Document:

<PAGE>
                                                                    EXHIBIT 10.7

Effective Date: April 20, 2006

Mr. James Christmas

Re: Amendment No. 3 to Employment Agreement

Dear Mr. Christmas:

When countersigned by you, this letter will serve as an amendment (referred to
here as "AMENDMENT NO. 3") to your existing employment agreement with KCS
Energy, Inc. (the "COMPANY") dated December 1, 2001 (the "ORIGINAL AGREEMENT").

     1. "CHANGE IN CONTROL" PROVISION. Section 11.1 of the Original Agreement is
amended by deleting the words "after the date of this Agreement and on or before
August 31, 2006 (but not thereafter)" and substituting therefor the words "after
the date of this Agreement and on or before August 31, 2008 (but not
thereafter)".

     2. ORIGINAL AGREEMENT RATIFIED. In all other respects, the Original
Agreement remains in effect, and is ratified by you and by the Company.

                                      * * *

Please sign below and return a signed copy to the Company to confirm your
agreement with this Amendment No. 3.

Very truly yours,

KCS ENERGY, INC.

By: /s/ William N. Hahne
    ---------------------------------
Name: William N. Hahne
Title: President and Chief Operating
       Officer

Accepted and agreed to:

/s/ James W. Christmas
-------------------------------------
James W. Christmas<PAGE>
                                                                    Exhibit 10.8

Effective Date: April 20, 2006

Mr. William N. Hahne

Re: Amendment No. 3 to Employment Agreement

Dear Mr. Hahne:

When countersigned by you, this letter will serve as an amendment (referred to
here as "AMENDMENT NO. 3") to your existing employment agreement with KCS
Energy, Inc. (the "COMPANY") dated December 1, 2001 (the "ORIGINAL AGREEMENT").

     1. "CHANGE IN CONTROL" PROVISION. Section 11.1 of the Original Agreement is
amended by deleting the words "after the date of this Agreement and on or before
August 31, 2006 (but not thereafter)" and substituting therefor the words "after
the date of this Agreement and on or before August 31, 2008 (but not
thereafter)".

     2. ORIGINAL AGREEMENT RATIFIED. In all other respects, the Original
Agreement remains in effect, and is ratified by you and by the Company.

                                      * * *

Please sign below and return a signed copy to the Company to confirm your
agreement with this Amendment No. 3.

Very truly yours,

KCS ENERGY, INC.

By: /s/ James W. Christmas
    ---------------------------------------
Name: James W. Christmas
Title: Chairman and Chief Executive Officer

Accepted and agreed to:

/s/ William N. Hahne
-------------------------------------------
William N. Hahne<PAGE>
                                                                    Exhibit 10.9

Effective Date: April 20, 2006

Mr. Harry Lee Stout

Re: Amendment No. 3 to Employment Agreement

Dear Mr. Stout:

When countersigned by you, this letter will serve as an amendment (referred to
here as "AMENDMENT NO. 3") to your existing employment agreement with KCS
Energy, Inc. (the "COMPANY") dated December 1, 2001 (the "ORIGINAL AGREEMENT").

     1. "CHANGE IN CONTROL" PROVISION. Section 11.1 of the Original Agreement is
amended by deleting the words "after the date of this Agreement and on or before
August 31, 2006 (but not thereafter)" and substituting therefor the words "after
the date of this Agreement and on or before August 31, 2008 (but not
thereafter)".

     2. ORIGINAL AGREEMENT RATIFIED. In all other respects, the Original
Agreement remains in effect, and is ratified by you and by the Company.

                                      * * *

Please sign below and return a signed copy to the Company to confirm your
agreement with this Amendment No. 3.

Very truly yours,

KCS ENERGY, INC.

By: /s/ James W. Christmas
    ---------------------------------------
Name: James W. Christmas
Title: Chairman and Chief Executive Officer

Accepted and agreed to:

/s/ Harry Lee Stout
-------------------------------------------
Harry Lee Stout<PAGE>
                                                                   Exhibit 10.10

KCS ENERGY, INC.                                              PHONE 713-877-8006
5555 San Felipe                                                 FAX 713-964-4808
Suite 1200                                                     www.kcsenergy.com
Houston, Texas 77056

Effective Date: April 9, 2006

                                                                      (KCS LOGO)

Mr. Joseph T. Leary

Re: Amendment No. 3 to Change in Control Agreement

Dear Joseph:

When countersigned by you, this letter will serve as an amendment (referred to
here as "AMENDMENT NO. 3") to your existing change in control agreement with KCS
Energy, Inc. (the "COMPANY") dated May 27, 2003, as amended (the "ORIGINAL
AGREEMENT").

     1.   EFFECTIVENESS OF AGREEMENT PROVISION. Section 5 of the Original
          Agreement is amended by deleting the words "August 1, 2006" and
          substituting therefor the words "August 1, 2008".

     2.   ORIGINAL AGREEMENT RATIFIED. In all other respects, the Original
          Agreement remains in effect, and is ratified by you and by the
          Company.

                                      * * *

Please sign below and return a signed copy to the Company to confirm your
agreement with this Amendment No. 3.

Very truly yours,

KCS ENERGY, INC.

By: /s/ James W. Christmas
    ------------------------------------
    James W. Christmas
    Chairman and Chief Executive Officer

Accepted and agreed to:

/s/ Joseph T. Leary
----------------------------------------
Joseph T. Leary<PAGE>
                                                                   Exhibit 10.11

KCS ENERGY, INC.                                              PHONE 713-877-8006
5555 San Felipe                                                 FAX 713-964-4808
Suite 1200                                                     www.kcsenergy.com
Houston, Texas 77056

Effective Date: April 9, 2006

                                                                      (KCS LOGO)

Mr. Frederick Dwyer

Re: Amendment No. 3 to Change in Control Agreement

Dear Frederick:

When countersigned by you, this letter will serve as an amendment (referred to
here as "AMENDMENT NO. 3") to your existing change in control agreement with KCS
Energy, Inc. (the "COMPANY") dated August 1, 2004, as amended (the "ORIGINAL
AGREEMENT").

     1.   EFFECTIVENESS OF AGREEMENT PROVISION. Section 5 of the Original
          Agreement is amended by deleting the words "August 1, 2006" and
          substituting therefor the words "August 1, 2008".

     2.   RETENTION BONUS. Section 7.4 will be deleted in its entirety.

     3.   ORIGINAL AGREEMENT RATIFIED. In all other respects, the Original
          Agreement remains in effect, and is ratified by you and by the
          Company.

                                      * * *

Please sign below and return a signed copy to the Company to confirm your
agreement with this Amendment No. 3.

Very truly yours,

KCS ENERGY, INC.

By: /s/ James W. Christmas
    ------------------------------------
    James W. Christmas
    Chairman and Chief Executive Officer

Accepted and agreed to:

/s/ Frederick Dwyer
----------------------------------------
Frederick Dwyerexv10w59

 

Exhibit 10.59

RECORDING REQUESTED

BY AND WHEN

RECORDED RETURN TO:

Alan J. Robin, Esq.

Shartsis Friese LLP

One Maritime Plaza, 18th Floor

San Francisco, CA 94111

DEED OF TRUST, SECURITY AGREEMENT AND

FIXTURE FILING

BY

HINES REIT 1515 S STREET LP,

a Delaware limited partnership

as Trustor

TO

FIRST AMERICAN TITLE INSURANCE COMPANY,

as Trustee

for the benefit of

METROPOLITAN LIFE INSURANCE COMPANY,

a New York corporation,

AND

METLIFE BANK, N.A.,

a national banking association

collectively, as Beneficiary

April 18, 2006

 

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

DEFINED TERMS

Execution Date: April 18, 2006

 

Note: Two promissory notes made by Trustor, each dated as of the Execution Date, (i) one
to the order of Metropolitan Life Insurance Company, a New York Corporation (the
“Metropolitan Note”) in the principal amount of Twenty Million and No/100ths Dollars
($20,000,000); and (ii) one to the order of MetLife Bank, N.A., a national banking
association (“MetLife Bank Note”) in the principal amount of Twenty-Five Million and
No/100ths Dollars ($25,000,000) (the Metropolitan Note and the MetLife Bank Note are
herein collectively referred to as the “Note”)

	 	 	 	 	 
	 
	Beneficiary & Address:	 	Collectively, Metropolitan Life Insurance Company,
	 	 	a New York corporation (“MetLife”), and
	 	 	MetLife Bank, N.A., a national banking
association (“MetLife Bank”)
	 	 	c/o Metropolitan Life Insurance Company
	 	 	10 Park Avenue
	 	 	Morristown, New Jersey 07962
	 

	 	Attn:
	 	Senior Vice President
	 

	 	 	 	Real Estate Investments
	 
	 	 	 	 
	 	 	with a copy to:
	 
	 	 	 	 
	 	 	Metropolitan Life Insurance Company
	 	 	400 South El Camino Real 8th Floor
	 	 	San Mateo, California 94402
	 	 	Attn: Vice President
	 
	 	 	 	 
	 
	Trustor & Address:	 	c/o Hines Interests Limited Partnership
	 	 	2800 Post Oak Blvd.
	 	 	Suite 5000
	 	 	Houston, Texas 77056
	 	 	Attention: Charles N. Hazen
	 
	 	 	 	 
	 	 	and with a copy to:
	 
	 	 	 	 
	 	 	Hines REIT 1515 S Street LP
	 	 	c/o Hines Interests Limited Partnership
	 	 	101 California Street, Suite 1000
	 	 	San Francisco, California 94111
	 	 	Attn: James C. Buie

1

 

	 	 	 	 	 
	 
	 	 	 	 
	 	 	and with a copy to:
	 
	 	 	 	 
	 	 	Baker Botts L.L.P.
	 	 	2001 Ross Avenue
	 	 	Suite 600
	 	 	Dallas, Texas 75201-2980
	 	 	Attn: Joel M. Overton, Jr.
	 
	 	 	 	 
	 
	Trustee & Address:	 	First American Title Insurance Company
	 	 	899 Pacific Street
	 	 	San Luis Obispo, CA 93401
	 	 	Attention: Lisa Blasquez
	 
	 	 	 	 
	 
	Liable Parties & Address:	 	Hines REIT Properties, L.P.
	 	 	c/o Hines Interests Limited Partnership
	 	 	2800 Post Oak Blvd.
	 	 	Suite 5000
	 	 	Houston, Texas 77056
	 	 	Attention: Charles N. Hazen

 

County and State in which the Property is located: Sacramento County, State of California

 

Use: office, retail and parking

 

Insurance:

Full Replacement Cost: $54,524,833 (including personal property)

Boiler and Machinery: $13,631,221

Business Income: In an amount sufficient to recover one (1) years’ Business Income (as
defined in Section 3.1(1)(3) hereof)

Commercial General Liability: Required Liability Limits: $25,000,000

Address for Insurance Notification:

     Metropolitan Life Insurance Company

     One MetLife Plaza

     27-01 Queens Plaza North

     Long Island City, New York, New York 11101

     Attn: Risk Management Unit, Area: 7C

 

Loan Documents: The Note, this Deed of Trust, the Reserve Agreement, the Escrow
Agreement, and any other documents executed by Trustor and related to the Note and/or
this Deed of Trust and all renewals, amendments, modifications, restatements and
extensions of these documents (except

2

 

the Indemnity Agreement and the Guaranty). Reserve
Agreement: Reserve Agreement dated as of the Execution Date and executed by Trustor and
Beneficiary. Escrow Agreement: the Escrow Agreement dated as of the Execution Date and
executed by Trustor and Beneficiary. Indemnity Agreement: Unsecured Indemnity Agreement
dated as of the Execution Date and executed by Trustor in favor of Beneficiary.
Guaranty: Guaranty dated as of the Execution Date and executed by Liable Party for the
benefit of Beneficiary. The Indemnity Agreement and the Guaranty are not Loan Documents
and shall survive repayment of the Loan or other termination of the Loan Documents.

     This DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is entered
into as of the Execution Date by Trustor to Trustee for the benefit of Beneficiary with reference
to the following Recitals:

RECITALS

     A. This Deed of Trust secures: (1) the payment of the indebtedness evidenced by the Note with
interest at the rates set forth in the Note, together with all renewals, modifications,
consolidations and extensions of the Note, all additional advances or fundings made by Beneficiary
pursuant to the terms of or as permitted by the Loan Documents, and any other amounts required to
be paid by Trustor under any of the Loan Documents, (collectively, the “Secured Indebtedness”, and
sometimes referred to as the “Loan”) and (2) the full performance by Trustor of all of the terms,
covenants and obligations set forth in any of the Loan Documents.

     B. Trustor makes the following covenants and agreements for the benefit of Beneficiary and
Trustee.

     NOW, THEREFORE, IN CONSIDERATION of the Recitals and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Trustor agrees as follows:

ARTICLE I

GRANT OF SECURITY

     Section 1.1 REAL PROPERTY GRANT. Trustor irrevocably mortgages, sells, transfers,
grants, conveys, assigns and warrants to Beneficiary, its successors and assigns, in trust, with
power of sale and right of entry and possession, all of Trustor’s present and future estate, right,
title and interest in and to the following which are collectively referred to as the “Real
Property”:

          (1) that certain real property located in the County and State which is more
particularly described in Exhibit “A” attached to this Deed of Trust or any portion
of the real property; all easements, rights-of-way, gaps, strips and gores of land
benefiting or forming a part of said real property; streets and alleys abutting or in any
way benefiting said real property; sewers and water rights in any way benefiting said real
property; privileges, licenses, tenements, and appurtenances appertaining to the real
property, and the reversion(s), remainder(s), and claims of Trustor with respect to these

3

 

items, and the benefits of any existing or future conditions, covenants and
restrictions affecting the real property (collectively, the “Land”);

          (2) all things now or hereafter owned by Trustor and affixed to or placed on the Land,
including all buildings, structures and improvements, all fixtures and all machinery,
elevators, boilers, building service equipment (including, without limitation, all equipment
for the generation or distribution of air, water, heat, electricity, light, fuel or for
ventilating or air conditioning purposes or for sanitary or drainage purposes or for the
removal of dust, refuse or garbage), partitions, and other property now or in the future
owned by Trustor and attached, or installed in or forming a part of the improvements and all
replacements, repairs, additions, or substitutions to these items (collectively, the
“Improvements”);

          (3) all present and future income, rents, revenue, profits, proceeds, accounts
receivables and other benefits from the Land and/or Improvements which Trustor is or may be
entitled to receive and all deposits made with respect to the Land and/or Improvements,
including, but not limited to, any security given to utility companies by Trustor, any
advance payment of real estate taxes or assessments or insurance premiums made by Trustor in
connection with the Land and/or Improvements and all claims or demands relating to such
deposits and other security, including claims for refunds of tax payments or assessments,
and all insurance proceeds payable to Trustor in connection with the Land and/or
Improvements whether or not such insurance coverage is specifically required under the terms
of this Deed of Trust (“Insurance Proceeds”) (all of the items set forth in this paragraph
are referred to collectively as “Rents and Profits”);

          (4) all damages, payments and revenue of every kind that Trustor may be entitled to
receive, from any person owning or acquiring a right to the oil, gas or mineral rights and
reservations of the Land;

          (5) all proceeds and claims arising on account of any damage to, or Condemnation (as
hereinafter defined) of any part of the Land and/or Improvements, and all causes of action
and recoveries for any diminution in the value of the Land and/or Improvements; and

          (6) all licenses, contracts, management agreements, guaranties, warranties, franchise
agreements, permits, or certificates relating to the ownership, use, operation or
maintenance of the Land and/or Improvements.

TO HAVE AND TO HOLD the Real Property, unto Trustee, its successors and assigns, in trust, for the
benefit of Beneficiary, its successors and assigns, forever subject to the terms, covenants and
conditions of this Deed of Trust.

     Section 1.2 PERSONAL PROPERTY GRANT. Trustor irrevocably sells, transfers, grants,
conveys, assigns and warrants to Beneficiary, its successors and assigns, a security interest in
Trustor’s interest in the following personal property which is collectively referred to as
“Personal Property”:

4

 

          (1) any portion of the Real Property which may be personal property, and all other
personal property, whether now existing or acquired in the future which is owned by Trustor
and attached to, appurtenant to, or used in the construction or operation of, or in
connection with, the Real Property;

          (2) all rights to the use of water, including water rights appurtenant to the Real
Property, pumping plants, ditches for irrigation, all water stock or other evidence of
ownership of any part of the Real Property that is owned by Trustor in common with others
and all documents of membership in any owner’s association or similar group;

          (3) all plans and specifications prepared for construction of the Improvements; and all
contracts and agreements of Trustor relating to the plans and specifications or to the
construction of the Improvements;

          (4) all appliances, furniture, furnishings, building materials, supplies, computers and
software, window coverings and floor coverings, lobby furnishings, equipment, machinery,
fixtures, goods, accounts, general intangibles, letters of credit, deposit accounts,
documents, instruments and chattel paper owned by Trustor and used in connection with the
ownership, operation, management and/or leasing of the Real Property, and all substitutions,
replacements of, and additions to, any of the these items;

          (5) all sales agreements, escrow agreements, similar agreements entered into with
respect to the sale of any part of the Real Property, all deposits made in connection
therewith and all net proceeds from any such sales (provided, however, Beneficiary shall
have no rights of approval or consent with respect to any such sales, escrow or other
agreements);

          (6) all proceeds from the voluntary or involuntary disposition or claim respecting any
of the foregoing items (including judgments, condemnation awards or otherwise); and

          (7) all names by which the Land and/or Improvements may be operated or known, and all
rights to carry on business under those names, and all trademarks, trade names, and goodwill
relating to the Land and/or Improvements.

Notwithstanding the foregoing, the term “Personal Property” shall not include any trade fixtures or
other personal property owned by tenants of the Property except to the extent that Trustor as
landlord holds an interest in any such tenant’s trade fixtures or other personal property under any
lease.

     All of the Real Property and the Personal Property are collectively referred to as the
“Property.”

     Section 1.3 CONDITIONS TO GRANT. If Trustor shall pay to Beneficiary the Secured
Indebtedness, at the times and in the manner stipulated in the Loan Documents, then this

5

 

Deed of Trust and all the rights granted by this Deed of Trust shall be released by
Beneficiary in accordance with the laws of the State.

ARTICLE II

TRUSTOR COVENANTS

     Section 2.1 DUE AUTHORIZATION, EXECUTION, AND DELIVERY.

          (a) Trustor represents and warrants that the execution of the Loan Documents and the Indemnity
Agreement have been duly authorized and there is no provision in the organizational documents of
Trustor requiring further consent for such action by any other entity or person.

          (b) Trustor represents and warrants that it is duly organized, validly existing and is in good
standing under the laws of the state of its formation and in the State, that it has all necessary
licenses, authorizations, registrations, permits and/or approvals to own its properties and to
carry on its business as presently conducted.

          (c) Trustor represents and warrants that the execution, delivery and performance of the Loan
Documents will not result in Trustor’s being in default under any provision of its organizational
documents or of any deed of trust, mortgage, lease, credit or other agreement to which it is a
party or which affects it or the Property.

          (d) Trustor represents and warrants that the Loan Documents and the Indemnity Agreement have
been duly authorized, executed and delivered by Trustor and constitute valid and binding
obligations of Trustor which are enforceable in accordance with their terms.

     Section 2.2 PERFORMANCE BY TRUSTOR. Trustor shall pay the Secured Indebtedness to
Beneficiary and shall keep and perform each and every other obligation, covenant and agreement of
the Loan Documents.

     Section 2.3 WARRANTY OF TITLE.

          (a) Trustor warrants that it holds marketable and indefeasible fee simple absolute title to
the Real Property, and that it has the right and is lawfully authorized to sell, convey or encumber
the Property subject only to those property specific exceptions to title contained in Schedule B-1
of the title insurance policy or policies which have been approved by Beneficiary (the “Permitted
Exceptions”). The Property is free from all due and unpaid taxes, assessments and mechanics’ and
materialmen’s liens.

          (b) Trustor further covenants to warrant and forever defend Beneficiary from and against all
persons claiming any interest in the Property, subject, however, to the Permitted Exceptions.

6

 

     Section 2.4 TAXES, LIENS AND OTHER CHARGES.

          (a) Unless otherwise paid to Beneficiary as provided in Section 2.5 or contested by Trustor in
accordance with the provisions hereinafter set forth, Trustor shall pay all real estate and other
taxes and assessments which may be payable, assessed, levied, imposed upon or become a lien on or
against any portion of the Property (all of the foregoing items are collectively referred to as the
“Imposition(s)”). The Impositions shall be paid not later than ten (10) days before the dates on
which the particular Imposition would become delinquent and Trustor shall produce to Beneficiary
receipts of the imposing authority, or other evidence reasonably satisfactory to Beneficiary,
evidencing the payment of the Imposition in full. If Trustor elects by appropriate legal action to
contest any Imposition, Trustor shall first deposit cash with Beneficiary as a reserve in an amount
which Beneficiary reasonably determines is sufficient to pay the Imposition plus all fines,
interest, penalties and costs which may become due pending the determination of the contest. If
Trustor deposits this sum with Beneficiary, Trustor shall not be required to pay the Imposition
provided that the contest operates to prevent enforcement or collection of the Imposition, or the
sale or forfeiture of, the Property, and is prosecuted with due diligence and continuity. Upon
termination of any proceeding or contest, Trustor shall pay the amount of the Imposition as finally
determined in the proceeding or contest. Provided that there is not then an Event of Default (as
defined in Section 11.1), the monies which have been deposited with Beneficiary pursuant to this
Section shall be applied toward such payment and the excess, if any, shall be returned to Trustor.

          (b) In the event of the passage, after the Execution Date, of any law which deducts from the
value of the Property, for the purposes of taxation, any lien or security interest encumbering the
Property, or changing in any way the existing laws regarding the taxation of mortgages, deeds of
trust and/or security agreements or debts secured by these instruments, or changing the manner for
the collection of any such taxes, and the law has the effect of imposing payment of any Impositions
upon Beneficiary, at Beneficiary’s option, the Secured Indebtedness shall be due and payable on the
earlier of (i) one hundred twenty (120) days after written notice to Trustor, or (ii) the date upon
which the Secured Indebtedness must be repaid in order to permit Beneficiary to lawfully avoid the
consequences of such law or the payment of any Impositions, but no Prepayment Fee or other premium
or penalty shall be due in connection therewith. Notwithstanding the preceding sentence, the
Beneficiary’s election to accelerate the Loan shall not be effective if (1) Trustor is permitted by
law (including, without limitation, applicable interest rate laws) to, and actually does, pay the
Imposition or the increased portion of the Imposition and (2) Trustor agrees in writing to pay or
reimburse Beneficiary in accordance with Section 11.6 for the payment of any such Imposition which
becomes payable at any time when the Loan is outstanding.

     Section 2.5 ESCROW DEPOSITS. Without limiting the effect of Section 2.4 and Section
3.1, Trustor shall pay to Beneficiary (1) monthly on the same date the monthly installment is
payable under the Note, an amount equal to 1/12th of the amounts Beneficiary reasonably estimates
are necessary to pay, on an annualized basis, (a) all Impositions and (b) the premiums for the
insurance policies required under this Deed of Trust (collectively the “Premiums”) until such time
as Trustor has deposited an amount equal to the annual charges for these items and, (2) within ten
(10) days after Beneficiary’s written demand therefor, any additional amounts necessary to pay the
Premiums and Impositions. Trustor will furnish to

7

 

Beneficiary bills for Impositions and Premiums thirty (30) days before Impositions become
delinquent and such Premiums become due for payment. No amounts paid as Impositions or Premiums
shall be deemed to be trust funds and these funds may be commingled with the general funds of
Beneficiary; provided that such funds shall be held by Beneficiary in an interest-bearing account,
with such interest as may be earned thereon being payable to Trustor from time to time within
thirty (30) days after Beneficiary’s receipt of a written request therefor by Trustor. If an Event
of Default occurs, Beneficiary shall have the right, at its election, to apply any amounts held
under this Section 2.5 in reduction of the Secured Indebtedness, or in payment of the Premiums or
Impositions for which the amounts were deposited. If Beneficiary sells or assigns the Loan to a
lender unaffiliated with Beneficiary pursuant to its rights under Section 12.1 hereof, the amounts
to be deposited pursuant to this Section 2.5 thereafter shall be made by Trustor into an
interest-bearing account at a national bank mutually approved by the assignee beneficiary and
Trustor.

     The foregoing provisions of this Article notwithstanding, Beneficiary agrees that it shall not
require Imposition or Premium deposits by Trustor unless and until:

          (1) An Event of Default exists under the Loan Documents, the Guaranty or the Indemnity
Agreement;

          (2) Neither Trustor nor a transferee permitted under Section 10.1 hereof is the owner
of the Property; or

          (3) except as expressly permitted in Section 10.1 hereof, there has been a change in
the Trustor or the general partners, stockholders or members of Trustor or in the
constituent general partners, controlling shareholders or controlling members of any of the
entities comprising the general partners of Trustor.

In addition, Beneficiary shall have the right to require Premium Deposits if Trustor fails to
furnish to Beneficiary, on or before the 10th day prior to the date upon which any
insurance premium would become delinquent, receipts for the payment of such insurance premium or
appropriate proof of issuance of a new policy which continues in force the insurance coverage
afforded under the expiring policy.

     The foregoing right of Beneficiary to require Imposition or Premium deposits can be exercised
by Beneficiary in its absolute discretion by written notice delivered to Trustor by Beneficiary at
any time within six (6) months of becoming aware that any of the events described immediately above
have occurred, notwithstanding the fact that the Event of Default that triggered the delivery of
such notice may be subsequently cured, or that the transfer or non-permitted change is subsequently
approved by Beneficiary.

     Section 2.6 CARE AND USE OF THE PROPERTY.

          (a) Trustor represents and warrants to Beneficiary as follows:

               (i) All authorizations, licenses, including without limitation liquor licenses, if any, and
operating permits required to allow the Improvements to be operated for the Use have been obtained,
paid for and are in full force and effect.

8

 

               (ii) The Improvements and their Use comply with (and no notices of violation have been
received in connection with) all Requirements (as defined in this Section) and Trustor shall at all
times comply with all present or future Requirements affecting or relating to the Property and/or
the Use. Trustor shall furnish Beneficiary, on request, proof of compliance with the Requirements.
Trustor shall not use or permit the use of the Property, or any part thereof, for any illegal
purpose. “Requirements” shall mean all laws, ordinances, orders, covenants, conditions and
restrictions and other requirements relating to land and building design and construction, use and
maintenance, that may now or hereafter pertain to or affect the Property or any part of the
Property or the Use, including, without limitation, planning, zoning, subdivision, environmental,
air quality, flood hazard, fire safety, handicapped facilities, building, health, fire, traffic,
safety, wetlands, coastal and other governmental or regulatory rules, laws, ordinances, statutes,
codes and requirements applicable to the Property, including permits, licenses and/or certificates
that may be necessary from time to time to comply with any of the these requirements.

               (iii) Trustor has complied in all material respects with all requirements of all instruments
and agreements affecting the Property, whether or not of record, including without limitation all
covenants and agreements by and between Trustor and any governmental or regulatory agency
pertaining to the development, use or operation of the Property. Trustor, at its sole cost and
expense shall, subject to the provisions of this Deed of Trust, keep the Property in good order,
condition, and repair, and make all necessary structural and non-structural, ordinary and
extraordinary repairs to the Property and the Improvements.

               (iv) Trustor shall abstain from, and not permit, the commission of any waste to the Property
and shall not remove or alter in any substantial manner, the structure or character of any
Improvements without the prior written consent of Beneficiary; provided, however, Beneficiary’s
consent shall not be required for alterations which are made pursuant to the terms of Leases either
approved by Beneficiary or as to which Beneficiary’s approval is not required hereunder.

               (v) The zoning approval for the Property is not dependent upon the ownership or use of any
property which is not encumbered by this Deed of Trust.

               (vi) Construction of the Improvements on the Property (other than any ongoing tenant
improvement work) is complete.

               (vii) The Property is in good repair and condition, free of any material damage, other than
that disclosed in that certain Property Condition Report prepared by Marx/Okubo Associates — dated
Oct. 25, 2005, Job # 059168 and delivered to Beneficiary.

          (b) Beneficiary shall have the right, at any time and from time to time during normal business
hours and upon two (2) days advance written notice to Trustor (other than in an emergency
situation, in which case no written notice shall be required), to enter the Property in order to
ascertain Trustor’s compliance with the Loan Documents, to examine the condition of the Property,
to perform an appraisal, to undertake surveying or engineering work, and to inspect premises
occupied by tenants, subject, however, to the terms and provisions of the tenants’ leases. Trustor
shall cooperate with Beneficiary performing these inspections. Beneficiary’s

9

 

rights hereunder include its rights under California Civil Code Section 2929.5, as such
Section may be amended from time to time. Trustor shall pay all costs incurred by Beneficiary in
connection with any such inspections, except as may otherwise be provided in such Section 2929.5.

          (c) Trustor shall use, or cause to be used, the Property continuously for the Use. Trustor
shall not use, or permit the use of, the Property for any other use without the prior written
consent of Beneficiary. Trustor shall not file or record a declaration of condominium, master deed
of trust or mortgage or any other similar document evidencing the imposition of a so called
“condominium regime” whether superior or subordinate to this Deed of Trust and Trustor shall not
permit any part of the Property to be converted to, or operated as, a “cooperative apartment house”
whereby the tenants or occupants participate in the ownership, management or control of any part of
the Property.

          (d) Without the prior written consent of Beneficiary, Trustor shall not (i) initiate or
acquiesce in a change in the zoning classification of and/or restrictive covenants affecting the
Property or seek any variance under existing zoning ordinances, (ii) use or permit the use of the
Property in a manner which may result in the Use becoming a non-conforming use under applicable
zoning ordinances, or (iii) subject the Property to restrictive covenants.

     Section 2.7 COLLATERAL SECURITY INSTRUMENTS. Trustor covenants and agrees that if
Beneficiary at any time holds additional security for any obligations secured by this Deed of
Trust, it may enforce its rights and remedies with respect to such security, at its option, either
before, concurrently or after a sale of the Property is made pursuant to the terms of this Deed of
Trust. Beneficiary may apply the proceeds of the additional security to the Secured Indebtedness
without affecting or waiving any right to any other security, including the security under this
Deed of Trust, and without waiving any breach or default of Trustor under this Deed of Trust or any
other Loan Document.

     Section 2.8 SUITS AND OTHER ACTS TO PROTECT THE PROPERTY.

          (a) Trustor shall promptly notify Beneficiary of the commencement, or receipt of notice, of
any and all actions or proceedings or other material matter or claim affecting the Property and/or
the interest of Beneficiary under the Loan Documents which accrue or arise at any time prior to the
foreclosure of this Deed of Trust or other transfer of title to the Property in extinguishment of
the Secured Indebtedness (collectively, “Actions”). Trustor shall appear in and defend any
Actions.

          (b) Beneficiary shall have the right, at the cost and expense of Trustor, to institute,
maintain and participate in Actions and take such other action, as it may deem appropriate in the
good faith exercise of its discretion to preserve or protect the Property and/or the interest of
Beneficiary under the Loan Documents. Any money paid by Beneficiary under this Section shall be
reimbursed to Beneficiary in accordance with Section 11.6 hereof.

     Section 2.9 LIENS AND ENCUMBRANCES. Without the prior written consent of Beneficiary,
to be exercised in Beneficiary’s sole and absolute discretion, Trustor shall not create, place or
allow to remain any lien or encumbrance on the Property, other than the

10

 

Permitted Exceptions, including deeds of trust, mortgages, security interests, conditional
sales, mechanic liens, tax liens or assessment liens regardless of whether or not they are
subordinate to the lien created by this Deed of Trust (collectively, “Liens and Encumbrances”). If
any Liens and Encumbrances are recorded against the Property or any part of the Property, Trustor
shall obtain a discharge and release of, or bond over, in a manner satisfactory to Beneficiary, any
Liens and Encumbrances within twenty (20) days after receipt of notice of their existence, but in
all events prior to the foreclosure thereof.

     Section 2.10 SINGLE PURPOSE ENTITY. Trustor represents, warrants, and covenants with
Beneficiary that it has not and shall not: (i) engage in business other than owning, managing,
leasing, repairing, maintaining and operating the Property; (ii) acquire or own a material asset
other than the Property and incidental personal property; (iii) maintain assets in a way difficult
to segregate and identify, or commingle its assets with the assets of any other person or entity;
(iv) fail to hold itself out to the public as a legal entity separate from any other; (v) fail to
conduct business solely in its name or fail to maintain records, accounts or bank accounts separate
from any other person or entity; or (vi) dissolve, liquidate, consolidate, merge or sell all or
substantially all of its assets, except as permitted under Section 10.1 of this Agreement.

ARTICLE III

INSURANCE

     Section 3.1 REQUIRED INSURANCE AND TERMS OF INSURANCE POLICIES.

          (a) During the term of this Deed of Trust, Trustor at its sole cost and expense must provide
insurance policies and certificates of insurance satisfactory to Beneficiary as to amounts, types
of coverage and the companies underwriting these coverages as provided below. In no event shall
such policies be terminated or otherwise allowed to lapse without replacement policies in effect
complying with the requirements set forth below. Trustor shall be responsible for its own
deductibles. Trustor shall also pay for any insurance, or any increase of policy limits, not
described in this Deed of Trust which Trustor requires for its own protection or for compliance
with government statutes. Trustor’s insurance shall be primary and without contribution from any
insurance procured by Beneficiary.

     Policies of insurance shall be delivered to Beneficiary in accordance with the following
requirements:

          (1) All Risk Property insurance on the Improvements and the Personal Property insuring
against any peril now or hereafter included within the classification of “All Risk” or
“Special Perils,” including contingent liability from Operation of Building Laws, Demolition
Costs and Increased Cost of Construction endorsements, in each case (i) in an amount equal
to 100% of the “Full Replacement Cost” of the Improvements and Personal Property, which for
purposes of this Article III shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of depreciation
and with a Replacement Cost Endorsement; (ii) containing no coinsurance provisions or, if
such provisions are

11

 

contained therein, then containing an agreed amount endorsement with respect to the
Improvements and Personal Property waiving all co-insurance provisions; (iii) providing for
no deductible in excess of $250,000; and (iv) containing an “Ordinance or Law Coverage” or
“Enforcement” endorsement if any of the Improvements or the use of the Property shall
constitute non-conforming structures or uses. The Full Replacement Cost shall be determined
from time to time by an appraiser or contractor designated and paid by Trustor and approved
by Beneficiary or by an engineer or appraiser in the regular employ of the insurer.

          (2) Commercial General Liability insurance against claims for personal injury, bodily
injury, death or property damage occurring upon, in or about the Property, such insurance
(i) to be on the so-called “occurrence” form with a combined single limit of not less than
the amount set forth in the Defined Terms; (ii) to continue at not less than this limit
until required to be changed by Beneficiary in writing by reason of changed economic
conditions making such protection inadequate; and (iii) to cover at least the following
hazards: (a) premises and operations; (b) products and completed operations on an “if any”
basis; (c) independent contractors; (d) blanket contractual liability for all written and
oral contracts; and (e) contractual liability covering the indemnities contained in this
Deed of Trust to the extent available.

          (3) Business Income insurance in an amount sufficient to prevent Trustor from becoming
a co-insurer within the terms of the applicable policies, and sufficient to recover one (1)
year’s “Business Income” (as hereinafter defined). The amount of such insurance shall be
increased from time to time during the terms of this Deed of Trust as and when new leases
and renewal leases are entered into and rents payable increase or the annual estimate of
gross income from occupancy of the Property increases to reflect such rental increases.
“Business Income” shall mean the sum of (i) the total anticipated gross income from
occupancy of the Property, (ii) the amount of all charges (such as, but not limited to,
operating expenses, insurance premiums and taxes) which are the obligation of tenants or
occupants to Trustor, (iii) the fair market rental value of any portion of the Property
which is occupied by Trustor, and (iv) any other amounts payable to Trustor or to any
affiliate of Trustor pursuant to Leases.

          (4) If Beneficiary determines at any time that any part of the Property is located in
an area identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards and flood insurance has
been made available, Trustor will maintain a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount not less than the lesser of (i) the outstanding
principal balance of the Loan or (ii) the maximum amount of insurance which is available
under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or
the National Flood Insurance Reform Act of 1994, as amended.

          (5) During the period of any construction or renovation or alteration of the
Improvements, a so-called “Builder’s All Risk” insurance policy in non-reporting form for
any Improvements under construction, renovation or alteration including,

12

 

without limitation, for demolition and increased cost of construction or renovation, in
an amount approved by Beneficiary including an Occupancy endorsement and Worker’s
Compensation Insurance covering all persons engaged in the construction, renovation or
alteration in an amount at least equal to the minimum required by statutory limits of the
State.

          (6) Workers’ Compensation insurance, subject to the statutory limits of the State, and
employer’s liability insurance with a limit of at least $1,000,000 per accident and per
disease per employee, and $1,000,000 for disease in the aggregate in respect of any work or
operations on or about the Property, or in connection with the Property or its operations
(if applicable).

          (7) Boiler & Machinery insurance covering the major components of the central heating,
air conditioning and ventilating systems, boilers, other pressure vessels, high pressure
piping and machinery, elevators and escalators, if any, and other similar equipment
installed in the Improvements, in an amount equal to one hundred percent (100%) of the full
replacement cost of all equipment installed in, on or at the Improvements. These policies
shall insure against physical damage to and loss of occupancy and use of the Improvements
arising out of an accident or breakdown.

          (8) Insurance from and against all losses, damages, costs, expenses, claims and
liabilities related to or arising from acts of terrorism, of such types, in an amount equal
to the Full Replacement Cost or as determined by Beneficiary, but in no event shall such
amount be less than the Loan Amount as long as such coverage limit is commercially
available, with such deductibles, issued by such companies, and on such forms of insurance
policies as reasonably required by Beneficiary and as may be commercially available.
Coverage may be included in Trustor’s all-risk property insurance policy or in the form of a
blanket policy or a stand-alone policy, in each case in a manner reasonably satisfactory to
Beneficiary.

          (9) A blanket policy of environmental insurance with an aggregate amount of not less
than $10,000,000.00 in the aggregate, and at all times having at least $4,000,000 of
coverage available for environmental claims made with respect to the Property and no
deductible in excess of $250,000.00.

          (10) Such other insurance as may from time to time be reasonably required by
Beneficiary against other insurable hazards, including, but not limited to, vandalism,
earthquake, sinkhole and mine subsidence.

          (b) Beneficiary’s interest must be clearly stated by endorsement in the insurance policies
described in this Section 3.1 as follows:

          (1) The policies of insurance referenced in Subsections (a)(1), (a)(3), (a)(4), (a)(5)
and (a)(7) of this Section 3.1 shall identify Beneficiary under the New York Standard
Mortgagee Clause (non-contributory) endorsement (or a clause approved by Beneficiary in its
sole and absolute discretion containing substantially the same terms and conditions).

13

 

          (2) The insurance policies referenced in Section 3.1 (a)(2) and 3.1 (a)(9) shall name
Beneficiary as an additional insured.

          (3) All of the policies referred to in Section 3.1 shall provide for at least thirty
(30) days’ written notice to Beneficiary in the event of policy cancellation and/or material
change and/or non-renewal.

          (c) All the insurance companies must be authorized to do business in the State of California
and be approved by Beneficiary. The insurance companies must have a general policy rating of A or
better and a financial class of VIII or better by A.M. Best Company, Inc. and a claims paying
ability of BBB or better according to Standard & Poors. Trustor shall deliver evidence
satisfactory to Beneficiary of payment of premiums due under the insurance policies.

          (d) Certified copies of the policies, and any endorsements, shall be made available for
inspection by Beneficiary upon request. If any policy is canceled before the Loan is satisfied,
and Trustor fails to immediately procure replacement insurance, Beneficiary reserves the right but
shall not have the obligation immediately to procure replacement insurance at Trustor’s cost.

          (e) Trustor shall be required during the term of the Loan to continue to provide Beneficiary
with original renewal policies or replacements of the insurance policies referenced in Section
3.1(a). Beneficiary may accept Certificates of Insurance evidencing insurance policies referenced
in Subsections (a)(2), (a)(4) and (a)(6) of this Section 3.1 instead of requiring the actual
policies. Beneficiary shall be provided with renewal Certificates of Insurance or Binders not less
than fifteen (15) days prior to each expiration. The failure of Trustor to maintain the insurance
required under this Article III shall not constitute a waiver of Trustor’s obligation to fulfill
these requirements.

          (f) All binders, policies, endorsements, certificates, and cancellation notices are to be sent
to the Beneficiary’s Address for Insurance Notification as set forth in the Defined Terms until
changed by notice from Beneficiary.

     Section 3.2 ADJUSTMENT OF CLAIMS. Trustor hereby authorizes and empowers Beneficiary
to settle, adjust or compromise any claims for damage to, or loss or destruction of, all or a
portion of the Property, regardless of whether there are Insurance Proceeds available or whether
any such Insurance Proceeds are sufficient in amount to fully compensate for such damage, loss or
destruction; provided, however, except during the continuation of an Event of Default hereunder, no
such settlement, adjustment or compromise by Beneficiary shall be made without Trustor’s prior
written consent to the terms and conditions thereof, which consent shall not be unreasonably
withheld, conditional or delayed.

     Section 3.3 ASSIGNMENT TO BENEFICIARY. In the event of the foreclosure of this Deed
of Trust or other transfer of the title to the Property in extinguishment of the Secured
Indebtedness, all right, title and interest of Trustor in and to any insurance policy, or premiums
or payments in satisfaction of claims or any other rights under the insurance policies required
under Section 3.1(a) above and any other insurance policies pertaining to the Property with

14

 

respect to the period prior to the foreclosure of this Deed of Trust, or other transfer of
title to the Property in extinguishment of the Secured Indebtedness shall pass to the transferee of
the Property.

ARTICLE IV

BOOKS, RECORDS AND ACCOUNTS

     Section 4.1 BOOKS AND RECORDS. Trustor shall keep adequate books and records of
account in accordance with generally accepted accounting principles (“GAAP”), or in accordance with
other methods acceptable to Beneficiary in its sole discretion, consistently applied and furnish to
Beneficiary:

          (a) a quarterly operating statement of the Property detailing the total revenues received,
total expenses incurred, total cost of all capital improvements, total debt service and total cash
flow, and a current rent roll, each to be prepared and certified by Trustor in the form reasonably
required by Beneficiary, and if available, any quarterly operating statement prepared by an
independent certified public accountant, within thirty to sixty (30-60) days after the close of
each fiscal quarter of Trustor;

          (b) an annual balance sheet and profit and loss statement of Trustor in the form required by
Beneficiary, prepared and certified by an officer of Trustor within one hundred twenty (120) days
after the close of each fiscal year of Trustor; provided that if Trustor is not a Hines Fund or a
Hines Affiliate, if required by Beneficiary, such annual balance sheet and profit and loss
statement of Trustor shall be audited and prepared by an independent certified public accountant
acceptable to Beneficiary in the form required by Beneficiary, prepared and certified by an officer
of Trustor

          (c) an annual operating budget presented on a monthly basis consistent with the annual
operating statement described above for the Property including cash flow projections for the
upcoming two (2) year period and all proposed capital replacements and improvements at least
fifteen (15) days prior to the start of each calendar year; and

          (d) an annual ARGUS© valuation file in electronic form which includes, without limitation, a
then current rent roll, all income of the Property, and all Property expenses.

     Section 4.2 PROPERTY REPORTS. Upon request from Beneficiary or its representatives
and designees, Trustor shall furnish in a timely manner to Beneficiary:

          (a) a property management report for the Property, showing the number of inquiries made and/or
rental applications received from tenants or prospective tenants and deposits received from tenants
and any other information reasonably requested by Beneficiary, in reasonable detail and certified
by Trustor (or an officer, general partner, member or principal of Trustor if Trustor is not an
individual) to be true and complete in all material respects to its (or his or her, as the case may
be) knowledge, but no more frequently than quarterly; and

          (b) an accounting of all security deposits held in connection with any Lease of any part of
the Property, including the name and identification number of the accounts in which

15

 

such security deposits are held, the name and address of the financial institutions in which
such security deposits are held and the name of the person to contact at such financial
institution, along with any authority or release necessary for Beneficiary to obtain information
regarding such accounts directly from such financial institutions.

     Section 4.3 ADDITIONAL MATTERS.

          (a) Trustor shall furnish Beneficiary with such other additional financial or management
information (including State and Federal tax returns) as may, from time to time, be reasonably
required by Beneficiary in form and substance satisfactory to Beneficiary.

          (b) Trustor shall furnish Beneficiary and its agents convenient facilities for the examination
and audit of any such books and records.

          (c) Beneficiary and its representatives shall have the right upon prior written notice to
examine and audit the records, books, management and other papers of Trustor and its affiliates
(including any Liable Parties) which reflect upon their financial condition and/or the income,
expenses and operations of the Property, at the Property or at any office regularly maintained by
Trustor, its affiliates (including any Liable Parties) where the books and records pertaining to
the Property are located. Beneficiary shall have the right upon advance notice to make copies and
extracts from the foregoing records and other papers.

ARTICLE V

LEASES AND OTHER AGREEMENTS AFFECTING THE PROPERTY

     Section 5.1 TRUSTOR’S REPRESENTATIONS AND WARRANTIES.

     Trustor represents and warrants to Trustee and Beneficiary, as of the date hereof, as follows:

          (a) There are no leases or occupancy agreements affecting the Property except those leases and
amendments listed on Exhibit B to the Assignment of Leases and Trustor has delivered to Beneficiary
true, correct and complete copies of all leases, including amendments (collectively, “Existing
Leases”) and all guaranties and amendments of guaranties given in connection with the Existing
Leases (the “Guaranties”).

          (b) There are no defaults by Trustor under the Existing Leases and Guaranties and, to the best
knowledge of Trustor, there are no defaults by any tenants under the Existing Leases or any
guarantors under the Guaranties, except in each case, such defaults as may have been previously
disclosed to Beneficiary in any executed estoppel certificate obtained by Trustor and delivered to
Beneficiary in connection with the Loan. The Existing Leases and the Guaranties are in full force
and effect.

          (c) To the best knowledge of Trustor, except as may have been previously disclosed to
Beneficiary in any executed estoppel certificate obtained by Trustor and delivered to Beneficiary
in connection with the Loan, none of the tenants now occupying 10% or more of the

16

 

Property or having a current lease affecting 10% or more of the Property is the subject of any
bankruptcy, reorganization or insolvency proceeding or any other debtor-creditor proceeding.

          (d) No Existing Leases may be amended, terminated or canceled unilaterally by a tenant and no
tenant may be released from its obligations, except (1) in the event of (i) material damage to, or
destruction of, the Property or (ii) condemnation, or (2) as expressly set forth in the Existing
Leases.

     Section 5.2 ASSIGNMENT OF LEASES. In order to further secure payment of the Secured
Indebtedness and the performance of Trustor’s obligations under the Loan Documents, Trustor
absolutely, presently and unconditionally grants, assigns and transfers to Beneficiary all of
Trustor’s right, title, interest and estate in, to and under (i) all of the Existing Leases and
Guaranties affecting the Property and (ii) all of the future leases of the Property (meaning leases
entered into after the date hereof of space in the Property by Trustor) and all amendments thereof,
and all guaranties and amendments of guaranties with respect thereto, and (iii) the Rents and
Profits. Trustor acknowledges that it is permitted to collect the Rents and Profits pursuant to a
revocable license unless and until an Event of Default occurs. The Existing Leases and Guaranties
and all such future leases, lease amendments, guaranties and amendments of guaranties are
collectively referred to as the “Leases”.

     Section 5.3 PERFORMANCE OF OBLIGATIONS.

          (a) Trustor shall perform all of its obligations under any and all Leases. If any of the acts
described in this Section requiring the consent or approval of Beneficiary are done without the
written consent of Beneficiary (unless Beneficiary’s consent is deemed given pursuant to the
provisions of this Section), then, at the option of Beneficiary, such acts shall be of no force or
effect and Trustor’s actions shall constitute a default under this Deed of Trust.

          (b) Trustor agrees to furnish Beneficiary executed copies of all future Leases.

          (c) Trustor shall not, without the express written consent of Beneficiary (unless pursuant to
provisions of this Section such consent is deemed given by reason of Beneficiary’s failure to
timely respond to a request for consent):

               (i) enter into any new Lease unless (x) such Lease is consistent with the Leasing Guidelines,
and (y) such new Lease is on a standard form of Lease developed for the Property which has been
previously approved by Beneficiary (the “Standard Lease Form”), provided, however, that Trustor may
make non-material changes to such Standard Lease Form so long as such changes do not conflict with
the Leasing Guidelines. The Leasing Guidelines are attached hereto as Exhibit “B”; or

               (ii) extend any Lease, provided, however, that Trustor may extend any Lease so long as the
terms of such extension are consistent with the Leasing Guidelines agreed to by Beneficiary from
time to time or if such extension is pursuant to a right the tenant exercises under its Lease; or

               (iii) cancel or terminate any Leases except in the case of a default unless Trustor has
entered into new Leases (which must comply with clause (i) above) (a)

17

 

covering all of the premises of the Leases being terminated or surrendered, or (b) less than
all of the premises of the Leases being terminated or surrendered if the rent payable under the new
Leases is equal to or greater than the rent payable under the Leases being terminated or
surrendered, or

               (iv) modify or amend any Leases in any material way or reduce the rent unless, after giving
effect to such amendment or modification, the Lease is consistent with the Leasing Guidelines;
provided, however, (a) that any such amendment or modification may include
non-material modifications so long as such amendment or modification is consistent with the Leasing
Guidelines and (b) and nothing in this clause (iv) shall be deemed to prevent Trustor from entering
into amendments required under the terms of Leases; or

               (v) unless the tenants remain liable under the Leases, consent to an assignment of the
tenant’s interest or to a subletting of the demised premises under any Lease; or

               (vi) accept payment of advance rents in an amount in excess of one month’s rent; or

               (vii) enter into or grant any options to purchase the Property; or

               (viii) enter into any lease that grants recourse against Trustor which is not limited to
Trustor’s interest in the Property or to the proceeds thereof.

When Beneficiary’s approval is required under this Section 5.3, Beneficiary shall respond
to Trustor’s request for approval with ten (10) business days after Trustor’s submittal of all
required information. If Beneficiary fails to respond within such ten (10) business day period,
Beneficiary’s approval shall be deemed to have been given if Beneficiary does not furnish a
response to Trustor within five (5) business days after Trustor’s second written request for
approval of such leasing matter (which may include from time to time submissions for approval of a
letter of intent, interim or final drafts of leases or amendments), provided that any second
request for approval must be sent after the expiration of such ten (10) business day period
and must include the following statement on the first page in all capital letters and
boldface type in order for it to be deemed validly delivered to Beneficiary:

“YOUR FAILURE TO RESPOND IN WRITING TO TRUSTOR’S SECOND REQUEST FOR
APPROVAL OF THE MATTER DESCRIBED HEREIN RELATING TO A LEASE AT 1515
S STREET, SACRAMENTO, CALIFORNIA, AS SET FORTH HEREIN WITHIN FIVE
(5) BUSINESS DAYS FROM THE DATE YOU RECEIVE THIS REQUEST SHALL BE
DEEMED TO CONSTITUTE BENEFICIARY’S APPROVAL OF SUCH REQUEST.”

     For purposes of this Section and any letter delivered to Beneficiary pursuant to this Section,
the term “business days” shall mean any day other than Saturday or Sunday or any other day on which
banks in the State of New York are authorized to be closed.

18

 

     Notwithstanding anything herein to the contrary, Trustor shall have the right to enter into
Leases or amendments to Leases without Beneficiary’s consent which (i) comply with the Leasing
Guidelines then in effect, and (ii) are based on the Standard Lease Form developed for the Property
with such non-material changes to such Standard Lease Form that do not conflict with the Leasing
Guidelines.

     Section 5.4 SUBORDINATE LEASES. Each Lease entered into after the date hereof
affecting the Property shall be absolutely subordinate to the lien of this Deed of Trust and shall
also contain a provision, satisfactory to Beneficiary, to the effect that in the event of the
judicial or non-judicial foreclosure of the Property, at the election of the acquiring foreclosure
purchaser, the particular Lease shall not be terminated and the tenant shall attorn to the
purchaser. If Beneficiary requests, Trustor shall cause a tenant or tenants to enter into
subordination and attornment agreements or nondisturbance agreements with Beneficiary on forms
which have been approved by Beneficiary, subject to such changes and modifications thereto to which
Beneficiary shall agree in its reasonable discretion. Notwithstanding the foregoing, if the Lease
prepared for said tenant has been approved by Beneficiary (or if such Lease does not require
Beneficiary’s prior written consent as set forth in Section 5.3(c)), then, upon Trustor’s request,
Beneficiary hereby agrees to a provide a non-disturbance agreement to such tenant on Beneficiary’s
standard form of non-disturbance agreement, subject to such changes and modifications thereto to
which Beneficiary shall agree in its reasonable discretion. Trustor agrees to pay Beneficiary, if
and only if Trustor requests such non-disturbance agreement, (i) a $2,500 fee per non-disturbance
agreement provided by Beneficiary, plus (ii) any and all reasonable third party attorneys’
fees incurred by Beneficiary in connection with providing any such non-disturbance agreement.

     Section 5.5 LEASING COMMISSIONS. Trustor covenants and agrees that all contracts and
agreements relating to the Property requiring the payment of leasing commissions, management fees
or other similar compensation shall (i) provide that the obligation will not be enforceable against
Beneficiary and (ii) be subordinate to the lien of this Deed of Trust. Beneficiary will be
provided evidence of Trustor’s compliance with this Section upon request.

     Section 5.6 LEASE RESERVE FUND.

          (a) If a CDC Termination Event (as defined in the Reserve Agreement) occurs, Trustor shall
deposit with Beneficiary the Lease Reserve Fund (as defined in the Reserve Agreement) in the amount
of Five Million Dollars ($5,000,000.00) in accordance with the terms and conditions of the Reserve
Agreement. The terms and conditions of the Reserve Agreement are expressly incorporated herein by
this reference.

          (b) In the event of an Event of Default under the Loan Documents, the Indemnity Agreement or
the Guaranty, the Lease Reserve Fund may be drawn by Beneficiary and the proceeds may be applied as
determined by Beneficiary to any amounts outstanding under the Loan and/or actual releasing costs
of the Property.

19

 

ARTICLE VI

ENVIRONMENTAL HAZARDS

     Section 6.1 REPRESENTATIONS AND WARRANTIES; COVENANTS OF TRUSTOR.

          (a) Representations and Warranties. Trustor hereby represents and warrants to
Beneficiary that, as of the date hereof (i) except as disclosed to Beneficiary in that certain
Phase I Report by ATC Associates, Inc., dated Sept. 21, 2005, Project 53.09843.0003 as supplemented
by letter dated 3/31/06 and delivered to Beneficiary (the “Environmental Report”), neither Trustor
nor, to Trustor’s actual knowledge, any tenant, subtenant or occupant of the Property, has at any
time placed, suffered or permitted the presence of any Hazardous Materials (as defined in Section
6.5) at, on, under, within or about the Property except for Permitted Materials (as hereinafter
defined) and except as expressly approved by Beneficiary in writing, (ii) except as disclosed to
Beneficiary in writing in the Environmental Report, all operations or activities upon the Property
by Trustor, and any use or occupancy of the Property by Trustor are presently in compliance with
all Requirements of Environmental Laws (as defined in Section 6.6), (iii) except as disclosed to
Beneficiary in the Environmental Report, Trustor does not know of, and has not received, any
written or oral notice or other communication from any person or entity (including, without
limitation, a governmental entity) relating to (a) Hazardous Materials at the Property or any other
property in reasonable proximity to the Property in violation of Requirements of Environmental Laws
or the performance of Remedial Work pertaining thereto, (b) of possible liability of any person or
entity relating to the Property pursuant to any Requirements of Environmental Laws, (c) other
adverse environmental conditions in connection with the Property or (d) any actual administrative
or judicial proceedings in connection with any of the foregoing, and (iv) Trustor has truthfully
and fully provided to Beneficiary, in writing, any and all information relating to environmental
conditions in, on, under or from the Property that is known to Trustor and that is contained in
Trustor’s files and records, including, without limitation, any reports relating to Hazardous
Materials in, on, under or from the Property and/or to the environmental condition of the Property.
As used herein, the term “Permitted Materials” shall mean and be limited to (i) such cleaning
fluids, office products and similar Hazardous Materials as are typically used by owners, managers,
operators and tenants of properties similar to the Property in connection with the ownership,
operation, maintenance, repair, management and/or leasing of such property, and (ii) with respect
to passenger vehicles parking in the parking facilities located on the Land, motor fuel, oil,
lubricants and similar substances typically contained within such vehicles, provided the same are
only maintained in such quantities and are of such composition as not to pose a risk of a violation
of Environmental Laws and are at all times used, stored and disposed of in compliance with the
Requirements of Environmental Laws.

          (b) Covenants. Trustor hereby covenants and agrees with Beneficiary that (i) all
operations or activities upon the Property by Trustor and any use or occupancy of the Property by
Trustor shall be in compliance with all requirements of Environmental Laws, (ii) Trustor will use
commercially reasonable efforts to assure that any tenant, subtenant or occupant of the Property
shall in the future be in compliance with all Requirements of Environmental Laws applicable to
their operations or activities at the Property, and
(iii) Trustor 

20

 

shall not
do and shall exercise commercially reasonable efforts not to permit any tenant or other user of the
Property to do any act that impairs the value of the Property, is contrary to any requirement of
any insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property.

     Section 6.2 REMEDIAL WORK. In the event any investigation or monitoring of site
conditions or any clean-up, containment, restoration, removal or other remedial work (collectively,
the “Remedial Work”) is required at the Property or as a result of conditions at the Property under
any Requirements of Environmental Laws, Trustor shall perform or cause to be performed the Remedial
Work in compliance with the applicable law, regulation, order or agreement. Unless otherwise
agreed in writing by Beneficiary, all Remedial Work shall be performed by one or more contractors,
selected by Trustor and reasonably approved in advance in writing by Beneficiary, and under the
supervision of a consulting engineer, selected by Trustor and reasonably approved in advance in
writing by Beneficiary. All costs and expenses of Remedial Work shall be paid by Trustor
including, without limitation, the charges of the contractor(s) and/or the consulting engineer, and
Beneficiary’s reasonable attorneys’, architects’ and/or consultants’ fees and costs incurred in
connection with monitoring or review of the Remedial Work. In the event Trustor shall fail to
timely commence, or cause to be commenced, or fail to diligently prosecute to completion, the
Remedial Work, Beneficiary may, but shall not be required to, cause such Remedial Work to be
performed, subject to the provisions of Sections 11.5 and 11.6. Notwithstanding anything to the
contrary contained herein, Trustor shall have no obligation to Beneficiary (for reimbursement or
otherwise) with respect to Remedial Work required as a direct result of (i) any grossly negligent
or willful act of Beneficiary or its respective officers, agents, contractors, subcontractors or
employees, or (ii) events or circumstances first occurring after a foreclosure of this Deed of
Trust or other transfer of title to the Property in extinguishment of the Secured Indebtedness.

     Section 6.3 ENVIRONMENTAL SITE ASSESSMENT. Beneficiary shall have the right, once per
year or, if an Event of Default has occurred and is continuing, as frequently as Beneficiary may
deem it appropriate in its sole discretion, to undertake, at the expense of Trustor, an
environmental site assessment on the Property, including any testing that Beneficiary may
determine, in its sole discretion, is necessary or desirable to ascertain the environmental
condition of the Property and the compliance of the Property with Requirements of Environmental
Laws. Additionally, Beneficiary shall have the right to undertake, at Beneficiary’s expense, such
additional environmental site assessments on the Property as Beneficiary from time to time deems
advisable in its reasonable discretion. Trustor shall cooperate fully with Beneficiary and its
consultants performing such assessments and tests.

     Section 6.4 UNSECURED OBLIGATIONS. The lien of this Deed of Trust shall not secure
(i) any obligations evidenced by or arising under the Indemnity Agreement (“Unsecured
Obligations”), or (ii) any other obligations to the extent that they are the same or have the same
effect as any of the Unsecured Obligations. The Unsecured Obligations shall continue in full
force, and any breach or default of any such obligations shall constitute a breach or default under
this Deed of Trust but the proceeds of any foreclosure sale shall not be applied against Unsecured
Obligations. Nothing in this Section shall in any way limit or otherwise affect the right of
Beneficiary to obtain a judgment in accordance with applicable law for any deficiency in

21

 

recovery of all obligations that are secured by this Deed of Trust following foreclosure;
provided the foregoing shall not extend to diminished value of the Property.

     Section 6.5 HAZARDOUS MATERIALS.

     “Hazardous Materials” shall mean:

          (a) Those substances included within the definitions of “hazardous substances,” “hazardous
materials,” “toxic substances,” or “solid waste” in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.)
(“CERCLA”), as amended by Superfund Amendments and Reauthorization Act of l986 (Pub. L. 99-499 100
Stat. 1613) (“SARA”), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901
et seq.) (“RCRA”), and the Hazardous Materials Transportation Act, 49 U.S.C.
Section 5101 et seq., and in the regulations promulgated pursuant to said laws, all
as amended;

          (b) Those substances listed in the United States Department of Transportation Table (49 CFR
172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency)
as hazardous substances (40 CFR Part 302 and amendments thereto);

          (c) Any material, waste or substance which is (A) petroleum, including crude oil or any
fraction thereof, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for
fuel, or any mixture thereof, (B) asbestos, (C) polychlorinated biphenyls, (D) designated as a
“hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Sections 1251
et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the Clean
Water Act (33 U.S.C. Section 1317), (E) a chemical substance or mixture regulated under the Toxic
Substances Control Act of 1976, 15 U.S.C. Sections 2601 et seq., (F) flammable
explosives, or (G) radioactive materials; and

          (d) Any material, waste or substance which is included within any of the following:

               (i) any of the definitions of “acutely hazardous waste,” “extremely hazardous waste,”
“hazardous waste,” “infectious waste,” “retrograde material,” “volatile organic compound” or
“waste” pursuant to Cal. Health & Safety Code Sections 25110 et seq.;

               (ii) any chemical known to the State of California to cause cancer or reproductive toxicity as
published pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, Cal. Health &
Safety Code Sections 25249.5 et seq.;

               (iii) the definition of “hazardous substance” pursuant to Cal. Health & Safety Code Section
25281;

               (iv) the definition of “hazardous substance” as used in the Carpenter-Presley-Tanner Hazardous
Substance Account Act, Cal. Health & Safety Code, Sections 25300 et seq.;

               (v) either of the definitions of “hazardous materials” or “hazardous substances” pursuant to
Cal. Health & Safety Section 25501;

22

 

               (vi) the definition of “hazardous material” pursuant to Cal. Health & Safety Code Section
25411;

               (vii) the definition of “asbestos” pursuant to Cal. Health & Safety Code Section 25918;

               (viii) either of the definitions of “air contaminant” or “air pollutant” as used in the
Porter-Cologne Water Quality Control Act, Cal. Health & Safety Code Sections 39000 et
seq.; and

               (ix) “waste” or “hazardous substance” pursuant to Cal. Water Code Section 13050; and

          (e) Such other substances, materials and wastes which are or become regulated as hazardous or
toxic under applicable local, California or federal law, or the United States government, or which
are classified as hazardous or toxic under federal, California, or local laws or regulations.

     Section 6.6 REQUIREMENTS OF ENVIRONMENTAL LAWS. “Requirements of Environmental Laws”
shall mean all requirements of environmental, ecological or health (to the extent relating to
environmental matters) laws or regulations or rules of common law related to the environmental
condition of the Property, including, without limitation, all requirements imposed by any
environmental permit, law, rule, order, or regulation of any federal, state, or local executive,
legislative, judicial, regulatory, or administrative agency, which relate to (i) exposure to
Hazardous Materials; (ii) pollution or protection of the air, surface water, ground water, land;
(iii) solid, gaseous, or liquid waste generation, treatment, storage, disposal, or transportation;
or (iv) regulation of the manufacture, processing, distribution and commerce, use, or storage of
Hazardous Materials.

ARTICLE VII

CASUALTY, CONDEMNATION AND RESTORATION

     Section 7.1 TRUSTOR’S REPRESENTATIONS.

     Trustor represents and warrants, as of the date hereof, as follows:

          (a) Except as expressly approved by Beneficiary in writing, no casualty or damage to any part
of the Property which would cost more than $50,000 to restore or replace has occurred which has not
been fully restored or replaced.

          (b) No part of the Property has been taken in condemnation or other similar proceeding or
transferred in lieu of condemnation, nor has Trustor received notice of any proposed condemnation
or other similar proceeding affecting the Property.

          (c) There is no pending proceeding for the total or partial condemnation of the Property.

23

 

     Section 7.2 RESTORATION.

          (a) Trustor shall give prompt written notice of any casualty to the Property to Beneficiary
whether or not required to be insured against. The notice shall describe the nature and cause of
the casualty and the extent of the damage to the Property. Trustor covenants and agrees to
commence and diligently pursue to completion the Restoration. Notwithstanding the foregoing,
Trustor shall not be required to pursue or complete the Restoration if Beneficiary receives and
thereafter fails to make available to Trustor Insurance Proceeds sufficient to complete the
Restoration.

          (b) Trustor assigns to Beneficiary all Insurance Proceeds which Trustor is entitled to receive
in connection with a casualty to the Property whether or not such insurance is required under this
Deed of Trust. In the event of any damage to or destruction of the Property, and provided (1) an
Event of Default does not currently exist, and (2) Beneficiary has reasonably determined that (i)
there has not been an Impairment of the Security (as defined in Section 7.2(c)), and (ii) the
repair, restoration and rebuilding of any portion of the Property that has been partially damaged
or destroyed (the “Restoration”) can be accomplished during the Term of the Loan in full compliance
with all Requirements to substantially the same condition, character and general utility as nearly
as possible to that existing immediately prior to the casualty and at least equal in value as that
existing immediately prior to the casualty, the Net Insurance Proceeds shall be applied to the Cost
of Restoration in accordance with the terms of this Article. Beneficiary shall hold and disburse
the Insurance Proceeds less the cost, if any, to Beneficiary of recovering the Insurance Proceeds
including, without limitation, reasonable attorneys’ fees and expenses, and adjusters’ fees (the
“Net Insurance Proceeds”) to the Restoration.

          (c) For the purpose of this Article, “Impairment of the Security” shall mean any or all of the
following: (i) any of the Leases for more than 35,000 square feet existing immediately prior to the
damage, destruction condemnation or casualty shall have been cancelled, or shall contain any
exercisable right (unless such right is waived in writing) to cancel as a result of the damage,
destruction or casualty; (ii) the casualty or damage occurs during the last year of the term of the
Loan; or (iii) restoration of the Property is estimated to require more than one year to complete
from the date of the occurrence.

          (d) If the Net Insurance Proceeds are to be used for the Restoration in accordance with this
Article, Trustor shall comply with Beneficiary’s Requirements For Restoration as set forth in
Section 7.4 below. Upon Trustor’s satisfaction and completion of the Requirements For Restoration
and upon confirmation that there is no Event of Default then existing, Beneficiary shall pay any
remaining Restoration Funds (as defined in Section 7.4 below) then held by Beneficiary to Trustor.

          (e) In the event that the conditions for Restoration set forth in this Section have not been
met, Beneficiary may, at its option, apply the Net Insurance Proceeds to the reduction of the
Secured Indebtedness in such order as Beneficiary may determine and Beneficiary may declare the
entire Secured Indebtedness immediately due and payable, it being understood that the right of
Beneficiary to receive a Prepayment Fee in connection with such payment of the Secured Indebtedness
shall be governed by the provisions of Section 9(d) of the

24

 

Note. After payment in full of the Secured Indebtedness, any remaining Restoration Funds
shall be paid to Trustor.

     Section 7.3 CONDEMNATION.

          (a) If the Property or any part of the Property is taken by reason of any condemnation or
similar eminent domain proceeding, or by a grant or conveyance in lieu of condemnation or eminent
domain (“Condemnation”), Beneficiary shall be entitled to all compensation, awards, damages,
proceeds and payments or relief for the Condemnation (“Condemnation Proceeds”). At its option,
Beneficiary shall be entitled to commence, appear in and prosecute in its own name any action or
proceeding or to make any compromise or settlement in connection with such Condemnation. Trustor
hereby irrevocably constitutes and appoints Beneficiary as its attorney-in-fact, which appointment
is coupled with an interest, to commence, appear in and prosecute any action or proceeding or to
make any compromise or settlement in connection with any such Condemnation. Notwithstanding the
foregoing, except during the continuation of an Event of Default hereunder, Beneficiary shall not
exercise such power of attorney, nor shall any such settlement, adjustment or compromise by
Beneficiary be made without Trustor’s prior written consent to the terms and conditions thereof,
unless an Event of Default then exists hereunder, which consent shall not be unreasonably withheld,
conditioned or delayed.

          (b) Trustor hereby assigns to Beneficiary all Condemnation Proceeds which Trustor is entitled
to receive. In the event of any Condemnation, and provided (1) an Event of Default does not
currently exist, (2) Beneficiary has reasonably determined that (i) there has not been an
Impairment of the Security, and (ii) the Restoration of any portion of the Property that has not
been taken can be accomplished during the Term of the Loan in full compliance with all Requirements
to substantially the same condition, character and general utility as nearly as possible to that
existing immediately prior to the taking and at least equal in value as that existing immediately
prior to the taking, then Trustor shall commence and diligently pursue to completion the
Restoration. Beneficiary shall hold and disburse the Condemnation Proceeds less the cost, if any,
to Beneficiary of recovering the Condemnation Proceeds including, without limitation, reasonable
attorneys’ fees and expenses, and adjusters’ fees (the “Net Condemnation Proceeds”) to the
Restoration.

          (c) In the event the Net Condemnation Proceeds are to be used for the Restoration, Trustor
shall comply with Beneficiary’s Requirements For Restoration as set forth in Section 7.4 below.
Upon Trustor’s satisfaction and completion of the Requirements For Restoration and upon
confirmation that there is no Event of Default then existing, Beneficiary shall pay any remaining
Restoration Funds (as defined in Section 7.4 below) then held by Beneficiary to Trustor.

          (d) In the event that the conditions for Restoration set forth in this Section have not been
met, Beneficiary may, at its option, apply the Net Condemnation Proceeds to the reduction of the
Secured Indebtedness in such order as Beneficiary may determine and Beneficiary may declare the
entire Secured Indebtedness immediately due and payable, it being understood that the right of
Beneficiary to receive a Prepayment Fee in connection with such payment of the Secured Indebtedness
shall be governed by the provisions of Section 9(d) of the

25

 

Note. After payment in full of the Secured Indebtedness, any remaining Restoration Funds
shall be paid to Trustor.

     Section 7.4 REQUIREMENTS FOR RESTORATION. Unless otherwise expressly agreed in a
writing signed by Beneficiary, the following are the Requirements For Restoration:

          (a) If the Net Insurance Proceeds or Net Condemnation Proceeds are to be used for the
Restoration, prior to the commencement of any Restoration work (the “Work”), Trustor shall provide
Beneficiary for its review and written approval (i) to the extent damage is sufficient to require
plans to restore, complete plans and specifications for the Work which (A) have been approved by
all required governmental authorities, (B) have been approved by an architect reasonably
satisfactory to Beneficiary (the “Architect”) and (C) are accompanied by Architect’s signed
statement of the total estimated cost of the Work (the “Approved Plans and Specifications”); (ii)
the amount of money (or a letter of credit in such amount, form, scope and substance acceptable to
Beneficiary in its sole discretion) which Beneficiary reasonably determines will be sufficient when
added to the Net Insurance Proceeds or Condemnation Proceeds to pay the entire cost of the
Restoration (collectively referred to as the “Restoration Funds”), which Restoration Funds shall be
held in an interest bearing account, with all interest earned therein becoming part of the
Restoration Funds; (iii) evidence that the Approved Plans and Specifications and the Work are in
compliance with all Requirements; (iv) an executed contract for construction with a contractor
reasonably satisfactory to Beneficiary (the “Contractor”) in a form approved by Beneficiary in
writing; and (v) a surety bond and/or guarantee of payment with respect to the completion of the
Work. The bond or guarantee shall be satisfactory to Beneficiary in form and amount and shall be
signed by a surety or other entities who are acceptable to Beneficiary.

          (b) Trustor shall not commence the Work, other than temporary work to protect the Property or
prevent interference with business, until Trustor shall have complied with the requirements of
subsection (a) of this Section 7.4. So long as there does not currently exist an Event of Default
and the following conditions have been complied with or, in Beneficiary’s reasonable discretion,
waived, Beneficiary shall disburse the Restoration Funds in increments to Trustor, from time to
time as the Work progresses:

               (i) Trustor shall be in charge of the Work.

               (ii) Beneficiary shall disburse the Restoration Funds directly or through escrow with a title
company selected by Trustor and reasonably approved by Beneficiary, upon not less than ten (10)
days’ prior written notice from Trustor to Beneficiary and Trustor’s delivery to Beneficiary of (A)
Trustor’s written request for payment (a “Request for Payment”) accompanied by a certificate by
Architect in a form reasonably satisfactory to Beneficiary which states that (a) all of the Work
completed to that date has been completed in substantial compliance with the Approved Plans and
Specifications and in accordance with all Requirements, (b) the amount requested has been paid or
is then due and payable and is properly a part of the cost of the Work, and (c) when added to all
sums previously paid by Beneficiary, the requested amount does not exceed the value of the Work
completed to the date of such certificate; and (B) evidence satisfactory to Beneficiary that the
balance of the Restoration Funds remaining after making the payments shall be sufficient to pay the
balance of the cost of the

26

 

Work. Each Request for Payment shall be accompanied by (x) waivers of liens covering that
part of the Work previously paid for, if any (y) a title search or by other evidence reasonably
satisfactory to Beneficiary that no mechanic’s or materialmen’s liens or other similar liens for
labor or materials supplied in connection with the Work have been filed against the Property and
not discharged of record (or if such liens exist, adequate security (including, if applicable, a
bond in form and substance satisfactory to Beneficiary) shall have been provided therefor, provided
that in all events any lien must be discharged, released or adequately bonded around, in a manner
satisfactory to Beneficiary, within thirty (30) days after receipt of notice of its existence but
in all events prior to the foreclosure thereof), and (z) an endorsement to Beneficiary’s title
policy insuring that no encumbrance exists on or affects the Property other than the Permitted
Exceptions and such other matters as Beneficiary may approve in writing.

               (iii) The final Request for Payment shall be accompanied by (a) a final certificate of
occupancy or other evidence of approval of appropriate governmental authorities for the use and
occupancy of the Improvements, (b) evidence that the Restoration has been completed in substantial
accordance with the Approved Plans and Specifications and in accordance with all Requirements, (c)
evidence that the costs of the Restoration have been paid in full (or with the application of the
sums requested in such final Request for Payment will be paid in full), and (d) evidence that no
mechanic’s or similar liens for labor or material supplied in connection with the Restoration are
outstanding against the Property, including final waivers of liens covering all of the Work and an
endorsement to Beneficiary’s title policy insuring that no encumbrance exists on or affects the
Property other than the Permitted Exceptions and such other matters as Beneficiary may approve in
writing.

          (c) If (i) within sixty (60) days after the occurrence of any damage, destruction or
condemnation requiring Restoration and plans and specifications are required in connection
therewith, Trustor fails to submit to Beneficiary and receive from Beneficiary Beneficiary’s
approval of the applicable plans and specifications or after such approval is obtained fails to
deposit with Beneficiary the additional amount necessary to accomplish the Restoration as provided
in subparagraph (a) above, or (ii) after such plans and specifications are approved by all such
governmental authorities and Beneficiary, Trustor fails to commence promptly or diligently continue
to completion the Restoration, or (iii) Trustor becomes delinquent in payment to mechanics,
materialmen or others for the costs incurred in connection with the Restoration and has not
protected Beneficiary against the consequences thereof by bonding over in a manner reasonably
satisfactory Beneficiary, or (iv) there exists an Event of Default, then, in addition to all of the
rights herein set forth and after ten (10) days’ written notice of the non-fulfillment of one or
more of these conditions, Beneficiary may apply the Restoration Funds to reduce the Secured
Indebtedness in such order as Beneficiary may determine, and at Beneficiary’s option and in its
sole discretion, Beneficiary may declare the Secured Indebtedness immediately due and payable, but
no Prepayment Fee shall be payable except in accordance with Section 9(d) of the Note.

27

 

ARTICLE VIII

REPRESENTATIONS OF TRUSTOR

     Section 8.1 ERISA. Trustor hereby represents, warrants and agrees that: (i) it is
acting on its own behalf and that it is not an employee benefit plan as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which is subject to
Title 1 of ERISA, nor a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended (each of the foregoing hereinafter referred to collectively as a “Plan”); (ii) Trustor’s
assets do not constitute “plan assets” of one or more such Plans within the meaning of Department
of Labor Regulation Section 2510.3-101; and (iii) it will not be reconstituted as a Plan or as an
entity whose assets constitute “plan assets”.

     Section 8.2 NON-RELATIONSHIP. Neither Trustor nor any direct partner of Trustor is
(i) a director or officer of MetLife or MetLife Bank, (ii) a parent, son or daughter of a director
or officer of MetLife or MetLife Bank, or a descendent of any of them, (iii) a stepparent, adopted
child, stepson or stepdaughter of a director or officer of MetLife or MetLife Bank, or (iv) a
spouse of a director or officer of MetLife or MetLife Bank.

     Section 8.3 NO ADVERSE CHANGE.

     Trustor represents and warrants that, as of the date hereof:

          (a) there has been no material adverse change from the conditions shown in the application
submitted for the Loan by Trustor (“Application”) or in the materials submitted in connection with
the Application in the credit rating or financial condition of Trustor, Liable Party or their
respective general partners (collectively, “Trustor’s Constituents”).

          (b) Trustor has delivered to Beneficiary true and correct copies of all Trustor’s
organizational documents and except as expressly approved by Beneficiary in writing, there have
been no changes in Trustor’s Constituents since the date that the Application was executed by
Trustor.

          (c) Neither Trustor, nor any of the Trustor’s Constituents, is involved in any bankruptcy,
reorganization, insolvency, dissolution or liquidation proceeding, and to the best knowledge of
Trustor, no such proceeding is contemplated or threatened.

          (d) Trustor has received reasonably equivalent value for the granting of this Deed of Trust.

     Section 8.4 FOREIGN INVESTOR. Trustor represents and warrants that neither Trustor
nor any of Trustor’s direct partners are a “foreign person” within the meaning of Sections 1445 and
7701 of the Internal Revenue Code of 1986, and the amendments of such Code or Regulations as
promulgated pursuant to such Code. Trustor is a “disregarded entity” within the meaning of such
Code or Regulations; however, Hines REIT Properties, L.P., a Delaware limited partnership
(“Operating Partnership”), the beneficial owner of Trustor, is not a “disregarded entity” within
the meaning of such Code or Regulations.

28

 

     Section 8.5 PATRIOT ACT/PROHIBITED PERSON.

          (a) Neither Trustor, nor any person holding a controlling interest in Trustor, is (i) engaged
in any money laundering in violation of the AML Laws (as hereinafter defined), including the
Patriot Act (as hereinafter defined) or (ii) a Prohibited Person (as hereinafter defined). No
person has a direct or indirect controlling interest (as hereinafter defined) in Trustor other than
as disclosed to Beneficiary.

          (b) Trustor shall notify Beneficiary promptly upon its senior management obtaining actual
knowledge (without any duty to conduct any investigation or inquiry except to the extent, if any,
required by applicable law) that Trustor or any person owning any direct or indirect controlling
interest in Trustor, is or becomes (i) engaged in any money laundering in violation of the AML Laws
or (ii) a Prohibited Person.

          (c) For the purposes of this Section 8.5:

               (i) “AML Laws” shall mean money laundering and anti-terrorist laws, rules, regulations and
executive orders of the United States, including the Patriot Act and those issued by the U.S.
Office of Foreign Asset Control and the U.S. Department of Treasury, all as amended from time to
time.

               (ii) “controlling interest” with respect to any entity shall mean either (A) ownership
directly or indirectly of more than 50% of all equity interests in such entity or (B) the
possession, directly or indirectly, of the power to direct or cause the direction of the day to day
management and policies of such entity, through the ownership of voting securities, by contract or
otherwise.

               (iii) “Patriot Act” shall mean Title III of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended from time to
time.

               (iv) “Prohibited Person” shall mean (A) any individual or entity listed in the Annex to, or
which is otherwise subject to the provisions of Section 1 of, Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism, (B) any
individual or entity that is named as a “specifically designated national (SDN)” on the most
current list published by the U.S. Treasury Department Office of Foreign Assets Control at its
official website (http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf) or at any replacement
website or other replacement official publication of such list or is named on any other similar
U.S. or foreign government or regulatory list issued post 9/11/01, (C) any terrorist organizations
or narcotics traffickers, including those individuals or entities that are included on any lists of
persons with whom Grantor is prohibited from transacting business and maintained by the U.S. Office
of Foreign Assets Control.

     Section 8.6 BROKERS. Trustor hereby represents and warrants that CBRE Melody
(“Broker”) is its broker in connection with the Loan, and Trustor agrees to pay the fees of Broker
in accordance with the written agreement between Trustor and Broker. Beneficiary shall

29

 

have no obligations for, and Trustor hereby indemnifies and holds Beneficiary harmless from,
the payment of any brokerage commissions or fees of any kind and any legal fees and/or expenses
incurred by Beneficiary in connection with any claims for brokerage commissions or fees with
respect to the Loan by anyone claiming by, through or under Trustor. Trustor acknowledges that
Beneficiary may be affiliated with, or may have been involved in other transactions with Broker,
and Trustor agrees that it shall have no rights against Beneficiary or defenses to Trustor’s
obligations under the Loan Documents because of any such relationship.

     Section 8.7 SECURITIES LAWS. The limited partnership interests evidenced by the
Trustor’s Organizational Documents have been issued in accordance with all applicable federal and
state securities laws, or authorized exemptions from such securities laws, including, but not
limited to, the Securities Act of 1933, as amended, the Securities and Exchange Act of 1934, and
the California Corporate Securities Law of 1968, each as amended. The limited partnership
interests of Trustor have not been issued in violation of any federal, state or local securities
law, and to the extent that these securities have been issued in reliance on exemptions from such
federal or state securities law, all necessary steps have been taken to qualify for such
exemptions. The limited partners of Trustor have been properly notified of all applicable
securities laws and related restrictions on their ability to transfer, sell or otherwise dispose of
their partnership interests in Trustor. Except for identification of Beneficiary as a lender to
Trustor, the name of Beneficiary will not be in any of the offering materials provided or to be
provided to any person, including but not limited to any of the limited partners of Trustor. There
has not been any representation, whether written, oral or otherwise, that Beneficiary in any way
has participated or endorsed the offering of the partnership interests in Trustor.

ARTICLE IX

EXCULPATION AND LIABILITY

     Section 9.1 LIABILITY OF TRUSTOR.

          (a) Notwithstanding anything contained herein or in the other Loan Documents to the contrary,
upon the occurrence of an Event of Default, except as provided in this Section 9.1, Beneficiary
will look solely to the Property and the security under the Loan Documents for the repayment of the
Loan and will not enforce a deficiency judgment against Trustor or any direct or indirect partner,
member or shareholder or other holder of a beneficial interest in Trustor. However, nothing
contained in this section shall limit the rights of Beneficiary to proceed against Trustor (but not
its partners, members, shareholders or other holders of any beneficial interests in Trustor) (i) to
enforce any Leases entered into by Trustor or its affiliates as tenant, or guarantees, or other
agreements entered into by Trustor in a capacity other than as borrower or any policies of
insurance; (ii) to recover damages for fraud, intentional material misrepresentation or breach of
warranty or intentional physical waste; (iii) to recover any Condemnation Proceeds or Insurance
Proceeds or other similar funds which have been misapplied by Trustor or which, under the terms of
the Loan Documents, should have been paid to Beneficiary; (iv) to recover any tenant security
deposits, tenant letters of credit or other deposits or fees paid to Trustor and not applied to
rent or returned to tenants pursuant to the terms of the tenant leases that are part of the
collateral for the Loan or prepaid rents for a period of more than 30 days which have not been
delivered to Beneficiary; (v) to recover Rents and

30

 

Profits received by Trustor during the period beginning six (6) months prior to the date a
notice of acceleration of maturity of the Note is delivered to Trustor through the date Beneficiary
acquires title to the Property which have not been applied to the Loan or in accordance with the
Loan Documents for leasing, repair, management, operating and maintenance expenses of the Property,
insurance premiums, Imposition deposits, deposits into a reserve for replacements or taxes upon the
Property or any other sum required to be paid under the Loan Documents, but only to the extent
Rents and Profits were available but not so applied; (vi) to recover damages, costs and expenses
arising from, or in connection with any breach of warranty by Borrower under Article VI of this
Deed of Trust pertaining to hazardous materials or any warranty or the Indemnity Agreement; (vii)
to recover damages arising from Trustor’s failure to comply with Section 8.1 of this Deed of Trust
pertaining to ERISA; and (viii) to recover any damages, costs, expenses or liabilities, including
attorneys’ fees, incurred by Beneficiary and arising from any order, consent decree or settlement
relating to the cleanup of Hazardous Materials, or any other “environmental provision” (as defined
in California Code of Civil Procedure Section 736, as such Section may be amended from time to
time) relating to the Property or any portion thereof. In accordance with California Code of Civil
Procedure Section 726.5, as such Section may be amended from time to time, the foregoing shall not
limit the right of Beneficiary to waive the security of this Deed of Trust as to any parcel of Real
Property that is “environmentally impaired” or is an “affected parcel” (as such terms are defined
in such Section), and as to any Personal Property attached to such parcel, and thereafter to
exercise against Trustor, to the extent permitted by such Section 726.5, the rights and remedies of
an unsecured creditor, including reduction of Beneficiary’s claim against Trustor to judgment, and
any other rights and remedies permitted by law. If Beneficiary exercises the rights and remedies
of an unsecured creditor in accordance the preceding sentence, Trustor promises to pay to
Beneficiary, on demand by Beneficiary following such exercise, all amounts owed to Beneficiary
under any Loan Document, and Trustor agrees that it but not any direct or indirect partner, member,
shareholder or other holder of a beneficial interest in Borrower, will be personally liable for the
payment of all such sums.

          (b) The limitation of liability set forth in this Section 9.1 shall not apply and the Loan
shall be fully recourse to Trustor (but not to any direct or indirect partner, member, shareholder
or other holder of beneficial interests in Trustor) in the event that (i) Trustor does not deposit
the Lease Reserve Fund as and when required under Section 5.6 and the Reserve Agreement; provided,
however that so long as Hines REIT 1515 S Street LP or a Permitted Transferee (as hereinafter
defined) is Trustor and Hines REIT Properties, L.P. is the Liable Party, then and in such event,
such liability shall be limited to the amount of any deficiency judgment, which amount shall not
exceed $5,000,000.00 plus any and all costs incurred by Beneficiary in the enforcement and
foreclosure of the Note and Deed of Trust, including, without limitation, attorneys’ fees; (ii) a
Transfer occurs without the consent of Beneficiary (other than a transfer which is permitted
without Beneficiary’s consent pursuant to the terms of Section 10.1), (iii) a Subordinate Financing
occurs in violation of Section 10.2 of the Deed of Trust without the consent of Beneficiary, (iv)
Trustor commences a voluntary proceeding under applicable federal bankruptcy law, or (v) a
collusive involuntary proceeding under applicable federal bankruptcy law is commenced against
Trustor and is not dismissed within 120 days. In addition, this agreement shall not waive any
rights which Beneficiary would have under any provisions of the U.S. Bankruptcy Code to file a
claim for the full amount of the Secured Indebtedness or to require that the Property shall
continue to secure all of the Secured Indebtedness.

31

 

ARTICLE X

CHANGE IN OWNERSHIP, CONVEYANCE OF PROPERTY

     Section 10.1 CONVEYANCE OF PROPERTY, CHANGE IN OWNERSHIP AND COMPOSITION.

          (a) Except as otherwise expressly provided in this Section 10.1, Trustor shall not cause or
permit: (i) the Property or Trustor’s interest in the Property, to be conveyed, transferred,
assigned, encumbered, sold or otherwise disposed of; or (ii) any transfer, assignment or
conveyance of any interest in Trustor or in the partners, or stockholders, or members or
beneficiaries of, Trustor or of any of Trustor’s Constituents or (iii) any merger, reorganization,
dissolution or other change in the ownership structure of Trustor or any of the general partners of
Trustor, including, without limitation, any conversion of Trustor or any general partner of Trustor
from a general partnership to a limited partnership, a limited liability partnership or a limited
liability company (collectively, “Transfers”).

          (b) The prohibitions on transfer shall not be applicable to (i) transfers of ownership as a
result of the death, or in connection with estate planning, of a natural person to a spouse, son or
daughter or descendant of either, or to a stepson or stepdaughter or descendant of either, or to
trusts for the benefit of such family members, or (ii) Leases approved or deemed approved pursuant
to the terms of this Deed of Trust, or (iii) any transfer in connection with Condemnation, or (iv)
liens in compliance with Section 2.9 or 7.4(c). In addition, the prohibitions on transfer shall
not be applicable to the transfer of all of the direct or indirect ownership interests in Trustor
pursuant to the Credit Facility Pledge (as defined in Section 10.2 below), as the result of a
default under the Credit Agreement (as defined in Section 10.2 below) so long as the transferee is
a Qualified Institutional Investor (as defined below) and so long as Trustor pays to Beneficiary
all out of pocket costs and expenses incurred by Beneficiary in connection with any proposed
Transfer pursuant to the preceding, including without limitation, reasonable attorneys’ fees and
costs. As used herein, the term “Qualified Institutional
Lender” and “Qualified Institutional
Investor” shall mean any insurance company, bank, investment bank, savings and loan association,
trust company, commercial credit corporation, pension plan, pension fund or pension fund advisory
firm, mutual fund or other investment company, government entity or plan, “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (other than a
broker/dealer), or real estate investment trust, in each case having at least $200,000,000 in
capital/statutory surplus, shareholder’s equity or net worth, as applicable, and being experienced
in making commercial real estate loans or otherwise investing in commercial real estate. Any
corporation, partnership, joint venture, limited liability company or trust created and controlled
by any of the foregoing entities shall also be deemed a “Qualified Institutional Investor”.

          (c) Notwithstanding anything contained in Loan Documents to the contrary, and provided there
is no Event of Default under the Loan Documents or the Indemnity Agreement as of the time of the
transfer, the following transfers, done at Trustor’s sole cost and expense, shall be deemed
“Permitted Transfers” and the entities to which the transfer is made shall be deemed “Permitted
Transferees”) and shall not require Beneficiary’s prior written approval:

32

 

               (i) Any assignments or transfers of interests among, between, to or from Hines Affiliates
(defined below) so long as (a) Hines Affiliates continue to control, directly or indirectly, the
management and operations of the investment advisor of Hines Real Estate Investment Trust, Inc., a
publicly traded Maryland real estate investment trust (“Hines REIT”), (b) Hines REIT continues to
be the general partner of and retains management and operational control of Operating Partnership,
and (c) Operating Partnership continues to own, directly or indirectly, all of the partnership
interests in Trustor and retains management and operational control of the Trustor and the
Property;

               (ii) Any assignments, transfers, pledges, encumbrances, hypothecations or redemptions of
limited partnership interests, or issuance of new limited partnership interests, in Operating
Partnership, so long as (a) Hines Affiliates continue to control, directly or indirectly, the
management and operation of the investment advisor of Hines REIT, and (b) Hines REIT continues to
be the general partner of and retains management and operational control of Operating Partnership;
and

               (iii) Any assignments, transfers, pledges, encumbrances, hypothecations, redemptions of
shares, stock or other interests, or issuance of new shares, stock, or other interests, in Hines
REIT so long as Hines Affiliates continue to control, directly or indirectly, the management and
operation of the investment advisor of Hines REIT;

               (iv) Any assignments, transfers, pledges, encumbrances, hypothecations, redemptions of shares,
stock, or other interests, or issuance of new shares, stock partnership or other interests in any
direct or indirect owner or holder of beneficial interests in Hines REIT or in Operating
Partnership so long as clauses (a) (b) and (c) of Section 10.1(c)(i) above are satisfied.

     Should any of the Permitted Transfers described in this Section 10.1(c) result in a change in
the entity that owns the Property, such transfer shall still be deemed a “Permitted Transfer” so
long as: (i) the Trustor provides Beneficiary with at least thirty (30) days prior written notice
of such transfer, (ii) the transferee of the Property shall be able to make the representations set
forth in Sections 8.1, 8.4 and 8.5 of this Deed of Trust, (iii) the transferee of the Property
shall expressly assume in writing all obligations under the Loan Documents and the Indemnity
Agreement in a manner reasonably satisfactory to Beneficiary, (iv) Trustor or transferee shall pay
all costs and expenses incurred by Beneficiary in connection with the transfer, including title
insurance premiums or endorsements, documentation costs and reasonable attorneys’ fees. No
transfer shall release Trustor from its obligations under the Loan Documents or the Indemnity
Agreement with respect to events arising or occurring prior to the date of transfer.

     A “Hines Affiliate” or “Hines Affiliates” shall mean any partnership, limited liability
company, corporation, trust or other entity owned (wholly or partially, directly or indirectly) and
controlled (directly or indirectly) by Gerald D. Hines, Jeffery C. Hines, Hines Interests Limited
Partnership, a Delaware limited partnership (“HILP”), trusts established for the benefit of the
Hines Family (as defined below), or in the event of the death or disability of Jeffery C. Hines
and/or Gerald D. Hines, the estate of either of them. As used herein, the “Hines Family” shall
mean Gerald D. Hines and/or Jeffery C. Hines, their respective parents, brothers and sisters, their

33

 

respective spouses and children and/or grandchildren of any of the foregoing (including
children or grandchildren by adoption).

          (d) Notwithstanding anything contained in this Deed of Trust to the contrary, Trustor shall
have the right one time (and only one time) during the term of the Loan to transfer the Property
(or interests in Trustor to the extent not deemed a Permitted Transfer) in a single transaction to
a single purchaser (which purchaser shall establish a single purpose entity satisfying the
requirements of Section 2.10 hereof to own the Property, or, in the case of the sale of
interests in Trustor, adhere to the requirements of said Section), subject to the Deed of Trust
encumbering the Property, on the terms and conditions hereafter set forth:

               (i) no Event of Default shall exist under any of the Loan Documents on the date of the closing
of the proposed sale;

               (ii) Trustor shall have received the written approval of the proposed transferee from the
Beneficiary, not to be unreasonably withheld; provided however, that such approval shall not be
required if the transfer is to the Hines-Sumisei U.S. Core Office Fund, L.P., Hines U.S. Office
Value Added Fund, L.P., National Office Partners Limited Partnership (each, a “Hines Fund”) (or to
a single purpose entity formed by a Hines Fund in which the Hines Fund shall hold more than a 50%
ownership interest and control the management and operation of such single purpose entity) but such
transfer shall be subject to each of the other provisions of this Section 10(d) except to the
extent expressly provided to the contrary

               (iii) the proposed transferee shall have represented and warranted to Beneficiary on the date
of the closing of the proposed sale, pursuant to a document in form and substance reasonably
satisfactory to Beneficiary, that the representations and warranties set forth in Section
8.1 of this Deed of Trust are true and correct as to such transferee;

               (iv) the Net Operating Income (as such term is hereafter defined), in the reasonable opinion
of Beneficiary, derived from the Property shall be no less than 1.87 times the annual payments
required under the Loan;

               (v) the Loan to Value Ratio (as such term is hereafter defined) of the Property at the time of
the transfer shall not be greater than 65%;

               (vi) the Trustor or transferee shall have paid to Beneficiary, on or before the date of the
closing of the sale, a transfer fee in the amount of (i) one-half percent (0.5%) of the aggregate
outstanding principal balance of the Note as of the date of the closing of the sale, and (ii) a
processing fee in the amount of $10,000; provided, however that if the transferee is a Hines Fund,
the transfer fee pursuant to clause (i) of this Section 10.1(d)(vi) shall be reduced to one-eighth
percent (0.125%).

               (vii) the proposed transferee shall have executed and delivered to Beneficiary, on or before
the date of the closing of the proposed sale, an assumption agreement in form and substance
reasonably satisfactory to Beneficiary, pursuant to which the transferee shall have assumed the
Loan Documents and the Indemnity Agreement executed by the Trustor;

34

 

               (viii) only if the transferee is not a Hines Fund, or a Hines Affiliate, additional Liable
Parties acceptable to Beneficiary shall execute a guaranty to guaranty the obligations of Trustor
with respect to (i) the recourse provisions of the Loan which are set forth in Section 9.1(b)
above, and (ii) the Indemnity Agreement; in each case only with respect to events arising or
occurring from and after the date of the transfer, which additional Liable Parties must have (in
the aggregate if more than one) a net worth of not less than $50,000,000.00;

               (ix) Trustor and/or the proposed transferee shall have provided to Beneficiary, at least 30
days prior to the sale date, such documentation and information as shall have been reasonably
required by Beneficiary to evaluate the financial condition of the proposed transferee, including,
but not limited to, certified or audited financial information for the proposed transferee in form
and substance reasonably satisfactory to Beneficiary, and based thereon, Beneficiary shall have
thereafter determined, in its reasonable discretion, that the proposed transferee or affiliates
(including for purposes of this subsection (ix) any Hines Affiliate in the event of a transfer to a
Hines Fund) has a net worth as of the date of the closing of the sale (following the transfer of
the Property) of not less than One Hundred Million Dollars ($100,000,000.00);

               (x) Trustor and/or the proposed transferee shall have provided to Beneficiary, at least 30
days prior to the sale date, such documentation and information as shall have been reasonably
required by Beneficiary to evaluate the experience of the proposed transferee, and based thereon,
Beneficiary shall have thereafter determined, in its reasonable discretion, that the proposed
transferee or its affiliates (including for purposes of this subsection (x) any Hines Affiliate in
the event of a transfer to a Hines Fund) is experienced in the ownership, management and leasing of
properties similar to the Property (or, alternatively, documentation satisfactory to Beneficiary
evidencing that such transferee has retained a property manager reasonably satisfactory to
Beneficiary having such experience);

               (xi) Trustor shall have provided to Beneficiary, on or before the date of the closing of the
proposed sale, customary UCC, tax and litigation searches with respect to the proposed transferee,
the results of which searches shall be reasonably satisfactory to Beneficiary;

               (xii) Trustor or the proposed transferee shall have provided to Beneficiary, on or before the
date of the closing of the proposed sale, a new mortgagee’s policy of title insurance or an
endorsement to the Beneficiary’s Title Insurance Policy for this Deed of Trust (in a form
reasonably satisfactory to Beneficiary) which insures, among other things, that (a) in the event
the transfer constitutes a transfer of the Property rather than transfers of entity interests, the
transferee of the Property owns fee title to the Property, (b) this Deed of Trust remains a first
priority lien encumbering the Property, (c) since the date of the original closing of the Loan,
there have been no changes to the condition of title to the Property other than any such changes as
may have been previously approved in writing by Beneficiary, and (d) all endorsements to the
original Beneficiary Title Insurance Policy remain unmodified and in full force and effect (or
Beneficiary is provided new endorsements with the same effect); and

               (xiii) The Trustor or transferee shall have paid to Beneficiary, on or before the date of the
closing of the sale, all reasonable costs and expenses incurred by Beneficiary in connection with
the proposed sale and Beneficiary’s determination whether the

35

 

conditions to such sale have been satisfied, including, but not limited to, revenue,
documentary, stamp or intangible or other taxes, title insurance premiums, survey costs,
documentation costs, reasonable attorneys’ fees and costs, and reasonable fees and costs relating
to engineers, appraisers and architects.

     Trustor shall be notified, within thirty (30) days following Beneficiary’s receipt of all the
data necessary to make its determination as to the acceptability of the transferee, of whether
Beneficiary approves or disapproves (with specific reasons for any such disapproval) of the
transferee.

     In no event shall any such sale release, or be deemed to release, the Trustor from its
obligations under the Note, Loan Documents or the Indemnity Agreement with respect to matters or
events arising or occurring prior to the date of the sale.

     For purposes of this Section 10.1(d) only, the following terms used herein in this Section
shall have the following meanings:

          (1) the term “Net Operating Income” shall mean the amount by which the “Effective Gross
Income” for the calendar year immediately succeeding the year in which the calculation is
being made is anticipated to exceed the “Operating Expenses” for that same calendar year.
Net Operating Income shall be computed on any basis of accounting selected by Trustor
provided that Trustor provides to Beneficiary sufficient detail to permit Beneficiary to
convert Net Operating Income to a cash basis of accounting;

          (2) the term “Effective Gross Income” shall mean all gross receipts from the Property
including, but not be limited to, any and all of the following from the operation of the
Property: (1) all base rents collectable from tenants under leases whose terms have
commenced or will commence and who are anticipated to be in occupancy during the immediately
succeeding calendar year from the date of the test; (2) all other income to be received
during the immediately succeeding calendar year pursuant to contractual agreements with
tenants or other entities (including, but not limited to, percentage rent, parking income,
storage rent, and antenna rent, if any), and all real estate tax refunds, condemnation
proceeds (as defined herein), and insurance proceeds (as defined herein); and (3) tenant
contributions for Operating Expenses (including, but not limited to, common area maintenance
charges, real estate taxes, etc.) based upon the projection of Operating Expenses described
below for the next succeeding calendar year;

          (3) the term “Operating Expenses” shall mean normal and customary operating expenses
and shall be based upon the last full calendar year’s actual operating expenses (adjusted
for occupancy or inflation, where appropriate, and taking into account any known component
of operating expenses), and shall include, but not be limited to, any and all of the
following expenses relating to the Property: real estate taxes, insurance premiums, actual
management fees of up to three percent (3%) of gross income, common area operating and
maintenance expenses (including snow removal, cleaning and repairs), and rental payments
under any ground lease, but excluding the aggregate amount of principal and/or interest paid
under any mortgages, capital

36

 

expenditures, tenant inducements and leasing commissions and non-cash items such as
depreciation; and

          (4) the term “Debt Service Coverage Ratio” for the Indebtedness shall be determined by
dividing (1) the Net Operating Income from the Property for a given calendar year by (2) the
annual debt service on the Indebtedness for such calendar year.

          (5) the term “Loan to Value Ratio” shall mean the ratio of (i) the amount of the
outstanding principal balance of the Loan to (ii) the value of the Property, as such value
is reasonably determined by Beneficiary. However, should Beneficiary and Trustor disagree
as to the Loan to Value Ratio, then Beneficiary shall select an MAI appraiser reasonably
acceptable to Beneficiary to perform an MAI appraisal, at Trustor’s sole cost and expense.
Such MAI appraisal shall be reasonably acceptable to Beneficiary and contain the final
determination for the “value of the property” as such phrase is used above.

     Section 10.2 PROHIBITION ON SUBORDINATE FINANCING. Trustor shall not incur or permit
the incurring of any of the following (each of the following referred to as “Subordinate
Financing”): (i) any financing in addition to the Loan that is secured by a lien, security interest
or other encumbrance of any part of the Property (but excluding any encumbrance of Trustor’s
interest in Personal Property arising out of purchase money debt for, or the leasing of, equipment
or other personal property items, which shall be allowed), or (ii) any pledge or other similar
encumbrance of the interest of a partner, member or shareholder or holder of any other beneficial
interest directly in Trustor; except for a pledge (the “Credit Facility Pledge”) of a direct or
indirect 100% ownership interest in Trustor which Credit Facility Pledge secures (x) a Credit
Agreement in the original principal amount of $140,000,000 with an accordian to $250,000,000 dated
as of September 9, 2005 between Operating Partnership, and KeyBank National Association, a national
banking association (“KeyBank”), as Administrative Agent, and the lending institutions party to or
as may become parties to the Credit Agreement, as supplemented, amended, extended or renewed on
substantially similar economic and material business terms from time to time, or (y) any
refinancing or replacement thereof on substantially similar economic and material business terms
provided by KeyBank or other Qualified Institutional Lender (the Credit Agreement as described in
the foregoing clauses (x) and (y) is referred to herein collectively, as the “Credit Agreement”),
provided that the Credit Agreement shall not be secured by a lien, pledge or security interest or
other encumbrance of any part of the Property.

     Section 10.3 RESTRICTIONS ON ADDITIONAL OBLIGATIONS. During the term of the Loan,
Trustor shall not, without the prior written consent of Beneficiary, become liable with respect to
any indebtedness or other obligation except for (i) the Loan, (ii) Leases entered into in the
ordinary course of owning and operating the Property for the Use, (iii) other liabilities incurred
in the ordinary course of owning and operating the Property for the Use but excluding any loans or
borrowings, (iv) liabilities or indebtedness disclosed in writing to and approved by Beneficiary on
or before the Execution Date, and (v) any other single item of indebtedness or liability which does
not exceed $250,000 or, when aggregated with other items or indebtedness or liability, does not
exceed $500,000.

37

 

     Section 10.4 STATEMENTS REGARDING OWNERSHIP. Trustor agrees to submit or cause to be
submitted to Beneficiary within ten (10) days after request by Beneficiary, a sworn, notarized
certificate, signed by an authorized (i) individual who is Trustor or one of the individuals
comprising Trustor, (ii) member of Trustor, (iii) partner of Trustor or (iv) officer of Trustor, as
the case may be, stating whether (x) any part of the Property, or any interest in the Property, has
been conveyed, transferred, assigned, encumbered, or sold, and if so, to whom (excluding Leases);
(y) any conveyance, transfer, pledge or encumbrance of any direct interest in Trustor has been made
by Trustor and if so, to whom; or (z) there has been any change in the direct individual(s)
comprising Trustor or in the direct partners, members, stockholders or beneficiaries in Trustor
from those on the Execution Date, and if so, a description of such change or changes.

ARTICLE XI

DEFAULTS AND REMEDIES

     Section 11.1 EVENTS OF DEFAULT. Any of the following shall be deemed to be a material
breach of Trustor’s covenants in this Deed of Trust and shall constitute a default (“Event of
Default”):

          (a) The failure of Trustor to pay any installment of principal, interest or principal and
interest, any required escrow deposit or any other sum required to be paid under any Loan Document,
whether to Beneficiary or otherwise, within seven (7) days after Beneficiary shall have given
Trustor written notice of the due date of such payment (provided, however, such written notice
shall not be required more than once in any period of twelve (12) consecutive months, and after
such written notice shall have been given once during any such 12-month period, Trustor shall be in
default hereunder if such sums remain unpaid for more than seven (7) days after the due date
thereof).

          (b) The failure of Trustor to perform or observe any other term, provision, covenant,
condition or agreement under any Loan Document, including, without limitation, the Reserve
Agreement and the Escrow Agreement a for a period of more than thirty (30) days after receipt of
notice of such failure (or, if applicable, for such shorter period as is expressly provided in such
documents prior to the occurrence of an Event of Default); provided, however, if such failure
cannot be cured within such 30-day period (and if such default is not a monetary default), Trustor
shall have such additional period of time as shall be reasonably necessary to effect the cure
thereof provided Trustor promptly institutes the appropriate curative action within such 30-day
period and diligently pursues same, but in no event more than sixty (60) days (including the
original 30-day period) in the aggregate.

          (c) The filing by Trustor or one of the Liable Parties (an “Insolvent Entity”) of a voluntary
petition or application for relief in bankruptcy, the filing against an Insolvent Entity of an
involuntary petition or application for relief in bankruptcy which is not dismissed within one
hundred twenty (120) days, or an Insolvent Entity’s adjudication as a bankrupt or insolvent, or the
filing by an Insolvent Entity of any petition, application for relief or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief for itself under any present or future federal, state or

38

 

other statute, law, code or regulation relating to bankruptcy, insolvency or other relief for
debtors, or an Insolvent Entity’s seeking or consenting to or acquiescing in the appointment of any
trustee, custodian, conservator, receiver or liquidator of an Insolvent Entity or of all or any
substantial part of the Property or of any or all of the Rents and Profits, or the making by an
Insolvent Entity of any general assignment for the benefit of creditors, or the admission in
writing by an Insolvent Entity of its inability to pay its debts generally as they become due;

          (d) If any warranty, representation, certification, financial statement or other information
made or furnished at any time pursuant to the terms of the Loan Documents by Trustor, or by any
person or entity otherwise liable under any Loan Document shall be materially false or misleading;
or

          (e) If Trustor shall suffer or permit the Property, or any part of the Property, to be used in
a manner which would reasonably be expected to, if continued, (1) impair Trustor’s title to the
Property, (2) create rights of adverse use or possession, or (3) constitute an implied dedication
of any part of the Property; provided, however, that no event described in this subsection (e)
shall be deemed an Event of Default until the expiration of the cure period set forth in Subsection
11.1(b) above, unless prior to the expiration of the cure period such event (x) impairs Trustor’s
title to the Property, (y) creates rights of adverse use or possession, or (z) constitutes an
implied dedication of any part of the Property.

          (f) If Liable Parties shall default under the Guaranty executed by Liable Parties in favor of
Beneficiary dated as of the Execution Date.

          (g) If Trustor shall default under the Indemnity Agreement.

     Section 11.2 REMEDIES UPON DEFAULT. Upon the happening of an Event of Default, the
Secured Indebtedness shall, at the option of Beneficiary, become immediately due and payable,
without further notice or demand, and Beneficiary may undertake any one or more of the following
remedies:

          (a) Foreclosure. Institute a foreclosure action in accordance with the law of the
State, or take any other action as may be allowed, at law or in equity, for the enforcement of the
Loan Documents and realization on the Property or any other security afforded by the Loan
Documents. In the case of a judicial proceeding, Beneficiary may proceed to final judgment and
execution for the amount of the Secured Indebtedness owed as of the date of the judgment, together
with all costs of suit, reasonable attorneys’ fees and interest on the judgment at the maximum rate
permitted by law from the date of the judgment until paid. If Beneficiary is the purchaser at the
foreclosure sale of the Property, the foreclosure sale price shall be applied against the total
amount due Beneficiary; and/or

          (b) Power of Sale. Institute a non-judicial foreclosure proceeding in compliance with
applicable law in effect on the date foreclosure is commenced for the Beneficiary to sell the
Property either as a whole or in separate parcels as Beneficiary may determine at public sale or
sales to the highest bidder for cash, in order to pay the Secured Indebtedness. If the Property is
sold as separate parcels, Beneficiary may direct the order in which the parcels are sold. Trustee
shall deliver to the purchaser a Trustee’s deed or deeds

39

 

without covenant or warranty, express or implied. Trustee may postpone the sale of all or any
portion of the Property by public announcement at the time and place of sale, and from time to time
may further postpone the sale by public announcement in accordance with applicable law; and/or

          (c) Entry. Enter into possession of the Property, lease the Improvements, collect all
Rents and Profits and, after deducting all costs of collection and administration expenses, apply
the remaining Rents and Profits in such order and amounts as Beneficiary, in Beneficiary’s sole
discretion, may elect to the payment of Impositions, operating costs, costs of maintenance,
restoration and repairs, Premiums and other charges, including, but not limited to, costs of
leasing the Property and reasonable fees and costs of counsel and receivers, and in reduction of
the Secured Indebtedness; and/or

          (d) Receivership. Have a receiver appointed to enter into possession of the Property,
lease the Property, collect the Rents and Profits and apply them as the appropriate court may
direct. Beneficiary shall be entitled to the appointment of a receiver without the necessity of
proving either the inadequacy of the security or the insolvency of Trustor or any of the Liable
Parties. Trustor and Liable Parties shall be deemed to have consented to the appointment of the
receiver. The collection or receipt of any of the Rents and Profits by Beneficiary or any receiver
shall not affect or cure any Event of Default. Beneficiary’s rights hereunder include its rights
under California Code of Civil Procedure Section 564, as such Section may be amended from time to
time; and/or

          (e) Action for Breach of Contract. In accordance with California Code of Civil
Procedure Section 736, as such Section may be amended from time to time, Beneficiary may bring an
action for breach of contract against Trustor for breach of any “environmental provision” (as such
term is defined in such Section) made by Trustor herein or in any other Loan Document, for the
recovery of damages and/or for the enforcement of the environmental provision; and/or

          (f) Waiver of Security. In accordance with California Code of Civil Procedure Section
726.5, as such Section may be amended from time to time, Beneficiary may waive the security of this
Deed of Trust as to any parcel of Real Property that is “environmentally impaired” or is an
“affected parcel” (as such terms are defined in such Section), and as to any Personal Property
attached to such parcel, and thereafter exercise against Trustor, to the extent permitted by such
Section 726.5, the rights and remedies of an unsecured creditor, including reduction of
Beneficiary’s claim against Trustor to judgment, and any other rights and remedies permitted by
law. Trustor and Beneficiary acknowledge that pursuant to California Code of Civil Procedure
Section 726.5, Beneficiary’s rights under this Section 11.2 are limited to instances in which
Trustor or any affiliate, agent, co-tenant, partner or joint venturer of Trustor either (i) caused,
contributed to, permitted or acquiesced in the release (as defined in such Section 726.5) or
threatened release of Hazardous Materials, or (ii) had actual knowledge or notice of such release
or threatened release prior to the execution and delivery of this Deed of Trust and failed to
disclose such release or threatened release to Beneficiary in writing after Beneficiary’s written
request for information concerning the environmental condition of the Property, unless Beneficiary
otherwise obtained actual knowledge of such release or threatened release prior to the execution
and delivery of this Deed of Trust.

40

 

     In the event Beneficiary elects, in accordance with California Code of Civil Procedure Section
726.5, to waive all or part of the security of this Deed of Trust and proceed against Trustor on an
unsecured basis, the valuation of the Real Property, the determination of the environmentally
impaired status of such security and any cause of action for a money judgment shall, at the request
of Beneficiary, be referred to a referee in accordance with California Code of Civil Procedure
Sections 638 et seq. Such referee shall be an M.A.I. appraiser selected by
Beneficiary and approved by Trustor, which approval shall not be unreasonably withheld or delayed.
The decision of such referee shall be binding upon both Trustor and Beneficiary, and judgment upon
the award rendered by such referee shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure Sections 644 and 645. Trustor
shall pay all reasonable costs and expenses incurred by Beneficiary in connection with any
proceeding under California Code of Civil Procedure Section 726.5, as such Section may be amended
from time to time.

     Section 11.3 APPLICATION OF PROCEEDS OF SALE. In the event of a sale of the Property
pursuant to Section 11.2 of this Deed of Trust, to the extent permitted by law, the Beneficiary
shall determine in its sole discretion the order in which the proceeds from the sale shall be
applied to the payment of the Secured Indebtedness, including without limitation, the expenses of
the sale and of all proceedings in connection with the sale, including reasonable attorneys’ fees
and expenses; Impositions, Premiums, liens, and other charges and expenses; the outstanding
principal balance of the Secured Indebtedness; any accrued interest; any Prepayment Fee; and any
other amounts owed under any of the Loan Documents.

     Section 11.4 WAIVER OF JURY TRIAL. To the fullest extent permitted by law, Trustor
and Beneficiary HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY in any action, proceeding
and/or hearing on any matter whatsoever arising out of, or in any way connected with, the Note,
this Deed of Trust or any of the Loan Documents, or the enforcement of any remedy under any law,
statute, or regulation. Neither party will seek to consolidate any such action in which a jury has
been waived, with any other action in which a jury trial cannot or has not been waived. Each party
has received the advice of counsel with respect to this waiver.

     Section 11.5 BENEFICIARY’S RIGHT TO PERFORM TRUSTOR’S OBLIGATIONS. Trustor agrees
that, if Trustor fails to perform any act or to pay any money which Trustor is required to perform
or pay under the Loan Documents, Beneficiary may make the payment or perform the act at the cost
and expense of Trustor and in Trustor’s name or in its own name. Any money paid by Beneficiary
under this Section 11.5 shall be reimbursed to Beneficiary in accordance with Section 11.6.

     Section 11.6 BENEFICIARY REIMBURSEMENT. All payments made, or funds expended or
advanced by Beneficiary pursuant to the provisions of Section 11.5 or otherwise in any Loan
Document, shall (1) become a part of the Secured Indebtedness, (2) bear interest at the Interest
Rate (as defined in the Note) from the date such payments are made or funds expended or advanced,
(3) become due and payable by Trustor upon demand by Beneficiary, and (4) bear interest at the
Default Rate (as defined in the Note) from the date of such demand. Trustor shall reimburse
Beneficiary within ten (10) days after receipt of written demand for such amounts.

41

 

     Section 11.7 FEES AND EXPENSES. If Beneficiary becomes a party (by intervention or
otherwise) to any action or proceeding affecting, directly or indirectly, Trustor, the Property or
the title thereto or Beneficiary’s interest under this Deed of Trust, or employs an attorney to
collect any of the Secured Indebtedness or to enforce performance of the obligations, covenants and
agreements of the Loan Documents, Trustor shall reimburse Beneficiary in accordance with Section
11.6 for all reasonable expenses, costs, charges and legal fees incurred by Beneficiary (including,
without limitation, the fees and expenses of experts and consultants), whether or not suit is
commenced.

     Section 11.8 WAIVER OF CONSEQUENTIAL DAMAGES. Trustor covenants and agrees that in no
event shall Beneficiary be liable for consequential damages, and to the fullest extent permitted by
law, Trustor expressly waives all existing and future claims that it may have against Beneficiary
for consequential damages.

     Section 11.9 INDEMNIFICATION OF TRUSTEE. Except for gross negligence and willful
misconduct, Trustee shall not be liable for any act or omission or error of judgment. Trustee may
rely on any document believed by it in good faith to be genuine. All money received by Trustee
shall be held in trust, but need not be segregated (except to the extent required by law), until
used or applied as provided in this Deed of Trust. Trustee shall not be liable for interest on the
money. Trustor shall protect, indemnify and hold harmless Trustee against all liability and
expenses which Trustee may incur in the lawful performance of its duties, except where such
liability or expenses are based on its gross negligence or willful misconduct.

     Section 11.10 ACTIONS BY TRUSTEE. At any time, upon written request of Beneficiary
and presentation of this Deed of Trust and the Note for endorsement, and without affecting the
personal liability of any entity or the Liable Parties for payment of the Secured Indebtedness or
the effect of this Deed of Trust upon the remainder of the Property, Trustee may take such actions
as Beneficiary may request which are permitted by this Deed of Trust or by applicable law.

     Section 11.11 SUBSTITUTION OF TRUSTEE. Beneficiary has the power and shall be
entitled, at any time and from time to time, to remove Trustee or any successor trustee and to
appoint another trustee in the place of Trustee or any successor trustee, by an instrument
recorded in the Official Records of the county or counties where the Property is located. The
recorded instrument shall be conclusive proof of the proper substitution and appointment of the
successor Trustee without the necessity of any conveyance from the predecessor Trustee.

ARTICLE XII

TRUSTOR AGREEMENTS AND FURTHER ASSURANCES

     Section 12.1 PARTICIPATION AND SALE OF LOAN.

          (a) Beneficiary may sell, transfer or assign its entire interest or one or more participation
interests in the Loan and the Loan Documents at any time and from time to time, including, without
limitation, its rights and obligations as servicer of the Loan. Beneficiary may forward to each
prospective purchaser, transferee, assignee, servicer or participant (collectively,

42

 

the “Investor”) or each prospective Investor, all documents and information which Beneficiary
now has or may hereafter acquire relating to the Secured Indebtedness and to Trustor or any Liable
Parties and the Property, whether furnished by Trustor, any Liable Parties or otherwise, as
Beneficiary determines necessary or desirable, and Beneficiary will obtain from each receiving
party a confidentiality agreement pursuant to which such party agrees to use confidential
information about the Property only for evaluating the prospective transaction for which
Beneficiary provides the information.

          (b) Trustor will and will cause all Liable Parties to cooperate with Beneficiary, at no
out-of-pocket expense to Trustor or such Liable Parties, in furnishing such information and
providing such other assistance, reports and legal opinions as Beneficiary may reasonably request
in connection with any such transaction. In addition, Trustor acknowledges that Beneficiary may
release or disclose to potential purchasers or transferees of the Loan, or potential participants
in the Loan, on a confidential basis, originals or copies of the Loan Documents, title information,
engineering reports, financial statements, operating statements, appraisals, Leases, rent rolls,
and all other materials, documents and information in Beneficiary’s possession or which Beneficiary
is entitled to receive under the Loan Documents, with respect to the Loan, Trustor, the Liable
Parties or the Property. Trustor shall also furnish to such Investors or such prospective
Investors, on a confidential basis, any and all information concerning the Property, the Leases,
the financial condition of Trustor and the Liable Parties as may be reasonably requested by
Beneficiary, any Investor or any prospective Investor in connection with any sale, transfer or
participation interest.

          (c) Notwithstanding anything to the contrary in Section 12(a) or 12(b) above, if Beneficiary
(i) transfers and assigns its entire interest in the Loan to a third party, such transfer shall be
to an institutional investor which has experience in making and administering mortgage loans
comparable to the Loan, and (ii) transfers participation interests in the Loan, Beneficiary shall
retain (x) administration rights with respect to the Loan and all actions between Trustor and such
transferee relating to the Loan Documents and the Property, and (y) authority to grant all consents
and approvals (except with respect to major decisions, as customarily defined in participation
agreements among institutional lenders) contemplated with respect to the Loan Documents and the
Property, including lease approvals.

          (d) Notwithstanding anything herein to the contrary, Beneficiary agrees that the Loan will not
be securitized.

     Section 12.2 REPLACEMENT OF NOTE. Upon notice to Trustor of the loss, theft,
destruction or mutilation of the Note and receipt by Trustor of Beneficiary’s sworn affidavit
confirming same, Trustor will execute and deliver, in lieu of the original Note, a replacement
note, identical in form and substance to the Note and dated as of the Execution Date. Upon the
execution and delivery of the replacement note, all references in any of the Loan Documents to the
Note shall refer to the replacement note.

     Section 12.3 TRUSTOR’S ESTOPPEL. Within ten (10) business days after a request by
Beneficiary (but no more frequently than once in any particular calendar year, unless the same is
required in connection with a participation of the Loan or an assignment of the Note), Trustor
shall furnish an acknowledged written statement in form reasonably satisfactory to Beneficiary

43

 

(i) setting forth the amount of the Secured Indebtedness, (ii) stating to Trustor’s knowledge,
that either no offsets or defenses exist against the Secured Indebtedness, or if any offsets or
defenses are alleged to exist, their nature and extent, (iii) whether to Trustor’s knowledge, any
default then exists under the Loan Documents or any event has occurred and is continuing, which,
with the lapse of time, the giving of notice, or both, would constitute such a default, and (iv)
any other matters as Beneficiary may reasonably request.

     Section 12.4 FURTHER ASSURANCES. Trustor shall, without expense to Beneficiary and/or
Trustee, execute, acknowledge and deliver all further acts, deeds, conveyances, mortgages, deeds of
trust, assignments, security agreements, and financing statements as Beneficiary and/or Trustee
shall from time to time reasonably require, to assure, convey, assign, transfer and confirm unto
Beneficiary and/or Trustee the Property and rights conveyed or assigned by this Deed of Trust or
which Trustor may become bound to convey or assign to Beneficiary and/or Trustee, or for carrying
out the intention or facilitating the performance of the terms of this Deed of Trust or any of the
other Loan Documents, or for filing, refiling, registering, reregistering, recording or
re-recording this Deed of Trust. If Trustor fails to comply with the terms of this Section within
ten (10) days after receiving Beneficiary’s initial written request for such compliance,
Beneficiary may, at Trustor’s expense, perform Trustor’s obligations for and in the name of
Trustor, and Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact to do so. The
appointment of Beneficiary as attorney-in-fact is coupled with an interest.

     Section 12.5 SUBROGATION. Beneficiary shall be subrogated to the lien of any and all
encumbrances against the Property paid out of the proceeds of the Loan and to all of the rights of
the recipient of such payment.

ARTICLE XIII

SECURITY AGREEMENT

     Section 13.1 SECURITY AGREEMENT.

     THIS DEED OF TRUST CREATES A LIEN ON THE PROPERTY. IN ADDITION, TO THE EXTENT THE PROPERTY IS
PERSONAL PROPERTY OR FIXTURES UNDER APPLICABLE LAW, THIS DEED OF TRUST CONSTITUTES A SECURITY
AGREEMENT UNDER THE CALIFORNIA UNIFORM COMMERCIAL CODE (THE “U.C.C.”) AND ANY OTHER APPLICABLE LAW
AND IS FILED AS A FIXTURE FILING. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, BENEFICIARY MAY, AT
ITS OPTION, PURSUE ANY AND ALL RIGHTS AND REMEDIES AVAILABLE TO A SECURED PARTY WITH RESPECT TO ANY
PORTION OF THE PROPERTY, AND/OR BENEFICIARY MAY, AT ITS OPTION, PROCEED AS TO ALL OR ANY PART OF
THE PROPERTY IN ACCORDANCE WITH BENEFICIARY’S RIGHTS AND REMEDIES WITH RESPECT TO THE LIEN CREATED
BY THIS DEED OF TRUST. THIS FINANCING STATEMENT SHALL REMAIN IN EFFECT AS A FIXTURE FILING UNTIL
THIS DEED OF TRUST IS RELEASED OR SATISFIED OF RECORD.

     Section 13.2 REPRESENTATIONS AND WARRANTIES.

44

 

     Trustor warrants, represents and covenants, as of the date hereof and at all times hereafter,
as follows:

          (a) Trustor owns the Personal Property free from any lien, security interest, encumbrance or
adverse claim, except for the Permitted Exceptions, and as otherwise expressly approved by
Beneficiary in writing. Trustor will notify Beneficiary of, and will protect, defend and indemnify
Beneficiary against, all claims and demands of all persons at any time claiming any rights or
interest in the Personal Property except for the matters aforesaid.

          (b) The Personal Property has not been used and shall not be used or bought for personal,
family, or household purposes, but shall be bought and used solely for the purpose of carrying on
Trustor’s business.

          (c) Trustor will not remove the Personal Property without the prior written consent of
Beneficiary, except the items of Personal Property which are consumed or worn out in ordinary usage
shall be promptly replaced by Trustor with other Personal Property of value equal to or greater
than the value of the replaced Personal Property.

     Section 13.3 CHARACTERIZATION OF PROPERTY. The grant of a security interest to
Beneficiary in this Deed of Trust shall not be construed to limit or impair the lien of this Deed
of Trust or the rights of Beneficiary with respect to any property which is real property or which
the parties have agreed to treat as real property. To the fullest extent permitted by law,
everything used in connection with the production of Rents and Profits is, and at all times and for
all purposes and in all proceedings, both legal and equitable, shall be regarded as real property,
irrespective of whether or not the same is physically attached to the Land and/or Improvements.

     Section 13.4 PROTECTION AGAINST PURCHASE MONEY SECURITY INTERESTS. It is understood
and agreed that in order to protect Beneficiary from the effect of U.C.C. Section 9313, as amended
from time to time and as enacted in the State, in the event that Trustor intends to purchase any
goods which may become fixtures attached to the Property, or any part of the Property, and such
goods will be subject to a purchase money security interest held by a seller or any other party:

          (a) Before executing any security agreement or other document evidencing or perfecting the
security interest, Trustor shall obtain the prior written approval of Beneficiary. All requests
for such written approval shall be in writing and contain the following information: (i) a
description of the fixtures; (ii) the address at which the fixtures will be located; and (iii) the
name and address of the proposed holder and proposed amount of the security interest.

          (b) Trustor shall pay all sums and perform all obligations secured by the security agreement.
A default by Trustor under the security agreement which continues beyond any notice and/or cure
period applicable thereto shall constitute a default under this Deed of Trust. If Trustor fails to
make any payment on an obligation secured by a purchase money security interest in the Personal
Property or any fixtures and such failure continues beyond any notice and/or cure period applicable
thereto, Beneficiary, at its option, may pay the secured amount and Beneficiary shall be subrogated
to the rights of the holder of the purchase money security interest.

45

 

          (c) Beneficiary shall have the right to acquire by assignment from the holder of the security
interest for the Personal Property or fixtures, all contract rights, accounts receivable,
negotiable or non-negotiable instruments, or other evidence of indebtedness and to enforce the
security interest as assignee.

          (d) The provisions of subparagraphs (b) and (c) of this Section 13.4 shall not apply if the
goods which may become fixtures are of at least equivalent value and quality as the Personal
Property being replaced and if the rights of the party holding the security interest are expressly
subordinated to the lien and security interest of this Deed of Trust in a manner satisfactory to
Beneficiary.

ARTICLE XIV

MISCELLANEOUS COVENANTS

     Section 14.1 NO WAIVER. No single or partial exercise by Beneficiary and/or Trustee,
or delay or omission in the exercise by Beneficiary and/or Trustee, of any right or remedy under
the Loan Documents shall preclude, waive or limit the exercise of any other right or remedy.
Beneficiary shall at all times have the right to proceed against any portion of, or interest in,
the Property without waiving any other rights or remedies with respect to any other portion of the
Property. No right or remedy under any of the Loan Documents is intended to be exclusive of any
other right or remedy but shall be cumulative and may be exercised concurrently with or
independently from any other right and remedy under any of the Loan Documents or under applicable
law.

     Section 14.2 NOTICES. All notices, demands and requests given or required to be given
by, pursuant to, or relating to, this Deed of Trust shall be in writing. All notices shall be
deemed to have been properly given if mailed by United States registered or certified mail, with
return receipt requested, postage prepaid, or by United States Express Mail or other comparable
overnight courier service to the parties at the addresses set forth in the Defined Terms (or at
such other addresses as shall be given in writing by any party to the others) and shall be deemed
complete upon receipt or refusal to accept delivery as indicated in the return receipt or in the
receipt of such United States Express Mail or courier service.

     Section 14.3 HEIRS AND ASSIGNS; TERMINOLOGY.

          (a) This Deed of Trust applies to, inures to the benefit of, and binds Beneficiary, Trustee
and Trustor, and their heirs, legatees, devisees, administrators, executors, successors and
assigns. The term “Beneficiary” shall include Beneficiary as defined in the Defined Terms and
including any successor direct holder of all or any portion of the Loan from time to time. The
term “Trustor” shall include both the original Trustor and any subsequent owner or owners of any of
the Property. The term “Trustee” shall include both the original Trustee and any subsequent
successor or additional trustee(s) acting under this Deed of Trust. The term “Beneficiary” shall
include both the original Beneficiary and any subsequent holder or holders of the Note. The term
“Liable Parties” shall include both the original Liable Parties and any subsequent or substituted
Liable Parties.

46

 

          (b) In this Deed of Trust, whenever the context so requires, the masculine gender includes the
feminine and/or neuter, and the singular number includes the plural.

     Section 14.4 SEVERABILITY. If any provision of this Deed of Trust should be held
unenforceable or void, then that provision shall be separated from the remaining provisions and
shall not affect the validity of this Deed of Trust except that if the unenforceable or void
provision relates to the payment of any monetary sum, then, Beneficiary may, at its option, declare
the Secured Indebtedness immediately due and payable, but no Prepayment Fee or other premium or
penalty shall be due in connection therewith.

     Section 14.5 APPLICABLE LAW. This Deed of Trust shall be construed and enforced in
accordance with the laws of the State of California (the “State”).

     Section 14.6 CAPTIONS. The captions are inserted only as a matter of convenience and
for reference, and in no way define, limit, or describe the scope or intent of any provisions of
this Deed of Trust.

     Section 14.7 TIME OF THE ESSENCE. Time shall be of the essence with respect to all of
Trustor’s obligations under this Deed of Trust and the other Loan Documents.

     Section 14.8 NO MERGER. In the event that Beneficiary should become the owner of the
Property, there shall be no merger of the estate created by this Deed of Trust with the fee estate
in the Property.

     Section 14.9 NO MODIFICATIONS. This Deed of Trust may not be changed, amended or
modified, except in a writing expressly intended for such purpose and executed by Trustor and
Beneficiary.

[Remainder of Page Left Intentionally Blank.]

47

 

     IN WITNESS WHEREOF, Trustor has executed this Deed of Trust, or has caused this Deed of Trust
to be executed by its duly authorized representative(s) as of the Execution Date.

	 	 	 	 	 	 	 	 	 
	HINES REIT 1515 S Street LP,
	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	By:	 	Hines REIT 1515 S Street GP LLC,
	 	 	a Delaware limited liability company,
	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines REIT Properties, L.P.,
	 	 	 	 	a Delaware limited partnership
	 	 	 	 	its sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Hines Real Estate Investment Trust, Inc.,
	 	 	 	 	 	 	a Maryland corporation
	 	 	 	 	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	President
	 

	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	STATE OF TEXAS

	 	)	 	 	 	 
	 

	 	) ss.
	 	 	 	 
	COUNTY OF HARRIS

	 	)	 	 	 	 

On April ___, 2006, before me,                                                             , personally appeared                                                             ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity, and that by his/her signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature                                              (Seal

49

 

PROMISSORY NOTE

DEFINED TERMS

				
	Execution Date: April 18, 2006

	 	 	City and State of Signing: Houston, Texas
	 
	 	 	 
	 	 	 	 
	Loan Amount: Twenty Million and no/00 Dollars
($20,000,000.00) to be disbursed to Borrower on
the Advance Date

	 	 	Interest Rate: 5.68% per annum
	 
	 	 	 
	 	 	 	 

			
	Borrower:	 	Hines REIT 1515 S Street LP, a Delaware limited partnership

 

	 	 	 
	Borrower’s Address:

	 	c/o Hines Interests Limited Partnership
	 

	 	2800 Post Oak Blvd. 
	 

	 	Suite 5000
	 

	 	Houston, Texas 77056
	 

	 	Attention: Charles N. Hazen
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	c/o Hines Interests Limited Partnership
	 

	 	101 California Street, Suite 1000 
	 

	 	San Francisco, California 94111
	 

	 	Attn: James C. Buie
	 
	 	 
	Liable Party:

	 	Hines REIT Properties, L.P.
	 
	 	 
	Liable Party’s Address:

	 	c/o Hines Interests Limited Partnership
	 

	 	2800 Post Oak Blvd. 
	 

	 	Suite 5000
	 

	 	Houston, Texas 77056
	 

	 	Attention: Charles N. Hazen

 

Lender: METROPOLITAN LIFE INSURANCE COMPANY, A NEW YORK CORPORATION

 

	 	 	 	 	 
	Lender’s Address:	 	Metropolitan Life Insurance Company

10 Park Avenue

Morristown, New Jersey 07960
	 

	 	Attention:
	 	Senior Vice-President,
	 

	 	 	 	Real Estate Investments
	 
	 	 	 	 
	 

	 	 	 	And
	 
	 	 	 	 
	 	 	Metropolitan Life Insurance Company

400 South El Camino Real, 8th Floor

San Mateo, California 94402

Attn: Vice President

 

 

				
	Maturity Date: May 1, 2011

	 	 	Advance Date: The date funds are disbursed to
Borrower.
	 
	 	 	 
	 	 	 	 
	Interest Only Period: The period from the
Advance Date and ending on the Maturity
Date.

Monthly Installment: Equal monthly installments
of interest only at the Interest Rate each in
the amount of $94,666.67.

	 	 	Permitted Prepayment Period: The Loan may not
be prepaid in whole or in part prior to the
Maturity Date except as follows: During the 90
day period prior to the Maturity Date, Borrower
may prepay the Loan, in whole but not in part,
without a Prepayment Fee on not less than 10
days prior written notice (“Prepayment
Notice”). In addition, commencing on the first
day of the 19th month following the
Advance Date (November 1, 2007), Borrower may
prepay the Loan, in whole but not in part, with
a Prepayment Fee on not less than 10 days’
prior written notice.
	 	 	 	 
	Late Charge: An amount equal to four cents
($.04) for each dollar that is overdue.

	 	 	Default Rate: An annual rate equal to the
lesser of (a) the Interest Rate plus four
percent (4%), or (b) the maximum rate of
interest allowed by law.
	 	 	 	 
	Note: This Promissory Note. Deed of Trust: Deed of Trust, Security Agreement,
and Fixture Filing dated as of the Execution Date granted by Borrower to the Trustee named in the
Deed of Trust for the benefit of Lender and MetLife Bank, N.A. Reserve Agreement: Reserve Agreement
dated as of the Execution Date and executed by Borrower and Lender. Loan Documents: This Note, the
MetLife Bank Note (as defined in Section 3 hereof), the Deed of Trust, the Reserve Agreement, and any
other documents executed by Borrower and related to this Note, the MetLife Bank Note and/or the Deed
of Trust and all renewals, amendments, modifications, restatements and extensions of these documents.
Guaranty: Guaranty dated as of the Execution Date and executed by Liable Party for the benefit of
Lender and MetLife Bank. Indemnity Agreement: Unsecured Indemnity Agreement dated as of the
Execution Date and executed by Borrower in favor of Lender and MetLife Bank, N.A. The Unsecured
Indemnity Agreement and Guaranty are not Loan Documents and shall survive repayment of the Loan and
the MetLife Bank Loan or other termination of the Loan Documents. MetLife Bank Loan: The loan
evidenced by the MetLife Bank Note.

     FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender, at Lender’s Address or
such other place as Lender may from time to time designate, the Loan Amount with interest payable
in the manner described below, in money of the United States of America that at the time of payment
shall be legal tender for payment of all obligations.

     Capitalized terms which are not defined in this Note shall have the meanings set forth in the
Deed of Trust.

2

 

     1. Payment of Principal and Interest. Principal and interest under this Note shall be
payable as follows:

          (a) Interest on the funded portion of the Loan Amount shall accrue from the Advance
Date at the Interest Rate;

          (b) Borrower shall pay accrued interest on the Loan from the Advance Date through May
31, 2006, on June 1, 2006 and thereafter shall pay the Monthly Installment on the first day
of each month until the Maturity Date; and,

          (c) On the Maturity Date, a final payment in the aggregate amount of the unpaid
principal sum evidenced by this Note, all accrued and unpaid interest, and all other
outstanding sums evidenced by this Note or secured by the Deed of Trust and/or any other
Loan Documents (other than the MetLife Bank Note) as well as any future advances under the
Deed of Trust that may be made to or on behalf of Borrower by Lender following the Advance
Date and which remain unpaid as the Maturity Date (collectively, the “Secured
Indebtedness”), shall become immediately payable in full.

     Borrower acknowledges and agrees that, except for a prepayment permitted under the Loan
Documents, the entire original Loan Amount shall be outstanding and due on the Maturity Date.

     Interest shall be calculated on the basis of a thirty (30) day month and a three hundred sixty
(360) day year, except that (i) if the Advance Date occurs on a date other than the first day of a
calendar month, interest payable for the period commencing on the Advance Date and ending on the
last day of the month in which the Advance Date occurs shall be calculated on the basis of the
actual number of days elapsed over a 365 day or 366 day year, as applicable, and (ii) if the
Maturity Date occurs on a date other than the last day of the month, interest payable for the
period commencing on the first day of the month in which the Maturity Date occurs and ending on the
Maturity Date shall be calculated on the basis of the actual number of days elapsed over a 365 day
or 366 day year, as applicable.

     2. Application of Payments. At the election of Lender, and to the extent permitted by
law, all payments shall be applied in the order selected by Lender to any expenses, prepayment
fees, late charges, escrow deposits and other sums then due and payable under the Loan Documents,
and to unpaid interest at the Interest Rate or at the Default Rate, as applicable. The balance of
any payments shall be applied to reduce the then unpaid Loan Amount.

     3. Security; the MetLife Bank Note. The covenants of the Deed of Trust are
incorporated by reference into this Note. This Note shall evidence, and the Deed of Trust shall
secure, the Secured Indebtedness. The Deed of Trust also secures a separate Promissory Note of
even date herewith in the principal amount of Twenty Five Million Dollars ($25,000,000) payable by
Borrower to MetLife Bank, N.A., a national banking association (the “MetLife Bank Note”).

     4. Late Charge. If any payment of interest, any payment of a Monthly Installment or
any payment of a required escrow deposit is not paid within seven (7) days after the due date,
Lender shall have the option to charge Borrower the Late Charge; provided that the Late Charge
shall not be applicable with respect to any payment which is not made on the Maturity Date. The

3

 

Late Charge is for the purpose of defraying the expenses incurred in connection with handling
and processing delinquent payments and is payable in addition to any other remedy Lender may have.
Unpaid Late Charges shall become part of the Secured Indebtedness and shall be added to any
subsequent payments due under the Loan Documents.

     5. Acceleration Upon Default. At the option of Lender, if Borrower fails to pay any
sum specified in this Note within seven (7) days after Lender shall have given written notice of
such failure to Borrower (provided, however, such written notice shall not be required more than
once in any period of twelve (12) consecutive months, and after such written notice shall have been
given once during any such 12 month period, the provisions of this Section 5 shall be applicable to
any such failure to pay such sums which continues for more than seven (7) days after the due date
thereof and further provided such notice shall not be required for any payment which is not made on
the Maturity Date), or if an Event of Default occurs, the Secured Indebtedness, and all other sums
evidenced and/or secured by the Loan Documents, including without limitation any applicable
Prepayment Fees (collectively, the “Accelerated Loan Amount”) shall become immediately due and
payable.

     6. Interest Upon Default. The Accelerated Loan Amount shall bear interest at the
Default Rate which shall never exceed the maximum rate of interest permitted to be contracted under
the laws of California. The Default Rate shall commence upon the occurrence of an Event of Default
and shall continue until all defaults are cured.

     7. Limitation on Interest. The agreements made by Borrower with respect to this Note
and the other Loan Documents are expressly limited so that in no event shall the amount of interest
received, charged or contracted for by Lender exceed the highest lawful amount of interest
permissible under the laws applicable to the Loan. If at any time performance of any provision of
this Note or the other Loan Documents results in the highest lawful rate of interest permissible
under applicable laws being exceeded, then the amount of interest received, charged or contracted
for by Lender shall automatically and without further action by any party be deemed to have been
reduced to the highest lawful amount of interest then permissible under applicable laws. If Lender
shall ever receive, charge or contract for, as interest, an amount which is unlawful, at Lender’s
election, the amount of unlawful interest shall be refunded to Borrower (if actually paid) or
applied to reduce the then unpaid Loan Amount. To the fullest extent permitted by applicable laws,
any amounts contracted for, charged or received under the Loan Documents included for the purpose
of determining whether the Interest Rate would exceed the highest lawful rate shall be calculated
by allocating and spreading such interest to and over the full stated term of this Note.

     8. Prepayment. Borrower shall not have the right to prepay all or any portion of the
Loan Amount at any time during the term of this Note except as expressly set forth in the Loan
Documents. If Borrower provides a Prepayment Notice, the Accelerated Loan Amount shall become due
and payable on the date specified in the Prepayment Notice; provided, however, that Borrower shall
have the right, no more than twice per calendar year, to revoke any such notice, in which event the
Accelerated Loan Amount shall not be due. In addition to the foregoing limitations on prepayment,
this Note may not be prepaid without the simultaneous prepayment of the MetLife Bank Note in
accordance with its terms.

4

 

     9. Prepayment Fee. (a) Any tender of payment by Borrower or any other person or
entity of the Secured Indebtedness, other than as expressly provided in the Loan Documents, shall
constitute a prohibited prepayment. If a prepayment of all or any part of the Secured Indebtedness
is made (i) following an Event of Default and an acceleration of the Maturity Date, (ii) subject
to Section 9(d) below, following the application of money to the principal of the Loan after a
casualty or condemnation, or (iii) in connection with a purchase of the Property or a repayment of
the Secured Indebtedness in connection with a judicial or non-judicial foreclosure or sale of the
Property, then to compensate Lender for the loss of the investment, Borrower shall pay an amount
equal to the Prepayment Fee (as hereinafter defined).

          (a) The “Prepayment Fee” shall be the greater of (A) the Prepayment Ratio (as
hereinafter defined) multiplied by the difference between (x) and (y), where (x) is the
present value of all remaining payments of principal and interest including the outstanding
principal due on the Maturity Date (assuming all such amounts would be paid 90 days prior to
the Maturity Date), discounted at the rate which, when compounded monthly, is equivalent to
the Treasury Rate plus 50 basis points compounded semi-annually, and (y) is the amount of
the principal then outstanding, or (B) one percent (1%) of the amount of the principal being
prepaid.

          (b) The “Treasury Rate” shall be the annualized yield on securities issued by the
United States Treasury having a maturity equal to the remaining stated term of this Note, as
quoted in the Federal Reserve Statistical Release [H. 15 (519)] under the heading
“U.S. Government Securities — Treasury Constant Maturities” for the date which is 5 Business
Days prior to the date on which prepayment is being made. If this rate is not available on
such date, the Treasury Rate shall be determined by interpolating between the yield on
securities of the next longer and next shorter maturity. If the Treasury Rate is no longer
published, Lender shall select a comparable rate. Lender will, upon request, provide an
estimate of the amount of the Prepayment Fee two weeks before the date of the scheduled
prepayment.

          (c) The “Prepayment Ratio” shall be a fraction, the numerator of which shall be the
amount of principal being prepaid, and the denominator of which shall be the principal then
outstanding.

          (d) In the event of a casualty or condemnation, Borrower shall file a claim to recover
from the insurer or condemning authority any Prepayment Fee which would be payable in
connection with a prepayment of the Loan. If Borrower does not recover under its claim all
or any portion of such Prepayment Fee (and such recovery shall not be deemed to have
occurred unless such amounts recovered are determinable in some objective way as
compensation for such Prepayment Fee), then the Prepayment Fee shall be reduced by the
amount of such shortfall (and if there is no such recovery, no Prepayment Fee shall be due).

     10. Waiver of Right to Prepay Note Without Prepayment Fee. Borrower acknowledges that
Lender has relied upon the anticipated investment return under this Note in entering into
transactions with, and in making commitments to, third parties and that the tender of any
prohibited prepayment, shall, to the extent permitted by law and not otherwise provided to the
contrary in the Loan Documents, include the Prepayment Fee calculated as of the date such

5

 

prepayment is tendered. Borrower agrees that the Prepayment Fee represents the reasonable
estimate of Lender and Borrower of a fair average compensation for the loss that may be sustained
by Lender as a result of a prohibited prepayment of this Note and it shall be paid without
prejudice to the right of Lender to collect any other amounts provided to be paid under the Loan
Documents.

     BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION
2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE
MATURITY DATE OF THIS NOTE, AND (B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF THIS NOTE IS
MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY LENDER ON ACCOUNT OF
ANY EVENT OF DEFAULT BY BORROWER UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY
TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED OR RESTRICTED BY THE DEED OF
TRUST, THEN BORROWER SHALL BE OBLIGATED TO PAY CONCURRENTLY THE PREPAYMENT FEE SPECIFIED IN SECTION
9. BY INITIALING THIS PROVISION IN THE SPACE PROVIDED BELOW, BORROWER AGREES THAT LENDER’S
AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES
ADEQUATE CONSIDERATION FOR THIS WAIVER AND AGREEMENT.

BORROWER’S INITIALS:                    

     11. Liability of Borrower. Notwithstanding anything to the contrary contained herein
or in the Deed of Trust or other Loan Documents, upon the occurrence of an Event of Default, except
as provided in this Section 11, Lender will look solely to the Property and the security under the
Loan Documents for the repayment of the Loan and will not enforce a deficiency judgment against
Borrower or any direct or indirect partner, member, shareholder or other holder of a beneficial
interest in Borrower. However, nothing contained in this section shall limit the rights of Lender
to proceed against Borrower (but not its partners, members, shareholders or other holders of any
beneficial interests in Borrower) (i) to enforce any Leases entered into by Borrower or its
affiliates as tenant, or guarantees, or other agreements entered into by Borrower in a capacity
other than as borrower or any policies of insurance; (ii) to recover damages for fraud, intentional
material misrepresentation or breach of warranty or intentional physical waste; (iii) to recover
any condemnation proceeds or insurance proceeds or other similar funds which have been misapplied
by Borrower or which, under the terms of the Loan Documents, should have been paid to Lender; (iv)
to recover any tenant security deposits, tenant letters of credit or other deposits or fees paid to
Borrower and not applied to rent or returned to the tenants pursuant to the terms of the tenant
leases that are part of the collateral for the Loan or prepaid rents for a period of more than 30
days which have not been delivered to Lender; (v) to recover Rents and Profits (as defined in the
Deed of Trust) received by Borrower during the period beginning six (6) months prior to the date a
notice of acceleration of maturity of this Note is delivered to Borrower through the date Lender
acquires title to the Property which have not been applied to the Loan or in accordance with the
Loan Documents for leasing, repair, management, operating and maintenance expenses of the Property,
insurance premiums, Imposition deposits, deposits into a reserve for replacements or taxes upon the
Property or any other sum required to be paid under the Loan Documents, but only to the extent
Rents and Profits were available but not so

6

 

applied; (vi) to recover damages, costs and expenses arising from, or in connection with any
breach of warranty by Borrower under Article VI of the Deed of Trust pertaining to hazardous
materials or the Indemnity Agreement; (vii) to recover damages arising from Borrower’s failure to
comply with Section 8.1 of the Deed of Trust pertaining to ERISA; and (viii) to recover any
damages, costs, expenses or liabilities, including attorneys’ fees, incurred by Lender and arising
from any order, consent decree or settlement relating to the cleanup of Hazardous Materials (as
defined in the Deed of Trust), or any other “environmental provision” (as defined in California
Code of Civil Procedure Section 736, as such Section may be amended from time to time) relating to
the Property or any portion thereof. In accordance with California Code of Civil Procedure Section
726.5, as such Section may be amended from time to time, the foregoing shall not limit the right of
Lender to waive the security of the Deed of Trust as to any parcel of Real Property that is
“environmentally impaired” or is an “affected parcel” (as such terms are defined in such Section),
and as to any Personal Property attached to such parcel, and thereafter to exercise against
Borrower, to the extent permitted by such Section 726.5, the rights and remedies of an unsecured
creditor, including reduction of Lender’s claim against Borrower to judgment, and any other rights
and remedies permitted by law. If Lender exercises the rights and remedies of an unsecured creditor
in accordance with the preceding sentence, Borrower promises to pay to Lender, on demand by Lender
following such exercise, all amounts owed to Lender under any Loan Document, and Borrower agrees
that it (but not any direct or indirect partner, member, shareholder or other holder of a
beneficial interest in Borrower) will be personally liable for the payment of all such sums.

     Notwithstanding the foregoing, the limitation of liability set forth in this Section 11 shall
not apply and the Loan shall be fully recourse to Borrower (but not to any direct or indirect
partner, member, shareholder or other holder of a beneficial interest in Borrower) in the event
that (i) Borrower does not provide the Letter of Credit as and when required under the Deed of
Trust; provided, however that so long as Hines REIT 1515 S Street, LP or a Permitted Transferee is
Borrower and Hines REIT Properties, L.P. is the Liable Party, then and in such event, such
liability shall be limited to the amount of any deficiency judgment, which amount shall not exceed
$5,000,000.00 plus any and all costs incurred by Lender in the enforcement and foreclosure of the
Note and Deed of Trust, including, without limitation, attorneys’ fees; (ii) a Transfer occurs
without the consent of Lender (other than a transfer which is permitted without Lender’s consent
pursuant to the terms of Section 10.1 of the Deed of Trust), (iii) a Subordinate Financing occurs
in violation of Section 10.2 of the Deed of Trust without the consent of Lender, (iv) Borrower
commences a voluntary proceeding under applicable federal bankruptcy law, or (v) a collusive
involuntary proceeding under applicable federal bankruptcy law is commenced against Borrower and is
not dismissed within 120 days. In addition, this agreement shall not waive any rights which Lender
would have under any provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Secured Indebtedness or to require that the Property shall continue to secure all of the
Secured Indebtedness.

     12. Waiver by Borrower. Borrower and others who may become liable for the payment of
all or any part of this Note, and each of them, waive diligence, demand, presentment for payment,
notice of nonpayment (except any notice of nonpayment specifically required under the terms of this
Note or the other Loan Documents), protest, notice of dishonor and notice of protest, notice of
intent to accelerate and notice of acceleration and specifically consent to and waive notice of any
amendments, modifications, renewals or extensions of this Note, including

7

 

the granting of extension of time for payment, whether made to or in favor of Borrower or any
other person or persons.

     13. Exercise of Rights. No single or partial exercise by Lender, or delay or omission
in the exercise by Lender, of any right or remedy under the Loan Documents shall waive or limit the
exercise of any such right or remedy. Lender shall at all times have the right to proceed against
any portion of or interest in the Property in the manner that Lender may deem appropriate, without
waiving any other rights or remedies. The release of any party under this Note shall not operate
to release any other party which is liable under this Note and/or under the other Loan Documents or
under the Indemnity Agreement.

     14. Fees and Expenses. If Borrower defaults under this Note, subject to the
provisions of Section 11 above, Borrower (but not any direct or indirect partner, member,
shareholder or other holder of a beneficial interest in Borrower) shall be liable for and shall pay
to Lender, in addition to the sums stated above, the costs and expenses of enforcement and
collection, including a reasonable sum as an attorney’s fee.

     15. No Amendments. This Note may not be modified or amended except in a writing
executed by Borrower and Lender. No waivers shall be effective unless they are set forth in a
writing signed by the party which is waiving a right. This Note and the other Loan Documents are
the final expression of the lending relationship between Borrower and Lender, and there is no
unwritten agreement with respect to the subject matter of the Loan.

     16. Governing Law. This Note is to be construed and enforced in accordance with the
laws of the State of California.

     17. Construction. The words “Borrower” and “Lender” shall be deemed to include their
respective heirs, representatives, successors and assigns, and shall denote the singular and/or
plural, and the masculine and/or feminine, and natural and/or artificial persons, as appropriate.
The provisions of this Note shall remain in full force and effect notwithstanding any changes in
the shareholders, partners or members of Borrower. If more than one party is Borrower, the
obligations of each party shall be joint and several. The captions in this Note are inserted only
for convenience of reference and do not expand, limit or define the scope or intent of any section
of this Note.

     18. Notices. All notices, demands, requests and consents permitted or required under
this Note shall be given in the manner prescribed in the Deed of Trust.

     19. Time of the Essence. Time shall be of the essence with respect to all of
Borrower’s obligations under this Note.

     20. Severability. If any provision of this Note should be held unenforceable or void,
then that provision shall be deemed separable from the remaining provisions and shall not affect
the validity of this Note, except that if that provision relates to the payment of any monetary
sum, then Lender may, at its option, declare the Secured Indebtedness (together with the Prepayment
Fee) immediately due and payable.

[remainder of page left intentionally blank]

8

 

IN WITNESS WHEREOF, Borrower has executed this Note as of the Execution Date.

	 	 	 	 	 	 	 	 	 
	HINES REIT 1515 S Street LP,

a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	By:	 	Hines REIT 1515 S Street GP LLC,

a Delaware limited liability company,

its general partner
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines REIT Properties, L.P.,

a Delaware limited partnership,
 its sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Hines Real Estate Investment Trust, Inc.

a Maryland corporation,

its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	President
	 

	 	 	 	 	 	 	 	 

9

 

PROMISSORY NOTE

DEFINED TERMS

				
	Execution Date: April 18, 2006

	 	 	City and State of Signing: Houston, Texas
	 
	 	 	 
	 	 	 	 
	Loan Amount: Twenty Five Million and no/00
Dollars ($25,000,000.00) to be disbursed to
Borrower on the Advance Date

	 	 	Interest Rate: 5.68% per annum
	 
	 	 	 
	 	 	 	 

Borrower: Hines REIT 1515 S Street LP, a Delaware limited partnership

	 	 	 
	 
	Borrower’s Address:

	 	c/o Hines Interests Limited Partnership
	 

	 	2800 Post Oak Blvd.
	 

	 	Suite 5000
	 

	 	Houston, Texas 77056
	 

	 	Attention: Charles N. Hazen
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	c/o Hines Interests Limited Partnership
	 

	 	101 California Street, Suite 1000
	 

	 	San Francisco, California 94111
	 

	 	Attn: James C. Buie
	 
	 	 
	Liable Party:

	 	Hines REIT Properties, L.P.
	 
	 	 
	Liable Party’s Address:

	 	 c/o Hines Interests Limited Partnership
	 

	 	2800 Post Oak Blvd.
	 

	 	Suite 5000
	 

	 	Houston, Texas 77056
	 

	 	Attention: Charles N. Hazen

      

Lender:                    MetLife Bank, N.A., a national banking association

					
	 
	Lender’s Address:
	 	 	 	 
	 	 	c/o Metropolitan Life Insurance Company
	 	 	10 Park Avenue
	 	 	Morristown, New Jersey 07960
	 

	 	Attention:
	 	Senior Vice-President,
	 

	 	 	 	Real Estate Investments
	 
	 	 	 	 
	 

	 	 	 	And
	 
	 	 	 	 
	 	 	c/o Metropolitan Life Insurance Company
	 	 	400 South El Camino Real, 8thFloor
	 	 	San Mateo, California 94402
	 

	 	Attn:
	 	Vice President

 

 

				
	Maturity Date: May 1, 2011

	 	 	Advance Date: The date funds are disbursed to
Borrower.
	 
	 	 	 
	 	 	 	 
	Interest Only Period: The period from the
Advance Date and ending on the Maturity Date.

Monthly Installment: Equal monthly installments
of interest only at the Interest Rate each in
the amount of $118,333.33.

	 	 	Permitted Prepayment Period: The Loan may not
be prepaid in whole or in part prior to the
Maturity Date except as follows: During the 90
day period prior to the Maturity Date, Borrower
may prepay the Loan, in whole but not in part,
without a Prepayment Fee on not less than 10
days prior written notice (“Prepayment
Notice”). In addition, commencing on the first
day of the 19thmonth following the
Advance Date (November 1, 2007), Borrower may
prepay the Loan, in whole but not in part, with
a Prepayment Fee on not less than 10 days’
prior written notice.
	 
	 	 	 
	 	 	 	 
	Late Charge: An amount equal to four cents
($.04) for each dollar that is overdue.

	 	 	Default Rate: An annual rate equal to the
lesser of (a) the Interest Rate plus four
percent (4%), or (b) the maximum rate of
interest allowed by law.

 

Note: This Promissory Note. Deed of Trust: Deed of Trust, Security Agreement,
and Fixture Filing dated as of the Execution Date granted by Borrower to the Trustee named in the
Deed of Trust for the benefit of Lender and MetLife(as defined in Section 3). Reserve Agreement:
Reserve Agreement dated as of the Execution Date and executed by Borrower and Lender. Loan
Documents: This Note, the MetLife Note (as defined in Section 3 hereof), the Deed of Trust, the
Reserve Agreement, and any other documents executed by Borrower and related to this Note, the MetLife
Note and/or the Deed of Trust and all renewals, amendments, modifications, restatements and
extensions of these documents. Guaranty: Guaranty dated as of the Execution Date and executed by
Liable Party for the benefit of Lender and MetLife. Indemnity Agreement: Unsecured Indemnity
Agreement dated as of the Execution Date and executed by Borrower in favor of Lender and MetLife.
The Unsecured Indemnity Agreement and Guaranty are not Loan Documents and shall survive repayment of
the Loan and the MetLife Loan or other termination of the Loan Documents. MetLife Loan: The loan
evidenced by the MetLife Note.

     FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender, at Lender’s Address or
such other place as Lender may from time to time designate, the Loan Amount with interest payable
in the manner described below, in money of the United States of America that at the time of payment
shall be legal tender for payment of all obligations.

     Capitalized terms which are not defined in this Note shall have the meanings set forth in the
Deed of Trust.

     21. Payment of Principal and Interest. Principal and interest under this Note shall
be payable as follows:

2

 

          (a) Interest on the funded portion of the Loan Amount shall accrue from the Advance
Date at the Interest Rate;

          (b) Borrower shall pay accured interest on the Loan from the Advance Date through May
31, 2006, on June 1, 2006 and thereafter shall pay the Monthly Installment on the first day
of each month until the Maturity Date; and,

          (c) On the Maturity Date, a final payment in the aggregate amount of the unpaid
principal sum evidenced by this Note, all accrued and unpaid interest, and all other
outstanding sums evidenced by this Note or secured by the Deed of Trust and/or any other
Loan Documents (other than the MetLife Note) as well as any future advances under the Deed
of Trust that may be made to or on behalf of Borrower by Lender following the Advance Date
and which remain unpaid as the Maturity Date (collectively, the “Secured Indebtedness”),
shall become immediately payable in full.

     Borrower acknowledges and agrees that, except for a prepayment permitted under the Loan
Documents, the entire original Loan Amount shall be outstanding and due on the Maturity Date.

     Interest shall be calculated on the basis of a thirty (30) day month and a three hundred sixty
(360) day year, except that (i) if the Advance Date occurs on a date other than the first day of a
calendar month, interest payable for the period commencing on the Advance Date and ending on the
last day of the month in which the Advance Date occurs shall be calculated on the basis of the
actual number of days elapsed over a 365 day or 366 day year, as applicable, and (ii) if the
Maturity Date occurs on a date other than the last day of the month, interest payable for the
period commencing on the first day of the month in which the Maturity Date occurs and ending on the
Maturity Date shall be calculated on the basis of the actual number of days elapsed over a 365 day
or 366 day year, as applicable.

     22. Application of Payments. At the election of Lender, and to the extent permitted
by law, all payments shall be applied in the order selected by Lender to any expenses, prepayment
fees, late charges, escrow deposits and other sums then due and payable under the Loan Documents,
and to unpaid interest at the Interest Rate or at the Default Rate, as applicable. The balance of
any payments shall be applied to reduce the then unpaid Loan Amount.

     23. Security; the MetLife Note. The covenants of the Deed of Trust are incorporated
by reference into this Note. This Note shall evidence, and the Deed of Trust shall secure, the
Secured Indebtedness. The Deed of Trust also secures a separate Promissory Note of even date
herewith in the principal amount of Twenty Million Dollars ($20,000,000) payable by Borrower to
Metropolitan Life Insurance Company, a New York corporation (“MetLife”) (the “MetLife Note”).

     24. Late Charge. If any payment of interest, any payment of a Monthly Installment or
any payment of a required escrow deposit is not paid within seven (7) days after the due date,
Lender shall have the option to charge Borrower the Late Charge; provided that the Late Charge
shall not be applicable with respect to any payment which is not made on the Maturity Date. The
Late Charge is for the purpose of defraying the expenses incurred in connection with handling and
processing delinquent payments and is payable in addition to any other remedy Lender may

3

 

have. Unpaid Late Charges shall become part of the Secured Indebtedness and shall be added to
any subsequent payments due under the Loan Documents.

     25. Acceleration Upon Default. At the option of Lender, if Borrower fails to pay any
sum specified in this Note within seven (7) days after Lender shall have given written notice of
such failure to Borrower (provided, however, such written notice shall not be required more than
once in any period of twelve (12) consecutive months, and after such written notice shall have been
given once during any such 12 month period, the provisions of this Section 5 shall be applicable to
any such failure to pay such sums which continues for more than seven (7) days after the due date
thereof and further provided such notice shall not be required for any payment which is not made on
the Maturity Date), or if an Event of Default occurs, the Secured Indebtedness, and all other sums
evidenced and/or secured by the Loan Documents, including without limitation any applicable
Prepayment Fees (collectively, the “Accelerated Loan Amount”) shall become immediately due and
payable.

     26. Interest Upon Default. The Accelerated Loan Amount shall bear interest at the
Default Rate which shall never exceed the maximum rate of interest permitted to be contracted under
the laws of California. The Default Rate shall commence upon the occurrence of an Event of Default
and shall continue until all defaults are cured.

     27. Limitation on Interest. The agreements made by Borrower with respect to this Note
and the other Loan Documents are expressly limited so that in no event shall the amount of interest
received, charged or contracted for by Lender exceed the highest lawful amount of interest
permissible under the laws applicable to the Loan. If at any time performance of any provision of
this Note or the other Loan Documents results in the highest lawful rate of interest permissible
under applicable laws being exceeded, then the amount of interest received, charged or contracted
for by Lender shall automatically and without further action by any party be deemed to have been
reduced to the highest lawful amount of interest then permissible under applicable laws. If Lender
shall ever receive, charge or contract for, as interest, an amount which is unlawful, at Lender’s
election, the amount of unlawful interest shall be refunded to Borrower (if actually paid) or
applied to reduce the then unpaid Loan Amount. To the fullest extent permitted by applicable laws,
any amounts contracted for, charged or received under the Loan Documents included for the purpose
of determining whether the Interest Rate would exceed the highest lawful rate shall be calculated
by allocating and spreading such interest to and over the full stated term of this Note.

     28. Prepayment. Borrower shall not have the right to prepay all or any portion of the
Loan Amount at any time during the term of this Note except as expressly set forth in the Loan
Documents. If Borrower provides a Prepayment Notice, the Accelerated Loan Amount shall become due
and payable on the date specified in the Prepayment Notice; provided, however, that Borrower shall
have the right, no more than twice per calendar year, to revoke any such notice, in which event the
Accelerated Loan Amount shall not be due. In addition to the foregoing limitations on prepayment,
this Note may not be prepaid without the simultaneous prepayment of the MetLife Note in accordance
with its terms.

     29. Prepayment Fee. (a) Any tender of payment by Borrower or any other person or
entity of the Secured Indebtedness, other than as expressly provided in the Loan Documents, shall
constitute a prohibited prepayment. If a prepayment of all or any part of the Secured

4

 

Indebtedness is made (i) following an Event of Default and an acceleration of the Maturity
Date, (ii) subject to Section 9(d) below, following the application of money to the principal of
the Loan after a casualty or condemnation, or (iii) in connection with a purchase of the Property
or a repayment of the Secured Indebtedness in connection with a judicial or non-judicial
foreclosure or sale of the Property, then to compensate Lender for the loss of the investment,
Borrower shall pay an amount equal to the Prepayment Fee (as hereinafter defined).

          (a) The “Prepayment Fee” shall be the greater of (A) the Prepayment Ratio (as
hereinafter defined) multiplied by the difference between (x) and (y), where (x) is the
present value of all remaining payments of principal and interest including the outstanding
principal due on the Maturity Date (assuming all such amounts would be paid 90 days prior to
the Maturity Date), discounted at the rate which, when compounded monthly, is equivalent to
the Treasury Rate plus 50 basis points compounded semi-annually, and (y) is the amount of
the principal then outstanding, or (B) one percent (1%) of the amount of the principal being
prepaid.

          (b) The “Treasury Rate” shall be the annualized yield on securities issued by the
United States Treasury having a maturity equal to the remaining stated term of this Note, as
quoted in the Federal Reserve Statistical Release [H. 15 (519)] under the heading
“U.S. Government Securities — Treasury Constant Maturities” for the date which is 5 Business
Days prior to the date on which prepayment is being made. If this rate is not available on
such date, the Treasury Rate shall be determined by interpolating between the yield on
securities of the next longer and next shorter maturity. If the Treasury Rate is no longer
published, Lender shall select a comparable rate. Lender will, upon request, provide an
estimate of the amount of the Prepayment Fee two weeks before the date of the scheduled
prepayment.

          (c) The “Prepayment Ratio” shall be a fraction, the numerator of which shall be the
amount of principal being prepaid, and the denominator of which shall be the principal then
outstanding.

          (d) In the event of a casualty or condemnation, Borrower shall file a claim to recover
from the insurer or condemning authority any Prepayment Fee which would be payable in
connection with a prepayment of the Loan. If Borrower does not recover under its claim all
or any portion of such Prepayment Fee (and such recovery shall not be deemed to have
occurred unless such amounts recovered are determinable in some objective way as
compensation for such Prepayment Fee), then the Prepayment Fee shall be reduced by the
amount of such shortfall (and if there is no such recovery, no Prepayment Fee shall be due).

     30. Waiver of Right to Prepay Note Without Prepayment Fee. Borrower acknowledges that
Lender has relied upon the anticipated investment return under this Note in entering into
transactions with, and in making commitments to, third parties and that the tender of any
prohibited prepayment, shall, to the extent permitted by law and not otherwise provided to the
contrary in the Loan Documents, include the Prepayment Fee calculated as of the date such
prepayment is tendered. Borrower agrees that the Prepayment Fee represents the reasonable estimate
of Lender and Borrower of a fair average compensation for the loss that may be sustained by Lender
as a result of a prohibited prepayment of this Note and it shall be paid

5

 

without prejudice to the right of Lender to collect any other amounts provided to be paid
under the Loan Documents.

     BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION
2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE
MATURITY DATE OF THIS NOTE, AND (B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF THIS NOTE IS
MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY LENDER ON ACCOUNT OF
ANY EVENT OF DEFAULT BY BORROWER UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY
TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED OR RESTRICTED BY THE DEED OF
TRUST, THEN BORROWER SHALL BE OBLIGATED TO PAY CONCURRENTLY THE PREPAYMENT FEE SPECIFIED IN SECTION
9. BY INITIALING THIS PROVISION IN THE SPACE PROVIDED BELOW, BORROWER AGREES THAT LENDER’S
AGREEMENT TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE CONSTITUTES
ADEQUATE CONSIDERATION FOR THIS WAIVER AND AGREEMENT.

BORROWER’S INITIALS:________

     31. Liability of Borrower. Notwithstanding anything to the contrary contained herein
or in the Deed of Trust or other Loan Documents, upon the occurrence of an Event of Default, except
as provided in this Section 11, Lender will look solely to the Property and the security under the
Loan Documents for the repayment of the Loan and will not enforce a deficiency judgment against
Borrower or any direct or indirect partner, member, shareholder or other holder of a beneficial
interest in Borrower. However, nothing contained in this section shall limit the rights of Lender
to proceed against Borrower (but not its partners, members, shareholders or other holders of any
beneficial interests in Borrower) (i) to enforce any Leases entered into by Borrower or its
affiliates as tenant, or guarantees, or other agreements entered into by Borrower in a capacity
other than as borrower or any policies of insurance; (ii) to recover damages for fraud, intentional
material misrepresentation or breach of warranty or intentional physical waste; (iii) to recover
any condemnation proceeds or insurance proceeds or other similar funds which have been misapplied
by Borrower or which, under the terms of the Loan Documents, should have been paid to Lender; (iv)
to recover any tenant security deposits, tenant letters of credit or other deposits or fees paid to
Borrower and not applied to rent or returned to the tenants pursuant to the terms of the tenant
leases that are part of the collateral for the Loan or prepaid rents for a period of more than 30
days which have not been delivered to Lender; (v) to recover Rents and Profits (as defined in the
Deed of Trust) received by Borrower during the period beginning six (6) months prior to the date a
notice of acceleration of maturity of this Note is delivered to Borrower through the date Lender
acquires title to the Property which have not been applied to the Loan or in accordance with the
Loan Documents for leasing, repair, management, operating and maintenance expenses of the Property,
insurance premiums, Imposition deposits, deposits into a reserve for replacements or taxes upon the
Property or any other sum required to be paid under the Loan Documents, but only to the extent
Rents and Profits were available but not so applied; (vi) to recover damages, costs and expenses
arising from, or in connection with any breach of warranty by Borrower under Article VI of the Deed
of Trust pertaining to hazardous materials or the Indemnity Agreement; (vii) to recover damages
arising from Borrower’s failure

6

 

to comply with Section 8.1 of the Deed of Trust pertaining to ERISA; and (viii) to recover any
damages, costs, expenses or liabilities, including attorneys’ fees, incurred by Lender and arising
from any order, consent decree or settlement relating to the cleanup of Hazardous Materials (as
defined in the Deed of Trust), or any other “environmental provision” (as defined in California
Code of Civil Procedure Section 736, as such Section may be amended from time to time) relating to
the Property or any portion thereof. In accordance with California Code of Civil Procedure Section
726.5, as such Section may be amended from time to time, the foregoing shall not limit the right of
Lender to waive the security of the Deed of Trust as to any parcel of Real Property that is
“environmentally impaired” or is an “affected parcel” (as such terms are defined in such Section),
and as to any Personal Property attached to such parcel, and thereafter to exercise against
Borrower, to the extent permitted by such Section 726.5, the rights and remedies of an unsecured
creditor, including reduction of Lender’s claim against Borrower to judgment, and any other rights
and remedies permitted by law. If Lender exercises the rights and remedies of an unsecured creditor
in accordance with the preceding sentence, Borrower promises to pay to Lender, on demand by Lender
following such exercise, all amounts owed to Lender under any Loan Document, and Borrower agrees
that it (but not any direct or indirect partner, member, shareholder or other holder of a
beneficial interest in Borrower) will be personally liable for the payment of all such sums.

     Notwithstanding the foregoing, the limitation of liability set forth in this Section 11 shall
not apply and the Loan shall be fully recourse to Borrower (but not to any direct or indirect
partner, member, shareholder or other holder of a beneficial interest in Borrower) in the event
that (i) Borrower does not provide the Letter of Credit as and when required under the Deed of
Trust; provided, however that so long as Hines REIT 1515 S Street, LP or a Permitted Transferee is
Borrower and Hines REIT Properties, L.P. is the Liable Party, then and in such event, such
liability shall be limited to the amount of any deficiency judgment, which amount shall not exceed
$5,000,000.00 plus any and all costs incurred by Lender in the enforcement and foreclosure of the
Note and Deed of Trust, including, without limitation, attorneys’ fees; (ii) a Transfer occurs
without the consent of Lender (other than a transfer which is permitted without Lender’s consent
pursuant to the terms of Section 10.1 of the Deed of Trust), (iii) a Subordinate Financing occurs
in violation of Section 10.2 of the Deed of Trust without the consent of Lender, (iv) Borrower
commences a voluntary proceeding under applicable federal bankruptcy law, or (v) a collusive
involuntary proceeding under applicable federal bankruptcy law is commenced against Borrower and is
not dismissed within 120 days. In addition, this agreement shall not waive any rights which Lender
would have under any provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Secured Indebtedness or to require that the Property shall continue to secure all of the
Secured Indebtedness.

     32. Waiver by Borrower. Borrower and others who may become liable for the payment of
all or any part of this Note, and each of them, waive diligence, demand, presentment for payment,
notice of nonpayment (except any notice of nonpayment specifically required under the terms of this
Note or the other Loan Documents), protest, notice of dishonor and notice of protest, notice of
intent to accelerate and notice of acceleration and specifically consent to and waive notice of any
amendments, modifications, renewals or extensions of this Note, including the granting of extension
of time for payment, whether made to or in favor of Borrower or any other person or persons.

7

 

     33. Exercise of Rights. No single or partial exercise by Lender, or delay or omission
in the exercise by Lender, of any right or remedy under the Loan Documents shall waive or limit the
exercise of any such right or remedy. Lender shall at all times have the right to proceed against
any portion of or interest in the Property in the manner that Lender may deem appropriate, without
waiving any other rights or remedies. The release of any party under this Note shall not operate
to release any other party which is liable under this Note and/or under the other Loan Documents or
under the Indemnity Agreement.

     34. Fees and Expenses. If Borrower defaults under this Note, subject to the
provisions of Section 11 above, Borrower (but not any direct or indirect partner, member,
shareholder or other holder of a beneficial interest in Borrower) shall be liable for and shall pay
to Lender, in addition to the sums stated above, the costs and expenses of enforcement and
collection, including a reasonable sum as an attorney’s fee.

     35. No Amendments. This Note may not be modified or amended except in a writing
executed by Borrower and Lender. No waivers shall be effective unless they are set forth in a
writing signed by the party which is waiving a right. This Note and the other Loan Documents are
the final expression of the lending relationship between Borrower and Lender, and there is no
unwritten agreement with respect to the subject matter of the Loan.

     36. Governing Law. This Note is to be construed and enforced in accordance with the
laws of the State of California.

     37. Construction. The words “Borrower” and “Lender” shall be deemed to include their
respective heirs, representatives, successors and assigns, and shall denote the singular and/or
plural, and the masculine and/or feminine, and natural and/or artificial persons, as appropriate.
The provisions of this Note shall remain in full force and effect notwithstanding any changes in
the shareholders, partners or members of Borrower. If more than one party is Borrower, the
obligations of each party shall be joint and several. The captions in this Note are inserted only
for convenience of reference and do not expand, limit or define the scope or intent of any section
of this Note.

     38. Notices. All notices, demands, requests and consents permitted or required under
this Note shall be given in the manner prescribed in the Deed of Trust.

     39. Time of the Essence. Time shall be of the essence with respect to all of
Borrower’s obligations under this Note.

     40. Severability. If any provision of this Note should be held unenforceable or void,
then that provision shall be deemed separable from the remaining provisions and shall not affect
the validity of this Note, except that if that provision relates to the payment of any monetary
sum, then Lender may, at its option, declare the Secured Indebtedness (together with the Prepayment
Fee) immediately due and payable.

[remainder of page left intentionally blank]

8

 

     IN WITNESS WHEREOF, Borrower has executed this Note as of the Execution Date.

	 	 	 	 	 	 	 	 	 
	HINES REIT 1515 S Street LP,
	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	By:	 	Hines REIT 1515 S Street GP LLC,
	 	 	a Delaware limited liability company,
	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines REIT Properties, L.P.,
	 	 	 	 	a Delaware limited partnership
	 	 	 	 	its sole member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Hines Real Estate Investment Trust, Inc.,
	 	 	 	 	 	 	a Maryland corporation
	 	 	 	 	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Charles N. Hazen
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]