Document:

exv10w4

 

Exhibit 10.4

 

CREDIT AGREEMENT

dated as of

August 1, 2006

among

HINES REIT 3100 MCKINNON STREET LP,

HINES REIT 1900/2000 ALAMEDA DE LAS PULGAS LLC,

HINES REIT 321 NORTH CLARK STREET LLC and

THE BORROWING BASE SUBSIDIARIES PARTY HERETO FROM TIME TO TIME,

as Borrowers,

HINES REIT PROPERTIES, L.P.,

as Sponsor,

HSH NORDBANK AG, NEW YORK BRANCH

and

THE LENDERS PARTY HERETO FROM TIME TO TIME,

as Lenders,

and

HSH NORDBANK AG, NEW YORK BRANCH,

as Agent and Arranger

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 
	 	Page
	ARTICLE I Definitions
	 	 	1	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Terms Generally
	 	 	30	 
	SECTION 1.03. Accounting Terms; GAAP
	 	 	30	 
	 
	 	 	 	 
	ARTICLE II The Credits
	 	 	31	 
	SECTION 2.01. Commitments
	 	 	31	 
	SECTION 2.02. Loans and Borrowings
	 	 	31	 
	SECTION 2.03. Requests for Borrowings
	 	 	31	 
	SECTION 2.04. Funding of Borrowings
	 	 	32	 
	SECTION 2.05. LIBOR Rate Periods
	 	 	33	 
	SECTION 2.06. Termination and Reduction of Commitments
	 	 	33	 
	SECTION 2.07. Additional Interest
	 	 	33	 
	SECTION 2.08. Evidence of Debt
	 	 	34	 
	SECTION 2.09. Prepayment of Loans; Certain Other Payments
	 	 	35	 
	SECTION 2.10. Fees
	 	 	37	 
	SECTION 2.11. Interest
	 	 	38	 
	SECTION 2.12. Unavailability of LIBOR
	 	 	38	 
	SECTION 2.13. Increased Costs and Capital Adequacy
	 	 	39	 
	SECTION 2.14. Joint and Several Liability of Borrowers
	 	 	40	 
	SECTION 2.15. No Withholdings
	 	 	42	 
	SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs
	 	 	43	 
	SECTION 2.17. Cash Management Accounts
	 	 	44	 
	SECTION 2.18. Interest Rate Protection Agreement
	 	 	47	 
	SECTION 2.19. Tenant Security Deposits
	 	 	51	 
	SECTION 2.20. Additional Collateral
	 	 	52	 
	SECTION 2.21. Lease Termination Account
	 	 	54	 
	SECTION 2.22. Substitution of Initial Limited Payment Guaranty
	 	 	55	 
	 
	 	 	 	 
	ARTICLE III Representations and Warranties
	 	 	58	 
	SECTION 3.01. Existence and Power
	 	 	58	 
	SECTION 3.02. Authorization; No Contravention
	 	 	58	 
	SECTION 3.03. Binding Effect
	 	 	59	 
	SECTION 3.04. Financial Information
	 	 	59	 
	SECTION 3.05. Litigation
	 	 	59	 
	SECTION 3.06. Compliance with Laws and Agreements
	 	 	60	 
	SECTION 3.07. Use of Proceeds
	 	 	60	 
	SECTION 3.08. Compliance with ERISA
	 	 	60	 
	SECTION 3.09. Taxes
	 	 	60	 
	SECTION 3.10. Properties
	 	 	61	 
	SECTION 3.11. Defaults
	 	 	63	 
	SECTION 3.12. Offsets and Defenses
	 	 	63	 

i

 

	 	 	 	 	 
	 
	 	Page
	SECTION 3.13. Holding Company Status
	 	 	63	 
	SECTION 3.14. Full Disclosure
	 	 	64	 
	SECTION 3.15. Security Interest and Liens
	 	 	64	 
	SECTION 3.16. Liens on Ownership Interests
	 	 	64	 
	SECTION 3.17. Solvency
	 	 	64	 
	SECTION 3.18. Space Lease
	 	 	65	 
	SECTION 3.19. Federal Reserve Regulations
	 	 	66	 
	SECTION 3.20. Foreign Person
	 	 	66	 
	SECTION 3.21. Control Person
	 	 	66	 
	SECTION 3.22. Name; Principal Place of Business
	 	 	67	 
	SECTION 3.23. Brokerage
	 	 	67	 
	SECTION 3.24. Purpose of Borrower
	 	 	67	 
	SECTION 3.25. Organizational and Operational Restrictions
	 	 	67	 
	SECTION 3.26. Usury
	 	 	67	 
	SECTION 3.27. Patriot Act
	 	 	68	 
	SECTION 3.28. Conditions to Closing
	 	 	68	 
	SECTION 3.29. REAs
	 	 	68	 
	SECTION 3.30. Ground Lease
	 	 	69	 
	 
	 	 	 	 
	ARTICLE IV Conditions to Funding; Security and Collateral
	 	 	69	 
	SECTION 4.01. Conditions to Closing
	 	 	69	 
	SECTION 4.02. Each Borrowing after Initial Loans
	 	 	71	 
	SECTION 4.03. Addition of Properties as Borrowing Base Properties
	 	 	74	 
	SECTION 4.04. Removal of Borrowing Base Properties
	 	 	81	 
	 
	 	 	 	 
	ARTICLE V Affirmative Covenants
	 	 	84	 
	SECTION 5.01. Financial Reporting
	 	 	84	 
	SECTION 5.02. Payment of Obligations
	 	 	86	 
	SECTION 5.03. Maintenance of Property
	 	 	87	 
	SECTION 5.04. Compliance with Laws and Documents
	 	 	87	 
	SECTION 5.05. Inspection of Property, Books and Records
	 	 	88	 
	SECTION 5.06. Use of Proceeds
	 	 	88	 
	SECTION 5.07. Environmental Matters
	 	 	88	 
	SECTION 5.08. Taxes; Certain Liens
	 	 	89	 
	SECTION 5.09. Security Interests and Defense of Title
	 	 	89	 
	SECTION 5.10. REIT Status
	 	 	90	 
	SECTION 5.11. Litigation and Other Notices
	 	 	90	 
	SECTION 5.12. Additional Borrowers
	 	 	92	 
	SECTION 5.13. Further Assurances
	 	 	92	 
	SECTION 5.14. Appraisals
	 	 	92	 
	SECTION 5.15. Utilities
	 	 	93	 
	SECTION 5.16. Maintenance of Existence
	 	 	93	 
	SECTION 5.17. Patriot Act Compliance
	 	 	93	 

ii

 

	 	 	 	 	 
	 
	 	Page
	SECTION 5.18. Estoppel Certificates
	 	 	93	 
	SECTION 5.19. Required Insurance
	 	 	94	 
	SECTION 5.20. Damage or Destruction
	 	 	95	 
	SECTION 5.21. Taking of the Mortgaged Property
	 	 	100	 
	SECTION 5.22. Application of Proceeds of Casualty or Taking
to Loan; Loan Repayment
	 	 	102	 
	SECTION 5.23. Debt Service Coverage Ratio
	 	 	102	 
	SECTION 5.24. Borrowing Base Loan Amount
	 	 	103	 
	SECTION
5.25. Post-Closing Obligations
	 	 	103	 
	SECTION 5.26. Leasing
	 	 	104	 
	SECTION 5.27. REAs
	 	 	105	 
	SECTION 5.28. Ground Leases
	 	 	105	 
	 
	 	 	 	 
	ARTICLE VI Negative Covenants
	 	 	107	 
	SECTION 6.01. Indebtedness
	 	 	107	 
	SECTION 6.02. Liens
	 	 	108	 
	SECTION 6.03. Fundamental Changes; Certain Transfers of
Collateral and Equity Interest
	 	 	108	 
	SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions
	 	 	109	 
	SECTION 6.05. Restricted Payments
	 	 	109	 
	SECTION 6.06. Interest Rate Protection Agreements
	 	 	109	 
	SECTION 6.07. Transactions with Affiliates
	 	 	109	 
	SECTION 6.08. Modification of Documents; Management
Agreements; New Accounts
	 	 	110	 
	SECTION 6.09. Negative Pledges, etc.
	 	 	110	 
	SECTION 6.10. Intentionally Omitted
	 	 	110	 
	SECTION 6.11. Sole Purpose of Borrowing Base Subsidiaries
	 	 	110	 
	SECTION 6.12. Changes in Zoning
	 	 	111	 
	SECTION 6.13. ERISA
	 	 	111	 
	SECTION 6.14. Adverse Contracts
	 	 	111	 
	SECTION 6.15. Alterations
	 	 	111	 
	SECTION 6.16. KeyBank Revolving Credit Facility
	 	 	111	 
	 
	 	 	 	 
	ARTICLE VII Events of Default
	 	 	112	 
	 
	 	 	 	 
	ARTICLE VIII Agent and The Lenders
	 	 	115	 
	SECTION 8.01. Appointment of Agent
	 	 	115	 
	SECTION 8.02. Agent’s Rights as a Lender
	 	 	115	 
	SECTION 8.03. Agent Obligations
	 	 	115	 
	SECTION 8.04. Right to Rely
	 	 	116	 
	SECTION
8.05. Appointment of Sub-Agents
	 	 	116	 
	SECTION 8.06. Release of Collateral
	 	 	116	 
	SECTION 8.07. Perfection of Lien by Possession; Appointment
of Lenders
	 	 	117	 

iii

 

	 	 	 	 	 
	 
	 	Page
	SECTION 8.08. Bankruptcy of Any Borrower
	 	 	117	 
	SECTION 8.09. Resignation; Successor Agent
	 	 	117	 
	SECTION 8.10. Lenders’ Independent Analysis
	 	 	118	 
	SECTION 8.11. Defaults by Any Lender
	 	 	118	 
	 
	 	 	 	 
	ARTICLE IX Miscellaneous
	 	 	120	 
	SECTION 9.01. Notices
	 	 	120	 
	SECTION 9.02. Each Borrower as Agent for Each Other
	 	 	122	 
	SECTION 9.03. Waivers; Amendments
	 	 	123	 
	SECTION 9.04. Expenses; Indemnity; Damage Waiver
	 	 	124	 
	SECTION 9.05. Successors and Assigns
	 	 	125	 
	SECTION 9.06. Survival
	 	 	127	 
	SECTION 9.07. Counterparts; Integration; Effectiveness
	 	 	128	 
	SECTION 9.08. Severability
	 	 	128	 
	SECTION 9.09. Right of Setoff
	 	 	128	 
	SECTION 9.10. Governing Law; Jurisdiction; Consent to
Service of Process
	 	 	128	 
	SECTION 9.11. Waiver of Jury Trial
	 	 	129	 
	SECTION 9.12. Headings
	 	 	129	 
	SECTION 9.13. Confidentiality
	 	 	130	 
	SECTION 9.14. Interest Rate Limitation
	 	 	130	 
	SECTION 9.15. Determinations and Consent of Agent
	 	 	131	 
	SECTION 9.16. No Joint Venture
	 	 	131	 
	SECTION 9.17. Limitation on Liability
	 	 	131	 

iv

 

EXHIBITS

	 	 	 	 	 
	Exhibit A-1

	 	—
	 	Legal Description of Alameda Property
	Exhibit A-2

	 	—
	 	Legal Description of McKinnon Property
	Exhibit A-3

	 	—
	 	Legal Description of North Clark Property
	Exhibit B

	 	—
	 	List of Letters of Credit
	Exhibit C-1

	 	—
	 	Form of Account Agreement (with notice)
	Exhibit C-2

	 	—
	 	Form of Account Agreement (without notice)
	Exhibit D

	 	—
	 	Form of Borrowing Base Certificate
	Exhibit E

	 	—
	 	Form of Borrowing Base Property Compliance Certificate
	Exhibit F

	 	—
	 	Commitments
	Exhibit G

	 	—
	 	Disclosed Matters as to Litigation
	Exhibit H

	 	—
	 	Acceptable Major Metropolitan Market
	Exhibit I

	 	—
	 	Form of Estoppel Certificate
	Exhibit J

	 	—
	 	Form of Manager’s Cooperation Agreement
	Exhibit K

	 	—
	 	Form of Mortgage/Deed of Trust/Deed to Secure Debt
	Exhibit L

	 	—
	 	Form of Assignment of Leases and Rents
	Exhibit M

	 	—
	 	Form of Assignment and Assumption
	Exhibit N

	 	—
	 	Schedule of Material Operating Agreements
	Exhibit O

	 	—
	 	Accounts
	Exhibit P

	 	—
	 	Contractual Restrictions regarding Liens
	Exhibit Q

	 	—
	 	Schedule of Registered Trademarks
	Exhibit R

	 	—
	 	Rent Roll
	Exhibit S

	 	—
	 	Form of SNDA
	Exhibit T

	 	—
	 	Insurance Policies
	Exhibit U

	 	—
	 	SPE Covenants
	Exhibit V

	 	—
	 	Exceptions to Representations
	Exhibit W

	 	—
	 	Assignment of Leases of Rents and Mortgages relating to the Initial Borrowing Base Properties
	Exhibit X

	 	—
	 	Form of Westin REA Estoppel

v

 

     CREDIT AGREEMENT dated as of August 1, 2006 (this “Agreement”), among HINES REIT 3100
MCKINNON STREET LP, a Delaware limited partnership (“McKinnon LP”), HINES REIT 1900/2000
ALAMEDA DE LAS PULGAS LLC, a Delaware limited liability company (“Alameda LLC”), HINES REIT
321 NORTH CLARK STREET LLC, a Delaware limited liability company (“North Clark LLC”), each
of the foregoing having an address at c/o Hines REIT Properties, L.P., 2800 Post Oak Blvd., Suite
5000, Houston, Texas 77056, each of the Borrowing Base Subsidiaries (as defined below) party hereto
from time to time (together with McKinnon LP, Alameda LLC and North Clark LLC, each a
“Borrower” and collectively, the “Borrowers”), HINES REIT PROPERTIES, L.P., a
Delaware limited partnership, having an address at 2800 Post Oak Blvd., Suite 5000, Houston, Texas
77056 (“Sponsor”), HSH NORDBANK AG, NEW YORK BRANCH, a German banking corporation acting
through its New York branch, having an office at 230 Park Avenue, New York, New York 10169, and
each of the other Lenders signatory to this Agreement from time to time (together with their
respective successors and assigns in their respective capacity as a lender, including any Assignees
(as defined below) hereunder, each a “Lender” and collectively the “Lenders”), and
HSH NORDBANK AG, NEW YORK BRANCH, a German banking corporation acting through its New York branch,
having an office at 230 Park Avenue, New York, New York 10169, in its capacity as agent for the
Lenders (in its capacity as agent for the Lenders, together with any permitted successor agent, the
“Agent”) and arranger.

W I T N E S S E T H:

     WHEREAS, Borrowers have requested the Lenders to make available to Borrowers, and Agent to
administer, a credit facility in an aggregate principal amount not to exceed $500,000,000, which
credit facility will be used for the purposes permitted hereunder; and

     WHEREAS, the Lenders have agreed to make available to Borrowers, and Agent has agreed to
administer, a credit facility upon the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this
Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows.

ARTICLE I

Definitions

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Acceptable Major Metropolitan Market” means a major United States metropolitan market
designated on Exhibit H attached hereto, as such Exhibit may be modified from time to time
by the mutual agreement of Borrowers and Agent.

     “Accessibility Laws” means all laws and regulations governing accessibility of public
facilities to the handicapped, specifically including the physical accessibility requirements

 

 

of
Title III of the Americans with Disabilities Act of 1990, and the implementing regulations
promulgated thereunder by the Department of Justice and the Americans with Disabilities Act
Accessibility Guidelines (ADAAG) associated therewith.

     “Accounts” means, collectively, all accounts of Borrowers and all accounts of any
Person held on behalf of or for the benefit of any Borrower, including the Cash Management
Accounts, the Tenant Security Account, the Lease Termination Account, the Additional Collateral
Account and the Guaranty Collateral Account.

     “Account Agreements” means (a) with respect to each Account other than the Additional
Collateral Account and the Guaranty Collateral Account, an agreement in the form annexed hereto as
Exhibit C-1 or in such other form acceptable to Agent and (b) with respect to the
Additional Collateral Account and the Guaranty Collateral Account, an agreement in the form annexed
hereto as Exhibit C-2 or in such other form acceptable to Agent, and in each case, executed
and delivered by Borrowers, the Manager (if reasonably required by Agent), Agent and the bank at
which such Account that is the subject of such agreement is held, if not held at Agent.

     “Additional Collateral” means either (a) cash, (b) a Collateral Letter of Credit, (c)
any other collateral in form and content acceptable to Agent, or (d) any combination of the
foregoing, delivered or pledged by Borrowers to Agent as contemplated by Sections 4.04(a),
5.23 or 5.24 hereof, in each case, which is to be held in accordance with
Section 2.20 or the other applicable provisions hereof.

     “Additional Collateral Account” has the meaning set forth in Section 2.20(b)
hereof.

     “Additional Collateral Value” means the sum of (a) the amount of funds in the
Additional Collateral Account, (b) the undrawn portion of the stated amount of any Collateral
Letter of Credit, and (c) the liquidation value of any other Additional Collateral.

     “Additional Interest” means any amounts which become due and payable under
Sections 2.07, 2.13 and 2.15 hereof.

     “Administrative Questionnaire” means an Administrative Questionnaire to be completed
by prospective assignees of any interest of a Lender in the Loan, in a form supplied by Agent.

     “Advisor” means Hines Advisors Limited Partnership, a Texas limited partnership, or
another wholly owned Affiliate of Hines Interest Limited Partnership which becomes the entity which
is contracted by the REIT to be responsible for directing or performing the day-to-day business
affairs of the REIT.

     “Advisory Agreement” means that certain Advisory Agreement, dated as of June 26, 2006,
entered into by and among Sponsor, the REIT and the Advisor.

2

 

     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

     “Agent” has the meaning set forth in the first paragraph to this Agreement.

     “Aggregate Vacancy Rate” means, as of any date of determination, the ratio of (a) the
aggregate amount of net rentable square feet in all of the Borrowing Base Properties which is not
rented pursuant to a Space Lease which is then in effect such that no Credit Party is deriving
income therefrom, to (b) the aggregate amount of all net rentable square feet in all of the
Borrowing Base Properties. Solely for the purposes of this definition and the definition of
“Individual Vacancy Rate” set forth in this Section 1.1, the term “net rentable square
feet” shall mean the sum of the net rentable square feet stated in Space Leases then in effect
relating to such Borrowing Base Property as being the demised premises thereunder, plus the net
rentable square feet contained within the unleased space in such Borrowing Base Property.

     “Alameda LLC” has the meaning set forth in the first paragraph hereof.

     “Alameda Property” means that certain real property and Alameda LLC’s right, title and
interest in and to the improvements located thereon located at 1900 and 2000 Alameda de Las Pulgas,
San Mateo, California, which real property is more particularly described on Exhibit A-1
attached hereto, together with all related facilities, amenities, fixtures, and personal property
owned by Alameda LLC and any right, title and interest of Alameda LLC in and to any other
improvements now or hereafter located thereon.

     “Allocated Title Amount” means, as of the date of any determination with respect to
the Title Insurance Policy for any Borrowing Base Property, an amount equal to one hundred and ten
percent (110%) of the aggregate amount of Loans made with respect to such Borrowing Base Property;
provided, however, if a “tie-in” endorsement is not available for such Title
Insurance Policy, the Allocated Title Amount for the Title Insurance Policy for such Borrowing Base
Property shall be an amount equal to one hundred percent (100%) of the Appraised Value of such
Borrowing Base Property.

     “Applicable Margin” means (a) with respect to any Ten Year Loan which has been
advanced prior to the first (1st) anniversary of the Effective Date (including the Initial Loan),
four-tenths of one percent (.40%) per annum and (b) with respect to any Ten Year Loan which has
been advanced on or after the first (1st) anniversary of the Effective Date, any Five Year Loan or
any Seven Year Loan, forty-five one-hundredths of one percent (.45%) per annum.

     “Applicable Percentage” means, with respect to any Lender, the percentage of the Total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.

     “Appraisal” means a written appraisal report as to a Property as the term “appraisal”
is defined in the Code of Professional Ethics of the American Institute of Appraisers, meeting the
requirements of the Federal Institutions Reform, Recovery and Enforcement Act of 1989, prepared by
a professional appraiser retained by Agent, who is a member of the Appraisal

3

 

Institute, addressed to Agent and, if requested by Borrowers, also permitting the REIT,
Sponsor or the applicable Property Owner to rely on such Appraisal, and in form, scope and
substance satisfactory to Agent, setting forth such appraiser’s determination of the Appraised
Value.

     “Appraised Value” means, as of any date of determination with respect to any Property,
the “as-is” fair market value of such Property, which would be obtained in an arm’s length
transaction between an informed and willing buyer and an informed and willing seller, under no
compulsion, respectively, to buy or sell, as set forth in, and as of the appraisal date of, the
Appraisal for such Property which has most recently been delivered to or received by Agent.

     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.05 hereof), and accepted by Agent, in the form annexed hereto as Exhibit M or any
other form approved by Agent.

     “Assignments of Agreements” means all assignments of agreements executed and delivered
by one or more Borrowers to or for the benefit of Agent by which Agent, on behalf of the Lenders,
acquires an assignment of such Borrower’s right, title and interest in, to and under all
agreements, contracts, warranties, appraisals, reports, books, records and files now or hereafter
entered into pertaining to the construction, use, occupancy, possession, management, maintenance or
ownership of a Borrowing Base Property.

     “Assignments of Leases and Rents” means collectively, (a) those certain assignments of
leases and rents described on Exhibit W hereto and (b) any of the assignments of leases and
rents executed and delivered by any Borrower to or for the benefit of Agent by which Agent, on
behalf of the Lenders, acquires a collateral assignment of such Borrower’s interest under leases of
real estate, in the form annexed hereto as Exhibit L, and all amendments, modifications and
supplements thereto; provided, however, that the form annexed hereto as Exhibit
L may be modified as reasonably determined by Agent to include provisions customarily included
in assignments of leases and rents used by institutional lenders for similar properties in the
state where the applicable Borrowing Base Property is located.

     “Authorized Officer” means (a) in the case of Sponsor, the president, any vice
president, chief financial officer, principal accounting officer, treasurer or controller of the
REIT acting as general partner of Sponsor, (b) in the case of the REIT, the president, any vice
president, chief financial officer, principal accounting officer, treasurer or controller of the
REIT, and (c) in the case of a Borrower, the president, any vice president, chief financial
officer, manager, principal accounting officer, treasurer or controller of such Borrower, or its
general partner, as applicable.

     “Availability” means (a) on the Effective Date, One Hundred Eighty-Five Million
Dollars ($185,000,000), (b) at any time during the Availability Period with respect to which a
determination is being made (other than the Effective Date), the excess of (i) the Borrowing Base
Loan Amount at such time, over (ii) the outstanding principal balance of the Loans at such time,
and (c) at any time after the Availability Period, Zero Dollars ($0.00).

4

 

     “Availability Period” means the period commencing on the Effective Date and ending on
the Business Day immediately preceding the third (3rd) anniversary of the Effective Date.

     “Base Rate” means, as of any date of determination, a per annum interest rate
determined by Agent (on a daily basis) to be equal to the higher of (a) the rate per annum
established by Agent, based on the commercial lending rate established by Agent’s principal office
in New York, New York from time to time as the reference rate for short-term commercial loans in
Dollars to United States domestic corporate borrowers (which Borrowers acknowledge is not
necessarily Agent’s lowest rate), plus, the then Applicable Margin, and (b) the overnight
cost of funds of the Lenders, as determined by Agent in its discretion plus, the then
Applicable Margin.

     “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

     “Borrower” and “Borrowers” have the meanings set forth in the first paragraph
hereof.

     “Borrowers’ Certificate” means that certain Certificate by Borrowers in favor of Agent
dated as of the Effective Date.

     “Borrowing” means Loans made or continued on the same date and, as to which a single
LIBOR Rate Period is in effect.

     “Borrowing Base Certificate” means a report certifying the Borrowing Base Loan Amount
and the calculation thereof, in the form of Exhibit D annexed hereto.

     “Borrowing Base Loan Amount” means, as of any date of determination, an amount equal
to the least of:

     (a) an amount equal to the aggregate, for all Borrowing Base Properties, of fifty-five
percent (55%) of the Appraised Value of each Borrowing Base Property, plus, solely
in the case of any determination of the Borrowing Base Loan Amount in the context of a
determination of Availability for purposes of Section 4.04(a) hereof, the Additional
Collateral Value;

     (b) the Total Commitment as of such date of determination; and

     (c) the Imputed Loan Amount as of the date with respect to which a Borrowing Base
Certificate was then most recently delivered or required to have been delivered pursuant to
the terms and conditions hereof,

in each case, as demonstrated to Agent’s reasonable satisfaction.

     “Borrowing Base Net Operating Income” means an amount which is the difference between
(x) Borrowing Base Operating Revenues and (y) Borrowing Base Operating Expenses.

5

 

     “Borrowing Base Operating Expenses” means all expenses actually paid by Borrowers in
the normal course of business in connection with the operation of the Borrowing Base Properties
during the period in question determined on a cash basis (but including, in the case of any
determination made with respect to a calendar quarter, an allocated quarterly amount on account of
annual or semi-annual installments of insurance premiums and real estate taxes, but only to the
extent such expenses were paid out of revenue from the Borrowing Base Properties) including imputed
replacement costs (in an amount equal to fifteen cents ($0.15) per annum per net rentable square
foot of the Borrowing Base Properties), and management fees equal to the greater of the actual
management fees paid during such period and two percent (2%) of Borrowing Base Operating Revenues,
but not including any extraordinary expenses (e.g., lease-up costs and expenses, brokerage
commissions and fees relating to leases, lease buy-out payments, capital expenditures and tenant
improvement costs/expenses or any other extraordinary expenses), depreciation, amortization or
Interest on the Loans; the calculation of “Borrowing Base Operating Expenses” shall be reasonably
satisfactory to Agent.

     “Borrowing Base Operating Revenues” means all cash receipts of Borrowers from or
related to the ownership and operation of or otherwise derived from the Borrowing Base Properties,
including all Space Lease Rents (calculated based upon all executed and delivered Space Leases) and
any proceeds from rental or business interruption insurance to the extent corresponding to Space
Lease Rent which would otherwise be payable absent the applicable event, in each case, during the
period in question, but without taking into account (i) straight-lining of rents and other similar
accounting requirements, (ii) extraordinary revenues (e.g., Lease Termination Payments (unless
Agent shall have agreed in advance to include any such amounts as “Borrowing Base Operating
Revenues”), payments from tenants (current or future) for the reduction of space leased by such
tenants (unless Agent shall have agreed in advance to include any such amounts as “Borrowing Base
Operating Revenues”), or leases to tenants that are in bankruptcy or otherwise in default
thereunder), (iii) other miscellaneous operating revenues and sums payable to Borrowers from user’s
facilities or amenities located on the Borrowing Base Properties, (iv) withdrawals from cash
reserves and similar such payments, and (v) security deposits under any Space Lease if forfeited by
the depositor (unless such security deposits were applied as Space Lease Rents and Agent shall have
agreed in advance to include any such amounts as “Borrowing Base Operating Revenues”); the
calculation of “Borrowing Base Operating Revenues” shall be reasonably satisfactory to Agent.

     “Borrowing Base Property” means, collectively, (i) the Initial Borrowing Base
Properties and (ii) any other Property owned in fee simple by a Borrower or in which a Borrower
holds a long-term ground leasehold estate that becomes a Borrowing Base Property pursuant to
Section 4.03 hereof.

     “Borrowing Base Property Compliance Certificate” means a certificate in the form of
Exhibit E annexed hereto.

     “Borrowing Base Subsidiary” means any directly or indirectly wholly-owned special
purpose subsidiary of Sponsor (or, with Agent’s approval, any other Subsidiary of Sponsor)
incorporated or organized under the laws of any state of the United States of America or the
District of Columbia that owns or holds a long-term ground leasehold estate in any

6

 

Borrowing Base Property. A “Borrowing Base Subsidiary” also shall be a Borrower until
such time, if any, as released pursuant to Section 4.04(b) hereof.

     “Borrowing Request” means a request by Borrowers for a Borrowing in accordance with
Section 2.03 hereof.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to remain closed.

     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Capital Repair Guaranty Amount” has the meaning set forth in the Limited Payment
Guaranty.

     “Cash Management Accounts” has the meaning set forth in Section 2.17(a)
hereof.

     “Casualty” means any damage to, destruction of or casualty affecting any Borrowing
Base Property that, together with any other damage, destruction or other casualty then affecting
such Borrowing Base Property, causes, or reasonably could be expected to cause, a decline in the
“as-is” fair market value of such Borrowing Base Property in an amount greater than three percent
(3%) of the then Appraised Value of such Borrowing Base Property.

     “Casualty Proceeds Disbursement Threshold” has the meaning set forth in Section
5.20(b) hereof.

     “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended.

     “Change in Control” means the occurrence of any of the following: (a) any failure by
the REIT to be advised by, and have its day-to-day business affairs to be performed and directed
by, the Advisor, (b) any failure of Hines Interests Limited Partnership or the Advisor to be
Controlled by Jeffrey C. Hines, Gerald D. Hines, their parents, brothers, sisters, and the spouses,
children, grandchildren (natural or adopted) of any of the foregoing, the estate of Jeffrey C.
Hines and/or Gerald D. Hines, any trust for any of the foregoing, and/or any entity owned by any
combination of the foregoing, (c) any failure by Sponsor to be Controlled by the REIT or (d) any
failure of any Borrower to be Controlled by Sponsor. In amplification of the foregoing, a Change
of Control shall occur regardless of the events or circumstances relating to or causing such Change
of Control, including any Transfer (other than any pledge which secures the KeyBank Revolving
Credit Facility) or any foreclosure or other exercise of any remedies of any pledge of any Equity
Interest (including any pledge which secures the KeyBank Revolving Credit Agreement).

7

 

     “Closing” means the execution and delivery of this Agreement by Borrowers, Sponsor,
Agent and the Lenders party hereto and the advance of the Initial Loan to Borrowers.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Collateral” means all collateral on which a Lien is granted or purported to be
granted pursuant to any Financing Document.

     “Collateral Letter of Credit” means an irrevocable and unconditional letter of credit
(and any renewals, replacements and amendments thereof), issued by KeyBank (so long as KeyBank’s
long-term unsecured debt is rated at least “BBB+” (or the equivalent) or better by S&P, Moody’s or
Fitch), or another issuer whose long-term unsecured debt is rated at least “A” (or the equivalent)
or better by S&P, Moody’s or Fitch, or which is otherwise reasonably acceptable to Agent, for the
account of Sponsor or one or more Borrowers to and for the benefit of Agent, which shall (a) be
expressly transferable and assignable one or more times (and shall provide that any fees required
to be paid in connection with a transfer or assignment shall be paid by Sponsor or Borrowers and
not Agent), (b) be payable at sight upon presentment to a New York, New York area branch of the
issuer of a sight draft accompanied by a signed statement that Agent is permitted to draw on said
letter of credit pursuant to the terms of this Agreement or the other Financing Documents, (c)
permit Agent to make multiple draws at Agent’s election, (d) have an expiration date no earlier
than one (1) year from the date of issuance and provide that it shall automatically be renewed from
year to year without further action on the part of any Person unless the issuer thereof notifies
Agent in writing no less than forty-five (45) days prior to the expiration date, and (e) be
otherwise in form and content reasonably acceptable to Agent.

     “Commercial Spread” has the meaning set forth in the Loan Fee Letter.

     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans, expressed as an amount representing the maximum aggregate amount of such Lender’s Credit
Exposure hereunder, as such commitment may be reduced pursuant to Section 2.06 hereof or
reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.05 hereof. The initial amount of each Lender’s Commitment is set forth on
Exhibit F attached hereto, or in the Assignment and Assumption pursuant to which such
Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders’ Commitments is $500,000,000. The aggregate amount of the Lenders’ Commitments shall never
exceed the Maximum Loan Amount. Effective upon the assignment of an interest pursuant to
Section 9.05 hereof, Exhibit F may be amended by Agent to reflect such assignment.

     “Commitment Fee” has the meaning set forth in Section 2.10(a) hereof.

     “Commitment Fee Rate” means a per annum rate equal to fifteen one-hundredths of one
percent (0.15%).

     “Comparable Building Standards” means, with respect to any Borrowing Base Property,
the standards of management, operation and maintenance of a property in the applicable Acceptable
Major Metropolitan Market which is comparable to such Borrowing Base Property in location, size,
facilities, quality and nature, and in each of the foregoing cases, in any

8

 

event comparable to the standards of management, operation and maintenance for such Borrowing
Base Property which exists as of the date that such Borrowing Base Property is added as a Borrowing
Base Property hereunder.

     “Consolidated” and “consolidated” mean, when used with reference to financial
statements or financial statement items of a Person, such statements or items on a consolidated
basis in accordance with applicable principles of consolidation under GAAP.

     “Consolidated Subsidiaries” means, as to any Person, Subsidiaries of such Person with
respect to which such Person’s financial statements are prepared on a Consolidated basis. As used
in this Agreement, any reference to financial statement items of Consolidated Subsidiaries of any
Borrower shall mean such items as determined on a Consolidated basis with such Borrower.

     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

     “Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans at such time.

     “Credit Party” means, collectively, each Borrower and Guarantor.

     “Debt Service Coverage Ratio” means:

   (a) for purposes of calculating the Debt Service Coverage Ratio on a Testing
Determination Date under Sections 2.20, 5.01 and 5.23 hereof and
calculating the Borrowing Base Loan Amount under Sections 2.20, 5.01 and
5.24 (if calculated on a Testing Determination Date) determined for a three (3)
month period ending on the applicable Testing Determination Date, the ratio of (i) Borrowing
Base Net Operating Income for such three (3) month period to (ii) the Imputed Debt Service
calculated as of such Testing Determination Date; and

   (b) for all other purposes as of any date of determination, determined for a three (3)
month period ending on last day (the “Operative Day”) of the calendar month
immediately preceding such date of determination (or if the financial information necessary
to compute the Borrowing Base Net Operating Income for such three (3) month period is not
then reasonably available, the “Operative Day” shall be the last day of the calendar month
immediately preceding the calendar month immediately preceding such date of determination),
the ratio of (i) Borrowing Base Net Operating Income for such three (3) month period to (ii)
the Imputed Debt Service calculated as of the Operative Day. In amplification of the
foregoing, in the event the date of determination under this clause (b) is between
July 1st through July 31st, the Operative Day would be June 30th (or if the
financial information necessary to compute the Borrowing Base Net Operating Income for such
three (3) month period is not then reasonably available, the “Operative Day” would be May
31st).

9

 

     “Deemed DSCR Deficiency Amount” has the meaning set forth in Section 4.04
hereof.

     “Deemed LTV Deficiency Amount” has the meaning set forth in Section 4.04
hereof.

     “Default” means any event or condition which upon notice, lapse of time or both would
become an Event of Default.

     “Default Rate” has the meaning set forth in Section 2.11(b) hereof.

     “Defaulting Lender” has the meaning set forth in Section 8.11(a) hereof.

     “Disclosed Matters” means the actions, suits and proceedings disclosed in Exhibit
G annexed hereto.

     “Dollars,” “dollars” or “$” refers to lawful money of the United
States of America.

     “DSCR Deficiency Amount” has the meaning set forth in Section 5.23 hereof.

     “DSCR Due Date” has the meaning set forth in Section 5.23 hereof.

     “Effective Date” means the date on which the Closing occurs.

     “Environmental Indemnity” means that certain Environmental Indemnity dated as of the
Effective Date provided by the Credit Parties for the benefit of Agent and Lenders.

     “Environmental Laws” has the meaning set forth in the Environmental Indemnity.

     “Environmental Losses” has the meaning set forth in the Environmental Indemnity.

     “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the rules and regulations promulgated thereunder by any Governmental Authority
from time to time.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

     “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which

10

 

the 30-day notice period is waived), (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d)
the incurrence by any Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the termination of any Plan, (e) the receipt by any Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (f) the incurrence by any Borrower or any
ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan, (g) the receipt by any Borrower or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA, or
(h) any transaction engaged in by any Borrower in connection with which it could reasonably be
expected to be subject to either a material civil penalty assessed pursuant to Section 502 of ERISA
or a material tax imposed under Section 4975 of the Code.

     “Estoppel Certificate” means a Tenant Estoppel Certificate, substantially in the form
annexed hereto as Exhibit I, with such changes as the Agent shall reasonably deem necessary
based on the applicable Space Lease and applicable Property.

     “Event of Default” has the meaning assigned to such term in Article VII
hereof.

     “Facility Maturity Date” means July 31, 2019, or such earlier date as the entire
principal amount of the outstanding Loans shall become due and payable by acceleration or
otherwise.

     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding 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 (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by Agent from three (3) Federal funds brokers of recognized standing selected by it.

     “Financing Documents” means this Agreement, the Note, the Security Documents, the
Environmental Indemnity, the Recourse Liability Agreement, the Limited Payment Guaranty, the Loan
Fee Letter, the Manager’s Cooperation Agreement, the Account Agreements, the Lender Interest Rate
Protection Agreements, the Borrowers’ Certificate and all other agreements, certificates or other
documents now or hereafter evidencing, securing or executed by or on behalf of any Credit Party,
the Manager or any Affiliate of the Credit Party or the Manager in connection with the Transactions
or the Loans.

     “Fitch” means Fitch Investors Service, L.P.

     “Five Year Loan” means a Loan which Borrowers have elected in the Borrowing Request
for such Loan to have a Maturity Date of five (5) years from the date that such Loan was

11

 

advanced pursuant to this Agreement, or such earlier date as the entire principal amount of
the Loans shall become due and payable by acceleration or otherwise.

     “Full Recourse Event” means any of those events or circumstances described in
clause (h) of the definition of “Recourse Liability Events” in this Section 1.01.

     “GAAP” means generally accepted accounting principles in the United States of America
which are recognized as such by the American Institute of Certified Public Accountants or by the
Financial Accounting Standards Board or through appropriate boards or committees thereof after the
Effective Date, and which are consistently applied for all periods, so as to properly reflect the
financial position of a Person, except as otherwise provided in Section 1.03 hereof.

     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

     “Ground Lease” means any lease acceptable to Agent which grants a Borrower a leasehold
estate (rather than a fee interest) in all or part of any Borrowing Base Property.

     “Ground Rent” means any and all rent, additional rent and any other amounts payable by
a Borrower as a lessee under a Ground Lease.

     “Guarantor” means, individually and collectively, Sponsor and the REIT;
provided, however, in the event that the Initial Limited Payment Guaranty shall be
terminated in accordance with Section 2.22 hereof, “Guarantor” shall for all purposes
herein and in all other Financing Documents mean Sponsor only.

     “Guarantor Financial Covenants” means, (a) with respect to Sponsor, the covenants of
Sponsor under Section 23 of the Recourse Liability Agreement and (b) with respect to the REIT, the
covenants of the REIT under Section 5 of the Limited Payment Guaranty.

     “Guaranty Collateral” has the meaning set forth in Section 2.22 hereof.

     “Guaranty Collateral Account” has the meaning set forth in Section 2.22
hereof.

     “Guaranty Collateral Amount” means, as of any date of determination, the sum of (a)
the Minimum Required Liquidity Amount as of such date, (b) the Property Leasing Guaranty Amount as
of such date and (c) the Capital Repair Guaranty Amount as of such date.

     “Guaranty Letter of Credit” means an irrevocable and unconditional letter of credit
(and any renewals, replacements and amendments thereof), issued by KeyBank (so long as KeyBank’s
long-term unsecured debt is rated at least “BBB+” (or the equivalent) or better by S&P, Moody’s or
Fitch), or another issuer whose long-term unsecured debt is rated at least “A” (or the equivalent)
or better by S&P, Moody’s or Fitch, or which is otherwise reasonably acceptable to Agent, for the
account of one or more Borrowers or Sponsor to and for the benefit

12

 

of Agent, which shall (a) be expressly transferable and assignable one or more times (and
shall provide that any fees required to be paid in connection with a transfer or assignment shall
be paid by Borrowers or Sponsor and not Agent), (b) be payable at sight upon presentment to a New
York, New York area branch of the issuer of a sight draft accompanied by a signed statement that
Agent is permitted to draw on said letter of credit pursuant to the terms of this Agreement or the
other Financing Documents, (c) permit Agent to make multiple draws at Agent’s election, (d) have an
expiration date no earlier than one (1) year from the date of issuance and provide that it shall
automatically be renewed from year to year without further action on the part of any Person unless
the issuer thereof notifies Agent in writing no less than forty-five (45) days prior to the
expiration date, and (e) be otherwise in form and content reasonably acceptable to Agent.

     “Hazardous Substances” has the meaning set forth in the Environmental Indemnity.

     “Identified Investment Accounts” means, collectively, (a) with respect to the Initial
Borrowing Base Properties, the investment accounts of Borrowers identified as such on Exhibit
O attached hereto and (b) with respect to any other Borrowing Base Property, an investment
account relating to such Borrowing Base Property that Agent reasonably agrees shall become an
“Identified Investment Account”.

     “Improvements” has the meaning set forth in the Mortgages.

     “Imputed Debt Service” means, as of any date of determination, an amount equal to the
aggregate amount of Interest that would have been paid for the period in question if the actual
outstanding principal balance of the Loans as of such date, less the Additional Collateral Value as
of such date, would bear Interest at a rate equal to eight percent (8.0%), in each case, calculated
based on the actual number of days elapsed during such period and a year of 360 days, and
determined on a trailing three (3) month basis (which three (3) month period shall correspond in
length to the applicable three (3) month period which is the subject of the determination of
Borrowing Base Net Operating Income for purposes of calculating the Debt Service Coverage Ratio to
determine the applicable Imputed Loan Amount).

     “Imputed Loan Amount” means, as of any date of determination, the aggregate amount of
Loans which, based on debt service payable on the basis of the Imputed Debt Service, would have
resulted in a Debt Service Coverage Ratio of 1.35:1.0 as of such date.

     “Indebtedness” of any Person means, without duplication,

     (a) all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind;

     (b) all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments;

     (c) all obligations of such Person upon which interest charges are customarily paid;

13

 

     (d) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person;

     (e) all obligations of such Person in respect of the deferred purchase price of
property (i.e., any obligations to pay any consideration after the acquisition of such
property) or services;

     (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on property owned
or acquired by such Person, whether or not the Indebtedness secured thereby has been
assumed;

     (g) all guarantees by such Person of Indebtedness of others;

     (h) all Capital Lease Obligations of such Person and obligations in respect of
synthetic leases;

     (i) all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty; and

     (j) all obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.

The Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

     “Individual Vacancy Rate” means, as of any date of determination, the ratio of (a) the
amount of net rentable square feet (as defined in the definition of “Aggregate Vacancy Rate” set
forth in Section 1.1 hereof) in each Borrowing Base Property which is not rented pursuant
to a Space Lease which is then in effect such that no Credit Party is deriving income therefrom, to
(b) the aggregate amount of all net rentable square feet (as defined in the definition of
“Aggregate Vacancy Rate” set forth in Section 1.1 hereof) in such Borrowing Base Property.

     “Initial Borrowing Base Properties” means, collectively, the Alameda Property, the
McKinnon Property and the North Clark Property.

     “Initial Capital Repair Guaranty Amount” has the meaning set forth in the Limited
Payment Guaranty.

     “Initial Interest Rate Protection Agreement” means the Interest Rate Protection
Agreement effective August 1, 2006 and entered into between HSH Nordbank, New York Branch and
Sponsor in the notional amount of $185,000,000, as assigned by Sponsor to Borrowers pursuant to
that certain novation agreement dated as of the Effective Date.

     “Initial Limited Payment Guaranty” means that certain Limited Payment Guaranty dated
as of the Effective Date by the REIT in favor of Agent.

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     “Initial Loan” means, collectively, the Loans made on the Effective Date; it being
agreed and understood that the portion of the Initial Loan allocable to (a) the North Clark
Property is $136,632,201, (b) the McKinnon Property is $15,302,806 and (c) Alameda Property is
$33,064,993.

     “Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the United States Bankruptcy Code, as in effect from time to time, or under any
other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

     “Insurance Policies” means the policies of insurance required to be maintained
pursuant to Exhibit T hereof.

     “Interest” means interest payable on the Loans at the LIBOR Rate or the Default Rate,
as applicable.

     “Interest Rate Protection Agreement” means the Initial Interest Rate Protection
Agreement and any other agreement with respect to an interest rate swap, swaption or other
derivative arrangement acceptable to Agent, in each case, which conforms to the requirements set
forth in Section 2.18 hereof, and the effect of which is to protect Borrowers from an
increase in the rate of interest payable by Borrowers on Loans at the LIBOR Rate.

     “Investment Package” has the meaning set forth in Section 4.03(a) hereof.

     “KeyBank” means KeyBank National Association, a national banking association.

     “KeyBank Guaranty Related Amendment” has the meaning set forth in Section 2.22
hereof.

     “KeyBank Revolving Credit Facility” means that certain Credit Agreement dated as of
September 9, 2005 among Sponsor, KeyBank, Commerzbank AG, New York and Cayman Islands Branches,
LaSalle Bank National Association, Sovereign Bank, Wachovia Bank National Association and any
lender party thereto, and any renewal, refinancing, increase, amendment or replacement of the
revolving credit facility evidenced thereby in accordance with Section 6.16 hereof.

     “Lease Termination Account” has the meaning set forth in Section 2.21 hereof.

     “Lease Termination Payments” means any amounts received by or on behalf of any
Borrower in connection with any termination, cancellation or surrender of any Space Lease, whether
occurring as a result of a default by a Tenant under the applicable Space Lease, by agreement of a
Borrower or Manager and such Tenant, by the terms of the applicable Space Lease, in connection with
any bankruptcy or other insolvency proceeding of such Tenant, or otherwise.

     “Leasing Commissions and Tenant Improvement Costs” means, with respect to any portion
of a Borrowing Base Property, (a) leasing brokerage commissions, (b) tenant improvement allowances,
and (c) costs of any renovation or other tenant improvement work, in

15

 

each case, which (i) a Borrower is obligated to pay in connection with the leasing of such
portion of such Borrowing Base Property pursuant to the applicable Space Lease, (ii) have been
incurred in the ordinary course of business by such Borrower and (iii) are customarily incurred by
landlords with respect to commercial leases in buildings which are of a Comparable Building
Standard.

     “Legal Requirements” means all laws, ordinances, rules, regulations, codes, orders and
directives of any Governmental Authority, including all applicable licenses, building codes, rent
stabilization laws, zoning and subdivision ordinances, flood disaster, health and Environmental
Laws, and Accessibility Laws.

     “Lender” and “Lenders” have the meanings set forth in the first paragraph
hereof.

     “Lender Interest Rate Protection Agreement” means the Initial Interest Rate Protection
Agreement and any other Interest Rate Protection Agreement to which (a) any Borrower and Agent or
any Affiliate of Agent are parties in the event that such Borrower and Agent or such Agent’s
Affiliate elect to enter into an Interest Rate Protection Agreement or (b) if Agent or such Agent’s
Affiliate shall have elected not to enter into an Interest Rate Protection Agreement then, with the
consent of Agent, any Borrower and any Lender or any Affiliate of any Lender are parties in the
event that such Borrower and such Lender or such Lender’s Affiliate elect to enter into an Interest
Rate Protection Agreement.

     “LIBOR” means (a) the London Interbank Offered rate for Dollar deposits in an amount
comparable to the applicable Borrowing with respect to which the applicable LIBOR Rate is being
determined as appearing on Associated Press-Dow Jones Telerate Service Page 3750 (formerly known as
Telerate display page 3750) (or such other page as may replace Page 3750 on that service or such
other service as may be nominated by the British Bankers’ Association as the information vendor for
the purpose of displaying British Bankers’ Association Interest Settlement Rates for Dollar
deposits) at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the
date two (2) LIBOR Banking Days prior to the first day of the applicable LIBOR Rate Period and with
respect to which LIBOR is being determined for a time period equal to, or if no equal time period
is so appearing on Associated Press-Dow Jones Telerate Service Page 3750 (or substitute thereof as
aforesaid), the time period so appearing which is most approximately equal to such LIBOR Rate
Period; or (b) if such method for determining LIBOR shall not be available, the rate per annum
(rounded upwards, if necessary, to the nearest 1/1000 of 1%) quoted by Agent’s principal London,
England office at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on
the date two (2) LIBOR Banking Days prior to the first day of the LIBOR Rate Period for the
offering by Agent’s principal London, England office to leading banks in the London interbank
market of Dollar deposits having a term comparable to such LIBOR Rate Period and in an amount
comparable to the principal balance of the Borrowing with respect to which the applicable LIBOR
Rate is being determined.

     “LIBOR Banking Day” means any Business Day on which dealings in deposits in Dollars
are transacted in the London interbank market and banks are also open for business in London,
England.

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     “LIBOR Rate” means, with respect to each Loan, at any time, an interest rate per annum
equal to the sum of (a) the applicable LIBOR for such Loan, plus (b) the then Applicable Margin.

     “LIBOR Rate Period” means, with respect to any Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the calendar month that
is one (1) month thereafter (or such shorter period to which the Agent and Borrowers may agree);
provided, that (a) if any LIBOR Rate Period would end on a day other than a LIBOR Banking
Day, such LIBOR Rate Period shall be extended to the next succeeding LIBOR Banking Day unless the
result of such extension would be to carry such LIBOR Rate Period over into another calendar month,
in which event such LIBOR Rate Period shall end on the immediately preceding LIBOR Banking Day and
(b) if any LIBOR Rate Period relating to a Loan would otherwise end after the Maturity Date for
such Loan (including as a result of the foregoing clause (a)), then such LIBOR Rate period
shall end on the Maturity Date for such Loan. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

     “Limited Payment Guaranty” means the Initial Limited Payment Guaranty, or in the event
that a Substitute Limited Payment Guaranty shall be entered into by Sponsor and the Initial Limited
Payment Guaranty shall be terminated in accordance with Section 2.22 hereof, the Substitute
Limited Payment Guaranty only.

     “Loan Fee Letter” means that certain letter dated as of the Effective Date among Agent
and Borrowers pertaining to fees payable with respect to the Loan.

     “Loan-to-Value Ratio” means, as of any date of determination thereof, the ratio
(expressed as a percentage) of (a) the aggregate outstanding principal balance of the Loans as of
such date, less the Additional Collateral Value as of such date, to (b) the Appraised Value of the
Borrowing Base Properties.

     “Loan Year” means the period commencing on the Effective Date and ending on the first
(1st) anniversary of the Effective Date, and every twelve (12) month period thereafter during the
Term.

     “Loans” means the loans made by the Lenders to Borrowers pursuant to this Agreement.

     “LTV Deficiency Amount” has the meaning set forth in Section 5.24 hereof.

     “LTV Due Date” has the meaning set forth in Section 5.24 hereof.

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     “Majority Lenders” means, at any time, the Lenders whose Commitments represent at
least fifty one percent (51%) of the aggregate of all Commitments (excluding Defaulting Lenders and
the Commitments of any Defaulting Lender), or if the Commitments have been terminated irrevocably,
the Lenders holding at least fifty one percent (51%) of the Obligations then outstanding (excluding
Defaulting Lenders and Obligations owing to any Defaulting Lender).

     “Management Agreement” means a written agreement between any Borrower and a Manager
entered into in accordance with this Agreement and pursuant to which a Manager undertakes the
management of a Property, and any and all amendments and modifications thereof and all restatements
thereto entered into in accordance with this Agreement.

     “Manager” means Hines Interests Limited Partnership or another property management
company engaged by any Borrower and satisfactory to Agent.

     “Manager’s Cooperation Agreement” means an agreement between Agent and the applicable
Manager, and consented and agreed to by the applicable Borrower with respect to each Borrowing Base
Property, substantially in the form annexed hereto as Exhibit J.

     “Margin Stock” has the meaning assigned to such term in Regulation U.

     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations or condition, financial or otherwise, of any Credit Party, taken individually, or the
Credit Parties, taken as a whole, (b) the ability of any Credit Party, taken individually, or the
Credit Parties, taken as a whole, to perform in all material respects any of their obligations
under this Agreement and the other Financing Documents, (c) the ability of Guarantor to comply with
the Guarantor Financial Covenants, (d) the rights of or benefits available to the Lenders or Agent
under this Agreement and the other Financing Documents, taken as a whole, (e) the ownership,
operation, use or value of any Borrowing Base Property or (f) Agent’s Liens on any of the Borrowing
Base Properties, the Cash Management Accounts or other material portion of the Collateral or the
priority of any such Lien.

     “Material Indebtedness” means, as of any date of determination, (a) Indebtedness
(other than the Loans) of the Borrowers in an aggregate principal amount exceeding two percent (2%)
of the then aggregate outstanding principal amount of the Loans, or (b) obligations under any
Interest Rate Protection Agreement.

     “Material Operating Agreements” means (a) the Operating Agreements set forth on
Exhibit N attached hereto and pertaining to the Initial Borrowing Base Properties, together
with any contracts or agreements entered into in replacement thereof or substitution therefor, and
(b) any other Operating Agreement entered into after the Effective Date by a Borrower or Manager
with respect to a Borrowing Base Property, which has a noncancellable term which exceeds one (1)
year in length.

     “Material Taking” means a Taking (a) of any portion of a Borrowing Base Property
unless the portion so taken constitutes less than fifteen percent (15%) of the land constituting
the applicable Borrowing Base Property, such land is located along the perimeter or periphery of
the applicable Borrowing Base Property or otherwise does not affect any material

18

 

portion of the Improvements, or (b) of such portion of applicable Borrowing Base Property or
such property which when so taken would, in Agent’s reasonable determination, leave remaining a
balance of the applicable Borrowing Base Property (and, if applicable, such other property) which,
due to the amount and/or nature of the area so taken and/or the location of the area taken in
relation to the area not so taken, would not, under economic conditions, applicable zoning laws,
building regulations and the requirements of this Agreement and the Permitted Encumbrances permit
the Restoration of the applicable Borrowing Base Property.

     “Maturity Date” means (a) with respect to each Five Year Loan, the fifth (5th)
anniversary of the date that such Loan was advanced pursuant to this Agreement, (b) with respect to
each Seven Year Loan, the seventh (7th) anniversary of the date that such Loan was advanced
pursuant to this Agreement, and (c) with respect to each Ten Year Loan, the tenth (10th)
anniversary of the date that such Loan was advanced pursuant to this Agreement, or, in each case,
such earlier date as the entire principal amount of the Loans shall become due and payable by
acceleration or otherwise. Notwithstanding the foregoing, in no event shall a “Maturity
Date” occur after the Facility Maturity Date.

     “Maximum Loan Amount” means $500,000,000, as such amount may be reduced pursuant to
Section 2.06(a) or (b) hereof.

     “McKinnon LP” has the meaning set forth in the first paragraph hereof.

     “McKinnon Property” means that certain real property and McKinnon LP’s right, title
and interest in and to the improvements located thereon located at 3100 McKinnon Street, Dallas,
Texas, which real property is more commonly known as Citymark, Dallas, Texas, as more particularly
described in Exhibit A-2 attached hereto, together with all related facilities, amenities,
fixtures, and personal property owned by McKinnon LP and any right, title and interest of McKinnon
LP in and to any other improvements now or hereafter located thereon.

     “Minimum Required Liquidity Amount” has the meaning set forth in the Limited Payment
Guaranty.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Mortgaged Property” shall have the meaning set forth in each Mortgage.

     “Mortgages” means, collectively, (a) those certain mortgages described on Exhibit
W attached hereto and (b) any of the mortgages, deeds of trust, deeds to secure debt and
assignments of leases and rents executed and delivered by any Borrower after the Effective Date to
or for the benefit of Agent by which Agent, on behalf of the Lenders, acquires a Lien on real
estate, in the form annexed hereto as Exhibit K, and all amendments, modifications and
supplements thereto; provided, however, that the form annexed hereto as Exhibit
K may be modified as reasonably determined by Agent to include provisions customarily included
in mortgages, deeds of trust and deeds to secure debt used by institutional lenders for similar
properties in the state where the applicable Borrowing Base Property is located; provided,
further, that, the principal amount secured by each Mortgage shall be equal to the
Maximum Loan Amount unless the Borrowing Base Property which is to be encumbered by such Mortgage
is located in a State that imposes any mortgage recording tax, intangibles tax or other similar

19

 

taxes or fees which would result in a cost to record such Mortgage in excess of $20,000.00, in
which case the principal amount to be secured under such Mortgage shall be equal to one hundred
percent (100%) of the Appraised Value of such Borrowing Base Property.

     “Multiemployer Plan” means any “multiemployer plan” (as defined in Section 4001(a)(3)
of ERISA) subject to Title IV of ERISA, (i) to which any Borrower or any ERISA Affiliate is making
or accruing an obligation to make contributions, or (ii) with respect to which any Borrower or any
ERISA Affiliate could be subjected to any liability under Title IV of ERISA.

     “Net Proceeds” means the amount of all insurance proceeds paid pursuant to any
Insurance Policy as the result of a Casualty, after deduction of the costs and expenses (including
fees of any insurance consultant or adjuster and reasonable attorneys’ fees and disbursements), if
any, incurred in collecting the same.

     “Net Restoration Award” means the amount of all awards and payments received on
account of a Taking, after deduction of the costs and expenses (including reasonable attorneys’
fees and disbursements), if any, incurred in collecting the same.

     “North Clark LLC” has the meaning set forth in the first paragraph hereof.

     “North Clark Property” means that certain real property and North Clark LLC’s right,
title and interest in and to the improvements located thereon located at 321 North Clark Street,
Chicago, Illinois, which real property is more particularly described in Exhibit A-3
attached hereto, together with all related facilities, amenities, fixtures, and personal property
owned by North Clark LLC and any right, title and interest of North Clark LP in and to any other
improvements now or hereafter located there.

     “Note” means, collectively, one or more Promissory Notes dated as of the Effective
Date made by Borrowers in favor of Agent in the principal amount of $500,000,000, together with any
replacements or substitutes therefor.

     “Obligations” means, collectively, (a) all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Credit Parties to Agent and/or
any Lender, arising under or pursuant to this Agreement or any of the other Financing Documents,
whether or not evidenced by any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or
secondary, as principal or guarantor, and including all principal, Interest, charges, expenses,
fees, attorneys’ fees, filing fees and any other sums chargeable to any Borrower or Guarantor
hereunder or under any of the other Financing Documents and (b) all present and future debts,
liabilities and obligations now or hereafter arising from or in connection with Lender Interest
Rate Protection Agreements.

     “Operating Account” means any account to be established by any Borrower at Agent or
another bank or financial institution reasonably acceptable to Agent into which sums are required
to be deposited pursuant to Section 2.19 hereof.

20

 

     “Operating Agreements” means, collectively, all agreements entered into by any
Borrower or by another Person, including Manager, on behalf of any Borrower which relate to the
ownership, operation or maintenance of a Borrowing Base Property or which relate to or govern any
Borrower’s use of and rights in personal property, or any portion thereof. “Operating Agreements”
do not include the Management Agreements and the Space Leases.

     “Participant” has the meaning set forth in Section 9.05 hereof.

     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may
be amended from time to time, and corresponding provisions of future laws.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Permitted Encumbrances” means:

     (a) Liens imposed by law for taxes, assessments and governmental charges or levies that
are not yet due or are being contested in compliance with Section 5.08 hereof;

     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business and securing obligations
that are not overdue by more than forty five (45) days or that are being contested in
compliance with Section 5.08 hereof;

     (c) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations
or letters of credit or guarantees issued in respect thereof;

     (d) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business or letters of credit or guarantees
issued in respect thereof;

     (e) easements, zoning restrictions, rights-of-way and similar encumbrances on real
property (i) imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of a Borrower or (ii) in the
case of any real property subject to a Mortgage, encumbrances disclosed in the title
insurance policy issued to, and approved by, Agent; and

     (f) Space Leases existing as of the Closing Date (or with respect to any Borrowing Base
Property which is not an Initial Borrowing Base Property, Space Leases existing as of the
date that such Borrowing Base Property is added as a Borrowing Base Property) or entered
into thereafter in accordance with this Agreement and the other Financing Documents;

21

 

provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

     “Permitted Forward Swap Agreement” has the meaning set forth in Section
2.18(b) hereof.

     “Permitted Indebtedness” means any (a) of the Obligations, (b) incidental indemnity
and hold harmless agreements under agreements entered into by any Borrower in accordance with this
Agreement, (c) trade debt and accounts payable incurred by Borrowers in the ordinary course of
business which are unsecured and paid within ninety (90) days of the date incurred, (d) conditional
sales contracts and purchase money financing for equipment and other items of tangible personal
property, in each case, incurred by Borrowers in the ordinary course of business, (e) Capital Lease
Obligations of Borrowers, (f) payments of Ground Rent then due and payable, and (g) Leasing
Commissions and Tenant Improvement Costs.

     “Permitted Investments” means:

     (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one (1) year from the date of acquisition thereof;

     (b) investments in commercial paper maturing within two hundred and seventy (270) days
from the date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time deposits
maturing within one hundred eighty (180) days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus and undivided profits
of not less than $500,000,000;

     (d) investments in money market mutual funds having portfolio assets in excess of
$5,000,000,000, that comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940 and are rated AAA by S&P and
Aaa by Moody’s;

     (e) fully collateralized repurchase agreements with a term of not more than thirty (30)
days for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above;

     (f) securities with maturities of one (1) year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United States of
America, or any political subdivision or taxing authority thereof, and rated at least A by
S&P or Moody’s; and

22

 

     (g) with respect to any Person organized or conducting operations outside of the United
States, investments denominated in the currency of the jurisdiction in which such Person is
organized or conducting business which are similar to the items specified in clauses
(a) through (f) above (other than the nationality of the governmental or
non-governmental issuer or counterparty involved).

     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     “Premises Documents” has the meaning set forth in the Mortgages.

     “Prepayment Fee” means, with respect to any prepayment or repayment, whether by reason
of an Event of Default or otherwise, as applicable, of a Loan:

     (a) with respect to any Five Year Loan, (i) four tenths of one percent (.40%) of the
amount of such prepayment or repayment if such prepayment or repayment is made during the
period commencing on the date that such Five Year Loan is advanced and ending on the second
(2nd) anniversary of the date that such Five Year Loan is advanced, (ii) fifteen
one-hundredths of one percent (.15%) of the amount of such prepayment or repayment if such
prepayment or repayment is made during the period commencing on the day immediately
succeeding the second (2nd) anniversary of the date that such Five Year Loan is advanced and
ending on the third (3rd) anniversary of the date that such Five Year Loan is advanced and
(iii) thereafter zero percent (0%) of the amount of such prepayment;

     (b) with respect to any Seven Year Loan, (i) four tenths of one percent (.40%) of the
amount of such prepayment or repayment if such prepayment or repayment is made during the
period commencing on the date that such Seven Year Loan is advanced and ending on the third
(3rd) anniversary of the date that such Seven Year Loan is advanced, (ii) fifteen
one-hundredths of one percent (.15%) of the amount of such prepayment or repayment if such
prepayment or repayment is made during the period commencing on the day immediately
succeeding the third (3rd) anniversary of the date that such Seven Year Loan is advanced and
ending on the fourth (4th) anniversary of the date that such Seven Year Loan is advanced and
(iii) thereafter zero percent (0%) of the amount of such prepayment; and

     (c) with respect to any Ten Year Loan, (i) four tenths of one percent (.40%) of the
amount of such prepayment or repayment if such prepayment or repayment is made during the
period commencing on the date that such Ten Year Loan is advanced and ending on the fourth
(4th) anniversary of the date that such Ten Year Loan is advanced, (ii) fifteen
one-hundredths of one percent (.15%) of the amount of such

23

 

prepayment or repayment if such prepayment or repayment is made during the period
commencing on the day immediately succeeding the fourth (4th) anniversary of the date that
such Ten Year Loan is advanced and ending on the fifth (5th) anniversary of the date that
such Ten Year Loan is advanced and (iii) thereafter zero percent (0%) of the amount of such
prepayment;

provided, however, notwithstanding the foregoing or any other provision of this
Agreement to the contrary, there shall be no Prepayment Fee with respect to any prepayment or
repayment of a Loan which is made pursuant to Sections 5.22, 5.23 or 5.24
hereof.

     “Pro Rata Share” means with respect to all matters relating to any Lender, the
percentage obtained by dividing (a) the Commitment of such Lender by (b) the aggregate Commitment
of all the Lenders, in each case as of the date of determination.

     “Property” means an office building property (specifically including land, building,
improvements, furniture, fixtures, equipment and all related personal property used or useful in
connection with such property) (or such other real estate asset class approved by Agent as being
eligible to be a Borrowing Base Property) owned by any Borrower or in which any Borrower holds a
long term ground leasehold estate. A “Property” may be a prospective Borrowing Base
Property, a Borrowing Base Property or a former Borrowing Base Property, as the context indicates.

     “Property Leasing Guaranty Amount” has the meaning set forth in Section 2.22
hereof.

     “Property Owner” means, with respect to any Property, the fee owner of or the holder
of a long-term ground leasehold estate in such Property. A “Property Owner” may be the fee
or leasehold owner of a prospective Borrowing Base Property, a Borrowing Base Property or a former
Borrowing Base Property, as the context indicates.

     “Proposed Addition Date” has the meaning set forth in Section 4.03(a) hereof.

     “Proposed Removal Date” has the meaning set forth in Section 4.04 hereof.

     “Qualified Counterparty” means any Lender or any other financial institution whose
senior long term debt is rated A or better by S&P, A2 or better by Moody’s, or equivalent rating by
Fitch or other nationally recognized rating agency, and which is otherwise confirmed in writing by
Agent as being reasonably acceptable to Agent.

     “REA” means any reciprocal easement agreement, easement and operating agreement,
parking agreements or any other similar agreement in effect with respect to any Borrowing Base
Property which is recorded or filed of record against such Borrowing Base Property. For the
avoidance of doubt, without limiting any other agreements which would constitute an “REA”, (a) that
certain Easement and Operating Agreement, dated as of January 14, 1986, and recorded on January 21,
1986 as Document number 86025944 between North Clark LLC (as successor-in-interest) and THR Chicago
LLC (as successor-in-interest) and (b) that certain the Parking Agreement, dated as of January 14,
1986, and recorded on January 21,

24

 

1986 as Document number 86025945 between North Clark LLC (as successor-in-interest) and THR
Chicago LLC (as successor-in-interest), are each an “REA” hereunder.

     “Real Estate Investment Trust” means a “real estate investment trust,” as such term is
defined in Section 856 of the Code.

     “Recourse Liability Agreement” means that certain Recourse Liability Agreement dated
the Effective Date and provided by the Credit Parties for the benefit of Agent and Lenders.

     “Recourse Liability Events” means, collectively, any or all of the following:

     (a) fraud or willful misconduct on the part of any Borrower, Guarantor or any Affiliate
of any such Person which relates to or arises out of the Loan, any Borrowing Base Property,
any Credit Party or any Financing Document;

     (b) a breach of a material representation or warranty contained in any Financing
Document on the part of any Borrower or Guarantor;

     (c) appropriation or application of Loan proceeds, Space Lease Rents or other revenue,
income and other profits arising from the Borrowing Base Properties, insurance proceeds,
condemnation awards, security deposits, sums payable pursuant to any Interest Rate
Protection Agreement or proceeds of the disposition of all or any portion of the Collateral
in contravention of this Agreement or any other Financing Document, including a breach by
any Borrower of Section 2.17 hereof, including the failure of Borrowers to deposit
within one (1) Business Day following Agent’s notice to Borrowers of the occurrence of an
Event of Default (i) cash Security Deposits into the Tenant Security Account in accordance
with Section 2.19(a) hereof and (ii) sums held in any Identified Investment Account
in accordance with Section 2.17(f) hereof;

     (d) Restricted Payments made in contravention of Section 6.05 hereof;

     (e) physical waste of any Borrowing Base Property or any part thereof;

     (f) any sale or other disposition of any Borrowing Base Property in contravention of
this Agreement or any other Financing Document;

     (g) the incurrence of any Indebtedness, whether secured or unsecured, in contravention
of this Agreement or any other Financing Document; and

     (h) the occurrence of an Event of Default pursuant to clause (h) of Article
VII hereof or the occurrence of a Default or an Event of Default pursuant to clause
(g) of Article VII as a result of an action taken by any Borrower, Guarantor or
any Affiliate thereof in any actual or prospective proceeding described in said clause
(g) in collusion with another Person.

     “Register” has the meaning set forth in Section 9.05 hereof.

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     “Regulation T” means Regulation T of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     “Regulation U” means Regulation U of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     “Regulation X” means Regulation X of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.

     “REIT” means Hines Real Estate Investment Trust, Inc., a Maryland corporation.

     “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

     “Release” means any discharge, emission or release, including a Release as defined in
CERCLA at 42 U.S.C. Section 9601(22). The term “Released” has a corresponding meaning.

     “Release Conditions” has the meaning set forth in Section 5.20(d)(i) hereof.

     “Rent Roll” has the meaning set forth in Section 3.18 hereof.

     “Required Lenders” means, at any time, the Lenders whose Commitments represent at
least sixty-six and two-thirds percent (66 2/3%) of the aggregate of all Commitments (excluding
Defaulting Lenders and the Commitments of any Defaulting Lender), or if the Commitments have been
terminated irrevocably, the Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of
the Obligations then outstanding (excluding Defaulting Lenders and Obligations owing to any
Defaulting Lender).

     “Restoration” means in case of a Casualty or a Taking, the restoration, replacement or
rebuilding of the portion of a Borrowing Base Property affected by the Casualty or Taking such that
when such restoration, replacement or rebuilding is completed, the applicable Borrowing Base
Property shall have been restored, in the case of any Casualty, substantially to the same character
and condition as prior to such Casualty, and in the case of any Taking, to an integral unit as
substantially similar as possible, taking into account the extent of the Taking, to the character
and condition of the applicable Borrowing Base Property prior to such Taking, in each case in
accordance with this Agreement, all Legal Requirements, the Permitted Encumbrances, and to the
extent any alterations or additions were made in compliance with this Agreement, with any such
alterations or additions. In any case, Restoration shall (i) provide substantially the same (but
in no case less than what is required by Legal Requirements and the Permitted Encumbrances) amount
and type of, and rights with respect to, utilities and parking spaces applicable to the applicable
Borrowing Base Property as existed prior to such Casualty or Taking, (ii) provide sufficient (in
Agent’s reasonable determination) access across and over the applicable Borrowing Base Property to
the public roads and highways, and (iii) be such that the Loan-to-Value Ratio, when such Borrowing
Base Property is so restored, together with the amount of any Net Proceeds or Net Restoration
Awards received by Agent and

26

 

applied in repayment of the principal amount of the Loans, shall be equal to or less than
fifty five percent (55%).

     “Restricted Payment” means any dividend or other distribution (whether in cash
securities or other property) with respect to any Equity Interests in any Borrower, or any payment
(whether in cash, securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or termination of any
such Equity Interests or any option, warrant or other right to acquire any such Equity Interests.

     “S&P” means Standard and Poor’s Ratings Group.

     “Security Agreements” means the Mortgages, and all other security agreements now or
hereafter executed by any Borrower to secure the Obligations, in form, scope and substance
satisfactory to Agent.

     “Security Deposits” has the meaning set forth in Section 2.19(a) hereof.

     “Security Documents” means the Security Agreements, the Assignments of Agreements,
Assignments of Leases and Rents, the Account Agreements, all uniform commercial code financing
statements and all other Financing Documents that secure the Obligations.

     “Security Interests” means the security interests in the Collateral granted under the
Security Agreements, the Liens granted under the Mortgages and all other security interests and
liens granted under the other Security Documents.

     “Seven Year Loan” means a Loan which Borrowers have elected in the Borrowing Request
for such Loan to have a Maturity Date of seven (7) years from the date that such Loan was advanced
pursuant to this Agreement, or such earlier date as the entire principal amount of the Loans shall
become due and payable by acceleration or otherwise.

     “Single Purpose Bankruptcy Remote Entity” has the meaning set forth in Exhibit
U attached hereto.

     “Solvent” means, with respect to any Person on a particular date, that such Person is
not insolvent (as such term is defined in the Uniform Fraudulent Transfer Act).

     “Space Lease” or “Space Leases” means any and all leases, subleases, licenses,
concessions and other agreements related to the occupancy of any portion of any Borrowing Base
Property now or hereafter entered into by or on behalf of the applicable Borrower or its
predecessors in title thereto, together with any and all extensions and renewals thereof.

     “Space Lease Letter of Credit” means Tenant Security Deposits in the form of letters
of credit.

     “Space Lease Rents” means all sums payable pursuant to any Space Lease in the nature
of “rent”, “fixed rent”, “base rent”, “additional rent”, “percentage rent”, “common area

27

 

maintenance or administrative charges”, “real estate taxes”, “insurance premiums”, or
otherwise with respect to the use and occupancy of all or any portion of the Borrowing Base
Property encumbered by such Space Lease.

     “Specified Substitution Date” has the meaning set forth in Section 2.22
hereof.

     “Sponsor” has the meaning set forth in the first paragraph hereof.

     “Subsidiary” or “subsidiary” means, with respect to any Person (the
“parent”) at any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other ownership interests
representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent. Unless the context otherwise clearly
requires, references herein to a “Subsidiary” refer to a Subsidiary of a Borrower.

     “Substitute Limited Payment Guaranty” has the meaning set forth in Section
2.22 hereof.

     “Successor Agent Requirements” has the meaning set forth in Section 8.09
hereof.

     “Survey” means, for each Property, an as-built ALTA/ASCM survey of such Property in
form and substance and prepared by a surveyor reasonably acceptable to Agent, which shall include
such certifications in favor of Agent and the applicable title company as Agent shall reasonably
request.

     “Swap Rate” means the sum of (a) the swap rate displayed on Bloomberg (adjusted to
reflect monthly compounding on an actual 360 day basis) for a period comparable to the applicable
LIBOR Rate Period and corresponding to the term of the applicable Interest Rate Protection
Agreement, as determined by Agent (and if there is no swap rate given for such LIBOR Rate Period,
Agent shall interpolate such swap rate based on the swap rates provided for the periods closest to
such LIBOR Rate Period), plus (ii) the Commercial Spread.

     “Taking” means any temporary or permanent taking by any Governmental Authority of any
Borrowing Base Property or any part thereof through eminent domain or other proceedings or by any
settlement or compromise of such proceedings, or any voluntary conveyance of such property or any
part thereof during the pendency of any such proceedings.

     “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, filings, charges, withholdings or other fees imposed by any Governmental Authority.

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     “Ten Year Loan” means a Loan which Borrowers have elected in the Borrowing Request for
such Loan to have a Maturity Date of ten (10) years from the date that such Loan was advanced
pursuant to this Agreement, or such earlier date as the entire principal amount of the Loans shall
become due and payable by acceleration or otherwise.

     “Tenant” means a tenant, subtenant, licensee, concession holder or other Person having
the right to use or occupy all or any portion of any Borrowing Base Property pursuant to a Space
Lease.

     “Tenant Security Account” has the meaning set forth in Section 2.19 hereof.

     “Term” means, with respect to any Loan, the period commencing on the Effective Date
and ending on the Maturity Date for such Loan.

     “Testing Determination Date” means the last day of the calendar quarter with respect
to which a certificate required pursuant to Section 5.01(h) hereof was then most recently
required to be delivered, or as otherwise provided herein.

     “Title Continuation” means an endorsement to a Title Insurance Policy indicating that,
since the issuance of such Title Insurance Policy, there has been no change in the state of title
to the applicable Property and no Liens or survey exceptions not theretofore approved by Agent as
provided herein, which notice or endorsements shall contain no exception for inchoate mechanic’s
liens and shall have the effect of continuing such Title Insurance Policy to the date of such
endorsement and increasing the Title Insurance Policy to the Allocated Title Amount, after giving
effect to any additional Loans made with respect to such Property.

     “Title Insurance Policy” means, with respect to any Property, a paid title insurance
policy (including all Title Continuations, any other endorsements thereto and facultative
reinsurance agreements issued in connection therewith), insuring Agent that the Mortgage in respect
of such Property is a valid first lien on the “Mortgaged Property” (as defined in such Mortgage)
containing no exceptions to coverage other than Permitted Encumbrances and which Title Insurance
Policy shall (a) be in an amount equal to the Allocated Title Amount for such Property, (b) contain
(i) no exception for mechanics’ or materialmen’s liens, (ii) no survey exceptions other than those
reasonably approved by Agent, and (iii) to the extent available under the applicable Legal
Requirements relating to title insurance, such affirmative insurance and endorsements (including
tie-in endorsements) as Agent shall reasonably require, (c) be reinsured pursuant to ALTA 1994
facultative form agreements with direct access in the same manner and, with the same title
insurance companies reinsuring the same percentages, as set forth in the Title Insurance Policies
for the Initial Borrowing Base Properties and (d) otherwise be in form and substance reasonably
satisfactory to Agent.

     “Total Commitments” means at any time the aggregate amount of the Commitments of all
Lenders. In no event shall the Total Commitments exceed the Maximum Loan Amount.

     “Transactions” means the execution, delivery and performance by Borrowers and the
other Credit Parties of this Agreement and the other Financing Documents, the borrowing of Loans
and the use of the proceeds thereof.

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     “Transfer” means, with respect to any Person, (a) the conveyance, transfer,
assignment, liquidation, disposition, pledge, mortgage, hypothecation, encumbrance or sale, by
operation of law or otherwise by such Person of (i) the Collateral, or any part thereof or interest
therein, or (ii) a direct or indirect equity or beneficial ownership interest in another Person,
(b) the leasing of all or substantially all of any Borrowing Base Property (other than pursuant to
a Space Lease), or (c) any change in the composition or form of business association or any
modification of any of the organizational documents of such Person which would result in a Change
in Control.

     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

     SECTION 1.02. Terms Generally. In this Agreement and in any Financing Documents, (a) the
definitions of terms herein and therein shall apply equally to the singular and plural forms of the
terms defined, (b) whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to
have the same meaning and effect as the word “shall” and (e) unless the context requires otherwise
(i) any definition of or reference to any Financing Document, agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, restated, extended, supplemented, consolidated, severed, partially
released, substituted, renewed or otherwise modified (subject to any restrictions thereon set forth
herein), (ii) any reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein”, “hereof’ and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement or such Financing Document, respectively, in
its entirety and not to any particular provision hereof, (iv) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement or such Financing Document, respectively, and (v) the
words “asset” and “property” shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.

     SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect
from time to time; provided that, if Borrowers notify Agent that Borrowers request an
amendment to any provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision (or if Agent
notifies Borrowers that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such change in GAAP or in
the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith. In calculating compliance with any
of the
financial covenants (and related definitions), any amounts taken into account in making such
calculations that were paid, incurred

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or accrued in violation of any provision of this Agreement
shall be added back or deducted, as applicable, in order to determine compliance with such
covenants.

ARTICLE II

The Credits

     SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make Loans to Borrowers from time to time during the Availability Period
in an aggregate principal amount that will not result in (a) such Lender’s Credit Exposure
exceeding such Lender’s Commitment and (b) the aggregate Credit Exposures exceeding the Borrowing
Base Loan Amount; provided, that, Lenders shall not be obligated to make more than
two (2) Loans in any calendar month. The Loans shall be evidenced by the Note, being one or more
promissory notes in an aggregate maximum principal amount of the Maximum Loan Amount. Interest and
Additional Interest, if any, shall be payable in accordance with the terms of the Note and this
Agreement. The Loan shall be repaid with Interest, Additional Interest, costs, fees and charges as
more particularly set forth in this Agreement, the Note, the Mortgages and the other Financing
Documents. The Loans are not “revolving” and any portion of principal which is prepaid or repaid
for any reason may not be reborrowed.

     SECTION 2.02. Loans and Borrowings.

     (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be responsible
for any other Lender’s failure to make Loans as required hereunder.

     (b) Each Lender at its option may make any Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of Borrowers to repay such Loan in accordance with the terms of this
Agreement.

     (c) At the commencement of each LIBOR Rate Period for any Borrowing, such Borrowing shall be
not less than $1,000,000. In no event shall there more than a total of ten (10) Borrowings
outstanding at any time.

     (d) The Initial Loan shall be a Ten Year Loan. Each Loan made thereafter shall be either a
Five Year Loan, a Seven Year Loan or a Ten Year Loan, in each case, as designated by Borrowers in a
Borrowing Request delivered pursuant to Section 2.03 hereof.

     SECTION 2.03. Requests for Borrowings. To request a Borrowing, Borrowers shall notify Agent of such request by delivery to Agent of a
Borrowing Request not later than 2:00 p.m., New York City time, three (3) Business Days before the
date of the proposed Borrowing. Each such Borrowing Request shall be in a form approved by Agent
and signed by Borrowers and shall be revocable until one (1) Business Day prior to the date of the
requested Borrowing, but shall thereafter be irrevocable; provided, however, in the
event of any such revocation, Borrowers shall be responsible for any losses, costs or other
expenses incurred

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by Agent or any Lenders in liquidating or redeploying deposits or other funds
acquired by Agent or such Lender to fund the applicable Borrowing and any overdraft, processing or
other reasonable costs (including reasonable attorney’s fees) incurred by Agent or any Lender as a
result of such revocation. Each Borrowing Request shall specify the following information in
compliance with Section 2.02 hereof:

     (a) the aggregate amount of the requested Borrowing;

     (b) the date of such Borrowing, which shall be a LIBOR Banking Day which is also a
Business Day;

     (c) whether the Loan proposed to be advanced with respect to such Borrowing shall be a
Five Year Loan, a Seven Year Loan or a Ten Year Loan;

     (d) the Borrowing Base Property with respect to which the Loan is being made;
provided, that, in the event more than one Borrowing Base Property is the subject of
such Loan, the allocation of such Loan among such Borrowing Base Properties; and

     (e) the location and number of the applicable Borrower’s (or Borrowers’) account into
which funds relating to such Borrowing shall be disbursed and which shall comply with the
requirements of Section 2.04 hereof.

Promptly following receipt of a Borrowing Request in accordance with this Section 2.03,
Agent shall advise each applicable Lender of the details thereof and of the amount of such Lender’s
Loan to be made as part of the requested Borrowing. Nothing in this Section 2.03 shall
obligate the Lenders to accept any Borrowing Request unless and until the conditions set forth in
Section 4.02 hereof shall have been satisfied with respect to the requested Borrowing.

     SECTION 2.04. Funding of Borrowings.

     (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 2:00 p.m., New York City time, to the account of
Agent most recently designated by it for such purpose by notice to the Lenders. Agent will make
such Loans available to Borrowers by promptly crediting the amount so received, in like funds, to
an account of the applicable Borrower (or Borrowers) designated by Borrowers in the applicable
Borrowing Request.

     (b) Unless Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to Agent such
Lender’s share of such Borrowing, Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.04(a) hereof and may, in reliance upon
such assumption, make available to Borrowers a corresponding amount. In such event, if a Lender
has not made its share of the applicable Borrowing available to Agent, then the applicable Lender
agrees to pay to Agent forthwith on demand, and Borrowers agree to pay to Agent within two (2)
Business Days of demand, such corresponding amount with Interest thereon, for each day from and
including the date such amount is made available to the applicable Borrower to but excluding the
date of payment to Agent, at (i) in the case of such Lender, the greater of the

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Federal Funds
Effective Rate and a rate determined by Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of Borrowers, the interest rate applicable to the
applicable Borrowing. If such Lender pays such amount to Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

     SECTION 2.05. LIBOR Rate Periods. Each Borrowing shall be at a LIBOR Rate and shall have
an initial LIBOR Rate Period of one (1) month (or such shorter period to which the Agent and the
Borrowers may agree), or, in the case of a LIBOR Rate Period relating to a Loan which would
otherwise end after the Maturity Date for such Loan, ending on and including the Maturity Date for
such Loan as set forth in and subject to the provisions of the definition of LIBOR Rate Period.
Unless such Borrowing is repaid on or prior to the end of the LIBOR Rate Period then applicable
thereto, such Borrowing shall thereafter continue for subsequent LIBOR Rate Periods of one (1)
month, or, in the case of a LIBOR Rate Period relating to a Loan which would otherwise end after
the Maturity Date for such Loan, ending on and including the Maturity Date for such Loan, as set
forth in and subject to the provisions of the definition of LIBOR Rate Period.

     SECTION 2.06. Termination and Reduction of Commitments.

     (a) Unless previously terminated in accordance with the provisions of this Agreement, the
Commitments shall be reduced on each Maturity Date by the aggregate principal balance of the Loans
which shall mature on such Maturity Date, with the Commitments being terminated in full on the
Facility Maturity Date (unless previously terminated in accordance with the provisions of this
Agreement).

     (b) On the third (3rd) anniversary of the Effective Date, the Commitments shall be reduced to
an amount equal to the then aggregate outstanding principal balance of the Loans and Borrowers’
obligation to pay the Commitment Fee with respect to the period commencing on the day immediately
succeeding the third (3rd) anniversary of the Effective Date shall terminate.

     (c) Any termination or reduction of the Commitments in accordance with the provisions of this
Agreement shall be permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments.

     SECTION 2.07. Additional Interest . Borrowers shall pay to Agent the following losses, costs and expenses of Agent or any Lender
incurred or reasonably estimated by Agent or such Lender, as applicable, to be incurred by reason
of:

     (a) (i) any payment or prepayment (under any circumstances whatsoever, whether voluntary or
involuntary) of any portion of the outstanding principal of the Loans, (ii) the conversion (for any
reason provided in this Agreement) of the rate of interest payable with respect to the Loans from
the LIBOR Rate to the Base Rate, in each case, on a date other than the last day of an applicable
LIBOR Rate Period, or (iii) the failure of any Borrowing to occur on the date established pursuant
to Section 2.03 hereof, which amounts shall include an amount equal to the present value
(using as a discount rate the rate at which interest is computed pursuant to clause (y) below) of
the excess, if any, of (x) the amount of interest that would have

33

 

accrued at LIBOR on the amount so
prepaid, converted, not funded or not borrowed, as the case may be, for the period from the date of
occurrence to the last day of the applicable LIBOR Rate Period over (y) the amount of interest (as
determined by Agent) that Agent would have received on account of a Eurodollar deposit placed by
Agent with leading banks in the London interbank market for an amount comparable to the amount so
prepaid, converted, not funded or not borrowed, as the case may be, for the period from the date of
occurrence to the last day of the applicable LIBOR Rate Period; and

     (b) any sums becoming payable by any Borrower to Agent, any Lender or any of their Affiliates
pursuant to any Lender Interest Rate Protection Agreement, including on any termination thereof.

In any of the foregoing events, Borrowers shall pay to Agent, concurrently with any principal
payment with respect to clause (a) of this Section 2.07 and within five (5) days
after demand in all other cases, or in the case of any Lender Interest Rate Protection Agreement,
such shorter period as shall be specified therein, such amount as shall equal the amount of the
Additional Interest certified by Agent (or the applicable Lender) to Borrowers by reason of such
event. A certificate as to the amount of such Additional Interest submitted by Agent to Borrowers
setting forth Agent’s (or the applicable Lender’s) basis for the determination of Additional
Interest shall be conclusive evidence of the amount thereof, absent manifest error. Failure on the
part of Agent to demand payment from any Borrower for any Additional Interest attributable to any
particular period shall not constitute a waiver of Agent’s (or the applicable Lender’s) right to
demand payment of such amount for any subsequent or prior period.

     SECTION 2.08. Evidence of Debt.

     (a) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of Borrowers to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and Interest payable and paid to such Lender from time
to time hereunder.

     (b) Agent shall maintain accounts in which it shall record (i) the amount of each Loan made
hereunder and the LIBOR Rate Period and Maturity Date applicable thereto,
(ii) the amount of any principal or Interest due and payable or to become due and payable from
Borrowers to each Lender hereunder, and (iii) the amount of any sum received by Agent hereunder or
under the other Financing Documents for the account of the Lenders and each Lender’s share thereof.

     (c) The entries made in the accounts maintained pursuant to Sections 2.08(a) or
(b) hereof shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or Agent to
maintain such accounts or any error therein shall not in any manner increase or decrease the
obligation of Borrowers to repay the Loans in accordance with the terms of this Agreement.

     (d) Any Lender may request that Loans made by it be evidenced by a separate promissory note.
In such event, Borrowers shall, at their sole cost and expense, prepare, execute and deliver to
such Lender such a promissory note payable to the order of such Lender (or, if

34

 

requested by such
Lender, to such Lender and its registered assigns) and in a form approved by Agent, which form
shall be substantially similar to the Note and shall be included within the defined term “Note” as
defined in Section 1.01 hereof and the other Note(s) previously delivered shall be amended
to reduce the principal amount(s) thereof accordingly. Thereafter, the Loans evidenced by such
promissory note and Interest thereon shall at all times (including after any assignment pursuant to
Section 9.05 hereof) be represented by one or more promissory notes in such form payable to
the order of the payee named therein (or, if such promissory note is a registered note, to such
payee and its registered assigns).

     SECTION 2.09. Prepayment of Loans; Certain Other Payments.

     (a) Principal Payment at Maturity. Each Borrower hereby unconditionally promises to
pay to Agent for the account of each Lender the then unpaid principal amount of each Loan on the
Maturity Date relating to such Loan, together with all accrued and unpaid Interest, Additional
Interest, and other sums due and payable hereunder or under the other Financing Documents as of
such Maturity Date which relates to such Loan.

     (b) Optional Prepayments. Borrowers shall have the right at any time and from time to
time to prepay any Loan in whole or in part, subject to prior notice in accordance with Section
2.09(d) hereof. Each partial prepayment of the Loan pursuant to this Section 2.09(b)
shall be in an amount not less than $1,000,000.

     (c) Mandatory Prepayments. If at any time:

     (i) Borrowers (y) elect to make a repayment of the Loans in the amount of the
applicable DSCR Deficiency Amount pursuant to Section 5.23 hereof or (z)
fail to (A) add one or more Properties as additional Borrowing Base Properties in
accordance with Section 4.03 hereof on or prior to the applicable DSCR Due
Date so that the Debt Service Coverage Ratio calculated as of the applicable Testing
Determination Date, after giving effect to the addition of such Property, shall not
be less than 1.35:1.0, or (B) deliver Additional Collateral on or prior to the
applicable DSCR Due Date in the amount of the applicable DSCR
Deficiency Amount and the other items required to be delivered pursuant to
clause (ii)(z) of Section 5.23 hereof, Borrowers shall make a
prepayment of the Loans in the amount of the applicable DSCR Deficiency Amount on or
prior to the applicable DSCR Due Date;

     (ii) Borrowers (y) elect to make a repayment of the Loans in the amount of the
applicable LTV Deficiency Amount pursuant to Section 5.24 hereof or (z) fail
to (A) increase the Borrowing Base Loan Amount by adding one or more Properties as
additional Borrowing Base Properties on or prior to the applicable LTV Due Date in
accordance with Section 4.03 hereof or (B) deliver Additional Collateral on
or prior to the applicable LTV Due Date in the amount of the applicable LTV
Deficiency Amount and the other items required to be delivered pursuant to
clause (iii)(z) of Section 5.24 hereof, Borrowers shall make a
repayment of the Loans in the amount of the applicable LTV Deficiency Amount on or
prior to the applicable LTV Due Date; or

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     (iii) upon the occurrence of any of the circumstances requiring prepayment
described in any other section of this Agreement or in any Financing Document,
including Section 5.22 hereof, Borrowers shall make a prepayment of the
Loans in the amount, and on the date, required pursuant to the applicable Section of
this Agreement or the other Financing Document.

          (d) Prepayment Notice. Borrowers shall notify Agent by telephone (confirmed by
telecopy) of any prepayment hereunder (other than a prepayment pursuant to Section 2.09(c)
hereof) not later than 2:00 p.m., New York City time five (5) Business Days before the date of
prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Loan or portion thereof to be prepaid and indicate the Maturity Date and
LIBOR Rate Period applicable to such Loan. Promptly following receipt of any such notice relating
to a Loan, Agent shall advise the Lenders of the contents thereof. Each prepayment of a Loan shall
be accompanied by payment of (i) accrued and unpaid Interest on the principal amount being prepaid,
(ii) the amounts required to be paid, if any, pursuant to Section 2.09(e) hereof, (iii) all
fees and expenses incurred by Agent in connection with such prepayment of the Loans and payable by
Borrowers in accordance with this Agreement, and (iv) all Additional Interest, the applicable
Prepayment Fee, if any, and any other amounts then due and payable hereunder, and under the Note,
the Mortgage and the other Financing Documents.

          (e) Reduction of Lender Interest Rate Protection Agreement. Concurrently with any
prepayment of a Loan, Borrowers shall, as a further condition of such prepayment, (i) in the case
of any Lender Interest Rate Protection Agreement, cause a reduction of the notional amount of such
interest rate protection arrangement so as to cause the aggregate notional amounts of all Interest
Rate Protection Agreements then in effect (other than Permitted Forward Swap Agreements and
Interest Rate Protection Agreements entered into in accordance with Section 2.18(i) hereof)
to correspond to the aggregate outstanding principal balance of the Loans, after giving effect to
such prepayment, (ii) pay all sums, if any, payable by any Borrower pursuant to any Interest Rate
Protection Agreement with respect to such reduction and (iii) provide evidence to Agent of
Borrowers’ compliance with clauses (i) and (ii) of this
Section 2.09(e), provided, however, in the event that Borrowers
reasonably believe that they shall obtain one or more Loans within one hundred and eighty (180)
days after the date of such prepayment which Borrowers reasonably believe would not otherwise
become the subject of a Permitted Forward Swap Agreement or an Interest Rate Protection Agreement
entered into in accordance with Section 2.18(i) hereof, Borrowers shall not be required to
cause a reduction of such Lender Interest Rate Protection Agreement below an amount equal to the
sum of (y) the aggregate outstanding principal balance of the Loans, after giving effect to such
prepayment, and (z) the amount of such anticipated Loan to be obtained by Borrowers within such one
hundred and eighty (180) day period; provided, further, however, in the
event that after the expiration of such one hundred and eighty (180) day period, the aggregate
outstanding principal balance of the Loans shall be less than the aggregate notional amounts of
such Lender Interest Rate Protection Agreements (other than Permitted Forward Swap Agreements and
Interest Rate Protection Agreements entered into in accordance with Section 2.18(i)
hereof), Borrowers shall immediately cause a reduction of such aggregate notional amounts of such
interest rate protection arrangements so as to cause such aggregate notional amounts to correspond
to the aggregate outstanding principal balance of the Loans as of the end of such one hundred and

36

 

eighty (180) day period (without regard to any subsequent repayment) and otherwise comply with
clauses (ii) and (iii) of this Section 2.09(e) with respect to such
reduction. Notwithstanding anything to the contrary contained herein, (A) Borrowers’ rights under
the first proviso of this Section 2.09(e) to not cause a reduction of any Lender Interest
Rate Protection Agreement concurrently with a prepayment of a Loan shall only exist until the third
(3rd) anniversary of the Effective Date and (B) to the extent that any one hundred and
eighty (180) day period referred to in this Section 2.09(e) shall extend beyond the third
(3rd) anniversary of the Effective Date, such period shall be deemed to be shortened by
the applicable number of days so that such period shall expire on the third (3rd)
anniversary of the Effective Date.

          (f) Other Sums. Borrowers shall pay to Agent all other sums owed to Agent pursuant to
the Financing Documents when such sums are due and payable as provided in the applicable Financing
Document, or if not provided therein, within five (5) Business Days after the due date thereof or
if expressly required, within five (5) Business Days after demand by Agent. To the extent any
other such sums are determined on a per diem or similar basis, such sums shall be calculated on the
basis of a 360 day year and the actual number of days elapsed. The amount of such sums shall be
determined by Agent, and such determination shall be conclusive absent manifest error.

          (g) No Set-offs, etc. All principal, Interest, Additional Interest and other sums
payable by any Borrower under the Note, this Agreement and the other Financing Documents, and/or by
Guarantor under any Financing Documents to which it is a party, shall be paid in full and without
set-offs, off-sets, counterclaims, deductions or withholdings of any kind.

          SECTION 2.10. Fees.

          (a) Borrowers shall pay all fees provided for in the Loan Fee Letter in accordance with the
terms of this Agreement and the Loan Fee Letter. Borrowers shall also pay to Agent for the account
of each Lender a commitment fee (the “Commitment Fee”), which shall
accrue at the Commitment Fee Rate on the daily amount of the unused portion of the Commitment
of such Lender during the period from and including the Effective Date (or if later, the date such
Lender becomes a party to this Agreement) to but excluding the date on which such Commitment
terminates, whether or not prior to such time all the conditions in Section 4.02 hereof are
met. Accrued Commitment Fees shall be payable in arrears on (i) August 1, 2007, August 1, 2008 and
August 1, 2009 and (ii) such earlier date on which the Commitments terminate. All Commitment Fees
shall be computed on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The applicable Commitment Fees
shall be determined by Agent, and such determination shall be conclusive absent manifest error.

          (b) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to Agent for distribution to the Lenders. Absent any error in the calculation thereof, fees paid
shall not be refundable under any circumstances.

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          SECTION 2.11. Interest.

          (a) The Loans comprising each Borrowing shall bear interest for each day during each LIBOR
Rate Period applicable thereto at the applicable LIBOR Rate for such LIBOR Rate Period.

          (b) Notwithstanding the foregoing, if any principal of any Loan is not paid when due or any
Interest on any Loan or any fee or other amount payable by any Borrower hereunder is not paid
within five (5) days after the date when same are due, whether at stated maturity, upon
acceleration or otherwise, the aggregate amount of the Loans and such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to three percent (3%) per
annum plus the weighted average LIBOR Rate applicable to the Loans as provided in Section
2.11(a) hereof (the “Default Rate”).

          (c) Accrued Interest on each Loan shall be payable in arrears on the first day of each month
hereafter and on the Maturity Date for such Loan; provided that Interest accrued pursuant
to Section 2.11(b) hereof shall be payable on demand.

          (d) All Interest hereunder shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but excluding the last day).
The applicable LIBOR Rate shall be determined by Agent, and such determination shall be conclusive
absent manifest error.

          (e) Borrowers shall pay Additional Interest as and when provided herein, and in the event any
Lender Interest Rate Protection Agreement is in effect, in such Lender Interest Rate Protection
Agreement.

          SECTION 2.12. Unavailability of LIBOR. If prior to the commencement of any LIBOR Rate
Period for a Borrowing:

          (a) Agent determines (which determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for ascertaining LIBOR for such LIBOR Rate
Period; or

          (b) Agent determines (which determination shall be conclusive absent manifest error)
that it shall become illegal to maintain the Loans or a portion thereof on the basis of one
or more LIBOR Rates,

then Agent shall give notice thereof to Borrowers and the Lenders by telephone or telecopy, as
promptly as practicable thereafter and, until Agent notifies Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, the LIBOR Rate for such Borrowing shall
be deemed to be equal to the Base Rate; provided, however, Borrowers shall continue
to be obligated to make all payments which are required to be made under each Interest Rate
Protection Agreement. Upon Agent’s determination (which determination shall be conclusive absent
manifest error) that the circumstances giving rise to such notice no longer exist, Agent shall
promptly notify Borrowers of same, and as soon as reasonably practicable after such notice, the
Loans shall resume bearing Interest at the LIBOR Rate in accordance with this Agreement.

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          SECTION 2.13. Increased Costs and Capital Adequacy.

          (a) Borrowers shall pay to Agent additional amounts as Agent shall determine will compensate
Lenders for costs incurred in maintaining the Loans or any portion thereof outstanding or for the
reduction of any amounts received or receivable by Lenders in connection with the Loans, in each
case as a result of any change in any applicable law, regulation or treaty, or in the
interpretation or administration thereof by any domestic or foreign governmental authority charged
with the interpretation or administration thereof (whether or not having the force of law), or by
any domestic or foreign court, (i) changing the basis of taxation of payments to any Lender (other
than taxes imposed on all or any portion of the overall net income of any Lender by the United
States or by any political subdivision or taxing authority of the United States or by any foreign
governmental authority), (ii) imposing, modifying or applying any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, credit extended by, or
any other acquisition of funds for loans by any Lender (whether directly, indirectly or on a
portfolio wide basis), or (iii) imposing on any Lender any other condition affecting any Note or
the Loan, in each case, so long as Agent determines (which determination shall be conclusive absent
manifest error) that same are generally applicable to transactions between Agent and similarly
situated borrowers, which are similar to the Transactions.

          (b) If any Lender shall determine that (i) any change in the application of any law, rule,
regulation or guideline adopted or arising out of the July 1988 report of the Basel Committee on
Banking Regulations and Supervisory Practices entitled “International Convergence of Capital
Measurement and Capital Standards,” including the draft Capital Accord currently proposed to
replace such report, or any change in the interpretation or administration thereof by any domestic
or foreign governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, (ii) any change in or adoption of any
other law, rule, regulation or guideline regarding capital adequacy, or (iii) compliance by
any Lender, or any lending office of any Lender, or the holding company of any Lender, with any
request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency based on any such change or adoption, has or
would have the effect of reducing the rate of return on any Lender’s capital to a level below that
which such Lender would have achieved but for such adoption, change or compliance (taking into
consideration the policies of such Lender with respect to capital adequacy), then from time to time
Borrowers shall pay to Agent such additional amounts as will compensate Lenders for such actual
reduction with respect to any portion of the Loans outstanding so long as Agent determines (which
determination shall be conclusive absent manifest error) that same are generally applicable to
transactions between Agent and similarly situated borrowers, which are similar to the Transactions.

          (c) Any amount payable by Borrowers pursuant to Section 2.13(a) or (b) hereof
shall be paid to Agent within five (5) Business Days of receipt by Borrowers of a certificate of
Agent setting forth the amount due and Agent’s basis for the determination of such amount, which
statement shall be conclusive and binding upon Borrowers absent manifest error. Failure on the
part of Agent to demand payment from Borrowers or any other Borrower for any such amount
attributable to any particular period shall not constitute a waiver of Agent’s right to demand
payment of such amount for any subsequent or prior period.

39

 

          SECTION 2.14. Joint and Several Liability of Borrowers. Subject to Section 9.17
hereof:

          (a) Each Borrower is accepting joint and several liability hereunder and under the
other Financing Documents in consideration of the financial accommodations to be provided by
Agent and the Lenders under this Agreement and the other Financing Documents, for the mutual
benefit, directly and indirectly, of each Borrower and in consideration of the undertakings
of the other Borrowers to accept joint and several liability for the Obligations.

          (b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with
the other Borrowers, with respect to the payment and performance of all of the Obligations
(including any Obligations arising under this Section 2.14), it being the intention
of the parties hereto that all the Obligations shall be the joint and several obligations of
each Borrower without preferences or distinction among them.

          (c) If and to the extent that any Borrower shall fail to make any payment with respect
to any of the Obligations as and when due or to perform any of the Obligations in accordance
with the terms thereof, then in each such event the other Borrowers will make such payment
with respect to, or perform, such Obligation.

          (d) The Obligations of each Borrower under the provisions of this Section 2.14
constitute the absolute and unconditional Obligations of each Borrower
enforceable against each Borrower, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.

          (e) Except as otherwise expressly provided in this Agreement or in any other Financing
Document, each Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Loans or other financial accommodations issued under or pursuant to
this Agreement or any other Financing Documents, to the extent permitted by applicable law,
notice of the occurrence of any Default, Event of Default, or of any demand for any payment
under this Agreement or any other Financing Document, notice of any action at any time taken
or omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, all demands, notices and
other formalities of every kind in connection with this Agreement or any other Financing
Document. Each Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the acceptance of any
payment of any of the Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in
respect of any default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement or any other Financing Document, any and
all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Obligations or the addition, substitution or release,
in whole or in part, of any Borrower. Without limiting the generality of the foregoing,
each Borrower assents to any

40

 

other action or delay in acting or failure to act on the part
of Agent or any Lender with respect to the failure by any Borrower to comply with any of its
respective Obligations, including any failure strictly or diligently to assert any right or
to pursue any remedy or to comply fully with applicable laws or regulations thereunder,
which might, but for the provisions of this Section 2.14 afford grounds for
terminating, discharging or relieving any Borrower, in whole or in part, from any of its
Obligations under this Section 2.14, it being the intention of each Borrower that,
so long as any of the Obligations hereunder remain unsatisfied, the Obligations of such
Borrower under this Section 2.14 shall not be discharged except by performance and
then only to the extent of such performance. The Obligations of each Borrower under this
Section 2.14 shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect
to any Borrower, Agent or any Lender. The joint and several liability of Borrowers
hereunder shall continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, constitution or place of formation
of any Borrower, Agent or any Lender.

          (f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is
currently informed of the financial condition of the other Borrowers and of all other
circumstances which a diligent inquiry would reveal and which bear upon the risk of
nonpayment of the Obligations. Each Borrower further represents and warrants to Agent and
Lenders that such Borrower has read and understands the terms and conditions of the
Financing Documents. Each Borrower hereby covenants that such Borrower will continue to
keep informed of the other Borrowers’ financial condition, the financial
condition of the Guarantor and other guarantors, if any, and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Obligations.

          (g) Each Borrower waives all rights and defenses arising out of an election of remedies
by Agent or any Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed such
Person’s rights of subrogation and reimbursement against any other Borrower, Guarantor or
any other guarantor. To the fullest extent permitted by law, Borrowers waive in the event
of foreclosure of any or all of the Mortgages, all rights to a marshalling of the assets of
Borrowers and of the Borrowing Base Properties, or to a sale in inverse order of alienation
in the event of foreclosure of all or any of the Mortgages, and agree in the event of
foreclosure of any or all of the Mortgages, not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters whatsoever to
defeat, reduce or affect the right of Agent or any Lender under the Financing Documents to a
sale of the Borrowing Base Properties for the collection of the Obligations without any
prior or different resort for collection or of the right of Agent to the payment of the
Obligations out of the net proceeds of the Borrowing Base Properties in preference to every
other claimant whatsoever. In addition, to the fullest extent permitted by law, Borrowers
waive in the event of foreclosure of any or all of the Mortgages, any equitable right
otherwise available to Borrowers which would require the separate sale of the Borrowing Base
Properties or require Agent to exhaust its remedies against any one of the Borrowing Base
Properties or combination of the Borrowing Base

 41

 

Properties; and further in the event of such
foreclosure, each Borrower does hereby expressly consent to and authorize, at the option of
Agent, the foreclosure and sale either separately or together of any combination of the
Borrowing Base Properties.

          (h) If a payment shall be made by any Borrower (the “Claiming Borrower”) to
satisfy an Obligation owing by any other Borrower, each other Borrower (a “Contributing
Borrower”) shall indemnify the Claiming Borrower in an amount equal to the amount of
such payment multiplied by a fraction of which the numerator shall be the net worth of the
Contributing Borrower on the date hereof (or with respect to any Person that becomes a
Borrower after the date hereof, on the date that such Person becomes a Borrower) and the
denominator shall be the aggregate net worth of each Borrower on the date hereof (or with
respect to any Person that becomes a Borrower after the date hereof, on the date that such
Person becomes a Borrower); provided, however, that all rights of each
Borrower under this Section 2.14(h) and all other rights of indemnity, contribution
or subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full of the Obligations. No failure on the part of any Borrower to
make the payments required by this Section 2.14(h) (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any other Borrower, and, subject to Section 9.17 hereof, each
Borrower shall remain liable for the full amount of the Obligations.

          SECTION 2.15. No Withholdings. All sums payable by Borrowers under the Note, this Agreement and the other Financing Documents,
shall be paid in full and without set-off or counterclaims and free of any deductions or
withholdings for any and all Taxes. In the event that any Borrower is prohibited by any law from
making any such payment free of such deductions or withholdings with respect to Taxes, then such
Borrower shall pay such additional amount to Agent as may be necessary in order that the actual
amount received by Lenders after such deduction or withholding (and after payment of any additional
Taxes due as a consequence of the payment of such additional amount) shall equal the amount that
would have been received if such deduction or withholding were not required; provided,
however, no Borrower shall be obligated to pay such additional amount on account of a
specific Lender if (a) Borrowers are required to deduct or withhold any sums under the law in
effect as of the date that such Lender becomes a “Lender” hereunder (unless such law similarly
affects Agent or any Lender which was theretofore a “Lender” hereunder and Borrowers are already
required to pay such additional amounts to Agent or any such Lender as of such date pursuant to the
terms hereof, in which case, Borrowers shall be required to pay such additional amounts to such new
“Lender”), (b) solely because a Lender, although having a legal basis to do so, fails to deliver to
Borrowers a duly executed copy of United States Internal Revenue Service Form W-8 BEN or W-8 ECI or
any successor form or any required renewal thereof, as the case may be, certifying in each case
that such Lender is entitled to receive payments hereunder or under the other Financing Documents
without deduction or withholding of any United States federal income taxes, or (c) solely because
such Lender, although having a legal basis to do so, fails to deliver to Borrowers a duly executed
United States Internal Revenue Service Form W-8 BEN or W-9 or any successor form or any required
renewal thereof, establishing that a full exemption exists from United States backup withholding
tax, and as result of such failure, any Borrower was prohibited by the Code, from making any such
payment free of such deductions or withholding. Notwithstanding anything contained in this
Section 2.15, in no event will any Lender’s failure to deliver any such

42

 

forms, or any
renewal or extension thereof, affect, postpone or relieve Borrowers from any obligation to pay
Interest, principal and other amounts due under the Financing Documents (other than amounts due
under this Section 2.15 as a result of a Lender’s failure to deliver such forms). Such
additional amount shall be due concurrently with the payment with respect to which such additional
amount is owed in the amount of Taxes certified by Agent (or the applicable Lender). A certificate
as to the amount of Taxes submitted by Agent to Borrowers setting forth Agent’s (or the applicable
Lender’s) basis for the determination of Taxes shall be conclusive evidence of the amount thereof,
absent manifest error. Failure on the part of Agent to demand payment from Borrowers or any other
Borrower for any Taxes attributable to any particular period shall not constitute a waiver of
Agent’s (or the applicable Lender’s) right to demand payment of such amount for any subsequent or
prior period.

          SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) Each Borrower shall make each payment required to be made by it hereunder (whether of
principal, Interest, Additional Interest, Prepayment Fee or otherwise) prior to 2:00 p.m., New York
City time, on the date when due, in immediately available funds, without set-off or counterclaim.
Any amounts received after such time on any date may, in the discretion
of Agent, be deemed to have been received on the next succeeding Business Day for purposes of
calculating Interest thereon. All such payments shall be payable by wire transfer to the credit of
Agent, at JPMorgan Chase Bank, ABA #021-000-021, in favor of HSH Nordbank AG, New York Branch,
Account #400949687, Reference: Hines Real Estate Investment Trust, Attention: Loan Operations or
to such other account or address as Agent may from time to time designate in writing to Borrowers
given at least five (5) Business Days prior to the effective date of such change. Agent shall
distribute any such payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. Agent may, but shall not be required to, charge,
when due and payable, any account of any Borrower maintained with Agent for principal, Interest,
fees or other amounts owing to Agent or any Lender on or with respect to this Agreement, the Loans
or any other Financing Document. Whenever any payment to be made under the Financing Documents
shall be stated to be due, or if a Maturity Date would otherwise occur, on a day which is not a
Business Day, such payment shall be made, and such Maturity Date shall occur, on the next
succeeding Business Day, unless the effect of extending the date on which such payment would be due
would be to extend the due date for such payment into the next calendar month in which case such
payment shall be due on the immediately preceding Business Day. Any such extension of time shall
be included in the computation of payment of Interest hereunder. All payments hereunder shall be
made in dollars.

          (b) All sums received by Agent shall be applied on account of sums then due and owing by the
Credit Parties under the Financing Documents in such order as Agent shall elect.

          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or Interest on or other sums due with respect to any
of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate
amount of its Loans and accrued Interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at

43

 

face value)
participations in the Loans of other Lenders to the extent necessary so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued Interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of
such recovery, without interest, and (ii) the provisions of this Section 2.16(c) shall not
be construed to apply to any payment made by any Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or participant, other
than to any Borrower or Affiliate thereof (as to which the provisions of this Section
2.16(c) shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against each Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor of such Borrower in
the amount of such participation.

          (d) Unless Agent shall have received notice from Borrowers prior to the date on which any
payment is due to Agent for the account of the Lenders hereunder that Borrowers will not make such
payment, Agent may assume that Borrowers have made such payment on
such date in accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders the amount due. In such event, if Borrowers have not in fact made such payment, then each
of the Lenders severally agrees to repay to Agent forthwith on demand the amount so distributed to
such Lender with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by Agent in accordance with banking industry rules on
interbank compensation.

          SECTION 2.17. Cash Management Accounts.

          (a) Each Borrower shall cause all Space Lease Rents and all other revenue, income and other
profits (other than Lease Termination Payments which are required to be deposited into the Lease
Termination Account pursuant to Section 2.21 hereof) arising from the Borrowing Base
Properties to be paid and deposited into their respective Operating Accounts immediately upon
receipt except to the extent otherwise provided herein or in any other Financing Document. Each
Borrower hereby grants to Agent and the Lenders a security interest in all of its right, title and
interest in and to its Operating Account and all other accounts opened or maintained by such
Borrower in connection with the ownership, operation and leasing of the Borrowing Base Properties
(collectively, but not including any Tenant Security Accounts, the Lease Termination Account, the
Additional Collateral Account or the Guaranty Collateral Account, the “Cash Management
Accounts”) and all sums on deposit therein as additional security for the Obligations and all
other obligations of the Credit Parties under the Financing Documents.

          (b) (i) Provided that no Event of Default has occurred and is continuing, and subject to the
other limitations on withdrawals and uses of revenue set forth herein and in the other Financing
Documents, and the other terms and provisions of the Financing Documents with respect to insurance
proceeds and other particular sums, each Borrower may make

44

 

withdrawals from its Cash Management
Accounts (x) to pay reasonable and necessary expenditures relating to the Borrowing Base Properties
in the ordinary course of business, including property management fees paid to Manager pursuant to
the applicable Management Agreement, (y) to pay the Obligations or other obligations arising from
Permitted Indebtedness, and (z) to make Restricted Payments not prohibited pursuant to Section
6.05 hereof. After the occurrence and during the continuation of an Event of Default, and upon
notice from Agent, no Borrower shall have any right, and the Credit Parties covenant that they
shall not and shall not permit the other Credit Parties to withdraw any amounts from any Cash
Management Account, except as may otherwise be approved by Agent or as otherwise permitted by any
other Financing Document.

               (ii) Following the occurrence and during the continuation of an Event of Default, Agent shall
have the rights and remedies with respect to the Cash Management Accounts specified in this
Agreement, the Account Agreements or in any other Financing Document, at law or equity.

          (c) On the Effective Date, Borrowers shall deliver to Agent Account Agreements with respect to
the Cash Management Accounts applicable to the Initial Borrowing Base Properties other than the
Identified Investment Accounts. Thereafter, as a condition to the addition of any Property as a
Borrowing Base Property pursuant to Section 4.03 hereof, the applicable Borrower shall
deliver to Agent an Account Agreement with respect to the Cash Management Accounts relating to such
Property (other than any investment account which Agent agrees shall become an “Identified
Investment Account”). No Borrower shall close any Cash Management Account without obtaining the
prior consent of Agent and shall not open any new Cash Management Account (i) without at least ten
(10) days’ prior notice to Agent, (ii) unless the bank or other financial institution at which such
account is opened and maintained is reasonably acceptable to Agent and (iii) unless, prior to or
concurrently with the opening of such new Cash Management Account, such Borrower delivers to Agent
an Account Agreement with respect thereto. Borrowers shall pay all fees and costs with respect to
such Account Agreements for their Cash Management Accounts. Neither Agent nor the Lenders shall be
liable for any loss of interest on or any penalty or charge assessed against the funds in, payable
on, or credited to any Cash Management Account as a result of the exercise by Agent of any of its
rights, remedies or obligations hereunder or under any other Financing Document, at law or equity.
Any interest earned on the balance of each Cash Management Account shall be deposited into such
account and be applied or withdrawn with the balance of such account in accordance with this
Section 2.17. Agent shall have sole control over the Cash Management Accounts;
provided that each Borrower shall be permitted to manage and withdraw funds from its Cash
Management Accounts to the extent provided herein until the occurrence and during the continuance
of an Event of Default.

          (d) Upon the occurrence and during the continuance of an Event of Default, the rights of
Borrowers and each and every other Person (excluding Agent and the applicable depositary bank,
subject to any control agreement or other agreement between Agent and such depositary bank) with
respect to the Cash Management Accounts shall immediately terminate upon notice to Borrowers and
such depository bank, and no such Person except Agent shall make any further withdrawal therefrom,
subject, however, to the right of Borrowers to cause withdrawals on account of
Restricted Payments permitted to be made pursuant to Section 6.05

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hereof at the time of an
Event of Default pursuant to the terms set forth in Section 2.17(e) hereof. Thereafter,
Agent may from time to time designate such signatories with respect to the Cash Management Accounts
as Agent may desire, and may make or authorize withdrawals from the Cash Management Accounts to pay
the Obligations in whole or in part and/or pay operating expenses and capital expenditures with
respect to the Borrowing Base Properties, and/or any other expenses, all as Agent may deem
necessary or appropriate and in such order as Agent may elect. Agent may notify the financial
institutions in which any Cash Management Account is held that the applicable Credit Party no
longer has a right to instruct such financial institution with respect to matters relating to the
withdrawal, operation or administration of, or investment or application of funds on deposit in
such Cash Management Account. Without limiting the foregoing, upon the occurrence and during the
continuance of an Event of Default, Agent shall have the right to cause the withdrawal of all funds
on deposit in any Cash Management Account and the deposit of such funds in an account established
with Agent at any time following receipt by the financial institution in which such Cash Management
Account is held of a notice from Agent pursuant to the Account Agreement with respect to such
Account stating that an Event of Default then exists, and each Borrower hereby authorizes and
directs such financial institutions
to make payment directly to Agent of the funds in or credited to such accounts, or such part
thereof as Agent may request. Such financial institution shall have the absolute right to rely
upon such notice without inquiring as to the accuracy of the matters referred to in such notice and
the depositories shall be fully protected by the applicable Borrower in relying upon such written
notice from Agent. In the event that Agent delivers such a notice, Agent shall thereafter have the
exclusive right to so instruct such financial institution. Nothing in this Section 2.17(d)
shall be construed so as to limit or impair Agent’s absolute right to have a receiver appointed
following an Event of Default.

          (e) At such times as an Event of Default shall have occurred and be continuing, Borrowers
shall have the right from time to time to request Agent to permit withdrawals from Cash Management
Accounts of sums to make Restricted Payments permitted to be made pursuant to Section 6.05
hereof at the time of an Event of Default. Any such request shall be accompanied by a certified
statement by the Authorized Officer as to the amount of the requested withdrawal together with
information in reasonable detail as to the basis for the amount of the requested withdrawal. In
the event that Borrowers shall be entitled to such a withdrawal, Agent shall, to the extent
sufficient funds shall then exist, promptly direct the applicable bank or financial institution
holding such Cash Management Accounts to disburse such amounts to Borrowers.

          (f) Borrowers shall, within one (1) Business Day following Agent’s notice to Borrowers of the
occurrence of an Event of Default, deposit into the Operating Account an amount equal to the
greater of (i) the aggregate amounts held in the Identified Investment Accounts as of the day
immediately preceding the date on which such Event of Default shall have occurred or (ii) the
aggregate amounts held in the Identified Investment Account as of the day that Borrowers shall be
required to make such deposit into the Operating Account. During the existence of an Event of
Default, Borrowers shall not make or permit any deposits to be made into, or any withdrawals from,
any Identified Investment Account (other than withdrawals to be immediately deposited into the
Operating Account in accordance with this Section 2.17(f)). Without limiting the
foregoing, in the event that amounts are deposited into any Identified Investment Account during
the existence of an Event of Default with respect to which Borrowers

46

 

have received such notice from
Agent, Borrowers shall within one (1) Business Day after such deposit, cause such amount to be
deposited into the Operating Account.

          SECTION 2.18. Interest Rate Protection Agreement.

          (a) Interest Rate Protection Agreement. On the Effective Date, Borrowers shall cause
the Initial Interest Rate Protection Agreement to be assigned by Sponsor to Borrowers as referred
to in the definition of “Initial Interest Rate Protection Agreement” in Section 1.01
hereof. Subject to Section 2.09(e) and 2.18(i) hereof, Borrowers shall at all
times maintain Interest Rate Protection Agreements in full force and effect having notional amounts
equal to the aggregate amount of the then outstanding principal balance of the Loans and having
terms which correspond to the Maturity Dates of the Loans (noting, for purposes of clarification,
that the Initial Interest Rate Protection Agreements satisfy the foregoing requirement with
respect to the Borrowings made on the Effective Date). In addition, any Interest Rate
Protection Agreement must satisfy the following criteria:

     (i) Each Interest Rate Protection Agreement shall be an interest rate swap,
swaption, or other derivative product acceptable to Agent, the effect of which is to
protect Borrowers against upward fluctuations of LIBOR for an interest period of one
(1) month in excess of the Swap Rate;

     (ii) Subject to Section 2.09(e) and 2.18(i) hereof, each
Interest Rate Protection Agreement shall have a term ending on the Maturity Date of
the Loan with respect to which such Interest Rate Protection Agreement corresponds
and shall be in a notional amount equal to the aggregate outstanding principal
balance of the applicable Loans;

     (iii) Each Interest Rate Protection Agreement shall be entered into between
Borrowers, on the one hand, and Agent (or an Affiliate of Agent) or with Agent’s
prior consent, any Lender or any Affiliate of any Lender, on the other hand, if
Agent (or an Affiliate of Agent), any Lender (or any Affiliate of any Lender) and
Borrowers shall in their sole discretion enter into an Interest Rate Protection
Agreement, or if Agent (or an Affiliate of Agent), any Lender (or any Affiliate of
any Lender) and Borrowers do not enter into such Interest Rate Protection Agreement,
a Qualified Counterparty;

     (iv) In the case of an Interest Rate Protection Agreement which is an interest
rate cap agreement, all sums payable by Borrowers on account of the purchase price
for the Interest Rate Protection Agreement during the term of the Interest Rate
Protection Agreement shall have been paid in full on or prior to the effective date
thereof;

     (v) Each Borrower’s interest in such Interest Rate Protection Agreement,
including all rights of such Borrower to payment thereunder and any residual value
thereof, shall have been collaterally assigned to Agent;

     (vi) The financial institution which is party to such Interest Rate Protection
Agreement shall have executed and delivered to Agent a consent to the

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collateral
assignment of each Borrower’s interest in such Interest Rate Protection Agreement
referred to in clause (v) above pursuant to a consent in form and substance
reasonably satisfactory to Agent (the “Interest Rate Protection Agreement
Consent”); and

     (vii) Such Interest Rate Protection Agreement shall be reasonably satisfactory
to Agent in form and content.

          (b) Forward Interest Rate Protection Agreements. In addition to any Interest Rate
Protection Agreements entered into in satisfaction of the requirements of Section 2.18(a)
hereof pertaining to existing Loans, Borrowers shall have the right from time to time, to enter
into one or more forward Interest Rate Protection Agreements (other than with respect to
outstanding Loans) having an “effective date” occurring prior to the third (3rd) anniversary of
the Effective Date, a term of five (5), seven (7) or ten (10) years, a notional amount not
greater than the excess of the Total Commitments not then the subject of Interest Rate Protection
Agreements and which shall otherwise comply with the requirements of clauses (ii) through
(vi) in Section 2.18(a) hereof (“Permitted Forward Swap Agreements”). In
the event that Agent, any Affiliate of Agent, any Lender or any Affiliate of Lender elects or is
permitted, as referred to in the definition of “Lender Interest Rate Protection Agreement” as set
forth in Section 1.1 hereof, to enter into an Interest Rate Protection Agreement with
Borrowers, any such Interest Rate Protection Agreement may be a Lender Interest Rate Protection
Agreement. Notwithstanding anything to the contrary contained herein, Borrowers shall cause all
Permitted Forward Swap Agreements which have not become required Interest Rate Protection
Agreements as a result of Borrowings after the Effective Date to terminate on or prior to the third
(3rd) anniversary of the Effective Date.

          (c) Failure to Provide Interest Rate Protection. In the event that Borrowers breach
their obligations to enter into and maintain an Interest Rate Protection Agreement required
hereunder in full force and effect as set forth in Section 2.18(a) hereof, in addition to
Agent’s rights and remedies hereunder or under the other Financing Documents, Agent may, but shall
have no obligation to, at Borrowers’ sole cost and expense and on each Borrower’s behalf, enter
into an Interest Rate Protection Agreement as may be required pursuant to Section 2.18(a)
hereof. In the event that Agent shall elect to enter into an Interest Rate Protection Agreement on
Borrowers’ behalf, such Interest Rate Protection Agreement, at Agent’s election, may be a Lender
Interest Rate Protection Agreement. Agent is hereby irrevocably appointed the true and lawful
attorney of each Borrower (coupled with an interest), and Agent shall be entitled to act pursuant
to such power following an Event of Default that shall have occurred and be continuing by reason of
a failure to comply with the terms of Section 2.18(a) hereof, in its name and stead, solely
to execute such an Interest Rate Protection Agreement and all necessary documents ancillary
thereto, and for that purpose Agent may execute all necessary agreements and instruments, and may
substitute one or more persons with like power, each Borrower hereby ratifying and confirming all
that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof. All
sums paid and liabilities incurred by Agent pursuant to this Section 2.18 shall be paid by
Borrowers (and not from the proceeds of a Loan) within five (5) Business Days after Agent’s demand
with Interest at the Default Rate to the date of payment to Agent and such sums and liabilities,
including such Interest, shall be deemed and shall constitute advances under this Agreement and be
secured by the Security Documents.

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          (d) Obligation of Borrowers Unaffected by Interest Rate Protection Agreement. No
Interest Rate Protection Agreement shall alter, impair, restrict, limit or modify in any respect
the obligation of any Borrower to pay Interest on the Loans, as and when the same becomes due and
payable in accordance with the provisions of the Financing Documents.

          (e) Termination, etc. of Interest Rate Protection Agreement. No Borrower shall
terminate, modify, cancel or surrender, or permit the termination, modification, cancellation or
surrender of, any required Interest Rate Protection Agreement without the prior consent of Agent or
as required pursuant to Section 2.09(e) or 2.18(i) hereof. Within five (5)
Business Days after any Borrower obtains knowledge of or receipt of notice (which may be given by
Agent or a Lender) of a default by the financial institution that is a party to any Interest Rate
Protection Agreement, the applicable Borrower shall substitute for such defaulted Interest Rate
Protection
Agreement another Interest Rate Protection Agreement (to which the Person that defaulted under
the defaulted Interest Rate Protection Agreement is not a party) so that, after giving effect to
such substitution, Borrowers are in compliance with the requirements of Section 2.18(a)
hereof.

          (f) Receipts from Interest Rate Protection Agreements. All payments due to any
Borrower pursuant to any Interest Rate Protection Agreement, including upon any termination
thereof, shall be payable to and, except as provided below, held by Agent; provided,
however, that all periodic “net payments” due to any Borrower so received by Agent in
connection with a payment made by a counterparty to an Interest Rate Protection Agreement shall be
applied by Agent on account of Interest then due and payable on the Loan unless an Event of Default
shall have occurred and be continuing; provided, further, however, if an
Event of Default shall have occurred and be continuing Agent may, in its discretion, for so long as
such Event of Default is continuing and in addition to any other rights and remedies hereunder,
apply the amounts so held by Agent to the Loans or other amounts due under the Financing Documents
at Agent’s election. Such funds shall constitute additional security for the Obligations, a
security interest therein being granted hereby. In the event any Borrower receives any sums
pursuant to or in connection with any Interest Rate Protection Agreement, it shall immediately pay
such sums to Agent, provided, however, so long as no Event of Default shall have
occurred and be continuing, all payments received by Agent in connection with any Interest Rate
Protection Agreement in excess of amounts then due and payable on account principal, Interest or
other sums due in connection with the Loan shall be promptly remitted to Borrowers.

          (g) Security. No Interest Rate Protection Agreement shall be secured by all or any
portion of the Collateral unless it is a Lender Interest Rate Protection Agreement, in which case
each Borrower’s obligations under such Lender Interest Rate Protection Agreement shall be secured
pari passu with the principal amount of the Loans secured by the Mortgages and the other Security
Documents. In amplification of the foregoing, in the event that any payment made by any Borrower
hereunder or under any other Financing Documents is insufficient to pay all amounts due and owing
on the date of such payment and is intended to be applied on account of principal of the Loans,
such payment shall be applied pari passu to the amounts due under the Lender Interest Rate
Protection Agreement and to the outstanding principal of the Loans.

          (h) Interest Rate Protection Agreements. Each Lender that is a party to any Interest
Rate Protection Agreement acknowledges that the interest of each Borrower in and to such Interest
Rate Protection Agreement will be pledged and collaterally assigned to Agent

49

 

pursuant to the
Financing Documents, and hereby consents without any restrictions to such pledge and collateral
assignment. All payments, if any, due under such Interest Rate Protection Agreement shall be paid
directly to Agent to be applied in accordance with Section 2.18(f) hereof, and all other
rights of any Borrower shall, upon the occurrence and during the continuance of an Event of
Default, be exercisable by Agent. Each Lender that is a party to any Interest Rate Protection
Agreement shall execute and deliver to Agent, and cause any Affiliate of such Lender that is a
party to any Interest Rate Protection Agreement to execute and deliver to Agent, upon entering into
such agreement the Interest Rate Protection Agreement Consent in order to confirm the foregoing.

          (i) Additional Interest Rate Protection Agreements. Without limiting any other
provision of this Section 2.18, if, as of any date on which no Default or Event of Default
shall exist, Borrowers reasonably believe that they shall obtain one or more Loans within one
hundred and eighty (180) days after such date which Borrowers reasonably believe would not
otherwise become the subject of a Permitted Forward Swap Agreement or an Interest Rate Protection
Agreement with respect to which the notional amount thereunder was not reduced in connection with a
prepayment of the Loans in accordance with Section 2.09(e) hereof, Borrowers shall have the
right to enter into one or more Interest Rate Protection Agreements which shall have an aggregate
notional amount not greater than the amount of such anticipated Loans to be obtained by Borrowers
within such one hundred and eighty (180) day period; provided, further,
however, in the event that after the expiration of such one hundred and eighty (180) day
period, the aggregate outstanding principal balance of the Loans shall be less than aggregate
notional amounts of all Interest Rate Protection Agreements then in effect (including Interest Rate
Protection Agreements entered into pursuant to this Section 2.18(i), but excluding any
Permitted Forward Swap Agreements and any Interest Rate Protection Agreements with respect to which
the notional amount thereunder was not reduced in connection with a prepayment of the Loans in
accordance with Section 2.09(e) hereof), Borrowers shall immediately (i) cause a reduction
of the aggregate notional amounts of such interest rate protection arrangements so as to cause such
aggregate notional amount of all Interest Rate Protection Agreements (other than any Permitted
Forward Swap Agreements and any Interest Rate Protection Agreements with respect to which the
notional amount thereunder was not reduced in connection with a prepayment of the Loans in
accordance with Section 2.09(e) hereof) to correspond to the aggregate outstanding
principal balance of the Loans as of the end of such one hundred and eighty (180) day period, (ii)
pay all sums, if any, payable by Borrowers pursuant to any Interest Rate Protection Agreement with
respect to such reduction and (iii) provide evidence to Agent of Borrowers’ compliance with
clauses (i) and (ii) of this Section 2.18(i). Notwithstanding anything to
the contrary contained herein, (y) Borrowers’ rights under this Section 2.18(i) to enter
into one or more Interest Rate Protection Agreements which are not required pursuant to this
Section 2.18 hereof shall only exist until the third (3rd) anniversary of the
Effective Date and (z) to the extent that any one hundred and eighty (180) day period referred to
in this Section 2.18(i) shall extend beyond the third (3rd) anniversary of the
Effective Date, such period shall be deemed to be shortened by the applicable number of days so
that such period shall expire on the third (3rd) anniversary of the Effective Date.

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          SECTION 2.19. Tenant Security Deposits.

          (a) To the extent required by Legal Requirements or any Space Lease, each Borrower shall hold,
in trust, all applicable Tenant security deposits provided pursuant to the applicable Space Leases
(“Security Deposits”) in a segregated account with one or more depository institutions
reasonably approved by Agent (collectively, the “Tenant Security Account”), and shall not
commingle any such funds with any other funds of any Borrower. Without limiting the foregoing, to
the extent required by Legal Requirements or any Space Lease, Borrowers shall, and shall cause
Manager to, deposit all applicable cash Security Deposits collected by Borrowers, Manager or any of
their respective agents into the Tenant Security Account within one (1) Business Day of receipt.
Within ten (10) days after Agent’s request, Borrowers shall furnish to Agent a statement of all
Security Deposits. Within one (1) Business Day following Agent’s notice to Borrowers of the
occurrence of an Event of Default, Borrowers
shall deposit into the Tenant Security Account (to the extent not then held in the Tenant
Security Account pursuant to this Section 2.19) an amount equal to the aggregate amount of
all cash Security Deposits under Space Leases then in effect which have not theretofore been
returned to the applicable Tenant or applied against amounts due under the applicable Space Lease,
in each case, in accordance with the terms of this Agreement.

          (b) Subject to Legal Requirements, the Tenant Security Account shall be under the sole
dominion and control of Agent, and Borrowers shall have no right to make withdrawals therefrom
except as provided in this Section 2.19 and as required by Legal Requirements. Each
Borrower may make withdrawals from its Tenant Security Account at such time as no Event of Default
has occurred and is continuing provided the proceeds are (i) applied in the ordinary course of
business to sums due under the applicable Space Lease when the terms of such Space Lease or Legal
Requirements permit the application thereof or (ii) returned to the applicable Tenant pursuant to
Legal Requirements or the terms of the applicable Space Lease which require such Borrower to return
such Security Deposit. After the occurrence and during the continuation of an Event of Default,
neither Borrowers nor any other Person shall have any right to, and each Borrower covenants that it
shall not, withdraw any amounts from the Tenant Security Account or apply any Security Deposits,
except as may be approved by Agent. In the event an Event of Default exists but a Borrower is
required pursuant to the terms of the applicable Space Lease or Legal Requirements to return any
Security Deposit to the applicable Tenant, Borrowers shall deliver a notice to Agent certifying
same and stating the reason therefor. Agent shall, at Agent’s option and at Borrowers’ sole cost
and expense, either permit the applicable Borrower to return the Security Deposit to the applicable
Tenant or, if Agent elects, cause such Security Deposit to be returned directly to the applicable
Tenant. Following the occurrence and during the continuation of an Event of Default, Agent shall
have the rights and remedies with respect to the Tenant Security Account specified in this
Agreement or in any other Financing Document, subject to Legal Requirements and the rights of the
Tenants under the Space Leases.

          (c) Upon the request of Agent during the existence of an Event of Default, Borrowers shall
transfer to the name of Agent and deliver to Agent all original Space Lease Letters of Credit
obtained by any Borrower, together with reasonable evidence that all fees payable to the issuer on
account of such assignment and transfer have been paid. All such Space Lease Letters of Credit
shall be transferable by their terms. Each Borrower hereby grants to

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Agent and Lenders a security
interest in all rights of such Borrower in and to all Space Lease Letters of Credit, including all
proceeds thereof, as additional security for the Obligations. In addition to all other rights and
remedies of Agent and Lenders, Agent may, and to the extent necessary in order to do so, each
Borrower hereby grants to Agent an irrevocable power of attorney, coupled with an interest, and
Agent shall be entitled to act pursuant to such power following an Event of Default that shall have
occurred and be continuing by reason of a failure to comply with the terms of this Section
2.19, solely to draw upon or otherwise realize on each such Space Lease Letters of Credit in
accordance with its terms and those of the applicable Space Lease. Upon the receipt of any Space
Lease Letters of Credit, Agent shall hold such Space Lease Letters of Credit as additional
collateral for the Loans subject to the terms of the related Space Leases. If a Borrower is
required by the terms of the applicable Space Lease or Legal Requirements to return any Space Lease
Letter of Credit which is then being held by Agent to the Tenant, Agent shall, at Borrowers’ sole
cost and expense, re-assign and transfer and deliver
possession of such original Space Lease Letter of Credit to the applicable Borrower provided
Borrowers deliver to Agent a written request for same, certifying the foregoing and indicating the
applicable Space Lease and Letter of Credit and the reasons for such return, such Borrower shall
promptly return the same to the applicable Tenant. At Agent’s election and at Borrowers’ sole cost
and expense, instead of delivering such Space Lease Letter of Credit to such Borrower, Agent shall
return same to the applicable Tenant.

          (d) So long as no Event of Default shall have occurred and be continuing, Borrowers shall have
the right to hold all Space Lease Letters of Credit in the name of the applicable Borrowers, as
beneficiary, and draw on such Space Lease Letter of Credit in accordance therewith and with the
applicable Space Lease and Legal Requirements. Borrowers shall deposit the proceeds of any such
drawing into the applicable Operating Account. Borrowers shall have no right to draw on any Space
Lease Letter of Credit during the existence of an Event of Default without the prior consent of
Agent.

          SECTION 2.20. Additional Collateral.

          (a) If any Additional Collateral shall be required or is contemplated to be delivered by
Borrowers pursuant to any provision of this Agreement, then Borrowers shall either (i) if the form
of such Additional Collateral shall be cash, pay to Agent for deposit in the Additional Collateral
Account, (ii) if the form of such Additional Collateral shall be a Collateral Letter of Credit,
deliver to Agent such Collateral Letter of Credit, or (iii) if the form of such Additional
Collateral shall be any other collateral acceptable to Agent, deliver to Agent such other
collateral in form and content acceptable to Agent with such other documents as Agent shall require
in order to grant Agent a first priority perfected security interest therein, if applicable, in
each case, in such amounts or the liquidation value being, as required or contemplated pursuant to
Sections 4.04(a), 5.23(b) and 5.24(b) hereof.

          (b) Agent shall deposit all sums delivered to Agent for deposit in the Additional Collateral
Account into an account or subaccount of Agent or, at Agent’s election, a bank or other financial
institution approved by Agent (the “Additional Collateral Account”). Each Borrower hereby
grants to Agent for itself and on behalf of Lenders a security interest in all rights of such
Borrower in and to the Additional Collateral Account and all sums on deposit therein as additional
security for the Obligations. All sums deposited in the Additional Collateral

52

 

Account shall be
released and applied in accordance with the terms of this Agreement. If held by Agent, the credit
balance in the Additional Collateral Account may be commingled with the general funds of Agent and
shall bear interest at a rate per annum which is substantially similar to interest rates offered by
Agent to similarly situated Borrowers for comparable deposits held in similar accounts. If not
held by Agent, any such Borrower shall cause the bank or financial institution at which the
Additional Collateral Account is held to execute and deliver to Agent an Account Agreement with
respect to the Additional Collateral Account, Borrowers shall pay all fees and costs with respect
thereto and no Borrower shall close such account without obtaining the prior consent of Agent. To
the extent that any sums on deposit in the Additional Collateral Account are held in a time deposit
account and are withdrawn from the Additional Collateral Account prior to the maturity of any time
deposit, whether at the direction of a Borrower or by
Agent in connection with the exercise by Agent of Agent’s rights and remedies hereunder,
neither Agent nor Lenders shall be liable for any interest forfeited or otherwise foregone by
Borrowers as the result of such withdrawal. Any income from such investments will be deposited to,
and become a portion of, the Additional Collateral Account. Agent shall have sole dominion and
control over the Additional Collateral Account.

          (c) In addition to all other rights and remedies available to Agent and Lenders, upon the
occurrence and during the continuance of any Event of Default, Agent shall have the right without
notice to any Borrower or any other Person to apply the Additional Collateral and make drawings
under any Collateral Letter of Credit for the payment of any and all Obligations that are due and
payable, with such amounts to be applied as set forth in Section 2.16 hereof and otherwise
in accordance with this Agreement. Agent may also draw on any such Collateral Letter of Credit in
the event that the issuer thereof notifies Agent that such Collateral Letter of Credit shall be not
renewed, or shall be revoked or otherwise terminated, in which event the proceeds thereof shall be
retained, held and applied by Agent as Additional Collateral in accordance with this Section
2.20. If (x) any Collateral Letter of Credit expires or is revoked, unrenewed or otherwise not
in full force and Agent shall not have fully drawn the amount of such Collateral Letter of Credit
prior to the date that it is no longer in effect, (y) the issuer thereof declares its inability to
pay its debts on time, is the subject of any bankruptcy, insolvency, reorganization, receivership,
dissolution or similar proceedings, is prohibited by law or court order from doing business in the
State of New York or the state of its organization/incorporation or from otherwise performing its
obligations under such Collateral Letter of Credit or other financial obligations, or has its
credit rating downgraded below its rating as of the date such Collateral Letter of Credit is issued
by S&P, Moody’s, Fitch or another financial services rating agency (or below a rating of “BBB+” (or
the equivalent) by S&P, Moody’s or Fitch in the event the issuer is KeyBank) or (z) the issuer
thereof fails to pay upon or otherwise refuses or is unable to honor Agent’s draft within the time
period set forth in such Collateral Letter of Credit, Borrowers shall, within five (5) Business
Days after notice from Agent, deliver to Agent substitute Additional Collateral. If the
outstanding principal amount of the Loans, together with all Interest and other sums due and
payable in connection therewith and all other outstanding Obligations then due or required to be
performed, shall have been indefeasibly repaid or performed, as applicable, by the Credit Parties
in full, all of the Commitments have expired or been terminated and all Lender Interest Rate
Protection Agreements have been terminated, then Agent shall return to Borrowers any Additional
Collateral or Collateral Letter of Credit to the extent then in possession or control of Agent.

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          (d) If, as of any Testing Determination Date following the date on which Borrowers shall have
delivered any Additional Collateral pursuant to Sections 4.03(a), 5.23 or
5.24 hereof, (i) the Debt Service Coverage Ratio calculated as of the calendar quarter
ending on such Testing Determination Date shall be greater than 1.35:1.0, (ii) the Debt Service
Coverage Ratio calculated as of the calendar quarter ending on the immediately preceding Testing
Determination Date shall be greater than 1.35:1.0, (iii) the aggregate outstanding principal
balance of the Loans is less than or equal to the Borrowing Base Loan Amount (without giving effect
to the Additional Collateral Value) as of such Testing Determination Date and as of the immediately
preceding Testing Determination Date, and (iv) no Default or Event of Default shall have occurred
and be continuing, then, Agent shall upon request of Borrowers promptly (x) return any Collateral
Letter of Credit, (y) disburse into the Operating Account all of the
unapplied funds in the Additional Collateral Account or (z) return to Borrowers any other
collateral, or the liquidated cash proceeds thereof, if applicable, delivered by Borrowers to Agent
as Additional Collateral which shall not have been in the form of cash or a Collateral Letter of
Credit.

          (e) Other than as expressly set forth in this Section 2.20, Borrowers shall have no
right to receive a return of any Additional Collateral.

          SECTION 2.21. Lease Termination Account.

          (a) Borrowers shall deposit (or cause to be deposited) all Lease Termination Payments which,
individually or together with all other Lease Termination Payments made by or on behalf of the same
Tenant (or its Affiliates), are greater than $500,000 into an account (the “Lease Termination
Account”) at a bank or other financial institution reasonably acceptable to Agent immediately
upon receipt thereof. Borrowers hereby grant to Agent for itself and on behalf of Lenders a
security interest in all rights of Borrowers in and to the Lease Termination Account and all sums
on deposit therein as additional security for the Obligations. All sums deposited in the Lease
Termination Account shall be released and applied in accordance with the terms of this Agreement.
Borrowers shall deliver an Account Agreement with respect to the Lease Termination Account promptly
upon the opening of such account. Agent shall have sole dominion and control over the Lease
Termination Account.

          (b) Borrowers shall be permitted to make withdrawals from the Lease Termination Account solely
for the payment of Leasing Commissions and Tenant Improvement Costs relating to space demised under
Space Leases which gave rise to Lease Termination Payments which have been deposited into the Lease
Termination Account or relating to other vacant space at such Borrowing Base Property so long as
(i) no Event of Default shall have occurred and be continuing and (ii) at least five (5) Business
Days prior to such withdrawal, Borrowers shall have delivered to Agent (x) a copy of the Space
Lease which is the subject of such Leasing Commissions and Tenant Improvement Costs, (y) an
itemization of such Leasing Commissions and Tenant Improvement Costs and (z) a certificate executed
by Borrowers certifying that (A) the applicable itemization referred to in clause (y) above
is true, correct and complete in all material respects and (B) such Leasing Commissions and Tenant
Improvement Costs relate to space demised under Space Leases which gave rise to Lease Termination
Payments which have been deposited into the Lease Termination Account or relating to other vacant
space at such Borrowing Base Property. Borrowers hereby covenant and agree (i) to use

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any and all
withdrawals from the Lease Termination Account solely for the payment of the applicable Leasing
Commissions and Tenant Improvements Costs set forth on the applicable itemization referred to in
clause (y) above within ten (10) Business Days after the withdrawal thereof. Other than as
expressly set forth in this Section 2.21(b), Borrowers shall have no right to make any
withdrawals from the Lease Termination Account. Upon the reletting of all of the space demised
under a Space Lease which gave rise to the applicable Lease Termination Payments (or an equal
number of net rentable square feet of other vacant space in the applicable Borrowing Base
Property), and the payment of all Leasing Commissions and Tenant Improvement Costs applicable to
such reletting, Borrowers shall have the right to withdraw any remaining balance of the applicable Lease Termination Payment so long as (A) no Event of
Default shall have occurred and be continuing, (B) Borrowers shall have delivered evidence
acceptable to Agent demonstrating such facts and (C) Borrowers shall have given Agent at least five
(5) Business Days prior notice of such withdrawal.

          SECTION 2.22. Substitution of Initial Limited Payment Guaranty.

          (a) Without limiting Section 6.16 hereof, Borrowers shall use commercially reasonable
efforts (i) to cause KeyBank to amend the terms of (or to provide a waiver with respect to) the
KeyBank Revolving Credit Facility (a “KeyBank Guaranty Related Amendment”) in a manner
reasonably acceptable to Agent, which amendment or waiver shall (y) expressly permit Sponsor to
provide the guaranties set forth in the Limited Payment Guaranty by executing and delivering the
Substitute Limited Payment Guaranty or (z) remove any limitation on the Sponsor’s ability to
provide guaranties, and (ii) to otherwise satisfy the conditions set forth in Section
2.22(b) hereof, in each case, within ninety (90) days after the Effective Date (the
“Specified Substitution Date”), so that the Initial Limited Payment Guaranty may be
substituted with the Substitute Limited Payment Guaranty in accordance with Section 2.22(b)
hereof.

          (b) Upon satisfaction of all of the following conditions precedent, the Initial Limited
Payment Guaranty shall be terminated pursuant to Section 2.22(d) hereof and substituted
with the Substitute Limited Payment Guaranty:

               (i) Borrowers shall have delivered a copy of the KeyBank Guaranty Related Amendment to Agent,
along with a request to substitute the Initial Limited Payment Guaranty with the Substitute Limited
Payment Guaranty;

               (ii) No Event of Default shall have occurred and be continuing;

               (iii) To the extent that any amounts are then due and payable under the Initial Limited
Payment Guaranty, such amounts shall have been paid in full;

               (iv) Sponsor shall be in satisfaction of all of the Guarantor’s Financial Covenants set forth
in the Recourse Liability Agreement;

               (v) Sponsor shall execute and deliver to Agent a guaranty (the “Substitute Limited Payment
Guaranty”) in the form of the Initial Limited Payment Guaranty, with such changes as Agent
determines are reasonably necessary in order to reflect the change of the “Guarantor” thereunder
from the REIT to Sponsor and to confirm that Sponsor shall be liable

55

 

for all of the “Guaranteed
Obligations” thereunder to the same extent as if Sponsor had entered into the Substitute Limited
Payment Guaranty on the Effective Date;

               (vi) Agent shall have received a favorable customary written opinion (addressed to Agent and
the Lenders and dated as of the date of the Substitute Limited Payment Guaranty) of counsel for the
Sponsor, covering such matters relating to Sponsor and the Substitute Limited Payment Guaranty as
Agent shall reasonably request, including a non-contravention opinion; and

               (vii) a resolution adopted by the REIT’s Board of Directors authorizing the execution,
delivery and performance by Sponsor of the Substitute Limited Payment Guaranty, which resolution
shall be accompanied by a certification by a secretary of the REIT certifying that such resolution
has not been modified, rescinded or amended and is in full force and effect.

          (c) In the event that the Initial Limited Payment Guaranty shall not be substituted with the
Substitute Limited Payment Guaranty in accordance with Section 2.22(b) on or prior to the
Specified Substitution Date, then Borrowers shall immediately pay to Agent cash for deposit into
the Guaranty Collateral Account or deliver to Agent a Guaranty Letter of Credit, in either case, in
an amount equal to the Guaranty Collateral Amount as of the Specified Substitution Date (the
“Guaranty Collateral”).

          (d) Upon (i) satisfaction of all of the conditions set forth in Section 2.22(b) to
terminate the Initial Limited Payment Guaranty or (ii) the delivery to Agent of the Guaranty
Collateral pursuant to Section 2.22(c) hereof, as applicable, Agent and the REIT shall
enter into an agreement reasonably acceptable to Agent and the REIT to terminate the Initial
Limited Payment Guaranty and to release the REIT from all of its obligations under the Initial
Limited Payment Guaranty so long as in the case of clause (ii) above, no Event of Default
shall have occurred and be continuing (it being understood that the failure of an Event of Default
to have occurred and be continuing is a condition precedent to the occurrence of the event
described in clause (i) above (as such condition precedent is set forth in clause
(i) of Section 2.22(b) hereof)).

          (e) In the event that the Initial Limited Payment Guaranty shall not be substituted with the
Substitute Limited Payment Guaranty in accordance with Section 2.22(b) on or prior to the
Specified Substitution Date, then during the period commencing on the Specified Substitution Date
and ending on the date, if any, that all of the conditions set forth in Section 2.22(b)
hereof shall have been satisfied, including the delivery of a Substitute Limited Payment Guaranty,
the Guaranty Collateral Amount shall be remeasured as of each Testing Determination Date. In the
event that the Guaranty Collateral Amount as of any Testing Determination Date during such period
shall exceed the Guaranty Collateral Amount as of the immediately preceding Testing Determination
Date (or the Guaranty Collateral Amount as of the Specified Substitution Date in the event of the
first Testing Determination Date during such period), then Borrowers shall within fifteen (15)
Business Days after the date which is the earlier of (y) the date which is forty five (45) days
after such Testing Determination Date or (z) the date that Borrowers deliver the items referred to
in clauses (iii) and (iv) of Section 5.01(e) hereof with respect to the
calendar quarter ending on such Testing Determination Date, pay to Agent cash for deposit into the
Guaranty Collateral Account or deliver to Agent a new Guaranty Letter of

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Credit, in each case, in
the amount of such excess (or in the event that a Guaranty Letter of Credit is then being held by
Agent, cause such Guaranty Letter of Credit to be increased by the amount of such excess). In the
event that the Guaranty Collateral Amount as of any Testing Determination Date during such period
shall be less than the Guaranty Collateral Amount as of the immediately preceding Testing
Determination Date (or the Guaranty Collateral Amount as of the Specified Substitution Date in the
event of the first Testing Determination Date during such period), then Agent shall promptly after
request by Borrowers (A) deliver such excess to Borrowers from the Guaranty Collateral Account (to
the extent sufficient funds exist therein) or (B) permit Borrowers to reduce any Guaranty Letter of
Credit then held by Agent by the amount
of such excess, so long as, in each case, no Default or Event of Default shall have occurred
and be continuing.

          (f) Agent shall deposit all cash delivered to Agent pursuant to this Section 2.22 for
deposit in the Guaranty Collateral Account into an account or subaccount of Agent or, at Agent’s
election, a bank or other financial institution approved by Agent (the “Guaranty Collateral
Account”). Each Borrower hereby grants to Agent for itself and on behalf of Lenders a security
interest in all rights of such Borrower in and to the Guaranty Collateral Account and all sums on
deposit therein as additional security for the Obligations. All sums deposited in the Guaranty
Collateral Account shall be released and applied in accordance with the terms of this Agreement.
If held by Agent, the credit balance in the Guaranty Collateral Account may be commingled with the
general funds of Agent and shall bear interest at a rate per annum which is substantially similar
to interest rates offered by Agent to similarly situated Borrowers for comparable deposits held in
similar accounts. If not held by Agent, any such Borrower shall cause the bank or financial
institution at which the Guaranty Collateral Account is held to execute and deliver to Agent an
Account Agreement with respect to the Guaranty Collateral Account, Borrowers shall pay all fees and
costs with respect thereto and no Borrower shall close such account without obtaining the prior
consent of Agent. To the extent that any sums on deposit in the Guaranty Collateral Account are
held in a time deposit account and are withdrawn from the Guaranty Collateral Account prior to the
maturity of any time deposit, whether at the direction of a Borrower or by Agent in connection with
the exercise by Agent of Agent’s rights and remedies hereunder, neither Agent nor Lenders shall be
liable for any interest forfeited or otherwise foregone by Borrowers as the result of such
withdrawal. Any income from such investments will be deposited to, and become a portion of, the
Guaranty Collateral Account. Agent shall have sole dominion and control over the Guaranty
Collateral Account.

          (g) In addition to all other rights and remedies available to Agent and Lenders, upon the
occurrence and during the continuance of any Event of Default, Agent shall have the right without
notice to any Borrower or any other Person to apply the sums held in the Guaranty Collateral
Account and make drawings under any Guaranty Letter of Credit for the payment of any and all
Obligations that are due and payable, with such amounts to be applied as set forth in Section
2.16 hereof and otherwise in accordance with this Agreement. Agent may also draw on any such
Guaranty Letter of Credit in the event that the issuer thereof notifies Agent that such Guaranty
Letter of Credit shall be not renewed, or shall be revoked or otherwise terminated, in which event
the proceeds thereof shall be deposited into the Guaranty Collateral Account and held and applied
in accordance with this Section 2.22. If (i) any Guaranty Letter of Credit expires or is
revoked, unrenewed or otherwise not in full force and Agent shall not have fully drawn the amount
of such Guaranty Letter of Credit prior to the date that it is no longer in

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effect, (ii) the issuer
thereof declares its inability to pay its debts on time, is the subject of any bankruptcy,
insolvency, reorganization, receivership, dissolution or similar proceedings, is prohibited by law
or court order from doing business in the State of New York or the state of its
organization/incorporation or from otherwise performing its obligations under such Guaranty Letter
of Credit or other financial obligations, or has its credit rating downgraded below its rating as
of the date such Guaranty Letter of Credit is issued by S&P, Moody’s, Fitch or another financial
services rating agency (or below a rating of “BBB+” (or the equivalent) by S&P, Moody’s or Fitch in
the event the issuer is KeyBank) or (iii) the issuer thereof fails to pay upon or otherwise refuses
or is unable to honor Agent’s draft within the time period set forth in such
Guaranty Letter of Credit, Borrowers shall, within five (5) Business Days after notice from
Agent, deliver to Agent cash for deposit into the Guaranty Collateral Account or a substitute
Guaranty Letter of Credit, in each case, in the amount of the then undrawn amount of such existing
Guaranty Letter of Credit. If the outstanding principal amount of the Loans, together with all
Interest and other sums due and payable in connection therewith and all other outstanding
Obligations then due or required to be performed, shall have been indefeasibly repaid or performed,
as applicable, by the Credit Parties in full, all of the Commitments have expired or been
terminated and all Lender Interest Rate Protection Agreements have been terminated, then Agent
shall return to Borrowers any sums then held in the Guaranty Collateral Account or Guaranty Letter
of Credit to the extent then in possession or control of Agent.

          (h) Other than as expressly set forth in this Section 2.22, Borrowers shall have no
right to receive a return of any sums then held in the Guaranty Collateral Account or any Guaranty
Letter of Credit.

ARTICLE III

Representations and Warranties

          To induce Agent and the Lenders to enter into this Agreement and the Lenders to make the loans
hereunder, each Borrower hereby represents, warrants and covenants to the Lenders and Agent as
follows (which representations, warranties and covenants shall survive the execution and delivery
of this Agreement and the other Financing Documents, regardless of any investigation made by the
Lenders and Agent or on its behalf):

          SECTION 3.01. Existence and Power. Each Credit Party (a) is duly organized, validly
existing and in good standing (or its legal equivalent, if any) under the laws of its jurisdiction
of organization, (b) has all necessary powers required to own its properties, to carry on its
business as now conducted and to enter into and perform its obligations under this Agreement and
the other Financing Documents to which it is a party, (c) to the extent such Credit Party is the
owner of a Borrowing Base Property, is qualified to do business in, and is in good standing in each
State in which such Borrowing Base Property is located, and (d) is qualified to do business in, and
is in good standing in, every other jurisdiction where such qualification is required.

          SECTION 3.02. Authorization; No Contravention. The execution, delivery and performance by
each Credit Party of this Agreement and the other Financing Documents to which it is a party (a)
are within its powers and have been duly authorized by all necessary

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action, (b) require no action
by or in respect of, or filing with, any Governmental Authority, any property manager or other
third party, (c) do not contravene, or constitute a breach of or default under, any provision of
applicable law or regulation, any of its constitutive documents or of any judgment, injunction,
order, decree, permit, license, note, mortgage, agreement or other instrument binding upon such
Person or any of its Affiliates or their respective assets and (d) do not result in the creation or
imposition of any Lien on any asset of any Credit Party or the REIT or any of their respective
Affiliates (except the Security
Interests). All consents, approvals, authorizations or orders of any Person, court or Governmental
Authority or any third party that are required in connection with the execution and delivery by any
Borrower of this Agreement and the other Financing Documents or to consummate the transactions
contemplated hereby have been obtained and are in full force and effect.

          SECTION 3.03. Binding Effect. This Agreement and the other Financing Documents to which
each Credit Party is a party have been duly executed and delivered by such Person and constitute
valid and binding agreements of each Credit Party, in each case enforceable in accordance with
their respective terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or moratorium or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles.

          SECTION 3.04. Financial Information.

          (a) Each Credit Party has heretofore furnished to Agent true, correct and complete audited
financial statements of the REIT and its Consolidated Subsidiaries for the fiscal year ending
December 31, 2005 prepared by the management of such Credit Party and audited by Deloitte and
Touche LLP, and unaudited financial statements for the three (3) month period ended March 31, 2006,
prepared by the management of such Credit Party. Such financial statements are true, correct and
complete in all material respects and present fairly in conformity with GAAP and in all material
respects the financial condition and results of operations of the REIT as of the dates and for the
periods indicated, and such financial statements disclose in accordance with GAAP all material
liabilities, direct or contingent, of the REIT on a consolidated basis as of the date thereof.
Borrowers have also furnished to Agent true, correct and complete operating statements of Borrowers
dated May 31, 2006 which (i) reflect the results of operations of Borrowers year-to-date through
such date, or since inception of any Borrower which has not been in existence as of January 1, 2006
and (ii) were prepared by the management of such Borrowers.

          (b) Since March 31, 2006, there has been no material adverse change in the business, assets,
operations or financial condition of any Borrower, Sponsor and the REIT.

          (c) No Borrower is currently indebted or in contract for any Indebtedness, is not otherwise
liable in respect of any Indebtedness or is holding out its credit as being available to satisfy
the obligations of any Person, other than the Permitted Indebtedness relating to such Borrower.

          SECTION 3.05. Litigation. Except for the Disclosed Matters, there are no actions, suits or
proceedings at law or in equity or before or instituted by any Governmental Authority (a) pending
or, to any Credit Party’s knowledge, threatened against or affecting any

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Borrower, Sponsor, the
REIT, any Borrowing Base Property, the Collateral or any part thereof (including any condemnation
or eminent domain
proceeding against any of the Borrowing Base Properties, or any part thereof) which (i) seeks
damages in excess of $2,000,000 or injunctive or other equitable relief, (ii) is not covered by
insurance or (iii) if adversely determined, could reasonably be expected to have a Material Adverse
Effect, or (b) pending or, to any Borrower’s knowledge, threatened, which affect or might affect
the validity or enforceability of any Security Document (or the priority of the lien thereof) or
any other Financing Documents.

          SECTION 3.06. Compliance with Laws and Agreements. Each Credit Party is in compliance in
all material respects with all Legal Requirements applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property, and each has all
governmental licenses, authorizations, consents and approvals required to carry on its business as
now conducted. There are no pending or, to Borrowers’ knowledge, threatened actions, suits or
proceedings to revoke, invalidate, rescind or modify any such governmental licenses,
authorizations, consents or approvals. All Legal Requirements applicable to any Borrowing Base
Property and all approvals in effect with respect thereto permit the operation and the current and
anticipated uses of such Borrowing Base Property, and permit such Borrowing Base Property to be
restored and such uses continued following any Casualty, without need of any variance, special use
permit or similar exception. There are no pending or, to the Borrowers’ knowledge, threatened
actions, suits or proceedings to revoke, attach, invalidate, rescind or modify the ordinances and
regulations currently in effect and to which any of the Borrowing Base Properties are subject.

          SECTION 3.07. Use of Proceeds. The proceeds of the Loans will be used solely for the
general corporate, company or partnership, as applicable, purposes of Borrowers to the extent
permitted hereunder, specifically including the purposes contemplated by the REIT’s Prospectus
dated June 19, 2006 (as the same may be updated from time to time).

          SECTION 3.08. Compliance with ERISA. Neither any Credit Party, the REIT nor ERISA
Affiliates currently maintains or is obligated to contribute to, or has ever maintained or been
obligated to contribute to, a Plan or a Multiemployer Plan. No ERISA Event has occurred and
neither any Credit Party, the REIT nor any ERISA Affiliates has incurred any liability, and no
action or event has occurred that could cause any of them to incur any liability, under Title IV of
ERISA (a) to the PBGC other than a liability to the PBGC for premiums under Section 4007 of ERISA
or (b) in respect of a Multiemployer Plan which has not been discharged in full when due. None of
the assets of any Credit Party or the REIT constitute “plan assets” within the meaning of 29 CFR
2510.3-101.

          SECTION 3.09. Taxes.

          (a) Each Credit Party and the REIT has timely filed or cause to be filed all United States
Federal income tax returns and all other tax returns and reports which are required to be filed by
it and has paid or caused to be paid all Taxes required to have been paid by it,
except for Taxes the amount, applicability or validity of which is being contested in good
faith by appropriate proceedings and for which such Credit Party or the REIT, as applicable, has
set aside on its books adequate reserves and otherwise in accordance with Section 5.08
hereof. To Borrowers’ knowledge, the charges, accruals and reserves on the books of such Credit
Party and

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the REIT in respect of Taxes or other similar governmental charges, additions to Taxes
and any penalties and interest thereon are adequate.

          (b) The REIT has made an election to be taxed as a “real estate investment trust” under
Sections 856 through 860 of the Code, and the REIT qualifies as a “real estate investment trust”
under Sections 856 through 860 of the Code.

          SECTION 3.10. Properties.

          (a) Title. Alameda LLC is the sole legal and beneficial owner of a fee simple
interest in the Alameda Property. Alameda LLC does not own, directly or indirectly, any legal or
beneficial interest in any material asset other than the Alameda Property and the other “Mortgaged
Property” set forth in the Mortgage relating to the Alameda Property. McKinnon LP is the sole
legal and beneficial owner of a fee simple interest in the McKinnon Property. McKinnon LP does not
own, directly or indirectly, any legal or beneficial interest in any material asset other than the
McKinnon Property and the other “Mortgaged Property” set forth in the Mortgage relating to the
McKinnon Property. North Clark LLC is the sole legal and beneficial owner of a fee simple interest
in the North Clark Property. North Clark LLC does not own, directly or indirectly, any legal or
beneficial interest in any material asset other than the North Clark Property and the other
“Mortgaged Property” set forth in the Mortgage relating to the North Clark Property. No Borrower
owns, directly or indirectly, any legal or beneficial interest in any material asset other than the
Borrowing Base Property owned or leased by such Borrower and the other “Mortgaged Property” set
forth in the Mortgage relating to such Borrowing Base Property.

          (b) Trademarks. To Borrowers’ knowledge, there exists no claim by any Person that
contests or questions any Credit Parties’ or the REIT’s right to use all applicable patents,
trademarks, copyrights, technology, know-how and processes necessary for the conduct of the
business and the operation of any of the Borrowing Base Properties substantially in the manner as
contemplated to be conducted and operated. To Borrowers’ knowledge, there are no claims, and to
the best of Borrowers’ knowledge, there is no infringement of the rights of any Person, arising
from the use of such patents, trademarks, copyrights, technology, know-how and processes by any
Credit Party or the REIT. To Borrowers’ knowledge, no Borrower has any knowledge of any
infringement by any third party on any rights of any Credit Party or the REIT in any of its
respective intellectual property. To Borrowers’ knowledge, no name or logo used in connection with
the Borrowing Base Properties or any part thereof or business therein is a registered trade name or
trademark except for those names and logos set forth on Exhibit Q hereto.

          (c) Casualty/Taking. No Casualty has occurred to any portion of any Borrowing Base
Property since the applicable Borrower’s acquisition thereof which remains
unrepaired and (i) no Taking of any portion of any Borrowing Base Property, (ii) no Taking or
modification, realignment or relocation of any streets or roadways abutting any Borrowing Base
Property or (iii) no denial of access to any Borrowing Base Property from any point of access
(public or private), has occurred since the applicable Borrower’s acquisition thereof (or to
Borrowers’ knowledge, prior to such acquisition) or, to the knowledge of such Credit Party, is
threatened or pending.

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          (d) Encroachments. Except as shown on the Survey of each Borrowing Base Property, to
Borrowers’ knowledge, none of the improvements thereon encroach upon any building line, setback
line, side yard line or any easement.

          (e) Defects. Except as disclosed in the building condition reports certified to Agent
and delivered to Agent at or prior to the Effective Date, to Borrowers’ knowledge, there exists no
structural or other material defects or damages in any of the Borrowing Base Properties, whether
latent or otherwise that (i) pose a hazard to life or safety, (ii) require immediate repair and in
the case of either (i) or (ii), the cost of which would exceed $2,000,000 to repair, and no
Borrower has received written notice from any insurance company or bonding company of any defects
or inadequacies in any of the Borrowing Base Properties, or any part thereof, which would
materially adversely affect the insurability of the same or cause the imposition of extraordinary
premiums or charges thereon or of any termination or threatened termination of any policy of
insurance or bond.

          (f) Alterations. No alterations, additions or other modifications have been made to
any Borrowing Base Property since the date of the Survey of such property which would render such
Survey inaccurate in any material respect.

          (g) Utilities and Access. Each Borrowing Base Property has utility services and
facilities, including water supply, storm and sanitary sewer facilities, gas and electric and
telephone facilities, adequate in all respects, including minimum capacities, for the operation of
such Borrowing Base Property for its intended purposes in accordance with this Agreement. Except
as shown on the Survey of each Borrowing Base Property, to Borrowers’ knowledge all such utility
services and facilities are available at the boundaries of such Borrowing Base Property. Each
Borrowing Base Property has direct physical access to and from at least one public road adequate in
all respects for the operation of such Borrowing Base Property for its intended purposes in
accordance with this Agreement.

          (h) Equipment. All furniture, fixtures and equipment necessary for the operation of
each Borrowing Base Property for its intended purposes in accordance with this Agreement have been
installed or incorporated in such Borrowing Base Property.

          (i) Tax Parcel. Each Borrowing Base Property is separately assessed from all other
adjacent land for purposes of real estate taxes and without regard for any other property, and for
all purposes may be mortgaged, conveyed and otherwise dealt with as an independent parcel.
Borrowers have paid all taxes and assessments affecting the Borrowing Base Properties or otherwise
payable by any Borrower which were due on or before on the Effective Date, except for Taxes being
contested in accordance with Section 5.08 hereof. To the best of Borrowers’ knowledge,
there is no material proposed new tax assessment against any of the Borrowing Base
Properties or any basis for such an assessment, other than potential increases in valuation in
connection with Borrowers’ recent acquisition of the Borrowing Base Properties.

          (j) Flood Hazards. Except as shown on the Survey of each Borrowing Base Property, to
Borrowers’ knowledge, neither all nor any portion of such Borrowing Base Property is located within
an area that has been designated or identified as an area having special flood hazards by the
Secretary of Housing and Urban Development or by such other official as shall

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from time to time be
authorized by federal or state law to make such designation pursuant to the National Flood
Insurance Act of 1968, as such act may from time to time be amended, or pursuant to any other
national, state, county or city program of flood control.

          (k) Employee Matters. Except as described on Exhibit V attached hereto, no
Borrower nor Manager is party to any collective bargaining agreement. To Borrowers’ knowledge,
there are no material grievances, disputes or controversies with any union or any other
organization of employees at any of the Borrowing Base Properties, including employees of Manager,
or threats of strikes, work stoppages or any asserted pending demands for collective bargaining by
any union or organization.

          (l) Insurance Policies. The Insurance Policies required to be maintained as of the
date hereof pursuant to Section 5.19 hereof and the other Financing Documents are in full
force and effect.

          (m) Accounts. All Accounts of any Borrower or of any other Person, including Manager
and Agent, held on behalf of or for the benefit of Borrowers which are required to be established
pursuant to this Agreement or any other Financing Document, including the account number of each
Account and the name and address of the financial institution at which each Account is held, are as
set forth on Exhibit O attached hereto. No Borrower has any other accounts except as set
forth on said exhibit. Borrowers have delivered to Agent an Account Agreement for each such
Account, except for the Identified Investment Accounts and those Accounts which are held by Agent
pursuant to the terms of this Agreement.

          (n) Agreements. The copies of the Management Agreement and the Material Operating
Agreements provided to Agent are true, correct and complete. The Management Agreement and the
Material Operating Agreements are in full force and effect and are valid and enforceable. Neither
the Management Agreement nor any Material Operating Agreement has been amended, modified,
terminated, assigned or otherwise changed, or the provisions thereof waived, except as permitted
hereunder and to Borrowers’ knowledge, no material default by any Borrower or any party thereto has
occurred and is continuing thereunder. There are no other Operating Agreements which have a
noncancellable term which exceeds one (1) year in length except those set forth on Exhibit
N.

          SECTION 3.11. Defaults. No Default or Event of Default has occurred and is continuing. To
Borrowers’ knowledge, no Borrower is in default or in breach of any of its obligations under or
with respect to any agreement, instrument or undertaking to which it is a party or by which it or
any of its properties is bound.

          SECTION 3.12. Offsets and Defenses. No Credit Party has any offsets or defenses against or
counterclaims with respect to any of its obligations under this Agreement or the other Financing
Documents, any and all such offsets, defenses and counterclaims, if any, being hereby waived.

          SECTION 3.13. Holding Company Status. No Credit Party or the REIT is a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

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          SECTION 3.14. Full Disclosure. Each Credit Party has disclosed or made available to Agent
and the Lenders all agreements, instruments and corporate or other restrictions to which it or any
of its or their assets is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or on behalf of any
Credit Party or the REIT to Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, Borrowers
represent only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

          SECTION 3.15. Security Interest and Liens. Each of the Security Documents creates and
grants to Agent, for its own benefit and for the benefit of the Lenders, a legal, valid and
enforceable first priority (except as permitted pursuant to Section 6.02 hereof) Security
Interest in the Collateral identified therein, and when the appropriate recordings and filings have
been effected in the applicable public offices, each of the Security Documents will constitute a
perfected Security Interest in all such Collateral, prior and superior to all other Security
Interests with respect to such Collateral, except as permitted under the Financing Documents. Such
Collateral is not subject to any other Liens whatsoever and no Credit Party or any of its
Affiliates has made or assumed any contract or other arrangement that could give rise to any Lien
on all or any portion of the Collateral, except Liens permitted by Section 6.02 hereof. No
Credit Party or any of its Affiliates is under any contractual restriction which would prohibit it
from granting such perfected first priority Security Interests in the Collateral except as
disclosed on Exhibit P annexed hereto.

          SECTION 3.16. Liens on Ownership Interests. There exists no Lien on any Equity Interest in
any Credit Party or the REIT (except as permitted pursuant to Section 6.02 hereof). Except
for the Financing Documents and the Space Leases set forth in the Rent Roll, no Borrower has made,
assumed or been assigned any contract or arrangement of any kind, the performance of which by the
other party thereto would give rise to a Lien against all or any portion of the Collateral which is
not a Permitted Encumbrance.

          SECTION 3.17. Solvency.

          (a) The fair salable value of the business of each Credit Party and the REIT is not less than
the amount that will be required to be paid on or in respect of the probable liability on the
existing debts and other liabilities (including contingent liabilities) of such Credit Party and
the REIT, as they become absolute and mature.

          (b) The assets of each Credit Party and the REIT do not constitute unreasonably small capital
for such Credit Party and the REIT to carry out their respective businesses as now conducted and as
proposed to be conducted including the capital needs of such Credit Party and the REIT, taking into
account the particular capital requirements of such businesses conducted by such Credit Party and
the REIT and projected capital requirements and capital availability thereof.

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          (c) No Credit Party nor the REIT has incurred or intends to incur debts beyond its respective
ability to pay as they mature (taking into account the timing and amounts of cash to be received by
each Credit Party the REIT, and of amounts to be payable on or in respect of debt of each Credit
Party and the REIT).

          (d) No Credit Party nor the REIT believes that final judgments against them in actions for
money damages presently pending will be rendered at a time when, or in an amount such that, they
will be unable to satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered). The cash flow of each Credit Party and
the REIT, after taking into account all other anticipated uses of the cash of such Credit Party and
the REIT (including the payments on or in respect of debt referred to Section 3.17(c)
hereof), will at all times be sufficient to pay all such judgments promptly in accordance with
their terms.

          SECTION 3.18. Space Lease. A true, correct and complete rent roll for each Borrowing Base
Property is attached hereto as Exhibit R (collectively, the “Rent Roll”). There
are no Space Leases with respect to any Borrowing Base Property other than the Space Leases which
are set forth on the Rent Roll. Except as set forth on the Rent Roll or otherwise disclosed on
Exhibit V attached hereto or by any estoppel certificate received by Agent on or prior to
the Effective Date: (a) each Space Lease is in full force and effect; (b) the Tenants have
accepted possession of and are in occupancy of all of their respective demised premises and have
commenced the payment of Space Lease Rent under the Space Leases to the extent set forth on the
Rent Roll, and, to Borrowers’ knowledge, there are no offsets, claims or defenses to the
enforcement thereof presently outstanding; (c) all Space Lease Rents due and payable under each
Space Lease have been paid and no portion of any Space Lease Rent has been paid for any period more
than thirty (30) days in advance; (d) the fixed rent payable under each Space Lease is the amount
of fixed rent set forth in the Rent Roll, and, to Borrowers’ knowledge, there is no claim or basis
for a claim by the Tenant thereunder for an adjustment to the such fixed rent; (e) no Tenant has
made
any claim in writing against any Borrower or Manager which has been received by a Borrower or
Manager and remains outstanding that a Borrower or Manager is in default under its applicable Space
Lease; (f) to Borrowers’ knowledge, no default by any Borrower or any Tenant under any Space Lease,
and no event which, with the giving of notice or passage of time, or both, would constitute a
default, has occurred; (g) each Space Lease is the valid, binding and enforceable obligation of the
applicable Borrower and to Borrowers’ knowledge, the applicable Tenant thereunder, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization or moratorium or
other similar laws relating to the enforcement of creditors’ rights generally and by general
equitable principles; (h) each Space Lease is subordinate to the Mortgage relating to the Borrowing
Base Property with respect to which the demised premises under such Space Leases is located, either
by its terms or pursuant to a subordination, non-disturbance and attornment agreement; (i) no Space
Lease Letter of Credit has been delivered to a Borrower or Manager other than as set forth on
Exhibit B attached hereto; (j) there is no tenant improvement work remaining to be
performed by the applicable Borrower under any Space Lease; (k) there are no sums remaining to be
paid by any Borrower to any Tenant with respect to any Space Lease, whether on account of any
tenant improvement work or otherwise; (l) there are no remaining rent concessions, tenant
allowances or abatements with respect to any Space Lease; (m) all real estate brokerage commissions
relating to the Space

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Leases have been paid in full and there are no other real estate brokerage
commissions; (n) to Borrowers’ knowledge, no Lease has been assigned or sublet by any Tenant; and
(o) to Borrowers’ knowledge, no Tenant has (i) consented to the appointment of a conservator,
receiver, trustee, custodian or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to it or of or relating to all, or
substantially all, of its property, or for the winding-up or liquidation of its affairs, (ii)
admitted in writing its inability to pay its debts generally as they become due, (iii) filed a
petition, or otherwise instituted, or consented to the institution against it of, proceedings to
take advantage of any law relating to bankruptcy, insolvency or reorganization or the relief of
debtors, (iv) made an assignment for the benefit of its creditors or (v) suspended payment of its
obligations. No Space Lease contains any option to purchase or right of first refusal to purchase
any of the Borrowing Base Properties or any part thereof. All Security Deposits under the Space
Leases are as set forth on the Rent Roll and are held pursuant to Section 2.19 hereof.
Each Borrower and Manager are in compliance with all Legal Requirements with respect to all
security deposits. The Rent Roll sets forth the scheduled expiration date of each Space Lease and
any existing arrearages in the payment of rent thereunder. No use restriction contained in any
Space Lease is violated by any use permitted under any other Space Lease individually or when
aggregated with any other Space Lease(s).

          SECTION 3.19. Federal Reserve Regulations.

          (a) No Credit Party or the REIT is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940. No Credit Party or
the REIT is engaged principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying Margin Stock.

          (b) No part of the proceeds of the Loans will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or carry Margin
Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or
to refund indebtedness originally incurred for such purpose, or (ii) for any purpose which entails
a violation of, or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation T, U or X thereof. No portion of the assets of any Credit Party, the REIT or
any of their respective Affiliates consists of Margin Stock. If requested by any Lender, each
Credit Party and the REIT shall furnish to such Lender a statement on Federal Reserve Form U-1
referred to in said Regulation U.

          SECTION 3.20. Foreign Person. No Credit Party or the REIT is a “foreign person” within the
meaning of Section 1445 or 7701 of the Code.

          SECTION 3.21. Control Person. Neither any Credit Party, the REIT, nor to Borrowers’
knowledge, any Person having “control” (as that term is defined in 12 U.S.C. § 375b or in
regulations promulgated pursuant thereto) of such Credit Party or the REIT is, an “executive
officer,” “director,” or “person who directly or indirectly or in concert with one or more persons,
owns, controls, or has the power to vote more than ten percent (10%) of any class of voting
securities” (as those terms are defined in 12 U.S.C. § 375b or in regulations promulgated pursuant
thereto) of any Lender, of a bank holding company of which any Lender is

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a subsidiary, or of any
other subsidiary of a bank holding company of which any Lender is a subsidiary.

          SECTION 3.22. Name; Principal Place of Business. No Credit Party uses any trade name or
has done business under any name other than its actual name set forth herein. The principal place
of business and chief executive office of each Credit Party is as set forth in the first paragraph
of this Agreement.

          SECTION 3.23. Brokerage. No Credit Party has dealt with any brokers or “finders” in
connection with the Loans and no brokerage or “finder’s” fees or commissions are payable by or to
any Person in connection with the Loans except Churchill Capital Company. Borrowers hereby agree
to indemnify and defend Agent and Lenders and hold Agent and Lenders harmless from and against any
and all claims for any brokerage or “finder’s” fees or commissions payable to brokers or finders
with whom any Credit Party or the REIT has dealt. Churchill Capital Company is not an Affiliate of
any Credit Party.

          SECTION 3.24. Purpose of Borrower. Each Borrower is, and at all times during the Term
shall remain, a single purpose entity whose sole purpose is to acquire, own, hold, lease, operate,
manage, develop, maintain or sell and otherwise deal with the Borrowing Base Property owned by such
Borrower. Without limiting the foregoing, each Borrower is and shall at all times be a Single
Purpose Bankruptcy Remote Entity.

          SECTION 3.25. Organizational and Operational Restrictions. Each Borrower (a) maintains its
accounts and, except as provided below, books and records separate from any other Person and, to
the extent (i) not part of a consolidated group filing a consolidated return or returns or (ii)
treated as a division for tax purposes of another taxpayer, shall file its own tax returns; (b)
does not commingle its funds or assets with those of any other Person; (c) holds its assets in its
own name; (d) maintains its financial statements, accounting records and other entity documents
separate from any other Person; provided, that, its assets may be included in, and
its financial statements and accounting records consolidated with, the consolidated financial
statements and accounting records of Sponsor and/or the REIT; (e) pays its own liabilities,
including the salaries of its own employees, out of its own funds and assets; (f) observes all
company or partnership, as applicable, formalities in all material respects; (g) has not acquired
obligations or securities of any shareholder; (h) allocates fairly and reasonably shared expenses,
including shared office space, and uses its own stationery, invoices and checks; (i) maintains its
assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify
its individual assets from those of any other Person; (j) does not identify any Person, including
Sponsor or the REIT or any Affiliate of Sponsor or the REIT, as a division or part of it; and (k)
has no obligation to indemnify its officers, directors or partners except to the extent any
liability therefor is fully subordinated to the Obligations and will not constitute a claim against
it in the event that cash flow in excess of the amount required to pay the Loans is insufficient to
pay such obligation.

          SECTION 3.26. Usury. The amounts to be received by Agent under the Note and the other
Financing Documents as Interest or Additional Interest do not violate any laws of the State of New
York or any other State in which a Borrowing Base Property is located regulating the maximum rate
of interest that may be charged or received.

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          SECTION 3.27. Patriot Act. None of any Credit Party, the Advisor or the REIT, and to
Borrowers’ knowledge, any direct or indirect owner of the REIT (a) is listed on any Government
Lists (as defined below), (b) is a person who has been determined by competent authority to be
subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or
any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or
in any enabling legislation or other Presidential Executive Orders in respect thereof, (c) has been
previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude
or for any Patriot Act Offense (as defined below), or (d) to Borrowers’ knowledge is currently
under investigation by any governmental authority for alleged criminal activity. For purposes
hereof, the term “Patriot Act Offense” means any violation of the criminal laws of the
United States of America or of any of the several states, or that would be a criminal violation if
committed within the jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any offense under (i)
the criminal laws against terrorism; (ii) the criminal laws against money laundering, (iii) the
Bank Secrecy Act, as amended, (iv) the Money Laundering Control Act of 1986, as amended, or the (v)
Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or
aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term
“Government Lists” means (A) the Specially Designated Nationals and Blocked Persons Lists
maintained by the Office of Foreign Assets Control (“OFAC”), (B) any other list of
terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the
Rules and Regulations of OFAC that Agent notified Borrowers in writing is now included in
Governmental Lists, or (C) any similar lists maintained by the United States Department of State,
the United States Department of Commerce or any other government authority or pursuant to any
Executive Order of the President of the United States of America that Agent notified Borrowers in
writing is now included in Governmental Lists.

          SECTION 3.28. Conditions to Closing. All of the conditions to Closing set forth in
Section 4.01 hereof and all of the conditions to Borrowings under Section 4.02 with
respect to the Initial Loan have been satisfied as of the Effective Date or have been waived by
Agent in accordance herewith.

          SECTION 3.29. REAs. Borrowers have delivered or caused to be delivered to Agent a true,
correct and complete copy of each REA. Each REA is in full force and effect and has not been
modified, amended or otherwise supplemented except pursuant to any amendment, modification or
supplement delivered to Agent. The REAs represent the only agreements among Borrowers and the
other parties thereto with respect to the applicable Borrowing Base Property and any other property
which is the subject of the REAs, and there are no other promises, agreements, understandings, or
commitments of any kind among Borrowers and the other parties to the REAs with respect thereto.
There are no defaults under any REA on the part of the applicable Borrower, or to Borrowers’
knowledge, by any other party thereunder, and no event has occurred, which with the passage of
time, the giving of notice, or both, would constitute a default under any REA on the part of the
applicable Borrower, or to Borrowers’ knowledge, by the other parties thereunder. All sums due and
payable by Borrowers under the REAs have been paid in full. Neither the applicable Borrower nor
any other party to any REA has commenced any action or, to Borrowers’ knowledge, given or received
any notice for the purpose of terminating such REA, or to Borrowers’ knowledge, given or received
any notice of default which has not been cured. To Borrowers’ knowledge, no party to the REA is
the subject

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of any bankruptcy or other insolvency action. No REA contains any option to purchase
or right of first refusal or option to purchase any Collateral or any part thereof. To Borrowers’
knowledge (a) all of the representations, warranties, certifications, statements and other
information set forth on any estoppel certificate relating to an REA and delivered to Agent are
true, correct and complete in all material respects and (b) none of such estoppels omit to state a
material fact necessary in order to make the representations, warranties, certifications,
statements and other information contained therein not materially misleading.

          SECTION 3.30. Ground Lease. Each Ground Lease is in full force and effect and has not been
modified or amended except as disclosed to Agent. The Ground Lease represents the only agreements
between the applicable Borrower and the landlord thereunder with respect to the applicable
Borrowing Base Property
and there are no other promises, agreements, understandings, or commitments of any kind between the
applicable Borrower and the landlord thereunder with respect thereto. There are no defaults under
any Ground Lease on the part of the applicable Borrower as tenant or, to Borrowers’ knowledge, by
the landlord thereunder, and no event has occurred, which with the passage of time, the giving of
notice, or both, would constitute a default under any Ground Lease on the part of the applicable
Borrower, or to Borrowers’ knowledge, by the landlord thereunder. All rents, additional rents and
other sums due and payable by the applicable Borrowers under each Ground Lease have been paid in
full. Neither the applicable Borrower, as tenant, or the landlord under any Ground Lease has
commenced any action or given or received any notice for the purpose of terminating such Ground
Lease or given or received notice of default which has not been cured. To Borrowers’ knowledge,
the landlord under the Ground Lease is not the subject of any bankruptcy or other insolvency
action. To Borrowers’ knowledge (a) all of the representations, warranties, certifications,
statements and other information set forth on the any estoppel certificate relating to a Ground
Lease and delivered to Agent are true, correct and complete in all material respects and (b) none
of such estoppels omit to state a material fact necessary in order to make the representations,
warranties, certifications, statements and other information contained therein not materially
misleading. Notwithstanding anything to the contrary contained herein, the foregoing
representations set forth in this Section 3.30 shall only apply with respect to Properties
which are added as Borrowing Base Properties after the Effective Date in accordance with this
Agreement.

ARTICLE IV

Conditions to Funding; Security and Collateral

          SECTION 4.01. Conditions to Closing. This Agreement shall not be effective until the
following conditions shall have been satisfied (except to the extent that any of the following
conditions are waived in accordance with Section 9.03 hereof):

          (a) This Agreement and the other Financing Documents required to be executed on or
before the Effective Date shall have been executed by each party thereto and each Credit
Party shall have performed and complied with all covenants, agreements and conditions
contained herein and in the other Financing Documents which are required to be performed or
complied with by such Credit Party before or on the Effective Date;

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          (b) Agent shall have received a favorable customary written opinion (addressed to Agent
and the Lenders and dated the Effective Date) of counsel for the Credit Parties, covering
such matters relating to the Credit Parties, this Agreement, the other Financing Documents
and the Transactions as Agent shall reasonably request;

          (c) The representations and warranties made by each Credit Party in the Financing
Documents and in any certificate, document, or financial or other statement furnished by the
Credit Parties pursuant to or in connection therewith, shall be true and correct on and as
of the Effective Date;

          (d) Agent and the Lenders shall have received all fees and other amounts due and
payable by Borrowers in accordance with this Agreement on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by any of the Credit Parties hereunder on or prior to the
Effective Date;

          (e) Intentionally Omitted;

          (f) With respect to any Liens not permitted pursuant to Section 6.02 hereof,
Agent shall have received termination statements in form and substance reasonably
satisfactory to it;

          (g) To the extent required by Agent, Agent shall have received the results, reasonably
satisfactory to Agent, of a search of tax and other Liens, and judgments and of the Uniform
Commercial Code filings made with respect to each Credit Party in the jurisdictions in which
such Credit Party is organized and has its principal place of business and in which the
Borrowing Base Properties and any other Collateral requested by Agent are located and in
which Uniform Commercial Code filings have been filed;

          (h) Agent shall have received, if necessary, evidence that all governmental and third
party approvals necessary in connection with the Transactions and the continuing operations
of the Credit Parties shall have been obtained and are in full force and effect;

          (i) Intentionally Omitted;

          (j) Agent shall have received a copy of the certificate or articles of incorporation or
other constitutive documents, in each case amended to date, of each of the Credit Parties
and the REIT, certified as of a recent date by the Secretary of State or other appropriate
official of the state or other jurisdiction of its organization; a certificate of the
Secretary of such Credit Party or the REIT, dated the Effective Date and certifying (A) that
attached thereto is a true and complete copy of such certificate or articles of
incorporation, limited partnership, limited liability company or other constitutive document
as the case may be, as in effect on the date of such certificate and at all times since a
date prior to the date of the resolution described in clause (C) below, (B) that
attached thereto is a true and complete copy of such Credit Party’s and the REIT’s by-laws,
limited partnership agreement or limited liability company agreement, as the case

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may be, as
in effect on the date of such certificate and at all times since a date prior to the date of
the resolution described in clause (C) below, (C) that attached thereto is a true
and complete copy of a resolution adopted by the REIT’s Board of Directors authorizing the
execution, delivery and performance of this Agreement and the other Financing Documents to
which each Credit Party is a party and that such resolution has not been modified, rescinded
or amended and is in full force and effect, (D) that such Credit Party’s and the REIT’s
certificate or articles of incorporation, certificate of limited partnership, by-laws,
limited partnership or operating agreement and other constitutive documents have not been
amended since the date thereof (except as attached to the
foregoing certificates), and (E) as to the incumbency and specimen signature of each of
such Credit Party’s or the REIT’s officers executing this Agreement or any other Financing
Document delivered in connection herewith or therewith, as applicable and a certificate of
another of such Credit Party’s or the REIT’s officers as to incumbency and signature of its
secretary, all in form and substance reasonably satisfactory to Agent and its counsel;

          (k) Agent shall have received certificates of good standing (or its legal equivalent,
if any), existence or its equivalent with respect to each Credit Party and the REIT
certified as of a recent date by the appropriate Governmental Authorities of the state or
other jurisdiction of incorporation or organization and in each other jurisdiction in which
qualification is necessary in order for such Borrower or such Guarantor to own or lease its
property and conduct its business;

          (l) All intercompany indebtedness of the Credit Parties and any of their Affiliates,
shall have been subordinated to their respective obligations under the Transaction on terms
acceptable to Agent other than acquisition and advisory fees paid to the Advisor by the REIT
(and not by any Borrower);

          (m) Agent shall have received evidence of insurance, satisfactory to Agent, for each
policy of insurance required to be maintained pursuant to Section 5.19 hereof;

          (n) Agent shall have received such other documents, information and materials, and
completed such other reviews as Agent or its counsel shall reasonably deem necessary; and

          (o) No Default or Event of Default shall have occurred and be continuing.

          SECTION 4.02. Each Borrowing after Initial Loans. The obligation of any Lender to make any
Loan(s) after the Initial Loans on the occasion of any Borrowing is subject to the satisfaction on
such date of the following conditions (except to the extent any of the following conditions are
waived in accordance with Section 9.03 hereof):

          (a) Borrowers shall have delivered to Agent a Borrowing Base Certificate at least five
(5) Business Days prior to the requested date of any Borrowing presenting its computation of
the Borrowing Base Loan Amount as of the date of, and

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after giving effect to, such
Borrowing, together with all supporting documentation required by Agent, and Agent shall
have approved the calculations set forth in such Borrowing Base Certificate;
provided, however, in the event that such Borrowing is to occur concurrently
with the addition of a Property as a Borrowing Base Property pursuant to Section
4.03 hereof, the computation of the Borrowing Base Loan Amount shall give effect to the
addition of such Property as a Borrowing Base Property;

          (b) The conditions set forth in Section 4.01 hereof shall have been satisfied
or waived as provided therein (however, clauses (g), (j) and (k)
thereof shall
apply only to the extent of any new Borrower), including, in the event that such
Borrowing is to occur concurrently with the addition of a Property as a Borrowing Base
Property pursuant to Section 4.03 hereof, the conditions as applying to the
prospective Borrower that is the owner of such Borrowing Base Property; provided,
that, for purposes of this clause (b), the term “Effective Date” shall be deemed to
mean the “date of such Borrowing.”

          (c) Borrowers shall have taken all action required to be taken to cause an Interest
Rate Protection Agreement to be in full force and effect which will satisfy all of the
conditions set forth in Section 2.18(a) hereof after giving effect to such
Borrowing;

          (d) Agent and the Lenders shall have received all fees and other amounts due and
payable by Borrowers in accordance with this Agreement on or prior to such Borrowing
including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by any of the Credit Parties hereunder on or prior to such
Borrowing;

          (e) The representations and warranties of the Credit Parties set forth in this
Agreement and the other Financing Documents shall be true and correct in all material
respects on and as of the date of such Borrowing;

          (f) (i) At the time of and immediately after giving effect to such Borrowing, no
Default or Event of Default shall have occurred and be continuing and (ii) no Default or
Event of Default shall have occurred during the then current calendar quarter or in the two
(2) calendar quarters immediately preceding such then current calendar quarter;

          (g) No event shall have occurred and be continuing, or would result from such extension
of credit, which has had or could reasonably be expected to have a Material Adverse Effect;

          (h) No such Borrowing would result in (i) the Availability being less than Zero Dollars
($0) and (ii) the aggregate Credit Exposure exceeding the Borrowing Base Loan Amount;
provided, however, in the event that such Borrowing is to occur concurrently
with the addition of a Property as a Borrowing Base Property pursuant to Section
4.03 hereof, the computation of the Availability and Borrowing Base Loan Amount shall
give effect to the addition of such Property as a Borrowing Base Property;

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          (i) Agent shall have received a certificate signed by an Authorized Officer of
Borrowers certifying that all of the conditions precedent to such Borrowing set forth in
this Section 4.02 have been satisfied as of the date of such Borrowing (except for
those which have been waived by Agent in accordance with Section 9.03 hereof);

          (j) Agent shall have received a solvency certificate, in form and substance
satisfactory to Agent, signed by the Authorized Officer of each Borrower and Guarantor
attesting to the matters set forth in Section 3.17 hereof;

          (k) if such Borrowing is to occur concurrently with the addition of a Property as a
Borrowing Base Property pursuant to Section 4.03 hereof, then the conditions set
forth in Section 4.03 hereof shall have been satisfied or waived as provided therein
with respect to such addition and such Property will become a Borrowing Base Property;

          (l) if such Borrowing is not to occur concurrently with the addition of a Property as a
Borrowing Base Property pursuant to Section 4.03 hereof then, Agent shall have
received the following items at least three (3) Business Days prior to the proposed date of
such Borrowing:

     (i) amendments, modifications, restatements or supplements to the applicable
Mortgage, Security Agreements and other Financing Documents (including each Uniform
Commercial Code financing statement) which Agent determines are reasonably necessary
in order to (x) evidence such additional Borrowing, (y) in the event that the
principal amount secured by such Mortgage is less than the Maximum Loan Amount, to
increase the principal amount secured by such Mortgage to one hundred percent (100%)
of the then Appraised Value of such Borrowing Base Property and (z) otherwise deal
with any new facts or circumstances relating to such Borrowing Base Property, each
of which shall be delivered to or at the direction of Agent to be properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or reasonably requested on the date which such
Borrowing shall occur;

     (ii) a Title Continuation relating to the applicable Borrowing Base Property,
or if such Borrowing Base Property is located in Texas or another State in which a
Title Continuation shall not be available, a new Title Insurance Policy dated as of
the date of such Borrowing;

     (iii) the then current Credit Parties shall have ratified in writing for the
benefit of Agent and the Lenders their obligations under this Agreement and the
other Financing Documents to which they are a party and delivered to Agent such
additional or supplemental Financing Documents in connection with such Borrowing as
Agent shall reasonably request;

     (iv) Agent shall have received a favorable written opinion (addressed to Agent
and the Lenders and dated as of the date of such Borrowing) of counsel

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for the
Credit Parties, covering such matters relating to the Credit Parties, this Agreement
and the amendments, modifications, restatements or supplements delivered pursuant to
Section 4.02(l)(i) above as Agent shall reasonably request, including
favorable customary written opinions from local counsel to the Credit Parties in
each state in which the applicable Borrowing Base Property and other Collateral in
connection therewith is located as Agent shall reasonably request confirming the due
creation and perfection of Agent’s or the Lenders’ Liens on and security interests
in, the Collateral, in form and substance reasonably satisfactory to Agent; and

     (v) any other item (or, if Agent elects, updates thereof) reasonably requested
by Agent which is required to be delivered by Agent with respect to additions of
Properties as Borrowing Base Properties set forth in Section 4.03(c)(ii)
hereof; and

          (m) Borrowers shall have delivered a Borrowing Request to Agent in accordance with
Section 2.03 hereof.

          SECTION 4.03. Addition of Properties as Borrowing Base Properties.

          (a) Request for Addition as Borrowing Base Property. Borrowers shall have the right
to request that a Property be added as a Borrowing Base Property by providing Agent and each Lender
(whose notice address has been provided to Borrowers) with a request for such Property to be added
as a Borrowing Base Property at least thirty-seven (37) days prior to the date on which Borrowers
desire to have such Property added as a Borrowing Base Property (each, a “Proposed Addition
Date”). Such request shall be accompanied by a copy of all documents, materials and other
information to be presented to Borrowers’ investment committee regarding such Property and a
Borrowing Base Property Compliance Certificate for such Property (such documents, materials, other
information and such Borrowing Base Property Compliance Certificate, the “Investment
Package”).

          (b) Qualification as Borrowing Base Property. No Property shall qualify to be added
as a Borrowing Base Property unless the following conditions are satisfied (except to the extent
any of the following conditions are waived in accordance with Section 9.03 hereof):

     (i) such Property shall be located within an Acceptable Major Metropolitan
Market; and

     (ii) such Property shall otherwise be acceptable to Agent in its reasonable
discretion (which may be withheld even if the Property is located within an
Acceptable Major Metropolitan Market and all of the conditions set forth in
Section 4.03(c) hereof are satisfied).

Agent shall use commercially reasonable efforts to notify Borrowers within five (5) Business Days
after the date on which Agent shall have received the entire Investment Package with respect to a
Property (together with any other documents reasonably requested by Agent or any Lender within
three (3) Business Days after the delivery of the entire Investment Package) whether the Majority
Lenders have agreed that such Property may be added as a Borrowing Base

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Property subject to
satisfaction of the conditions precedent set forth in Section 4.03(c) hereof to Agent’s
satisfaction in accordance with Section 4.03(c). In the event that the Majority Lenders
have agreed that such Property may be added as a Borrowing Base Property and Borrowers shall
satisfy the conditions precedent set forth in Section 4.03(c) hereof, Agent shall notify
Borrowers of Agent’s determination of the Initial Capital Repair Guaranty Amount, if any,
applicable to such Property. Solely as between Agent and the Lenders, in the event that any Lender
shall fail to notify Agent of its determination of whether such Property may be added as a
Borrowing Base Property subject to satisfaction of the conditions precedent set forth in
Section 4.03(c) hereof, such Lender shall be deemed to have agreed with Agent’s decision with respect to such
determination.

          (c) Conditions Precedent for the Addition of a Property as a Borrowing Base Property.
A Property shall not be added as a Borrowing Base Property unless and until the following
conditions shall have been satisfied, except to the extent that Agent may elect (or waived in
accordance with Section 9.03) to waive any such conditions:

     (i) Borrowers shall have delivered the Investment Package to Agent and Lenders
in accordance with Section 4.03(a) hereof and Agent shall have approved the
Borrowing Base Loan Amount calculations set forth in the Borrowing Base Property
Compliance Certificate for such Property and notified Borrowers that such Property
shall be added as a Borrowing Base Property subject to the satisfaction of the
conditions precedent set forth in Section 4.03(c) hereof;

     (ii) Borrowers shall have delivered the following items, at Borrowers’ sole
cost and expense, as soon as reasonably available, and Agent shall have approved
such items at least three (3) Business Days prior to the Proposed Addition Date; it
being understood and agreed that in the event that Borrowers shall not have
delivered any such item(s) to Agent so as to provide Agent and its consultants and
attorneys, as applicable, within a reasonable period of time, to review same (which
period shall be determined by Agent), Borrowers shall be deemed to not have
satisfied the condition set forth in this clause (ii) with respect to such
item(s):

     (A) evidence satisfactory to Agent that the Property Owner shall have
all necessary and material occupancy and operating permits and licenses for
such Property and such Property must be in compliance with all Legal
Requirements, in each case, as of the date that such Property is added as a
Borrowing Base Property, all as shall be demonstrated to Agent’s
satisfaction, which evidence shall include (i) a zoning report dated no more
than ninety (90) days prior to the date that such Property is added as a
Borrowing Base Property (or if dated prior to such ninety (90) day period,
then updated within such period) addressed to Agent (or to the REIT, Sponsor
or the applicable Property Owner so long as such report or a separate letter
from the preparer of such report shall provide that Agent may rely on such
report in a manner reasonably acceptable to Agent) prepared by The Planning
& Zoning Resources Corporation or another

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zoning firm reasonably acceptable
to Agent and which report shall be in form and substance reasonably
acceptable to Agent, (ii) to the extent reasonably available, a letter from
the municipality in which such Property is located, confirming such
compliance and (iii) to the extent available, a certificate or certificates,
as applicable, of occupancy for such Property;

     (B) a title report showing that the Property Owner is the fee or ground
leasehold owner of such Property, as applicable, a legal description
of the Property and that no title defects exist with respect to such
Property which could affect the marketability (or in the case of Properties
located in Texas, the insurability) of such Property, all as shall be
demonstrated to the reasonable satisfaction of Agent, along with copies of
all exceptions to title shown on such title report;

     (C) a physical inspection report of such Property addressed to Agent
(or to the REIT, the Sponsor or the applicable Property Owner so long as
such report or a separate letter from the preparer of such report shall
provide that Agent may rely on such inspection in a manner acceptable to
Agent) prepared by an architect or engineer acceptable to Agent and which
physical inspection report shall be dated no more than ninety (90) days
prior to the date that such Property is added as a Borrowing Base Property
(or if dated prior to such ninety (90) day period, then updated within such
period) and shall otherwise be in form and substance reasonably satisfactory
to Agent;

     (D) a current Phase I Environmental Assessment report with respect to
such Property addressed to Agent (or to the REIT, the Sponsor or the
applicable Property Owner so long as such report or a separate letter from
the preparer of such report shall provide that Agent may rely on such
inspection in a manner reasonably acceptable to Agent) and prepared by a
qualified environmental consultant retained by a Borrower or Sponsor and
reasonably acceptable to Agent together with a Phase II Environmental
Assessment report and any other additional reports and assessments to the
extent recommended by the environmental consultant or reasonably requested
by Agent, which reports shall be dated no more than ninety (90) days prior
to the date that such Property is added as a Borrowing Base Property (or if
dated prior to such ninety (90) day period, then updated within such period)
and shall otherwise be in form and substance reasonably satisfactory to
Agent;

     (E) an Appraisal of such Property;

     (F) copies of all Leases (together with abstracts for each Lease to the
extent prepared and in any event with respect to each Lease which demises
more than 45,000 net rentable square feet of such Property or more than ten
percent (10%) of the net rentable square footage of the

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Property), operating
agreements, licenses, permits, equipment leases and other contracts and
encumbrances relating to the Property;

     (G) a Survey of such Property dated no more than ninety (90) days prior
to the date that such Property is added as a Borrowing Base Property (or if
dated prior to such ninety (90) day period, then updated within such
period);

     (H) evidence that no material Improvements located on any portion of
such Property shall be located within an area that has been designated or
identified as an area having special flood hazards by the Secretary of
Housing and Urban Development or by such other official as shall from time
to time be authorized by federal or state law to make such designation
pursuant to the National Flood Insurance Act of 1968, as such act may from
time to time be amended, or pursuant to any other national, state, county or
city program of flood control or, if so located, that adequate flood
insurance (as reasonably determined by Agent’s insurance consultant) will be
provided;

     (I) to the extent available, all purchase information relating to such
Property (including copies of any contracts of sale, closing statements,
deeds, and such other documents and agreements entered into or delivered in
connection with the acquisition of such Property);

     (J) to the extent available, an operating statement, occupancy report,
receivables aging report and operating and capital expenditure budget for
such Property for the then current calendar year, and to the extent
available to the Property Owner, the three (3) immediately preceding
calendar years;

     (K) to the extent available, an operating statement for the current
calendar quarter and the trailing twelve (12) calendar months, a current
Rent Roll, an Argus run with projections of at least twelve (12) months, a
current receivable aging report, an operating and capital expenditures
budget for the current calendar year, capital expenditure and renovation
plan, if available, current market sales and leasing comps and leasing data,
in each case, in form and content reasonably acceptable to Agent;

     (L) evidence of approval by the REIT’s Board of Directors of the
acquisition of such Property;

     (M) an organizational chart in substantially the same format as the
organizational chart of Borrowers attached to the Borrowers’ Certificate,
certified by the Borrowers as being true and correct, showing all direct and
indirect owners of the equity interests of such proposed

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Borrower in the
same manner and up to the same levels as shown in such organizational chart;

     (N) Estoppel Certificates, in content satisfactory to Agent, from
Tenants renting, in the aggregate, at least seventy five percent (75%) of
the net rentable square footage of such Property (the “Estoppel
Threshold”); provided, however, in the event that the
Estoppel Threshold shall not have been satisfied as of the date which is
three (3) Business Days, prior to the Proposed Addition Date, Borrowers
shall be required to
deliver such remaining Estoppel Certificates in order to comply with
the Estoppel Threshold within sixty (60) days after the addition of such
Property as a Borrowing Base Property;

     (O) subordination, non-disturbance and attornment agreements in the
form of Exhibit S attached hereto (or such other form reasonably
acceptable to Agent) (y) from each Tenant which (I) together with any
Affiliates, leases more than 45,000 net rentable square feet of such
Property or more than ten percent (10%) of the net rentable square footage
of such Property or (II) is a party to a Lease which is not automatically
subordinate to all mortgages or (z) is otherwise reasonably requested by
Agent;

     (P) evidence (which shall include certificates of insurance reasonably
acceptable to Agent and Agent’s insurance consultant) that all insurance
policies required to be in effect with respect to the Borrowing Base
Properties pursuant to Section 5.19 hereof shall be in effect with
respect to such Property, as confirmed to Agent’s reasonable satisfaction in
a report addressed to Agent and prepared by an insurance consultant retained
by Agent;

     (Q) Property Owner shall have delivered to Agent (w) a Mortgage,
Security Agreement and other Financing Documents (including each Uniform
Commercial Code financing statement) required by law or reasonably requested
by Agent to be filed, registered or recorded in order to create in favor of
Agent for its own benefit and for the benefit of the Lenders a first
priority perfected Lien in such Property and in such other Collateral in
connection therewith, each of which shall be delivered to or at the
direction of Agent to be properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or reasonably requested on the date which such Property shall be
added as a Borrowing Base Property, (x) evidence reasonably acceptable to
Agent to establish such Property Owner’s title to, and the due creation,
perfection and priority of Agent’s or the Lenders’ Liens on and security
interests in, the Collateral, in form and substance reasonably satisfactory
to Agent, (y) a joinder or similar agreement with the effect that Property
Owner shall have become a party to this Agreement and the other Financing
Documents as a “Borrower” and (z) any amendment,

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modification or supplement
to this Agreement or any other Financing Document reasonably requested by
Agent to address any issues pertaining to such Property and which Agent
reasonably determines warrant any such amendment, modification or
supplement;

     (R) the then current Credit Parties shall have ratified in writing for
the benefit of Agent and the Lenders their obligations under this Agreement
and the other Financing Documents to which they are a party and delivered to
Agent such additional or supplemental Financing
Documents in connection with such Borrowing Base Property (and any new
Borrower) as Agent shall reasonably request;

     (S) the Manager of such Property shall have delivered a Manager’s
Cooperation Agreement;

     (T) if such Property is a ground lease, such ground lease shall be in
form and content acceptable to Agent, and the ground lessor shall have
executed and delivered to Agent an estoppel certificate reasonably
acceptable to Agent;

     (U) if such Property is subject to any REAs, such REAs shall have been
approved by Agent and the parties thereto shall have executed and delivered
to Agent an estoppel certificate reasonably acceptable to Agent;

     (V) Agent shall have received a favorable written opinion (addressed to
Agent and the Lenders and dated the date that such Property is added as a
Borrowing Base Property) of counsel for the Credit Parties, covering such
matters relating to the Credit Parties, this Agreement and the other
Financing Documents delivered pursuant to this Section 4.03(c) and
related Transactions as Agent shall reasonably request, including favorable
customary written opinions from local counsel to the Credit Parties in each
state in which such Property and other Collateral in connection therewith is
located and/or any Security Documents are filed or recorded as Agent shall
reasonably request confirming the due creation and perfection of Agent’s or
the Lenders’ Liens on and security interests in, the Collateral, in form and
substance reasonably satisfactory to Agent;

     (W) with respect to such Property and other Collateral in connection
therewith, and any new Borrower, the conditions of Sections 4.01(f),
(g), (h), and, with respect to such new Borrower only,
(j) and (k) hereof shall have been satisfied;

     (X) a Title Insurance Policy with respect to such Property and
modifications to the existing tie-in endorsements, to the extent available,
contained in the then existing Title Insurance Policies for the Borrowing
Base Properties, in each case, in form and substance reasonably

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satisfactory
to Agent with the effect that, pursuant to such “tie-in” endorsements, the
lien of the Mortgage on each Borrowing Base Property, including such
Property, is insured for the aggregate of the amount of the individual Title
Insurance Policies;

     (Y) Agent shall have received a certificate, in form and substance
satisfactory to Agent, signed by the Authorized Officer of Borrowers
certifying that the representations and warranties of the Credit Parties set
forth in this Agreement and the other Financing Documents are
true and correct in all material respects on and as of the date that
such Property is added as a Borrowing Base Property;

     (Z) a certificate signed by the Authorized Officer of Borrowers
certifying that the conditions to the addition of such Property as a
Borrowing Base Property set forth in this Section 4.03 have been
satisfied;

     (AA) Agent shall have received (i) a pro forma balance sheet of the
Borrowing Base Subsidiary proposed to become the owner of such Property
dated as of the date such Property is added as a Borrowing Base Property and
(ii) photo identification of the signatories of any Financing Documents (or
any amendments, modifications or supplements thereto) entered into in
connection with the addition of such Property as a Borrowing Base Property;

     (BB) Except as otherwise set forth in Section 2.17 hereof,
Borrowers shall have delivered to Agent Account Agreements with respect to
any Account relating to such Property; and

     (CC) Agent shall have received such other documents, estoppels,
opinions, information, approvals and materials (each, in form and substance
reasonably satisfactory to Agent), and completed such other reviews,
reasonably requested by Agent or its counsel with respect to such Property
(and the results of such reviews shall be reasonably satisfactory to Agent);

     (iii) The addition of such Property as a Borrowing Base Property would not
result in the Availability being less than zero dollars ($0) (calculated as of the
date that such Property is added as a Borrowing Base Property and after giving
effect to such acceptance) or the aggregate amount of the Loans exceeding the
Borrowing Base Loan Amount;

     (iv) Agent and the Lenders shall have received payment of all fees and other
amounts due and payable by Borrowers in accordance with this Agreement, on or prior
to the date that such Property is added as a Borrowing Base Property, including, to
the extent invoiced, Agent’s counsel fees and other costs and expenses incurred by
Agent in connection with the addition of such Property and

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reimbursement or payment
of all other out-of-pocket expenses required to be reimbursed or paid by any of the
Credit Parties hereunder on or prior to such date;

     (v) No event shall have occurred and be continuing, or would result from the
addition of such Property as a Borrowing Base Property, which has had on and as of
the date of such Property is added as a Borrowing Base Property or would have a
Material Adverse Effect;

     (vi) No Default or Event of Default shall exist immediately prior to or after
giving effect to the addition of such Property as a Borrowing Base Property
(unless with respect to Defaults, the effect of such addition is to cure all
Defaults); and

     (vii) The date on which such Property shall be added as a Borrowing Base
Property shall be no more than sixty (60) days after the Proposed Addition Date.

          SECTION 4.04. Removal of Borrowing Base Properties.

          (a) Removal of Borrowing Base Properties. Borrowers may request that a Property that
has previously been added as a Borrowing Base Property be removed as a Borrowing Base Property, and
the Security Interests and any other Liens of Agent and the Lenders solely related thereto be
released; provided, that:

     (i) Borrowers shall provide Agent a request to remove such Property as a
Borrowing Base Property, which request shall specify the anticipated date of the
removal of such Property (the “Proposed Removal Date”) and be given at least
thirty (30) days prior to the Proposed Removal Date;

     (ii) Agent shall have received at least ten (10) Business Days prior to the
Proposed Removal Date, a Borrowing Base Certificate executed by an Authorized
Officer of Borrowers presenting its computation of the Borrowing Base Loan Amount as
of the requested date of removal, and after giving effect to (A) the removal of such
Borrowing Base Property from the Borrowing Base, (B) the deletion of the Borrowing
Base Net Operating Income from such Borrowing Base Property from the Borrowing Base
Net Operating Income on a trailing three (3) month-basis, (C) any prepayments of the
Loans anticipated to be made on or prior to the requested date of removal, and (D)
Additional Collateral Value, if any;

     (iii) After giving effect to the removal of such Property as a Borrowing Base
Property, Availability will not be less than Zero Dollars ($0) and the aggregate
amount of the Loans shall not exceed the Borrowing Base Loan Amount;
provided, however, if, after giving effect to the removal of such
Property as a Borrowing Base Property, the conditions set forth in this clause
(iii) shall not be complied with, Borrowers shall be deemed to have complied
with this clause (iii) in the event that Borrowers (x) increase the
Borrowing Base Loan Amount by adding one or more Properties as additional Borrowing
Base

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Properties in accordance with Section 4.03 hereof so that, after giving
effect to the removal of such Property as a Borrowing Base Property and such
increase in the Borrowing Base Loan Amount, the conditions set forth in this
clause (iii) shall be complied with, (y) make an optional prepayment of the
Loans in accordance with Section 2.09(b) hereof in an amount necessary so
that, after giving effect to the removal of such Property as a Borrowing Base
Property and such prepayment of the Loans, the conditions set forth in this
clause (iii) shall be complied with (the
“Deemed LTV Deficiency Amount”) or (z) deliver to Agent (A) Additional
Collateral in accordance with Section 2.20(a) hereof in an amount equal to
the Deemed LTV Deficiency Amount and (B) (I) such new (or modifications or
supplements to the existing) Financing Documents to give effect to the Additional
Collateral and to grant and perfect a first priority security interest in favor of
Agent on such Additional Collateral, which modifications and supplements or new
Financing Documents shall be in form and content acceptable to Agent, (II) to the
extent required by Agent, legal opinions from Borrowers’ counsel with respect to the
authorization of Borrowers to execute, deliver and perform, and enforceability
against Borrowers of, any such modifications or new Financing Documents, in form and
content reasonably acceptable to Agent and (III) to the extent required by Agent,
certifications from Borrowers and reaffirmations from Guarantor in form and content
reasonably acceptable to Agent.

     (iv) After giving effect to the removal of such Property as a Borrowing Base
Property, there shall be at least three (3) Borrowing Base Properties;

     (v) Contemporaneously with the removal of such Property as a Borrowing Base
Property, Borrowers shall have (x) (A) paid accrued and unpaid Interest on any
principal amount being prepaid in connection with such removals, (B) deposited any
amounts Borrowers have elected to prepay or any Additional Collateral to be
delivered, (C) added one or more Properties as additional Borrowing Base Properties
in accordance with Section 4.03 hereof, in each case under the foregoing
subclauses (A), (B) and (C), to the extent necessary to
permit compliance with the conditions set forth in clauses (iii) and/or
(viii) of this Section 4.04(a), along with any other amounts
required to be paid pursuant to Section 2.09 hereof relating to any such
prepayment or any other items required to be delivered pursuant to clause
(iii)(z)(B) or clause (viii)(z)(B) of this Section 4.04(a)
relating to the delivery of any Additional Collateral, (y) paid all fees and
expenses incurred by Agent in connection with the Loans and/or with the prepayment
of the Loans, and (z) paid all Additional Interest and any other amounts then due
and payable hereunder, and under the Note, the Mortgage and the other Financing
Documents;

     (vi) No Event of Default or Default shall exist immediately prior to or after
giving effect to the removal of such Property as a Borrowing Base Property (unless,
with respect to Defaults, the effect of such removal is to cure all Defaults);

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     (vii) Agent shall have received a certificate signed by the Authorized Officer
of Borrowers certifying that the conditions in clauses (iii), (iv),
(v) and (vi) of this Section 4.04(a) are satisfied;

     (viii) After giving effect to the removal of such Property as a Borrowing Base
Property, any prepayments of the Loan made on or prior to the date of removal and
the Additional Collateral Value, if any, the Debt Service Coverage Ratio calculated
as of the date of such removal shall not be less than 1.35:1.0, and
Agent shall have received a certificate from Borrowers setting forth such
computation of such Debt Service Coverage Ratio; provided, however,
if, after giving effect to the removal of such Property as a Borrowing Base
Property, the conditions set forth in this clause (viii) shall not be
complied with, Borrowers shall be deemed to have complied with this clause
(viii) in the event that Borrowers shall (x) add one or more Properties as
additional Borrowing Base Properties in accordance with Section 4.03 hereof
so that the Debt Service Coverage Ratio calculated as of the date of such removal,
after giving effect to such removal and the addition of such Properties as Borrowing
Base Properties, is in compliance with this clause (viii), (y) make an
optional prepayment of the Loans in accordance with Section 2.09(b) hereof
in an amount necessary so that, after giving effect to the removal of such Property
as a Borrowing Base Property and such prepayment of the Loans, the conditions set
forth in this clause (viii) shall be complied with (the “Deemed DSCR
Deficiency Amount”) or (z) deliver to Agent (A) Additional Collateral in
accordance with Section 2.20(a) hereof in an amount equal to the Deemed LTV
Deficiency Amount and (B) (I) such new (or modifications to the existing) Financing
Documents to give effect to the Additional Collateral and to grant and perfect a
first priority security interest in favor of Agent on such Additional Collateral,
which modifications or new Financing Documents shall be in form and content
acceptable to Agent, (II) to the extent required by Agent, legal opinions from
Borrowers’ counsel with respect to the authorization of Borrowers to execute,
deliver and perform, and enforceability against Borrowers of, any such modifications
or new Financing Documents, in form and content reasonably acceptable to Agent and
(III) to the extent required by Agent, certifications from Borrowers and
reaffirmations from Guarantor in form and content reasonably acceptable to Agent;
and

     (ix) Agent and the Lenders shall have received all fees and other amounts due
and payable by Borrowers in accordance with this Agreement, on or prior to the date
that such Property is removed as a Borrowing Base Property, including, to the extent
invoiced, Agent’s counsel fees and other costs and expenses incurred by Agent in
connection with the removal of such Property as a Borrowing Base Property and
reimbursement or payment of all other out-of-pocket expenses required to be
reimbursed or paid by any of the Credit Parties hereunder on or prior to such date.

          (b) Release of Borrowing Base Subsidiaries. If, as of any date, a Borrower no longer
owns any Borrowing Base Properties (or any profits or proceeds of any Borrowing Base Property
arising from any Casualty or Taking) then Agent shall, upon the request of Borrowers,

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release such
Borrowing Base Subsidiary from its obligations hereunder and under the other Financing Documents,
unless a Default or Event of Default exists or would result from such release.

ARTICLE V

Affirmative Covenants

          Until the Commitments have expired or been terminated, all outstanding principal of the Loans,
together with all Interest and other sums due and payable in connection therewith have been
indefeasibly paid in full, all other outstanding Obligations then due or required to be performed
have been paid or performed, as applicable, and all Lender Interest Rate Protection Agreements have
terminated, each Borrower and Guarantor, as applicable, covenants and agrees with Agent and the
Lenders that:

          SECTION 5.01. Financial Reporting. The REIT and Borrowers will furnish to Agent:

          (a) As soon as practicable and in any event within ninety (90) days after the close of
each fiscal year of the REIT, audited consolidated financial statements of the REIT for such
period, which shall include a consolidated balance sheet, consolidated statement of
operations (income and expenses), consolidated statement of cash flow, consolidated
statement of shareholder’s equity, and any other financial information with respect to the
REIT as shall reasonably be required by Agent, in form reasonably acceptable to Agent (it
being agreed that the form of financial statements of the REIT presented to Agent prior to
Closing is acceptable), prepared in accordance with GAAP consistently applied for all
periods, where applicable, showing the comparative figures for the previous fiscal year, and
audited by and accompanied by an opinion thereon by Deloitte & Touche LLP, Ernst & Young
LLP, KPMG or PricewaterhouseCoopers, or any other independent certified public accounting
firm selected by the REIT and reasonably acceptable to Agent, which audit shall be
unqualified as the scope of audit and state that such financial statements were prepared in
accordance with GAAP, and that the examination of such accounting firm in connection with
such financial statements has been made in accordance with generally accepted auditing
standards;

          (b) As soon as practicable and in any event within ninety (90) days after the close of
each fiscal year of the Borrowers, unaudited financial statements of the Borrowers for such
period, which shall include a balance sheet, which may be consolidated, statement of
operations (income and expenses), statement of cash flow, statement of changes in members’
or partners’ capital or shareholder’s equity, as applicable, and any other financial
information with respect to the Borrowers as shall be reasonably requested by Agent, in form
reasonably acceptable to Agent (it being agreed that the form of financial statements of
Borrowers presented to Agent prior to Closing is acceptable), prepared in accordance with
GAAP consistently applied for all periods. Such financial statements shall be certified by
an Authorized Officer of each Borrower

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(or the REIT) as being true, correct and complete and
fairly presenting the financial position of such Borrower;

          (c) As soon as practicable and in any event within forty-five (45) days after the end
of each calendar quarter, unaudited consolidated financial statements of the REIT for such
period, which shall include a consolidated balance sheet, consolidated statement of
operations (income and expenses) which is both for such calendar quarter and year-to-date,
consolidated statement of cash flow and any other financial information with respect to the
REIT as shall be reasonably requested by Agent, in form reasonably acceptable to Agent (it
being agreed that the form of financial statements of the REIT presented to Agent prior to
Closing is acceptable), prepared in accordance with GAAP, where applicable, showing the
comparative figures for the corresponding period of the previous fiscal year, and certified
by an Authorized Officer of the REIT as being true, correct and complete and fairly
presenting the financial position of the REIT;

          (d) As soon as practicable and in any event within forty-five (45) days after the end
of each calendar quarter, unaudited financial statements of the Borrowers for such period,
which shall include a balance sheet, which may be consolidated, statement of operations
(income and expenses) and any other financial information with respect to the Borrowers as
shall be reasonably requested by Agent, in form reasonably acceptable to Agent (it being
agreed that the form of financial statements of Borrowers presented to Agent prior to
Closing is acceptable), prepared in accordance with GAAP, where applicable, consistently
applied for all periods. Such financial statements shall be certified by the an Authorized
Officer of each Borrower (or the REIT) as being true, correct and complete and fairly
presenting the financial position of such Borrower;

          (e) As soon as practicable and in any event within forty-five (45) days after the end
of each calendar quarter (i) a quarterly capital expenditures status report for each of the
Borrowing Base Properties for which Agent shall have made a determination of an Initial
Capital Repair Guaranty Amount as being applicable thereto at the time that such Borrowing
Base Property was added as a Borrowing Base Property pursuant to Section 4.03
hereof, (ii) a consolidated leasing status report with respect to all Borrowing Base
Properties for such quarter, in each case, in form, detail and scope reasonably satisfactory
to Agent (it being agreed that the forms presented to Agent prior to Closing are
satisfactory), (iii) a statement of the Individual Vacancy Rate with respect to each
Borrowing Base Property, and (iv) a statement of the Aggregate Vacancy Rate. Such items
shall be certified by an Authorized Officer of each Borrower as being true, correct and
complete in all material respects;

          (f) [Reserved];

          (g) Promptly after the preparation thereof, and no later than forty-five (45) days
after the last day of each calendar year, annual operating budgets for each of the Borrowing
Base Properties for the next succeeding calendar year;

          (h) Promptly after the preparation thereof, and no later than forty-five (45) days
after the last day of each calendar quarter, (i) computations of Borrowing Base

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Net Operating Income for each Borrowing Base Property, (ii) computations of Debt Service
Coverage Ratio as of the Testing Determination Date occurring on the last day of such
calendar quarter (iii) a Borrowing Base Certificate executed by an Authorized
Officer of Borrowers (or the REIT) setting forth its computation of the Borrowing Base
Loan Amount as of the Testing Determination Date occurring on the last day of such calendar
quarter; (iii) a Rent Roll and (iv) a receivables aging report with respect to each
Borrowing Base Property setting forth all outstanding arrears. Such items shall be
certified by an Authorized Officer of each Borrower as being true, correct and complete in
all material respects;

          (i) Within twenty (20) days after the end of each calendar month, a copy of a bank
statement with respect to each Account showing the beginning and ending balance in such
Account as of the end of each month and each withdrawal, deposit and other transaction which
has occurred during such calendar month;

          (j) Concurrently with any delivery under Section 5.01(b) or (d) hereof,
a certificate of an Authorized Officer of the Borrowers (or the REIT), in form and substance
reasonably satisfactory to Agent, which certificate shall (i) certify that to the best of
his or her knowledge no Default or Event of Default has occurred and, if such a Default or
Event of Default has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii) state whether any change
in the application of GAAP has occurred since the date of the audited financial statements
referred to in Section 3.04 hereof and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such certificate;

          (k) Promptly after the same becomes publicly available, copies (which may be in
electronic format) of registration statements, annual, periodic and other reports, and proxy
statements and other information, if any, as shall be filed by the REIT with the Securities
and Exchange Commission or with any national securities exchange or distributed by the REIT
to its shareholders generally;

          (l) Within ninety (90) days after the end of each calendar year, (i) the Annual Report
on Form 10-K of the REIT as submitted to the Securities and Exchange Commission; and

          (m) Promptly following any request therefor, such other information regarding the
operations, business affairs, properties and financial condition of the Credit Parties, the
REIT and the Borrowing Base Properties, including the performance of their obligations under
the Financing Documents, as Agent or any Lender shall reasonably request.

          SECTION 5.02. Payment of Obligations. Each Credit Party will pay its obligations,
excluding Tax liabilities (which are the subject of Section 5.08 hereof) and the
Obligations (which are the subject of the other provisions of this Agreement and in the other
Financing Documents), before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate proceedings,

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(b) such Credit Party has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.03. Maintenance of Property.

          (a) Each Borrower will keep all property useful and necessary in its business as then
conducted in good working order and condition, ordinary wear and tear excepted, and with respect to
its respective Borrowing Base Property, in accordance with the terms and conditions of the
applicable Space Leases and other material agreements affecting such Borrowing Base Property.
Without limiting the foregoing or Section 5.04 hereof, each Borrower will maintain its
respective Borrowing Base Property in a manner consistent with Comparable Building Standards and,
subject to Section 6.15 hereof, make such repairs and alterations to its respective
Borrowing Base Property as is necessary to maintain Comparable Building Standards.

          (b) Each Borrower will cause all construction, renovation, and rehabilitation work performed
by or on behalf of such Borrower with respect to its respective Borrowing Base Property to be
performed in a good and workmanlike manner substantially in accordance with all Legal Requirements
affecting such Borrowing Base Property, and the terms and conditions of the applicable Space Leases
and other material agreements affecting such Borrowing Base Property.

          (c) Each Borrower will comply in all material respects with all rights of way or use,
declarations or transfers of air rights, other declarations, zoning lot development agreements,
privileges, franchises, licenses, servitudes, easements and other encumbrances affecting or forming
a part of its respective Borrowing Base Property or any portion thereof, and all instruments
creating or evidencing the same, in each case, to the extent compliance therewith is required of
any Borrower under the terms thereof. No Borrower will take any action which results in a
forfeiture or termination of the rights afforded to such Borrower under any such instruments. Each
Borrower will make all reasonable efforts to secure the performance of the obligations of the
grantors or other parties thereto and to enforce such Borrower’s rights thereunder. Each Borrower
will not, without the prior consent of Agent, modify, amend or enter into any agreement in
substitution for any such instruments.

          (d) Each Borrower will not commit or knowingly permit any physical waste or deterioration of
or to its respective Borrowing Base Property or other improvements, structures and equipment
thereon. Each Borrower will promptly, diligently and continuously restore, replace or rebuild any
part of and improvements, structures and equipment on its respective Borrowing Base Property
damaged or destroyed by any Casualty (including any Casualty for which insurance was not obtained
or obtainable) or which may be affected by any Taking, in accordance with the Financing Documents
and the Permitted Encumbrances. Each Borrower will promptly replace, or caused to be replaced, any
part of its respective Borrowing Base Property taken by theft to the extent necessary to comply
with the provisions of this Section 5.03(d).

          SECTION 5.04. Compliance with Laws and Documents. Without limiting any other provision hereof, each Borrower will comply in all material respects
with all Legal Requirements applicable to it or its property, obtain, keep in full force and effect
and comply in

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all material respects with all licenses and permits and any other agreements and
instruments binding upon such Borrower or its properties required for the operation of its
property, except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. Each Borrower shall comply in all material respects with the terms and provisions
of its constitutive documents and any judgment, Management Agreements, and Space Leases.

          SECTION 5.05. Inspection of Property, Books and Records. Each Credit Party will keep, and
cause the REIT to keep, proper books of record and account in which full, true and correct entries
in all material respects are made of all dealings and transactions in relation to its business and
activities; and will permit representatives of Agent or any Lender upon reasonable prior notice to
visit and inspect any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs, finances and accounts
with their respective officers, senior employees and independent public accountants, all during
normal business hours and as often as may reasonably be desired. At Borrowers’ sole cost and
expense, Agent shall have the right at any time, and from time to time, to audit the existence and
condition of the Collateral and to review compliance with the Financing Documents;
provided, that, so long as no Default or Event of Default shall have occurred and
be continuing, Borrowers shall only be required to pay for one (1) such audit in any two (2)
calendar years unless an additional audit is required under Legal Requirements; provided, however,
in no event shall Borrowers be required to pay for more than one (1) such audit in any calendar
year so long as no Default or Event of Default shall have occurred and be continuing.

          SECTION 5.06. Use of Proceeds. The proceeds of the Loans under this Agreement will be used
by Borrowers solely for the general corporate, company or partnership, as applicable, purposes of
Borrowers to the extent permitted hereunder, specifically including the purposes contemplated by
the REIT’s Prospectus dated June 19, 2006 (as the same may be updated from time to time). None of
such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any “margin stock” within the meaning of Regulations T, U and X.

          SECTION 5.07. Environmental Matters. (a) Borrowers will promptly give to Agent notice in
writing of any complaint, order, citation or notice of violation with respect to, or if a Borrower
becomes aware of, (i) the existence or alleged existence of a violation of any applicable
Environmental Law by any Credit Party or any Borrowing Base Property, (ii) any Release into the
environment at, from or affecting any Borrowing Base Property, (iii) the commencement of any
cleanup of any Hazardous Substances at, from or affecting any Borrowing Base Property, (iv) any
pending legislative or threatened proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law at, from or affecting any Borrowing Base
Property and (v) any Borrowing Base Property that is or will be subject to a Lien imposed pursuant
to any
Environmental Law, which, in each of clauses (i) through (v) above, individually or
in the aggregate, would have a Material Adverse Effect.

          (b) Borrowers shall, at its sole cost and expense, (i) cause an environmental mold
investigation to be performed with respect to the North Clark Property, including the portion
thereof leased to the American Bar Association, by an environmental engineer or

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consultant
reasonably acceptable to Agent, based on sampling and testing parameters and procedures reasonably
acceptable to Agent, at least once in every Loan Year, (ii) deliver a written report addressed to
Agent from such environmental engineer or consultant in form and substance reasonably acceptable to
Agent, which report shall indicate the results of such investigation, identify any areas of mold
growth within the North Clark Property and recommend any further investigations or remediation
required with respect to any such areas of mold growth (or similar problems), and (iii) in the
event that such report shall recommend any further investigations or remediation with respect to
any areas of mold growth (or similar problems), promptly perform (or cause to be performed) such
further investigations or remediation in a manner reasonably acceptable to Agent.

          SECTION 5.08. Taxes; Certain Liens. Each Credit Party will pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon such Credit Party or
upon their respective income or profits or in respect of their respective property before the same
shall become delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, would give rise to Liens upon such properties or any part
thereof; provided, however, that such payment and discharge shall not be required
with respect to (i) any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and the applicable
party, shall have set aside on its books adequate reserves with respect thereto, and such contest
operates to suspend collection of the contested tax, assessment, charge, levy or claims and
enforcement of a Lien or (ii) any tax, assessment, charge, levy or claims, the failure to pay and
discharge when due which, individually or in the aggregate would not have a Material Adverse
Effect. With respect to real estate taxes, assessments or other governmental charges or levies
affecting any Borrowing Base Property, the applicable Borrower may not contest same if any Default
or Event of Default exists or without giving prior notice to Agent. Furthermore, (x) such
Borrowing Base Property, or any other Collateral pledged by such Borrower, must not, in the
judgment of Agent, be in any danger of being sold, forfeited, terminated, canceled or lost in any
respect as a result of such contest, (y) the non-payment of the whole or any part of any tax,
assessment, charge or levy during the pendency of any such action must not result in the delivery
of a tax deed to such Borrowing Base Property or any other collateral because of such non-payment,
and (z) Borrowers shall have furnished such security, if any, as may be required in the proceedings
or as may be reasonably requested by Agent to ensure the payment of such tax, assessment, charge or
levy, together with any interest or penalties which may become due in connection therewith. With
respect to the Borrowing Base Properties, Borrowers promptly will deliver to Agent, upon request,
copies of official receipts or other evidence reasonably satisfactory to Agent evidencing the
payment of such taxes, assessments and governmental charges or levies.

          SECTION 5.09. Security Interests and Defense of Title.

          (a) Each Borrower will at all times take, or cause to be taken, all actions, at such times as
any Borrower obtains knowledge of the need for such action, necessary to maintain the Security
Interests as valid and perfected Liens, subject only to Liens permitted under Section 6.02
hereof, and supply all information to Agent necessary for such maintenance. Notwithstanding
anything to the contrary herein, Agent shall have the right, at any time, to intervene in any suit
affecting any perfected Liens and to employ independent counsel in

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connection with any such suit to
which it may be a party by intervention or otherwise; and upon demand, Borrowers agree to pay to
Agent all reasonable expenses paid or incurred by Agent in respect of any such suit affecting title
to any such Lien or affecting Agent’s lien or rights hereunder, including the reasonable fees and
expenses of Agent’s counsel. Borrowers will indemnify and hold harmless Agent from and against any
and all costs and expenses, including any and all cost, loss, damage or liability which Agent may
suffer or incur by reason of the failure of the perfected Lien or by reason of the failure or
liability of any Borrower, for any reason, to convey or grant a security interest in the rights,
titles and interests which the applicable Financing Document purports to mortgage, assign, pledge
or grant a security interest in, and all amounts at any time so payable by Borrowers shall be
secured by the Financing Documents.

          (b) Each Borrower will, at its sole cost and expense, at all times cause the applicable
Security Documents to be recorded, registered or filed in the applicable public records, and any
amendments or supplements hereto and thereto, and, if requested by Agent, any instruments of
assignment hereof or thereof, to be recorded, registered and filed, as applicable, and to be kept
recorded, registered and filed, in such manner and in such places, shall pay all recording,
registration and filing fees and taxes and other charges, including any recording, transfer or
intangible personal property tax or similar imposition, with respect thereto, and shall comply with
all Legal Requirements in order fully and effectively to establish, preserve, perfect and protect
the liens of the Security Documents subject only to Permitted Encumbrances. Each Borrower hereby
authorizes Agent to file financing and continuation statements with respect to the applicable
Borrowing Base Properties and other Collateral.

          SECTION 5.10. REIT Status. The Credit Parties will exercise commercially reasonable
efforts to do, or cause to be done, all things necessary to preserve and keep in full force and
effect the REIT’s status as a Real Estate Investment Trust consistent with the requirements
applicable to its election to be taxed as a “real estate investment trust” under Sections 850
through 856 of the Code and shall be in compliance with all other applicable laws with respect to
Real Estate Investment Trusts. The Credit Parties will not permit any of their Affiliates to take
any action which could lead to the REIT’s disqualification as a Real Estate Investment Trust.

          SECTION 5.11. Litigation and Other Notices. Each Credit Party will give Agent prompt
notice of the following:

          (a) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, the issuance by any court or Governmental Authority of any injunction, order,
decision or other restraint prohibiting, or having the effect of prohibiting, the making of
the Loans, or invalidating, or having the effect of invalidating, any provision of this
Agreement or the other Financing Documents that would materially adversely affect the
Lenders’ ability to enforce any payment obligations hereunder, or the filing or commencement
of any litigation or similar proceeding seeking any such injunction, order, decision or
other restraint;

          (b) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, the filing or commencement of any action, suit or proceeding against or affecting
any Credit Party, the REIT or any wholly owned

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Affiliates of a Credit Party or the REIT,
whether at law or in equity or by or before any arbitrator or Governmental Authority, (i)
which is material and is brought by or on behalf of any Governmental Authority, or in which
injunctive or other equitable relief is sought or (ii) which, if adversely determined, could
(A) reasonably be expected to result in liability of such Credit Party or the REIT, in an
aggregate amount of $2,000,000 or more, not reimbursable by insurance or otherwise have a
Material Adverse Effect, or (B) impairs the right of any Credit Party to perform its
obligations under this Agreement, any Note or any other Financing Document to which it is a
party;

          (c) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of Credit
Parties in an aggregate amount exceeding $100,000;

          (d) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, the occurrence of any Default or Event of Default;

          (e) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, any development in the business or affairs of such Credit Party which has had or
could reasonably be expected to result in, a Material Adverse Effect;

          (f) within three (3) Business Days after the Credit Parties’ receipt of a notice, or
obtaining knowledge, thereof, any acceleration of any Indebtedness of any Credit Party;

          (g) within five (5) Business Days after the occurrence thereof, any name change or
change in fiscal year for any Credit Party;

          (h) within five (5) Business Days after the occurrence thereof, a copy of any amendment
to the any organizational document of any Credit Party, and promptly following Agent’s
request, an organizational chart of the owners of direct or indirect beneficial and
equitable interests in Borrowers substantially in the form attached to the Borrowers’
Certificate, certified by Borrowers as being true and correct, showing all
direct and indirect owners of the equity interests of Borrowers in the same manner and
up to the same levels as shown in such organizational chart;

          (i) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, any breach, default or failure of performance by any party under, or any notice
that a party has challenged or denied the validity or enforceability of the Permitted
Encumbrances, any Material Operating Agreement, any REA, Management Agreement or any other
material agreement, contract or other instrument to which any Credit Party is a party or by
which any of their properties are bound, in each case, which could reasonably be expected to
have a Material Adverse Effect;

          (j) within three (3) Business Days after receipt of notice of the same from any Person,
any material adverse claim against or affecting any Credit Party, any Borrowing Base
Property or any other Collateral, Borrowers’ rights under any Permitted

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Encumbrance or any
license, permit or approval obtained by Borrowers or the Liens securing the Obligations;

          (k) promptly following the Credit Parties’ receipt of a notice, or obtaining knowledge,
thereof, notification of any material changes in any Material Operating Agreement, and with
respect to any other contracts which may be necessary for the operation of any of the
Borrowing Base Properties, including elevator maintenance agreements, agreements with
respect to electricity, gas, water, and telephone service (both local and long distance),
heating, ventilating and air conditioning, and other major mechanical maintenance
agreements, the respective Borrower will notify Agent if any such contracts are not renewed
or replaced with similar agreements upon their expiration or termination, and shall include
with such notification a detailed explanation of reasons for such termination, non-renewal
and non-replacement; and

          (l) promptly upon Agent’s request, such other information concerning the business,
properties, or financial condition of Credit Parties or the REIT, including the performance
of the Credit Parties’ obligations under the Financing Documents, as Agent shall reasonably
request.

Each notice delivered under this Section 5.11 shall be accompanied by a statement of an
Authorized Officer or other executive officer of Borrowers setting forth the details of the event
or development requiring such notice and any action taken or proposed to be taken with respect
thereto.

          SECTION 5.12. Additional Borrowers. Each Credit Party shall cause each Borrowing Base
Subsidiary that is formed after the Effective Date, at Agent’s request, to become a party to this
Agreement, and to deliver to Agent all applicable Security Documents and other Financing Documents
or joinder thereto, as applicable in form, scope and substance as required by this Agreement. In
connection therewith, such Credit Party shall also cause such other party to provide such
resolutions, certificates and opinions of counsel as shall be reasonably requested by Agent in
accordance with this Agreement.

          SECTION 5.13. Further Assurances. Each Credit Party will execute any and all documents and
take all further actions which may be required under applicable law, or which Agent may reasonably
request, to grant, preserve, protect and perfect the first priority Liens created by the Security
Documents in the Collateral (including with respect to security interests in real property
leaseholds and after-acquired real and personal property).

          SECTION 5.14. Appraisals. Agent shall have the right, but not the obligation, to obtain,
at Borrowers’ expense, Appraisals of any Borrowing Base Property (a) at any time that an Event of
Default shall have occurred and be continuing, (b) at any time after the second (2nd)
anniversary of the then most recent Appraisal (including any Appraisal which may have previously
been obtained by Agent pursuant to this Section 5.14) relating to such Borrowing Base
Property and (c) otherwise subject to and in accordance with Section 4.03(c)(ii)(E) hereof.
Agent shall have the right, but not the obligation, to obtain Appraisals at any other time at
Agent’s expense. Borrowers shall cooperate with Agent and any appraiser and their agents and
employees in connection with any such Appraisals.

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          SECTION 5.15. Utilities. Each Borrower shall pay all charges for all utility services at
any time rendered to its respective Borrowing Base Property, the payment of which is the obligation
of such Borrower in connection with its respective Borrowing Base Property and will do all other
things required for the maintenance and continuance of utility services necessary for the
operation, use and occupancy of its respective Borrowing Base Property for their intended purposes
in accordance with this Agreement, and ensure that they are available at the boundaries of such
Borrowing Base Property.

          SECTION 5.16. Maintenance of Existence. Each Borrower shall (a) qualify to do business in
and remain in good standing (or its legal equivalent, if any) under the laws of its jurisdiction of
organization and the State where the its respective Borrowing Base Property is located and, to the
extent required for the ownership, management and operation of its assets, any other jurisdiction,
(b) preserve, renew and keep in full force and effect its existence as an entity organized and
existing pursuant to the laws of its jurisdiction of organization and qualified to do business in
the State where its respective Borrowing Base Property is located, (c) take all action to maintain
all rights, privileges and franchises necessary or desirable for the conduct of its business in its
jurisdiction of organization and the State where its respective Borrowing Base Property is located,
and, to the extent required for the ownership, management and operation of its assets, any other
jurisdiction, and (d) comply with all Legal Requirements with respect to the foregoing.

          SECTION 5.17. Patriot Act Compliance. Each Credit Party will, and will cause the REIT and
all wholly owned Subsidiaries of the Credit Parties and the REIT to comply with the Patriot Act and
all applicable requirements of governmental authorities having jurisdiction over such Persons and
the applicable Borrowing
Base Property, including those relating to money laundering and terrorism. Agent shall have the
right to audit each Credit Party’s and each such other Person’s compliance with the Patriot Act and
all applicable requirements of governmental authorities having jurisdiction over such Credit Party
or other Person and the applicable Borrowing Base Property, including those relating to money
laundering and terrorism. In the event that a Credit Party or such other Person fails to comply
with the Patriot Act or any such requirements of governmental authorities, then Agent may, at its
option, cause such Credit Party or such other Person to comply therewith and any and all costs and
expenses incurred by Agent in connection therewith shall be secured by the Financing Documents and
shall be payable on demand and shall accrue interest at the Default Rate from the date paid or
incurred by Agent until paid to Agent.

          SECTION 5.18. Estoppel Certificates. Within ten (10) Business Days after request therefor
from Agent, Guarantor and/or any such Borrower to whom such a request is made will deliver to Agent
a certificate executed by Guarantor and/or such Borrower, as applicable, stating the amount due
under the Note and this Agreement and to the effect that as of the date of such certificate no
Default or Event of Default has occurred and is continuing or, if any such Default or Event of
Default has occurred and is continuing, describing in reasonable detail each such Default or Event
of Default and the action, if any, taken or being taken to cure the same, and such other
information regarding the Loan, the Borrowing Base Properties, Guarantor and such Borrower as Agent
reasonably requests.

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          SECTION 5.19. Required Insurance.

          (a) Required Coverage. In addition to any insurance required to be maintained by
Borrowers pursuant to the Management Agreement, the Premises Documents or the Space Leases, each
Borrower shall, at its sole cost and expense, maintain, or, as specifically set forth below, cause
to be maintained, the Insurance Policies set forth on Exhibit T attached hereto.

          (b) General Requirements of Insurance Policies. All Insurance Policies shall be
issued by an insurer or insurers with an A.M. Best rating of A:X or better. The property, boiler
and machinery Insurance Policies shall also name Agent and each Lender under a non-contributing New
York Standard Mortgagee or lenders loss payable endorsement clause and, with respect to rental
income, as Lender Loss Payee, on forms reasonably acceptable to Agent, or equivalent endorsements
reasonably satisfactory to Agent and shall be otherwise reasonably satisfactory to Agent in form
and content. All property Insurance Policies also shall include a replacement cost and
co-insurance waiver and/or an agreed amount endorsement and other endorsements as are provided in
Exhibit T attached hereto. The amount of any deductible under any Insurance Policy must be
reasonably acceptable to Agent. No Insurance Policy shall contain any exclusion for terrorism or
terrorist acts or be subject to any sublimit for terrorism or terrorist acts without the prior
approval of Agent, unless a separate policy of terrorism insurance reasonably acceptable to Agent
shall have been provided to Agent. Without Agent’s prior consent, no Borrower shall name any
Person other than Agent as loss payee or mortgagee under any property Insurance Policies nor shall
any Borrower carry separate or additional insurance
coverage covering the Borrowing Base Properties and such improvements and betterments which
such Borrower is required to insure pursuant to any agreement concurrent in form or contributing in
the event of loss with that required by this Agreement; provided, that, if blanket
policies are obtained, this sentence shall not apply to property covered by such blanket policies,
other than the Borrowing Base Properties and such improvements and betterments. Each Borrower will
pay the premiums for the Insurance Policies as the same become due and payable. Each Borrower will
deliver to Agent certified copies of the Insurance Policies required to be maintained pursuant to
Section 5.19(a) hereof, provided, however, Agent shall not be deemed by
reason of the custody of such Insurance Policies to have knowledge of the contents thereof. Each
Borrower will also deliver to Agent, within ten (10) days of Agent’s request, a certificate of such
Borrower, or an insurance agent thereof evidencing the coverages set forth herein together with
evidence that all premiums due thereon have been paid and that the same are in full force and
effect. Not later than ten (10) days prior to the expiration date of each of the Insurance
Policies, each Borrower will deliver or cause to be delivered to Agent a certificate of insurance
evidencing renewal of coverage as required herein or, at Agent’s request, a certified copy of a
renewal policy or policies, in each case together with evidence satisfactory to Agent that all
premiums therefor have been paid and that the policies are in full force and effect.
Notwithstanding the foregoing, the approval of any insurance or insurance company by Agent shall
not be a representation by Agent or any Lender of the solvency of any insurer or the sufficiency of
any coverage required under this Agreement. All insurance requirements set forth herein are
considered the minimum acceptable levels in terms of insurance and insurer to be procured.

     (c) As to Agent and the Lenders. Each Insurance Policy shall contain a provision
whereby the insurer (i) agrees that such policy shall not be canceled or fail to be

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renewed, or the
terms thereof modified as described in clauses (y) and (z) below without, in each
case, at least thirty (30) days’ prior notice to Agent, (ii) waives any right to claim any premiums
and commissions against Agent and the Lenders, provided, that the policy need not waive the
requirement that the premium be paid in order for a claim to be paid to the insured and (iii)
provides that Agent is permitted to make payments to effect the continuation of such policy upon
notice of cancellation due to nonpayment of premiums. Each Borrower will notify Agent in the event
that (x) such policy shall be canceled or terminated, (y) the coverage, deductible and limits of
such policy shall be modified, or (z) other provisions of such policy shall be modified if such
policy, after giving effect to such modification, and all modifications in the aggregate, would not
satisfy the requirements of this Agreement. Notwithstanding anything to the contrary in the
preceding sentence, each Borrower shall be required to maintain such Insurance Policies in
accordance with the requirements of this Agreement. In the event any Insurance Policy (except for
general public and other liability and workers’ compensation insurance) shall contain breach of
warranty provisions, such policy shall provide that with respect to the interest of Agent, such
Insurance Policy shall not be invalidated by and shall insure Agent regardless of (A) any act,
failure to act or negligence of or violation of warranties, declarations or conditions contained in
such policy by any named insured, (B) the occupancy or use of the Borrowing Base Properties for
purposes more hazardous than permitted by the terms thereof, or (C) any foreclosure or other action
or proceeding taken by Agent pursuant to any provision of this Agreement.

     (d) Blanket Policies. Any insurance maintained pursuant to this Section 5.19
may be evidenced by blanket insurance policies covering the Borrowing Base Properties and
other properties or assets of such Borrower; provided, that any such policy shall in
all other respects comply with the requirements of this Section 5.19.

     (e) Agent’s Right to Procure Insurance. Notwithstanding anything to the contrary
contained herein, if at any time Agent is not in receipt of evidence that all insurance required
hereunder is maintained in full force and effect, Agent shall have the right (but not the
obligation) to take such action as Agent deems necessary to protect its interests in the Borrowing
Base Properties, including the obtaining of such insurance coverages as are required hereunder, and
all expenses incurred by Agent in connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Borrowers promptly after demand and shall be secured by the
Financing Documents.

     SECTION 5.20. Damage or Destruction.

     (a) Promptly, and in any case within five (5) Business Days after the occurrence thereof,
Borrowers shall notify Agent of any fire or other Casualty with respect to any portion of any of
the Borrowing Base Properties. Such notice also shall generally describe the nature and extent of
such Casualty and set forth such party’s best estimate of the cost of Restoration.

     (b) Agent shall be entitled to receive all insurance proceeds payable with respect to the
applicable Borrowing Base Property on account of a Casualty. Borrowers irrevocably assign,
transfer and sets over to Agent all rights of each Borrower to any such insurance proceeds, award
or payment. Borrowers hereby irrevocably authorize and empower Agent, in the name of such Borrower
or otherwise, to file for and prosecute in its own name what

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would otherwise be such Borrower’s
claim for any such insurance proceeds. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and shall then be continuing and provided such Borrower files, all
claims and diligently prosecutes same, such Borrower shall have the right to file, adjust, settle
and prosecute any claim for and receive such insurance proceeds; provided, however,
that such Borrower shall not agree to any adjustment or settlement of any such claim payable with
respect to a Casualty the insurance proceeds with respect to which are greater than $1,000,000 (the
“Casualty Proceeds Disbursement Threshold”) without Agent’s prior consent which shall not
be unreasonably withheld. Each Borrower shall promptly after demand pay to Agent all reasonable
costs and expenses (including the fee of any insurance consultant or adjuster and reasonable
attorneys’ fees and disbursements) incurred by Agent in connection with a Casualty and seeking and
obtaining any insurance proceeds, award or payment with respect thereto. Net Proceeds held by
Agent, together with any interest earned thereon, shall constitute additional security for the
payment of the Obligations (a security interest therein being granted hereby), until disbursed in
accordance with this Section 5.20 or Section 5.22 hereof, as the case may be.
Notwithstanding the foregoing, or anything else herein, to the contrary, all proceeds of business
interruption/rent loss insurance may be collected by and shall be paid and applied in accordance
with Section 5.20(g) hereof.

     (c) Each Borrower shall, at its sole cost and expense, promptly commence and diligently and
continuously perform to completion the Restoration in a good and workmanlike
manner and in compliance with all Legal Requirements and the requirements of the Permitted
Encumbrances, whether or not such Borrower shall have satisfied the requirements of Section
5.20(d) hereof in order to cause the Net Proceeds to be made available for such Restoration and
whether or not such insurance proceeds on account of the Casualty shall be sufficient for such
purpose.

     (d) In the case of any Casualty with respect to which the insurance proceeds payable are less
than the Casualty Proceeds Disbursement Threshold, so long as no Default or Event of Default shall
have occurred and be continuing, such insurance proceeds may be retained by the applicable
Borrower. Subject to the rights of Agent contained herein during a Default or an Event of Default,
such insurance proceeds shall be used by Borrowers solely for purposes of performing and completing
the Restoration in accordance with this Agreement. In the case of any Casualty with respect to
which the insurance proceeds payable are equal to or greater than the Casualty Proceeds
Disbursement Threshold, the Net Proceeds shall be held by Agent, if Agent so elects, as a part of
the Collateral and shall be applied or dealt with by Agent as follows:

     (i) The Net Proceeds shall be disbursed in accordance with Agent’s standard
construction lending practices, terms and conditions if the following conditions are
satisfied (each a “Release Condition” and collectively, the “Release
Conditions”) within one hundred and eighty (180) days after the occurrence of
such Casualty:

     (A) no Default or Event of Default shall have occurred and be
continuing;

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     (B) the applicable Borrower shall have delivered to Agent within sixty
(60) days after the occurrence of the Casualty, a notice of such Borrower’s
desire to undertake the Restoration;

     (C) the applicable Borrower shall have demonstrated to the reasonable
satisfaction of Agent that the Restoration can be completed at least six (6)
months prior to the then-current Maturity Date, or such earlier time as may
be required by applicable Legal Requirements;

     (D) the applicable Borrower shall have demonstrated to the reasonable
satisfaction of Agent that sufficient funds are available to such Borrower
through rent and/or business interruption insurance maintained pursuant to
Section 5.19 hereof, cash, and/or a letter of credit or other
similar cash-equivalent security reasonably satisfactory to Agent as to
form, content and issuer, and which shall be for the benefit of Agent, to
pay all debt service with respect to the Loan and all operating expenses
with respect to the applicable Borrowing Base Property during the period
reasonably estimated by such Borrower as necessary for the completion of the
Restoration;

     (E) the applicable Borrower shall have provided Agent with a guaranty
of completion satisfactory to Agent in form and content and as to
guarantor which, among other things, guarantees the timely and
lien-free completion of the Restoration;

     (F) to the extent, in Agent’s reasonable judgment, the Net Proceeds are
insufficient to pay the costs of the Restoration, the applicable Borrower
shall have provided Agent with a letter of credit, cash deposit or similar
equivalent security in the amount of such deficiency in form, content and
issuer reasonably satisfactory to Agent;

     (G) Agent shall have obtained Appraisals at Borrowers’ expense,
certifying that upon completion of the repairs and restoration of the
applicable Borrowing Base Property the outstanding aggregate principal
balance of the Loans shall not exceed fifty-five percent (55%) of the
aggregate Appraised Values of each Borrowing Base Property;

     (H) Agent shall have received architectural plans and specifications
for all restoration and repairs and an estimate of the costs and expenses of
all such restoration and repairs, all of which shall be in form reasonably
acceptable to Agent; and

Prior to any disbursement of Net Proceeds by Agent, Borrowers shall be entitled to pursuant to this
Section 5.20, the following information and documentation shall have been obtained by the
applicable Borrower, at such Borrower’s expense, and submitted to Agent, which information and
documentation shall be in form and substance reasonably satisfactory to Agent:

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	 	(1)	 	A request for
disbursement signed by the applicable Borrower,
accompanied by billing statements, vouchers or invoices,
which request for disbursement shall expressly warrant
that the work with respect to which the advance is
requested has been performed substantially in accordance
with the approved plans and specifications for the
restoration or repair;
	 
	 	(2)	 	Proof that all
invoices for labor and materials previously submitted by
the applicable Borrower and approved and reimbursed by
Agent have been paid, except for those the subject of
the current request for disbursement and except for
customary retainage;
	 
	 	(3)	 	Lien waivers
(full or partial, as applicable) for all payees under
previous requests for disbursements;
	 
	 	(4)	 	A report from the
applicable Borrower’s architect or, if Agent shall
elect, Agent’s consultant, which shall specify the
percentage of completion of restoration or repair, shall
provide detailed
comments on specific work performed since the date of
the last such report, and, if required by Agent, an
estimate of the cost to complete the restoration and
repair after taking into account the work then
completed;
	 
	 	(5)	 	At the reasonable
request of Agent, a Title Continuation, or if the
applicable Borrowing Base Property is located in a
jurisdiction in which a full title premium shall be
required in order to obtain a Title Continuation, then
Borrowers shall provide Agent with an updated title
report or abstractor’s certification indicating that,
since the immediately preceding Title Continuation (or
title update or abstractor’s certification, as
applicable) relating to such Borrowing Base Property, as
applicable, delivered to Agent pursuant to this
Agreement, there has been no change in the state of
title to such Borrowing Base Property and no Liens or
survey exceptions not theretofore approved by Agent as
provided herein, which title report shall be in form and
substance reasonably acceptable to Agent;

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	 	(6)	 	Copies of the
material agreements pursuant to which the restoration or
repair shall be done, which shall be in form and
substance reasonably satisfactory to Agent, and which
also shall be reasonably satisfactory to Agent as to the
party performing the construction obligations
thereunder;
	 
	 	(7)	 	An assignment to
Agent of all material construction and
design-professional contracts (which may be pursuant to
the applicable Mortgage and the applicable Assignment of
Agreements), together with the written consent to such
assignments by all parties to such contracts (which may
be included in any such contract); and
	 
	 	(8)	 	Such other
information and documentation as Agent may reasonably
request regarding the Improvements and the restoration
or repairs and the cost thereof; and

     (ii) Notwithstanding Section 5.20(d)(i) hereof, if Agent does not elect
to hold the Net Proceeds, the applicable Borrower shall not disburse any Net
Proceeds other than in accordance with the conditions of this Section
5.20(d) and Sections 5.20(e) and 5.20(f) hereof.

          (e) If one or more of the Release Conditions are not satisfied within the time period set
forth in Section 5.20(d) hereof, all Net Proceeds shall be applied in accordance with
Section 5.22 hereof, provided, that, if each of the Release Conditions shall have
been satisfied except the Release Condition set forth in Section 5.20(d)(i)(A) hereof as a
result of the occurrence of a Default (as opposed to the occurrence of an Event of Default), Agent
shall not so apply the Net Proceeds until such time, if any, as an Event of Default shall have
occurred.

          (f) All reasonable costs and expenses incurred by Agent in connection with making the Net
Proceeds available for the Restoration (including reasonable attorneys’ fees and disbursements and
reasonable fees and actual out-of-pocket expenses of Agent’s construction consultants and
inspectors) shall be paid by the applicable Borrower. Any Net Proceeds remaining after the
Restoration and the payment in full of all costs incurred in connection with the Restoration, will
be distributed by Agent to the applicable Borrower so long as no Default or Event of Default then
exists.

          (g) Business interruption/rent loss insurance proceeds of each Borrower shall be deposited
into either (i) an account or subaccount of Agent or (ii) an account at a bank or other financial
institution reasonably approved by Agent. Provided no Default or Event of Default shall have
occurred and be continuing, such proceeds shall be applied to the payment of Interest, principal
due and payable, if any, under Section 2.09 hereof and other sums that become due and
payable under the Financing Documents relating to the Loans made with respect to the applicable
Borrowing Base Property, as and when due and then to operating expenses for

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applicable Borrowing
Base Property. Each Borrower hereby grants to Agent a security interest in all rights of such
Borrower in and to such account and all sums on deposit therein as additional security for the
Obligations. Upon the occurrence and during the continuation of an Event of Default, Agent shall
have the rights and remedies with respect to such account specified in this Agreement and in any
other Financing Document. If held by Agent, the credit balance in such account or subaccount may
be commingled with the general funds of Agent. If not held by Agent, the applicable Borrower shall
cause the bank or financial institution at which such account is held to execute and deliver to
Agent an Account Agreement with respect to such account, such Borrower shall pay all fees and costs
with respect thereto and such Borrower shall not close such account without obtaining the prior
consent of Agent. Neither Agent nor Lenders shall be liable for any loss of interest on or any
penalty or charge assessed against the funds in, payable on, or credited to such account as a
result of the exercise by Agent of any of its rights, remedies or obligations hereunder or under
any other Financing Document. Any interest earned on the balance of such account shall be
deposited into such account and be applied with the balance of such account in accordance with this
Section 5.20(g). Agent shall have sole control over such account. So long as no Default
or Event of Default shall have occurred and be continuing, any business interruption/rent loss
insurance proceeds remaining after completion of the Restoration shall be distributed to the
applicable Borrower.

          (h) To the extent that any sums are held by Agent in an account or subaccount of Agent
pursuant to this Section 5.20, such sums shall bear interest at a rate per annum which is
substantially similar to interest rates offered by Agent to similarly situated Borrowers for
comparable deposits held in similar accounts.

          SECTION 5.21. Taking of the Mortgaged Property.

          (a) Promptly, and in any case within three (3) Business Days after the occurrence thereof, the
applicable Borrower shall notify Agent of any Taking of any portion of its respective Borrowing
Base Property or the commencement of any proceedings or negotiations which might result in such a
Taking. Such notice shall generally describe the nature and extent of such Taking or the nature of
such proceedings or negotiations and the nature and extent of the Taking which might result
therefrom. Agent shall be entitled hereunder to all awards or compensation payable on account of
any Material Taking. Each Borrower hereby irrevocably assigns, transfers and sets over to Agent
all rights of each such Borrower to any such awards or compensation and irrevocably authorizes and
empowers Agent, in the name of such Borrower or otherwise, to collect and receipt for any such
award or compensation and delegate to Agent the right to file and prosecute any and all claims for
any such awards or compensation and to participate in any and all hearings, trials and appeals in
connection with a Taking on behalf of the applicable Borrower; provided, however,
that Agent shall be under no obligation to question the amount of any award or compensation.
Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing
and provided such Borrowers files, all claims and diligently prosecutes same, such Borrower shall
have the right to file, adjust, settle and prosecute any claim for and receive such award or
compensation; provided, however, that such Borrower shall not agree to any
adjustment or settlement of any such claim payable with respect to a Major Taking without Agent’s
prior consent which will not be unreasonably withheld. Although it is hereby expressly agreed that
the same shall not be necessary, and in any event, each Borrower shall, upon demand of Agent, make,
execute and deliver any and all assignments and other

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instruments sufficient for the purpose of
assigning any such award or compensation to Agent, free and clear of any encumbrances of any kind
or nature whatsoever. Agent may be represented by counsel satisfactory to it at the expense of
such Borrower. Each Borrower will pay promptly after demand all costs and expenses (including
reasonable attorneys’ fees and disbursements and any appraiser or other consultant) incurred by
Agent in connection with any Taking and seeking and obtaining any award or payment on account
thereof.

          (b) Each Borrower shall, at its sole cost and expense, promptly commence and diligently and
continuously perform to completion the Restoration in a good and workmanlike manner and in
compliance with all Legal Requirements and the requirements of the Permitted Encumbrances, whether
or not such Borrower shall have satisfied the Release Conditions in order to cause the Net
Restoration Award to be made available for such Restoration and whether or not such awards or
compensation, if any, on account of the Taking shall be sufficient for such purpose.

          (c) In the case of a Taking which is not a Major Taking, so long as no Default or Event of
Default shall have occurred and be continuing, all Net Restoration Awards relating thereto may be
retained by the applicable Borrower. Subject to the rights of Agent set forth herein during an
Event of Default, such Net Restoration Awards shall be used by Borrowers solely for purposes of
performing and completing the Restoration in accordance with this Agreement. All Net Restoration
Awards arising out of Material Takings shall be held and applied by Agent as follows:

     (i) If the Release Conditions (and for purposes of this Section 5.21,
such Release Conditions shall apply to a Taking as if it were a Casualty) are
satisfied within the time period set forth in Section 5.20(d) hereof, all
Net Restoration Awards shall be applied to pay the cost of Restoration, such
application to be effected in the same manner as provided in Section 5.20(d)
hereof (and for purposes of this Section 5.21, such Release Conditions shall
apply to a taking as if it were a Casualty) with respect to Net Proceeds and the
balance, if any, of such Net Restoration Awards shall, if no Default or Event of
Default exists, be paid over or assigned to the applicable Borrower following
completion of the Restoration.

     (ii) If the Taking is a Material Taking, and one or more of the Release
Conditions are not satisfied within the time period set forth in Section
5.20(d) hereof, all Net Restoration Awards shall be applied in accordance with
Section 5.22 hereof, provided, that, if each of the Release
Conditions shall have been satisfied except the Release Condition set forth in
Section 5.20(d)(i)(A) hereof as a result of the occurrence of a Default (as
opposed to the occurrence of an Event of Default), Agent shall not so apply the Net
Restoration Awards until such time, if any, as an Event of Default shall have
occurred.

     (iii) In the case of a Taking for temporary use, any Net Restoration Awards
shall be applied to the Obligations in such order as Agent may elect.

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          (d) To the extent that any sums are held by Agent in an account or subaccount of Agent
pursuant to this Section 5.21, such sums shall bear interest at a rate per annum which is
substantially similar to interest rates offered by Agent to similarly situated Borrowers for
comparable deposits held in similar accounts.

          SECTION 5.22. Application of Proceeds of Casualty or Taking to Loan; Loan Repayment. Upon
a Casualty, if the disposition of the Net Proceeds is governed by Section 5.20(e) hereof or
upon a Taking, if the disposition of the Net Restoration Awards is governed by Section
5.21(c)(ii) hereof, at the option of Agent, the Loan(s) with respect to the applicable Property
shall be immediately due and payable, in which event Borrowers shall make a repayment of the
outstanding principal amount of such Loans (without any Prepayment Fee being due in connection
therewith) within five (5) Business Days after notice thereof. If Agent does not so elect to cause
Borrowers to make such a repayment, Agent shall have the option to (a) make available the Net
Proceeds or the Net Restoration Awards, as the case may be, to the applicable Borrower for
Restoration in the manner provided in Section 5.20(d) hereof or (b) apply the Net Proceeds
and/or the Net Restoration Awards to the Obligations, in such order and manner as Agent determines
without any Prepayment Fee being due in connection therewith.

          SECTION 5.23. Debt Service Coverage Ratio. In the event that, on any Testing Determination
Date, (a) the Debt Service Coverage Ratio calculated as of such Testing Determination Date shall be
less than 1.35:1.0 for the calendar
quarter ending on such Testing Determination Date and the Debt Service Coverage Ratio calculated as
of the immediately preceding Testing Determination Date shall be less than 1.35:1.0 for the
calendar quarter ending on such immediately preceding Testing Determination Date, or (b) the Debt
Service Coverage Ratio calculated as of such Testing Determination Date shall be less than
1.15:1.0, Borrowers shall be required, on or prior to the date which is fifteen (15) Business Days
after the date which is the earlier of (A) the date which is forty five (45) days after such
Testing Determination Date or (B) the date that Borrowers deliver the items referred to in
clauses (i), (ii) and (iii) of Section 5.01(h) hereof with respect
to the calendar quarter ending on such Testing Determination Date (each, a “DSCR Due
Date”), either (i) to repay the Loans by an amount which, if applied to reduce the aggregate
principal balance of the Loans, would result in the Debt Service Coverage Ratio calculated as of
such Testing Determination Date, if recomputed, being equal to 1.35:1.0 (in the case of clause
(a) hereof) or 1.15:1.0 (in the case of clause (b) hereof), as applicable (in either
case, such amount, the “DSCR Deficiency Amount”), (ii) to deliver to Agent (y) Additional
Collateral in accordance with Section 2.20(a) hereof in an amount equal to the DSCR
Deficiency Amount and (z) (A) such new (or modifications to the existing) Financing Documents to
give effect to the Additional Collateral and to grant and perfect a first priority security
interest in favor of Agent on such Additional Collateral, which modifications or new Financing
Documents shall be in form and content acceptable to Agent, (B) to the extent required by Agent,
legal opinions from Borrowers’ counsel with respect to the authorization of Borrowers to execute,
deliver and perform, and enforceability against Borrowers of, any such modifications or new
Financing Documents, in form and content reasonably acceptable to Agent and (C) to the extent
required by Agent, certifications from Borrowers and reaffirmations from Guarantor in form and
content reasonably acceptable to Agent or (iii) to add one or more Properties as additional
Borrowing Base Properties in accordance with Section 4.03 hereof on or prior to the
applicable DSCR Due Date so that the Debt Service Coverage Ratio calculated as of such Testing
Determination Date, after giving effect to the addition of such Property, shall not be

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less than
1.35:1.0; provided, that, the time periods required for Borrowers to obtain Agent’s
consent to the addition of a Property as a Borrowing Base Property and to otherwise deliver the
required items and otherwise satisfy the conditions set forth in Section 4.03 hereof shall
not be extended or otherwise modified to allow Borrowers to add such Property as an additional
Borrowing Base Property prior to the applicable DSCR Due Date.

          SECTION 5.24. Borrowing Base Loan Amount.

          (a) Subject to Section 5.24(b) hereof, at all times Borrowers shall ensure that the
aggregate outstanding principal balance of the Loans shall not exceed the Borrowing Base Loan
Amount. In addition to such times as Borrowers shall be required to deliver a Borrowing Base
Certificate, Agent shall have the right to calculate the Borrowing Base Loan Amount at any time and
from time to time.

          (b) In the event that, on any date of determination, the aggregate outstanding principal
balance of the Loans shall exceed the Borrowing Base Loan Amount, Borrowers shall be required, on
or prior to the date which is fifteen (15) Business Days (each, an “LTV Due Date”) after
(A) in the event that such date of determination is a Testing Determination Date, the date which is
the earlier of (I) the date which is forty five (45) days after such Testing
Determination Date or (II) the date that Borrowers deliver the items referred to in
clauses (i), (ii) and (iii) of Section 5.01(h) hereof with respect
to the calendar quarter ending on such Testing Determination Date or (B) in the event that such
date of determination is not a Testing Determination Date, the date of such determination, either
(i) to increase the Borrowing Base Loan Amount by adding one or more Properties as additional
Borrowing Base Properties in accordance with Section 4.03 hereof, provided,
that, the time periods required for Borrowers to obtain Agent’s consent to the addition of
a Property as a Borrowing Base Property and to otherwise deliver the required items and otherwise
satisfy the conditions set forth in Section 4.03 hereof shall not be extended or otherwise
modified to allow Borrowers to add such Property as an additional Borrowing Base Property prior to
the applicable LTV Due Date (ii) to repay the Loans by the amount necessary to eliminate such
excess (the “LTV Deficiency Amount”), or (iii) to deliver to Agent (y) Additional
Collateral in accordance with Section 2.20(a) hereof in an amount equal to the LTV
Deficiency Amount and (z) (A) such new (or modifications to the existing) Financing Documents to
give effect to the Additional Collateral and to grant and perfect a first priority security
interest in favor of Agent on such Additional Collateral, which modifications or new Financing
Documents shall be in form and content acceptable to Agent, (B) to the extent required by Agent,
legal opinions from Borrowers’ counsel with respect to the authorization of Borrowers to execute,
deliver and perform, and enforceability against Borrowers of, any such modifications or new
Financing Documents, in form and content reasonably acceptable to Agent and (C) to the extent
required by Agent, certifications from Borrowers and reaffirmations from Guarantor in form and
content reasonably acceptable to Agent.

          SECTION 5.25. Post-Closing Obligations.

          (a) With respect to each Property which becomes a Borrowing Base Property after the Effective
Date, Borrowers shall, within sixty (60) days after the date on which such Property shall become a
Borrowing Base Property, deliver to Agent (i) all Estoppel Certificates required pursuant to
Section 4.03(c)(ii)(N) hereof with respect to such Property and (ii) a balance

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sheet of the
Borrowing Base Subsidiary which owns such Property dated as of the date that such Property is
acquired by such Borrowing Base Subsidiary.

          (b) As soon as practicable, but in any event, within ninety (90) days after the Effective
Date, Borrowers shall deliver, at Borrowers’ sole cost and expense, to Agent a Survey for the
Alameda Property dated no earlier than the Effective Date.

          (c) As soon as practicable, but in any event, within thirty (30) days after the Effective
Date, Borrowers shall deliver to Agent, at Borrowers’ sole cost and expense, a Phase I
Environmental update or a new Phase I Environmental Site Assessment with respect to the Alameda
Property, which shall be addressed to Agent and prepared by a qualified environmental consultant
reasonably acceptable to Agent. In amplification of the foregoing, such update or new assessment
shall run in favor of Agent in a manner reasonably acceptable to Agent such that Agent may rely on
such report without the necessity of a reliance letter.

          (d) As soon as practicable, but in any event, within sixty (60) days after the Effective Date,
Borrowers shall deliver to Agent Estoppel Certificates from Tenants at the
Alameda Property which (when taken together with the Tenants at the Alameda Property with
respect to which delivered Estoppel Certificates to Agent on or prior to the Effective Date) rent,
in the aggregate, at least seventy five percent (75%) of the net rentable square footage of the
Alameda Property.

          (e) As soon as practicable, but in any event, within thirty (30) days after the Effective
Date, Borrowers shall deliver to Agent an estoppel certificate from THR Chicago LLC in
substantially the form attached hereto as Exhibit X concerning the subject matter referred
to thereon.

          (f) As soon as practicable, but in any event, within thirty (30) days after the Effective
Date, Borrowers shall deliver to Agent, at Borrowers’ sole cost and expense, a revised Survey for
the North Clark Property dated no earlier than the Effective Date.

          SECTION 5.26. Leasing.

          (a) Borrowers shall have the right to enter, amend, modify, extend, renew or otherwise
supplement into Space Leases with respect to the Borrowing Base Properties so long as (i) no Event
of Default shall have occurred and be continuing, (ii) Borrowers shall deliver a copy of executed
Space Leases (or modifications, amendments, extensions, renewals or supplements of any Space
Leases, as applicable) within ten (10) Business Days after the execution thereof, (iii) the terms
of such Space Leases shall be customary with respect to commercial leases in buildings which are of
a Comparable Building Standard in the applicable Acceptable Major Metropolitan Market and (iv) such
Space Leases shall contain provisions obligating the Tenants thereunder to attorn to Agent or any
purchaser therefrom in the event Agent or such purchaser succeeds to the interest of the applicable
Borrower under such Space Leases; provided, however, no Borrower shall terminate or
accept the surrender of any Space Lease covering in excess of the greater of (a) ten percent (10%)
of the net rentable square feet of the applicable Borrowing Base Property or (b) 45,000 net
rentable square feet, without the prior consent of Agent.

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          (b) Borrowers shall deliver to Agent within ten (10) Business Days after receipt thereof,
copies of any default notices and notices of lease terminations received from or delivered to
Tenants, which (together with their Affiliates) occupy more than 45,000 net rentable square feet in
the aggregate or more than ten (10%) of any Borrowing Base Property in the aggregate.

          (c) Borrowers shall, and shall cause Manager to, observe, perform, and discharge all material
obligations, covenants, and warranties provided for under the terms of the Space Leases to be kept,
observed and performed by Borrowers. Borrowers shall, and shall cause Manager to use commercially
reasonable efforts to diligently enforce or secure the performance of each and every material
obligation, term, covenant, condition, and agreement to be performed by any Space Lessee under the
terms of the applicable Space Lease; provided, however, that, no Borrower
shall be required to commence any litigation against a Tenant to enforce such obligations under its
Space Lease if such Borrower reasonably believes such
commencement would not be appropriate under the circumstances. Borrowers shall, and shall
cause Manager to, appear in and defend any action or proceeding arising under, occurring out of, or
in any manner connected with, the Space Leases or the obligations, duties, or liabilities of
Borrowers or any Tenant thereunder, and, if an Event of Default shall have occurred and be
continuing, Agent shall have the right, but not the obligation, to appear in and defend in the name
and on behalf of Agent, but at the expense of Borrowers, and Borrowers shall pay upon written
demand all reasonable costs and expenses of Agent, including reasonable attorneys’ fees and
disbursements, in any action or proceeding in which Agent may appear.

          (d) Borrowers shall not, and shall not permit Manager to, receive or collect any Space Lease
Rents (other than security deposits, and Lease Termination Payments held and applied in accordance
herewith, the applicable Space Lease and Legal Requirements) for a period of more than one (1)
month in advance.

          (e) Borrowers shall not pledge, transfer, assign, mortgage, encumber, or allow to be
encumbered any Space Leases or Space Lease Rents except to Agent and the Lenders as provided herein
or in the other Financing Documents.

          SECTION 5.27. REAs. Borrowers shall cause each REA to remain in full force and effect at
all times. Borrowers shall observe, perform, and discharge, in all material respects, all
obligations, covenants, and warranties provided for under the REAs to be kept, observed, and
performed by the applicable Borrower. Borrowers shall use commercially reasonable efforts to
enforce its rights and/or secure the performance by the other party(ies) to the REAs. No Borrower
shall enter into, surrender, terminate, cancel, modify or amend in any material respect, or enter
into any agreement in substitution for, or consent to the assignment of any REA without, in each
case, the prior consent of Agent, which shall not be unreasonably withheld.

          SECTION 5.28. Ground Leases.

          (a) Borrowers shall cause any applicable Borrower who is a tenant under a Ground Lease to (i)
pay all Ground Rents required to be paid under and pursuant to the provisions of each such Ground
Lease as and when such rent or other charge is payable,

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(ii) diligently perform and observe in all
material respects all of the terms, covenants and conditions of each such Ground Lease on the part
of the applicable Borrower, as tenant thereunder, to be performed and observed prior to the
expiration of any applicable grace period therein provided, and (iii) promptly notify Agent of the
giving of any written notice by the landlord under any such Ground Lease to the applicable Borrower
of any default by the applicable Borrower in the performance or observance of any of the terms,
covenants or conditions of such Ground Lease on the part of the applicable Borrower, as tenant
thereunder, to be performed or observed and deliver to Agent a true copy of each such notice.

          (b) No Borrower shall without the prior consent of Agent, surrender the leasehold estate
created by any such Ground Lease or terminate or cancel any such Ground Lease or modify, change,
supplement, alter or amend any such Ground Lease, either orally or in
writing, and each Borrower hereby assigns to Agent, as further security for the payment of the
Obligations and for the performance and observance of the terms, covenants and conditions of this
Agreement and the other Financing Documents, all of the rights, privileges and prerogatives of the
applicable Borrower, as tenant under any such Ground Lease, to surrender the leasehold estate
created by such Ground Lease or to terminate, cancel, modify, change, supplement, alter or amend
such Ground Lease and any such surrender of the leasehold estate created by such Ground Lease or
termination, cancellation, modification, change, supplement, alteration or amendment of such Ground
Lease without the prior consent of Agent shall be void and of no force and effect.

          (c) If any Borrower shall default in the performance or observance of any material term,
covenant or condition of any such Ground Lease on the part of such Borrower, as tenant thereunder,
to be performed or observed, then, without limiting the generality of the other provisions of the
applicable Mortgage and this Agreement and without waiving or releasing any Credit Party from any
of its obligations hereunder or under any Financing Document, Agent shall have the right, but shall
be under no obligation, to pay any sums and to perform any act or take any action as may be
appropriate to cause all of the material terms, covenants and conditions of any such Ground Lease
on the part of the tenant thereunder to be performed or observed or to be promptly performed or
observed on behalf of such Borrower, to the end that the rights of such Borrower in, to and under
such Ground Lease shall be kept unimpaired as a result thereof and free from default, even though
the existence of such event of default or the nature thereof be questioned or denied by any Credit
Party or by any party on behalf of any Credit Party. If Agent shall make any payment or perform
any act or take action in accordance with the preceding sentence, Agent will notify Borrowers of
the making of any such payment, the performance of any such act, or the taking of any such action.
In any such event, subject to the rights of any lawful occupants, Agent and any Person designated
as Agent’s agent by Agent shall have, and are hereby granted, the right to enter upon the Borrowing
Base Property which is the subject of the applicable Ground Lease at any reasonable time, on
reasonable notice and from time to time for the purpose of taking any such action. Agent may pay
and expend such sums of money as Agent reasonably deems necessary for any such purpose and upon so
doing shall be subrogated to any and all rights of the landlord under the applicable Ground Lease.
Borrowers hereby agrees to pay to Agent within five (5) days after demand, all such sums so paid
and expended by Agent, together with interest thereon from the day of such payment by Agent at the
Default Rate. All sums so paid and expended by Agent and the interest thereon shall be secured by
the Mortgage and the Liens of the other Security Documents. If the lessor under any such

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Ground
Lease shall deliver to Agent a copy of any notice of default sent by said lessor to any Borrower,
as tenant under such Ground Lease, such notice shall constitute full protection to Agent for any
action taken or omitted to be taken by Agent, in good faith, in reliance thereon.

          (d) Borrowers shall cause the applicable Borrower to exercise each individual option, if any,
to extend or renew the term of the applicable Ground Lease at the earliest possible date, but in
event, within five (5) Business Days after demand by Agent made at any time within one (1) year
prior to the last day upon which any such option may be exercised (to the extent such option can be
exercised within such period), and if such Borrower shall fail to do so, such Borrower hereby
expressly authorizes and appoints Agent its attorney-in-fact to exercise any such option in the
name of and upon behalf of such Borrower, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest.

          (e) No Borrower shall subordinate or consent to the subordination of any such Ground Lease to
any mortgage, security deed, lease or other interest on or in the landlord’s interest in all or any
part of any Borrowing Base Property, unless, in each such case: (i) such Borrower is required to
do so under the terms of the such Ground Lease, (ii) the holder of such lien on the landlord’s
interest enters into a nondisturbance agreement with such Borrower as the tenant under such Ground
Lease in form and substance reasonably satisfactory to Agent and (iii) Agent has consented to such
subordination, which consent shall not unreasonably be withheld provided that the conditions set
forth in the preceding clauses (i) and (ii) have been satisfied and no Default or Event of Default
shall have occurred and be continuing.

          (f) During the Term, there shall be no merger of the leasehold estate created by any such
Ground Lease with the fee estate of the landlord thereunder without the prior written consent of
Agent.

ARTICLE VI

Negative Covenants

          Until the Commitments have expired or been terminated, all outstanding principal of the Loans,
together with all Interest and other sums due and payable in connection therewith have been
indefeasibly paid in full, all other outstanding Obligations then due or required to be performed
have been paid or performed, as applicable, and all Lender Interest Rate Protection Agreements have
terminated, each Borrower and Guarantor, as applicable, covenants and agrees with Agent and the
Lenders that:

          SECTION 6.01. Indebtedness. No Borrower will create, incur, assume or permit to exist any
Indebtedness of such Borrower, except Permitted Indebtedness. Sponsor shall not create, incur,
assume or permit to exist any Indebtedness if the result of such Indebtedness of Sponsor would
result in a violation of any of the Guarantor Financial Covenants applicable to Sponsor. During
any period in which the REIT is the “guarantor” under the Limited Payment Guaranty, Sponsor shall
not permit the REIT to create, incur, assume or permit to exist any Indebtedness if the result of
such Indebtedness of the REIT would result in a violation of any of the Guarantor Financial
Covenants applicable to the REIT.

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          SECTION 6.02. Liens. No Credit Party will create, incur, assume or permit to exist and
shall promptly discharge any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:

          (a) Permitted Encumbrances;

          (b) Liens created by the Financing Documents in favor of Agent and the Lenders; and

          (c) as to Sponsor, any pledge (but not the foreclosure of or any other exercise of
remedies with respect to such pledge) on Sponsor’s Equity Interests in one or more Borrowers
solely arising under and securing the KeyBank Revolving Credit Facility or any pledge on any
other asset of Sponsor.

          SECTION 6.03. Fundamental Changes; Certain Transfers of Collateral and Equity Interest.

          (a) Without Agent’s prior consent, no Borrower shall merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or Transfer (other than
pursuant to Space Leases entered into as of the Effective Date (or with respect to any Borrowing
Base Property which is not an Initial Borrowing Base Property, Space Leases existing as of the date
that such Borrowing Base Property is added as a Borrowing Base Property) or entered into in
accordance with Section 5.26 hereof) or otherwise dispose of (in one transaction or in a
series of transactions) any of its assets (subject to Section 6.03(d) hereof), or the stock
or other equity units of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve.

          (b) Sponsor will not, and will not permit the REIT to, (i) engage to any material extent in
any business other than businesses of the type conducted by Sponsor or the REIT, as applicable, on
the Effective Date and businesses reasonably related thereto or such other businesses as are
contemplated or described in the REIT’s Prospectus dated June 19, 2006, as the same may be updated
from time to time, or (ii) change its fiscal year.

          (c) Except as otherwise permitted herein, no Credit Party will, directly or indirectly,
Transfer any Equity Interests in any Borrower (other than a Lien (but not the foreclosure of or any
other exercise of remedies with respect to such Lien) on the Equity Interest in any Borrower by
Sponsor solely arising under and securing the KeyBank Revolving Credit Facility) or any part
thereof or any interest therein except to the extent expressly permitted by this Agreement or the
other Financing Documents.

          (d) Borrowers may, without the prior consent of Agent, in the ordinary course of business,
sell or otherwise dispose of, free from the lien of the Security Documents, any fixtures or other
tangible property located at or on a Borrowing Base Property (except all or any portion of the
buildings or other permanent structures built upon the Land) to the extent such property has become
old, inadequate, obsolete, worn out or unfit or unadapted for use in the operation of such
Borrowing Base Property, cannot be advantageously used in the efficient operation of such Borrowing
Base Property or the removal and/or replacement of which would

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result in a cost savings,
provided, that, in the case of each such sale or other disposition of any such
property, Borrowers shall substitute such property with other property acquired by Borrowers free
and clear of all liens, encumbrances and rights of others except Permitted Encumbrances, of a
utility at least equal to the property sold or otherwise disposed of when new and such substitute
property is subject to a first, perfected security interest in favor of Agent.

          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. Without limiting
Section 6.11 hereof, Borrowers will not purchase, hold or acquire any capital stock,
evidences of indebtedness or other securities (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loans or advances to, guarantee any
obligations of, or make or permit to exist any investment or any other interest in, any other
Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any
assets of any other Person constituting a business unit (collectively, “Investments”),
except:

          (a) Permitted Investments and Investments that were Permitted Investments when made;

          (b) Indemnities made and surety bonds issued in the ordinary course of business;

          (c) Indemnities made in the Financing Documents; and

          (d) Investments consisting of Interest Rate Protection Agreements permitted under
Section 6.06 hereof.

          SECTION 6.05. Restricted Payments. No Borrower may make any Restricted Payment if at the
time of the making thereof an Event of Default has occurred and is continuing, or would result
therefrom, other than the minimum amount of dividends (directly or indirectly through the partners
of Borrowers that are direct or indirect wholly-owned Subsidiaries of the REIT) required by law for
the REIT to maintain its status as a real estate investment trust under the Code and solely to the
extent sufficient funds to pay such dividends are not then available from (a) any Subsidiary of the
REIT other than any Borrower, or (b) assets of the REIT or Sponsor other than Borrowing Base
Properties, Cash Management Accounts or other Collateral (or proceeds thereof).

          SECTION 6.06. Interest Rate Protection Agreements. No Borrower will enter into any
interest rate cap, swap, collar or other derivative arrangement, except for Interest Rate
Protection Agreements entered into in accordance herewith.

          SECTION 6.07. Transactions with Affiliates. No Borrower will sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in or enter into any other transactions, agreements and undertakings of
any nature whatsoever with, any of Affiliates of any Credit Party, except in the ordinary course of
business at prices and on terms and conditions not less favorable to such Borrower than could be
obtained on an arm’s-length basis from unrelated third parties.

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          SECTION 6.08. Modification of Documents; Management Agreements; New Accounts.

          (a) No Borrower will modify, amend or alter their certificates of formation or limited
partnership, articles of incorporation, by-laws, operating or partnership agreement or other
constitutive documents (i) in any way that could adversely affect the rights, remedies or interests
of Agent or any Lender under the Financing Documents or in the Collateral, or any Credit Party’s
ability to perform its Obligations, or (ii) without the consent of Agent, in any other material
way;

          (b) Borrowers shall at all times cause each Borrowing Base Property to be managed by a Manager
pursuant to a Management Agreement. No Borrower will modify, amend, alter, terminate accept the
surrender of, or enter into any agreement in substitution of, any Management Agreement, or waive
any term of any Management Agreement, (i) in any way that could adversely affect the rights,
remedies or interests of Agent or any Lender under the Financing Documents or in the Collateral, or
such Credit Party’s ability to perform its Obligations, or (ii) without the consent of Agent (not
to be unreasonably withheld or delayed), in any other material way. Without limiting the
foregoing, no Borrower shall enter into any Management Agreement without the prior consent of
Agent, which consent shall not be unreasonably withheld, and if such consent is obtained, without
the delivery of a Manager Cooperation Agreement by Manager thereunder. Borrowers shall observe,
perform, and discharge all material obligations, covenants, and warranties provided for under any
Management Agreement to be kept, observed, and performed by a Borrower. Borrowers shall diligently
enforce their material rights and or secure the performance by Manager under the Management
Agreement; or

          (c) No Borrower will open any new account used in connection with the operation, ownership,
use or leasing of any Borrowing Base Property, including any deposit, reserve or payroll account,
or close any account used in connection with the operation, ownership, use or leasing of any
Borrowing Base Property, without Agent’s prior consent.

          SECTION 6.09. Negative Pledges, etc. No Credit Party will enter into any agreement (other
than this Agreement and the other Financing Documents) which (a) prohibits the creation or
assumption of any Lien upon any of the Collateral, including any hereafter acquired property of
Borrowers, (b) specifically prohibits the amendment or other modification of this Agreement or (c)
restricts or imposes any conditions upon the ability of such Credit Party to pay dividends or other
distributions with respect to any shares of its capital stock or to make or repay loans or advances
to such Credit Party or to guarantee Indebtedness of such Credit Party.

          SECTION 6.10. Intentionally Omitted.

          SECTION 6.11. Sole Purpose of Borrowing Base Subsidiaries. Each Borrower is and shall remain, a single purpose entity whose sole purpose is to acquire,
own, hold, lease, operate, manage, develop, maintain or sell and otherwise deal with its Borrowing
Base Property and the other Collateral provided by it and perform activities ancillary thereto.
Borrowers shall comply with the single purpose covenants set forth on Exhibit U attached
hereto.

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          SECTION 6.12. Changes in Zoning. No Borrower shall request or seek to obtain any change
to, or consent to any request for or change in, any Legal Requirement, restrictive covenant or
other restriction applicable to any Borrowing Base Property or any portion thereof or any other
law, ordinance, rule, regulation, restrictive covenant or restriction affecting the zoning,
development or use of the applicable Borrowing Base Property or any portion thereof, or any
variance or special exception therefrom, without the prior consent of Agent, which consent shall
not be unreasonably withheld.

          SECTION 6.13. ERISA. No Credit Party will, or permit the REIT to, at any time have any
employees or engage in any transaction which would cause any obligation or action taken or to be
taken hereunder by such entity to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA or the Code.

          SECTION 6.14. Adverse Contracts. No Credit Party will enter into any contract or agreement
which would materially and adversely affect its business, property, assets, operations, condition
(financial or otherwise) taken as a whole, or its ability to perform its obligations under this
Agreement or any of the other Financing Documents.

          SECTION 6.15. Alterations. Without Agent’s prior consent, which consent shall not be
unreasonably withheld, no Borrower shall alter or add to its respective Borrowing Base Property
except for (a) non-structural alterations and repairs in the ordinary course of business that do
not reduce the value of the applicable Borrowing Base Property nor impair the value of the
collateral and cost, in the aggregate for any calendar year, less than $1,000,000 and (b)
alterations required by any Space Leases entered into as of the Effective Date (or with respect to
any Borrowing Base Property which is not an Initial Borrowing Base Property, Space Leases existing
as of the date that such Borrowing Base Property is added as a Borrowing Base Property) or entered
into in accordance with Section 5.26 hereof.

          SECTION 6.16. KeyBank Revolving Credit Facility. Borrowers shall not permit Sponsor to
renew, refinance, increase, amend or replace the KeyBank Revolving Credit Facility unless such
renewal, refinancing, increase, amendment or replacement is on substantially the same economic and
other material terms set forth in the loan documents relating to the KeyBank Revolving Credit
Facility or on such other terms which, in Agent’s reasonable determination, would not result in a
Material Adverse Effect, a Default or
Event of Default and, with respect to a refinancing or replacement, which refinancing or
replacement is with a bank or other financial institution with respect to which Agent (a) is not
then currently involved (in an adverse position or relationship) in any litigation, arbitration or
other proceeding or in any other material dispute or (b) does not have another reasonable material
basis to reject; provided, however, it is hereby agreed that KeyBank and any other
“Lender” which is a party to the KeyBank Revolving Credit Facility as of the Effective Date shall
be deemed to be a reasonably acceptable bank or financial institution to provide such refinancing
or replacement. Without limiting the foregoing, at least ten (10) Business Days prior to entering
into any refinancing or replacement of, or (ii) eight (8) Business Days prior to entering into any
renewal, increase or amendment of, as applicable, the KeyBank Revolving Credit Facility, Borrowers
shall cause Sponsor to deliver a copy of the loan agreement, guaranties, pledges, UCC financing
statements and other material documents evidencing, securing otherwise relating to such renewal,
refinancing, increase, amendment or replacement in order for Agent to review terms thereof for

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purposes of making the determination set forth in this Section 6.16. Within ten (10)
Business Days after entering into any renewal, refinancing, increase, amendment or replacement
permitted hereunder, Borrowers shall deliver certified copies of the loan agreement, guaranties,
pledges, UCC financing statements and other material documents evidencing, securing otherwise
relating thereto.

ARTICLE VII

Events of Default

          The following shall each constitute an “Events of Default” hereunder:

          (a) any Borrower shall fail to pay when due any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed for prepayment
thereof or earlier following acceleration;

          (b) (i) any Borrower shall fail to pay any Interest or Additional Interest or any Commitment
Fee or any other amount payable under the Loan Fee Letter or fail to make any payment or deposit
required pursuant to Sections 2.17 through 2.22 hereof (other than Section
2.22(c) hereof), in each case, and such failure shall continue for five (5) days after same is
due or (ii) any Borrower or Guarantor fails to pay when due any other monetary Obligations,
excluding those referred to in clause (a) or (b)(i) of this Article VII, on or
before the due date therefor and such failure described in this subclause (ii) continues
for five (5) days after notice from Agent of the non-payment thereof;

          (c) any representation or warranty made or deemed made by any Borrower or a Guarantor in the
Financing Documents, or in any report, certificate, financial statement or other document furnished
pursuant to the Financing Documents, shall prove to have been incorrect in any material respect as
of the date when made or deemed made; provided, however, if any Borrower or Guarantor in good faith
believed that such representation or warranty (other than representations or warranties set forth
in Section 3.04 hereof) to be true and correct in all material respects when made, and the
breach of such representation or warranty has not, in Agent’s reasonable judgment, had a material
adverse affect on Agent, any Lender, the Loans, the Transactions or the Collateral, then such
Borrower or Guarantor shall have ten (10) days after
receipt of written notice from Agent stating that such representation or warranty is incorrect
in any material respect, in which to take and complete such action as is required so that such
representation or warranty is true and correct in all material respect as of the end of such ten
(10) day period;

          (d) a Credit Party shall fail to observe or perform any covenant, condition or agreement
contained in (i) Sections 5.17, 5.19, 5.22, 5.25, 5.26(e),
5.28(e), 5.28(f), 6.01 through 6.07, 6.09, 6.11,
6.12 or 6.16 hereof, (ii) Sections 2.09(e) (with respect to reductions of
notional amounts of interest rate protection arrangements at the expiration of any one hundred and
eighty (180) day (or shorter if applicable) period referred to therein), 2.17 through
2.22 (other than Section 2.22(c) hereof), 5.23 or 5.24 hereof, and
such failure shall continue for five (5) days, and (iii) Sections 5.01, 5.07,
5.08, 5.09, 5.10, 5.12, 5.20, 5.21,
5.26(b), 5.26(c), 5.27, 5.28(a) through

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(d), 6.08,
6.13, 6.14 or 6.15 hereof, and such failure shall continue for ten (10)
days after notice of same from Agent;

          (e) any “Event of Default” shall occur under, or any other default shall occur and shall
continue beyond the applicable grace period expressly provided for in, any Financing Documents
other than this Agreement, including an “Event of Default” under any Mortgage;

          (f) any Borrower or Guarantor (i) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise, and after taking into account
any applicable grace period) in respect of any Material Indebtedness (other than Indebtedness
hereunder), or (ii) fails to observe or perform any other agreement or condition relating to any
Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating
thereto, in each case, beyond any applicable grace period, or any other event occurs, the effect of
which default or other event is to cause, or to permit the holder or holders or the beneficiary or
beneficiaries of Material Indebtedness (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness
to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically
or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or cash collateral in respect thereof to be demanded;

          (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed, in
each case, by Persons other than Agent, Lenders, and their respective Affiliates and agents,
seeking (i) liquidation, reorganization or other relief in respect of any Borrower, Sponsor or the
REIT or its debts, or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
any Borrower, Sponsor or the REIT or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for ninety (90) days or an order or decree
approving or ordering any of the foregoing shall be entered;

          (h) any Borrower, Sponsor or the REIT shall (i) voluntarily commence any proceeding or file
any petition seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (g) of this Article VII, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Borrower, Sponsor or the REIT or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;

          (i) any Borrower, Sponsor or the REIT shall become unable, admit in writing its inability or
fail generally to pay its debts as they become due;

          (j) one or more final non-appealable judgments for the payment of money in an aggregate amount
in excess of $5,000,000 (not covered by insurance where the carrier has

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accepted responsibility)
shall be rendered against any Borrower or Guarantor or any combination thereof and the same shall
remain undischarged for a period of thirty (30) consecutive days during which execution shall not
be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any material assets of any Borrower or Guarantor to enforce any such judgment;

          (k) an ERISA Event shall have occurred that, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse Effect;

          (l) a Change in Control shall occur;

          (m) any of the Financing Documents shall for any reason cease to be, or shall be asserted by
any Credit Party, the REIT, the Advisor, the Manager or any Affiliate of a Credit Party, the REIT,
the Manager or the Advisor not to be, a legal, valid and binding obligation of any such Credit
Party, the REIT, the Advisor, the Manager or any Affiliate of a Credit Party, the REIT, the Manager
or the Advisor which is a party to such Financing Document, including the improper filing by such
Credit Party, the REIT, the Advisor, the Manager or any Affiliate of a Credit Party, the REIT, the
Manager or the Advisor of an amendment or termination statement relating to a filed financing
statement describing the Collateral, or any Lien on any material portion of the Collateral
purported to be created by any of such Financing Documents shall for any reason cease to be, or be
asserted by any such Person granting any such Lien not to be a valid, first priority perfected Lien
(except to the extent otherwise permitted under any of the Financing Documents);

          (n) any Credit Party shall fail in the due performance or observance of any covenant,
agreement or term binding upon such Credit Party contained in this Agreement, other than those
covenants, agreements or terms which such Credit Party’s failure to perform would constitute
another Event of Default referred to in this Article VII, and such failure shall continue
unremedied for more than thirty (30) days after notice thereof shall have been given to such Credit
Party by Agent; provided, however, that if such failure is of a nature such that it
cannot be cured by the payment of money and if such failure requires work to be performed, acts to
be done or conditions to be removed which cannot by their nature, with due diligence, be performed,
done or removed, as the case may be, within such thirty (30) day period and such Credit Party shall
have commenced to cure such failure within such thirty (30) day period, such
period shall be deemed extended for so long as shall be required by such Credit Party in the
exercise of due diligence to cure such failure, but in no event shall such thirty (30) day period
be so extended to be a period in excess of one hundred and twenty (120) days;

          (o) the failure of any Borrower to punctually and properly perform, observe, and comply with
any material covenant or agreement contained in any Management Agreement with respect to any
Borrowing Base Property and such default shall continue for more than any applicable grace period,
if any; or

          (p) the exercise of any remedies by any agent and/or lender which is a party to the KeyBank
Revolving Credit Facility following an “Event of Default” under KeyBank Revolving Credit Facility,
including the acceleration of the credit facility which is the subject

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thereof and/or the
foreclosure, deed in lieu of foreclosure or similar transaction of any Equity Interest or other
collateral given to secure such credit facility;

then, and in every such event (other than an event described in clause (g) or (h)
of this Article VII), and at any time thereafter during the continuance of such event,
Agent may, by notice to Borrowers, take any one or more of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately; (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in
which case any principal not so declared to be due and payable may thereafter be declared to be due
and payable), and thereupon the principal of the Loans so declared to be due and payable, together
with accrued Interest thereon and all fees and other obligations of all Credit Parties accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties; (iii) apply any and all
portion of amounts on deposit in the Accounts and other amounts securing the Obligations to the
payment of the then outstanding Obligations in such order as Agent shall determine or (iv) exercise
any other rights or remedies available under this Agreement and the Financing Documents, or at law
or in equity; and in case of any event described in clause (g) or (h) of this
Article VII, the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued Interest thereon and all fees and other obligations of all
Credit Parties accrued hereunder, shall automatically become due and payable, and Agent may take
any one or more of the preceding actions, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Credit Parties.

ARTICLE VIII

Agent and The Lenders

          SECTION 8.01. Appointment of Agent. Each of the Lenders hereby irrevocably appoints Agent
as its agent both as agent and collateral agent and authorizes Agent to take such actions on its
behalf and to exercise such powers as are delegated to Agent by the terms hereof and the other
Financing Documents, together with such actions and powers as are reasonably incidental thereto.

          SECTION 8.02. Agent’s Rights as a Lender. The bank or other financial institution serving as Agent hereunder and under the other Financing
Documents shall have the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not Agent and such bank or other financial institution and
its Affiliates may accept deposits from, lend money to and generally engage in any kind of business
with any Credit Party or any of its Subsidiaries or other Affiliate thereof as if it were not Agent
hereunder.

          SECTION 8.03. Agent Obligations. Agent shall not have any duties or obligations except
those expressly set forth herein or in the other Financing Documents. Without limiting the
generality of the foregoing, (a) Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default or Event of Default has occurred and is continuing, (b)
Agent shall not have any duty to take any discretionary action or to exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or thereby that Agent
is required to exercise in writing by the Required Lenders (or such other

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umber or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 9.03
hereof), and (c) except as expressly set forth herein, Agent shall not have any duty to disclose,
and shall not be liable for any failure to disclose, any information relating to any Credit Party
or any of its Subsidiaries that is communicated to or obtained by the bank or other financial
institution serving as Agent or any of its Affiliates in any capacity. Agent shall not be liable
to the other Lenders for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.03 hereof) or in the absence of its own gross
negligence or willful misconduct. Agent shall be deemed not to have knowledge of any Default or
Event of Default unless and until notice thereof is given to Agent by Borrowers or a Lender, and
Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or
any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV hereof or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to Agent.

          SECTION 8.04. Right to Rely. Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed or sent by the
proper Person. Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. Agent may consult with legal counsel (who may be counsel for a Credit Party), independent
accountants and other experts selected by it, and shall not be liable to the other Lenders for any
action taken or not taken by it in accordance with the advice of any such counsel, accountants or
experts.

          SECTION 8.05. Appointment of Sub-Agents. Agent may perform any and all of its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by Agent. Agent and any such sub-agent may perform any and all
its duties and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the
Related Parties of Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as well as activities
as Agent.

          SECTION 8.06. Release of Collateral. With respect to the release of Collateral, the
Lenders hereby irrevocably authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any property covered by this Agreement or the other Financing
Documents (a) upon termination or expiration of the Commitments, the payment in full of the
outstanding principal amount of the Loans, together with all Interest and other sums due and
payable in connection therewith, the performance and satisfaction of all other outstanding
Obligations then due or required to be paid or performed, as applicable, and the termination of all
Lender Interest Rate Protection Agreements; or (b) constituting property being released, sold or
disposed of in compliance with the provisions of the Financing Documents (and

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Agent may rely in
good faith conclusively on any certificate stating that the property is being released, sold or
disposed of in compliance with the provisions of the Financing Documents, without further inquiry),
including Section 4.04 hereof; provided, however, that (y) Agent shall not
be required to execute any release on terms which, in Agent’s opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (z) such release shall not in any manner discharge, affect or
impair any Liens upon all interests retained, all of which shall continue to constitute part of the
property covered by the Financing Documents.

          SECTION 8.07. Perfection of Lien by Possession; Appointment of Lenders. With respect to
perfecting security interests in Collateral which, in accordance with Article 9 of the Uniform
Commercial Code or any comparable provision of any Lien perfection statute in any applicable
jurisdiction, can be perfected only by possession, each Lender hereby appoints each other Lender
its agent for the purpose of perfecting such interest. Should any Lender (other than Agent) obtain
possession of any such Collateral, such Lender shall notify Agent, and, promptly upon Agent’s
request, shall deliver such Collateral to Agent or in accordance with Agent’s instructions. Each
Lender agrees that it will not have any right individually to enforce or seek to enforce this
Agreement or any other Financing Document or to realize upon any Collateral for the Loans, it being
understood and agreed that such rights and remedies may be exercised only by or with the approval
of Agent.

          SECTION 8.08. Bankruptcy of Any Borrower. In the event that a petition seeking relief
under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy,
insolvency, liquidation or similar law is filed by or against any Borrower or any other Person
obligated under any Financing Document, Agent is authorized, to the fullest extent permitted by
applicable law, to file a proof of claim on behalf of
itself and the Lenders in such proceeding for the total amount of obligations owed by such Person.
With respect to any such proof of claim which Agent may file, each Lender acknowledges that without
reliance on such proof of claim, such Lender shall make its own evaluation as to whether an
individual proof of claim must be filed in respect of such obligations owed to such Lender and, if
so, take the steps necessary to prepare and timely file such individual claim.

          SECTION 8.09. Resignation; Successor Agent. Subject to the appointment and acceptance of a
successor Agent as provided in this Section 8.09, Agent may resign at any time by notifying
the Lenders and Borrowers. Upon any such resignation, the Required Lenders shall have the right,
to appoint a successor Agent which satisfies the Successor Agent Requirements. If no successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a bank or other
financial institution organized under the laws of the United States or any political subdivision
which has a branch, agency or representative office located in New York City, Boston, Washington
D.C., Chicago, Dallas, San Francisco or Los Angeles and has total assets in excess of $500,000,000
(collectively, the “Successor Agent Requirements”). Upon the acceptance of its appointment
as Agent hereunder by a successor, such successor shall 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 its duties and obligations hereunder. The fees payable by Borrowers to a successor
Agent shall be the same as those payable to its

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predecessor unless otherwise agreed in writing
between Borrowers and such successor. After Agent’s resignation hereunder, the provisions of this
Article VIII and Section 9.04 hereof shall continue in effect for the benefit of
such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Agent.

          SECTION 8.10. Lenders’ Independent Analysis. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and without reliance
upon Agent or any other Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
Each Lender acknowledges the potential conflict of interest of each other Lender as a result of
Lenders holding disproportionate interests in the Loans, and expressly consents to and waives any
claim based upon such conflict of interest.

          SECTION 8.11. Defaults by Any Lender.

          (a) Consequences of Default. If for any reason any Lender shall be in default of any
of its obligations pursuant to this Agreement or any other Financing Document (a “Defaulting
Lender”), then, in addition to the rights and remedies that may be available to Agent and any
other Lender under this Agreement, at law and in equity, such Defaulting Lender’s right to
participate as a Lender in decisions under this Agreement, including any rights to approve or
direct any determination, action or inaction of Agent where the approval or direction of Lenders is
required or permitted hereby, and such Defaulting Lender’s right to assign, transfer, sell all or
any portion of its rights in and to the Loan or a participation therein pursuant to Section
9.05 hereof, shall be suspended during the pendency of such default.

          (b) Remedies. If for any reason the Defaulting Lender fails to make timely payment of
any amount required to be paid by such Defaulting Lender to or for the benefit of Agent or any
other Lender hereunder, then, in addition to other rights and remedies which Agent or such other
Lender may have hereunder or otherwise, Agent or any Lender shall be entitled, but not obligated
(i) to advance funds on behalf of any Defaulting Lender, (ii) to collect interest from the
Defaulting Lender at the greater of the Federal Funds Effective Rate and a rate determined by Agent
in accordance with banking industry rules on interbank compensation until the date on which the
payment is made, (iii) to withhold or set off or in the case of a Lender, to cause Agent to
withhold or setoff, and to apply to the payment of the defaulted amount and any related interest,
any amounts to be paid to the Defaulting Lender under this Agreement, (iv) to bring an action or
suit against the Defaulting Lender in a court of competent jurisdiction to recover the defaulted
amount and any related interest and (v) to purchase the Defaulting Lender’s interest in the Loans
in the manner set forth in this Section 8.11. Upon the Defaulting Lender’s failure to make
payments as set forth herein and so long as such failure remains uncured (and it is agreed an
advance of funds by any other Lender pursuant to clause (i) above shall not be considered a cure of
the Defaulting Lender’s default), the Defaulting Lender shall not be entitled to receive its share
of any payments made by any Borrower (or amounts owed by any Borrower)

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after such date pursuant to
the Financing Documents. If Agent receives any payment with respect to the Obligations from any
Borrower as to which a Defaulting Lender would otherwise have been entitled, then such Defaulting
Lender’s share of such payment shall be credited toward the amount owed hereunder by such
Defaulting Lender on a dollar for dollar basis.

          (c) Purchase of Defaulting Lender’s Interest After Default. In the event of a default
by a Lender as referred to in Section 8.11(a) hereof, each Lender which is not a Defaulting
Lender shall have the right, but not the obligation, in its discretion, to acquire such Defaulting
Lender’s interest in the Loans and the Commitments. If more than one Lender exercises such right,
each such Lender which is not a Defaulting Lender shall have the right to acquire (in accordance
with such acquiring Lender’s Pro Rata Share or by any proportion collectively agreed upon by
Lenders desiring to so purchase the Defaulting Lender’s interest) the Defaulting Lender’s interest
in the Loans and the Commitments. Such right to purchase shall be exercised by notice from the
applicable Lender(s) electing to exercise such right to the Defaulting Lender (an “Exercise
Notice”), copies of which shall also be sent concurrently to each other Lender. The Exercise
Notice shall specify (i) the purchase price for the interest of the Defaulting Lender, determined
in accordance with Section 8.11(d) hereof and (ii) the date on which such purchase is to
occur, which shall be any Business Day which is not less than fifteen (15) days after the date on
which the Exercise Notice is given, provided that if such Defaulting Lender shall have cured its
default in full (including with the payment of any interest and other
amounts due in connection therewith) to the satisfaction of Agent within said fifteen (15) day
period, then the Exercise Notice shall be of no further effect and the non-defaulting Lender(s)
shall no longer have a right to purchase such Defaulting Lender’s interest. Upon any such purchase
of a Defaulting Lender’s interest and as of the date of such purchase (the “Purchase
Date”), the Defaulting Lender’s interest in the Loans and the Commitments, and its rights
hereunder as a Lender arising from and after the Purchase Date (but not its rights and liabilities
with respect thereto or under this Agreement or the other Financing Documents for obligations,
indemnities and other matters arising or matters occurring before the Purchase Date) shall
terminate on the Purchase Date, and the Defaulting Lender shall promptly execute all documents
reasonably requested to surrender and transfer such interest. Without in any manner limiting the
remedies of Agent or any other Lender, the obligation of a Defaulting Lender to sell and assign its
interest in the Loan and the Commitments under this Section 8.11 shall be specifically
enforceable by Agent and/or any other Lender by an action brought in any court of competent
jurisdiction for such purpose, it being acknowledged and agreed that, in light of the disruption in
the administration of the Loans and the other terms of the Financing Documents that a Defaulting
Lender may cause, damages and other remedies at law are not adequate.

          (d) Purchase Price; Payment for Defaulting Lender’s Interest. The purchase price (the
“Purchase Price”) for the interest of a Defaulting Lender in the Loans and the Commitments
shall be equal to the sum of all of the Defaulting Lender’s advances under the Financing Documents
outstanding as of the Purchase Date, less the costs and expenses incurred by Agent and any
non-defaulting Lender directly as a result of the Defaulting Lender’s default hereunder, including
interest accrued on such unpaid amounts, court costs and including reasonable attorneys’ fees and
disbursements, and fees for accountants and other similar advisors (provided that such costs and
expenses are paid by the Lenders acquiring the interest of such Default to Agent and the Lenders
incurring same).

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ARTICLE IX

Miscellaneous

          SECTION 9.01. Notices.

          (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to clause (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:

          (i) if to any Borrower or Guarantor:

c/o Hines REIT Properties, L.P.

2800 Post Oak Boulevard, Suite 5000

Houston, Texas 77056-6118

Attention: Sherri W. Schugart

Telecopy No. 713-966-2075

with simultaneous copies to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Attention: Joel M. Overton, Jr.

Telecopy No. 214-661-4938

          (ii) if to Agent:

HSH Nordbank AG

New York Branch

230 Park Avenue, 32nd Floor

New York, New York 10169

Attention: Real Estate Finance

Telecopy No. 212-407-6833

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with copies to:

HSH Nordbank AG

San Francisco Representative Office

560 Mission, Suite 2800

San Francisco, California 94105-2904

Attention: Real Estate Finance

Telecopy No. 415-537-8780

and:

HSH Nordbank AG

New York Branch

230 Park Avenue, 32nd Floor

New York, New York 10169

Attention: General Counsel

Telecopy No. 212-407-6811

and:

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

Attention: Warren J. Bernstein, Esq.

Telecopy No. 212-836-8689

          (iii) if to HSH, as Lender:

HSH Nordbank AG

New York Branch

230 Park Avenue, 32nd Floor

New York, New York 10169

Attention: Real Estate Finance

Telecopy No. 212-407-6833

with copies to:

HSH Nordbank AG

San Francisco Representative Office

560 Mission, Suite 2800

San Francisco, California 94105-2904

Attention: Real Estate Finance

Telecopy No. 415-537-8780

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and:

HSH Nordbank AG

New York Branch

230 Park Avenue, 32nd Floor

New York, New York 10169

Attention: General Counsel

Telecopy No. 212-407-6811

and:

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

Attention: Warren J. Bernstein, Esq.

Telecopy No. 212-836-8689

          (iv) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by Agent; provided that the
foregoing shall not apply to notices pursuant to Article II hereof unless otherwise agreed
by Agent and the applicable Lender. Agent or any Credit Party may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to
particular notices or communications.

          (c) Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.

          SECTION 9.02. Each Borrower as Agent for Each Other. Each Borrower hereby irrevocably
appoints North Clark LLC as the agent and attorney-in-fact for all Borrowers. Each Borrower hereby
irrevocably appoints and authorizes North Clark LLC (i) to provide Agent with all notices with
respect to Loans obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action as North Clark LLC deems appropriate on its
behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to
carry out the purposes of this Agreement. It is understood that the handling of the Loan account
and Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers
in the most efficient and economical manner and at their request, and that none of Agent or any
Lender shall incur liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group.

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To induce Agent and Lenders to do so, and in
consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each of Agent
and Lenders and hold each of Agent and Lenders harmless against any and all liability, expense,
loss or claim of damage or injury, made against any of Agent or Lenders by any Borrower or by any
third party whosoever, arising from or incurred by reason of (a) the handling of the loan Account
and Collateral of Borrowers as herein provided or (b) Agent’s or any Lender’s relying on any
instructions of Borrowers.

          SECTION 9.03. Waivers; Amendments.

          (a) No failure or delay by Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of Agent and the Lenders hereunder, under the other Financing Documents or other
agreement, document or instrument, at law and in equity are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Credit Party therefrom shall in any event be effective unless the
same shall be in writing and permitted by Section 9.03(b) hereof, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default or Event of Default, regardless of whether Agent or any Lender may have had
notice or knowledge of such Default or Event of Default at the time, and shall not be construed as
a waiver of any condition to the making of any other Loan or the making of any other credit
accommodation hereunder.

          (b) Neither this Agreement nor any other Financing Document may be amended or modified, or any
material term thereof waived, except pursuant to an agreement or agreements in writing entered into
by the Credit Parties and the Required Lenders or by the Credit Parties and Agent with the consent
of the Required Lenders; provided that no such agreement shall (i) increase the Commitment
of any Lender without the prior consent of such Lender, (ii) reduce the principal amount of any
Loan or Note or reduce the rate of Interest thereon, or reduce any fees payable hereunder, without
the prior consent of each Lender directly affected thereby, (iii) postpone a Maturity Date or any
Interest on any Loan, or any fees payable hereunder, or reduce the amount of, waive or excuse any
such payment or postpone the scheduled date of expiration of any Commitment, without the prior
consent of each Lender directly affected thereby, (iv) modify the definitions of “Borrowing
Base Loan Amount” or “Imputed Loan Amount” herein without the consent of each Lender;
(v) change any of the provisions of this Section 9.03 hereof or the definition of
“Required Lenders” or “Majority Lenders” herein or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the consent of each
Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of Agent hereunder without the consent of Agent, or (vi) other than as
permitted hereunder, including Sections 2.20 and 8.06, release of any guaranties of
the Obligations or the release of any material Collateral; provided, however,
consent of the Required Lenders shall not be required for the release of the REIT from its
obligations under the Limited Payment Guaranty so long as the conditions precedent set forth

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in Section 2.22 hereof relating to such release shall be satisfied in accordance with
Section 2.22 hereof.

          (c) Notwithstanding the foregoing, Exhibit F attached hereto may be amended from time
to time by Agent alone to reflect assignments of the Commitments made in accordance with this
Agreement.

          SECTION 9.04. Expenses; Indemnity; Damage Waiver.

          (a) The Credit Parties shall, jointly and severally, pay (i) all reasonable out-of-pocket
expenses incurred by Agent and its Affiliates, in connection with the Transactions, the syndication
of the credit facilities provided for herein (not to exceed $100,000), the preparation of this
Agreement and the other Financing Documents and any amendments, modifications or waivers requested
by any Credit Party of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), including (a) the reasonable fees, charges
and disbursements of counsel for Agent; (b) costs and expenses of lien and title searches and title
insurance; (c) taxes, fees and other charges for recording and/or filing of the Mortgages and other
Security Documents, including financing statements, continuations, and other actions to perfect,
protect, and continue Agent’s Liens; (d) sums paid or incurred to pay any amount or take any action
required of any Credit Party under the Financing Documents that any Credit Party fails to pay or
take; (e) costs of appraisals, inspections, and verifications of the Collateral (including the
out-of-pocket expenses incurred by Agent in evaluating whether a Property is a Borrowing Base
Property), including reasonable travel, lodging, and meals for inspections of the Collateral and
Borrowers’ operations by Agent (not to exceed $5,000 per year
as long as no Event of Default shall exist); and (f) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment and costs and expenses of preserving and
protecting the Collateral and (ii) all out-of-pocket expenses incurred by Agent or any Lender,
including the fees, charges and disbursements of any counsel for Agent or any Lender, in connection
with the enforcement or protection of its rights in connection with this Agreement, including its
rights under this Section 9.04, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans.

          (b) The Credit Parties shall, jointly and severally, indemnify Agent and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this Agreement, any
Financing Document or any agreement or instrument contemplated hereby or thereby, the performance
by the Credit Parties hereto of their respective obligations hereunder or thereunder or the
consummation of the Transactions or any other transactions contemplated hereby or thereby or any
action taken by Agent or any Lender hereunder or thereunder other than actions or claims (or any
loss, cost, liability, damage or expense in connection therewith) arising out of any dispute
between Agent and one or more Lenders, or any Lender with one or more other Lenders, the subject of
which is their obligations hereunder, (ii) any Loan or the use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Substances on or

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from any property owned or
operated by any Borrower or any of their Subsidiaries, or any Environmental Losses related in any
way to any Borrower or any of their Subsidiaries, (iv) the properties or assets of the Credit
Parties, including the Borrowing Base Properties and any other Collateral or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claim, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

          (c) To the extent that the Credit Parties fail to pay any amount required to be paid by it to
Agent under Section 9.04(a) or (b) hereof, each Lender severally agrees to pay to
Agent such Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought and based upon the outstanding principal
balance of the aggregate Credit Exposure) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against Agent in its capacity as such.

          (d) To the extent permitted by applicable law, the Credit Parties shall not assert, and hereby
waive, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, the other Financing Documents or any agreement
or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds
thereof.

          (e) All amounts due under this Section 9.04 shall be payable within five (5) days
after demand therefor.

          SECTION 9.05. Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that (i) a
Credit Party may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior consent of each Lender (and any attempted assignment or transfer by such Credit
Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this Section 9.05.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby and, to
the extent expressly contemplated hereby, the Related Parties of each of Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) (i) Subject to the conditions set forth in clause (ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
consent of Agent (but without the consent of any Borrower), provided that no consent of
Agent shall be required for an assignment of any Commitment to an assignee that is a Lender with a
Commitment immediately prior to giving effect to such assignment. Each Credit

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Party agrees to
provide assistance (at no material cost to any Credit Party or their Affiliates) as may be
reasonably requested by any Lender in connection with any such Assignment.

               (ii) Assignments shall be subject to the following additional conditions:

     (A) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered
to Agent) shall not be less than $10,000,000;

     (B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations
under this Agreement;

     (C) the parties to each assignment shall execute and deliver to Agent
an Assignment and Assumption; and

     (D) the assignee, if it shall not be a Lender, shall deliver to Agent
an Administrative Questionnaire.

               (iii) Subject to acceptance and recording thereof pursuant to clause (iv) below, from
and after the effective date specified in each Assignment and Assumption the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.07, 2.13, 2.15 and 9.04 hereof). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Section 9.05 hereof shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with Section 9.05(c)
hereof.

               (iv) Agent, acting for this purpose as an agent of each Borrower, shall maintain at one of
its offices a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount
of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and Borrowers, Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by Borrowers and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

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               (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), any Note subject to such assignment and any consent to such
assignment required by Section 9.05(b)(i) hereof, Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the Register as provided in
this Section 9.05(b)(v).

          (c) (i) Any Lender may, without the consent of any Borrower or Agent, sell participations to
one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (C) Borrowers, Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.03(b) hereof that affects such Participant. Subject to
Section 9.05(c)(ii) hereof, each Credit Party agrees, to the fullest extent permitted under
applicable law, that each Participant shall be entitled to the benefits of Sections 2.07,
2.13 and 2.15 hereof to the same extent as if it were a Lender and had acquired its
interest by
assignment pursuant to Section 9.05(b) hereof. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.09 hereof as though it were
a Lender, provided such Participant agrees to be subject to Section 2.18(c) hereof
as though it were a Lender.

               (ii) A Participant shall not be entitled to receive any greater payment under Section
2.13 or 2.15 hereof than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the participation to such
Participant is made with Borrowers’ prior consent.

          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement and the Note issued to such Lender to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or the
central reserve bank or similar authority of any other country, and this Section 9.05 shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          SECTION 9.06. Survival. All covenants, agreements, representations and warranties made by
each Credit Party herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans
regardless of any investigation made by any such other party or on its

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behalf and notwithstanding
that Agent or any Lender may have had notice or knowledge of any Default or Event of Default or
incorrect representation or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or any accrued Interest on any Loan
or any fee or any other amount payable under this Agreement is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.07, 2.13,
2.15 and 9.04 hereof and Article VIII hereof shall survive and remain in
full force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof for a period of three (3) years thereafter.

          SECTION 9.07. Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Financing Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01 hereof, this Agreement shall become effective when it shall have been executed
by Agent and when Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

          SECTION 9.08. Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 9.09. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of a Credit Party or any
of its Subsidiaries against any of and all the obligations of such Credit Party or any of its
Subsidiaries now or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section 9.09 are in
addition to other rights and remedies (including other rights of setoff) which such Lender may
have.

          SECTION 9.10. Governing Law; Jurisdiction; Consent to Service of Process.

          (a) THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF THE
STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS

128

 

PRINCIPLES THEREOF THAT WOULD CALL FOR THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

          (b) Each Credit Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court for the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or any other Financing Document, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding which is no longer subject to appeal, shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement or any other Financing Document shall affect any right that
Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement
or any other Financing Document against any Credit Party or any of their respective properties in
the courts of any jurisdiction.

          (c) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement in any
court referred to in the first sentence of Section 9.10(b) hereof. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01 hereof. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 9.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

          SECTION 9.12. Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.

129

 

          SECTION 9.13. Confidentiality. Each of Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates and its and its Affiliates’ directors, officers, employees and agents, including
accountants, rating agencies, portfolio management servicers, legal counsel and other advisors (it
being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information confidential on the
terms and conditions set forth in this Section 9.13), (b) to the extent requested by any
regulatory authority, governmental or quasi-governmental agency or their representatives, (c) to
the extent required by applicable laws or regulations or by any court order, subpoena or other
legal process or by any applicable stock exchange rules, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement, any other Financing Document or the enforcement of rights hereunder or
thereunder, at law or in
equity, (f) in connection with any litigation between or among any of Agent, the Lenders and the
Credit Parties, (g) subject to an agreement containing provisions substantially the same as those
of this Section 9.13, to any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (h) with respect to
Information pertaining to any Credit Party, with the consent of Borrowers or (i) to the extent such
Information (1) becomes publicly available other than as a result of a breach of this Section
9.13 by the applicable party seeking to use such information or (2) becomes available to Agent
or any Lender on a nonconfidential basis from a source other than any Borrower. Notwithstanding
the foregoing, each of Agent and the Lenders may disclose to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of the Transactions and all materials
of any kind (including opinions and tax analysis) that have been provided to such Persons relating
to the tax treatment and tax structure of the Transactions. For the purposes of this Section
9.13, “Information” means all information received from a Credit Party relating to any
Borrower or its business, other than any such information that is available to Agent or any Lender
on a nonconfidential basis prior to disclosure by any Credit Party and information that is
independently developed by Agent or any Lender. Any Person required to maintain the
confidentiality of Information as provided in this Section 9.13 shall be considered to have
complied with its obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to its own
confidential information. Each party hereto acknowledges that certain Information obtained by it
may be material and nonpublic and that, under applicable law, such party may be prohibited from
trading in securities of the party to whom such material nonpublic information pertains based upon
such material and nonpublic Information.

          SECTION 9.14. Interest Rate Limitation. Each Credit Party, Agent and Lenders intend at all
times to comply with applicable laws of the State of New York and that this Section 9.14
shall control every other agreement herein or in the other Financing Documents. If the applicable
law (state or federal) is ever judicially interpreted so as to render usurious any amount called
for under the Note, this Agreement or any other Financing Document, or contracted for, charged,
taken, reserved or received with respect to the Loans, or if Agent’s or any Lender’s exercise of
the option to accelerate the maturity of any Loan or any prepayment by Borrowers results in
Borrowers having paid any interest in excess of that permitted by applicable law, then it is the
Credit Party’s, Agent’s and Lender’s express intent that all excess amounts theretofore collected
by Agent or any Lender shall be credited against the unpaid principal of the Loans (without any
requirement to pay any Prepayment Fee in connection therewith) or, if all

130

 

Loans have been or would
thereby be paid in full, refunded to Borrowers and the provisions of this Agreement and the other
Financing Documents immediately be deemed reformed and the amounts thereafter collectible
thereunder reduced, in each case, without the necessity of the execution of any new document, so as
to comply with applicable law, but so as to permit the recovery of the fullest amount otherwise
called for thereunder. All sums paid or agreed to be paid to Agent or any Lender for the use,
forbearance or detention of any Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of such Loan until
payment in full so that the rate or amount of interest on account of such Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to such Loan for so long as such
Loan is outstanding. Notwithstanding anything to the contrary contained herein or in any other
Financing Document, it is not the
intention of Agent or any Lender to accelerate the maturity of any interest that has not accrued at
the time of such acceleration or to collect unearned interest at the time of such acceleration.

          SECTION 9.15. Determinations and Consent of Agent. With respect to any matter for which
Agent’s consent, approval or waiver is required hereunder or under the other Financing Documents,
no such consent, approval or waiver by Agent hereunder or thereunder shall in any event be
effective unless the same shall be in writing and signed by Agent, and then such consent, approval
or waiver shall be effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on any Credit Party in any case shall entitle such Credit Party to
any other or further notice or demand in similar or other circumstance. Unless expressly provided
to the contrary in any particular instance, any determination, election or judgment made or any
consent, approval or waiver given by Agent pursuant to this Agreement or any other Financing
Document shall be made or given, as the case may be, in Agent’s sole discretion made in good faith,
whether or not the applicable provision of this Agreement or any other Financing Document expressly
so provides. In making any such determination, election or judgment or in providing or deciding
not to provide any such consent, approval or waiver, Agent shall be entitled to rely, to the extent
Agent so elects, in whole or in part on the advice of counsel (including counsel for any Borrower
or Guarantor), independent public accountants, engineers, architects, appraisers, insurance
consultants and other experts selected by Agent.

          SECTION 9.16. No Joint Venture. No Credit Party is nor shall be deemed to be a joint
venturer, partner, tenant in common or joint tenant with, or an agent of Agent or any Lender for
any purpose.

          SECTION 9.17. Limitation on Liability. Notwithstanding anything to the contrary contained
in this Agreement, in the Note, the Mortgages or in the other Financing Documents, the sole
remedies of Agent and Lenders with respect to the payment of principal, Interest, Additional
Interest and other amounts owed hereunder or under the Note or any other Financing Documents or for
any claim based on this Agreement, the Note or any other Financing Document shall be solely against
the Borrowing Base Properties, the other Mortgaged Property and the other Collateral, and no
recourse shall be had for the payment of such amounts against any assets (other than the Borrowing
Base Properties, the other Mortgaged Property and the other Collateral) of any Borrower or
Guarantor; provided, however, that:

131

 

          (a) nothing contained in this Agreement (including the provisions of this Section
9.17), the Note or the other Financing Documents shall constitute a waiver of any of
Borrowers’ obligations herein, under the Note or the other Financing Documents, or of any of
any obligations of the Guarantor under the Financing Documents to which it is a party; and

          (b) nothing contained in this Agreement (including the provisions of this Section
9.17), the Note or the other Financing Documents shall constitute a limitation of
liability of any Borrower, Guarantor or any of their respective assets with respect to
the Recourse Liability Agreement, the Limited Payment Guaranty, the Environmental
Indemnity or any other guaranty or indemnity agreement given by it in connection with the
Loans.

[The remainder of this page is intentionally left blank.]

132

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	“BORROWERS”
	 
	 	 	 	 	 	 
	 	 	HINES REIT 3100 MCKINNON STREET LP, a Delaware limited

partnership
	 
	 	 	 	 	 	 
	 	 	By:	 	Hines REIT 3100 MCKINNON STREET GP LLC, a Delaware

limited liability company, its general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title: Authorized Representative
	 
	 	 	 	 	 	 
	 	 	HINES REIT 1900/2000 ALAMEDA DE LAS PULGAS LLC, a Delaware

limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/	 	 
	 	 	 	 	 
	 	 	 	 	Name:
	 	 	 	 	Title: Authorized Representative
	 
	 	 	 	 	 	 
	 	 	HINES REIT 321 NORTH CLARK STREET LLC, a Delaware limited

liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/	 	 
	 	 	 	 	 
	 	 	 	 	Name:
	 	 	 	 	Title: Authorized Representative

[Signatures continue on following page]

133

 

	 	 	 	 	 	 	 
	 	 	“SPONSOR”
	 
	 	 	 	 	 	 
	 	 	HINES REIT PROPERTIES, L.P., a Delaware limited partnership
	 
	 	 	 	 	 	 
	 	 	By:	 	Hines Real Estate
Investment Trust, Inc., a Maryland corporation, its
general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title: Authorized Representative

[Signatures continue on following page]

134

 

	 	 	 	 	 
	 	 	“AGENT”
	 
	 	 	 	 
	 	 	HSH NORDBANK AG, NEW YORK BRANCH
	 
	 	 	 	 
	 

	 	By:	 	/s/
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: Authorized Representative
	 
	 	 	 	 
	 

	 	By:	 	/s/
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: Authorized Representative
	 
	 	 	 	 
	 	 	“LENDERS”
	 
	 	 	 	 
	 	 	HSH NORDBANK AG, NEW YORK BRANCH
	 
	 	 	 	 
	 

	 	By:	 	/s/
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: Authorized Representative
	 
	 	 	 	 
	 

	 	By:	 	/s/
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title: Authorized Representative

135exv10w1

 

EXHIBIT 10.1

PENFORD CORPORATION

DEFERRED COMPENSATION PLAN

Effective September 1, 1989

Restated September 1, 2001

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE
	ARTICLE I—PURPOSE
	 	 	1	 
	 
	 	 	 	 
	1.1 Purpose
	 	 	1	 
	1.2 Effective Date
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II—DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2.1 Account
	 	 	1	 
	2.2 Base Annual Salary
	 	 	1	 
	2.3 Beneficiary
	 	 	1	 
	2.4 Board
	 	 	1	 
	2.5 Bonus
	 	 	2	 
	2.6 Change in Control
	 	 	2	 
	2.7 Committee
	 	 	2	 
	2.8 Compensation
	 	 	2	 
	2.9 Corporation
	 	 	2	 
	2.10 Deferral Commitment
	 	 	3	 
	2.11 Deferral Period
	 	 	3	 
	2.12 Determination Date
	 	 	3	 
	2.13 Director
	 	 	3	 
	2.14 Early Retirement Date
	 	 	3	 
	2.15 Elective Deferred Compensation
	 	 	3	 
	2.16 Executive
	 	 	3	 
	2.17 Fees
	 	 	3	 
	2.18 Financial Hardship
	 	 	3	 
	2.19 Interest
	 	 	4	 
	2.20 Normal Retirement Date
	 	 	4	 
	2.21 Participant
	 	 	4	 
	2.22 Participation Agreement
	 	 	4	 
	2.23 Plan
	 	 	4	 
	2.24 Plan Benefit
	 	 	4	 
	2.25 Plan Year
	 	 	4	 
	2.26 Retirement
	 	 	5	 
	2.27 Retirement Plan
	 	 	5	 
	2.28 Termination
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III—ELIGIBILITY AND DEFERRAL COMMITMENTS
	 	 	5	 
	 
	 	 	 	 
	3.1 Eligibility and Participation
	 	 	5	 
	3.2 Deferral Election
	 	 	5	 
	3.3 Modification of Deferral Commitment
	 	 	6	 

(i)

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE
	ARTICLE IV—DEFERRED COMPENSATION ACCOUNT
	 	 	6	 
	 
	 	 	 	 
	4.1 Account
	 	 	6	 
	4.2 Interest; Determination of Accounts
	 	 	6	 
	4.3 Statement of Account
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V—PLAN BENEFITS
	 	 	7	 
	 
	 	 	 	 
	5.1 Plan Benefit
	 	 	7	 
	5.2 Commencement of Payments
	 	 	8	 
	5.3 Form of Benefit Payment
	 	 	8	 
	5.4 Hardship Distributions
	 	 	8	 
	5.5 Accelerated Distribution
	 	 	10	 
	5.6 Supplemental Retirement Benefit
	 	 	10	 
	5.7 Golden Parachute Payments
	 	 	10	 
	5.8 Withholding on Benefit Payments
	 	 	10	 
	5.9 Valuation and Settlement
	 	 	10	 
	5.10 Payment to Guardian
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VI—BENEFICIARY DESIGNATION
	 	 	11	 
	 
	 	 	 	 
	6.1 Beneficiary Designation
	 	 	11	 
	6.2 Changes to Designation
	 	 	11	 
	6.3 Change in Marital Status
	 	 	11	 
	6.4 No Beneficiary Designation
	 	 	12	 
	6.5 Effect of Payment
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VII—ADMINISTRATION
	 	 	12	 
	 
	 	 	 	 
	7.1 Committee; Duties
	 	 	12	 
	7.2 Agents
	 	 	12	 
	7.3 Binding Effect of Decisions
	 	 	12	 
	7.4 Indemnity of Committee
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VIII—CLAIMS PROCEDURE
	 	 	13	 
	 
	 	 	 	 
	8.1 Claim
	 	 	13	 
	8.2 Denial of Claim
	 	 	13	 
	8.3 Review of Claim
	 	 	13	 
	8.4 Final Decision
	 	 	13	 
	 
	 	 	 	 
	ARTICLE IX—AMENDMENT AND TERMINATION OF THE PLAN
	 	 	13	 
	 
	 	 	 	 
	9.1 Amendment
	 	 	13	 
	9.2 Corporation’s Right to Terminate
	 	 	14	 

(ii)

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE
	ARTICLE X—MISCELLANEOUS
	 	 	15	 
	 
	 	 	 	 
	10.1 Unfunded Plan
	 	 	15	 
	10.2 Unsecured General Creditor
	 	 	15	 
	10.3 Trust Fund
	 	 	15	 
	10.4 Nonassignability
	 	 	15	 
	10.5 Not a Contract of Employment
	 	 	16	 
	10.6 Protective Provisions
	 	 	16	 
	10.7 Governing Law
	 	 	16	 
	10.8 Validity
	 	 	16	 
	10.9 Notice
	 	 	16	 
	10.10 Successors
	 	 	17	 

(iii)

 

PENFORD CORPORATION

DEFERRED COMPENSATION PLAN

ARTICLE I—PURPOSE

1.1 Purpose

     Penford Corporation (the “Corporation”) adopts this Deferred Compensation Plan (the “Plan”) to
provide current tax planning opportunities as well as supplemental funds for Retirement or death
for certain employees and Directors of the Corporation. It is intended that the Plan will aid in
attracting and retaining employees and Directors of exceptional ability by providing them with this
benefit.

1.2 Effective Date

     The Plan, effective as of September 1, 1989 and restated September 1, 1996, is amended by this
restatement, as of September 1, 2001.

ARTICLE II—DEFINITIONS

     For purposes of this Plan, the following terms shall have the meanings indicated, unless the
context clearly indicates otherwise:

2.1 Account

     “Account” means the record maintained by the Corporation for each Participant in accordance
with Article IV with respect to any deferral of Compensation or Fees pursuant to this Plan.

2.2 Base Annual Salary

     “Base Annual Salary” means the annual compensation payable to an Executive, excluding Bonuses
and noncash compensation.

2.3 Beneficiary

     “Beneficiary” means the person, persons or entity designated under Article VI to receive any
Plan Benefits payable after a Participant’s death.

2.4 Board

     “Board” means the Compensation and Benefits Committee of the Board of Directors of
Penford Corporation or any successor thereto.

PAGE 1 - DEFERRED COMPENSATION PLAN

 

 

2.5 Bonus

     “Bonus” means the compensation derived under the Corporation’s “Management Incentive Plan” and
payable in any year in a lump sum to an Executive.

2.6 Change in Control

     A Change in Control shall have occurred if:

     (a) Any Person is or becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing more than fifty percent (50%) of the voting power
of the outstanding Voting Stock,

     (b) The effective date of a merger, consolidation, reorganization or dissolution in
which the Corporation is not the surviving entity, or

     (c) During any period of two (2) consecutive years, individuals who constitute the
Board of Directors of the Corporation at the beginning of any such period cease for any
reason to constitute at least a majority thereof, unless the election, or the nomination for
election by the Corporation’s shareholders, of each new director was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were directors of the
Corporation at the beginning of such period. “Person” means an individual, firm, corporation
or other entity, together with all Affiliates and Associates of such Person, but shall not
include the Corporation, any subsidiary of the Corporation or any employee benefit plan of
the Corporation. “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. “Voting Stock”
means the common stock of the Corporation and any other shares entitled to vote for the
election of directors of the Corporation.

2.7 Committee

     “Committee” means a committee of three (3) persons appointed by the Chief Executive Officer of
the Company to administer the Plan pursuant to Article VII.

2.8 Compensation

     “Compensation” means the following, determined before reduction for amounts deferred under
this Plan:

     (a) For an Executive, the total Base Annual Salary and Bonus remuneration payable by
the Corporation to the Executive for services.

     (b) For a Director, all of the fees payable by the Corporation for service on the
Board.

2.9 Corporation

     “Corporation” means Penford Corporation, a Washington corporation, or any successor thereto,
and any corporations or other entities affiliated with or subsidiary to it that may be selected by
the Board.

PAGE 2 - DEFERRED COMPENSATION PLAN

 

 

2.10 Deferral Commitment

     “Deferral Commitment” means a Base Annual Salary Deferral Commitment or a Bonus Deferral
Commitment made by an Executive or a Fee Deferral Commitment made by a Director pursuant to Article
III and for which a Participation Agreement has been submitted by the Executive or Director to the
Committee.

2.11 Deferral Period

     “Deferral Period” means the period during which a Participant has elected to defer a portion
of his Compensation. The Deferral Period shall be a Plan Year.

2.12 Determination Date

     “Determination Date” means the last day of each calendar month.

2.13 Director

     “Director” means a member of the Board.

2.14 Early Retirement Date

     “Early Retirement Date” means the date on which a Participant terminates employment with
Employer, the earlier of the date on or after such Participant’s attainment of age fifty-five (55)
and completion of twenty (20) Years of Service or age sixty-two (62) and completion of ten (10)
Years of Service, but prior to the Participant’s Normal Retirement Date.

2.15 Elective Deferred Compensation

     “Elective Deferred Compensation” means the amount of Compensation or Fees that the Executive
or Director elects to defer pursuant to a Deferral Commitment.

2.16 Executive

     “Executive” means one of a select group of management or highly compensated employees of the
Corporation, as designated by the Committee and approved by the Board for participation in the
Plan.

2.17 Fees

     “Fees” means Board meeting, committee meeting, annual retainer and committee chairmanship
fees.

2.18 Financial Hardship

     “Financial Hardship” means a severe financial hardship to the Participant resulting from a
sudden and unexpected illness or accident of the Participant or of a dependent of the Participant,
loss of the Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.
Financial Hardship shall be determined by the

PAGE 3 - DEFERRED COMPENSATION PLAN

 

 

Committee on the basis of information supplied by the
Participant in accordance with the standards set forth by the Committee.

2.19 Interest

     “Interest” means the monthly equivalent of an annual yield that is two (2) percentage points
higher than the annual yield of the Moody’s Average Corporate Bond Yield Index for the preceding
month, as published by Moody’s Investor Service, Inc. (or any successor thereto), or, if such index
is no longer published, a substantially similar index selected by the Board. At no time shall the Interest Rate be
less than six percent (6%) annually.

2.20 Normal Retirement Date

     “Normal Retirement Date” means the date on which a Participant terminates employment with
Employer on or after such Participant’s attainment of age sixty-five (65).

2.21 Participant

     “Participant” means an Executive or Director who has elected to defer Compensation or Fees
during any Deferral Period.

2.22 Participation Agreement

     “Participation Agreement” means the agreement submitted by an Executive or Director to the
Committee prior to the beginning of the Deferral Period, with respect to one (1) or more Deferral
Commitments made for such Deferral Period.

2.23 Plan

     “Plan” means this Deferred Compensation Plan as amended from time to time.

2.24 Plan Benefit

     “Plan Benefit” means:

     (a) The Deferred Compensation Account benefit payable to a Participant as calculated
pursuant to Article IV and payable under Sections 5.1 through 5.5; and

     (b) The Supplemental Retirement Benefit payable to an Executive under Section 5.6.

2.25 Plan Year

          “Plan Year” means the fiscal year of the Corporation.

PAGE 4 - DEFERRED COMPENSATION PLAN

 

 

2.26 Retirement

     “Retirement” means:

     (a) For an Executive, termination from service on or after the Early Retirement Date or
Normal Retirement Date. The Committee, in its sole discretion, may deem any separation from
service as a Retirement.

     (b) For a Director, termination from service on the Board at or after age seventy (70).

2.27 Retirement Plan

     “Retirement Plan” means the Penford Corporation Retirement Plan effective March 1, 1984 as
amended from time to time.

2.28 Termination

     Termination means:

     (a) For an Executive, leaving employment with the Corporation prior to Retirement.

     (b) For a Director, leaving the Board prior to Retirement.

ARTICLE III—ELIGIBILITY AND DEFERRAL COMMITMENTS

3.1 Eligibility and Participation

     (a) Eligibility. The Committee shall specify the name of each Executive who shall be
initially entitled to participate in the Plan as of the next succeeding Plan Year. These
names shall be submitted to the Board for approval. Once designated eligible, an Executive
may participate in the Plan each year without further approval until such time, if any, that
the Committee determines that the Executive’s employment status no longer deserves reward
through participation in the Plan. Notwithstanding that determination, no account shall be
paid out until Retirement or Termination. All Directors are eligible to participate each
year.

     (b) Participation. An eligible individual may elect to participate in the Plan with
respect to any Deferral Period by submitting a Participation Agreement to the Committee by
the thirtieth (30th) day of the month immediately preceding the beginning of the
Deferral Period.

     (c) Part-Year Participation. When an individual first becomes eligible to participate
during a Deferral Period, a Participation Agreement may be submitted to the Committee within
thirty (30) days following notification of the individual of eligibility to participate,
which will be effective only with regard to Compensation earned following such submission.

3.2 Deferral Election

     (a) Election by Executive. Prior to September 1, 2001, an Executive could elect to
defer receipt of a certain whole percentage or flat dollar amount, up to fifty percent
(50%), of the Base

PAGE 5 - DEFERRED COMPENSATION PLAN

 

 

Annual Salary and a certain whole percentage or flat dollar amount, up to
one hundred percent (100%), of any Bonus payable to him or her as an employee of the
Corporation. Beginning September 1, 2001, an Executive may elect to defer receipt of a
certain whole percentage or flat dollar amount, up to twenty-five percent (25%), of the Base
Annual Salary and a certain whole percentage or flat dollar amount, up to fifty percent
(50%), of any Bonus payable to him or her as an employee of the Corporation for the next
Plan Year; provided, however, that any such election to defer shall apply only with respect
to Base Annual Salary or any Bonus payable to the Executive by the Corporation prior to the
Executive’s termination of employment for any reason.

     (b) Election by Director. A Director may elect to defer receipt of a certain whole
percentage or flat dollar amount, up to one hundred percent (100%), of Fees for the next
Plan Year.

     (c) Minimum Deferral. Total deferrals by a Participant in a year must be fifteen
hundred dollars ($1,500) or more. In any partial first year of participation, no minimum
deferral shall be required.

3.3 Modification of Deferral Commitment

     Deferral Commitments shall be irrevocable except that the Committee may, in its sole
discretion, reduce the amount to be deferred or waive the remainder of the Deferral Commitment upon
a finding that the Participant has suffered a Financial Hardship. A finding of Financial Hardship
shall not limit a Participant’s ability to participate in succeeding Deferral Periods. In the event
a Participant becomes disabled under the Penford Long-Term Disability Plan, deferrals will be
immediately suspended.

ARTICLE IV—DEFERRED COMPENSATION ACCOUNT

4.1 Account

     The Corporation shall establish on its books a separate account for each Participant who
elects to defer Compensation under the Plan, and shall credit to the account of each Participant
the Elective Deferred Compensation. The credit shall be entered on the Corporation’s books of
account at the time that Compensation or Fees not deferred are paid to the Participant. Any
withholding of taxes or other amounts with respect to Deferred Compensation that is required by
state, federal, or local law shall be withheld from the Participant’s corresponding nondeferred
compensation to the maximum extent possible and the remaining amount shall reduce the amount
credited to the Participant’s Account.

4.2 Interest; Determination of Accounts

     Each Participant’s Account as of each Determination Date shall consist of the balance of the
Participant’s Account as of the immediately preceding Determination Date, plus the Participant’s
Elective Deferred Compensation credited and any Interest earned, minus the amount of any
distributions made, since the immediately preceding Determination Date. Interest earned shall be
calculated as of each Determination Date based upon the average daily balance of the Account since
the preceding Determination Date and shall be credited to the Participant’s Account at that time.

PAGE 6 - DEFERRED COMPENSATION PLAN

 

 

4.3 Statement of Account

     A report shall be issued by the Corporation to each Participant setting forth his or her
Account balance under the Plan as of the immediately preceding Determination Date as soon as
practicable after the close of each Plan Year or such other time as the Committee deems
appropriate.

ARTICLE V—PLAN BENEFITS

5.1 Plan Benefit

     The Corporation shall pay Plan Benefits pursuant to this Article V equal to the Participant’s
Account to each Participant who terminates employment for any reason.

     (a) Early Withdrawals. A Participant’s Account may be distributed to the Participant
before Termination of employment or service on the Board as follows:

     (i) Early Withdrawals. A Participant may elect in a Participation Agreement to
withdraw all or any portion of the amount deferred by that Participation Agreement as
of a
date specified in the election. For elections made for a Plan Year prior to September
1, 1996, such withdrawal shall be made for the purchase of a primary residence or the
costs of providing a secondary education to a dependent. If at the time the withdrawal
is scheduled said reason does not exist, the early withdrawal election shall be null
and void. For elections made for a Plan Year beginning September 1, 1996 or thereafter,
such withdrawal shall be made for any reason, which reason need not be disclosed by the
Participant. Such date shall not be sooner than seven (7) years after the date the
Deferral Period commences. The amount withdrawn shall not exceed the amount of
Compensation deferred, without Interest.

     (ii) Form of Payment. Withdrawals shall be paid in a lump sum and shall be
charged to the Participant’s Account as a distribution.

     (b) Retirement and Termination Benefits. If an Executive terminates employment with
Corporation, or if a Director terminates service on the Board, for any reason except death,
Corporation shall pay the Participant benefits equal to the balance in the Account.

     (c) Death Benefit.

     (i) Pretermination. If a Participant dies while employed by Corporation or
serving on the Board, Corporation shall pay to the Participant’s Beneficiary benefits
equal to the balance in the Account. The benefit shall be paid in the form elected by
the Participant in the form of payment designation, or, if no such election is on file,
in a lump sum.

     (ii) Posttermination. If a Participant dies following the Participant’s
Retirement or Termination of employment with Corporation or service on the Board,
Corporation shall pay the Participant’s Beneficiary benefits equal to the balance, if
any, in the Account. Payments shall continue to be made in the same form as those made
to the Participant prior to death.

PAGE 7 - DEFERRED COMPENSATION PLAN

 

 

5.2 Commencement of Payments

     (a) Deferred Compensation Account. Payment of any Deferred Compensation Account
benefits under the Plan shall be made as of, or commence as of, the earlier of:

     (i) A date elected by the Participant as specified in the applicable Participation
Agreement between the Corporation and the Participant; or

     (ii) The settlement date as provided in Section 5.9.

     (b) Supplemental Retirement Benefits. Supplemental Retirement Benefits under Section
5.6 shall be made as of, or commence as of, the earliest date for which a monthly payment is
payable to or for the Participant under the Retirement Plan.

5.3 Form of Benefit Payment

     At the time the Participant elects to defer Compensation, the Participant shall also elect the
form of benefit payment. The Participant may elect a different form of benefit payment for payments
made due to either Retirement, Termination prior to Retirement or Termination within twenty-four
(24) months following a Change in Control.

     (a) Alternative Forms. Alternative forms of benefit payment are:

     (i) In equal annual installments, the number of such installments not to exceed
ten (10), as designated by the Participant;

     (ii) In a single sum payment; or

     (iii) In a combination of partial lump sum payment, and balance in installments,
not to exceed ten (10) years.

     Such election shall be irrevocable.

     (b) Small Accounts. If the Participant’s Account is under five thousand dollars
($5,000) on the valuation date, the benefit shall be paid in a lump sum.

     (c) Installments. If payment is by installments, the amount of the installments shall
be redetermined each year on the twelve (12) month anniversary of the valuation date based
upon the remaining Account balance, the remaining number of installments and Interest equal
to the rate in effect as of the preceding month.

5.4 Hardship Distributions

     Notwithstanding the foregoing provisions of this Article V, payment from the Participant’s
Deferred Compensation Account may be made to the Participant or a Beneficiary following the death
of a Participant in the sole discretion of the Committee by reason of Financial Hardship. A payment
based upon Financial Hardship of the Participant may not exceed the amount required to meet the
immediate financial need created by the hardship and not reasonably available from other sources of
the Participant.

PAGE 8 - DEFERRED COMPENSATION PLAN

 

 

Any resumption of the Participant’s deferrals under the Plan shall be made only at
the election of the Participant in accordance with Article III herein.

PAGE 9 - DEFERRED COMPENSATION PLAN

 

 

5.5 Accelerated Distribution

     Notwithstanding any other provision of the Plan, within twenty-four (24) months following a
Change in Control or at any time following Retirement or Termination of employment or service on
the Board, a Participant shall be entitled to receive, upon written request to the Committee, a
lump sum distribution equal to ninety percent (90%) of the vested Account balance as of the
Determination Date immediately preceding the date on which the Committee receives the written
request. The remaining balance of ten percent (10%) shall be forfeited by the Participant. A
Participant who receives a distribution under this Section 5.5 shall not participate in the Plan
for twelve (12) calendar months following the election. The amount payable under this Section shall
be paid in a lump sum within sixty-five (65) days following the receipt of the notice by the
Committee from the Participant. Following the death of the Participant, the designated Beneficiary
may, at any time, request an accelerated distribution under this Section.

5.6 Supplemental Retirement Benefit

     Employer shall restore an amount equal to any reduction in a Participant’s Retirement Plan or
Social Security benefits because of deferrals under this Plan to the extent the Retirement Plan or
Social Security benefits are not restored by any other Employer-provided plan or agreement.

5.7 Golden Parachute Payments

     If any benefit payable under this Plan would constitute an excess parachute payment under
Section 280G of the Internal Revenue Code of 1986, or any successor provision, the amount payable
shall be increased to the extent necessary to result in the Participant’s receiving the same net
amount after all applicable taxes have been paid as the net after-tax amount the Participant would
have received if the benefit had not been subject to additional taxes due to being treated as an
excess parachute payment.

5.8 Withholding on Benefit Payments

     The Corporation shall withhold from payments made hereunder any taxes required to be withheld
from such payments under federal, state or local law. However, a Beneficiary may elect not to have
withholding for federal income tax purposes pursuant to Section 3405(a)(2) of the Internal Revenue
Code, or any successor provision thereto.

5.9 Valuation and Settlement

     The last day of the month following the month of Retirement, Termination or death shall be the
valuation date. If a lump sum is elected, the amount of the lump sum shall be based on the value of
the Participant’s Account on the valuation date. If a combination of lump sum and installments is
elected, the lump sum will be paid on the settlement date and installments will commence on the
twelve (12) month anniversary of the valuation date. If installment payments are elected, the
amount of the installment payments shall be based on the value of the Participant’s Account on the
valuation date. The date on which installment payments commence shall be the settlement date. The
settlement date shall be no more than thirty-five (35) days after the valuation date. All payments
shall be made as of the first day of the month.

5.10 Payment to Guardian

     If a Plan benefit is payable to a minor or a person declared incompetent or to a person
incapable of handling the disposition of property, the Committee may direct payment of such Plan
benefit to the

PAGE 10 - DEFERRED COMPENSATION PLAN

 

 

guardian, legal representative or person having the care and custody of such minor,
incompetent or person. The
Committee may require proof of incompetency, minority, incapacity or guardianship as it may deem
appropriate prior to distribution of the Plan benefit. Such distribution shall completely discharge
the Committee and the Corporation from all liability with respect to such benefit.

ARTICLE VI—BENEFICIARY DESIGNATION

6.1 Beneficiary Designation

     Each Participant shall have the right, at any time, to designate any person or persons or an
entity as his Beneficiary or Beneficiaries (both primary as well as secondary) to whom benefits
under this Plan shall be paid in the event of a Participant’s death prior to complete distribution
of the benefits due under the Plan. Each Beneficiary Designation shall be in written form
prescribed by the Committee and will be effective only when filed with the Committee during the
Participant’s lifetime. Designation by a married Participant of a Beneficiary other than the
Participant’s spouse shall not be effective without spousal execution of a written consent
acknowledging the effect of the designation unless such consent cannot be obtained because the
spouse cannot be located.

6.2 Changes to Designation

     Any Beneficiary designation may be changed by the Participant without the consent of the
previously named Beneficiary by the filing of a new designation with the Committee subject to the
spousal consent required in Section 6.1 above. The filing of a new Beneficiary designation shall
cancel all designations previously filed, unless the designation clearly indicates that such
designation controls the account attributable to deferrals made during the election period in which
the designation is filed.

6.3 Change in Marital Status

     If the Participant’s marital status changes after the Participant has designated a
Beneficiary, the following shall apply:

     (a) If the Participant is married at death but was unmarried when the designation was
made, the designation shall be void unless the spouse has consented to it in the manner
prescribed above.

     (b) If the Participant is unmarried at death but was married when the designation was
made:

     (i) The designation shall be void if the spouse was named as Beneficiary.

     (ii) The designation shall remain valid if a nonspouse Beneficiary was named.

     (c) If the Participant was married when the designation was made and is married to a
different spouse at death, the designation shall be void unless the new spouse has consented
to it in the manner prescribed above.

PAGE 11 - DEFERRED COMPENSATION PLAN

 

 

6.4 No Beneficiary Designation

     If any Participant fails to designate a Beneficiary in the manner provided above, if the
designation is void, or if the Beneficiary designated by a deceased Participant dies before the
Participant or before
complete distribution of the Participant’s benefits, the Participant’s Beneficiary shall be the
person in the first of the following classes in which there is a survivor:

     (a) The Participant’s surviving spouse;

     (b) The Participant’s children in equal shares, except that if any of the children
predecease the Participant but leave issue surviving, then such issue shall take by right of
representation the share the parent would have taken if living;

     (c) The Participant’s estate.

6.5 Effect of Payment

     The payment to the deemed Beneficiary shall completely discharge the Corporation’s obligations
under this Plan.

ARTICLE VII—ADMINISTRATION

7.1 Committee; Duties

     This Plan shall be administered by a committee of three (3) persons appointed by the Chief
Executive Officer of the Company. The Committee shall have such powers and duties as may be
necessary to discharge its responsibilities. These powers shall include, but not be limited to,
interpretation of the Plan provisions, determination of amounts due to any Participant, the rights
of any Participant or Beneficiary under this Plan, the right to require any necessary information
from any Participant, determine the amounts credited to Participant’s Account and Interest earned,
and any other activities deemed necessary or helpful.

7.2 Agents

     The Committee may, from time to time, employ other agents and delegate to them such
administrative duties as it sees fit, and may from time to time consult with counsel who may be
counsel to the Corporation.

7.3 Binding Effect of Decisions

     The decision or action of the Committee in respect of any question arising out of or in
connection with the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon all persons having
any interest in the Plan.

7.4 Indemnity of Committee

     To the extent permitted by applicable law, the Corporation shall indemnify, hold harmless and
defend the members of the Committee against any and all claims, loss, damage, expense or liability
aris-

PAGE 12 - DEFERRED COMPENSATION PLAN

 

 

ing from any action or failure to act with respect to this Plan, on account of such member’s
service on the Committee, except in the case of gross negligence or willful misconduct.

ARTICLE VIII—CLAIMS PROCEDURE

8.1 Claim

     Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or
requesting information under the Plan shall present the request in writing to the Committee, which
shall respond in writing as soon as practicable.

8.2 Denial of Claim

     If the claim or request is denied, the written notice of denial shall state:

     (a) The reasons for denial, with specific reference to the Plan provisions on which the
denial is based,

     (b) A description of any additional material or information required and an explanation
of why it is necessary, and

     (c) An explanation of the Plan’s claims review procedure.

8.3 Review of Claim

     Any person whose claim or request is denied or who has not received a response within thirty
(30) days may request review by notice given in writing to the Committee. The claim or request
shall be reviewed by the Committee who may, but shall not be required to, grant the claimant a
hearing. On review, the claimant may have representation, examine pertinent documents, and submit
issues and comments in writing.

8.4 Final Decision

     The decision on review shall normally be made within sixty (60) days. If an extension of time
is required for a hearing or other special circumstances, the claimant shall be notified and the
time limit shall be one hundred twenty (120) days. The decision shall be in writing and shall state
the reasons and the relevant Plan provisions. All decisions on review shall be final and bind all
parties concerned.

ARTICLE IX—AMENDMENT AND TERMINATION OF THE PLAN

9.1 Amendment

     The Board may at any time amend the Plan in whole or in part provided, however, that no
amendment shall be effective to decrease or restrict the amount credited to any Account maintained
under the Plan as of the date of amendment. Changes in the definition of “Interest” shall be
subject to the following restrictions:

PAGE 13 - DEFERRED COMPENSATION PLAN

 

 

     (a) Notice. A change shall not become effective before the first day of the Plan Year
which follows the adoption of the amendment and at least thirty (30) days’ written notice of
the amendment to the Executive.

     (b) Change in Control. Any change in the definition of Interest after a Change in
Control shall apply only to those amounts credited to the Executive’s Account after the
Change in Control.

9.2 Corporation’s Right to Terminate

     The Board may at any time partially or completely terminate the Plan if, in its judgment, the
tax, accounting, or other effects of the continuance of the Plan, or potential payments thereunder,
would not be in the best interests of the Corporation.

     (a) Partial Termination. The Board may partially terminate the Plan by instructing the
Committee not to accept any additional Deferral Commitments. In the event of such a partial
termination, the Plan shall continue to operate and be effective with regard to Deferral
Commitments entered into prior to the effective date of such partial termination.

     (b) Complete Termination. The Board may completely terminate the Plan by instructing
the Committee not to accept any additional Deferral Commitments, and terminate all ongoing
Deferral Commitments. In the event of such a complete termination, the Plan shall cease to
operate and, prior to a Change in Control, the Committee shall pay out to each Participant
the balance in his Account in equal annual installments amortized over the period listed
below based on the Account balance at the time of such complete termination:

	 	 	 
	Appropriate Account Balance	 	Payout Period
	 
	Less than $10,000
	 	2 Years
	$10,000 but less than $50,000
	 	5 Years
	More than $50,000
	 	  10 Years
	 

          Interest earned on the unpaid balance in the Participant’s Account shall be the
applicable Interest rate on the Determination Date immediately preceding the effective date
of such complete termination.

          Upon Plan termination prior to a Change in Control, any Participant who is retired and
receiving installment payments will receive the account balance in a lump sum.

          After a Change in Control, the benefits shall be paid to each Participant in the form
elected by each Participant.

PAGE 14 - DEFERRED COMPENSATION PLAN

 

 

ARTICLE X—MISCELLANEOUS

10.1 Unfunded Plan

     This Plan is intended to be an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of “management or highly-compensated employees” within the
meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3 and 4 of Title I of
ERISA. Accordingly, the Plan shall terminate and no further benefits shall accrue hereunder in the
event it is determined by a court of competent jurisdiction or by an opinion of counsel that the
Plan constitutes an employee pension benefit plan within the meaning of Section 3(2) of ERISA which
is not so exempt. In the event of a termination under this Section 10.1, all ongoing Deferral
Commitments shall terminate, no additional Deferral Commitments will be accepted by the Committee,
and the amount of each Participant’s Account balance shall be distributed to such Participant at
such time and in such manner as the Committee, in its sole discretion, determines.

10.2 Unsecured General Creditor

     Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interest or claims in any property or assets of the Corporation, nor shall they
be Beneficiaries of, or have any rights, claims or interests in any life insurance policies,
annuity contracts or the proceeds therefrom owned or which may be acquired by the Corporation.
Except as may be provided in Section 10.3, such policies, annuity contracts or other assets of the
Corporation shall not be held under any trust for the benefit of the Participants, their
Beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Corporation under this Plan. Any and all of the Corporation’s
assets and policies shall be, and remain, the general, unpledged, unrestricted assets of the
Corporation. The Corporation’s obligation under the Plan shall be that of an unfunded and unsecured
promise to pay money in the future.

10.3 Trust Fund

     The Corporation shall be responsible for the payment of all benefits provided under the Plan.
At its discretion, the Corporation may establish one (1) or more trusts, with such trustees as the
Board may approve, for the purpose of providing for the payment of such benefits. Although such
trust or trusts may be irrevocable, the assets thereof shall be subject to the claims of all the
Corporation’s creditors in the event of insolvency. To the extent any benefits provided under the
Plan are actually paid from any such trust, the Corporation shall have no further obligation with
respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and
shall be paid by, the Corporation.

10.4 Nonassignability

     Neither a Participant nor any other person shall have the right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and nontransferable. No part of
the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency.

PAGE 15 - DEFERRED COMPENSATION PLAN

 

 

10.5 Not a Contract of Employment

     The terms and conditions of this Plan shall not be deemed to constitute a contract of
employment between the Corporation and the Participant, and the Participant (or the Participant’s
Beneficiary) shall have no rights against the Corporation except as may otherwise be specifically
provided herein. Moreover, nothing in this Plan shall be deemed to give a Participant the right to
be retained in the service of the Corporation or to interfere with the right of the Corporation to
discipline or discharge the Participant at any time.

10.6 Protective Provisions

     A Participant will cooperate with the Corporation by furnishing any and all information
requested by the Corporation, in order to facilitate the payment of benefits hereunder, and by
taking such physical examinations as the Corporation may deem necessary and taking such other
actions as may be requested by the Corporation.

10.7 Governing Law

     The provisions of this Plan shall be construed and interpreted according to the laws of the
State of Washington, except as preempted by federal law.

10.8 Validity

     If any provision of this Plan shall be held illegal or invalid for any reason, said illegality
or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provisions had never been inserted herein.

10.9 Notice

     Any notice or filing required or permitted to be given to the Committee under the Plan shall
be sufficient if in writing and hand delivered, or sent by registered or certified mail, to any
member of the Committee or the Secretary of the Corporation. Such notice shall be deemed given as
of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on
the receipt for registration or certification. Mailed notice to the Committee shall be directed to
the Corporation’s address. Mailed notice to a Participant or Beneficiary shall be directed to the
individual’s last known address in the Corporation’s records.

PAGE 16 - DEFERRED COMPENSATION PLAN

 

 

10.10 Successors

     The provisions of this Plan shall bind and inure to the benefit of the Corporation and its
successors and assigns. The term successors as used herein shall include any corporate or other
business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Corporation, and successors of any such
corporation or other business entity.

	 	 	 	 	 	 	 
	 

	 	 	 	PENFORD CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

President and CEO
	 	 
	 
	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 
	 

	 	 	 	 

	 	 

PAGE 17 - DEFERRED COMPENSATION PLAN

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