PREDICTABLE RESULTS OF THE OWNERSHIP OF SUCH PARTY'S INTEREST
IN HSRE-ESP OR OF THE OVERALL BUSINESS OF HSRE-ESP, THAT ANY CASH DISTRIBUTIONS
FROM HSRE-ESP OPERATIONS OR OTHERWISE WILL BE MADE TO THE MEMBERS BY ANY
SPECIFIC DATE OR WILL BE MADE AT ALL, OR THAT ANY SPECIFIC TAX BENEFITS WILL
ACCRUE AS A RESULT OF AN INVESTMENT IN HSRE-ESP.
7.1.9
SUCH PARTY HAS BEEN ADVISED TO CONSULT WITH SUCH
PARTY'S OWN ATTORNEY REGARDING ALL LEGAL MATTERS CONCERNING AN INVESTMENT IN
HSRE-ESP AND THE TAX CONSEQUENCES OF PARTICIPATING IN HSRE-ESP, AND HAS DONE SO,
TO THE EXTENT SUCH PARTY CONSIDERS NECESSARY.
7.1.10
SUCH PARTY MUST BEAR THE ECONOMIC RISK OF INVESTMENT IN
HSRE-ESP FOR AN INDEFINITE PERIOD OF TIME, SINCE THE INTERESTS HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND, THEREFORE, CANNOT BE SOLD
UNLESS EITHER THEY ARE SUBSEQUENTLY REGISTERED UNDER SUCH ACT OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
7.1.11
INTERESTS IN HSRE-ESP HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR QUALIFIED UNDER THE
21
SECURITIES LAWS OF ANY STATE, OR ANY OTHER APPLICABLE BLUE SKY LAWS IN RELIANCE,
IN PART, ON THE WARRANTIES AND REPRESENTATIONS OF SUCH PARTY HEREIN.
7.2
ADDITIONAL WARRANTIES AND REPRESENTATIONS.
EACH PARTY, SOLELY WITH RESPECT TO SUCH PARTY AND NOT WITH RESPECT TO ANY OTHER
PARTY, WARRANTS AND REPRESENTS TO THE OTHER PARTY THAT:
7.2.1
SUCH PARTY AND SUCH PARTY'S INVESTMENT ADVISORS, IF
ANY, HAVE CAREFULLY REVIEWED AND UNDERSTAND THE RISKS OF, AND OTHER
CONSIDERATIONS RELATING TO, THE PURCHASE OF AN INTEREST IN HSRE-ESP.
7.2.2
SUCH PARTY IS ACQUIRING SUCH PARTY'S INTEREST IN
HSRE-ESP FOR INVESTMENT PURPOSES ONLY FOR ITS OWN ACCOUNT, AND NOT WITH A VIEW
TO THE RESALE, ASSIGNMENT, PLEDGE, MORTGAGE, HYPOTHECATION, TRANSFER OR
DISTRIBUTION OF ALL OR ANY PART THEREOF.
NO OTHER PERSON WILL HAVE ANY DIRECT
OR INDIRECT BENEFICIAL INTEREST IN OR RIGHT TO SUCH PARTY'S INTEREST IN
HSRE-ESP.
7.2.3
SUCH PARTY:
(1) IS AUTHORIZED AND OTHERWISE DULY
QUALIFIED TO PURCHASE AND HOLD INTERESTS IN HSRE-ESP;
AND (2) HAS ITS PRINCIPAL
PLACE OF BUSINESS AT ITS ADDRESS SET FORTH ABOVE IN THIS AGREEMENT.
7.2.4
BY REASON OF ITS BUSINESS OR FINANCIAL EXPERIENCE,
OR BY REASON OF THE BUSINESS OR FINANCIAL EXPERIENCE OF SUCH PARTY'S FINANCIAL
ADVISOR WHO IS UNAFFILIATED WITH AND WHO IS NOT COMPENSATED, DIRECTLY OR
INDIRECTLY, BY EITHER THE OTHER PARTY OR HSRE-ESP OR ANY AFFILIATE OR SELLING
AGENT OF EITHER THE OTHER PARTY OR HSRE-ESP, SUCH PARTY IS CAPABLE OF EVALUATING
THE RISKS AND MERITS OF THIS INVESTMENT AND OF PROTECTING SUCH PARTY'S OWN
INTERESTS IN CONNECTION WITH THIS INVESTMENT.
7.2.5
SUCH PARTY IS AN "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(A) PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION ("SEC").
NOTWITHSTANDING SUCH PARTY'S STATUS AS AN ACCREDITED INVESTOR, SUCH PARTY IS
ACQUIRING SUCH PARTY'S INTEREST IN HSRE-ESP AND ENTERING INTO THIS AGREEMENT AS
A JOINT VENTURE WITH THE OTHER PARTY AND DOES NOT CONSIDER THE INTERESTS IN
HSRE-ESP TO CONSTITUTE A "SECURITY" UNDER ANY FEDERAL OR