Document:

exv10w62

 

Exhibit 10.62

OWNERSHIP INTERESTS PLEDGE AND SECURITY AGREEMENT

1. Grant of Security Interest. Hines REIT Properties, L.P., a Delaware limited partnership, having
an address at c/o Hines Interests Limited Partnership, 2800 Post Oak Blvd., Suite 5000, Houston,
Texas 77056 (“Pledgor”) does hereby pledge, assign, transfer and deliver to KeyBank National
Association, a national banking association, having an address at 127 Public Square, Cleveland,
Ohio 44114, in its capacity as administrative agent (together with any successor administrative
agent appointed pursuant to Section 11 of the Term Loan Agreement (as hereinafter defined),
“Administrative Agent”), for itself and such other financial institutions (collectively, “Lenders”)
as may become parties to (in accordance with the terms of) that certain Term Loan Agreement
(hereinafter the “Term Loan Agreement”) dated as of even date herewith, by and among Pledgor, as
borrower, Administrative Agent and Lenders, and does hereby grant to Administrative Agent on behalf
of Lenders a continuing security interest in the Collateral (as hereinafter defined), which
security interest is expressly subordinated to the security interest in the Collateral securing the
obligations under the Senior Credit Facility (as defined in the Term Loan Agreement), to secure the
payment and performance in full of the Obligations (as hereinafter defined).

2. Term Loan Agreement and Defined Terms. This agreement (“Pledge and Security Agreement” or
“Agreement”) is delivered pursuant to the terms of the Term Loan Agreement. Capitalized terms used
herein which are not otherwise specifically defined herein shall have the same meaning herein as in
the Term Loan Agreement.

3. Collateral. The term “Collateral” shall mean and include the following property, wherever
located:

	 	(a)	 	all of Pledgor’s right, title and interest (including, without limitation, Pledgor’s
voting rights) in each Portfolio Investment (all interests in Portfolio Investments included in the
Collateral pursuant to this clause (a) or clause (b) below of this Section 3 are referred to herein
as “Pledged Interests”) (as of the Closing Date the Pledged Interests consist solely of the
Portfolio Investments listed on Exhibit A);
	 
	 	(b)	 	all Portfolio Investments acquired by Pledgor after the Closing Date; provided, however,
that, if the terms of any third party financing proposed to be obtained in connection with the
acquisition of any Portfolio Asset relating to any such Portfolio Investment would prohibit Pledgor
from pledging in favor of Administrative Agent on behalf of Lenders one hundred percent (100%) of
such Portfolio Investment, then only that portion of such Portfolio Investment that is permitted to
be pledged under the terms of such financing (and, in each case, to the greatest extent so
permitted) shall be included in the Collateral; provided further, however, that in no event shall
less than forty nine percent (49%) of such Portfolio Investment be included in the Collateral
without the consent of Administrative Agent on behalf of Lenders, such consent not to be
unreasonably withheld or delayed;
	 
	 	(c)	 	all certificates or other instruments, if any, representing a Pledged Interest;

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	 	(d)	 	all Pledgor’s income, cash flow, rights of distribution, dividends, interest, proceeds,
accounts, fees, profits, or other rights to payment which in any way relate to or arise out of the
Pledged Interests;
	 
	 	(e)	 	all rights of access arising from the Pledged Interests to books, records, information and
electronically stored data relating to any of the foregoing; and
	 
	 	(f)	 	the Borrower Escrow Account, including all funds deposited therein pursuant to Section 3.3
of the Term Loan Agreement and any income earned on such funds;

provided, however, that for the avoidance of doubt, to the extent that the Pledged Interest in any
Portfolio Investment constituting Collateral also constitutes collateral securing obligations under
the Senior Credit Facility, then such Pledged Interest shall be a second priority Lien on the same
interest securing obligations under the Senior Credit Facility.

4. Obligations. The term “Obligations” shall mean all obligations of Pledgor to
Administrative Agent and Lenders, whether now existing or hereafter arising, direct or indirect,
absolute or contingent, under any one or more of: (i) this Agreement; (ii) the Term Loan
Agreement, the Note(s), or any other Credit Document; and (iii) each of the same as hereafter
modified, amended, extended or replaced in accordance with the terms thereof.

5. Warranties and Representations. Pledgor warrants and represents to, and agrees with,
Administrative Agent on behalf of Lenders that:

	 	5.1	 	Pledgor is the owner of the Collateral free and clear of all pledges, liens, security
interests and other encumbrances of every nature whatsoever, except for (i) the Senior Security
Interest, (ii) any liens or encumbrances in effect as of the date hereof which have been disclosed
to Administrative Agent; or (iii) any such liens or encumbrances in favor of Administrative Agent
on behalf of Lenders;
	 
	 	5.2	 	Pledgor has the full right, power and authority to pledge the Collateral and to grant the
security interest in the Collateral as herein provided;
	 
	 	5.3	 	There are no restrictions on, or consents required (except for those which have been
obtained prior to the execution hereof) with respect to, the transfer of the Collateral to
Administrative Agent on behalf of Lenders hereunder, or, except as provided in the organizational
documents of the Portfolio Investment Entities, with respect to any subsequent transfer thereof or
realization thereupon by Administrative Agent on behalf of Lenders;
	 
	 	5.4	 	Each Pledged Interest listed on Exhibit A is as described and set forth on Exhibit A
attached hereto and made a part hereof;

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	 	5.5	 	True and complete copies of the organizational documents of each of the Portfolio
Investment Entities listed on Exhibit A have been delivered by Pledgor to
Administrative Agent on behalf of Lenders, and, as of the date hereof, the same have
not been further amended or modified in any respect whatsoever;
	 
	 	5.6	 	All of the warranties and representations made by or in respect of Pledgor under the Term
Loan Agreement are true and accurate;
	 
	 	5.7	 	The execution, delivery and performance of this Agreement by Pledgor does not and shall
not result in the violation of any mortgage, indenture, material contract, instrument, agreement,
judgment, decree, order, statute, rule or regulation to which Pledgor is subject, or by which it or
any of its property is bound;
	 
	 	5.8	 	This Agreement constitutes a legal, valid and binding obligation of Pledgor in accordance
with the terms hereof and has been duly authorized, executed and delivered by Pledgor.

6. Pledgor’s Agreements. Pledgor agrees so long as the Obligations remain outstanding that:

	 	6.1	 	Pledgor shall execute all such instruments, documents and papers, and will do all such
acts as Administrative Agent may reasonably request from time to time to carry into effect the
provisions and intent of this Agreement including, without limitation, the execution of
stop-transfer orders, stock powers, notifications to obligors on the Collateral, the providing of
notification in connection with book-entry securities or general intangibles, and the providing of
instructions to the issuers of uncertificated securities, and will do all such other acts as
Administrative Agent on behalf of Lenders may reasonably request with respect to the perfection and
protection of the pledge and security interests granted herein and the assignments effected hereby,
including, without limitation, the execution and delivery of any amendments or supplements to this
Agreement to evidence the Portfolio Investments or portions thereof included in the Collateral, and
authorizes Administrative Agent at any time and from time to time to file UCC financing statements,
continuation statements, and amendments thereto describing the Collateral without the signature of
Borrower;
	 
	 	6.2	 	Except for the Senior Security Interest or any liens or encumbrances in effect as of the
date hereof that have been disclosed to Administrative Agent or liens or encumbrances permitted by
the Term Loan Agreement, Pledgor shall keep the Collateral free and clear of all liens,
encumbrances, attachments, security interest pledges and charges;
	 
	 	6.3	 	Except as permitted by the Term Loan Agreement and the Senior Credit Facility, Pledgor
shall not transfer the Collateral or any direct or indirect interest therein to any other Person;

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	 	6.4	 	Except as provided below and pursuant to the terms of the Senior Credit Facility, Pledgor shall
deliver to Administrative Agent on behalf of Lenders, if and when received by Pledgor, any item
representing or constituting any of the Collateral including, without limitation, all cash
dividends and distributions. If under any circumstance whatsoever any such proceeds should be paid
to or come into the hands of Pledgor, Pledgor shall hold the same in trust for immediate delivery
to Administrative Agent on behalf of Lenders to be held as additional Collateral. Notwithstanding
the foregoing, so long as Pledgor, as borrower under the Term Loan Agreement, is not required to
deposit funds into the Borrower Escrow Account on the date a cash dividend or distribution with
respect to the Collateral is received by Pledgor, Pledgor may retain or dispose of such cash
dividend or distribution, but may not retain, and shall deliver to Administrative Agent on behalf
of Lenders, as set forth above, all certificates of ownership whether now existing or hereafter
received as a result of any dividends, splits or other transactions in or affecting the Collateral.
Administrative Agent on behalf of Lenders shall apply all such dividends and distributions so
delivered to or as may be received by Administrative Agent on behalf of Lenders in accordance with
Section 3.3 of the Term Loan Agreement;
	 
	 	6.5	 	Except as permitted by the Term Loan Agreement or this Agreement and the Senior Credit
Facility, Pledgor shall not exercise any right with respect to the Collateral which would
materially dilute or materially adversely affect Administrative Agent’s or Lenders’ security
interest in the Collateral;
	 
	 	6.6	 	Except as permitted by the Term Loan Agreement and the Senior Credit Facility, Pledgor shall
not, without the prior written consent of Administrative Agent on behalf of Lenders in each
instance, which consent shall not be unreasonably withheld or delayed, vote the Collateral in favor
of or consent to any resolution or action which does or might:

	 	(i)	 	impose any additional restrictions upon the sale, transfer or disposition of the
Collateral other than restrictions, if any, the application of which is waived to the full
satisfaction of Administrative Agent on behalf of Lenders as to the Collateral; or
	 
	 	(ii)	 	result in the issuance of any additional interest in any of the Portfolio Investment
Entities, or of any class of security, which issuance could reasonably be expected to
materially adversely affect the value of the Collateral; or
	 
	 	(iii)	 	vest additional powers, privileges, preferences or priorities in any other class of
interest in any of the Portfolio Investment Entities to the material detriment of the value of or
rights accruing to the Collateral; or

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	 	(iv)	 	permit any of the Portfolio Investment Entities to sell, transfer, assign, pledge,
mortgage, or otherwise encumber any property, assets or investments owned by such Portfolio
Investment Entity, or to incur any new Indebtedness;

	 	6.7	 	Except as permitted by the Term Loan Agreement and the Senior Credit Facility, Pledgor
shall not enter into or consent to any amendment or modification of or with respect to the
governing documents of any of the Portfolio Investment Entities
which could reasonably be expected to materially adversely affect the value of the Collateral
without the prior written consent of Administrative Agent on behalf of Lenders in each instance,
which consent shall not be unreasonably withheld or delayed;
	 
	 	6.8	 	Insofar as the same may be material or significant to Administrative Agent’s or Lenders’
interests, subject to the terms of the Senior Credit Facililty, Pledgor shall perform in all
material respects all of its obligations as a partner, member or shareholder of each Portfolio
Investment Entity and shall enforce, to the extent provided for it in the governing documents of
such Portfolio Investment Entity all of the obligations of the other shareholders, partners or
members of such Portfolio Investment Entity;
	 
	 	6.9	 	Pledgor shall not itself or on behalf of any Portfolio Investment Entity take any action
which would cause or result in a violation of any provisions of the Credit Documents; and
	 
	 	6.10	 	Subject to the terms of the Senior Credit Facility, Pledgor shall take all such actions
as may be necessary or desirable in order to insure that all of the Obligations of the Pledgor
under the Credit Documents are punctually and faithfully paid and performed in the manner provided
for therein.

7. Events of Default.

	 	7.1	 	Upon the occurrence and during the continuance of any Event of Default, Administrative
Agent on behalf of Lenders may exercise any one or more of the rights and remedies as hereinafter
set forth or as set forth and provided for in each of the other Credit Documents.
	 
	 	7.2	 	Prior to the occurrence of an Event of Default, and after the cure of such Event of
Default (if cured prior to an acceleration of the Loan Maturity by Administrative Agent) and the
reimbursement by Pledgor of all expenses incurred by Administrative Agent and Lenders resulting
from such Event of Default, Pledgor shall be entitled to exercise any and all rights to receive
cash dividends and distributions, consent, vote, approve, elect, determine, consult, propose,
agree, and all other rights or prerogatives, if any, pertaining to the Collateral or any part

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	 	 	 	thereof, to the extent permitted under the terms of the Term Loan Agreement and
other Credit Documents.

8. After Event of Default

	 	8.1	 	Upon the occurrence and during the continuance of any Event of Default, and at any time
thereafter (unless (x) Administrative Agent on behalf of Lenders has waived such Event of Default
by written instrument signed by a duly authorized officer of Administrative Agent or (y) such Event
of Default has been cured as set forth in Section 7.2 hereof and in Section 9.2 of the Term Loan
Agreement), subject to the rights and remedies of the Senior Secured Parties, Administrative Agent
on behalf of Lenders
shall have all of the rights and remedies of a secured party upon default under the Uniform
Commercial Code as adopted in the Commonwealth of Massachusetts, in addition to which
Administrative Agent on behalf of Lenders may sell or otherwise dispose of the Collateral or any
portion thereof and/or enforce and collect the Collateral or any portion thereof (including,
without limitation, the liquidation of debt instruments or securities and the exercise of
conversion rights with respect to convertible securities, whether or not such instruments or
securities have matured, and whether or not any penalties or other charges are imposed on account
of such action) for application towards (but not necessarily in complete satisfaction of) the
Obligations. Subject to the rights and remedies of the Senior Secured Parties, the proceeds of any
such collection or of any such sale or other disposition of the Collateral, or any portion thereof
shall be applied as provided in Section 3.3 of the Term Loan Agreement. Pledgor shall remain
liable to Administrative Agent and Lenders for any deficiency remaining following such application.
Any surplus remaining after payment in full of all Obligations shall be paid over to Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
	 
	 	8.2	 	Unless the Collateral is perishable, threatens to decline speedily in value, or is of a
type customarily sold on a recognized market (in which event Administrative Agent shall give
Pledgor such notice as may be practicable under the circumstances), Administrative Agent shall give
Pledgor at least the greater of the minimum notice required by law or ten (10) days’ prior written
notice of the date, time and place of any public sale thereof, or of the time after which any
private sale or any other intended disposition is to be made.
	 
	 	8.3	 	Pledgor acknowledges that any exercise by Administrative Agent on behalf of Lenders of
Lender’s rights upon an Event of Default will be subject to compliance by Administrative Agent on
behalf of Lenders with the applicable statutes, regulations, ordinances, directives and orders of
any federal, state, municipal or other governmental authority including, without limitation, any of
the foregoing which may restrict the sale or disposition of securities. Administrative Agent in
its sole discretion at any such sale or in connection with any such disposition may restrict the
prospective bidders or purchasers as to their number, nature of business,

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	 	 	 	investment intention, or otherwise, including, without limitation, a requirement
that the Persons making such purchases represent and agree to the satisfaction of
Administrative Agent that they are purchasing the Collateral, or some portion
thereof, for their own account, for investment and not with a view towards the
distribution or a sale thereof, or that they otherwise fall within some lawful
exemption from registration under applicable laws.

9. Actions By Administrative Agent. Pledgor hereby appoints Administrative Agent, or any agent
designated by Administrative Agent, as the attorney-in-fact of Pledgor after an Event of Default
has occurred and is continuing to: (a) endorse in favor of Administrative Agent on behalf of
Lenders any of the Collateral; (b) cause the transfer of any of the Collateral in such name as
Administrative Agent may from time to time
determine; (c) renew, extend or roll over any Collateral; (d) make, demand and initiate actions to
enforce any of the Collateral or rights therein; and (e) file financing statements, continuation
statements, and amendments thereto describing the Collateral without the signature of Pledgor.
Administrative Agent on behalf of Lenders may take such action with respect to the Collateral as
Administrative Agent may reasonably determine to be necessary to protect and preserve its interest
in the Collateral. Subject to the rights and remedies of the Senior Secured Parties,
Administrative Agent shall also have and may exercise at any time after an Event of Default has
occurred and is continuing all rights, remedies, powers, privileges and discretions of Pledgor with
respect to and under the Collateral; provided that in no event shall Administrative Agent have the
right to make capital calls on Pledgor or any other shareholder, member or partner of a Portfolio
Investment Entity. The within designation and grant of power of attorney is coupled with an
interest and is irrevocable until this Pledge and Security Agreement is terminated by a written
instrument executed by a duly authorized officer of Administrative Agent on behalf of Lenders or
until all Obligations have been paid or fulfilled and the obligation of Lenders to make Loans under
the Term Loan Agreement has terminated. The power of attorney under this Section 9 shall not be
affected by subsequent disability or incapacity of Pledgor. Neither Administrative Agent nor any
Lender shall be liable for any act or omission to act pursuant to this Section 9, except for any
act or omission to act which constitutes gross negligence or willful misconduct. Administrative
Agent on behalf of Lenders shall execute partial releases of this Agreement under the terms of the
Term Loan Agreement.

10. Rights and Remedies. The rights, remedies, powers, privileges and discretions of
Administrative Agent on behalf of Lenders hereunder (hereinafter, the “Rights and Remedies”) shall
be cumulative and not exclusive of any rights, remedies, powers, privileges or discretions which it
may otherwise have. No delay or omission by Administrative Agent or any Lender in exercising or
enforcing any of the Rights and Remedies shall operate as, or constitute, a waiver thereof. No
waiver by Administrative Agent or any Lender of any Default or any Event of Default or of any
default under any other Credit Document shall operate as a waiver of any other Default or Event of
Default or of any other default under any Credit Document. No exercise of any Rights and Remedies
shall preclude any other exercise of the Rights and Remedies. No waiver by Administrative Agent or
any Lender of any of the Rights and Remedies on any one occasion shall be deemed a waiver on any
subsequent occasion nor shall it be deemed a continuing waiver. All Rights and Remedies and all
of Administrative Agent’s and Lenders’

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rights, remedies, powers, privileges and discretions under
any other agreement or transaction in respect of the Collateral are cumulative and not alternative or exclusive and may be exercised by
Administrative Agent or any Lender at such time or times in such order of preference as
Administrative Agent or such Lender in its sole and absolute discretion may determine.

11. Pledgor’s Consent and Waiver. Pledgor hereby agrees that Administrative Agent on behalf of
Lenders may enforce its rights as against Pledgor or the Collateral, or as against
any other party liable for the Obligations, or as against any other collateral given for any of the
Obligations, in any order or in such combination as Administrative Agent on behalf of Lenders may
in its sole discretion determine, and Pledgor hereby expressly waives all suretyship defenses and
defenses in the nature thereof, agrees to the release or substitution of any Collateral hereunder
or otherwise, and consents to each and all of the terms, provisions and conditions of the other
Credit Documents. Following the occurrence of any Event of Default, Pledgor further: (a) waives
presentment, demand, notice and protest with respect to the Obligations and the Collateral; (b)
waives any delay on the part of Administrative Agent or any Lender; (c) assents to any indulgence
or waiver which Administrative Agent or any Lender may grant or give any other Person liable or
obliged to Administrative Agent or Lenders for or on account of the Obligations; (d) authorizes
Administrative Agent on behalf of Lenders to alter, amend, cancel, waive or modify any term or
condition of the obligations of any other Person liable or obligated to Administrative Agent or
Lenders for or on account of the Obligations without notice to or further consent from Pledgor; (e)
agrees that no release of any property securing the Obligations shall affect the rights of
Administrative Agent or any Lender with respect to the Collateral hereunder which is not so
released; and (f) to the fullest extent that is permitted by applicable law, waives the right to
notice and/or hearing, it might otherwise be entitled thereto, prior to Administrative Agent’s
exercising the Rights and Remedies on behalf of Lenders upon an Event of Default.

12. Administrative Agent May Assign. Pledgor agrees that upon any sale or transfer by
Administrative Agent or any Lender of the Credit Documents and the indebtedness evidenced thereby
that is permitted under the Term Loan Agreement, Administrative Agent or such Lender may deliver
the Collateral disposed of as part of such a sale or transfer to the purchaser or transferee, who
shall thereupon become vested with all powers and rights given to Administrative Agent or such
Lender in respect thereto, and Administrative Agent or such Lender shall be thereafter forever
relieved and fully discharged from any liability or responsibility in connection therewith.

13. Limits on Administrative Agent’s and Lenders’ Duties. Neither Administrative Agent nor any
Lender shall have any duty as to the collection or protection of the Collateral, or any portion
thereof, or any income or distribution thereon, beyond the safe custody of such Collateral as may
come into the actual possession of Administrative Agent or such Lender and the accounting for
monies actually received by Administrative Agent or such Lender hereunder, and neither
Administrative Agent nor any Lender shall have any duty as to the preservation of rights against
prior parties or any other rights pertaining thereto. Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in its possession of
such Collateral is accorded treatment equal to that which is accords its own property. Nothing in
this Agreement shall be construed as an undertaking by the Administrative Agent or any Lender of

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any of the liabilities or obligations of Pledgor as Pledgor or any other shareholder, member or
partner of a Portfolio Investment Entity, including but not limited to, the obligation to make
contributions to capital or the obligation to make any other payment to, for or on
behalf of the Pledgor. The Administrative Agent’s rights and obligations in respect of the Pledged
Interests are those only of a secured party under Massachusetts law.

14. Release; Termination. (a) Within three (3) Business Days after receipt of a written request
from Pledgor to release any item of the Collateral that is subject of a proposed Permitted
Portfolio Disposition, Administrative Agent on behalf of Lenders will execute and deliver to
Pledgor such instruments as are reasonably required to evidence the release of such item of the
Collateral from the security interest granted hereby (which release may be concurrent with and
conditional on the consummation of such Permitted Portfolio Disposition); provided that at the time
of such request and such release no Event of Default shall have occurred and be continuing.

     (b) Upon the indefeasible payment in full of all Obligations and the termination or expiration
of the obligation of Lenders to make Loans under the Term Loan Agreement, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such payment and termination or expiration, the Administrative gent will, at Pledgor’s sole
expense, deliver to Pledgor all certificates and instruments evidencing the Collateral held by
Administrative Agent hereunder, and execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination.

     (c) Administrative Agent on behalf of the Lenders will execute and deliver such instruments as
Pledgor reasonably requests, including amendments to any financing statements filed in connection
with this Pledge and Security Agreement, to certify or evidence that any Portfolio Investments or
other assets of Pledgor that are not required to be included in the Collateral pursuant to the
terms of this Pledge and Security Agreement or any other Credit Document are not part of the
Collateral or subject to any Lien pursuant to this Pledge and Security Agreement or any other
Credit Document.

15. Miscellaneous.

	 	15.1	 	Administrative Agent’s and Lenders’ Rights and Remedies may be exercised without resort
to or regard to any other source of satisfaction of the Obligations.
	 
	 	15.2	 	All of the agreements, obligations, undertakings, representations and warranties herein
made by Pledgor shall inure to the benefit of Administrative Agent and Lenders and their respective
successors and assigns and shall bind Pledgor and its successors and assigns.
	 
	 	15.3	 	This Agreement and all other instruments executed in connection herewith constitute the
entire agreement between Pledgor and Administrative Agent on behalf of Lenders pertaining to the
subject matter hereof, and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of such parties pertaining to the subject matter hereof.

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	 	15.4	 	No modification, amendment or waiver of any provisions of this Agreement shall be
effective unless executed in writing by the party to be charged with such
modification, amendment and waiver and, if such party be Administrative Agent on behalf of Lenders,
then by a duly authorized officer thereof.
	 
	 	15.5	 	This Agreement and all other documents in Administrative Agent’s possession which relate
to the Obligations may be reproduced by Administrative Agent by any photographic, photostatic
microfilm, microcard, miniature photographic, xerographic or similar process and, with the
exception of instruments constituting the Collateral, Administrative Agent may destroy the original
from which any document was so reproduced. Any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or not the original is
in existence and whether or not such reproduction was made in the regular course of business) and
any enlargement, facsimile or further reproduction shall be likewise admissible in evidence.
	 
	 	15.6	 	Captions in this Agreement are intended solely for convenience and shall not be deemed to
affect the meaning or construction of any provision hereof.
	 
	 	15.7	 	Each provision hereof shall be enforceable to the fullest extent permitted by applicable
law. The invalidity and unenforceability of any provision(s) hereof shall not impair or affect any
other provision(s) hereof which are valid and enforceable.
	 
	 	15.8	 	This Agreement may be executed in
several counterparts, each of which when executed and delivered is an original, but all of which
together shall constitute one instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart which is executed by the party
against whom enforcement of such agreement is sought.
	 
	 	15.9	 	Any demand, notice or request by either party to the other shall be given in the manner
provided therefor in the Term Loan Agreement.
	 
	 	15.10	 	In the event of any conflict between the provisions of this Agreement and the Term Loan
Agreement, the Term Loan Agreement shall govern.
	 
	 	15.11	 	This Agreement shall in all respects be governed, construed, applied and enforced in
accordance with the laws of the Commonwealth of Massachusetts without regard to principles of
conflicts of law.

16. WAIVER OF JURY TRIAL. PLEDGOR AND ADMINISTRATIVE AGENT ON BEHALF OF LENDERS MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENTS CONTEMPLATED TO BE

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EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND LENDERS TO ACCEPT THIS AGREEMENT AND MAKE THE FACILITY.

17. Subordination. This Agreement and the terms, covenants, representations and conditions set
forth herein, including, without limitation, the security interest created hereby, is subject to
and subordinate in all respects to the terms, covenants, representations and conditions of that
certain Ownership Interests Pledge and Security Agreement dated as of September 9, 2005 executed by
Pledgor in favor of KeyBank National Association, as administrative agent (“Credit Agent”) for
itself and the other financial institutions a party to that certain Credit Agreement dated as of
September 9, 2005 by and among Pledgor, Credit Agent and the Lenders named therein (together with
the Credit Agent, the “Senior Secured Parties”).

[Signature pages attached]

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     This Pledge and Security Agreement has been executed and delivered as an instrument under seal
as of the 24th day of April, 2006.

	 	 	 	 	 	 	 	 	 
	 	 	PLEDGOR:
	 
	 	 	 	 	 	 	 	 
	 	 	HINES REIT PROPERTIES, L.P., a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	HINES REAL ESTATE INVESTMENT TRUST, INC., a Maryland corporation,
its General Partner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Frank R. Apollo
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Frank R. Apollo
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its
	 	Chief Accounting Officer
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Hereunto duly authorized

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	 	ADMINISTRATIVE AGENT AND LENDER:

KEYBANK NATIONAL ASSOCIATION as Administrative Agent and as a Lender

 	 
	 	By:  	/s/ John Murphy
 	 
	 	 	Name:  	John Murphy 	 
	 	 	Title:  	Senior Vice President 	 
	 

[Agent’s Signature Page to Ownership Interests Pledge and Security Agreement]

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EXHIBIT A

	 	 	 	 	 
	Portfolio Investment Entity	 	Portfolio Investment	 	Pledged Interest
	 
	 	 	 	 
	Hines-Sumisei U.S. Core Office Fund, L.P., a
Delaware limited partnership (“Core Office
Fund”)

	 	141,249.21 partnership units
in Core Office Fund*
	 	100% of Portfolio
Investment
	 
	 	 	 	 
	Hines REIT 1900/2000 Alameda de Las Pulgas
LLC, a Delaware limited liability company
(“Alameda LLC”)

	 	100% of membership
interests in Alameda LLC
	 	100% of Portfolio
Investment
	 
	 	 	 	 
	Hines REIT 3100 McKinnon Street GP LLC, a
Delaware limited liability company
(“McKinnon GP”)

	 	100% of membership
interests in McKinnon GP
	 	100% of Portfolio
Investment
	 
	 	 	 	 
	Hines REIT 3100 McKinnon Street LP, a
Delaware limited partnership (“McKinnon
LP”)

	 	100% of limited partner
interests in McKinnon LP
	 	100% of Portfolio
Investment
	 
	 	 	 	 
	Hines REIT Airport Corporate Center LLC, a
Delaware limited liability company (“Airport
Center”)

	 	100% of membership
interests in Airport Center
	 	49% of Portfolio
Investment
	 
	 	 	 	 
	Hines REIT 321 North Clark Street LLC, a
Delaware limited liability company (“Illinois
LLC)**

	 	100% of membership
interests in Illinois LLC
	 	100% of Portfolio
Investment

 

			
	*	 	As of the date hereof, Pledgor holds 141,249.21 units of partnership interest in Hines-Sumisei
U.S. Core Office Fund, L.P., representing approximately 27.3731% of the partnership interests of
such Portfolio Investment Entity. Pledgor’s interest is a non-managing general partner interest
which would convert to a limited partner interest upon transfer to any Person other than Pledgor.
	 
	**	 	This Person will not constitute a Portfolio Investment Entity, nor will the interest held by
Pledgor therein constitute a Portfolio Investment or a Pledged Interest, until the acquisition of
the real property located at 321 North Clark Street in Chicago, Illinois has been consummated,
which is expected to occur on or about April 24, 2006.

-1-exv10w63

 

Exhibit 10.63

SUBORDINATION AGREEMENT

April 24, 2006

KeyBank National Association

225 Franklin Street, 18th Floor

Boston, Massachusetts 02110

Attention:   Mr. John J. Murphy,

                     Vice President

     Re: Hines REIT Properties, L.P. Term Loan Agreement

Ladies and Gentlemen:

     Reference is hereby made to the Term Loan Agreement, dated as of April 24, 2006 (as the same
may be amended, supplemented, restated or otherwise modified from time to time, the “Term Loan
Agreement”), by and among Hines REIT Properties, L.P., a Delaware limited partnership, as borrower
(“Borrower”), KeyBank National Association, a national banking association, as agent (“Agent”) for
itself and such other lenders from time to time party thereto (collectively, the “Lenders”), and
the Lenders. All capitalized terms used herein without definition shall have the meanings given to
such terms in the Term Loan Agreement.

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

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

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

 

 

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

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

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

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

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

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

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

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

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

[Signature Page Follows.]

2

 

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

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

	 	By:
	 	/s/ Frank Apollo
	 

	 	 	 	 
	 

	 	 	 	Name: Frank Apollo

Title: Chief Accounting Officer

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

	 	By:
	 	/s/ Frank Apollo
	 

	 	 	 	 
	 

	 	 	 	Name: Frank Apollo

Title: Chief Accounting Officer

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

	 	By:
	 	/s/ Frank Apollo
	 

	 	 	 	 
	 

	 	 	 	Name: Frank Apollo

Title: Vice President

ACCEPTED AND AGREED TO:

KEYBANK NATIONAL ASSOCIATION,

  as Agent

By: /s/ John J. Murphy

       Name: John J. Murphy

       Title: Senior Vice President

Signature Page to Subordination Agreement

3

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