exv10w7



 






Exhibit 10.7




SUBORDINATION AGREEMENT




September 9, 2005




KeyBank National Association

101 Federal Street

Boston, Massachusetts 02110

Attention: Mr. John J. Murphy,

                  Vice President




Re: Hines REIT Properties, L.P. Revolving Credit Facility




Ladies and Gentlemen:




          Reference is hereby made to the Credit Agreement, dated as of September 9, 2005 (as the same
may be amended, supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), by and among Hines REIT Properties, L.P., a Delaware limited partnership, as borrower
(“Borrower”), KeyBank National Association, a national banking association, as agent (“Agent”) for
itself and such other lenders from time to time party thereto (collectively, the “Lenders”), and
the Lenders. All capitalized terms used herein without definition shall have the meanings given to
such terms in the Credit Agreement.




          The undersigned, Hines Interests Limited Partnership (“HILP”) and Hines Advisors Limited
Partnership (“Advisor”), have in the past and may in the future pay, or cause one of more of their
affiliates to pay, certain organizational and offering expenses and general and administrative
costs for the benefit of Borrower for which they are entitled, subject to certain conditions, to be
reimbursed by Borrower (collectively, the “Reimbursables”). The Reimbursables are shown as a
liability on the Borrower’s consolidated balance sheet as the line item “due to affiliates.” In
order for the Reimbursables to not be considered “Funded Debt” for purposes of the Credit Agreement
and the other Credit Documents, HILP and Advisor hereby agree as follows for the benefit of Agent
and the Lenders:




          Each of Borrower, Advisor and HILP hereby covenants and agrees that Advisor’s and HILP’s
respective right to receive payment of the Reimbursables shall be subject and subordinate in right
of payment, in accordance with the provisions of this Subordination Agreement (this “Agreement”),
to the prior indefeasible payment in full in cash of all of the Borrower Obligations; provided that
so long as no such Borrower Obligations which are due are unsatisfied and no Event of Default has
occurred and is continuing or would exist after giving effect thereto, Borrower shall be permitted
to pay and Advisor and HILP shall be entitled to receive, payments in respect of the Reimbursables.




          1. In the event that, notwithstanding the provisions of this Agreement, Advisor and/or HILP
shall have received any payment in respect of the Reimbursables from Borrower in an amount or at a
time prohibited under this Agreement, then and in any such event, such payment shall be received
and held in trust for the benefit of Agent and shall forthwith be




 









 








paid over or delivered (duly endorsed, if appropriate) to Agent, to the extent necessary to
pay all of the Borrower Obligations then due and payable and not paid by Borrower.




          2. Nothing contained in this Agreement is intended to or shall impair, as between Borrower and
Advisor or Borrower and HILP, any obligations of Borrower to make payments in respect of the
Reimbursables to Advisor or HILP or any of their affiliates, as the case may be, as and when the
same shall become due and payable.




          3. This Agreement shall be binding upon Borrower, Advisor and HILP and their respective
successors and assigns and shall inure to the benefit of and be enforceable by Borrower. This
Agreement shall also be enforceable by Agent and its successors and assigns. Each of Borrower,
Advisor and HILP represents and warrants to Agent that (i) it has the power and authority to enter
into and perform its obligations under this Agreement, (ii) its entering into and performing its
obligations under this Agreement have been duly authorized by all necessary action, and (iii) this
Agreement constitutes the legal, valid and binding obligation of such party and is enforceable
against such party in accordance with its terms, except as enforceability may be limited by
applicable insolvency, bankruptcy or other laws affecting creditors’ rights generally, or general
principles of equity, whether such enforceability is considered in a proceeding in equity or at
law.




          4. This Agreement shall be governed by and construed and enforced in accordance with the laws
of the Commonwealth of Massachusetts.




          5. This Agreement may not be amended, nor may any provision hereof be waived, except in a
writing executed and delivered by Borrower, Advisor, HILP and Agent.




          6. This Agreement may be executed in separate counterparts and by different parties hereto on
different counterparts (telecopy of an executed signature page hereof having the same effect as
manual delivery of a signed counterpart hereof), each of which shall constitute an original, but
all of which, when taken together, shall constitute but one Agreement.




          7. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.




          8. This Agreement constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof.




          9. This Agreement shall terminate on the date on which the Commitments shall have terminated
and all Borrower Obligations shall have been fully and indefeasibly paid in cash.




[Signature Page Follows.]




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          IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the date first above written.




	 	 	 	 	 	 	 	 	 
	 	 	HINES REIT PROPERTIES, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines Real Estate Investment Trust, Inc., its
General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES ADVISORS LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines Advisors GP LLC, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES INTERESTS LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines Holdings, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 






	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 
	 
	 	 	 	 
	KEYBANK NATIONAL ASSOCIATION,
	   as Agent
	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 





Signature
Page to Subordination Agreement