Document:

Revolving Credit Agreement

    
      

    

    Exhibit
      10.13

    

     

    REVOLVING
      CREDIT AGREEMENT

    

    among

    

    HARTMAN
      REIT OPERATING PARTNERSHIP, L.P.

    HARTMAN
      REIT OPERATING PARTNERSHIP III LP

    

    and

    

    OTHER
      BORROWERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

    

    and

    

    KEYBANK
      NATIONAL ASSOCIATION

    UNION
      BANK OF CALIFORNIA, N.A.

    COMPASS
      BANK

    COMERICA
      BANK

    COMMERCEBANK,
      N.A.

    

    and

    

    OTHER
      LENDERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

    

    and

    

    KEYBANK
      NATIONAL ASSOCIATION,

    AS
      ADMINISTRATIVE AGENT

    

    and

    

    UNION
      BANK OF CALIFORNIA, N.A.,

    AS
      DOCUMENTATION AGENT

    

    with

    

    KEYBANC
      CAPITAL MARKETS, 

    AS
      LEAD
      ARRANGER AND BOOK MANAGER

    

    

    Dated
      as
      of March 11, 2005

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

     

    TABLE
      OF
      CONTENTS

     

    
      	
              §1. DEFINITIONS
                AND RULES OF INTERPRETATION

            	
               
2

            
	
               

                  §1.1. Definitions

            	
                2

            
	
               

                  §1.2. Rules
                of Interpretation

            	
               20

            
	
               

              §2. THE
                REVOLVING CREDIT FACILITY

            	
               21

            
	
               

                  §2.1. Commitment
                to Lend

            	
               21

            
	
               

                  §2.2. The
                Revolving Credit Notes

            	
               21

            
	
               

                  §2.3. Interest
                on Revolving Credit Loans; Fees

            	
               22

            
	
               

                  §2.4. Requests
                for Revolving Credit Loans

            	
               24

            
	
               

                  §2.5. Conversion
                Options

            	
               25

            
	
               

                  §2.6. Funds
                for Revolving Credit Loans

            	
               26

            
	
               

                  §2.7. Reduction
                of Commitment

            	
               27

            
	
               

                  §2.8. Increase
                in Total Commitment

            	
               27

            
	
               

                  §2.9. Reserved

            	
               28

            
	
               

              §3. REPAYMENT
                OF THE LOANS

            	
               28

            
	
               

                  §3.1. Maturity

            	
               28

            
	
               

                  §3.2. Optional
                Repayments of Revolving Credit Loans

            	
               28

            
	
               

                  §3.3. Mandatory
                Repayment of Loans

            	
               29

            
	
               

              §4. CERTAIN
                GENERAL PROVISIONS

            	
               29

            
	
               

                  §4.1. Funds
                for Payments

            	
               29

            
	
               

              §4.2. Computations

            	 

               29

            

    

     

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                 

                    §4.3. Inability
                  to Determine Libor Rate

              	
                 30

              
	
                 

                    §4.4. Illegality

              	
                 30

              
	
                 

                    §4.5. Additional
                  Costs, Etc.

              	
                 30

              
	
                 

                    §4.6. Capital
                  Adequacy

              	
                 32

              
	
                 

                    §4.7. Certificate;
                  Limitations

              	
                 32

              
	
                 

                    §4.8. Indemnity

              	
                 32

              
	
                 

                    §4.9. Interest
                  on Overdue Amounts; Late Charge

              	
                 33

              
	
                 

                §5. LETTERS
                  OF CREDIT

              	
                 33

              
	
                 

                    §5.1. Letter
                  of Credit Commitments

              	
                 33

              
	
                 

                    §5.1.1. Commitment
                  to Issue Letters of Credit

              	
                 33

              
	
                 

                    §5.1.2. Letter
                  of Credit Applications

              	
                 34

              
	
                 

                    §5.1.3. Terms
                  of Letters of Credit

              	
                 34

              
	
                 

                    §5.1.4. Obligations
                  of Lenders with respect to Letters of Credit

              	
                 35

              
	
                 

                    §5.2. Reimbursement
                  Obligation of the Borrower

              	
                 35

              
	
                 

                    §5.3. Letter
                  of Credit Payments; Funding of a Loan

              	
                 36

              
	
                 

                    §5.4. Obligations
                  Absolute

              	
                 37

              
	
                 

                    §5.5. Reliance
                  by Issuer

              	
                 38

              
	
                 

                §6. RECOURSE
                  OBLIGATIONS

              	
                 38

              
	
                 

                §7. REPRESENTATIONS
                  AND WARRANTIES

              	
                 38

              
	
                 

                    §7.1. Authority,
                  Etc.

              	
                 39

              
	
                 

                    §7.2. Governmental
                  Approvals

              	
                 41

              
	
                 

                    §7.3. Title
                  to Properties; Leases

              	
                 41

              
	
                 

                §7.4. Financial
                  Statements

              	
                42

              

      

    

     

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

       

       

      
        	
                 

                    §7.5. No
                  Material Changes, Etc.

              	
                 42

              
	
                 

                    §7.6. Franchises,
                  Patents, Copyrights, Etc.

              	
                 42

              
	
                 

                    §7.7. Litigation

              	
                 43

              
	
                 

                    §7.8. No
                  Materially Adverse Contracts, Etc.

              	
                 43

              
	
                 

                    §7.9. Compliance
                  With Other Instruments, Laws, Etc.

              	
                 43

              
	
                 

                    §7.10. Tax
                  Status

              	
                 44

              
	
                 

                    §7.11 No
                  Event of Default

              	
                 44

              
	
                 

                    §7.12. Investment
                  Company Acts

              	
                 44

              
	
                 

                    §7.13.
                  Name;
                  Jurisdiction of Organization; Absence of UCC Financing Statements,
                  Etc.

              	
                 44

              
	
                 

                    §7.14. Absence
                  of Liens

              	
                 44

              
	
                 

                    §7.15. Certain
                  Transactions

              	
                 44

              
	
                 

                    §7.16. Employee
                  Benefit Plans; Multiemployer Plans; Guaranteed Pension
                  Plans

              	
                 45

              
	
                 

                    §7.17. Regulations
                  U and X

              	
                 45

              
	
                 

                    §7.18. Environmental
                  Compliance

              	
                 45

              
	
                 

                    §7.19. Subsidiaries

              	
                 47

              
	
                 

                    §7.20. Loan
                  Documents

              	
                 47

              
	
                 

                    §7.21. REIT
                  Status

              	
                 47

              
	
                 

                §8. AFFIRMATIVE
                  COVENANTS OF THE BORROWER AND THE TRUST

              	
                 47

              
	
                 

                    §8.1. Punctual
                  Payment

              	
                 47

              
	
                 

                    §8.2. Maintenance
                  of Office; Jurisdiction of Organization, Etc.

              	
                 47

              
	
                 

                    §8.3. Records
                  and Accounts

              	
                 48

              
	
                 

                    §8.4. Financial
                  Statements, Certificates and Information

              	
                 48

              
	
                 

                §8.5. Notices

              	
                50

              

      

       

    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
               

                  §8.6. Existence
                of Borrower; Maintenance of Properties

            	
               52

            
	
               

                  §8.7. Existence
                of the Trust; Maintenance of REIT Status of the Trust; Maintenance
                of
                Properties; Hartman Management

            	
               52

            
	
               

                  §8.8. Insurance

            	
               53

            
	
               

                  §8.9. Taxes

            	
               53

            
	
               

                  §8.10. Inspection
                of Properties and Books

            	
               54

            
	
               

                  §8.11. Compliance
                with Laws, Contracts, Licenses, and Permits

            	
               55

            
	
               

                  §8.12. Use
                of Proceeds

            	
               55

            
	
               

                  §8.13. Additional
                Borrower; Solvency of Borrower; Removal of Borrower; Addition
                of Real Estate Asset to Borrowing Base Pool

            	
               55

            
	
               

                  §8.14. Further
                Assurances

            	
               56

            
	
               

                  §8.15. Interest
                Rate Protection

            	
               57

            
	
               

                  §8.16. Environmental
                Indemnification

            	
               57

            
	
               

                  §8.17. Response
                Actions

            	
               57

            
	
               

                  §8.18. Environmental
                Assessments

            	
               58

            
	
               

                  §8.19. Employee
                Benefit Plans

            	
               58

            
	
               

                  §8.20. No
                Amendments to Certain Documents

            	
               59

            
	
               

              §9. CERTAIN
                NEGATIVE COVENANTS OF THE BORROWER AND THE TRUST

            	
               59

            
	
               

                  §9.1. Restrictions
                on Indebtedness

            	
               59

            
	
               

                  §9.2. Restrictions
                on Liens, Etc.

            	
               61

            
	
               

                  §9.3. Restrictions
                on Investments

            	
               62

            
	
               

                  §9.4. Merger,
                Consolidation and Disposition of Assets; Assets of the
                Trust

            	
               64

            
	
               

                  §9.5. Compliance
                with Environmental Laws

            	
               64

            
	
               

              §9.6. Distributions

            	
              65

            

    

     

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

                  §9.5. Management
                Agreement

            	
               65

            
	
               

              §10. FINANCIAL
                COVENANTS; COVENANTS
                REGARDING ELIGIBLE UNENCUMBERED PROPERTIES

            	
               65

            
	
               

                  §10.1. Consolidated
                Total Leverage Ratio

            	
               65

            
	
               

                  §10.2. Interest
                Coverage Ratio

            	
               65

            
	
               

                  §10.3. Fixed
                Charge Coverage Ratio

            	
               65

            
	
               

                  §10.4. Secured
                Debt Leverage

            	
               66

            
	
               

                  §10.5. Borrowing
                Base Pool Asset Value

            	
               66

            
	
               

                  §10.6. Borrowing
                Base Pool Debt Service Coverage Ratio

            	
               66

            
	
               

                  §10.7. Occupancy;
                Borrowing Base Pool

            	
               66

            
	
               

              §11. RESERVED

            	
               66

            
	
               

              §12. CONDITIONS
                TO THE FIRST ADVANCE

            	
               66

            
	
               

                  §12.1. Loan
                Documents

            	
               66

            
	
               

                  §12.2. Certified
                Copies of Organization Documents

            	
               66

            
	
               

                  §12.3. By-laws;
                Resolutions

            	
               67

            
	
               

                  §12.4. Incumbency
                Certificate: Authorized Signers

            	
               67

            
	
               

                  §12.5.
                Title
                Policies

            	
               67

            
	
               

                  §12.6. Certificates
                of Insurance

            	
               67

            
	
               

                  §12.7. Hazardous
                Substance Assessments

            	
               67

            
	
               

                  §12.8. Opinion
                of Counsel Concerning Organization and Loan
                Documents

            	
               68

            
	
               

                  §12.9. Structural
                Condition Assurances

            	
               68

            
	
               

                  §12.10. Guaranty

            	
               68

            
	
               

              §12.11. Formation
                of Hartman III; Transfer of Eligible Unencumbered
                Properties

            	
              68

            

    

     

     

    
      
        
        

      

      
        -v-

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

                  §12.12.
                 Inspection of Eligible Unencumbered Properties

            	
               68

            
	
               

                  §12.13.
                Certifications from Government Officials; UCC-11
                Reports

            	
               68

            
	
               

                  §12.14. Proceedings
                and Documents; Adverse Changes

            	
               68

            
	
               

                  §12.15. Fees

            	
               69

            
	
               

                  §12.16. Closing
                Certificate

            	
               69

            
	
               

                  §12.17. Patriot
                Act, Etc.

            	
               69

            
	
               

              §13. CONDITIONS TO ALL BORROWINGS

            	
               69

            
	
               

                  §13.1. Representations
                True; No Event of Default; Compliance Certificate

            	
               69

            
	
               

                  §13.2. No
                Legal Impediment

            	
               69

            
	
               

                  §13.3. Governmental
                Regulation

            	
               70

            
	
               

                  §13.4. Borrowing
                Documents

            	
               70

            
	
               

                  §13.5. Reserved

            	
               70

            
	
               

                  §13.6. New
                Borrowing Base Pool Property

            	
               70

            
	
               

                  §13.7. Continued
                Compliance

            	
               70

            
	
               

                §14. EVENTS
                  OF DEFAULT; ACCELERATION; ETC.

              

            	
               70

            
	
               

                  §14.1. Events
                of Default and Acceleration

            	
               70

            
	
               

                  §14.2. Termination
                of Commitments

            	
               74

            
	
               

                  §14.3. Remedies

            	
               74

            
	
               

              15.
                SECURITY INTEREST AND SET-OFF

            	
               75

            
	
               

                  15.1
                Security
                Interest

            	
               75

            
	
               

                  15.2
                Set-Off
                and Debit

            	
               75

            
	
               

                  15.3
                Right to
                Freeze

            	
               76

            
	
               

              15.4
                Additional Rights

            	
              76

            

    

     

    
    

     

    
      
        
        

      

      
        -vi-

        
          

        

      

      
        
        

      

    

     

     

     

    
      	
               

              §16. THE
                AGENT

            	
               76

            
	
               

                  §16.1. Authorization

            	
               76

            
	
               

                  §16.2. Employees
                and Agents

            	
               76

            
	
               

                  §16.3. No
                Liability

            	
               77

            
	
               

                  §16.4. No
                Representations

            	
               77

            
	
               

                  §16.5. Payments

            	
               77

            
	
               

                  §16.6. Holders
                of Notes

            	
               78

            
	
               

                  §16.7. Indemnity

            	
               78

            
	
               

                  §16.8. Agent
                as Lender

            	
               78

            
	
               

                  §16.9. Notification
                of Defaults and Events of Default

            	
               79

            
	
               

                  §16.10. Duties
                in Case of Enforcement

            	
               79

            
	
               

                  §16.11.
                Successor Agent

            	
               79

            
	
               

                  §16.12.
                Notices

            	
               80

            
	
               

                  §16.13.
                Other
                Agents

            	
               80

            
	
               

              §17. EXPENSES

            	
               80

            
	
               

              §18. INDEMNIFICATION

            	
               81

            
	
               

              §19. SURVIVAL
                OF COVENANTS, ETC.

            	
               82

            
	
               

              §20. ASSIGNMENT;
                PARTICIPATIONS; ETC.

            	
               82

            
	
               

                  §20.1. Conditions
                to Assignment by Lenders.

            	
               82

            
	
               

                  §20.2. Certain
                Representations and Warranties; Limitations;
                Covenants

            	
               83

            
	
               

                  §20.3. Register

            	
               84

            
	
               

              §20.4. New
                Notes

            	
              84

            
	
               

              §20.5. Participations

            	
              84

            

    

     

     

    
      
        
        

      

      
        -vii-

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

                  §20.6. Pledge
                by Lender

            	
               85

            
	
               

                  §20.7. No
                Assignment by Borrower

            	
               85

            
	
               

                  §20.8. Disclosure

            	
               85

            
	
               

                  §20.9. Syndication

            	
               85

            
	
               

              §21. NOTICES,
                ETC.

            	
               86

            
	
               

              §22. HARTMAN
                OP AS AGENT FOR THE BORROWER

            	
               86

            
	
               

              §23. GOVERNING
                LAW; CONSENT TO JURISDICTION AND SERVICE

            	
               87

            
	
               

              §24. HEADINGS

            	
               87

            
	
               

              §25. COUNTERPARTS

            	
               87

            
	
               

              §26. ENTIRE
                AGREEMENT, ETC.

            	
               87

            
	
               

              §27. WAIVER
                OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

            	
               88

            
	
               

              §28. CONSENTS,
                AMENDMENTS, WAIVERS, ETC.

            	
               88

            
	
               

              §29. SEVERABILITY

            	
               89

            
	
               

              §30. INTEREST
                RATE LIMITATION

            	
               90

            

    

     

     

    

    

    
      
        
        

      

      
        -viii-

        
          

        

      

      
        
        

      

    

     

        Exhibits
      to Revolving Credit Agreement

    

    

    Exhibit
      A
      - Form of Revolving Credit Note

    

    Exhibit
      B
      - Form of Completed Loan Request 

    

    Exhibit
      C
      - Forms of Compliance Certificates

    

    Exhibit
      D
      - Form of Assignment and Assumption

    

    Exhibit
      E
      - Form of Joinder Agreement

     

    
 

    

    
      
        
        

      

      
        -ix-

        
          

        

      

      
        
        

      

    

    

    

    Schedules
      to Revolving Credit Agreement

    

    Schedule
      1     Borrowers

    

    Schedule
      2     Lender’s
      Commitments 

    

    Schedule
      7.1(b)           Capitalization

    

    Schedule
      7.3(c)           Partially-Owned
      Entities

    

    Schedule
      7.7                Litigation

    

    Schedule
      7.13              Legal
      Name; Jurisdiction

    

    Schedule
      7.15              Affiliate
      Transactions

    

    Schedule
      7.16              Employee
      Benefit Plans

    

    Schedule
      7.19              Subsidiaries

    

    Schedule
      8.19              Employee
      Benefit Plans

    

    Schedule
      9.1                Indebtedness

    9.1(g)            Contingent
      Liabilities

    

    

    
    

    

    
      
        
        

      

      
        -x-

        
          

        

      

      
        
        

      

    

    
 

    REVOLVING
      CREDIT AGREEMENT

     

    This
      REVOLVING CREDIT AGREEMENT is made as of the 11th day of March, 2005, by and
      among HARTMAN REIT OPERATING PARTNERSHIP, L.P., a Delaware limited a partnership
      (“Hartman OP”), HARTMAN REIT OPERTING PARTNERSHIP III LP, a Texas limited
      partnership (“Hartman III”) and the Wholly-Owned Subsidiaries (defined below)
      which are listed on Schedule 1 hereto (as such Schedule 1 may be (or may be
      deemed to be) amended from time to time (Hartman OP, Hartman III and any such
      Wholly-Owned Subsidiary listed on Schedule 1 being hereinafter referred to
      collectively as the “Borrower” unless referred to in their individual
      capacities), having their principal place of business at 1450 West Sam Houston
      Parkway North, Suite 100, Houston, Texas 77043; KEYBANK NATIONAL ASSOCIATION
      (“KeyBank”), having a principal place of business at 127 Public Square,
      Cleveland, Ohio 44114, UNION BANK OF CALIFORNIA, N.A., COMPASS BANK, COMERICA
      BANK, COMMERCEBANK, N.A. and the other lending institutions which may become
      parties hereto pursuant to §20 (individually, a “Lender” and collectively, the
“Lenders”); KEYBANK NATIONAL ASSOCIATION, as administrative agent for itself and
      each other Lender (the “Agent”); UNION BANK OF CALIFORNIA, N.A., as
      Documentation Agent; and KEYBANC CAPITAL MARKETS, as Lead Arranger and Book
      Manager.

    

    RECITALS

    

    A.  The
      Borrower is primarily engaged in the business of owning, acquiring, developing,
      renovating and operating retail, office or mixed office/warehouse properties.
      Hartman OP, directly or indirectly, holds 100% of the partnership interests
      in
      Hartman III.

    

    B.  Hartman
      Commercial Properties REIT, a Maryland real estate investment trust (the
“Trust”), is the sole general partner of Hartman OP, holds in excess of 53% of
      the partnership interests in Hartman OP as of the date of this Agreement, and
      is
      qualified to elect REIT status for income tax purposes and has agreed to
      guaranty the obligations of the Borrower hereunder and under the other Loan
      Documents (as defined below).

    

    C.  Hartman
      OP is the 100% owner and sole member of Hartman REIT Operating Partnership
      III
      GP LLC, a Texas limited liability company, which limited liability company
      is
      the sole general partner of Hartman III and of Hartman REIT Operating
      Partnership III LP LTD, the sole limited partner of Hartman III. Allen R.
      Hartman is the sole manager of Hartman REIT Operating Partnership III GP LLC,
      a
      Texas limited liability company.

    

    D.  Hartman
      Management, L.P., a Texas limited partnership (“Hartman Management”), is the
      sole property manager and advisor for the Borrower and the Trust. 
Hartman
      Management is wholly-owned (through Hartman Property Management Holdings LLC)
      by
      Allen R. Hartman.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    

    E.  The
      Borrower and the Trust have requested, and the Lenders have agreed to establish,
      an unsecured revolving credit facility for use by the Borrower pursuant to
      the
      terms and conditions hereof.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements herein
      contained, the parties hereto agree as follows:

    

    §1.    DEFINITIONS
      AND RULES OF INTERPRETATION.

    

    §1.1.    Definitions.
      The following terms shall have the meanings set forth in this §1 or elsewhere in
      the provisions of this Agreement referred to below:

     

    Accountants.
      In each
      case, independent certified public accountants reasonably acceptable to the
      Majority Lenders. The Lenders hereby acknowledge that the Accountants may
      include Pannell Kerr Forster of Texas PC and any so-called “big-four” accounting
      firm.

    

    Accounts
      Payable.
      Accounts payable of the Borrower, the Trust and their respective Subsidiaries,
      as determined in accordance with GAAP.

    

    Adjusted
      Net Operating Income.
      For any
      period of determination, an amount equal to (i) the Net Operating Income of
      the
      Borrowing Base Pool for the applicable period; minus
      (ii) the
      Borrowing Base Pool Capital Reserve for such period.

     

    Affiliate.
      With
      reference to any Person, (i) any director, officer, general partner, trustee
      or
      managing member (or the equivalent thereof) of that Person, (ii) any other
      Person controlling, controlled by or under direct or indirect common control
      of
      that Person, (iii) any other Person directly or indirectly holding 5% or more
      of
      any class of the capital stock or other equity interests (including options,
      warrants, convertible securities and similar rights) of that Person, (iv) any
      other Person 5% or more of any class of whose capital stock or other equity
      interests (including options, warrants, convertible securities and similar
      rights) is held directly or indirectly by that Person, and (v) any Person
      directly or indirectly controlling that Person, whether through a management
      agreement, voting agreement, other contract or otherwise.

    

    Agent.
      See the
      preamble to this Agreement. The Agent shall include any successor agent, as
      permitted by §16.

    

    Agent's
      Head Office.
      The
      Agent's office located at 127 Public Square, Cleveland, Ohio 44114, or at such
      other location as the Agent may designate from time to time, or the office
      of
      any successor agent permitted under §16.

    

      Agreement.
        This
        Revolving Credit Agreement, including the Schedules
        and
Exhibits
        hereto,
        as the same may be from time to time amended, restated, modified and/or
        supplemented and in effect.

    

     

    
      
        
        

      

      
        2

        
          

        

      

       

    

    

    Agreement
      of Limited Partnership of the Borrower.
      Collectively, (i) the Amended and Restated Agreement of Limited Partnership
      of
      Hartman OP, dated December 31, 1998, as amended, among the Trust and the limited
      partners named therein, (ii) the Agreement of Limited Partnership of Hartman
      III, dated on or about the date hereof, (iii) the Agreement of Limited
      Partnership of Hartman III LP LTD, dated on or about the date hereof, and (iv)
      the Operating Agreement of Hartman III GP LLC, dated on or about the date
      hereof, in each case as amended through the date hereof and as the same may
      be
      further amended from time to time as permitted by §8.20.

    

    Anti-Terrorism
      Order.
      Executive Order No. 13,224 66 Fed Reg. 49,079 (2001) issued by the President
      of
      the United States of America (Executive Order Blocking Property and Prohibiting
      Transactions with Persons Who Commit, Threaten to Commit, or Support
      Terrorism).

    

    Applicable
      Base Rate Margin.
      The
      Applicable Base Rate Margin is set forth in §2.3(c).

    

    Applicable
      L/C Percentage.
      With
      respect to any Letter of Credit, a per annum percentage equal to the Applicable
      Libor Margin in effect on each day during the applicable period.

    

    Applicable
      Libor Margin.
      The
      Applicable Libor Margin is set forth in §2.3(c).

    

    Assignment
      and Assumption.
      See
§20.1.

    

    Availability.
      As of
      the date that any Loan is to be made hereunder, an amount that would permit
      the
      Borrower to remain in compliance with the covenants set forth in §§10.5 and 10.6
      on a pro forma
      basis,
      after giving effect to the requested Loan and all other Loans outstanding for
      which the amount thereof is not included in the most recent quarterly covenant
      calculations for the covenants set forth in §§10.5 and 10.6 submitted by the
      Borrower. The amount available to be drawn at any time shall be the Availability
      less the Maximum Drawing Amount and all outstanding Loans at such
      time.

    

    Base
      Rate.
      The
      higher of (i) the variable per annum rate of interest announced from time to
      time by KeyBank as its “base rate” and (ii) one half of one percent (1/2%)
plus
      the
      Federal Funds Rate. The Base Rate is a reference rate and does not necessarily
      represent the lowest or best rate being charged to any customer. Any change
      in
      the Base Rate during an Interest Period shall be effective and result in a
      corresponding change on the same day in the rate of interest accruing from
      and
      after such day on the unpaid balance
      of principal of the Base Rate Loans, if any, effective on the day of such change
      in the Base Rate, without notice or demand of any kind.

    

    Base
      Rate Loan(s).
      Those
      Loans bearing interest calculated by reference to the Base Rate.

    

    Borrower.
      See the
      preamble hereto.

     

    
 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Borrowing
      Base Asset Value.
      As of
      any date of determination, the result of (i) the Adjusted Net Operating Income
      of the Borrowing Base Pool for the most recently completed four consecutive
      fiscal quarters, divided by
      (ii) the
      Capitalization Rate. Notwithstanding the foregoing, (i) with respect to any
      Real
      Estate Asset acquired during the applicable period, Borrowing Base Asset Value
      shall be calculated as follows: (x) from acquisition through the first two
      complete fiscal quarters after such acquisition, the Net Operating Income from
      such Real Estate Asset shall be excluded and it shall be included in Borrowing
      Base Asset Value at its cost basis; (y) once the acquired Real Estate Asset
      has
      been owned by the Borrower for three complete fiscal quarters, such Real Estate
      Asset shall no longer be valued at its cost basis but shall be valued based
      upon
      its Net Operating Income for such three fiscal quarters, annualized,
less
      a
      capital reserve equal to the total number of square feet of such Real Estate
      Asset multiplied by
      $0.15,
      with the sum thereof being divided by
      the
      Capitalization Rate; and (z) once the acquired Real Estate Asset has been owned
      by the Borrower for four complete fiscal quarters, such Real Estate Asset shall
      no longer be valued at its cost basis but shall be valued based upon its Net
      Operating Income for such four fiscal quarters in the manner set forth in the
      first sentence above, and (ii) Net Operating Income from Real Estate Assets
      removed from the Borrowing Base Pool for any reason during the applicable period
      shall be excluded. 

    

    Borrowing
      Base Pool.
      As
      determined from time to time, collectively, the Eligible Unencumbered Properties
      that the Borrower has designated in writing to be included in the Borrowing
      Base
      Pool, subject to and in accordance with the terms hereof.

    

    Borrowing
      Base Conditions.
      See
      definition of “Eligible Unencumbered Property(ies)”.

    

    Borrowing
      Base Pool Capital Reserve.
      For any
      period of determination, a capital reserve equal to the total number of square
      feet of the Borrowing Base Pool for such period, multiplied by
      $0.15
      per annum. 

    

    Building(s).
      Individually and collectively, the buildings, structures and improvements now
      or
      hereafter located on the Real Estate Assets.

    

    Business
      Day.
      For all
      purposes other than as covered by clause (ii) below, any day other than a
      Saturday, Sunday or legal holiday on which banks in Cleveland, Ohio are
open
      for
      the conduct of a substantial part of their commercial banking business; and
      (ii)
      with respect to all notices and determinations in connection with, and payments
      of principal and interest on, Libor Rate Loans, any day that is a Business
      Day
      described in clause (i) and that is also a Libor Business Day.

    
      

      Capital
        Expenditures.
        Any
        expenditure for any item that would be treated or defined as a capital
        expenditure under GAAP.

      

      Capital
        Reserve.
        For any
        period, a capital reserve equal to the weighted average square feet of the
        Real
        Estate Assets during the applicable period, multiplied by
        $0.15
        per annum.

       

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    

    Capitalization
      Rate.
      The
      Capitalization Rate shall be 9.25%.

    

    Capitalized
      Leases.
      Leases
      under which the Borrower or any of its Subsidiaries or any Partially-Owned
      Entity is the lessee or obligor, the discounted future rental obligations under
      which are required to be capitalized on the balance sheet of the lessee or
      obligor in accordance with GAAP.

     

    Cash
      and Cash Equivalents.
      As of
      any date of determination, the sum of (a) the aggregate amount of unrestricted
      cash then actually held by the Borrower or any of its Subsidiaries (excluding
      without limitation, until forfeited or otherwise entitled to be retained by
      the
      Borrower or any of its Subsidiaries, tenant security and other restricted
      deposits), and (b) the aggregate amount of unrestricted cash equivalents (valued
      at fair market value) then held by the Borrower or any of its Subsidiaries.
      As
      used in this definition, (i) “unrestricted” means the specified asset is not
      subject to any Liens in favor of any Person, and (ii) “cash equivalents” means
      that such asset has a liquid, par value in cash and is convertible to cash
      on
      demand. Notwithstanding anything contained herein to the contrary, the term
      Cash
      and Cash Equivalents shall not include the Commitments of the Lenders to make
      Loans or to make any other extension of credit under this
      Agreement.

    

    CERCLA.
      See
§7.18.

    

    Closing
      Date.
      March
      11, 2005.

    

    Code.
      The
      Internal Revenue Code of 1986, as amended and in effect from time to
      time.

    

    Commitment.
      With
      respect to each Lender, the amount set forth from time to time on Schedule
      2
      hereto
      as the amount of such Lender's Commitment to make Revolving Credit Loans to,
      and
      to participate in the issuance, extension and renewal of Letters of Credit
      for
      the account of, the Borrower as such Schedule
      2
      may be
      updated by the Agent from time to time.

      

    Commitment
      Percentage.
      With
      respect to each Lender, the percentage set forth on Schedule
      2
      hereto
      as such Lender's percentage of the Total Commitment, as such Schedule 2
      may be
      updated by the Agent from time to time.

    

    Completed
      Loan Request.
      A loan
      request accompanied by all information required to be supplied under the
      applicable provisions of §2.4.

    

    Consolidated
      or consolidated.
      With
      reference to any term defined herein, shall mean that term as applied to the
      accounts of the Borrower, the Trust and their respective Subsidiaries,
      consolidated in accordance with GAAP in accordance with the terms of this
      Agreement. 

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

    

    Consolidated
      EBITDA.
      In
      relation to the Borrower, the Trust and their respective Subsidiaries for any
      applicable period, an amount equal to, without double-counting, the net income
      or loss of the Borrower, the Trust and their respective Subsidiaries determined
      in accordance with GAAP (before minority interests and excluding losses
      attributable to the sale or other disposition of assets and adjusted to
      eliminate the straight-lining of rents) for such period, plus
      (x) the
      following to the extent deducted in computing such Consolidated net income
      for
      such period: (i) Consolidated Total Interest Expense for such period, (ii)
      real
      estate depreciation and amortization for such period, and (iii) other non-cash
      charges for such period; and minus
      (y) all
      gains attributable to the sale or other disposition of assets or debt
      restructurings in such period, in each case adjusted to include the Borrower’s,
      the Trust’s or any Subsidiary’s pro rata
      share of
      EBITDA (and the items comprising EBITDA) from any Partially-Owned Entity in
      such
      period, based on its percentage ownership interest in such Partially-Owned
      Entity (or such other amount to which the Borrower, the Trust or such Subsidiary
      is entitled or for which the Borrower, the Trust or such Subsidiary is obligated
      based on an arm’s length agreement), provided
      that for
      purposes of calculating the Interest Coverage Ratio (§10.2) and the Fixed Charge
      Coverage Ratio (§10.3), Consolidated EBITDA shall only include EBITDA from a
      Partially-Owned Entity to the extent cash income is actually received in the
      applicable period by the Borrower, the Trust or such Subsidiary in the form
      of
      dividends or similar distributions.

    

    Consolidated
      Fixed Charges.
      For any
      applicable period, an amount equal to (i) Consolidated Total Interest
      Expense (including, in any event, capitalized interest) for such period
plus
      (ii) the
      aggregate amount of scheduled principal payments of Indebtedness (excluding
      balloon payments at maturity) required to be made during such period by the
      Borrower, the Trust and their respective Subsidiaries on a Consolidated basis
      plus
      (iii)
      the Capital Reserve applicable to such period plus
      (iv) the
      dividends and distributions, if any, paid or required to be paid during such
      period on the Preferred Equity, if any, of the Borrower, the Trust and their
      respective Subsidiaries (other than dividends paid in the form of capital
      stock).

      

    Consolidated
      Total Indebtedness.
      As of
      any date of determination, Consolidated Total Indebtedness means for the
      Borrower, the Trust and their respective Subsidiaries, all obligations,
      contingent or otherwise, which should be classified on the obligor’s balance
      sheet as liabilities, or to which reference should be made by footnotes thereto,
      all in accordance with GAAP, including, in any event, the sum of (without
      double-counting), all Indebtedness outstanding on such date, in each case
      whether Recourse, Without Recourse or contingent, provided,
      however,
      that
      amounts not drawn under the Revolving Credit Loans on such date shall not be
      included in calculating Consolidated Total Indebtedness, and provided,
      further,
      that
      (without double-counting), each of the following shall be included in
      Consolidated Total Indebtedness: (a) all amounts of guarantees, indemnities
      for
      borrowed money, stop-loss agreements and the like provided by the Borrower,
      the
      Trust and their respective Subsidiaries, in each case in connection with and
      guarantying repayment of amounts outstanding under any other Indebtedness;
      (b) all amounts for which a letter of credit (including the Letters
      of
      Credit) has been issued for the account of the Borrower, the Trust or any of
      their respective Subsidiaries; (c) all

     

     

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

    

     

    amounts
      of bonds posted by the Borrower, the Trust or any of their respective
      Subsidiaries guaranteeing performance or payment obligations; (d) all lease
      obligations (including under Capital Leases) and (e) all liabilities of the
      Borrower, the Trust or any of their respective Subsidiaries as partners, members
      or the like for liabilities (whether such liabilities are Recourse, Without
      Recourse or contingent obligations of the applicable partnership or other
      Person) of partnerships or other Persons in which any of them have an equity
      interest, which liabilities are for borrowed money or any of the matters listed
      in clauses (a), (b), (c) or (d) above. Without limitation of the foregoing
      (without double counting), with respect to any Partially-Owned Entity, (x)
      to
      the extent that the Borrower, the Trust or any of their respective Subsidiaries
      or such Partially-Owned Entity is providing a completion guaranty in connection
      with a construction loan entered into by a Partially-Owned Entity, Consolidated
      Total Indebtedness shall include the Borrower’s, the Trust’s or such
      Subsidiary’s pro rata
      liability under the Indebtedness relating to such completion guaranty (or,
      if
      greater, the Borrower’s, the Trust’s or such Subsidiary’s potential liability
      under such completion guaranty) and (y) in connection with the liabilities
      described in clauses (a) and (d) above (other than completion guarantees, which
      are referred to in clause (x)), the Consolidated Total Indebtedness shall
      include the portion of the liabilities of such Partially-Owned Entity which
      are
      attributable to the Borrower’s, the Trust’s or such Subsidiary’s percentage
      equity interest in such Partially-Owned Entity or such greater amount of such
      liabilities for which the Borrower, the Trust or their respective Subsidiaries
      are, or have agreed to be, liable by way of guaranty, indemnity for borrowed
      money, stop-loss agreement or the like, it being agreed that, in any case,
      Indebtedness of a Partially-Owned Entity shall not be excluded from Consolidated
      Total Indebtedness by virtue of the liability of such Partially-Owned Entity
      being Without Recourse. For purposes hereof, the amount of borrowed money shall
      equal the sum of (1) the amount of borrowed money as determined in accordance
      with GAAP plus
      (2) the
      amount of those contingent liabilities for borrowed money set forth in
      subsections (a) through (e) above, but shall exclude any adjustment for
      so-called “straight-line interest accounting”. 

      

    Consolidated
      Total Interest Expense.
      For any
      applicable period, the aggregate amount of interest required in accordance
      with
      GAAP to be paid, accrued, expensed or, to the extent it could be a cash expense
      in the applicable period, capitalized, without double-counting, by the Borrower,
      the Trust and their respective Subsidiaries during such period on: (i) all
      Indebtedness of the Borrower, the Trust and their respective Subsidiaries
      (including the Loans, obligations under Capital Leases (to the extent
      Consolidated EBITDA has not been reduced by such Capital Lease obligations
      in
      the applicable period) and any Subordinated Indebtedness and including original
      issue discount and amortization of prepaid interest, if any, but excluding
      any
      Distribution on Preferred Equity), (ii) all amounts available for borrowing,
      or
      for drawing under letters of credit (including the Letters of Credit), if any,
      issued for the account of the Borrower, the Trust or any of their respective
      Subsidiaries, but only if such interest was or is required to be reflected
      as an
      item of expense, and (iii) all commitment fees, agency fees, facility fees,
      balance deficiency fees and similar fees and expenses in connection with the
      borrowing of money.

     

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
 

    

    Conversion
      Request.
      A
      notice given by the Borrower to the Agent of its election to convert or continue
      a Loan in accordance with §2.5.

    

    Corporate
      Park.
      The
      Real Estate Asset owned in fee simple by Hartman III located at 7010-35 W.
      Tidwell and 5715 NW Central Dr., Houston, Texas 77092 and commonly referred
      to
      as Corporate Park Northwest.

    

    Default.
      When
      used with reference to this Agreement or any other Loan Document, an event
      or
      condition specified in §14.1 that, but for the requirement that time elapse or
      notice be given, or both, would constitute an Event of Default.

    

    Delinquent
      Lender.
      See
§16.5(c).

    

    Disqualifying
      Environmental Event.
      Any
      Release or threatened Release of Hazardous Substances, any violation of
      Environmental Laws or any other similar environmental event with respect to
      any
      Eligible Unencumbered Property that will, in the Agent’s reasonable opinion,
      cost in excess of $500,000 to remediate or, which, with respect to all of the
      Eligible Unencumbered Properties, will, in the Agent’s reasonable opinion cost
      in excess of $1,000,000 in the aggregate to remediate.

    

    Disqualifying
      Structural Event.
      Any
      structural issue which, with respect to any Eligible Unencumbered Property,
      will, in the Agent’s reasonable opinion, cost in excess of $500,000 to remediate
      or, which, with respect to all of the Eligible Unencumbered Properties, will,
      in
      the Agent’s reasonable opinion cost in excess of $1,000,000 in the aggregate to
      remediate.

     

    Distribution.
      With
      respect to:

    

    (i) the
      Borrower, any distribution of cash or other cash equivalent, directly or
      indirectly, to the partners of the Borrower; or any other distribution on or
      in
      respect of any partnership interests of the Borrower; and

    

    (ii) the
      Trust, the declaration or payment of any dividend on or in respect of any shares
      of any class of capital stock or other equity of the Trust, other than dividends
      payable solely in shares of common stock by the Trust; the purchase, redemption,
      or other retirement of any shares of any class of capital stock or other equity
      of the Trust, directly or indirectly through a Subsidiary of the Trust or
      otherwise; the return of capital by the Trust to its shareholders as such;
      or
      any other distribution on or in respect of any shares of any class of capital
      stock or other equity of the Trust.

    

    Dollars
      or $.
      Lawful
      currency of the United States of America.

     

    
       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
 

    

    Drawdown
      Date.
      The
      date on which any Revolving Credit Loan is made or is to be made, and the date
      on which any Revolving Credit Loan is converted or continued in accordance
      with
§2.5.

    

    Eligible
      Assignee.
      Any of
      (a) a commercial bank (or similar financial institution) organized under the
      laws of the United States, or any State thereof or the District of Columbia,
      and
      having total assets in excess of $500,000,000; (b) a savings and loan
      association or savings bank organized under the laws of the United States,
      or
      any State thereof or the District of Columbia, and having a net worth of at
      least $100,000,000, calculated in accordance with GAAP; and (c) a commercial
      bank (or similar financial institution) organized under the laws of any other
      country (including the central bank of such country) which is a member of the
      Organization for Economic Cooperation and Development (the “OECD”), or a
      political subdivision of any such country, and having total assets in excess
      of
      $500,000,000, provided
      that
      such bank (or similar financial institution) is acting through a branch or
      agency located in the United States of America. In no event will the Borrower
      or
      any Affiliate of the Borrower be an Eligible Assignee.

    

    Eligible
      Unencumbered Property(ies).
      As of
      any date of determination, an Unencumbered Property that: (i) is a Permitted
      Property, (ii) is not the subject of a Disqualifying Environmental Event or
      a
      Disqualifying Structural Event, (iii) is not a Real Estate Asset Under
      Development, (iv) is wholly-owned in fee simple by the Borrower, (v) has been
      improved with a Building or Buildings which (a) have been issued a certificate
      of occupancy (where available) or are otherwise lawfully occupied for their
      intended use and (b) are in good and sound operating condition, (vi) does not
      comprise more than 15% of the total Borrowing Base Asset Value (except for
      Corporate Park, which may not comprise more than 25% of total Borrowing Base
      Asset Value), and (vii) is free of all Liens
      other than Permitted Liens (the foregoing clauses (i) through (vii) being herein
      referred to collectively as the “Borrowing Base Conditions”).

    

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

    

    Environmental
      Laws.
      See
§7.18(a).

    

    Environmental
      Reports.
      See
§7.18.

    

    ERISA.
      The
      Employee Retirement Income Security Act of 1974, as amended and in effect from
      time to time.

    

    ERISA
      Affiliate.
      Any
      Person which is treated as a single employer with the Borrower under §414 of the
      Code.

    

    ERISA
      Reportable Event.
      A
      reportable event with respect to a Guaranteed Pension Plan within the meaning
      of
§4043 of ERISA and the regulations promulgated thereunder.

     

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    Event
      of Default.
      See
§14.1.

    

    Facility
      Fee.
      See
§2.3(e).

    

    Fair
      Market Value of Real Estate Assets.
      As of
      any date of determination, an amount equal to (i) Consolidated Net Operating
      Income for the most recent four (4) consecutive complete fiscal quarters
less
      (ii) the
      Capital Reserve applicable to such period; with the product thereof being
divided by
      (iii)
      the Capitalization Rate. 

    

    Federal
      Funds Rate.
      For any
      day, a fluctuating interest 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, as published for such day
      (or,
      if such day is not a Business Day, for the next preceding Business Day) by
      the
      Federal Reserve Bank of New York, or, if such rate is not so published for
      any
      day that is a Business Day, the average of the quotations for such day on such
      transactions received by the Agent from 3 federal funds brokers of recognized
      standing selected by the Agent.

    

    Financial
      Statement Date.
      September 30, 2004.

    

    Fronting
      Bank.
      KeyBank.

     

     “funds
      from operations”.
      As
      defined in accordance with resolutions adopted by the Board of Governors of
      the
      National Association of Real Estate Investment Trusts, as in effect at the
      applicable date of determination.

    

    GAAP.
      Generally accepted accounting principles, consistently applied.

    

    GMAC
      Loan.
      The
      term loan in the aggregate principal amount approximately equal to $34,400,000
      made to Hartman REIT Operating Partnership II, L.P. (“Hartman II”) by General
      Motors Acceptance Corp. in December, 2002.

    

    Guaranteed
      Pension Plan.
      Any
      employee pension benefit plan within the meaning of §3(2) of ERISA maintained or
      contributed to by the Borrower or the Trust, as the case may be, or any ERISA
      Affiliate of any of them the benefits of which are guaranteed on termination
      in
      full or in part by the PBGC pursuant to Title IV of ERISA, other than a
      Multiemployer Plan.

    

    Guaranty.
      The
      Guaranty, dated as of the date hereof, made by the Trust, Hartman III LP LTD
      and
      Hartman III GP LLC in favor of the Agent and the Lenders pursuant to which
      the
      Trust guarantees to the Agent and the Lenders the unconditional payment and
      performance of the Obligations. 

    

    Hartman
      Group.
      Collectively, (i) Hartman OP, (ii) Hartman III, (iii) Hartman III LP LTD, (iv)
      Hartman III GP LLC, (v) the Trust, (vi) the respective Subsidiaries of Hartman
      OP, Hartman III and the Trust and (vii) the Partially-Owned
      Entities.

    

    Hartman
      Management.
      See the
      preamble to this Agreement.

     

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

         

    

    Hartman
      Property LLC.
      Hartman
      Property Management Holdings LLC, a Texas limited liability
      company.

    

    Hartman
      III LP LTD.
      Hartman
      REIT Operating Partnership III LP LTD, a Texas limited partnership.

    

    Hartman
      III GP LLC.
      Hartman
      REIT Operating Partnership III GP LLC, a Texas limited liability
      company.

    

    Hazardous
      Substances.
      See
§7.18(b).

    

    Implied
      Debt Service.
      As of
      any date of determination, an amount equal to (i) the average amount of
      Unsecured Consolidated Total Indebtedness outstanding during the applicable
      period, multiplied by
      (ii) the
      Mortgage Constant.

    

    Increase.
      See
§2.8.

     

    Increase
      Conditions.
      The
      satisfaction of each of the following:

    

    
      	(a)       
                	
              no
                Default or Event of Default shall have occurred and be continuing
                (both
                before and after giving effect to the Increase) and all representations
                and warranties contained in the Loan Documents shall be true and
                correct
                as of the effective date of the Increase (except to the extent that
                such
                representations and warranties relate expressly to an earlier
                date);
                

            

    

    

    
      	(b)        
               	
              the
                Increase shall be extended on the same terms and conditions applicable
                to
                the other Loans; 

            

    

    

    
      	(c)          
              	
              to
                the extent any portion of the Increase is committed to by a
                third party financial institution or institutions not already a Lender
                hereunder, such financial institution shall be an Eligible Assignee
                and
                approved by the Agent (such approval not to be unreasonably withheld
                or
                delayed) and each such financial institution shall have signed a
                counterpart signature page becoming a party to this Agreement and
                a
                “Lender” hereunder; and

            

    

    

    
      	(d)        
               	
              one
                or more of the existing Lenders or such other financial institutions
                which
                may become parties hereto incident to the Increase have committed
                in
                writing pursuant to the terms hereof to lend the full aggregate amount
                of
                the Increase.

            

    

    

    Indebtedness.
      All
      obligations, contingent and otherwise, that in accordance with GAAP should
      be
      classified upon the obligor's balance sheet as liabilities, or to which
      reference should be made by footnotes thereto, including in any event and
      whether or not so classified: (a) all debt and similar monetary obligations,
      whether direct or indirect,

     

    
      
        
          
          

        

        
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    including,
      without limitation, all Obligations and all obligations under any hedge, swap
      or
      other interest rate protection arrangement, any forward purchase contract or
      any
      put; (b) all liabilities secured by any mortgage, pledge, security interest,
      lien, charge, or other encumbrance existing on property owned or acquired
      subject thereto, whether or not the liability secured thereby shall have been
      assumed; (c) all reimbursement obligations under letters of credit (including
      the Letters of Credit); and (d) all guarantees for borrowed money, endorsements
      and other contingent obligations, whether direct or indirect, in respect of
      indebtedness or obligations of others, including any obligation to supply funds
      (including partnership obligations and capital requirements) to or in any manner
      to invest in, directly or indirectly, the debtor, to purchase indebtedness,
      or
      to assure the owner of indebtedness against loss, through an agreement to
      purchase goods, supplies, or services for the purpose of enabling the debtor
      to
      make payment of the indebtedness held by such owner or otherwise.

      

    Interest
      Payment Date.
      As to
      any Base Rate Loan and any Libor Rate Loan, the tenth day of any calendar month
      in which such Loan is outstanding, and with respect to any Libor Rate Loan,
      also
      on the last day of the applicable Interest Period. 

    

    Interest
      Period.
      With
      respect to each Revolving Credit Loan, but without duplication of any other
      Interest Period, (a) initially, the period commencing on the Drawdown Date
      of
      such Loan and ending (as selected by the Borrower in a Completed Loan Request):
      (i) for any Base Rate Loan, the first occurring tenth day of a calendar month
      after such Base Rate Loan is made (whether by borrowing or by conversion from
      a
      Libor Rate Loan), and (ii) for any Libor Rate Loan, 30, 60, 90 or 120 days
      after
      the Drawdown Date of such Loan; and (b) thereafter, each period commencing
      at
      the end of the last day of the immediately preceding Interest Period applicable
      to such Revolving Credit Loan and ending on the last day of the applicable
      period set forth in (a)(i) and (ii) above (as selected by the Borrower in a
      Conversion Request); provided
      that all
      of the foregoing provisions relating to Interest Periods are subject to the
      following:

    

    
      (A)  if
        any
        Interest Period with respect to a LIBOR Rate Loan would otherwise end on
        a day
        that is not a LIBOR Business Day, such Interest Period 

      shall
        end
        on the next succeeding LIBOR Business Day, unless such next succeeding LIBOR
        Business Day occurs in the next calendar month, in which case such Interest
        Period shall end on the next preceding LIBOR Business Day, as determined
        conclusively by the Agent in accordance with the then current bank practice
        in
        London; 

    

    

    (B)  any
      Interest Period pertaining to a LIBOR Loan that begins on the last Business
      Day
      of a calendar month (or on a day for which there is no 

    numerically
      corresponding day in the calendar month at the end of such Interest Period)
      shall end on the last Business Day of a calendar month; 

     

    (C)  if
      the
      Borrower shall fail to give notice of conversion or continuation as provided
      in
§2.5, the Borrower shall be deemed to have

     

    
      
        
          
          

        

        
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    requested
      a conversion
      of the affected Libor Rate Loan to a Base Rate Loan on the last day of the
      then
      current Interest Period with respect thereto;

     

    (D)  any
      Interest Period relating to any Libor Rate Loan that begins on the last Business
      Day of a calendar month (or on a day for which there is no 

    numerically
      corresponding day in the calendar month at the end of such Interest Period)
      shall, subject to subparagraph (E) below, end on the last Business Day of a
      calendar month; and

    

    (E)  no
      Interest Period may extend beyond the Maturity Date.

     

    Investments.
      All
      expenditures made and all liabilities incurred (contingently or otherwise,
      but
      without double-counting): (i) for the acquisition of stock, partnership or
      other
      equity interests or for the acquisition of Indebtedness of, or for loans,
      advances, capital contributions or transfers of property to, any Person; (ii)
      in
      connection with Real Estate Assets Under Development; and (iii) for the
      acquisition of any other obligations of any Person. In determining the aggregate
      amount of Investments outstanding at any particular time: (a) there shall be
      deducted in respect of each such Investment any amount received as a return
      of
      capital (but only by repurchase, redemption, retirement, repayment, liquidating
      dividend or liquidating distribution); (b) there shall not be deducted in
      respect of any Investment any amounts received as earnings on such Investment,
      whether as dividends, interest or otherwise; and (c) there shall not be deducted
      from the aggregate amount of Investments any decrease in the value
      thereof.

    

    Joinder
      Documents.
      The one
      or more Joinder Agreements among the Agent (on behalf of itself and the Lenders)
      and any Wholly-owned Subsidiary which is to become a Borrower at any time after
      the Closing Date, the form of which is attached hereto as Exhibit
      E,
      together with all other documents, instruments and certificates required by
      any
      such Joinder Agreement to be delivered by such Wholly-owned Subsidiary to the
      Agent and the Lenders on the date such Wholly-owned Subsidiary becomes a
      Borrower hereunder. 

    

    Land.
      An
      undeveloped Real Estate Asset owned in fee by the Borrower.

    

    Lead
      Arranger.
      Keybanc
      Capital Markets.

    

    Leases.
      Leases,
      licenses and agreements whether written or oral, relating to the use or
      occupation of space in or on the Buildings or on the Real Estate Assets by
      persons other than the Borrower or any other member of the Hartman
      Group.

    

    Lenders.
      Collectively, KeyBank and each other lending institution which may become a
      party to this Agreement, and any other Person who becomes an assignee of any
      rights of a Lender pursuant to §20 or a Person who acquires all or substantially
      all of the stock or assets of a Lender.

     

    Letter
      of Credit Application.
      See
§5.1.1.

     

    
      
        
          
          

        

        
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    Letter
      of Credit Fee.
      See
§2.3(f).

    

    Letter
      of Credit Participation.
      See
§5.1.4.

    

    Letters
      of Credit.
      See
§5.1.1.

    

    Libor
      Business Day.
      Any day
      on which commercial banks are open for international business (including
      dealings in Dollar deposits) in London, England. 

      

    Libor
      Breakage Costs.
      With
      respect to any Libor Rate Loan to be prepaid prior to the end of the applicable
      Interest Period or not borrowed, converted or continued (“drawn” and, with
      correlative meaning, “draw”) after elected, a prepayment “breakage” fee in an
      amount required to compensate the Lenders for any and all additional losses,
      costs or expenses that such Lenders incur as a result of such prepayment or
      failure to borrow, convert or continue a Libor Rate Loan, including, without
      limitation, any loss (including loss of anticipated profits), cost or expense
      incurred by reason of the liquidation or reemployment of deposits of other
      funds
      acquired by any Lender to fund or maintain such Libor Rate Loan.

    

    Libor
      Rate.
      For any
      LIBOR Rate Loan for any Interest Period, the average rate (rounded upwards
      to
      the nearest 1/16th) as shown in Dow Jones Markets (formerly Telerate) (Page
      3750) at which deposits in U.S. dollars are offered by first class banks in
      the
      London Interbank Market at approximately 11:00 a.m. (London time) on the day
      that is one (1) LIBOR Business Day prior to the first day of such Interest
      Period with a maturity approximately equal to such Interest Period and in an
      amount approximately equal to the amount to which such Interest Period relates,
      adjusted for reserves and taxes if required by future regulations. If Dow Jones
      Markets no longer reports such rate or Agent determines in good faith that
      the
      rate so reported no longer accurately reflects the rate available to Agent
      in
      the London Interbank Market, Agent may select a replacement index. For any
      period during which a Reserve Percentage shall apply, the LIBOR Rate with
      respect to LIBOR Rate Loans shall be equal to the amount determined above
      divided by an amount equal to 1 minus the Reserve Percentage.

     

    Libor
      Rate Loan(s).
      Loans
      bearing interest calculated by reference to the Libor Rate.

    

    Lien.
      See
§9.2.

    

    Loan
      Documents.
      Collectively, this Agreement, the Guaranty, the Notes, the Pledge Agreement,
      the
      Negative Pledge, the Letters of Credit, the Letter of Credit Applications,
      the
      Joinder Documents and any and all other agreements, instruments, documents
      or
      certificates now or hereafter evidencing or otherwise relating to the Loans
      and
      executed and delivered by or on behalf of the Borrower or its Subsidiaries
      or
      the Trust or its Subsidiaries in connection with or in any way relating to
      the
      Loans or the transactions contemplated by this Agreement, and all schedules,
      exhibits and annexes hereto or thereto, as any of the same may from time to
      time
      be amended and in effect.

     

    
      
        
          
          

        

        
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    Loans.
      The
      Revolving Credit Loans.

    

    M&M
      Liens.
      Mechanic’s and materialmen’s liens.

     

    Majority
      Lenders.
      As of
      any date, any two or more Lenders whose aggregate Commitments constitute more
      than fifty percent (50%) of the Total Commitment (or, if the Commitments have
      been terminated, any two or more Lenders whose aggregate Commitments,
      immediately prior to such termination, constituted more than fifty percent
      (50%)
      of the Total Commitment). 

    

    Management
      Agreement.
      Collectively, (i) the Amended and Restated Property Management Agreement dated
      as of August 31, 2004 among the Trust, Hartman OP and Hartman Management, and
      (ii) the Advisory Agreement dated as of August 31, 2004 among the Trust and
      Hartman Management, each as in effect on the date hereof.

    

    Maturity
      Date.
      March
      11, 2008, or such earlier date on which the Revolving Credit Loans shall become
      due and payable pursuant to the terms hereof. 

    

    Maximum
      Drawing Amount.
      The
      maximum aggregate amount that the beneficiaries may at any time draw under
      outstanding Letters of Credit, as such maximum aggregate amount may be reduced
      from time to time pursuant to the terms of the Letter of Credit.

    

    Mortgage
      Constant.
      As at
      any date of determination, a ratio that represents the payment of principal
      and
      interest on an amortizing mortgage loan based on (i) an interest rate equal
      to
      the greater of (a) the actual weighted average interest rate on the Loans,
      (b)
      the then 10-year treasury rate plus 2.0% and based on a 25-year mortgage-style
      amortization schedule and (c) 6.5%.

    

    Mortgage
      Note(s).
      A
      mortgage note, in which the Borrower holds a direct interest as payee, for
      real
      estate that is developed, so long as at the relevant date of determination,
      such
      Mortgage Note is not in default.

    

    Multiemployer
      Plan.
      Any
      multiemployer plan within the meaning of §3(37) of ERISA maintained or
      contributed to by the Borrower or the Trust, as the case may be, or any ERISA
      Affiliate.

    

    Negative
      Pledge.
      The one
      or more negative pledge agreements entered into by the Borrower and relating
      to
      the Eligible Unencumbered Properties.

    

    Net
      Operating Income.
      For any
      period, an amount equal to (i) the aggregate rental and other income from the
      operation of the applicable Real Estate Assets during such period; minus
      (ii) all
      expenses and other proper charges incurred in connection with the operation
      of
      such Real Estate Assets (including, without limitation, real estate taxes,
      management fees, payments under ground leases and bad debt expenses) during
      such

     

    
      
        
          
          

        

        
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    period;
      but, in any case, before payment of or provision for debt service charges for
      such period, income taxes for such period, capital expenses for such period,
      and
      depreciation, amortization, and other non-cash expenses for such period, all
      as
      determined in  accordance
      with GAAP (provided
      that,
      except for purposes of calculating the covenants set forth in §§10.1, 10.4 and
      10.5, any rent leveling adjustments shall be excluded from rental
      income).

    

    Note
      Record.
      A
      Record with respect to any Note.

    

    Notes.
      The
      Revolving Credit Notes.

    

    Obligations.
      All
      indebtedness, obligations and liabilities of the Borrower and its Subsidiaries
      to any of the Lenders or the Agent, individually or collectively (but without
      double-counting), under this Agreement and each of the other Loan Documents
      and
      in respect of any of the Loans, the Notes and Reimbursement Obligations incurred
      and the Letter of Credit Applications and the Letters of Credit and other
      instruments at any time evidencing any thereof, whether existing on the date
      of
      this Agreement or arising or incurred hereafter, direct or indirect, joint
      or
      several, absolute or contingent, matured or unmatured, liquidated or
      unliquidated, secured or unsecured, arising by contract, operation of law or
      otherwise, and including any indebtedness, obligations and liabilities of the
      Borrower and its Subsidiaries under any Protected Interest Rate Agreement
      entered into with any Lender.

    

    Organizational
      Documents.
      Collectively, (i) the Agreement of Limited Partnership of Hartman OP, (ii)
      the
      Certificate of Limited Partnership of Hartman OP, (iii) the Agreement of Limited
      Partnership of Hartman III, (iv) the Certificate of Limited Partnership of
      Hartman III, (v) the Amended and Restated Declaration of Trust of the Trust,
      (vi) the Amended and Restated By-Laws of the Trust, and (vii) all of the
      partnership agreements, corporate charters and by-laws, limited liability
      company operating agreements, joint venture agreements or similar agreements,
      charter documents and certificates or other agreements relating to the
      formation, organization or governance of any Borrower (including, without
      limitation, any Wholly-owned Subsidiary who becomes a Borrower from time to
      time
      hereunder), in each case as any of the foregoing may be amended in accordance
      with §8.20. 

    

    Partially-Owned
      Entity(ies).
      Any of
      the partnerships, associations, corporations, limited liability companies,
      trusts, joint ventures or other business entities or Persons in which the
      Borrower or the Trust, directly, or indirectly through its full or partial
      ownership of another entity, own an equity interest, but which is not required
      in accordance with GAAP to be consolidated with the Borrower or the Trust for
      financial reporting purposes.

    

    Patriot
      Act.
      Title
      III of Public Law 107-56 of the United States of America, United and
      Strengthening America by Providing Appropriate Tools Required to Intercept
      and
      Obstruct Terrorism (USA PATRIOT Act) Act of 2001. 

     

     

    
      
        
          
          

        

        
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    PBGC.
      The
      Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor
      entity or entities having similar responsibilities.

    

    Permits.
      All
      governmental permits, licenses, and approvals necessary for the lawful operation
      and maintenance of the Real Estate Assets.

    

    Permitted
      Liens.
      Liens
      permitted by §9.2.

    

    Permitted
      Property.
      A
      property which is a retail, office or mixed office/warehouse
      property.

    

    Person.
      Any
      individual, corporation, general partnership, limited partnership, trust,
      limited liability company, limited liability partnership, unincorporated
      association, business, or other legal entity, and any government (or any
      governmental agency or political subdivision thereof).

    

    Pledge
      Agreement.
      The one
      or more pledge agreements entered into by any member of the Potomac Group in
      favor of the Agent pursuant to which the equity interests of the owners of
      the
      Borrowing Base Pool are pledged to the Agent, for the ratable benefit of the
      Agent and the Lenders.

    

    Preferred
      Equity.
      Any
      preferred stock, preferred partnership interests, preferred member interests
      or
      other preferred equity interests issued by the Borrower, the Trust or any of
      their respective Subsidiaries.

    

    Protected
      Interest Rate Agreement.
      An
      agreement which evidences the interest protection arrangements required by
      §8.15, and all extensions, renewals, modifications, amendments, substitutions
      and replacements thereof.

    

    Rate
      Period.
      The
      period beginning on the first day of any fiscal month following delivery to
      the
      Agent of the annual or quarterly financial statements required to be delivered
      pursuant to §8.4.1(a) or §8.4(b) and ending on the last day of the fiscal month
      in which the next such annual or quarterly financial statements are delivered
      to
      the Agent. 

    

    RCRA.
      See
§7.18.

    

    Real
      Estate Assets.
      The
      fixed and tangible properties consisting of Land and/or Buildings owned in
      fee
      simple by the Borrower or any of its Subsidiaries at the relevant time of
      reference thereto, including, without limitation, the Eligible Unencumbered
      Properties at such time of reference. 

    

    Real
      Estate Assets Under Development.
      Any
      Real Estate Assets (including raw land) for which the Borrower or any of its
      Subsidiaries is actively pursuing (or intends to actively pursue) construction
      of one or more Buildings or other improvements and for which
      construction, if commenced, is proceeding to completion without undue delay
      from
      Permit denial, construction delays or otherwise, all pursuant to such Person's
      ordinary

     

    
       

      
        
          
          

        

        
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    course
      of
      business, provided
      that any
      such Real Estate Asset (or, if applicable, any Building comprising a portion
      of
      any such Real Estate Asset) will no longer be considered a Real Estate Asset
      Under Development when a certificate of occupancy has issued for such Real
      Estate Asset (or Building) or such Real Estate Asset (or Building) may otherwise
      be lawfully occupied for its intended use unless it becomes the subject of
      a
      redevelopment of any significant portion thereof.

    

    Record.
      The
      grid attached to any Note, or the continuation of such grid, or any other
      similar record, including computer records, maintained by any Lender with
      respect to any Loan.

    

    Recourse.
      With
      reference to any obligation or liability, any liability or obligation that
      is
      not Without Recourse to the obligor thereunder, directly or indirectly. For
      purposes hereof, a Person shall not be deemed to be “indirectly” liable for the
      liabilities or obligations of an obligor solely by reason of the fact that
      such
      Person has an ownership interest in such obligor, provided
      that
      such Person is not otherwise legally liable, directly or indirectly, for such
      obligor's liabilities or obligations (e.g., without limitation, by reason of
      a
      guaranty or contribution obligation, by operation of law or by reason of such
      Person being a general partner of such obligor).

    

    Reimbursement
      Obligation.
      The
      Borrower's obligation to reimburse the Lenders and the Agent on account of
      any
      drawing under any Letter of Credit as provided in §5.2. Notwithstanding the
      foregoing, unless the Borrower shall notify the Agent of its intent to repay
      the
      Reimbursement Obligation on the date of the related drawing under any Letter
      of
      Credit as provided in §5.2 and such Reimbursement Obligation is in fact paid by
      the Borrower on such date, such Reimbursement Obligation shall simultaneously
      with such drawing be converted to and become a Base Rate Loan as set forth
      in
§5.3.

    

    REIT.
      A “real
      estate investment trust”, as such term is defined in Section 856 of the
      Code.

    

    Release.
      See
§7.18(c)(iii).

    

    Reserve
      Percentage.
      The
      maximum aggregate reserve requirement (including all basic, supplemental,
      marginal and other reserves) which is imposed on member banks of the Federal
      Reserve System against “Euro-currency
      Liabilities”
      as
      defined in Regulation D.

    

    Revolving
      Credit Loan(s).
      Each
      and every revolving credit loan made or to be made by the Lenders to the
      Borrower pursuant to §2.

     

    Revolving
      Credit Notes.
      Collectively, the separate promissory notes of the Borrower in favor of each
      Lender in substantially the form of Exhibit
      A
      hereto,
      in an aggregate principal amount equal to $50,000,000, dated as of the date
      hereof or as of such later date as any Person becomes a Lender under this
      Agreement, and completed with

     

    
       

      
        
          
          

        

        
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    appropriate
      insertions, as each of such notes may be amended, replaced, substituted and/or
      restated from time to time (including in connection with any
      Increase).

    

    SARA.
      See
§7.18.

    

    SEC.
      The
      Securities and Exchange Commission, or any successor thereto.

    

    SEC
      Filings.
      Collectively, (i) each Form 10-K, 10-Q and Form 8-K filed by the Trust with
      the
      SEC from time to time and (ii) each of the other public forms and reports filed
      by the Trust with the SEC from time to time.

    

    Subsidiary.
      Any
      corporation, association, partnership, limited liability company, trust, joint
      venture or other business entity or Person which is required to be consolidated
      with the Borrower or the Trust in accordance with GAAP.

    

    Total
      Commitment.
      As of
      any date, the sum of the then current Commitments of the Lenders. As of the
      Closing Date, the Total Commitment is $50,000,000. After the Closing Date,
      the
      aggregate amount of the Total Commitment may be increased to an amount not
      exceeding $100,000,000, provided
      that
      such Increase is in accordance with the provisions of §2.8.

    

    Total
      Funded Revolver Debt.
      As of
      any date of determination, the average daily outstanding balance of the Loans
      during the applicable period ending on such date of determination.

    

    Trust.
      See
      preamble. 

    

    Type.
      As to
      any Revolving Credit Loan, its nature as a Base Rate Loan or a Libor Rate
      Loan.

    

    Unanimous
      Lender Approval.
      The
      written consent of each Lender that is a party to this Agreement at the time
      of
      reference.

    

    Unencumbered
      Asset.
      Any
      Real Estate Asset that on any date of determination is not subject to any Liens
      (except for Permitted Liens).

    

    Unsecured
      Consolidated Total Indebtedness.
      As of
      any date of determination, the aggregate principal amount of Consolidated Total
      Indebtedness outstanding at such date (including all Obligations), that is
      not
      secured by a lien evidenced by a mortgage, deed of trust, negative pledge,
      assignment of partnership interests or other security interest.

      

    Wholly-owned
      Subsidiary.
      Any
      single purpose entity that is a Subsidiary of Hartman OP and of which Hartman
      OP
      at all times owns directly or indirectly (through a Subsidiary or Subsidiaries)
      100% of the outstanding voting or controlling interests and of the economic
      interests. 

     

    
      
        
          
          

        

        
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    “Without
      Recourse”
      or
“without
      recourse”.
      With
      reference to any obligation or liability, any obligation or liability for which
      the obligor thereunder is not liable or obligated other than as to its interest
      in a designated Real Estate Asset or other specifically identified asset only,
      subject to such limited exceptions to the non-recourse nature of such obligation
      or liability, such as fraud, misappropriation and misapplication indemnities,
      as
      are usual and customary in like transactions involving institutional lenders
      at
      the time of the incurrence of such obligation or liability, and to usual and
      customary environmental indemnification obligations in connection with such
      designated Real Estate Asset.

    

    §1.2.      
      Rules
      of Interpretation.

    

    (i)  A
      reference to any document or agreement shall include such document or agreement
      as amended, modified or supplemented from time to time in 

    accordance
      with its terms or the terms of this Agreement.

    

    (ii)    
      The
      singular includes the plural and the plural includes the singular.

    

    (iii)   
      A
      reference to any law includes any amendment or modification to such
      law.

    

    (iv)   
      A
      reference to any Person includes its permitted successors and permitted
      assigns.

    

    (v)    
      Accounting
      terms not otherwise defined herein have the meanings assigned to them by
      generally accepted accounting principles applied on a consistent 

    basis
      by
      the accounting entity to which they refer.

    

    (vi)    The
      words
“include”, “includes” and “including” are not limiting.

    

    (vii)   
      All
      terms
      not specifically defined herein or by generally accepted accounting principles,
      which terms are defined in the Uniform Commercial Code as in 

    effect
      in
      Massachusetts, have the meanings assigned to them therein.

     

     (viii)  
      Reference
      to a particular “§” refers to that section of this Agreement unless otherwise
      indicated.

    

    (ix)     
      The
      words
“herein”, “hereof”, “hereunder” and words of like import shall refer to this
      Agreement as a whole and not to any particular section or 

    subdivision
      of this Agreement.

     

    
      
        
          
          

        

        
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    §2.  
THE
      REVOLVING CREDIT FACILITY.

    

    §2.1        
      Commitment
      to Lend.
      Subject
      to the provisions of §2.4 and the other terms and conditions set forth in this
      Agreement, each of the Lenders severally agrees to lend to the Borrower, and
      the
      Borrower may borrow, repay, and reborrow from each Lender from time to time
      between the Closing Date and the Maturity Date upon notice by the Borrower
      to
      the Agent (with copies to the Agent for each Lender) given in accordance with
      §2.4, such sums as are requested by the Borrower up to a maximum aggregate
      principal amount outstanding (after giving effect to all amounts requested)
      at
      any one time equal to such Lender's Commitment minus,
      without
      double counting, an amount equal to such Lender’s Commitment Percentage
      multiplied by the sum of all Reimbursement Obligations to the extent not yet
      deemed Revolving Credit Loans and the Maximum Drawing Amount; provided
      that the
      sum of the outstanding amount of the Revolving Credit Loans (after giving effect
      to all amounts requested), plus
      the
      Maximum Drawing Amount and, without double counting the portion, if any, of
      any
      Letter of Credit which is drawn and included in the Revolving Credit Loans,
      all
      outstanding Reimbursement Obligations, shall not at any time exceed the lesser
      of (i) the Total Commitment and (ii) the Availability at such
      time,
      and provided,
      further,
      that at
      the time the Borrower requests a Revolving Credit Loan and after giving effect
      to the making thereof: (i) in the case of any borrowing or other extension
      of
      credit, all of the conditions in §13 (and in the case of the initial borrowing
      on the Closing Date or other date of initial borrowing, also the conditions
      in
§12) have been met at the time of such request, and (ii) there has not
      occurred and is not continuing (or will not occur by reason thereof) any Default
      or Event of Default.

    

    The
      Revolving Credit Loans shall be made pro rata
      in
      accordance with each Lender's Commitment Percentage. Each request for a
      Revolving Credit Loan made pursuant to §2.4 shall constitute a representation
      and warranty by the Borrower that the conditions set forth in §12 have been
      satisfied as of the Closing Date (or other date of initial borrowing) and that
      the conditions set forth in §13 have been satisfied on the date of such request
      and will be satisfied on the proposed Drawdown Date of the requested Loan or
      issuance of Letter of Credit, as the case may be, provided
      that the
      making of such representation and warranty by the Borrower shall not limit
      the
      right of any Lender not to lend if such conditions have not been met. No
      Revolving Credit Loan or other extension of credit shall be required to be
      made
      by any Lender unless all of the conditions contained in §12 have been satisfied
      as of the Closing Date (or other date of initial borrowing) with respect to
      the
      initial Revolving Credit Loan or issuance of Letter of Credit, and unless all
      of
      the
      conditions set forth in §13 have been satisfied at the time of any request for a
      Revolving Credit Loan or other extension of credit and on the Drawdown Date
      therefor.

    

    §2.2.    The
      Revolving Credit Notes.
      The
      Revolving Credit Loans shall be evidenced by the Revolving Credit Notes. A
      Revolving Credit Note shall be payable to the order of each Lender in an
      aggregate principal amount equal to such Lender's Commitment. The Borrower
      irrevocably authorizes each Lender to make or cause to be made, at or about
      the

     

    
      
        
          
          

        

        
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    time
      of
      the Drawdown Date of any Revolving Credit Loan or at the time of receipt of
      any
      payment of principal on such Lender's Revolving Credit Note, an appropriate
      notation on such Lender's applicable Note Record reflecting the making of such
      Revolving Credit Loan or (as the case may be) the receipt of such payment.
      The
      outstanding amount of the Revolving Credit Loans set forth on such applicable
      Note Record shall be prima facie
      evidence
      of the principal amount thereof owing and unpaid to such Lender, but the failure
      to record, or any error in so recording, any such amount on such Note Record
      shall not limit or otherwise affect the rights and obligations of the Borrower
      hereunder or under any Revolving Credit Note to make payments of principal
      of or
      interest on any Revolving Credit Note when due.

    

    §2.3.    Interest
      on Revolving Credit Loans; Fees.

    

    (a)    Each
      Base
      Rate Loan shall bear interest for the period commencing with the Drawdown Date
      thereof and ending on the last day of the Interest Period with respect
      thereto (unless earlier paid in accordance with §3.2) at a rate equal to the
      Base Rate plus
      the
      Applicable Base Rate Margin. 

    

    (b)    Each
      Libor Rate Loan shall bear interest for the period commencing with the Drawdown
      Date thereof and ending on the last day of the Interest Period with
      respect thereto (unless earlier paid in accordance with §3.2) at a rate equal to
      the Libor Rate determined for such Interest Period plus
      the
      Applicable Libor Margin.

    

    (c)    With
      reference to Base Rate Loans and Libor Rate Loans,  the “Applicable Base
      Rate Margin” and the “Applicable Libor Margin” shall be equal to (A)
from
      the
      Closing Date through the end of the fiscal month in which the financial
      statements required to be delivered pursuant to §8.4(b)
      for
      the first full fiscal quarter of the Borrower ending after the initial Loans
      are
      made hereunder are delivered to the Agent, a percentage based on the Total
      Leverage Ratio in effect when such initial Loans are made, as determined by
      reference to the Table below, and (B) thereafter, the percentage determined
      for
      each Rate Period by reference to the Table below:

     

    
       

      
        
          
          

        

        
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              Table

               

            
	
              Applicable
                Margin

               

            
	
               

              Total
                Leverage Ratio

            	
              Applicable
                

              Libor
                Margin

            	
              Applicable
                

              Base
                Rate

              Margin

            
	 	 	 
	
              a)   
                less
                than 60% but 

                    
                greater than or equal  to 

                    
                50%

               

            	
              2.40%

            	
              1.15%

            
	
              c) 
                 less
                50% but greater 

                    
                than or equal to 45%

               

            	
              2.15%

            	
              1.025%

            
	
              d) 
                 less
                than 45% 

            	
              1.90%

            	
              1.00%

            

    

    

    For
      purposes of determining the Applicable Base
      Rate
      Margin
      and the Applicable Libor Margin, the Consolidated Total Leverage Ratio (§10.1
      hereof) will be tested quarterly, commencing with the first full fiscal quarter
      of the Borrower ending after the initial Loans are made hereunder, based on
      the
      annual or quarterly financial statements required to be delivered pursuant
      to
§8.4(a) or 8.4(b), respectively. For purposes of determining the interest rate
      for any Rate Period hereunder, any interest rate change shall be effective
      on
      the first day of the fiscal month immediately following the date on which the
      financial statements required to be delivered pursuant to §8.4(a) or §8.4(b) are
      delivered to the Agent, together with a notice to the Agent (which shall be
      verified by the Agent) specifying any change in the Applicable Base
      Rate
      Margin
      and/or the Applicable Libor Margin. If the Borrower has failed to timely deliver
      the financial statements required to be delivered by it pursuant to §8.4(a) or
§8.4(b), then in addition to the other rights and remedies of the Lenders
      hereunder, the Applicable Base
      Rate
      Margin
      and the Applicable Libor Margin that are then in effect shall automatically
      be
      increased to the highest level until such financial statements are
      delivered.

    

    (d)    The
      Borrower unconditionally promises to pay interest on each Revolving Credit
      Loan
      in arrears on each Interest Payment Date with respect thereto,
      and  when
      the
      principal of such Revolving Credit Loan is due (whether at maturity, by reason
      of acceleration or otherwise).

    

    (e)    The
      Borrower agrees to pay to the Agent, for the accounts of the Lenders in
      accordance with their respective Commitment Percentages, from the Closing
Date
      through the Maturity Date, a facility fee (the “Facility Fee”) calculated at the
      rate of (i) for any day when the outstanding principal balance of the Loans
      is
      less than or equal to 

     

    
       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

     

    50%
      of
      the Total Commitment, 0.20% per annum, and (ii) for any day when the outstanding
      principal balance of the Loans is greater than 50% of the Total Commitment,
      0.10% per annum, in each case calculated on the average daily amount, during
      each fiscal quarter or portion thereof, of the unborrowed portion of the Total
      Commitment. The Facility Fee shall be payable quarterly in arrears on the fifth
      Business Day of each calendar quarter for the immediately preceding calendar
      quarter commencing on the first such date following the Closing Date through
      the
      Maturity Date, with a final payment on the Maturity Date.

    

    (f)    The
      Borrower shall pay to the Agent the following Letter of Credit fees (in each
      case, a “Letter of Credit Fee”): (i) a fee in an amount equal to the
Applicable
      L/C Percentage of the daily aggregate undrawn amount of each outstanding Letter
      of Credit during the applicable period, which fee shall be for the accounts
      of
      the Lenders (including the Fronting Bank) pro rata
      in
      accordance with their respective Commitment Percentages, and (ii) a fee in
      an
      amount equal to 0.125% per annum for the account of the Fronting Bank. Each
      Letter of Credit Fee shall be payable quarterly in arrears on the fifth Business
      Day of each calendar quarter for the immediately preceding calendar quarter,
      with a final payment on the Maturity Date or any earlier date on which the
      Commitments shall terminate (which Letter of Credit Fee shall be pro-rated
      for
      any calendar quarter in which such Letter of Credit is issued, drawn upon or
      otherwise reduced or terminated). In addition, the Borrower shall pay to Issuing
      Lender for its own account , upon issuance, the standard issuance, documentation
      and service charges for Letters of Credit issued from time to time by Issuing
      Lender.

    

    §2.4.    Requests
      for Revolving Credit Loans.

    

    The
      following provisions shall apply to each request by the Borrower for a Revolving
      Credit Loan:

    

    (i)    The
      Borrower shall submit a Completed Loan Request to the Agent, together with
      a
      duplicate copy of such Completed Loan Request for each Lender
      which is then a party to this Agreement at the time such loan request is made.
      Except as otherwise provided herein, each Completed Loan Request shall be in
      a
      minimum amount of $500,000 or an integral multiple of $100,000 in excess
      thereof. Each Completed Loan Request shall be irrevocable and binding on the
      Borrower and shall obligate the Borrower to accept the Revolving Credit Loans
      requested from the Lenders on the proposed Drawdown Date.

    

    (ii)    Each
      Completed Loan Request shall be delivered by the Borrower to the Agent by 10:00
      a.m., Cleveland, Ohio time, (x) on the Business Day of  the
      proposed Drawdown Date of any Base Rate Loan, and (y) at least three (3)
      Business Days prior to the proposed Drawdown Date of any Libor Rate
      Loan.

    
 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

       

    

    (iii)    Each
      Completed Loan Request shall include a completed certificate in the form of
      Exhibit
      B
      hereto
      specifying: (1) the principal amount of the Revolving
      Credit Loan requested, (2) the proposed Drawdown Date of such Revolving Credit
      Loan, (3) the Interest Period applicable to such Revolving Credit Loan, and
      (4)
      the Type of such Revolving Credit Loan being requested, and certifying that,
      both before and after giving effect to such requested Revolving Credit Loan,
      no
      Default or Event of Default exists or will exist under this Agreement or any
      other Loan Document and that, after giving effect to the Requested Revolving
      Credit Loan (and all other outstanding Revolving Credit Loans and Letters of
      Credit), the Borrower is in compliance with Availability.

    

    (iv)    No
      Lender
      shall be obligated to fund any Revolving Credit Loan unless:

    

       
      (a)    a
      Completed Loan Request has been timely received by the Agent as provided in
      subsection (i) above; and

     

    (b)    both
      before and after giving effect to the Revolving Credit Loan to be made pursuant
      to the Completed Loan Request, all of the conditions
      contained in §12 shall have been satisfied as of the Closing Date, with respect
      to the initial advance only, and all of the conditions set forth in §13 shall
      have been met, including, without limitation, the condition under §13.1 that
      there be no Default or Event of Default under this Agreement.

    

    (v)    The
      Agent
      will promptly notify each Lender of any Completed Loan Request and will cause
      a
      copy thereof to be delivered to each Lender on the same
      Business Day received, or, in the case of a Libor Rate Loan, the next Business
      Day, in each case absent circumstances outside of its control.

    

    §2.5.    Conversion
      Options.

    

    (a)    The
      Borrower may elect from time to time to convert any outstanding Revolving Credit
      Loan to a Revolving Credit Loan of another Type, provided
      that (i)
subject
      to the further proviso at the end of this §2.5(a) and subject to §2.5(b) and
§2.5(d), with respect to any conversion of a Base Rate Loan to a Libor Rate
      Loan
      (or a continuation of a Libor Rate Loan, as provided in §2.5(b)), the Borrower
      shall give the Agent (with copies to the Agent for each Lender) at least three
      (3) Business Days' prior written notice of such election, which such notice
      must
      be received by the Agent by 10:00 a.m. on any Business Day; and (ii) no Loan
      may
      be converted into a Libor Rate Loan when any Default or Event of Default has
      occurred and is continuing. All or any part of outstanding
      Revolving Credit Loans of any Type may be converted as provided herein,
provided
      that
      each Conversion Request relating to the conversion of a Base Rate Loan to a
      Libor Rate Loan shall be for an amount equal to $1,000,000 or an integral
      multiple of $100,000 in excess thereof and shall be irrevocable by the
      Borrower.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    (b)    Any
      Revolving Credit Loan of any Type may be continued as such upon the expiration
      of the Interest Period with respect thereto (i) in the case of Base Rate
      Loans, automatically and (ii) in the case of Libor Rate Loans by compliance
      by
      the Borrower with the notice provisions contained in §2.5(a)(i); provided
      that no
      Libor Rate Loan may be continued as such when any Default or Event of Default
      has occurred and is continuing but shall be automatically converted to a Base
      Rate Loan on the last day of the first Interest Period relating thereto ending
      during the continuance of any Default or Event of Default. The Borrower shall
      notify the Agent promptly when any such automatic conversion contemplated by
      this §2.5(b) is scheduled to occur.

    

    (c)    In
      the
      event that the Borrower does not notify the Agent of its election hereunder
      with
      respect to any Revolving Credit Loan in accordance with the terms
      hereof, such Loan shall be automatically converted to a Base Rate Loan at the
      end of the applicable Interest Period.

    

    (d)    The
      Borrower may not request or elect a Libor Rate Loan pursuant to §2.4, elect to
      convert a Base Rate Loan to a Libor Rate Loan pursuant to §2.5(a) or
elect
      to
      continue a Libor Rate Loan pursuant to §2.5(b) if, after giving effect thereto,
      there would be greater than six (6) Libor Rate Loans then outstanding. Any
      Loan
      Request or Conversion Request for a Libor Rate Loan that would create greater
      than six (6) Libor Rate Loans outstanding shall be deemed to be a Loan Request
      or Conversion Request for a Base Rate Loan. By way of explanation of the
      foregoing, in the event that the Borrower wishes to convert or continue two
      or
      more Loans into one Libor Rate Loan on the same day and for identical Interest
      Periods (or borrow an additional Revolving Credit Loan simultaneously with
      converting or continuing a Revolving Credit Loan for identical Interest
      Periods), such Libor Rate Loan shall constitute one single Libor Rate Loan
      for
      purposes of this clause (d).

    

    §2.6.    Funds
      for Revolving Credit Loans.

    

    (a)    Subject
      to the other provisions of this §2, not later than 11:00 a.m. (Cleveland, Ohio
      time) on the proposed Drawdown Date of any Revolving Credit Loan, each
      of
      the Lenders will make available to the Agent, at the Agent’s Head Office, in
      immediately available funds, the amount of such Lender's Commitment Percentage
      of the amount of the requested Revolving Credit Loan. Upon receipt from each
      Lender of such amount, the Agent will make available to the Borrower the
      aggregate amount of such Revolving Credit Loan made available to the Agent
      by
      the Lenders. All such funds received by the Agent by 11:00 a.m. (Cleveland,
      Ohio
      time) on any Business Day will be made available to the Borrower not later
      than
      2:00 p.m. on the same Business Day; funds received
      after such time will be made available by not later than 11:00 a.m. on the
      next
      Business Day. The failure or refusal of any Lender to make available to the
      Agent at the aforesaid time and place on any Drawdown Date the amount of its
      Commitment Percentage of the requested Revolving Credit Loan shall not relieve
      any other Lender from its several obligation hereunder to make available to
      the
      Agent the amount of its Commitment Percentage of any requested Revolving Credit
      Loan but in no event shall the

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Agent
      (in
      its capacity as Agent) have any obligation to make any funding or shall any
      Lender be obligated to fund more than its Commitment Percentage of the requested
      Revolving Credit Loan or to increase its Commitment Percentage on account of
      such failure or otherwise.

    

    (b)    The
      Agent
      may, unless notified to the contrary by any Lender prior to a Drawdown Date,
      assume that such Lender has made available to the Agent on such
      Drawdown Date the amount of such Lender's Commitment Percentage of the Revolving
      Credit Loan to be made on such Drawdown Date, and the Agent may (but it shall
      not be required to), in reliance upon such assumption, make available to the
      Borrower a corresponding amount. If any Lender makes available to the Agent
      such
      amount on a date after such Drawdown Date, such Lender shall pay to the Agent
      on
      demand an amount equal to the product of (i) the average, computed for the
      period referred to in clause (iii) below, of the weighted average interest
      rate
      paid by the Agent for federal funds acquired by the Agent during each day
      included in such period, multiplied
      by
      (ii) the
      amount of such Lender's Commitment Percentage of such Revolving Credit Loan,
      multiplied
      by
      (iii) a
      fraction, the numerator of which is the number of days that elapsed from and
      including such Drawdown Date to the date on which the amount of such Lender's
      Commitment Percentage of such Revolving Credit Loan shall become immediately
      available to the Agent, and the denominator of which is 365. A statement of
      the
      Agent submitted to such Lender with respect to any amounts owing under this
      paragraph shall be prima facie
      evidence
      of the amount due and owing to the Agent by such Lender.

    

    §2.7.    Reduction
      of Commitment.
      The
      Borrower shall have the right at any time and from time to time upon five (5)
      Business Days’ prior written notice to the Agent (with copies to the Agent for
      each Lender) to reduce by $5,000,000 or an integral multiple of $1,000,000
      in
      excess thereof (but not below $25,000,000 or, if greater, the Maximum Drawing
      Amount) or terminate entirely the unborrowed portion of the then Total
      Commitment, whereupon the Commitments of the Lenders shall be reduced
pro rata
      in
      accordance with their respective Commitment Percentages by the amount specified
      in such notice or, as the case may be, terminated. Upon the effective date
      of
      any such reduction or termination, the Borrower shall pay to the Agent for
      the
      respective accounts of the Lenders all accrued and unpaid interest on the amount
      of such reduction and the full amount of the Facility Fee then accrued and
      unpaid on the amount of the reduction. No reduction or termination of the
      Commitments may be reinstated.

      

    §2.8.    Increase
      in Total Commitment.
      At
      any
      time (but at least 60 days prior to the Maturity Date), the Borrower shall
      have
      the right, upon written notice to the Agent and satisfaction of the Increase
      Conditions, to cause the Total Commitment to increase by an amount not at any
      time exceeding $50,000,000 (the “Increase”), in which event Schedule
      2
      will be
      deemed to be amended to reflect the increased Commitment of each Lender, if
      any,
      that has agreed in writing to an increase and to add any third party financial
      institution that may have become a party to, and a “Lender” under, this
      Agreement in connection with the Increase (and the Agent is hereby authorized
      to
      effect

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    such
      amendment on behalf of the Lenders and the Borrower); provided,
      however,
      that it
      shall be a condition precedent to the effectiveness of the Increase that the
      Increase Conditions shall have been satisfied. In the event that the Increase
      results in any change to the Commitment Percentage of any Lender, then on the
      effective date of such Increase in the Total Commitment (i) any new Lender,
      and
      any existing Lender whose Commitment has increased, shall pay to the Agent
      such
      amounts as are necessary to fund its new or increased Commitment Percentage
      of
      all existing Revolving Credit Loans, (ii) the Agent will use the proceeds
      thereof to pay to all Lenders whose Commitment Percentage is decreasing such
      amounts as are necessary so that each such Lender’s participation in existing
      Revolving Credit Loans will be equal to its adjusted Commitment Percentage,
      and
      (iii) if the effective date of such Increase in the Total Commitment occurs
      on a
      date other than the last day of an Interest Period applicable to any outstanding
      Libor Rate Loan, the Borrower will be responsible for Libor Breakage Costs
      and
      any other amounts payable pursuant to §4.8 on account of the payments made
      pursuant to clause (ii) above. No Lender shall have any obligation to increase
      its Commitment in connection with the Increase. 

    

    §2.9.    [Reserved].
      

     

    §3.      
      REPAYMENT
      OF THE LOANS.

    

    §3.1.    Maturity.
      The
      Borrower promises to pay on the Maturity Date, and there shall become absolutely
      due and payable on the Maturity Date, all unpaid principal of the Revolving
      Credit Loans outstanding on such date, together with any and all accrued and
      unpaid interest thereon, the unpaid balance of the Facility Fee accrued through
      such date, and any and all other unpaid amounts due under this Agreement, the
      Notes or any other of the Loan Documents.

    

    §3.2.    Optional
      Repayments of Revolving Credit Loans.
      The
      Borrower shall have the right, at its election, to prepay the outstanding amount
      of the Revolving Credit Loans, in whole or in part, at any time without penalty
      or premium; provided
      that the
      outstanding amount of any Libor Rate Loans may not be prepaid on a date other
      than the last day of an Interest Period unless the Borrower pays the Libor
      Breakage Costs for each Libor Rate Loan so prepaid at the time of such
      prepayment. The Borrower shall give the Agent (with copies to the Agent for
      each
      Lender), no later than 10:00 a.m., Cleveland, Ohio time, at least two (2)
      Business Days' prior written notice of any prepayment pursuant
      to this §3.2 of any Base Rate Loans, and at least four (4) Business Days' notice
      of any proposed prepayment pursuant to this §3.2 of Libor Rate Loans, specifying
      the proposed date of prepayment of Revolving Credit Loans and the principal
      amount to be prepaid. Each such partial prepayment of the Loans shall be in
      an
      amount equal to $1,000,000 or an integral multiple of $1,000,000 in excess
      thereof or, if less, the outstanding balance of the Revolving Credit Loans
      then
      being repaid, shall be accompanied by the payment of all charges, if any,
      outstanding on all Revolving Credit Loans so prepaid and of all accrued interest
      on the principal prepaid to the date of 

     

    
       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

    

     

    payment,
      and shall be applied, in the absence of instruction by the Borrower, first
      to
      the principal of Base Rate Loans and then to the principal of Libor Rate
      Loans.

    

    §3.3    Mandatory
      Repayment of Loans.
      If at
      any time the sum of the outstanding amount of the Loans, plus
      the
      Maximum Drawing Amount, plus
      without
      double counting any Revolving Credit Loans, the outstanding Reimbursement
      Obligations, if any, exceeds the lesser of (i) the Total Commitment at such
      time, or (ii) the Availability at such time, the Borrower shall immediately
      pay
      to the Agent an amount in cash necessary to eliminate such excess, such amount
      to be applied, in the absence of instruction by the Borrower, first to the
      principal of Base Rate Loans and then to the principal of Libor Rate
      Loans.

    

    §4.     CERTAIN
      GENERAL PROVISIONS.

    

    §4.1.    Funds
      for Payments.

    

    (a)    All
      payments of principal, interest, fees, and any other amounts due hereunder
      or
      under any of the other Loan Documents shall be made to the Agent, for
the
      respective accounts of the Lenders or (as the case may be) the Agent, at the
      Agent's Head Office, in each case in Dollars and in immediately available funds.
      The Borrower shall make each payment of principal of and interest on the Loans
      and Reimbursement Obligations which are not converted to a Loan hereunder and
      of
      fees hereunder not later than 12:00 p.m. (Cleveland, Ohio time) on the due
      date
      thereof.

    

    (b)    All
      payments by the Borrower hereunder and under any of the other Loan Documents
      shall be made without setoff or counterclaim and free and clear of and
      without deduction for any taxes, levies, imposts, duties, charges, fees,
      deductions, withholdings, compulsory liens, restrictions or conditions of any
      nature now or hereafter imposed or levied by any jurisdiction or any political
      subdivision thereof or taxing or other authority therein unless the Borrower
      is
      compelled by law to make such deduction or withholding. If the Borrower is
      compelled by law to make any such deduction or withholding with respect to
      any
      amount payable by it hereunder or under any of the other Loan Documents (except
      with respect to taxes on the income or profits of the Agent or any Lender),
      the
      Borrower shall pay to the Agent, for the account of the Lenders or (as the
      case
      may be) the Agent, on the date on which such amount is due and payable hereunder
      or under such other Loan Document, such additional amount in Dollars as shall
      be
necessary
      to enable the Lenders to receive the same net amount which the Lenders would
      have received on such due date had no such deduction or withholding obligation
      been imposed upon the Borrower. The Borrower will deliver promptly to the Agent
      (with copies to the Agent for each Lender) certificates or other valid vouchers
      for all taxes or other charges deducted from or paid with respect to payments
      made by the Borrower hereunder or under such other Loan Document.

    

    §4.2.    Computations.
      All
      computations of interest on Loans and of fees to the extent applicable shall
      be
      based on a 360-day year, in each case paid for the actual number of days
      elapsed. Except as otherwise provided in the definition of the term

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    “Interest
      Period” with respect to Libor Rate Loans, whenever a payment hereunder or under
      any of the other Loan Documents becomes due on a day that is not a Business
      Day,
      the due date for such payment shall be extended to the next succeeding Business
      Day, and interest shall accrue during such extension. The outstanding amount
      of
      the Loans as reflected on the Note Records or record attached to any other
      Note
      from time to time shall constitute prima facie evidence of the principal amount
      thereof.

    

    §4.3.    Inability
      to Determine Libor Rate.
      In the
      event, prior to the commencement of any Interest Period relating to any Libor
      Rate Loan, the Agent shall determine that adequate and reasonable methods do
      not
      exist for ascertaining the Libor Rate that would otherwise determine the rate
      of
      interest to be applicable to any Libor Rate Loan during any Interest Period,
      the
      Agent shall forthwith give notice of such determination (which shall be
      conclusive and binding on the Borrower) to the Borrower and the Lenders. In
      such
      event (a) any Loan Request with respect to Libor Rate Loans shall be
      automatically withdrawn and shall be deemed a request for Base Rate Loans,
      (b)
      each Libor Rate Loan will automatically, on the last day of the then current
      Interest Period applicable thereto, become a Base Rate Loan, and (c) the
      obligations of the Lenders to make Libor Rate Loans shall be suspended, in
      each
      case unless and until the Agent determines that the circumstances giving rise
      to
      such suspension no longer exist, whereupon the Agent shall so notify the
      Borrower and the Lenders.

    

    §4.4.    Illegality.
      Notwithstanding any other provisions herein, if any present or future law,
      regulation, treaty or directive or in the interpretation or application thereof
      shall make it unlawful for any Lender to make or maintain Libor Rate Loans,
      such
      Lender shall forthwith give notice of such circumstances to the Agent and the
      Borrower and thereupon (a) the Commitment of such Lender to make Libor
      Rate
      Loans or convert Base Rate Loans to Libor Rate Loans shall forthwith be
      suspended and (b) such Lender's Commitment Percentage of Libor Rate Loans then
      outstanding shall be converted automatically to Base Rate Loans on the last
      day
      of each Interest Period applicable to such Libor Rate Loans or within such
      earlier period as may be required by law, all until such time as it is no longer
      unlawful for such Lender to make or maintain Libor Rate Loans. The Borrower
      hereby agrees promptly to pay the Agent for the account of such Lender, upon
      demand, any additional amounts necessary to compensate such Lender for
Libor Breakage Costs incurred by such Lender in making
      any
      conversion required by this §4.4 prior to the last day of an Interest
      Period.

     

    §4.5.    Additional
      Costs, Etc.
      If any
      present or future applicable law, which expression, as used herein, includes
      statutes, rules and regulations thereunder and interpretations thereof by any
      competent court or by any governmental or other regulatory body or official
      charged with the administration or the interpretation thereof and requests,
      directives, instructions and notices at any time or from time to time hereafter
      made upon or otherwise issued to any Lender or the Agent by any central bank
      or
      other fiscal, monetary or other authority (whether or not having the force
      of
      law, but if not having the

     

     

    
      
        
        

      

      
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    force
      of
      law, then generally applied by the Lenders or the Agent with respect to similar
      loans), shall:

    

    (a)    subject
      any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction
      or withholding of any nature with respect to this Agreement, the other
      Loan Documents, any Letters of Credit, such Lender's Commitment or the Loans
      (other than taxes based upon or measured by the income or profits of such Lender
      or the Agent), or

    

    (b)    change
      the basis of taxation (except for changes in taxes on income or profits) of
      payments to any Lender of the principal of or the interest on any Loans
or
      any
      other amounts payable to the Agent or any Lender under this Agreement or the
      other Loan Documents, or

    

    (c)    impose
      or
      increase or render applicable (other than to the extent specifically provided
      for elsewhere in this Agreement) any special deposit, reserve, assessment,
      liquidity, capital adequacy or other similar requirements (whether or not having
      the force of law) against assets held by, or deposits in or for the account
      of,
      or loans by, or letters of credit issued by, or commitments of an office of
      any
      Lender, or

    

    (d)    impose
      on
      any Lender or the Agent any other conditions or requirements with respect to
      this Agreement, the other Loan Documents, the Loans, such Lender's
      Commitment, or any class of loans or commitments of which any of the Loans
      or
      such Lender's Commitment forms a part;

    

    and
      the
      result of any of the foregoing is

    

    (i)    to
      increase the cost to any Lender of making, funding, issuing, renewing, extending
      or maintaining any of the Loans or such Lender's Commitment or any Letter of
      Credit, or

    

    (ii)    to
      reduce
      the amount of principal, interest, Reimbursement Obligation or other amount
      payable to such Lender or the Agent hereunder on
      account of such Lender's Commitment, any Letter of Credit or any of the Loans,
      or

    

    (iii)    to
      require such Lender or the Agent to make any payment or to forego any interest
      or Reimbursement Obligation or other sum payable hereunder, the amount of which
      payment or foregone interest or Reimbursement Obligation or other sum is
      calculated by reference to the gross amount of any sum receivable or deemed
      received by such Lender or the Agent from the Borrower hereunder,

    

    then,
      and
      in each such case, the Borrower will, upon demand made by the Agent or such
      Lender (such demand to be made promptly by the Agent or such Lender upon the
      making of any such determination), at any time and from time to time and as
      often as the occasion

     

     

    
      
        
        

      

      
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    therefor
      may arise, pay to such Lender or the Agent such additional amounts as such
      Lender or the Agent shall determine in good faith to be sufficient to compensate
      such Lender or the Agent for such additional cost, reduction, payment or
      foregone interest or other sum, provided
      that
      such Lender or the Agent is generally imposing similar charges on its other
      similarly situated borrowers. The Agent shall provide the Borrower with a
      calculation, in reasonable detail, of such amounts in accordance with its
      customary practices.

    

    §4.6.    Capital
      Adequacy.
      If any
      future law, governmental rule, regulation, policy, guideline or directive
      (whether or not having the force of law, but if not having the force of law,
      then generally applied by the Lenders with respect to similar loans) or the
      interpretation thereof by a court or governmental authority with appropriate
      jurisdiction affects the amount of capital required or expected to be maintained
      by banks or bank holding companies and any Lender or the Agent determines that
      the amount of capital required to be maintained by it is increased by or based
      upon the existence of Loans made or deemed to be made pursuant hereto, then
      such
      Lender or the Agent may notify the Borrower of such fact, and the Borrower
      shall
      pay to such Lender or the Agent from time to time, upon demand made by the
      Agent
      or such Lender (such demand to be made promptly by the Agent or such Lender
      upon
      the making of any such determination), as an additional fee payable hereunder,
      such amount as such Lender or the Agent shall determine reasonably and in good
      faith and certify in a notice to the Borrower to be an amount that will
      adequately compensate such Lender in light of these circumstances for its
      increased costs of maintaining such capital. Each Lender and the Agent shall
      allocate such cost increases among its customers in good faith and on an
      equitable basis, and will not charge the Borrower unless it is generally
      imposing a similar charge on its other similarly situated borrowers. The Agent
      shall provide the Borrower with a calculation, in reasonable detail, of such
      amounts in accordance with its customary practices.

    

    §4.7.    Certificate;
      Limitations.
      A
      certificate setting forth any additional amounts payable pursuant to §§4.5 or
      4.6 and a brief explanation of such amounts which are due, submitted by any
      Lender or the Agent to the Borrower, shall be prima facie
      evidence
      that such
      amounts are due and owing. Notwithstanding anything to the contrary contained
      in
      this Article 5, to the extent reasonably possible, each Lender shall designate
      an alternate lending office in the continental United States to make the Loans
      in order to reduce any liability of Borrower to such Lender under §§4.4, 4.5 or
      4.6 or to avoid the unavailability of a Libor Rate Loan, so long as such
      designation is not disadvantageous to such Lender. 

    

    §4.8.    Indemnity.
      In
      addition to the other provisions of this Agreement regarding such matters,
      the
      Borrower agrees to indemnify the Agent and each Lender and to hold the Agent
      and
      each Lender harmless from and against any loss, cost or expense (including
      loss
      of anticipated profits) that the Agent or such Lender may sustain or incur
      as a
      consequence of (a) a default by the Borrower in the payment of any principal
      amount of or any interest on any Libor Rate Loans as and when due and payable,
      including any such loss or expense arising from interest or fees payable by
      the
      Agent or such Lender to

     

    
      
        
          
          

        

        
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    lenders
      of funds obtained by it in order to maintain its Libor Rate Loans, (b) the
      failure by the Borrower to make a borrowing or conversion after the Borrower
      has
      given a Completed Loan Request for a Libor Rate Loan or a Conversion Request
      for
      a Libor Rate Loan, and (c) the making of any payment of a Libor Rate Loan or
      the
      making of any conversion of any such Loan to a Base Rate Loan on a day that
      is
      not the last day of the applicable Interest Period with respect thereto,
      including interest or fees payable by the Agent or a Lender to lenders of funds
      obtained by it in order to maintain any such Libor Rate Loans.

    

    §4.9.    Interest
      on Overdue Amounts; Late Charge.
      Notwithstanding anything to the contrary stated herein, upon the occurrence
      and
      during the continuance of an Event of Default, at the option of the Majority
      Lenders, to the extent permitted by applicable law, the unpaid balance of all
      Obligations shall bear interest at the rate otherwise applicable thereto
plus
      2%,
      compounded daily until such Event of Default is cured or waived to the
      satisfaction of the Agent and the required Lenders. In addition, the Borrower
      shall pay a late charge equal to five percent (5%) of any amount of interest
      charges on the Loans which is not paid within ten (10) days of the date when
      due.

    

    §5.     LETTERS
      OF CREDIT.
      

    

    §5.1.    Letter
      of Credit Commitments.

    

    §5.1.1. Commitment
      to Issue Letters of Credit.
      Subject
      to the terms and conditions set forth in this Agreement, at any time and from
      time to time from the Closing Date through the day that is one-hundred twenty
      (120) days prior to the Maturity Date, the Issuing Lender shall issue such
      Letters of Credit as the Borrower may request upon the delivery of a written
      request on the Fronting Bank's customary form as part of a Completed Loan
      Request (a “Letter of Credit Application”), the Fronting Bank on behalf of the
      Lenders and in reliance upon the agreement of the Lenders set forth in §5.1.4
      and upon the representations and warranties of the Borrower contained herein,
      agrees, in its individual capacity, to issue, extend and renew for the account
      of the Borrower one or more
      letters of credit (individually, a “Letter of Credit”), in such form as may be
      requested from time to time by the Borrower and agreed to by the Fronting Bank;
      provided,
      however,
      that,
      after giving effect to such Completed Loan Request, (a) the Maximum Drawing
      Amount plus all Reimbursement Obligations (to the extent, if any, not yet deemed
      a Revolving Credit Loan pursuant to §5.3), shall not exceed $5,000,000 at any
      one time and (b) the sum of (i) the Maximum Drawing Amount and, without double
      counting, all Reimbursement Obligations (to the extent, if any, not yet deemed
      a
      Revolving Credit Loan pursuant to §5.3) and (ii) the amount of all Loans
      outstanding shall not exceed the lesser of (x) the Total Commitment in effect
      at
      such time and (y) the Availability at such time.

    

    Each
      Letter of Credit Application shall be executed by an officer of Borrower. The
      Issuing Lender shall be entitled to conclusively rely on such Person’s authority
      to

     

    
      
        
          
          

        

        
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    request
      a
      Letter of Credit on behalf of Borrower. The Issuing Lender shall have no duty
      to
      verify the authenticity of any signature appearing on a Letter of Credit
      Request. The Borrower assumes all risks with respect to the use of the Letters
      of Credit. Unless the Issuing Lender and the Required Lenders otherwise consent,
      the term of any Letter of Credit shall not exceed a period of time commencing
      on
      the issuance of the Letter of Credit and ending on the date which is sixty
      (60)
      days prior to the Maturity Date (but in any event the term shall not extend
      beyond the Maturity Date). The amount available to be drawn under any Letter
      of
      Credit shall reduce on a dollar-for-dollar basis the amount available to be
      drawn under the Total Commitment as a Loan. Each Letter of Credit Application
      shall be submitted to the Issuing Lender at least ten (10) Business Days (or
      such shorter period as the Issuing Lender may approve) prior to the date upon
      which the requested Letter of Credit is to be issued. Each such Letter of Credit
      Application shall contain (i) a statement as to the purpose for which such
      Letter of Credit shall be used (which purpose shall be in accordance with the
      terms of this Agreement), and (ii) a certification by the chief financial or
      chief accounting officer of Borrower that the Borrower is and will be in
      compliance with all covenants under the Loan Documents after giving effect
      to
      the issuance of such Letter of Credit. The Borrower shall further deliver to
      the
      Issuing Lender such additional applications and documents as the Issuing Lender
      may require, in conformity with the then standard practices of its letter of
      credit department, in connection with the issuance of such Letter of Credit;
      provided that in the event of any conflict, the terms of this Agreement shall
      control. The Issuing Lender shall, if it approves of the content of the Letter
      of Credit request (which approval shall not be unreasonably withheld), and
      subject to the conditions set forth in this Agreement, issue the Letter of
      Credit on or before ten (10) Business Days following receipt of the documents
      last due pursuant to §2.10(b). Each Letter of Credit shall be in form and
      substance reasonably satisfactory to the Issuing Lender in its reasonable
      discretion. Upon issuance of a Letter of Credit, the Issuing Lender shall
      provide notice of the issuance of such Letter of Credit to the Lenders and
      shall
      provide a copy of such Letter of Credit to any Lender that requests a copy.
      Upon
      the issuance of a Letter of Credit, each Revolving Credit Lender shall be deemed
      to have purchased a participation therein from Issuing Lender in an amount
      equal
      to its respective Commitment Percentage of the amount of such
      Letter of Credit. No Lender’s obligation to participate in a Letter of Credit
      shall be affected by any other Lender’s failure to perform as required herein
      with respect to such Letter of Credit or any other Letter of Credit. The
      issuance of any supplement, modification, amendment, renewal or extension to
      or
      of any Letter of Credit shall be treated in all respects the same as the
      issuance of a new Letter of Credit.

    

    §5.1.2.   Letter
      of Credit Applications.
      Each
      Letter of Credit Application shall be completed to the satisfaction of the
      Agent
      and the Fronting Bank. 

    

    §5.1.3.       
      Terms
      of Letters of Credit.
      Each
      Letter of Credit issued, extended or renewed hereunder shall, among other
      things, (i) provide for the payment of sight drafts for honor thereunder when
      presented in accordance with the terms thereof and when accompanied by the
      documents described therein, and (ii) shall have an expiry date

     

    
      
        
        

      

      
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    no
      later than one year after its issuance. Each Letter of Credit so
      issued, extended or renewed shall be subject to the Uniform Customs.

    

    §5.1.4.   Obligations
      of Lenders with respect to Letters of Credit.
      Each
      Lender severally agrees that it shall be absolutely liable, without regard
      to
      the occurrence of any Default or Event of Default or any other condition
      precedent whatsoever, to the extent of such Lender's Commitment Percentage,
      to
      reimburse the Fronting Bank on demand for the amount of each draft paid by
      the
      Fronting Bank under each Letter of Credit (such agreement for a Lender being
      called herein the “Letter of Credit Participation” of such Lender). Each such
      payment made by a Lender shall be treated as a purchase by such Lender of a
      participation in the Fronting Bank’s interest in such Letter of Credit and each
      Lender shall share, in accordance with its respective Commitment Percentage,
      in
      any interest (but not any fee payable solely for the account of the Fronting
      Bank) which accrues and is payable by the Borrower pursuant to §5.2 or otherwise
      in connection with such Letter of Credit.

    

    §5.2.    Reimbursement
      Obligation of the Borrower.
      In
      order to induce the Fronting Bank to issue, extend and renew each Letter of
      Credit and the Lenders to participate therein, the Borrower hereby agrees to
      reimburse or pay to the Fronting Bank, for the account of the Fronting Bank
      or
      (as the case may be) the Lenders, with respect to each Letter of Credit issued,
      extended or renewed by the Fronting Bank hereunder,

    

    (a)    promptly
      upon notification by the Fronting Bank or the Agent that any draft presented
      under such Letter of Credit is honored by the Fronting Bank, or 

    the
      Fronting Bank otherwise makes a payment with respect thereto, (i) the amount
      paid by the Fronting Bank under or with respect to such Letter of Credit, and
      (ii) any amounts payable pursuant to §5.5 under, or with respect to, such Letter
      of Credit, and

    

    (b)    upon
      the
      termination of the Total Commitment, or the acceleration of the Reimbursement
      Obligations with respect to all Letters of Credit in accordance 

    with
§14,
      an amount equal to the then Maximum Drawing Amount on all Letters of Credit,
      which
      amount shall be held by the Agent in an interest-bearing account (with interest
      to be added to such account) as cash collateral for the benefit of the Lenders
      and the Agent for all Reimbursement Obligations. Upon the expiration,
      termination or surrender without draw of any Letter of Credit, the Agent shall
      release to the Borrower the cash collateral amount applicable to such Letter
      of
      Credit.

    

    Each
      such
      payment shall be made to the Agent for the benefit of the Fronting Bank or
      the
      Lenders, as applicable, at the Agent's Head Office in immediately available
      funds. Interest on any and all amounts not converted to a Revolving Credit
      Loan
      pursuant to §5.3 and remaining unpaid by the Borrower under this §5.2 at any
      time from the date such amounts become due and payable (whether as stated in
      this §5.2, by acceleration or otherwise) until payment in full (whether before
      or after judgment) shall be payable to the Agent for the benefit of the Lenders
      on demand at the rate specified in §4.9 for overdue principal on the
      Loans.

     

     

    
       

      
        
          
          

        

        
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    §5.3.    Letter
      of Credit Payments; Funding of a Loan.
      If any
      draft shall be presented or other demand for payment shall be made under any
      Letter of Credit, the Fronting Bank will use its reasonable efforts to notify
      the Borrower and the Lenders, on or before the date the Fronting Bank intends
      to
      honor such drawing, of the date and amount of the draft presented or demand
      for
      payment and of the date and time when it expects to pay such draft or honor
      such
      demand for payment and, except to the extent the amount of such draft becomes
      a
      Revolving Credit Loan as set forth in this §5.3, Borrower shall reimburse Agent,
      as set forth in §5.2. Notwithstanding anything contained in §5.2 or this §5.3 to
      the contrary, however, unless Borrower shall have notified the Agent and
      Fronting Bank prior to 11:00 a.m. (New York time) on the Business Day
      immediately prior to the date of such drawing that Borrower intends to reimburse
      Fronting Bank for the amount of such drawing with funds other than the proceeds
      of Revolving Credit Loans, Borrower shall be deemed to have timely given a
      Completed Loan Request pursuant to §2.4 to Agent, requesting a Base Rate Loan on
      the date on which such drawing is honored and in an amount equal to the amount
      of such drawing. The Borrower may thereafter convert any such Base Rate Loan
      to
      a Revolving Credit Loan of another Type in accordance with §2.5. Each Lender
      shall, in accordance with §2.6, make available such Lender's Commitment
      Percentage of such Revolving Credit Loan to Agent, the proceeds of which shall
      be applied directly by Agent to reimburse Fronting Bank for the amount of such
      draw. In the event that any Lender fails to make available to Agent the amount
      of such Lender's Commitment Percentage of such Revolving Credit Loan on the
      date
      of any drawing, Agent shall be entitled to recover such amount on demand from
      such Lender plus any additional amounts payable under §2.6(b) in the event of a
      late funding by a Lender. Further, such Lender shall be deemed to have assigned
      any and all payments made of principal and interest on its Loans, amounts due
      with respect to its participations in Letters of Credit and any other amounts
      due to it hereunder to the Agent to fund the amount of any drawn Letter of
      Credit which such Lender was required to fund pursuant to this section until
      such amount has been funded (as a result of such assignment or otherwise).
      If
      after the issuance of a Letter of Credit pursuant to §2.10(c) by the
Issuing
      Lender, but prior to the funding of any portion thereof by a Lender, one of
      the
      events described in §14.1(g) or (h) shall have occurred, each Lender will, on
      the date such Revolving Credit Loan was to have been made, purchase an undivided
      participation interest in the Letter of Credit in an amount equal to its
      Commitment Percentage of the amount of such Letter of Credit. Each Lender will
      immediately transfer to the Issuing Lender in immediately available funds the
      amount of its participation and upon receipt thereof the Issuing Lender will
      deliver to such Lender a Letter of Credit participation certificate dated the
      date of receipt of such funds and in such amount. The Fronting Bank is
      irrevocably authorized by the Borrower and each of the Lenders to honor draws
      on
      each Letter of Credit by the beneficiary thereof in accordance with the terms
      of
      such Letter of Credit. The responsibility of the Fronting Bank to the Borrower
      and the Lenders shall be only to determine that the documents (including each
      draft) delivered under each Letter of Credit in connection with such presentment
      shall be in conformity in all material respects with such Letter of Credit
      in
      accordance with the Fronting Bank’s customary practices.

     

     

    
      
        
          
          

        

        
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    §5.4.    Obligations
      Absolute.
      The
      obligations of the Borrower to the Lenders under this Agreement with respect
      to
      Letters of Credit shall be absolute, unconditional and irrevocable, and shall
      be
      paid and performed strictly in accordance with the terms of this Agreement,
      under all circumstances whatsoever, including, without limitation, the following
      circumstances: (i) any improper use which may be made of any Letter of Credit
      or
      any improper acts or omissions of any beneficiary or transferee of any Letter
      of
      Credit in connection therewith; (ii) the existence of any claim, set-off,
      defense or any right which the Borrower may have at any time against any
      beneficiary or any transferee of any Letter of Credit (or persons or entities
      for whom any such beneficiary or any such transferee may be acting) or the
      Lenders (other than the defense of payment to the Lenders in accordance with
      the
      terms of this Agreement) or any other person, whether in connection with any
      Letter of Credit, this Agreement, any other Loan Document, or any unrelated
      transaction; (iii) any statement or any other documents presented under any
      Letter of Credit proving to be insufficient, forged, fraudulent or invalid
      in
      any respect or any statement therein being untrue or inaccurate in any respect
      whatsoever; (iv) any breach of any agreement between Borrower and any
      beneficiary or transferee of any Letter of Credit; (v) any irregularity in
      the
      transaction with respect to which any Letter of Credit is issued, including
      any
      fraud by the beneficiary or any transferee of such Letter of Credit; (vi)
      payment by the Issuing Lender under any Letter of Credit against presentation
      of
      a sight draft or a certificate which does not comply with the terms of such
      Letter of Credit, provided that such payment shall not have constituted gross
      negligence or willful misconduct on the part of the Issuing Lender as determined
      by a court of competent jurisdiction after the exhaustion of all applicable
      appeal periods, and (vii) any other circumstance or happening whatsoever,
      whether or not similar to any of the foregoing, provided that such other
      circumstances or happenings shall not have been the result of gross negligence
      or willful misconduct on the part of the Issuing Lender as determined by a
      court
      of competent jurisdiction after the exhaustion of all applicable appeal periods.
      Borrower assumes all risks of the acts, omissions, or misuse of any Letter
      of
      Credit by the beneficiary thereof. Neither Agent, Issuing Lender nor any Lender
      will be responsible for (i)
      the
      form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter
      of Credit or any document submitted by any party in connection with the issuance
      of any Letter of Credit, even if such document should in fact prove to be in
      any
      or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
      the form, validity, sufficiency, accuracy, genuineness or legal effect of any
      instrument transferring or assigning or purporting to transfer or assign any
      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;
      (iii) failure of any beneficiary of any Letter of Credit to comply fully with
      the conditions required in order to demand payment under a Letter of Credit;
      (iv) errors, omissions, interruptions or delays in transmission or delivery
      of
      any messages, by mail, cable, telegraph, telex or otherwise; (v) errors in
      interpretation of technical terms; (vi) any loss or delay in the transmission
      or
      otherwise of any document or draft required by or from a beneficiary in order
      to
      make a disbursement under a Letter of Credit or the proceeds thereof; (vii)
      for
      the misapplication by the beneficiary of any Letter of Credit of the proceeds
      of
      any drawing under such Letter of Credit; and (viii) for any
      consequences

     

    
      
        
          
          

        

        
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    arising
      from causes beyond the control of Agent or any Lender. None of the foregoing
      will affect, impair or prevent the vesting of any of the rights or powers
      granted to Agent, Issuing Lender or the Lenders hereunder. In furtherance and
      extension and not in limitation or derogation of any of the foregoing, any
      act
      taken or omitted to be taken by Agent, Issuing Lender or the other Lenders
      in
      good faith will be binding on Borrower and will not put Agent, Issuing Lender
      or
      the other Lenders under any resulting liability to Borrower.

    

    §5.5.    Reliance
      by Issuer.
      The
      Fronting Bank and the Agent shall be entitled to rely, and shall be fully
      protected in relying upon, any Letter of Credit, draft, writing, resolution,
      notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
      telex or teletype message, statement, order or other document 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, independent
      accountants and other experts selected by the Fronting Bank or the Agent. The
      Agent and the Fronting Bank shall be fully justified in failing or refusing
      to
      take any action under this §5 (other than the issuance of a Letter of Credit
      pursuant to a Letter of Credit Application and otherwise in accordance with
      the
      terms of this Agreement) unless it shall first have received such advice or
      concurrence of the Majority Lenders (or such other number or percentage of
      the
      Lenders as may be required by this Agreement) as it reasonably deems appropriate
      or it shall first be indemnified to its reasonable satisfaction by the 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. The Agent and any Fronting
      Bank
      shall in all cases be fully protected by the Lenders in acting, or in refraining
      from acting, under this §5 in accordance with a request of the Majority Lenders
      (or such other number or percentage of the Lenders as may be required by this
      Agreement), and such request and any action taken or failure to act pursuant
      thereto shall be binding upon the Lenders and all future holders of the Notes
      or
      of a Letter of Credit Participation.

     

    §6.     RECOURSE
      OBLIGATIONS.
      The
      Obligations are full recourse obligations of the Borrower, and all of the
      respective assets and properties of the Borrower shall be available for the
      payment in full in cash and performance of the Obligations. The obligations
      of
      the Trust under the Guaranty are full recourse obligations of the Trust, and
      all
      of the respective assets and properties of the Trust shall be available for
      the
      payment in full in cash and performance thereof. 

    

    §7.     REPRESENTATIONS
      AND WARRANTIES.
      The
      Borrower and the Trust, on their own behalf and on behalf of their respective
      Subsidiaries, jointly and severally represent and warrant to the Agent and
      the
      Lenders all of the statements contained in this §7.

     

    
      
        
          
          

        

        
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    §7.1.    Authority,
      Etc.

    

    (a)    Organization:
      Good Standing.

    

    (i)    Each
      of
      Hartman OP and Hartman III is a limited partnership duly organized, validly
      existing and in good standing under the laws of its state of organization;
      each
      of Hartman OP and Hartman III has all requisite limited partnership power to
      own
      its properties and conduct its business as now conducted and as presently
      contemplated; and each of Hartman OP and Hartman III is in good standing as
      a
      foreign entity and is duly authorized to do business in the jurisdictions where
      the Eligible Unencumbered Properties owned by it are located and in each other
      jurisdiction where such qualification is necessary except where a failure to
      be
      so qualified would not have a materially adverse effect on its business,
      operations, assets, condition (financial or otherwise) or properties. Each
      Borrower (other than Hartman OP and Hartman III) is a limited partnership,
      general partnership, nominee trust or limited liability company, as the case
      may
      be, duly organized, validly existing and in good standing under the laws of
      its
      state of organization; each such Borrower has all requisite limited partnership,
      general partnership, trust, limited liability company or corporate, as the
      case
      may be, power to own its respective properties and conduct its respective
      business as now conducted and as presently contemplated; and each such Borrower
      is in good standing as a foreign entity and is duly authorized to do business
      in
      the jurisdictions where the Eligible Unencumbered Properties owned by it are
      located and in each other jurisdiction where such qualification is necessary
      except where a failure to be so qualified in such other jurisdiction would
      not
      have a materially adverse effect on the business, operations, assets, condition
      (financial or otherwise) or properties of such Borrower.

    
 

    (ii)    the
      Trust
      is a real estate investment trust duly organized, validly existing and in good
      standing under the laws of the State of Maryland; each Subsidiary of the Trust
      is duly organized, validly existing and in good standing as a corporation,
      nominee trust, limited liability company, limited partnership or general
      partnership, as the case may be, under the laws of the state of its
      organization; the Trust and each of its Subsidiaries has all requisite
      corporate, trust, limited liability company, limited partnership or general
      partnership, as the case may be, power to own its respective properties and
      conduct its respective business as now conducted and as presently contemplated;
      and the Trust is in good standing as a foreign entity and is duly authorized
      to
      do business in the jurisdictions where such qualification is
      necessary,

     

    
      
        
          
          

        

        
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    except
      where a failure to be so qualified in such other would not have a materially
      adverse effect on the business, operations, assets, condition (financial or
      otherwise) or properties of the Trust or any such Subsidiary.

    

    (b)    Capitalization.
      The
      outstanding equity of each of Hartman OP and Hartman III is comprised of a
      general partner interest and limited partner interests, all of which
      have been duly issued and are outstanding and fully paid and non-assessable.
      All
      of the issued and outstanding general partner interests of Hartman OP are owned
      and held of record by the Trust and all of the issued and outstanding general
      partner interests of Hartman III are owned and held of record by Hartman OP.
      As
      of the Closing Date, all of the issued and outstanding limited partner interests
      of Hartman OP are owned and held of record as set forth on Schedule
      7.1(b).
      There
      are no outstanding securities or agreements exchangeable for or convertible
      into
      or carrying any rights to acquire a general partner interest in Hartman OP
      or
      Hartman III. There are no outstanding commitments, options, warrants, calls
      or
      other agreements (whether written or oral) binding on Hartman OP, Hartman III
      or
      the Trust which require or could require Hartman OP, Hartman III or the Trust
      to
      sell, grant, transfer, assign, mortgage, pledge or otherwise dispose of any
      general partner interest in Hartman OP or Hartman III. No general partner
      interests of Hartman OP or Hartman III are subject to any restrictions on
      transfer or any partner agreements, voting agreements, trust deeds, irrevocable
      proxies; or any other similar agreements or interests (whether written or oral).
      For so long as any Borrower which is a Wholly-owned Subsidiary of Hartman OP
      is
      a Borrower, Hartman OP owns, directly or indirectly, 100% (by number of votes
      or
      controlling interests) of the outstanding voting interests and of the economic
      interests in each such Borrower. All of the issued and outstanding equity
      interests of each Borrower other than Hartman OP and Hartman III are owned
      and
      held of record by the Persons set forth on Schedule
      7.1(b)
      attached
      hereto, and all of such equity interests have been duly issued and are
      outstanding and fully paid and non-assessable. There are no outstanding
      securities or agreements exchangeable for or convertible into or carrying any
      rights to acquire any equity interests in any Borrower (other than Hartman
      OP
      and
      Hartman III). There are no outstanding commitments, options, warrants, calls
      or
      other agreements (whether written or oral) binding on any Borrower (other than
      Hartman OP and Hartman III) which require or could require any Borrower (other
      than Hartman OP and Hartman III) to sell, grant, transfer, assign, mortgage,
      pledge or otherwise dispose of any equity interest in such Borrower. Except
      as
      set forth on Schedule
      7.1(b),
      no
      equity interests of any Borrower are subject to any restrictions on transfer
      or
      any partner agreements, voting agreements, trust deeds, irrevocable proxies;
      or
      any other similar agreements or interests (whether written or oral). All of
      the
      Preferred Equity which exists as of the date of this Agreement, and each of
      the
      agreements or other documents entered into and/or setting forth the terms,
      rights and restrictions applicable to any such Preferred Equity, are listed
      and
      described on Schedule
      7.1(b)
      attached
      hereto. All of the agreements and other documents relating to the Preferred
      Equity in effect on the Closing Date have been furnished to the
      Agent.

    

    (c)    Due
      Authorization.
      The
      execution, delivery and performance of this Agreement and the other Loan
      Documents to which the Borrower or the Trust is or

     

    
       

      
        
          
          

        

        
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    is
      to
      become
      a party and the transactions contemplated hereby and thereby (i) are within
      the
      authority of the Borrower and the Trust, (ii) have been duly authorized by
      all
      necessary proceedings on the part of the Borrower or the Trust and any general
      partner or member thereof, (iii) do not conflict with or result in any breach
      or
      contravention of any provision of law, statute, rule or regulation to which
      the
      Borrower or the Trust is subject or any judgment, order, writ, injunction,
      license or permit applicable to the Borrower or the Trust, (iv) do not conflict
      with any provision of the Organizational Documents of the Borrower or the Trust
      or any general partner thereof, and (v) do not contravene any provisions of,
      or
      constitute Default or Event of Default hereunder or a failure to comply with
      any
      term, condition or provision of, (x) the GMAC Loan, (y) the Management Agreement
      or (z) any other agreement, instrument, judgment, order, decree, permit, license
      or undertaking binding upon or applicable to the Borrower or the Trust or any
      of
      the Borrower's or the Trust's properties (except for any such failure to comply
      under any such other agreement, instrument, judgment, order, decree, permit,
      license, or undertaking as would not materially and adversely affect the
      business, operations, assets, condition (financial or otherwise) or properties
      of the Trust, Hartman OP, Hartman III or any other member of the Hartman Group)
      or result in the creation of any mortgage, pledge, security interest, lien,
      encumbrance or charge upon any of the properties or assets of the Borrower
      or
      the Trust.

    

    (d)    Enforceability.
      Each of
      the Loan Documents to which the Borrower or the Trust is a party has been duly
      executed and delivered and constitutes the legal, valid
      and
      binding obligations of the Borrower and the Trust, as the case may be, subject
      only to applicable bankruptcy, insolvency, reorganization, moratorium or other
      laws relating to or affecting generally the enforcement of creditors'
      rights.

    

    §7.2.    Governmental
      Approvals.
      The
      execution, delivery and performance by the Borrower and the Trust of this
      Agreement and the other Loan Documents to which the Borrower
      or the Trust is or is to become a party and the transactions contemplated hereby
      and thereby do not require (i) the approval or consent of any governmental
      agency or authority other than those already obtained and delivered to the
      Agent, or (ii) filing with any governmental agency or authority, other than
      filings which will be made with the SEC when and as required by law or deemed
      appropriate by the Trust.

    

    §7.3.    Title
      to Properties; Leases.

    

    The
      Borrower and the Trust each has good fee to all of its respective properties,
      assets and rights of every name and nature purported to be owned by it,
      including, without limitation, that:

    

    (a)    The
      Borrower holds good and clear record and marketable fee simple title to the
      Eligible Unencumbered Properties and all assets or properties relating

    thereto,
      subject to no Liens other than Permitted Liens.

     

    
      
        
          
          

        

        
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    (b)    The
      Borrower and the Trust will, as of the Closing Date, own all of the assets
      as
      reflected in the financial statements of the Borrower and the Trust described
      in §7.4, or acquired since the date of such financial statements (except
      property and assets sold or otherwise disposed of in the ordinary course of
      business since that date).

    

    (c)    Each
      of
      the direct or indirect interests of the Borrower in any Partially-Owned Entity
      is set forth on Schedule
      7.3(c)
      attached
      hereto, including the type of entity
      in
      which the interest is held, the percentage interest owned by the Borrower in
      such entity, the capacity in which the Borrower holds the interest, and the
      Borrower’s ownership interest therein. 

    

    §7.4.    Financial
      Statements.
      The
      Borrower has furnished to each of the Lenders the audited Consolidated balance
      sheet of the Trust and its Subsidiaries as of December 31, 2003 (together with
      the unaudited Consolidated balance sheet of the Trust and its Subsidiaries
      as of
      September 30, 2004 and the related Consolidated Statements of Income, changes
      in
      shareholders’ equity and cash flows for the fiscal year or other period then
      ended, as applicable (collectively, the “Initial Financials”). Such Initial
      Financials have been prepared in accordance with GAAP and, in the case of the
      December 31, 2003 financial statements, accompanied by an auditors’ report
      prepared without qualification by the Accountants. The Initial Financials fairly
      present the financial condition of the Trust and its Subsidiaries as at the
      close of business on the date thereof and the results of operations for the
      fiscal year then ended. There are no contingent liabilities of the Trust or
      any
      of its Subsidiaries as of such date known to the officers of the Trust or any
      of
      its Subsidiaries not disclosed in the Initial Financials.

     

            
      §7.5    No
      Material Changes, Etc.
      Since
      the Financial Statement Date, there has occurred no materially adverse change
      in
      the business, operations, assets, condition (financial or otherwise) or
      properties of the Trust, Hartman OP, Hartman III or any other member
      of
      the Hartman Group. Since the Financial Statement Date and the Closing Date
      (or
      such later date upon which a Real Estate Asset became part of the Borrowing
      Base
      Pool), there has been no material adverse change to the Net Operating Income
      of
      any Real Estate Asset that is part of the Borrowing Base Pool.

    

    §7.6.    Franchises,
      Patents, Copyrights, Etc.
      The
      Borrower, the Trust and each of their respective Subsidiaries possess all
      franchises, patents, copyrights, trademarks, trade names, licenses and permits,
      and rights in respect of the foregoing, adequate for the conduct of their
      respective businesses substantially as now conducted without known conflict
      with
      any rights of others, except where the failure to so possess could not
      reasonably be expected to have a material adverse effect on the business,
      operations, assets, condition (financial or otherwise) or properties of the
      Trust, Hartman OP, Hartman III or any other member of the Hartman Group. The
      Borrower, the Trust and each of their respective Subsidiaries possess all
      material Permits relating to each of the Unencumbered Assets comprising part
      of
      the Borrowing Base Pool. 

     

    
      
        
          
          

        

        
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    §7.7    Litigation.
      Except
      as disclosed on Schedule
      7.7,
      there
      are no actions, suits, proceedings or investigations of any kind pending or,
      to
      the Borrower’s or the Trust’s knowledge, threatened against the Borrower, the
      Trust or any of their respective Subsidiaries before any court, tribunal or
      administrative agency or board that, if adversely determined, could reasonably
      be expected to, either individually or in the aggregate, materially adversely
      affect the business, operations, assets, condition (financial or otherwise)
      or
      properties of the Trust, Hartman OP, Hartman III or any other member of the
      Hartman Group, or materially impair the right of the Trust, Hartman OP, Hartman
      III or any other member of the Hartman Group, to carry on its businesses
      substantially as now conducted by it, or result in any substantial liability
      not
      fully covered by insurance, or for which adequate reserves are not maintained,
      as reflected in the applicable consolidated financial statements or SEC Filings
      of the Borrower and the Trust, or which question the validity of this Agreement
      or any of the other Loan Documents, or any action taken or to be taken pursuant
      hereto or thereto.

    

    §7.8.    No
      Materially Adverse Contracts, Etc.
      Neither
      the Borrower, the Trust nor any of their respective Subsidiaries is subject
      to
      any charter, corporate, partnership, limited liability company or other legal
      restriction, or any judgment, decree, order, rule or regulation that has or
      could reasonably expected in the future to have a materially adverse effect
      on
      the business, operations, assets, condition (financial or otherwise) or
      properties of the Trust, Hartman OP, Hartman III or any other member of the
      Hartman Group. None of the Borrower, the Trust or any of their respective
      Subsidiaries is a party to any contract or agreement that has had, or could
      reasonably be expected to have, any materially adverse effect on the business,
      operations, assets, condition (financial or otherwise) or properties of the
      Trust, Hartman OP, Hartman III or any other member of the Hartman
      Group.

      

    §7.9.    Compliance
      With Other Instruments, Laws, Etc.
      Neither
      the Borrower, the Trust nor any of their respective Subsidiaries is in violation
      of any provision of its partnership agreement, operating agreement, charter
      or
      other Organizational Document, as the case may be, or any agreement or
      instrument to which it may be subject or by which it or any of its properties
      may be bound or any decree, order, judgment, statute, license, rule or
      regulation, in any of the foregoing cases in a manner that could reasonably
      be
      expected to result, individually or in the aggregate, in the imposition of
      substantial penalties or materially and adversely affect the business,
      operations, assets, condition (financial or otherwise) or properties of the
      Trust, Hartman OP, Hartman III or any other member of the Hartman Group. Without
      limitation of the foregoing, the Borrower is in compliance with, and neither
      the
      entering into of the Loan Documents or the use of the proceeds of the Loans
      will
      violate: any law, rule or regulation relating to anti-terrorism or money
      laundering, including the Anti-Terrorism Order, the Patriot Act, the Trading
      with the Enemy Act, as amended, or any of the foreign assets control regulations
      of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
      amended) or any enabling legislation or executive order relating
      thereto.

     

    
      
        
          
          

        

        
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    §7.10.    Tax
      Status.
      (i)
      Each of the Borrower, the Trust and their respective Subsidiaries (a) has made
      or filed all federal, state and local income and all other tax returns, reports
      and declarations required by any jurisdiction to which it is subject, (b) has
      paid all taxes and other governmental assessments and charges shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and by appropriate proceedings, and (c) has set
      aside on its books provisions reasonably adequate for the payment of all taxes
      for periods subsequent to the periods to which such returns, reports or
      declarations apply, and (ii) there are no unpaid taxes claimed to be due by
      the
      taxing authority of any jurisdiction, and the respective officers of the
      Borrower and the Trust and their respective Subsidiaries know of no basis for
      any such claim.

    

    §7.11    
No
      Event of Default.
      No
      Default or Event of Default has occurred and is continuing.

    

    §7.12.    Investment
      Company Acts.
      None of
      the Borrower, the Trust or any of their respective Subsidiaries is an
“investment company”, or an “affiliated company” or a “principal underwriter” of
      an “investment company”, as such terms are defined in the Investment Company Act
      of 1940.

    

    §7.13.    Name;
      Jurisdiction of Organization; Absence of UCC Financing Statements,
      Etc.
      The
      exact legal name of the Borrower and the Trust, and their respective
      jurisdictions of organization, are set forth on Schedule
      7.13
      attached
      hereto. Except for Permitted Liens, there is no financing statement, security
      agreement, chattel mortgage, real estate mortgage, equipment lease, financing
      lease, option, encumbrance or other document filed or recorded with any filing
      records, registry, or other public office, that purports to cover, affect or
      give notice of any present or possible future lien or encumbrance on, or
      security interest in, any Eligible Unencumbered Property. Except
      in favor
      of
      the Agent, neither the Borrower nor the Trust has pledged or granted any lien
      on
      or security interest in or otherwise encumbered or transferred any of their
      respective interests in any Subsidiary (including in the case of the Trust,
      its
      interests in Hartman OP).

    

    §7.14.    Absence
      of Liens.
      The
      Borrower is the owner of the Eligible Unencumbered Properties free from any
      Lien, except for Permitted Liens.

    

    §7.15.    Certain
      Transactions.
      Except
      as set forth on Schedule
      7.15,
      none of
      the officers, partners, directors, or employees of the Trust, the Borrower
      or
      any of their Subsidiaries is presently a party to any transaction with the
      Borrower, the Trust or any of their respective Subsidiaries (other than for
      services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, partner, member, director or such
      employee or, to the knowledge of the Borrower or the Trust, any corporation,
      partnership, limited liability company, trust or other entity in which any
      officer, partner, director, or any such

     

    
      
        
          
          

        

        
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    employee
      or natural Person related to such officer, partner, director or employee or
      other Person in which such officer, partner, member, director or employee has
      a
      direct or indirect beneficial interest has a substantial interest or is an
      officer, director, member, trustee or partner.

    

    §7.16.    Employee
      Benefit Plans; Multiemployer Plans; Guaranteed Pension Plans.
      Except
      as disclosed in the SEC Filings or on Schedule
      7.16,
      none of
      the Borrower, the Trust nor any ERISA Affiliate maintains or contributes to
      any
      Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension
      Plan.

    

    §7.17.    Regulations
      U and X.
      No
      portion of any Loan is to be used, and no portion of any Letter of Credit is
      to
      be obtained, for the purpose of purchasing or carrying any “margin security” or
“margin stock” as such terms are used in Regulations U and X of the Board of
      Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and
      224.

    

    §7.18.    Environmental
      Compliance.
      The
      Borrower has caused Phase I and other environmental assessments or similar
      assessments (collectively, the “Environmental Reports”) to be conducted to
      investigate the past and present environmental condition and usage of the Real
      Estate Assets, true and complete copies of which have been delivered to the
      Agent if so requested by the Agent. To the Borrower's knowledge, except as
      otherwise expressly disclosed on Schedule
      7.18,
      the
      Borrower makes the following representations and warranties:

    

     
      (a)    None
      of
      the Borrower, its Subsidiaries, the Trust or any operator of the Real Estate
      Assets or any portion thereof, or any operations thereon is in violation,
      or alleged violation, of any judgment, decree, order, law, license, rule or
      regulation pertaining to environmental matters, including without limitation,
      those arising under the Resource
      Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental
      Response, Compensation and Liability Act of 1980 as amended (“CERCLA”), the
      Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the Federal Clean
      Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or
      any
      state or local statute, regulation, ordinance, order or decree relating to
      health, safety or the environment (hereinafter “Environmental Laws”), which
      violation or alleged violation has, or its remediation would have, by itself
      or
      when aggregated with all such other violations or alleged violations, a material
      adverse effect on the business, operations, assets, condition (financial or
      otherwise), properties or prospects of the Trust, Hartman OP, Hartman III or
      any
      other member of the Hartman Group, or constitutes a Disqualifying Environmental
      Event with respect to any of the Eligible Unencumbered Properties.

    

    (b)    None
      of
      the Borrower, the Trust or any of their respective Subsidiaries has received
      written notice from any third party, including, without limitation, any
federal,
      state or local governmental authority, (i) that it has been identified by the
      United States Environmental Protection Agency (“EPA) as a potentially
      responsible party under CERCLA with respect to a site listed on the National
      Priorities

     

    
      
        
          
          

        

        
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    List,
      40
      C.F.R. Part 300 Appendix B (1986), (ii) that any hazardous waste, as defined
      by
      42 U.S.C. § 9601(5), any hazardous substances as defined by 42 U.S.C. §
      9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any
      toxic substances, oil or hazardous materials or other chemicals or substances
      regulated by any Environmental Laws (“Hazardous Substances”) which it has
      generated, transported or disposed of have been found at any site at which
      a
      federal, state or local agency or other third party has conducted or has ordered
      that the Borrower, the Trust or any of their respective Subsidiaries conduct
      a
      remedial investigation, removal or other response action pursuant to any
      Environmental Law, or (iii) that it is or shall be a named party to any claim,
      action, cause of action, complaint, or legal or administrative proceeding (in
      each case, contingent or otherwise) arising out of any third party's incurrence
      of costs, expenses, losses or damages of any kind whatsoever in connection
      with
      the release of Hazardous Substances, which event described in any such notice
      would have a material adverse effect on the business, operations, assets,
      condition (financial or otherwise), properties or prospects of the Trust,
      Hartman OP, Hartman III or any other member of the Hartman Group, or constitutes
      a Disqualifying Environmental Event with respect to any of the Eligible
      Unencumbered Properties.

    

    (c)    (i)
      No
      portion of the Real Estate Assets has been used for the handling, processing,
      storage or disposal of Hazardous Substances except in accordance with
      applicable Environmental Laws; and no underground tank or other underground
      storage receptacle for Hazardous Substances is located on any portion of any
      Real Estate Assets except in accordance with applicable Environmental Laws,
      (ii)
      in the course of any activities conducted by the Borrower, the Trust, their
      respective Subsidiaries or the operators of their respective properties or
      any
      ground or space tenants on any Real Estate Asset, no Hazardous Substances have
      been generated or are being used on such Real Estate
      Asset except in accordance with applicable Environmental Laws, (iii) there
      has
      been no present or past releasing, spilling, leaking, pumping, pouring,
      emitting, emptying, discharging, injecting, escaping, disposing or dumping
      (a
“Release”) or threatened Release of Hazardous Substances on, upon, into or from
      the Real Estate Assets in violation of applicable Environmental Laws, (iv)
      there
      have been no Releases in violation of applicable Environmental Laws upon, from
      or into any real property in the vicinity of any of the Real Estate Assets
      which, through soil or groundwater contamination, may have come to be located
      on
      such Real Estate Asset, and (v) to the best of Borrower’s Knowledge, any
      Hazardous Substances that have been generated on any of the Real Estate Assets
      during ownership thereof by the Borrower, the Trust, their respective
      Subsidiaries or the operations of their respective properties have been
      transported off-site only in compliance with all applicable Environmental Laws;
      any of which events described in clauses (i) through (v) above would have a
      material adverse effect on the business, operations, assets, condition
      (financial or otherwise), properties or prospects of the Trust, Hartman OP,
      Hartman III or any other member of the Hartman Group, or constitutes a
      Disqualifying Environmental Event with respect to any of the Eligible
      Unencumbered Properties. 

    

     (d)    None
      of
      the Borrower, the Trust or any of the Real Estate Assets is subject to any
      applicable Environmental Law requiring the performance of Hazardous

     

    
      
        
          
          

        

        
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    Substances
      site assessments, or the removal or remediation of Hazardous Substances, or
      the
      giving of notice to any governmental agency or the recording or delivery to
      other Persons of an environmental disclosure document or statement, by virtue
      of
      the transactions set forth herein and contemplated hereby, or as a condition
      to
      the effectiveness of any other transactions contemplated hereby.

    

    §7.19.    Subsidiaries.
      Schedule
      7.19
      sets
      forth, as of the Closing Date, all of the respective Subsidiaries of Hartman
      OP,
      Hartman III and each other member of the Hartman Group and the
      Trust.

    

    §7.20.    Loan
      Documents.
      All of
      the representations and warranties by or on behalf of the Borrower and the
      Trust
      and their respective Subsidiaries made in this Agreement and in the other Loan
      Documents or any document or instrument delivered to the Agent or the Lenders
      pursuant to or in connection with any of such Loan Documents are true and
      correct in all material respects and do not include any untrue statement of
      a
      material fact or omit to state a material fact required to be stated or
      necessary to make such representations and warranties not materially
      misleading.

    

    §7.21.    REIT
      Status.
      The
      Trust is qualified as a REIT and has not taken any action that would prevent
      it
      from maintaining its qualification as a REIT for its tax years ending December
      31, 2003 or December 31, 2004, or from maintaining such qualification at all
      times during the term of this Agreement.

      

    §8.     AFFIRMATIVE
      COVENANTS OF THE BORROWER AND THE TRUST.
      The
      Borrower and the Trust, on their own behalf and on behalf of their respective
      Subsidiaries, jointly and severally covenant and agree that:

    

    §8.1.    Punctual
      Payment.
      The
      Borrower will duly and punctually pay or cause to be paid the principal and
      interest on the Loans and all interest, fees, charges and other amounts and
      Obligations provided for in this Agreement and the other Loan Documents, all
      in
      accordance with the terms of this Agreement, the Notes and the other Loan
      Documents.

    

    §8.2.    Maintenance
      of Office; Jurisdiction of Organization, Etc..
      Each of
      the Borrower and the Trust will maintain its chief executive office in Houston,
      Texas, or at such other place in the United States of America as each of them
      shall designate by written notice to the Agent to be delivered at least thirty
      (30) days prior to any change of chief executive office, where, subject to
§21,
      notices, presentations and demands to or upon the Borrower and the Trust in
      respect of the Loan Documents may be given or made. Neither the Trust nor the
      Borrower will change its jurisdiction of organization, name or corporate
      structure without giving the Agent at least thirty (30) days prior written
      notice of such change, and, in the case of a change in corporate structure,
      without the prior written consent of the Agent, which consent may not be
      unreasonably withheld.

     

    
      
        
          
          

        

        
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    §8.3.    Records
      and Accounts.
      Each of
      the Borrower and the Trust will (a) keep, and cause each of its Subsidiaries
      to
      keep, true and accurate records and books of account in which full, true and
      correct entries will be made in accordance with GAAP and (b) maintain adequate
      accounts and reserves for all taxes (including income taxes), contingencies,
      depreciation and amortization of its properties and the properties of its
      Subsidiaries.

    

    §8.4.    Financial
      Statements, Certificates and Information.
      The
      Borrower and the Trust will deliver to the Agent (with copies to the Agent
      for
      each Lender):

    

    (a)    as
      soon
      as practicable, but in any event not later than ninety (90) days after the
      end
      of each fiscal year of the Trust, the audited consolidated balance sheet
      of
      the Trust and its Subsidiaries at the end of such year, and the related audited
      consolidated statements of income, changes in shareholder’s equity (or the
      equivalent thereof) and cash flows for the year then ended, in each case,
      setting forth in comparative form the figures as of the end of and for the
      previous fiscal year and all such statements to be in reasonable detail,
      prepared in accordance with GAAP, and, in each case, accompanied by an auditor's
      report prepared without qualification by the Accountants; together with, at
      the
      Agent’s request, a written statement from such Accountants to the effect that
      they have read a copy of this Agreement, and that, in making the examination
      necessary to said certification, they have obtained no knowledge of any Default
      or Event of Default under §10 or otherwise under the provisions of this
      Agreement relating to the financial condition of the Trust or any of its
      Subsidiaries, or of any facts or circumstances that
      would cause the Trust not to continue to qualify as a REIT for federal income
      tax purposes, or, if such Accountants shall have obtained knowledge of any
      then
      existing Default, Event of Default or such facts or circumstances, they shall
      make disclosure thereof in such statement;

    

    (b)    as
      soon
      as practicable, but in any event not later than forty-five (45) days after
      the
      end of each of its March 31, June 30 and September 30 fiscal quarters,
copies
      of
      the unaudited consolidated balance sheet of the Trust and its Subsidiaries,
      as
      at the end of such quarter, and the related unaudited consolidated statements
      of
      income, changes in shareholders’ equity and cash flows for the portion of the
      Trust’s fiscal year then elapsed, all in reasonable detail and prepared in
      accordance with GAAP (which may be provided by inclusion in the Form 10-Q of
      the
      Trust filed with the SEC for such period provided pursuant to clause (i) below),
      together with a certification by the principal financial or accounting officer
      of the Borrower and the Trust that the information contained in such financial
      statements fairly presents the financial position of the Trust and its
      Subsidiaries on the date thereof (subject to year-end adjustments none of which
      shall be materially adverse and the absence of footnotes);

    

    (c)    as
      soon
      as practicable, but in any event not later than ninety (90) days after the
      end
      of each of its fiscal years, statements of Net Operating Income and outstanding
      Indebtedness as at the end of such fiscal year and for the fiscal year then
      ended in respect of each Real Estate Asset (including each Eligible Unencumbered
      Property), each prepared in accordance with GAAP consistent with the definitions
      of Net

     

    
      
        
          
          

        

        
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    Operating
      Income and outstanding Indebtedness used in this Agreement and a rent roll
      and
      operating statement in respect of each Eligible Unencumbered Property, in each
      case certified by the chief financial or accounting officer of the Borrower
      as
      true and correct;

    

    (d)    as
      soon
      as practicable, but in any event not later than forty-five (45) days after
      the
      end of each of the fiscal quarters of the Borrower, (i) copies of the
unaudited
      statements of Net Operating Income and outstanding Indebtedness as at the end
      of
      such quarter and for the portion of the fiscal year then elapsed in respect
      of
      each Real Estate Asset (including each Eligible Unencumbered Property), each
      prepared in accordance with GAAP consistent with the definitions of Net
      Operating Income and outstanding Indebtedness used in this Agreement, and a
      rent
      roll and operating statement in respect of each Eligible Unencumbered Property,
      in each case certified by the chief financial or accounting officer of the
      Borrower to present fairly the Net Operating Income and outstanding Indebtedness
      and rent roll in respect of each such Real Estate Asset, (ii) an occupancy
      analysis in respect of each Real Estate Asset (including each Eligible
      Unencumbered Property) certified by the chief financial officer of the Borrower
      to be true and complete, and (iii) from Hartman III, a schedule of revenues
      and
      expenses for each Eligible Unencumbered Property;

    

    (e)    simultaneously
      with the delivery of the financial statements referred to in subsections (a)
      and
      (b) above, a statement in the form of Exhibit
      C-1
      hereto
signed
      by
      the chief financial or accounting officer of the Borrower, and setting forth
      in
      reasonable detail computations evidencing compliance with the covenants
      contained in §10;

    

    (f)    promptly
      as they become available, a copy of each report submitted to the Borrower,
      the
      Trust or any of their respective subsidiaries by the Accountants in
      connection with each annual audit of the books of the Borrower, the Trust or
      such Subsidiary by such Accountants or in connection with any interim audit
      thereof pertaining to any phase of the business of the Borrower, the Trust
      or
      any such Subsidiary;

    

    (g)    contemporaneously
      with (or promptly after) the filing or mailing thereof, copies of all material
      of a financial nature sent to the holders of any Indebtedness
      of the Trust or any of its Subsidiaries (other than the Loans) for borrowed
      money, to the extent that the information or disclosure contained in such
      material refers to or could reasonably be expected to have a material adverse
      effect on the business, operations, assets, condition (financial or otherwise)
      or properties of the Trust, Hartman OP, Hartman III or any other member of
      the
      Hartman Group;

    

    (h)    contemporaneously
      with the filing or mailing thereof, copies of all material of a financial nature
      filed with the SEC or sent to the equityholders of the Trust;

    

    (i)    as
      soon
      as practicable, but in any event not later than ninety (90) days after the
      end
      of each fiscal year of the Trust, copies of the Form 10-K statement filed
      by
      the Trust with the SEC for such fiscal year, and as soon as practicable, but
      in
      any event not later than fifty (50) days after the end of each fiscal quarter
      of
      the Trust copies of the Form 10-Q statement filed by the Trust with the SEC
      for
      such fiscal quarter;

     

    
      
        
          
          

        

        
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    (j)    in
      the
      case of the Borrower and the Trust, as soon as practicable, but in any event
      not
      later than thirty (30) days prior to the end of each of their respective
fiscal
      years, a business plan for the next fiscal year (including pro forma
      projections for such period);

    

    (k)    together
      with the financial statements delivered pursuant to §8.4(a), a certification by
      the chief financial or accounting officer of the Borrower of the state
and
      federal taxable income of the Trust and its Subsidiaries as of the end of the
      applicable fiscal year;

    

    (l)    in
      the
      event that the definition of “funds from operations” is revised by the Board of
      Governors of the National Association of Real Estate Investment Trusts,
      a
      report, certified by the chief financial or accounting officer of the Borrower,
      of the “funds from operations” of the Borrower based on the definition as in
      effect on the date of this Agreement and based on the definition as so revised
      from time to time, which such report shall be delivered to the Agent (with
      copies to the Agent for each Lender) with
      the
      financial statements required to be delivered pursuant to §8.4(a) or §8.4(b)
      above, as applicable; and

    

    (m)    from
      time
      to time such other financial data and other information about the Borrower,
      the
      Trust, their respective Subsidiaries, the Real Estate Assets and the
      Partially-Owned Entities as the Agent or any Lender (through the Agent) may
      reasonably request.

    

    §8.5.    Notices.

    

    (a)    Defaults.
      The
      Borrower and the Trust will, promptly after obtaining knowledge of the same,
      notify the Agent in writing (with copies to the Agent for each Lender)
      of the occurrence of any Default or Event of Default. If any Person shall give
      any notice or take any other action in respect of (x) a claimed Default (whether
      or not constituting an Event of Default) under this Agreement or (y) a claimed
      failure by the Borrower, the Trust or any of their respective Subsidiaries,
      as
      applicable, to comply with any term, condition or provision of or under any
      note, evidence of Indebtedness, indenture or other obligation (i) in excess
      of
      $5,000,000, individually or in the aggregate, in respect of Indebtedness that
      is
      Without Recourse and (ii) in excess of $1,000,000, individually or in the
      aggregate, in respect of Indebtedness that is Recourse, to which or with respect
      to which any of them is a party or obligor, whether as principal obligor,
      guarantor or surety, and such failure to comply would permit the holder of
      such
      note or obligation or other evidence of Indebtedness to accelerate the maturity
      thereof, the Borrower shall forthwith give written notice thereof to the Agent
      and each of the Lenders, describing the notice or action and the nature of
      the
      claimed failure to comply.

    

    (b)    Environmental
      Events.
      The
      Borrower and the Trust will promptly give notice in writing to the Agent (with
      copies to the Agent for each Lender) (i) upon Borrower's
      or the Trust's obtaining knowledge of any material violation (as determined
      by
      the Borrower or the Trust in the exercise of its reasonable discretion) of
      any

     

    
      
        
          
          

        

        
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    Environmental
      Law regarding any Real Estate Asset or Borrower's or the Trust's operations,
      (ii) upon Borrower's or the Trust's obtaining knowledge of any known Release
      of
      any Hazardous Substance at, from, or into any Real Estate Asset which it reports
      in writing or is reportable by it in writing to any governmental authority
      and
      which is material in amount or nature or which could materially affect the
      value
      of such Real Estate Asset, (iii) upon Borrower's or the Trust's receipt of
      any
      notice of material violation of any Environmental Laws or of any material
      Release of Hazardous Substances in violation of any Environmental Laws or any
      matter that may be a Disqualifying Environmental Event with respect to any
      of
      the Eligible Unencumbered Properties, including a notice or claim of liability
      or potential responsibility from any third party (including without limitation
      any federal, state or local governmental officials) and including notice of
      any
      formal inquiry, proceeding, demand, investigation or other action with regard
      to
      (A) Borrower's or the Trust's or any other Person's operation of any Real Estate
      Asset, (B) contamination on, from or into any Real Estate Asset, or (C) investigation
      or remediation of off-site locations at which Borrower or the Trust or any
      of
      its predecessors are alleged to have directly or indirectly disposed of
      Hazardous Substances, or (iv) upon Borrower's or the Trust’s obtaining knowledge
      that any expense or loss has been incurred by such governmental authority in
      connection with the assessment, containment, removal or remediation of any
      Hazardous Substances with respect to which Borrower or the Trust or any
      Partially-Owned Entity may be liable or for which a lien may be imposed on
      any
      Real Estate Asset. 

    

    (c)    Notification
      of Claims against Eligible Unencumbered Properties.
      The
      Borrower will, and will cause each Subsidiary to, promptly upon becoming aware
      thereof,
      notify the Agent in writing (with copies to the Agent for each Lender) of any
      setoff, claims, withholdings or other defenses to which any of the Eligible
      Unencumbered Properties are subject, which (i) could reasonably be expected
      to
      have a material adverse effect on (x) the business, operations, assets,
      condition (financial or otherwise), properties or prospects of the Trust,
      Hartman OP, Hartman III or any other member of the Hartman Group, or (y) the
      value of any such Eligible Unencumbered Property, or (ii) with respect to such
      Eligible Unencumbered Property, constitute a Disqualifying Environmental Event,
      a Disqualifying Structural Event or a Lien.

    

    (d)    Notice
      of Litigation and Judgments.
      The
      Borrower and the Trust will give notice to the Agent in writing (with copies
      to
      the Agent for each Lender) within three
      (3)
      days of becoming aware of any litigation or proceedings threatened in writing
      or
      any pending litigation and proceedings an adverse determination in which could
      materially adversely affect Hartman OP, Hartman III, the Trust or any other
      member of the Hartman Group, or any Eligible Unencumbered Property, or to which
      the Borrower, the Trust or any of their respective Subsidiaries is or is to
      become a party involving a claim against the Borrower, the Trust or any of
      their
      respective Subsidiaries that could reasonably be expected to have a materially
      adverse effect on the respective business, operations, assets, condition
      (financial or otherwise) or properties of the Trust, Hartman OP, Hartman III
      or
      any other member of the Hartman Group or on the value or operation of the
      Eligible Unencumbered Properties and stating the nature and status of
      such

     

    
      
        
          
          

        

        
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    litigation
      or proceedings. The Borrower and the Trust will give notice to the Agent and
      each of the Lenders, in writing, in form and detail reasonably satisfactory
      to
      the Agent, within three (3) days of any judgment not covered by insurance,
      final
      or otherwise, against the Borrower, the Trust or any of such Subsidiaries in
      an
      amount in excess of $1,000,000.

    

    (e)    Acquisition
      of Real Estate Assets.
      The
      Borrower shall notify the Agent (with copies to the Agent for each Lender)
      in
      its financial reports delivered pursuant
      to §§8.4(a) and (b) of the acquisition of Real Estate Assets during the
      applicable quarter by the Borrower or any other member of the Hartman Group
      (other than the Trust, which will not directly own any Real Estate Assets)
      (whether or not such acquisition was made with proceeds of the Loans), which
      notice shall include, with respect to each such Real Estate Asset, its address,
      a brief description and recent photograph, a rent roll summary,
      a pro forma
      and
      historic (if available) income statement and a summary of the key business
      terms
      of such acquisition. 

    

    §8.6.    Existence
      of Borrower; Maintenance of Properties.
      The
      Borrower and the Trust will do or cause to be done all things necessary to,
      and
      shall, preserve and keep in full force and effect its respective existence
      in
      its jurisdiction of organization and will do or cause to be done all things
      necessary to preserve and keep in full force all of its respective rights and
      franchises and those of its respective Subsidiaries which may be necessary
      to
      properly and advantageously conduct the businesses conducted by it. The Borrower
      (a) will cause all necessary repairs, renewals, replacements, betterments and
      improvements to be made to all Real Estate Assets owned or controlled by it,
      all
      as in the judgment of the Borrower may be necessary so that the business carried
      on in connection therewith may be properly and advantageously conducted at
      all
      times, and in any event, will keep all of the Real Estate Assets (for so long
      as
      such Real Estate Assets are owned by the Borrower or any of its Subsidiaries)
      in
      a condition consistent with the Real Estate Assets currently owned or controlled
      by the Borrower or its Subsidiaries, (b) will cause all of its other properties
      and those of its Subsidiaries used or useful in the conduct of its business
      or
      the business of its Subsidiaries to be maintained and kept in good condition,
      repair and working order and supplied with all necessary equipment, (c) will
      not
      permit the Trust to directly own or lease any Real Estate Asset, and (d) will,
      and will cause each of its Subsidiaries to continue to engage primarily in
      the
      businesses now conducted by it.

    

    §8.7.    Existence
      of the Trust; Maintenance of REIT Status of the Trust; Maintenance of
      Properties; Hartman Management; Etc.
      

    

    (a)       
      The
      Trust
      will do or cause to be done all things necessary to preserve and keep in full
      force and effect the Trust’s existence as a Maryland real estate investment
      trust. The Trust will at all times (i) maintain its status as a REIT and not
      take any action which could lead to its disqualification as a REIT and (ii)
      continue to operate as a self-directed and self-administered REIT and make
      public reports and filings as though it were listed on a nationally-recognized
      stock exchange. The Trust will not engage in any business other than the
      business of acting as a REIT and serving as the general partner

     

    
      
        
          
          

        

        
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    and
      limited partner of the Borrower and matters directly relating thereto, and
      shall
      (x) conduct all or substantially all of its business operations through the
      Borrower or through subsidiary partnerships or other entities in which the
      Borrower owns 100% of the legal and economic interests and (y) own no real
      property or material personal property other than through its ownership
      interests in the Borrower. The Trust will (a) cause all of its properties and
      those of its Subsidiaries used or useful in the conduct of its business or
      the
      business of its Subsidiaries to be maintained and kept in good condition, repair
      and working order, and supplied with all necessary equipment, (b) cause to
      be
      made all necessary repairs, renewals, replacements, betterments and improvements
      thereof, all as in the judgment of the Trust may be necessary so that the
      business carried on in connection therewith may be properly and advantageously
      conducted at all times and (c) cause
      each of its Subsidiaries to continue to engage primarily in the businesses
      now
      conducted by it.

    

    (b)     Hartman
      Management will continue to perform its services, duties and obligations under
      the Management Agreement in good faith and consistent with the manner in which
      such services, duties and obligations have been performed prior to the date
      hereof. Each of Hartman OP and the Trust will continue to perform its
      obligations under the Management Agreement consistent with the manner in which
      such services, duties and obligations have been performed prior to the date
      hereof. No payments will be made by the Borrower or the Trust to Hartman
      Management, Hartman Property LLC or Allen R. Hartman for the services intended
      to be provided under the Management Agreement except as contemplated by the
      Management Agreement as in effect on the date hereof. Neither Borrower will
      enter into any transactions after the Closing Date that, if in effect on the
      Closing Date, would have required disclosure on Schedule
      7.15
      without
      the consent of the Agent.

    

    (c)     Neither
      of Hartman III LP LTD and Hartman III GP LLC will engage in any business other
      than the business of serving as the general partner or limited partner, as
      the
      case may be, of Hartman III and matters directly relating thereto and shall
      not
      own any real property or material personal property other than through its
      ownership interests in Hartman III. 

    

    §8.8.    Insurance.
      The
      Borrower and the Trust will maintain with respect to their other properties,
      and
      will cause each of its Subsidiaries to maintain, with financially sound and
      reputable insurers, insurance with respect to such properties and its business
      against such casualties and contingencies as shall be in accordance with the
      general practices of businesses engaged in similar activities in similar
      geographic areas and in amounts, containing such terms, in such forms and for
      such periods as may be reasonable and prudent.

    

    §8.9.    Taxes.
      The
      Borrower will, and will cause the Trust and each of their respective
      Subsidiaries to, pay or cause to be paid real estate taxes, other taxes,
      assessments and other governmental charges against the Real Estate Assets before
      the same become delinquent and will duly pay and discharge, or cause to be
      paid
      and

     

    
      
        
          
          

        

        
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    discharged,
      before the same shall become overdue, all taxes, assessments and other
      governmental charges imposed upon its sales and activities, or any part thereof,
      or upon the income or profits therefrom, as well as all claims for labor,
      materials, or supplies that if unpaid might by law become a lien or charge
      upon
      any of the Real Estate Assets; provided
      that any
      such tax, assessment, charge, levy or claim need not be paid if the validity
      or
      amount thereof shall currently be contested in good faith by appropriate
      proceedings and if the Borrower or the Trust shall have set aside on its books
      adequate reserves with respect thereto; and provided
      further
      that the Borrower or the Trust will pay all such taxes, assessments, charges,
      levies or claims forthwith prior to the attachment of any lien as security
      therefor. Promptly upon request by the Agent if required for bank regulatory
      compliance purposes or similar bank purposes, the Borrower will provide evidence
      of the payment of real estate taxes, other taxes, assessments and other
      governmental charges against the Real Estate Assets in the form of receipted
      tax
      bills or other form reasonably acceptable to the Agent, or evidence of the
      existence of applicable contests as contemplated herein.

    

    §8.10.    Inspection
      of Properties and Books.
      (a)
      Subject to the rights of tenants to limit or prohibit such access, as denoted
      in
      the applicable Leases, the Borrower and the Trust will permit the Agent or
      any
      of its designated representatives upon reasonable notice (which notice may
      be
      given orally or in writing and provided
      that no
      notice shall be required if a Default or Event of Default has occurred and
      is
      continuing), to visit and inspect any of the properties of the Borrower, the
      Trust or any of their respective Subsidiaries or Hartman Management to examine
      the books of account of the Borrower, the Trust and their respective
      Subsidiaries and Hartman Management (and to make copies thereof and extracts
      therefrom) and to discuss the affairs, finances and accounts of the Borrower,
      the Trust and their respective Subsidiaries with, and to be advised as to the
      same by, its officers, all at such reasonable times and intervals as the Agent
      may reasonably request. 

    

           
      (b)      The
      Borrower hereby agrees that each of the Lenders and the Agent (and each of
      their
      respective, and their respective affiliates’, employees, officers, directors,
      agents and advisors (collectively, “Representatives”) is, and has
      been from
      the
      commencement of discussions with respect to the facility established by the
      Agreement (the “Facility”), permitted to disclose to any and all Persons,
      without limitation of any kind, the structure and tax aspects (as such terms
      are
      used in Code sections 6011 and 6111) of the Facility, and all materials of
      any
      kind (including opinions or other tax analyses) that are or have been provided
      to such Lender or the Agent related to such structure and tax aspects.
In
      this
      regard, the Lenders and the Agent intend that this transaction will not be
      a
“confidential transaction” under Code sections 6011, 6111 or 6112, and the
      regulations promulgated thereunder. Neither
      Borrower, any Guarantor, nor any Subsidiary of any of the foregoing intends
      to
      treat the Loan or the transactions contemplated by this Agreement and the other
      Loan Documents as being a "reportable transaction" (within the meaning of
      Treasury Regulation Section 1.6011-4). If the Borrower or the Guarantor
      determines to take any action inconsistent with such intention,

     

    
      
        
          
          

        

        
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    the
      Borrower will promptly notify the Agent thereof. If the Borrower so notifies
      the
      Agent, the Borrower acknowledges that the Agent may treat the Loan as part
      of a
      transaction that is subject to Treasury Regulation Section 301.6112-1, and
      the
      Agent will maintain the lists and other records, including the identity of
      the
      applicable party to the Loan as required by such Treasury
      Regulation.

    

    §8.11.    Compliance
      with Laws, Contracts, Licenses, and Permits.
      The
      Borrower and the Trust will comply with, and will cause each of their respective
      Subsidiaries to comply with (a) all applicable laws and regulations now or
      hereafter in effect wherever its business is conducted that are material in
      any
      respect to the operation of their respective businesses
      in the ordinary course and consistent with past practices, including, without
      limitation, all such Environmental Laws and all such applicable federal and
      state securities laws, (b) the provisions of its partnership agreement, trust
      agreement, operating agreement or corporate charter and other Organizational
      Documents, as applicable, (c) all material agreements and instruments to which
      it is a party or by which it or any of its properties may be bound (including
      the Real Estate Assets and the Leases) and (d) all applicable decrees, orders,
      and judgments. If at any time while any Loan or Note or other Obligations is
      outstanding or the Lenders have any obligation to make Loans or issue Letters
      of
      Credit hereunder, any Permit shall become necessary or required in order that
      the Borrower may fulfill any of its obligations hereunder, the Borrower and
      the
      Trust and their respective Subsidiaries will immediately take or cause to be
      taken all reasonable steps within the power of the Borrower or the Trust, as
      applicable, to obtain such Permit and furnish the Agent with evidence thereof.
      Without limitation of the foregoing, the Borrower will continue to comply with
      all laws, rules and regulations relating to anti-terrorism or money laundering,
      including the Anti-Terrorism Order, the Patriot Act, the Trading with the Enemy
      Act, as amended, and the foreign assets control regulations of the United States
      Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and the enabling
      legislation or executive orders relating thereto.

    

    §8.12.    Use
      of
      Proceeds.
      Subject
      at all times to the other provisions of this Agreement, including without
      limitation §7.17, the Borrower will use the proceeds of the Loans solely to
      repay in full its obligations under its existing revolving credit facility
      agented by Union Planters, to finance acquisitions of Permitted Properties
      and
      for its working capital and general corporate purposes. 

    

    §8.13.    Additional
      Borrower; Solvency of Borrower; Removal of Borrower; Addition of Real Estate
      Asset to Borrowing Base Pool.

    

    (a)    If,
      after
      the Closing Date, Hartman OP or Hartman III wishes to designate as an Eligible
      Unencumbered Property a Real Estate Asset that otherwise qualifies
      as an Eligible Unencumbered Property but is owned by a Person other than the
      Borrower, Hartman OP and/or Hartman III shall cause such Person (which Person
      must be a direct or indirect Wholly-owned Subsidiary of Hartman OP) to become
      a
      party to this Agreement and the other applicable Loan Documents prior to such
      Real Estate Asset

     

    
      
        
          
          

        

        
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    becoming
      an Eligible Unencumbered Property hereunder. The liability of each Person which
      is from time to time a Borrower hereunder shall be joint and several with each
      other Borrower for all Obligations for so long as such Borrower is a Borrower
      hereunder (provided
      that
      Hartman OP and Hartman III shall at all times be a Borrower hereunder). In
      accordance with §11.3, at any time and from time to time but only for so long as
      no Default or Event of Default shall then exist, Hartman OP may notify Agent,
      in
      writing (each, a “Release Notice”), that the Borrower would like one (1) or more
      Eligible Unencumbered Properties to be removed from the Borrowing Base Pool.
      Such Release Notice shall be accompanied by a Certificate of Compliance in
      the
      form of Exhibit
      C-2,
      evidencing compliance with §2.1 and §10 after giving effect to the requested
      release. 

     

    Upon
      the
      Agent’s receipt of such Release Notice and its satisfaction with the Certificate
      of Compliance, such Eligible Unencumbered Properties (each, a “Released
      Property”) shall be removed from the Borrowing Base Pool and any Wholly-owned
      Subsidiary which is the owner of a Released Property (and is not the owner
      of
      any other an Eligible Unencumbered Property) and which is then a Borrower (other
      than Hartman OP and Hartman III) hereunder shall be released from its
      obligations hereunder (including the Obligations). Hartman OP will not permit
      any Borrower (other than Hartman OP and Hartman III) that owns any Eligible
      Unencumbered Property to have any Subsidiaries unless such Subsidiary's
      business, obligations and undertakings are exclusively related to the business
      of such Borrower. 

    

    
                  (b)     The
        Borrower, the Trust and Hartman Management shall remain solvent at all
        times.

    

    

    (c)     
      Prior
      to
      the addition of any Real Estate Asset to the Borrowing Base Pool, the Borrower
      shall deliver to the Agent (i) a written request to add such Real
      Estate Asset to the Borrowing Base Pool, (ii) the Joinder Documents, if
      applicable, (iii) a current rent roll and operating statement for such Real
      Estate Asset, (iv) a Certificate of Compliance in the form of Exhibit
      C-2
      evidencing compliance with §2.1 and §10 after giving effect to the requested
      addition, (v) a certification that such Real Estate Asset is not the subject
      of
      a Disqualifying Environmental Event or a Disqualifying Structural Event, and
      (vi) any other documents, certificates, instruments or agreements reasonably
      requested by the Agent. 

     

    
      
        
        

      

    

    (d)    Notwithstanding
      the foregoing clauses (a) - (c) or any other provision of this Agreement, in
      the
      event the Borrower wishes to add a Real Estate Asset to
      the
      Borrowing Base Pool which does not meet one or more of the Unencumbered Property
      Conditions or the provisions of §8.13(c), such Real Estate Asset may be included
      in the Borrowing Base Pool with the approval of the Majority Lenders.

    

    §8.14.    Further
      Assurances.
      The
      Borrower and the Trust will cooperate with the Agent and the Lenders and execute
      such further instruments and documents as the Lenders or the Agent shall
      reasonably request to carry out to their satisfaction the transactions
      contemplated by this Agreement and the other Loan Documents.

     

    
      
        
          
          

        

        
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    §8.15.    Interest
      Rate Protection.
      No
      later than 180 days after the Closing Date, the Borrower shall obtain and
      thereafter maintain in effect interest rate protection arrangements (by means
      of
      hedging techniques or vehicles such as interest rate swaps, interest rate caps,
      interest rate corridors or interest rate collars, in each case to be capped
      at a
      rate reasonably satisfactory to the Agent and otherwise in form and substance
      reasonably satisfactory to the Agent) covering all Indebtedness for borrowed
      money in excess of $40,000,000 until the point at which the ratio of variable
      rate Indebtedness to fixed rate Indebtedness is no more than 50% of Consolidated
      Total Indebtedness, and containing terms otherwise reasonably satisfactory
      to
      the Agent. Once obtained, the Borrower
      shall maintain such arrangements in full force and effect as provided therein,
      and shall not, without the approval of the Agent, modify, terminate, or transfer
      such arrangements during any period in which the Borrower’s variable rate
      Indebtedness exceeds fifty percent (50%) of Consolidated Total Indebtedness
      for
      borrowed money. 

    

    §8.16.    Environmental
      Indemnification.
      The
      Borrower and the Trust each covenants and agrees that it will indemnify and
      hold
      the Agent and each Lender, and each of their respective Affiliates, harmless
      from and against any and all claims, expense, damage, loss or liability incurred
      by the Agent or any Lender (including all reasonable costs of legal
      representation incurred by the Agent or any Lender, but excluding, as
      applicable, for the Agent or a Lender any claim, expense, damage, loss or
      liability as a result of the gross negligence or willful misconduct of the
      Agent
      or such Lender or any of their respective Affiliates) relating to (a) any
      Release or threatened Release of Hazardous Substances on any Real Estate Asset;
      (b) any violation of any Environmental Laws with respect to conditions at any
      Real Estate Asset or the operations conducted thereon; (c) the investigation
      or
      remediation of off-site locations at which the Borrower, the Trust or any of
      their respective Subsidiaries or their predecessors are alleged to have directly
      or indirectly disposed of Hazardous Substances; or (d) any action, suit,
      proceeding or investigation brought or threatened with respect to any Hazardous
      Substances relating to Real Estate Assets (including, but not limited to, claims
      with respect to wrongful death, personal injury or damage to property). It
      is
      expressly acknowledged by the Borrower that, notwithstanding the introductory
      paragraph of this §8, this covenant of indemnification shall survive the
      repayment of the amounts owing under the Notes and this Agreement and the
      termination of this Agreement and the obligations of the Lenders hereunder
      and
      shall inure to the benefit of the Agent and the Lenders and their respective
      Affiliates, their respective successors, and their respective assigns under
      the
      Loan Documents permitted under this Agreement.

    

    §8.17.    Response
      Actions.
      The
      Borrower covenants and agrees that if any Release or disposal of Hazardous
      Substances shall occur or shall have occurred on any Real Estate Asset owned
      directly or indirectly by the Borrower or the Trust, in violation of applicable
      Environmental Laws, the Borrower will cause the prompt containment and removal
      of such Hazardous Substances and remediation of such Real Estate Asset as
      necessary to comply with all Environmental Laws or to preserve the value of
      any
      applicable Eligible Unencumbered Property.

     

    
      
        
          
          

        

        
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    §8.18.    Environmental
      Assessments.
      If the
      Agent reasonably believes, after discussion with the Borrower and review of
      any
      environmental reports provided by the Borrower, that a Disqualifying
      Environmental Event has occurred with respect to any one or more of the Eligible
      Unencumbered Properties, whether or not a Default or an Event of Default shall
      have occurred, the Agent may, from time to time, for the purpose of assessing
      and determining whether a Disqualifying Environmental Event has in fact
      occurred, cause the Borrower to obtain one or more environmental assessments
      or
      audits of such Eligible Unencumbered Property prepared by a hydrogeologist,
      an
      independent engineer
      or other qualified consultant or expert approved by the Agent to evaluate or
      confirm (i) whether any Hazardous Substances are present in the soil or water
      at
      such Eligible Unencumbered Property and (ii) whether the use and operation
      of
      such Eligible Unencumbered Property complies with all Environmental Laws.
      Environmental assessments may include without limitation detailed visual
      inspections of such Eligible Unencumbered Property including, without
      limitation, any and all storage areas, storage tanks, drains, dry wells and
      leaching areas, and, if and to the extent reasonable, appropriate and required
      pursuant to applicable Environmental Laws, the taking of soil samples, surface
      water samples and ground water samples, as well as such other investigations
      or
      analyses as the Agent deems appropriate. All such environmental assessments
      shall be at the sole cost and expense of the Borrower.

    

    §8.19.    Employee
      Benefit Plans.

    

    (a)    Notice.
      The
      Borrower and the Trust will notify the Agent (with copies to the Agent for
      each
      Lender) at least thirty (30) days prior to the establishment of
      any
      Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan by any
      of
      them or any of their respective ERISA Affiliates other than those disclosed
      on
Schedule
      8.19
      attached
      hereto or disclosed in the SEC Filings, and neither the Borrower nor the Trust
      will establish any Employee Benefit Plan, Multiemployer Plan or Guaranteed
      Pension Plan which could reasonably be expected to have a material adverse
      effect on Hartman OP, Hartman III, the Trust or any member of the Hartman
      Group.

    

    (b)    In
      General.
      Each
      Employee Benefit Plan maintained by the Borrower, the Trust or any of their
      respective ERISA Affiliates will be operated in compliance with
      the
      provisions of ERISA and, to the extent applicable, the Code, including but
      not
      limited to the provisions thereunder respecting prohibited
      transactions.

    

    (c)    Terminability
      of Welfare Plans.
      With
      respect to each Employee Benefit Plan maintained by the Borrower, the Trust
      or
      any of their respective ERISA Affiliates
      which is an employee welfare benefit plan within the meaning of §3(l) or
§3(2)(B) of ERISA, the Borrower, the Trust, or any of their respective ERISA
      Affiliates, as the case may be, shall have the right to terminate each such
      plan
      at any time (or at any time subsequent to the expiration of any applicable
      bargaining agreement) without liability other than liability to pay claims
      incurred prior to the date of termination.

     

    
      
        
          
          

        

        
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    (d)    Unfunded
      or Underfunded Liabilities.
      The
      Borrower and the Trust will not at any time have accruing or accrued unfunded
      or
      underfunded liabilities with
      respect to any Employee Benefit Plan, Guaranteed Pension Plan or Multiemployer
      Plan, or permit any condition to exist under any Multiemployer Plan that would
      create a withdrawal liability.

    

    §8.20.    No
      Amendments to Certain Documents.
      The
      Borrower and the Trust will not at any time cause or permit its certificate
      of
      limited partnership, agreement of limited partnership
      (including without limitation the Agreement of Limited Partnership of the
      Borrower), articles of incorporation, by-laws, operating agreement, trust
      agreement or other Organizational Documents, as the case may be, to be modified,
      amended or supplemented in any respect whatever, without (in each case) the
      express prior written consent or approval of the Agent, if such changes could
      affect the Trust’s REIT status or otherwise adversely affect the rights of the
      Agent and the Lenders hereunder or under any other Loan Document. Any such
      modification, amendment or supplement shall, in any event, be subject to the
      other terms and provisions of this Agreement and the other Loan
      Documents.

    

    §9.         
      CERTAIN
      NEGATIVE COVENANTS OF THE BORROWER AND THE TRUST.
      The
      Borrower and the Trust, on their own behalf and on behalf of their respective
      Subsidiaries, jointly and severally covenant and agree that neither the Borrower
      nor the Trust will:

    

    §9.1.    Restrictions
      on Indebtedness.
      Create,
      incur, assume, guarantee or be or remain liable, contingently or otherwise,
      with
      respect to any Indebtedness other than:

    

    (a)    Indebtedness
      to the Agent and the Lenders (and their respective Affiliates) arising under
      any
      of the Loan Documents;

    

    (b)    current
      liabilities of the Borrower incurred in the ordinary course of business other
      than through (i) the borrowing of money, or (ii) the obtaining of credit
except
      for credit on an open account basis customarily extended and in fact extended
      in
      connection with normal purchases of goods and services;

    

    (c)    Indebtedness
      (other than relating to the Eligible Unencumbered Properties) in an aggregate
      amount not in excess of $500,000 in respect of taxes, assessments,
      governmental charges or levies and claims for labor, materials and supplies
      to
      the extent that payment therefor shall not at the time be required to be made
      in
      accordance with the provisions of §8.9 (but including, in any event, any
      Indebtedness secured by an M&M Lien);

    

    (d)    Indebtedness
      (other than relating to the Eligible Unencumbered Properties) in an aggregate
      amount not in excess of $1,000,000 in respect of judgments or awards
      that have been in force for less than the applicable period for taking an appeal
      so long as execution is not levied thereunder or in respect of which, at the
      time, a good faith

     

    
      
        
          
          

        

        
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    appeal
      or
      proceeding for review is being prosecuted, and in respect of which a stay of
      execution shall have been obtained pending such appeal or review;

    

    (e)    endorsements
      for collection, deposit or negotiation incurred in the ordinary course of
      business;

    
 

    (f)    Secured
      term loan Indebtedness of Hartman OP and its Subsidiaries (but not Hartman
      III)
      disclosed on Schedule 9.1(f) or incurred after the Closing Date, provided
      that:
      (i) such Indebtedness is Without Recourse to the Borrower or the Trust and
      is
      Without Recourse to any of the respective assets of any of the Borrower or
      the
      Trust other than to the specific Real Estate Asset or Assets acquired,
      refinanced or rehabilitated with the proceeds of such Indebtedness, and (ii)
      at
      the time any such Indebtedness is incurred and after giving effect thereto,
      there exists no Default or Event of Default hereunder; 

    

    (g)    contingent
      liabilities of the Borrower disclosed in the financial statements referred
      to in
§7.4 or on Schedule
      9.1(g)
      hereto,
      and such other contingent liabilities
      of the Borrower having a combined aggregate potential liability of not more
      than
      $1,000,000 at any time; 

    

    (h)    Indebtedness
      of the Borrower for the purchase price of capital assets (other than Real Estate
      Assets but including Indebtedness in respect of Capitalized Leases)
      incurred in the ordinary course of business, provided
      that the
      aggregate principal amount of Indebtedness permitted by this clause (i) shall
      not exceed $500,000 at any time outstanding; and

    

    (i)    Recourse
      Indebtedness of Hartman OP (but not Hartman III) incurred after the Closing
      Date
      (other than Indebtedness relating to or affecting the Eligible Unencumbered
      Properties) in connection with the purchase of or the construction of or
      renovation of improvements on any Real Estate Asset, provided
      that (i)
      the aggregate principal amount of Indebtedness permitted by this clause (i)
      shall not exceed $40,000,000 at any time outstanding, and (ii) at the time
      any
      such Indebtedness is incurred and after giving effect thereto, there exists
      no
      Default or Event of Default hereunder.

    

    Notwithstanding
      the foregoing, in no event shall the Borrower, the Trust or any of their
      respective Subsidiaries incur or have outstanding (i) unhedged variable rate
      Indebtedness in excess of fifty percent (50%) of Consolidated Total
      Indebtedness, or (ii) any other revolving credit facility, whether secured
      or
      unsecured, or any unsecured Indebtedness for borrowed money.

    

    It
      is
      understood and agreed that the provisions of this §9.1 shall not apply to
      Indebtedness of any Partially-Owned Entity that is Without Recourse to the
      Borrower or the Trust, or any of their respective assets.

    

    The
      terms
      and provisions of this §9.1 are in addition to, and not in limitation of, the
      covenants set forth in §10.

     

    
      
        
          
          

        

        
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    §9.2.    Restrictions
      on Liens, Etc.
      (a)
      Create or incur or suffer to be created or incurred or to exist any lien,
      mortgage, pledge, attachment, security interest or other rights of third parties
      of any kind upon any of the Eligible Unencumbered Properties, whether
now
      owned
      or hereafter acquired, or upon the income or profits therefrom; (b) acquire,
      or
      agree or have an option to acquire, any property or assets upon conditional
      sale
      or other title retention or purchase money security agreement, device or
      arrangement in connection with the operation of the Eligible Unencumbered
      Properties; (c) suffer to exist with respect to the Eligible Unencumbered
      Properties, any taxes, assessments, governmental charges and claims for labor,
      materials and supplies for which payment thereof is not being contested or
      for
      which payment notwithstanding a contest is required to be made in accordance
      with the provisions of §8.9 and has not been timely made; or (d) sell, assign,
      pledge or otherwise transfer for security any accounts, contract rights, general
      intangibles, chattel paper or instruments, with or without recourse, relating
      to
      the Eligible Unencumbered Properties (the foregoing types of liens and
      encumbrances described in clauses (a) through (d) being sometimes referred
      to
      herein collectively as “Liens”), provided
      that the
      Borrower may create or incur or suffer to be created or incurred or to exist
      the
      following (“Permitted Liens”):

    

    (i)    Liens
      securing taxes, assessments, governmental charges or levies which are not yet
      due and payable or which are not yet required to be paid under
§8.9;

    

    (ii)    Liens
      arising out of deposits or pledges made in connection with, or to secure payment
      of, worker's compensation, unemployment insurance, old age pensions
      or other social security obligations; and deposits with utility companies and
      other similar deposits made in the ordinary course of business;

    

    (iii)    Liens
      (other than affecting the Eligible Unencumbered Properties or the equity
      interests of the Borrower or the Trust) in respect of judgments or awards,
      the
      Indebtedness with respect to which is not prohibited by §9.1(d);

    

    (iv)    Encumbrances
      on properties consisting of easements, rights of way, covenants, zoning and
      other land-use restrictions, building restrictions, restrictions on
      the
      use of real property and defects and irregularities in the title thereto;
      landlord's or lessor's Liens under Leases to which the Borrower is a party
      or
      bound; purchase options granted at a price not less than the market value of
      such property; and other minor Liens or encumbrances on properties, none of
      which interferes materially with the use of the property affected in the
      ordinary conduct of the business of the Borrower, and which matters (x) do
      not
      individually or in the aggregate have a material adverse effect on the business
      of Hartman OP, Hartman III, the Trust or any member of the Hartman Group and
      (y)
      do not make title to such property unmarketable by the conveyancing standards
      in
      effect where such property is located;

    

    (v)    any
      Leases entered into in the ordinary course of business;

    

    (vi)    as
      to
      Real Estate Assets which are acquired after the date of this Agreement, Liens
      and other encumbrances or rights of others which exist on the date
      of

     

    
      
        
          
          

        

        
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    acquisition
      and which do not otherwise constitute a breach of this Agreement (including
      the
      other
      provisions of this §9.2); provided
      that
      nothing in this clause (vi) shall be deemed or construed to permit an Eligible
      Unencumbered Property to be subject to a Lien to secure
      Indebtedness;

    

    (vii)    Liens
      affecting the Eligible Unencumbered Properties (but not the equity interests
      of
      the Borrower or the Trust ) in respect of judgments or awards not in
      excess
      of $250,000 that are under appeal or have been in force for less than the
      applicable period for taking an appeal, so long as execution is not levied
      thereunder or in respect of which, at the time, a good faith appeal or
      proceeding for review is being diligently prosecuted, and in respect of which
      a
      stay of execution shall have been obtained pending such appeal or review;
provided
      that the
      Borrower shall have obtained a bond or insurance or made other arrangements
      with
      respect thereto, in each case reasonably satisfactory to the Agent;

    

    (viii)  
Liens
      securing Indebtedness for the purchase price of capital assets (other than
      Real
      Estate Assets but including Indebtedness in respect of  Capitalized
      Leases for equipment and other equipment leases) to the extent not otherwise
      prohibited by §9.1;

    

    (ix)    
M&M
      Liens securing an aggregate amount not in excess of $500,000 at any time, so
      long as each such M&M Lien is bonded within 30 days of attachment;
      and

    

    (x)     other
      Liens (other than Liens affecting the Eligible Unencumbered Properties or the
      equity interests of the Borrower or the Trust) in connection with any
Indebtedness
      permitted under §9.1.

    

    Nothing
      contained in this §9.2 shall restrict or limit the Borrower or any of their
      respective Wholly-owned Subsidiaries from creating a Lien in connection with
      any
      Real Estate Asset which is not an Eligible Unencumbered Property and otherwise
      in compliance with the other terms of this Agreement, provided
      that in
      no event will the Borrower, the Trust or any of their respective Subsidiaries
      create, incur or suffer to be created or incurred or to exist any Lien, other
      than in favor of the Agent, on the equity interests of the Borrower or the
      Trust. Without limitation of the foregoing, the Trust shall not create or incur
      or suffer to be created or incurred any Lien on any of its directly-owned
      properties or assets, including, in any event, its general partner interests
      and
      limited partner interests in the Borrower.

    

    §9.3.    Restrictions
      on Investments.
      Make or
      permit to exist or to remain outstanding any Investment except, with respect
      to
      the Borrower and its Subsidiaries only, Investments in:

    

       
      (a)    (i)
      marketable direct or guaranteed obligations of the United States of America
      that
      mature within one (1) year from the date of purchase (including investments
      in
      securities guaranteed by the United States of America such as securities in
      so-called
      “overseas private investment corporations”) and (ii) demand
      deposits,

     

    
      
        
          
          

        

        
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    certificates
      of deposit, bankers acceptances and time deposits of United States banks having
      total assets in excess of $1,000,000,000;

    

      
      (b)    (i)
      preferred stock or public bonds issued by companies listed on a nationally
      recognized exchange and having a rating of at least AAA, and (ii) shares in
      public REITs so long as such REIT is listed on a nationally recognized exchange
      and has a rating of at least AAA, provided
      that the
      aggregate investments in all such items described in clauses (i) and (ii) above
      will not at any time exceed five percent (5%) of the Fair Market Value of Real
      Estate Assets, and provided,
      further,
      that no
      such investment shall be outstanding for longer than 90 days;

    

      
      (c)    securities
      commonly known as “commercial paper” issued by a corporation organized and
      existing under the laws of the United States of America or any state thereof
      that at the time of purchase have been rated and the ratings for which are
      not
      less than ”P 1” if rated by Moody's, and not less than “A 1” if rated by
      S&P; 

    

      
      (d)    Investments
      existing on the Closing Date and listed in the financial statements referred
      to
      in §7.4;

    

      
      (e)    other
      Investments hereafter in connection with the acquisition and development of
      Permitted Properties by the Borrower or any Wholly-owned Subsidiary of the
      Borrower, provided
      that the
      aggregate amounts actually invested by Borrower (or if not invested directly
      by
      Borrower, actually invested by an Affiliate of the Borrower for which the
      Borrower has any funding obligation) and such Wholly-owned Subsidiary at any
      time in Real Estate Assets under Development (including all development costs)
      will not exceed twenty percent (20%) of the Fair Market Value of Real Estate
      Assets at the time of any such Investment, and provided,
      further,
      that
      Investments in unimproved Land may at no time exceed fifteen percent (15%)
      of
      the Fair Market Value of Real Estate Assets;

    

      
      (f)    (i)
      any
      Investments now or hereafter made in any Wholly-owned Subsidiary; and (ii)
      Investments now or hereafter made in any Partially-Owned Entity (or other Person
      for which the Borrower has any funding obligation) so long as such Investment
      is
      made in connection with Permitted Properties and provided
      that the
      aggregate amounts actually invested by Borrower (or if not invested directly
      by
      Borrower, actually invested by an Affiliate of the Borrower for which the
      Borrower has any funding obligation) and such Wholly-owned Subsidiary at any
      time in any Partially-Owned Entity (or other such Person) will not exceed thirty
      percent (30%) of the Fair Market Value of Real Estate Assets at the time of
      any
      such Investment; and

    

      
      (g)    Investments
      in respect of (1) equipment, inventory and other tangible personal property
      acquired in the ordinary course of business, (2) current trade and customer
      accounts receivable for services rendered in the ordinary course of business
      and
      payable in accordance with customary trade terms, (3) advances in the ordinary
      course of business to employees for travel expenses, drawing accounts and
      similar expenditures, (4) prepaid expenses made in the ordinary course of
      business.

     

    
      
        
          
          

        

        
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      (h)    Investments
      by the Borrower in Mortgage Notes, provided
      that the
      aggregate investment in such Mortgage Notes will not exceed twenty percent
      (20%)
      of the Fair Market Value of Real Estate Assets at the time of any such
      Investment.

    

    In
      no
      event shall the aggregate of Investments (1) made pursuant to subclauses (a),
      (b) or (c) above (or otherwise in marketable securities to the extent permitted
      under this §9.3) exceed ten percent (10%) of the Fair Market Value of Real
      Estate Assets, and (2) made pursuant to subclauses (a), (b), (c), (d) to the
      extent relating to any of the types of Investments otherwise described in this
      clause (2), (e) to the extent relating to Real Estate Assets under Development,
      (f)(ii), or (h) exceed thirty percent (30%) of the Fair Market Value of Real
      Estate Assets at any time.

    

    Notwithstanding
      the foregoing, the Trust shall be permitted to make and maintain Investments
      in
      the Borrower and the Trust shall contribute to the Borrower, promptly upon,
      and
      in any event within 3 Business Days of, the Trust’s receipt thereof, 100% of the
      aggregate proceeds received by the Trust in connection with any offering of
      stock or debt in the Trust (net of fees and expenses customarily incurred in
      such offerings).

    

    §9.4.    Merger,
      Consolidation and Disposition of Assets; Assets of the Trust.

    

    (a)    Become
      a
      party to any merger, consolidation, spin-off or other material business change
      without the prior written approval of the Majority Lenders (other than the
      merger or consolidation of a Borrower with and into Hartman OP (with Hartman
      OP
      being the surviving entity) so long as no Default or Event of Default has
      occurred and is continuing, or would occur and be continuing after giving effect
      to such merger or consolidation); or

    

    (b)    sell,
      transfer or otherwise dispose of any Real Estate Assets or other property,
      including any equity interest in any Person, except (i) the sale, transfer
      or
other
      disposition of obsolete or worn out property in the ordinary course of business,
      (ii) the sale or issuance of equity interests of the Trust and Hartman OP in
      the
      ordinary course of business, (iii) the sale of Permitted Investments in the
      ordinary course of business and (iv) the sale, transfer or other disposition
      of
      property, provided
      that (A)
      such sale, transfer or disposition is at fair market value, (B) such sale,
      transfer or disposition will not result in a Material Adverse Effect and (C)
      in
      connection with the sale of any material Real Estate Asset, the Borrower shall
      have provided to the Agent a compliance certificate in the form of Exhibit
      C-2,
      hereto
      signed by the chief financial officer or chief accounting officer of the
      Borrower, setting forth in reasonable detail computations evidencing compliance
      with the covenants contained in §10 hereof and certifying that no Default or
Event
      of
      Default would exist or occur and be continuing after giving effect to all such
      proposed such sale, transfer or disposition.

    

    §9.5.    Compliance
      with Environmental Laws.
      (a) Use
      any of the Real Estate Assets or any portion thereof as a facility for the
      handling, processing, storage or disposal of Hazardous Substances except for
      quantities of Hazardous Substances used in the ordinary course of business
      and
      in compliance with all applicable Environmental Laws,

     

    
       

      
        
          
          

        

        
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(b)
      cause or permit to be located on any of the Real
      Estate Assets any underground tank or other underground storage receptacle
      for
      Hazardous Substances except in compliance with Environmental Laws, (c) generate
      any Hazardous Substances on any of the Real Estate Assets except in compliance
      with Environmental Laws, or (d) conduct any activity at any Real Estate Asset
      or
      use any Real Estate Asset in any manner so as to cause a Release in violation
      of
      applicable Environmental Laws.

    

    §9.6.    Distributions.

    

    (a)    The
      Borrower will not declare or make (i) annual Distributions in excess of 95%
      of
“funds from operations”; or (ii) any Distributions during any period
after
      any
      Event of Default has occurred; provided,
      however,
      (a)
      that the Borrower may at all times (including while an Event of Default is
      continuing) make Distributions to the extent (after taking into account all
      available funds of the Trust from all other sources) required in order to enable
      the Trust to continue to qualify as a REIT and (b) in the event that the
      Borrower cures any such Event of Default in clause (ii) above and the Agent
      has
      accepted such cure prior to accelerating the Loan, the limitation of clause
      (ii)
      above shall cease to apply with respect to such Event of Default. 

    

    (b)    The
      Trust
      will not, during any period when any Event of Default has occurred and is
      continuing, make any Distributions in excess of the minimum Distributions
      required to be made by the Trust in order to maintain its status as a
      REIT.

    

    §9.7.    Management
      Agreement.
      Terminate or fail to renew the Management Agreement or modify, amend or
      otherwise supplement in any respect the Management Agreement, in each case
      without the prior written consent of the Agent.

    

       
      §10.     FINANCIAL
      COVENANTS; COVENANTS REGARDING ELIGIBLE UNENCUMBERED PROPERTIES.
      The
      Borrower and the Trust, on their own behalf and on behalf of their respective
      Subsidiaries, jointly and severally covenant and agree that:

    

    §10.1.  
Consolidated
      Total Leverage Ratio.
      At any
      time, (i) Consolidated Total Indebtedness as at the last day of any fiscal
      quarter shall not exceed 60% of (ii) the Fair Market Value of Real Estate
      Assets.

     

    §10.2.    Interest
      Coverage Ratio.
      As at
      the end of any fiscal quarter, the ratio of (i) Consolidated EBITDA for the
      four
      consecutive fiscal quarters ending on the last day of such fiscal quarter to
      (ii) Consolidated Total Interest Expense for the four consecutive fiscal
      quarters ending on the last day of such fiscal quarter must exceed 2.00 to
      1.0.

    

    §10.3.    Fixed
      Charge Coverage Ratio.
      As at
      the end of any fiscal quarter, the ratio of (i) Consolidated EBITDA for the
      four
      consecutive fiscal quarters ending on the last day of such fiscal quarter to
      (ii) Consolidated Fixed Charges for the four consecutive fiscal quarters ending
      on the last day of such fiscal quarter must exceed 1.50 to 1.0.

     

    
       

      
        
          
          

        

        
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    §10.4.    Secured
      Debt Leverage.
      At any
      time, (i) Consolidated Total Indebtedness (less any Unsecured Consolidated
      Total
      Indebtedness) as at the last day of any fiscal quarter shall not exceed 40%
      of
      (ii) the Fair Market Value of Real Estate Assets.

    

    §10.5.    Borrowing
      Base Pool Asset Value.
      As at
      the end of any fiscal quarter or any other date of measurement, the Borrower
      shall not permit the ratio of (i) Borrowing Base Asset Value to (ii) Total
      Funded Revolver Debt to be equal to or less than 1.67 to 1.0.

    

    §10.6.    Borrowing
      Base Pool Debt Service Coverage Ratio.
      As at
      the end of any fiscal quarter, the ratio of (i) Adjusted Net Operating Income
      of
      the Borrowing Base Pool for the four consecutive fiscal quarters ending on
      the
      last day of such fiscal quarter; divided by
      (ii) the
      Implied Debt Service applicable in such four fiscal quarter period shall not
      be
      less than 1.50 to 1.00.

    

    §10.7.    Occupancy;
      Borrowing Base Pool.
      Eligible Unencumbered Properties shall at all times maintain a stabilized
      occupancy of 80% in the aggregate. There shall at all times be at least ten
      (10)
      Eligible Unencumbered Properties in the Borrowing Base Pool.

    

    §11.     
      [Reserved.]
      

    

    §12. 
CONDITIONS
      TO THE FIRST ADVANCE.
      The
      obligations of any Lender to make the initial Revolving Credit Loans and of
      the
      Fronting Bank to issue any initial Letters of Credit (and to maintain the
      existing outstanding Loans and Letters of Credit) shall be subject to the
      satisfaction of the following conditions precedent on or prior to the Closing
      Date with, in each instance, the Agent having approved in its sole discretion
      each matter submitted to it in compliance with such conditions:

    

    §12.1.    Loan
      Documents.
      Each of
      the Loan Documents shall have been duly executed and delivered by the respective
      parties thereto and shall be in full force and effect.

      

    §12.2.    Certified
      Copies of Organization Documents.
      The
      Agent shall have received (i) from the Borrower a copy, certified as of a recent
      date by a duly authorized officer of the Trust, in its capacity as general
      partner of Hartman OP, to be true and complete, of the Agreement of Limited
      Partnership of Hartman OP and any other Organizational Document or other
      agreement governing the rights of the partners or other equity owners of Hartman
      OP, (ii) from the Borrower a copy, certified as of a recent date by a duly
      authorized officer of Hartman OP, in its capacity as general partner of Hartman
      III, to be true and complete, of the Agreement of Limited Partnership of Hartman
      III and any other Organizational Document or other agreement governing the
      rights of the partners or other equity owners of Hartman III, and (iii) from
      the
      Trust a copy, certified as of a recent date by the appropriate officer of the
      State of Maryland to be true and correct,

     

    
      
        
          
          

        

        
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    of
      the
      trust agreement of the Trust, in each case along with any other organization
      documents of the Borrower or the Trust and their respective general partners,
      as
      the case may be, and each as in effect on the date of such
      certification.

    

    §12.3.    By-laws;
      Resolutions.
      All
      action on the part of the Borrower and the Trust necessary for the valid
      execution, delivery and performance by the Borrower and the Trust of this
      Agreement and the other Loan Documents to which any of them is or is to become
      a
      party shall have been duly and effectively taken, and evidence thereof
      satisfactory to the Agent shall have been provided to the Agent. The Agent
      shall
      have received from the Trust and the Borrower true copies of its by-laws and
      the
      resolutions adopted by its board of directors or trustees authorizing the
      transactions described herein and evidencing the due authorization, execution
      and delivery of the Loan Documents to which the Trust and/or the Borrower is
      a
      party, each certified by the secretary as of a recent date to be true and
      complete.

    

    §12.4.    Incumbency
      Certificate: Authorized Signers.
      The
      Agent shall have received from the Trust and the Borrower an incumbency
      certificate, dated as of the Closing Date, signed by a duly authorized officer
      of the Trust and the Borrower, as applicable, and giving the name of each
      individual who shall be authorized: (a) to sign, in the name and on behalf
      of
      the Borrower and the Trust, as the case may be, each of the Loan Documents
      to
      which the Borrower or the Trust is or is to become a party; (b) to make Loan
      and
      Conversion Requests on behalf of the Borrower and (c) to give notices and to
      take other action on behalf of the Borrower or the Trust, as applicable, under
      the Loan Documents.

    

    §12.5.    Title
      Policies.
      The
      Agent shall have received copies of the owner’s title policies for each of the
      Eligible Unencumbered Properties for which the Agent has requested
      copies.

    

    §12.6.    Certificates of Insurance.
      The
      Agent shall have received (a) certificates of insurance as to all of the
      insurance maintained by Borrower on the Eligible Unencumbered Properties
      (including flood insurance if necessary) from the insurer or an independent
      insurance broker identifying insurers, types of insurance, insurance limits,
      and
      policy terms; and (b) such further information and certificates from Borrower,
      its insurers and insurance brokers as the Agent may reasonably
      request.

    

    §12.7.    Hazardous Substance Assessments.
      To the
      extent requested by the Agent, the Agent shall have received hazardous waste
      site assessment reports concerning Hazardous Substances (or the threat thereof)
      and asbestos with respect to the Eligible Unencumbered Properties, from
      environmental engineers acceptable to the Agent, such reports to be in form
      and
      substance satisfactory to the Agent. The Agent shall have the right to obtain
      third-party review of the reports at the Borrower's expense.

     

    
      
        
          
          

        

        
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    §12.8.    Opinion
      of Counsel Concerning Organization and Loan Documents.
      The
      Agent shall have received favorable opinions addressed to the Lenders and the
      Agent in form and substance reasonably satisfactory to the Agent from counsel
      to
      the Borrower and each Guarantor and, if any, state specific local counsel who
      are reasonably satisfactory to Agent, each as counsel to the Borrower, the
      Trust
      and their respective Subsidiaries, with respect to applicable law.

     

    §12.9.    Structural
      Condition Assurances.
      To the
      extent requested by the Agent, the Agent shall have received evidence
      satisfactory to the Agent as to the good physical condition of the Buildings
      and
      that utilities and public water and sewer service is available at the lot lines
      of the Eligible Unencumbered Properties and connected directly to the Buildings
      with all necessary permits.

     

    §12.10            
      Guaranty.
      The
      Guaranty shall have been duly executed and delivered by the Trust. 

    

    §12.11    Formation
      of Hartman III; Transfer of Eligible Unencumbered Properties.
      The
      Agent shall be satisfied that Hartman III has been duly formed pursuant to
      organizational documents reasonably satisfactory to the Agent and that fee
      title
      each of the Eligible Unencumbered Properties has been fully transferred to
      Hartman III by Hartman OP in a manner satisfactory to the Agent. The Borrower
      shall furnish to the Agent all such documentation reasonably required by the
      Agent to evidence compliance with the foregoing.

    

    §12.12    Inspection of Eligible Unencumbered Properties.
      The
      Agent shall have completed to its satisfaction an inspection of the Eligible
      Unencumbered Properties at the Borrower's expense. 

    

    §12.13.   Certifications from Government Officials;
      UCC-11 Reports.

    

    The
      Agent
      shall have received (i) long-form certifications from government officials
      evidencing the legal existence, good standing and foreign qualification of
      the
      Borrower and the Trust, along with a certified copy of the certificate of
      limited partnership of the Borrower,
      all as of the most recent practicable date; and (ii) UCC-11 search results
      from
      the appropriate jurisdictions for the Borrower and the Trust.

    

    §12.14.    Proceedings and Documents;
      Adverse Changes.
      All
      proceedings in connection with the transactions contemplated by this Agreement,
      the other Loan Documents and all other documents incident thereto shall be
      satisfactory in form and substance to the Agent's counsel, and the Agent and
      such counsel shall have received all information and such counterpart originals
      or certified or other copies of such documents as the Agent may reasonably
      request. There shall have occurred no material adverse change in government
      regulations or policies affecting the Borrower, the Agent, the Lead Arranger
      or
      any Lender. No disruption or material adverse change in the financial
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    capital
      markets in general that could reasonably be expected to have a material adverse
      effect on the market for loan syndications. 

    

    §12.15.    Fees.
      The
      Borrower shall have paid to the Agent, for the accounts of the Lenders or for
      its own account, as applicable, all of the fees and expenses that are due and
      payable as of the Closing Date in accordance with this Agreement or any separate
      fee letter entered into by the Borrower and the Trust and the
      Agent.

    

    §12.16.    Closing
      Certificate.
      The
      Borrower and the Guarantor shall have delivered a bringdown Closing Certificate
      to the Agent, in form and substance satisfactory to the Agent.

    

    §12.17.    Patriot
      Act, Etc.
      The
      Borrower and the Guarantor shall have delivered to the Agent, sufficiently
      in
      advance of the Closing Date, all documentation and other information required
      by
      bank regulatory authorities under applicable “know your customer” and anti-money
      laundering rules and regulations, including without limitation, the Patriot
      Act.

    

    §13.    CONDITIONS
      TO ALL BORROWINGS.
      The
      obligations of any Lender to make any Loan, and of the Fronting Bank to issue
      any Letter of Credit, whether on or after the Closing Date, shall also be
      subject to the satisfaction of the following conditions precedent:

    

    §13.1.    Representations
      True; No Event of Default; Compliance Certificate.
      Each of
      the representations and warranties made by or on behalf of the Borrower, the
      Trust or any of their respective Subsidiaries contained in this Agreement,
      the
      other Loan Documents or in any document or instrument delivered pursuant to
      or
      in connection with this Agreement shall be true as of the date as of which
      they
      were made and shall also be true at and as of the time of the making of each
      Loan, and the issuance, extension or renewal of any Letter of Credit, with
      the
      same effect as if made at and as of that time (except to the extent that such
      representations and warranties relate expressly to an earlier date); and no
      Default or Event of Default under this Agreement shall have occurred and
be
      continuing on the date of any Completed Loan Request or on the Drawdown Date
      of
      any Loan or Letter of Credit. 

    

    §13.2.    No
      Legal Impediment.
      No
      change shall have occurred any law or regulations thereunder or interpretations
      thereof that in the reasonable opinion of the Agent or any Lender or the
      Fronting Bank would make it illegal for any Lender to make such Loan or to
      participate in the issuance, extension or renewal of such Letter of Credit
      or,
      in the reasonable opinion of the Agent, would make it illegal to issue, extend
      or renew such Loan or Letter of Credit. No disruption or material adverse change
      in the financial or capital markets in general that could reasonably be expected
      to have a material adverse effect on the market for loan
      syndications.

     

    
       

      
        
          
          

        

        
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    §13.3.    Governmental
      Regulation.
      Each
      Lender shall be satisfied that the making of such Loan or participation in
      the
      issuance, extension or renewal of such Letter of Credit is in compliance with
      any applicable regulations of the Comptroller of the Currency or the Board
      of
      Governors of the Federal Reserve System. 

    

    §13.4.    Borrowing
      Documents.
      In the
      case of any request for a Revolving Credit Loan or a Letter of Credit, the
      Agent
      shall have received the Completed Loan Request and required
      certificates.

    

    §13.5.    [Reserved.]

    

    §13.6.    New
      Borrowing Base Pool Property.
      To the
      extent the Completed Loan Request is for a funding based upon any new Real
      Estate Asset being part of the Borrowing Base Pool, the Agent shall have
      determined that the Unencumbered Property Conditions and the terms of Section
      8.13(c) have been satisfied with respect to such Real Estate Asset.

    

    §13.7.    Continued
      Compliance.
      To the
      extent deemed applicable by the Agent, the conditions of Section 12 shall remain
      or be satisfied.

    

    §14.     EVENTS
      OF DEFAULT; ACCELERATION; ETC..

    

    §14.1.    Events
      of Default and Acceleration.
      If any
      of the following events (“Events of Default”) shall occur:

    

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

    

    (b)    the
      Borrower shall fail to pay any interest on the Loans or any other sums due
      hereunder or under any of the other Loan Documents or any fee letter
(including,
      without limitation, amounts due under §8.16) when the same shall become due and
      payable, and such failure continues for three (3) days;

    

    (c)    the
      Borrower, the Trust or any of their respective Subsidiaries shall fail to
      comply, or to cause the Trust to comply, as the case may be, with any of the
      respective
      covenants contained in the following: §8.1 (except with respect to principal,
      interest and other sums covered by clauses (a) or (b) above); §8.2; §§8.4
      through §810, inclusive; §8.12; §8.13; §8.15; §8.19; §8.20; §9; §10 and
§11;

    

    (d)    the
      Borrower, the Trust or any of their respective Subsidiaries shall fail to
      perform any other term, covenant or agreement contained herein or in any of
      the
      other
      Loan Documents (other than those specified elsewhere in this §14) and such
      failure continues for thirty (30) days;

     

    
       

      
        
          
          

        

        
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    (e)    any
      representation or warranty made by or on behalf of the Borrower, the Trust
      or
      any of their respective Subsidiaries in this Agreement or any of the
other
      Loan Documents shall prove to have been false in any material respect upon
      the
      date when made or deemed to have been made or repeated;

    

    (f)    the
      Borrower, the Trust or any of its Subsidiaries or, to the extent of Recourse
      to
      the Borrower, the Trust or such Subsidiaries thereunder, any
      Partially-Owned
      Entity or other of their respective Affiliates, shall fail to pay when due,
      or
      within any applicable period of grace, any Consolidated Total Indebtedness
      which
      is in excess of (i) $5,000,000, either individually or in the aggregate, if
      such
      Indebtedness is without Recourse and (ii) $1,000,000, either individually or
      in
      the aggregate, if such Indebtedness is Recourse, or fail to observe or perform
      any material term, covenant, condition or agreement contained in any agreement,
      document or instrument by which it is bound evidencing, securing or otherwise
      relating to such Consolidated Total Indebtedness for such period of time (after
      the giving of appropriate notice if required) as would permit the holder or
      holders thereof or of any obligations issued thereunder in excess of (i)
      $5,000,000, either individually or in the aggregate, if such Indebtedness is
      without Recourse and (ii) $1,000,000, either individually or in the aggregate,
      if such Indebtedness is Recourse, to accelerate the maturity
      thereof;

    

    (g)    any
      of
      Hartman OP, Hartman III, the Trust or any of their respective Subsidiaries,
      Hartman Management or Hartman Property LLC shall make an assignment
      for the benefit of creditors, or admit in writing its inability to pay or
      generally fail to pay its debts as they mature or become due, or shall petition
      or apply for the appointment of a trustee or other custodian, liquidator or
      receiver of any of Hartman OP, Hartman III, the Trust or any of their respective
      Subsidiaries or of any substantial part of the properties or assets of any
      of
      such parties or shall commence any case or other proceeding relating to any
      of
      Hartman OP, Hartman III, the Trust or any of their respective Subsidiaries
      under
      any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      dissolution or liquidation or similar law of any jurisdiction, now or
hereafter
      in effect, or shall take any action to authorize or in furtherance of any of
      the
      foregoing, or if any such petition or application shall be filed or any such
      case or other proceeding shall be commenced against any of Hartman OP, Hartman
      III, the Trust or any of their respective Subsidiaries and (i) any of Hartman
      OP, Hartman III, the Trust or any of their respective Subsidiaries shall
      indicate its approval thereof, consent thereto or acquiescence therein or (ii)
      any such petition, application, case or other proceeding shall continue
      undismissed, or unstayed and in effect, for a period of forty-five (45)
      days;

    

    (h)    a
      decree
      or order is entered appointing any trustee, custodian, liquidator or receiver
      or
      adjudicating any of Hartman OP, Hartman III, the Trust or any of their
      respective Subsidiaries, Hartman Management or Hartman Property LLC bankrupt
      or
      insolvent, or approving a petition in any such case or other proceeding, or
      a
      decree or order for relief is entered in respect of any of Hartman OP, Hartman
      III, the Trust or any of their respective Subsidiaries, Hartman Management
      or
      Hartman Property LLC in an involuntary case under federal bankruptcy laws as
      now
      or hereafter constituted;

     

    
      
        
          
          

        

        
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    (i)    there
      shall remain in force, undischarged, unsatisfied and unstayed, for more than
      thirty (30) days, whether or not consecutive, any final judgment that
is
      not
      fully insured against any of Hartman OP, Hartman III, the Trust or any of their
      respective Subsidiaries that, with other outstanding uninsured final judgments,
      undischarged, unsatisfied and unstayed, against any of such parties exceeds
      in
      the aggregate $1,000,000;

    

    (j)    any
      of
      the Loan Documents or any provision of any Loan Document shall be canceled,
      terminated, revoked or rescinded otherwise than in accordance with
      the
      terms thereof (other than the Guaranty, which may not be terminated without
      the
      prior consent of the Agent) or with the express prior written agreement, consent
      or approval of the Agent, or any action at law, suit or in equity or other
      legal
      proceeding to make unenforceable, cancel, revoke or rescind any of the Loan
      Documents shall be commenced by or on behalf of the Borrower or any of its
      Subsidiaries or the Trust or any of its Subsidiaries, or any court or any other
      governmental or regulatory authority or agency of competent jurisdiction shall
      make a determination that, or issue a judgment, order, decree or ruling to
      the
      effect that, any one or more of the Loan Documents is illegal, invalid or
      unenforceable as to any material terms thereof; the Guaranty shall be
      terminated, revoked or rescinded; or the Agent shall at any time fail to have
      a
      perfected, first-priority pledge of and security interest in the equity
      interests of each entity owning any Eligible Unencumbered Property;

    

    (k)    any
      “Event of Default” or default (after notice and expiration of any period of
      grace, to the extent provided), as defined or provided in any of the other
      Loan
      Documents, shall occur and be continuing;

    

    (l)    with
      respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have
      occurred and the Agent shall have determined in their reasonable discretion
      that such event reasonably could be expected to result in liability of
the
      Borrower or any of its Subsidiaries or the Trust or any of its Subsidiaries
      to
      the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
      $1,000,000 and such event in the circumstances occurring reasonably could
      constitute grounds for the termination of such Guaranteed Pension Plan by the
      PBGC or for the appointment by the appropriate United States District Court
      of a
      trustee to administer such Guaranteed Pension Plan; or a trustee shall have
      been
      appointed by the United States District Court to administer such Plan; or the
      PBGC shall have instituted proceedings to terminate such Guaranteed Pension
      Plan;

    

    (m)    subject
      to the Borrower’s ability to remove Real Estate Assets from the Borrowing Base
      Pool in accordance with the provisions set forth below in this §14,
      the
      failure of any of the Real Estate Assets being included from time to time as
      part of the Borrowing Base Pool to comply with any of the conditions set forth
      in the definition of Eligible Unencumbered Properties; 

    

    (n)    the
      failure of Allen R. Hartman, for any reason, to cease to retain the titles
      of
      President of Hartman Management and Chairman of Hartman OP and to perform
      the functions typically performed under such respective offices and to be
      actively involved in strategic planning and decision-making for the Trust,
      unless within six (6)

     

    
      
        
          
          

        

        
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    months
      after such failure, the Board of Directors or Board of Trustees has duly elected
      or appointed a qualified substitute to replace such individual who is acceptable
      to the Agent in its sole discretion (as notified to the Borrower by the Agent
      in
      writing); or the occurrence of any transaction in which any “person” or “group”
      (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange
      Act
      of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
      Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
      of voting rights applicable to the Trust ordinarily entitled to vote in the
      election of directors or trustees, empowering such “person” or “group” to elect
      a majority of the Board of Directors or Board of Trustees of the Trust, who
      did
      not have such power before such transaction; or during any twelve-month period
      on or after the Closing Date, individuals who at the beginning of such period
      constituted the Board of Trustees of the Trust (together with any new directors
      whose election by the Board of Trustees or whose nomination for election by
      the
      shareholders of the Trust was approved by a vote of at least a majority of
      the
      members of the Board of Trustees then in office who either were members of
      the
      Board of Trustees at the beginning of such period or whose election or
      nomination for election was previously so approved) ceased for any reason to
      constitute a majority of the members of the Board of Trustees of the Trust
      then
      in office; or

     

    (o)    without
      limitation of the other provisions of this §14.1, (i) the Trust shall at any
      time fail to be the sole general partner of Hartman OP or shall at any
time
      be
      in contravention of any of the requirements contained in the last paragraph
      of
§9.2 hereof, or §9.3 (including, without limitation, the last paragraph of
§9.3), (ii) Hartman OP shall at any time fail to be the sole general partner
      and
      the sole limited partner of Hartman III, (iii) the Management Agreement shall
      be
      terminated, amended or modified
      without the prior written consent of the Agent, or (iv) Allen R. Hartman shall
      fail to be the 100% legal and beneficial equity interests in Hartman Management
      or Hartman Property LLC; 

    

    then,
      and
      in any such event, so long as the same may be continuing, the Agent may, and
      upon the request of the Majority Lenders shall, declare all amounts owing
      with respect to this Agreement, the Notes and the other Loan Documents to be,
      and they shall thereupon forthwith become, immediately due and payable without
      presentment, demand, protest or other notice of any kind, all of which are
      hereby expressly waived by the Borrower, the Trust and each of their respective
      Subsidiaries; provided
      that in
      the event of any Event of Default specified in §14.1(g) or 14.1(h), all such
      amounts shall become immediately due and payable automatically and without
      any
      requirement of notice from any of the Lenders or the Agent or action by the
      Lenders or the Agent. Without limitation of the foregoing, upon the occurrence
      of an Event of Default and/or the acceleration of the Loans or other enforcement
      action under any Loan Document (including the Pledge Agreement), the Agent
      shall
      have the right to terminate the Management Agreement, effective on the date
      of
      such termination (or such later date as the Agent may elect).

     

    Notwithstanding
      the foregoing provisions of this §14.1, in the event of a Default or Event of
      Default arising as a result of the inclusion of any Real Estate Asset in
      the

     

    
      
        
          
          

        

        
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    Borrowing
      Base Pool at any particular time of reference, if such Default or Event of
      Default is capable of being cured by the exclusion of such Real Estate Asset
      from the Borrowing Base Pool in accordance with, and subject to, §8.13 and from
      all other covenant calculations under §10 or otherwise, the Borrower shall be
      permitted a period not to exceed five (5) days to submit to the Agent (with
      copies to the Agent for each Bank) a compliance certificate in the form of
      Exhibit
      C-1
      hereto
      evidencing compliance with §2.1 and with all of the covenants set forth in §10
      (with calculations evidencing such compliance after excluding from such
      covenants all Net Operating Income and Consolidated EBITDA generated by the
      Real
      Estate Asset to be excluded from the Borrowing Base Pool) and with the
      Unencumbered Property Conditions, and otherwise certifying that, after giving
      effect to the exclusion of such Real Estate Asset from the Borrowing Base Pool,
      no Default or Event of Default will be continuing.

    

    §14.2.    Termination
      of Commitments.
      If any
      one or more Events of Default specified in §14.1(g) or §14.1(h) shall occur, any
      unused portion of the Commitments or other commitments to extend credit
      hereunder shall forthwith terminate and the Lenders shall be relieved of all
      obligations to make Loans to the Borrower and the Agent and the Fronting Bank
      shall be relieved of all further obligations to issue, extend or renew Letters
      of Credit. If any other Event of Default shall have occurred and be continuing,
      the Agent may, and upon the request of the Majority Lenders shall, terminate
      the
      unused portion of the Commitments or other commitment to extend credit
      hereunder. No such termination of the Commitments or other commitment to extend
      credit hereunder shall relieve the Borrower
      of any of the Obligations or any of its existing obligations to the Agent or
      the
      Lenders arising under other agreements or instruments.

    

    §14.3.    Remedies.
      In the
      event that one or more Events of Default shall have occurred and be continuing,
      whether or not the Lenders shall have accelerated the maturity of the Loans
      pursuant to §14.1, the Majority Lenders may direct the Agent to proceed to
      protect and enforce the rights and remedies of the Agent and the Lenders under
      this Agreement, the Notes, any or all of the other Loan Documents or under
      applicable law by suit in equity, action at law or other appropriate proceeding
      (including for the specific performance of any covenant or agreement contained
      in this Agreement or the other Loan Documents or any instrument pursuant to
      which the Obligations are evidenced and, to the full extent permitted by
      applicable law, the obtaining of the ex
      parte
      appointment of a receiver), and, if any amount shall have become due, by
      declaration or otherwise, proceed to enforce the payment thereof or any other
      legal or equitable right or remedy of the Agent and the Lenders under the Loan
      Documents or applicable law. No remedy herein conferred upon the Lenders or
      the
      Agent or the holder of any Note or purchaser of any Letter of Credit
      Participation is intended to be exclusive of any other remedy and each and
      every
      remedy shall be cumulative and shall be in addition to every other remedy given
      hereunder or under any of the other Loan Documents or now or hereafter existing
      at law or in equity or by statute or any other provision of law.

     

    
      
        
          
          

        

        
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    §15.     SECURITY
      INTEREST AND SET-OFF.

    

    §15.1    Security
      Interest.
      Borrower hereby grants to the Agent, on behalf of and for the benefit of the
      Lenders, and to each Lender, a lien, security interest and right of setoff
      as
      security for all liabilities and obligations to the Lenders, whether now
      existing or hereafter arising, upon and against all deposits, credits,
      collateral and property, now or hereafter in the possession, custody,
      safekeeping or control of the Agent or any Lender or any entity under the
      control of KeyCorp. and its successors and assigns, or in transit to any of
      them.

    

    §15.2    Set-Off
      and Debit.
      (i) If
      any Event of Default or other event which would entitle the Agent to accelerate
      the Loans occurs, or (ii) at any time, whether or not any Default or Event
      of
      Default exists, in the event any attachment, trustee process, garnishment,
      or
      other levy or lien is, or is sought to be, imposed on any property of the
      Borrower; then, in any such event, any such deposits, balances or other sums
      credited by or due from the Agent or any Lender, or from any such affiliate
      of
      the Agent or any Lender, to the Borrower may to the fullest extent not
      prohibited by applicable law at any time or from time to time, without regard
      to
      the existence, sufficiency or adequacy of any other collateral, and without
      notice or compliance with any other condition precedent now or hereafter imposed
      by statute, rule of law or otherwise, all of which are hereby waived, be set
      off, debited and appropriated, and applied by the Agent or any Lender, as the
      case may be, against any or all of the Obligations irrespective of whether
      demand shall have been made and although such Obligations may be unmatured,
      in
      such manner as the Agent
      or
      the applicable Lender in its sole and absolute discretion may determine. Within
      five (5) Business Days of making any such set off, debit or appropriation and
      application, the Agent agrees to endeavor to notify the Borrower thereof,
provided
      that the
      failure to give such notice shall not affect the validity of such set off,
      debit
      or appropriation and application. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR
      ANY
      LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
      WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT
      TO
      SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY KNOWINGLY,
      VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each other
      Lender that (a) if an amount to be set off is to be applied to indebtedness
      of
      the Borrower to such Lender, other than the obligations evidenced by the Note
      held by such Lender, such amount shall be applied ratably to such other
      indebtedness and to the obligations evidenced by the Note held by such Lender,
      and (b) if such Lender shall receive from the Borrower, whether by voluntary
      payment, exercise of the right of setoff, counterclaim, cross action,
      enforcement of the claim evidenced by the Note held by such Lender by
      proceedings against the Borrower at law or in equity or by proof thereof in
      bankruptcy, reorganization liquidation, receivership or similar proceedings,
      or
      otherwise, and shall retain and apply to the payment of the Note held by such
      Lender any amount in excess of its ratable portion of the payments received
      by
      all of the Lenders with respect to the Note held by all of the Lenders, such
      Lender will make such disposition and arrangements with

     

    
       

      
        
          
          

        

        
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    the
      other
      Lenders with respect to such excess, either by way of distribution, pro tanto
      assignment of claims, subrogation or otherwise as shall result in each Lender
      receiving in respect of the Note held by it its proportionate payment as
      contemplated by this Agreement; provided that if all or any part of such excess
      payment is thereafter recovered from such Lender, such disposition and
      arrangements shall be rescinded and the amount restored to the extent of such
      recovery, but without interest.

    

    §15.3    Right
      to Freeze.
      The
      Agent and each of the Lenders shall also have the right, at its option, upon
      the
      occurrence of any event which would entitle the Agent or any Lender to set
      off
      or debit as set forth in §15.2, to freeze, block or segregate any such deposits,
      balances and other sums so that the Borrower may not access, control or draw
      upon the same.

    

    §15.4    Additional
      Rights.
      The
      rights of the Agent, the Lenders and each affiliate of Administrative Agent
      and
      each of the Lenders under this Section 15 are in addition to, and not in
      limitation of, other rights and remedies, including other rights of set off,
      which the Agent or any Lender may have.

    

    §16.     THE
      AGENT.

    

    §16.1.    Authorization.
      (a) The
      Agent is authorized to take such action on behalf of each of the Lenders and
      to
      exercise all such powers as are hereunder and under any of the
      other
      Loan Documents and any related documents delegated to the Agent, together with
      such
      powers as are reasonably incident thereto, provided
      that no
      duties or responsibilities not expressly assumed herein or therein shall be
      implied to have been assumed by the Agent. The relationship between the Agent
      and the Lenders is and shall be that of agent and principal only, and nothing
      contained in this Agreement or any of the other Loan Documents shall be
      construed to constitute the Agent as a trustee or fiduciary for any
      Lender.

    

    (b)    The
      Borrower, without further inquiry or investigation, shall, and is hereby
      authorized by the Lenders to, assume that all actions taken by the Agent
hereunder
      and in connection with or under the Loan Documents are duly authorized by the
      Lenders. The Lenders shall notify Borrower of any successor to Agent by a
      writing signed by Majority Lenders, which successor shall be reasonably
      acceptable to the Borrower so long as no Default or Event of Default has
      occurred and is continuing. The Borrower acknowledges that any lender that
      acquires KeyBank is acceptable as a successor to the Agent.

    

    §16.2.    Employees
      and Agents.
      The
      Agent may exercise its powers and execute its duties by or through employees
      or
      agents and shall be entitled to take, and to rely on, advice of counsel
      concerning all matters pertaining to its rights and duties under this Agreement
      and the other Loan Documents. The Agent may utilize the services of such Persons
      as the Agent in its sole discretion may reasonably determine, and all reasonable
      fees and expenses of any such Persons shall be paid by the
      Borrower.

     

    
       

      
        
          
          

        

        
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    §16.3.    No
      Liability.
      Neither
      the Agent, nor any of its shareholders, directors, officers or employees nor
      any
      other Person assisting them in their duties nor any agent or employee thereof,
      shall be liable for any waiver, consent or approval given or any action taken,
      or omitted to be taken, in good faith by it or them hereunder or under any
      of
      the other Loan Documents, or in connection herewith or therewith, or be
      responsible for the consequences of any oversight or error of judgment
      whatsoever, except that the Agent may be liable for losses due to its willful
      misconduct or gross negligence, as finally determined by a court of competent
      jurisdiction.

    

    §16.4.    No
      Representations.
      The
      Agent shall not be responsible for the execution or validity or enforceability
      of this Agreement, the Notes or any of the other Loan Documents or for the
      validity, enforceability or collectibility of any such amounts owing with
      respect to the Notes, or for any recitals or statements, warranties or
      representations made herein or in any of the other Loan Documents or in any
      certificate or instrument hereafter furnished to it by or on behalf of the
      Trust
      or the Borrower or any of their respective Subsidiaries, or be bound to
      ascertain or inquire as to the performance or observance of any of the terms,
      conditions, covenants or agreements in this Agreement or the other Loan
      Documents. The Agent shall not be bound to ascertain whether any notice,
      consent, waiver or request delivered to it by the Borrower or the Trust or
      any
      holder of any of the Notes shall have been duly authorized or is true, accurate
      and complete. The Agent has not made nor does it now make any representations
      or
warranties,
      express or implied, nor does it assume any liability to the Lenders, with
      respect to the credit worthiness or financial condition of the Borrower or
      any
      of its Subsidiaries or the Trust or any of the Subsidiaries or any tenant under
      a Lease or any other entity. Each Lender acknowledges that it has, independently
      and without reliance upon the Agent or any other Lender, and based upon such
      information and documents as it has deemed appropriate, made its own credit
      analysis and decision to enter into this Agreement.

    

    §16.5.    Payments.

    

    (a)    A
      payment
      by the Borrower to the Agent hereunder or any of the other Loan Documents for
      the account of any Lender shall constitute a payment to such
      Lender. The Agent agrees to distribute to each Lender such Lender's pro
      rata
      share of
      payments received by the Agent for the accounts of all the Lenders, as provided
      herein or in any of the other Loan Documents. All such payments shall be made
      on
      the date received, if before 1:00 p.m., and if after 1:00 p.m., on the next
      Business Day. If payment is not made on the day received, the funds shall be
      invested by the Agent in overnight obligations, and interest thereon paid
pro rata
      to the
      Lenders.

    

    (b)    If
      in the
      reasonable opinion of the Agent the distribution of any amount received by
      it in
      such capacity hereunder, under the Notes or under any of the other
      Loan Documents might involve it in material liability, it may refrain from
      making distribution until its right to make distribution shall have been
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    competent
      jurisdiction, provided
      that the
      Agent shall invest any such undistributed amounts in overnight obligations
      on
      behalf of the Lenders and interest thereon shall be paid pro rata
      to the
      Lenders. If a court of competent jurisdiction shall adjudge that any amount
      received and distributed by the Agent is to be repaid, each Person to whom
      any
      such distribution shall have been made shall either repay to the Agent its
      proportionate share of the amount so adjudged to be repaid or shall pay over
      the
      same in such manner and to such Persons as shall be determined by such
      court.

    

    (c)    Notwithstanding
      anything to the contrary contained in this Agreement or any of the other Loan
      Documents, any Lender that fails (i) to make available to
      the
      Agent its pro rata
      share of
      any Loan or to purchase any Letter of Credit Participation or (ii) to adjust
      promptly such Lender's outstanding principal and its pro
      rata
      Commitment Percentage as provided in §2.1, shall be deemed delinquent (a
“Delinquent Lender”) and shall be deemed a Delinquent Lender until such time as
      such delinquency is satisfied. A Delinquent Lender shall be deemed to have
      assigned any and all payments due to it from the Borrower, whether on account
      of
      outstanding Loans, interest, fees or otherwise, to the remaining nondelinquent
      Lenders for application to, and reduction of, their respective pro rata
      shares
      of all outstanding Loans. The Delinquent Lender hereby authorizes the Agent
      to
      distribute such payments to the nondelinquent Lenders in proportion to their
      respective pro rata
      shares
      of all outstanding Loans. If not previously satisfied directly by the Delinquent
      Lender, a Delinquent Lender shall be deemed to have satisfied
      in full a delinquency when and if, as a result of application of the assigned
      payments to all outstanding Loans of the nondelinquent Lenders, the Lenders'
      respective pro
      rata
      shares
      of all outstanding Loans have returned to those in effect immediately prior
      to
      such delinquency and without giving effect to the nonpayment causing such
      delinquency.

    

    §16.6.    Holders
      of Notes.
      The
      Agent may deem and treat the payee of any Notes or the Purchaser of any Letter
      of Credit Participation as the absolute owner or purchaser thereof for all
      purposes hereof until it shall have been furnished in writing with a different
      name by such payee or by a subsequent holder, assignee or
      transferee.

    

    §16.7.    Indemnity.
      The
      Lenders ratably and severally agree hereby to indemnify and hold harmless the
      Agent and its Affiliates from and against any and all claims, actions and suits
      (whether groundless or otherwise), losses, damages, costs, expenses (including
      any expenses for which the Agent has not been reimbursed by the Borrower as
      required by §17), and liabilities of every nature and character arising out of
      or related to this Agreement, the Notes, or any of the other Loan Documents
      or
      the transactions contemplated or evidenced hereby or thereby, or the Agent's
      actions taken hereunder or thereunder, except to the extent that any of the
      same
      shall be directly caused by the Agent's willful misconduct or gross negligence,
      as finally determined by a court of competent jurisdiction.

    

    §16.8.    Agent
      as Lender.
      In its
      individual capacity as a Lender, KeyBank shall have the same obligations and
      the
      same rights, powers and privileges in respect to its

     

    
      
        
          
          

        

        
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    Commitment
      and the Loans made by it, and as the holder of any of the Notes and as the
      purchaser of any Letter of Credit Participation, as it would have were it not
      also the Agent. 

    

    §16.9.    Notification
      of Defaults and Events of Default.
      Each
      Lender hereby agrees that, upon learning of the existence of a Default or an
      Event of Default, it shall (to the extent notice has not previously been
      provided) promptly notify the Agent thereof. The Agent hereby agrees that upon
      receipt of any notice under this §16.9 it shall promptly notify the other
      Lenders of the existence of such Default or Event of Default.

    

    §16.10.   Duties
      in Case of Enforcement.
      In the
      case one or more Events of Default have occurred and shall be continuing, and
      whether or not acceleration of the Obligations shall have occurred, the Agent
      shall, at the request, or may, upon the consent, of the Majority Lenders, and
      provided that the Lenders have given to the Agent such additional indemnities
      and assurances against expenses and liabilities as the Agent may reasonably
      request, proceed to enforce the provisions of this Loan Agreement and the other
      Loan Documents and the exercise of any other legal or equitable rights or
      remedies as it may have hereunder or under any other Loan Document or otherwise
      by virtue of applicable law, or to refrain from so acting if similarly requested
      by the Majority Lenders. The Agent shall be fully protected in so acting or
      refraining from acting upon the instruction
      of the Majority Lenders, and such instruction shall be binding upon all the
      Lenders. The Majority Lenders may direct the Agent in writing as to the method
      and the extent of any such foreclosure, sale or other disposition or the
      exercise of any other right or remedy, the Lenders hereby agreeing to severally
      indemnify and hold the Agent harmless from all costs and liabilities incurred
      in
      respect of all actions taken or omitted in accordance with such direction,
      provided
      that the
      Agent need not comply with any such direction to the extent that the Agent
      reasonably believes the Agent’s compliance with such direction to be unlawful or
      commercially unreasonable in any applicable jurisdiction. The Agent may, in
      its
      discretion but without obligation, in the absence of direction from the Majority
      Lenders, take such interim actions as it believes reasonably necessary to
      preserve the rights of the Lenders hereunder, including but not limited to
      petitioning a court for injunctive relief or appointment of a receiver. Each
      of
      the Lenders acknowledges and agrees that no individual Lender may separately
      enforce or exercise any of the provisions of any of the Loan Documents,
      including without limitation the Notes, other than through the Agent. The Agent
      shall advise the Lenders of all such action taken by the Agent.

    

    §16.11.    Successor
      Agent.
      KeyBank, or any successor Agent, may resign as Agent at any time by giving
      at
      least 30 days prior written notice thereof to the Lenders and to the Borrower.
      Any such resignation shall be effective upon appointment and acceptance of
      a
      successor Agent, as hereinafter provided. Upon any such resignation, the
      Majority Lenders shall have the right to appoint a successor Agent, which is
      a
      Lender under this Agreement, provided
      that so
      long as no Default or Event of Default has occurred and is continuing the
      Borrower shall have the right to approve any successor Agent, which

     

    
      
        
          
          

        

        
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    approval
      shall not be unreasonably withheld. If, in the case of a resignation by the
      Agent, no successor Agent shall have been so appointed by the Majority Lenders
      and approved by the Borrower, and shall have accepted such appointment, within
      thirty (30) days after the retiring Agent's giving of notice of resignation,
      then the retiring Agent may, on behalf of the Lenders, appoint any one of the
      other Lenders as a successor Agent. The Borrower acknowledges that any lender
      that acquires KeyBank is acceptable as a successor Agent. Upon the acceptance
      of
      any appointment as Agent hereunder by a successor Agent, such successor Agent
      shall thereupon succeed to and become vested with all the rights, powers,
      privileges and duties of the retiring Agent, and the retiring Agent shall be
      discharged from all further duties and obligations as Agent under this
      Agreement. After any Agent's resignation hereunder as Agent, the provisions
      of
      this §16 shall inure to its benefit as to any actions taken or omitted to be
      taken by it while it was Agent under this Agreement. The Agent may be removed
      at
      the direction of the Majority Lenders in the event of a final judicial
      determination (in which the Agent had an opportunity to be heard) by a court
      of
      competent jurisdiction that the Agent had acted in a grossly negligent manner
      or
      in willful misconduct.

    

    §16.12.    Notices.
      Any
      notices or other information required hereunder to be provided to the Agent
      (with copies to the Agent for each Lender) shall be forwarded by the Agent
      to
      each of the Lenders promptly.

     

    §16.13.        
      [Reserved].

    

    §17.     EXPENSES.
      The
      Borrower agrees to pay (a) the reasonable costs of producing and reproducing
      this Agreement, the other Loan Documents and the other agreements and
      instruments mentioned herein, (b) the reasonable fees, expenses and
      disbursements of the Agent's outside counsel or any local counsel to the Agent
      incurred in connection with the preparation, administration or interpretation
      of
      the Loan Documents and other instruments mentioned herein, each closing
      hereunder, and amendments, modifications, approvals, consents or waivers hereto
      or hereunder, (c) the fees, expenses and disbursements of the Agent incurred
      by
      the Agent in connection with the preparation, administration or interpretation
      of the Loan Documents and other instruments mentioned herein, including, without
      limitation, the costs incurred by the Agent in connection with its inspection
      of
      the Eligible Unencumbered Properties, and, without double-counting amounts
      under
      clause (b) above, the fees and disbursements of the Agent's counsel in preparing
      the documentation, (d) all, if any, title insurance premiums, appraisal fees,
      engineer’s, inspector’s and surveyor’s fees, (e) the fees, costs, expenses and
      disbursements of the Agent and its Affiliates incurred in connection with the
      syndication and/or participations of the Loans (whether occurring before or
      after the closing hereunder), including, without limitation, reasonable legal
      fees, travel costs, costs of preparing syndication materials and photocopying
      costs, (f) all reasonable expenses (including reasonable attorneys' fees and
      costs, which attorneys may be employees of any Lender or the Agent, and the
      fees
      and costs of engineers, appraisers, surveyors, investment bankers, or other
      experts retained by any Lender or the Agent in connection

     

    
       

      
        
          
          

        

        
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    with
      any
      such enforcement proceedings) incurred by any Lender or the Agent in connection
      with (i) the enforcement of or preservation of rights under any of the Loan
      Documents against the Borrower or any of its Subsidiaries or the Trust or the
      administration thereof after the occurrence and during the continuance of a
      Default or Event of Default (including, without limitation, expenses incurred
      in
      any restructuring and/or “workout” of the Loans), and (ii) any litigation,
      proceeding or dispute whether arising hereunder or otherwise, in any way related
      to any Lender's or the Agent's relationship with the Borrower or any of its
      Subsidiaries or the Trust, (g) all reasonable fees, expenses and disbursements
      of the Agent incurred in connection with UCC searches and filings, UCC
      terminations or mortgage discharges, and the like, and (h) all costs incurred
      by
      the Agent in the future in connection with its inspection of the Eligible
      Unencumbered Properties (or any proposed Eligible Unencumbered Property) or
      with
      the addition of any Eligible Unencumbered Property. The covenants of this §17
      shall survive the repayment of the amounts owing under the Notes and this
      Agreement and the termination of this Agreement and the obligations of the
      Lenders hereunder.

    

    §18.     INDEMNIFICATION.
      The
      Borrower agrees to indemnify and hold harmless the Agent and each of the Lenders
      and the shareholders, directors, agents, officers, subsidiaries and affiliates
      of the Agent and each of the Lenders from and against any and all claims,
      actions and suits, whether groundless or otherwise, and from and against
      any and all liabilities, losses (including amounts, if any, owing to any Lender
      pursuant to §§4.4, 4.5, 4.6 and 4.8), settlement payments, obligations, damages
      and expenses of every nature and character in connection therewith, arising
      out
      of this Agreement or any of the other Loan Documents or the transactions
      contemplated hereby or thereby or which otherwise arise in connection with
      the
      financing, including, without limitation, (a) any actual or proposed use by
      the
      Borrower or any of its Subsidiaries of the proceeds of any of the Loans, (b)
      the
      Borrower or any of its Subsidiaries entering into or performing this Agreement
      or any of the other Loan Documents, or (c) pursuant to §8.16, in each case
      including, without limitation, the reasonable fees and disbursements of counsel
      and allocated costs of internal counsel incurred in connection with any such
      investigation, litigation or other proceeding, provided,
      however,
      that
      the Borrower shall not be obligated under this §18 to indemnify any Person for
      liabilities arising from such Person's own gross negligence or willful
      misconduct, as finally determined by a court of competent jurisdiction. In
      litigation, or the preparation therefor, the Borrower shall be entitled to
      select counsel reasonably acceptable to the Majority Lenders, and the Agent
      (as
      approved by the Majority Lenders) shall be entitled to select their own
      supervisory counsel, and, in addition to the foregoing indemnity, the Borrower
      agrees to pay promptly the reasonable fees and expenses of each such counsel.
      If
      and to the extent that the obligations of the Borrower under this §18 are
      unenforceable for any reason, the Borrower hereby agrees to make the maximum
      contribution to the payment in satisfaction of such obligations which is
      permissible under applicable law. The provisions of this §18 shall survive the
      repayment of the amounts owing under the Notes and this Agreement and the
      termination of this Agreement and the obligations of the Lenders hereunder
      and

     

    
      
        
          
          

        

        
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    shall
      continue in full force and effect as long as the possibility of any such claim,
      action, cause of action or suit exists.

    

    §19.     SURVIVAL
      OF COVENANTS, ETC.
      All
      covenants, agreements, representations and warranties made herein, in the Notes,
      in any of the other Loan Documents or in any documents or other papers delivered
      by or on behalf of the Borrower or any of its Subsidiaries or the Trust pursuant
      hereto shall be deemed to have been relied upon by the Lenders and the Agent,
      notwithstanding any investigation heretofore or hereafter made by any of them,
      and shall survive the making by the Lenders of any of the Loans and the
      issuance, extension or renewal of any Letter of Credit, as herein contemplated,
      and shall continue in full force and effect so long as any Letter of Credit
      or
      any amount due under this Agreement or the Notes or any of the other Loan
      Documents remains outstanding or any Lender has any obligation to make any
      Loans
      or purchase Letter of Credit Participations or the Fronting Bank has any
      obligation to issue, extend or renew Letters of Credit. The indemnification
      obligations of the Borrower provided herein and in the other Loan Documents
      shall survive the full repayment of amounts due and the termination of the
      obligations of the Lenders hereunder and thereunder to the extent provided
      herein and therein. All statements contained in any certificate or other paper
      delivered to any Lender or the Agent at any time by or on behalf of the Borrower
      or any of its Subsidiaries or the Trust pursuant hereto or in connection with
      the transactions contemplated
      hereby shall constitute representations and warranties by the Borrower or such
      Subsidiary or the Trust hereunder.

    

    §20. 
ASSIGNMENT;
      PARTICIPATIONS; ETC.

    

    §20.1.    Conditions
      to Assignment by Lenders.
      Except
      as provided herein, each Lender may assign to one or more Eligible Assignees
      (or
      to any other financial institution approved by the Agent) all or a portion
      (in a
      minimum amount of $5,000,000) of its interests, rights and obligations under
      this Agreement (including all or a portion of its Commitment Percentage and
      Commitment and the same portion of the Loans at the time owing to it, the Notes
      held by it and its participating interest in the risk relating to any Letters
      of
      Credit); provided
      that (a)
      the Agent and, other than during an Event of Default, the Borrower each shall
      have the right to approve any Eligible Assignee (or such other financial
      institution), which approval, in the case of an Eligible Assignee, shall not
      be
      unreasonably withheld or delayed, (b) subject to the provisions of §2.7, each
      Lender shall have at all times an amount of its Commitment of not less than
      $5,000,000 unless otherwise consented to by the Agent and (c) the parties to
      such assignment shall execute and deliver to the Agent, for recording in the
      Register (as hereinafter defined), an assignment and assumption, substantially
      in the form of Exhibit
      D
      hereto
      (an “Assignment and Assumption”), together with any Notes subject to such
      assignment. Upon such execution, delivery, acceptance and recording, from and
      after the effective date specified in each Assignment and Assumption, which
      effective date shall be at least two (2) Business Days after the execution
      thereof unless otherwise agreed or accepted by the Agent (provided
      any
      assignee has assumed the obligation to fund any outstanding

     

    
      
        
          
          

        

        
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    Libor
      Rate Loans), (i) the assignee thereunder shall be a party hereto and, to the
      extent provided in such Assignment and Assumption, have the rights and
      obligations of a Lender hereunder and thereunder, and (ii) the assigning Lender
      shall, to the extent provided in such assignment and upon payment to the Agent
      of the registration fee referred to in §20.3, be released from its obligations
      under this Agreement. Any such Assignment and Assumption shall run to the
      benefit of the Borrower and a copy of any such Assignment and Assumption shall
      be delivered by the Assignor to the Borrower. 

    

    Notwithstanding
      the provisions of subclause (a) of the preceding paragraph, any Lender may,
      without the consent of the Borrower, make an assignment otherwise permitted
      hereunder to (x) another Lender, and (y) an Affiliate of such Lender,
provided
      that
      such Affiliate is an Eligible Assignee (unless otherwise approved by the Agent).
      

    

    §20.2.    Certain
      Representations and Warranties; Limitations; Covenants.
      By
      executing and delivering an Assignment and Assumption, the parties to the
      assignment thereunder confirm to and agree with each other and the other parties
      hereto as follows: (a) other than the representation and warranty that it is
      the
      legal and beneficial owner of the interest being assigned thereby free and
      clear
      of any adverse claim, the assigning Lender makes no representation or warranty
      and assumes no responsibility with respect to any statements, warranties or
      representations made in or in connection with this Agreement
      or the execution, legality, validity, enforceability, genuineness, sufficiency
      or value of this Agreement, the other Loan Documents or any other instrument
      or
      document furnished pursuant hereto; (b) the assigning Lender makes no
      representation or warranty and assumes no responsibility with respect to the
      financial condition of the Borrower and its Subsidiaries or the Trust or any
      other Person primarily or secondarily liable in respect of any of the
      Obligations, or the performance or observance by the Borrower and its
      Subsidiaries or the Trust or any other Person primarily or secondarily liable
      in
      respect of any of the Obligations of any of their obligations under this
      Agreement or any of the other Loan Documents or any other instrument or document
      furnished pursuant hereto or thereto; (c) such assignee confirms that it has
      received a copy of this Agreement, together with copies of the most recent
      financial statements referred to in §7.4 and §8.4 and such other documents and
      information as it has deemed appropriate to make its own credit analysis and
      decision to enter into such Assignment and Assumption; (d) such assignee will,
      independently and without reliance upon the assigning Lender, the Agent 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 this Agreement; (e) such assignee represents and
      warrants that it is an Eligible Assignee (unless otherwise approved by the
      Agent); (f) such assignee appoints and authorizes the Agent to take such action
      as agent on its behalf and to exercise such powers under this Agreement and
      the
      other Loan Documents as are delegated to the Agent by the terms hereof or
      thereof, together with such powers as are reasonably incidental thereto; (g)
      such assignee agrees that it will perform in accordance with their terms all
      of
      the obligations that by the terms of this Agreement are required to be performed
      by it as a Lender; (h) such assignee represents and warrants that it is legally
      authorized to enter into such

     

    
      
        
          
          

        

        
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    Assignment
      and Assumption; and (i) such assignee acknowledges that it has made arrangements
      with the assigning Lender satisfactory to such assignee with respect to its
      pro
      rata share of Letter of Credit Fees in respect of outstanding Letters of
      Credit.

    

    §20.3.    Register.
      The
      Agent shall maintain a copy of each Assignment and Assumption delivered to
      it
      and a register or similar list (the “Register”) for the recordation of the names
      and addresses of the Lenders and the Commitment Percentages of, and principal
      amount of the Loans owing to, the Lenders from time to time. The entries in
      the
      Register shall be conclusive, in the absence of manifest error, and the
      Borrower, the Agent and the Lenders may treat each Person whose name is recorded
      in the Register as a Lender hereunder for all purposes of this Agreement. The
      Register shall be available for inspection by the Borrower and the Lenders
      at
      any reasonable time and from time to time upon reasonable prior notice. Upon
      each such recordation, the assigning Lender agrees to pay to the Agent a
      registration fee in the sum of $3,500 and all legal fees and expenses incurred
      by the Agent in connection with such assignment.

    

    §20.4.    New
      Notes.
      Upon
      its receipt of an Assignment and Assumption executed by the parties to such
      assignment, together with each Note subject to such assignment, the Agent shall
      (a) record the information contained therein in the Register, and (b) give
      prompt notice thereof to the Borrower and the Lenders (other than the assigning
      Lender).  Unless
      done simultaneously with the Assignment and Assumption, within three (3)
      Business Days after receipt of such notice, the Borrower, at its own expense,
      shall execute and deliver to the Agent, in exchange for each surrendered
      Revolving Credit Note, a new Revolving Credit Note to the order of such Eligible
      Assignee in an amount equal to the amount assumed by such Eligible Assignee
      pursuant to such Assignment and Assumption and, if the assigning Lender has
      retained some portion of its obligations hereunder, a new Revolving Credit
      Note
      and other Note, if applicable, to the order of the assigning Lender in an amount
      equal to the amount retained by it hereunder. Such new Notes shall provide
      that
      they are replacements for the surrendered Notes, shall be in an aggregate
      principal amount equal to the aggregate principal amount of the surrendered
      Notes, shall be dated the effective date of such Assignment and Assumption
      and
      shall otherwise be in substantially the form of the assigned Notes. The
      surrendered Notes shall be canceled and returned to the Borrower.

    

    §20.5.    Participations.
      Each
      Lender may sell participations to one or more lending institutions or other
      entities in all or a portion of such Lender's rights and obligations under
      this
      Agreement and the other Loan Documents; provided
      that (a)
      each such participation shall be in an amount of not less than $5,000,000,
      (b)
      any such sale or participation shall not affect the rights and duties of the
      selling Lender hereunder to the Borrower and the Agent and the Lender shall
      continue to exercise all approvals, disapprovals and other functions of a
      Lender, (c) the only rights granted to the participant pursuant to such
      participation arrangements with respect to waivers, amendments or modifications
      of, or approvals under, the Loan Documents shall be the rights to approve
      waivers, amendments or modifications that would reduce the principal of or
      the
      interest

     

    
       

      
        
          
          

        

        
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    rate
      on
      any Loans, extend the term or increase the amount of the Commitment of such
      Lender as it relates to such participant, reduce the amount of any fees to
      which
      such participant is entitled or extend any regularly scheduled payment date
      for
      principal or interest, and (d) no participant shall have the right to grant
      further participations or assign its rights, obligations or interests under
      such
      participation to other Persons without the prior written consent of the Agent,
      which consent shall not be unreasonably withheld.

    

    §20.6.    Pledge
      by Lender.
      Notwithstanding any other provision of this Agreement, any Lender at no cost
      to
      the Borrower may at any time pledge all or any portion of its interest and
      rights under this Agreement (including all or any portion of its Notes) to
      any
      of the twelve Federal Reserve Banks organized under §4 of the Federal Reserve
      Act, 12 U.S.C. §341. No such pledge or the enforcement thereof shall release the
      pledgor Lender from its obligations hereunder or under any of the other Loan
      Documents.

    

    §20.7.    No
      Assignment by Borrower.
      The
      Borrower shall not assign or transfer any of its rights or obligations under
      any
      of the Loan Documents without prior Unanimous Lender Approval.

     

    §20.8.    Disclosure.
      The
      Borrower agrees that, in addition to disclosures made in accordance with
      standard banking practices, any Lender may disclose information obtained by
      such
      Lender pursuant to this Agreement to assignees or participants and potential
      assignees or participants hereunder. 

    

    §20.9.    Syndication.
      The
      Borrower acknowledges that each of the Agent and the Lead Arranger intends,
      and
      shall have the right, by itself or through its Affiliates, to syndicate or
      enter
      into co-lending arrangements with respect to the Loans and the Total Commitment.
      The Lead Arranger, in cooperation with the Borrower, will manage all aspects
      of
      the syndication, including the selection of co-lenders, the determination of
      when Lead Arranger will approach potential co-lenders and the final allocations
      among co-lenders. Each of the Borrower and the Trust agrees to assist Lead
      Arranger actively in achieving a timely syndication that is reasonably
      satisfactory to the Lead Arranger, such assistance to include, among other
      things, (a) direct contact during the syndication between the Borrower’s and the
      Trust’s senior officers, representatives and advisors, on the one hand, and
      prospective co-lenders, on the other hand at such times and places as Lead
      Arranger may reasonably request, (b) providing to Lead Arranger all financial
      and other information with respect to the Borrower and the Trust and the
      transactions contemplated hereby that Lead Arranger may reasonably request,
      including but not limited to financial projections relating to the foregoing,
      and (c) assistance in the preparation of a confidential information memorandum
      and other marketing materials to be used in connection with the syndication,
      and
      the Borrower and the Trust agree to cooperate with the Agent's and the Lead
      Arranger’s and their Affiliate's syndication and/or co-lending efforts, such
      cooperation to include, without limitation, the provision of information
      reasonably requested by potential syndicate members. The Agent shall
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    entitled
      with the consent of Hartman OP (which shall not be unreasonably withheld or
      delayed), to change the structure or terms of the Loans if the Agent determines
      that such changes are advisable in order to ensure a successful syndication
      or
      an optimal credit structure for the Loans, provided
      the
      Total Commitment will not be reduced. In addition, the Borrower and the Trust
      agree that, prior to and during the syndication of the Total Commitment (which
      for purposes hereof shall be deemed to be completed 90 days after the Closing
      Date), the Borrower nor the Trust will permit any offering, placement or
      arrangement of any competing issues of debt securities or commercial bank
      facilities of the Borrower, the Trust and any of their Subsidiaries, unless
      approved by the Agent.

    

    §21.     NOTICES,
      ETC.
      Except
      as otherwise expressly provided in this Agreement, all notices and other
      communications made or required to be given pursuant to this Agreement or the
      Notes shall be in writing and shall be delivered in hand, mailed by United
      States registered or certified first class mail, postage prepaid, sent by
      overnight courier, or sent by facsimile and confirmed by delivery via courier
      or
      postal service, addressed as follows:

    

    (a)    if
      to the
      Borrower or the Trust, at 1450 West Sam Houston Parkway North, Suite 100,
      Houston TX 77043, attention Allen R. Hartman, (facsimile:  713-
      973-8912),
      with a copy to General Counsel, Hartman Management L.P., 1450 West Sam Houston
      Parkway North, Suite 100, Houston TX 77043, or to such other address for notice
      as the Borrower or the Trust shall have last furnished in writing to the
      Agent;

    

    (b)    if
      to the
      Agent, to KeyBank National Association, 1200 Abernathy Road NE, Suite 1550,
      Atlanta, Georgia 30328, attention Meredith Hall, Vice President (facsimile:
      (770) 510-2195), with a copy to Douglas Novitch, KeyBank National Association,
      127 Public Square, Cleveland, OH 44114, or such other address for notice as
      the
      Agent shall have last furnished in writing to the Borrower, with a copy to
      Pamela M. MacKenzie, Esq., Goulston & Storrs, 400 Atlantic Avenue, Boston,
      Massachusetts 02110-3333 (facsimile: (617)-574-7615), or at such other address
      for notice as the Agent shall last have furnished in writing to the Person
      giving the notice; and

    

    (c)    if
      to any
      Lender, at such Lender's address set forth on Schedule
      2
      hereto,
      or such other address for notice as such Lender shall have last furnished in
      writing
      to the Person giving the notice.

    

    Any
      such
      notice or demand shall be deemed to have been duly given or made and to have
      become effective (i) if delivered by hand, overnight courier, or facsimile
      to
      the party to which it is directed, at the time of the receipt thereof by such
      party or the sending of such facsimile and (ii) if sent by registered or
      certified first-class mail, postage prepaid, on the third Business Day following
      the mailing thereof.

    

    §22.     HARTMAN
      OP AS AGENT FOR THE BORROWER.
      The
      Borrower (other than Hartman OP) hereby appoints Hartman OP as its agent with
      respect to the receiving and giving of any notices, requests, instructions,
      reports, certificates (including, without limitation, compliance certificates),
      schedules, revisions, financial statements

     

    
       

      
        
          
          

        

        
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    or
      any
      other written or oral communications hereunder. The Agent and each Lender is
      hereby entitled to rely on any communications given or transmitted by Hartman
      OP
      as if such communication were given or transmitted by each and every Borrower;
      provided however,
      that
      any communication given or transmitted by any Borrower other than Hartman OP
      shall be binding with respect to such Borrower. Any communication given or
      transmitted by the Agent or any Lender to Hartman OP shall be deemed given
      and
      transmitted to each and every Borrower.

    

    §23.     GOVERNING
      LAW; CONSENT TO JURISDICTION AND SERVICE.
      THIS
      AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY
      PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF OHIO AND SHALL
      FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
      SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH
      OF THE BORROWER AND ITS SUBSIDIARIES AGREES THAT ANY SUIT FOR THE ENFORCEMENT
      OF
      THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
      OF
      THE
      STATE OF OHIO, THE STATE OF GEORGIA OR ANY OTHER COURT HAVING JURISDICTION
      OVER
      THE BORROWER AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS
      AND
      THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER OR ITS
      SUBSIDIARIES BY MAIL AT THE ADDRESS SPECIFIED IN §21. THE BORROWER AND ITS
      SUBSIDIARIES HEREBY WAIVE ANY OBJECTION THAT ANY OF THEM MAY NOW OR HEREAFTER
      HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
      BROUGHT IN AN INCONVENIENT COURT.

    

    §24.     HEADINGS.
      The
      captions in this Agreement are for convenience of reference only and shall
      not
      define or limit the provisions hereof.

    

    §25.     COUNTERPARTS.
      This
      Agreement and any amendment hereof may be executed in several counterparts
      and
      by each party on a separate counterpart, each of which when so executed and
      delivered shall be an original, and all of which together shall constitute
      one
      instrument. In proving this Agreement it shall not be necessary to produce
      or
      account for more than one such counterpart signed by the party against whom
      enforcement is sought.

    

    §26.     ENTIRE
      AGREEMENT, ETC.
      The
      Loan Documents and any other documents executed in connection herewith or
      therewith express the entire understanding of the parties with respect to the
      transactions contemplated hereby. Neither this Agreement nor any term hereof
      may
      be changed, waived, discharged or terminated, except as provided in
§28.

     

    
       

      
        
          
          

        

        
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    §27.     WAIVER
      OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
      EXCEPT
      TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES
      HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION
      OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE
      NOTES
      OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
      THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE
      EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES HEREBY
      WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
      REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
      CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
      DAMAGES. EACH OF THE BORROWER AND ITS SUBSIDIARIES (A) CERTIFIES THAT NO
      REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT
      OF
      LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT
      THE
      AGENT AND
      THE
      LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
      DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
      CERTIFICATIONS CONTAINED HEREIN.

    

    §28.     CONSENTS,
      AMENDMENTS, WAIVERS, ETC.
      Except
      as otherwise expressly provided in this Agreement, any consent or approval
      required or permitted by this Agreement may be given, and any term of this
      Agreement or of any of the other Loan Documents may be amended, and the
      performance or observance by the Borrower or the Trust or any of their
      respective Subsidiaries of any terms of this Agreement or the other Loan
      Documents or the continuance of any Default or Event of Default may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively) with, but only with, the written consent of the Majority Lenders.
      

    

    Notwithstanding
      the foregoing, Unanimous Lender Approval shall be required for any amendment,
      modification or waiver of this Agreement that:

    

    (i)    reduces
      or forgives any principal of any unpaid Loan or any interest thereon (including
      any general waiver of interest “breakage” costs) or any fees due any Lender
      hereunder, or permits any prepayment not otherwise permitted hereunder;
      or

    

    (ii)    changes
      the unpaid principal amount of any Loan, reduces the rate of interest applicable
      to any Loan, or reduces any fee payable to the Lenders hereunder;
      or

     

     

    
       

      
        
          
          

        

        
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    (iii)    changes
      the date fixed for any payment of principal of or interest on any Loan
      (including, without limitation, any extension of the Maturity Date) or any
      fees
      payable hereunder (including, without limitation, the waiver of any monetary
      Event of Default); or

    

    (iv)    changes
      the amount of any Lender's Commitment (other than pursuant to an assignment
      permitted under §20.1) or increases the amount of the Total Commitment except as
      permitted hereunder; or

    

    (v)    modifies
      any provision herein or in any other Loan Document which by the terms thereof
      expressly requires Unanimous Lender Approval; or

    

    (vi)    changes
      the definitions of Majority Lenders or Unanimous Lender Approval;
      or

     

    (vii)    releases
      the Guaranty.

    

    No
      waiver
      shall extend to or affect any obligation not expressly waived or impair any
      right consequent thereon. No course of dealing or delay or omission on the
      part
      of the Agent or the Lenders or any Lender in exercising any right shall operate
      as a waiver thereof or otherwise be prejudicial to such right or any other
      rights of the Agent or the Lenders. No notice to or demand upon the Borrower
      shall entitle the Borrower to other or further notice or demand in similar
      or
      other circumstances.

    

    Notwithstanding
      the foregoing, in the event that the Borrower requests any consent, waiver
      or
      approval under this Agreement or any other Loan Document, or an amendment or
      modification hereof or thereof, and one or more Lenders determine not to consent
      or agree to such consent, waiver, approval, amendment or modification, then
      the
      Lender then acting as Agent hereunder shall have the right to purchase the
      Commitment of such non-consenting Lender(s) at a purchase price equal to the
      then outstanding amount of principal, interest and fees then owing to such
      Lender(s) by the Borrower hereunder, and such non-consenting Lender(s) shall
      immediately upon request, sell and assign its Commitment and all of its other
      right, title and interest in the Loans and other Obligations to the Lender
      then
      acting as Agent pursuant to an Assignment and Assumption (provided that the
      selling Lender(s) shall not be responsible to pay any assignment fee in
      connection therewith).

    

    §29.     SEVERABILITY.
      The
      provisions of this Agreement are severable, and if any one clause or provision
      hereof shall be held invalid or unenforceable in whole or in part in any
      jurisdiction, then such invalidity or unenforceability shall affect only such
      clause or provision, or part thereof, in such jurisdiction, and shall not in
      any
      manner affect such clause or provision in any other jurisdiction, or any other
      clause or provision of this Agreement in any jurisdiction.

     

    
       

      
        
          
          

        

        
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    §30.     INTEREST
      RATE LIMITATION.
      Notwithstanding anything herein to the contrary, if at any time the interest
      rate applicable to any Loan, together with all fees, charges and other amounts
      which are treated as interest on such Loan under applicable law (collectively,
      the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which
      may be contracted for, charged, taken, received or reserved by the Lender
      holding such Loan in accordance with applicable law, the rate of interest
      payable in respect of such Loan hereunder, together with all Charges payable
      in
      respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
      the interest and Charges that would have been payable in respect of such Loan
      but were not payable as a result of the operation of this §30 shall be cumulated
      and the interest and Charges payable to such Lender in respect of other Loans
      or
      periods shall be increased (but not above the Maximum Rate therefor) until
      such
      cumulated amount, together with interest thereon at the Federal Funds Rate
      to
      the date of repayment, shall have been received by such Lender.

     

      

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    [Signature
      pages to Revolving Credit Agreement]

    

    IN
      WITNESS WHEREOF, the undersigned have duly executed this Agreement as a sealed
      instrument as of the date first set forth above.

    

    
      	 	
                          KEYBANK
                NATIONAL ASSOCIATION,

                          Individually
                and as Administrative Agent

               

               

                          By: 
                /s/ Meredith C.
                Hall                           
                

                                Name: 
                Meredith C. Hall

                                Title: 
                Vice President

               

            
	 	
                          UNION
                BANK OF CALIFORNIA, N.A.,

                          Individually
                and as Documentation Agent

               

               

                          By:  
                /s/ Patrick
                Trowbridge                      
                

                               
                Name:  Patrick Trowbridge

                               
                Title:  Vice President

               

                          COMPASS
                BANK 

               

               

                          By:  /s/
                Lori Y.
                Litow                                 
                

                               
                Name:  Lori Y. Litow

                               
                Title:  Vice President

               

                          COMERICA
                BANK

               

               

                          By:
                /s/ Charles
                Weddell                             

                             
                  Name:  Charles Weddell

                               
                Title:  Vice President

               

                          COMMERCEBANK,
                N.A.

               

               

                          By:  
                /s/ Francisco
                Rivero                          
                

                               
                Name: Francisco Rivero

                               
                Title:  Senior Vice President

               

              
                            By:  
                  /s/ Jamie M.
                  Elmore                          
                  

                                 
                  Name: Jamie M. Elmore

                                 
                  Title:  Vice
                  President

              

            

    

    

     

    
      
        
        

      

      
        91

        
          

        

      

      
        
        

      

    

     

    
 

    
      	 	
                          HARTMAN
                REIT OPERATING PARTNERSHIP, L.P.

            
	 	 
	 	
              By:
                Hartman Commercial Properties REIT,

            
	 	
                         
                its sole general partner

            
	 	 
	 	
                                By: 
/s/
                Allen R.
                Hartman                                 
                    

            
	 	
                                                                            
                Allen R. Hartman, President

            
	 	 

    

    

    
      	 	
              HARTMAN
                REIT OPERATING PARTNERSHIP III LP 

            
	 	 
	 	
              By:
                Hartman REIT Operating Partnership III GP LLC, a Texas 

               
                limited liability company, its sole general partner

               

            
	 	
                    
                By: Hartman REIT Operating Partnership, L.P., a  

                        
                Delaware
                limited partnership, its sole member

               

            
	 	
                           
                By: Hartman Commercial Properties REIT, a Maryland 

                                  
                real estate investment trust, its sole general partner

               

                           
                By:  
                /s/ Allen R.
                Hartman                                                     
                

                                  
                Allen
                R. Hartman, President

            
	 	 

    

    

    (Signatures
      continued on next page)

     

    
 

    
      
        
        

      

      
        92

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
              	
                HARTMAN
                  REIT OPERATING PARTNERSHIP III GP 

                LLC,
                  a Texas limited liability
                  company, Guarantor

              
	 	 
	 	
                By:
                  Hartman REIT Operating Partnership, LP., a Delaware 
                  

                      
                  limited partnership, its sole member

                 

              
	 	
                      
                  By: Hartman Commercial Properties REIT, a Maryland 
                                real
                    estate investment trust, its sole general partner

                   

                        
By: 
                    /s/ Allen R.
                    Hartman                                 
                                
                    
                                     
                      Allen
                      R. Hartman, President

                  

                

                 

              

      

      
        	
              	
                HARTMAN
                  REIT OPERATING PARTNERSHIP III LP 

                LTD,
                  a
                  Texas limited partnership, Guarantor

              
	 	 
	 	
                By:
                  Hartman Reit Operating Partnership III GP LLC, a Texas 

                 
                  limited liability company, its sole general partner

                 

              
	 	
                      
                  By: Hartman Reit Operating Partnership, L.P., a Delaware
                  

                             
                  limited partnership, its sole member

                 

              
	 	
                             
                  By: Hartman Commercial Properties REIT, a 

                                    
                  Maryland Real
                  Estate investment trust, its sole 

                                   
                  general partner

                 

                                   
                  By:  
                  /s/ Allen R.
                  Hartman                                         
                  

                                        
                   Allen
                  R. Hartman, President

              
	 	 

      

    

     

     

    ACCEPTED
      AND AGREED, as to each of the provisions

    contained
      in the foregoing agreement applicable to it:

    

    HARTMAN
      MANAGEMENT, L.P.

    

    By:
      Hartman Property Management 

    Holdings
      LLC, its sole general partner

    

    By:  
      /s/ Allen R.
      Hartman                                    
      

                             
      Allen
      R.
      Hartman, its sole member

                             
      and
      manager

    
 

    (Signatures
      continued on next page)

    

    
      
        
        

      

      
        93

        
          

        

      

      
        
        

      

    

    

    HARTMAN
      PROPERTY MANAGEMENT

    HOLDINGS
      LLC

    

    By:  
      /s/ Allen R.
      Hartman                                 
      

                             
      Allen
      R.
      Hartman, its sole member

                             
      and
      manager

    

     

     

     

     

     

     

    94Revolving Credit Note

    
      
        

      

    

    Exhibit
      10.14

    
      [EXHIBIT
        A]

      

      REVOLVING
        CREDIT NOTE

      

       

      
        	[$______________]	
                Date:
                  March 11, 2005

              

      

            

      

      FOR
        VALUE RECEIVED,
        the undersigned Hartman REIT Operating Partnership, L.P., a Delaware limited
        partnership, Hartman REIT Operating Partnership III LP, a Texas limited
        partnership and each of the other undersigned parties and other parties who
        are
        or from time to time become a Borrower under (and as defined in) the Revolving
        Credit Agreement referred to (and defined) below (hereinafter, together with
        their respective successors in title and assigns, collectively called the
        “Borrower”), by this promissory note (hereinafter, called “this Note”),
        absolutely and unconditionally, jointly and severally promises to pay to
        the
        order of [_______________], individually in its capacity as a Lender under
        the
        Revolving Credit Agreement (hereinafter, together with its successors in
        title
        and assigns, called the “Bank”), the principal sum of [___________ Dollars
        ($______________)], or so much thereof as shall have been advanced by the
        Bank
        to the Borrower by way of Loans and Letters of Credit under (and as defined
        in)
        the Revolving Credit Agreement and shall remain outstanding, such payment
        to be
        made as hereinafter provided, and to pay interest on the principal sum
        outstanding hereunder from time to time from and after the date hereof until
        the
        said principal sum or the unpaid portion thereof shall have become due and
        payable as hereinafter provided.

      

      Capitalized
        terms used
        herein without definition shall have the meanings set forth in the Revolving
        Credit Agreement.

      

      The
        unpaid principal
        (not at the time overdue) under this Note shall bear interest at the rate
        or
        rates from time to time in effect under the Revolving Credit Agreement. Accrued
        interest on the unpaid principal under this Note shall be payable on the
        dates
        specified in the Revolving Credit Agreement.

      

      On
        the Maturity Date
        there shall become absolutely due and payable by the Borrower hereunder,
        and the
        Borrower hereby jointly and severally promises to pay to the Bank, the balance
        (if any) of the principal hereof then remaining unpaid, all of the unpaid
        interest accrued hereon and all (if any) other amounts payable on or in respect
        of this Note or the indebtedness evidenced hereby or otherwise due under
        or in
        connection with the Revolving Credit Agreement.

      

      Each
        overdue amount
        (whether of principal, interest or otherwise) payable hereunder shall (to
        the
        extent permitted by applicable law) bear interest at the rates and on the
        terms
        provided in the Revolving Credit Agreement. The unpaid interest accrued on
        each
        overdue amount in accordance with the foregoing terms of this paragraph shall
        become and be absolutely due and payable by the Borrower to Bank on demand
        by
        the Agent. Interest on each overdue amount will continue to accrue as provided
        by the foregoing terms of this paragraph, and will (to the extent permitted
        by
        applicable law) be compounded daily until the obligations of the Borrower
        in
        respect of the payment of such overdue amount shall be discharged (whether
        before or after judgment).

       

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

       

      

      Each
        payment of
        principal, interest or other sum payable on or in respect of this Note or
        the
        indebtedness evidenced hereby shall be made by the Borrower directly to the
        Agent in Dollars, for the account of the Bank, at the Agent’s Head Office, on
        the due date of such payment, and in immediately available and freely
        transferable funds. All payments on or in respect of this Note or the
        indebtedness evidenced hereby shall be made without set-off or counterclaim
        and
        free and clear of and without any deductions, withholdings, restrictions
        or
        conditions of any nature.

      

      This
        Note is made and
        delivered by the Borrower to the Bank pursuant to that certain Revolving
        Credit
        Agreement dated as of March 11, 2005 among (i) the Borrower, (ii) the Lenders
        party thereto from time to time (including the Bank), (iii) the Agent and
        (iv)
        KeyBanc Capital Markets, as Lead Arranger and Book Manager (hereinafter,
        as
        originally executed and as may be amended, varied, supplemented, and/or restated
        from time to time, called the “Revolving Credit Agreement”). This Note evidences
        the obligations of the Borrower (a) to repay the principal amount of the
        Bank’s
        Commitment Percentage of the Revolving Credit Loans made by the Bank to the
        Borrower pursuant to the Revolving Credit Agreement; (b) to pay interest,
        as
        herein provided, on the principal amount hereof remaining unpaid from time
        to
        time; and (c) to pay other amounts (including all Obligations) which may
        become
        due and payable hereunder or thereunder. The payment of the principal of
        and the
        interest on this Note and the payment of all Obligations have been guaranteed.
        Reference is hereby made to the Revolving Credit Agreement (including the
        Schedules and Exhibits annexed thereto and the Guaranty) for a complete
        statement of the terms thereof.

      

      The
        Borrower has the
        right to prepay the unpaid principal of this Note in full or in part upon
        the
        terms contained in the Revolving Credit Agreement. The Borrower has an
        obligation to prepay principal of this Note from time to time if and to the
        extent required under, and upon the terms contained in, the Revolving Credit
        Agreement. Any partial payment of the indebtedness evidenced by this Note
        shall
        be applied in accordance with the terms of the Revolving Credit Agreement.

      

      Pursuant
        to and upon
        the terms contained in Section 14 of the Revolving Credit Agreement, the
        entire
        unpaid principal of this Note, all of the interest accrued on the unpaid
        principal of this Note and all (if any) other amounts payable on or in respect
        of this Note or the indebtedness evidenced hereby may be declared to be
        immediately due and payable, whereupon the entire unpaid principal of this
        Note,
        all of the interest accrued on the unpaid principal of this Note and all
        (if
        any) other amounts payable on or in respect of this Note or the indebtedness
        evidenced hereby shall (if not already due and payable) forthwith become
        and be
        due and payable to the Bank without presentment, demand, protest or any other
        formalities of any kind, all of which are hereby expressly and irrevocably
        waived by the Borrower.

       

      
        
          All
            computations of interest payable as provided in this Note shall be made
            by the
            Agent on the basis set forth therefor in the Revolving Credit Agreement.
            The
            interest rate in effect from time to time shall be determined in accordance
            with
            the terms of the Revolving Credit Agreement.

        

      

       

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

       

      Should
        all or any part
        of the indebtedness represented by this Note be collected by action at law,
        or
        in bankruptcy, insolvency, receivership or other court proceedings, or should
        this Note be placed in the hands of attorneys for collection after default,
        the
        Borrower hereby promises to pay to the holder of this Note, upon demand by
        the
        holder hereof at any time, in addition to principal, interest and all (if
        any)
        other amounts payable on or in respect of this Note or the indebtedness
        evidenced hereby, all court costs and attorneys’ fees and all other collection
        charges and expenses reasonably incurred or sustained by the holder of this
        Note.

      

      The
        Borrower hereby
        irrevocably waives notice of acceptance, presentment, notice of nonpayment,
        protest, notice of protest, suit and all other conditions precedent in
        connection with the delivery, acceptance, collection and/or enforcement of
        this
        Note. The Borrower hereby absolutely and irrevocably consents and submits
        to the
        jurisdiction of the courts of the State of Ohio and the State of Georgia,
        and
        any other court having jurisdiction over the Borrower, in connection with
        any
        actions or proceedings brought against the Borrower by the holder hereof
        arising
        out of or relating to this Note. This Note may be executed in any number
        of
        counterparts and by each party on a separate counterpart, each of which when
        so
        executed and delivered shall be an original, and all of which together shall
        constitute one instrument.

      

      This
        Note is intended
        to take effect as a sealed instrument. This Note and the obligations of the
        Borrower hereunder shall be governed by and interpreted and determined in
        accordance with the laws of the State of Ohio.

      

      Each
        Borrower shall be
        jointly and severally liable for the full amount owing under this Note.

      

      

      [Remainder
        of page intentionally left blank]

      

       

       

      
 

      
      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

          
          

        

      

      

      [Signature
        page to Revolving Credit Note]

      

      

      IN
        WITNESS WHEREOF,
        this REVOLVING CREDIT NOTE has been duly executed by the undersigned on the
        day
        and in the year first above written.

      

      

      
        	 	
                HARTMAN
                  REIT OPERATING PARTNERSHIP, L.P.

              
	 	 
	 	
                By:
                  Hartman Commercial Properties REIT, a Maryland real 

              
	 	
                estate
                  investment trust, its sole general partner

              
	 	 
	 	
                By:
                  _____________________     

              
	 	
                Name:

              
	 	
                Title:

              

      

      

      
        
          	 	
                  HARTMAN
                    REIT OPERATING PARTNERSHIP III LP

                
	 	 
	 	
                  By:
                    Hartman REIT Operating Partnership III GP LLC, a Texas 

                  limited
                    liability company, its sole general partner

                
	 	 
	 	
                  By:
                    Hartman REIT Operating Partnership, L.P., a Delaware 

                  limited
                    partnership, its sole member

                   

                
	 	
                  By:
                    Hartman Commercial Properties REIT, a Maryland 

                  real
                    estate investment trust, its sole general partner

                
	 	 
	 	 
	 	
                  By:_________________________________     

                
	 	
                  Allen
                    R. Hartman, President

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