Document:

exv10w77

 

Exhibit 10.77

 

FIRST AMENDMENT TO CREDIT AGREEMENT

dated as of

January 19, 2007

among

HINES REIT 3100 MCKINNON STREET LP,

HINES REIT 1900/2000 ALAMEDA DE LAS PULGAS LLC,

HINES REIT 321 NORTH CLARK STREET LLC and

THE BORROWING BASE SUBSIDIARIES PARTY HERETO FROM TIME TO TIME,

as Borrowers,

HINES REIT PROPERTIES, L.P.,

as Sponsor,

HSH NORDBANK AG, NEW YORK BRANCH

and

THE LENDERS PARTY HERETO FROM TIME TO TIME,

as Lenders,

and

HSH NORDBANK AG, NEW YORK BRANCH,

as Agent and Arranger

 

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT

          FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of January 19, 2007
(the “Amendment Effective Date”), among HINES REIT 3100 MCKINNON STREET LP, a Delaware
limited partnership (“McKinnon LP”), HINES REIT 1900/2000 ALAMEDA DE LAS PULGAS LLC, a
Delaware limited liability company (“Alameda LLC”), HINES REIT 321 NORTH CLARK STREET LLC,
a Delaware limited liability company (“North Clark LLC”), each of the foregoing having an
address at c/o Hines REIT Properties, L.P., 2800 Post Oak Blvd., Suite 5000, Houston, Texas 77056,
each of the Borrowing Base Subsidiaries party to the Existing Credit Agreement on the Amendment
Effective Date (as defined herein) from time to time (together with McKinnon LP, Alameda LLC and
North Clark LLC, each a “Borrower” and collectively, the “Borrowers”), HINES REIT
PROPERTIES, L.P., a Delaware limited partnership, having an address at 2800 Post Oak Blvd., Suite
5000, Houston, Texas 77056 (“Sponsor”), HSH NORDBANK AG, NEW YORK BRANCH, a German banking
corporation acting through its New York branch, having an office at 230 Park Avenue, New York, New
York 10169, and each of the other “Lenders” signatory to the Existing Credit Agreement, and HSH
NORDBANK AG, NEW YORK BRANCH, a German banking corporation acting through its New York branch,
having an office at 230 Park Avenue, New York, New York 10169, in its capacity as agent for the
Lenders (in its capacity as agent for the Lenders, together with any permitted successor agent, the
“Agent”) and arranger. All capitalized terms used but not otherwise defined herein shall
have the respective meanings set forth in the Existing Credit Agreement.

W I T N E S S E T H:

          WHEREAS, Borrowers, Sponsor, Agent and Lenders are party to that certain Credit Agreement
dated as August 1, 2006 (the “Existing Credit Agreement”) in connection with a credit
facility in an aggregate principal amount not to exceed $500,000,000, upon the terms and conditions
set forth in the Existing Credit Agreement;

          WHEREAS, pursuant to Section 2.22 of the Existing Credit Agreement, Borrower had
certain obligations pertaining to the KeyBank Revolving Credit Facility and the Substitute Limited
Payment Guaranty, as more particularly set forth therein;

          WHEREAS, Borrower, Sponsor and Guarantor have requested that Agent and Lenders agree to
certain modifications of the requirements set forth in Section 2.22 of the Existing Credit
Agreement; and

          WHEREAS, Agent and Lenders are willing to agree to the foregoing request of Borrower, Sponsor
and Guarantor upon the terms and conditions hereinafter set forth.

          NOW, THEREFORE, for and in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged
by the parties hereto, Borrowers, Sponsor, Agent and Lenders do hereby agree as follows:

          SECTION 1. (a) Section 1.01 of the Existing Credit Agreement is hereby amended,
effective as of the Effective Date, by the inclusion of the following definitions:

 

 

          “KeyBank Credit Agreement” means (as an alternative definition), the KeyBank Revolving
Credit Facility.

          “Payment Guaranty Shortfall Amount” means at any time that the amount of the
“Guaranteed Obligations” which may be the subject of the Limited Payment Guaranty is limited to the
Unutilized Sponsor Guaranty Capacity pursuant to Section 1(b) thereof, the excess, if any,
as of any date of determination, of (i) the amount of the “Guaranteed Obligations” which are then
the subject of the Limited Payment Guaranty, over (ii) the amount of the Unutilized Sponsor
Guaranty Capacity as of the then-most recent Testing Determination Date.

          “Sponsor Guaranty Limitation” means the amount of the limitation of guarantees which
may be provided by Sponsor pursuant to Section 7.4(b) of the KeyBank Revolving Credit
Agreement (i.e., the reference to the excess of “2.5% of Total Asset Value in the aggregate”) or,
to the extent said Section 7.4(b) is modified or a corresponding provision is set forth in
a replacement credit agreement entered into, in either case in accordance with Section 6.16
hereof, any limitation on such amount.

          “Unutilized Sponsor Guaranty Capacity” means, as of any date of determination, the
excess of (i) the Sponsor Guaranty Limitation over (ii) the then outstanding amount of the
guarantees of Sponsor (other than as provided in the Limited Payment Guaranty or otherwise in the
Financing Documents) which are applied in the computation of the Sponsor Guaranty Limitation, as
certified as of the then-most recent Testing Determination Date in a certificate delivered to Agent
pursuant to clause (h) of Section 5.01 hereof.

          (b) Section 1.01 of the Existing Credit Agreement is hereby amended, effective as of
the Effective Date, by the deletion of the definitions of “Capital Repair Guaranty Amount”,
“Guaranty Collateral Amount”, “Property Leasing Guaranty Amount” and “Specified
Substitution Date”.

          (c) (i) The defined term “Agreement”, as defined in the preamble to the Existing
Credit Agreement, pursuant to clause (e)(1) of Section 1.02 of the Existing Credit
Agreement shall mean the Agreement, as amended by this Amendment.

               (ii) This Amendment is a Financing Document.

          (d) Agent and Lenders hereby confirm that (i) they have received and waive the restrictions
set forth in Section 6.16 of the Credit Agreement as to Sponsor’s execution and delivery of
that certain First Amendment to Credit Agreement and Other Credit Documents dated as of November 8,
2006 amending the KeyBank Credit Agreement, (ii) such First Amendment to Credit Agreement and Other
Credit Documents is the KeyBank Guaranty Related Amendment and (iii) Borrower’s satisfaction of the
other conditions precedent set forth in clauses (i), (iii), and (v) through
(vii) of Section 2.22(b) of the Credit Agreement (noting, for purposes of
clarification, as amended by this Amendment), are being satisfied concurrently with the execution
and delivery of this Amendment.

2

 

          SECTION 2. Section 2.22 of the Existing Credit Agreement is hereby amended, effective
as of the Effective Date, to provide as follows:

          “SECTION 2.22. Substitution of Initial Limited Payment Guaranty.

          (a) Without limiting Section 6.16 hereof, Borrowers shall use commercially
reasonable efforts (i) to cause KeyBank to amend the terms of (or to provide a waiver with
respect to) the KeyBank Revolving Credit Facility (a “KeyBank Guaranty Related
Amendment”) in a manner reasonably acceptable to Agent, which amendment or waiver shall
(y) expressly permit Sponsor to provide the guarantees set forth in the Initial Limited
Payment Guaranty with such modifications as may be acceptable to Agent and Lenders, by
executing and delivering the Substitute Limited Payment Guaranty, or (z) remove any
limitation on the Sponsor’s ability to provide the guarantees set forth in the Initial
Limited Payment Guaranty or modify such limitation in a manner reasonably satisfactory to
Agent and Lenders, and (ii) to otherwise satisfy the conditions set forth in Section
2.22(b) hereof, in each case, within one hundred eighty (180) days after the Effective
Date, so that the Initial Limited Payment Guaranty may be substituted with the Substitute
Limited Payment Guaranty in accordance with Section 2.22(b) hereof.

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

          (i) Borrowers shall have delivered a copy of the KeyBank Guaranty Related
Amendment to Agent;

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

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

          (iv) Sponsor shall be in satisfaction of all of the Guarantor Financial
Covenants;

          (v) Sponsor shall have executed and delivered to Agent a guaranty (the
“Substitute Limited Payment Guaranty”) in the form of the Initial Limited
Payment Guaranty, with such changes as Agent determines are reasonably necessary in
order to reflect the terms of the KeyBank Guaranty Related Amendment and the change
of the “Guarantor” thereunder from the REIT to Sponsor pursuant to which Sponsor
shall be liable for all of the “Guaranteed Obligations” thereunder to the same
extent as if Sponsor had entered into the Substitute Limited Payment Guaranty on the
Effective Date;

          (vi) Agent shall have received a favorable customary written opinion (addressed
to Agent and the Lenders and dated as of the date of the Substitute Limited Payment
Guaranty) of counsel for the Sponsor, covering such

3

 

matters relating to Sponsor and the Substitute Limited Payment Guaranty as
Agent shall reasonably request, including a non-contravention opinion; and

          (vii) Agent shall have received a certification by the secretary of the REIT
confirming that the resolutions adopted by the REIT’s Board of Directors authorizing
the Loans and the provision of various guarantees by the REIT and/or the Sponsor in
connection therewith has not been modified, rescinded or amended and remains in full
force and effect.

          (c) Upon satisfaction of all of the conditions set forth in Section 2.22(b) to
terminate the Initial Limited Payment Guaranty, Agent and the REIT shall enter into an
agreement reasonably acceptable to Agent and the REIT to terminate the Initial Limited
Payment Guaranty and to release the REIT from all of its obligations under the Initial
Limited Payment Guaranty.

          (d) Concurrently with the delivery by Borrower of a statement required to be delivered
pursuant to clause (h) of Section 5.01 hereof which shall evidence the
existence of a Payment Guaranty Shortfall Amount, Borrowers shall deliver to Agent for
deposit into the Guaranty Collateral Account cash in an amount, and/or deliver to Agent a
Guaranty Letter of Credit having an undrawn stated amount, which, when added to any amount
then on deposit in the Guaranty Collateral Account and the undrawn stated amount of any
Guaranty Letter of Credit then held by Agent, equals the Payment Guaranty Shortfall Amount
as of the applicable Testing Determination Date (the “Guaranty Collateral”).

          (e) Following delivery of (i) any statement required to be delivered pursuant to
clause (h) of Section 5.01 hereof or (ii) at Borrower’s election which may
be exercised one (1) time during any calendar quarter in the event that there shall be a
decrease in the amount of the “Guaranteed Obligations” which are then the subject of the
Limited Payment Guaranty (resulting in a decrease in the Payment Guaranty Shortfall
Amount), a supplemental statement containing the information required to be delivered
pursuant to clause (h) of Section 5.01 hereof as of the date that such
decrease will occur, in each case that shall establish that the sum of the amount on deposit
in the Guaranty Collateral Account and the undrawn stated amount of any Guaranty Letter(s)
of Credit is greater than the Payment Guaranty Shortfall Amount, Agent shall promptly after
request by Borrowers (y) deliver to Borrowers funds on deposit in the Guaranty Collateral
Account (to the extent sufficient funds exist therein) and/or (z) permit Borrowers to reduce
any Guaranty Letter of Credit then held by Agent in an aggregate amount equal to such
excess, so long as, in each case, no Default or Event of Default shall have occurred and be
continuing.

          (f) Agent shall deposit all cash delivered to Agent pursuant to Section 2.22(d)
hereof for deposit in the Guaranty Collateral Account into an account or subaccount of Agent
or, at Agent’s election, a bank or other financial institution approved by Agent (the
“Guaranty Collateral Account”). Each Borrower hereby grants to Agent for itself and
on behalf of Lenders a security interest in all rights of such Borrower in and to the
Guaranty Collateral Account and all sums on deposit therein as additional security

4

 

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

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

5

 

Obligations then due or required to be performed, shall have been indefeasibly repaid
or performed, as applicable, by the Credit Parties in full, all of the Commitments have
expired or been terminated and all Lender Interest Rate Protection Agreements have been
terminated, then Agent shall return to Borrowers any sums then held in the Guaranty
Collateral Account or Guaranty Letter of Credit to the extent then in possession or control
of Agent.

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

          SECTION 3. Clause (h) of Section 5.01 of the Existing Credit Agreement is
hereby amended, effective as of the Effective Date, to provide as follows:

          “Promptly after the preparation thereof, and no later than forty-five (45) days after the last
day of each calendar quarter, (i) computations of Borrowing Base Net Operating Income for each
Borrowing Base Property, (ii) computations of Debt Service Coverage Ratio as of the Testing
Determination Date occurring on the last day of such calendar quarter, (iii) a Borrowing Base
Certificate executed by an Authorized Officer of Borrowers (or the REIT) setting forth its
computation of the Borrowing Base Loan Amount of the Testing Determination Date occurring on the
last day of such calendar quarter, (iv) a Rent Roll, (v) a receivables aging report with respect to
each Borrowing Base Property setting forth all outstanding arrears, and (vi) as of each Testing
Determination Date following delivery of the Substitute Limited Payment Guaranty, a computation of
the Payment Guaranty Shortfall Amount (including the amount of the Sponsor Guaranty Limitation, the
Unutilized Sponsor Guaranty Capacity and the then outstanding amount of the guarantees of Sponsor
which are applied in the computation of the Sponsor Guaranty Limitation, including the components
of the calculation of such amounts and a schedule of such guarantees). Such items shall be
certified by an Authorized Officer of each Borrower except that in the case of any item delivered
pursuant to clause (vi) above, such item will be instead certified by an Authorized Officer
of Sponsor, as being true, correct and complete in all material respects;”

          SECTION 4. Section 6.16 of the Existing Loan Agreement is hereby amended, effective as
of the Amendment Effective Date, by the addition of the following proviso at the end of the first
sentence thereof (beginning in the thirteenth line):

“; provided, further, no such renewal, refinancing, increase, amendment or
replacement would have the effect of decreasing the actual or potential Sponsor Guaranty
Limitation from that set forth in Section 7.4(b) of the KeyBank Revolving Credit
Agreement, as amended by that certain First Amendment to Credit Agreement and Other Credit
Documents dated as of November 8, 2006 amending the KeyBank Credit Agreement.”

          SECTION 5. Clause (d) of Article VII of the Existing Credit Agreement is
hereby amended, effective as of the Amendment Effective Date, by the deletion of the phrase “(other
than Section 2.22(c) hereof)” and the insertion of the phrase “(other than Section
2.22(d) hereof)” in its place.

6

 

          SECTION 6. Representations and Warranties.

          (a) Each Borrower hereby remakes as of the date hereof all of the representations and
warranties set forth in the Existing Credit Agreement, as modified hereby, and the other Financing
Documents and further represents and warrants the following:

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

               (ii) This Amendment has been duly executed and delivered and
constitutes a valid and binding agreement of each Credit Party, in
each case enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the
enforcement of creditors’ rights generally and by general equitable
principles; and

               (iii) All of the conditions set forth in Section 2.22(b)
of the Existing Credit Agreement have been satisfied as of the
Amendment Effective Date or have been waived by Agent in the manner
set forth in the Existing Credit Agreement.

     SECTION 6. Miscellaneous.

          (b) Each Credit Party hereby ratifies and reaffirms its obligations, waivers, indemnities and
covenants made under the Existing Credit Agreement, as amended hereby, and the other Financing
Documents.

          (c) All covenants, agreements, representations and warranties made by each Credit Party herein
or pursuant hereto and in the certificates or other instruments delivered in

7

 

connection with or pursuant to this Amendment shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this Amendment and the
making of any Loans regardless of any investigation made by any such other party or on its behalf
and notwithstanding that Agent or any Lender may have had notice or knowledge of any Default or
Event of Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal of or any accrued
Interest on any Loan or any fee or any other amount payable under the Existing Credit Agreement is
outstanding and so long as the Commitments have not expired or terminated.

          (d) This Amendment may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Amendment, the Existing Credit Agreement and the
other Financing Documents constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. This Amendment shall become effective when it shall have
been executed by Agent and when Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a
manually executed counterpart of this Amendment.

          (e) Any provision of this Amendment held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

          (f) THIS AMENDMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF THE
STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

          (g) Each Credit Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court for the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Amendment, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding which is no longer subject to appeal, shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Amendment shall affect any right that Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Amendment against any Credit Party or any of their respective
properties in the courts of any jurisdiction.

8

 

          (h) Each Credit Party hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Amendment in any
court referred to in the first sentence of paragraph (f) above. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

          (i) Each party to this Amendment irrevocably consents to service of process in the manner
provided for notices in Section 9.01 of the Existing Credit Agreement. Nothing in this
Amendment will affect the right of any party to this Amendment to serve process in any other manner
permitted by law.

          (j) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION (i).

          (k) Article and Section headings used herein are for convenience of reference only, are not
part of this Amendment and shall not affect the construction of, or be taken into consideration in
interpreting, this Amendment.

          (l) Lenders are entering into this Amendment as parties to the Credit Agreement and to
evidence their consent to the extent required pursuant to the Credit Agreement.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective duly authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	“BORROWERS”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES REIT 3100 MCKINNON STREET LP, a Delaware

limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	HINES REIT 3100 MCKINNON STREET GP	 	 
	 	 	 	 	LLC, a Delaware limited liability company, its	 	 
	 	 	 	 	general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	      /s/ Authorized Signatory
 

	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES REIT 1900/2000 ALAMEDA DE LAS PULGAS LLC, a	 	 
	 	 	Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	     /s/ Authorized Signatory	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES REIT 321 NORTH CLARK STREET LLC, a	 	 
	 	 	Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	      /s/ Authorized Signatory	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

[Signatures continue on following page]

 

 

	 	 	 	 	 	 	 	 	 
	 	 	“SPONSOR”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HINES REIT PROPERTIES, L.P., a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Hines Real Estate Investment Trust, Inc., a
Maryland corporation, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Authorized Signatory	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

[Signatures continue on following page]

 

 

	 	 	 	 	 
	 	“AGENT”

HSH NORDBANK AG, NEW YORK BRANCH

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	                                      /s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	“LENDERS”

HSH NORDBANK AG, NEW YORK BRANCH

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signatures continued on following page]

 

 

	 	 	 	 	 
	 	ING REAL ESTATE FINANCE (USA), LLC, a 

Delaware limited
liability company
 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LANDESBANK SAAR

 	 
	 	By:  	/s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	                                      /s/ Authorized Signatory
 	 
	 	 	Name:  	 	 
	 	 	Title:<PAGE>

                                                                    Exhibit 10.1

February 23, 2007

The Talbots, Inc.
1 Talbots Drive
Hingham, MA 02043

Attn:    Mr. Edward L. Larsen
         Senior Vice President, Finance
         Chief Financial Officer and Treasurer

                  Re:      Uncommitted Letter of Credit Facility
                           -------------------------------------

Ladies and Gentlemen:

         We are pleased to advise you that BANK OF AMERICA, N.A. has established
for THE TALBOTS, INC., THE J. JILL GROUP, INC., J. J. COMPANY, INC, J. JILL LLC,
and J. JILL GP (each, a "Borrower," and collectively, the "Borrowers"), an
uncommitted letter of credit facility under which it may issue on a
discretionary and uncommitted and as available basis for the account of the
respective Borrowers standby letters of credit (the "Standby Letters of Credit")
and commercial letters of credit (the "Commercial Letters of Credit" and
collectively with the Standby Letters of Credit, the "Letters of Credit"). The
Letters of Credit outstanding under this uncommitted letter of credit facility
shall not exceed in aggregate face amount at any time the amount of (a)
$5,000,000 for Standby Letters of Credit and (b) $150,000,000 for Commercial
Letters of Credit to support the importation of goods into the United States
from Hong Kong and other Asian countries. The terms and conditions of this
uncommitted letter of credit facility are as follows:

Letters of Credit
Discretionary:             The issuance of all Letters of Credit under this
                           uncommitted letter of credit facility shall be at the
                           sole and absolute discretion of the Lender. Upon the
                           request of the applicable Borrower, the Lender may
                           from time to time in its sole and absolute discretion
                           renew, extend, increase, decrease or otherwise modify
                           each Letter of Credit. This letter is not a
                           commitment by the Lender to issue, renew, extend,
                           increase, decrease or otherwise modify any Letter of
                           Credit. Without limiting the generality of the
                           foregoing, no Letter of Credit shall be issued after
                           the Expiration Date.

<PAGE>

The Talbots, Inc.
February 23, 2007
Page 2

Documentation;
Repayment of
Letter of Credit
Liabilities:               The Letters of Credit will be issued pursuant to, and
                           the repayment and other obligations of the Borrowers
                           in respect of the Letters of Credit shall be
                           evidenced by, a Master Commercial Letter of Credit
                           Reimbursement and Security Agreement, dated as of
                           July 8, 2002, as amended, and a Trade Key(R) Online
                           Services Agreement, dated as of October 10, 2001, as
                           amended, in each case between The Talbots, Inc. and
                           the Lender (each of the foregoing, a "Trade Services
                           Agreement," and collectively, the "Trade Services
                           Agreements"), and applications and agreements for
                           standby letters of credit or applications and
                           agreements for commercial letters of credit, as
                           applicable, satisfactory in form and substance to the
                           Lender and executed by the applicable Borrower. All
                           applications for Letters of Credit shall be submitted
                           as provided in the Trade Key(R) Online Services
                           Agreement referred to above or, if submitted in paper
                           form, to the address beneath the Lender's signature
                           below. As provided in the Trade Services Agreements,
                           The Talbots, Inc. will be primarily liable for all
                           obligations and liabilities incurred by each of the
                           other Borrowers in connection with the Letters of
                           Credit. The Borrowers shall execute and deliver to
                           the Lender such other documents as the Lender may
                           reasonably request from time to time.

Expiry Dates of
the Letters of Credit:     No Letter of Credit shall have an expiry date later
                           than the date which is one (1) year after the date of
                           issuance thereof.

Expiration Date:           February 23, 2008.

Letter of Credit Fees:     Each Borrower shall pay such fees on each Letter of
                           Credit as the Lender and such Borrower may agree from
                           time to time. Notwithstanding the foregoing,
                           Commercial Letters of Credit shall include the
                           following pricing based on the location of issuance:

<TABLE>
<CAPTION>
                                             Boston                           Hong Kong
                                             ------                           ---------
                           <S>               <C>                              <C>
                           Issuing Fee:      U.S. $25*                        Waived
                           Negotiation Fee:  The greater of 1/8% or U.S. $70  Waived
                           Amendment Fee:    U.S. $25*                        Waived
                           *Plus Cable Fee
</TABLE>
<PAGE>

The Talbots, Inc.
February 23, 2007
Page 3

Notice:                    The Lender hereby notifies each Borrower that
                           pursuant to the requirements of the USA PATRIOT Act
                           (Title III of Pub.L. 107-56 (signed into law October
                           26, 2001)) (the "Act"), the Lender is required to
                           obtain, verify and record information that identifies
                           such Borrower, which information includes the name
                           and address of such Borrower and other information
                           that will allow the Lender to identify such Borrower
                           in accordance with the Act.

         Please indicate your acknowledgment of the foregoing by signing and
returning to the Lender the enclosed copy of this letter at the address shown on
the first page hereof.

                                          Very truly yours,

                                          BANK OF AMERICA, N.A.

                                          By /s/ John Pocalyko
                                             -----------------------------------
                                          Name  John Pocalyko
                                          Title  Senior Vice President

                                          Address: 335 Madison Ave.
                                                   NY1-503-05-05
                                                   New York, NY 10017
                                          Telephone: 212-503-8340
                                          Facsimile: 212-503-7066

ACKNOWLEDGED AND AGREED:

THE TALBOTS, INC.

By /s/ Edward L. Larsen
   ------------------------------------
Name  Edward L. Larsen
Title  Senior Vice President, Finance
       Chief Financial Officer and Treasurer

THE J. JILL GROUP, INC.

By /s/ Edward L. Larsen
   ------------------------------------
Name  Edward L. Larsen
Title  Senior Vice President, Finance
       Chief Financial Officer and Treasurer

<PAGE>

The Talbots, Inc.
February 23, 2007
Page 4

J J. COMPANY, INC.

By /s/ Edward L. Larsen
   ------------------------------------
Name  Edward L. Larsen
Title  Senior Vice President, Finance
       Chief Financial Officer and Treasurer

J. JILL LLC

By /s/ Edward L. Larsen
   ------------------------------------
Name  Edward L. Larsen
Title  Senior Vice President, Finance
       Chief Financial Officer and Treasurer

J. JILL GP

By:
   ------------------------------------
   Its General Partner

By /s/ Edward L. Larsen
   ------------------------------------
Name  Edward L. Larsen
Title  Senior Vice President, Finance
       Chief Financial Officer and Treasurer

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