Document:

Exhibit 4.06

 

CUSIP
NO. 5252M0DL8

ISIN NO. US5252M0DL87

 

	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT:
  $600,000

  

No. R-1

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES I

 

RETURN ENHANCED NOTES LINKED TO MARQCUS PORTFOLIO A (USD) INDEX

DUE FEBRUARY 14, 2011

 

THIS
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE
DEPOSITORY.  UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY (AS DEFINED BELOW) OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM (A
“CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF
THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the “Company,”
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, on the Maturity Date, an amount equal to
the Redemption Amount.

 

The “Maturity Date” is February 14,
2011, or if such day is not a Business Day, on the next following Business Day.

 

The “Redemption
Amount” is the amount equal to the sum of the principal amount of the Notes
plus the Adjustment Amount, which may be negative, rounded to the nearest whole
U.S. cent.  If the Adjustment Amount is
negative, the value of the Adjustment Amount will be subtracted from the
principal amount of the notes for purposes of calculating the Redemption
Amount.

 

The “Adjustment
Amount” is, for each note, a single U.S. dollar payment calculated by the
Calculation Agent equal to the principal amount of the note multiplied by:

 

(A) Leverage x Index Return, if the
Index Return is greater than or equal to 0.0%; or

 

(B) 0%, if the Index Return is less than
0.0%.

 

The “Leverage” is 300%.

 

The “Trade
Date” is February 8, 2008.

 

The “Issue
Date” is February 14, 2008.

 

The “Valuation
Date” is February 7, 2011, or if such day is not an Index Business Day,
the immediately preceding Index Business Day; provided that if the Final Index
Level is not available on the scheduled Valuation Date due to Index
Unavailability, as described under “Index Unavailability” below, the Valuation
Date may be postponed (as described below).

 

The “Index” is
the Lehman Brothers Macro Quantitative Currency Trading Strategies (“MarQCuS”)
Portfolio A (USD) Index, calculated and published by the Index Calculation
Agent.

 

The “Index
Return” is a quotient, the numerator of which is the Final Index Level minus
the Initial Index Level and the denominator of which is the Initial Index
Level, expressed as a percentage.

 

The “Final
Index Level” is the closing value of the Index on the Valuation Date, as
calculated by the Index Calculation Agent (subject to the occurrence of Index
Unavailability).

 

The “Initial
Index Level” is 193.82, which is equal to the closing value of the Index on the
Trade Date, as calculated by the Index Calculation Agent.

 

The “Index
Level” is the closing level of the Index, as calculated by the Index
Calculation Agent and published on the Price Source, subject to adjustment in
accordance with the Index Adjustment below.

 

2

 

An “Index
Business Day” is a day on which commercial banks are open, including for
dealings in foreign exchange in accordance with market practice of the foreign
exchange market, in both London and New York.

 

“Index
Unavailability” means that the Index Level for the Valuation Date is not
published on the Price Source.

 

	
  MarQCuS Index

  	
   

  	
  Bloomberg Page

  (Price Source) *

  	
   

  	
  Reuters Page

  (Fallback Price Source) *

  	
   

  
	
  Forward Bias G10 Index

  	
   

  	
  LBMQMFG <INDEX>

  	
   

  	
  .LBMQMFG

  	
   

  
	
  Forward Bias Emerging Market (EM) Index

  	
   

  	
  LBMQMFE <INDEX>

  	
   

  	
  .LBMQMFE

  	
   

  
	
  TurnRate Index and

  	
   

  	
  LBMQMTR <INDEX>

  	
   

  	
  .LBMQMTR

  	
   

  
	
  Major/Miner Index

  	
   

  	
  LBMQMMM <INDEX>

  	
   

  	
  .LBMQMMM

  	
   

  
	
  CoBALT Index LBFX GBP

  	
   

  	
  LBMQMCO <INDEX>

  	
   

  	
  .LBMQMCO

  	
   

  
	
  RAFT Index

  	
   

  	
  LBMQMRF <INDEX>

  	
   

  	
  .LBMQMRF

  	
   

  

 

For purposes of calculating the MarQCuS Portfolio A Index, the term “Price
Source” and “Fallback Price Source” includes any (a) successor page to
or (b) solely in the event the Index Calculation Agent determines in good
faith that the an indicated Bloomberg or Reuters pages is no longer a
materially accurate source for the level of any MarQCuS Index, any replacement page for,
to the indicated Bloomberg and Reuters pages, respectively, on which the level
of the relevant MarQCuS Index may be published, as determined in the Index
Calculation Agent acting in good faith.

 

If the
Index Calculation Agent determines in good faith that the Index Level for the
Valuation Date was not published on the Price Source, the Calculation Agent
will determine the Final Index Level using the Index Level published on the
Fallback Price Source for such Valuation Date. 
If the Index Calculation Agent determines in good faith that the Index
Level for the Valuation Date was also not published on the Fallback Price
Source, the Calculation Agent will calculate the Index Return using as the
Final Index Level the Index Level published for the first Index Business Day
succeeding the scheduled Valuation Date; provided however that if no Index
Level is published on the Price Source or Fallback Price Source for each of the
three scheduled Index Business Days following the scheduled Valuation Date,
then (a) the third scheduled Index Business Day shall be deemed the
Valuation Date and (b) the Calculation Agent will determine the Final
Index Level on such third scheduled Index Business Day in good faith in
accordance with the formula for and method of calculating the Index last in
effect prior to commencement of the Index Unavailability, taking in to account
the latest available Index Level and any other information that it deems
relevant.

 

If the
Index Calculation Agent discontinues publication of the Index prior to, and
such discontinuation is continuing on, the Valuation Date, and the Index
Calculation Agent or another entity publishes a successor or substitute index
that the Calculation Agent determines in good faith to be comparable to the
discontinued Index (such index, a “Successor Index”), then the Final Index
Level will be determined by reference to the closing level of such Successor
Index on the Valuation Date; provided, however, that the Calculation Agent may
make such

 

3

 

adjustments as it deems
necessary, acting in good faith, to the level of the Successor Index so that
the level of the Successor Index reflects the same level as that of the Index
before it was discontinued.  Upon any
selection by the Calculation Agent of a Successor Index, the Calculation Agent
will cause written notice thereof to be promptly furnished to the trustee, to
the Issuer and to the holders of the notes.

 

If the
Index Calculation Agent discontinues publication of the Index prior to, and
such discontinuation is continuing on, the Valuation Date, and the Calculation
Agent determines in good faith that no Successor Index is available at such
time, then the Calculation Agent will determine the Final Index Level on the
Valuation Date.  The Final Index Level
will be computed by the Calculation Agent in accordance with the formula for
and method of calculating the Index last in effect prior to such
discontinuation, taking in to account the latest available Index Level and any
other information that it deems relevant.

 

In the
event that there is any error in relation to the calculation or publication of
the Final Index Level and the Index Calculation Agent publishes an adjustment
or correction to such Final Index Level on or prior to the Business Day
immediately preceding the Maturity Date, the Calculation Agent will calculate
the Redemption Amount using the Final Index Level as so adjusted or corrected.

 

If the
Calculation Agent, acting in good faith, determines that the Index has been or
will be rebased on or prior to the Valuation Date, the Index as so rebased will
be used for purposes of calculating the Redemption Amount; provided, however,
that the Calculation Agent may make such adjustments it considers necessary, if
any, to the level of the Index so rebased so that the Final Index Level
reflects the same Index Level for the Index on the Valuation Date before such
rebasing.

 

If the
Index Calculation Agent, acting in good faith, determines that on any Index Business
Day that a component MarQCuS Index (a) is no longer available or (b) has
been materially modified and such modification will have a materially adverse
effect on the MarQCuS Portfolio A Index, the Index Calculation Agent shall
remove or replace such affected component MarQCuS Index with an alternative
index or rate, variable or other component, and may make such adjustments to
the level of such replacement index or rate, variable or other component as it
considers necessary so that the level of the MarQCuS Portfolio A Index after
such removal or replacement reflects a similar level to that calculated prior
to the removal or replacement, acting in good faith.  Following the removal or replacement of a
component MarQCuS Index, the Index Calculation Agent will promptly publish a
notice which specifies the component MarQCuS Index removed or replaced and any
designated replacement thereof.

 

A “Business Day”, notwithstanding any provision in the Indenture, is
any day that is not is not a Saturday or Sunday and that is not a day on which
banking institutions in New York City generally are authorized or obligated by
law or executive order to be closed.

 

The “Calculation Agent” means Lehman Brothers Inc.

 

The “Index Calculation Agent” means Lehman Brothers International
(Europe).

 

4

 

Except as provided below, the Redemption Amount may, at the option of
the Company, be made by check mailed to the person entitled thereto at such
person’s address as it appears on the registry books of the Company.

 

Payment of any Redemption Amount will be made in immediately available
funds in accordance with the normal procedures of the Trustee (or any duly
appointed Paying Agent).

 

The Company will pay any administrative costs imposed by banks in making payments in
immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.

 

References herein to “U.S. dollars” or “U.S.$” or “$”
or “USD” are to the coin or currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.

 

REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

 

This Note shall not be
valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the
Indenture.

 

5

 

IN WITNESS
WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed
by its Chairman of the Board, its President, its Vice Chairman, its Chief
Financial Officer, one of its Vice Presidents or its Treasurer, by manual or
facsimile signature under its corporate seal, attested by its Secretary or one
of its Assistant Secretaries by manual or facsimile signature.

 

	
  Dated:
  February 14, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

CITIBANK, N.A.

  as Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  

 

6

 

[REVERSE
OF NOTE]

 

LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES,
SERIES I

RETURN ENHANCED NOTES LINKED TO MARQCUS PORTFOLIO A (USD) INDEX
 DUE FEBRUARY 14, 2011

 

Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I,
Return Enhanced Notes Linked to MarQCuS Portfolio A (USD) Index (herein called
the “Notes”).  The Notes are one of an indefinite
number of series of debt securities of the Company (collectively, the “Securities”)
issued or issuable under and pursuant to an indenture dated as of September 1,
1987, as amended and supplemented (the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as Trustee (herein called the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.  The separate series of
Securities may be issued in various aggregate principal amounts, may mature at different
times, may bear interest (if any) at different rates, may be subject to
different redemption provisions or repurchase rights (if any), may be subject
to different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.

 

Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.

 

Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Adjustment Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Adjustment Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series

 

 

Outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, on the
Adjustment Amount or the principal amount, or premium, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.

 

Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Adjustment Amount or the principal amount on this Note at the place, at the
respective times, at the rate, and in the coin or currency herein prescribed.

 

Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

 

Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $100,000 or integral
multiples of $100,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.

 

Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will

 

 

authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.

 

Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the person in whose name
this Note is registered as the owner hereof for all purposes, and neither the
Company nor the Trustee nor any agent of the Company or of the Trustee shall be
affected by any notice to the contrary.

 

Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be
capped at the Redemption Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.

 

Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Redemption
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

 

Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.

 

Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.Exhibit 10.1

 

CREDIT AGREEMENT

 

among

 

BEHRINGER HARVARD OPPORTUNITY OP I, LP, a Texas limited partnership,

and

BEHRINGER HARVARD BOWEN ROAD LP, a Delaware limited partnership,

BEHRINGER HARVARD WHITEWATER, LLC, a Delaware limited liability
company,

BEHRINGER HARVARD LAS COLINAS LP, a Delaware limited partnership,

BEHRINGER HARVARD BENT TREE LP, a Delaware limited partnership,

BEHRINGER HARVARD AUGUSTA LP, a Delaware limited partnership,

BEHRINGER HARVARD NORTHPOINT LP, a Delaware limited partnership, and

BEHRINGER HARVARD REGENCY LP, a Delaware limited partnership,

and

any other Subsidiary Obligor now or hereafter made a party to this
Agreement,

collectively, as Borrowers

 

and

 

BANK OF AMERICA, N.A., a national banking association,

as Administrative Agent, L/C Issuer, and Lender

 

and

 

BANK OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

and

 

the other Lenders hereafter made a party hereto

 

regarding a

 

Secured Revolving Credit Facility

 

Dated as of February 13, 2008

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  Article 1
  - THE LOAN

  	
   

  	
   

  	
  1

  
	
   

  	
  1.1

  	
  General
  Information and Exhibits and Schedules

  	
  1

  
	
   

  	
  1.2

  	
  Purpose

  	
  2

  
	
   

  	
  1.3

  	
  Commitment
  to Lend

  	
  2

  
	
   

  	
  1.4

  	
  Option
  to Increase Aggregate Commitment

  	
  2

  
	
   

  	
  1.5

  	
  Fees

  	
  3

  
	
   

  	
  1.6

  	
  Evidence
  of Debt

  	
  4

  
	
   

  	
  1.7

  	
  Interest
  Rates

  	
  4

  
	
   

  	
  1.8

  	
  Prepayment

  	
  7

  
	
   

  	
  1.9

  	
  Consequential
  Loss

  	
  8

  
	
   

  	
  1.10

  	
  Late
  Charge

  	
  8

  
	
   

  	
  1.11

  	
  Taxes

  	
  9

  
	
   

  	
  1.12

  	
  Payment
  Schedule and Maturity Date; Extension Options

  	
  10

  
	
   

  	
  1.13

  	
  Advances
  and Payments

  	
  12

  
	
   

  	
  1.14

  	
  Administrative
  Agent Advances

  	
  14

  
	
   

  	
  1.15

  	
  Defaulting
  Lender.

  	
  14

  
	
   

  	
  1.16

  	
  Several
  Obligations; No Liability, No Release

  	
  16

  
	
   

  	
  1.17

  	
  Replacement
  of Lenders

  	
  17

  
	
   

  	
  1.18

  	
  Borrowers’
  Rights

  	
  17

  
	
   

  	
  1.19

  	
  Swap
  Transaction

  	
  17

  
	
  Article 2
  - ADDITIONAL COVENANTS AND AGREEMENTS

  	
  19

  
	
   

  	
  2.1

  	
  Legal
  Existence; Name, Etc

  	
  19

  
	
   

  	
  2.2

  	
  Agreements
  with Affiliates

  	
  19

  
	
   

  	
  2.3

  	
  Hazard
  and Other Insurance

  	
  19

  
	
   

  	
  2.4

  	
  Condemnation

  	
  21

  
	
   

  	
  2.5

  	
  Repair
  and Restoration

  	
  22

  
	
   

  	
  2.6

  	
  Compliance
  with Legal Requirements

  	
  24

  
	
   

  	
  2.7

  	
  Maintenance
  and Repair

  	
  24

  
	
   

  	
  2.8

  	
  Operation
  of Collateral

  	
  24

  
	
   

  	
  2.9

  	
  Estoppel
  Certificates

  	
  25

  
	
   

  	
  2.10

  	
  Waiver
  Regarding Flood Status

  	
  25

  
	
   

  	
  2.11

  	
  Notice
  to Administrative Agent

  	
  25

  
	
   

  	
  2.12

  	
  Financial
  Statements

  	
  26

  
	
   

  	
  2.13

  	
  Appraisal

  	
  26

  
	
   

  	
  2.14

  	
  ERISA
  and Prohibited Transaction Taxes

  	
  26

  
	
   

  	
  2.15

  	
  Property
  Management

  	
  27

  
	
   

  	
  2.16

  	
  Contest
  of Claims

  	
  28

  
	
   

  	
  2.17

  	
  Single
  Purpose Entity/Separateness

  	
  29

  
	
   

  	
  2.18

  	
  Minimum
  Average Occupancy

  	
  29

  
	
   

  	
  2.19

  	
  Release
  of Collateral

  	
  29

  
	
   

  	
  2.20

  	
  Equity
  Ownership; Subsidiaries

  	
  30

  
	
   

  	
  2.21

  	
  Debt
  and Contingent Liabilities

  	
  30

  
	
   

  	
  2.22

  	
  Liens

  	
  31

  
	
   

  	
  2.23

  	
  Restricted
  Payments

  	
  31

  
						

 

 

	
   

  	
  2.24

  	
  Restriction
  on Fundamental Changes, Dispositions and Acquisitions

  	
  31

  
	
   

  	
  2.25

  	
  Modification
  of Organizational Documents

  	
  32

  
	
   

  	
  2.26

  	
  Transactions
  with Affiliates

  	
  32

  
	
   

  	
  2.27

  	
  Conduct
  of Business

  	
  32

  
	
   

  	
  2.28

  	
  Inconsistent
  Agreements

  	
  32

  
	
   

  	
  2.29

  	
  Collateral
  Pool; Existing Projects

  	
  32

  
	
   

  	
  2.30

  	
  Subdivision
  of Bowen Road Land; Release of Bowen Road Excess Land

  	
  33

  
	
  Article 3
  - REPRESENTATIONS AND WARRANTIES

  	
   

  	
  34

  
	
   

  	
  3.1

  	
  Patriot
  Act Due Diligence

  	
  34

  
	
   

  	
  3.2

  	
  Existence

  	
  34

  
	
   

  	
  3.3

  	
  Other
  Agreements

  	
  35

  
	
   

  	
  3.4

  	
  Collateral

  	
  35

  
	
   

  	
  3.5

  	
  Property
  Access

  	
  35

  
	
   

  	
  3.6

  	
  Utilities

  	
  36

  
	
   

  	
  3.7

  	
  Flood
  Hazards/Wetlands

  	
  36

  
	
   

  	
  3.8

  	
  Taxes/Assessments

  	
  36

  
	
   

  	
  3.9

  	
  Eminent
  Domain

  	
  36

  
	
   

  	
  3.10

  	
  Litigation

  	
  36

  
	
   

  	
  3.11

  	
  Accuracy

  	
  36

  
	
   

  	
  3.12

  	
  Foreign
  Ownership

  	
  37

  
	
   

  	
  3.13

  	
  Solvency

  	
  37

  
	
   

  	
  3.14

  	
  Financial
  Statements; No Change

  	
  37

  
	
   

  	
  3.15

  	
  Margin
  Stock; Commercial Loan; Other Regulatory Matters

  	
  37

  
	
   

  	
  3.16

  	
  Tax
  Filings

  	
  38

  
	
   

  	
  3.17

  	
  Full
  and Accurate Disclosure

  	
  38

  
	
  Article 4
  - DEFAULT AND REMEDIES

  	
   

  	
  38

  
	
   

  	
  4.1

  	
  Events
  of Default

  	
  38

  
	
   

  	
  4.2

  	
  Remedies

  	
  42

  
	
  Article 5
  - ADMINISTRATIVE AGENT

  	
   

  	
  44

  
	
   

  	
  5.1

  	
  Appointment
  and Authorization of Administrative Agent.

  	
  44

  
	
   

  	
  5.2

  	
  Delegation
  of Duties

  	
  45

  
	
   

  	
  5.3

  	
  Liability
  of Administrative Agent

  	
  46

  
	
   

  	
  5.4

  	
  Reliance
  by Administrative Agent

  	
  46

  
	
   

  	
  5.5

  	
  Notice
  of Default

  	
  46

  
	
   

  	
  5.6

  	
  Credit
  Decision; Disclosure of Information by Administrative Agent

  	
  47

  
	
   

  	
  5.7

  	
  Indemnification
  of Administrative Agent

  	
  48

  
	
   

  	
  5.8

  	
  Administrative
  Agent in Individual Capacity

  	
  48

  
	
   

  	
  5.9

  	
  Successor
  Administrative Agent

  	
  48

  
	
   

  	
  5.10

  	
  Releases;
  Acquisition and Transfers of Collateral

  	
  49

  
	
   

  	
  5.11

  	
  Application
  of Payments

  	
  51

  
	
   

  	
  5.12

  	
  Benefit

  	
  51

  
	
   

  	
  5.13

  	
  Co-Agents;
  Lead Managers

  	
  52

  
	
  Article 6
  - GENERAL TERMS AND CONDITIONS

  	
   

  	
  52

  
	
   

  	
  6.1

  	
  Consents;
  Borrowers’ Indemnity

  	
  52

  
	
   

  	
  6.2

  	
  Miscellaneous

  	
  53

  
	
   

  	
  6.3

  	
  Notices

  	
  54

  
						

 

 

	
   

  	
  6.4

  	
  Payments
  Set Aside

  	
  55

  
	
   

  	
  6.5

  	
  Successors
  and Assigns

  	
  55

  
	
   

  	
  6.6

  	
  Confidentiality

  	
  58

  
	
   

  	
  6.7

  	
  Set-off

  	
  59

  
	
   

  	
  6.8

  	
  Sharing
  of Payments

  	
  60

  
	
   

  	
  6.9

  	
  Amendments;
  Survival

  	
  60

  
	
   

  	
  6.10

  	
  Costs
  and Expenses

  	
  62

  
	
   

  	
  6.11

  	
  Tax
  Forms

  	
  62

  
	
   

  	
  6.12

  	
  Further
  Assurances

  	
  64

  
	
   

  	
  6.13

  	
  Inducement
  to Lenders

  	
  65

  
	
   

  	
  6.14

  	
  Forum

  	
  65

  
	
   

  	
  6.15

  	
  Interpretation

  	
  65

  
	
   

  	
  6.16

  	
  No
  Partnership, etc

  	
  65

  
	
   

  	
  6.17

  	
  Records

  	
  66

  
	
   

  	
  6.18

  	
  Commercial
  Purpose

  	
  66

  
	
   

  	
  6.19

  	
  Service
  of Process

  	
  66

  
	
   

  	
  6.20

  	
  USA
  Patriot Act Notice

  	
  66

  
	
   

  	
  6.21

  	
  Entire
  Agreement

  	
  66

  
	
   

  	
  6.22

  	
  Dispute
  Resolution

  	
  67

  
	
   

  	
  6.23

  	
  Waiver
  of Jury Trial

  	
  69

  

 

EXHIBITS
AND SCHEDULES:

 

	
  EXHIBIT A

  	
  —

  	
  Legal Descriptions of Existing Projects in
  Collateral Pool

  
	
  EXHIBIT A-1

  	
  —

  	
  Preliminary Plat - Bowen Road

  
	
  EXHIBIT B

  	
  —

  	
  Definitions and Financial Statements

  
	
  EXHIBIT C

  	
  —

  	
  Conditions Precedent to the Initial Advance

  
	
  EXHIBIT D

  	
  —

  	
  Conditions to Addition to Collateral Pool

  
	
  EXHIBIT E

  	
  —

  	
  Organizational Chart; List of Subsidiaries

  
	
  EXHIBIT F

  	
  —

  	
  Advances

  
	
  EXHIBIT F-1

  	
  —

  	
  Form of Advance Request

  
	
  EXHIBIT G

  	
  —

  	
  Survey Requirements

  
	
  EXHIBIT H

  	
  —

  	
  Form of Loan Assumption Agreement

  
	
  EXHIBIT I

  	
  —

  	
  Leasing and Tenant Matters

  
	
  EXHIBIT J

  	
  —

  	
  Insurance Requirements

  
	
  EXHIBIT K

  	
  —

  	
  Letters of Credit

  
	
  EXHIBIT L

  	
  —

  	
  Form of Assignment and Assumption

  
	
  EXHIBIT M

  	
  —

  	
  Form of Promissory Note

  
	
  EXHIBIT N

  	
  —

  	
  Schedule of Lenders

  
	
  EXHIBIT O

  	
  —

  	
  Form of Borrower’s NOI Certificate

  
	
  SCHEDULE 1

  	
  —

  	
  Exceptions to Representations and Warranties

  

 

 

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (“Agreement”)
is made effective as of February 13, 2008, by and among each lender from
time to time a party hereto (individually, a “Lender” and collectively,
the “Lenders”), BANK OF AMERICA, N.A.,
a national banking association, as Administrative Agent and L/C Issuer, BEHRINGER HARVARD OPPORTUNITY OP I, L.P., a Texas limited
partnership (the “Operating Partnership”), BEHRINGER
HARVARD BOWEN ROAD LP, a Delaware limited partnership, BEHRINGER HARVARD WHITEWATER, LLC, a Delaware limited
liability company, BEHRINGER HARVARD LAS
COLINAS LP, a Delaware limited partnership, BEHRINGER
HARVARD BENT TREE LP, a Delaware limited partnership, BEHRINGER HARVARD AUGUSTA LP, a Delaware limited
partnership, BEHRINGER HARVARD NORTHPOINT LP, a
Delaware limited partnership, and BEHRINGER HARVARD REGENCY
LP, a Delaware limited partnership (each, together with every other
Subsidiary who is now or hereafter made a party to this Agreement, a “Subsidiary
Obligor”) (the Operating Partnership and each Subsidiary Obligor now or
hereafter made a party to this Agreement are sometimes referred to herein,
collectively, as “Borrowers” and individually, as a “Borrower”),
who agree as follows:

 

RECITALS

 

Lenders have agreed to make
available to Borrowers a secured revolving credit facility (which includes
letters of credit) upon the terms and conditions set forth herein.

 

In consideration of the
mutual agreements herein contained, the parties hereto agree as follows:

 

ARTICLE 1 - THE LOAN

 

1.1           General Information and Exhibits and Schedules.  This Agreement includes the Exhibits and
Schedules listed below, all of which Exhibits and Schedules are attached hereto
and made a part hereof for all purposes. 
Each Borrower and Lenders agree that if any Exhibit or Schedule to
be attached to this Agreement contains blanks, the same shall be completed
correctly and in accordance with this Agreement prior to or at the time of the
execution and delivery thereof.

 

	
  Exhibit A

  	
  —

  	
  Legal Description

  
	
  Exhibit A-1

  	
  —

  	
  Preliminary Plat - Bowen Road

  
	
  Exhibit B

  	
  —

  	
  Definitions and Financial Statements

  
	
  Exhibit C

  	
  —

  	
  Conditions Precedent to the Initial Advance

  
	
  Exhibit D

  	
  —

  	
  Conditions to Addition to Collateral Pool

  
	
  Exhibit E

  	
  —

  	
  Organizational Chart; List of Subsidiaries

  
	
  Exhibit F

  	
  —

  	
  Advances

  
	
  Exhibit F-1

  	
  —

  	
  Form of Advance Request

  
	
  Exhibit G

  	
  —

  	
  Survey Requirements

  
	
  Exhibit H

  	
  —

  	
  Form of Loan Assumption Agreement

  
	
  Exhibit I

  	
  —

  	
  Leasing and Tenant Matters

  
	
  Exhibit J

  	
  —

  	
  Insurance Requirements

  

 

 

1

 

	
  Exhibit K

  	
  —

  	
  Letters of Credit

  
	
  Exhibit L

  	
  —

  	
  Form of Assignment and Assumption

  
	
  Exhibit M

  	
  —

  	
  Form of Promissory Note

  
	
  Exhibit N

  	
  —

  	
  Schedule of Lenders

  
	
  Exhibit O

  	
  —

  	
  Form of Borrower’s NOI Certificate

  
	
  Schedule 1

  	
  —

  	
  Exception to Representations and Warranties

  

 

The Exhibits and Schedules
contain other terms, provisions and conditions applicable to the Loan.  Capitalized terms used in this Agreement
shall have the meanings assigned to them in Exhibit B. This
Agreement and the other Loan Documents, which must be in form, detail and
substance satisfactory to Administrative Agent, evidence the agreements of each
Borrower and Lenders with respect to the Loan. 
Each Borrower shall comply with all of the Loan Documents applicable to such
Borrower and the Collateral owned by such Borrower.

 

1.2           Purpose.  The
proceeds of the Loan shall be used by Borrowers for (i) the purpose of
acquiring Projects for inclusion in the Collateral Pool, or (ii) the
working capital needs of Borrowers (including, for payment of obligations owing
from time to time by any Borrower under any Swap Transaction).

 

1.3           Commitment to Lend. 
Borrowers agree to borrow from each Lender, and each Lender severally
agrees to make Advances of its Pro Rata Share of the Aggregate Commitment to
Borrowers in amounts at any one time outstanding not to exceed such Lender’s
Pro Rata Share of the Aggregate Commitment and (except for Administrative Agent
with respect to Administrative Agent Advances), on the terms and subject to the
conditions set forth in this Agreement and Exhibit C and Exhibit F
attached to this Agreement.  The Loan is
a revolving loan.  Subject to the other
terms and conditions hereof, Borrowers may borrow, repay, and reborrow
hereunder. Anything contained in this Agreement to the contrary notwithstanding,
the aggregate principal amount of all Advances outstanding at any one time
shall not exceed the Maximum Availability Amount (as herein defined).

 

1.4           Option
to Increase Aggregate Commitment. 
Initially, the Aggregate Commitment of the Lenders is $75,000,000.00,
subject to the following limitations: (i) until such time as Arranger
shall have completed the sale of not less than $40,000,000 of the Loan to one
or more Lenders (other than Bank of America, N.A.), the Maximum Availability
Amount shall be limited to $35,000,000.00, and (ii) advances of the
Aggregate Commitment shall be limited at all times to the Maximum Availability
Amount.  The Operating Partnership, on
behalf of all Borrowers, shall have the right at any time during the term of
the Loan and for so long as no Default then exists, to request an increase to
the amount of the Aggregate Commitment by obtaining additional Commitments from
any Eligible Assignee, subject to the satisfaction of the following
requirements:

 

(a)           Administrative Agent shall have approved each Eligible
Assignee who will provide the additional Commitments required to increase the
Aggregate Commitment; provided, however, no other Lender shall have the right
to approve any such Eligible Assignee;

 

(b)           No Lender having a Commitment at the time the Operating
Partnership requests an increase in the Aggregate Commitment shall be obligated
to increase its Commitment but 

 

 

2

 

each
such Lender shall have a right of first refusal to increase its Commitment by
the amount of the proposed increase (and if more than one such Lender shall
have exercised such right of first refusal, the Lenders who exercise their
right of first refusal shall be entitled to increase their respective
Commitment on a proportionate basis taking into consideration their relative
existing Commitments at such time);

 

(c)           Each Lender providing a new Commitment shall have complied
with the requirements applicable thereto in Section 6.5 of this
Agreement; and

 

(d)           No single increase in the Aggregate Commitment shall be
for an amount equal to less than $25,000,000 and the Aggregate Commitment shall
not exceed $150,000,000.00.

 

1.5           Fees.

 

                1.5.1        Loan
Fees.  Borrowers shall pay to
Arranger the upfront fees specified in any letter agreement between Bank of
America, N.A., acting for its own account, Arranger and the Operating
Partnership or its Affiliate.

 

                1.5.2        Unused
Fees.  Borrowers shall pay to
Administrative Agent, for the ratable account of Lenders, a quarterly unused
facility fee (prorated for partial quarters) equal to an interest rate per
annum equal to the applicable Unused Fee Percentage times
the average daily Unused Commitment during such calendar quarter (assuming a
360 day year and based upon the number of days elapsed in such quarter).  Such unused fee shall be due and payable,
commencing on April 1, 2008 and continuing on the first day of each April,
July, October, and January thereafter during the term of the Loan, and on
the Maturity Date.  Solely for purposes of
this Section 1.5.2, the term “ratable” means, for any calculation
period, with respect to any Lender, the proportion that (i) the portion of
the daily Unused Commitment allocable to such Lender during such period bears
to (ii) the aggregate amount of the daily Unused Commitment of all Lenders
during such period.

 

                1.5.3        Letter
of Credit Fees.  As an inducement for
the issuance (including, without limitation, the extension) of each Letter of
Credit, Borrowers agree to pay to Administrative Agent:

 

(i)            For the ratable account of each Lender, an issuance fee
payable quarterly in arrears, equal to a percentage of the average-face amount
of such Letter of Credit during each applicable quarterly period, which
percentage is equal to the product of the average-face amount of such Letter of
Credit times an interest rate per annum
(assuming a 360 day year and based upon the number of days elapsed in such
quarter) equal to the Applicable Margin for LIBOR Rate Principal; and

 

(ii)           For the account of L/C Issuer, payable on the date of
issuance, an issuance fee equal to the greater of (A) the product of (1) the
face amount of such Letter of Credit times (2) one-eighth
of one percent (0.125%) and (B) $1,500.

 

 

 

3

 

1.6           Evidence of Debt.

 

(a)           Advances of the Loan made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Administrative Agent in the ordinary course of business.  The accounts or records maintained by
Administrative Agent and each Lender shall be prima facie evidence of the
amount of the Loan made by the Lenders to Borrowers and the interest and
payments thereon.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of Borrowers hereunder to pay any amount owing with respect to
the Indebtedness.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of Administrative Agent in respect of such matters, the
accounts and records of Administrative Agent shall control in the absence of
manifest error.  Each Lender may attach
schedules to its Note(s) and endorse thereon the date, amount and maturity
of the applicable Note and payments with respect thereto.

 

(b)           In addition to the accounts and records referred to in
subsection (a), each Lender and Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit.  In the event of any conflict between the
accounts and records maintained by Administrative Agent and the accounts and
records of any Lender in respect of such matters, the accounts and records of Administrative
Agent shall control in the absence of manifest error

 

1.7           Interest Rates. 
The Principal Debt from day to day outstanding which is not past due
shall bear interest at a rate per annum equal to the lesser of (i) the
maximum non-usurious rate of interest allowed by applicable law or (ii) the
following (computed as provided in Section 1.7.3 hereof) as
applicable: (a) on Base Rate Principal, on any day, the Base Rate, plus
the Applicable Margin; and (b) on LIBOR Rate Principal, for the applicable
Interest Period, the applicable LIBOR Rate, plus the Applicable Margin.

 

                1.7.1        Interest
Rate Elections.

 

(a)           Subject to the conditions and limitations in this
Agreement, the Operating Partnership, on behalf of Borrowers, may by written
notice to Administrative Agent in the form specified by Administrative Agent (a
“Rate Election Notice”):

 

(i)            Elect, for a new Advance of funds, that such Principal
Debt will be Base Rate Principal, LIBOR Rate Principal, or a combination
thereof;

 

(ii)           Elect to convert, on a LIBOR Business Day, all or part of
Base Rate Principal into LIBOR Rate Principal;

 

(iii)          Elect to convert, on the last day of the Interest Period
applicable thereto, all or part of any LIBOR Rate Principal into Base Rate
Principal; or

 

(iv)          Elect to continue, commencing on the last day of the Interest
Period applicable thereto, any LIBOR Rate Principal.

 

If, for any reason, an
effective election is not made in accordance with the terms and conditions
hereof for any Advance or for any LIBOR Rate Principal for which the
corresponding Interest Period is expiring, or to convert Base Rate Principal to
LIBOR Rate Principal, then the sums in 

 

 

4

 

question will be Base Rate
Principal until an effective LIBOR Rate Election is thereafter made for such
sums.

 

(b)           Each Rate Election Notice must be received by
Administrative Agent not later than 10:00 a.m., Administrative Agent’s
Time, on the applicable date as follows:

 

(i)            With
respect to an Advance of or conversion to Base Rate Principal, one (1) Business
Day prior to the proposed date of Advance or conversion; and

 

(ii)           With
respect to an Advance of, conversion to or continuation of LIBOR Rate
Principal, three (3) LIBOR Business Days prior to the proposed date of
Advance, conversion or continuation.

 

Unless otherwise specified
herein, no conversion from LIBOR Rate Principal may be made other than at the
end of the corresponding Interest Period. 
Each Rate Election Notice shall stipulate:  (A) the amount of the Advance or of the
Principal Debt to be converted or continued; (B) the nature of the
proposed Advance, conversion or continuation, which shall be either Base Rate
Principal, LIBOR Rate Principal or a combination thereof, and in the case of a
conversion or continuation, the nature of the Principal Debt to be converted or
continued; and (C) in the case of LIBOR Rate Principal, the proposed
commencement date and duration of the Interest Period.  All such notices shall be irrevocable once
given, and shall be deemed to have been given only when actually received by
Administrative Agent in writing in form specified by Administrative Agent.

 

(c)           Administrative Agent shall promptly notify the Operating
Partnership, on behalf of Borrowers, and Lenders of the interest rate
applicable to each portion of the Principal Debt other than a Base Rate
Principal upon determination of same.

 

                                1.7.2        General Conditions Precedent to
Certain LIBOR Rate Elections.  In
addition to any other conditions herein, a LIBOR Rate Election shall not be
permitted if:

 

(a)           A Default or a Potential Default has occurred and is
continuing; or

 

(b)           After giving effect to the requested LIBOR Rate Election,
the sum of all LIBOR Rate Principal and Base Rate Principal, plus all Letters
of Credit, would exceed the Aggregate Commitment; or

 

(c)           After giving effect to the requested LIBOR Rate Election,
more than six (6) LIBOR Rate Elections, in the aggregate, would be in
effect at any one time; or

 

(d)           The amount of LIBOR Rate Principal requested in the LIBOR
Rate Election is other than $1,000,000.00 or more; or

 

(e)           The requested interest period does not conform to the
definition of Interest Period herein; or

 

(f)            Any of the circumstances referred to in Section 1.7.4
hereof shall apply with respect to the requested LIBOR Rate Election or the
requested LIBOR Rate Principal.

 

 

5

 

                1.7.3        Computations
and Determinations. All computations of interest for Base Rate Principal
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last
day).  All computations of interest for
LIBOR Rate Principal and other fees and interest shall be made on the basis of
a 360-day year and actual days elapsed (including the first day but excluding
the last day).  Administrative Agent
shall determine each interest rate applicable to the Principal Debt in
accordance with this Agreement and its determination thereof shall be
conclusive in the absence of manifest error. 
The books and records of Administrative Agent shall be prima facie
evidence of all sums owing to Lenders from time to time under this Agreement,
but the failure to record any such information shall not limit or affect the
obligations of Borrowers under the Loan Documents.

 

                1.7.4        Unavailability
of Rate.

 

(a)           If, with
respect to any LIBOR Rate Election or any LIBOR Rate Principal outstanding
hereunder, Required Lenders determine that no adequate basis exists for
determining the LIBOR Rate or that the LIBOR Rate will not adequately and
fairly reflect the cost to Lenders of funding or maintaining the applicable
LIBOR Rate Principal for such Interest Period, and such Lender(s) so
notify Administrative Agent and the Operating Partnership, then until Required
Lender(s) notify Administrative Agent and the Operating Partnership that
the circumstances giving rise to such suspension no longer exist, (i) the
obligation of Lender(s) to permit such LIBOR Rate Election shall be
suspended and (ii) all existing affected LIBOR Rate Principal shall
automatically become Base Rate Principal on the last day of the corresponding
Interest Period.

 

(b)           Additionally, if, with respect to any LIBOR Rate Election
or any LIBOR Rate Principal outstanding hereunder, any Lender determines that
any applicable Law, or any request or directive (whether or not having the
force of Law) of any Tribunal, or compliance therewith by such Lender,
prohibits or restricts or makes impossible the making or maintaining of such
LIBOR Rate Election or LIBOR Rate Principal or the charging of interest on such
LIBOR Rate Principal, and such Lender so notifies Administrative Agent and the
Operating Partnership, then until such Lender notifies Administrative Agent and
the Operating Partnership that the circumstances giving rise to such suspension
no longer exist, (i) the obligation of such Lender to permit such LIBOR
Rate Election shall be suspended and (ii) all existing affected LIBOR Rate
Principal shall automatically become Base Rate Principal, either (1) as to
LIBOR Rate Principal, on the last day of the corresponding Interest Period (if
the Lender determines that it may lawfully continue to fund and maintain the
affected LIBOR Rate Principal to such day); or (2) if the Lender
determines that it may not lawfully continue to fund and maintain the affected
LIBOR Rate Principal to such day, and in such case Borrowers shall pay to such
Lender(s) the Consequential Loss, if any, pursuant to Sections 1.8
and 1.9 hereof.  Each Lender
agrees to designate a different Lending Office if such designation will avoid
the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.

 

                1.7.5        Increased
Cost and Reduced Return.  If at any
time after the Closing Date, any Lender (which shall include, for purposes of
this Section, any corporation controlling any Lender) determines that the
adoption or modification of any applicable Law regarding taxation, 

 

 

6

 

such Lender’s required
levels of reserves, deposits, insurance or capital (including any allocation of
capital requirements or conditions), or similar requirements, or any
interpretation or administration thereof by any Tribunal or compliance of such
Lender with any of such requirements, has or would have the effect of (a) increasing
such Lender’s costs relating to the Indebtedness, or (b) reducing the
yield or rate of return of such Lender on the Indebtedness, to a level below
that which such Lender could have achieved but for the adoption or modification
of any such requirements, Borrowers shall, within fifteen (15) days of any
request by such Lender, pay to such Lender such additional amounts as (in such
Lender’s sole judgment, after good faith and reasonable computation) will
compensate such Lender for such increase in costs or reduction in yield or rate
of return of such Lender (and assuming that the interest rate on the Loan has
not been adjusted to take into account such additional amount).  No failure by such Lender to immediately
demand payment of any additional amounts payable hereunder shall constitute a
waiver of such Lender’s right to demand payment of such amounts at any
subsequent time.  Nothing herein
contained shall be construed or so operate as to require Borrowers to pay any
interest, fees, costs or charges greater than is permitted by applicable Law.

 

                1.7.6        Past
Due Rate.  If any amount payable by
Borrowers under any Loan Document is not paid when due (without regard to any
applicable grace periods), such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Past Due Rate to
the fullest extent permitted by applicable Law. 
Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable on demand, at a rate per annum (the
“Past Due Rate”) equal to the lesser of (i) the maximum
non-usurious rate of interest allowed by applicable Law, or (ii) three
percent (3%) plus the higher of (a) the Prime Rate or (b) the
Adjusted LIBOR Rate.

 

1.8           Prepayment.

 

(a)           Voluntary Prepayment.  Borrowers may prepay the principal balance of
the Loan, in full at any time or in part from time to time, provided that: (i) Administrative
Agent shall have actually received from the Operating Partnership prior written
notice of the intent of any Borrower to prepay, the amount of principal which
will be prepaid (the “Prepaid Principal”), and the date on which the
prepayment will be made; (ii) each prepayment shall be in the amount of
$1,000 or more (unless the prepayment retires the outstanding balance of the
Loan in full); and (iii) each prepayment shall be in the amount of 100% of
the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Administrative Agent
and Lenders under the Loan Documents on or before the date of prepayment but
have not been paid; and (iv) no portion of LIBOR Rate Principal may be
prepaid except on the last day of the Interest Period applicable thereto,
unless (x) the prior written consent of Administrative Agent is obtained,
which consent shall not be required so long as no Default has occurred and, if
given, shall provide, without limitation, the manner and order in which the
prepayment is to be applied to the Indebtedness, and (y) Borrowers pay any
Consequential Loss as a result thereof, in accordance with Section 1.9
below. Prior to the Maturity Date, Borrowers shall have the right to borrow,
repay and reborrow, from time to time, the principal amount evidenced by the Loan,
subject to the terms and conditions of this Agreement.

 

 

7

 

(b)           Mandatory Prepayment.  If for any reason the total principal of the
Loan outstanding any time exceeds the Maximum Availability Amount, Borrowers
shall, within ten (10) days after notice of the same from Administrative
Agent, prepay the Loan by an amount equal to such excess.

 

1.9           Consequential Loss. 
Within fifteen (15) days after request by any Lender (or at the time of
any prepayment), Borrowers shall pay to such Lender such amount or amounts as
will compensate such Lender for any loss, cost, expense, penalty, claim or
liability, including any loss incurred in obtaining, prepaying, liquidating or
employing deposits or other funds from third parties (but excluding any loss of
revenue, profit or yield of any Lender), as determined by such Lender in its
judgment reasonably exercised (together, “Consequential Loss”) incurred
by such Lender with respect to any LIBOR Rate, including any LIBOR Rate Election
or LIBOR Rate Principal as a result of: (a) the failure of Borrowers to
make payments on the date specified under this Agreement or in any notice from
Borrowers to Administrative Agent; (b) the failure of Borrowers to borrow,
continue or convert into LIBOR Rate Principal on the date or in the amount
specified in a notice given by the Operating Partnership to Administrative
Agent pursuant to this Agreement; (c) the early termination of any
Interest Period for any reason; or (d) the payment or prepayment of any
amount on a date other than the date such amount is required or permitted to be
paid or prepaid, whether voluntarily or by reason of acceleration, including,
but not limited to, acceleration upon any transfer or conveyance of any right,
title or interest in the Collateral giving Administrative Agent on behalf of
Lenders the right to accelerate the maturity of the Loan as provided herein or
in any Loan Document.  The foregoing
notwithstanding, the amounts of the Consequential Loss shall never be less than
zero or greater than is permitted by applicable Law.  If any Consequential Loss will be due, the
Lender shall deliver to the Operating Partnership a notice, in reasonable
detail, as to the amount of, reasons for and the calculation of the Consequential
Loss, which notice shall be conclusive in the absence of manifest error.  Neither Administrative Agent nor the Lenders
shall have any obligation to purchase, sell and/or match funds in connection
with the funding or maintaining of the Loan or any portion thereof.  The obligations of Borrowers under this Section shall
survive any termination of the Loan Documents and payment of the Loan and shall
not be waived by any delay by Administrative Agent or Lenders in seeking such
compensation.

 

                1.10         Late Charge.  If any Borrower shall fail to make any
payment due hereunder or under the terms of any Note (other than payment of the
principal balance due on the Maturity Date or acceleration of the Loan) within
fifteen (15) days after the date such payment is due, Borrowers shall pay to
the applicable Lender or Lenders on demand a late charge equal to four percent
(4%) of such payment.  Such fifteen (15)
day period shall not be construed as in any way extending the due date of any
payment.  The “late charge” is imposed
for the purpose of defraying the expenses of a Lender incident to handling such
defaulting payment.  This charge shall be
in addition to, and not in lieu of, any other remedy Lenders may have and is in
addition to any fees and charges of any agents or attorneys which
Administrative Agent or Lenders may employ upon the occurrence of a Default,
whether authorized herein or by Law.

 

 

8

 

1.11         Taxes.

 

(a)           Subject to Section 6.11, any and all payments
by Borrowers to or for the account of Administrative Agent or any Lender under
any Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto levied by any jurisdiction within the United States of America,
excluding, in the case of Administrative Agent and any Lender, taxes imposed on
or measured by its net income, and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof)
under the Laws of which Administrative Agent or such Lender, as the case may
be, is subject (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). 
Subject to Section 6.11, if Borrowers shall be required by
any Laws to deduct any Taxes from or in respect of any sum payable under any
Loan Document to Administrative Agent or any Lender, (i)  the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Administrative Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrowers
shall make such deductions, (iii) Borrowers shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Laws, and (iv) within 30 days after the date of such
payment, Borrowers shall furnish to Administrative Agent (which shall forward
the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.

 

(b)           In addition, Borrowers agree to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).

 

(c)           Borrowers agree to indemnify Administrative Agent and each
Lender for the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by Administrative Agent and such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly
or legally imposed or asserted by the relevant Tribunal but, subject to
Administrative Agent or such Lender complying with the requirements of Section 6.11(a)(iii) hereof
to the extent the liability indemnified against relates to the subject matter
thereof.  Payment under this subsection
shall be made within 30 days after the date the Lender or Administrative Agent
makes a demand therefor.  If subsequent
to such payment, a final determination is made that any Taxes or Other Taxes
paid by Borrowers were not legally or correctly imposed or assessed by the
applicable Tribunal, Borrowers shall be entitled to a return of such Taxes or
Other Taxes.

 

(d)           Without prejudice to the survival of any other agreement
of Borrowers hereunder, the agreements and obligations of Borrowers contained
in this Section shall survive the termination of the Commitments and the
payment in full of all the other Indebtedness.

 

 

9

 

1.12         Payment Schedule and Maturity Date; Extension Options.

 

(a)            Maturity Date.  The entire principal balance of the Loan then
unpaid and all accrued interest then unpaid shall be due and payable in full on
the Maturity Date.

 

(b)            Payment Schedule. Accrued
unpaid interest shall be due and payable on the first (1st) day of the first
full calendar month after the Closing Date and on the same day of each
succeeding calendar month thereafter until all principal and accrued interest
owing on the Loan shall have been fully paid and satisfied.

 

(c)            Extension Options.  Borrowers shall have two options to extend
the Maturity Date of the Loan for two (2) consecutive twelve (12) month
periods (each, an “Extension Period”) (the first Extension Period
commencing as of February 14, 2011 and ending on February 13, 2012 is
herein referred to as the “First Extension Period” and the second
Extension Period commencing as of February 14, 2012 and ending on February 13,
2013 is herein referred to as the “Second Extension Period”) and, upon
the valid exercise of either such option, the term “Maturity Date” shall mean
the Maturity Date, as extended pursuant to this Section 1.12.  The exercise of each extension option shall
be effective only if all of the following conditions have been satisfied as to
each extension on or before the first day of the applicable Extension Period:

 

(i)            There
shall then exist no Default or Potential Default under the Loan Documents.

 

(ii)           The
NOI from the Collateral Pool, verified by Administrative Agent after receipt of
Borrowers’ NOI Certificate, annualized, is not less than 120% of the monthly
payments of principal and interest on the Loan which would be required for a
period of twelve (12) calendar months if the Maximum Availability Amount
(determined as of the date that is ten (10) days prior to the first day of
the applicable Extension Period) was to be fully amortized in consecutive level
payments of principal and interest over a period of 30 years at an interest
rate per annum equivalent to the greater of (A) 7.0% or (B) 1.75%
plus the Treasury Rate.  Borrowers shall
have the right to prepay the Loan in an amount sufficient to satisfy the
condition in this paragraph (ii) in connection  with the exercise of either or both extension
options.

 

(iii)          Either
the most current appraisal of each of the Eligible Properties in the Collateral
Pool in Administrative Agent’s possession (that complies with Section 2.13
below and has been approved by Administrative Agent) or, if required by Administrative
Agent, an update of such appraisal prepared within the 60 days preceding the
existing Maturity Date, in form and substance satisfactory to Administrative
Agent and otherwise in accordance with the appraisal requirements described in Section 2.13
below, shows that the Aggregate Commitment is not greater than 75% of the fair
market value of the Collateral Pool based on a “as is value”.

 

(iv)          Borrowers
shall be in compliance with the minimum average occupancy requirement of Section 2.18
of this Agreement.

 

(v)           At
the time of Borrowers’ request for the extension, the Collateral Pool shall
consist of no less than five (5) separate Projects.

 

 

10

 

(vi)          Administrative
Agent shall have received current, consolidated Financial Statements for each
Borrower and Guarantor (dated not earlier than sixty (60) days prior to the
request for extension) and all other Financial Statements and other information
as may be required under the Loan Documents regarding each Borrower and
Guarantor and the Collateral Pool.

 

(vii)         Borrowers
shall cause to be delivered to Administrative Agent at Borrowers’ expense
endorsements to the Title Insurance reflecting that the coverage afforded by
the Title Insurance has not been adversely affected as a result of the
modification and extension of the Loan and the documents referred to in
paragraph (viii) below.

 

(viii)        Each
Borrower and Guarantor shall have executed and delivered to Administrative
Agent a modification and extension agreement, providing for, among other things
(1) the extension of the Maturity Date, (2) the reaffirmation by
Borrowers and Guarantor of their respective obligations under the Loan
Documents, and (3) the waiver and release by each Borrower and Guarantor
of any defenses, claims, counterclaims, and rights of offset, if any, which
each Borrower or Guarantor may then have in respect of Administrative Agent and
the Lenders and the Indebtedness and Obligations, together with such other
agreements, documents or amendments to the Loan Documents as are reasonably
requested by Administrative Agent to properly document the extension, all in
form and content satisfactory to Administrative Agent in its good faith business
judgment. During any Extension Period, unless noted above, all terms and
conditions of the Loan Documents (including but not limited to interest rates
and payments) pertaining to the Loan shall continue to apply.

 

(ix)           The
request for extension must be made to Administrative Agent in writing at least
ninety (90) days prior to the then applicable Maturity Date.

 

(x)            Borrowers
shall have paid to Administrative Agent, for the ratable benefit of all
Lenders, as a condition to such extension on or before the first day of the
applicable Extension Period an extension fee equal to 0.0015 (15 basis points) times
the Aggregate Commitment (in effect as of the first day of the applicable
Extension Period).

 

(xi)           Administrative
Agent shall have determined, in its good faith business judgment, that no
material adverse change has occurred with respect to the Property or the
financial condition or creditworthiness of Borrowers or Guarantor.

 

If all of the foregoing
conditions are not satisfied strictly in accordance with their terms, the
extension shall not be or become effective. 
Upon the execution and delivery by each Borrower and  Guarantor of the modification and extension
agreement referred to in subparagraph (viii) above, the extension shall be
deemed to be effective. Each extension option is exercisable separately only
and not together and the second extension option shall be void and not
exercisable unless the first extension option was properly exercised.  Whether or not the extension becomes
effective, Borrowers shall pay all out-of-pocket costs and expenses incurred by
Administrative Agent in connection with the proposed extension (pre- and
post-closing), including, without limitation, appraisal fees, environmental
audit and legal fees; all such costs 

 

 

11

 

and expenses incurred up to
the time of Administrative Agent’s written agreement to the extension shall be
due and payable prior to Administrative Agent’s execution of that agreement (or
if the proposed extension does not become effective, then upon demand by
Administrative Agent).

 

1.13         Advances and Payments.

 

(a)           Following receipt of an Advance Request, Administrative
Agent shall promptly provide each Lender with a copy of the Advance
Request.  Administrative Agent shall
notify each Lender telephonically (with confirmation by facsimile) or by
facsimile (with confirmation by telephone) not later than 1:00 p.m.
Administrative Agent’s Time, two (2) Business Days prior to the Funding
Date for LIBOR Rate Principal Advances, and one (1) Business Day prior to
the Funding Date for all other Advances, of its Pro Rata Share of the amount
Administrative Agent has determined shall be advanced in connection therewith (“Advance
Amount”).  In the case of an Advance
of the Loan, each Lender shall make the funds for its Pro Rata Share of the
Advance Amount available to Administrative Agent not later than 11:00 a.m.
Administrative Agent’s Time on the Funding Date thereof.  After Administrative Agent’s receipt of the
Advance Amount from Lenders, Administrative Agent shall make proceeds of the
Loan in an amount equal to the Advance Amount (or, if less, such portion of the
Advance Amount that shall have been paid to Administrative Agent by Lenders in
accordance with the terms hereof) available to Borrowers on the applicable
Funding Date by advancing such funds to the Operating Partnership in accordance
with the provisions of Exhibit F.

 

(b)           All payments by Borrowers shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided
herein, all payments by Borrowers hereunder shall be made to Administrative
Agent not later than 12:00 p.m. (Administrative Agent’s Time) on the date
specified herein.  Administrative Agent
shall distribute to each Lender such funds as such Lender  may be entitled to receive hereunder, (i) on
or before 3:00 p.m. (Administrative Agent’s Time) on the day
Administrative Agent receives such funds, if Administrative Agent has received
such funds on or before 12:00 p.m. (Administrative Agent’s Time), or (ii) on
or before 12:00 p.m. (Administrative Agent’s Time) on the Business Day
following the day Administrative Agent receives such funds, if Administrative
Agent receives such funds after 12:00 p.m. (Administrative Agent’s Time). If Administrative Agent fails to timely pay
any amount to any Lender in accordance with this subsection, Administrative
Agent shall pay to such Lender interest at the Federal Funds Rate on such
amount, for each day from the day such amount was to be paid until it is paid
to such Lender.

 

(c)           Except as otherwise provided herein, all payments by
Borrowers or any Lender shall be made to Administrative Agent at Administrative
Agent’s Office not later than the time for such type of payment specified in
this Agreement.  All payments received
after such time shall be deemed received on the next succeeding Business
Day.  All payments shall be made in immediately
available funds in lawful money of the United States of America.  Whenever any payment falls due on a day which
is not a Business Day, such payment may be made on the next succeeding Business
Day.

 

(d)           Upon satisfaction of any applicable terms and conditions
set forth herein, Administrative Agent shall promptly make any amounts received
in accordance with the prior 

 

 

12

 

subsection
available in like funds received as follows: 
(i) if payable to Borrowers, in accordance with Exhibit F,
except as otherwise specified herein, and (ii) if payable to any Lender,
by wire transfer to such Lender at the address specified in the Schedule of
Lenders.

 

(e)           Except as otherwise provided in Exhibit K with
respect to Borrowers reimbursing drawings under Letters of Credit, unless any
Borrower or any Lender has notified Administrative Agent, prior to the date any
payment is required to be made by it to Administrative Agent, that Borrowers or
such Lender, as the case may be, will not make such payment, Administrative
Agent may assume that Borrowers or such Lender, as the case may be, has timely
made such payment and may (but shall not be required to do so) in reliance
thereon, make available a corresponding amount to the Person entitled
thereto.  If and to the extent that such
payment was not in fact made to Administrative Agent in immediately available
funds, then:

 

(i)            if any Borrower failed to make such payment, each Lender
shall forthwith on demand repay to Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by Administrative Agent to such Lender
to the date such amount is repaid to Administrative Agent in immediately
available funds at the Federal Funds Rate from time to time in effect; and

 

(ii)           if any Lender failed to make such payment, such Lender or,
if applicable, Electing Lender or Lenders shall forthwith on demand pay to
Administrative Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date such amount was
made available by Administrative Agent to Borrowers to the date such amount is
recovered by Administrative Agent (the “Compensation Period”) at a rate
per annum equal to the interest rate applicable to such amount under the
Loan.  If such Lender pays such amount to
Administrative Agent, then such amount shall constitute such Lender’s Pro Rata
Share, included in the applicable Advance. 
If such Lender does not pay such amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent may make a demand therefor upon
Borrowers (after taking into account the provisions of Section 1.15,
to the extent applicable), and Borrowers shall pay such amount to
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to such
amount under the Loan.  Nothing herein or
in any other Loan Document shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which
Administrative Agent or Borrowers may have against any Lender as a result of
any default by such Lender hereunder.

 

A
notice of Administrative Agent to any Lender or to Borrowers with respect to
any amount owing under this subsection shall be conclusive, absent manifest
error.

 

(f)            If any Lender makes available to
Administrative Agent funds for any Advance to be made by such Lender as
provided in the foregoing provisions of this Section, and the funds are not
advanced to Borrowers or otherwise used to satisfy any Obligations of such
Lender hereunder, Administrative Agent shall return such funds (in like funds
as received from such Lender) to such Lender, without interest.

 

 

13

 

(g)           Nothing herein shall be deemed to
obligate any Lender to obtain the funds for any Advance in any particular place
or manner or to constitute a representation by any Lender that it has obtained
or will obtain the funds for any Advance in any particular place or manner.

 

1.14         Administrative
Agent Advances.

 

(a)           Administrative Agent is authorized, from time to time, in
Administrative Agent’s sole discretion to make, authorize or determine Advances,
or otherwise expend funds, on behalf of Lenders (“Administrative Agent
Advances”), (i)  to pay any costs, fees and expenses as described
in Section 6.10 herein, (ii) when the applicable conditions
precedent set forth in Exhibit C and Exhibit F have
been satisfied to the extent required by Administrative Agent, and (iii) when
Administrative Agent deems necessary or desirable to preserve or protect the
Collateral Pool or any portion thereof (including those with respect to
property taxes, insurance premiums, operation, management, improvements,
maintenance, repair, sale and disposition) (A) subject to Section 5.5,
after the occurrence of a Default, and (B) subject to Section 5.10,
after acquisition of all or a portion of the Collateral Pool by foreclosure or
otherwise.

 

(b)           Administrative Agent Advances shall
constitute obligatory Advances of Lenders under this Agreement,
shall be repayable on demand and secured by the Collateral Pool, and if unpaid
by Lenders as set forth below shall bear interest at the rate applicable to
such amount under the Loan or if no longer applicable, at the Base Rate.  Administrative Agent shall notify each Lender
in writing of each Administrative Agent Advance.  Upon receipt of notice from Administrative
Agent of its making of an Administrative Agent Advance, each Lender shall make
the amount of such Lender’s Pro Rata Share of the outstanding principal amount
of Administrative Agent Advance available to Administrative Agent, in same day
funds, to such account of Administrative Agent as Administrative Agent may
designate, (i) on or before 3:00 p.m. (Administrative Agent’s Time)
on the day Administrative Agent provides Lenders with notice of the making of
such Administrative Agent Advance if Administrative Agent provides such notice
on or before 12:00 p.m. (Administrative Agent’s Time), or (ii) on or
before 12:00 p.m. on the Business Day immediately following the day
Administrative Agent provides Lenders with notice of the making of such Advance
if Administrative Agent provides notice after 12:00 p.m. (Administrative
Agent’s Time).

 

1.15         Defaulting Lender.

 

1.15.1      Notice and Cure of Lender Default;
Election Period; Electing Lenders. 
Administrative Agent shall notify (such notice being referred to as the “Default
Notice”) the Operating Partnership (for Advances) and each non-Defaulting
Lender if any Lender is a Defaulting Lender. 
Each non-Defaulting Lender shall have the right, but in no event or
under any circumstance the obligation, to fund such Defaulting Lender Amount,
provided that, within twenty (20) days after the date of the Default Notice
(the “Election Period”), such non-Defaulting Lender or Lenders (each
such Lender, an “Electing Lender”) irrevocably commit(s) by notice
in writing (an “Election Notice”) to Administrative Agent, the other
Lenders and Borrowers to fund the Defaulting Lender Amount and to assume the
Defaulting Lender’s obligations with respect to the advancing of the entire
undisbursed portion of the Defaulting Lender’s principal obligations under this
Agreement (such entire undisbursed portion of the Defaulting Lender’s principal
obligations under this Agreement, including its portion of the Payment Amount
that is the 

 

 

14

 

subject of the default, is
hereinafter referred to as the “Defaulting Lender Obligation”).  If Administrative Agent receives more than
one Election Notice within the Election Period, then the commitment to fund the
Defaulting Lender Amount and the Defaulting Lender Obligation shall be apportioned
pro rata among the Electing Lenders in the proportion that the amount of each
such Electing Lender’s Commitment bears to the total Commitments of all
Electing Lenders.  If the Defaulting
Lender fails to pay the Defaulting Lender Payment Amount within the Election
Period, the Electing Lender or Lenders, as applicable, shall be automatically
obligated to fund the Defaulting Lender Amount and Defaulting Lender Obligation
(and Defaulting Lender shall no longer be entitled to fund such Defaulting
Lender Amount and Defaulting Lender Obligation) within three (3) Business
Days following the expiration of the Election Period to reimburse
Administrative Agent or make payment to Borrowers, as applicable.  Notwithstanding anything to the contrary
contained herein, if Administrative Agent has funded the Defaulting Lender
Amount, Administrative Agent shall be entitled to reimbursement for its portion
of the Defaulting Lender Payment Amount pursuant to Section 5.11.

 

1.15.2      Removal of Rights; Indemnity.  Administrative Agent shall not be obligated
to transfer to a Defaulting Lender any payments made by or on behalf of
Borrowers to Administrative Agent for the Defaulting Lender’s benefit; nor
shall a Defaulting Lender be entitled to the sharing of any payments hereunder or
under any Note until all Defaulting Lender Payment Amounts are paid in
full.  Amounts payable to a Defaulting
Lender shall be paid by Administrative Agent to reimburse Administrative Agent
and any Electing Lender pro rata for all Defaulting Lender Payment
Amounts.  Solely for the purposes of
voting or consenting to matters with respect to the Loan Documents, a
Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting
Lender’s Commitment shall be deemed to be zero. 
A Defaulting Lender shall have no right to participate in any
discussions among and/or decisions by Lenders hereunder and/or under the other
Loan Documents.  Further, any Defaulting
Lender shall be bound by any amendment to, or waiver of, any provision of, or
any action taken or omitted to be taken by Administrative Agent and/or the
non-Defaulting Lenders under, any Loan Document which is made subsequent to the
Defaulting Lender’s becoming a Defaulting Lender.  This Section shall remain effective with
respect to a Defaulting Lender until such time as the Defaulting Lender shall
no longer be in default of any of its obligations under this Agreement by
curing such default by payment of all Defaulting Lender Payment Amounts (i) within
the Election Period, or (ii) after the Election Period with the consent of
the non-Defaulting Lenders.  Such
Defaulting Lender nonetheless shall be bound by any amendment to or waiver of
any provision of, or any action taken or omitted to be taken by Administrative
Agent and/or the non-Defaulting Lenders under any Loan Document which is made
subsequent to that Lender’s becoming a Defaulting Lender and prior to such cure
or waiver.  The operation of this
subsection or the subsection above alone shall not be construed to increase or
otherwise affect the Commitment of any non-Defaulting Lender, or relieve or
excuse the performance by Borrowers of Borrowers’ duties and obligations
hereunder or under any of the other Loan Documents.  Furthermore, nothing contained in this Section shall
release or in any way limit a Defaulting Lender’s obligations as a Lender
hereunder and/or under any other of the Loan Documents.  Further, a Defaulting Lender shall indemnify
and hold harmless Administrative Agent and each of the non-Defaulting Lenders
from any claim, loss, or costs incurred by Administrative Agent and/or the
non-Defaulting Lenders as a result of a Defaulting Lender’s failure to comply
with the requirements of this Agreement, INCLUDING SUCH FAILURE
CONSTITUTING IN 

 

 

15

 

WHOLE OR PART ADMINISTRATIVE
AGENT’S OR NONDEFAULTING LENDERS’ STRICT LIABILITY, OR COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE except to the extent such
failure constitutes willful misconduct or gross negligence on Administrative
Agent’s or Defaulting Lenders’ part; including, without limitation, any and all
additional losses, damages, costs and expenses (including, without limitation,
attorneys’ fees) incurred by Administrative Agent and any non-Defaulting Lender
as a result of and/or in connection with (i) a non-Defaulting Lender’s
acting as an Electing Lender, (ii) any enforcement action brought by
Administrative Agent against a Defaulting Lender, and (iii) any action
brought against Administrative Agent and/or Lenders.  The indemnification provided above shall
survive any termination of this Agreement.

 

1.15.3      Commitment Adjustments.  In connection with the adjustment of the
amounts of the Loan Commitments of the Defaulting Lender and Electing Lender(s) upon
the expiration of the Election Period as aforesaid, Borrowers, Administrative
Agent and Lenders shall execute such modifications to the Loan Documents as
shall, in the reasonable judgment of Administrative Agent, be necessary or
desirable in connection with the adjustment of the amounts of Commitments in
accordance with the foregoing provisions of this Section.  For the purpose of voting or consenting to
matters with respect to the Loan Documents such modifications shall also
reflect the removal of voting rights of the Defaulting Lender and increase in
voting rights of Electing Lenders to the extent an Electing Lender has funded
the Defaulting Lender Amount and assumed the Defaulting Lender Obligation.  In connection with such adjustments,
Defaulting Lenders shall execute and deliver an Assignment and Assumption
covering that Lender’s Commitment and otherwise comply with Section 6.5.  If a Lender refuses to execute and deliver
such Assignment and Assumption or otherwise comply with Section 6.5,
such Lender hereby appoints Administrative Agent to do so on such Lender’s
behalf.  Administrative Agent shall
distribute an amended Schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect such adjustments.  However, all such Defaulting Lender Amounts
and Defaulting Lender Obligation funded by Administrative Agent or Electing
Lenders shall continue to be Defaulting Lender Amounts of the Defaulting Lender
pursuant to its obligations under this Agreement.

 

1.15.4      No Election.  In the event that no Lender elects to commit
to fund the Defaulting Lender Amount and Defaulting Lender Obligations within
the Election Period, Administrative Agent shall, upon the expiration of the
Election Period, so notify the Operating Partnership and each Lender.

 

1.16         Several Obligations; No Liability, No Release.  Notwithstanding that certain of the Loan
Documents now or hereafter may have been or will be executed only by or in
favor of Administrative Agent in its capacity as such, and not by or in favor
of Lenders, any and all obligations on the part of Administrative Agent (if
any) to make any Advances of the Loan or reimbursements for other Payment
Amounts shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective Pro Rata Shares.  Except as may be specifically provided in
this Agreement, no Lender shall have any liability for the acts of any other
Lender.  No Lender shall be responsible
to Borrowers or any other Person for any failure by any other Lender to fulfill
its obligation to make Advances of the Loan or reimbursements for other Payment
Amounts, nor to take any other action on its behalf hereunder or in connection
with the financing contemplated herein. 
The failure of any Lender to 

 

 

16

 

pay to Administrative Agent
its Pro Rata Share of a Payment Amount shall not relieve any other Lender of
any obligation hereunder to pay to Administrative Agent its Pro Rata Share of
such Payment Amounts as and when required herein, but no Lender shall be
responsible for the failure of any other Lender to so fund its Pro Rata Share
of the Payment Amount.  In furtherance of
the foregoing, Lenders shall comply with their obligation to pay Administrative
Agent their Pro Rata Share of such Payment Amounts regardless of (i) the
occurrence of any Default hereunder or under any Loan Document; (ii) any
failure of consideration, absence of consideration, misrepresentation, fraud,
or any other event, failure, deficiency, breach or irregularity of any nature
whatsoever in the Loan Documents; (iii) any bankruptcy, insolvency or
other like event with regard to any Borrower or Guarantor.  The obligation of Lenders to pay to such
Payment Amounts is in all regards independent of any claims between Administrative
Agent and any Lender.

 

1.17         Replacement of Lenders.  If any Lender is a Defaulting Lender,
Borrowers may, upon notice to such Lender and Administrative Agent, replace
such Lender by causing such Lender to assign its Commitment with the payment of
any assignment fee by the replaced Lender to one or more other lenders or
Eligible Assignees acceptable to the Operating Partnership, Administrative
Agent and the L/C Issuer.  Borrowers
shall or shall cause the replacement lender to (subject to the provisions of Section 1.14
through 1.15 providing for payment of all Defaulting Lender Payment
Amounts to Administrative Agent and/or Electing Lenders, as applicable, prior
to payment of amounts due to a Defaulting Lender), (x) pay in full of all
principal, interest, fees and other amounts owing to such Lender through the
date of replacement, (y) provide appropriate assurances and indemnities
(which may include letters of credit) as such Lender may reasonably require
with respect to such replaced Lender’s obligation to fund its participation
interest in any Letters of Credit then outstanding and (z) provide a
release of such Lender from its obligations under the Loan Documents.  Any Lender being replaced shall execute and
deliver an Assignment and Assumption covering that Lender’s Commitment and
otherwise comply with Section 6.5. 
If a Lender being replaced refuses to execute and deliver such
Assignment and Assumption or otherwise comply with Section 6.5,
such Lender hereby appoints Administrative Agent to do so on such Lender’s
behalf.  Administrative Agent shall
distribute an amended Schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect adjustments to Lenders and their
Commitments.

 

1.18         Borrowers’ Rights. 
Nothing in Sections 1.15 through 1.17, nor any action
taken pursuant to Sections 1.15 through 1.17  (including the replacement of the Defaulting
Lender), shall relieve a Defaulting Lender from liability to Borrowers for the
Defaulting Lender’s failure to make Loan advances or to otherwise perform as
required by this Agreement, or limit any rights or remedies of Borrowers
against the Defaulting Lender.

 

1.19         Swap Transaction.

 

(a)           Any Borrower may, but shall not be required to, enter into
a Swap Transaction with a Lender acceptable to the Required Lenders (such
financial institution is referred to herein as “Swap Bank”).  The Lenders agree that the Swap Bank may be
Administrative Agent or an Affiliate of Administrative Agent.  Borrowers agree that if any Borrower executes
a Swap Transaction, the provisions of this Section 1.19 shall
govern and apply to such Swap Transaction. 
Borrowers acknowledge and agree that the failure of any Borrower to
comply with 

 

 

17

 

its
obligations under the Swap Transaction and to make payments when due
thereunder, will be a default under this Loan.

 

(b)           As additional security for the obligations of Borrowers
under the Loan Documents, each Borrower hereby transfers, assigns, and conveys
to Administrative Agent for the ratable benefit of Lenders, subject to the
terms and conditions contained herein, all of such Borrower’s rights, titles
and interests, but not its obligations, duties or liabilities for any breach,
in, under and to the Swap Transaction, any and all amounts received by such
Borrower in connection therewith or to which such Borrower is entitled
thereunder, and all proceeds of the foregoing. 
Administrative Agent shall have the right at any time (but shall have no
obligation) to take in its name or in the name of such Borrower such action as
Administrative Agent may at any time determine to be necessary or advisable to
cure any default under or with respect to the Swap Transaction or to protect
the rights of such Borrower or Swap Bank thereunder; provided, however,
that prior to the occurrence of a Default, Administrative Agent shall give
prior written notice to such Borrower before taking any such action.  Neither Administrative Agent or Lenders shall
incur any liability if any action so taken by Administrative Agent or on its
behalf shall prove to be inadequate or invalid, and each Borrower agrees to
hold Administrative Agent and Lenders free and harmless against and from any
loss, cost, liability or expense (including, but not limited to, attorneys’
fees and expenses) incurred in connection with any such action, as provided in
this Agreement.  It is agreed and
understood that, in addition to any and all other remedies to which
Administrative Agent and Lenders are entitled at law or in equity, Administrative
Agent and Lenders shall have all rights and benefits to which a secured party
is entitled at law or in equity, including, without limitation under the
Uniform Commercial Code as adopted and in effect in the State of Texas and upon
any foreclosure by Lenders of the lien under the Deed of Trust, all right,
title and interest of Borrowers in and to the Swap Transaction and any and all
amounts received by Borrowers in connection therewith or to which any Borrower
is entitled thereunder, and all proceeds of the foregoing, shall automatically
be conveyed in connection therewith, unless prior to such foreclosure,
Administrative Agent elects to exclude Borrowers’ right, title and interest in
the Swap Transaction from such foreclosure.

 

(c)           Each Borrower hereby constitutes and appoints
Administrative Agent as such Borrower’s true and lawful attorney, with the full
power of substitution, for it and in its name, place and stead, or otherwise,
on behalf and for the benefit of Administrative Agent, to exercise, at the
election of Administrative Agent, any and all rights and remedies of such
Borrower under the Swap Transaction, including, without limitation, making any
payments thereunder and consummating any transactions contemplated thereby,
from time to time to institute and prosecute in the name and at the expense of
such Borrower, or otherwise, but for the benefit of Administrative Agent and
Lenders, any and all proceedings at law, in equity, or otherwise, that
Administrative Agent may deem proper in order to collect, assert or enforce any
claim, right or title, of any kind, in and to the Swap Transaction hereby
assigned and conveyed, or intended so to be, and to defend and compromise, at
the election of Administrative Agent, any and all actions, suits or proceedings
with respect to the Swap Transaction, and generally to do all and any such
action in relation thereto as Administrative Agent shall deem advisable; and
each Borrower hereby declares that the appointment hereby made and powers
hereby granted are coupled with an interest and are and shall be irrevocable by
Borrowers in any manner, or for any reason. 
Administrative Agent may exercise its rights under this Section only
after the occurrence and during the continuation of a Default under any of the
Loan Documents.

 

 

18

 

ARTICLE 2 - ADDITIONAL COVENANTS AND AGREEMENTS

 

As an inducement to
Administrative Agent and Lenders and L/C Issuer, as applicable, to make
Advances of the Loan to each Borrower and to issue Letters of Credit hereunder,
each Borrower hereby agrees to comply with the following covenants and
agreements, as the same relates to such Borrower and the Collateral owned by
each such Borrower:

 

2.1           Legal Existence; Name, Etc.  Each Borrower shall preserve and keep in full
force and effect its entity status, franchises, rights and privileges under the
laws of the state of its formation, and all qualifications, licenses and
permits required for the ownership of the Collateral.

 

2.2           Agreements with Affiliates.  No Borrower will execute any agreement with
an Affiliate pertaining to any Collateral unless such agreement (i) is on
fair and reasonable terms substantially as favorable to such Borrower as would
be obtainable by such Borrower at the time in a comparable arm’s length
transaction with a Person other than an Affiliate, and (ii) is not binding
upon any successor owner of any of the Collateral.  If requested by Administrative Agent or any
Lender, the Operating Partnership (or the applicable Subsidiary Obligor) shall
deliver to Administrative Agent a copy of each such agreement.

 

2.3           Hazard and Other Insurance.

 

(a)           Each Borrower shall obtain and maintain, as to any
Collateral owned by such Borrower, the insurance coverage required by Exhibit J
and any other Loan Documents and shall furnish to Administrative Agent promptly
upon request a certificate or certificates from the respective insurer(s) setting
forth the nature and extent of all such insurance maintained by such Borrower
and the originals of each insurance policy (or to the extent permitted by
Administrative Agent, a certified copy of the original policy and a
satisfactory certificate of insurance) with premiums fully paid.  Any such insurance may be evidenced by
blanket insurance policies covering the Collateral and other property and
assets, provided that each policy otherwise complies with the requirements of
the Loan Documents and specifies the amount (if less than all) of the total
coverage that is allocated to the Collateral. 
No Borrower shall take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained hereunder
unless Administrative Agent is included thereon under a standard mortgagee
clause (without contribution) reasonably acceptable to Administrative Agent,
with loss payable as provided herein. 
All insurance required by this Agreement shall be primary without right
of contribution from any other insurance that may be carried by any Borrower or
Administrative Agent apart from this Agreement or the Loan Documents and the
provisions of all such required insurance shall operate in the manner as if
there were a separate policy covering each insured.  Each Borrower shall immediately notify
Administrative Agent whenever any such separate insurance is taken out and
shall promptly deliver to Administrative Agent any policy or certificate of
such separate insurance.

 

(b)           Not later than ten (10) days before the expiration
date of any such insurance policy, the Operating Partnership or the applicable
Subsidiary Obligor shall deliver to Administrative Agent a binder or
certificate of the insurer evidencing the renewal or replacement of that
policy, with premiums fully paid together with (in the case of a renewal) a
copy of all 

 

 

19

 

endorsements
to the policy affecting the Collateral and not previously delivered to
Administrative Agent, or (in the case of a replacement) an original or
certified copy of the replacement policy. 
Borrowers shall pay all premiums on policies required hereunder as they
become due and payable.  Borrowers shall
at all times comply, in all material respects, with the requirements of the
insurance policies required hereunder and of the issuers of such policies and
of any board of fire underwriters or similar body as applicable to or affecting
the Collateral.

 

(c)           If any Borrower fails to obtain and/or maintain the
insurance required under the Loan Documents, (i) Borrowers will indemnify
and hold Administrative Agent and the Lenders harmless from and against any
damage, loss, liability or expense resulting from all risks that would have
been covered by the required insurance if so maintained; (ii) if any loss
occurs, Administrative Agent, on behalf of the Lenders, shall nevertheless be
entitled to the benefit of all insurance covering the loss and held by or for
Borrowers, to the same extent as if it had been made payable to Administrative
Agent; and (iii)  Administrative Agent has the right (but not the
obligation) to obtain such insurance on commercially reasonable terms at the
expense of Borrowers, which may at Administrative Agent’s election be coverage
for Administrative Agent’s interest only, the costs and expenses so expended by
Administrative Agent shall be due and payable on demand by Borrowers, as part
of the Obligations, even if in excess of the Aggregate Commitment, and secured
by the Loan Documents.  If any hazard,
title, or other insurer becomes insolvent or subject to any bankruptcy,
receivership or similar proceeding, or if, in Administrative Agent’s reasonable
opinion set forth in a written notice to any Borrower the such insurer fails to
maintain a minimum A.M. Best’s rating of A- / IX or better (or such lower
rating, if any, as may be reasonably acceptable to Administrative Agent),  Borrowers shall promptly obtain and deliver
to Administrative Agent a like policy (or, if and to the extent permitted by
Administrative Agent, a certified copy of the policy or a satisfactory certificate
of insurance) issued by another insurer, which insurer and policy meet the
requirements of the Loan Documents.

 

(d)           Upon any foreclosure of any Deed of Trust or transfer of
title to any Collateral in lieu of foreclosure, the benefits of the insurance
policies referred to in this Section as to such Collateral and all
proceeds payable thereunder in respect of property damage occurring prior to
the transfer of title shall thereupon vest in the purchaser at foreclosure or
other such transferee to the extent permissible under such policies; provided
that all liability coverage shall remain with Borrowers.

 

(e)           Administrative Agent has the right (but not the
obligation) to make proof of loss for, settle and adjust any claim under, and
receive the proceeds of, all insurance for loss of or damage to the Collateral,
provided, that, prior to a Default, any settlement or adjustment
of any claim may be negotiated by the Operating Partnership or the applicable
Subsidiary Obligor but if the amount involved is greater than $100,000 then the
same shall remain subject to the final approval of Administrative Agent.  The reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees), appraisal costs, and
consultant fees incurred by Administrative Agent in the adjustment and
collection of insurance proceeds shall be due and payable by Borrowers on
demand, as part of the Obligations, even if in excess of the Aggregate
Commitment, and secured by the Loan Documents. 
Administrative Agent shall not be, under any circumstances, liable or
responsible for failure to collect or exercise diligence in the collection of
any of such proceeds or 

 

 

20

 

for
the obtaining, maintaining or adequacy of any insurance or for failure to see
to the proper application of any amount paid over to Borrowers.

 

(f)            Each Borrower shall take all necessary action, with
Administrative Agent’s consent (which consent will not be unreasonably
withheld), to obtain the benefit of any insurance proceeds lawfully or
equitably payable to such Borrower or Administrative Agent in connection with
any loss of or damage to any Collateral, all of which shall be paid directly to
Administrative Agent, whether or not the security for the Loan has been
impaired or otherwise affected, and applied first to reimburse Administrative
Agent for all unreimbursed out-of-pocket costs and expenses, including
reasonable attorney’s fees, incurred in connection with the collection of such
proceeds and the balance of such proceeds shall, at Administrative Agent’s
election, subject to Section 2.5 below, be (i)  released
to such Borrower, (ii) applied to repair or restoration, either partly or
entirely, of the Collateral so damaged, on such conditions (consistent with
Administrative Agent’s customary construction administration procedures) as may
be reasonably required by Administrative Agent to ensure and evidence the
proper application and payment of such proceeds and the progress of such repair
and restoration, or (iii) applied to the payment of the Obligations, whether
or not due, in such order and manner as Administrative Agent may elect in its
sole discretion.  In any event, the
unpaid portion of the Obligations shall remain in full force and effect and the
payment thereof shall not be excused.

 

2.4           Condemnation. 
Each Borrower shall take all commercially reasonable action, with
Administrative Agent’s consent (which consent will not be unreasonably
withheld), to obtain the benefit of any sums lawfully or equitably payable to
such Borrower or Administrative Agent for the condemnation of any part of the
Collateral for public or quasi-public use, or by virtue of private sale in lieu
thereof, and any sums which may be awarded or become payable to such Borrower
for injury or damage to the Collateral, all of which shall be paid directly to
Administrative Agent, whether or not the security for the Loan has been
impaired or otherwise affected, and applied first to reimburse Administrative
Agent for all unreimbursed out-of-pocket costs and expenses, including
reasonable attorney’s fees, incurred in connection with the collection of such
sums and the balance of such sums shall, at Administrative Agent’s election,
subject to Section 2.5 below, be (i) released to such
Borrower, (ii) applied to repair or restoration, either partly or
entirely, of the Collateral so affected, on such conditions (consistent with
Administrative Agent’s customary construction administration procedures) as may
be reasonably required by Administrative Agent to ensure and evidence the
proper application and payment of such proceeds and the progress of such repair
and restoration, or (iii) applied to the payment of the Obligations,
whether or not due, in such order and manner as Administrative Agent may elect
in its sole discretion.  In any event the
unpaid portion of the Obligations shall remain in full force and effect and the
payment thereof shall not be excused. 
Administrative Agent shall not be, under any circumstances, liable or
responsible for failure to collect or to exercise diligence in the collection
of any such sum or for failure to see to the proper application of any amount
paid over to any Borrower. 
Administrative Agent is hereby authorized, in the name of the applicable
Borrower(s), to execute and deliver valid acquittance for, and to appeal from,
any such award, judgment or decree; and all reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees, appraisal costs, and consultant
fees) incurred by Administrative Agent in connection with any such condemnation
shall be due and payable by Borrowers on demand, as part of the Obligations,
even if in excess of the Aggregate Commitment, and secured by the Loan
Documents.

 

 

21

 

2.5           Repair and Restoration.

 

(a)           If any of the Improvements are destroyed or damaged by
fire, explosion, windstorm, hail or any other casualty against which insurance
is required under this Agreement, or in the event any Collateral or portion
thereof is condemned or taken under power of eminent domain (or transferred in
lieu thereof), Administrative Agent will elect (under Sections 2.3
or 2.4, as applicable) to apply the insurance proceeds or condemnation
proceeds (or the proceeds of transfer in lieu thereof) which remain after
payment of the costs of collection thereof as provided in Section 2.3
and 2.4 (called the “Proceeds” below in this Section), or so much
thereof as is required, to restoration of the property damaged as nearly as
practicable to its value, character and condition immediately prior to such
casualty (the “Restoration”), provided that all of the following
conditions precedent are satisfied in full not later than one hundred and
twenty (120) days after the date on which the casualty loss occurred or title
to the portion of the Collateral taken (or transferred in lieu thereof) vested
in the condemning authority, as the case may be (or such longer period of time,
if any, as Administrative Agent may approve in its reasonable discretion):

 

(i)            no
Default or Potential Default then exists;

 

(ii)           the
Operating Partnership has presented evidence reasonably satisfactory to
Administrative Agent and Administrative Agent has reasonably determined, that (A) the
remaining portions of the Improvements can be feasibly redesigned and
reconstructed to such a condition that the Improvements thereon, upon
completion of such redesign or reconstruction, can be operated profitably again
for its original intended purpose, and (B) the NOI to be generated by the
remaining Improvements and the remainder of the Collateral Pool will be
sufficient to yield a Debt Service Coverage Ratio equal to or greater than the
minimum Debt Service Coverage Ratio required for the applicable periods of the
Loan described in clause (iii) of the definition of “Maximum Availability
Amount” set forth in Exhibit B to this Agreement (or,
alternatively, if the remaining NOI will not be sufficient to achieve the
minimum Debt Service Coverage Ratio, Administrative Agent shall recalculate the
Maximum Availability Amount based upon the anticipated NOI and Borrowers shall
make a principal payment on the Loan pursuant to Section 1.8
hereof);

 

(iii)          Tenants
of the Improvements (or replacement Tenants) sufficient to satisfy the
requirements of clause (ii) above have agreed in a manner satisfactory to
Administrative Agent, in its good faith business judgment, that they will
continue or extend their Leases for the terms then in effect following the
Restoration (with construction and/or initial occupancy requirements extended
by the time necessary to complete the Restoration);

 

(iv)          the
Operating Partnership has presented evidence reasonably satisfactory to
Administrative Agent, and Administrative Agent has reasonably determined, that
the Restoration and the completion of the Improvements in accordance with this
Agreement, can be accomplished within a reasonable period of time and in any
event prior to the Maturity Date;

 

 

22

 

 

(v)           the
Operating Partnership has delivered or caused to be delivered to Administrative
Agent, and Administrative Agent has approved (not to be unreasonably withheld),
complete, final plans and specifications (the “Restoration Plans”), for
the work to be performed in connection with the Restoration (hereinafter called
the “Restoration Work”) prepared and sealed by an architect or engineer,
with evidence reasonably satisfactory to Administrative Agent of the approval
of the Restoration Plans by Tenants whose continued occupancy is needed to
satisfy the requirements of clause (ii) above and whose spaces are
affected and all Tribunals whose approval is required;

 

(vi)          the
Operating Partnership has delivered or caused to be delivered to Administrative
Agent a signed estimate prepared and signed by Borrowers’ architect or
engineer, stating the entire estimated cost of completing the Restoration Work;

 

(vii)         if
Administrative Agent determines, in the exercise of its good faith business
judgment, that (A) the estimated cost of the Restoration Work
substantially in accordance with the Restoration Plans exceeds (B) the
available Proceeds held by Administrative Agent, then Borrowers shall deposit
with Administrative Agent an amount, in cash, sufficient to cover the excess
cost, which shall be held and disbursed by Administrative Agent to the pay the
costs of such Restoration Work prior to the disbursement of any Proceeds; and

 

(viii)        Administrative
Agent and the other Lenders will not incur any liability to any Person as a
result of such use of the Proceeds.

 

If all of the foregoing
conditions have not been satisfied within the time limit specified above, then
Administrative Agent may, at its option, apply such Proceeds to the
Obligations, whether or not due, in such order and manner as Administrative Agent
elects.

 

(b)           To the extent that Administrative Agent elects to apply
the Proceeds to the Restoration, then disbursement of the Proceeds for such
costs of the Restoration shall be subject to and in accordance with the
provisions of this Agreement governing Advance Requests and Advances.  If Administrative Agent determines from time
to time, in its good faith business judgment, that (i) the estimated cost
of the Restoration substantially in accordance with the Restoration Plans
exceeds (ii) the available Proceeds held by Administrative Agent plus all
other funds, if any, readily available for such Restoration (including excess
funds previously contributed by such Borrowers to Administrative Agent for the
purpose of the Restoration), then Borrowers shall contribute such additional
funds, in cash, to Administrative Agent to cover the excess cost before
Administrative Agent shall be required to disburse any such Proceeds or other
available funds for Restoration costs.  All
such funds provided by Borrowers to cover excess costs shall be used for such
Restoration costs prior to disbursement of any of the Proceeds for such costs.

 

(c)           Any such Proceeds held by Administrative Agent under this Section shall
be held in an interest-bearing account until disbursed for Restoration or
applied against the Obligations. 
Administrative Agent’s receipt and custody of such Proceeds shall not
constitute a repayment of any of the Obligations unless and until such Proceeds
are applied against the Obligations in accordance with this Agreement.  No disbursement of such Proceeds for
Restoration costs shall 

 

 

23

 

constitute
an Advance or increase the principal amount of the Loan.  If surplus Proceeds remain after completion
of the Restoration and payment of all costs therefor, then such surplus
Proceeds shall be, at Administrative Agent’s election, (i) applied against
the Obligations in such manner and order as Administrative Agent elects, or (ii) returned
to the Operating Partnership, on behalf of Borrowers.

 

(d)           In any event, upon the occurrence and during the
continuation of a Default not cured pursuant to this Agreement, at any time,
Administrative Agent may (but has no obligation to) apply all or any portion of
such Proceeds, or additional funds provided by Borrowers, in Administrative
Agent’s possession to the payment of the Obligations, whether or not due, in
such order and manner as Administrative Agent elects, and/or to the cure of any
Default (or Potential Default) without waiving the same.

 

2.6           Compliance with
Legal Requirements.  Each Borrower
shall comply and cause the Collateral owned by it to comply, with the terms,
conditions, covenants, representations and warranties of this Agreement and the
other Loan Documents and with all applicable Laws.  Except with the prior written consent of
Administrative Agent, no Borrower shall, by act or omission, permit any
property not subject to the lien of a Deed of Trust to rely on the Collateral
or any interest therein to fulfill any requirement of any Law.  Each Borrower shall preserve in force all
requisite zoning, utility, building, health, environmental and operating
permits from the governmental authorities having jurisdiction over the
Collateral owned by such Borrower.  If
any Borrower receives a written notice or claim from any Person or Tribunal
that the Collateral, or any use, activity, operation or maintenance thereof or
thereon, is not in compliance with any Law, such Borrower will promptly furnish
a copy of such notice or claim to Administrative Agent.

 

2.7           Maintenance and
Repair.  Each Borrower will keep the
Collateral owned by such Borrower in good order, repair, operating condition
and appearance, causing all necessary repairs, renewals, replacements,
additions and improvements to be promptly made, and will not allow any of such
Collateral to be misused, abused or wasted or to deteriorate, reasonable wear
and tear and damage by fire or other casualty excepted.  Notwithstanding the foregoing, no Borrower
will, without the prior written consent of Administrative Agent, (i) remove
from any Collateral any fixtures or personal property covered by a Deed of
Trust which are essential or material, in Administrative Agent’s good faith
business judgment, to the operation of the Collateral, except such as is
replaced by such Borrower by an article of equal suitability and quality, owned
by such Borrower, free and clear of any lien or security interest (except that
created by a Security Document), or (ii) make any structural alteration to
any Collateral in excess of $500,000 or any other alteration thereto which
materially reduces the value thereof.

 

2.8           Operation of
Collateral.  Each Borrower will
operate the Collateral owned by such Borrower in a commercially reasonable
manner and in accordance with all Laws and, subject to Section 2.16
hereof, will pay all fees or charges of any kind in connection therewith.  No Borrower will use or occupy or conduct any
activity on, or allow the use or occupancy of or the conduct of any activity
on, any of such Collateral in any manner which violates any Law or which
constitutes a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force with
respect thereto.  No Borrower will
initiate or permit any zoning reclassification of such Collateral or seek any
variance under 

 

 

24

 

existing zoning ordinances
applicable to such Collateral or use or permit the use of such Collateral in
such a manner which would result in such use becoming a nonconforming use under
applicable zoning ordinances or other Laws. 
Except for the Bowen Road Plat when approved by Administrative Agent
pursuant to Section 2.30 hereof, no Borrower will impose any
easement, restrictive covenant or encumbrance upon the Collateral, execute or
file any subdivision plat or condominium declaration affecting such Collateral
or consent to the annexation of such Collateral to any municipality, without
the prior written consent of Administrative Agent.  No Borrower will do or suffer to be done any
act whereby the value of any part of the Collateral may be lessened in any
material respect.  Each Borrower will
preserve, protect, renew, extend and retain all material rights and privileges
granted for or applicable to such Collateral. 
Without the prior written consent of Administrative Agent and except for
mineral rights or lease interests permitted as part of the Permitted
Encumbrances and the Approved O&G Leases, there shall be no drilling or
exploration for or extraction, removal or production of any mineral,
hydrocarbon, gas, natural element, compound or substance (including sand and
gravel) from the surface or subsurface of any Land regardless of the depth
thereof or the method of mining or extraction thereof.  Each Borrower will cause all debts and
liabilities of any character (including without limitation all debts and
liabilities for labor, material and equipment (including software embedded
therein) and all debts and charges for utilities servicing the Collateral)
incurred in the construction, maintenance, operation and development of such
Collateral to be promptly paid, except to the extent contested in good
faith.  Reference is hereby made to Exhibit I
of this Agreement, the provisions of which are incorporated herein for all
purposes.  Each Borrower shall comply
with the requirements of Exhibit I and each of the Security
Documents as the same relates to the Collateral owned by such Borrower.

 

2.9           Estoppel
Certificates.  Each Borrower, within
twenty (20) days after request, shall furnish to Administrative Agent, for the
benefit of each Lender and the L/C Issuer, a written statement, duly
acknowledged, setting forth the amount due on the Loan, the terms of payment of
the Loan, the date to which interest has been paid, whether any offsets or
defenses are known to exist against the Loan and, if any are alleged to exist,
the nature thereof in reasonable detail, and such other matters as
Administrative Agent reasonably may request.

 

2.10         Waiver Regarding
Flood Status.   To the extent
permitted by Law, each Borrower hereby irrevocably waives, releases and
discharges any and all rights of action, demands and other claims of any kind
or nature against Administrative Agent and the Lenders arising from any failure
of Administrative Agent or the Lenders to comply with the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, including any failure of
Administrative Agent or the Lenders to provide any such Borrowers with written
notification within ten days prior to the Closing Date (or Admission Date, as
applicable) whether any Collateral is in a special flood hazard area or whether
federal disaster relief assistance will be available in the event of flood
damage to any Collateral.

 

2.11         Notice to
Administrative Agent.  Each Borrower
shall promptly within five (5) days after first learning of the occurrence
of any of the following events affecting such Borrower (or, if known by such
Borrower, any other Borrower), notify Administrative Agent in writing thereof,
specifying in each case the action such Borrower has taken or will take with
respect thereto: (a) any violation of any Law by any Borrower; (b) any
litigation, arbitration or governmental investigation or proceeding instituted
or threatened in writing against any 

 

 

25

 

Borrower or any of the
Collateral Pool owned by any Borrower or Guarantor or any of the Collateral
Pool asserting criminal conduct or damages or penalties or claims in excess of
$100,000, and any material development therein; (c) any actual or
threatened in writing condemnation of any portion of the Collateral Pool, any
negotiations with respect to any such taking, or any loss of or substantial
damage to any of the Collateral Pool; (d) any notice received by such
Borrower with respect to the cancellation, alteration or non-renewal of any
insurance coverage maintained with respect to any of the Collateral Pool; (e) any
lien filed against any of the Collateral Pool or any stop notice served on such
Borrower; or (f) any required permit, license, certificate or approval
with respect to any of the Collateral Pool required to be obtained and
maintained by Law lapses or ceases to be in full force and effect.

 

2.12         Financial
Statements.  The Operating
Partnership shall deliver (or cause to be delivered) to Administrative Agent
(with sufficient copies for each Lender) the Financial Statements and other
statements and information at the times and for the periods described in Exhibit B
and any other Loan Document; which Financial Statements may be in the form of
consolidated financial statements of Guarantor which include the Operating
Partnership and each Subsidiary. Each Borrower will make all of its books,
records and accounts available to Administrative Agent and its representatives
at the offices of the Operating Partnership in Addison, Texas, upon request and
will permit them to review and copy the same. 
Each Borrower shall promptly notify Administrative Agent of any event or
condition that could reasonably be expected to have a Material Adverse Effect
in the financial condition of such Borrower and, if known by such Borrower,
Guarantor or any other Borrower. 
Administrative Agent shall provide a copy of such Financial Statements
to each Lender upon receipt.

 

2.13         Appraisal.  Administrative Agent may obtain from time to
time, an Appraisal of all or any part of the Collateral prepared in accordance
with written instructions from Administrative Agent by a third-party appraiser
engaged directly by Administrative Agent. 
Each such appraiser and Appraisal shall be satisfactory to
Administrative Agent (including satisfaction of applicable regulatory
requirements). The cost of any such Appraisal shall be borne by Borrowers if (A) such
Appraisal is required in connection with the exercise by the Operating
Partnership, on behalf of Borrowers, of one or both options to extend the
Maturity Date of the Loan, (B) if such Appraisal is the first Appraisal in
any calendar year, and (C) if Administrative Agent obtains such Appraisal
after the occurrence and during the continuation of a Default.  The costs of each such Appraisal shall be due
and payable by Borrowers on demand and shall be secured by the Loan
Documents.  Administrative Agent shall
provide a copy of such Appraisal to each Lender and the Operating Partnership
upon receipt. From time to time during the term of this Loan, but not more than
once annually, Administrative Agent may obtain a new or updated Appraisal of
any Project to determine the current, stabilized value of such Project and to
thereafter adjust the Collateral Value, as needed, based upon the then current
stabilized value of such Project

 

2.14         ERISA and
Prohibited Transaction Taxes.  As of
the date hereof and throughout the term of this Agreement, (a) no Borrower
is or will be (i) an “employee benefit plan,” as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
or (ii) a “plan” within the meaning of Section 4975(e) of the
Internal Revenue Code of 1986, as amended (the “Code”); (b) either (i) the
assets of Borrowers do not and will not constitute “plan assets” within the
meaning of the United States Department of Labor 

 

 

26

 

Regulations set forth in 29
C.F.R. §2510.3-101 or (ii) this Loan is not a prohibited transaction under
ERISA or Section 4975 of the Tax Code; (c) no Borrower is or will be
a “governmental plan” within the meaning of ERISA; and (d) either (i) the
assets of Borrowers do not and will not constitute “plan assets” within the
meaning of the United States Department of Labor Regulations set forth in 29
C.F.R. §2510.3-101 of a “governmental plan” within the meaning of ERISA or (ii) this
Loan will not violate any state statute applicable to any Borrower regulating
investments of fiduciaries with respect to governmental plans or otherwise
applicable to governmental plans (assuming that, as of the date hereof and
throughout the term of the Loan, (1) neither Administrative Agent nor
Lender is a “governmental plan” within the meaning of ERISA, and (2) the
assets of Administrative Agent and each Lender do not and will not constitute “plan
assets”, within the meaning of the United States Department of Labor
Regulations set forth in 29 C.F.R. §2510.3-101, of a governmental plan).  Each Borrower agrees to deliver to
Administrative Agent such certifications or other evidence of compliance with
the provisions of this Section 2.14 as Administrative Agent may
from time to time request.

 

2.15         Property
Management.  The Collateral Pool will
be managed by one or more Property Managers pursuant to one or more Property
Management Agreements.   Each Property
Management Agreement and the amounts payable to the Property Manager thereunder
shall be subordinate to the Deed of Trust, except as set forth in the Property
Manager’s Subordination. Borrowers shall not modify, amend or terminate a
Property Management Agreement unless such Property Management Agreement will be
modified or replaced by an agreement which reflects fair and reasonable market
terms as would be obtainable by Borrowers at the time in a comparable arm’s
length transaction with a Person other than an Affiliate and such Property Management
Agreement is or continues to be subject to the provisions of a Property Manager’s
Subordination.  Borrowers shall not
further delegate (or consent to the delegation of) the duties and obligations
of the Property Manager under any Property Management Agreement to a third
party unless pursuant to an agreement which (i) provides that such
agreement is not binding upon any successor owner of any of the Collateral
Pool, and (ii) may be terminated without cause and without payment of any
penalty on not less than thirty (30) days written notice. The Operating
Partnership shall deliver to Administrative Agent copies of each Property
Management Agreement and any amendments or modifications thereto.  Lenders acknowledge that the duties and
obligations of HPT Management Services LP, as Property Manager under the
existing Property Management Agreement, may be assigned, in whole or in part,
to an Affiliate of Borrowers and Guarantor; provided that, if requested by
Administrative Agent, the Operating Partnership shall provide copies to
Administrative Agent of any such assignment and such assignee and such Property
Management Agreement shall remain subject to a Property Manager’s
Subordination.  Borrowers shall not
execute any brokerage or leasing commission agreements with respect to the
leasing of the Collateral Pool unless such agreements (i) provide that
such agreements are not binding upon any successor owner of any of the
Collateral Pool, and (ii) reflect fair and reasonable market terms, and (iii) may
be terminated without cause and without payment of any penalty on not less than
thirty (30) days written notice.  No new
or additional property management agreement or leasing agreement shall be
executed by any Borrower unless and until such property manager and leasing
agent, as applicable, shall have executed and delivered to Administrative Agent
subordinations and agreements in form substantially similar to the Property
Manager’s Subordinations executed in connection with the closing of the Loan.

 

 

27

 

2.16         Contest of Claims.  Notwithstanding anything other provision
herein or in any Loan Document to the contrary, Borrowers may, to the extent
and in the manner permitted by applicable Laws, contest the payment of any
claim for payment for work or any tax, assessment or other governmental charge
against the Collateral, and the failure of any Borrower to pay the contested
claim pending such contest shall not be or become a Default, if (a) the
Operating Partnership has notified Administrative Agent of Borrowers’ intent to
contest such payment at least seven (7) days prior to commencing the
contest (unless such notice would cause a delay that might detrimentally affect
the right of Borrowers to so contest, in which case Borrowers must furnish
Administrative Agent with such advance notice of intent to contest as is
possible under the circumstances); (b) Borrowers have made any deposit or
payment under protest, or posted security, with any applicable Tribunal if, as
and to the extent required by applicable Laws; (c)  unless Borrowers have
complied with clause (b) preceding or if Borrowers has complied with
clause (b) preceding and Administrative Agent has determined that
compliance with clause (b) does not, in Administrative Agent’s good faith
business judgment, protect Lenders’ interests, Borrowers have furnished to
Administrative Agent a cash deposit satisfactory to Administrative Agent, or an
indemnity bond satisfactory to Administrative Agent with a surety satisfactory
to Administrative Agent, in an amount satisfactory to Administrative Agent (or
in the statutory amount, in the case of bond authorized by statute), to assure
payment of the matters under contest and to prevent any sale or forfeiture of
any part of the Collateral, and in the case of a claim for work which does or
could result in a lien against the Collateral, Borrowers have provided (i) to
the extent required by Administrative Agent and available under applicable
Laws, a bond which under applicable Laws releases the lien from the Collateral
encumbered by such lien, and (ii) such security, assurances and other
items, if any, as the Title Company may require to insure around the lien; (d) Borrowers
diligently and in good faith contest the same by appropriate legal proceedings
which shall operate to prevent the enforcement or collection of the same and
the sale of any part of the Collateral to satisfy the same; (e) Borrowers
promptly upon final determination thereof pay the amount of any such claim so
determined, together with all costs, interest and penalties payable in
connection therewith (and to the extent Borrowers have made a cash deposit with
Administrative Agent pursuant to clause (c) preceding, such deposit shall
be made available to Borrowers to pay the amount of such claim and
Administrative Agent shall release the excess, if any, to Borrowers upon
settlement and release of the claim); (f) the failure to pay the claim
does not constitute a default under any other deed of trust, mortgage or
security interest covering or affecting any part of the Collateral, and does
not subject Administrative Agent or any Lender to any civil or criminal
liability or to any damages or expense; and (g) the aggregate amount of
all claims being contested shall not exceed five percent (5%) of the Aggregate
Commitment.  Notwithstanding the
foregoing, Borrowers shall immediately upon request of Administrative Agent pay
(and if Borrowers shall fail so to do, Administrative Agent may, but shall not
be required to, pay or cause to be discharged or bonded against) any such claim
notwithstanding such contest if, in the reasonable opinion of Administrative
Agent, the Collateral is in jeopardy or in danger of being forfeited or
foreclosed.  Administrative Agent may pay
over any such cash deposit or part thereof to the claimant entitled thereto at
any time when, in the judgment of Administrative Agent, the entitlement of such
claimant is established.  Borrowers shall
not be required to comply with the requirements set forth above in this Section 2.16
for any claim made that is covered by Borrowers’ liability insurance if the
total amount of such claim is less than the amount of coverage under such
policy 

 

 

28

 

that is available to satisfy such claim, the insurer has not denied
liability under its policy for such claim, and the insurer has undertaken to
defend such claim without any reservation of rights.

 

2.17         Single Purpose
Entity/Separateness.  No Subsidiary
Obligor owns and no Subsidiary Obligor will own, any asset or property other
than (a) a Project, and (b) incidental personal and other tangible
and intangible property necessary for the financing, development, ownership,
management and operation of such Project. No Subsidiary Obligor will engage in
any business other than the development, ownership, management and operation of
its Project.  Each Subsidiary Obligor has
done or caused to be done and will do all things necessary to observe
organizational formalities and preserve its existence.  No Subsidiary Obligor will, or will permit,
any of its members or partners to, amend, modify or otherwise change the
partnership or operating agreement, articles of organization or other
organizational documents of such Subsidiary Obligor (other than in a ministerial
fashion) without the prior written consent of Administrative Agent, except to
reflect transfers of interests in such Subsidiary Obligor and its members or
partners that are permitted by the Loan Documents.  Each Subsidiary Obligor will maintain all of
its books, records, financial statements and bank accounts separate from those
of its Affiliates and any partner (to the maximum extent permissible under
GAAP) and, to the extent required by applicable Laws, each Subsidiary Obligor
will file its own tax returns.  Each
Subsidiary Obligor shall maintain its books, records, resolutions and
agreements as official records. Each Subsidiary Obligor will be, and at all
times will hold itself out to the public as a legal entity separate and
distinct from any other entity (including the Operating Partnership and any
Affiliate of the Operating Partnership), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as
a division or part of the other and shall maintain and utilize separate
stationery, invoices and checks.  No
Subsidiary Obligor will commingle the funds and other assets of Subsidiary
Obligors with those of any Affiliate or member, or any Affiliate of any member,
or any other person. Neither the joint and several obligations of Subsidiary
Obligors under the Loan Documents nor the performance by Subsidiary Obligors of
their obligations under the Loan Documents will be deemed to violate the
provisions of this Section 2.17.

 

2.18         Minimum Average
Occupancy.  At all times during the
term of the Loan, unless waived by the Required Lenders, Borrowers shall cause
not less than sixty-five percent (65%) of the total leaseable square footage of
the Collateral Pool, calculated on an aggregate basis, to be leased by
Borrowers pursuant to one or more Approved Leases.

 

2.19         Release of
Collateral.  At any time and from
time to time, any Subsidiary Obligor may obtain a release of the Lien of the
Security Documents (including a release of such Subsidiary Obligor of its
obligations under the Loan Documents, except indemnification obligations which,
by the terms of the Loan Documents, survive the repayment of, or expiration or
termination of, the Loan) as to any Project in the Collateral Pool (except the
Bowen Road Excess Land, which Bowen Road Excess Land shall be subject to the
provisions of Section 2.30 below) upon the satisfaction of the
following terms and conditions as of the date such release is to be effective:

 

(a)           The Operating Partnership shall have delivered written
notice to Administrative Agent not less than fifteen (15) days prior to the
proposed date of release specifying the Project to be released (herein, the “Release
Parcel”);

 

 

29

 

(b)           No Default or Potential Default shall have occurred and be
continuing as of the date the notice in clause (a) above or the date of
release and the release of the Lien as to the Release Parcel being requested by
the Operating Partnership will not result in a Default or Potential Default;

 

(c)           After the Closing Date, Arranger shall have completed the
syndication of at least $40,000,000 of the Loan to one or more Lenders (other
than Bank of America, N.A.);

 

(d)           The Operating Partnership shall have delivered to
Administrative Agent a current Borrower’s NOI Certificate reflecting the NOI
for the remainder of the Projects in the Collateral Pool, Administrative Agent
shall have calculated the Maximum Availability Amount assuming the release and
removal of the Release Parcel from the Collateral Pool, and Borrowers shall
have made a principal payment on the Loan equal to the amount, if any, by which
the Total Outstandings exceed the Maximum Availability Amount, as determined by
Administrative Agent;

 

(e)           If the Subsidiary Obligor to be released from its
obligations hereunder is the applicant under any Letter of Credit Application,
the remaining Borrowers shall execute and deliver to L/C Issuer and
Administrative Agent an assumption agreement, assuming and agreeing to perform
the obligations of such Subsidiary Obligor with respect to all L/C Obligations
under such Letter of Credit Application; and

 

(f)            After giving effect to the release of the Release Parcel
from the Collateral Pool, the remainder of the Collateral Pool shall comply
with the minimum average occupancy requirement set forth in Section 2.18
above.

 

2.20         Equity Ownership;
Subsidiaries. The Operating Partnership shall not engage in any business
other than the acquisition, ownership and operation of real estate assets and
Investments in Subsidiaries.  The
Operating Partnership may form, acquire, and own one or more Subsidiaries. No
Subsidiary Obligor shall engage in any business other than the acquisition,
ownership and operation of Collateral. 
The Operating Partnership hereby represents to Administrative Agent and
the Lenders that Exhibit E attached to this Agreement (as
supplemented from time to time) correctly sets forth the organizational
structure and ownership interests the Operating Partnership and each of its
Subsidiaries.  The Operating Partnership
shall promptly notify Administrative Agent of the existence of any additional
Subsidiary owned by the Operating Partnership by delivering to Administrative
Agent a revised Exhibit E.

 

2.21         Debt and
Contingent Liabilities.  Subsidiary
Obligors will not create, incur, assume or suffer to exist any Debt or
Contingent Liabilities, except: (a) Obligations under this Agreement and
the other Loan Documents; (b) Swap Transactions; (c) Contingent
Liabilities arising with respect to customary indemnification obligations in
favor of sellers in connection with the acquisition of Collateral and
purchasers in connection with the disposition of Collateral (d) liabilities
incurred in the normal course of business in connection with the ownership and
operating of Collateral, and (e) obligations in respect of equipment
financings permitted under Section 2.22 hereof.

 

 

30

 

2.22         Liens.  No Subsidiary Obligor will create or permit
to exist any Lien on any of its real or personal properties, assets or rights
of whatsoever nature (whether now owned or hereafter acquired) including the
Collateral, except: (a) Liens for taxes or other governmental charges not
at the time delinquent or thereafter payable without penalty or being contested
in good faith by appropriate proceedings and, in each case, for which it
maintains adequate reserves; (b) Liens arising under the Loan Documents; (c) Liens
approved by Administrative Agent and shown on Schedule B of the Title Insurance
issued to Administrative Agent insuring the Lien encumbering such Collateral; (d) Liens
securing leased personal property and equipment used in the ordinary course of
business in connection with the management and operation of Collateral, and (e) other
Liens, if any, approved by the Required Lenders.

 

2.23         Restricted
Payments.  The Operating Partnership
will not, and not permit any other Subsidiary Obligor to, (a) make any
distribution to any holders of its Securities, (b) purchase or redeem any
of its Securities, (c) pay any management fees or similar fees to any of
its equity holders or any Affiliate thereof, or (d) set aside funds for
any of the foregoing.  Notwithstanding
the foregoing, (i) any Subsidiary Obligor may pay dividends or make other
distributions to the Operating Partnership or to another Subsidiary that holds
in an interest in such Subsidiary Obligor; (ii) the Operating Partnership
may pay dividends or make other distributions to Guarantor; and (iii) so
long as no Default exists, Borrowers may pay (1) management fees to the
Property Manager (even if such Property Manager is an Affiliate of Borrowers)
if and to the extent that such fees are due and payable under a Property Management
Agreement approved by Administrative Agent or executed in accordance with the
terms of this Agreement, and (2) advisory fees and asset management fees
pursuant to its usual and customary asset management and advisory agreements.

 

2.24         Restriction on
Fundamental Changes, Dispositions and Acquisitions.  The Operating Partnership shall not, and
shall not permit any of the Subsidiary Obligors to, enter into any transaction
of merger or consolidation, or liquidate, wind-up, or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease, sublease, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business, property, or fixed assets, whether now owned
or hereafter acquired, or acquire by purchase or otherwise all or substantially
all the business, property, or fixed assets of, any Person, except that:

 

(a)           any Subsidiary of the Operating Partnership may be merged
with or into the Operating Partnership or any other Subsidiary, or be
liquidated, wound up or dissolved, or all or any part of its business,
property, or assets maybe conveyed, sold, leased, transferred, or otherwise
disposed of, in one transaction or a series of transactions, to the Operating
Partnership or any other Subsidiary; provided that, in the case of such a
merger involving the Operating Partnership, the Operating Partnership shall be
the continuing or surviving entity and in the case of any merger involving any
Subsidiary Obligor, the continuing or surviving entity shall assume and perform
the obligations of such Subsidiary Obligor under this Agreement and the other
Loan Documents;

 

(b)           Borrowers may execute Approved Leases in the ordinary
course of business in compliance with the terms of Exhibit I of this
Agreement; and

 

 

31

 

(c)           Any Borrower may sell or otherwise dispose of any
Collateral owned by such Borrower provided that such Borrower satisfies all of
the requirements in Section 2.19 of this Agreement for obtaining a
release of the Lien encumbering such Collateral.

 

2.25         Modification of
Organizational Documents.  The
Operating Partnership will not permit the charter, by-laws or other
organizational documents of the Operating Partnership or any other Borrower to
be amended or modified in any way which could reasonably be expected to
materially adversely affect the interests of the Lenders; and not change, or
allow any Borrower to change, its state of formation or its organizational form
without the prior written consent of Administrative Agent.

 

2.26         Transactions with
Affiliates.  The Operating
Partnership will not, and will not permit any of Subsidiary Obligors to, enter
into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates which is on terms which are less
favorable than would be obtainable in a comparable arm’s length transaction
with a Person other than an Affiliate.

 

2.27         Conduct of
Business.  The Operating Partnership
shall not permit any of the Subsidiary Obligors to engage in, any business
other than the acquisition, leasing, management, ownership, operation, and sale
or other disposition of Collateral.

 

2.28         Inconsistent
Agreements.  The Operating
Partnership will not, and not permit any Subsidiary Obligor to, enter into any
agreement containing any provision which would (a) be violated or breached
by any borrowing by any Borrower hereunder or by the performance by any
Borrower of any of its Obligations hereunder or under any other Loan Document, (b) prohibit
any Borrower from granting to Administrative Agent, on behalf of the Lenders, a
Lien on any of its assets, or (c) create or permit to exist or become
effective, except pursuant to the Loan Documents, any encumbrance or
restriction on the ability of any Borrower to (i) pay dividends or make
other distributions to any Borrower or pay any Debt owed to any Borrower, (ii) make
loans or advances to any Borrower, or (iii) transfer any of its assets or
properties to any Borrower, other than (A) customary restrictions and
conditions contained in agreements relating to the sale of all or a substantial
part of the assets of any Borrower pending such sale, provided that such sale
is permitted hereunder, and (B) customary provisions in Leases and other
contracts restricting the assignment thereof.

 

2.29         Collateral Pool; Existing
Projects. On the Closing Date, the Operating Partnership and the Subsidiary
Obligors made a party to this Agreement shall execute and deliver to
Administrative Agent the documents and instruments more particularly identified
on Exhibit C attached hereto, including such Security Documents as
may be necessary to grant to Administrative Agent and Lien on the Projects more
particularly identified on Exhibit A attached hereto (the “Existing
Projects”).  All Deeds of Trust
encumbering the Projects in the Collateral Pool shall provide that the same are
cross-defaulted and cross-collateralized. 
After the Closing Date, the Operating Partnership or any of its
Subsidiaries may request that the Lenders accept into the Collateral Pool
additional Projects.  If the Operating
Partnership or any its Subsidiaries desire to add a Project to the Collateral
Pool, the Operating Partnership shall so notify Administrative Agent and
Administrative Agent will thereafter notify the Lenders.  No Project will be admitted to the Collateral
Pool unless (i) such Project constitutes an Eligible Asset, (ii)

 

 

32

 

Administrative Agent has
received and reviewed the documents required pursuant to Exhibit D
of this Agreement, and (iii) all Lenders have approved the addition of
such Project to the Collateral Pool.  The
term “Eligible Asset” means any real property that is improved with, and
currently operated as, an office building and such asset satisfies all of the
following additional conditions:

 

(i)            such asset is owned
in fee (or will be acquired in fee as of the date such asset is added to the
Collateral Poor) by a Subsidiary Obligor (it being understood that if the
Subsidiary Obligor holds only a leasehold interest in and to the land on which
the improvements are located, the ground lease evidencing such leasehold
interest shall be subject to the prior review and approval of the Required
Lenders in their sole and absolution discretion and any approval by the
Required Lenders of such leasehold interest may be conditioned upon the
delivery to Administrative Agent of such consents and other agreements of the
ground lessor and/or fee owner as the Required Lenders may require);

 

(ii)           such asset is
located within the United States;

 

(iii)          after the addition
of such asset to the Collateral Pool, the Collateral Pool will continue to meet
the minimum average occupancy requirement set forth in Section 2.18
of this Agreement; and

 

(iv)          such asset is not
encumbered by Liens securing any Debt which is not to be repaid with the
proceeds of any Loan advanced hereunder or otherwise released on or before the
date on which such asset becomes part of the Collateral Pool or other Liens not
approved by Administrative Agent in its sole and absolute discretion.

 

2.30         Subdivision of
Bowen Road Land; Release of Bowen Road Excess Land.  The Operating Partnership has advised
Administrative Agent that the Land located on Bowen Road in Arlington, Texas
will be subdivided to create two separate legal lots pursuant to a subdivision
plat (“Bowen Road Plat”) to be prepared and submitted by the owner of
such Land to the City of Arlington, Texas for approval by the City of
Arlington.  The Operating Partnership has
delivered to Administrative Agent a copy of the preliminary draft of the
subdivision plat (“Preliminary Plat”), which copy is attached hereto as Exhibit A-1.  The Preliminary Plat attached hereto as Exhibit A-1
identifies the two parcels to be created upon approval and recordation of the
final Bowen Road Plat:  (i) Lot 1,
Block 1, comprised of 13.785 acres (the “Collateral Parcel”), and (ii) Lot
2, Block 1, comprised of 55.810 acres (the “Bowen Road Excess Land”).  The Operating Partnership will deliver to
Administrative Agent for Administrative Agent’s review and approval the final
Bowen Road Plat prior to recordation of the same with the City of
Arlington.  Administrative Agent’s
consent to the Bowen Road Plat will not be unreasonably withheld, conditioned
or delayed so long as (i) the final Bowen Road Plat contains no material
changes from the Preliminary Plat attached hereto as Exhibit A-1
and does not alter or modify the acreage of the Collateral Parcel or the access
to and from such Collateral Parcel and one or more publicly dedicated roadways
as currently shown on the Preliminary Plat, and (ii) Administrative Agent
receives and approves an access easement, in form acceptable to Administrative
Agent, creating a perpetual and unrestricted vehicular and pedestrian access
easement to and from the Collateral Parcel and a publicly dedicated right of
way over and across the existing driveways benefiting the Collateral Parcel,
together with an unrestricted right of access (and slope or support 

 

 

33

 

easements,
as necessary) to repair, rebuild, maintain any and all driveways within the
access easement area (the “Access Easement”).  Administrative Agent agrees that
Administrative Agent will grant a release of the lien of the Deed of Trust with
respect to the Bowen Road Excess Land, subject to and conditioned upon the
satisfaction of each of the following conditions precedent:

 

(i)            Administrative Agent shall have reviewed and approved the
final Bowen Road Plat,  and
Administrative Agent shall have executed a subordination of the final Bowen
Road Plat, in such form as may be reasonably acceptable to Administrative
Agent, subordinating the lien of the Deed of Trust encumbering the Collateral
Parcel and Bowen Road Excess Land to the final Bowen Road Plat;

 

(ii)           The City of Arlington, Texas shall have approved the final
Bowen Road Plat approved by Administrative Agent and the final Bowen Road Plat
shall have been duly executed by all parties as required by applicable law and
recorded in the Plat Records of Tarrant County, Texas; and

 

(iii)          Administrative Agent shall have received and approved the
Access Easement and the Access Easement shall have been duly executed and
recorded in the Real Property Records of Tarrant County, Texas.

 

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

 

As an inducement to
Administrative Agent and Lenders and L/C Issuer to make Advances of the Loan to
Borrowers and to issue Letters of Credit hereunder, except as set forth on Schedule
1, each Borrower hereby severally represents and warrants as to the
following, as the same relates to such Borrower and the Collateral owned by
such Borrower, which representations and warranties shall be true as of the
Closing Date (or Admission Date, as applicable) and, subject to the provisions
of Exhibit “F”, shall remain true on any Funding Date:

 

3.1           Patriot Act Due
Diligence.  No Borrower and no
Affiliate of any Borrower is named on any list of Specially Designated
Nationals or known or suspected terrorists that has been generated by the
Office of Foreign Assets Control (“OFAC”), nor are any of them organized
in, or citizens or residents of any country that is subject to embargo or trade
sanctions enforced by OFAC (collectively, “Restricted Parties”). Each
Borrower has conducted due diligence with respect to each of its Subsidiaries
and Affiliates, such that such Borrower has formed a reasonable belief that it
knows the true identity of each of its Subsidiaries and Affiliates.  To the best knowledge of each Borrower, no
funds of any Restricted Parties used in connection with this transaction were
derived from illegal or suspicious activities.

 

3.2           Existence.  Each Borrower is duly formed, validly
existing and in good standing under the laws of the state of its
formation.  Each Borrower is in good
standing and is authorized to transact business under the laws of the states in
which its respective property is located. 
Each Borrower is duly authorized to execute and deliver each Loan
Document to which it is a party, to borrow monies hereunder, and to perform its
Obligations under each Loan Document to which it is a party.  The execution, delivery and performance by
each Borrower of each Loan Document to which it is a party, and the borrowings
by each Borrower hereunder, do not and will not (a)

 

 

34

 

require any consent or
approval of any governmental agency or authority (other than any consent or
approval which has been obtained and is in full force and effect), (b) conflict
with (i) any provision of law, (ii) the charter, by-laws or other
organizational documents of any Borrower, or (iii) any agreement,
indenture, instrument or other document, or any judgment, order or decree,
which is binding upon any Borrower or any of its properties, or (c) require,
or result in, the creation or imposition of any Lien on any asset of any
Borrower (other than Liens in favor of Administrative Agent created pursuant to
the Security Documents).  This Agreement
and each other Loan Document to which each Borrower is a party is the legal,
valid and binding obligation of such Borrower, enforceable against such
Borrower in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors’ rights generally and to
general principles of equity.

 

3.3           Other Agreements.  No Borrower is in default, in any material
respect, under any contract, agreement or commitment to which it is a
party.  The execution, delivery and
compliance with the terms and provisions of this Agreement and the other Loan
Documents will not (i) to such Borrowers’ knowledge, violate any
provisions of Law or any applicable regulation, order or other decree of any
Tribunal, or (ii) conflict or be inconsistent with, or result in any
default under, any material contract, agreement or commitment to which such
Borrower is bound.  No Borrower is a
party to any agreement or instrument or subject to any court order, injunction,
permit, or restriction which would likely materially and adversely affect the
Collateral or the business, operations, or financial condition of any Borrower.

 

3.4           Collateral.  To the best knowledge of each Borrower who is
the record owner of a Project, except as may be disclosed in any Survey of the
Collateral delivered to Administrative Agent as of the Closing Date or
Admission Date, as applicable, such Project is in compliance with all zoning
requirements, building codes, subdivision improvement agreements, and all
covenants, conditions and restrictions of record.  Except as may be disclosed in the Title
Insurance delivered to Administrative Agent as of the Closing Date or Admission
Date, as applicable, the zoning and subdivision approval of the Collateral and
the right and ability to use or operate the Improvements are not in any way
dependent on or related to any real estate other than the Collateral and public
property or rights of way.  To the best
knowledge of each Borrower who is the record owner of a Project, except as may
be disclosed in any Survey of the Collateral delivered to Administrative Agent
as of the Closing Date of Admission Date, as applicable, there are no, nor are
there any alleged or asserted (in writing), violations of law, regulations,
ordinances, codes, permits, licenses, declarations, covenants, conditions, or
restrictions of record, or other agreements relating to such Project, or any
part thereof.  Each such record owner of
a Project has all requisite licenses, permits, franchises, qualifications,
certificates of occupancy or other governmental authorizations to own and lease
such Project and carry on its business, and to the best knowledge of each
Borrower who is the record owner of a Project, such Project is in compliance
with all applicable legal requirements and is free of structural defects, and
all building systems contained therein are in good working order, subject to
ordinary wear and tear.  No Project
constitutes, in whole or in part, a legally non-conforming use under applicable
legal requirements.

 

3.5           Property Access.  Each Project is accessible through fully
improved and dedicated roads accepted for maintenance and public use by the
public authority having jurisdiction.

 

 

35

 

3.6           Utilities.  All utility services necessary and sufficient
for the use or operation of the Collateral is available including water, storm,
sanitary sewer, gas, electric and telephone facilities.  To Borrowers’ knowledge, except as expressly
shown on any Survey of the Collateral to the contrary, such utilities are
located in the public right-of-way abutting the Collateral, and all such
utilities are connected so as to serve the Collateral without passing over
other property, except to the extent such other property is subject to a
perpetual easement for such utility benefiting such Collateral.

 

3.7           Flood
Hazards/Wetlands.  Except as
disclosed on the Survey of the Collateral, no Project is situated in an area
designated as having special flood hazards as defined by the Flood Disaster
Protection Act of 1973, as amended, or as wetlands by any governmental entity
having jurisdiction over the Collateral.

 

3.8           Taxes/Assessments.  Each Project is comprised of one or more
parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot. 
There are no unpaid or outstanding real estate or other taxes or
assessments on or against the Collateral or any part thereof, except general
real estate taxes not yet delinquent. 
Copies of the current general real estate tax bills with respect to each
Project have been delivered to Administrative Agent.  Said bills cover each Project in its entirety
and do not cover or apply to any other property.  There is no pending or, to the best knowledge
of each Borrower who is the record owner of a Project, contemplated action pursuant
to which any special assessment may be levied against any portion of the
Collateral.

 

3.9           Eminent Domain.  As of the date hereof, there is no eminent
domain or condemnation proceeding pending or, to the best knowledge of each
Borrower, threatened, relating to any Project.

 

3.10         Litigation.  Except as disclosed to Administrative Agent
in writing, there is no pending, or to the best knowledge of each Borrower,
threatened litigation, arbitration or other proceeding or governmental
investigation (herein, “Litigation”) involving or affecting the
Collateral or the validity, enforceability, or priority of any of the Loan
Documents, or against any Borrower.  If
any such Litigation is threatened or commenced (a) that seeks to enjoin,
prevent, or declare invalid or unlawful any Borrower’s occupancy, use or
operation of the Improvements; (b) that endangers, questions or attacks
the title to any part of the Collateral or the validity, enforceability, or
priority of any Loan Document; (c) that seeks to levy upon or seize any
part of the Collateral; (d) for any condemnation or taking of any part of
or interest in the Collateral; (e) regarding any claimed damage, default,
or diminution or offset against Rent; (f) with respect to any claimed
personal injury, death or property damage on or about the Collateral; or (g) which
constitutes a Material Adverse Effect; then Borrowers shall promptly and
vigorously contest such Litigation in good faith, resist the entry of any
temporary or permanent injunction, and seek the stay of any such injunction
that may be entered.

 

3.11         Accuracy.  Neither this Agreement nor any document,
financial statement, credit information, certificate or statement furnished to
Administrative Agent or the Lenders by any Borrower contains any untrue
statement of a material fact or omits to state a material fact which would
affect any Advance or Lenders’ decision to make any Advance hereunder.

 

 

36

 

3.12         Foreign Ownership.  No Borrower nor any member or partner in any
Borrower is or will be, and no legal or beneficial interest of a member or
partner in any Borrower is or will be held, directly or indirectly, by a “foreign
corporation”, “foreign partnership”, “foreign trust”, “foreign estate”, “foreign
person”, “affiliate” of a “foreign person” or a “United States intermediary” of
a “foreign person” within the meaning of Internal Revenue Code Sections 897 and
1445, the Foreign Investments in Real Property Tax Act of 1980, the
International Foreign Investment Survey Act of 1976, the Agricultural Foreign
Investment Disclosure Act of 1978, or the regulations promulgated pursuant to
such Acts or any amendments to such Acts.

 

3.13         Solvency.  No Borrower is insolvent and there has been
no: (i) assignment made for the benefit of the creditors of any Borrower; (ii) appointment
of a receiver for any Borrower or for the property of any Borrower; or (iii) bankruptcy,
reorganization, or liquidation proceeding instituted by or against any
Borrower.  No Borrower is contemplating
either the filing of a petition by it under state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property, and no Borrower has knowledge of any Person contemplating the filing
of any such petition against it.  The
fair saleable value of each Borrower’s assets exceeds and will, immediately
following the making of the Loan, exceed such Borrower’s total liabilities,
including, without limitation, subordinated, unliquidated, disputed and
contingent liabilities.  The fair
saleable value of each Borrower’s assets is and will, immediately following the
making of the Loan, be greater than each such Borrower’s probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured.  The
assets of each Borrower do not and, immediately following the making of the
Loan will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. 
No Borrower intends to, or believes that it will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be received by such Borrower and the amounts to be payable
on or in respect of obligations of such Borrower).

 

3.14         Financial
Statements; No Change. The Operating Partnership has heretofore delivered
to Administrative Agent copies of the most current, consolidated Financial
Statements of Guarantor and its Subsidiaries. 
Said Financial Statements were prepared on a basis consistent with that
of preceding years, and all of such Financial Statements present fairly, in all
material respects, the financial condition of Guarantor and its Subsidiaries as
of the dates in question and the results of operations for the periods
indicated.  Since the dates of such
Financial Statements, there has been no material adverse change in the business
or financial condition of Guarantor or any of its Subsidiaries.  No Borrower has any material contingent
liabilities not provided for or disclosed in said Financial Statements.

 

3.15         Margin Stock;
Commercial Loan; Other Regulatory Matters. 
No proceeds of the Loan shall be used by any Borrower in any manner that
might cause the borrowing or the application of such proceeds to violate
Regulations U, T or X or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Securities Act of 1933 or the
Securities Exchange Act of 1934.  The
Loan is solely for business and/or investment purposes, and is not intended for
personal, family, household or agricultural purposes.  The proceeds of the Loan shall be used for
commercial purposes and each Borrower hereby stipulates that the Loan shall be
construed for all purposes as a commercial loan.  No Borrower is an “investment 

 

 

37

 

company”
or a company “controlled” by an “investment company” or a “subsidiary” of an “investment
company,” within the meaning of the Investment Company Act of 1940.  No Borrower is a “holding company”, or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935.

 

3.16         Tax Filings.  Each Borrower has filed (or have obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and have paid or made adequate provision for the payment
of all federal, state and local taxes, charges and assessments payable by such
Borrower.

 

3.17         Full and Accurate
Disclosure.  No statement of fact
made by or on behalf of any Borrower in this Agreement or in any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained herein or
therein not misleading.  There is no fact
presently known to any Borrower which has not been disclosed to Administrative
Agent which materially and adversely affects, nor as far as each such Borrower
can foresee, might materially and adversely affect, the Collateral or the
business operations or financial condition of each Borrower.

 

ARTICLE 4- DEFAULT AND REMEDIES

 

4.1           Events of Default.  The occurrence of any one of the following
shall be a default under this Agreement (“Default”):

 

(a)           Failure to Pay Indebtedness.  (i) Any principal and/or interest on the
Loan is not paid on the Maturity Date, or in the case of any of payment of
principal and/or interest on the Loan is not paid when due on a date other than
the Maturity Date, such payment is not made within five (5) days after the
same became due, whether by acceleration or otherwise; or (ii) any other
payment of the Indebtedness is not paid on or before the date specified for
payment in the Loan Documents or, if no date is specified for payment in the
Loan Documents or such payment is due on demand, as the case may be, within ten
(10) days after written notice or demand from Administrative Agent.

 

(b)           Nonperformance of Covenants.  Any covenant, agreement or condition herein
or in any other Loan Document (other than covenants to pay any of the
Indebtedness) is not fully and timely performed, observed or kept, and such
failure is not cured within the applicable notice or grace period (if any)
provided for herein or in such other Loan Document or, if this Agreement or
such other Loan Document does not provide for such a notice or grace period,
within thirty (30) days after written notice and demand by Administrative Agent
to the Operating Partnership, on behalf of all Borrowers and Guarantor, for the
performance of such covenant, agreement or condition (or if such failure cannot
be cured within that original 30-day period and (i) the Operating
Partnership delivers written notice to Administrative Agent promptly within
that original 30-day period of the intention of Borrowers or Guarantor to cure
[and the proposed steps to cure] the failure with due diligence, and (ii) promptly
institutes curative action within that original 30-day period and diligently
pursues same, then Borrowers or Guarantor, as applicable, shall have such
additional period of time, not exceeding sixty (60) days next following the end
of the original 30-day period, as shall be necessary to effect the cure);

 

 

38

 

provided, however,
that there shall be no obligation of Administrative Agent to give any such
notice and no right of the Operating Partnership to cure under this paragraph
if the event or condition is intentionally caused by any Borrower or Guarantor.

 

(c)           Representations. 
Any statement, representation or warranty in any of the Loan Documents
or in any Financial Statement or any other writing heretofore or hereafter
delivered to Administrative Agent in connection with the Indebtedness or
Obligations is false, fraudulent, misleading or erroneous in any material
respect on the Closing Date or, subject to the provisions of Exhibit “F”,
the Admission Date or on the date as of which such statement, representation or
warranty is made or deemed made and, if notice or grace period is not provided
for, within fifteen (15) days after written notice and demand by Administrative
Agent to the Operating Partnership, on behalf of all Borrowers and Guarantor,
objecting to such statement, representation or warranty not being true and
correct (or if such failure cannot be cured within that original 15-day period
and the Operating Partnership delivers written notice to Administrative Agent
promptly within that original 15-day period of Borrowers’ or Guarantor’s
intention and proposed steps to cure the failure with due diligence, promptly
institutes curative action within that original 15-day period and diligently
pursues same, Borrowers or Guarantor, as applicable, shall have such additional
period of time, not exceeding forty-five (45) days next following the end of
the original fifteen (15) day period, as shall be necessary to effect the
cure); provided, however, that there shall be no obligation of
Administrative Agent to give such notice in the case of, and no right of
Borrowers or Guarantor to cure, any fraudulent or knowingly false
representation to Administrative Agent.

 

(d)           Injunction. 
Any court of competent jurisdiction enjoins or prohibits any Borrower,
Guarantor or any of the Lenders from performing this Agreement or any of the
other Loan Documents, and such injunction or order is not vacated within ninety
(90) days after the granting thereof.

 

(e)           Bankruptcy or Insolvency.  Any Borrower or Guarantor:

 

(i)            (A) 
Executes an assignment for the benefit of creditors, or takes any action in
furtherance thereof; or (B) admits in writing its inability to pay, or
fails to pay, its debts generally as they become due; or (C) as a debtor,
files a petition, case, proceeding or other action pursuant to, or voluntarily
seeks the benefit or benefits of any Debtor Relief Laws, or takes any action in
furtherance thereof; or (D) seeks the appointment of a receiver, trustee,
custodian or liquidator of the Collateral or any part thereof or of any
significant portion of its other property; or

 

(ii)           Suffers
the filing of a petition, case, proceeding or other action against it as a
debtor under any Debtor Relief Laws or seeking appointment of a receiver,
trustee, custodian or liquidator of the Collateral or any part thereof or of
any significant portion of its other property, and (A) admits, acquiesces
in or fails to contest diligently the material allegations thereof, or (B) the
petition, case, proceeding or other action results in entry of any order for
relief or order granting relief sought against it, or (C) in a proceeding
under Title 11 of the United States Code, the case is converted from one
chapter to another, or (D) fails to have the petition, case, proceeding or
other action 

 

 

39

 

permanently dismissed or
discharged on or before the earlier of trial thereon or sixty (60) days next
following the date of its filing; or

 

(iii)          Conceals,
removes, or permits to be concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or any of them, or makes or
suffers a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar Law; or suffers or permits, while insolvent,
any creditor to obtain a lien (other than as described in subparagraph (iv) below)
upon any of its property through legal proceedings which are not vacated and
such lien discharged prior to enforcement of such lien and in any event within
sixty (60) days from the date thereof; or

 

(iv)          Fails
to have discharged within a period of thirty (30) days any attachment,
sequestration, or similar writ levied upon any of its property unless such
attachment, sequestration or similar writ is being contested in accordance with
Section 2.16 of this Agreement; or

 

(v)           Fails
to pay within thirty (30) days any final money judgment against it.

 

(f)            Transfer of the Collateral.  Any sale, lease, conveyance, assignment or
transfer of all or any part of the Collateral Pool or any interest therein,
whether by operation of law or otherwise, except: (1) sales or transfers
of items of the personal property in the ordinary course of business which have
become obsolete or worn beyond practical use and which, if material to the
operation of the Collateral to which they relate, have been replaced by
adequate substitutes, owned by the applicable Borrower, having comparable
quality and utility to the replaced items when new; (2) Approved Leases
entered into in accordance with the terms of this Agreement; or (3) transfers
permitted in accordance with the terms of this Agreement or the Deed of Trust.

 

(g)           Other Debt. 
Any Borrower or Guarantor fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any (i) non-recourse Debt (other than the Indebtedness and
Obligations under this Agreement, any Loan Document or any Swap Transaction)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $30,000,000.00, or (ii) recourse
Debt or Contingent Liability (other than the Indebtedness and Obligations under
this Agreement, any Loan Document or any Swap Transaction) having an aggregate
principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $15,000,000.00.

 

(h)           Grant of Easement, Etc.  Without the prior written consent of
Administrative Agent (which consent shall be given or withheld in
Administrative Agent’s good faith business judgment), any Borrower grants any
easement or dedication, files any plat, condominium declaration, or
restriction, or otherwise encumbers in any material respect any Collateral, or
seeks or permits any zoning reclassification or variance, unless such action is
expressly permitted by the Loan Documents.

 

 

40

 

(i)            Abandonment. 
Any owner of any portion of any Collateral abandons such Collateral.

 

(j)            Default Under Other Lien.  A default or event of default (after taking
into consideration applicable notice, grace and cure periods, if any) occurs
under any lien, security interest or assignment covering the Collateral or any
part thereof (without hereby implying Administrative Agent’s consent to any
such lien, security interest or assignment not created under the Loan
Documents), or the holder of any such lien, security interest or assignment
declares a default or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.

 

(k)           Destruction. 
Any Borrower fails to comply with the requirements of the Loan Documents
applicable to a casualty affecting the Collateral and such failure is not cured
within the time period provided for Section 2.5 of this Agreement.

 

(l)            Condemnation. 
Any Borrower fails to comply with the requirements of the Loan Documents
applicable to eminent domain or condemnation affecting the Collateral and such
failure is not cured within the time period provided for in Section 2.5
of this Agreement.

 

(m)          Liquidation, Etc. 
Except as permitted by this Agreement, (2) the liquidation,
termination, dissolution, merger, consolidation of any Borrower, Guarantor or
any other Person obligated to pay any part of the Indebtedness or (2) the
failure of any Borrower to maintain its good standing in the state in which the
Collateral owned by such Borrower is located.

 

(o)           Material Adverse Effect.  The occurrence of an event that, in
Administrative Agent’s reasonable opinion, has or will have a Material Adverse
Effect, excluding:  (A) claims for
mechanic’s or materialmen’s liens or taxes against the Collateral which are
being contested by any Borrower in accordance with Section 2.16 of
this Agreement,  (B) any suit or
suits which are covered by insurance if the insurer has agreed to defend such
claims without reservation of rights and in Administrative Agent’s opinion the
coverage afforded by such insurance is sufficient to satisfy the recovery being
sought, or in the alternative, such suits do not involve the Collateral and
which seek recovery of amounts not exceeding $1,000,000.00 for any one such
suit or in the aggregate for all such suits, which are being contested
diligently and in good faith and for which adequate reserves have been
established, if appropriate in accordance with generally accepted accounting
principles, and (C) a material adverse change in the financial condition
of Guarantor unless Guarantor is in compliance with each of its financial
covenants as set forth in the Guaranty and Guarantor so certifies to
Administrative Agent within twenty (20) days after written request from
Administrative Agent.  At least ten (10) days
before declaring a default under this paragraph (o), Administrative Agent shall
notify the Operating Partnership, on behalf of Borrowers, of its determination
that an event covered by this paragraph (o) has occurred and a description
in reasonable detail of the basis for its determination.

 

(p)           Enforceability; Priority.  Any Loan Document shall for any reason
without Administrative Agent’s specific written consent cease to be in full
force and effect in all material respects, or shall be declared null and void
or unenforceable in whole or in any material part, or the validity or
enforceability thereof, in whole or in any material part, shall be challenged
or denied by any party thereto other than Administrative Agent or the Trustee
under the Deed of 

 

 

41

 

Trust;
or the liens, mortgages or security interests of Administrative Agent in any of
the Collateral become unenforceable in whole or in part, or cease to be of the
priority herein required, or the validity or enforceability thereof, in whole
or in material part, shall be challenged or denied by any Borrower, Guarantor
or any other Person obligated to pay any part of the Indebtedness.

 

(q)           Guaranty. 
Guarantor shall fail to timely comply with any covenant or obligation
under the Guaranty and such failure shall not be cured within five (5) Business
Days after the earlier of (i) the date on which Guarantor receives notice
of such failure to comply, or (ii) the date on which Guarantor is required
to deliver the applicable Compliance Certificate that discloses such failure to
comply with its financial covenants.

 

(r)            Change of Control. 
A Change of Control shall occur.

 

(s)           Environmental Indemnity.  Any Borrower or Guarantor shall fail to
timely comply with any covenant or obligation under any Environmental Indemnity
and such failure shall not be cured within applicable grace or cure periods set
forth in the Environmental Indemnity.

 

4.2           Remedies.

 

(a)           Upon a Default, Administrative Agent may with the consent of,
and shall at the direction of the Required Lenders, without notice, exercise
any and all rights and remedies afforded by this Agreement, the other Loan
Documents, at law or in equity or otherwise, including (i)  declaring
any and all Indebtedness immediately due and payable; (ii) reducing any
claim to judgment; or (iii) obtaining appointment of a receiver (to which
each Borrower hereby consents) and/or judicial or nonjudicial foreclosure under
any Deed of Trust; provided, however, upon a Default, Administrative
Agent at its election may (but shall not be obligated to) without the consent
of and shall at the direction of the Required Lenders, without notice, do any
one or more of the following: (1) terminate Lenders’ Commitment to lend
hereunder; (2) in its own name on behalf of the Lenders or in the name of
any Borrower, enter into possession of any of the Collateral, perform all work
necessary to maintain and repair any Improvements; or (3) set-off and
apply, to the extent thereof and to the maximum extent permitted by Law, any
and all deposits, funds, or assets at any time held and any and all other
indebtedness at any time owing by Administrative Agent or any Lender to or for
the credit or account of Borrowers against any Indebtedness.  Further, L/C Issuer may, with the approval of
Administrative Agent on behalf of the Required Lenders, demand immediate
payment by Borrowers of an amount equal to the aggregate amount of all
outstanding Letters of Credit to be held in a deposit account with
Administrative Agent to secure amounts due from Borrowers under Letters of
Credit and when no Letters of Credit exist, the Loan.

 

(b)           Each Borrower hereby appoints Administrative Agent as such
Borrower’s attorney-in-fact, which power of attorney is irrevocable and coupled
with an interest, with full power of substitution if Administrative Agent so
elects, to do any of the following in such Borrower’s name upon the occurrence
and during the continuation of a Default: 
(i) use such sums as are necessary, including any proceeds of the
Loan, (ii) endorse the name of such Borrower on any checks or drafts
representing proceeds of any insurance policies, or other 

 

 

42

 

checks
or instruments payable to such Borrower with respect to the Collateral; (iii) do
every act with respect to the ownership and operation of the Improvements that
such Borrower may do; (iv) prosecute or defend any action or proceeding
incident to the Collateral, and (v) pay, settle, or compromise all bills
and claims so as to clear title to the Collateral.  Any amounts expended by Administrative Agent
itself or on behalf of Lenders in connection with the exercise of its remedies
herein shall be deemed to have been advanced to Borrowers hereunder as a demand
obligation owing by Borrowers to Administrative Agent or Lenders as applicable
and shall constitute a portion of the Indebtedness, regardless of whether such
amounts exceed any limits for Indebtedness otherwise set forth herein.  Neither Administrative Agent nor Lenders
shall have any liability to Borrowers for the sufficiency or adequacy of any
such actions taken by Administrative Agent.

 

(c)           No delay or omission of Administrative Agent or Lenders to
exercise any right, power or remedy accruing upon the happening of a Default
shall impair any such right, power or remedy or shall be construed to be a
waiver of any such Default or any acquiescence therein.  No delay or omission on the part of
Administrative Agent or Lenders to exercise any option for acceleration of the
maturity of the Indebtedness, or for foreclosure of the Deed of Trust following
any Default as aforesaid, or any other option granted to Administrative Agent
and Lenders hereunder in any one or more instances, or the acceptances by
Administrative Agent or Lenders of any partial payment on account of the
Indebtedness, shall constitute a waiver of any such Default, and each such
option shall remain continuously in full force and effect.  No remedy herein conferred upon or reserved
to Administrative Agent and/or Lenders is intended to be exclusive of any other
remedies provided for in any Note or any of the other Loan Documents, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder, or under any Note or any of the other Loan
Documents, or now or hereafter existing at law or in equity or by statute.  Every right, power and remedy given to
Administrative Agent and Lenders by this Agreement, any Note, or any of the
other Loan Documents shall be concurrent, and may be pursued separately,
successively or together against any Borrower, Guarantor, or the Collateral or
any part thereof, or any personal property granted as security under the Loan
Documents, and every right, power and remedy given by this Agreement, any Note,
or any of the other Loan Documents may be exercised from time to time as often
as may be deemed expedient by the Required Lenders.

 

(d)           After the occurrence of a Default (which remains uncured
after the expiration of applicable notice or cure periods, if any),
Administrative Agent may with the consent of, and shall at the direction of the
Required Lenders, without notice, exercise any and all rights and remedies
afforded by this Agreement, the other Loan Documents, at law or in equity or otherwise,
and Administrative Agent shall be entitled to continue with the exercise or
enforcement of such rights and remedies unless and until (i) Administrative
Agent receives written notice from the Operating Partnership or Guarantor of
its or their intent to cure such Default, and (ii) the Operating
Partnership, Guarantor or any other Borrower cures such Default by payment to
Administrative Agent, for itself and the ratable benefit of the Lenders, of all
amounts then due and owing to Administrative Agent and the Lenders under the
Loan Documents, or if such Default arises as a result of a failure of
performance by any Borrower or Guarantor of any obligation (other than a
payment obligation) under the Loan Documents, Borrowers or Guarantor take such
action as Administrative Agent determines in its sole discretion (or,
alternatively, if such cure is to be effected after acceleration of the Loan,
in the 

 

 

43

 

discretion
of the Required Lenders), is required to fully and completely perform such
obligations.  The provisions of this Section 4.2(d) shall
govern and control over provisions to the contrary, if any, in the other Loan
Documents.

 

(e)           Regardless of how a Lender may treat payments received
from the exercise of remedies under the Loan Documents for the purpose of its
own accounting, for the purpose of computing the Indebtedness, payments shall
be applied as elected by Lenders.  No
application of payments will cure any Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent the
exercise, or continued exercise, of rights or remedies of Administrative Agent
and Lenders hereunder or thereunder or at law or in equity.

 

ARTICLE 5— ADMINISTRATIVE AGENT

 

5.1           Appointment and
Authorization of Administrative Agent.

 

(a)           Each Lender hereby irrevocably (subject to Section 5.9)
appoints, designates and authorizes Administrative Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative
Agent.  Without limiting the generality
of the foregoing sentence, the use of the term “agent” herein and in the other
Loan Documents with reference to Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. 
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b)           L/C Issuer shall act on behalf of Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
that L/C Issuer shall have all of the benefits and immunities (i) provided
to Administrative Agent in this Article with respect to any acts taken or
omissions suffered by L/C Issuer in connection with Letters of Credit issued by
it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative
Agent” as used in this Article and in the definition of “Agent-Related
Person” included L/C Issuer with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to L/C Issuer.

 

(c)           No individual Lender or group of Lenders or L/C Issuer shall
have any right to amend or waive, or consent to the departure of any party from
any provision of any Loan Document, or secure or enforce the obligations of
Borrowers or any other party pursuant to the Loan Documents, or otherwise.  All such rights, on behalf of Administrative
Agent, L/C Issuer or any Lender or Lenders, shall be held and exercised solely
by and at the option of Administrative Agent for the ratable benefit of the
Lenders. Such rights, however, are subject to 

 

 

44

 

the
rights of L/C Issuer, a Lender or Lenders, as expressly set forth in this
Agreement, to approve matters or direct Administrative Agent to take or refrain
from taking action as set forth in this Agreement.  Except as expressly otherwise provided in
this Agreement or the other Loan Documents, Administrative Agent shall have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights, or taking or refraining from taking any
actions which Administrative Agent is expressly entitled to exercise or take
under this Agreement and the other Loan Documents, including, without
limitation, (i) the determination if and to what extent matters or items
subject to Administrative Agent’s satisfaction are acceptable or otherwise
within its discretion, (ii) the making of Administrative Agent Advances,
and (iii) the exercise of remedies pursuant to, but subject to, Article 4
or pursuant to any other Loan Document and any action so taken or not taken
shall be deemed consented to by Lenders.

 

(d)           In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to any Borrower or Guarantor, no individual
Lender or group of Lenders or L/C Issuer shall have the right, and
Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether Administrative Agent shall have made
any demand on Borrowers) shall be exclusively entitled and empowered on behalf
of itself, L/C Issuer and the Lenders, by intervention in such proceeding or
otherwise:

 

(i)            to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of Lenders and Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of Lenders and
Administrative Agent and their respective agents and counsel and all other
amounts due Lenders and Administrative Agent under Section 6.10 and
Exhibit K allowed in such judicial proceeding; and

 

(ii)           to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender to make such
payments to Administrative Agent and, in the event that Administrative Agent
shall consent to the making of such payments directly to Lenders, to pay to
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Administrative Agent and its agents and counsel,
and any other amounts due Administrative Agent under Section 6.10.
Nothing contained herein shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of Lenders except as approved by Required Lenders or
to authorize Administrative Agent to vote in respect of the claims of Lenders
except as approved by Required Lenders in any such proceeding.

 

5.2           Delegation of
Duties.  Administrative Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or 

 

 

45

 

attorneys-in-fact
and shall be entitled to advice of counsel and other consultant experts
concerning all matters pertaining to such duties.  Administrative Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care.

 

5.3           Liability of
Administrative Agent.  No
Agent-Related Persons shall (i) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of Lenders for any recital, statement, representation or warranty
made by any Borrower or any subsidiary or Affiliate of any Borrower, or any
officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any
Borrower, Guarantor, or any of their Affiliates.

 

5.4           Reliance by
Administrative Agent.  Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any party to the Loan Documents), independent
accountants and other experts selected by Administrative Agent. Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders or all Lenders if required
hereunder as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.  Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders or such greater number of Lenders as may be
expressly required hereby in any instance, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the
Lenders.  In the absence of written
instructions from the Required Lenders or such greater number of Lenders, as
expressly required hereunder, Administrative Agent may take or not take any
action, at its discretion, unless this Agreement specifically requires the
consent of the Required Lenders or such greater number of Lenders.

 

5.5           Notice of Default.   Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, unless
Administrative Agent shall have received written notice from a Lender or any
Borrower referring to this Agreement, describing such Default that
Administrative Agent determines will have a Material Adverse Effect.  Administrative Agent will notify Lenders of
its receipt of any such notice. 
Administrative Agent shall take such action with respect to such Default
as may be requested by the Required Lenders

 

 

46

 

in accordance with Article 4;
provided, however, that unless and until Administrative Agent has
received any such request, Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of Lenders.

 

5.6           Credit Decision;
Disclosure of Information by Administrative Agent.

 

(a)           Each Lender acknowledges that none of Agent-Related
Persons has made any representation or warranty to it, and that no act by
Administrative Agent hereafter taken, including any consent to and acceptance
of any assignment or review of the affairs of any Borrower and Guarantor, shall
be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lenders as to any matter, including whether Agent-Related Persons
have disclosed material information in their possession.  Each Lender represents to Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of each Borrower and Guarantor, and all applicable bank or
other regulatory Laws relating to the transactions contemplated hereby, and
made its own decision to enter into this Agreement and to extend credit to
Borrowers hereunder.  Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of each Borrower and Guarantor.

 

(b)           Administrative Agent upon its receipt shall provide each
Lender such notices, reports and other documents expressly required to be
furnished to Lenders by Administrative Agent herein.  To the extent not already available to a
Lender, Administrative Agent shall also provide each Lender and/or make
available for each Lender’s inspection during reasonable business hours and at
the Lender’s expense, upon the Lender’s written request therefor: (i) copies
of the Loan Documents; (ii) such information as is then in Administrative
Agent’s possession in respect of the current status of principal and interest
payments and accruals in respect of the Loan; (iii) copies of all current
financial statements in respect of Guarantor and its Subsidiaries or other
Person liable for payment or performance by any Borrower or Guarantor of any
obligations under the Loan Documents, then in Administrative Agent’s possession
with respect to the Loan; and (iv) other current factual information then
in Administrative Agent’s possession with respect to the Loan and bearing on
the continuing creditworthiness of any Borrower or Guarantor, or any of their
respective Affiliates; provided  that nothing contained in this Section shall
impose any liability upon Administrative Agent for its failure to provide a
Lender any of such Loan Documents, information, or financial statements, unless
such failure constitutes willful misconduct or gross negligence on Administrative
Agent’s part; and provided, further, that Administrative Agent
shall not be obligated to provide any Lender with any information in violation
of Law or any contractual restrictions on the disclosure thereof (provided such
contractual restrictions shall not apply to distributing to a Lender factual
and financial information expressly required to be provided herein).  Except as set forth above, Administrative
Agent shall not have any duty or responsibility to provide any Lenders with any
credit or other 

 

 

47

 

information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any Borrower or Guarantor or any of their
respective Affiliates which may come into the possession of any of
Agent-Related Persons.

 

5.7           Indemnification
of Administrative Agent.  Whether or
not the transactions contemplated hereby are consummated, Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of Borrowers and without limiting the obligation of Borrowers
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it, INCLUDING THOSE IN WHOLE OR PART ARISING FROM ADMINISTRATIVE AGENT’S
STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE; provided,
however, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to the extent
determined in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Agent-Related Person’s own gross
negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section.  Without limitation of the
foregoing, to the extent that Administrative Agent is not reimbursed by or on
behalf of Borrowers, each Lender shall reimburse Administrative Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
attorney fees) incurred by Administrative Agent as described in Section 6.10.  The undertaking in this Section shall
survive the payment of all Indebtedness hereunder and the resignation or
replacement of Administrative Agent.

 

5.8           Administrative
Agent in Individual Capacity. 
Administrative Agent, in its individual capacity, and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with any party to the
Loan Documents and their respective Affiliates as though Administrative Agent
were not Administrative Agent hereunder and without notice to or consent of
Lenders.  Lenders acknowledge that Bank
of America, N.A. is the L/C Issuer and that any Borrower and Bank of America, N.A.
or its Affiliate, as Swap Bank, may enter into Swap Transactions.  If any portion of the Loan is used to honor
any Borrower’s payment obligations to the Swap Bank under the terms of such
Swap Transactions, Lenders shall have no right to share in any portion of such
payments owed to the Swap Bank.  Lenders
acknowledge that, pursuant to such activities, Bank of America, N.A. or its
Affiliates may receive information regarding any party to the Loan Documents,
or their respective Affiliates (including information that may be subject to
confidentiality obligations in favor of such parties or such parties’
Affiliates) and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them. 
With respect to its Pro Rata Share of the Loan, Bank of America, N.A.
shall have the same rights and powers under this Agreement as any other Lenders
and may exercise such rights and powers as though it were not Administrative
Agent or L/C Issuer or Swap Bank, and the terms “Lender” and “Lenders” include
Bank of America, N.A. in its individual capacity.

 

5.9           Successor
Administrative Agent.  Administrative
Agent may, and at the request of the Required Lenders as a result of
Administrative Agent’s gross negligence or willful misconduct in performing its
duties under this Agreement shall, resign as Administrative Agent upon 30 days’
notice to Lenders; provided any such
resignation by Bank of America, N.A. shall 

 

 

48

 

also
constitute its resignation as L/C Issuer.  If Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among Lenders a successor
administrative agent for Lenders, which successor administrative agent shall be
consented to by the Operating Partnership at all times other than during the existence
of a Default (which consent of the Operating Partnership shall not be
unreasonably withheld or delayed).  If no
successor administrative agent is appointed prior to the effective date of the
resignation of Administrative Agent, Administrative Agent may appoint, after
consulting with Lenders and the Operating Partnership, a successor
administrative agent from among Lenders. 
Upon the acceptance of its appointment as successor administrative agent
hereunder, such successor administrative agent shall succeed to all the rights,
powers and duties of the retiring Administrative Agent and L/C Issuer and the respective
terms “Administrative Agent” and “L/C
Issuer” shall mean such successor administrative agent and L/C Issuer, and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated and the retiring
L/C Issuer’s rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring L/C Issuer or any
other Lender, other than the obligation of the successor L/C Issuer to issue
letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations
of the retiring L/C Issuer with respect to such Letter of Credit.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article and
other applicable Sections of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent and L/C Issuer under this
Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent and L/C Issuer by the date which is 30
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and Lenders shall perform all of the duties of Administrative Agent and L/C Issuer hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above.  Notwithstanding the foregoing, however, Bank of America, N.A. may not be
removed as Administrative Agent at the request of the Required Lenders unless
Bank of America shall also simultaneously be replaced and fully released as “L/C
Issuer” hereunder pursuant to documentation in form and substance reasonably
satisfactory to Bank of America, N.A.

 

5.10         Releases; Acquisition
and Transfers of Collateral.

 

(a)           Lenders hereby irrevocably authorize Administrative Agent
to transfer or release any lien on, or after foreclosure or other acquisition
of title by Administrative Agent on behalf of Lenders to transfer or sell, any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all Indebtedness, (ii) constituting a release,
transfer or sale of a lien or property if the release, transfer or sale is
permitted under this Agreement or the other Loan Documents (and Administrative
Agent may rely conclusively on any such certificate, without further inquiry);
or (iii) after foreclosure or other acquisition of title (1) for a
purchase price of 90% of the value indicated in the most recent Appraisal of
the collateral obtained by Administrative Agent made in accordance with
regulations governing Administrative Agent, less any reduction indicated in the
Appraisal estimated by experts in such areas; or (2) if approved by the
Required Lenders.

 

 

49

 

(b)           If all or any portion of the Collateral is acquired by
foreclosure or by deed in lieu of foreclosure, Administrative Agent shall take
title to the collateral in its name or by an Affiliate of Administrative Agent,
but for the benefit of all Lenders in their Pro Rata Shares on the date of the
foreclosure sale or recordation of the deed in lieu of foreclosure (the “Acquisition
Date”).  Administrative Agent and all Lenders hereby expressly waive
and relinquish any right of partition with respect to any collateral so
acquired.  After any collateral is
acquired, Administrative Agent shall appoint and retain one or more Persons
(individually and collectively, “Collateral Manager”) experienced in the
management, leasing, sale and/or dispositions of similar properties.  After consulting with the Collateral Manager,
Administrative Agent shall prepare a written plan for completion of
construction (if required), operation, management, improvement, maintenance,
repair, sale and disposition of the Collateral and a budget for the aforesaid,
which may include a reasonable management fee payable to Administrative Agent
(the “Business Plan”). 
Administrative Agent will deliver the Business Plan not later than the
sixtieth (60th) day after the Acquisition Date to each Lender with a written
request for approval of the Business Plan. If the Business Plan is approved by
the Required Lenders, Administrative Agent and the Collateral Manager shall
adhere to the Business Plan until a different Business Plan is approved by the
Required Lenders.  Administrative Agent
may propose an amendment to the Business Plan as it deems appropriate, which
shall also be subject to Required Lender approval.  If the Business Plan (as may be amended) proposed
by Administrative Agent is not approved by the Required Lenders, (or if sixty
(60) days have elapsed following the Acquisition Date without a Business Plan
being proposed by Administrative Agent), any Lender may propose an alternative
Business Plan, which Administrative Agent shall submit to all Lenders for their
approval. If an alternative Business Plan is approved by the Required Lenders,
Administrative Agent may appoint one of the approving Lenders to implement the
alternative Business Plan.  Notwithstanding
any other provision of this Agreement, unless in violation of an approved
Business Plan or otherwise in an emergency situation, Administrative Agent
shall, subject to subsection (a) of this Section, have the right but not
the obligation to take any action in connection with the collateral (including
those with respect to property taxes, insurance premiums, completion of
construction, operation, management, improvement, maintenance, repair, sale and
disposition), or any portion thereof.

 

(c)           Upon request by Administrative Agent or the Operating
Partnership at any time, Lenders will confirm in writing Administrative Agent’s
authority to sell, transfer or release any such liens of particular types or
items of Collateral pursuant to this Section; provided, however, that (i)  Administrative
Agent shall not be required to execute any document necessary to evidence such
release, transfer or sale on terms that, in Administrative Agent’s opinion,
would expose Administrative Agent to liability or create any obligation or
entail any consequence other than the transfer, release or sale without
recourse, representation or warranty, and (ii) such transfer, release or
sale shall not in any manner discharge, affect or impair the obligations of
Borrowers other than those expressly being released.

 

(d)           If only two (2) Lenders (other than L/C Issuer) exist
at the time Administrative Agent receives a purchase offer for Collateral for
which one of the Lenders does not consent within ten (10) Business Days
after notification from Administrative Agent, the consenting Lender may offer (“Purchase
Offer”) to purchase all of non-consenting Lender’s right, title and
interest in the collateral for a purchase price equal to non-consenting Lender’s
Pro Rata Share of the net proceeds anticipated from such sale of such
collateral (as reasonably determined by 

 

 

50

 

Administrative
Agent, including the undiscounted face principal amount of any purchase money
obligation not payable at closing) (“Net Proceeds”).  Within ten (10) Business Days thereafter
the non-consenting Lender shall be deemed to have accepted such Purchase Offer
unless the non-consenting Lender notifies Administrative Agent that it elects
to purchase all of the consenting Lender’s right, title and interest in the
collateral for a purchase price payable by the non-consenting Lender in an
amount equal to the consenting Lender’s Pro Rata Share of the Net
Proceeds.  Any amount payable hereunder
by a Lender shall be due on the earlier to occur of the closing of the sale of
the collateral or 90 days after the Purchase Offer, regardless of whether the
collateral has been sold.

 

5.11         Application of
Payments.  Except as otherwise
provided below with respect to Defaulting Lenders, aggregate principal and
interest payments, payments for Indemnified Liabilities, proceeds from the
foreclosure or sale of the collateral, and net operating income from the
collateral during any period it is owned by Administrative Agent on behalf of
the Lenders (“Payments”) shall be apportioned pro rata among Lenders and
payments of any fees (other than fees designated for Administrative Agent’s
separate account) shall, as applicable, be apportioned pro rata among
Lenders.  Notwithstanding anything to the
contrary in this Agreement, all Payments due and payable to Defaulting Lenders
shall be due and payable to and be apportioned pro rata among Administrative
Agent and Electing Lenders.  Such
apportionment shall be in the proportion that the Defaulting Lender Payment
Amounts paid by them bears to the total Defaulting Lender Payment Amounts of
such Defaulting Lender.  Such
apportionment shall be made until Administrative Agent and Lenders have been
paid in full for the Defaulting Lender Payment Amounts.  All pro rata Payments shall be remitted to
Administrative Agent and all such payments not constituting payment of specific
fees, and all proceeds of the Collateral received by Administrative Agent,
shall be applied first, to pay any fees, indemnities, costs, expenses
(including those in Section 5.7) and reimbursements then due to
Administrative Agent from Borrowers, including Administrative Agent Advances; second,
to pay any fees, costs, expenses and reimbursements then due to Lenders from
Borrowers; third, to pay pro rata interest and late charges due in
respect of the Indebtedness and Administrative Agent Advances; fourth,
to pay or prepay pro rata principal of the Indebtedness and to secure any
outstanding Letters of Credit; fifth, to pay any indebtedness of Borrowers
owed to the Swap Bank under Swap Transactions; and last, to Borrowers,
if required by law, or Lenders in Pro Rata Share percentages equal to their
percentages at the termination of the Aggregate Commitment.  Notwithstanding the above, subject to Section 3
of Exhibit K, amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit above shall be applied to satisfy drawings
under such Letters of Credit as they occur. 
If any amount remains on deposit as Cash Collateral after all Letters of
Credit have either been fully drawn or expired, such remaining amount shall be
applied to the other Indebtedness, if any, in the order set forth above.

 

5.12         Benefit.  The terms and conditions of this Article are
inserted for the sole benefit of Administrative Agent and Lenders (except for
the provision in Section 5.9 requiring the consent of the Operating
Partnership) and the same (except for the provision in Section 5.9
requiring the consent of the Operating Partnership) may be waived in whole or in
part, with or without terms or conditions, without prejudicing Administrative
Agent’s or Lenders’ rights to later assert them in whole or in part.

 

 

51

 

5.13         Co-Agents; Lead
Managers.  None of the Lenders or
other persons identified on the facing page or signature pages of
this Agreement as a “syndication agent”, “documentation agent”, “co-agent”, “book
manager”, or “lead manager”, “arranger”, “lead arranger” or “co-arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such lenders, those applicable to all
Lenders as such.  Without limiting the
foregoing, none of Lenders or other Persons so identified as a “syndication
agent”, “documentation agent”, “co-agent” or “lead manager” shall have or be
deemed to have any fiduciary relationship with any Lenders.  Each Lender acknowledges that it has not
relied, and will not rely, on any of Lenders or other Persons so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.

 

ARTICLE 6- GENERAL TERMS AND CONDITIONS

 

6.1           Consents;
Borrowers’ Indemnity.  Except where
otherwise expressly provided in the Loan Documents, in any instance where the
approval, consent or the exercise of Administrative Agent’s or Lenders’
judgment is required, the granting or denial of such approval or consent and
the exercise of such judgment shall be (a) within the sole discretion of
Administrative Agent or Lenders, as applicable; (b) deemed to have been
given only by a specific writing intended for the purpose given and executed by
Administrative Agent or Lenders; and (c) free from any limitation or
requirement of reasonableness (unless such limitation or requirement is imposed
by applicable law).  Notwithstanding any
approvals or consents by Administrative Agent or Lenders, neither
Administrative Agent nor any Lender has any obligation or responsibility
whatsoever for the adequacy, form or content of any Appraisal, or Lease or
contract, or any other matter incident to the Collateral.  Any inspection, appraisal or audit of the
Collateral or the books and records of any Borrower, or the procuring of
documents and financial and other information, by or on behalf of
Administrative Agent shall be for Administrative Agent’s and Lenders’
protection only, and shall not constitute an assumption of responsibility to
any Borrower or anyone else with regard to the condition, value, construction,
maintenance or operation of the Collateral, or relieve any Borrower of such
Borrowers’ obligations.  Each Borrower
has selected its own surveyors, architects, engineers, contractors, materialmen
and all other Persons or entities furnishing services or materials to the
Project owned by such Borrower.  Neither
Administrative Agent nor any Lender has any duty to supervise or to inspect the
Collateral or any duty of care to any Borrower to protect against, or inform any
Borrower of the existence of, negligent, faulty, inadequate or defective
Improvements comprising any part of the Collateral.  Neither Administrative Agent nor any
Indemnified Party shall be liable or responsible for, and each Borrower shall
indemnify each Agent-Related Person and each Indemnified Party and their
respective Affiliates, directors, officers, agents, attorneys and employees
(collectively, the “Indemnitees”) from and against: (a) any Claims,
arising from or relating to (i) any defect in any of the Collateral or the
Improvements, (ii) the performance or failure of performance of any
Borrower or such Borrower’s surveyors, architects, engineers, contractors, or
any other Person, with respect to the Improvements, (iii) any failure to
repair, maintain, protect or insure the Improvements, (iv) the payment of
costs of labor, materials, or services supplied for the repair, maintenance or
renovation of the Improvements, (v) in connection with the protection and
preservation of the Collateral (including those with respect to property taxes,
insurance premiums, operation, management, improvements, maintenance, repair,
sale and disposition), (vi) the performance of any obligation of each
Borrower whatsoever; (b) any and all liabilities, obligations, losses, 

 

 

52

 

damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements
(including attorney fees and costs) of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against any such Indemnitee
in any way arising out of or with respect to (i) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (ii) any Commitment or Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto; (c) any and all claims, demands, actions or
causes of action arising out of or relating to the use of Information (as
defined in Section 6.6) or other materials made available to
Administrative Agent or a Lender by any Borrower or Guarantor; and (d) any
and all liabilities, losses, costs or expenses (including attorney fees and
costs) that any Indemnified Party suffers or incurs as a result of the
assertion of any foregoing claim, demand, action, cause of action or
proceeding, or as a result of the preparation of any defense in connection with
any foregoing claim, demand, action, cause of action or proceeding, in all
cases, whether or not an Indemnified Party is a party to such claim, demand,
action, cause of action or proceeding and whether it is defeated, successful or
withdrawn (all the foregoing, collectively, the “Indemnified Liabilities”),
INCLUDING IN WHOLE OR PART ANY LOSS ARISING
OUT OF AN INDEMNIFIED PARTY’S STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR
SOLE NEGLIGENCE; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of any Indemnified Party.  Upon demand by Administrative Agent,
Borrowers shall diligently defend any Claim which affects the Collateral or is
made or commenced against Administrative Agent or any Lender, whether alone or
together with any Borrower or any other Person, all at the sole cost and
expense of such Borrowers and by counsel to be approved by Administrative Agent
in the exercise of its reasonable judgment. 
In the alternative, at any time Administrative Agent may elect to
conduct its own defense on behalf of itself or any Lender through counsel
selected by Administrative Agent and at the cost and expense of the Borrowers.

 

6.2           Miscellaneous.  This Agreement may be executed in several
counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument.  The Loan Documents are for the sole benefit
of Administrative Agent, Lenders and each Borrower and are not for the benefit
of any third party.  A determination that
any provision of this Agreement is unenforceable or invalid shall not affect
the enforceability or validity of any other provision and the determination
that the application of any provision of this Agreement to any person or
circumstance is illegal or unenforceable shall not affect the enforceability or
validity of such provision as it may apply to other persons, entities or
circumstances.  Time shall be of the
essence with respect to the obligations of each Borrower under the Loan
Documents.  This Agreement, and its
validity, enforcement and interpretation, shall be governed by Texas 

 

 

53

 

Law
(without regard to any conflict of Laws principles) and applicable United
States federal Law.

 

6.3           Notices.

 

6.3.1        Modes of Delivery;
Changes.  Except as otherwise
provided herein, all notices, and other communications required or which any
party desires to give under this Agreement or any other Loan Document shall be
in writing.  Unless otherwise
specifically provided in such other Loan Document, all such notices and other
communications shall be deemed sufficiently given or furnished if delivered by
personal delivery, by courier, by registered or certified United States mail,
postage prepaid, or by facsimile (with, subject to Subsection 6.3.2
below, a confirmatory duplicate copy sent by first class United States mail),
addressed to the party to whom directed or by (subject to Subsection 6.3.3
below) electronic mail address to Borrowers, to the Operating Partnership at
the address of the Operating Partnership set forth at the end of this Agreement
or to Administrative Agent, L/C Issuer or Lenders at the addresses specified
for notices on the Schedule of Lenders (unless changed by similar notice in
writing given by the particular party whose address is to be changed).  Borrowers hereby agree that delivery of any
notice to the Operating Partnership in accordance with this Section 6.3
shall be deemed to be effective notice to all Borrowers.  Any such notice or communication shall be
deemed to have been given and received either at the time of personal delivery
or, in the case of courier or mail, as of the date of first attempted delivery
at the address and in the manner provided herein, or, in the case of facsimile,
upon receipt; provided, however, that service of a notice
required by any applicable statute shall be considered complete when the
requirements of that statute are met. 
Notwithstanding the foregoing, no notice of change of address shall be
effective except upon actual receipt. 
This Section shall not be construed in any way to affect or impair
any waiver of notice or demand provided in any Loan Document or to require
giving of notice or demand to or upon any person in any situation or for any
reason.

 

6.3.2        Effectiveness of
Facsimile Documents and Signatures. 
Loan Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all parties to the Loan
Documents.  Administrative Agent may also
require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

6.3.3        Limited Use of
Electronic Mail.  Electronic mail and
internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.

 

6.3.4        Reliance by
Administrative Agent and Lenders.  Administrative
Agent and Lenders shall be entitled to rely and act upon any notices (including
telephonic Advance notices) purportedly given by or on behalf of Borrowers even
if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient in good faith, varied from any confirmation thereof.  Each Borrower shall jointly and severally
indemnify each 

 

 

54

 

Agent-Related
Person and each Lender from all losses, costs, expenses and liabilities
resulting from the reliance in good faith by such Person on each notice
purportedly given by or on behalf of any Borrower, INCLUDING IN
WHOLE OR PART FOR AN AGENT RELATED PERSON’S OR LENDER’S STRICT LIABILITY,
OR COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE, except to the
extent of their gross negligence or willful misconduct.  All telephonic notices to and other
communications with Administrative Agent may be recorded by Administrative
Agent, and each of the parties hereto hereby consents to such recording.  If a Lender does not notify or inform
Administrative Agent of whether or not it consents to, or approves of or agrees
to any matter of any nature whatsoever with respect to which its consent,
approval or agreement is required under the express provisions of this
Agreement or with respect to which its consent, approval or agreement is
otherwise requested by Administrative Agent, in connection with the Loan or any
matter pertaining to the Loan, within ten (10) Business Days (or such
longer period as may be specified by Administrative Agent) after such consent,
approval or agreement is requested by Administrative Agent, the Lender shall be
deemed to have given its consent, approval or agreement, as the case may be,
with respect to the matter in question.

 

6.4           Payments Set
Aside.  To the extent that any
payment by or on behalf of any Borrower is made to Administrative Agent or any Lender,
or Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Administrative Agent or
such Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law, to a
depository (including Administrative Agent, any Lender or its or their
affiliates) for returned items or insufficient collected funds, or otherwise,
then (a) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Lender severally agrees to pay to Administrative
Agent upon demand its applicable share of any amount so recovered from or
repaid by Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect.

 

6.5           Successors and
Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender, and no Lender may assign or otherwise transfer any of
its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by
way of participation in accordance with the provisions of subsection (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null
and void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly 

 

 

55

 

contemplated
hereby, the Indemnified Parties) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b)           Any Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and Pro Rata Share of the Loan including,
for purposes of this subsection (b), participations in L/C Obligations at the
time owing to it); provided  that:

 

(i)            so
long as no Default has occurred and is continuing the assigning Lender’s
Commitment after the assignment must be at least $10,000,000.00, and except in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and Pro Rata Share of the Loan at the time owing to it or
in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund as defined in subsection (h) of this Section with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes its Pro Rata Share of the Loan outstanding) subject to each
such assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to Administrative Agent, shall not be
less than $10,000,000 unless each of Administrative Agent and, so long as no
Default has occurred and is continuing, the Operating Partnership otherwise
consents (each such consent not to be unreasonably withheld or delayed);

 

(ii)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with
respect to its Pro Rata Share of the Loan and the Commitment assigned;

 

(iii)          any
assignment of a Commitment must be approved by Administrative Agent and the L/C
Issuer unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and

 

(iv)          the
parties to each assignment shall execute and deliver to Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500, plus the cost of any applicable endorsement to the Title Insurance or
new Title Insurance.

 

Subject to acceptance and
recording thereof by Administrative Agent pursuant to subsection (c) of
this Section, from and after the effective date specified in each Assignment
and Assumption, the  assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement arising after the Assignment and Assumption
becomes effective (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of this Agreement with respect to Borrowers’ obligations surviving
termination of this Agreement).  Upon
request, Administrative Agent shall prepare and Borrowers shall execute and
deliver (i) a Note in the amount so assigned (“Replacement Note”)
to the assignee Lender, and (ii) a 

 

 

56

 

replacement Note
representing the remaining balance of the assigning Lender’s Commitment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

(c)           Administrative Agent, acting solely for this purpose as an
agent of Borrowers, shall forward the Assignment and Assumption and the
Replacement Note to the Title Company for issuance of an applicable endorsement
to the Title Insurance or new Title Insurance, and shall maintain at
Administrative Agent’s Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of Lenders, and the Commitments of, and principal amount of each Lender’s Pro
Rata Share of the Loan owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). 
The entries in the Register shall be conclusive, absent manifest error,
and Borrowers, Administrative Agent and Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by Borrowers and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

 

(d)           Any Lender may, without the consent of, but with prior
notice to Administrative Agent, sell participations to one or more banks or
other entities (a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or its Pro Rata Share of the Loan (including such Lender’s
participations in L/C Obligations) owing to it; provided  that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) Borrowers, Administrative Agent and
the other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this Agreement,
and (iv) except to the extent consented to by Administrative Agent in its
sole discretion with respect to each participation, any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement.

 

(e)           A Participant shall not be entitled to receive any greater
payment under Sections 1.7, 1.8 or 1.9 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant.

 

(f)            Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

(g)           If the consent of the Operating Partnership to an
assignment or to an assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment threshold specified in
clause (i) of the provision to the first sentence of subsection (b) 

 

 

57

 

above),
the Operating Partnership shall be deemed to have given its consent five (5) Business
Days after the date notice thereof has been delivered by the assigning Lender
(through Administrative Agent) unless such consent is expressly refused by the
Operating Partnership on or before such fifth Business Day.

 

(h)           As used herein, the following terms have the following
meanings:

 

(i)            “Eligible
Assignee” means (1) a Lender; (2) an Affiliate of a Lender; (3) an
Approved Fund; and (4) any other person (other than a natural person)
approved by Administrative Agent and, unless a Default has occurred and is
continuing, the Operating Partnership (each such approval not to be
unreasonably withheld or delayed).

 

(ii)           “Fund”
means any person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial real estate
loans and similar extensions of credit in the ordinary course of its business.

 

(iii)          “Approved
Fund” means any Fund that is administered or managed by (1) a Lender, (2) an
Affiliate of a Lender or (3) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(i)            Notwithstanding anything to the contrary contained
herein, if at any time Bank of America, N.A. assigns all of its Commitment and
interest in the Loan pursuant to subsection (b) above, Bank of America,
N.A. may, upon 30 days’ notice to the Operating Partnership and Lenders, resign
as L/C Issuer.  In the event of any such
resignation as L/C Issuer, the Operating Partnership shall be entitled to
appoint from among Lenders a successor L/C Issuer hereunder; provided, however,
that no failure by the Operating Partnership to appoint any such successor
shall affect the resignation of Bank of America, N.A. as L/C Issuer.  If Bank of America, N.A. resigns as L/C
Issuer it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require Lenders to make an advance of Base Rate
Principal or fund risk participations for L/C Borrowings pursuant to Exhibit K).

 

6.6           Confidentiality.  Each of Administrative Agent and Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to it and its Affiliates,
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Representatives to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to
the extent requested by any regulatory authority; (c) to the extent
required by applicable Laws or by any subpoena or similar legal process; (d) to
any other party to this Agreement; (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder; (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty’s or prospective
counterparty’s professional advisors) to any Swap Transaction or 

 

 

58

 

credit
derivative transaction relating to any Borrower and Guarantor and their obligations;
(g) with the consent of any Borrower; or (h) to the extent such
Information (1) becomes publicly available other than as a result of a
breach of this Section or (2) becomes available to Administrative
Agent, any Lender, or any of their respective Affiliates on a nonconfidential
basis from a source other than any Borrower. 
For the purposes of this Section, “Information” means all
information received from any Borrower or Guarantor relating to any Borrower or
Guarantor or their business, other than any such information that is available
to Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Borrower or Guarantor; provided that, in the case of
information received from any Borrower or Guarantor after the Closing Date,
such information is clearly identified in writing at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information. Administrative Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to Administrative Agent and Lenders in connection with the
administration and management of this Agreement, the Loan, the L/C Obligations,
any Swap Transactions, and the Loan Documents.

 

6.7           Set-off.  In addition to any rights and remedies of
Administrative Agent and Lenders provided by Law, upon the occurrence and
during the continuance of any Default, Administrative Agent and each Lender is
authorized at any time and from time to time, without prior notice to the
Operating Partnership, on behalf of Borrowers, any such notice being waived by
Borrowers (to the fullest extent permitted by Law), to set-off and apply any
and all deposits, general or special, time or demand, provisional or final, any
time owing by Administrative Agent or such Lender hereunder or under any other
Loan Document to or for the credit or the account of such parties to the Loan
Documents against any and all Indebtedness then due and payable under the Loan
Documents, irrespective of whether or not Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Indebtedness may be denominated in a currency different from that
of the applicable depositor indebtedness. 
Notwithstanding the foregoing, each Lender hereby agrees as follows:

 

Each Lender hereby acknowledges that the
exercise by any Lender of offset, set-off, banker’s lien, or similar rights
against any deposit account or other property or asset of any Borrower whether
or not located in a state with laws restricting lenders from pursuing multiple
collection methods, may result under such laws in significant impairment of the
ability of all Lenders to recover or collect the Indebtedness.  Therefore, each Lender agrees not to charge
or offset any amount owed to it by any Borrower against any of the accounts,
property or assets of any Borrower or any of its Affiliates held by such
Lender, without the prior written approval of Administrative Agent and the
Required Lenders.

 

Each Lender agrees promptly
to notify the Operating Partnership and Administrative Agent after any such
set-off and application made by such Lender under this Section; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application.

 

 

59

 

6.8           Sharing of
Payments.  If, other than as
expressly provided elsewhere herein, any Lender shall obtain on account of the
portions of the Loan advanced by it, or the participations in L/C Obligations
held by it, any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its ratable share (or other
share contemplated hereunder) thereof, such Lender shall immediately (a) notify
Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the portions of the Loan made by them and/or such
subparticipations in the participations in L/C Obligations held by them, as the
case may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such portions of the Loan or such participations,
as the case may be, pro rata with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from the
purchasing Lender under any of the circumstances described in Section 6.4
(including pursuant to any settlement entered into by the purchasing Lender in
its discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender’s ratable share (according
to the proportion of (i) the amount of such paying Lender’s required
repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered without further interest
thereon.  Each Borrower agrees that any
Lender so purchasing a participation from another Lender may, to the fullest
extent permitted by Law, exercise all its rights of payment (including the
right of set-off), but subject to Section 6.7 with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation. 
Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments.  Each Lender
that purchases a participation pursuant to this Section shall, from and
after the date of such purchase, have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

 

6.9           Amendments; Survival.  Administrative Agent and Lenders shall be
entitled to amend (whether pursuant to a separate intercreditor agreement or
otherwise) any of the terms, conditions or agreements set forth in Article 5
(except the right of the Operating Partnership to consent to certain amendments
referred to in Section 5.9) or as to any other matter in the Loan
Documents respecting payments to Administrative Agent or Lenders or the
required number of the Lenders to approve or disapprove any matter or to take
or refrain from taking any action, without the consent of any Borrower or any
other Person or the execution by any Borrower or any other Person of any such
amendment or intercreditor agreement. 
Subject to the foregoing, Administrative Agent may amend or waive any
provision of this Agreement or any other Loan Document, or consent to any
departure by any party to the Loan Documents therefrom which amendment, waiver
or consent is intended to be within Administrative Agent’s discretion or
determination, or otherwise in Administrative Agent’s reasonable determination
shall not have a Material Adverse Effect; provided however, otherwise no
such amendment, waiver or consent shall be effective unless in writing, signed
by the Required Lenders and Borrowers or the applicable party to the Loan
Documents, as the case may be, and acknowledged by Administrative Agent, and
each such waiver or consent shall be effective only in the specific 

 

 

60

 

instance and for the
specific purpose for which given; provided further however, no such
amendment, waiver or consent shall:

 

(a)           extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 4.2),
without the written consent of such Lender (it being understood that a waiver
of a Default shall not constitute an extension or increase in any Lender’s
Commitment);

 

(b)           postpone any date fixed by this Agreement or any other
Loan Document for any payment, of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan Document,
without the written consent of each Lender directly affected thereby;

 

(c)           reduce the principal of, or the rate of interest specified
herein on, any portion of the Loan or L/C Borrowing, or any fees or other
amounts payable hereunder or under any other Loan Document, without the written
consent of each Lender directly affected thereby; provided, however, that
Administrative Agent may waive any obligation of Borrowers to pay interest at
the Past Due Rate and/or late charges for periods of up to thirty days, and
only the consent of the Required Lenders shall be necessary to waive any
obligation of Borrowers to pay interest at the Past Due Rate and/or late
charges thereafter, or to amend the definition of “Past Due Rate” or “late
charges”;

 

(d)           change the percentage of the Aggregate Commitment or of
the aggregate unpaid principal amount of the Loan and L/C Obligations which is
required for the Lenders or any of them to take any action hereunder, without
the written consent of each Lender;

 

(e)           change the definition of “Pro Rata Share” or “Required
Lender” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;

 

(f)            amend this Section, or Section 6.8, without
the written consent of each Lender;

 

(g)           release the liability of any Borrower or Guarantor without
the written consent of each Lender;

 

(h)           permit the sale, transfer, pledge, mortgage or assignment
of any Collateral or any direct or indirect interest in Borrowers, except as
expressly permitted under the Loan Documents, without the written consent of
each Lender; or

 

(i)            transfer or release any lien on, or after foreclosure or
other acquisition of title by Administrative Agent on behalf of the Lenders
transfer or sell, any Collateral except as permitted in Section 5.10,
without the written consent of each Lender,

 

and, provided  further,
that (i) no amendment, waiver or consent shall, unless in writing and
signed by the L/C Issuer in addition to the Lenders required above, affect the
rights or duties of the L/C Issuer under this Agreement or any Letter of Credit
Application relating to any Letter of Credit issued or to be issued by it; and (ii) no
amendment, waiver or consent shall, unless in 

 

 

61

 

writing and signed by
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of Administrative Agent under this Agreement or any other Loan
Document.  Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased without the consent of such
Lender.  This Agreement shall continue in
full force and effect until the Indebtedness is paid in full and all of
Administrative Agent’s and Lenders’ obligations under this Agreement are
terminated; and all representations and warranties and all provisions herein
for indemnity of the Indemnified Parties, Administrative Agent and Lenders (and
any other provisions herein specified to survive) shall survive payment in
full, satisfaction or discharge of the Indebtedness, the resignation or removal
of Administrative Agent or replacement of any Lender, and any release or
termination of this Agreement or of any other Loan Documents.

 

6.10         Costs and Expenses.  Without limiting any Loan Document and to the
extent not prohibited by applicable Laws, Borrowers shall pay when due, shall
reimburse to Administrative Agent, for itself and for the ratable benefit of
Lenders, on demand and shall indemnify (i) Administrative Agent from, all
out-of-pocket fees, costs, and expenses paid or incurred by Administrative
Agent in connection with the negotiation, preparation and execution of this
Agreement and the other Loan Documents (and any amendments, approvals,
consents, waivers and releases requested, required, proposed or done from time
to time), and (ii) Administrative Agent and Lenders in connection with the
disbursement, administration or collection of the Loan or the enforcement of
the obligations of Borrowers or the exercise of any right or remedy of
Administrative Agent, including (a) all fees and expenses of
Administrative Agent’s counsel; (b) Appraisals obtained in connection with
Section 2.13 hereof, (c) survey costs; (d) title
insurance charges and premiums; (e) title search or examination costs,
including abstracts, abstractors’ certificates and uniform commercial code searches;
(f) judgment and tax lien searches for each Borrower; (g) escrow
fees; (h) fees and costs of environmental investigations, site assessments
and remediations; (i) recordation taxes, documentary taxes, transfer taxes
and mortgage taxes; (j) filing and recording fees; and (k) loan
brokerage fees which Borrowers have specifically agreed to pay.  Borrowers shall pay all costs and expenses
incurred by Administrative Agent, including attorneys’ fees, if the obligations
or any part thereof are sought to be collected by or through an attorney at
Law, whether or not involving probate, appellate, administrative or bankruptcy
proceedings.  Borrowers shall pay all
costs and expenses of complying with the Loan Documents.  Borrowers’ obligations under this Section shall
survive the delivery of the Loan Documents, the making of Advances, the payment
in full of the Indebtedness, the release or reconveyance of any of the Loan
Documents, the foreclosure of the Deed of Trust or conveyance in lieu of
foreclosure, any bankruptcy or other debtor relief proceeding, and any other
event whatsoever (other than an enforceable waiver of Borrowers’ obligations
under this Section by Administrative Agent).

 

6.11         Tax Forms.

 

(a)           (i)            Each
Lender, and each holder of a participation interest herein, that is not a “United
States person” (a “Foreign Lender”) within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended from time to time (“Code”)
shall deliver to Administrative Agent and Borrowers, prior to receipt of any
payment subject to withholding (or upon accepting an assignment or receiving a
participation interest herein), two duly signed 

 

 

62

 

completed
copies of either Form W-8BEN or any successor thereto (relating to such
Foreign Lender and entitling it to a complete exemption from withholding on all
payments to be made to such Foreign Lender by Borrowers pursuant to this
Agreement) or Form W-8ECI or any successor thereto (relating to all
payments to be made to such Foreign Lender by Borrowers pursuant to this
Agreement) of the United States Internal Revenue Service or such other evidence
satisfactory to Borrowers and Administrative Agent that such Foreign Lender is
entitled to an exemption from or reduction of, United States withholding tax,
including any exemption pursuant to Section 881(c) of the Code.  Thereafter and from time to time, each such
Foreign Lender shall (A) promptly submit to Administrative Agent and
Borrowers such additional duly completed and signed copies of one of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States Laws and regulations to avoid, or such evidence as is
satisfactory to Borrowers and Administrative Agent of any available exemption
from or reduction of, United States withholding taxes in respect of all
payments to be made to such Foreign Lender by Borrowers pursuant to the Loan
Documents, (B) promptly notify Administrative Agent and Borrowers of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Foreign Lenders, and
as may be reasonably necessary (including the re-designation of its lending
office, if any) to avoid any requirement of applicable Laws that Borrowers make
any deduction or withholding for taxes from amounts payable to such Foreign
Lender.

 

(ii)           Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any sums paid
or payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to
Administrative Agent on the date when such Foreign Lender ceases to act for its
own account with respect to any portion of any such sums paid or payable, and
at such other times as may be necessary in the determination of Administrative
Agent and Borrowers, in each case in the reasonable exercise of its or their
discretion, (A) two duly signed completed copies of the forms or
statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of United States Internal
Revenue Service Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and any other
certificate or statement of exemption required under the Code, to establish
that such Lender is not acting for its own account with respect to a portion of
any such sums payable to such Lender.

 

(iii)          Borrowers shall not be required to pay any additional
amount to any Foreign Lender under Section 1.11(a) with
respect to any Taxes required to be deducted or withheld (A) on the basis
of the information, certificates or statements of exemption such Lender
transmits with an United States Internal Revenue Service Form W-8IMY
pursuant to this subsection (a) or (B) if such Lender shall have
failed to satisfy the foregoing provisions of this subsection (a); provided
that if such Lender shall have satisfied the requirement of this subsection (a) on
the date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
subsection (a) shall relieve any Borrower of its obligation to pay any
amounts pursuant to Section 1.11 in the event that, as a result of
any change in any applicable law, treaty or governmental rule, regulation or
order, or any change in 

 

 

63

 

the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.

 

(iv)          Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which Borrowers are not required to pay
additional amounts under this subsection (a).

 

(b)           Upon the request of Administrative Agent or Borrowers,
each Lender that is a “United States person” within the meaning of Section 7701(a) (30)
of the Code shall deliver to Administrative Agent and the Operating Partnership
two duly signed completed copies of United States Internal Revenue Service Form W-9.  If such Lender fails to deliver such forms,
then Administrative Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable back-up withholding tax imposed by the
Code, without reduction.

 

(c)           If any Tribunal asserts that Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender
shall indemnify Administrative Agent therefor, including all penalties and
interest and costs and expenses (including attorney fees) of Administrative
Agent.  If any Tribunal asserts that any
Borrower did not properly withhold or backup withhold, as the case may be, any
tax or other amount from payments made to or for the account of any Lender as a
result of such Lender’s failure to timely deliver to the Operating Partnership
the applicable documents contemplated in this Section 6.11, such
Lender shall indemnify such Borrower therefor, including all penalties and
interest and costs and expenses (including attorney fees) of such
Borrower.  The obligation of Lenders
under this subsection shall survive the removal or replacement of a Lender, the
payment of all Indebtedness and the resignation or replacement of
Administrative Agent.

 

6.12         Further Assurances.  Each Borrower will, upon Administrative Agent’s
request, (a) promptly correct any defect, error or omission in any Loan
Document; (b) execute, acknowledge, deliver, procure, record or file such
further instruments and do such further acts as Administrative Agent, in its
good faith business judgment, deems necessary, desirable or proper to carry out
the purposes of the Loan Documents and to identify and subject to the liens and
security interest of the Loan Documents any property intended to be covered
thereby, including any renewals, additions, substitutions, replacements, or
appurtenances to the Collateral; (c) execute, acknowledge, deliver,
procure, file or record any document or instrument Administrative Agent, in its
good faith business judgment, deems necessary, desirable, or proper to protect
the liens or the security interest under the Loan Documents against the rights
or interests of third persons; and (d) provide such certificates,
documents, reports, information, affidavits and other instruments and do such
further acts deemed necessary, desirable or proper by Administrative Agent, in
its good faith business judgment, to comply with the requirements of any agency
having jurisdiction over Administrative Agent. In addition, at any time, and
from time to time, upon request by Administrative Agent or any Lender, each
Borrower will, at Borrowers’ expense, provide any and all further instruments,
certificates and other documents as may, in the opinion of Administrative Agent
or such Lender, in its good faith business judgment, 

 

 

64

 

be
necessary or desirable in order to verify each Borrower’s identity and
background in a manner satisfactory to Administrative Agent or such Lender.

 

6.13         Inducement to
Lenders.  The representations,
warranties, covenant and agreements contained in this Agreement and the other
Loan Documents (a) are made to induce Lenders to make the Loan and extend
any other credit to or for the account of Borrowers pursuant hereto, and
Administrative Agent and Lenders are relying thereon, and will continue to rely
thereon, and (b) shall survive any bankruptcy proceedings involving any
Borrower or the Collateral, foreclosure, or conveyance in lieu of foreclosure; provided,
however, clause (b) preceding shall not be construed to require any
Borrower to perform such covenants and agreements after bankruptcy, foreclosure
or deed in lieu of foreclosure except for indemnity and payment obligations
that relate to liabilities arising prior to such bankruptcy, foreclosure or
deed in lieu of foreclosure and interest accruing thereon thereafter.

 

6.14         Forum.  Each party to this Agreement hereby
irrevocably submits generally and unconditionally for itself and in respect of
its property to the jurisdiction of any state court, or any United States
federal court, sitting in the State specified in Section 6.2 of
this Agreement and to the jurisdiction of any state court or any United States
federal court, sitting in the state in which any of the Collateral is located,
over any suit, action or proceeding arising out of or relating to this
Agreement or the Indebtedness.  Each
Party to this Agreement hereby irrevocably waives, to the fullest extent
permitted by Law, any objection that they may now or hereafter have to the
laying of venue in any such court and any claim that any such court is an
inconvenient forum.  Each Party to this
Agreement hereby agrees and consents that, in addition to any methods of
service of process provided for under applicable Law, all service of process in
any such suit, action or proceeding in any state court, or any United States
federal court, sitting in the state specified in Section 6.2 may be
made by certified or registered mail, return receipt requested, directed to
such party at its address for notice stated in the Loan Documents, or at a
subsequent address of which Administrative Agent received actual notice from
such party in accordance with the Loan Documents, and service so made shall be
complete five (5) days after the same shall have been so mailed.  Nothing herein shall affect the right of
Administrative Agent to serve process in any manner permitted by Law or limit
the right of Administrative Agent to bring proceedings against any party in any
other court or jurisdiction.

 

6.15         Interpretation.  References to “Dollars,” “$,” “money,” “payments”
or other similar financial or monetary terms are references to lawful money of
the United States of America.  References
to Articles, Sections, Exhibits and Schedules are, unless specified otherwise,
references to articles, sections, exhibits and schedules of this
Agreement.  Words of any gender shall
include each other gender.  Words in the
singular shall include the plural and words in the plural shall include the
singular.  References to Borrowers or
Guarantor shall mean, each Person comprising same, jointly and severally.  References to “Persons” shall include both
natural persons and any legal entities, including public or governmental
bodies, agencies or instrumentalities. 
The words “include” and “including” shall be interpreted as if followed
by the words “without limitation”. 
Captions and headings in the Loan Documents are for convenience only and
shall not affect the construction of the Loan Documents.

 

6.16         No Partnership,
etc.  The relationship between
Lenders (including Administrative Agent) and Borrowers is solely that of lender
and borrower.  Neither Administrative
Agent nor 

 

 

65

 

any
Lender has any fiduciary or other special relationship with or duty to any
Borrower and none is created by the Loan Documents.  Nothing contained in the Loan Documents, and
no action taken or omitted pursuant to the Loan Documents, is intended or shall
be construed to create any partnership, joint venture, association, or special
relationship between any Borrower and Administrative Agent or any Lender or in
any way make Administrative Agent or any Lender a co-principal with any
Borrower with reference to the Collateral or otherwise.  In no event shall Administrative Agent’s or
Lenders’ rights and interests under the Loan Documents be construed to give
Administrative Agent or any Lender the right to control, or be deemed to
indicate that Administrative Agent or any Lender is in control of, the
business, properties, management or operations of any Borrower.

 

6.17         Records.  The unpaid amount of the Loan and the amount
of any other credit extended by Administrative Agent or Lenders to or for the
account of each Borrower set forth on the books and records of Administrative
Agent shall be prima facie evidence of the amount thereof owing and unpaid, but
failure to record any such amount on Administrative Agent’s books and records
shall not limit or affect the obligations of each Borrower under the Loan
Documents to make payments on the Loan when due.

 

6.18         Commercial Purpose.  Each Borrower warrants that the Loan is being
made solely to acquire or carry on a business or commercial enterprise, and/or
each Borrower is a business or commercial organization.  Each Borrower further warrants that all of
the proceeds of the Loan shall be used for commercial purposes and stipulates
that the Loan shall be construed for all purposes as a commercial loan, and is
made for other than personal, family, household or agricultural purposes.

 

6.19         Service of Process.  Each Borrower hereby consents to process
being served in any suit, action, or proceeding instituted in connection with
the Loan by (a) the mailing of a copy thereof by certified mail, postage
prepaid, return receipt requested, to the Operating Partnership and (b) serving
a copy thereof to 15601 Dallas Parkway, Suite 600, Addison, Texas  75001 Attention: Gerald J. Reihsen III, the
agent hereby designated and appointed by each Borrower as such Borrower’s agent
for service of process.  Each Borrower
irrevocably agrees that such service shall be deemed to be service of process
upon such Borrower in any such suit, action, or proceeding.  Nothing in any other Loan Document shall
affect the right of Administrative Agent to serve process in any manner
otherwise permitted by Law and nothing in any other Loan Document will limit
the right of Administrative Agent on behalf of the Lenders otherwise to bring
proceedings against any Borrower in the courts of any jurisdiction or
jurisdictions.

 

6.20         USA Patriot Act
Notice.  Each Lender and
Administrative Agent (for themselves and not on behalf of any Lender) hereby
notifies each Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of
each Borrower and other information that will allow such Lender or
Administrative Agent, as applicable, to identify each Borrower in accordance
with the Patriot Act.

 

6.21         Entire Agreement.  The Loan Documents constitute the entire
understanding and agreement between each Borrower, Administrative Agent and
Lenders with respect to the 

 

 

66

 

transactions
arising in connection with the Loan, and supersede all prior written or oral
understandings and agreements between each Borrower, Administrative Agent and
Lenders with respect to the matters addressed in the Loan Documents.  In particular, and without limitation, the
terms of any commitment letter, letter of intent or quote letter by
Administrative Agent or any Lender to make the Loan are merged into the Loan
Documents.  Neither Administrative Agent
nor any Lender has made any commitments to extend the term of the Loan past its
stated maturity date or to provide any Borrower with financing except as set
forth in the Loan Documents.  Except as
incorporated in writing into the Loan Documents, there are not, and were not,
and no Persons are or were authorized by Administrative Agent or any Lender to
make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the matters addressed in the Loan
Documents.

 

6.22         Dispute Resolution.

 

(a)           Arbitration. 
Except to the extent expressly provided below, any Dispute shall, upon
the request of any party, be determined by binding arbitration in accordance
with the Federal Arbitration Act, Title 9, United States Code (or if not
applicable, the applicable state law), the then-current rules for
arbitration of financial services disputes of AAA and the “Special Rules” set
forth below.  In the event of any
inconsistency, the Special Rules shall control.  The filing of a court action is not intended
to constitute a waiver of the right of any Borrower, Administrative Agent, or
any Lender, including the suing party, thereafter to require submittal of the
Dispute to arbitration.  Any party to
this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any Dispute in any court having
jurisdiction over such action.  For the
purposes of this Dispute Resolution Section only, the terms “party” and “parties”
shall include any parent corporation, subsidiary or affiliate of Administrative
Agent involved in the servicing, management or administration of any obligation
described in or evidenced by this Agreement, together with the officers,
employees, successors and assigns of each of the foregoing.

 

(b)           Special Rules.

 

(i)            The arbitration shall be conducted in the City of Dallas,
Texas.

 

(ii)           The arbitration shall be administered by AAA, who will
appoint an arbitrator.  If AAA is
unwilling or unable to administer or legally precluded from administering the
arbitration, or if AAA is unwilling or unable to enforce or legally precluded
from enforcing any and all provisions of this Dispute Resolution Section, then
any party to this Agreement may substitute, without the necessity of the
agreement or consent of the other party or parties, another arbitration
organization that has similar procedures to AAA but that will observe and
enforce any and all provisions of this Dispute Resolution Section.  All Disputes shall be determined by one
arbitrator; however, if the amount in controversy in a Dispute exceeds Five
Million Dollars ($5,000,000), upon the request of any party, the Dispute shall
be decided by three arbitrators (for purposes of this Agreement, referred to
collectively as the “arbitrator”).

 

(iii)          All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration and completed within ninety (90) days
from the date of 

 

 

67

 

commencement; provided, however, that upon a
showing of good cause, the arbitrator shall be permitted to extend the
commencement of such hearing for up to an additional sixty (60) days.

 

(iv)          The judgment and the award, if any, of the arbitrator shall
be issued within thirty (30) days of the close of the hearing.  The arbitrator shall provide a concise
written statement setting forth the reasons for the judgment and for the award,
if any.  The arbitration award, if any,
may be submitted to any court having jurisdiction to be confirmed and enforced,
and such confirmation and enforcement shall not be subject to arbitration.

 

(v)           The arbitrator will give effect to statutes of limitation
and any waivers thereof in determining the disposition of any Dispute and may
dismiss one or more claims in the arbitration on the basis that such claim or
claims is or are barred.  For purposes of
the application of the statute of limitations, the service on AAA under
applicable AAA rules of a notice of Dispute is the equivalent of the
filing of a lawsuit.

 

(vi)          Any dispute concerning this Dispute Resolution Section,
including any such dispute as to the validity or enforceability of this Dispute
Resolution Section of or whether a Dispute is arbitrable, shall be
determined by the arbitrator; provided, however, that the arbitrator shall not
be permitted to vary the express provisions of these Special Rules or the
Reservations of Rights in subsection (c) below.

 

(vii)         The arbitrator shall have the power to award legal fees and
costs pursuant to the terms of this Agreement.

 

(viii)        The arbitration will take place on an
individual basis without reference to, resort to, or consideration of any form
of class or class action.

 

(c)           Reservations of Rights.  Nothing in this Agreement shall be deemed to (i) limit
the applicability of any otherwise applicable statutes of limitation and any
waivers contained in this Agreement or any other Loan Document, or (ii) apply
to or limit the right of Administrative Agent or any Lender (A) to
exercise self help remedies such as (but not limited to) setoff, or (B) to
foreclose judicially or nonjudicially against any real or personal property
collateral, or to exercise judicial or nonjudicial power of sale rights, (C) to
obtain from a court provisional or ancillary remedies such as (but not limited
to) injunctive relief, writ of possession, prejudgment attachment, or the
appointment of a receiver, or (D) to pursue rights against a party to this
Agreement in a third-party proceeding in any action brought against either of
the Agents or any Lender in a state, federal or international court, tribunal
or hearing body (including actions in specialty courts, such as bankruptcy and
patent courts).  Subject to the terms of
this Agreement, Administrative Agent and any Lender may exercise the rights set
forth in clauses (A) through (D), inclusive, before, during or after the
pendency of any arbitration proceeding brought pursuant to this Agreement.
Neither the exercise of self help remedies nor the institution or maintenance
of an action for foreclosure or provisional or ancillary remedies shall
constitute a waiver of the right of any party, including the claimant in any
such action, to arbitrate the merits of the Dispute occasioning resort to such
remedies.  No provision in the Loan
Documents 

 

 

68

 

regarding
submission to jurisdiction and/or venue in any court is intended or shall be
construed to be in derogation of the provisions in any Loan Document for
arbitration of any Dispute.

 

(d)           Conflicting Provisions for Dispute Resolution.  If there is any conflict between the terms,
conditions and provisions of this Section and those of any other provision
or agreement for arbitration or dispute resolution, the terms, conditions and
provisions of this Section shall prevail as to any Dispute arising out of
or relating to (i) this Agreement, (ii) any other Loan Document, (iii) any
related agreements or instruments, or (iv) the transaction contemplated
herein or therein (including any claim based on or arising from an alleged
personal injury or business tort).  In
any other situation, if the resolution of a given Dispute is specifically
governed by another provision or agreement for arbitration or dispute
resolution, the other provision or agreement shall prevail with respect to said
Dispute.

 

(e)           Jury Trial Waiver in Arbitration.  By agreeing to this Section, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in
respect of any Dispute.

 

6.23         Waiver of Jury
Trial.  WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE”
(FOR PURPOSES OF THIS SECTION, AS DEFINED ABOVE) AS SET FORTH IN THIS
AGREEMENT, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS
DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE
OR NOT REQUIRED TO BE ARBITRATED, THE PARTIES HERETO WAIVE TRIAL BY JURY IN
RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.”  THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY THE PARTIES HERETO, AND THE PARTIES HERETO HEREBY REPRESENT
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR
ENTITY ACTING BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR ANY LENDER TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THIS AGREEMENT. 
THE PARTIES HERETO ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.  EACH PARTY HERETO FURTHER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.

 

THE WRITTEN LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

 

69

 

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

70

 

EXECUTED
and DELIVERED as of the date set forth above.

 

	
  Address for notices for all Borrowers:  

   

  Behringer Harvard Opportunity  OP I, LP  

  c/o Behringer Harvard Funds 15601 Dallas
  Parkway, Suite 600 

  Addison, Texas 75001 

  Attention: Gerald J. Reihsen, III  

  Telephone: (214) 655-1600  

  Telecopier: (214) 655-1610

  	
   

  	
  OPERATING PARTNERSHIP:  

   

  BEHRINGER HARVARD OPPORTUNITY OP I, LP,
  a Texas limited partnership  

   

  
	
  By:

  	
  BHO, Inc., a Delaware corporation, its
  general partner 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III 

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III 

  
	
   

  	
  Title:

  	
  Executive Vice President-Corporate
  Development & Legal Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY OBLIGOR:  

   

  BEHRINGER HARVARD BOWEN ROAD LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD WHITEWATER,
  LLC, 

  a Delaware limited liability company 

   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Secretary

  
											

 

 

	
   

  	
  BEHRINGER HARVARD LAS COLINAS
  LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD BENT TREE LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD AUGUSTA LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
						

 

 

	
   

  	
  BEHRINGER HARVARD NORTHPOINT LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD REGENCY LP,  
 a Delaware limited partnership   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President — Corporate
  Development & Legal and Secretary

  
	
   

  	
   

  	
   

  
						

 

 

 

	
  Administrative Agent’s Address for Notices:  

   

  901 Main Street, 20th Floor  

  Dallas, Texas 75202  

  Attention: Real Estate Loan Administration

  	
   

  	
  ADMINISTRATIVE AGENT, L/C ISSUER and LENDER: 

   

  BANK OF AMERICA, N.A., individually as Administrative Agent and L/C
  Issuer and Lender 

   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jamison L. Fox 

  
	
  Name:

  	
  Jamison L. Fox 

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  

 

 

 

 

EXHIBIT A

 

Legal Description of Existing Projects in Collateral Pool

 

 

1

 

EXHIBIT A-1

 

Preliminary Plat - Bowen Road

 

 

 

EXHIBIT B

 

DEFINITIONS AND FINANCIAL STATEMENTS

 

1.             DEFINITIONS.
As used in this Agreement and the attached exhibits, the following terms shall
have the following meanings:

 

“Acquisition Cost”
means, as to each Project, the sum of (i) the actual, gross purchase price
paid by the applicable Borrower to acquire such Project, as verified by
Administrative Agent in its reasonable discretion based upon the final
settlement or closing statement executed by such Borrower and the seller of
such Project, and (ii) expenses actually incurred by the applicable
Borrower for capital improvements made by such Borrower to the Project from
time to time.  For purposes of this
Agreement, the Acquisition Cost of any Project shall be adjusted, no more
frequently than quarterly and at the request of the applicable Borrower, to
include expenses actually incurred by the applicable Borrower for capital
improvements to a Project, only after such expenditures have been verified by
Administrative Agent after receipt and review by Administrative Agent of
evidence reasonably acceptable to Administrative Agent including paid receipts
and, if required by Administrative Agent, a current Engineering Report for such
Project, evidencing the completion of such capital improvements (provided that
Administrative Agent shall not require an Engineering Report more frequently
than once annually).

 

“Adjusted LIBOR Rate”
means the quotient obtained by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the LIBOR Reserve Percentage,
where,

 

“London Interbank Offered
Rate” means, with respect to any applicable Interest Period, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as selected by Administrative Agent in its good faith
business judgment from time to time) at approximately 11:00 a.m. London
time two (2) London Banking Days before the commencement of the Interest
Period, for deposits in U.S. Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time
for any reason, then the rate for that Interest Period will be determined by
such alternate method as reasonably selected by Administrative Agent; and

 

“LIBOR Reserve Percentage”
means, with respect to any applicable Interest Period, for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including basic,
supplemental, emergency, special and marginal reserves) generally applicable to
financial institutions regulated by the Federal Reserve Board whether or not
applicable to any Lender, in respect of “Eurocurrency liabilities” (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Rate Principal is determined),
whether or not any Lender has any Eurocurrency liabilities.  The LIBOR Rate shall be adjusted
automatically as of the effective date of each change in the LIBOR Reserve
Percentage.

 

 

1

 

“Administrative
Agent” means Bank of America, N.A., in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent
Advances” has the meaning set forth in Section 1.14 of this
Agreement.

 

“Administrative Agent’s
Office” means Administrative Agent’s address and, as appropriate, account
as set forth on the Schedule of Lenders, or such other address or account as
Administrative Agent hereafter may from time to time notify the Operating
Partnership and Lenders.

 

“Administrative Agent’s
Time” means the time of day observed in the city where Administrative Agent’s
Office is located.

 

“Admission Date”
means the date on which any Project (other than the existing Projects described
on Exhibit A attached hereto) is added to the Collateral Pool in
accordance with the provisions of Exhibit D to this Agreement.

 

“Advance” shall mean
all sums outstanding under each Note and an advance of the Loan hereafter made
in accordance with Exhibit F.

 

“Advance Request”
means a notice substantially in the form of Exhibit F-1 attached
hereto with respect to a proposed Advance hereunder the proceeds of which shall
be used for the purposes permitted by this Agreement.

 

“Advance
Termination Date” means the date which is ten (10) days prior to the
Maturity Date, as the same may be extended pursuant to this Agreement.

 

“Affiliate” means any
Person directly or indirectly through one or more intermediaries controlling,
controlled by, or under direct or indirect common control with, such
Person.  A Person shall be deemed to be “controlled
by” any other Person if such other Person possesses, directly or indirectly,
power (a) to vote 10% or more of the Securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing members
or partners or the equivalent; or (b) to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.

 

“Agent-Related Persons”
means Administrative Agent, together with its Affiliates (including Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.

 

“Aggregate
Commitment” means the Commitments of all the Lenders.

 

“Agreement” has the
meaning set forth in the introductory paragraph of this Agreement, and includes
all exhibits attached hereto and referenced in Section 1.1, as it
may be amended, restated, supplemented or otherwise modified from time to time

 

“ALTA” means the
American Land Title Association or any successor thereto.

 

 

2

 

“Annualized Adjusted
Expenses” means (A) the greater of (1) the actual cash operating
expenses of the Collateral Pool (excluding non-cash expenses such as (without
limitation) depreciation and expenses paid from reserves) calculated for each
calendar month during the trailing three (3) month period, annualized, but
(a) excluding payments of principal or interest on the Loan during such
twelve (12) month period; and (b) adjusted to include (without duplication
of the above) appropriate monthly accruals for the Collateral Pool for such
twelve month period: (i) the greater of the actual management fees payable
by each Borrower or three percent (3.00%) per annum, and (ii) periodic
expenses such as property taxes and insurance, or (2) the underwritten,
annualized projected operating expenses per square foot of leaseable space in
the Improvements, as determined by Administrative Agent pursuant to a current
Appraisal of each Project included within the Collateral Pool, prepared by an
appraiser acceptable to Administrative Agent, less (B) an amount
equal to $0.75 per square foot of leaseable space in the Improvements per annum
for a reserve for repairs and replacements (whether or not such reserve is
actually funded by Borrowers).

 

“Annualized Adjusted
Income” means the actual gross income from the Collateral Pool (including
parking payments, tax reimbursements, common area charges and Tenant
Reimbursements), paid to each Borrower during the most recent trailing three (3) calendar
months prior to the date of calculation by Administrative Agent hereunder,
annualized, pursuant to the terms of Qualified Leases in effect during such
trailing three (3) month period, adjusted for each calendar month during
such twelve (12) month period as necessary to reflect a vacancy factor equal to
the greater of (i) the actual vacancy of the Collateral Pool, or (ii) eight
percent (8.00%).  Annualized Adjusted
Income shall not include (i) base rental paid by Tenants pursuant to any
Leases that do not constitute Qualified Leases, (ii) any security
deposits, late fees or charges, and other penalties under any Lease other than
Tenant Reimbursements, (iii) free rent or prepaid rent received from any
Tenant under the terms of any Qualified Lease which is not yet due and payable,
or (iv) income or other payments from oil and gas leases which are not
owned by a Borrower and not part of the Collateral encumbered by the lien of a
Deed of Trust.

 

“Applicable
Margin” means, with respect to any Letter of Credit fee, LIBOR Rate
Principal, or Base Rate Principal, the interest rate per annum set forth in the
column in the table below directly opposite the applicable Debt Service
Coverage Ratio for the Collateral Pool as of any Test Date:

 

	
  DEBT SERVICE COVERAGE RATIO
  (DSCR)

  	
   

  	
  APPLICABLE
  MARGIN FOR LIBOR RATE

  PRINCIPAL AND LETTER OF CREDIT FEES

  	
   

  	
  APPLICABLE
  MARGIN FOR

  BASE RATE PRINCIPAL

  
	
  If the DSCR is equal to or greater than 1.20:1, then
  the Applicable Margin is "

  	
   

  	
  150 basis points

  	
   

  	
  0 basis points

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If the DSCR is equal to or greater than 1.15:1 but less
  than 1.20:1, then the Applicable Margin is "

  	
   

  	
  160 basis points

  	
   

  	
  10 basis points

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If the DSCR is less than 1.15:1, then the Applicable
  Margin is "

  	
   

  	
  170 basis points

  	
   

  	
  20 basis points

  

 

 

3

 

The
Applicable Margin shall be determined as of each Test Date, based upon the Debt
Service Coverage Ratio as of such Test Date, and the interest rate shall be
adjusted effective as of the first day of the first calendar month immediately
following the review and approval by Administrative Agent of the most recent
Borrower’s NOI Certificate required to be delivered by the Operating
Partnership pursuant to Exhibit B of this Agreement.  Pursuant to Exhibit B, the
Operating Partnership is required to deliver updated Borrower’s NOI
Certificates within 60 days after each Test Date and, subject to Exhibit F,
with each Advance Request.

 

“Appraisal” means,
with respect to each Project, a written appraisal of such Project prepared by
an appraiser acceptable to Administrative Agent and requested by Administrative
Agent, in each case in form, content and methodology satisfactory to
Administrative Agent and in compliance with all applicable legal and regulatory
requirements (including the requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 (or any successor statute thereto), and
the regulations promulgated thereunder).

 

“Approved Lease” is
defined in Exhibit I attached hereto.

 

“Approved O&G Leases”
means, together, (i) that certain Oil and Gas Lease (Restricted Surface
Use) dated as of December 7, 2007, executed by Behringer Harvard Bowen
Minerals LP, as lessor, Paloma Barnett, LLC, as lessee and Behringer Harvard
Bowen Road LP, as surface owner, and (ii) that certain Paid Up Oil and Gas
Lease to be executed by Behringer Harvard Bowen Minerals, LP, as lessor and
Chesapeake Exploration LLC, as lessee in the form provided to Lender.

 

“Arranger” means Banc
of America Securities LLC, as lead arranger and book manager.

 

“Assignment of Rents and
Leases” means each Assignment of Leases and Rents executed and acknowledged
by a Borrower, as applicable, in favor of Administrative Agent, for the ratable
benefit of the Lenders, in substantially the form of that executed on the Closing
Date or such other form reasonably acceptable to Administrative Agent, as the
same may be amended, restated, supplemented, consolidated, extended or
otherwise modified from time to time in accordance with the terms thereof and
hereof; provided, however, that if any Project hereafter added to the
Collateral Pool is located outside the States of Texas and Minnesota, the
Assignment of Rents and Leases shall be modified, as required by Administrative
Agent upon consultation with legal counsel licensed in such other state, to
conform to and include all provisions customarily granted to lenders for
secured transactions in such other state.

 

“Assignment and
Assumption” means an Assignment and Assumption substantially in the form of
Exhibit L.

 

“Base
Rate” means, on any day, a simple rate per annum equal to the Prime Rate
for that day.  Without notice to any
Borrower or anyone else, the Base Rate shall automatically fluctuate upward and
downward as and in the amount by which the Prime Rate fluctuates.

 

“Base
Rate Principal” means, at any time, the Principal Debt minus the portion,
if any, of such Principal Debt which is LIBOR Rate Principal.

 

 

4

 

“Borrowers” means,
collectively, the Operating Partnership and each Subsidiary Obligor now or
hereafter made a party to this Agreement and the term “Borrower” means,
individually, any of the foregoing Persons.

 

“Borrowers’ NOI
Certificate” means a certificate, in the form of that attached hereto as Exhibit O,
signed by a duly authorized officer of the Operating Partnership setting forth
the NOI for the Collateral Pool, based upon the most recent three (3) trailing
calendar months, along with such documents and information as Administrative
Agent may reasonably require to substantiate the NOI reflected therein.

 

“Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks
are authorized to close under the Laws of, or are in fact closed in, the state
where Administrative Agent’s Office is located.

 

“Cash Collateralize”
has the meaning set forth in Exhibit K.

 

“Change
of Control” means the occurrence of any of the following events: (a) Guarantor
shall cease to own and control at least 80% of the outstanding Securities of
the Operating Partnership; or (b) the Operating Partnership shall cease
to, directly or indirectly, own and control 100% of each class of the
outstanding Securities of each of the Subsidiary Obligors.

 

“Claims”
means any and all claims, demands, liabilities (including strict liability),
losses, damages (including consequential damages), causes of action, judgments,
penalties, fines, costs and expenses (including fees, costs and expenses of
attorneys, consultants, contractors, experts and laboratories incurred in good
faith), of any and every kind of character, contingent or otherwise, matured or
unmatured, known or unknown, foreseeable or unforeseeable.

 

“Closing Date” means
the date of this Agreement.

 

“Collateral” means
all property, whether real, personal or mixed, tangible or intangible, owned or
to be owned or leased or to be leased or otherwise held or to be held by any
Borrower or in which any Borrower has or shall acquire an interest, to the
extent of such Borrower’s interest therein, now or hereafter granted, assigned,
transferred, mortgaged or pledged to Administrative Agent and/or the Lenders or
in which a lien is granted to Administrative Agent and/or the Lenders to secure
all or any part of the Obligations, whether pursuant to the Security Documents
or otherwise, including the Land, Improvements and other property encumbered by
any Deed of Trust, the Leases and Rents, and any and all proceeds of the
foregoing.

 

“Collateral Value”
means, as of any Test Date or Admission Date (with respect to Projects added to
the Collateral Pool prior to any Test Date), for each Project now or hereafter
included within the Collateral Pool, an amount equal to the lower of the following:

 

(i)            an
amount equal to seventy-five percent (75%) of the “stabilized value” of such
Project, based upon the most recent Appraisal of such Project; and

 

(ii)           an
amount equal to seventy-five percent (75%) of the total Acquisition Cost of
such Project approved by Administrative Agent.

 

 

5

 

“Commitment” means,
as to each Lender, its obligation to (i) advance its Pro Rata Share of the
Loan, and (ii) purchase participations in L/C Obligations, in an aggregate
principal amount not exceeding the amount set forth opposite such Lender’s name
on the Schedule of Lenders at any one time outstanding, as such amount may be
reduced or adjusted from time to time in accordance with this Agreement.

 

“Commitment Usage”
means, at the time in question, the unpaid principal balance of the Loan plus
the amount of all L/C Obligations.

 

“Contingent Liability”
means, with respect to any Person, each obligation and liability of such Person
and all such obligations and liabilities of such Person incurred pursuant to
any agreement, undertaking or arrangement by which such Person:  (a) guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor against loss)
the indebtedness, dividend, obligation or other liability of any other Person
in any manner (other than by endorsement of instruments in the course of
collection), including any indebtedness, dividend or other obligation which may
be issued or incurred at some future time; (b) guarantees the payment of
dividends or other distributions upon the Securities of any other Person; (c) undertakes
or agrees (whether contingently or otherwise): 
(i) to purchase, repurchase, or otherwise acquire any indebtedness,
obligation or liability of any other Person or any property or assets
constituting security therefore, (ii) to advance or provide funds for the
payment or discharge of any indebtedness, obligation or liability of any other
Person (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain solvency, assets, level of income,
working capital or other financial condition of any other Person, or (iii) to
make payment to any other Person other than for value received; (d) agrees
to lease property or to purchase Securities, property or services from such
other Person with the purpose or intent of assuring the owner of such
indebtedness or obligation of the ability of such other Person to make payment
of the indebtedness or obligation; (e) to induce the issuance of, or in
connection with the issuance of, any letter of credit for the benefit of such
other Person; or (f) undertakes or agrees otherwise to assure a creditor
against loss.  The amount of any
Contingent Liability shall be deemed to be the outstanding principal amount (or
maximum permitted principal amount, if larger) of the indebtedness, obligation
or other liability guaranteed or supported thereby.  For purposes of this Agreement, the term “Contingent
Liability” shall not include any Excluded Liabilities.

 

“Debt” of any Person
means, without duplication, (a) all indebtedness of such Person, (b) all
borrowed money of such Person, whether or not evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person as lessee
under capital leases which have been or should be recorded as liabilities on a
balance sheet of such Person in accordance with GAAP, (d) all obligations
of such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable in the ordinary course of business), (e) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person; provided that if such
Person has not assumed or otherwise become liable for such indebtedness, such
indebtedness shall be measured at the fair market value of such property
securing such indebtedness at the time of determination, (f) all
obligations, contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn), bankers’ acceptances and similar
obligations issued for the account of 

 

 

6

 

such
Person (including the Letters of Credit), (g) all Swap Transactions and
Unrelated Swap Transactions of such Person to the extent the same constitute a
liability (instead of asset) of such Person, (h) all Contingent
Liabilities of such Person, (i) all Debt of any partnership of which such
Person is a general partner and (j) any Securities or other equity
instruments issued by such Person, whether or not mandatory redeemable, that
under GAAP are characterized as debt, whether pursuant to Financial Accounting
Standards Board Issuance No. 150 or otherwise.

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights
of creditors generally.

 

“Debt
Service” means for any twelve (12) month period, the hypothetical monthly
payments of principal and interest which would be required for each month
during such period, if the Total Outstandings were to be fully amortized in
consecutive, level payments of principal and interest over a thirty (30) year
period at an interest rate per annum equivalent to the greater of (A) 7.0%
or (B) 1.75% plus the Treasury Rate.

 

“Debt
Service Coverage Ratio” means the ratio of the NOI of the Collateral Pool,
determined as of any Test Date or Admission Date, as applicable, divided by the
Debt Service, determined as of the same Test Date or Admission Date.

 

“Deed of Trust” means
each deed of trust, mortgage, and/or deed to secure debt, as applicable, now or
hereafter executed and acknowledged by any Borrower in favor of Administrative
Agent for the ratable benefit of the Lenders (or, in the case of a deed of
trust, to a trustee for the benefit of the Agent and the Lenders) in form
acceptable to Administrative Agent, as each such agreement may be amended,
restated, supplemented,  consolidated,
extended or otherwise modified from time to time in accordance with the terms
thereof and hereof.

 

“Default”
has the meaning set forth in Section 4.1 of this Agreement.

 

“Defaulting
Lender” means a Lender that fails to pay its Pro Rata Share of a Payment
Amount within five (5) Business Days after notice from Administrative
Agent, until such Lender cures such failure as permitted in this Agreement.

 

“Defaulting
Lender Amount” means the Defaulting Lender’s Pro Rata Share of a Payment
Amount.

 

“Defaulting
Lender Payment Amounts” means a Defaulting Lender Amount plus interest from
the date such Defaulting Lender Amount was funded by Administrative Agent
and/or an Electing Lender, as applicable, to the date such amount is repaid to
Administrative Agent and/or such Electing Lender, as applicable, at the rate
per annum applicable to such Defaulting Lender Amount under the Loan or
otherwise at the Base Rate.

 

“Dispute” means any
controversy, claim or dispute between or among the parties to this Agreement,
including any such controversy, claim or dispute arising out of or relating to (a) this
Agreement, (b) any other Loan Document, (c) any related agreements or
instruments, or (d) the 

 

 

7

 

transaction
contemplated herein or therein (including any claim based on or arising from an
alleged personal injury or business tort).

 

“Eligible
Assignee” has the meaning set forth in Section 6.5.

 

“Engineer” means any
reputable engineer approved by Administrative Agent (not to be unreasonably
withheld) licensed as such in the state in which the applicable Project in
question is located.

 

“Engineering Report”
means, with respect to any Project, a written report prepared by an Engineer,
describing  and analyzing the physical
condition of the Improvements comprising part of such Project, describing any
necessary or recommended repairs, estimating the cost of such repairs and
otherwise in form and substance reasonably satisfactory to Administrative
Agent.

 

“Environmental Indemnity”
means each Environmental Indemnity Agreement executed and acknowledged by each
Borrower and Guarantor, in favor of Administrative Agent, for the ratable
benefit of the Lenders, in form acceptable to Administrative Agent, as the same
may be amended, restated, supplemented, consolidated, extended or otherwise
modified from time to time in accordance with the terms thereof and hereof.

 

“Excluded Liabilities”
means, as to any Person, any Debt for which the recourse liability of such
Person has been unconditionally (A) reduced to zero because of the completion
of construction of the improvements financed by such Debt, the issuance of
certificates of occupancy, the achievement of specified income performance
criteria, or some other similar criteria, or (B) limited to liability for
loss incurred by the obligee of the Debt caused by (i) fraud; (ii) any
untruth or inaccuracy in any instrument or information delivered to such
obligee by or on behalf of such Person as a condition to or in connection with
the execution of such guaranty or other agreement; (iii) any material
untruth or inaccuracy or omission in any representation or warranty; (iv) the
misapplication or misuse of any insurance proceeds or condemnation awards, or
any revenues, rents, issues, accounts, profits, accounts receivable and income
in accordance with the terms of such guaranty or other agreement; (vi) environmental
liabilities and indemnities; (vii) the failure to timely pay taxes and
general and special assessments, or (viii) other similar acts or omissions
specified in the guaranty or other agreement executed by such Person.

 

“Federal Funds
Rate” means, for any day, the rate per annum equal to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upwards to the next higher 1/100 of 1%) charged to Bank of America,
N.A. on such day on such transactions as determined by Administrative Agent.

 

 

8

 

“Fee Agreement” means
that certain letter agreement executed by the Operating Partnership, on behalf
of the Subsidiary Obligors, Arranger and Bank of America, N.A., for its own
account.

 

“Financial Statements”
means (i) for each reporting party other than an individual, a balance
sheet, income statement, statements of cash flow and amounts and sources of contingent
liabilities, a reconciliation of changes in equity and liquidity verification,
and unless Administrative Agent otherwise consents, consolidated and
consolidating statements if the reporting party is a holding company or a
parent of a subsidiary entity, each prepared in accordance with GAAP; and (ii) for
each reporting party who is an individual, a balance sheet, statements of
amount and sources of contingent liabilities, sources and uses of cash and
liquidity verification and, unless Administrative Agent otherwise consents,
Financial Statements for each entity owned or jointly owned by the reporting
party, each prepared in accordance with GAAP. 
For purposes of this definition and any covenant requiring the delivery
of Financial Statements, each party for whom Financial Statements are required
is a “reporting party” and a specified period to which the required Financial
Statements relate is a “reporting period”.

 

“Funding
Date” means the date on which an Advance of the Loan shall occur.

 

“GAAP” means generally
accepted accounting principles set forth in opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, in each case as
the same are applicable to the circumstances as of the date of determination.

 

“Guarantor” means
Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation.

 

“Guaranty” means each
guaranty agreement executed by Guarantor to Administrative Agent, for the
ratable benefit of the Lenders, with regard to Borrowers’ duties and
obligations under the Loan Documents, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.

 

“Improvements”
means all buildings, structures, fixtures, tenant improvements and
other improvements of every kind and description now or hereafter located in or
on or attached to any Land, including all building materials, water, sanitary
and storm sewers, drainage, electricity, steam, gas, telephone and other
utility facilities, parking areas, roads, driveways, walks and other site
improvements; and all additions and betterments thereto and all renewals,
substitutions and replacements thereof.

 

“Indebtedness” means (i) any
and all indebtedness to Administrative Agent, L/C Issuer or Lenders evidenced,
governed or secured by, or arising under, any of the Loan Documents, including
the Loan, and all Letters of Credit, and (ii) any and all indebtedness
owed to Swap Bank pursuant to any Swap Transactions.

 

“Indemnified Liabilities”
has the meaning set forth in Section 6.1.

 

 

9

 

“Indemnified
Parties” means (i) Administrative Agent on behalf of itself and
the Lenders, and each Lender; (ii) the Trustee(s) under any Deed of
Trust (the “Trustee”); (ii) any Persons or entities owned or controlled
by, owning or controlling, or under common control or affiliated with Lender
and/or Trustee; (iii) any participants in the Loan; (iv) the
directors, officers, partners, employees and agents of Administrative Agent or
any Lender and/or Trustee, and/or such Persons; and (v) the heirs,
personal representatives, successors and assigns of each of the foregoing
Persons.

 

“Interest Period”
means with respect to any LIBOR Rate Principal, the period commencing on the
date such LIBOR Rate Principal is disbursed or on the date on which the
Principal Debt or any portion thereof is converted into or continued as such
LIBOR Rate Principal, and ending on the date one (1), two (2), three (3), or
six (6) months thereafter, as elected by the Operating Partnership in the
applicable Rate Election Notice; provided  that:

 

(i)            Each Interest Period must commence on a LIBOR Business
Day;

 

(ii)           In the case of the continuation of LIBOR Rate Principal,
the Interest Period applicable after the continuation of such LIBOR Rate Principal
shall commence on the last day of the preceding Interest Period;

 

(iii)          The last day for each
Interest Period and the actual number of days during the Interest Period shall
be determined by Administrative Agent using the practices of the London interbank
eurodollar market; and

 

(iv)          No Interest Period shall extend beyond the Maturity Date,
and any Interest Period which begins before the Maturity Date and would
otherwise end after the Maturity Date shall instead end on the Maturity Date.

 

“L/C Borrowing” means
an extension of credit resulting from a drawing under any Letter of Credit
which has not been reimbursed on the date when made or refinanced as a Loan
advance.

 

“L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the renewal or increase of the amount thereof.

 

“L/C Issuer” means
Bank of America, N.A. in its capacity as issuer of Letters of Credit hereunder
or any successor issuer of Letter of Credit hereunder.

 

“L/C Obligations”
means, as at any date of determination, the aggregate undrawn face amount of
all outstanding Letters of Credit plus the aggregate of all L/C
Borrowings.

 

“Land” means,
collectively, the real property listed on Exhibit A attached hereto
and all other real property owned by any Borrower and more particularly
described in Exhibit A to each Deed of Trust executed by any
Borrower, together with all strips and gores within or adjoining such real
property, all estate, right, title, interest, claim or demand whatsoever of any
Borrower in the streets, roads, sidewalks, alleys, and ways adjacent thereto
(whether or not vacated and whether public or private, and whether open or
proposed), all of the tenements, hereditaments, easements, reciprocal easement
agreements, rights to the use of common drive entries, rights-of-

 

 

10

 

way
and other rights, privileges and appurtenances thereunto belonging or in any
way pertaining thereto.

 

“Laws” means all
constitutions, treaties, statutes, laws, ordinances, regulations, rules,
orders, writs, injunctions, or decrees of the United States of America, any
state or commonwealth, any municipality, any foreign country, any territory or
possession, or any Tribunal.

 

“Lease” means any
leases, licenses, concession agreements, franchise and other occupancy
agreements and other agreements demising, leasing or granting rights of
possession or use or, to the extent of the interest therein of any Borrower,
any sublease, subsublease or sublicense, including leases regarding oil, gas
and other minerals, which now or hereafter may affect the Collateral or any
part thereof or interest therein, including any agreement relating to a loan or
other advance of funds made in connection with any such lease, license,
concession agreement, franchise or other occupancy agreement and such sublease,
subsublease or sublicense, and every amendment, restatement, supplement
consolidation or other modification of or other agreement relating to or
entered into in connection with such lease, license, concession agreement,
franchise or other occupancy agreement and such sublease, subsublease or
sublicense, and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto, and any guarantees of leasing commissions.

 

“Lender”
means each lender from time to time  made
a party to this Agreement and L/C Issuer.

 

“Lending
Office” means, as to any Lender, the office or offices of
such Lender described as such on the Schedule of Lenders, or such other
office or offices as such Lender may from time to time notify the Operating
Partnership and Administrative Agent.

 

“Letter of Credit”
means any letter of credit issued hereunder.

 

“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a letter of credit in the form approved by L/C Issuer.

 

“Letter of Credit
Sublimit Expiration Date” means the day that is ten (10) days prior to
the Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).

 

“Letter of Credit
Sublimit” means an amount equal to $20,000,000.00.  The Letter of Credit Sublimit is part of, and
not in addition to, the Aggregate Commitment.

 

“LIBOR
Business Day” means a Business Day which is also a London Banking Day.

 

“LIBOR
Rate” means for any applicable Interest Period for any LIBOR Rate
Principal, a simple rate per annum equal to the Adjusted LIBOR Rate.

 

“LIBOR
Rate Election” means an election by the Operating Partnership of an
applicable LIBOR Rate in accordance with this Agreement.

 

 

11

 

“LIBOR
Rate Principal” means any portion of the Principal Debt which bears
interest at an applicable LIBOR Rate at the time in question.

 

“Lien” means any lien
(including any lien or security title granted pursuant to any mortgage, deed of
trust or deed to secure debt), pledge, hypothecation, assignment, security
interest, charge, levy, attachment, restraint or encumbrance of any kind
granted as security for a debt obligation (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest).

 

“Loan” means the
aggregate of all Advances made by the Lenders to any Borrower pursuant to the
terms of this Agreement.

 

“Loan Assumption
Agreement” means each Loan Assumption Agreement executed and acknowledged
by a Subsidiary Obligor, in favor of Administrative Agent, for the ratable
benefit of the Lenders, in the form of that attached hereto as Exhibit H,
as the same may be amended, restated, supplemented, consolidated, extended or
otherwise modified from time to time in accordance with the terms thereof and
hereof.

 

“Loan Documents”
means this Agreement (including all exhibits), the Notes, the Security
Documents, each Guaranty, each Loan Assumption Agreement, the Fee Agreement,
each Advance Request, any and all documents, instruments or agreements executed
and delivered to evidence, secure or in connection with all Letters of Credit,
each Master Agreement executed in connection with any Swap Transaction, and
such other documents evidencing, securing or pertaining to the Loan or any Swap
Transaction as shall, from time to time, be executed and/or delivered by any
Borrower, Guarantor, or any other Person to Administrative Agent, on behalf of
the Lenders, pursuant to this Agreement or any such Master Agreement, as the
same may be amended, modified, restated, replaced and supplemented from time to
time.

 

“LIBOR
Business Day” means a day on which dealings in dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

 

“Master Agreement”
means any form of master agreement published by the International Swaps and
Derivatives Association, Inc., or any other master agreement, entered into
between any Borrower in respect of any Swap Transaction or Unrelated Swap Transaction,
together with any related schedules, as amended, supplemented, superseded or
replaced from time to time, relating to or governing any or all of the
foregoing.

 

“Material Adverse Effect”
means (a) a material adverse change in, or a material adverse effect upon,
the Collateral, or the operations, business, properties, condition (financial
or otherwise) or prospects of the Operating Partnership or Guarantor and their
Subsidiaries taken as a whole; or (b) the business or financial ability of
any Borrower or Guarantor to fulfill any material obligation under the Loan
Documents is materially impaired;  (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any party to the Loan Documents of any Loan Document to
which it is a party.

 

“Maturity Date” means  February 13, 2011 [36 months],
as it may be earlier terminated in accordance with the terms hereof or extended
in accordance with the provisions of Section 1.12 of this
Agreement.

 

 

12

 

“Maximum Availability
Amount” means, as of any date, as to the Loan and all L/C Obligations, an
amount equal to the lowest of the following:

 

(i)            an
amount equal to the aggregate Collateral Value of the Collateral Pool;

 

(ii)           the
Aggregate Commitment; and

 

(iii)          the
portion of the Aggregate Commitment which, when compared to the NOI for the
Collateral Pool, as reflected in the most recent Borrowers’ NOI Certificate, as
verified by Administrative Agent, would result in a Debt Service Coverage Ratio
equal to or greater than the minimum Debt Service Coverage Ratio described
below for the applicable months during the term of the Loan, assuming that such
portion of the Aggregate Commitment was to be fully amortized in consecutive payments
of principal and interest over a period of 30 years at an interest rate per
annum equivalent to the greater of (A) 7.0% or (B) 1.75% plus the
Treasury Rate:

 

	
  MONTHS DURING TERM OF LOAN

  	
   

  	
  MINIMUM DEBT SERVICE

  COVERAGE RATIO

  
	
  1-24

  	
   

  	
  1.10:1

  
	
  25-36

  	
   

  	
  1.15:1

  
	
  During
  any Extension Period

  	
   

  	
  1.20:1

  

 

“NOI” means, for any
period, the amount, if any, by which the Annualized Adjusted Income for such
period exceeds the Annualized Adjusted Expenses for such period.

 

“Notes” means (i) any
promissory notes issued by Borrowers on the Closing Date, and (ii) any
promissory notes issued by Borrowers in connection with assignments of the
Commitments and Advances of any Lenders, in each case substantially in the form
of Exhibit M attached hereto,
together with any additional notes in substitution and replacement thereof,
issued by Borrowers to each Lender hereunder, made payable to the order of each
Lender in the amount of each Lender’s Commitment and collectively in the
maximum principal amount of the Loan, as
amended, modified, replaced, restated, extended or renewed from time to time.

 

“Obligations” means all
liabilities, obligations, covenants and duties of each Borrower and Guarantor
and from time to time owed to Administrative Agent or Lenders or any of them
under or otherwise with respect to any Loan Document, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrues after the commencement by or against any Borrower, Guarantor
or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming
such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceedings.

 

“Operating Partnership”
has the meaning set forth in the introductory paragraph of this Agreement.

 

“Past Due Rate” is
defined in Section 1.7.6 of this Agreement.

 

 

13

 

“Payment Amount”
means an Advance of the Loan, an unreimbursed Administrative Agent Advance, an
unreimbursed Indemnified Liability, and a reimbursement to L/C Issuer for an
unreimbursed drawing under a Letter of Credit, or any other amount that a
Lender is required to fund under this Agreement.

 

“Permitted Encumbrances”
means with respect to any Collateral, the following types of Liens and other
encumbrances: (i) Liens for real property taxes, assessments, vault
charges, water and sewer rents, and other Impositions the payment of which is
not delinquent, (ii) rights of Tenants under the Approved Leases in
existence on the Closing Date and any Approved Leases entered into hereafter in
accordance with the requirements of this Agreement; (iii) covenants,
easements, rights-of-way, restrictions, minor encroachments or other similar
encumbrances not impairing the marketability of such Collateral and not
interfering with the use of such Collateral for its intended purposes or with
the ordinary conduct of the business of the Borrower owning such Collateral; (iv) liens
securing the Obligations (including any Deed of Trust or other recorded Loan
Document); (v) Liens that are bonded and thereby released of record in a
manner reasonably satisfactory to Administrative Agent; (vi) all
exceptions contained in the Title Insurance approved by Administrative Agent;
and (vii) customary banker’s liens with respect to deposit or similar
accounts not maintained for the purpose of providing security or collateral for
the obligations of a Person.

 

“Person” means and
includes natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and Tribunals.

 

“Potential Default”
means any condition or event which with the giving of notice or lapse of time
or both would, unless cured or waived, become a Default.

 

“Prime
Rate” means, on any day, the rate of interest per annum then most recently
established by Administrative Agent as its “prime rate,” it being understood
and agreed that such rate is set by Administrative Agent as a general reference
rate of interest, taking into account such factors as Administrative Agent may
deem appropriate, that it is not necessarily the lowest or best rate actually
charged to any customer or a favored rate, that it may not correspond with
future increases or decreases in interest rates charged by other lenders or
market rates in general, and that Administrative Agent may make various
business or other loans at rates of interest having no relationship to such
rate.  If Administrative Agent (including
any subsequent Administrative Agent) ceases to exist or to establish or publish
a prime rate from which the Prime Rate is then determined, the applicable
variable rate from which the Prime Rate is determined thereafter shall be
instead the prime rate reported in The Wall Street Journal (or the
average prime rate if a high and a low prime rate are therein reported), and
the Prime Rate shall change without notice with each change in such prime rate
as of the date such change is reported.

 

“Principal
Debt” means the aggregate unpaid principal balance of the Loan at the time
in question.

 

“Project” means any portion of the Collateral comprised of Land
and Improvements located and operated independently from other portions of the
Collateral.

 

 

14

 

“Property Management
Agreement” means that certain Second Amended and Restated Property
Management and Leasing Agreement, dated December 29, 2006, executed by the
Operating Partnership, the other Borrowers and Guarantor and HPT Management
Services LP, as the same may be hereafter modified or amended and any other
property management and leasing agreement hereafter executed by the Operating
Partnership, any other Borrower or Guarantor in connection with the management,
leasing and operation of any Collateral in accordance with the provisions of
this Agreement.

 

“Property Manager”
means HPT Management Services LP, an affiliate of the Operating Partnership,
and each property manager retained by a Borrower or Guarantor to oversee the
ownership, management and and/or leasing of any of the Collateral.

 

“Property Manager’s
Subordination” means the Management Company’s Subordination and Consent
Agreement in the form executed as of the Closing Date or such other form as may
be reasonably acceptable to Administrative Agent, executed by each Property
Manager to Administrative Agent, for the benefit of the Lenders.

 

“Pro Rata Share”
means, with respect to each Lender at any time, a fraction expressed as a
percentage,  the numerator of which is
the amount of the Commitment of such Lender at such time and the denominator of
which is the amount of the Aggregate Commitment at such time or, if the
Aggregate Commitment have been terminated, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the total outstanding amount of all Indebtedness held by such Lender at such
time (taking into account funded participations in L/C Obligations) and the
denominator of which is the total outstanding amount of all Indebtedness at
such time.  The initial Pro Rata Share of
each Lender named on the signature pages hereto is set forth opposite the
name of that Lender on the Schedule of Lenders.

 

“Qualified Lease”
means each Approved Lease of the Collateral which meets the following
additional criteria: (i) the unexpired term of the Approved Lease is greater
than six (6) months (unless the applicable Subsidiary Obligor has executed
an Approved Lease with a term commencing on or about the expiration date of the
existing, expiring Lease), (ii) the Tenant under such Approved Lease has
accepted and is in occupancy of its respective leased premises in accordance
with the terms of such Approved Lease, (iii) the commencement date of such
Approved Lease has occurred and the Tenant has commenced the payment of base
rental thereunder, and (iv) the Tenant is not the subject of any
bankruptcy, insolvency or similar creditor’s rights proceedings and is not in
default (beyond a period of 30 days) of its monetary obligations under the
Approved Lease.

 

“Rents” means all
rents, issues, profits, royalties, receipts, revenues, accounts receivable,
security deposits and other deposits (subject to the prior right of Tenants
making such deposits) and income, including fixed, additional and percentage
rents, occupancy charges, operating expense reimbursements, reimbursements for increases
in taxes, sums paid by Tenants to Borrowers or any Subsidiary Obligor to
reimburse Borrowers or Subsidiary Obligor, as applicable, for amounts
originally paid or to be paid by Borrowers or such Subsidiary Obligor or their
agents or Affiliates for which such Tenants were liable, as, for example,
tenant improvements costs in excess of any work letter, lease takeover costs,
moving expenses and tax and operating expense pass-throughs for which a Tenant
is solely liable, parking, valet, 

 

 

15

 

maintenance,
common area, tax, insurance, utility and service charges and contributions,
proceeds of sale of electricity, gas, heating, air-conditioning and other
utilities and services, deficiency rents and liquidated damages, and other
benefits.  The term “Rents” includes
income and other amounts payable to any Borrower under any Leases pertaining to
the exploration and extraction of oil, gas and other minerals only if such
Leases are owned by such Borrower and a part of the Collateral encumbered by
the Security Documents.

 

“Required Lenders”
means as of any date of determination at least two Lenders (including L/C
Issuer) having at least 66-2/3% of the Aggregate Commitment or, if the
Aggregate Commitment have been terminated, at least two Lenders (including L/C
Issuer)  holding in the aggregate at
least 66-2/3%  of the total outstanding amount
of all Indebtedness (taking into account funded participations in L/C
Obligations); provided that the Commitment of, and the portion of the
total outstanding amount of all Indebtedness (taking into account funded participations in L/C Obligations)
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Schedule
of Lenders” means the schedule of Lenders party to this Agreement as set
forth on Exhibit N, as it may be modified from time to time in
accordance with this Agreement.

 

“Securities”
means, with respect to any Person, all shares, interests, participations or
other equivalents (however designated, whether voting or non-voting) of such
Person’s capital, whether now outstanding or issued or acquired after the
Closing Date, including common shares, preferred shares, membership interests
in a limited liability company, limited or general partnership interests in a
partnership, interests in a trust, interests in other unincorporated
organizations or any other equivalent of such ownership interest excluding,
however, springing membership interests established in connection with or in
contemplation of mortgage-backed financings.

 

“Security Documents”
means, collectively, each Deed of Trust, each Assignment of Rents and Leases,
and all other deeds of trust, deeds to secure debt, mortgages, security
agreements, pledge agreements, assignments and all other instruments or
documents (including UCC-1 financing statements, fixture filings, UCC-3
amendments of financing statements or similar documents required or advisable
in order to perfect or maintain the Liens created by the Security Documents)
delivered by any Borrower pursuant to this Agreement or any of the other Loan
Documents, whether such delivery is prior to, contemporaneous with or after
delivery of this Agreement, in order to grant to Administrative Agent the Liens
in real, personal or mixed property of that Person, and to maintain such Liens,
as each of the foregoing may be amended, restated, consolidated, supplemented
or otherwise modified from time to time in accordance with the terms thereof
and hereof.

 

“Subsidiary” means any
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of Securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than Securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries.

 

 

16

 

“Subsidiary
Obligor” means each Subsidiary of the Operating Partnership to whom the
Operating Partnership distributes all or any portion of the proceeds of the
Loan, whether one or more, and if more than one, each one individually or all
collectively, who may now or hereafter become party to this Agreement; provided,
that Borrowers shall make no distributions of any proceeds of the Loan
to any Person other than a Subsidiary Obligor without the consent of
Administrative Agent.

 

“Survey”
means, with respect to each Project, a current survey map prepared by a
surveyor licensed in the state in which such Project is located, reasonably
acceptable to Administrative Agent, containing the legal description of such
Project and conforming, and certified by such surveyor to Administrative Agent
and the Lenders and the Title Company as conforming, to the requirements set
forth on Exhibit G attached hereto or as otherwise approved by
Administrative Agent in its sole discretion. 
Any such survey shall contain a certification by such surveyor to
Administrative Agent and the Lenders stating whether the Project is located in
an area having special flood hazards as identified by the Federal Emergency
Management Agency.

 

“Swap Bank” is defined
in Section 1.19 of this Agreement.

 

“Swap Transaction”
means any agreement, whether or not in writing, entered into between any
Borrower and Swap Bank relating to any transaction entered into for the purpose
of hedging risks related to the Note that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swap option currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any form of Master Agreement published by the International Swaps and
Derivatives Association, Inc., or any other master agreement, entered into
between Swap Bank and any Borrower, together with any related schedules, as
amended, supplemented, superseded or replaced from time to time, relating to or
governing any or all of the foregoing.

 

“Tenant” means any
Person liable by contract or otherwise to pay rent or a percentage of income,
revenue or profits pursuant to a Lease, and includes a tenant, subtenant,
lessee and sublessee.

 

“Tenant Reimbursements”
means amounts paid or to be paid by Tenants under Qualified Leases during the
preceding twelve (12) calendar months as reimbursements for operating expenses
of the Collateral billed separately from the gross rent payable under such
Qualified Lease, such as by way of example but not limitation, taxes,
insurance, utilities and common area maintenance charges, but excluding
capital expenses and construction or tenant finish expenses incurred by any
Borrower which are amortized and reimbursed by the Tenant as part of the base
or minimum rent payable under the Approved Lease during the term of the
Approved Lease.

 

“Tenant Subordination
Agreement” means any Subordination, Non-Disturbance and Attornment
Agreement executed and acknowledged by a Tenant or any Subsidiary Obligor and
Administrative Agent, and reasonably acceptable in form and substance to
Administrative Agent, 

 

 

17

 

as
each such agreement may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.

 

“Test Date” means,
the last date of each calendar quarter (i.e., every December 31st, March 31st,
June 30th and September 30th) during the term of the Loan.

 

“Title Company” means
Commonwealth Land Title Insurance Company or any other national title insurance
company acceptable to Administrative Agent in its sole discretion.

 

“Title Insurance”
means, with respect to each Project, the paid mortgagee policy or policies of
title insurance, covering, in the aggregate, the full amount of the Loan, in
the form of an ALTA loan policy (or other form of loan policy available in the
applicable state and acceptable to Administrative Agent), in form satisfactory
to Administrative Agent, and issued by the Title Company.

 

“Total Outstandings”
means, at any time, the sum of (a) the aggregate outstanding principal
balance of the Loan, plus (b) the sum of all L/C Obligations.

 

“Treasury Rate” means
the rate of interest per annum on U.S. Treasury Notes having a maturity of ten
years as shown in the 10-year listing in the “this week” column under the
heading “Treasury Constant Maturities,” of the FEDERAL RESERVE statistical
release FORM H-15 which, as of the date that ten (10) days prior to
the date of any such determination of such Treasury Rate by Administrative
Agent hereunder, has been most recently published (or, if for any reason that
published rate is not available as of such date, another rate determined by
Administrative Agent to be comparable, in its discretion reasonably exercised,
shall be used for this purpose).

 

“Tribunal”
means any state, commonwealth, federal, foreign, territorial or other court or
governmental department, commission, board, bureau, district, authority, agency,
central bank, or instrumentality, or any arbitration authority.

 

“Unrelated Swap
Transaction” means any agreement,
whether or not in writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap or option, bond, note or bill option, interest rate
option, forward foreign exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swap option currency option or any
other, similar transaction (including any option to enter into any of the
foregoing) or any combination of the foregoing, and, unless the context
otherwise clearly requires, any form of Master Agreement published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between any counterparty and the any Borrower or
Guarantor, together with any related schedules, as amended, supplemented,
superseded or replaced from time to time, relating to or governing any or all of
the foregoing.

 

“Unused
Commitment” means, at any time, (a) the Aggregate Commitment minus (b) the
Commitment Usage.

 

“Unused
Fee Percentage” means (a) with respect to any calendar quarter during
which the average daily Unused Commitment is equal to or greater than fifty
percent (50%) of the Aggregate 

 

 

18

 

Commitment, two-tenths of one percent (0.20%) per annum,
and (b) with respect to any calendar quarter during which the average
daily Unused Commitment is less than fifty percent (50%) of the Aggregate
Commitment, one and one-half tenths of one percent (0.15%) per annum.

 

2.             FINANCIAL
STATEMENTS AND OTHER INFORMATION.  Each Borrower shall provide or cause to be
provided to Administrative Agent (with copies for each Lender) all of the
following:

 

(a)           Financial Statements of Guarantor and its Subsidiaries,
prepared on a consolidated basis in accordance with GAAP, (i) for each
fiscal year of Guarantor, as soon as reasonably practicable and in any event
within one hundred twenty (120) days after the close of such fiscal year, and (ii) for
each fiscal quarter of Guarantor, as soon as reasonably practicable and in any
event within sixty (60) days after the close of each fiscal quarter of
Guarantor.

 

(b)           With respect to each Project: (i) quarterly operating
reports for such Project, as soon as reasonably practicable and in any event
within sixty (60) days after the end of each calendar quarter, which operating
reports shall be in form and detail reasonably acceptable to Administrative
Agent and shall contain, at a minimum, a statement of all income and expenses
in connection with such Project for each month during such calendar quarter
(and for the calendar year through the end of such calendar quarter), and (ii) a
current rent roll for such Project, as soon as reasonably practicable but in
any event within sixty (60) days after the end of each such calendar quarter,
certified in writing as true and correct by a representative of the Operating
Partnership or Guarantor satisfactory to Administrative Agent.  Items provided under this paragraph shall be
in form and detail reasonably satisfactory to Administrative Agent.

 

(c)           So long as Guarantor is subject to the rules and
requirements of the Securities and Exchange Commission (“SEC”), copies
of all SEC Form 10-K and 10-Q reports filed with the SEC for Guarantor as
and when the same are so filed with the SEC.

 

(d)           Within sixty (60) days of each Test Date and as and when
required in connection with an Advance Request pursuant to Exhibit F,
a Borrowers’ NOI Certificate setting forth the NOI for the Collateral for the
most recent trailing three (3) calendar months prior to the date of such
Borrowers’ NOI Certificate.

 

(e)           Concurrently with the delivery of the financial statements
required under paragraph (a) above, a compliance certificate, in the form
required by Administrative Agent, regarding the Debt Service Coverage
calculations for all Projects within the Collateral Pool for the calendar
quarter most recently ended.

 

(g)           Concurrently with the delivery of the Financial Statements
required under paragraph (a) above, an updated organizational chart for
the Operating Partnership and Guarantor identifying each Subsidiary of the
Operating Partnership and Guarantor including, (i) the date on which any
Person became a Subsidiary of the Operating Partnership or Guarantor, and (ii) all
of the data required to be set forth in Exhibit E with respect to
all Subsidiaries of the Operating Partnership (it being understood that such 

 

 

19

 

written
notice shall be deemed to supplement Exhibit E for all purposes of
this Agreement).

 

(h)           The Financial Statements and Compliance Certificate (as
defined in the Guaranty) in accordance with the requirements of, and within the
time periods required by, the Guaranty.

 

(i)            From time to time promptly after Administrative Agent’s
request, such additional information, reports and statements respecting the
Collateral, or the business operations and financial condition of the Operating
Partnership and each Subsidiary Obligor, as Administrative Agent may reasonably
request.

 

All
Financial Statements shall contain or be attached to the signed and dated
written certification of the reporting party, in form specified by
Administrative Agent, to certify that the Financial Statements are furnished to
Administrative Agent and the other Lenders in connection with the extension of
credit by Administrative Agent and the other Lenders were prepared
in conformity with GAAP and fairly present, in all material respects, the
reporting party’s financial position (and its Subsidiaries, as applicable) as
at the date thereof; provided, however, Administrative Agent
agrees that the consolidated Financial Statements of Guarantor and its
Subsidiaries delivered to Administrative Agent in satisfaction of the
requirements of Exhibit C hereto are satisfactory as to form,
detail and accounting principles used therein and Financial Statements to be
provided in satisfaction of the requirements of this Agreement and the other
Loan Documents shall be satisfactory to Administrative Agent as to form, detail
and accounting principles if consistent with such Financial Statements.  All certifications and signatures on behalf
of corporations, partnerships or other entities shall be by a representative of
the reporting party satisfactory to Administrative Agent.  All fiscal year-end Financial Statements of
Guarantor and its Subsidiaries shall be audited, without any qualification or
exception not acceptable to Administrative Agent, by one of the “Big Four”
accounting firms or another firm of independent certified public accountants
reasonably acceptable to Administrative Agent, and shall contain all reports
and disclosures required by generally accepted accounting principles for a fair
presentation.  All quarterly Financial
Statements of Guarantor and its Subsidiaries shall be certified, without any
qualification or exception not acceptable to Administrative Agent in its good
faith business judgment, by a duly authorized officer of Guarantor.

 

 

20

 

 

 

EXHIBIT C

 

CONDITIONS PRECEDENT TO THE
INITIAL ADVANCE

 

As conditions precedent to
the initial Advance of Loan proceeds, if and to the extent required by
Administrative Agent, Administrative Agent shall have received and approved the
following:

 

1.             Fees and Expenses.  Any and all required
commitment and other fees and expenses (including the fees and costs of
Administrative Agent’s counsel) then required to be paid pursuant to the Fee
Agreement, this Agreement and all other Loan Documents, including, without
limitation, all fees, costs and expenses that Borrowers are required to pay
pursuant to any loan application or commitment.

 

2.             Financial Statements. The
Financial Statements of the Operating Partnership and its
Subsidiaries and Guarantor required by the
terms of this Agreement.

 

3.             Appraisal.  An Appraisal of each Project to be added to
the Collateral Pool on the Closing Date, made within thirty (30) days prior to
the Closing Date, which appraises each such Project on a “stabilized value”
basis.  Each appraiser and Appraisal must
be satisfactory to Administrative Agent and each Lender (including satisfaction
of applicable regulatory requirements) and each appraiser must be engaged
directly by Administrative Agent.

 

4.             Authorization.  Evidence of the existence, good standing,
authority and capacity of the Operating Partnership, each Subsidiary Obligor,
Guarantor and, to the extent required by Administrative Agent, evidence of the
existence and authority of each of their respective constituent partners, members,
managers and owners (however remote) to execute, deliver and perform their
respective obligations to Administrative Agent and Lenders under the Loan
Documents, including:

 

(a)           For each partnership (including a joint venture or limited
partnership): (i) a true and complete copy of an executed partnership
agreement or limited partnership agreement, and all amendments thereto; (ii) for
each limited partnership, a copy of the certificate of limited partnership and
all amendments thereto accompanied by a certificate issued by the appropriate
governmental official of the jurisdiction of formation that the copy is true
and complete, and evidence of each Borrower’s registration or qualification to
do business in the state where its principal place of business is located and,
as to any Subsidiary Obligor, the state where the Collateral owned by such
Subsidiary Obligor is located, and (iii) a partnership certificate
certifying who will be authorized to execute or attest any of the Loan
Documents, and a true and complete copy of all necessary resolutions approving
the Loan Documents and authorizing the transactions contemplated in this
Agreement and the other Loan Documents.

 

(b)           For each corporation:  (i) a true and complete copy of its
articles of incorporation and by-laws, and all amendments thereto, a
certificate of incumbency of all of its officers who are authorized to execute
or attest to any of the Loan Documents, and a true and complete copy of
resolutions approving the Loan Documents and authorizing the transactions
contemplated in this Agreement and the other Loan Documents; and (ii) 

 

 

1

 

certificates of existence, good standing and
qualification to do business issued by the appropriate governmental officials
in the state of its formation.

 

(c)           For each limited liability company or
limited liability partnership:  (i) a
true and complete copy of the articles of organization and operating agreement,
and all amendments thereto, a certificate of incumbency of all of its members,
managers or officers, as applicable, who are authorized to execute or attest to
any of the Loan Documents and Environmental Indemnity, and a true and complete
copy of resolutions approving the Loan Documents and Environmental Indemnity and
authorizing the transactions contemplated in this Agreement and the other Loan
Documents and Environmental Indemnity; and (ii) certificates of existence,
good standing and qualification to do business issued by appropriate
governmental officials in the state of its formation.

 

(d)           For each entity or organization that
is not a corporation, partnership, limited partnership, joint venture, limited
liability company or limited liability partnership, a copy of each document
creating it or governing the existence, operation, power or authority of it or
its representatives.

 

(e)           All certificates, resolutions, and
consents required by Administrative Agent applicable to the foregoing.

 

5.             Loan Documents and Other
Documents.  From the Operating
Partnership and each Subsidiary Obligor, duly executed, acknowledged and/or
sworn to as required, and delivered to Administrative Agent (with a copy for
each Lender) Loan Documents and the Environmental Indemnity then required by
Administrative Agent, dated the Closing Date, each in form and content
reasonably satisfactory to Administrative Agent, and (i) evidence
reasonably satisfactory to Administrative Agent that counterparts of the
Security Documents and all other documents Administrative Agent desires to have
recorded have been or will be recorded in all places necessary or desirable, in
the reasonable judgment of Administrative Agent to create and maintain (a) valid
and enforceable first priority Liens on the fee simple interests of each
Subsidiary Obligor, as applicable, in the Collateral in favor of Administrative
Agent, as mortgagee (or as beneficiary in those jurisdictions where the Lien is
granted to a trustee for the benefit of Administrative Agent), (b) valid
and enforceable first priority Liens on the Rents and Leases in favor of
Administrative Agent, (c) valid and enforceable first priority Liens in
all fixtures at the Collateral, in favor of Administrative Agent, as secured
party and (d) valid and enforceable first priority Liens in all other
items of Collateral in favor of Administrative Agent, and (ii) evidence
that financing statements under the Uniform Commercial Code (or any equivalent
or similar legislation), or any other documents required by other Laws, in form
and substance satisfactory to Administrative Agent in each jurisdiction as may
be necessary (in Administrative Agent’s reasonable judgment) effectively to
perfect and maintain the security interests in the Collateral created by such
Security Documents have been or will be filed or recorded, as applicable, in
all places necessary or desirable, in the reasonable judgment of Administrative
Agent, to create and maintain valid and enforceable first priority Liens on the
Collateral in favor of Administrative Agent.

 

 

2

 

6.             Opinions.  The written opinion of counsel reasonably
satisfactory to Administrative Agent for the Operating Partnership, each
Subsidiary Obligor, and Guarantor, addressed to Administrative Agent for the
benefit of Lenders, dated the Closing Date.

 

7.             Survey; No Special Flood Hazard.  For each Project to be added to the
Collateral Pool as of the Closing Date: (a) two (2)  prints of an
original Survey (with a copy for each Lender) of the Land and Improvements
thereon dated not more than sixty (60) days prior to the Closing Date (or dated
such earlier date, if any, as is satisfactory to the Title Company, but in any
event not more than one hundred eighty (180) days prior to the Closing Date)
satisfactory to Administrative Agent and the Title Company and otherwise, to
the extent required by Administrative Agent, in its good faith business
judgment, complying with Exhibit G, and (b) a flood insurance
policy (with a copy for each Lender) in an amount equal to the lesser of the
maximum Loan amount or the maximum amount of flood insurance available under
the Flood Disaster Protection Act of 1973, as amended, and otherwise in
compliance with the requirements of the Loan Documents, or evidence
satisfactory to Administrative Agent that none of the Improvements within such
Project is located in a flood hazard area.

 

8.             Title Insurance.  For each Project to be added to the
Collateral Pool as of the Closing Date: an ALTA title insurance policy (or a
title insurance policy promulgated by the laws of the state in which the
Collateral is located if an ALTA insurance policy is not available), issued by
the Title Company (which shall be approved by Administrative Agent in its good
faith business judgment) in the allocated Collateral Value for each Project, on
a coinsurance and/or reinsurance basis if and as required by Administrative
Agent, insuring without exclusion or exception for creditors’ rights that the
applicable Deed of Trust  constitutes a
valid lien covering the Land and all Improvements thereon, having the priority
required by Administrative Agent and subject only to those exceptions and
encumbrances (regardless of rank or priority) Administrative Agent approves, in
a form acceptable to Administrative Agent and with all “standard”
exceptions which can be deleted, including the exception for matters which a
current survey would show, deleted to the fullest extent authorized under
applicable title insurance rules, and the Borrower owning such Project shall
satisfy all requirements for the issuance of such policy; containing no
exception for standby fees or real estate taxes or assessments other than those
for the year in which the closing occurs to the extent the same are not then
due and payable and endorsed “not yet due and payable” and no exception for
subsequent assessments for prior years; providing full coverage against
mechanics’ and materialmens’ liens to the extent authorized under applicable
title insurance rules, and the Borrower owning such Project shall satisfy all
requirements therefor; insuring that no restrictive covenants shown in the
Title Insurance have been violated (or that such restrictive covenants are
unenforceable as a matter of Law pursuant to an endorsement approved by
Administrative Agent), and that no violation of the restrictions will result in
a reversion or forfeiture of title; insuring all appurtenant easements;
insuring that the fee estate of the applicable Subsidiary Obligor in the Land
and Improvements is marketable, vested in such Subsidiary Obligor; containing
such affirmative coverage and endorsements as Administrative Agent may require
and are available under applicable title insurance rules, and the applicable
Subsidiary Obligor shall satisfy all requirements therefor; insuring any
easements, leasehold estates or other matters appurtenant to or benefiting the
Land and/or the Improvements as part of the insured estate; insuring the right
of access to the Land to the extent authorized under applicable title insurance
rules, and the Borrower owning such Project shall satisfy all requirements
therefor; and containing provisions acceptable to Administrative Agent in its
good 

 

 

3

 

faith
business judgment regarding advances and/or readvances of Loan funds after
closing.  Neither Borrowers nor their
counsel shall have any interest, direct or indirect, in the Title Company (or
its agent) or any portion of the premium paid for the Title Insurance.

 

9.             Insurance Policies.  For each Project to be added to the
Collateral Pool as of the Closing Date, the insurance policies initially
required by Administrative Agent, pursuant to the Loan Documents, together with
evidence satisfactory to Administrative Agent that all premiums therefor have
been paid for a period of not less than one (1) year from the Closing Date
and that the policies are in full force and effect.

 

10.           Leases.  For each Project to be added to the
Collateral Pool as of the Closing Date, (i) true and correct copies of all
Leases; and (ii) Tenant Subordination Agreements (including nondisturbance
agreements if and to the extent agreed by Administrative Agent in its
discretion) from all Tenants whose Leases are not expressly unconditionally
subordinate to the Lien of the Deed of Trust in favor of Administrative Agent,
in form and content satisfactory to Administrative Agent.

 

11.           Rent Roll; Operating Statements.  For each Project to be added to the
Collateral Pool, a current rent roll for such Project, certified by
the Subsidiary Obligor as being true and correct in all material respects and a
three (3) year operating and occupancy history of such Project in form
satisfactory to Administrative Agent, provided  that with respect
to any period such Project being acquired by a Subsidiary Obligor with the
proceeds of the Loan or owned by such Subsidiary Obligor less than three years,
such information shall only be required to be delivered to the extent
reasonably available to Subsidiary Obligor.

 

12.           Environmental Compliance/Report.  For each Project to be added to the
Collateral Pool as of the Closing Date: evidence satisfactory to Administrative
Agent that the Land does not contain and is not within or near any area
designated as a hazardous waste site by any Tribunal, that neither the
Collateral nor any adjoining property contains or has ever contained any
substance classified as hazardous or toxic (or otherwise regulated, such as,
without limitation, asbestos, radon and/or petroleum products) under any Law or
governmental requirement pertaining to health or the environment, and that
neither the Collateral nor any use or activity thereon violates or is or could
be subject to any response, remediation, clean-up or other obligation under any
Law or governmental requirement pertaining to health or the environment
including without limitation, a written report of an environmental assessment
of the Collateral, made within twelve (12) months prior to the Closing Date, by
an engineering firm, and of a scope and in form and content satisfactory to
Administrative Agent, complying with Administrative Agent’s established
guidelines, showing that there is no evidence of any such substance which has
been generated, treated, stored, released or disposed of in the Collateral, and
such additional evidence as may be required by Administrative Agent.  All reports, drafts of reports, and
recommendations, whether written or oral, from such engineering firm shall be
made available and communicated to Administrative Agent.

 

13.           Access, Utilities, and Laws.  For each Project to be added to the
Collateral Pool as of the Closing Date: (a) evidence satisfactory to
Administrative Agent in its good faith business judgment that the Collateral
abuts and has fully adequate direct and free access to one or more public
streets, dedicated to public use, fully installed and accepted by the
appropriate Tribunal, that 

 

 

4

 

all fees, costs and expenses of the installation and
acceptance thereof have been paid in full, and that there are no restrictions
on the use and enjoyment of such streets which would materially adversely
affect the Project; (b) evidence reasonably satisfactory to Administrative
Agent that all applicable zoning ordinances, restrictive covenants and
governmental requirements affecting the Collateral permit the use for which the
Collateral is intended and have been or will be complied with without the
existence of any variance, non-complying use, nonconforming use or other
special exception; (c) evidence satisfactory to Administrative Agent that
the Land and Improvements comply and will comply with all Laws and governmental
requirements regarding subdivision and platting and would so comply if the Land
and the Improvements thereon were conveyed as a separate parcel; (d) a
true and correct copy of a valid certificate of occupancy for the Improvements,
together with all other consents, licenses, permits and approvals necessary for
the use, occupancy and operation of the Improvements, all in assignable form
(to the extent appropriate) and in full force and effect; and (e) evidence
reasonably satisfactory to Administrative Agent of compliance by Borrowers and
the Collateral, and the proposed use and occupancy of the Improvements, with
such other applicable Laws and governmental requirements as Administrative
Agent may request, including all Laws and governmental requirements regarding
access and facilities for handicapped or disabled persons including, without
limitation and to the extent applicable, The Federal Architectural Barriers Act
(42 U.S.C. § 4151 et seq.), The Fair Housing Amendments Act of 1988 (42 U.S.C.
§ 3601 et seq.), The Americans With Disabilities Act of 1990 (42 U.S.C. § 12101
et seq.), The Rehabilitation Act of 1973 (29 U.S.C. § 794), and any applicable
state requirements.

 

14.           Priority.  For each Project to be added to the
Collateral Pool as of the Closing Date, (a) evidence satisfactory to
Administrative Agent in its good faith business judgment that prior to and as
of the time the applicable Deed of Trust was filed for record no mechanic’s or
materialman’s lien claim or notice, lis pendens, judgment, or other claim or
encumbrance against the Project has been filed for record in the county where
the Project is located or in any other public record which by Law provides
notice of claims or encumbrances regarding the Project; (b) a certificate or certificates of a reporting
service acceptable to Administrative Agent, reflecting the results of searches
made not earlier than ten (10) days prior to the Closing Date, (i) of
the central and local Uniform Commercial Code records, showing no filings
against any of the collateral for the Loan or against any Borrower except for
the Permitted Encumbrances or other items consented to by Administrative Agent;
and (ii) if required by Administrative Agent, of the appropriate judgment
and tax lien records, showing no outstanding judgment or tax lien against any
Borrower.

 

15.           Tax and Standby Fee Certificates.  For each Project to be added to the
Collateral Pool as of the Closing Date, evidence satisfactory to Administrative
Agent in its good faith business judgment (a) of the identity of all
taxing authorities and utility districts (or similar authorities) having
jurisdiction over the Project or any portion thereof; (b) that all taxes,
standby fees and any other similar charges currently due and payable have been
paid, including (if available) copies of receipts or statements marked “paid”
by the appropriate authority; and (c) that the Land is a separate tax lot
or lots with separate assessment or assessments of the Land and Improvements,
independent of any other land or improvements and that the Land is a separate
legally subdivided parcel.

 

16.           Engineering Reports.  For each Project to be added to the
Collateral Pool as of the Closing Date, Borrowers shall have delivered (or
cause to be delivered) to Administrative Agent 

 

 

5

 

(i) a
written Engineering Report with respect to the Collateral dated not more than
60 days prior to the Closing Date and prepared by an Engineer reasonably acceptable to Administrative
Agent, which Engineering Report shall in all other respects be reasonably satisfactory, in form and
substance, to Administrative Agent and (ii)  a reliance letter from the
Engineer with respect to each Engineering Report addressed to Administrative
Agent and Lenders, which letter shall be in form and substance reasonably
satisfactory to the Agent.

 

17.           No Adverse Litigation. For each Project to be added to the Collateral
Pool as of the Closing Date, there shall not be pending or threatened in
writing, any action, suit, proceeding, governmental investigation or
arbitration against or affecting any Borrower or any property of any Borrower
that has not been disclosed by Borrowers to Administrative Agent in writing
prior to the execution of this Agreement, and there shall have occurred no
development not so disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in the good
faith business judgment of Administrative Agent, is reasonably likely to have a
Material Adverse Effect, and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action, suit
or proceeding seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of the Loan hereunder.

 

18.           Identification Due Diligence.  All due diligence materials deemed necessary
by Administrative Agent and each Lender with respect to verifying the identity
and background information of each Borrower and Guarantor in a manner
satisfactory to Administrative Agent and each Lender.

 

19.           Borrower’s NOI Certificate.  A Borrower’s NOI Certificate dated as of the
Closing Date.

 

20.           Management Documents.  Copies of all management and leasing
agreements related to such Project to be added to the Collateral Pool, together
with a fully executed original Property Manager’s Subordination from the
applicable Property Manager in form satisfactory to Administrative Agent

 

21.           Form Lease. 
The form or forms Lease used at each Project to be added to the
Collateral Pool.

 

22.           Other Documents.  Such other documents and certificates as
Administrative Agent may reasonably request from Borrowers or Subsidiary
Obligor, in form and content reasonably satisfactory to Administrative Agent.

 

 

6

 

 

 

EXHIBIT D

 

CONDITIONS
TO ADDITION TO COLLATERAL POOL

 

                No Project will be
evaluated by the Lenders as a potential addition to the Collateral Pool unless
the Operating Partnership delivers to Administrative Agent and Administrative
Agent approves, in its sole discretion, each of the following items as to each
such Project:

 

1.             Loan Assumption Agreement.   A Loan Assumption Agreement, duly executed
by the Operating Partnership and the Subsidiary Obligor who is the owner of the
Project to be added to the Collateral Pool.

 

2.             Appraisal.  An Appraisal of the Project, made within
thirty (30) days prior to the proposed Admission Date for such Project, which
appraises each such Project on a “stabilized value” basis.  Each appraiser and Appraisal must be
satisfactory to Administrative Agent and each Lender (including satisfaction of
applicable regulatory requirements) and each appraiser must be engaged directly
by Administrative Agent.

 

3.             Authorization.  Evidence of the existence, good standing,
authority and capacity of the Subsidiary Obligor who is the owner of the
Project to be added to the Collateral Pool and, to the extent required by
Administrative Agent, evidence the existence and authority of each of its
constituent partners, members, managers and owners to execute, deliver and
perform their respective obligations to Administrative Agent and Lenders under
the Loan Documents, including:

 

(a)           For each partnership (including a joint venture or limited
partnership):  (i) a true and
complete copy of an executed partnership agreement or limited partnership
agreement, and all amendments thereto; (ii) for each limited partnership,
a copy of the certificate of limited partnership and all amendments thereto
accompanied by a certificate issued by the appropriate governmental official of
the jurisdiction of formation that the copy is true and complete, and evidence
of registration or qualification to do business in the state the Project owned
by such Subsidiary Obligor is located, and (iii) a partnership certificate
certifying who will be authorized to execute or attest the Loan Assumption
Agreement and other Loan Documents, and a true and complete copy of all
necessary resolutions approving the execution of the Loan Assumption Agreement
and other Loan Documents and authorizing the transactions contemplated in this
Agreement, the Loan Assumption Agreement and the other Loan Documents.

 

(b)           For each corporation:  (i) a true and complete copy of its
articles of incorporation and by-laws, and all amendments thereto, a certificate
of incumbency of all of its officers who are authorized to execute or attest to
the Loan Assumption Agreement or any of the Loan Documents, and a true and
complete copy of resolutions approving the Loan Assumption Agreement and other
Loan Documents and authorizing the transactions contemplated in this Agreement,
the Loan Assumption Agreement and the other Loan Documents; and (ii) certificates
of existence, good standing and qualification to do business issued by the
appropriate governmental officials in the state of its formation.

 

 

1

 

(c)           For each limited liability company or
limited liability partnership:  (i) a
true and complete copy of the articles of organization and operating agreement,
and all amendments thereto, a certificate of incumbency of all of its members,
managers or officers, as applicable, who are authorized to execute or attest to
the Loan Assumption Agreement and any of the other Loan Documents and
Environmental Indemnity, and a true and complete copy of resolutions approving
the Loan Assumption Agreement, other Loan Documents and Environmental Indemnity
and authorizing the transactions contemplated in this Agreement, the Loan
Assumption Agreement and the other Loan Documents and Environmental Indemnity;
and (ii) certificates of existence, good standing and qualification to do
business issued by appropriate governmental officials in the state of its
formation.

 

(d)           For each entity or organization that
is not a corporation, partnership, limited partnership, joint venture, limited
liability company or limited liability partnership, a copy of each document
creating it or governing the existence, operation, power or authority of it or
its representatives.

 

(e)           All certificates, resolutions, and consents
required by Administrative Agent applicable to the foregoing.

 

4.             Loan Documents and Other
Documents.  From Subsidiary Obligor
who is the owner of the Project to be added to the Collateral Pool, duly
executed, acknowledged and/or sworn to as required, and delivered to
Administrative Agent (with a copy for each Lender):

 

(a)           a Deed of Trust and Assignment of Rents and Leases, each
in form satisfactory to Administrative Agent to create (i) valid and
enforceable first priority Liens on the fee simple interests of Subsidiary
Obligor in such Project in favor of Administrative Agent, as mortgagee (or as
beneficiary in those jurisdictions where the Lien is granted to a trustee for
the benefit of Administrative Agent), (ii) valid and enforceable first
priority Liens on the Rents and Leases in favor of Administrative Agent, (iii) valid
and enforceable first priority Liens in all fixtures at the Project, in favor
of Administrative Agent, as secured party and (iv) valid and enforceable
first priority Liens in all other items of Collateral owned by such Subsidiary
Obligor in favor of Administrative Agent, which Deed of Trust and Assignment of
Rents and Leases will be dated as of the Admission Date, and recorded in all
places necessary or desirable, in the reasonable judgment of Administrative
Agent, to create the above-described Liens;

 

(b)           UCC-1 financing statements under the Uniform Commercial
Code (or any equivalent or similar legislation), or any other documents
required by other Laws, in form and substance reasonably satisfactory to
Administrative Agent in each jurisdiction as may be necessary (in
Administrative Agent’s reasonable judgment) effectively to perfect and maintain
the security interests in such Project created by such Security Documents
executed by the Subsidiary Obligor, which financing statements will be filed or
recorded, as applicable, in all places necessary or desirable, in the
reasonable judgment of Administrative Agent, to create and maintain valid and
enforceable first priority Liens on the Collateral in favor of Administrative
Agent; and

 

 

2

 

(c)           an Environmental Indemnity, in form and substance
satisfactory to Administrative Agent, duly executed by the Subsidiary Obligor,
the Operating Partnership and Guarantor.

 

5.             Opinions.  The written opinion of counsel reasonably
satisfactory to Administrative Agent for the Subsidiary Obligor who owns the
Project to be added to the Collateral Pool, addressed to Administrative Agent
for the benefit of Lenders, dated as of the Admission Date.

 

6.             Survey; No Special Flood Hazard.  For each Project to be added to the
Collateral Pool, unless waived in whole or in part by Administrative Agent: (a) two
(2)  prints of an original Survey (with a copy for each Lender) of the
Land and Improvements thereon dated not more than sixty (60) days prior to the
Admission Date (or dated such earlier date, if any, as is satisfactory to the
Title Company, but in any event not more than one hundred eighty (180) days
prior to the Admission Date) satisfactory to Administrative Agent and the Title
Company and otherwise, to the extent required by Administrative Agent, in its
good faith business judgment, complying with Exhibit G, and (b) a
flood insurance policy (with a copy for each Lender) in an amount equal to the
lesser of the maximum Loan amount or the maximum amount of flood insurance
available under the Flood Disaster Protection Act of 1973, as amended, and
otherwise in compliance with the requirements of the Loan Documents, or evidence
satisfactory to Administrative Agent that none of the Improvements included
within such Project is located in a flood hazard area.

 

7.             Title Insurance. 
For each Project to be added to the Collateral Pool, an ALTA title
insurance policy (or a title insurance policy promulgated by the laws of the
state in which the Project is located if an ALTA insurance policy is not
available), issued by the Title Company (which shall be approved by
Administrative Agent in its good faith business judgment) in an amount not to
exceed the allocated Collateral Value for such Project, on a coinsurance and/or
reinsurance basis if and as required by Administrative Agent, insuring without
exclusion or exception for creditors’ rights that the applicable Deed of
Trust  constitutes a valid lien covering
the Land and all Improvements thereon, having the priority required by
Administrative Agent and subject only to those exceptions and encumbrances
(regardless of rank or priority) Administrative Agent approves, in a form acceptable
to Administrative Agent and with all “standard” exceptions which can be
deleted, including the exception for matters which a current survey would show,
deleted to the fullest extent authorized under applicable title insurance
rules, and the Borrower owning such Project shall satisfy all requirements for
the issuance of such policy; containing no exception for standby fees or real
estate taxes or assessments other than those for the year in which the closing
occurs to the extent the same are not then due and payable and endorsed “not
yet due and payable” and no exception for subsequent assessments for prior
years; providing full coverage against mechanics’ and materialmens’ liens to
the extent authorized under applicable title insurance rules, and the Borrower
owning such Project shall satisfy all requirements therefor; insuring that no
restrictive covenants shown in the Title Insurance have been violated (or that
such restrictive covenants are unenforceable as a matter of Law pursuant to an
endorsement approved by Administrative Agent), and that no violation of the
restrictions will result in a reversion or forfeiture of title; insuring all
appurtenant easements; insuring that the fee estate of the applicable
Subsidiary Obligor in the Land and Improvements is marketable, vested in such
Subsidiary Obligor; containing such affirmative coverage and endorsements as
Administrative Agent may require and are available under applicable title 

 

 

3

 

insurance
rules, and the applicable Subsidiary Obligor shall satisfy all requirements
therefor; insuring any easements, leasehold estates or other matters
appurtenant to or benefiting the Land and/or the Improvements as part of the
insured estate; insuring the right of access to the Land to the extent
authorized under applicable title insurance rules, and the Borrower owning such
Project shall satisfy all requirements therefor; and containing provisions
acceptable to Administrative Agent in its good faith business judgment regarding
advances and/or readvances of Loan funds after closing.  Neither Borrowers nor their counsel shall
have any interest, direct or indirect, in the Title Company (or its agent) or
any portion of the premium paid for the Title Insurance.

 

8.             Insurance Policies.  For each Project to be added to the
Collateral Pool, the insurance policies initially required by Administrative
Agent, pursuant to the Loan Documents, together with evidence satisfactory to
Administrative Agent that all premiums therefor have been paid for a period of
not less than one (1) year from the Admission Date and that the policies
are in full force and effect.

 

9.             Leases.  For each Project to be added to the
Collateral Pool, unless waived in whole or in part by Administrative Agent (i) true
and correct copies of all Leases; and (ii) Tenant Subordination Agreements
(including nondisturbance agreements if and to the extent agreed by
Administrative Agent in its discretion) from all Tenants whose Leases are not
expressly, unconditionally subordinate to the Lien of the Deed of Trust in
favor of Administrative Agent, in form and content satisfactory to
Administrative Agent.

 

10.           Rent Roll; Operating
Statements.  For each Project to be added to the
Collateral Pool, a current rent roll for such Project, certified by the
Subsidiary Obligor as being true and correct in all material respects and a
three (3) year operating and occupancy history of such Project in form
satisfactory to Administrative Agent, provided  that with respect
to any period such Project being acquired by a Subsidiary Obligor with the
proceeds of the Loan or owned by such Subsidiary Obligor less than three years,
such information shall only be required to be delivered to the extent
reasonably available to Subsidiary Obligor.

 

11.           Environmental Compliance/Report.  For each Project to be added to the
Collateral Pool, evidence satisfactory to Administrative Agent that no portion
of the Land is “wetlands” under any applicable Law and that the Land does not
contain and is not within or near any area designated as a hazardous waste site
by any Tribunal, that neither the Project nor any adjoining property contains
or has ever contained any substance classified as hazardous or toxic (or
otherwise regulated, such as, without limitation, asbestos, radon and/or
petroleum products) under any Law or governmental requirement pertaining to
health or the environment, and that neither the Project nor any use or activity
thereon violates or is or could be subject to any response, remediation,
clean-up or other obligation under any Law or governmental requirement
pertaining to health or the environment including without limitation, a written
report of an environmental assessment of the Project, made within twelve (12)
months prior to the Admission Date, by an engineering firm, and of a scope and
in form and content satisfactory to Administrative Agent, complying with
Administrative Agent’s established guidelines, showing that there is no
evidence of any such substance which has been generated, treated, stored,
released or disposed of in the Project, and such additional evidence as may be
required by Administrative Agent.  All
reports, drafts of reports, and recommendations, whether written or 

 

 

4

 

oral,
from such engineering firm shall be made available and communicated to
Administrative Agent.

 

12.           Access, Utilities, and Laws.  For each Project to be added to the
Collateral Pool  (a) evidence
satisfactory to Administrative Agent in its good faith business judgment that
the Project abuts and has fully adequate direct and free access to one or more
public streets, dedicated to public use, fully installed and accepted by the
appropriate Tribunal and that there are no restrictions on the use and
enjoyment of such streets which would materially adversely affect the Project; (b) evidence
reasonably satisfactory to Administrative Agent that all applicable zoning
ordinances, restrictive covenants and governmental requirements affecting the
Collateral permit the use for which the Collateral is intended and have been or
will be complied with without the existence of any variance, non-complying use,
nonconforming use or other special exception; (c) evidence satisfactory to
Administrative Agent that the Land and Improvements comply and will comply with
all Laws and governmental requirements regarding subdivision and platting and
would so comply if the Land and the Improvements thereon were conveyed as a
separate parcel; and (d) if required by Administrative Agent, a true and
correct copy of a valid certificate of occupancy for the Improvements or other
evidence satisfactory to Administrative Agent that all permits or approvals
required for occupancy of the Improvements have been obtained.

 

13.           Priority. 
For each Project to be added to the Collateral Pool (a) evidence
satisfactory to Administrative Agent in its good faith business judgment that
prior to and as of the time the applicable Deed of Trust was filed for record
no mechanic’s or materialman’s lien claim or notice, lis pendens, judgment, or
other claim or encumbrance against the Project has been filed for record in the
county where the Project is located or in any other public record which by Law
provides notice of claims or encumbrances regarding the Project; (b) a certificate
or certificates of a reporting service acceptable to Administrative Agent,
reflecting the results of searches made not earlier than ten (10) days
prior to the Admission Date, of the central and local Uniform Commercial Code
records, showing no filings against any of the collateral for the Loan or
against the Subsidiary Obligor otherwise except for the Permitted Encumbrances
or other items consented to by Administrative Agent.

 

14.           Tax and Standby Fee Certificates.  For each Project to be added to the
Collateral Pool, evidence satisfactory to Administrative Agent in its good
faith business judgment (a) of the identity of all taxing authorities and
utility districts (or similar authorities) having jurisdiction over the Project
or any portion thereof; (b) that all taxes, standby fees and any other
similar charges currently due and payable have been paid, including (if
available) copies of receipts or statements marked “paid” by the appropriate
authority; and (c) that the Land is a separate tax lot or lots with
separate assessment or assessments of the Land and Improvements, independent of
any other land or improvements and that the Land is a separate legally
subdivided parcel.

 

15.           Engineering Reports.  For each Project to be added to the
Collateral Pool, the Subsidiary Obligor shall have delivered (or cause to be
delivered) to Administrative Agent (i) a written Engineering Report with
respect to such Project dated not more than 60 days prior to the Admission Date
and prepared by an Engineer reasonably acceptable to Administrative Agent,
which Engineering Report shall in all other respects be reasonably
satisfactory, in form and substance, to Administrative Agent and (ii) a
reliance letter from the Engineer with respect to 

 

 

5

 

each
Engineering Report addressed to Administrative Agent and Lenders, which letter
shall be in form and substance reasonably satisfactory to the Agent.

 

16.           No Adverse Litigation. For each Project to be added to the Collateral
Pool, there shall not be pending or threatened in writing, any action,
suit, proceeding, governmental investigation or arbitration against or
affecting the Subsidiary Obligor or the Project that has not been disclosed to
Administrative Agent in writing and approved by the Lenders, and there shall
have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, that, in
either event, in the good faith business judgment of Administrative Agent, is
reasonably likely to have a Material Adverse Effect, and no injunction or other
restraining order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the making of the
Loan hereunder.

 

17.           Identification Due Diligence.  All due diligence materials reasonably deemed
necessary by Administrative Agent and each Lender with respect to verifying the
identity and background information of each new Subsidiary Obligor in a manner
reasonably satisfactory to Administrative Agent and each Lender.

 

18.           Borrower’s NOI Certificate.  A Borrower’s NOI Certificate dated as of the
Admission Date.

 

19.           Management Documents.  Copies of all management and leasing
agreements related to such Project, together with a fully executed original
Property Manager’s Subordination from the applicable Property Manager in form
satisfactory to Administrative Agent

 

20.           Form Lease. 
The form or forms Lease used at such Project.

 

21.           Other Documents. 
Such other documents and certificates as Administrative Agent may
reasonably request from Borrowers or Subsidiary Obligor, in form and content
reasonably satisfactory to Administrative Agent.

 

If, after receipt and review of the foregoing documents and
information, Administrative Agent is prepared to proceed with acceptance of
such Eligible Asset as a part of the Collateral Pool, Administrative Agent will
so notify the Operating Partnership, and Administrative Agent will submit the
foregoing documents and information and the Appraisal to the Lenders, for approval
by all Lenders.  Upon the unanimous
approval of all Lenders and upon execution and delivery of documents and
completion of all other closing requirements imposed by Administrative Agent,
such Eligible Asset shall become a part of the Collateral Pool.

 

 

6

 

 

 

EXHIBIT E

 

ORGANIZATIONAL
CHART; LIST OF SUBSIDIARIES

 

 

 

 

EXHIBIT F

 

ADVANCES

 

1.             Advance Request.  The Operating Partnership shall deliver a
Advance Request to Administrative Agent, together with, if the amount requested
would otherwise exceed the then existing Maximum Availability Amount or if the
NOI for the Collateral Pool is no longer sufficient to achieve the Debt Service
Coverage Ratio required to maintain the then existing Maximum Availability
Amount, a current Borrower’s NOI Certificate. 
Each Advance Request must be received by Administrative Agent not later
than 11:00 a.m., Administrative Agent’s Time, at least three (3) Business
Days prior to the Funding Date for LIBOR Rate Principal Advances, and at least
one (1) Business Day prior to the Funding Date for all other
Advances.  Each Advance Request, and
Borrowers’ acceptance of any Advance, shall be deemed to ratify and confirm, as
of the requested Funding Date, that, except as disclosed in any Advance Request
and approved by Lenders: (a) the representations and warranties contained
herein and in the other Loan Documents remain true and correct in all material
respects to the same extent as though made on and as of the requested Funding
Date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date, (b) there is no uncured Default or Potential Default
existing under the Loan Documents and no event shall have occurred and be
continuing or would result from the consummation of the borrowing contemplated
by such Advance Request that would constitute a Default or a Potential Default,
(c) all Advances previously made to Borrowers were disbursed, and the
proceeds of the Advance requested in the Advance Request will immediately be
disbursed, for the purposes permitted by this Agreement and for no other
purpose, (d)  each Borrower shall have performed in all material respects
all agreements and satisfied in all material respects all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
requested Funding Date; and (e) there shall not be pending or, to the
knowledge of any Borrower, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting any Borrower or
any property of any Borrower that is required to be but has not been disclosed
by such Borrowers to Administrative Agent in writing pursuant this Agreement.

 

2.             Advances.  Borrowers shall be entitled to an Advance
only in an amount approved by Administrative Agent in accordance with the terms
of this Agreement and the Loan Documents. Lenders shall, only upon the
satisfaction, as reasonably determined by Administrative Agent, of all
applicable conditions of this Agreement and the Loan Documents, be required to
make the requested Advance to the Operating Partnership, for distribution to
one or more Borrowers, on the applicable Funding Date.  All Advances of the Loan made to the
Operating Partnership under this Agreement shall be deemed to be Advances to
each Borrower, irrespective of how such Advance 
is applied or distributed by the Operating Partnership and each Borrower
is and will be jointly and severally liable for the repayment of all such
Advances, as provided herein and in the other Loan Documents.

 

3.             Conditions to the First Advance.  As conditions precedent to the first Advance
hereunder, if and to the extent required by Administrative Agent, to
Administrative Agent’s satisfaction in its good faith business judgment,
Borrowers must have satisfied the conditions 

 

 

1

 

required under this
Agreement, including all of those conditions set forth in Exhibit C
and Section 4 below.

 

4.             Conditions to All Advances.  As conditions precedent to each Advance made
pursuant to a Advance Request, in addition to all other requirements contained
in this Agreement, if and to the extent required by Administrative Agent:

 

(a)           The Advance Termination Date shall
not have passed;

 

(b)           Administrative Agent shall have
received and approved an Advance Request;

 

(c)           If required to establish an increase
in the Maximum Availability Amount or a decrease in the same based upon a
change in the required Debt Service Coverage for the Collateral Pool,
Administrative Agent shall have received and approved a current Borrower’s NOI
Certificate and verified the Operating Partnership’s calculation of NOI
reflected therein;

 

(d)           After giving effect to the requested
Advance, the Total Outstandings shall not exceed the Maximum Availability
Amount;

 

(e)           Administrative Agent shall have
determined, in the exercise of its good faith business judgment, that no
Default or Potential Default exists or will exists, as of the Funding Date;

 

(f)            Except as to any disclosure in any Advance Request
approved by Lenders, Administrative Agent shall have determined, in the
exercise of its good faith business judgment, that the representations and
warranties made in the Loan Documents are true and correct on and as of the
Funding Date and no event shall have occurred or condition or circumstance
shall exist which, if known to Borrowers, would render any such representation
or warranty incorrect in any material respect; and

 

(g)           Administrative Agent shall have
determined, in its reasonable discretion, that as of the Funding Date, no event
shall have occurred, nor shall any condition exist, that could have a Material
Adverse Effect.

 

5.             Direct Advances.  Borrowers hereby irrevocably authorize
Administrative Agent on behalf of Lenders (but Administrative Agent shall have
no obligation) to (i) advance Loan funds directly to Lenders to pay
interest due on the Loan, and (ii) advance and directly apply the proceeds
of any Advance to the satisfaction of any of Borrowers’ obligations under any
of the Loan Documents, even though Borrowers did not include that amount in an
Advance Request and/or no Default exists. Each such direct Advance shall be
added to the outstanding principal balance of the Loan and shall be secured by
the Loan Documents.  Unless Borrowers pay
such interest from other resources, Administrative Agent may advance Loan funds
pursuant to this Section for interest payments as and when due.  Nothing contained in this Agreement shall be
construed to permit Borrowers to defer payment of interest on the Loan beyond
the date(s) due.  Administrative
Agent may hold, use, disburse and apply the Loan for payment of any obligation
of Borrowers under the Loan Documents. 
Borrowers hereby assign and pledge the proceeds of the Loan to
Administrative Agent for the ratable benefit of Lenders for such purposes.  During the continuance of a Default,
Administrative Agent on behalf of Lenders may advance and incur 

 

 

2

 

such expenses as Administrative
Agent deems necessary to preserve the Collateral, and any other security for
the Loan, and such expenses, even though in excess of the amount of the Loan,
shall be secured by the Loan Documents and shall be payable to Administrative
Agent on behalf of Lenders on demand. 
Administrative Agent on behalf of Lenders may disburse any portion of
any Advance at any time, and from time to time, to Persons other than Borrowers
for the purposes specified in this Section and the amount of Advances to
which Borrowers shall thereafter be entitled shall be correspondingly reduced.

 

6.             Conditions and Waivers.  All conditions precedent to the obligation of
Lenders to make any Advance are imposed hereby solely for the benefit of
Administrative Agent and Lenders, and no other party may require satisfaction
of any such condition precedent or be entitled to assume that Lenders will
refuse to make any Advance in the absence of strict compliance with such
conditions precedent.

 

 

3

 

EXHIBIT F-1

 

FORM OF ADVANCE REQUEST

 

ADVANCE REQUEST NO.:

 

	
  TO:

  	
  Bank of America, N.A., as Administrative Agent

  
	
  LOAN NO.:

  	
   

  
	
  DATE:

  	
   

  
	
  BORROWERS:

  	
  BEHRINGER HARVARD OPPORTUNITY OP I, LP, a Texas limited partnership
  (the “Operating Partnership”), and certain of its Subsidiaries

  
	
   

  	
   

  

 

In
accordance with the Credit Agreement dated February     ,
2008, among the Operating Partnership, certain other parties (the “Credit
Agreement”), Administrative Agent and the Lenders as defined therein, the
Operating Partnership  requests that
$                    
be advanced from Loan proceeds.  The
Operating Partnership hereby further certifies to Administrative Agent and the
Lenders as follows:

 

1.             The proposed Funding Date (which
must be a Business Day) is                 .

 

2.             The following
elections shall apply with respect to such Advance:

 

	
  (a)

  	
  o

  	
  Base Rate Principal:

  	
  $

  	 

	
   

  	 

	
  (b)

  	
  o

  	
  LIBOR Rate Principal:

  	
  $

  	 

	
   

  	
   

  	
   

  	
   

  	 

	 
	
  INTEREST
  PERIOD

  	
   

  	
  AMOUNT

  
	 
	
  o one
  month

  	
   

  	
  $

  
	 
	
  o two
  months

  	
   

  	
  $

  
	 
	
  o three
  months

  	
   

  	
  $

  
	 
	
  o six
  months

  	
   

  	
  $

  
							

 

3.                                       The Maximum
Availability Amount is
$                    
and the amount of the proposed Advance will not cause the Total Outstandings to
exceed the Maximum Availability Amount.   If the
Maximum Availability Amount specified above is greater than that specified in
the most recent Advance Request, then attached to this Advance Request as Exhibit A
is a current Borrower’s NOI Certificate.

 

4.                                       The Debt
Service Coverage Ratio (as determined in accordance with the Credit Agreement)
equals or exceeds the following:
                    .

 

5.                                       All
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true and accurate in all respects as of the date of this
Advance Request, except as disclosed in any previous Advance Request or as
follows (if any):

 

1

 

6.             The Advance should
be credited to the account of the Operating Partnership, on behalf of Borrowers,
as follows:

 

	
  Account No.:

  	
   

  	
   

  	
   

  
	
  Account Name:

  	
   

  	
   

  	
   

  
	
  ABA No.:

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  	
   

  

 

	
  OPERATING
  PARTNERSHIP:

  
	
   

  	
   

  	
   

  
	
  BEHRINGER HARVARD OPPORTUNITY OP I, LP, a Texas
  limited partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
  BHO, Inc., a Delaware corporation, its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive
  Vice President-Corporate Development & Legal Secretary

  
						

 

2

 

EXHIBIT G

 

SURVEY
REQUIREMENTS

 

1.             Requirements.  The Survey shall be made in accordance with,
and meet the requirements of, the certification below by a registered
professional engineer or registered professional land surveyor.  The description shall be a single metes and
bounds perimeter description of the entire Land, and a separate metes and
bounds description of the perimeter of each constituent tract or parcel out of
the Land.  The total acreage and square
footage of the Land and each constituent tract or parcel of the Land shall be
certified.  If the Land has been recorded
on a map or plat as part of an abstract or subdivision, all survey lines must
be shown, and all lot and block lines (with distances and bearings) and
numbers, must be shown.  The date of any
revisions subsequent to the initial survey prepared pursuant to these
requirements must also be shown.

 

2.             Certification.  The certification for the property
description and the map or plat shall be addressed to Administrative Agent,
Borrowers and the Title Company, signed by the surveyor (a registered
professional land surveyor or registered professional engineer), bearing
current date, registration number, and seal, and shall be in the following form
or its substantial equivalent, as may be approved by Administrative Agent:

 

                                                This is to certify to
                                
[Insert names of Administrative Agent, Borrowers
and Title Company] that this map or plat and the survey on which it
is based were made in accordance with the “Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys” jointly established and
adopted by ALTA and NSPS in 2005, and include optional items 1, 2, 4 (in square
feet or acres), 6, 8, 10, 11(b), 16, 17, 18, and if buildings are located on
the land, optional items 7(a), 7(b)(1), 7(b)(2) and 9 of Table A
thereof.  Pursuant to the Accuracy
Standards as adopted by ALTA and NSPS and in effect on the date of this
certification, the undersigned further certifies that in my professional
opinion, as a land surveyor registered in the State of
                      ,
the maximum Relative Positional Accuracy resulting from the measurements made
on the survey does not exceed the Allowable Relative Positional Accuracy for
Measurements Controlling Land Boundaries on ALTA/ACSM Land Title Surveys (0.07
feet or 20 mm + 50 ppm).  The undersigned additionally certifies that (a) this
survey was made on the ground under my supervision; (b) I have received
and examined a copy of the Title Insurance Commitment No.                               
issued by the Title Company as well as a copy of each instrument listed
therein, and the subject land and each tract or parcel thereof described in this
survey is the same land as described in the Title Commitment; (c) if the
subject land consists of two or more tracts or parcels having common
boundaries, those tracts and parcels are contiguous along the common
boundaries; (d) the subject land and each tract or parcel thereof has a
tax map designation separate and distinct from that of any other land and the
subject land and each tract or parcel thereof is a separate, legally subdivided
parcel;  (e) this survey correctly
shows all matters of record, (and to the extent they can be located, their
location and dimensions) of which I have been advised affecting the subject
land according to the legal description in such matters (with instrument, book,
and page number indicated); (f) except as shown on this survey, no
part of the subject land is located in a 100-year Flood Plain or in an identified
“flood prone area,” as defined pursuant to the Flood Disaster Protection
Act of 1973, as amended, as reflected by Flood Insurance Rate Map Panel 

 

 

1

 

                                                #                       dated                       , which such map panel covers the area in which
the subject property is situated and this survey correctly indicates the zone
designation of any area as being in the 100-year Flood Plain or “flood prone
area”; (g) to the best of my knowledge, this survey shows the relation
of and distance of all substantial, visible buildings, sidewalks and other
improvements to easements and setback lines; and (h) to the best of my
knowledge, except as shown on this survey, neither the subject land nor any
tract or parcel thereof serves any adjoining land for drainage, utilities, or
ingress or egress.

 

 

2

 

 

 

EXHIBIT H

 

FORM OF LOAN ASSUMPTION
AGREEMENT

 

LOAN ASSUMPTION AGREEMENT

 

THIS LOAN ASSUMPTION
AGREEMENT (this “Agreement”) is entered into effective as of
                            ,
20    , by and among BANK OF AMERICA, N.A., a national
banking association, as Administrative Agent (“Administrative Agent”),
BEHRINGER HARVARD OPPORTUNITY OP I, LP, a Texas limited partnership(“Operating
Partnership”), for itself and on behalf of all Borrowers made a party to
the Credit Agreement, and
                                                   ,
                                                  
(“New Obligor”), on the following terms and conditions:

 

R E C I T A L S:

 

A.            Operating
Partnership and certain of its Subsidiaries (the “Property Owners”) may
from time to time be indebted to the Loan Parties (defined below) pursuant to
that certain Credit Agreement dated as
of February     , 2008 (as modified, amended,
renewed, restated or supplemented from time to time, the “Credit Agreement”), among the Operating Partnership, the Lenders from time to time
party thereto, and Bank of America, N.A., a national banking association, as
Administrative Agent (in such capacity, together with its successors and
assigns, “Administrative
Agent”) and L/C Issuer (Administrative
Agent, L/C Issuer and Lenders, together
with their respective successors and assigns, are herein called the “Loan Parties”),
and certain Property Owners from time to time made a party thereto.  The Credit Agreement pertains to a $75,000,000
loan (with an option to increase the amount of such loan up to $150,000,000 as
provided in the Credit Agreement) (the “Loan”).  The Operating Partnership and the Property
Owners from time to time obligated under the Credit Agreement and the other
Loan Documents (as defined in the Credit Agreement) are sometimes referred to
herein as the “Borrower Parties”.

 

B.            The
Loan is evidenced by one or more promissory notes issued by the Borrower
Parties from time to time pursuant to the Credit Agreement (the “Notes”).

 

C.            Certain
of the proceeds of the Loan will be advanced by the Operating Partnership or
other Borrower Parties to New Obligor to be used by New Obligor to finance the
acquisition of certain real property. 
New Obligor, a Subsidiary of the Operating Partnership, will benefit, directly
and indirectly, from the making of the
Loan.  New Obligor desires to
assume and perform, jointly and severally with the Borrower Parties, all of the
duties and obligations of the Borrower Parties arising under the Credit
Agreement, the Notes and the other Loan Documents (as defined in the Credit
Agreement).

 

NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.             Assumption of Loan Obligations.  New Obligor hereby unconditionally, jointly
and severally with the Borrower Parties, (i) assumes and agrees to perform
all of the obligations 

 

 

1

 

and liabilities of an “Borrower” under the Credit Agreement in
accordance with the terms and provisions of the Credit Agreement, and (ii) promises to pay to Administrative Agent, L/C
Issuer and Lenders all principal, interest and other sums due and payable under
the Credit Agreement, the Notes and other Loan Documents in accordance with
their terms.  New Obligor hereby
agrees to be bound by the terms of the Credit Agreement and the Notes to the
same extent as if the Credit Agreement and the Notes were originally executed
and delivered to Loan Parties by New Obligor.

 

2.             Governing Law/Binding
Effect.  This Agreement is
governed by and shall be construed in accordance with the laws of the State of
Texas, without reference to any conflicts of law rule that would otherwise
require the application of the laws of another jurisdiction.  This Agreement shall be binding on and shall
inure to the benefit of the parties and their successors and assigns.

 

3.             Notice of Final Agreement.  In connection with the Loan, Borrower
Parties, Administrative Agent, L/C Issuer and Lenders have executed and
delivered certain agreements, instruments and documents (collectively
hereinafter referred to as the “Written Loan Agreement”).  It is the intention of the Borrower Parties,
Administrative Agent, L/C Issuer and Lenders that this Notice be incorporated
by reference into each of the written agreements, instruments and documents
comprising the Written Loan Agreement. 
Borrower Parties, Administrative Agent, L/C Issuer and Lenders each
warrants and represents that the entire agreement made and existing by or among
Borrower Parties, Administrative Agent, L/C Issuer and Lenders with respect to
the Loan is contained within the Written Loan Agreement, as amended and
supplemented hereby, and that no agreements or promises have been made by, or
exist by or among, Borrower Parties, Administrative Agent, L/C Issuer and
Lenders that are not reflected in the Written Loan Agreement.

 

THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 

 

2

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

 

 

	
  NEW
  OBLIGOR:

  
	
   

  	
   

  
	
  [ADD SIGNATURE BLOCK]

  
	
   

  
	
   

  
	
  OPERATING PARTNERSHIP:

  
	
   

  
	
  BEHRINGER HARVARD OPPORTUNITY OP I,

  LP, a Texas limited partnership

  
	
   

  	
   

  
	
  By:

  	
  BHO, Inc., a Delaware corporation, its

  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Gerald
  J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive
  Vice President — Corporate

  
	
   

  	
   

  	
  Development &
  Legal and Secretary

  
	
   

  	
   

  
	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A., a national banking

  association, as Administrative Agent

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
							

 

 

 

3

 

EXHIBIT I

 

LEASING AND TENANT MATTERS

 

Each
Borrower hereby agrees with Administrative Agent and the other Lenders as
follows:

 

1.             Leases. 
Subsidiary Obligors may, without the prior approval of Administrative
Agent, execute one or more Leases in respect of a single Project  (collectively, “Exempt Leases”) so
long as (i) the net rentable area covered by such Lease does not exceed
more than fifteen percent (15%) of the total net rentable square feet of such
Project; (ii) the Lease is for a term of five years or more; and (iii) the
minimum base rent payable by the tenant under such Lease (based upon rental
rates determined by the Appraisal for such Project) equals or exceeds, as to
the Projects listed below, the amount set for the below in the Rental Rate column
opposite such Project (or, as to any additional projects added to the
Collateral Pool, an amount determined by Administrative Agent in its reasonable
discretion after its review and approval of a current Appraisal of the same):

 

	
  Project

  	
   

  	
  Rental Rate

  
	
  2
  Northpointe Drive, Houston, TX 77060

  	
   

  	
  $20.94

  
	
  12600
  Whitewater Drive, Minnetonka, MN 55343

  	
   

  	
  $12.40

  
	
  1525,
  1555 & 16231 West Walnut Hill Lane, Irving, TX 75038

  	
   

  	
  $12.06

  
	
  17300
  Dallas Parkway, Dallas, TX 75248

  	
   

  	
  $19.13

  
	
  2603
  Augusta Drive, Houston, TX 77057

  	
   

  	
  $21.97

  
	
  5000
  South Bowen Road, Arlington, TX 76017

  	
   

  	
  $13.93

  
	
  2901
  Wilcrest Drive, Houston, TX 77042

  	
   

  	
  $18.53

  

 

Except
for Exempt Leases, no Borrower shall enter into any Lease of space in the
Improvements which has not been approved in writing by Administrative
Agent.  As used herein, the term “Approved
Leases” means, collectively, all Exempt Leases and all Leases approved in
writing by Administrative Agent.  If any
proposed Lease is not an Exempt Lease, prior to execution, the applicable
Subsidiary Obligor shall provide to Administrative Agent a correct and complete
copy of such proposed Lease, including any exhibits and each guarantee thereof
(if any), together with, if available, a comparison version of such Lease
showing the revisions made to its original form or the form lease, if any,
approved by Administrative Agent, as applicable.

 

2.             Oil and Gas Leases.  Except for the Approved O&G Leases, no
Subsidiary Obligor shall (i) execute any Lease permitting the exploration,
extraction, drilling, productions and similar activities for oil, gas and other
hydrocarbons and other minerals in and under the Land comprising any part of
the Collateral, or (ii) grant, assign, transfer or convey to any Person
(other than another Subsidiary Obligor), any right, title or interest in and to
any oil, gas and other hydrocarbons and other minerals in and under the Land
comprising any part of the Collateral, in either case, without the prior
written approval of Administrative Agent, which approval will not be
unreasonably withheld so long as such Lease or conveyance instrument, as
applicable, contains an absolute and unconditional waiver by the holder or
lessee to use the surface of the Land for such activities or for any activity
that would otherwise interfere with the current use of the Land and
Improvements.

 

 

1

 

3.             Effect
of Lease Approval.  No approval of
any Lease by Administrative Agent shall be for any purpose other than to
protect Lenders’ security, and to preserve Lenders’ rights under the Loan
Documents.  No approval by Administrative
Agent shall result in a waiver of any default of any Borrower.  In no event shall any approval by
Administrative Agent of a Lease be a representation of any kind, with regard to
the Lease or its adequacy or enforceability, or the financial capacity of any
Tenant or guarantor.

 

4.             Delivery
of Leasing Information and Documents. 
Each Subsidiary Obligor shall promptly (a) deliver to
Administrative Agent such rent rolls, leasing schedules and reports, operating
statements, and other information regarding tenants and prospective tenants or
other leasing information as Administrative Agent from time to time may
request, and (b) use commercially reasonable efforts to obtain and deliver
to Administrative Agent such estoppel certificates and Tenant Subordination
Agreements executed by such Tenants (and guarantors, if any) in such forms as
Administrative Agent from time to time may require (but not more than once
annually).

 

5.             Compliance
and Default.  Each Subsidiary Obligor
shall deliver to Administrative Agent, upon request by Administrative Agent,
evidence of the approval of any Tenant to any construction plans or other items
requiring such Tenant’s approval under its Lease.  Each Subsidiary Obligor shall promptly notify
Administrative Agent in writing of any failure by such Subsidiary Obligor or
any Tenant to perform any material obligation under any Lease regarding the
Collateral owned by such Subsidiary Obligor, any event or condition which would
permit a Tenant to terminate or cancel a Lease, or any written notice given by
a Tenant with respect to the foregoing, specifying in each case the action such
Subsidiary Obligor has taken or will take with respect thereto.

 

 

2

 

 

 

EXHIBIT J

 

INSURANCE
REQUIREMENTS

 

Each Subsidiary Obligor shall obtain and maintain
at such Subsidiary Obligor’s sole expense, as to the Collateral owned by such
Subsidiary Obligor:

 

(1)           Mortgagee title insurance issued to
Administrative Agent as required by this Agreement;

 

(2)           Property insurance with respect to
all insurable property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such additional hazards as are presently included
in Special Form (also known as “all risk”) coverage and against any and
all acts of terrorism and such other insurable hazards as Administrative Agent
may require, in an amount not less than 100% of the full replacement cost,
including the cost of debris removal, without deduction for depreciation and
sufficient to prevent such Subsidiary Obligor and Administrative Agent from
becoming a coinsurer, such insurance to be in “builder’s risk” completed
value(non reporting) form during and with respect to any construction on such
Collateral;

 

(3)           If and to the extent any portion of
the Improvements owned by such Subsidiary Obligor is, under the Flood Disaster
Protection Act of 1973 (“FDPA”), as it may be amended from time to time, in a
Special Flood Hazard Area, within a Flood Zone designated A or V in a
participating community, a flood insurance policy in an amount required by
Administrative Agent, but in no event less than the amount sufficient to meet
the requirements of applicable law and the FDPA, as such requirements may from
time to time be in effect;

 

(4)           General liability insurance, on an “occurrence”
basis against claims for “personal injury” liability, including bodily injury,
death or property damage liability, insurance, including “Dram Shop” or other
liquor liability coverage if alcoholic beverages are sold from or may be
consumed at such Collateral, for the benefit of such Subsidiary Obligor as
named insured and Administrative Agent as additional insured;

 

(5)           Statutory workers’ compensation
insurance with respect to any work on or about such Collateral (including
employer’s liability insurance, if required by Administrative Agent), covering
all employees of such Subsidiary Obligor and any contractor; to the extent such
coverage is covered by the contractor or subcontractor on behalf of such
Subsidiary Obligor, Administrative Agent will accept such coverage on behalf of
such Subsidiary Obligor upon receipt of evidence of such coverage;

 

(6)           If there is a general contractor,
commercial general liability insurance, including products and completed
operations coverage, and in other respects similar to that described in clause (4) above,
for the benefit of the general contractor as named insured and such Subsidiary
Obligor and Administrative Agent as additional insureds, in addition to
statutory workers’ compensation insurance with respect to any work on or about
such Collateral (including employer’s liability insurance, if required by
Administrative Agent), covering all employees of the general contractor and any
contractor;

 

 

1

 

(7)           Blanket fidelity bond and errors and
omissions (to the extent not covered by the blanket fidelity bond) insurance
coverage insuring against losses resulting from dishonest or fraudulent acts
committed by (A) such Subsidiary Obligor’s personnel; (B) any
employees of outside firms that provide appraisal, legal, data processing or
other services for such Subsidiary Obligor or (C) temporary contract
employees or student interns; and

 

(8)           Such other insurance with respect to
such Collateral and endorsements as may from time to time be required by
Administrative Agent (including but not limited to soft cost coverage,
automobile liability insurance, business interruption insurance or delayed
rental insurance, boiler and machinery insurance, earthquake insurance, wind
insurance, sinkhole coverage, and/or permit to occupy endorsement)) and against
other insurable hazards or casualties which at the time are commonly insured
against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and
improvements.

 

At least ten (10) days prior to the
expiration of each such policy, Subsidiary Obligor shall furnish Administrative
Agent with evidence satisfactory to Administrative Agent of the payment of
premiums and the reissuance of policies continuing insurance in force as
required by this Agreement. All such policies of insurance shall contain an
endorsement or agreement by the insurer that any loss is payable in accordance
with the terms of such policies notwithstanding any act or negligence of such
Subsidiary Obligor which might otherwise result in forfeiture of said
insurance, and the further agreement of the insurer waiving all rights of
setoff, counterclaim or deductions against such Subsidiary Obligor.  All insurance policies shall be issued and
maintained by insurers, in amounts, with deductibles, limits and retentions,
and in forms satisfactory to Administrative Agent, and shall require not less
than ten (10) days’ prior written notice to Administrative Agent of any
cancellation for nonpayment of premiums, and 
not less than thirty (30) days’ prior written notice to Administrative
Agent of any other cancellation or any change of coverage. All insurance
companies must be licensed to do business in the state in which such Collateral
is located and must have an A. M. Best Company financial and performance
ratings of A-:IX or better.  All
insurance policies maintained, or caused to be maintained, by such Subsidiary
Obligor with respect to such Collateral, except for general liability
insurance, shall provide that each such policy shall be primary without right
of contribution from any other insurance that may be carried by such Subsidiary
Obligor or Administrative Agent and that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured.

 

All such policies of insurance shall contain an
endorsement or agreement by the insurer that any loss is payable in accordance
with the terms of such policies notwithstanding any act or negligence of such
Subsidiary Obligor which might otherwise result in forfeiture of said
insurance, and the further agreement of the insurer waiving all rights of
setoff, counterclaim or deductions against such Subsidiary Obligor.  Without limiting the discretion of
Administrative Agent with respect to required endorsements to insurance
policies, all such policies for loss of or damage to such Collateral shall
contain a standard mortgagee clause (without contribution) naming
Administrative Agent as mortgagee with loss proceeds payable to Administrative
Agent notwithstanding (i) any act, failure to act or negligence of or
violation of any warranty, declaration or condition contained in any such
policy by any named or additional insured; (ii) the occupation or use of
such Collateral 

 

 

2

 

for purposes more hazardous than permitted by the
terms of any such policy; (iii) any foreclosure or other action by
Administrative Agent under the Loan Documents; or (iv) any change in title
to or ownership of such Collateral or any portion thereof, such proceeds to be
held for application as provided in this Agreement.

 

The originals of each initial insurance policy (or
to the extent permitted by Administrative Agent, a copy of the original policy
and such evidence of insurance acceptable to Administrative Agent) shall be
delivered to Administrative Agent at the time of execution of this Agreement,
with all premiums fully paid current. 
Each Subsidiary Obligor shall pay all premiums on policies required
hereunder as they become due and payable and promptly deliver to Administrative
Agent evidence satisfactory to Administrative Agent of the timely payment
thereof.  If any loss occurs at any time
when any Subsidiary Obligor has failed to perform such Subsidiary Obligor’s
covenants and agreements in this paragraph with respect to any insurance
payable because of loss sustained to any part of the Collateral owned by such
Subsidiary Obligor, whether or not such insurance is required by Administrative
Agent, Administrative Agent shall nevertheless be entitled to the benefit of
all insurance covering the loss and held by or for such Subsidiary Obligor, to
the same extent as if it had been made payable to Administrative Agent.

 

 

3

 

 

 

EXHIBIT K

 

LETTERS OF
CREDIT

 

1.             The Letter of Credit Commitment.

 

(i)            Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this Exhibit K, (1) from time to time on any Business
Day during the period from the Closing Date until the Letter of Credit Sublimit
Expiration Date, to issue Letters of Credit for the account of Borrowers and to
amend or renew Letters of Credit previously issued by it, in accordance with Section 2
below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of Borrowers; provided  that the L/C Issuer shall not be
obligated to make any L/C Credit Extension with respect to any Letter of
Credit, and no Lender shall be obligated to participate in, any Letter of
Credit if as of the date of such L/C Credit Extension, (x) the amount of
all L/C Obligations and the outstanding principal balance of the Loan would
exceed the Maximum Availability Amount, or (y) the total amount of all L/C
Obligations would exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to
the terms and conditions hereof, Borrowers’ ability to obtain Letters of Credit
shall be fully revolving, and accordingly Borrowers may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed. 
The obligations of Borrowers with respect to Letters of Credit shall be
joint and several, notwithstanding that any Letter of Credit may be issued for
the account of any one or more Borrowers (but less than all Borrowers).  Each Letter of Credit shall be secured by the
Security Documents, irrespective of when such Letter of Credit may be issued
hereunder or the purpose or beneficiary of such Letter of Credit.  The release of any Borrower or of any Release
Parcel from the Collateral Pool in accordance with the provisions of this
Agreement shall not relieve the remaining Borrowers of their duties and
obligations under this Agreement with respect to any Letters of Credit issued
and outstanding hereunder.

 

(ii)           The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:

 

(A)          any
order, judgment or decree of any Tribunal or arbitrator shall by its terms
purport to enjoin or restrain the L/C Issuer from issuing such Letter of
Credit, or any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of Law) from any Tribunal with jurisdiction
over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the L/C Issuer
in good faith deems material to it;

 

(B)           subject
to the other provisions of this Exhibit K, the expiry date of such
requested Letter of Credit would occur more than twelve months after the date
of issuance or last renewal, unless the Required Lenders have approved such
expiry date;

 

 

1

 

(C)           the
expiry date of such requested Letter of Credit would occur after the Letter of
Credit Sublimit Expiration Date, unless such Letter of Credit is Cash
Collateralized pursuant to the other provisions of this Exhibit K;

 

(D)          the
issuance of such Letter of Credit would violate one or more policies of the L/C
Issuer; or

 

(E)           such
Letter of Credit is in an initial amount less than $25,000, or is in a currency
other than United States dollars.

 

(iii)          The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms hereof,
or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

 

2.             Procedures for Issuance and Amendment of Letters of
Credit.

 

(i)            Each Letter of Credit shall be issued or amended, as the
case may be, upon the request any Borrower delivered to the L/C Issuer (with a
copy to Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by the applicable Borrower.  Such Letter of Credit Application must be
received by the L/C Issuer and Administrative Agent not later than 11:00 a.m.,
Administrative Agent’s Time, at least two (2) Business Days (or such later
date and time as the L/C Issuer may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may
require in its good faith business judgment. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C
Issuer may require in its good faith business judgment.

 

(ii)           Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with Administrative Agent (by
telephone or in writing) that Administrative Agent has received a copy of such
Letter of Credit Application from such Borrower and, if not, the L/C Issuer
will provide Administrative Agent with a copy thereof.  Upon receipt by the L/C Issuer of
confirmation from Administrative Agent that the requested issuance or amendment
is permitted in accordance with the terms hereof, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of Borrowers or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to, 

 

 

2

 

purchase
from the L/C Issuer a participation in such Letter of Credit in an amount equal
to the product of such Lender’s Pro Rata Share times the amount of such
Letter of Credit.

 

(iii)          Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the Operating
Partnership and Administrative Agent a true and complete copy of such Letter of
Credit or amendment.

 

3.             Drawings
and Reimbursements; Funding of Participations.

 

(i)            Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Operating Partnership and Administrative Agent thereof.  On the date of any payment by the L/C Issuer
under a Letter of Credit (each such date, an “Honor Date”),
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the drawing (the “Draw Amount”), and the amount of such Lender’s
Pro Rata Share thereof.  In such event,
Borrowers shall be deemed to have requested an advance of Base Rate Principal
to be disbursed on the Honor Date in an amount equal to the Draw Amount,
subject to the amount of the unutilized portion of the Maximum Availability
Amount.  Any notice given by the L/C
Issuer or Administrative Agent pursuant to this subsection may be given by telephone
if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

 

(ii)           Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to the subsection above make funds available to
Administrative Agent for the account of the L/C Issuer at Administrative Agent’s
Office in an amount equal to its Pro Rata Share of the Draw Amount not later
than 1:00 p.m., Administrative Agent’s Time, on the Business Day specified
in such notice by Administrative Agent, whereupon, subject to the provisions of
the subsection below, each Lender that so makes funds available shall be deemed
to have made an advance of Base Rate Principal to Borrowers in such
amount.  Administrative Agent shall remit
the funds so received to the L/C Issuer.

 

(iii)          Until each Lender funds its Loan advance or participation
in an L/C Borrowing pursuant to this Section 3 to reimburse the L/C
Issuer for any amount drawn under any Letter of Credit, interest in respect of
such Lender’s Pro Rata Share of such amount shall be solely for the account of
the L/C Issuer.

 

(iv)          Each Lender’s obligation to make a Loan advance to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 3, shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, Borrowers or any other person for any reason
whatsoever; (B) the occurrence or continuance of a Default or Potential
Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing.  No such
reimbursement shall relieve or otherwise impair the obligation of Borrowers to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.

 

 

3

 

(v)           If any Lender fails to make available to Administrative
Agent for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 3 by
the time specified in subsection (ii) above, the L/C Issuer shall be
entitled to recover from such Lender (acting through Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect.  A certificate of the
L/C Issuer submitted to any Lender (through Administrative Agent) with respect
to any amounts owing under this clause (v) shall be conclusive absent
manifest error.

 

4.             Repayment of Participations.

 

(i)            At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender’s
participation in a L/C Borrowing in respect of such payment in accordance with Section 3
above, if Administrative Agent receives for the account of the L/C Issuer any
payment in respect of the related Draw Amount or interest thereon (whether
directly from Borrowers or otherwise, including proceeds of Cash Collateral
applied thereto by Administrative Agent), Administrative Agent will distribute
to such Lender its Pro Rata Share (appropriately adjusted, in the case of
interest payments, to reflect the period of time Lender’s participation payment
was outstanding) thereof in the same funds as those received by Administrative
Agent.

 

(ii)           If any payment received by Administrative Agent for the
account of the L/C Issuer pursuant to Section 3 is required to be
returned, under any of the circumstances described in Section 6.4
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion) each Lender shall pay to Administrative Agent for the account of
the L/C Issuer its Pro Rata Share thereof on demand of Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.

 

5.             Obligations Absolute.  The obligation of Borrowers to reimburse the
L/C Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing, shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

 

(i)            any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)           the existence of any claim, counterclaim, set-off, defense
or other right that Borrowers may have at any time against any beneficiary or
any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

 

(iii)          any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or 

 

 

4

 

any
statement therein being untrue or inaccurate in any respect; or any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;

 

(iv)          any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; or

 

(v)           any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of,
Borrowers.

 

Borrowers
shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with Borrowers’ instructions or other irregularity, Borrowers will promptly
notify the L/C Issuer.  Borrowers shall
be conclusively deemed to have waived any such claim against the L/C Issuer and
its correspondents unless such notice is given as aforesaid.

 

6.             Role of L/C Issuer.  Each Lender and Borrowers agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer, any Agent-Related
Person nor any of the respective correspondents, participants or assignees of
the L/C Issuer shall be liable to any Lender for (i) any action taken or
omitted in connection herewith at the request or with the approval of the
Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit
Application.  Borrowers hereby assume all
risks of the acts or omissions of any beneficiary or transferee with respect to
the use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude Borrowers’ pursuing such
rights and remedies as they may have against the beneficiary or transferee at
law or under any other agreement.  None
of the L/C Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
the above Section 5; provided, however, that anything
in such clauses to the contrary notwithstanding, Borrowers may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to Borrowers, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by Borrowers which Borrowers prove were caused by
the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying
with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that 

 

 

5

 

appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

 

7.             Cash Collateral.  Upon the request of Administrative Agent, (i) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing that remains unpaid
for more than three (3) Business Days, or (ii) if, as of the Letter
of Credit Sublimit Expiration Date, any Letter of Credit may for any reason
remain outstanding and partially or wholly undrawn, Borrowers shall within
three (3) Business Days after written request from Administrative Agent
immediately Cash Collateralize the then outstanding amount of all L/C
Obligations (in an amount equal to such outstanding amount determined as of the
date of such L/C Borrowing or the Letter of Credit Sublimit Expiration Date, as
the case may be).  For the purposes
hereof “Cash Collateralize” means to pledge and deposit with or deliver
to Administrative Agent, for the ratable benefit of the L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to
Administrative Agent in its good faith business judgment and the L/C Issuer
(which documents are hereby consented to by the Lenders).  Derivatives of such term shall have
corresponding meaning.  Borrowers hereby
grant Administrative Agent, for the ratable benefit of the L/C Issuer and the
Lenders, a security interest in all such cash and deposit account balances and
all proceeds of the foregoing.  Cash
collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America, N.A..

 

8.             Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the L/C
Issuer and any Borrower when a Letter of Credit is issued, (i) the rules of
the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as
may be in effect at the time of issuance) shall apply to each standby Letter of
Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the “ICC”) at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6,
1998 regarding the European single currency (euro)) shall apply to each
commercial Letter of Credit.

 

9.             Fees. 
Borrowers shall pay to Administrative Agent, for the benefit of Lenders
and L/C Issuers, as applicable, all fees for the issuance of Letters of Credit
specified in Section 1.5 of this Agreement.

 

10.           Conflict with Letter of Credit Application.  In the event of any conflict between the
terms hereof and the terms of any Letter of Credit Application, the terms
hereof shall control.

 

 

6

 

 

EXHIBIT L

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This Assignment and
Assumption (this “Assignment”) is dated as of the Effective Date set
forth below and is entered into by and between
                                  
(the “Assignor”) and
                                        
(the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (the “Credit Agreement”), receipt of a
copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.

 

For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit
Agreement, as of the Effective Date inserted by Administrative Agent as
contemplated below, (i) all of the Assignor’s rights and obligations as a
Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including,  without limitation, any Letter of Credit and Guaranty), and
(ii) to the extent permitted to be assigned under applicable Law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or in any way based on or related to any
of the foregoing, including, but not limited to contract claims, tort claims,
malpractice claims, statutory claims and all other claims at Law or in equity,
related to the rights and obligations sold and assigned pursuant to clause (i) above
(the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.

 

	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

  	
   

  	
  [is
  an Affiliate/Approved Fund of                             ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrowers(s):

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative
  Agent:

  	
   

  	
   

  	
  ,
  as the administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit
  Agreement:

  	
   

  	
  The
  Credit Agreement, dated as of                               ,
  among                                             ,
  the Lenders parties thereto, [and] Bank of
  America, N.A., as Administrative Agent[, and the other agents
  parties thereto]

  
													

 

1

 

6.             Assigned Interest:

 

	
  Aggregate
  Commitment of all Lenders

  	
   

  	
  Amount
  of Commitment Assigned

  	
   

  	
  Percentage
  Assigned of Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
								

 

Effective Date:
                                    ,
20     [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

 

	
  The terms set forth in this Assignment are hereby agreed to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
  [Consented to and] Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  , as

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Administrative Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Consented to:]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

2

 

 

ANNEX 1 TO ASSIGNMENT AND
ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.         Representations and Warranties.

 

1.1.      Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents, or any collateral thereunder, (iii) the financial condition of
any Borrower, any of its Subsidiaries or Affiliates, or any other Person
obligated in respect of any Loan Document, or (iv) the performance or
observance by any Borrower, any of its Subsidiaries or Affiliates, or any other
Person of any of their respective obligations under any Loan Document.

 

1.2.      Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iv) it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Exhibit B thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision independently and without reliance on
Administrative Agent or any other Lender to enter into this Assignment and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and (ii) it
will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender.

 

1.3       Assignee’s Address for Notices, etc.  Attached hereto as Schedule 1 is all contact
information, address, account and other administrative information relating to
the Assignee.

 

 

1

 

2.         Payments.  From
and after the Effective Date, Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignee whether such amounts have accrued prior
to or on or after the Effective Date. The Assignor and the Assignee shall make
all appropriate adjustments in payments by Administrative Agent for periods
prior to the Effective Date or with respect to the making of this Assignment
directly between themselves.

 

3.         General Provisions. 
This Assignment shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.  This Assignment may be executed in any number
of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment.  This Assignment shall be governed by, and
construed in accordance with, the Law of the State of Texas.

 

 

2

 

 

 

SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION

 

ADMINISTRATIVE DETAILS

 

(Assignee to list names of
credit contacts, addresses, phone and facsimile numbers, electronic mail
addresses and account and payment information)

 

	
   

  	
  (a)

  	
  Libor Lending Office:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Domestic Lending Office:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Notice Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assignee Name:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
  Telephone: (   )

  	
   

  
	
   

  	
   

  	
  Telecopier: (   )

  	
   

  
	
   

  	
   

  	
  Electronic Mail:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Payment Instructions:
  Account No.:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Account No.:

  	
   

  
	
   

  	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
  Reference:

  	
   

  
											

 

 

1

 

 

EXHIBIT M

 

FORM OF PROMISSORY NOTE

 

	
  $ 

  	
                                ,
  200   

  

 

                FOR VALUE
RECEIVED, BEHRINGER HARVARD OPPORTUNITY OP I, LP, a Texas limited partnership,
BEHRINGER HARVARD BOWEN ROAD LP, a Delaware limited partnership, BEHRINGER
HARVARD WHITEWATER, LLC, a Delaware limited liability company, BEHRINGER
HARVARD LAS COLINAS LP, a Delaware limited partnership, BEHRINGER HARVARD BENT
TREE LP, a Delaware limited partnership, BEHRINGER HARVARD AUGUSTA LP, a
Delaware limited partnership, BEHRINGER HARVARD NORTHPOINT LP, a Delaware
limited partnership, and BEHRINGER HARVARD REGENCY LP, a Delaware limited
partnership, [and                                                                                                    
any other Subsidiary Obligor now or hereafter made
a party to the Credit Agreement described below] (collectively, “Borrowers”)
hereby jointly and severally, promise to pay to the order of
                                          ,
a
                                            
(“Lender”)  under that certain Credit
Agreement (defined below) among Borrowers,  Bank of
America, N.A., a national banking association (together with any and all of its
successors and assigns, “Administrative Agent”), as Administrative Agent
for the ratable benefit of the Lenders from time to time made  a party to that certain Credit Agreement (the
“Credit Agreement”) dated February     , 2008,
without offset, in immediately available funds in lawful money of the United
States of America, at Administrative Agent’s Office as defined in the Credit
Agreement, the principal sum of
                                                                              
DOLLARS
($                                              )
(or the unpaid balance of all principal advanced against this Note, if that
amount is less), together with interest on the unpaid principal balance of this
Note from day to day outstanding as hereinafter provided.

 

This Note is being executed
and delivered by Borrowers to amend, restate, [bifurcate,]
[consolidate,] and further evidence the
indebtedness evidenced by the following note[s]:  that certain Promissory Note issued by
Borrowers as of
                        ,
20    , to the order of
                                ,
in the stated principal amount of
$                                
(the “$                  
Note”) [and that certain Promissory Note issued by
Borrowers as of
                    ,
20    , to the order of                           ,
in the stated principal amount of
$                            
]([together,] the “Original Note[s]”).  The
indebtedness [a portion of the indebtedness]
evidenced by the
$                      
Note is being assigned by
                        
to Payee pursuant to an Assignment and Assumption Agreement dated of even date
herewith, executed by
                                
and Payee.  This Note is being issued in
substitution and replacement of the Original Note[s]
and shall constitute a renewal, amendment, [consolidation,][bifurcation,]
and restatement of the indebtedness evidenced by the Original Note[s].  This Note shall
not constitute a novation or payment of any part of the indebtedness evidenced
by the Original Note[s].  All interest evidenced by the Original Note[s] shall continue to be due and payable until paid.

 

1.             Note; Interest; Payment Schedule and Maturity Date.  This Note is one of the Notes referred to in
Credit Agreement and is entitled to the benefits thereof.  The entire principal balance of this Note
then unpaid shall be due and payable at the times as set forth in the Credit 

 

 

1

 

Agreement.  Accrued unpaid interest shall be due and
payable at the times and at the interest rate as set forth in the Credit
Agreement until all principal and accrued interest owing on this Note shall
have been fully paid and satisfied.  Any
amount not paid when due and payable hereunder shall, to the extent permitted
by applicable Law, bear interest at the Past Due Rate, as set forth in the
Credit Agreement.

 

2.             Guaranty; Loan Documents.  The obligations of Borrowers under this Note
are secured by the Security Documents (as defined in the Credit Agreement) and
guaranteed, in whole or in part, by the Guaranty (whether one or more, as
defined in the Credit Agreement).

 

3.             Defaults.

 

(a)           It shall be a default (“Default”) under this Note
and each of the other Loan Documents if (after giving effect to any applicable
notice, grace or cure periods) (i) any principal, interest or other amount
of money due under this Note is not paid in full when due, regardless of how
such amount may have become due; (ii) any covenant, agreement, condition,
representation or warranty herein or in any other Loan Documents is not fully
and timely performed, observed or kept; or (iii) there shall occur any default
or event of default under the Deed of Trust or any other Loan Document.  Upon the occurrence and during the
continuation of a Default, Administrative Agent, on behalf of Payee and the
other Lenders, (as defined in the Loan Agreement) shall have the rights to
declare the unpaid principal balance and accrued but unpaid interest on this
Note, and all other amounts due hereunder and under the other Loan Documents,
at once due and payable (and upon such declaration, the same shall be at once
due and payable), to foreclose any liens and security interests securing
payment hereof and to exercise any of its other rights, powers and remedies
under this Note, under any other Loan Document, or at Law or in equity.

 

(b)           All of the rights, remedies, powers and privileges
(together, “Rights”) of Administrative Agent, on behalf of Payee and the
other Lenders, provided for in this Note and in any other Loan Document are
cumulative of each other and of any and all other Rights at Law or in
equity.  The resort to any Right shall
not prevent the concurrent or subsequent employment of any other appropriate
Right.  No single or partial exercise of
any Right shall exhaust it, or preclude any other or further exercise thereof,
and every Right may be exercised at any time and from time to time.  No failure by Administrative Agent, Payee or
the other Lenders to exercise, nor delay in exercising any Right, including but
not limited to the right to accelerate the maturity of this Note, shall be
construed as a waiver of any Default or as a waiver of any Right.  Without limiting the generality of the
foregoing provisions, the acceptance by Payee from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i) constitute
a waiver of or impair or extinguish the right of Administrative Agent, on
behalf of Payee, to accelerate the maturity of this Note or to exercise any
other Right at the time or at any subsequent time, or nullify any prior
exercise of any such Right, or (ii) constitute a waiver of the requirement
of punctual payment and performance or a novation in any respect.

 

(c)           If any holder of this Note retains an attorney in
connection with any Default or at maturity or to collect, enforce or defend
this Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy, arbitration or other proceeding, or if any Borrower

 

 

2

 

sues
any holder in connection with this Note or any other Loan Document and does not
prevail, then Borrowers agree to pay to each such holder, in addition to
principal, interest and any other sums owing to Payee hereunder and under the
other Loan Documents, all  costs and expenses
incurred by such holder in trying to collect this Note or in any such suit or
proceeding, including, without limitation, attorneys’ fees and expenses,
investigation costs and all court costs, whether or not suit is filed hereon,
whether before or after the Maturity Date, or whether in connection with
bankruptcy, insolvency or appeal, or whether collection is made against
Borrowers or Guarantor or endorser or any other person primarily or secondarily
liable hereunder.

 

4.             Heirs, Successors and Assigns.  The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing sentence shall not be construed
to permit Borrowers to assign the Loan except as otherwise permitted under the
Loan Documents.  As further provided in
the Loan Agreement, Payee may, at any time, sell, transfer, or assign all on a
portion of its interest in this Note, the Deed of Trust and the other Loan
Documents, as set forth in the Loan Agreement.

 

5.             General Provisions.  Time is of the essence with respect to
Borrowers’ obligations under this Note. 
If more than one person or entity executes this Note as a borrower, all
of said parties shall be jointly and severally liable for payment of the
indebtedness evidenced hereby.  Each
Borrower on behalf of itself and all sureties, endorsers, guarantors and any
other party now or hereafter liable for the payment of this Note in whole or in
part, hereby (a) waives, to the extent permitted by applicable Laws,
demand, presentment for payment, notice of dishonor and of nonpayment, protest,
notice of protest, notice of intent to accelerate, notice of acceleration and
all other notices (except any notices which are specifically required by this
Note or any other Loan Document or are required by applicable Law), filing of
suit and diligence in collecting this Note or enforcing any of the security
herefor; (b) agrees to any substitution, subordination, exchange or
release of any such security or the release of any party primarily or
secondarily liable hereon; (c) agrees that neither Administrative Agent
nor Payee or any Lender shall be required first to institute suit or exhaust
its remedies hereon against such Borrower or others liable or to become liable
hereon or to perfect or enforce its rights against them or any security
herefor; (d) consents to any extensions or postponements of time of
payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect
hereto, without notice thereof to any of them; and (e) submits (and waives
all rights to object) to non-exclusive personal jurisdiction of any state or
federal court sitting in the city and county, and venue in the city or county,
in which payment is to be made as specified in Section 1 of this
Note, for the enforcement of any and all obligations under this Note and the
Loan Documents; (f) waives the benefit of all homestead and similar
exemptions as to this Note; (g) agrees that their liability under this
Note shall not be affected or impaired by any determination that any security
interest or lien taken by Administrative Agent, on behalf of Payee and the
other Lenders, to secure this Note is invalid or unperfected; and (h) hereby
subordinates any and all rights against such Borrower and any of the security
for the payment of this Note, whether by subrogation, agreement or otherwise,
until this Note is paid in full.  A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or
circumstances.  

 

 

3

 

This
Note may not be amended except in a writing specifically intended for such
purpose and executed by the party against whom enforcement of the amendment is
sought.  Captions and headings in this
Note are for convenience only and shall be disregarded in construing it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT
OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

 

6.             Notices. 
Any notice, request, or demand to or upon Borrowers, Administrative
Agent or Payee shall be deemed to have been properly given or made when
delivered in accordance with the Loan Agreement.

 

7.             No Usury.  It is expressly stipulated and agreed to be
the intent of Borrowers, Administrative Agent and all Lenders (including Payee)
at all times to comply with applicable state law or applicable United States
federal law (to the extent that it permits a lender to contract for, charge,
take, reserve, or receive a greater amount of interest than under state law)
and that this Section shall control every other covenant and agreement in
this Note and the other Loan Documents. 
If applicable state or federal law should at any time be judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Loan, or if the exercise by
Administrative Agent, on behalf of the Lenders, of the option to accelerate the
Maturity Date, or if any prepayment by Borrowers results in Borrowers having
paid any interest in excess of that permitted by applicable law, then it is
Administrative Agent’s and each Lender’s (including Payee’s) express intent
that all excess amounts theretofore collected by Administrative Agent’s and
each Lender (including Payee) shall be credited on the principal balance of
this Note and all other indebtedness and the provisions of this Note and the
other Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder.  All sums paid
or agreed to be paid to Lenders (including Payee) for the use, forbearance, or
detention of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the maximum lawful rate from time to time
in effect and applicable to the Loan for so long as the Loan is outstanding.

 

THE
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

THERE
ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

IN
WITNESS WHEREOF, Borrowers have duly executed this Note as of the date first
above written.

 

                                                                [INSERT
SIGNATURE BLOCKS FOR BORROWERS]

 

 

4

 

 

EXHIBIT N

 

SCHEDULE OF LENDERS

 

BANK OF
AMERICA, N.A., as Administrative Agent:

 

Domestic and Libor Lending Office:

901 Main Street,
20th Floor

Dallas, TX
75202-3714

Attn:       Real Estate Loan Administration

Cindy King

Telephone:  214/209-1925

Facsimile:  214/209-1571

 

Notices:

 

901 Main Street,
20th Floor

Dallas, TX
75202-3714

Attn:       Real Estate Loan Administration

Cindy King

Telephone:  214/209-1925

Facsimile:  214/209-1571

 

 

	
   BANK
  OF AMERICA, N.A., AS LENDER

  	
   

  	
  COMMITMENT AMOUNT: $ 

  PRO RATA SHARE:               %

  

 

Domestic
and Libor Lending Office:

 

901 Main Street,
20th Floor

Dallas, TX
75202-3714

Attn:       Real Estate Loan Administration

Cindy King

Telephone:  214/209-1925

Facsimile:  214/209-1571

 

Notices:

 

901 Main Street,
20th Floor

Dallas, TX
75202-3714

Attn:       Real Estate Loan Administration

Cindy King

Telephone:  214/209-1925

Facsimile:  214/209-1571

 

Payment
Instructions;  Account Information:

 

	
  Account No.:

  	
   

  	
   

  
	
  Account Name:

  	
   

  	
   

  
	
  ABA No.:

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  

 

 

1

 

	
   

  	
  , AS LENDER

  	
  COMMITMENT AMOUNT: $ 

  PRO RATA SHARE:         %

  
	
   

  

 

	
  Domestic
  and Libor Lending Office:

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
	
   

  
	
  Notices:

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
						

 

Payment
Instructions:  Account No.:

 

	
  Account No.:

  	
   

  	
   

  
	
  Account Name:

  	
   

  	
   

  
	
  ABA No.:

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  

 

2

 

 

EXHIBIT O

 

FORM OF
BORROWER’S NOI CERTIFICATE

 

SEE ATTACHED

 

 

1

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