thereof, consent thereto oracquiescence therein or such petition, application, case or proceeding shallnot have been dismissed within sixty (60) days following the filing orcommencement thereof;

 

(i)            a decree or order isentered appointing a trustee, custodian, liquidator or receiver for theBorrower, any Guarantor or any of their respective Subsidiaries or adjudicatingany such Person, bankrupt or insolvent, or approving a petition in any suchcase or other proceeding, or a decree or order for relief is entered in respectof any such Person in an involuntary case under federal bankruptcy laws as nowor hereafter constituted;

 

(j)            there shall remain inforce, undischarged, unsatisfied and unstayed, for more than forty-five (45)days, one or more uninsured or unbonded final judgments against (x) theBorrower or any Guarantor that, either individually or in the aggregate, exceed$25,000,000.00 in any calendar year or (y) any Subsidiary of the Borrowerthat is not a Subsidiary Guarantor that, either individually or in theaggregate, exceed $50,000,000.00 in any calendar year;

 

(k)           any of the LoanDocuments or the Contribution Agreement shall be canceled, terminated, revokedor rescinded otherwise than in accordance with the terms thereof or the expressprior written agreement, consent or approval of the Lenders, or any action atlaw, suit in equity or other legal proceeding to cancel, revoke or rescind anyof the Loan Documents or the Contribution Agreement shall be commenced by or onbehalf of the Borrower or any Guarantor, or any court or any other governmentalor regulatory authority or agency of competent jurisdiction shall make adetermination, or issue a judgment, order, decree or ruling, to the effect thatany one or more of the Loan Documents or the Contribution Agreement is illegal,invalid or unenforceable in accordance with the terms thereof;

 

(l)            any dissolution,termination, partial or complete liquidation, merger or consolidation of theBorrower, any Guarantor or any of their respective Subsidiaries shall occur orany sale, transfer or other disposition of the assets of the Borrower, anyGuarantor or any of their respective Subsidiaries shall occur, in each case,other than as permitted under the terms of this Agreement or the other LoanDocuments;

 

(m)          with respect to anyGuaranteed Pension Plan, an ERISA Reportable Event shall have occurred and theRequired Lenders shall have determined in their reasonable discretion that suchevent reasonably could be expected to result in liability of the Borrower, theGuarantors or any of their respective Subsidiaries to the PBGC or suchGuaranteed Pension Plan in an aggregate amount exceeding $10,000,000.00 and (x) suchevent in the circumstances occurring reasonably could constitute grounds forthe termination of such Guaranteed Pension Plan by the PBGC or for theappointment by the appropriate United States District Court of a trustee toadminister such Guaranteed Pension Plan; or (y) a trustee shall have beenappointed by the United States District Court to administer such Plan; or (z) thePBGC shall have instituted proceedings to terminate such Guaranteed PensionPlan;

 

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(n)           the Borrower, anyGuarantor or any of their respective Subsidiaries or any shareholder, officer,director, partner or member of any of them shall be indicted for a federalcrime, a punishment for which could include the forfeiture of (i) anyassets of the Borrower or any of their respective Subsidiaries which in thegood faith judgment of the Required Lenders could reasonably be expected tohave a Material Adverse Effect, or (ii) the Collateral;

 

(o)           any Guarantor deniesthat it has any liability or obligation under the Guaranty or any other LoanDocument, or shall notify the Agent or any of the Lenders of such Guarantor’sintention to attempt to cancel or terminate the Guaranty or any other LoanDocument;

 

(p)           the Borrower, anyGuarantor or any of their respective Subsidiaries shall fail to comply with thecovenants set forth in §8.6 hereof; provided, however, no Eventof Default shall occur hereunder as a result of such failure if such failurerelates solely to a parcel or parcels of Real Estate whose book value, eitherindividually or in the aggregate, does not exceed $50,000,000.00;

 

(q)           any Change of Controlshall occur; or

 

(r)            an Event of Defaultunder any of the other Loan Documents shall occur;

 

then, and inany such event, the Agent may, and upon the request of the Required Lendersshall, by notice in writing to the Borrower declare all amounts owing withrespect to this Agreement, the Notes, the Letters of Credit and the other LoanDocuments to be, and they shall thereupon forthwith become, immediately due andpayable without presentment, demand, protest or other notice of any kind, allof which are hereby expressly waived by the Borrower; provided that inthe event of any Event of Default specified in §12.1(g), §12.1(h) or §12.1(i) asto Borrower or REIT, all such amounts shall become immediately due and payableautomatically and without any requirement of presentment, demand, protest orother notice of any kind from any of the Lenders or the Agent.  Upon demand by Agent or the MajorityRevolving Credit Lenders in their absolute and sole discretion after theoccurrence and during the continuance of an Event of Default, and regardless ofwhether the conditions precedent in this Agreement for a Revolving Credit Loanhave been satisfied, the Revolving Credit Lenders will cause a Revolving CreditLoan to be made in the undrawn amount of all Letters of Credit.  The proceeds of any such Revolving CreditLoan will be pledged to and held by Agent as security for any amounts thatbecome payable under the Letters of Credit and all other Obligations.  In the alternative, if demanded by Agent inits absolute and sole discretion after the occurrence and during thecontinuance of an Event of Default, the Borrower will deposit with and pledgeto Agent cash in an amount equal to the amount of all undrawn Letters ofCredit.  Such amounts will be pledged toand held by Agent for the benefit of the Lenders as security for any amountsthat become payable under the Letters of Credit and all other Obligations.  Upon any draws under Letters of Credit, atAgent’s sole discretion, Agent may apply any such amounts to the repayment ofamounts drawn thereunder and upon the expiration of the Letters of Credit anyremaining amounts will be applied to the payment of all other Obligations or ifthere are no outstanding Obligations and Lenders have no further obligation tomake Revolving Credit Loans or issue Letters of Credit or if such excess nolonger exists, such proceeds deposited by the Borrower will be released to theBorrower.

 

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§12.2       CertainCure Periods; Limitation of Cure Periods.

 

(a)           Notwithstandinganything contained in §12.1 to the contrary, (i) no Event of Default shallexist hereunder upon the occurrence of any failure described in §12.1(b) inthe event that the Borrower cures such Default within five (5) BusinessDays after the date such payment is due, provided that no such cureperiod shall apply to any payments due upon the maturity of the Notes, and (ii) noEvent of Default shall exist hereunder upon the occurrence of any failuredescribed in §12.1(d) in the event that the Borrower cures (or causes tobe cured) such Default within thirty (30) days following receipt of writtennotice of such default, provided that the provisions of this clause (ii) shallnot pertain to any default (whether of Borrower, Guarantor or any Subsidiarythereof) consisting of a failure to comply with §7.4(c), §7.12, §7.16, §8.1,§8.2, §8.3, §8.4, §8.7, §8.8 or to any Default excluded from any provision ofcure of defaults contained in any other of the Loan Documents.

 

§12.3       Termination ofCommitments.  If any one or moreEvents of Default specified in §12.1(g), §12.1(h) or §12.1(i) shalloccur with respect to Borrower or REIT, then immediately and without any actionon the part of the Agent or any Lender any unused portion of the credithereunder shall terminate and the Lenders shall be relieved of all obligationsto make Loans or issue Letters of Credit to the Borrower.  If any other Event of Default shall haveoccurred, the Agent may, and upon the election of the Majority Revolving CreditLenders shall, by notice to the Borrower terminate the obligation to makeRevolving Credit Loans to and issue Letters of Credit for the Borrower.  No termination under this §12.3 shall relievethe Borrower of its obligations to the Lenders arising under this Agreement orthe other Loan Documents.

 

§12.4       Remedies.  In case any one or more Events of Defaultshall have occurred and be continuing, and whether or not the Lenders shallhave accelerated the maturity of the Loans pursuant to §12.1, the Agent onbehalf of the Lenders may, and upon the direction of the Required Lendersshall, proceed to protect and enforce their rights and remedies under thisAgreement, the Notes and/or any of the other Loan Documents by suit in equity,action at law or other appropriate proceeding, including to the full extentpermitted by applicable law the specific performance of any covenant oragreement contained in this Agreement and the other Loan Documents, theobtaining of the ex parte appointment of a receiver, and, if any amount shallhave become due, by declaration or otherwise, the enforcement of the paymentthereof.  No remedy herein conferred uponthe Agent or the holder of any Note is intended to be exclusive of any otherremedy and each and every remedy shall be cumulative and shall be in additionto every other remedy given hereunder or now or hereafter existing at law or inequity or by statute or any other provision of law.  Notwithstanding the provisions of thisAgreement providing that the Loans may be evidenced by multiple Notes in favorof the Lenders, the Lenders acknowledge and agree that only the Agent may exerciseany remedies arising by reason of a Default or Event of Default.  If the Borrower or any Guarantor fails toperform any agreement or covenant contained in this Agreement or any of theother Loan Documents beyond any applicable period for notice and cure, Agentmay itself perform, or cause to be performed, any agreement or covenant of suchPerson contained in this Agreement or any of the other Loan Documents whichsuch Person shall fail to perform, and the out-of-pocket costs of suchperformance, together with any reasonable expenses, including reasonableattorneys’ fees actually incurred (including attorneys’ fees incurred in anyappeal) by Agent in connection therewith, shall be payable by the Borrower upondemand and shall constitute a part of the Obligations and shall if not paidwithin 

 

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five (5) days afterdemand bear interest at the rate for overdue amounts as set forth in thisAgreement.  In the event that all or anyportion of the Obligations is collected by or through an attorney-at-law, theBorrower shall pay all costs of collection including, but not limited to,reasonable attorney’s fees.

 

§12.5       Distribution ofCollateral Proceeds.  In the eventthat, following the occurrence and during the continuance of any Event ofDefault, any monies are received in connection with the enforcement of any ofthe Loan Documents, or otherwise with respect to the realization upon any ofthe Collateral or other assets of the Borrower or the Guarantors, such moniesshall be distributed for application as follows:

 

(a)           First, to the paymentof, or (as the case may be) the reimbursement of the Agent for or in respectof, all reasonable out-of-pocket costs, expenses and disbursements which shallhave been paid or incurred by the Agent to protect or preserve the Collateralor in connection with the collection of such monies by the Agent, for theexercise, protection or enforcement by the Agent of all or any of the rights,remedies, powers and privileges of the Agent or the Lenders under thisAgreement or any of the other Loan Documents or in respect of the Collateral orin support of any provision of adequate indemnity to the Agent against anytaxes or liens which by law shall have, or may have, priority over the rightsof the Agent or the Lenders to such monies;

 

(b)           Second, to all otherObligations (including any interest, expenses or other obligations incurredafter the commencement of a bankruptcy) in such order or preference as theRequired Lenders shall determine; provided, that (i) Swing Loansshall be repaid first, (ii) distributions in respect of such otherObligations shall include, on a pari passu basis, any Agent’s fee payablepursuant to §4.2; (iii) in the event that any Lender shall have wrongfullyfailed or refused to make an advance under §2.5(d), §2.7 or §2.10(f) andsuch failure or refusal shall be continuing, advances made by other Lendersduring the pendency of such failure or refusal shall be entitled to be repaidas to principal and accrued interest in priority to the other Obligations describedin this subsection (b), and (iv) except as otherwise provided in clause(iii), Obligations owing to the Lenders with respect to each type of Obligationsuch as interest, principal, fees and expenses (but excluding the Swing Loans)shall be made among the Lenders pro rata and as between Revolving Credit Loansand Term Loans shall be made pro rata; and provided, further thatthe Required Lenders may in their discretion make proper allowance to take intoaccount any Obligations not then due and payable; and

 

(c)           Third, the excess, ifany, shall be returned to the Borrower or to such other Persons as are entitledthereto.

 

§13.         SETOFF.

 

Regardless ofthe adequacy of any Collateral, during the continuance of any Event of Default,any deposits (general or specific, time or demand, provisional or final,regardless of currency, maturity, or the branch where such deposits are held)or other sums credited by or due from any Lender to the Borrower or theGuarantors and any securities or other property of the Borrower or theGuarantors in the possession of such Lender may, without notice to the Borroweror any Guarantor (any such notice being expressly waived by the Borrower andeach

 

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Guarantor) butwith the prior written approval of Agent, be applied to or set off against thepayment of Obligations and any and all other liabilities, direct, or indirect,absolute or contingent, due or to become due, now existing or hereafterarising, of the Borrower or the Guarantors to such Lender under the LoanDocuments.  Each of the Lenders agreewith each other Lender that if such Lender shall receive from the Borrower orthe Guarantors, whether by voluntary payment, exercise of the right of setoff,or otherwise, and shall retain and apply to the payment of the Note or Notesheld by such Lender (but excluding the Swing Loan Note) any amount in excess ofits ratable portion of the payments received by all of the Lenders with respectto the Notes held by all of the Lenders, such Lender will make such dispositionand arrangements with the other Lenders with respect to such excess, either byway of distribution, protanto assignment of claims, subrogationor otherwise as shall result in each Lender receiving in respect of the Notes heldby it its proportionate payment as contemplated by this Agreement; providedthat if all or any part of such excess payment is thereafter recovered fromsuch Lender, such disposition and arrangements shall be rescinded and theamount restored to the extent of such recovery, but without interest.

 

§14.         THE AGENT.

 

§14.1       Authorization.  The Agent is authorized to take such actionon behalf of each of the Lenders and to exercise all such powers as arehereunder and under any of the other Loan Documents and any related documentsdelegated to the Agent, together with such powers as are reasonably incidentthereto, provided that no duties or responsibilities not expressly assumedherein or therein shall be implied to have been assumed by the Agent.  The obligations of the Agent hereunder areprimarily administrative in nature, and nothing contained in this Agreement orany of the other Loan Documents shall be construed to constitute the Agent as atrustee for any Lender or to create an agency or fiduciary relationship.  Agent shall act as the contractualrepresentative of the Lenders hereunder, and notwithstanding the use of theterm “Agent”, it is understood and agreed that Agent shall not have anyfiduciary duties or responsibilities to any Lender by reason of this Agreementor any other Loan Document and is acting as an independent contractor, theduties and responsibilities of which are limited to those expressly set forthin this Agreement and the other Loan Documents. The Borrower and any other Person shall be entitled to conclusively relyon a statement from the Agent that it has the authority to act for and bind theLenders pursuant to this Agreement and the other Loan Documents.

 

§14.2       Employees and Agents.  The Agent may exercise its powers and executeits duties by or through employees or agents and shall be entitled to take, andto rely on, advice of counsel concerning all matters pertaining to its rightsand duties under this Agreement and the other Loan Documents. The Agent mayutilize the services of such Persons as the Agent may reasonably determine, andall reasonable fees and expenses of any such Persons shall be paid by theBorrower.

 

§14.3       No Liability.  Neither the Agent nor any of itsshareholders, directors, officers or employees nor any other Person assistingthem in their duties nor any agent, or employee thereof, shall be liable for (a) anywaiver, consent or approval given or any action taken, or omitted to be taken,in good faith by it or them hereunder or under any of the other Loan Documents,or in connection herewith or therewith, or be responsible for the consequencesof any oversight or error of judgment whatsoever, except that the Agent or suchother Person, as the

 

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case may be, shall beliable for losses due to its willful misconduct or gross negligence as finallydetermined by a court of competent jurisdiction after the expiration of allapplicable appeal periods or (b) any action taken or not taken by Agentwith the consent or at the request of the Required Lenders.  The Agent shall not be deemed to haveknowledge or notice of the occurrence of any Default or Event of Default,except with respect to defaults in the payment of principal, interest and feesrequired to be paid to the Agent for the account of the Lenders, unless theAgent has received notice from a Lender or the Borrower referring to the LoanDocuments and describing with reasonable specificity such Default or Event ofDefault and stating that such notice is a “notice of default”.

 

§14.4       No Representations.  The Agent shall not be responsible for theexecution or validity or enforceability of this Agreement, the Notes, any ofthe other Loan Documents or any instrument at any time constituting, orintended to constitute, collateral security for the Notes, or for the value ofany such collateral security or for the validity, enforceability orcollectability of any such amounts owing with respect to the Notes, or for anyrecitals or statements, warranties or representations made herein, or anyagreement, instrument or certificate delivered in connection therewith or inany of the other Loan Documents or in any certificate or instrument hereafterfurnished to it by or on behalf of the Borrower, the Guarantors or any of theirrespective Subsidiaries, or be bound to ascertain or inquire as to theperformance or observance of any of the terms, conditions, covenants oragreements herein or in any of the other Loan Documents.  The Agent shall not be bound to ascertainwhether any notice, consent, waiver or request delivered to it by the Borrower,the Guarantors or any holder of any of the Notes shall have been dulyauthorized or is true, accurate and complete. The Agent has not made nor does it now make any representations orwarranties, express or implied, nor does it assume any liability to theLenders, with respect to the creditworthiness or financial condition of theBorrower, the Guarantors or any of their respective Subsidiaries, or the valueof the Collateral or any other assets of the Borrower, any Guarantor or any oftheir respective Subsidiaries.  EachLender acknowledges that it has, independently and without reliance upon theAgent or any other Lender, and based upon such information and documents as ithas deemed appropriate, made its own credit analysis and decision to enter intothis Agreement.  Each Lender alsoacknowledges that it will, independently and without reliance upon the Agent orany other Lender, based upon such information and documents as it deemsappropriate at the time, continue to make its own credit analysis and decisionsin taking or not taking action under this Agreement and the other LoanDocuments.  Agent’s Special Counsel hasonly represented Agent and KeyBank in connection with the Loan Documents andthe only attorney client relationship or duty of care is between Agent’sSpecial Counsel and Agent or KeyBank. Each Lender has been independentlyrepresented by separate counsel on all matters regarding the Loan Documents andthe granting and perfecting of liens in the Collateral.

 

§14.5       Payments.

 

(a)           A payment by theBorrower or any Guarantor to the Agent hereunder or under any of the other LoanDocuments for the account of any Lender shall constitute a payment to suchLender.  The Agent agrees to distributeto each Lender not later than one Business Day after the Agent’s receipt ofgood funds, determined in accordance with the Agent’s customary practices, suchLender’s pro rata share of payments received by the Agent for the account ofthe Lenders except as otherwise expressly provided herein or in any of theother Loan Documents.

 

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In the event that theAgent receives payment prior to 2:00 p.m. (Cleveland time) on a BusinessDay and fails to distribute such amounts the same Business Day, the Agent shallpay interest on such amount at a rate per annum equal to the Federal FundsEffective Rate from time to time in effect.

 

(b)           If in the opinion ofthe Agent the distribution of any amount received by it in such capacityhereunder, under the Notes or under any of the other Loan Documents mightinvolve it in liability, it may refrain from making such distribution until itsright to make such distribution shall have been adjudicated by a court ofcompetent jurisdiction.  If a court ofcompetent jurisdiction shall adjudge that any amount received and distributedby the Agent is to be repaid, each Person to whom any such distribution shallhave been made shall either repay to the Agent its proportionate share of theamount so adjudged to be repaid or shall pay over the same in such manner andto such Persons as shall be determined by such court.  In the event that the Agent shall refrainfrom making any distribution of any amount received by it as provided in this§14.5(b), the Agent shall endeavor to hold such amounts in an interest bearingaccount and at such time as such amounts may be distributed to the Lenders, theAgent shall distribute to each Lender, based on their respective CommitmentPercentages, its prorata share of the interest or other earningsfrom such deposited amount.

 

(c)           Notwithstandinganything to the contrary contained in this Agreement or any of the other LoanDocuments, any Lender that fails (i) to make available to the Agent itspro rata share of any Loan or participation in a Letter of Credit or SwingLoan, (ii) to comply with the provisions of §13 with respect to makingdispositions and arrangements with the other Lenders, where such Lender’s shareof any payment received, whether by setoff or otherwise, is in excess of itspro rata share of such payments due and payable to all of the Lenders, in eachcase as, when and to the full extent required by the provisions of thisAgreement, or (iii) to perform any other obligation within the time periodspecified for performance, or if no time period is specified, if such failurecontinues for a period of five (5) Business Days after notice from theAgent shall be deemed delinquent (a “Delinquent Lender”) and shall be deemed aDelinquent Lender until such time as such delinquency is satisfied.  In addition to the rights and remedies thatmay be available to the Agent at law and in equity, a Delinquent Lender’s rightto participate in the administration of the Loan Documents, including, withoutlimitation, any rights to consent to or direct any action or inaction of theAgent pursuant to this Agreement or otherwise, or to be taken into account inthe calculation of Majority Revolving Credit Lenders, Required Lenders or anymatter requiring approval of all of the Lenders, shall be suspended while suchLender is a Delinquent Lender.  ADelinquent Lender shall be deemed to have assigned any and all payments due toit from the Borrower or the Guarantors, whether on account of outstandingLoans, interest, fees or otherwise, to the remaining nondelinquent Lenders forapplication to, and reduction of, their respective pro rata shares of alloutstanding Loans.  The Delinquent Lenderhereby authorizes the Agent to distribute such payments to the nondelinquentLenders in proportion to their respective pro rata shares of all outstandingLoans.  The provisions of this Section shallapply and be effective regardless of whether an Event of Default occurs and isthen continuing, and notwithstanding (i) any other provision of thisAgreement to the contrary or (ii) any instruction of the Borrower as toits desired application of payments.  TheAgent shall be entitled to (i) withhold or set off, and to apply to thepayment of the obligations of any Delinquent Lender any amounts to be paid tosuch Delinquent Lender under this Agreement, (ii) to collect interest fromsuch Lender for the period from the date on

 

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which the payment was dueat the rate per annum equal to the Federal Funds Effective Rate plus onepercent (1%), for each day during such period, and (iii) bring an actionor suit against such Delinquent Lender in a court of competent jurisdiction torecover the defaulted obligations of such Delinquent Lender.  A Delinquent Lender shall be deemed to havesatisfied in full a delinquency when and if, as a result of application of theassigned payments to all outstanding Loans of the nondelinquent Lenders or as aresult of other payments by the Delinquent Lenders to the nondelinquentLenders, the Lenders’ respective pro rata shares of all outstanding Loans havereturned to those in effect immediately prior to such delinquency and withoutgiving effect to the nonpayment causing such delinquency.

 

§14.6       Holders of Notes.  Subject to the terms of §18, the Agent maydeem and treat the payee of any Note as the absolute owner or purchaser thereoffor all purposes hereof until it shall have been furnished in writing with adifferent name by such payee or by a subsequent holder, assignee or transferee.

 

§14.7       Indemnity.  The Lenders ratably agree hereby to indemnifyand hold harmless the Agent from and against any and all claims, actions andsuits (whether groundless or otherwise), losses, damages, costs, expenses(including any expenses for which the Agent has not been reimbursed by theBorrower as required by §15), and liabilities of every nature and characterarising out of or related to this Agreement, the Notes, or any of the otherLoan Documents or the transactions contemplated or evidenced hereby or thereby,or the Agent’s actions taken hereunder or thereunder, except to the extent thatany of the same shall be directly caused by the Agent’s willful misconduct orgross negligence as finally determined by a court of competent jurisdictionafter the expiration of all applicable appeal periods.  The agreements in this §14.7 shall survivethe payment of all amounts payable under the Loan Documents.

 

§14.8       Agent as Lender.  In its individual capacity, KeyBank shallhave the same obligations and the same rights, powers and privileges in respectto its Commitment and the Loans made by it, and as the holder of any of theNotes as it would have were it not also the Agent.

 

§14.9       Resignation.  The Agent may resign at any time by givingthirty (30) calendar days’ prior written notice thereof to the Lenders and theBorrower.  The Required Lenders mayremove the Agent from its capacity as Agent in the event of the Agent’s willfulmisconduct or gross negligence.  TheCommitment Percentage of the Lender that is acting as Agent shall not be takeninto account in the calculation of the Required Lenders for the purpose ofremoving the Agent in the event of the Agent’s gross negligence or willfulmisconduct.  Any such resignation orremoval may at Agent’s option also constitute Agent’s resignation as IssuingLender and Swing Loan Lender.  Upon anysuch resignation or removal, the Required Lenders, subject to the terms of§18.1, shall have the right to appoint as a successor Agent and, if applicable,Issuing Lender and Swing Loan Lender, any Lender or any bank whose senior debtobligations are rated not less than “A” or its equivalent by Moody’s or notless than “A” or its equivalent by S&P and which has a net worth of notless than $500,000,000.00.  Unless aEvent of Default shall have occurred and be continuing, such successor Agentand, if applicable, Issuing Lender and Swing Loan Lender, shall be reasonablyacceptable to the Borrower.  If nosuccessor Agent shall have been appointed and shall have accepted suchappointment within thirty (30) days after the retiring Agent’s giving of noticeof resignation or the Required Lenders’ removal of Agent, then

 

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the retiring or removedAgent may, on behalf of the Lenders, and, so long as no Event of Default shallhave occurred and be continuing, with the Borrower’s consent (such consent notto be unreasonably withheld, delayed or conditioned) appoint a successor Agent,which shall be any Lender or any financial institution whose senior debtobligations are rated not less than “A2” or its equivalent by Moody’s or notless than “A” or its equivalent by S&P and which has a net worth of notless than $500,000,000.00.  Upon theacceptance of any appointment as Agent and, if applicable, Issuing Lender andSwing Loan Lender, hereunder by a successor Agent and, if applicable, IssuingLender and Swing Loan Lender, such successor Agent and, if applicable, IssuingLender and Swing Loan Lender, shall thereupon succeed to and become vested withall the rights, powers, privileges and duties of the retiring or removed Agentand, if applicable, Issuing Lender and Swing Loan Lender, and the retiring orremoved Agent and, if applicable, Issuing Lender and Swing Loan Lender, shallbe discharged from its duties and obligations hereunder as Agent and, ifapplicable, Issuing Lender and Swing Loan Lender.  After any retiring or removed Agent’sresignation or removal, the provisions of this Agreement and the other LoanDocuments shall continue in effect for its benefit in respect of any actionstaken or omitted to be taken by it while it was acting as Agent, Issuing Lenderand Swing Loan Lender.  If the resigningor removed Agent shall also resign as the Issuing Lender, such successor Agentshall issue letters of credit in substitution for the Letters of Credit, ifany, outstanding at the time of such succession or shall make otherarrangements satisfactory to the current Issuing Lender, in either case, toassume effectively the obligations of the current Agent with respect to suchLetters of Credit.  Upon any change inthe Agent under this Agreement, the resigning or removed Agent shall executesuch assignments of and amendments to the Loan Documents as may be necessary tosubstitute the successor Agent for the resigning or removed Agent.

 

§14.10     Duties in the Case ofEnforcement.  In case one or moreEvents of Default have occurred and shall be continuing, and whether or notacceleration of the Obligations shall have occurred, the Agent may and, if (a) sorequested by the Required Lenders and (b) the Lenders have provided to theAgent such additional indemnities and assurances in accordance with theirrespective Commitment Percentages against expenses and liabilities as the Agentmay reasonably request, shall proceed to exercise all or any legal andequitable and other rights or remedies as it may have; provided, however,that unless and until the Agent shall have received such directions, the Agentmay (but shall not be obligated to) take such action, or refrain from takingsuch action, with respect to such Default or Event of Default as it shall deemto be in the best interests of the Lenders. Without limiting the generality of the foregoing, if Agent reasonablydetermines payment is in the best interest of all the Lenders, Agent maywithout the approval of the Lenders pay taxes and insurance premiums and spendmoney for maintenance, repairs or other expenses which may be necessary to beincurred, and Agent shall promptly thereafter notify the Lenders of suchaction.  Each Lender shall, within thirty(30) days of request therefor, pay to the Agent its Commitment Percentage ofthe reasonable costs incurred by the Agent in taking any such actions hereunderto the extent that such costs shall not be promptly reimbursed to the Agent bythe Borrower or the Guarantors or out of the Collateral within suchperiod.  The Required Lenders may directthe Agent in writing as to the method and the extent of any such exercise, theLenders hereby agreeing to indemnify and hold the Agent harmless in accordancewith their respective Commitment Percentages from all liabilities incurred inrespect of all actions taken or omitted in accordance with such directions, exceptto the extent that any of the same shall be directly caused by the Agent’swillful misconduct or gross negligence as finally determined by a court ofcompetent jurisdiction after the expiration of all applicable

 

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appeal periods, providedthat the Agent need not comply with any such direction to the extent that theAgent reasonably believes the Agent’s compliance with such direction to beunlawful in any applicable jurisdiction or commercially unreasonable under theUCC as enacted in any applicable jurisdiction.

 

§14.11     Bankruptcy.  In the event a bankruptcy or other insolvencyproceeding is commenced by or against the Borrower or any Guarantor withrespect to the Obligations, the Agent shall have the sole and exclusive rightto file and pursue a joint proof claim on behalf of all Lenders.  Any votes with respect to such claims orotherwise with respect to such proceedings shall be subject to the vote of theRequired Lenders or all of the Lenders as required by this Agreement.  Each Lender irrevocably waives its right tofile or pursue a separate proof of claim in any such proceedings unless Agentfails to file such claim within thirty (30) days after receipt of writtennotice from the Lenders requesting that Agent file such proof of claim.

 

§14.12     Reliance by Agent.  The Agent shall be entitled to rely upon, andshall not incur any liability for relying upon, any notice, request,certificate, consent, statement, instrument, document or other writing (includingany electronic message, Internet or intranet website posting or otherdistribution) believed by it to be genuine and to have been signed, sent orotherwise authenticated by an Authorized Officer.  The Agent also may rely upon any statementmade to it orally or by telephone and believed by it to have been made by theproper Person, and shall not incur any liability for relying thereon.  In determining compliance with any conditionhereunder to the making of a Loan, that by its terms must be fulfilled to thesatisfaction of a Lender, the Agent may presume that such condition issatisfactory to such Lender unless the Agent shall have received notice to thecontrary from such Lender prior to the making of such Loan.  The Agent may consult with legal counsel (whomay be counsel for the Borrower), independent accountants and other expertsselected by it, and shall not be liable for any action taken or not taken by itin accordance with the advice of any such counsel, accountants or experts.

 

§14.13     Approvals.  If consent is required for some action underthis Agreement, or except as otherwise provided herein an approval of theLenders, the Majority Revolving Credit Lenders or the Required Lenders isrequired or permitted under this Agreement, each Lender agrees to give theAgent, within ten (10) Business Days of receipt of the request for actiontogether with all reasonably requested information related thereto (or suchlesser period of time required by the terms of the Loan Documents), notice inwriting of approval or disapproval (collectively “Directions”) in respect ofany action requested or proposed in writing pursuant to the terms hereof.  To the extent that any Lender does notapprove any recommendation of Agent, such Lender shall in such notice to Agentdescribe the actions that would be acceptable to such Lender.  If consent is required for the requestedaction, any Lender’s failure to respond to a request for Directions within therequired time period shall be deemed to constitute a Direction to take suchrequested action.  In the event that anyrecommendation is not approved by the requisite number of Lenders and asubsequent approval on the same subject matter is requested by Agent, then forthe purposes of this paragraph each Lender shall be required to respond to arequest for Directions within five (5) Business Days of receipt of suchrequest.  Agent and each Lender shall beentitled to assume that any officer of the other Lenders delivering any notice,consent, certificate or other writing is authorized to give such notice,consent, certificate or other writing unless Agent and such other Lenders haveotherwise been notified in writing.

 

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§14.14     Borrower Not Beneficiary.  Except for the provisions of §14.9 relatingto the appointment of a successor Agent, the provisions of this §14 are solelyfor the benefit of the Agent and the Lenders, may not be enforced by theBorrower or any Guarantor, and except for the provisions of §14.9, may bemodified or waived without the approval or consent of the Borrower.

 

§15.         EXPENSES.

 

The Borroweragrees to pay (a) the reasonable costs of producing and reproducing thisAgreement, the other Loan Documents and the other agreements and instrumentsmentioned herein, (b) any imposed taxes (including any interest andpenalties in respect thereto) payable by the Agent or any of the Lenders (otherthan taxes based upon the Agent’s or any Lender’s gross or net income, exceptthat the Agent and the Lenders shall be entitled to indemnification for any andall amounts paid by them in respect of taxes based on income or other taxesassessed by any State in which Collateral is located, such indemnification tobe limited to taxes due solely on account of the granting of Collateral underthe Security Documents and to be net of any credit allowed to the indemnifiedparty from any other State on account of the payment or incurrence of such taxby such indemnified party), including any recording, mortgage, documentary orintangibles taxes in connection with the Loan Documents, or other taxes payableon or with respect to the transactions contemplated by this Agreement,including any such taxes payable by the Agent or any of the Lenders after theClosing Date (the Borrower hereby agreeing to indemnify the Agent and eachLender with respect thereto), (c) all environmental reviews and thereasonable fees, expenses and disbursements of the counsel to the Agent and anylocal counsel to the Agent incurred in connection with the preparation, administration,or interpretation of the Loan Documents and other instruments mentioned herein,and amendments, modifications, approvals, consents or waivers hereto orhereunder, (d) the out-of-pocket fees, costs, expenses and disbursementsof Agent incurred in connection with the syndication and/or participation (byKeyBank) of the Loans, (e) all other reasonable out of pocket fees,expenses and disbursements of the Agent incurred by the Agent in connectionwith the preparation or interpretation of the Loan Documents and otherinstruments mentioned herein, the addition or substitution of additionalCollateral, the making of each advance hereunder, the issuance of Letters ofCredit, and the syndication of the Commitments pursuant to §18 (withoutduplication of those items addressed in subparagraph (d), above), (f) allout-of-pocket expenses (including attorneys’ fees and costs) incurred by anyLender or the Agent in connection with (i) the enforcement of orpreservation of rights under any of the Loan Documents against the Borrower orthe Guarantors or the administration thereof after the occurrence of a Defaultor Event of Default and (ii) any litigation, proceeding or dispute whetherarising hereunder or otherwise, in any way related to the Agent’s or any of theLenders’ relationship with the Borrower or the Guarantors in respect of theLoan and the Loan Documents (provided that any attorneys fees and costspursuant to this clause (f)(ii) shall be limited to those incurred bythe Agent and one other counsel with respect to the Lenders as a group), (g) allreasonable fees, expenses and disbursements of the Agent incurred in connectionwith UCC searches, UCC filings, title rundowns, title searches or mortgagerecordings, (h) all reasonable out-of-pocket fees, expenses anddisbursements (including reasonable attorneys’ fees and costs) which may beincurred by KeyBank in connection with the execution and delivery of thisAgreement and the other Loan Documents (without duplication of any of the itemslisted above), and (i) all expenses relating to the use of Intralinks,SyndTrak or any other similar system for the dissemination and sharing of

 

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documents andinformation in connection with the Loans. The covenants of this §15 shall survive the repayment of the Loans andthe termination of the obligations of the Lenders hereunder.

 

§16.         INDEMNIFICATION.

 

The Borroweragrees to indemnify and hold harmless the Agent, the Lenders and the Arrangerand each director, officer, employee, agent and Affiliate thereof and Personwho controls the Agent or any Lender or the Arranger against any and allclaims, actions and suits, whether groundless or otherwise, and from andagainst any and all liabilities, losses, damages and expenses of every natureand character arising out of or relating to this Agreement or any of the otherLoan Documents or the transactions contemplated hereby and thereby including,without limitation, (a) any and all claims for brokerage, leasing, findersor similar fees which may be made relating to the Real Estate or the Loans, (b) anycondition of the Real Estate, (c) any actual or proposed use by theBorrower of the proceeds of any of the Loans or Letters of Credit, (d) anyactual or alleged infringement of any patent, copyright, trademark, servicemark or similar right of the Borrower, any Guarantor or any of their respectiveSubsidiaries, (e) the Borrower and the Guarantors entering into orperforming this Agreement or any of the other Loan Documents, (f) withrespect to the Borrower, the Guarantors and their respective Subsidiaries andtheir respective properties and assets, the violation of any Environmental Law,the Release or threatened Release of any Hazardous Substances or any action,suit, proceeding or investigation brought or threatened with respect to anyHazardous Substances (including, but not limited to, claims with respect towrongful death, personal injury, nuisance or damage to property), and (g) anyuse of Intralinks, SyndTrak or any other system for the dissemination andsharing of documents and information, in each case including, withoutlimitation, the reasonable fees and disbursements of counsel incurred inconnection with any such investigation, litigation or other proceeding; provided,however, that the Borrower shall not be obligated under this §16 toindemnify any Person for liabilities arising from such Person’s own grossnegligence or willful misconduct as determined by a court of competentjurisdiction after the exhaustion of all applicable appeal periods.  In litigation, or the preparation therefor,the Lenders and the Agent shall be entitled to select a single law firm astheir own counsel and, in addition to the foregoing indemnity, the Borroweragrees to pay promptly the reasonable fees and expenses of such counsel.  If, and to the extent that the obligations ofthe Borrower under this §16 are unenforceable for any reason, the Borrowerhereby agrees to make the maximum contribution to the payment in satisfactionof such obligations which is permissible under applicable law.  The provisions of this §16 shall survive therepayment of the Loans and the termination of the obligations of the Lendershereunder.

 

§17.         SURVIVAL OF COVENANTS,ETC.

 

All covenants,agreements, representations and warranties made herein, in the Notes, in any ofthe other Loan Documents or in any documents or other papers delivered by or onbehalf of the Borrower or the Guarantors or any of their respectiveSubsidiaries pursuant hereto or thereto shall be deemed to have been reliedupon by the Lenders and the Agent, notwithstanding any investigation heretoforeor hereafter made by any of them, and shall survive the making by the Lendersof any of the Loans, as herein contemplated, and shall continue in full forceand effect so long as any amount due under this Agreement or the Notes or anyof the other Loan

 

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Documentsremains outstanding or any Letters of Credit remain outstanding or any Lenderhas any obligation to make any Loans or issue any Letters of Credit.  The indemnification obligations of theBorrower provided herein and in the other Loan Documents shall survive the fullrepayment of amounts due and the termination of the obligations of the Lendershereunder and thereunder to the extent provided herein and therein.  All statements contained in any certificatedelivered to any Lender or the Agent at any time by or on behalf of theBorrower, any Guarantor or any of their respective Subsidiaries pursuant heretoor in connection with the transactions contemplated hereby shall constituterepresentations and warranties by such Person hereunder.

 

§18.         ASSIGNMENT ANDPARTICIPATION.

 

§18.1       Conditions to Assignmentby Lenders.  Except as providedherein, each Lender may assign to one or more banks or other entities all or aportion of its interests, rights and obligations under this Agreement(including all or a portion of its Commitment Percentage and Commitment and thesame portion of the Loans at the time owing to it and the Notes held by it); providedthat (a) the Agent, the Issuing Lender and, so long as no Default or Eventof Default exists hereunder, the Borrower shall have each given its priorwritten consent to such assignment, which consent shall not be unreasonablywithheld or delayed (provided that such consent shall not be required for anyassignment to another Lender, to a lender or an Affiliate of a Lender whichcontrols, is controlled by or is under common control with the assigning Lenderor to a wholly-owned Subsidiary of such Lender), (b) each such assignmentshall be of a constant, and not a varying, percentage of all the assigningLender’s rights and obligations under this Agreement with respect to theRevolving Credit Commitment in the event an interest in the Revolving CreditLoans is assigned, or of a constant, and not a varying, percentage of all theassigning Lender’s rights and obligations under this Agreement with respect tothe Term Loan Commitment in the event an interest in the Term Loans isassigned, (c) the parties to such assignment shall execute and deliver tothe Agent, for recording in the Register (as hereinafter defined) an Assignmentand Acceptance Agreement in the form of Exhibit H annexed hereto,together with any Notes subject to such assignment, (d) in no event shallany assignment be to any Person controlling, controlled by or under commoncontrol with, or which is not otherwise free from influence or control by theBorrower or any Guarantor, (e) such assignee of a portion of the RevolvingCredit Loans shall have a net worth as of the date of such assignment of notless than $100,000,000.00 (unless otherwise approved by Agent and, so long asno Default or Event of Default exists hereunder, the Borrower), and (f) suchassignee shall acquire an interest in the Loans of not less than $5,000,000.00and integral multiples of $1,000,000.00 in excess thereof (or if less, theremaining Loans of the assignor), unless waived by the Agent, and so long as noDefault or Event of Default exists hereunder, the Borrower.  Upon execution, delivery, acceptance andrecording of such Assignment and Acceptance Agreement, (i) the assigneethereunder shall be a party hereto and all other Loan Documents executed by theLenders and, to the extent provided in such Assignment and AcceptanceAgreement, have the rights and obligations of a Lender hereunder, (ii) theassigning Lender shall, upon payment to the Agent of the registration feereferred to in §18.2, be released from its obligations under this Agreementarising after the effective date of such assignment with respect to theassigned portion of its interests, rights and obligations under this Agreement,and (iii) the Agent may unilaterally amend Schedule 1.1 toreflect such assignment.  In connectionwith each assignment, the assignee shall represent and warrant to the Agent,the assignor and each other Lender as to whether such

 

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assignee is controlling,controlled by, under common control with or is not otherwise free frominfluence or control by, the Borrower and/or any Guarantor.

 

§18.2       Register.  The Agent shall maintain on behalf of theBorrower a copy of each assignment delivered to it and a register or similarlist (the “Register”) for the recordation of the names and addresses of theLenders and the Commitment Percentages of and principal amount of the Loansowing to the Lenders from time to time. The entries in the Register shall be conclusive, in the absence ofmanifest error, and the Borrower, the Guarantors, the Agent and the Lenders maytreat each Person whose name is recorded in the Register as a Lender hereunderfor all purposes of this Agreement.  TheRegister shall be available for inspection by the Borrower and the Lenders atany reasonable time and from time to time upon reasonable prior notice.  Upon each such recordation, the assigningLender agrees to pay to the Agent a registration fee in the sum of $3,500.00.

 

§18.3       New Notes.  Upon its receipt of an Assignment andAcceptance Agreement executed by the parties to such assignment, together witheach Note subject to such assignment, the Agent shall record the informationcontained therein in the Register. Within five (5) Business Days after receipt of notice of suchassignment from Agent, the Borrower, at its own expense, shall execute anddeliver to the Agent, in exchange for each surrendered Note, a new Note to theorder of such assignee in an amount equal to the amount assigned to suchassignee pursuant to such Assignment and Acceptance Agreement and, if theassigning Lender has retained some portion of its obligations hereunder, a newNote to the order of the assigning Lender in an amount equal to the amountretained by it hereunder.  Such new Notesshall provide that they are replacements for the surrendered Notes, shall be inan aggregate principal amount equal to the aggregate principal amount of thesurrendered Notes, shall be dated the effective date of such Assignment andAcceptance Agreement and shall otherwise be in substantially the form of theassigned Notes.  The surrendered Notesshall be canceled and returned to the Borrower.

 

§18.4       Participations.  Each Lender may sell participations to one ormore Lenders or other entities in all or a portion of such Lender’s rights and obligationsunder this Agreement and the other Loan Documents; provided that (a) anysuch sale or participation shall not affect the rights and duties of theselling Lender hereunder, (b) such participation shall not entitle suchparticipant to any rights or privileges under this Agreement or any LoanDocuments, including without limitation, rights granted to the Lenders under§4.8, §4.9, §4.10 and §13, (c) such participation shall not entitle theparticipant to the right to approve waivers, amendments or modifications, (d) suchparticipant shall have no direct rights against the Borrower, (e) suchsale is effected in accordance with all applicable laws, and (f) suchparticipant shall not be a Person controlling, controlled by or under commoncontrol with, or which is not otherwise free from influence or control by theBorrower and/or any Guarantor; provided, however, such Lender may agree withthe participant that it will not, without the consent of the participant, agreeto (i) increase, or extend the term or extend the time or waive anyrequirement for the reduction or termination of, such Lender’s Commitment, (ii) extendthe date fixed for the payment of principal of or interest on the Loans orportions thereof owing to such Lender (other than pursuant to an extension ofthe Revolving Credit Maturity Date pursuant to §2.12), (iii) reduce the amount of any such payment of principal, (iv) reducethe rate at which interest is payable thereon or (v) release any Guarantoror any material Collateral (except as otherwise permitted

 

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underthis Agreement).  Any Lender whichsells a participation shall promptly notify the Agent of such sale and theidentity of the purchaser of such interest.

 

§18.5       Pledge by Lender.  Any Lender may at any time pledge all or anyportion of its interest and rights under this Agreement (including all or anyportion of its Note) to any of the twelve Federal Reserve Banks organized under§4 of the Federal Reserve Act, 12 U.S.C. §341 or to such other Person as theAgent may approve to secure obligations of such lenders.  No such pledge or the enforcement thereofshall release the pledgor Lender from its obligations hereunder or under any ofthe other Loan Documents.

 

§18.6       No Assignment by Borrower.  The Borrower shall not assign or transfer anyof its rights or obligations under this Agreement without the prior writtenconsent of each of the Lenders.

 

§18.7       Disclosure.  The Borrower agrees to promptly cooperatewith any Lender in connection with any proposed assignment or participation ofall or any portion of its Commitment. The Borrower agrees that in addition to disclosures made in accordancewith standard banking practices any Lender may disclose information obtained bysuch Lender pursuant to this Agreement to assignees or participants andpotential assignees or participants hereunder. Each Lender agrees for itself that it shall use reasonable efforts inaccordance with its customary procedures to hold confidential all informationobtained from the Borrower or any Guarantor that has not been identified inwriting as public by any of them, and shall use reasonable efforts inaccordance with its customary procedures to not disclose such information toany other Person, it being understood and agreed that, notwithstanding theforegoing, a Lender may make (a) disclosures to its participants (providedsuch Persons are advised of the provisions of this §18.7), (b) disclosuresto its directors, officers, employees, Affiliates, accountants, appraisers,legal counsel and other professional advisors of such Lender (provided thatsuch Persons who are not employees of such Lender are advised of the provisionof this §18.7), (c) disclosures customarily provided or reasonablyrequired by any potential or actual bona fide assignee, transferee orparticipant or their respective directors, officers, employees, Affiliates,accountants, appraisers, legal counsel and other professional advisors inconnection with a potential or actual assignment or transfer by such Lender ofany Loans or any participations therein (provided such Persons are advised ofthe provisions of this §18.7), (d) disclosures to bank regulatoryauthorities or self-regulatory bodies with jurisdiction over such Lender, or (e) disclosuresrequired or requested by any other governmental authority or representativethereof or pursuant to legal process; provided that, unless specificallyprohibited by applicable law or court order, each Lender shall notify theBorrower of any request by any governmental authority or representative thereofprior to disclosure (other than any such request in connection with anyexamination of such Lender by such government authority) for disclosure of anysuch non-public information prior to disclosure of such information.  In addition, each Lender may make disclosureof such information to any contractual counterparty in swap agreements or suchcontractual counterparty’s professional advisors (so long as such contractualcounterparty or professional advisors agree to be bound by the provisions ofthis §18.7).  Non-public informationshall not include any information which is or subsequently becomes publiclyavailable other than as a result of a disclosure of such information by aLender, or prior to the delivery to such Lender is within the possession ofsuch Lender if such information is not known by such Lender to be subject toanother confidentiality agreement with or other obligations of secrecy to theBorrower

 

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or the Guarantors, or isdisclosed with the prior approval of the Borrower.  Nothing herein shall prohibit the disclosureof non-public information to the extent necessary to enforce the LoanDocuments.

 

§18.8       Mandatory Assignment.  In the event the Borrower requests thatcertain amendments, modifications or waivers be made to this Agreement or anyof the other Loan Documents which request is approved by Agent but is notapproved by one or more of the Lenders (any such non-consenting Lender shallhereafter be referred to as the “Non-Consenting Lender”), then, within thirty(30) Business Days after the Borrower’s receipt of notice of such disapprovalby such Non-Consenting Lender, the Borrower shall have the right as to suchNon-Consenting Lender, to be exercised by delivery of written notice deliveredto the Agent and the Non-Consenting Lender within thirty (30) Business Days ofreceipt of such notice, to elect to cause the Non-Consenting Lender to transferits Commitment.  The Agent shall promptlynotify the remaining Lenders that each of such Lenders shall have the right,but not the obligation, to acquire a portion of the Commitment, pro rata basedupon their relevant Commitment Percentages, of the Non-Consenting Lender (or ifany of such Lenders does not elect to purchase its pro rata share, then to suchremaining Lenders in such proportion as approved by the Agent).  In the event that the Lenders do not elect toacquire all of the Non-Consenting Lender’s Commitment, then the Agent shallendeavor to find a new Lender or Lenders to acquire such remainingCommitment.  Upon any such purchase ofthe Commitment of the Non-Consenting Lender, the Non-Consenting Lender’sinterests in the Obligations and its rights hereunder and under the LoanDocuments shall terminate at the date of purchase, and the Non-ConsentingLender shall promptly execute and deliver any and all documents reasonablyrequested by Agent to surrender and transfer such interest, including, withoutlimitation, an Assignment and Acceptance Agreement in the form attached heretoas Exhibit H and such Non-Consenting Lender’s original Note.  The purchase price for the Non-ConsentingLender’s Commitment shall equal any and all amounts outstanding and owed byBorrower to the Non-Consenting Lender, including principal and all accrued andunpaid interest or fees, plus any applicable amounts payable pursuant to §4.7which would be owed to such Non-Consenting Lender if the Loans were to berepaid in full on the date of such purchase of the Non-Consenting Lender’sCommitment (provided that the Borrower may pay to such Non-Consenting Lenderany interest, fees or other amounts (other than principal) owing to suchNon-Consenting Lender).

 

§18.9       Amendments to LoanDocuments.  Upon any such assignment,the Borrower and the Guarantors shall, upon the request of the Agent, enterinto such documents as may be reasonably required by the Agent to modify theLoan Documents to reflect such assignment.

 

§18.10     Titled Agents.  The Titled Agents shall not have anyadditional rights or obligations under the Loan Documents, except for thoserights, if any, as a Lender.

 

§19.         NOTICES.

 

Each notice,demand, election or request provided for or permitted to be given pursuant tothis Agreement (hereinafter in this §19 referred to as “Notice”), butspecifically excluding to the maximum extent permitted by law any notices ofthe institution or commencement of foreclosure proceedings, must be in writingand shall be deemed to have been properly given or served by personal deliveryor by sending same by overnight courier or by depositing same in the

 

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United StatesMail, postpaid and registered or certified, return receipt requested, or asexpressly permitted herein, by telegraph, telecopy, telefax or telex, andaddressed as follows:

 

If to the Agent or KeyBank:

 

KeyBank National Association800 SuperiorCleveland, Ohio  44114-1306Attn:  Real Estate Capital Services

 

With a copy to:

 

KeyBank National Association127 Public SquareCleveland, Ohio  44114-1306Attn:  Mr. Kevin MurrayTelecopy No.:  (216) 689-5819

 

and

 

McKenna Long & Aldridge LLPSuite 5300303 Peachtree Street, N.E.Atlanta, Georgia  30308Attn:  William F. Timmons, Esq.Telecopy No.:  (404) 527-4198

 

If to the Borrower:

 

c/o Behringer Harvard Operating Partnership ILP 15601 Dallas ParkwaySuite 600Addison, TX 75001-6206Attn:  Gerald J. Reihsen, III, Esq.Telecopy No.:  (469) 655-1610

 

With a copy to:

 

Luce, Forward, Hamilton & Scripps 600 W. BroadwaySuite 2600San Diego, CA 92101Attn:  Darryl SteinhauseTelecopy No.:  (619) 645-5340

 

to any otherLender which is a party hereto, at the address for such Lender set forth on itssignature page hereto, and to any Lender which may hereafter become aparty to this Agreement,

 

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at suchaddress as may be designated by such Lender. Each Notice shall be effective upon being personally delivered or uponbeing sent by overnight courier or upon being deposited in the United StatesMail as aforesaid, or if transmitted by telegraph, telecopy, telefax or telexis permitted, upon being sent and confirmation of receipt.  The time period in which a response to suchNotice must be given or any action taken with respect thereto (if any),however, shall commence to run from the date of receipt if personally deliveredor sent by overnight courier, or if so deposited in the United States Mail, theearlier of three (3) Business Days following such deposit or the date ofreceipt as disclosed on the return receipt. Rejection or other refusal to accept or the inability to deliver becauseof changed address for which no notice was given shall be deemed to be receiptof the Notice sent.  By giving at leastfifteen (15) days prior Notice thereof, the Borrower, a Lender or Agent shallhave the right from time to time and at any time during the term of thisAgreement to change their respective addresses and each shall have the right tospecify as its address any other address within the United States of America.

 

§20.         RELATIONSHIP.

 

Neither theAgent nor any Lender has any fiduciary relationship with or fiduciary duty tothe Borrower, any Guarantor or their respective Subsidiaries arising out of orin connection with this Agreement or the other Loan Documents or thetransactions contemplated hereunder and thereunder, and the relationshipbetween each Lender and Agent, and the Borrower is solely that of a lender andborrower, and nothing contained herein or in any of the other Loan Documentsshall in any manner be construed as making the parties hereto partners, jointventurers or any other relationship other than lender and borrower.

 

§21.         GOVERNING LAW; CONSENT TOJURISDICTION AND SERVICE.

 

**THISAGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISESPECIFICALLY PROVIDED HEREIN OR THEREIN, SHALL, PURSUANT TO NEW YORK GENERALOBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE LAWS OF THE STATE OFNEW YORK.  THE BORROWER AGREES THAT ANYSUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BEBROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK(INCLUDING ANY FEDERAL COURT SITTING THEREIN). THE BORROWER FURTHER ACCEPTS, GENERALLY AND UNCONDITIONALLY, THENON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT ANDIRREVOCABLY (i) SUBJECT TO AVAILABLE RIGHTS TO APPEAL, AGREES TO BE BOUNDBY ANY JUDGMENT RENDERED THEREBY WITH RESPECT TO THIS AGREEMENT AND ANY OF THEOTHER LOAN DOCUMENTS AND (ii) WAIVES ANY OBJECTION IT MAY NOW ORHEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURTOR THAT SUCH A COURT IS AN INCONVENIENT FORUM. THE BORROWER FURTHER AGREES THAT SERVICE OF PROCESS IN ANY SUCH SUIT MAY BEMADE UPON THE BORROWER BY REGISTERED OR CERTIFIED MAIL AT THE ADDRESS SPECIFIEDIN SECTION 19 HEREOF.  IN ADDITIONTO THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN,THE AGENT OR ANY LENDER MAY BRING ACTION(S) FOR**

 

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**ENFORCEMENTON A NONEXCLUSIVE BASIS WHERE ANY COLLATERAL OR ASSETS OF THE BORROWER EXISTSAND THE BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS ANDTHE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BYREGISTERED OR CERTIFIED MAIL AT THE ADDRESS SPECIFIED IN SECTION 19HEREOF.**

 

§22.         HEADINGS.

 

The captionsin this Agreement are for convenience of reference only and shall not define orlimit the provisions hereof.

 

§23.         COUNTERPARTS.

 

This Agreementand any amendment hereof may be executed in several counterparts and by eachparty on a separate counterpart, each of which when so executed and deliveredshall be an original, and all of which together shall constitute oneinstrument.  In proving this Agreement itshall not be necessary to produce or account for more than one such counterpartsigned by the party against whom enforcement is sought.

 

§24.         ENTIRE AGREEMENT, ETC.

 

This Agreementand the Loan Documents is intended by the parties as the final, complete andexclusive statement of the transactions evidenced by this Agreement and theLoan Documents.  All prior orcontemporaneous promises, agreements and understandings, whether oral orwritten, are deemed to be superseded by this Agreement and the Loan Documents,and no party is relying on any promise, agreement or understanding not setforth in this Agreement and the Loan Documents. Neither this Agreement nor anyterm hereof may be changed, waived, discharged or terminated, except asprovided in §27.

 

§25.         WAIVER OF JURY TRIAL ANDCERTAIN DAMAGE CLAIMS.

 

**EACH OFTHE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIALWITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTIONWITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OROBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS ANDOBLIGATIONS.  THE BORROWER HEREBY WAIVESANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANYSPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES AND TO THE EXTENT PERMITTED BY APPLICABLELAW, PUNITIVE OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUALDAMAGES.  THE BORROWER (A) CERTIFIESTHAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HASREPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT,IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGESTHAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENTAND THE OTHER LOAN**

 

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**DOCUMENTSTO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS ANDCERTIFICATIONS CONTAINED IN THIS §25. THE BORROWER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS§25 WITH LEGAL COUNSEL AND THAT THE BORROWER AGREES TO THE FOREGOING AS ITSFREE, KNOWING AND VOLUNTARY ACT.**

 

§26.         DEALINGS WITH THEBORROWER.

 

The Agent, theLenders and their affiliates may accept deposits from, extend credit to, investin, act as trustee under indentures of, serve as financial advisor of, andgenerally engage in any kind of banking, trust or other business with theBorrower, the Guarantors and their respective Subsidiaries or any of theirAffiliates regardless of the capacity of the Agent or the Lenderhereunder.  The Lenders acknowledge that,pursuant to such activities, KeyBank or its Affiliates may receive informationregarding such Persons (including information that may be subject toconfidentiality obligations in favor of such Person) and acknowledge that theAgent shall be under no obligation to provide such information to them.

 

§27.         CONSENTS, AMENDMENTS,WAIVERS, ETC.

 

Except asotherwise expressly provided in this Agreement, any consent or approvalrequired or permitted by this Agreement may be given, and any term of thisAgreement or of any other instrument related hereto or mentioned herein may beamended, and the performance or observance by the Borrower or the Guarantors ofany terms of this Agreement or such other instrument or the continuance of anyDefault or Event of Default may be waived (either generally or in a particularinstance and either retroactively or prospectively) with, but only with, thewritten consent of the Required Lenders. Notwithstanding the foregoing, none of the following may occur withoutthe written consent of each Lender:  (a) areduction in the rate of interest on the Notes (other than a reduction orwaiver of default interest); (b) an increase in the amount of theCommitments of the Lenders (except as provided in §2.11 and §18.1); (c) aforgiveness, reduction or waiver of the principal of any unpaid Loan or anyinterest thereon or fee payable under the Loan Documents; (d) a change inthe amount of any fee payable to a Lender hereunder; (e) the postponementof any date fixed for any payment of principal of or interest on the Loan; (f) anextension of the Revolving Credit Maturity Date (except as provided in §2.12)or the Term Loan Maturity Date (except as provided in §2.13); (g) a changein the manner of distribution of any payments to the Lenders or the Agent; (h) therelease of the Borrower, any Guarantor or any Collateral except as otherwiseprovided in this Agreement; (i) an amendment of the definition of MajorityRevolving Credit Lenders, Required Lenders or of any requirement for consent byall of the Lenders; (j) any modification to require a Lender to fund a prorata share of a request for an advance of the Loan made by the Borrower otherthan based on its Commitment Percentage; (k) an amendment to this §27; or (l) anamendment of any provision of this Agreement or the Loan Documents whichrequires the approval of all of the Lenders, the Majority Revolving CreditLenders or the Required Lenders to require a lesser number of Lenders toapprove such action.  The provisions of§14 may not be amended without the written consent of the Agent.  There shall be no amendment, modification orwaiver of any provision in the Loan Documents with respect to Swing Loanswithout the consent of the Swing Loan Lender, nor any amendment, modificationor waiver of any provision in the Loan Documents with respect to Letters ofCredit without the consent of the Issuing Lender.  The

 

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Borroweragrees to enter into such modifications or amendments of this Agreement or theother Loan Documents as reasonably may be requested by KeyBank in connectionwith the syndication of the Loan, provided that no such amendment ormodification materially affects or increases any of the obligations of theBorrower hereunder.  No waiver shallextend to or affect any obligation not expressly waived or impair any rightconsequent thereon.  No course of dealingor delay or omission on the part of the Agent or any Lender in exercising anyright shall operate as a waiver thereof or otherwise be prejudicialthereto.  No notice to or demand upon theBorrower shall entitle the Borrower to other or further notice or demand insimilar or other circumstances.

 

§28.         SEVERABILITY.

 

The provisionsof this Agreement are severable, and if any one clause or provision hereofshall be held invalid or unenforceable in whole or in part in any jurisdiction,then such invalidity or unenforceability shall affect only such clause orprovision, or part thereof, in such jurisdiction, and shall not in any manneraffect such clause or provision in any other jurisdiction, or any other clauseor provision of this Agreement in any jurisdiction.

 

§29.         TIME OF THE ESSENCE.

 

Time is of theessence with respect to each and every covenant, agreement and obligation ofthe Borrower under this Agreement and the other Loan Documents.

 

§30.         NO UNWRITTEN AGREEMENTS.

 

**THE LOANDOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.  THERE ARE NOUNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTHBELOW.**

 

§31.         REPLACEMENT NOTES.

 

Upon receiptof evidence reasonably satisfactory to the Borrower of the loss, theft,destruction or mutilation of any Note, and in the case of any such loss, theftor destruction, upon delivery of an indemnity agreement reasonably satisfactoryto the Borrower or, in the case of any such mutilation, upon surrender andcancellation of the applicable Note, the Borrower will execute and deliver, inlieu thereof, a replacement Note, identical in form and substance to theapplicable Note and dated as of the date of the applicable Note and upon suchexecution and delivery all references in the Loan Documents to such Note shallbe deemed to refer to such replacement Note.

 

§32.         NO THIRD PARTIESBENEFITED.

 

This Agreementand the other Loan Documents are made and entered into for the sole protectionand legal benefit of the Borrower, the Guarantors, the Lenders, the Agent andtheir permitted successors and assigns, and no other Person shall be a director indirect legal

 

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beneficiaryof, or have any direct or indirect cause of action or claim in connection with,this Agreement or any of the other Loan Documents.  All conditions to the performance of theobligations of the Agent and the Lenders under this Agreement, including theobligation to make Loans and issue Letters of Credit, are imposed solely andexclusively for the benefit of the Agent and the Lenders and no other Personshall have standing to require satisfaction of such conditions in accordancewith their terms or be entitled to assume that the Agent and the Lenders willrefuse to make Loans or issue Letters of Credit in the absence of strictcompliance with any or all thereof and no other Person shall, under anycircumstances, be deemed to be a beneficiary of such conditions, any and all ofwhich may be freely waived in whole or in part by the Agent and the Lenders atany time if in their sole discretion they deem it desirable to do so.  In particular, the Agent and the Lenders makeno representations and assume no obligations as to third parties concerning thequality of the construction by the Borrower or any of its Subsidiaries of anydevelopment or the absence therefrom of defects.

 

§33.         PATRIOT ACT.

 

Each Lenderand the Agent (for itself and not on behalf of any Lender) hereby notifies theBorrower that, pursuant to the requirements of the Patriot Act, it is requiredto obtain, verify and record information that identifies the Borrower, whichinformation includes names and addresses and other information that will allowsuch Lender or the Agent, as applicable, to identify the Borrower in accordancewith the Patriot Act.

 

[remainder of page intentionallyleft blank]

 

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**IN WITNESSWHEREOF**, each of the undersigned have caused thisAgreement to be executed by its duly authorized representatives as of the datefirst set forth above.

 
|   | **BORROWER:**                                                                  |
|--------|--------------------------------------------------------------------------------|
|   | ** **                                                                     |
|   | **BEHRINGER HARVARD OPERATING  PARTNERSHIP I LP, a Texas limited partnership** |
|   |                                                                           |
|   | By:                                                                            | BHR, Inc., a Delaware corporation, its General  Partner |
|   |                                                                           |   |
|   | By:                                                                            |   |
|   | Name:                                                                          |   |
|   | Title:                                                                         |   |
|        |                                                                                |  |  |  |  |

 

 

(SEAL)

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|   | **AGENT AND LENDERS****:**                                   |
|--------|--------------------------------------------------------------|
|   | ** **                                                   |
|   | **KEYBANK NATIONAL ASSOCIATION, individually  and as Agent** |
|   |                                                         |
|   |                                                         |   |
|   |                                                         | By: |   |
|   |                                                         | Name: |   |
|   |                                                         | Title: |   |
|        |                                                              |  |  |  |  |

 

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|   | **WACHOVIA BANK, NATIONAL ASSOCIATION** |
|--------|-----------------------------------------|
|   |                                    |   |
|   |                                    |   |
|   | By:                                     |   |
|   | Name:                                   |   |
|   | Title:                                  |   |
|        |                                         |  |  |  |

 

Addressfor Notices:

 

Wachovia Bank, NationalAssociation301 S. College Street16th Floor, NC0172Charlotte, NC 28288
| Attention: |   | Cindy  Bean     |
|------------|--------|-----------------|
| Telephone: |   | (704)  383-7534 |
| Facsimile: |   | (704)  715-0065 |

 

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|   | **AAREAL BANK AG** |
|--------|--------------------|
|   |               |
|   |               |
|   | By:                |   |
|   | Name:              |   |
|   | Title:             |   |
|        |                    |  |  |  |

 

Addressfor Notices:

 

Aareal Bank AG

Paulinenstrasse 15

65189 Wiesbaden

Germany
| Attention: |   | Markus  Obenland    |
|------------|--------|---------------------|
| Telephone: |   | +49-(0)611-348-3594 |
| Facsimile: |   | +49-(0)611-348-2757 |

 

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** **
|   | **WESTDEUTSCHE IMMOBILIENBANK AG** |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By:                                |   |
|   | Name:                              |   |
|   | Title:                             |   |
|   |                               |
|   |                               |
|   | By:                                |   |
|   | Name:                              |   |
|   | Title:                             |   |
|        |                                    |  |  |

 

 

Addressfor Notices:

 

1211 Avenue of the Americas

24th Floor

New York, NY 10036
| Attention: |   | David  McGannon |
|------------|--------|-----------------|
| Telephone: |   | (212)  588-0065 |
| Facsimile: |   | (212)  588-0992 |

 

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|   | **RBS CITIZENS, N.A. d/b/a CHARTER ONE** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Name:                                    |   |
|   | Title:                                   |   |
|        |                                          |  |  |  |

 

Addressfor Notices:

 

RBS Citizens, N.A. d/b/aCharter One

1215 Superior Avenue

6th Floor

Cleveland, OH 44114
| Attention: |   | Don  Woods      |
|------------|--------|-----------------|
| Telephone: |   | (216)  277-0199 |
| Facsimile: |   | (216)  277-4607 |

 

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| ** ** | **FIFTH THIRD BANK, a Michigan banking  corporation** |
|------------|-------------------------------------------------------|
|       |                                                  |
|       |                                                  |
|       | By:                                                   |   |
|       | Name:                                                 |   |
|       | Title:                                                |   |
|            |                                                       |  |  |  |

 

Addressfor Notices:

 

Fifth Third Bank

MD C82111

3821 Ruckriegel Parkway

Louisville, KY 40299
| Attention: |   | Tammy  Leachman |
|------------|--------|-----------------|
| Telephone: |   | (502)  297-6199 |
| Facsimile: |   | (502)  267-7747 |

 

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| ** ** | **NATIONAL  CITY BANK** |
|------------|-------------------------|
|       |                    |
|       |                    |
|       | By:                     |   |
|       | Name:                   |   |
|       | Title:                  |   |
|            |                         |  |  |  |

 

Addressfor Notices:

 

National City Bank

2000 Auburn Drive, Suite 400

Beachwood, OH 44122
| Attention: |   | Sean  Apicella  |
|------------|--------|-----------------|
| Telephone: |   | (216)  488-3687 |
| Facsimile: |   | (216)  488-3160 |

 

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|   | **ALLIED IRISH BANKS, P.L.C.** |
|--------|--------------------------------|
|   |                           |
|   |                           |
|   | By:                            |   |
|   | Name:                          |   |
|   | Title:                         |   |
|        |                                |  |  |  |

 

 
|   | By:    |   |
|--------|--------|--------|
|   | Name:  |   |
|   | Title: |   |
|        |        |        |  |  |

 

 

Addressfor Notices:

 

Allied Irish Banks, P.L.C.

405 Park Avenue

New York, NY 10022
| Attention: |   | Doug  Marron / Aaron Bawol       |
|------------|--------|----------------------------------|
| Telephone: |   | (212)  515-6763 / (212) 339-8038 |
| Facsimile: |   | (212)  339-8325                  |

 

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|   | **PNC BANK, NATIONAL ASSOCIATION** |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By:                                |   |
|   | Name:                              |   |
|   | Title:                             |   |
|        |                                    |  |  |  |

 

Addressfor Notices:

 

PNC Bank, NationalAssociation

500 1st Avenue

Pittsburgh, PA 15219
| Attention: |   | Leigh  Ann Geyer |
|------------|--------|------------------|
| Telephone: |   | (412)  762-5600  |
| Facsimile: |   | (412)  762-6500  |

 

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|   | **CITIBANK, N.A.** |
|--------|--------------------|
|   |               |
|   |               |
|   | By:                |   |
|   | Name:              |   |
|   | Title:             |   |
|        |                    |  |  |  |

 

Addressfor Notices:

 

Citibank, N.A.

8401 N. Central Expressway

Suite 500

Dallas, Texas  75225
| Attention: |   | Andrea  L. Murry |
|------------|--------|------------------|
| Telephone: |   | (972)  419-3453  |
| Facsimile: |   | (972)  419-3308  |

 

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|   | **BANK OF AMERICA, N.A.** |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       |   |
|   | Name:                     |   |
|   | Title:                    |   |
|        |                           |  |  |  |

 

Addressfor Notices:

 

Bank of America, N.A.

901 Main Street, 20th Floor

TX1-492-20-06

Dallas, TX 75202
| Attention: |   | Brett  Bell     |
|------------|--------|-----------------|
| Telephone: |   | (214)  209-2773 |
| Facsimile: |   | (214)  209-1832 |

 

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|   | **TEXAS CAPITAL BANK, NATIONAL  ASSOCIATION** |
|--------|-----------------------------------------------|
|   |                                          |
|   |                                          |
|   | By:                                           |   |
|   | Name:                                         |   |
|   | Title:                                        |   |
|        |                                               |  |  |  |

 

Addressfor Notices:

 

Texas Capital Bank, NationalAssociation

500 Throckmorton Street

Suite 300

Fort Worth, TX 76102
| Attention: |   | Jeffrey  A. Moten |
|------------|--------|-------------------|
| Telephone: |   | (817)  852-4005   |
| Facsimile: |   | (817)  336-0553   |

 

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**EXHIBIT A**

 

FORM OF REVOLVING CREDIT NOTE

 
| $                           |   |   |                      , 2007 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

FOR VALUERECEIVED, the undersigned (“Maker”), hereby promises to pay to                                                                    (“Payee”), or order, in accordance with the terms of that certain CreditAgreement, dated as of December 11, 2007, as from time to time in effect,by and among Behringer Harvard Operating Partnership I LP, KeyBank NationalAssociation, for itself and as Agent, and such other Lenders as may be fromtime to time named therein (the “Credit Agreement”), to the extent not soonerpaid, on or before the Revolving Credit Maturity Date, the principal sum of                                  ($                    ),or such amount as may be advanced by the Payee under the Credit Agreement as aRevolving Credit Loan with daily interest from the date thereof, computed asprovided in the Credit Agreement, on the principal amount hereof from time totime unpaid, at a rate per annum on each portion of the principal amount whichshall at all times be equal to the rate of interest applicable to such portionin accordance with the Credit Agreement, and with interest on overdue principaland, to the extent permitted by applicable law, on overdue installments ofinterest and late charges at the rates provided in the Credit Agreement.  Interest shall be payable on the datesspecified in the Credit Agreement, except that all accrued interest shall bepaid at the stated or accelerated maturity hereof or upon the prepayment infull hereof.  Capitalized terms usedherein and not otherwise defined herein shall have the meanings set forth inthe Credit Agreement.

 

Paymentshereunder shall be made to the Agent for the Payee at 127 Public Square,Cleveland, Ohio 44114-1306, or at such other address as Agent may designatefrom time to time.

 

This Note isone of one or more Revolving Credit Notes evidencing borrowings under and isentitled to the benefits and subject to the provisions of the Credit Agreement.  The principal of this Note may be due andpayable in whole or in part prior to the Revolving Credit Maturity Date and issubject to mandatory prepayment in the amounts and under the circumstances setforth in the Credit Agreement, and may be prepaid in whole or from time to timein part, all as set forth in the Credit Agreement.

 

Notwithstandinganything in this Note to the contrary, all agreements between the undersignedMaker and the Lenders and the Agent, whether now existing or hereafter arisingand whether written or oral, are hereby limited so that in no contingency,whether by reason of acceleration of the maturity of any of the Obligations orotherwise, shall the interest contracted for, charged or received by theLenders exceed the maximum amount permissible under applicable law.  If, from any circumstance whatsoever,interest would otherwise be payable to the Lenders in excess of the maximumlawful amount, the interest payable to the Lenders shall be reduced to themaximum amount permitted under applicable law; and if from any circumstance theLenders shall ever receive anything of value deemed interest by applicable lawin excess of the maximum lawful amount, an amount equal to any excessiveinterest shall be applied to the reduction of the principal balance of theObligations of the undersigned Maker and to the payment of interest or, if suchexcessive interest exceeds the unpaid balance of principal of the Obligationsof the undersigned Maker, such excess shall be refunded to the undersigned 

 

A-1

----

 

Maker.  All interest paid oragreed to be paid to the Lenders shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated and spread throughout the full perioduntil payment in full of the principal of the Obligations of the undersignedMaker (including the period of any renewal or extension thereof) so that theinterest thereon for such full period shall not exceed the maximum amountpermitted by applicable law.  This paragraphshall control all agreements between the undersigned Maker and the Lenders andthe Agent.

 

In case anEvent of Default shall occur, the entire principal amount of this Note maybecome or be declared due and payable in the manner and with the effectprovided in said Credit Agreement.

 

This Noteshall, pursuant to New York General Obligations Law Section 5-1401, begoverned by the laws of the State of New York.

 

Theundersigned Maker and all guarantors and endorsers hereby waive presentment,demand, notice, protest, notice of intention to accelerate the indebtednessevidenced hereby, notice of acceleration of the indebtedness evidenced herebyand all other demands and notices in connection with the delivery, acceptance,performance and enforcement of this Note, except as specifically otherwiseprovided in the Credit Agreement, and assent to extensions of time of paymentor forbearance or other indulgence without notice.

 

IN WITNESSWHEREOF, the undersigned has by its duly authorized officer executed this Noteon the day and year first above written.

 
|   | **BEHRINGER  HARVARD OPERATING   PARTNERSHIP I LP**, a Texas limited partnership |
|--------|----------------------------------------------------------------------------------|
|   |                                                                             |
|   |                                                                             |
|   | By:                                                                              | BHR, Inc., a Delaware corporation,  its General Partner |
|   |                                                                             |
|   |                                                                             |
|   |                                                                             | By: |   |
|   |                                                                             | Name: |
|   |                                                                             | Title: |
|   |                                                                             |
|   |                                                                             |
|   |                                                                             | (SEAL) |
|        |                                                                                  |  |  |  |

 

A-2

----

 

**EXHIBIT B**

 

FORM OF SWING LOAN NOTE

 
| $50,000,000.00 |   |   |                      , 2007 |   |
|----------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

FOR VALUERECEIVED, the undersigned (“Maker”), hereby promises to pay to                                                                    (“Payee”), or order, in accordance with the terms of that certain CreditAgreement, dated as of December 11, 2007, as from time to time in effect,by and among Behringer Harvard Operating Partnership I LP, KeyBank NationalAssociation, for itself and as Agent, and such other Lenders as may be fromtime to time named therein (the “Credit Agreement”), to the extent not soonerpaid, on or before the Revolving Credit Maturity Date, the principal sum ofFifty Million and No/100 Dollars ($50,000,000.00), or such amount as may beadvanced by the Payee under the Credit Agreement as a Swing Loan with dailyinterest from the date thereof, computed as provided in the Credit Agreement,on the principal amount hereof from time to time unpaid, at a rate per annum oneach portion of the principal amount which shall at all times be equal to therate of interest applicable to such portion in accordance with the CreditAgreement, and with interest on overdue principal and, to the extent permittedby applicable law, on overdue installments of interest and late charges at therates provided in the Credit Agreement. Interest shall be payable on the dates specified in the CreditAgreement, except that all accrued interest shall be paid at the stated oraccelerated maturity hereof or upon the prepayment in full hereof.  Capitalized terms used herein and nototherwise defined herein shall have the meanings set forth in the CreditAgreement.

 

Paymentshereunder shall be made to the Agent for the Payee at 127 Public Square,Cleveland, Ohio 44114-1306, or at such other address as Agent may designatefrom time to time.

 

This Note isone of one or more Swing Loan Notes evidencing borrowings under and is entitledto the benefits and subject to the provisions of the Credit Agreement.  The principal of this Note may be due andpayable in whole or in part prior to the Revolving Credit Maturity Date and issubject to mandatory prepayment in the amounts and under the circumstances setforth in the Credit Agreement, and may be prepaid in whole or from time to timein part, all as set forth in the Credit Agreement.

 

Notwithstandinganything in this Note to the contrary, all agreements between the undersignedMaker and the Lenders and the Agent, whether now existing or hereafter arising andwhether written or oral, are hereby limited so that in no contingency, whetherby reason of acceleration of the maturity of any of the Obligations orotherwise, shall the interest contracted for, charged or received by theLenders exceed the maximum amount permissible under applicable law.  If, from any circumstance whatsoever,interest would otherwise be payable to the Lenders in excess of the maximumlawful amount, the interest payable to the Lenders shall be reduced to themaximum amount permitted under applicable law; and if from any circumstance theLenders shall ever receive anything of value deemed interest by applicable lawin excess of the maximum lawful amount, an amount equal to any excessiveinterest shall be applied to the reduction of the principal balance of theObligations of the undersigned Maker and to the payment of interest or, if suchexcessive interest exceeds the unpaid balance of principal of the Obligationsof the undersigned Maker, such excess shall be refunded to the undersigned 

 

B-1

----

 

Maker.  All interest paid oragreed to be paid to the Lenders shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated and spread throughout the full perioduntil payment in full of the principal of the Obligations of the undersignedMaker (including the period of any renewal or extension thereof) so that theinterest thereon for such full period shall not exceed the maximum amountpermitted by applicable law.  This paragraphshall control all agreements between the undersigned Maker and the Lenders andthe Agent.

 

In case anEvent of Default shall occur, the entire principal amount of this Note maybecome or be declared due and payable in the manner and with the effect providedin said Credit Agreement.

 

This Noteshall, pursuant to New York General Obligations Law Section 5-1401, begoverned by the laws of the State of New York.

 

Theundersigned Maker and all guarantors and endorsers hereby waive presentment,demand, notice, protest, notice of intention to accelerate the indebtednessevidenced hereby, notice of acceleration of the indebtedness evidenced herebyand all other demands and notices in connection with the delivery, acceptance,performance and enforcement of this Note, except as specifically otherwiseprovided in the Credit Agreement, and assent to extensions of time of paymentor forbearance or other indulgence without notice.

 

IN WITNESSWHEREOF, the undersigned has by its duly authorized officer executed this Noteon the day and year first above written.

 
|   | **BEHRINGER  HARVARD OPERATING  PARTNERSHIP I LP**, a Texas limited partnership |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By:                                                                             | BHR, Inc., a Delaware corporation, its  General Partner |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | By: |   |
|   |                                                                            | Name: |
|   |                                                                            | Title: |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | (SEAL) |
|        |                                                                                 |  |  |  |

 

B-2

----

 

**EXHIBIT C**

 

FORM OFTERM LOAN NOTE

 
| $                           |   |   |                      , 2007 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

FOR VALUERECEIVED, the undersigned (“Maker”), hereby promises to pay to                                                                    (“Payee”), or order, in accordance with the terms of that certain CreditAgreement, dated as of December 11, 2007, as from time to time in effect,by and among Behringer Harvard Operating Partnership I LP, KeyBank NationalAssociation, for itself and as Agent, and such other Lenders as may be fromtime to time named therein (the “Credit Agreement”), to the extent not soonerpaid, on or before the Term Loan Maturity Date, the principal sum of                                  ($                    ),or such amount as may be advanced by the Payee under the Credit Agreement as aTerm Loan with daily interest from the date thereof, computed as provided inthe Credit Agreement, on the principal amount hereof from time to time unpaid,at a rate per annum on each portion of the principal amount which shall at alltimes be equal to the rate of interest applicable to such portion in accordancewith the Credit Agreement, and with interest on overdue principal and, to theextent permitted by applicable law, on overdue installments of interest andlate charges at the rates provided in the Credit Agreement.  Interest shall be payable on the datesspecified in the Credit Agreement, except that all accrued interest shall bepaid at the stated or accelerated maturity hereof or upon the prepayment infull hereof.  Capitalized terms usedherein and not otherwise defined herein shall have the meanings set forth inthe Credit Agreement.

 

Paymentshereunder shall be made to the Agent for the Payee at 127 Public Square,Cleveland, Ohio 44114-1306, or at such other address as Agent may designatefrom time to time.

 

This Note isone of one or more Term Loan Notes evidencing borrowings under and is entitledto the benefits and subject to the provisions of the Credit Agreement.  The principal of this Note may be due andpayable in whole or in part prior to the Term Loan Maturity Date and is subjectto mandatory prepayment in the amounts and under the circumstances set forth inthe Credit Agreement, and may be prepaid in whole or from time to time in part,all as set forth in the Credit Agreement.

 

Notwithstandinganything in this Note to the contrary, all agreements between the undersignedMaker and the Lenders and the Agent, whether now existing or hereafter arisingand whether written or oral, are hereby limited so that in no contingency,whether by reason of acceleration of the maturity of any of the Obligations orotherwise, shall the interest contracted for, charged or received by theLenders exceed the maximum amount permissible under applicable law.  If, from any circumstance whatsoever,interest would otherwise be payable to the Lenders in excess of the maximumlawful amount, the interest payable to the Lenders shall be reduced to themaximum amount permitted under applicable law; and if from any circumstance theLenders shall ever receive anything of value deemed interest by applicable lawin excess of the maximum lawful amount, an amount equal to any excessiveinterest shall be applied to the reduction of the principal balance of theObligations of the undersigned Maker and to the payment of interest or, if suchexcessive interest exceeds the unpaid balance of principal of the Obligationsof the undersigned Maker, such excess shall be refunded to the undersigned 

 

C-1

----

 

Maker.  All interest paid oragreed to be paid to the Lenders shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated and spread throughout the full perioduntil payment in full of the principal of the Obligations of the undersignedMaker (including the period of any renewal or extension thereof) so that theinterest thereon for such full period shall not exceed the maximum amountpermitted by applicable law.  Thisparagraph shall control all agreements between the undersigned Maker and theLenders and the Agent.

 

In case anEvent of Default shall occur, the entire principal amount of this Note maybecome or be declared due and payable in the manner and with the effect providedin said Credit Agreement.

 

This Noteshall, pursuant to New York General Obligations Law Section 5-1401, begoverned by the laws of the State of New York.

 

Theundersigned Maker and all guarantors and endorsers hereby waive presentment,demand, notice, protest, notice of intention to accelerate the indebtednessevidenced hereby, notice of acceleration of the indebtedness evidenced herebyand all other demands and notices in connection with the delivery, acceptance,performance and enforcement of this Note, except as specifically otherwiseprovided in the Credit Agreement, and assent to extensions of time of paymentor forbearance or other indulgence without notice.

 

IN WITNESSWHEREOF, the undersigned has by its duly authorized officer executed this Noteon the day and year first above written.

 
|   | **BEHRINGER  HARVARD OPERATING  PARTNERSHIP I LP**, a Texas limited partnership |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By:                                                                             | BHR, Inc., a Delaware corporation, its  General Partner |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | By: |   |
|   |                                                                            | Name: |
|   |                                                                            | Title: |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | (SEAL) |
|        |                                                                                 |  |  |  |

 

C-2

----

 

**EXHIBIT D**

 

**FORM OF JOINDER AGREEMENT**

 

THIS JOINDERAGREEMENT (“Joinder Agreement”) is executed as of                                    ,20    , by                                                              ,a                                                     (“Joining Party”), and delivered to KeyBank National Association, as Agent,pursuant to §5.2 of the Credit Agreement dated as of December 11, 2007, asfrom time to time in effect (the “Credit Agreement”), by and among BehringerHarvard Operating Partnership I LP (the “Borrower”), KeyBank NationalAssociation, for itself and as Agent, and the other Lenders from time to timeparty thereto.  Terms used but notdefined in this Joinder Agreement shall have the meanings defined for thoseterms in the Credit Agreement.

 

**RECITALS**

 

A.                                   JoiningParty is required, pursuant to §5.2****ofthe Credit Agreement, to become an additional Subsidiary Guarantor under theGuaranty, the Indemnity Agreement and the Contribution Agreement.

 

B.                                     JoiningParty expects to realize direct and indirect benefits as a result of theavailability to the Borrower of the credit facilities under the CreditAgreement.

 

NOW,THEREFORE, Joining Party agrees as follows:

 

**AGREEMENT**

 

1.                                       Joinder.  By thisJoinder Agreement, Joining Party hereby becomes a “Subsidiary Guarantor” and a “Guarantor”under the Credit Agreement, the Guaranty, the Indemnity Agreement, and theother Loan Documents with respect to all the Obligations of the Borrower now orhereafter incurred under the Credit Agreement and the other Loan Documents, anda “Subsidiary Guarantor” under the Contribution Agreement.  Joining Party agrees that Joining Party isand shall be bound by, and hereby assumes, all representations, warranties,covenants, terms, conditions, duties and waivers applicable to a “SubsidiaryGuarantor” and a “Guarantor” under the Credit Agreement, the Guaranty, theIndemnity Agreement, the other Loan Documents and the Contribution Agreement.

 

2.                                       Representations and Warranties of JoiningParty.  Joining Party represents and warrants toAgent that, as of the Effective Date (as defined below), except as disclosed inwriting by Joining Party to Agent on or prior to the date hereof and approvedby the Agent in writing (which disclosures shall be deemed to amend theSchedules and other disclosures delivered as contemplated in the CreditAgreement), the representations and warranties contained in the CreditAgreement and the other Loan Documents applicable to a “Guarantor” or “SubsidiaryGuarantor” are true and correct in all material respects as applied to JoiningParty as a Subsidiary Guarantor and a Guarantor on and as of the Effective Dateas though made on that date.  As of theEffective Date, all covenants and agreements in the Loan Documents and theContribution Agreement of the Subsidiary Guarantors apply to Joining Party andno Default or Event of Default shall exist or might exist upon the EffectiveDate in the event that Joining Party becomes a Subsidiary Guarantor.

 

D-1

----

 

3.             Joint and Several. Joining Party hereby agrees that, as of the Effective Date, theGuaranty, the Contribution Agreement and the Indemnity Agreement heretoforedelivered to the Agent and the Lenders shall be a joint and several obligationof Joining Party to the same extent as if executed and delivered by JoiningParty, and upon request by Agent, will promptly become a party to the Guaranty,the Contribution Agreement and the Indemnity Agreement to confirm such obligation.

 

4.             Further Assurances. Joining Party agrees to execute and deliver such other instruments anddocuments and take such other action, as the Agent may reasonably request, inconnection with the transactions contemplated by this Joinder Agreement.

 

5.             **GOVERNING LAW**.**  THIS JOINDER AGREEMENT SHALL BE DEEMED TO BEA CONTRACTUAL OBLIGATION UNDER, AND SHALL, PURSUANT TO NEW YORK GENERALOBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND ENFORCEDIN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.**

 

6.             Counterparts. This Joinder Agreement may be executed in any number of counterpartswhich shall together constitute but one and the same agreement.

 

7.             The effective date (the “Effective Date”)of this Joinder Agreement is                                  ,20    .

 

IN WITNESSWHEREOF, Joining Party has executed this Joinder Agreement under seal as of theday and year first above written.

 
|   | “JOINING  PARTY” |
|--------|----------------------------|
|   |                       |
|   |                       | ,  a |
|   |                       |
|   |                       |
|   | By:                        |   |
|   | Name:                      |   |
|   | Title:                     |   |
|   |                       |
|   |                       | [SEAL] |
|        |                            |  |  |  |  |  |

 
| ACKNOWLEDGED:                           |                     |
|-----------------------------------------|--------------------------|
|                                    |                     |
| KEYBANK  NATIONAL ASSOCIATION, as Agent |                     |
|                                    |                     |
| By:                                     |                     |   |
|                                    |                     |
| Its:                                    |                     |   |
|                                    |                     |
|                                    | [Printed Name and Title] |   |
|                                         |                          |  |  |  |

 

D-2

----

 

**EXHIBIT E**

 

FORM OF REQUEST FOR REVOLVING CREDITLOAN

 
| KeyBank National Association, as Agent |
|----------------------------------------|
| 800 Superior                           |
| Cleveland, Ohio 44114-1306             |
| Attn: Diana D’Aquila              |
|                                   |
| Ladies  and Gentlemen:                 |

 

Pursuant tothe provisions of §2.7 of the Credit Agreement dated as of December 11,2007 (as the same may hereafter be amended, the “Credit Agreement”), by andamong Behringer Harvard Operating Partnership I LP (the “Borrower”), KeyBankNational Association for itself and as Agent, and the other Lenders from timeto time party thereto, the undersigned Borrower hereby requests and certifiesas follows:

 

1.                                       Revolving Credit Loan. The undersigned Borrower hereby requests a **[RevolvingCredit Loan under §2.1] [Swing Loan under §2.5]**of the CreditAgreement:

 

Principal Amount: $                    Type (LIBOR Rate, Base Rate):Drawdown Date:Interest Period for Revolving Credit LIBOR Rate Loans:

 

by credit to the generalaccount of the Borrower with the Agent at the Agent’s Head Office.

 

**[If the requested Loan is a Swing Loan and the Borrower desires forsuch Loan to be a LIBOR Rate Loan following its conversion as provided in§2.5(d), specify the Interest Period followingconversion:                                  ]**

 

2.                                       Use of Proceeds. Such Loan shall be used for purposes permitted by §2.9 of the CreditAgreement.

 

3.                                       No Default.  Theundersigned chief financial officer or chief accounting officer of Borrowercertifies that the Borrower is and will be in compliance with all covenantsunder the Loan Documents after giving effect to the making of the Loanrequested hereby and no Default or Event of Default has occurred and iscontinuing.

 

4.                                       Representations True. The undersigned chief financial officer or chief accounting officer ofthe Borrower certifies, represents and agrees on behalf of the Borrower (andnot in his individual capacity) that each of the representations and warrantiesmade by or on behalf of the Borrower, the Guarantors or their respectiveSubsidiaries, contained in the Credit Agreement, in the other Loan Documents orin any document or instrument delivered pursuant to or in connection with theCredit Agreement was true in all material respects as of the date on which itwas made and, is true in all material respects as of the date hereof and shallalso be true at and as of the Drawdown Date for the Loan requested hereby, withthe same effect as if made at and as of such Drawdown Date, except to theextent of changes resulting from transactions permitted by 

 

E-1

----

 

the Loan Documents andexcept as previously disclosed in writing by the Borrower to Agent and approvedby the Agent in writing (which disclosures shall be deemed to amend theSchedules and other disclosures delivered as contemplated in this Agreement (itbeing understood and agreed that any representation or warranty which by itsterms is made as of a specified date shall be required to be true and correctonly as of such specified date).

 

5.                                       Other Conditions. The undersigned chief financial officer or chief accounting officer ofthe Borrower certifies, represents and agrees on behalf of the Borrower (andnot in his individual capacity) that all other conditions to the making of theLoan requested hereby set forth in the Credit Agreement have been satisfied orwaived in writing.

 

6.                                       Definitions. Terms defined in the Credit Agreement are used herein with the meaningsso defined.

 

IN WITNESSWHEREOF, the undersigned has duly executed this request this           day of                          ,200    .

 
|   | **BEHRINGER  HARVARD OPERATING  PARTNERSHIP I LP**, a Texas limited partnership |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By:                                                                             | BHR, Inc., a Delaware corporation, its  General Partner |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | By: |   |
|   |                                                                            | Name: |
|   |                                                                            | Title: |

 

E-2

----

 

**EXHIBIT F**

 

FORM OF LETTER OF CREDIT REQUEST

 

**[DATE]**

 
| KeyBank National Association, as Agent |
|----------------------------------------|
| 1675 Broadway, Suite 400          |
| Denver, Colorado 80202                 |
| Attn: Cheryl Van Klompenberg           |

 

**Re:****                            ****Letterof Credit Request under Credit Agreement dated as of December 11, 2007**

 

Ladies and Gentlemen:

 

Pursuant to§2.10 of the Credit Agreement dated as of December 11, 2007, by and amongyou, certain other Lenders and Behringer Harvard Operating Partnership I LP(the “Borrower”) (the “Credit Agreement”), we hereby request that you issue aLetter of Credit as follows:

 

(i)                                     Name andaddress of beneficiary:

 

(ii)                                  Face amount: $

 

(iii)                               ProposedIssuance Date:

 

(iv)                              ProposedExpiration Date:

 

(v)                                 Other terms andconditions as set forth in the proposed form of Letter of Credit attachedhereto.

 

(vi)                              Purpose ofLetter of Credit:

 

This Letter ofCredit Request is submitted pursuant to, and shall be governed by, and subjectto satisfaction of, the terms, conditions and provisions set forth in §2.10 ofthe Credit Agreement.

 

Theundersigned chief financial officer or chief accounting officer of the Borrowercertifies on behalf of the Borrower (and not in his individual capacity) thatthe Borrower is and will be in compliance with all covenants under the LoanDocuments after giving effect to the issuance of the Letter of Credit requestedhereby and no Default or Event of Default has occurred and is continuing.

 

F-1

----

 

We alsounderstand that if you grant this request this request obligates us to acceptthe requested Letter of Credit and pay the issuance fee and Letter of Creditfee as required by §2.10(e).  Allcapitalized terms defined in the Credit Agreement and used herein withoutdefinition shall have the meanings set forth in §1.1 of the Credit Agreement.

 

Theundersigned chief financial officer or chief accounting officer of the Borrowercertifies, represents and agrees on behalf of the Borrower (and not in hisindividual capacity) that each of the representations and warranties made by oron behalf of the Borrower, the Guarantors or their respective Subsidiaries,contained in the Credit Agreement, in the other Loan Documents or in any documentor instrument delivered pursuant to or in connection with the Credit Agreementwas true in all material respects as of the date on which it was made, is trueas of the date hereof and shall also be true at and as of the proposed issuancedate of the Letter of Credit requested hereby, with the same effect as if madeat and as of the proposed issuance date, except to the extent of changesresulting from transactions permitted by the Loan Documents and except aspreviously disclosed in writing by the Borrower to Agent and approved by theAgent in writing (which disclosures shall be deemed to amend the Schedules andother disclosures delivered as contemplated in this Agreement (it beingunderstood and agreed that any representation or warranty which by its terms ismade as of a specified date shall be required to be true and correct only as ofsuch specified date).

 
| ** ** | Very  truly yours, |
|------------|--------------------|

 
|   | **BEHRINGER  HARVARD OPERATING  PARTNERSHIP I LP**, a Texas limited partnership |
|--------|---------------------------------------------------------------------------------|
|   |                                                                            |
|   | By:                                                                             | BHR, Inc., a Delaware corporation, its  GeneralPartner |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            | By: |   |
|   |                                                                            | Name: |
|   |                                                                            | Title: |

 

F-2

----

 

**EXHIBIT G**

 

FORM OF COMPLIANCE CERTIFICATE

 
| KeyBank National Association, as Agent |
|----------------------------------------|
| 127 Public Square                      |
| Cleveland, Ohio 44114-1306             |
| Attn: Joshua Mayers                    |

 

Ladies and Gentlemen:

 

Reference ismade to the Credit Agreement dated as of December 11, 2007 (as the samemay hereafter be amended, the “Credit Agreement”) by and among BehringerHarvard Operating Partnership I LP (the “Borrower”), KeyBank NationalAssociation for itself and as Agent, and the other Lenders from time to timeparty thereto.  Terms defined in theCredit Agreement and not otherwise defined herein are used herein as defined inthe Credit Agreement.

 

Pursuant tothe Credit Agreement, the Borrower is furnishing to you herewith (or has mostrecently furnished to you) the consolidated financial statements of theBorrower for the fiscal period ended                              (the “Balance Sheet Date”).  Suchfinancial statements have been prepared in accordance with GAAP and presentfairly the consolidated financial position of the Borrower at the date thereofand the results of its operations for the periods covered thereby.

 

Thiscertificate is submitted in compliance with requirements of §2.11(d), §7.4(c),§8.1, §10.12 or §11.3 of the Credit Agreement. If this certificate is provided under a provision other than §7.4(c),the calculations provided below are made using the consolidated financialstatements of the Borrower as of the Balance Sheet Date adjusted in the bestgood faith estimate of the Borrower to give effect to the making of a Loan,issuance of a Letter of Credit, acquisition or disposition of property or otherevent that occasions the preparation of this certificate; and the nature of suchevent and the estimate of the Borrower of its effects are set forth inreasonable detail in an attachment hereto. The undersigned officer is the chief financial officer or chiefaccounting officer of the Borrower.

 

Theundersigned representative has caused the provisions of the Loan Documents tobe reviewed and has no knowledge of any Default or Event of Default. (Note: Ifthe signer does have knowledge of any Default or Event of Default, the form ofcertificate should be revised to specify the Default or Event of Default, thenature thereof and the actions taken, being taken or proposed to be taken bythe Borrower with respect thereto.)

 

Theundersigned is providing the attached information to demonstrate compliance asof the date hereof with the covenants described in the attachment hereto.

 

G-1

----

 

IN WITNESS WHEREOF, theundersigned has duly executed this Compliance Certificate on behalf of theBorrower (and not in his individual capacity) this           day of                      ,200    .

** **
| ** ** | **BEHRINGER  HARVARD OPERATING  PARTNERSHIP I LP**, a Texas limited partnership |
|------------|---------------------------------------------------------------------------------|
|       |                                                                            |
|       | By:                                                                             | BHR, Inc.,  a Delaware corporation, its  General Partner |
|       |                                                                            |   |
|       |                                                                            |   |
|       |                                                                            | By: |   |
|       |                                                                            |   Name: |
|       |                                                                            |   Title: |

 

G-2

----

 

**APPENDIX TO COMPLIANCE CERTIFICATE**

 

G-3

----

 

**WORKSHEET**

** **

**GROSS ASSET VALUE***

 
| A.     |   | Stabilized  Properties owned for prior six (6) fiscal quarters (other than 222  Riverside Plaza and 1325 G Street):                                                                                                                                                                            |   |   |   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |
| 1.     |   | Net  Operating Income for the prior four (4) consecutive fiscal quarters:                                                                                                                                                                                                                      |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| 2.     |   | Capital  Reserves for such Real Estate:                                                                                                                                                                                                                                                             |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| 3.     |   | 1  minus 2 divided by 7.50%:                                                                                                                                                                                                                                                                        |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| B.     |   | Real  Estate acquired during the prior six (6) fiscal quarters (other than 222  Riverside Plaza and 1325 G Street):                                                                                                                                                                            |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| C.     |   | Construction  in Progress of Development Properties, until the earlier of (x) the 1  year anniversary of the project completion for such Real Estate and  (y) the first day of the first fiscal quarter following the date such  Real Estate first achieves a Lease Rate of at least 85%: |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| D.     |   | Acquisition  cost of 222 Riverside Plaza and 1325 G Street:                                                                                                                                                                                                                                         |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| E.     |   | Aggregate  of Unrestricted Cash and Cash Equivalents:                                                                                                                                                                                                                                               |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| F.     |   | Book  Value of Land Assets:                                                                                                                                                                                                                                                                         |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| G.     |   | Lesser  of book value or outstanding principal balance of Mortgage Receivables  secured by office properties and the Multifamily Facility                                                                                                                                                           |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
| H.     |   | Pro  rata share of Gross Asset Value attributable to such assets owned by  Unconsolidated Affiliates:                                                                                                                                                                                               |   | $      |   |   |
|   |   |                                                                                                                                                                                                                                                                                                |   |   |   |   |
|   |   | Gross  Assets Value equals sum of A.3 plus B plus C plus D plus  E plus F plus G plus H                                                                                                                                                                                                             |   | $      |   |   |

 

----

*  Gross Asset Value will be adjusted, asappropriate, for acquisitions, dispositions and other changes to the portfolioduring the calendar quarter most recently ended prior to a date ofdetermination.  All income, expense andvalue associated with assets included in Gross Asset Value disposed of duringthe four (4) calendar quarter period most recently ended prior to a date 

 

G-4

----

 

ofdetermination will be eliminated from calculations. Gross Asset Value shall becalculated in accordance with §1.2(l)**.**

 

G-5

----

 

**EXHIBIT H**

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

**THISASSIGNMENT AND ACCEPTANCE AGREEMENT** (this “Agreement”) dated                                        ,by and between                                                        (“Assignor”), and                                                        (“Assignee”).

 

W I T N E S S E T H:

 

**WHEREAS**, Assignor is aparty to that certain Credit Agreement, dated December 11, 2007, by andamong **BEHRINGER HARVARD OPERATING PARTNERSHIP I LP** (“Borrower”), the other lenders thatare or may become a party thereto, and **KEYBANKNATIONAL ASSOCIATION**, individually and as Agent (the “CreditAgreement”); and

 

**WHEREAS**, Assignordesires to transfer to Assignee **[Describeassigned Commitment]** under the Credit Agreement and its rights withrespect to the Commitment assigned and its Outstanding Loans with respectthereto;

 

**NOW,THEREFORE**, for and in consideration of the sum of Ten andNo/100 Dollars ($10.00) and other good and valuable considerations, the receiptand sufficiency of which are hereby acknowledged, Assignor and Assignee herebyagree as follows:

 

1.             Definitions.  Terms defined in the Credit Agreement andused herein without definition shall have the respective meanings assigned tosuch terms in the Credit Agreement.

 

2.             Assignment.

 

(a)           Subject to the terms and conditionsof this Agreement and in consideration of the payment to be made by Assignee toAssignor pursuant to Paragraph 5 of this Agreement, effective as of the “AssignmentDate” (as defined in Paragraph 7 below), Assignor hereby irrevocably sells,transfers and assigns to Assignee, without recourse, a portion of its **[Revolving Credit][TermLoan]** Note in theamount of$                              representing a $                              **[Revolving Credit] [Term Loan]**Commitment, and a                                  percent (          %)**[Revolving Credit][TermLoan]** CommitmentPercentage, and a corresponding interest in and to all of the other rights andobligations under the Credit Agreement and the other Loan Documents relatingthereto (the assigned interests being hereinafter referred to as the “AssignedInterests”), including Assignor’s share of all outstanding **[Revolving Credit][Term]** Loans with respect to the AssignedInterests and the right to receive interest and principal on and all other feesand amounts with respect to the Assigned Interests, all from and after theAssignment Date, all as if Assignee were an original Lender under and signatoryto the Credit Agreement having a **[Revolving Credit][Term Loan]** Commitment Percentage equal to theamount of the respective Assigned Interests.

 

(b)           Assignee, subject to the terms andconditions hereof, hereby assumes all obligations of Assignor with respect tothe Assigned Interests from and after the Assignment Date as if Assignee werean original Lender under and signatory to the Credit Agreement, whichobligations shall include, but shall not be limited to, the obligation to make **[Revolving**

 

H-1

----

 

**Credit][Term]**Loans to the Borrower with respect to theAssigned Interests and to indemnify the Agent as provided therein (suchobligations, together with all other obligations set forth in the CreditAgreement and the other Loan Documents are hereinafter collectively referred toas the “Assigned Obligations”).  Assignorshall have no further duties or obligations with respect to, and shall have nofurther interest in, the Assigned Obligations or the Assigned Interests.

 

3.             Representationsand Requests of Assignor.

 

(a)           Assignor represents and warrants toAssignee (i) that it is legally authorized to, and has full power andauthority to, enter into this Agreement and perform its obligations under thisAgreement; (ii) that as of the date hereof, before giving effect to theassignment contemplated hereby the principal face amount of Assignor’s **[Revolving Credit][TermLoan]** Note is$                        and the aggregate outstanding principal balance of the **[Revolving Credit][Term]** Loans made by it equals$                        ,and (iii) that it has forwarded to the Agent the **[Revolving Credit][Term Loan]** Note held by Assignor.  Assignor makes no representation or warranty,express or implied, and assumes no responsibility with respect to anystatements, warranties or representations made in or in connection with the LoanDocuments or the execution, legality, validity, enforceability, genuineness orsufficiency of any Loan Document or any other instrument or document furnishedpursuant thereto or in connection with the Loan, the collectability of theLoans, the continued solvency of the Borrower or the continued existence,sufficiency or value of the Collateral or any assets of the Borrower which maybe realized upon for the repayment of the Loans, or the performance orobservance by the Borrower of any of its obligations under the Loan Documentsto which it is a party or any other instrument or document delivered orexecuted pursuant thereto or in connection with the Loan; other than that it isthe legal and beneficial owner of, or has the right to assign, the interestsbeing assigned by it hereunder and that such interests are free and clear ofany adverse claim.

 

(b)           Assignor requests that the Agentobtain replacement notes for each of Assignor and Assignee as provided in theCredit Agreement.

 

4.             Representations of Assignee.  Assignee makes and confirms to the Agent,Assignor and the other Lenders all of the representations, warranties andcovenants of a Lender under Articles 14 and 18 of the Credit Agreement.  Without limiting the foregoing, Assignee (a) representsand warrants that it is legally authorized to, and has full power and authorityto, enter into this Agreement and perform its obligations under this Agreement;(b) confirms that it has received copies of such documents and informationas it has deemed appropriate to make its own credit analysis and decision toenter into this Agreement; (c) agrees that it has and will, independentlyand without reliance upon Assignor, any other Lender or the Agent and basedupon such documents and information as it shall deem appropriate at the time,continue to make its own credit decisions in evaluating the Loans, the LoanDocuments, the creditworthiness of the Borrower and the value of the assets ofthe Borrower, and taking or not taking action under the Loan Documents; (d) appointsand authorizes the Agent to take such action as agent on its behalf and toexercise such powers as are reasonably incidental thereto pursuant to the termsof the Loan Documents; (e) agrees that, by this Assignment, Assignee hasbecome a party to and will perform in accordance with their terms all theobligations which by the terms of the Loan Documents are required to beperformed by it as a Lender; (f) represents and warrants that Assigneedoes not control, is not controlled by, is not under common control with and is

 

H-2

----

 

otherwise free frominfluence or control by, the Borrower or REIT, (g) represents and warrantsthat if Assignee is not incorporated under the laws of the United States ofAmerica or any State, it has on or prior to the date hereof delivered toBorrower and Agent certification as to its exemption (or lack thereof) fromdeduction or withholding of any United States federal income taxes and (h) ifAssignee is an assignee of any portion of the Revolving Credit Notes, Assigneehas a net worth as of the date hereof of not less than $100,000,000.00 unlesswaived in writing by Borrower and Agent as required by the CreditAgreement.  Assignee agrees that Borrowermay rely on the representation contained in Section 4(i).

 

5.             Payments to Assignor.  In consideration of the assignment madepursuant to Paragraph 1 of this Agreement, Assignee agrees to pay to Assignoron the Assignment Date, an amount equal to$                        representing the aggregate principal amount outstanding of the **[Revolving Credit][Term]** Loans owing to Assignor under theLoan Agreement and the other Loan Documents with respect to the AssignedInterests.

 

6.             Payments by Assignor.  Assignor agrees to pay the Agent on theAssignment Date the registration fee required by §18.2 of the Credit Agreement.

 

7.             Effectiveness.

 

(a)           The effective date for this Agreementshall be                              (the “Assignment Date”).  Following theexecution of this Agreement, each party hereto shall deliver its duly executedcounterpart hereof to the Agent for acceptance and recording in the Register bythe Agent.

 

(b)           Upon such acceptance and recordingand from and after the Assignment Date, (i) Assignee shall be a party tothe Credit Agreement and, to the extent of the Assigned Interests, have therights and obligations of a Lender thereunder, and (ii) Assignor shall,with respect to the Assigned Interests, relinquish its rights and be releasedfrom its obligations under the Credit Agreement.

 

(c)           Upon such acceptance and recordingand from and after the Assignment Date, the Agent shall make all payments inrespect of the rights and interests assigned hereby accruing after theAssignment Date (including payments of principal, interest, fees and otheramounts) to Assignee.

 

(d)           All outstanding LIBOR Rate Loansshall continue in effect for the remainder of their applicable Interest Periodsand Assignee shall accept the currently effective interest rates on itsAssigned Interest of each LIBOR Rate Loan.

 

8.             Notices.  Assignee specifies as its address for noticesand its Lending Office for all assigned Loans, the offices set forth below:

 

H-3

----

 
| Notice Address: |   |       |
|-----------------|--------|------------|
|            |   |       |
|            |   |       |
|            |   | Attn:      |   |
|            |   | Facsimile: |

 
|                       |   |          |
|----------------------------|--------|---------------|
| Domestic Lending Office:   |   | Same as above |
|                       |   |          |
| Eurodollar Lending Office: |   | Same as above |

 

9.             Payment Instructions.  All payments to Assignee under the CreditAgreement shall be made as provided in the Credit Agreement in accordance withthe separate instructions delivered to Agent.

 

10.           Governing Law.  THIS AGREEMENT IS INTENDED TO TAKE EFFECT ASA SEALED INSTRUMENT FOR ALL PURPOSES AND TO BE GOVERNED BY, AND PURSUANT TO NEWYORK GENERAL OBLIGATIONS LAW SECTION 5-1401 SHALL BE CONSTRUED INACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TOCONFLICT OF LAWS).

 

11.           Counterparts.  This Agreement may be executed in any numberof counterparts which shall together constitute but one and the same agreement.

 

12.           Amendments.  This Agreement may not be amended, modifiedor terminated except by an agreement in writing signed by Assignor andAssignee, and consented to by Agent.

 

13.           Successors.  This Agreement shall inure to the benefit ofthe parties hereto and their respective successors and assigns as permitted bythe terms of Credit Agreement.

 

[signatures on following page]

 

H-4

----

 

IN WITNESS WHEREOF,intending to be legally bound, each of the undersigned has caused thisAgreement to be executed on its behalf by its officers thereunto dulyauthorized, as of the date first above written.

 
| ** ** | ASSIGNEE: |
|------------|-----------|
|       |      |
|       |      |
|       | By:       |   |
|       | Title:    |

 

 
| ** ** | ASSIGNOR: |
|------------|-----------|
|       |      |
|       |      |
|       | By:       |   |
|       | Title:    |

 
| RECEIPT  ACKNOWLEDGED AND  ASSIGNMENT CONSENTED TO BY:           |
|------------------------------------------------------------------|
|                                                             |
| KEYBANK  NATIONAL ASSOCIATION, as Agent                          |
|                                                             |
| By:                                                              |   |   |
| Title:                                                           |
|                                                             |
| CONSENTED  TO BY:(1)                                             |
|                                                             |
| BEHRINGER  HARVARD OPERATING                                     |
| PARTNERSHIP  I LP, a Texas limited partnership                   |
|                                                             |
| By:  BHR, Inc., a Delaware corporation, its General Partner |
|                                                             |
|                                                             |
| By:                                                              |   |   |
|                                                             | Name: |
|                                                             | Title: |
|                                                                  |  |  |  |  |

 

----

(1) Insert to extentrequired by Credit Agreement.

 

H-5

----

 

**EXHIBIT I**

 

**FORM OF LETTER OF CREDIT APPLICATION**

 

I-1

----

 

**SCHEDULE 1.1**

 

**LENDERS ANDCOMMITMENTS**

 

**REVOLVING CREDITLOAN**

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | **Revolving Credit  Commitment** | ** **    | **Revolving Credit  Commitment Percentage** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|---------------|-------------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                            | ** ** | ** **                            | ** **    | ** **                                            | ** ** |
| KeyBank National Association  127 Public Square  Cleveland, Ohio 44114-1306  Attention:           Kevin  Murray

Telephone:      216-689-5986

Facsimile:            216-689-4997                                                                                                                        |       | $                                     | 45,000,000.00 |                                                  | 15         | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
| Wachovia  Bank, National Association  201 S. College Street, CP9  NC1183  Charlotte, NC 28288  Attention:                 Vincent  Massey

Telephone:            (704)-590-3321

Facsimile:               (704)-715-0094 |       | $                                     | 45,000,000.00 |                                                  | 15         | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
| Aareal Bank  AG  Paulinenstrasse 15  65189 Wiesbaden  Germany  Attention:                 Petra  Friedhofer

Telephone:            +49-(0)611-348-2356

Facsimile:               +49-(0)611-348-2757                     |       | $                                     | 45,000,000.00 |                                                  | 15         | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                  |       |                                  |          |                                                  |       |

 

1

----

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                                              | ** ** | **Revolving Credit  Commitment** | ** **    | **Revolving Credit  Commitment Percentage** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|---------------|-------------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                  | ** ** | ** **                            | ** **    | ** **                                            | ** ** |
| Westdeutsche  Immobilienbank AG  Grosse Bleiche 46  55116 Mainz  Germany  Attention:                 Klaus  May

Telephone:            +49 6131 9280 - 7428

Facsimile:               +49 6131 9280 -  7490                    |       | $                                     | 30,000,000.00 |                                                  | 10         | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| RBS  Citizens, N.A. d/b/a Charter One  1215 Superior Ave, 6th Floor  Cleveland, OH 44114  Attention:                 R.J.  Quinn

Telephone:            (216)-277-0744

Facsimile:               (216)-277-4607                |       | $                                     | 24,000,000.00 |                                                  | 8          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| Fifth Third  Bank, a Michigan banking corporation  MD 1MOC2B  5050 Kingsley Drive  Cincinnati, OH 45263  Attention:                 Joyce  Elam

Telephone:            (513)-358-7336

Facsimile:               (513)-358-3479 |       | $                                     | 24,000,000.00 |                                                  | 8          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                        |       |                                  |          |                                                  |       |
| National  City Bank  CREA  2000 Auburn Drive, Suite 400  Beachwood, OH 44122  Attention:                 Peggy  Cramer

Telephone:            (216)-488-9124

Facsimile:               (216)-488-0214                     |       | $                                     | 21,000,000.00 |                                                  | 7          | % |

 

2

----

 
| **Name and Address**                                                                      | ** **                                        | **Revolving Credit  Commitment** | ** **    | **Revolving Credit  Commitment Percentage** | ** ** |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------|---------------------------------------|---------------|-------------------------------------------------------|------------|
| ** **                                                                                          | ** **                                        | ** **                            | ** **    | ** **                                            | ** ** |
| LIBOR  Lending Office  Same as Above                                                                |                                              |                                  |          |                                                  |       |
|                                                                                                |                                              |                                  |          |                                                  |       |
| Allied Irish  Banks, P.L.C.  2nd Floor, Iona House  Shelbourne Road  Ballsbridge, Dublin 4, Ireland |                                              | $                                     | 18,000,000.00 |                                                  | 6          | % |
| Attention:                                                                                          | Berne  Glynn/Peter Garvey                         |                                  |          |                                                  |       |   |   |
| Telephone:                                                                                          | +353 1 641  6633 / 6636                           |                                  |          |                                                  |       |   |   |
| Facsimile:                                                                                          | +353 1 641  6668                                  |                                  |          |                                                  |       |   |   |
|                                                                                                |                                              |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                |                                              |                                  |          |                                                  |       |
|                                                                                                |                                              |                                  |          |                                                  |       |
| PNC Bank,  National Association  500 1st Avenue  Pittsburgh, PA 15219                               |                                              | $                                     | 15,000,000.00 |                                                  | 5          | % |
| Attention:

Telephone:

Facsimile:                                                                  | Colleen Mannerino

(412)-760-7647

(412)-705-2124 |                                  |          |                                                  |       |   |   |
|                                                                                                |                                              |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                |                                              |                                  |          |                                                  |       |
|                                                                                                |                                              |                                  |          |                                                  |       |
| Citibank, N.A.  8401 N. Central Expressway  Suite 500  Dallas, TX 75225                        |                                              | $                                     | 15,000,000.00 |                                                  | 5          | % |
| Attention:

Telephone:

Facsimile:                                                                  | Kimberly Brand

(972)-419-3454

(972)-419-3308    |                                  |          |                                                  |       |   |   |
|                                                                                                |                                              |                                  |          |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                |                                              |                                  |          |                                                  |       |

 

3

----

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** | **Revolving Credit  Commitment** | ** **     | **Revolving Credit  Commitment Percentage** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|----------------|-------------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                       | ** ** | ** **                            | ** **     | ** **                                            | ** ** |
| Bank of  America, N.A.  901 Main Street, 20th Floor  TX1-492-20-06  Dallas, TX 75202  Attention:                 Cindy  King

Telephone:            (214)-209-1925

Facsimile:               (214)-209-1571         |       | $                                     | 12,000,000.00  |                                                  | 4          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
| Texas  Capital Bank, National Association  6060 N. Central Expressway  Dallas, TX 75206  Attention:                 Claudia  Watkins

Telephone:            (972)-560-4525

Facsimile:               (214) 706-6849 |       | $                                     | 6,000,000.00   |                                                  | 2          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                                  |           |                                                  |       |
| TOTAL                                                                                                                                                                                                                                                                                                                                                                                                                            |       | $                                     | 300,000,000.00 |                                                  | 100        | % |

 

4

----

 

**TERM LOAN**

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                 | ** **                                                  | **Term Loan  Commitment** | ** **    | **Term Loan  Commitment Percentage** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|--------------------------------|---------------|------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                     | ** **                                                  | ** **                     | ** **    | ** **                                     | ** ** |
| KeyBank  National Association  127 Public Square  Cleveland, Ohio 44114-1306  Attention:                 Kevin  Murray

Telephone:            216-689-5986

Facsimile:               216-689-4997 |                                                        | $                              | 42,000,000.00 |                                           | 21         | % |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| Wachovia  Bank, National Association  201 S. College Street, CP9  NC1183   Charlotte, NC 28288                                                                                                                                                                                                                                                                                                                 |                                                        | $                              | 30,000,000.00 |                                           | 15         | % |
| Attention:

Telephone:

Facsimile:                                                                                                                                                                                                                                                                                                                                                                             | Vincent  Massey

(704)-590-3321

(704)-715-0094             |                           |          |                                           |       |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| Aareal Bank  AG  Paulinenstrasse 15  65189 Wiesbaden  Germany                                                                                                                                                                                                                                                                                                                                                  |                                                        | $                              | 30,000,000.00 |                                           | 15         | % |
| Attention:

Telephone:

Facsimile:                                                                                                                                                                                                                                                                                                                                                                             | Petra  Friedhofer

+49-(0)611-348-2356

+49-(0)611-348-2757 |                           |          |                                           |       |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |                           |          |                                           |       |
| Westdeutsche  Immobilienbank AG  Grosse Bleiche 46  55116 Mainz  Germany                                                                                                                                                                                                                                                                                                                                       |                                                        | $                              | 20,000,000.00 |                                           | 10         | % |
| Attention:

Telephone:

Facsimile:                                                                                                                                                                                                                                                                                                                                                                             | Klaus May

+49 6131  9280 - 7428

+49 6131  9280 - 7490     |                           |          |                                           |       |   |   |

 

5

----

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                                             | ** ** | **Term Loan  Commitment** | ** **    | **Term Loan  Commitment Percentage** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|---------------|------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| RBS  Citizens, N.A. d/b/a Charter One  1215 Superior Ave, 6th Floor  Cleveland, OH 44114  Attention:                 R.J.  Quinn

Telephone:            (216)-277-0744

Facsimile:               (216)-277-4607               |       | $                              | 16,000,000.00 |                                           | 8          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| Fifth Third  Bank, a Michigan bankingcorporation  MD 1MOC2B  5050 Kingsley Drive  Cincinnati, OH 45263  Attention:                 Joyce  Elam

Telephone:            (513)-358-7336

Facsimile:               (513)-358-3479 |       | $                              | 16,000,000.00 |                                           | 8          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| National  City Bank  CREA  2000 Auburn Drive, Suite 400  Beachwood, OH 44122  Attention:                 Peggy  Cramer

Telephone:            (216)-488-9124

Facsimile:               (216)-488-0214                    |       | $                              | 14,000,000.00 |                                           | 7          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |       |                           |          |                                           |       |
| PNC Bank,  National Association  500 1st Avenue  Pittsburgh, PA 15219  Attention:                 Colleen  Mannerino

Telephone:            (412)-760-7647

Facsimile:               (412)-705-2124                           |       | $                              | 10,000,000.00 |                                           | 5          | % |

 

6

----

 
| **Name and Address**                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** | **Term Loan  Commitment** | ** **    | **Term Loan  Commitment Percentage** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|---------------|------------------------------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                       | ** ** | ** **                     | ** **    | ** **                                     | ** ** |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| Citibank,  N.A.  8401 N. Central Expressway  Suite 500  Dallas, TX 75225  Attention:                 Kimberly  Brand

Telephone:            (972)-419-3454

Facsimile:               (972)-419-3308            |       | $                              | 10,000,000.00 |                                           | 5          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| Bank of  America, N.A.  901 Main Street, 20th Floor  TX1-492-20-06  Dallas, TX 75202  Attention:                 Cindy  King

Telephone:            (214)-209-1925

Facsimile:               (214)-209-1571         |       | $                              | 8,000,000.00  |                                           | 4          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| Texas  Capital Bank, National Association  6060 N. Central Expressway  Dallas, TX 75206  Attention:                 Claudia  Watkins

Telephone:            (972) 560-4525

Facsimile:               (214) 706-6849 |       | $                              | 4,000,000.00  |                                           | 2          | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| LIBOR  Lending Office  Same as Above                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |       |                           |          |                                           |       |
| TOTAL                                                                                                                                                                                                                                                                                                                                                                                                                            |       | 200,000,000.00                 |          | 100                                            | %          |

 

7

----

 

**TOTAL COMMITMENTS**

 
| **Name**                                          | ** ** | **Total Commitment** | ** **     | **Total Commitment  Percentage** | ** ** |
|---------------------------------------------------|------------|---------------------------|----------------|---------------------------------------|------------|
| ** **                                        | ** ** | ** **                | ** **     | ** **                            | ** ** |
| KeyBank National Association                      |       | $                         | 87,000,000.00  |                                  | 17.4       | % |
|                                              |       |                      |           |                                  |       |
| Wachovia Bank, National Association               |       | $                         | 75,000,000.00  |                                  | 15.0       | % |
|                                              |       |                      |           |                                  |       |
| Aareal Bank AG                                    |       | $                         | 75,000,000.00  |                                  | 15.0       | % |
|                                              |       |                      |           |                                  |       |
| Westdeutsche Immobilienbank AG                    |       | $                         | 50,000,000.00  |                                  | 10.0       | % |
|                                              |       |                      |           |                                  |       |
| RBS Citizens, N.A. d/b/a Charter One              |       | $                         | 40,000,000.00  |                                  | 8.0        | % |
|                                              |       |                      |           |                                  |       |
| Fifth Third Bank, a Michigan banking  corporation |       | $                         | 40,000,000.00  |                                  | 8.0        | % |
|                                              |       |                      |           |                                  |       |
| National City Bank                                |       | $                         | 35,000,000.00  |                                  | 7.0        | % |
|                                              |       |                      |           |                                  |       |
| Allied Irish Banks, P.L.C.                        |       | $                         | 18,000,000.00  |                                  | 3.6        | % |
|                                              |       |                      |           |                                  |       |
| PNC Bank, National Association                    |       | $                         | 25,000,000.00  |                                  | 5.0        | % |
|                                              |       |                      |           |                                  |       |
| Citibank, N.A.                                    |       | $                         | 25,000,000.00  |                                  | 5.0        | % |
|                                              |       |                      |           |                                  |       |
| Bank of America, N.A.                             |       | $                         | 20,000,000.00  |                                  | 4.0        | % |
|                                              |       |                      |           |                                  |       |
| Texas Capital Bank, National Association          |       | $                         | 10,000,000.00  |                                  | 2.0        | % |
|                                              |       |                      |           |                                  |       |
| TOTAL                                             |       | $                         | 500,000,000.00 |                                  | 100.0      | % |

 

8

----

 

**SCHEDULE 1.2**

 

**SUBSIDIARYGUARANTORS**

 

(UPDATED FROMTIME TO TIME BY AGENT)

 
| Behringer  Harvard Cyprus, LLC, a Colorado limited liability company  |
|-----------------------------------------------------------------------|
|                                                                  |
| Behringer  Harvard Wayside, LLC, a Delaware limited liability company |
|                                                                  |
| Behringer  Harvard Centreport Office LP, a Texas limited partnership  |
|                                                                  |
| Behringer  Harvard Texas Street LP, a Delaware limited partnership    |
|                                                                  |
| Behringer  Harvard Eldridge Land LP, a Texas limited partnership      |

 

1

----

 

**SCHEDULE 4.3**

 

**ACCOUNTS**

 

None.

 

1

----

 

**EXHIBITS AND SCHEDULES**

 
| Exhibit A |   | FORM OF REVOLVING CREDIT NOTE                |
|----------------|--------|---------------------------------------------------|
|           |   |                                              |
| Exhibit B |   | FORM OF SWING LOAN NOTE                      |
|           |   |                                              |
| Exhibit C |   | FORM OF TERM LOAN NOTE                       |
|           |   |                                              |
| Exhibit D |   | FORM OF JOINDER AGREEMENT                    |
|           |   |                                              |
| Exhibit E |   | FORM OF REQUEST FOR REVOLVING CREDIT  LOAN   |
|           |   |                                              |
| Exhibit F |   | FORM OF LETTER OF CREDIT REQUEST             |
|           |   |                                              |
| Exhibit G |   | FORM OF COMPLIANCE CERTIFICATE               |
|           |   |                                              |
| Exhibit H |   | FORM OF ASSIGNMENT AND ACCEPTANCE  AGREEMENT |
|           |   |                                              |
| Exhibit I |   | FORM OF LETTER OF CREDIT APPLICATION         |
|           |   |                                              |
| Schedule 1.1   |   | LENDERS AND COMMITMENTS                           |
|           |   |                                              |
| Schedule 1.2   |   | SUBSIDIARY GUARANTORS                             |
|           |   |                                              |
| Schedule 4.3   |   | ACCOUNTS                                          |
|           |   |                                              |
| Schedule 6.3   |   | LIST OF ALL ENCUMBRANCES ON ASSETS                |
|           |   |                                              |
| Schedule 6.5   |   | NO MATERIAL CHANGES                               |
|           |   |                                              |
| Schedule 6.7   |   | PENDING LITIGATION                                |

 

----

 
| Schedule 6.10    |   | UNPAID TAXES                                         |
|------------------|--------|------------------------------------------------------|
|             |   |                                                 |
| Schedule 6.14    |   | CERTAIN TRANSACTIONS                                 |
|             |   |                                                 |
| Schedule 6.20(a) |   | SUBSIDIARIES OF REIT                                 |
|             |   |                                                 |
| Schedule 6.20(b) |   | UNCONSOLIDATED AFFILIATES REIT AND ITS  SUBSIDIARIES |
|             |   |                                                 |
| Schedule 6.21    |   | PROPERTY                                             |
|             |   |                                                 |
| Schedule 6.23    |   | MATERIAL LOAN AGREEMENTS                             |

 

----